SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM N-1A
REGISTRATION STATEMENT (No. 2-50318)
UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 87 [X]
and
REGISTRATION STATEMENT UNDER THE INVESTMENT
COMPANY ACT OF 1940 [X]
Amendment No. ____ [ ]
FIDELITY UNION STREET TRUST
(Exact Name of Registrant as Specified in Charter)
82 Devonshire Street, Boston, MA 02109
(Address of Principal Executive Offices)
(617) 570-7000
(Registrant's Telephone Number)
Arthur S. Loring, Secretary
82 Devonshire Street
Boston, Massachusetts 02109
(Name and Address of Agent for Service)
It is proposed that this filing will become effective:
( ) Immediately upon filing pursuant to paragraph (b) of Rule 485.
( ) On ( ) pursuant to paragraph (b) of Rule 485.
( ) 60 days after filing pursuant to paragraph (a) of Rule 485.
(x) On October 7, 1994 pursuant to paragraph (a) of Rule 485.
Registrant has filed a declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940 and filed the Notice required by such Rule
on October 31, 1993.
SPARTAN ARIZONA MUNICIPAL MONEY MARKET PORTFOLIO
SPARTAN ARIZONA MUNICIPAL INCOME PORTFOLIO
CROSS REFERENCE SHEET
FORM N-1A
ITEM NUMBER PROSPECTUS SECTION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
1 .............................. Cover Page
2 a .............................. Expenses
b, c .............................. Contents; The Fund at a Glance; Who May Want
to Invest
3 a .............................. *
b .............................. *
c .............................. Performance
d .............................. *
4 a i............................. Charter
ii........................... The Funds at a Glance; Investment Principles and
Risks; Securities and Investment Practices
b .............................. Securities and Investment Practices
c .............................. Who May Want to Invest; Investment Principles
and Risks; Securities and Investment Practices
5 a .............................. Charter
b i............................. Doing Business with Fidelity; Charter; Cover Page
ii........................... Charter; Breakdown of Expenses
iii.......................... Expenses; Breakdown of Expenses
c .............................. Charter
d .............................. Charter; Breakdown of Expenses
e .............................. Charter; Cover Page
f .............................. Expenses
g .............................. *
5A .............................. *
6 a i............................. Charter
ii........................... How to Buy Shares; How to Sell Shares;
Transaction Details; Exchange Restrictions
iii.......................... Charter
b ............................. Charter
c .............................. Exchange Restrictions; Transaction Details
d .............................. *
e .............................. Doing Business with Fidelity; How to Buy Shares;
How to Sell Shares; Investor Services
f, g .............................. Dividends, Capital Gains, and Taxes
7 a .............................. Charter; Cover Page
b .............................. How to Buy Shares; Transaction Details; Expenses
c .............................. *
d .............................. How to Buy Shares
e .............................. *
f .............................. Breakdown of Expenses
8 .............................. How to Sell Shares; Investor Services; Transaction
Details; Exchange Restrictions
9 .............................. *
</TABLE>
* Not Applicable
SPARTAN ARIZONA MUNICIPAL MONEY MARKET PORTFOLIO
SPARTAN ARIZONA MUNICIPAL INCOME PORTFOLIO
CROSS REFERENCE SHEET
(CONTINUED)
FORM N-1A
ITEM NUMBER STATEMENT OF ADDITIONAL INFORMATION SECTION
<TABLE>
<CAPTION>
<S> <C> <C> <C>
10, 11 ............................ Cover Page
12 ............................ Description of the Trusts
13 a - c ............................ Investment Policies and Limitations
d ............................ *
14 a - c ............................ Trustees and Officers
15 a, b ............................ *
c ............................ Trustees and Officers
16 a i........................... FMR
ii.......................... Trustees and Officers
iii......................... Management Contracts
b ............................ Management Contracts
c, d ............................ Interest of FMR Affiliates
e ............................ *
f ............................ Distribution and Service Plans
g ............................ *
h ............................ Description of the Trusts
i ............................ Interest of FMR Affiliates
17 a ............................ Portfolio Transactions
b ............................ *
c ............................ Portfolio Transactions
d, e ............................ *
18 a ............................ Description of the Trusts
b ............................ *
19 a ............................ Additional Purchase and Redemption Information
b ............................ Additional Purchase and Redemption Information;
Valuation of Portfolio Securities
c ............................ *
20 Distributions and Taxes
21 a, b ............................ Interest of FMR Affiliates
c ............................ *
22 ............................ Performance
23 ............................ *
</TABLE>
* Not Applicable
Please read this prospectus before investing, and keep it on file for
future reference. It contains important information, including how each
fund invests and the services available to shareholders.
A Statement of Additional Information dated October 7, 1994 has been filed
with the Securities and Exchange Commission, and is incorporated herein by
reference (is legally considered a part of this prospectus). The Statement
of Additional Information is available free upon request by calling
Fidelity at 1-800-544-8888.
Investments in the money market fund are neither insured nor guaranteed by
the U.S. government, and there can be no assurance that the fund will
maintain a stable $1.00 share price.
Mutual fund shares are not deposits or obligations of, or guaranteed by,
any depository institution. Shares are not insured by the FDIC, the Federal
Reserve Board, or any other agency, and are subject to investment risk,
including the possible loss of principal.
LIKE ALL MUTUAL
FUNDS, THESE
SECURITIES HAVE NOT
BEEN APPROVED OR
DISAPPROVED BY THE
SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION, NOR HAS
THE SECURITIES AND
EXCHANGE
COMMISSION OR ANY
STATE SECURITIES
COMMISSION PASSED
UPON THE ACCURACY
OR ADEQUACY OF THIS
PROSPECTUS. ANY
REPRESENTATION TO
THE CONTRARY IS A
CRIMINAL OFFENSE.
SAZ-pro-1094
SPARTAN(Registered trademark) ARIZONA
MUNICIPAL FUNDS
The funds seek a high level of current income free from federal income tax
and Arizona state personal income tax. Spartan Arizona Municipal Money
Market invests in high-quality, short-term instruments and is designed to
maintain a stable $1.00 share price. Spartan Arizona Municipal Income
invests in a broader range of securities.
PROSPECTUS
OCTOBER 7, 1994(FIDELITY_LOGO_GRAPHIC) 82 DEVONSHIRE STREET, BOSTON, MA
02109
CONTENTS
KEY FACTS THE FUNDS AT A GLANCE
WHO MAY WANT TO INVEST
EXPENSES Each fund's yearly
operating expenses.
PERFORMANCE
THE FUNDS IN DETAIL CHARTER How each fund is
organized.
INVESTMENT PRINCIPLES AND RISKS
Each fund's overall approach to
investing.
BREAKDOWN OF EXPENSES How
operating costs are calculated and
what they include.
YOUR ACCOUNT DOING BUSINESS WITH FIDELITY
TYPES OF ACCOUNTS Different
ways to set up your account.
HOW TO BUY SHARES Opening an
account and making additional
investments.
HOW TO SELL SHARES Taking money
out and closing your account.
INVESTOR SERVICES Services to
help you manage your account.
SHAREHOLDER AND DIVIDENDS, CAPITAL GAINS, AND
ACCOUNT POLICIES TAXES
TRANSACTION DETAILS Share price
calculations and the timing of
purchases and redemptions.
EXCHANGE RESTRICTIONS
KEY FACTS
THE FUNDS AT A GLANCE
MANAGEMENT: Fidelity Management & Research Company (FMR) is the
management arm of Fidelity Investments, which was established in 1946 and
is now America's largest mutual fund manager. FMR Texas Inc. (FTX), a
subsidiary of FMR, chooses investments for Spartan Arizona Municipal Money
Market.
As with any mutual fund, there is no assurance that a fund will achieve its
goal.
SPARTAN ARIZONA MONEY
GOAL: High current tax-free income for Arizona residents while maintaining
a stable share price.
STRATEGY: Invests in high-quality, short-term securities whose interest is
free from federal income tax and Arizona personal income tax.
SPARTAN ARIZONA INCOME
GOAL: High current tax-free income for Arizona residents.
STRATEGY: Invests mainly in long-term, investment-grade securities whose
interest is free from federal income tax and Arizona personal income tax.
WHO MAY WANT TO INVEST
These non-diversified funds may be appropriate for investors in higher tax
brackets who seek high current income that is free from federal income tax
and Arizona personal income tax. Each fund's level of risk, and potential
reward, depends on the quality and maturity of its investments. Spartan
Arizona Municipal Money Market is managed to keep its share price stable at
$1.00. Spartan Arizona Municipal Income, with its broader range of
investments, has the potential for higher yields, but also carries a higher
degree of risk.
By themselves, these funds do not constitute a balanced investment plan.
The value of the funds' investments and the income they generate will vary
from day to day, generally reflecting changes in interest rates, market
conditions, and other federal and state political and economic news. When
you sell shares of Spartan Arizona Municipal Income, they may be worth more
or less than what you paid for them.
The Spartan family of funds is designed for cost-conscious investors
looking for higher yields through lower costs. The Spartan
Approach(Registered trademark) requires investors to make high minimum
investments and, in some cases, to pay for individual transactions.
EXPENSES
SHAREHOLDER TRANSACTION EXPENSES are charges you pay when you buy or sell
shares of a fund. See page for more information.
Maximum sales charge on purchases and
reinvested distributions None
Deferred sales charge on redemptions None
Redemption fee (as a % of amount redeemed
on shares held less than 180 days )
for Spartan Arizona Municipal Money Market None
for Spartan Arizona Municipal Income .50%
Exchange and wire transaction fees $5.00
Checkwriting fee, per check written $2.00
(available for Spartan Arizona Municipal Money Market)
Account closeout fee $5.00
THESE FEES ARE WAIVED (except for the redemption fee) if your account
balance at the time of the transaction is $50,000 or more.
ANNUAL FUND OPERATING EXPENSES are paid out of each fund's assets. Each
fund pays a management fee to FMR. Expenses are factored into each fund's
share price or dividends and are not charged directly to shareholder
accounts (see page ).
The following are projections based on estimated expenses, and are
calculated as a percentage of average net assets.
SPARTAN ARIZONA MONEY
Management fee (after 0.00
reimbursement) %
12b-1 fee None
Other expenses 0.00
%
Total fund operating expenses 0.00
%
SPARTAN ARIZONA INCOME
Management fee (after 0.00
reimbursement) %
12b-1 fee None
Other expenses 0.00
%
Total fund operating expenses 0.00
%
EXAMPLES: Let's say, hypothetically, that each fund's annual return is 5%
and that its operating expenses are exactly as just described. For every
$1,000 you invested, here's how much you would pay in total expenses after
the number of years indicated, first assuming that you leave your account
open, and then assuming that you close your account at the end of the
period:
SPARTAN ARIZONA MONEY
Account Account
open closed
After 1 year $ $
After 3 years $ $
SPARTAN ARIZONA INCOME
Account Account
open closed
After 1 year $ $
After 3 years $ $
These examples illustrate the effect of expenses, but are not meant to
suggest actual or expected costs or returns, all of which may vary.
FMR has voluntarily agreed to temporarily limit Spartan Arizona Municipal
Money Market's operating expenses to .00% of its average net assets, and
Spartan Arizona Municipal Income's operating expenses to .00% of its
average net assets. If this agreement were not in effect, the management
fee, other expenses, and total operating expenses would be .50%, .00%, and
.50%, respectively, for Spartan Arizona Municipal Money Market, and .55%,
.00%, and .55%, respectively, for Spartan Arizona Municipal Income.
Expenses eligible for reimbursement do not include interest, taxes,
brokerage commissions, or extraordinary expenses.
PERFORMANCE
This section would normally show how each fund has performed over time.
Because the funds were new when this prospectus was printed, their
performance is not included. Twice a year, you will receive a report
detailing each fund's recent strategies, performance, and holdings. For
current performance or a free annual report, call 1-800-544-8888.
EXPLANATION OF TERMS
TOTAL RETURN is the change in value of an investment in a fund over a given
period, assuming reinvestment of any dividends and capital gains. A
CUMULATIVE TOTAL RETURN reflects actual performance over a stated period of
time. An AVERAGE ANNUAL TOTAL RETURN is a hypothetical rate of return that,
if achieved annually, would have produced the same cumulative total return
if performance had been constant over the entire period. Average annual
total returns smooth out variations in performance; they are not the same
as actual year-by-year results. Average annual total returns covering
periods of less than one year assume that performance will remain constant
for the rest of the year.
YIELD refers to the income generated by an investment in a fund over a
given period of time, expressed as an annual percentage rate. When a money
market fund yield assumes that income earned is reinvested, it is called an
EFFECTIVE YIELD. A TAX-EQUIVALENT YIELD shows what an investor would have
to earn before taxes to equal a tax-free yield. Yields for the bond fund
are calculated according to a standard that is required for all stock and
bond funds. Because this differs from other accounting methods, the quoted
yield may not equal the income actually paid to shareholders.
UNDERSTANDING
PERFORMANCE
YIELD illustrates the income
earned by a fund over a
recent period. Seven-day
yields are the most common
illustration of money market
performance. 30-day yields
are usually used for bond
funds. Yields change daily,
reflecting changes in interest
rates.
TOTAL RETURN reflects both the
reinvestment of income and
capital gain distributions, and
any change in a fund's share
price.
(checkmark)
THE CONSUMER PRICE INDEX is a widely recognized measure of inflation
calculated by the U.S. government.
The funds' recent strategies, performance, and holdings are detailed twice
a year in financial reports, which are sent to all shareholders. For
current performance or a free annual report, call 1-800-544-8888.
TOTAL RETURNS AND YIELDS ARE BASED ON PAST RESULTS AND ARE NOT AN
INDICATION OF FUTURE PERFORMANCE.
THE FUNDS IN DETAIL
CHARTER
EACH FUND IS A MUTUAL FUND: an investment that pools shareholders' money
and invests it toward a specified goal. In technical terms, Spartan Arizona
Municipal Money Market is currently a non-diversified fund of Fidelity
Union Street Trust II, and Spartan Arizona Municipal Income is currently a
non-diversified fund of Fidelity Union Street Trust. Both trusts are
open-end management investment companies. Fidelity Union Street Trust II
was organized as a Delaware business trust on June 20, 1991. Fidelity Union
Street Trust was organized as a Massachusetts business trust on March 1,
1974. There is a remote possibility that one fund might become liable for a
misstatement in the prospectus about another fund.
EACH FUND IS GOVERNED BY A BOARD OF TRUSTEES, which is responsible for
protecting the interests of shareholders. The trustees are experienced
executives who meet throughout the year to oversee the funds' activities,
review contractual arrangements with companies that provide services to the
funds, and review performance. The majority of trustees are not otherwise
affiliated with Fidelity.
THE FUNDS MAY HOLD SPECIAL MEETINGS AND MAIL PROXY MATERIALS. These
meetings may be called to elect or remove trustees, change fundamental
policies, approve a management contract, or for other purposes.
Shareholders not attending these meetings are encouraged to vote by proxy.
Fidelity will mail proxy materials in advance, including a voting card and
information about the proposals to be voted on. For Spartan Arizona
Municipal Money, you are entitled to one vote for each share you own. For
Spartan Arizona Municipal Income, the number of votes you are entitled to
is based upon the dollar value of your investment.
FMR AND ITS AFFILIATES
FIDELITY FACTS
Fidelity offers the broadest
selection of mutual funds
in the world.
(bullet) Number of Fidelity mutual
funds: over ___
(bullet) Assets in Fidelity mutual
funds: over $___ billion
(bullet) Number of shareholder
accounts: over __ million
(bullet) Number of investment
analysts and portfolio
managers: over ___
(checkmark)
The funds are managed by FMR, which chooses their investments and handles
their business affairs. FTX has primary responsibility for providing
investment management services for Spartan Arizona Municipal Money Market.
Anne Punzak is manager of Spartan Arizona Income, which she has managed
since September 1994. Ms. Punzak also manages Aggressive Tax-Free, High
Yield Tax-Free, Spartan Aggressive Municipal Income and Spartan Florida
Municipal Income. She joined Fidelity in 1984.
Fidelity Distributors Corporation (FDC) distributes and markets Fidelity's
funds and services. Fidelity Service Co. (FSC) performs transfer agent
servicing functions for the funds.
FMR Corp. is the parent company of these organizations. Through ownership
of voting common stock, Edward C. Johnson 3d (President and a trustee of
the trusts), Johnson family members, and various trusts for the benefit of
the Johnson family form a controlling group with respect to FMR Corp.
United Missouri Bank, N.A., is each fund's transfer agent, although it
employs FSC to perform these functions for the funds. It is located at 1010
Grand Avenue, Kansas City, Missouri.
To carry out the funds' transactions, FMR may use its broker-dealer
affiliates and other firms that sell fund shares, provided that a fund
receives services and commission rates comparable to those of other
broker-dealers.
INVESTMENT PRINCIPLES AND RISKS
SPARTAN ARIZONA MUNICIPAL MONEY MARKET seeks high current income that is
free from federal income tax and Arizona personal income tax while
maintaining a stable $1.00 share price by investing in high-quality,
short-term municipal securities of all types. As a result, when you sell
your shares, they should be worth the same amount as when you bought them.
Of course, there is no guarantee that the fund will maintain a stable $1.00
share price. FMR normally invests at least 65% of the fund's total assets
in state tax-free securities, and normally invest at least 80% of the
fund's assets in municipal securities whose interest is free from federal
income tax.
The fund follows industry-standard guidelines on the quality and maturity
of its investments, which are designed to help maintain a stable $1.00
share price. The fund will purchase only high-quality securities that FMR
believes present minimal credit risks and will observe maturity
restrictions on securities it buys. It is possible that a major change in
interest rates or a default on the fund's investments could cause its share
price (and the value of your investment) to change.
SPARTAN ARIZONA MUNICIPAL INCOME seeks high current income that is free
from federal income tax and Arizona personal income tax by investing
primarily in municipal securities judged by FMR to be of investment-grade
quality, although it can invest in some lower-quality securities. The fund
has no restrictions on maturity, but it generally invests in long-term
bonds and maintains a dollar-weighted average maturity of 15 years or
longer. FMR normally invests at least 65% of the fund's total assets in
state tax-free securities, and normally invests at least 80% of the fund's
assets in municipal securities whose interest is free from federal income
tax.
EACH FUND'S yield and the bond fund's share price change daily based on
changes in interest rates, market conditions, other political and economic
news, and on the quality and maturity of its investments. In general, bond
prices rise when interest rates fall, and vice versa. This effect is
usually more pronounced for longer-term securities. Lower-quality
securities offer higher yields, but also carry more risk.
Each fund's performance is closely tied to the economic and political
conditions within the state of Arizona. The rate of growth in Arizona
slowed in the late '80s and early '90s, and assessed valuations in many
areas have declined, putting pressure on state and local budgets. However,
the state's growth in population and employment and other economic
indicators continues to outpace that of the nation as a whole. Economic
conditions within the state are expected to reflect moderate growth through
1994.
If you are subject to the federal alternative minimum tax, you should note
that each fund may invest all of its assets in municipal securities issued
to finance private activities. The interest from these investments is a
tax-preference item for purposes of the tax.
FMR normally invests each fund's assets according to its investment
strategy. The funds do not expect to invest in federally taxable
obligations, and Spartan Arizona Municipal Income does not expect to invest
in state taxable obligations. Each fund also reserves the right to invest
without limitation in short-term instruments, to hold a substantial amount
of uninvested cash, or to invest more than normally permitted in taxable
obligations for temporary, defensive purposes.
SECURITIES AND INVESTMENT PRACTICES
The following pages contain more detailed information about types of
instruments in which a fund may invest, and strategies FMR may employ in
pursuit of a fund's investment objective. A summary of risks and
restrictions associated with these instrument types and investment
practices is included as well. Policies and limitations are considered at
the time of purchase; the sale of instruments is not required in the event
of a subsequent change in circumstances.
FMR may not buy all of these instruments or use all of these techniques to
the full extent permitted unless it believes that doing so will help the
funds achieve their goals. As a shareholder, you will receive financial
reports every six months detailing fund holdings and describing recent
investment activities.
DEBT SECURITIES. Bonds and other debt instruments are used by issuers to
borrow money from investors. The issuer pays the investor a fixed or
variable rate of interest, and must repay the amount borrowed at maturity.
Some debt securities, such as zero coupon bonds, do not pay current
interest, but are purchased at a discount from their face values. Debt
securities have varying degrees of quality and varying levels of
sensitivity to changes in interest rates. Longer-term bonds are generally
more sensitive to interest rate changes than short-term bonds.
Lower-quality debt securities (sometimes called "municipal junk bonds") may
have speculative characteristics, and involve greater risk of default or
price changes due to changes in the issuer's creditworthiness. The market
prices of these securities may fluctuate more than higher-quality
securities and may decline significantly in periods of general or regional
economic difficulty.
DEBT RATINGS
MOODY'S STANDARD &
POOR'S
INVESTORS SERVICE, INC. CORPORATION
Rating Rating
INVESTMENT GRADE
Highest quality Aaa AAA
High quality Aa AA
Upper-medium grade A A
Medium grade Baa BBB
LOWER QUALITY
Moderately speculative Ba BB
Speculative B B
Highly speculative Caa CCC
Poor quality Ca CC
Lowest quality, no interest C C
In default, in arrears -- D
REFER TO THE FUNDS' STATEMENT OF ADDITIONAL INFORMATION FOR A MORE
COMPLETE DISCUSSION OF THESE RATINGS.
RESTRICTIONS: Spartan Arizona Municipal Income does not currently intend to
invest more than one-third of its assets in non-investment grade debt
securities (investment grade debt securities are those rated Baa or above
by Moody's or BBB by S&P, and unrated securities judegd by FMR to be of
equivalent quality). The fund currently intends to limit its investments in
debt securities to those rated B or above, and unrated securities judged by
FMR to be of equivalent quality.
MUNICIPAL SECURITIES are issued to raise money for a variety of public
purposes, including general financing for state and local governments, or
financing for specific projects or public facilities. Municipal securities
may be issued in anticipation of future revenues, and may be backed by the
full taxing power of a municipality, the revenues from a specific project,
or the credit of a private organization. A security's credit may be
enhanced by a bank, insurance company, or other financial institution. A
fund may own a municipal security directly or through a participation
interest.
STATE TAX-FREE SECURITIES include municipal obligations issued by the state
of Arizona or its counties, municipalities, authorities, or other
subdivisions. The ability of issuers to repay their debt can be affected by
many factors that impact the economic vitality of either the state or a
region within the state.
Other state tax-free securities include general obligations of U.S.
territories and possessions such as Guam, the Virgin Islands, and Puerto
Rico, and their political subdivisions and public corporations. The economy
of Puerto Rico is closely linked to the U.S. economy, and will depend on
the strength of the U.S. dollar, interest rates, the price stability of oil
imports, and the continued existence of favorable tax incentives. Recent
legislation reduced these incentives, but it is impossible to predict what
impact the changes will have.
MUNICIPAL LEASE OBLIGATIONS are used by municipalities to acquire land,
equipment, or facilities. If the municipality stops making payments or
transfers its obligations to a private entity, the obligation could lose
value or become taxable.
PRIVATE ENTITIES may be involved in some municipal securities. For example,
industrial revenue bonds are backed by private entities, and resource
recovery bonds often involve private corporations. The viability of a
project or tax incentives could affect the value and credit quality of
these securities.
ASSET-BACKED SECURITIES may include pools of purchase contracts, financing
leases, or sales agreements entered into by municipalities. These
securities usually rely on continued payments by a municipality, and may
also be subject to prepayment risk.
VARIABLE- AND FLOATING-RATE INSTRUMENTS may have interest rates that move
in tandem with a benchmark, helping to stabilize their prices. Inverse
floaters have interest rates that move in the opposite direction from the
benchmark, making the instrument's market value more volatile.
PUT FEATURES entitle the holder to put (sell back) an instrument to the
issuer or a financial intermediary. In exchange for this benefit, a fund
may pay periodic fees or accept a lower interest rate. Demand features,
standby commitments, and tender options are types of put features.
ADJUSTING INVESTMENT EXPOSURE. A fund can use various techniques to
increase or decrease its exposure to changing security prices, interest
rates, or other factors that affect security values. These techniques may
involve derivative transactions such as buying and selling options and
futures contracts and purchasing indexed securities.
FMR can use these practices to adjust the risk and return characteristics
of a fund's portfolio of investments. If FMR judges market conditions
incorrectly or employs a strategy that does not correlate well with the
fund's investments, these techniques could result in a loss, regardless of
whether the intent was to reduce risk or increase return. These techniques
may increase the volatility of the fund and may involve a small investment
of cash relative to the magnitude of the risk assumed. In addition, these
techniques could result in a loss if the counterparty to the transaction
does not perform as promised.
WHEN-ISSUED AND DELAYED-DELIVERY TRANSACTIONS are trading practices in
which payment and delivery for the securities take place at a future date.
The market value of a security could change during this period, which could
affect a fund's yield or the market value of its assets.
ILLIQUID AND RESTRICTED SECURITIES. Some investments may be determined by
FMR, under the supervision of the Board of Trustees, to be illiquid, which
means that they may be difficult to sell promptly at an acceptable price.
The sale of other securities, including illiquid securities, may be subject
to legal restrictions. Difficulty in selling securities may result in a
loss or may be costly to a fund.
RESTRICTIONS: A fund may not purchase a security if, as a result, more than
10% of its assets would be invested in illiquid securities.
DIVERSIFICATION. Diversifying a fund's investment portfolio can reduce the
risks of investing. This may include limiting the amount of money invested
in any one issuer or, on a broader scale, in any one industry or type of
project. Economic, business, or political changes can affect all securities
of a similar type. A fund that is not diversified may be more sensitive to
these changes, and also to changes in the market value of a single issuer
or industry.
RESTRICTIONS: The funds are considered non-diversified. Generally, to meet
federal tax requirements at the close of each quarter, a fund does not
invest more than 25% of its total assets in any one issuer and, with
respect to 50% of total assets, does not invest more than 5% of its total
assets in any one issuer. These limitations do not apply to U.S. government
securities. A fund may invest more than 25% of its total assets in tax-free
securities that finance similar types of projects.
BORROWING. A fund may borrow from banks or from other funds advised by FMR,
or through reverse repurchase agreements. If a bond fund borrows money, its
share price may be subject to greater fluctuation until the borrowing is
paid off. If the fund makes additional investments while borrowings are
outstanding, this may be considered a form of leverage.
RESTRICTIONS: A fund may borrow for temporary or emergency purposes, but
not in an amount exceeding 33% of its total assets.
FUNDAMENTAL INVESTMENT POLICIES AND RESTRICTIONS
Some of the policies and restrictions discussed on the preceding pages are
fundamental, that is, subject to change only by shareholder approval. The
following paragraphs restate all those that are fundamental. All policies
stated throughout this prospectus, other than those identified in the
following paragraphs, can be changed without shareholder approval.
SPARTAN ARIZONA MUNICIPAL MONEY MARKET seeks as high a level of current
income exempt from federal income tax and Arizona personal income tax, as
is consistent with preservation of capital.
SPARTAN ARIZONA MUNICIPAL INCOME seeks a high level of current income,
exempt from federal income tax and Arizona personal income tax.
EACH FUND normally invests at least 80% of its assets in municipal
securities whose interest is free from federal income tax. Each fund may
borrow for temporary or emergency purposes, but not in an amount exceeding
33% of its total assets.
BREAKDOWN OF EXPENSES
Like all mutual funds, the funds pay fees related to their daily
operations. Expenses paid out of a fund's assets are reflected in its share
price or dividends; they are neither billed directly to shareholders nor
deducted from shareholder accounts.
Each fund pays a MANAGEMENT FEE to FMR for managing its investments and
business affairs. FMR in turn pays fees to an affiliate who provides
assistance with these services for Spartan Arizona Municipal Money Market.
FMR may, from time to time, agree to reimburse the funds for management
fees above a specified limit. FMR retains the ability to be repaid by a
fund if expenses fall below the specified limit prior to the end of the
fiscal year. Reimbursement arrangements, which may be terminated at any
time without notice, can decrease a fund's expenses and boost its
performance.
MANAGEMENT FEE
The management fee is calculated and paid to FMR every month. Each fund
pays a management fee at a fixed annual rate of its average net assets:
.50% for Spartan Arizona Municipal Money Market and .55% for Spartan
Arizona Municipal Income.
FMR HAS A SUB-ADVISORY AGREEMENT with FTX, which has primary responsibility
for providing investment management for Spartan Arizona Municipal Money
Market, while FMR retains responsibility for providing other management
services. FMR pays FTX 50% of its management fee (before expense
reimbursements) for these services.
FSC performs many transaction and accounting functions for the funds. These
services include processing shareholder transactions and calculating each
fund's share price. FMR, and not the funds, pays for these services.
To offset shareholder service costs, FMR or its affiliates also collect the
funds' $5.00 exchange fee, $5.00 account closeout fee, $5.00 fee for wire
purchases and redemptions, and, for Spartan Arizona Municipal Money Market,
the $2.00 checkwriting charge.
Each fund has adopted a Distribution and Service Plan. These plans
recognize that FMR may use its resources, including management fees, to pay
expenses associated with the sale of fund shares. This may include payments
to third parties, such as banks or broker-dealers, that provide shareholder
support services or engage in the sale of the fund's shares. It is
important to note, however, that the funds do not pay FMR any separate fees
for this service.
YOUR ACCOUNT
DOING BUSINESS WITH FIDELITY
Fidelity Investments was established in 1946 to manage one of America's
first mutual funds. Today, Fidelity is the largest mutual fund company in
the country, and is known as an innovative provider of high-quality
financial services to individuals and institutions.
In addition to its mutual fund business, the company operates one of
America's leading discount brokerage firms, Fidelity Brokerage Services,
Inc. (FBSI). Fidelity is also a leader in providing tax-sheltered
retirement plans for individuals investing on their own or through their
employer.
Fidelity is committed to providing investors with practical information to
make investment decisions. Based in Boston, Fidelity provides customers
with complete service 24 hours a day, 365 days a year, through a network of
telephone service centers around the country.
To reach Fidelity for general information, call these numbers:
(bullet) For mutual funds, 1-800-544-8888
(bullet) For brokerage, 1-800-544-7272
If you would prefer to speak with a representative in person, Fidelity has
over __ walk-in Investor Centers across the country.
TYPES OF ACCOUNTS
You may set up an account directly in a fund or, if you own or intend to
purchase individual securities as part of your total investment portfolio,
you may consider investing in a fund through a brokerage account.
If you are investing through FBSI or another financial institution or
investment professional, refer to its program materials for any special
provisions regarding your investment in the fund.
The different ways to set up (register) your account with Fidelity are
listed below.
WAYS TO SET UP YOUR ACCOUNT
INDIVIDUAL OR JOINT TENANT
FOR YOUR GENERAL INVESTMENT NEEDS
Individual accounts are owned by one person. Joint accounts can have two or
more owners (tenants).
GIFTS OR TRANSFERS TO A MINOR (UGMA, UTMA)
TO INVEST FOR A CHILD'S EDUCATION OR OTHER FUTURE NEEDS
These custodial accounts provide a way to give money to a child and obtain
tax benefits. An individual can give up to $10,000 a year per child without
paying federal gift tax. Depending on state laws, you can set up a
custodial account under the Uniform Gifts to Minors Act (UGMA) or the
Uniform Transfers to Minors Act (UTMA).
TRUST
FOR MONEY BEING INVESTED BY A TRUST
The trust must be established before an account can be opened.
BUSINESS OR ORGANIZATION
FOR INVESTMENT NEEDS OF CORPORATIONS, ASSOCIATIONS, PARTNERSHIPS, OR OTHER
GROUPS
Requires a special application.
HOW TO BUY SHARES
EACH FUND'S SHARE PRICE, called net asset value (NAV), is calculated every
business day. Spartan Arizona Municipal Money Market is managed to keep its
share price stable at $1.00. Each fund's shares are sold without a sales
charge.
TO SELL SHARES OF THROUGH YOUR FIDELITY ULTRA SERVICE OR FIDELITYPLUS
ACCOUNT, call 1-800-544-6262 to receive a handbook with instructions.
Shares are purchased at the next share price calculated after your
investment is received and accepted. Share price is normally calculated at
4 p.m. Eastern time.
IF YOU ARE NEW TO FIDELITY, complete and sign an account application and
mail it along with your check. You may also open your account in person or
by wire as described on page . If there is no application accompanying this
prospectus, call 1-800-544-8888.
IF YOU ALREADY HAVE MONEY INVESTED IN A FIDELITY FUND, you can:
(bullet) Mail in an application with a check, or
(bullet) Open your account by exchanging from another Fidelity fund.
If you buy shares by check or Fidelity Money Line(registered trademark),
and then sell those shares by any method other than by exchange to another
Fidelity fund, the payment may be delayed for up to seven business days to
ensure that your previous investment has cleared.
MINIMUM INVESTMENTS
TO OPEN AN ACCOUNT $10,000
for Spartan Arizona Municipal Money $25,000
TO ADD TO AN ACCOUNT $1,000
Through automatic investment plans $500
MINIMUM BALANCE $5,000
For Spartan Arizona Municipal Money $10,000
UNDERSTANDING THE
SPARTAN APPROACH(Registered trademark)
Fidelity's Spartan Approach is
based on the principle that
lower fund expenses can
increase returns. The Spartan
funds keep expenses low in
two ways. First, higher
investment minimums reduce
the effect of a fund's fixed
costs, many of which are paid
on a per-account basis.
Second, unlike most mutual
funds that include transaction
costs as part of overall fund
expenses, Spartan
shareholders pay directly for
the transactions they make.
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TO OPEN AN ACCOUNT TO ADD TO AN ACCOUNT
Phone 1-800-544-777 (phone_graphic) (bullet) Exchange from another (bullet) Exchange from another
Fidelity fund account Fidelity fund account
with the same with the same
registration, including registration, including
name, address, and name, address, and
taxpayer ID number. taxpayer ID number.
(bullet) Use Fidelity Money
Line to transfer from
your bank account. Call
before your first use to
verify that this service
is in place on your
account. Maximum
Money Line: $50,000.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Mail (mail_graphic) (bullet) Complete and sign the (bullet) Make your check
application. Make your payable to the complete
check payable to the name of the fund.
complete name of the Indicate your fund
fund of your choice. account number on
Mail to the address your check and mail to
indicated on the the address printed on
application. your account statement.
(bullet) Exchange by mail: call
1-800-544-6666 for
instructions.
</TABLE>
<TABLE>
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<S> <C> <C>
In Person (hand_graphic) (bullet) Bring your application (bullet) Bring your check to a
and check to a Fidelity Fidelity Investor Center.
Investor Center. Call Call 1-800-544-9797 for
1-800-544-9797 for the the center nearest you.
center nearest you.
</TABLE>
<TABLE>
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Wire (wire_graphic) (bullet) There may be a $5.00 (bullet) There may be a $5.00
fee for each wire fee for each wire
purchase. purchase.
(bullet) Call 1-800-544-7777 to (bullet) Wire to:
set up your account Bankers Trust
and to arrange a wire Company,
transaction. Bank Routing
(bullet) Wire within 24 hours to: #021001033,
Bankers Trust Account #00163053.
Company, Specify the complete
Bank Routing name of the fund and
#021001033, include your account
Account #00163053. number and your
Specify the complete name.
name of the fund and
include your new
account number and
your name.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
Automatically (automatic_graphic) (bullet) Not available. (bullet) Use Fidelity Automatic
Account Builder. Sign
up for this service
when opening your
account, or call
1-800-544-6666 to add
it.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
HOW TO SELL SHARES
You can arrange to take money out of your fund account at any time by
selling (redeeming) some or all of your shares. Your shares will be sold at
the next share price calculated after your order is received and accepted.
Share price is normally calculated at 4 p.m. Eastern time.
IF YOU ARE SELLING SOME BUT NOT ALL OF YOUR SHARES, leave at least $5,000
worth of shares in the account ($10,000 for Spartan Arizona Municipal Money
Market) to keep it open.
TO SELL SHARES BY BANK WIRE OR FIDELITY MONEY LINE, you will need to sign
up for these services in advance.
CERTAIN REQUESTS MUST INCLUDE A SIGNATURE GUARANTEE. It is designed to
protect you and Fidelity from fraud. Your request must be made in writing
and include a signature guarantee if any of the following situations apply:
(bullet) You wish to redeem more than $100,000 worth of shares,
(bullet) Your account registration has changed within the last 30 days,
(bullet) The check is being mailed to a different address than the one on
your account (record address),
(bullet) The check is being made payable to someone other than the account
owner, or
(bullet) The redemption proceeds are being transferred to a Fidelity
account with a different registration.
You should be able to obtain a signature guarantee from a bank, broker
(including Fidelity Investor Centers), dealer, credit union (if authorized
under state law), securities exchange or association, clearing agency, or
savings association. A notary public cannot provide a signature guarantee.
SELLING SHARES IN WRITING
Write a "letter of instruction" with:
(bullet) Your name,
(bullet) The fund's name,
(bullet) Your fund account number,
(bullet) The dollar amount or number of shares to be redeemed, and
(bullet) Any other applicable requirements listed in the table at right.
Unless otherwise instructed, Fidelity will send a check to the record
address. Deliver your letter to a Fidelity Investor Center, or mail it to:
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
CHECKWRITING
If you have a checkbook for your account in Spartan Arizona Municipal Money
Market, you may write an unlimited number of checks. Do not, however, try
to close out your account by check.
ACCOUNT TYPE SPECIAL REQUIREMENTS
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IF YOU SELL SHARES OF SPARTAN ARIZONA INCOME AFTER HOLDING THEM LESS THAN 180 DAYS,
THE FUND WILL DEDUCT A REDEMPTION FEE EQUAL TO .50% OF THE VALUE OF THOSE SHARES. IF
YOUR ACCOUNT BALANCE IS LESS THAN $50,000, THERE ARE FEES FOR INDIVIDUAL REDEMPTION
TRANSACTIONS: $2.00 FOR EACH CHECK YOU WRITE AND $5.00 FOR EACH EXCHANGE, BANK WIRE,
AND ACCOUNT CLOSEOUT.
</TABLE>
<TABLE>
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<S> <C> <C>
Phone 1-800-544-777 (phone_graphic) All account types (bullet) Maximum check request:
$100,000.
(bullet) For Money Line transfers to
your bank account; minimum:
$10; maximum: $100,000.
(bullet) You may exchange to other
Fidelity funds if both
accounts are registered with
the same name(s), address,
and taxpayer ID number.
Mail or in Person (mail_graphic)(hand_graphic) Individual, Joint (bullet) The letter of instruction must
Tenant, be signed by all persons
Sole Proprietorship required to sign for
, UGMA, UTMA transactions, exactly as their
Trust names appear on the
account.
(bullet) The trustee must sign the
letter indicating capacity as
Business or trustee. If the trustee's name
Organization is not in the account
registration, provide a copy of
the trust document certified
within the last 60 days.
(bullet) At least one person
Executor, authorized by corporate
Administrator, resolution to act on the
Conservator, account must sign the letter.
Guardian (bullet) Include a corporate
resolution with corporate seal
or a signature guarantee.
(bullet) Call 1-800-544-6666 for
instructions.
Wire (wire_graphic) All account types (bullet) You must sign up for the wire
feature before using it. To
verify that it is in place, call
1-800-544-6666. Minimum
wire: $5,000.
(bullet) Your wire redemption request
must be received by Fidelity
before 4 p.m. Eastern time
for money to be wired on the
next business day.
</TABLE>
<TABLE>
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<S> <C> <C>
Check (check_graphic) All account types (bullet) Minimum check: $1,000.
(bullet) All account owners must sign
a signature card to receive a
checkbook.
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
(tdd_graphic) TDD - Service for the Deaf and Hearing Impaired: 1-800-544-0118
</TABLE>
INVESTOR SERVICES
Fidelity provides a variety of services to help you manage your account.
INFORMATION SERVICES
FIDELITY'S TELEPHONE REPRESENTATIVES are available 24 hours a day, 365 days
a year. Whenever you call, you can speak with someone equipped to provide
the information or service you need.
24-HOUR SERVICE
ACCOUNT ASSISTANCE
1-800-544-6666
ACCOUNT BALANCES
1-800-544-7544
ACCOUNT TRANSACTIONS
1-800-544-7777
PRODUCT INFORMATION
1-800-544-8888
QUOTES
1-800-544-8544
RETIREMENT ACCOUNT
ASSISTANCE
1-800-544-4774
AUTOMATED SERVICE
(checkmark)
STATEMENTS AND REPORTS that Fidelity sends to you include the following:
(bullet) Confirmation statements (after every transaction, except
reinvestments, that affects your account balance or your account
registration)
(bullet) Account statements (quarterly)
(bullet) Financial reports (every six months)
To reduce expenses, only one copy of most financial reports will be mailed
to your household, even if you have more than one account in the fund. Call
1-800-544-6666 if you need copies of financial reports or historical
account information.
TRANSACTION SERVICES
EXCHANGE PRIVILEGE. You may sell your fund shares and buy shares of other
Fidelity funds by telephone or in writing. There may be a $5.00 fee for
each exchange out of the funds, unless you place your transaction on
Fidelity's automated exchange services.
Note that exchanges out of a fund are limited to four per calendar year,
and that they may have tax consequences for you. For details on policies
and restrictions governing exchanges, including circumstances under which a
shareholder's exchange privilege may be suspended or revoked, see page .
SYSTEMATIC WITHDRAWAL PLANS let you set up periodic redemptions from your
account.
FIDELITY MONEY LINE(Registered trademark) enables you to transfer money by
phone between your bank account and your fund account. Most transfers are
complete within three business days of your call.
REGULAR INVESTMENT PLANS
One easy way to pursue your financial goals is to invest money regularly.
Fidelity offers convenient services that let you transfer money into your
fund account, or between fund accounts, automatically. While regular
investment plans do not guarantee a profit and will not protect you against
loss in a declining market, they can be an excellent way to invest for a
home, educational expenses, and other long-term financial goals.
REGULAR INVESTMENT PLANS
FIDELITY AUTOMATIC ACCOUNT BUILDERSM
TO MOVE MONEY FROM YOUR BANK ACCOUNT TO A FIDELITY FUND
MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 Monthly or (bullet) For a new account, complete the
quarterly appropriate section on the fund
application.
(bullet) For existing accounts, call
1-800-544-6666 for an application.
(bullet) To change the amount or frequency of
your investment, call 1-800-544-6666 at
least three business days prior to your
next scheduled investment date.
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<S> <C> <C>
DIRECT DEPOSIT
TO SEND ALL OR A PORTION OF YOUR PAYCHECK OR GOVERNMENT CHECK TO A FIDELITY FUNDA
</TABLE>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 Every pay (bullet) Check the appropriate box on the fund
period application, or call 1-800-544-6666 for an
authorization form.
(bullet) Changes require a new authorization
form.
<TABLE>
<CAPTION>
<S> <C> <C>
FIDELITY AUTOMATIC EXCHANGE SERVICE
TO MOVE MONEY FROM A FIDELITY MONEY MARKET FUND TO ANOTHER FIDELITY FUND
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C>
MINIMUM FREQUENCY SETTING UP OR CHANGING
$500 Monthly, (bullet) To establish, call 1-800-544-6666 after
bimonthly, both accounts are opened.
quarterly, or (bullet) To change the amount or frequency of
annually your investment, call 1-800-544-6666.
</TABLE>
A BECAUSE BOND FUND SHARE PRICES FLUCTUATE, THAT FUND MAY NOT BE AN
APPROPRIATE CHOICE FOR DIRECT DEPOSIT OF YOUR ENTIRE CHECK.
SHAREHOLDER AND ACCOUNT POLICIES
DIVIDENDS, CAPITAL GAINS, AND TAXES
Each fund distributes substantially all of its net investment income and
capital gains. if any, to shareholders each year. Income dividends are
declared daily and paid monthly. Capital gains earned by the bond fund are
normally distributed in October and December.
DISTRIBUTION OPTIONS
When you open an account, specify on your application how you want to
receive your distributions. If the option you prefer is not listed on the
application, call 1-800-544-6666 for instructions. Each fund offers four
options (three for Spartan Arizona Municipal Money Market):
1. REINVESTMENT OPTION. Your dividend and capital gain distributions, if
any, will be automatically reinvested in additional shares of the fund. If
you do not indicate a choice on your application, you will be assigned this
option.
2. INCOME-EARNED OPTION. Your capital gain distributions, if any, will be
automatically reinvested, but you will be sent a check for each dividend
distribution. This option is not available for Spartan Arizona Municipal
Money Market.
3. CASH OPTION. You will be sent a check for your dividend and capital gain
distributions, if any.
4. DIRECTED DIVIDENDS(Registered trademark) OPTION. Your dividend and
capital gain distributions, if any, will be automatically invested in
another identically registered Fidelity fund.
Dividends will be reinvested at the fund's NAV on the last day of the
month. Capital gain distributions, if any, will be reinvested at the NAV as
of the date the fund deducts the distribution from its NAV. The mailing of
distribution checks will begin within seven days.
UNDERSTANDING
DISTRIBUTIONS
As a fund shareholder, you
are entitled to your share of
the fund's net income and
gains on its investments. The
fund passes its earnings
along to its investors as
DISTRIBUTIONS.
Each fund earns interest from
its investments. These are
passed along as DIVIDEND
DISTRIBUTIONS. The fund may
realize capital gains if it sells
securities for a higher price
than it paid for them. These
are passed along as CAPITAL
GAIN DISTRIBUTIONS. Money
market funds usually don't
make capital gain
distributions.
(checkmark)
TAXES
As with any investment, you should consider how an investment in a tax-free
fund could affect you. Below are some of the funds' tax implications.
TAXES ON DISTRIBUTIONS. Interest income that a fund earns is distributed to
shareholders as income dividends. Interest that is federally tax-free
remains tax-free when it is distributed.
However, gain on the sale of tax-free bonds results in taxable
distributions. Short-term capital gains and a portion of the gain on bonds
purchased at a discount are taxed as dividends. Long-term capital gain
distributions are taxed as long-term capital gains. These distributions are
taxable when they are paid, whether you take them in cash or reinvest them.
However, distributions declared in December and paid in January are taxable
as if they were paid on December 31. Fidelity will send you and the IRS a
statement showing the tax status of the distributions paid to you in the
previous year.
The interest from some municipal securities is subject to the federal
alternative minimum tax. Each fund may invest up to 100% of its assets in
these securities. Individuals who are subject to the tax must report this
interest on their tax returns.
To the extent a fund's income dividends are derived from Arizona state
tax-free investments, they will be free from Arizona state income tax.
TAXES ON TRANSACTIONS. Your bond fund redemptions - including exchanges to
other Fidelity funds - are subject to capital gains tax. A capital gain or
loss is the difference between the cost of your shares and the price you
receive when you sell them.
Whenever you sell shares of a fund, Fidelity will send you a confirmation
statement showing how many shares you sold and at what price. You will also
receive a consolidated transaction statement every January. However, it is
up to you or your tax preparer to determine whether this sale resulted in a
capital gain and, if so, the amount of tax to be paid. Be sure to keep your
regular account statements; the information they contain will be essential
in calculating the amount of your capital gains.
"BUYING A DIVIDEND." If you buy shares just before a fund deducts a capital
gain distribution from its NAV, you will pay the full price for the shares
and then receive a portion of the price back in the form of a taxable
distribution.
TRANSACTION DETAILS
THE FUNDS ARE OPEN FOR BUSINESS each day the New York Stock Exchange (NYSE)
is open. Fidelity normally calculates each fund's NAV as of the close of
business of the NYSE, normally 4 p.m. Eastern time.
EACH FUND'S NAV is the value of a single share. The NAV is computed by
adding the value of the fund's investments, cash, and other assets,
subtracting its liabilities, and then dividing the result by the number of
shares outstanding.
The money market fund values the securities it owns on the basis of
amortized cost. This method minimizes the effect of changes in a security's
market value and helps the fund to maintain a stable $1.00 share price. For
the bond fund, assets are valued primarily on the basis of market
quotations, if available. Since market quotations are often unavailable,
assets are usually valued by a method that the Board of Trustees believes
accurately reflects fair value.
EACH FUND'S OFFERING PRICE (price to buy one share) and REDEMPTION PRICE
(price to sell one share) are its NAV.
WHEN YOU SIGN YOUR ACCOUNT APPLICATION, you will be asked to certify that
your Social Security or taxpayer identification number is correct and that
you are not subject to 31% backup withholding for failing to report income
to the IRS. If you violate IRS regulations, the IRS can require a fund to
withhold 31% of your taxable distributions and redemptions.
YOU MAY INITIATE MANY TRANSACTIONS BY TELEPHONE. Note that Fidelity will
not be responsible for any losses resulting from unauthorized transactions
if it follows reasonable procedures designed to verify the identity of the
caller. Fidelity will request personalized security codes or other
information, and may also record calls. You should verify the accuracy of
your confirmation statements immediately after you receive them. If you do
not want the ability to redeem and exchange by telephone, call Fidelity for
instructions.
IF YOU ARE UNABLE TO REACH FIDELITY BY PHONE (for example, during periods
of unusual market activity), consider placing your order by mail or by
visiting a Fidelity Investor Center.
EACH FUND RESERVES THE RIGHT TO SUSPEND THE OFFERING OF SHARES for a period
of time. Each fund also reserves the right to reject any specific purchase
order, including certain purchases by exchange. See "Exchange Restrictions"
on page . Purchase orders may be refused if, in FMR's opinion, they would
disrupt management of a fund.
WHEN YOU PLACE AN ORDER TO BUY SHARES, your order will be processed at the
next offering price calculated after your order is received and accepted.
Note the following:
(bullet) All of your purchases must be made in U.S. dollars and checks
must be drawn on U.S. banks.
(bullet) Fidelity does not accept cash.
(bullet) When making a purchase with more than one check, each check must
have a value of at least $50.
(bullet) Each fund reserves the right to limit the number of checks
processed at one time.
(bullet) If your check does not clear, your purchase will be cancelled and
you could be liable for any losses or fees a fund or its transfer agent has
incurred.
(bullet) You begin to earn dividends as of the first business day
following the day of your purchase.
TO AVOID THE COLLECTION PERIOD associated with check and Money Line
purchases, consider buying shares by bank wire, U.S. Postal money order,
U.S. Treasury check, Federal Reserve check, or direct deposit instead.
YOU MAY BUY OR SELL SHARES OF THE FUNDS THROUGH A BROKER, who may charge
you a fee for this service. If you invest through a broker or other
institution, read its program materials for any additional service features
or fees that may apply.
CERTAIN FINANCIAL INSTITUTIONS that have entered into sales agreements with
FDC may enter confirmed purchase orders on behalf of customers by phone,
with payment to follow no later than the time when a fund is priced on the
following business day. If payment is not received by that time, the
financial institution could be held liable for resulting fees or losses.
WHEN YOU PLACE AN ORDER TO SELL SHARES, your shares will be sold at the
next NAV calculated after your request is received and accepted. Note the
following:
(bullet) Normally, redemption proceeds will be mailed to you on the next
business day, but if making immediate payment could adversely affect a
fund, it may take up to seven days to pay you.
(bullet) Shares will earn dividends through the date of redemption;
however, shares redeemed on a Friday or prior to a holiday will continue to
earn dividends until the next business day.
(bullet) Fidelity Money Line redemptions generally will be credited to
your bank account on the second or third business day after your phone
call.
(bullet) Each fund may hold payment on redemptions until it is reasonably
satisfied that investments made by check or Fidelity Money Line have been
collected, which can take up to seven business days.
(bullet) Redemptions may be suspended or payment dates postponed when the
NYSE is closed (other than weekends or holidays), when trading on the NYSE
is restricted, or as permitted by the SEC.
(bullet) If you sell shares by writing a check and the amount of the check
is greater than the value of your account, your check will be returned to
you and you may be subject to additional charges.
THE REDEMPTION FEE for Spartan Arizona Municipal Income, if applicable,
will be deducted from the amount of your redemption. This fee is paid to
the fund rather than FMR, and it does not apply to shares that were
acquired through reinvestment of distributions. If shares you are redeeming
were not all held for the same length of time, those shares you held
longest will be redeemed first for purposes of determining whether the fee
applies.
THE FEES FOR INDIVIDUAL TRANSACTIONS are waived if your account balance at
the time of the transaction is $50,000 or more. Otherwise, you should note
the following:
(bullet) The $2.00 checkwriting charge will be deducted from your account.
(bullet) The $5.00 exchange fee will be deducted from the amount of your
exchange.
(bullet) The $5.00 wire fee will be deducted from the amount of your wire.
(bullet) The $5.00 account closeout fee does not apply to exchanges or
wires, but it will apply to checkwriting.
IF YOUR ACCOUNT BALANCE FALLS BELOW $5,000 ($10,000 for Spartan Arizona
Municipal Money Market), you will be given 30 days' notice to reestablish
the minimum balance. If you do not increase your balance, Fidelity reserves
the right to close your account and send the proceeds to you. Your shares
will be redeemed at the NAV on the day your account is closed and the $5.00
account closeout fee will be charged.
FIDELITY MAY CHARGE A FEE FOR SPECIAL SERVICES, such as providing
historical account documents, that are beyond the normal scope of its
services.
EXCHANGE RESTRICTIONS
As a shareholder, you have the privilege of exchanging shares of a fund for
shares of other Fidelity funds. However, you should note the following:
(bullet) The fund you are exchanging into must be registered for sale in
your state.
(bullet) You may only exchange between accounts that are registered in the
same name, address, and taxpayer identification number.
(bullet) Before exchanging into a fund, read its prospectus.
(bullet) If you exchange into a fund with a sales charge, you pay the
percentage-point difference between that fund's sales charge and any sales
charge you have previously paid in connection with the shares you are
exchanging. For example, if you had already paid a sales charge of 2% on
your shares and you exchange them into a fund with a 3% sales charge, you
would pay an additional 1% sales charge.
(bullet) Exchanges may have tax consequences for you.
(bullet) Because excessive trading can hurt fund performance and
shareholders, each fund reserves the right to temporarily or permanently
terminate the exchange privilege of any investor who makes more than four
exchanges out of the fund per calendar year. Accounts under common
ownership or control, including accounts with the same taxpayer
identification number, will be counted together for purposes of the four
exchange limit.
(bullet) Each fund reserves the right to refuse exchange purchases by any
person or group if, in FMR's judgment, the fund would be unable to invest
the money effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
(bullet) Your exchanges may be restricted or refused if a fund receives or
anticipates simultaneous orders affecting significant portions of the
fund's assets. In particular, a pattern of exchanges that coincide with a
"market timing" strategy may be disruptive to a fund.
Although the funds will attempt to give you prior notice whenever they are
reasonably able to do so, they may impose these restrictions at any time.
The funds reserve the right to terminate or modify the exchange privilege
in the future.
OTHER FUNDS MAY HAVE DIFFERENT EXCHANGE RESTRICTIONS, and may impose
administrative fees of up to $7.50 and redemption fees of up to 1.50% on
exchanges. Check each fund's prospectus for details.
From Filler pages
SPARTAN(registered trademark) ARIZONA MUNICIPAL MONEY MARKET PORTFOLIO
A FUND OF FIDELITY UNION STREET TRUST
SPARTAN(registered trademark) ARIZONA MUNICIPAL INCOME PORTFOLIO
A FUND OF FIDELITY UNION STREET TRUST II
STATEMENT OF ADDITIONAL INFORMATION
OCTOBER 7, 1994
This Statement is not a prospectus but should be read in conjunction with
the funds' current Prospectus (dated October 7, 1994). Please retain this
document for future reference. To obtain an additional copy of the
Prospectus, please call Fidelity Distributors Corporation at
1-800-544-8888.
TABLE OF CONTENTS PAGE
Investment Policies and Limitations
Special Factors Affecting Arizona
Special Factors Affecting Puerto Rico
Portfolio Transactions
Valuation of Portfolio Securities
Performance
Additional Purchase and Redemption Information
Distributions and Taxes
FMR
Trustees and Officers
Management Contracts
Distribution and Service Plans
Interest of FMR Affiliates
Description of the Trusts
Appendix
INVESTMENT ADVISER
Fidelity Management & Research Company (FMR)
INVESTMENT SUB-ADVISER (MONEY MARKET FUND ONLY)
FMR Texas Inc. (FMR Texas)
DISTRIBUTOR
Fidelity Distributors Corporation (FDC)
TRANSFER AGENT
United Missouri Bank, N.A. (United Missouri) and Fidelity Service Co. (FSC)
SAZ-ptb-1094
INVESTMENT POLICIES AND LIMITATIONS
The following policies and limitations supplement those set forth in the
Prospectus. Unless otherwise noted, whenever an investment policy or
limitation states a maximum percentage of a fund's assets that may be
invested in any security or other asset, or sets forth a policy regarding
quality standards, such standard or percentage limitation will be
determined immediately after and as a result of the fund's acquisition of
such security or other asset. Accordingly, any subsequent change in values,
net assets, or other circumstances will not be considered when determining
whether the investment complies with the fund's investment policies and
limitations.
A fund's fundamental investment policies and limitations cannot be changed
without approval of a "majority of the outstanding voting securities" (as
defined in the Investment Company Act of 1940 (the 1940 Act)) of the fund.
However, except for the fundamental investment limitations set forth below,
the investment policies and limitations described in this Statement of
Additional Information are not fundamental and may be changed without
shareholder approval.
INVESTMENT LIMITATIONS OF SPARTAN ARIZONA MUNICIPAL MONEY MARKET PORTFOLIO
(MONEY MARKET FUND)
THE FOLLOWING ARE THE MONEY MARKET FUND'S FUNDAMENTAL INVESTMENT
LIMITATIONS SET FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that the
fund may be deemed to be an underwriter within the meaning of the
Securities Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities, or tax-exempt obligations issued or guaranteed by a U.S.
territory or possession or a state or local government, or a political
subdivision of any of the foregoing) if, as a result, more than 25% of the
fund's total assets would be invested in securities of companies whose
principal business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments; or
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(8) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objective, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) To meet federal tax requirements for qualification as a "regulated
investment company," the fund limits its investments so that at the close
of each quarter of its taxable year: (a) with regard to at least 50% of
total assets, no more than 5% of total assets are invested in the
securities of a single issuer, and (b) no more than 25% of total assets are
invested in the securities of a single issuer. Limitations (a) and (b) do
not apply to "Government securities" as defined for federal tax purposes.
(ii) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (2)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(v) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vi) The fund does not currently intend to invest more than 25% of its
total assets in industrial revenue bonds related to a single industry.
(vii) The fund does not currently intend to purchase or sell futures
contracts or call options. This limitation does not apply to options
attached to, or acquired or traded together with, their underlying
securities, and does not apply to securities that incorporate features
similar to options or futures contracts.
(viii) The fund does not currently intend to engage in repurchase
agreements or make loans, but this limitation does not apply to purchases
of debt securities.
(ix) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(x) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objective, policies, and
limitations as the fund.
For purposes of limitations (4) and (i), FMR identifies the issuer of a
security depending on its terms and conditions. In identifying the issuer,
FMR will consider the entity or entities responsible for payment of
interest and repayment of principal and the source of such payments; the
way in which assets and revenues of an issuing political subdivision are
separated from those of other political entities; and whether a
governmental body is guaranteeing the security.
For the money market fund's limitations on quality and maturity, see the
section entitled "Quality and Maturity" on page __.
INVESTMENT LIMITATIONS OF SPARTAN ARIZONA MUNICIPAL INCOME PORTFOLIO
(INCOME FUND)
THE FOLLOWING ARE THE INCOME FUND'S FUNDAMENTAL INVESTMENT LIMITATIONS SET
FORTH IN THEIR ENTIRETY. THE FUND MAY NOT:
(1) issue senior securities, except as permitted under the Investment
Company Act of 1940;
(2) borrow money, except that the fund may borrow money for temporary or
emergency purposes (not for leveraging or investment) in an amount not
exceeding 33 1/3% of its total assets (including the amount borrowed) less
liabilities (other than borrowings). Any borrowings that come to exceed
this amount will be reduced within three days (not including Sundays and
holidays) to the extent necessary to comply with the 33 1/3% limitation;
(3) underwrite securities issued by others, except to the extent that the
fund may be considered an underwriter within the meaning of the Securities
Act of 1933 in the disposition of restricted securities;
(4) purchase the securities of any issuer (other than securities issued or
guaranteed by the U.S. government or any of its agencies or
instrumentalities, or tax-exempt obligations issued or guaranteed by a U.S.
territory or possession or a state or local government, or a political
subdivision of any of the foregoing) if, as a result, more than 25% of the
fund's total assets would be invested in securities of companies whose
principal business activities are in the same industry;
(5) purchase or sell real estate unless acquired as a result of ownership
of securities or other instruments (but this shall not prevent the fund
from investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business);
(6) purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent
the fund from purchasing or selling options and futures contracts or from
investing in securities or other instruments backed by physical
commodities); or
(7) lend any security or make any other loan if, as a result, more than 33
1/3% of its total assets would be lent to other parties, but this
limitation does not apply to purchases of debt securities or to repurchase
agreements.
(8) The fund may, notwithstanding any other fundamental investment policy
or limitation, invest all of its assets in the securities of a single
open-end management investment company with substantially the same
fundamental investment objectives, policies, and limitations as the fund.
THE FOLLOWING INVESTMENT LIMITATIONS ARE NOT FUNDAMENTAL AND MAY BE CHANGED
WITHOUT SHAREHOLDER APPROVAL.
(i) To meet federal tax requirements for qualification as a "regulated
investment company," the fund limits its investments so that at the close
of each quarter of its taxable year: (a) with regard to at least 50% of
total assets, no more than 5% of total assets are invested in the
securities of a single issuer, and (b) no more than 25% of total assets are
invested in the securities of a single issuer. Limitations (a) and (b) do
not apply to "government securities" as defined for federal tax purposes.
(ii) The fund does not currently intend to sell securities short, unless it
owns or has the right to obtain securities equivalent in kind and amount to
the securities sold short, and provided that transactions in futures
contracts and options are not deemed to constitute selling securities
short.
(iii) The fund does not currently intend to purchase securities on margin,
except that the fund may obtain such short-term credits as are necessary
for the clearance of transactions, and provided that margin payments in
connection with futures contracts and options on futures contracts shall
not constitute purchasing securities on margin.
(iv) The fund may borrow money only (a) from a bank or from a registered
investment company or portfolio for which FMR or an affiliate serves as
investment adviser or (b) by engaging in reverse repurchase agreements with
any party (reverse repurchase agreements are treated as borrowings for
purposes of fundamental investment limitation (2)). The fund will not
purchase any security while borrowings representing more than 5% of its
total assets are outstanding. The fund will not borrow from other funds
advised by FMR or its affiliates if total outstanding borrowings
immediately after such borrowing would exceed 15% of the fund's total
assets.
(v) The fund does not currently intend to purchase any security if, as a
result, more than 10% of its net assets would be invested in securities
that are deemed to be illiquid because they are subject to legal or
contractual restrictions on resale or because they cannot be sold or
disposed of in the ordinary course of business at approximately the prices
at which they are valued.
(vi) The fund does not currently intend to invest more than 25% of its
total assets in industrial revenue bonds related to a single industry.
(vii) The fund does not currently intend to engage in repurchase agreements
or make loans, but this limitation does not apply to purchases of debt
securities.
(viii) The fund does not currently intend to (a) purchase securities of
other investment companies, except in the open market where no commission
except the ordinary broker's commission is paid, or (b) purchase or retain
securities issued by other open-end investment companies. Limitations (a)
and (b) do not apply to securities received as dividends, through offers of
exchange, or as a result of a reorganization, consolidation, or merger.
(ix) The fund does not currently intend to invest all of its assets in the
securities of a single open-end management investment company with
substantially the same fundamental investment objectives, policies, and
limitations as the fund.
For purposes of limitations (4) and (i), FMR identifies the issuer of a
security depending on its terms and conditions. In identifying the issuer,
FMR will consider the entity or entities responsible for payment of
interest and repayment of principal and the source of such payments; the
way in which assets and revenues of an issuing political subdivision are
separated from those of other political entities; and whether a
governmental body is guaranteeing the security.
For the income fund's limitations on futures and options transactions, see
the section entitled "Limitations on Futures and Options Transactions"
beginning on page 8.
AFFILIATED BANK TRANSACTIONS. A fund may engage in transactions with
financial institutions that are, or may be considered to be, "affiliated
persons" of the fund under the Investment Company Act of 1940. These
transactions may include repurchase agreements with custodian banks;
short-term obligations of, and repurchase agreements with, the 50 largest
U.S. banks (measured by deposits); municipal securities; U.S. government
securities with affiliated financial institutions that are primary dealers
in these securities; short-term currency transactions; and short-term
borrowings. In accordance with exemptive orders issued by the Securities
and Exchange Commission, the Board of Trustees has established and
periodically reviews procedures applicable to transactions involving
affiliated financial institutions.
QUALITY AND MATURITY (MONEY MARKET FUND ONLY). Pursuant to procedures
adopted by the Board of Trustees, the fund may purchase only high-quality
securities that FMR believes present minimal credit risks. To be considered
high-quality, a security must be a U.S. government security; rated in
accordance with applicable rules in one of the two highest categories for
short-term securities by at least two nationally recognized rating services
(or by one, if only one rating service has rated the security); or, if
unrated, judged to be of equivalent quality by FMR.
The fund currently intends to limit its investments to securities with
remaining maturities of 397 days or less, and to maintain a dollar-weighted
average maturity of 90 days or less.
DELAYED-DELIVERY TRANSACTIONS. Each fund may buy and sell securities on a
delayed-delivery or when-issued basis. These transactions involve a
commitment by a fund to purchase or sell specific securities at a
predetermined price or yield, with payment and delivery taking place after
the customary settlement period for that type of security (and more than
seven days in the future). Typically, no interest accrues to the purchaser
until the security is delivered. The income fund may receive fees for
entering into delayed-delivery transactions.
When purchasing securities on a delayed-delivery basis, each fund assumes
the rights and risks of ownership, including the risk of price and yield
fluctuations. Because a fund is not required to pay for securities until
the delivery date, these risks are in addition to the risks associated with
the fund's other investments. If a fund remains substantially fully
invested at a time when delayed-delivery purchases are outstanding, the
delayed-delivery purchases may result in a form of leverage. When
delayed-delivery purchases are outstanding, the fund will set aside
appropriate liquid assets in a segregated custodial account to cover its
purchase obligations. When a fund has sold a security on a delayed-delivery
basis, the fund does not participate in further gains or losses with
respect to the security. If the other party to a delayed-delivery
transaction fails to deliver or pay for the securities, the fund could miss
a favorable price or yield opportunity, or could suffer a loss.
Each fund may renegotiate delayed-delivery transactions after they are
entered into, and may sell underlying securities before they are delivered,
which may result in capital gains or losses.
REFUNDING CONTRACTS. The income fund may purchase securities on a
when-issued basis in connection with the refinancing of an issuer's
outstanding indebtedness. Refunding contracts require the issuer to sell
and the fund to buy refunded municipal obligations at a stated price and
yield on a settlement date that may be several months or several years in
the future. The fund generally will not be obligated to pay the full
purchase price if it fails to perform under a refunding contract. Instead,
refunding contracts generally provide for payment of liquidated damages to
the issuer (currently 15-20% of the purchase price). The fund may secure
its obligations under a refunding contract by depositing collateral or a
letter of credit equal to the liquidated damages provisions of the
refunding contract. When required by SEC guidelines, the fund will place
liquid assets in a segregated custodial account equal in amount to its
obligations under refunding contracts.
INVERSE FLOATERS. The income fund may invest in inverse floaters, which are
instruments whose interest rates bear an inverse relationship to the
interest rate on another security or the value of an index. Changes in the
interest rate on the other security or index inversely affect the residual
interest rate paid on the inverse floater, with the result that the inverse
floater's price will be considerably more volatile than that of a
fixed-rate bond. For example, a municipal issuer may decide to issue two
variable-rate instruments instead of a single long-term, fixed-rate bond.
The interest rate on one instrument reflects short-term interest rates,
while the interest rate on the other instrument (the inverse floater)
reflects the approximate rate the issuer would have paid on a fixed-rate
bond, multiplied by two, minus the interest rate paid on the short-term
instrument. Depending on market availability, the two portions may be
recombined to form a fixed-rate municipal bond. The market for inverse
floaters is relatively new.
VARIABLE OR FLOATING RATE OBLIGATIONS bear variable or floating interest
rates and carry rights that permit holders to demand payment of the unpaid
principal balance plus accrued interest from the issuers or certain
financial intermediaries. Floating rate instruments have interest rates
that change whenever there is a change in a designated base rate while
variable rate instruments provide for a specified periodic adjustment in
the interest rate. These formulas are designed to result in a market value
for the instrument that approximates its par value.
With respect to the money market fund, a demand instrument with a
conditional demand feature must have received both a short-term and a
long-term high-quality rating or, if unrated, have been determined to be of
comparable quality pursuant to procedures adopted by the Board of Trustees.
A demand instrument with an unconditional demand feature may be acquired
solely in reliance upon a short-term high-quality rating or, if unrated,
upon a finding of comparable short-term quality pursuant to procedures
adopted by the Board of Trustees.
The funds may invest in fixed-rate bonds that are subject to third party
puts and in participation interests in such bonds held in trust or
otherwise. These bonds and participation interests have tender options or
demand features that permit a fund to tender (or put) the bonds to an
institution at periodic intervals and to receive the principal amount
thereof. A fund considers variable rate instruments structured in this way
(Participating VRDOs) to be essentially equivalent to other VRDOs it
purchases. The IRS has not ruled whether the interest on Participating
VRDOs is tax-exempt and, accordingly, a fund intends to purchase these
instruments based on opinions of bond counsel.
The money market fund may invest in variable or floating rate instruments
that ultimately mature in more than 397 days, if the fund acquires a right
to sell the instruments that meets certain requirements set forth in Rule
2a-7. Variable rate instruments (including instruments subject to a demand
feature) that mature in 397 days or less may be deemed to have maturities
equal to the period remaining until the next readjustment of the interest
rate. Other variable rate instruments with demand features may be deemed to
have a maturity equal to the period remaining until the next adjustment of
the interest rate or the period remaining until the principal amount can be
recovered through demand. A floating rate instrument subject to a demand
feature may be deemed to have a maturity equal to the period remaining
until the principal amount can be recovered through demand.
TENDER OPTION BONDS are created by coupling an intermediate- or long-term,
fixed-rate, tax-exempt bond (generally held pursuant to a custodial
arrangement) with a tender agreement that gives the holder the option to
tender the bond at its face value. As consideration for providing the
tender option, the sponsor (usually a bank, broker-dealer, or other
financial institution) receives periodic fees equal to the difference
between the bond's fixed coupon rate and the rate (determined by a
remarketing or similar agent) that would cause the bond, coupled with the
tender option, to trade at par on the date of such determination. After
payment of the tender option fee, a fund effectively holds a demand
obligation that bears interest at the prevailing short-term tax-exempt
rate. Subject to applicable regulatory requirements, the money market fund
may buy tender option bonds if the agreement gives the fund the right to
tender the bond to its sponsor no less frequently than once every 397 days.
In selecting tender option bonds for the funds, FMR will consider the
creditworthiness of the issuer of the underlying bond, the custodian, and
the third party provider of the tender option. In certain instances, a
sponsor may terminate a tender option if, for example, the issuer of the
underlying bond defaults on interest payments.
ZERO COUPON BONDS do not make regular interest payments. Instead, they are
sold at a deep discount from their face value and are redeemed at face
value when they mature. Because zero coupon bonds do not pay current
income, their prices can be very volatile when interest rates change. In
calculating its daily dividend, a fund takes into account as income a
portion of the difference between a zero coupon bond's purchase price and
its face value.
STANDBY COMMITMENTS are puts that entitle holders to same-day settlement at
an exercise price equal to the amortized cost of the underlying security
plus accrued interest, if any, at the time of exercise. Each fund may
acquire standby commitments to enhance the liquidity of portfolio
securities, but, in the case of the money market fund, only when the
issuers of the commitments present minimal risk of default.
Ordinarily a fund will not transfer a standby commitment to a third party,
although it could sell the underlying municipal security to a third party
at any time. A fund may purchase standby commitments separate from or in
conjunction with the purchase of securities subject to such commitments. In
the latter case, the fund would pay a higher price for the securities
acquired, thus reducing their yield to maturity. Standby commitments will
not affect the dollar-weighted average maturity of the money market fund,
or the valuation of the securities underlying the commitments.
Issuers or financial intermediaries may obtain letters of credit or other
guarantees to support their ability to buy securities on demand. FMR may
rely upon its evaluation of a bank's credit in determining whether to
support an instrument supported by a letter of credit. In evaluating a
foreign bank's credit, FMR will consider whether adequate public
information about the bank is available and whether the bank may be subject
to unfavorable political or economic developments, currency controls, or
other governmental restrictions that might affect the bank's ability to
honor its credit commitment.
Standby commitments are subject to certain risks, including the ability of
issuers of standby commitments to pay for securities at the time the
commitments are exercised; the fact that standby commitments are not
marketable by the funds; and the possibility that the maturities of the
underlying securities may be different from those of the commitments.
MUNICIPAL LEASE OBLIGATIONS. Each fund may invest a portion of its assets
in municipal leases and participation interests therein. These obligations,
which may take the form of a lease, an installment purchase, or a
conditional sale contract, are issued by state and local governments and
authorities to acquire land and a wide variety of equipment and facilities.
Generally, the funds will not hold such obligations directly as a lessor of
the property, but will purchase a participation interest in a municipal
obligation from a bank or other third party. A participation interest gives
a fund a specified, undivided interest in the obligation in proportion to
its purchased interest in the total amount of the obligation.
Municipal leases frequently have risks distinct from those associated with
general obligation or revenue bonds. State constitutions and statutes set
forth requirements that states or municipalities must meet to incur debt.
These may include voter referenda, interest rate limits, or public sale
requirements. Leases, installment purchases, or conditional sale contracts
(which normally provide for title to the leased asset to pass to the
governmental issuer) have evolved as a means for governmental issuers to
acquire property and equipment without meeting their constitutional and
statutory requirements for the issuance of debt. Many leases and contracts
include "non-appropriation clauses" providing that the governmental issuer
has no obligation to make future payments under the lease or contract
unless money is appropriated for such purposes by the appropriate
legislative body on a yearly or other periodic basis. Non-appropriation
clauses free the issuer from debt issuance limitations.
FEDERALLY TAXABLE OBLIGATIONS. The funds do not intend to invest in
securities whose interest is federally taxable; however, from time to time,
each fund may invest a portion of its assets on a temporary basis in
fixed-income obligations whose interest is subject to federal income tax.
For example, each fund may invest in obligations whose interest is
federally taxable pending the investment or reinvestment in municipal
securities of proceeds from the sale of its shares or sales of portfolio
securities.
Should a fund invest in federally taxable obligations, it would purchase
securities that in FMR's judgment are of high quality. These would include
obligations issued or guaranteed by the U.S. government or its agencies or
instrumentalities; obligations of domestic banks; and repurchase
agreements. The income fund's standards for high quality, taxable
obligations are essentially the same as those described by Moody's
Investors Service, Inc. (Moody's) in rating corporate obligations within
its two highest ratings of Prime-1 and Prime-2, and those described by
Standard & Poor's Corporation (S&P) in rating corporate obligations
within its two highest ratings of A-1 and A-2. The money market fund will
purchase taxable obligations only if they meet its quality requirements.
Proposals to restrict or eliminate the federal income tax exemption for
interest on municipal obligations are introduced before Congress from time
to time. Proposals also may be introduced before the Arizona legislature
that would affect the state tax treatment of the funds' distributions. If
such proposals were enacted, the availability of municipal obligations and
the value of the funds' holdings would be affected and the Trustees would
reevaluate the funds' investment objectives and policies.
Each fund anticipates being as fully invested as practicable in municipal
securities; however, there may be occasions when, as a result of maturities
of portfolio securities, sales of fund shares, or in order to meet
redemption requests, a fund may hold cash that is not earning income. In
addition, there may be occasions when, in order to raise cash to meet
redemptions, a fund may be required to sell securities at a loss.
REPURCHASE AGREEMENTS. In a repurchase agreement, a fund purchases a
security and simultaneously commits to resell that security to the seller
at an agreed-upon price on an agreed-upon date within a number of days from
the date of purchase. The resale price reflects the purchase price plus an
agreed-upon incremental amount which is unrelated to the coupon rate or
maturity of the purchased security. A repurchase agreement is a taxable
obligation which involves the obligation of the seller to pay the
agreed-upon price, which obligation is in effect secured by the value (at
least equal to the amount of the agreed-upon resale price and marked to
market daily) of the underlying security. Each fund may engage in
repurchase agreements with respect to any security in which it is
authorized to invest even if, with respect to the money market fund, the
underlying security matures in more than 397 days. While it does not
presently appear possible to eliminate all risks from these transactions
(particularly the possibility of a decline in the market value of the
underlying securities, as well as delays and costs to the fund in
connection with bankruptcy proceedings), it is each fund's current policy
to limit repurchase agreements to parties whose creditworthiness has been
reviewed and found satisfactory by FMR.
REVERSE REPURCHASE AGREEMENTS. In a reverse repurchase agreement, a fund
sells a portfolio instrument to another party, such as a bank or
broker-dealer, in return for cash and agrees to repurchase the instrument
at a particular price and time. While a reverse repurchase agreement is
outstanding, the fund will maintain appropriate liquid assets in a
segregated custodial account to cover its obligation under the agreement. A
fund will enter into reverse repurchase agreements only with parties whose
creditworthiness has been found satisfactory by FMR. Such transactions may
increase fluctuations in the market value of a fund's assets and may be
viewed as a form of leverage.
ILLIQUID INVESTMENTS are investments that cannot be sold or disposed of in
the ordinary course of business at approximately the prices at which they
are valued. Under the supervision of the Board of Trustees, FMR determines
the liquidity of a fund's investments and, through reports from FMR, the
Board monitors investments in illiquid instruments. In determining the
liquidity of a fund's investments, FMR may consider various factors,
including (1) the frequency of trades and quotations, (2) the number of
dealers and prospective purchasers in the marketplace, (3) dealer
undertakings to make a market, (4) the nature of the security (including
any demand or tender features), and (5) the nature of the marketplace for
trades (including the ability to assign or offset a fund's rights and
obligations relating to the investment).
FMR may determine some restricted securities and municipal lease
obligations to be illiquid for each fund. Investments currently considered
by the income fund to be illiquid include over-the-counter options.
However, with respect to over-the-counter options the income fund writes,
all or a portion of the value of the underlying instrument may be illiquid
depending on the assets held to cover the option and the nature and terms
of any agreement the fund may have to close out the option before
expiration.
In the absence of market quotations, illiquid investments are valued for
purposes of monitoring amortized cost valuation (money market fund) or
priced (income fund) at fair value as determined in good faith by a
committee appointed by the Board of Trustees. If through a change in
values, net assets, or other circumstances, a fund were in a position where
more than 10% of its net assets were invested in illiquid securities, it
would seek to take appropriate steps to protect liquidity.
RESTRICTED SECURITIES generally can be sold in privately negotiated
transactions, pursuant to an exemption from registration under the
Securities Act of 1933, or in a registered public offering. Where
registration is required, a fund may be obligated to pay all or part of the
registration expense and a considerable period may elapse between the time
it decides to seek registration and the time it may be permitted to sell a
security under an effective registration statement. If, during such a
period, adverse market conditions were to develop, a fund might obtain a
less favorable price than prevailed when it decided to seek registration of
the security. However, in general, the money market fund anticipates
holding restricted securities to maturity or selling them in an exempt
transaction.
INDEXED SECURITIES. The income fund may purchase securities whose prices
are indexed to the prices of other securities, securities indices, or other
financial indicators. Indexed securities typically, but not always, are
debt securities or deposits whose value at maturity or coupon rate is
determined by reference to a specific instrument or statistic. Indexed
securities have principal payments as well as coupon payments that depend
on the performance of one or more interest rates. Their coupon rates or
principal payments may change by several percentage points for every 1%
interest rate change. One example of indexed securities is inverse
floaters.
The performance of indexed securities depends to a great extent on the
performance of the security or other instrument to which they are indexed,
and may also be influenced by interest rate changes. At the same time,
indexed securities are subject to the credit risks associated with the
issuer of the security, and their values may decline substantially if the
issuer's creditworthiness deteriorates. Indexed securities may be more
volatile than the underlying instruments.
LOWER-QUALITY MUNICIPAL SECURITIES. The income fund may invest a portion of
its assets in lower-quality municipal securities as described in the
Prospectus.
While the market for Arizona municipals is considered to be adequate,
adverse publicity and changing investor perceptions may affect the ability
of outside pricing services used by the fund to value its portfolio
securities, and the fund's ability to dispose of lower-quality bonds. The
outside pricing services are monitored by FMR and reported to the Board to
determine whether the services are furnishing prices that accurately
reflect fair value. The impact of changing investor perceptions may be
especially pronounced in markets where municipal securities are thinly
traded.
The fund may choose, at its expense or in conjunction with others, to
pursue litigation or otherwise exercise its rights as a security holder to
seek to protect the interests of security holders if it determines this to
be in the best interest of the fund's shareholders.
INTERFUND BORROWING PROGRAM. Each fund has received permission from the SEC
to lend money to and borrow money from other funds advised by FMR or its
affiliates, but will participate in the interfund borrowing program only as
a borrower. Interfund loans normally will extend overnight, but can have a
maximum duration of seven days. A fund will borrow through the program only
when the costs are equal to or lower than the costs of bank loans. Loans
may be called on one day's notice, and the fund may have to borrow from a
bank at a higher interest rate if an interfund loan is called or not
renewed.
ELECTRIC UTILITIES INDUSTRY. The electric utilities industry has been
experiencing, or may experience in the future, problems, including (a) the
effects of inflation upon construction and operating costs, (b) the
availability and cost of fuel, (c) the availability and cost of capital,
(d) the effects of conservation on energy demand, (e) the effects of
rapidly changing environmental, safety, and licensing requirements, and
other federal, state, and local regulations, (f) timely and sufficient rate
increases, (g) opposition to nuclear power, and (h) increased competition.
HEALTH CARE INDUSTRY. The health care industry is subject to regulatory
action by a number of private and governmental agencies, including federal,
state, and local governmental agencies. A major source of revenues for the
health care industry is payments from the Medicare and Medicaid programs.
As a result, the industry is sensitive to legislative changes and
reductions in governmental spending for such programs. Numerous other
factors may affect the industry, such as general and local economic
conditions; demand for services; expenses (including malpractice insurance
premiums); and competition among health care providers. In the future, the
following elements may adversely affect health care facility operations:
adoption of legislation proposing a national health insurance program;
medical and technological advances which dramatically alter the need for
health services or the way in which such services are delivered; and
efforts by employers, insurers, and governmental agencies to reduce the
costs of health insurance and healthcare services.
HOUSING. Housing revenue bonds are generally issued by a state, county,
city, local housing authority, or other public agency. They are secured by
the revenues derived from mortgages purchased with the proceeds from the
bond issue. It is extremely difficult to predict the supply of available
mortgages to be purchased with the proceeds of an issue or the future cash
flow from the underlying mortgages. Consequently, there are risks that
proceeds will exceed supply, resulting in early retirement of bonds, or
that the homeowner repayments will create an irregular cash flow.
Many factors may affect the financing of multi-family housing projects,
including acceptable completion of construction, proper management,
occupancy and rent levels, economic conditions, and changes to current laws
and regulations.
EDUCATION. In general, there are two types of education-related bonds;
those issued to finance projects for public colleges and universities, and
those representing pooled interests in student loans. Bonds issued to
supply public educational institutions with funds are subject to the risk
of unanticipated revenue decline. Among the factors that may affect
enrollment are restrictions on students' ability to pay tuition,
availability of state and federal funding, and general economic conditions.
Student loan revenue bonds are backed by pools of student loans and are
generally offered by state (or substate) authorities or commissions.
Student loans are guaranteed by state guarantee agencies and reinsured by
the Department of Education. The risks associated with these issues is
that default on the student loans may result in prepayment to bondholders
and an earlier-than-anticipated retirement of the bond.
INVESTMENT POLICIES FOR INCOME FUND ONLY
LIMITATIONS ON FUTURES AND OPTIONS TRANSACTIONS. The fund intends to file a
notice of eligibility for exclusion from the definition of the term
"commodity pool operator" with the Commodity Futures Trading Commission
(CFTC) and the National Futures Association, which regulate trading in the
futures markets before engaging in any purchases or sales of futures
contracts or options on futures contracts. The fund intends to comply with
Rule 4.5 under the Commodity Exchange Act, which limits the extent to which
the fund can commit assets to initial margin deposits and option premiums.
In addition, the fund will not: (a) sell futures contracts, purchase put
options, or write call options if, as a result, more than 25% of the fund's
total assets would be hedged with futures and options under normal
conditions; (b) purchase futures contracts or write put options if, as a
result, the fund's total obligations upon settlement or exercise of
purchased futures contracts and written put options would exceed 25% of its
total assets; or (c) purchase call options if, as a result, the current
value of option premiums for call options purchased by the fund would
exceed 5% of the fund's total assets. These limitations do not apply to
options attached to or acquired or traded together with their underlying
securities, and do not apply to securities that incorporate features
similar to options.
The above limitations on the fund's investments in futures contracts and
options, and the fund's policies regarding futures contracts and options
discussed elsewhere in this Statement of Additional Information, may be
changed as regulatory agencies permit.
FUTURES CONTRACTS. When the fund purchases a futures contract, it agrees to
purchase a specified underlying instrument at a specified future date. When
the fund sells a futures contract, it agrees to sell the underlying
instrument at a specified future date. The price at which the purchase and
sale will take place is fixed when the fund enters into the contract. Some
currently available futures contracts are based on specific securities,
such as U.S. Treasury bonds or notes, and some are based on indices of
securities prices, such as the Bond Buyer Municipal Bond Index. Futures can
be held until their delivery dates, or can be closed out before then if a
liquid secondary market is available.
The value of a futures contract tends to increase and decrease in tandem
with the value of its underlying instrument. Therefore, purchasing futures
contracts will tend to increase the fund's exposure to positive and
negative price fluctuations in the underlying instrument, much as if it had
purchased the underlying instrument directly. When the fund sells a futures
contract, by contrast, the value of its futures position will tend to move
in a direction contrary to the market. Selling futures contracts,
therefore, will tend to offset both positive and negative market price
changes, much as if the underlying instrument had been sold.
FUTURES MARGIN PAYMENTS. The purchaser or seller of a futures contract is
not required to deliver or pay for the underlying instrument unless the
contract is held until the delivery date. However, both the purchaser and
seller are required to deposit "initial margin" with a futures broker,
known as a futures commission merchant (FCM), when the contract is entered
into. Initial margin deposits are typically equal to a percentage of the
contract's value. If the value of either party's position declines, that
party will be required to make additional "variation margin" payments to
settle the change in value on a daily basis. The party that has a gain may
be entitled to receive all or a portion of this amount. Initial and
variation margin payments do not constitute purchasing securities on margin
for purposes of the fund's investment limitations. In the event of the
bankruptcy of an FCM that holds margin on behalf of a fund, the fund may be
entitled to return of margin owed to it only in proportion to the amount
received by the FCM's other customers, potentially resulting in losses to
the fund.
PURCHASING PUT AND CALL OPTIONS. By purchasing a put option, the fund
obtains the right (but not the obligation) to sell the option's underlying
instrument at a fixed strike price. In return for this right, the fund pays
the current market price for the option (known as the option premium).
Options have various types of underlying instruments, including specific
securities, indices of securities prices, and futures contracts. The fund
may terminate its position in a put option it has purchased by allowing it
to expire or by exercising the option. If the option is allowed to expire,
the fund will lose the entire premium it paid. If the fund exercises the
option, it completes the sale of the underlying instrument at the strike
price. The fund may also terminate a put option position by closing it out
in the secondary market at its current price, if a liquid secondary market
exists.
The buyer of a typical put option can expect to realize a gain if security
prices fall substantially. However, if the underlying instrument's price
does not fall enough to offset the cost of purchasing the option, a put
buyer can expect to suffer a loss (limited to the amount of the premium
paid, plus related transaction costs).
The features of call options are essentially the same as those of put
options, except that the purchaser of a call option obtains the right to
purchase, rather than sell, the underlying instrument at the option's
strike price. A call buyer typically attempts to participate in potential
price increases of the underlying instrument with risk limited to the cost
of the option if security prices fall. At the same time, the buyer can
expect to suffer a loss if security prices do not rise sufficiently to
offset the cost of the option.
WRITING PUT AND CALL OPTIONS. When the fund writes a put option, it takes
the opposite side of the transaction from the option's purchaser. In return
for receipt of the premium, the fund assumes the obligation to pay the
strike price for the option's underlying instrument if the other party to
the option chooses to exercise it. When writing an option on a futures
contract, the fund will be required to make margin payments to an FCM as
described above for futures contracts. The fund may seek to terminate its
position in a put option it writes before exercise by closing out the
option in the secondary market at its current price. If the secondary
market is not liquid for a put option the fund has written, however, the
fund must continue to be prepared to pay the strike price while the option
is outstanding, regardless of price changes, and must continue to set aside
assets to cover its position.
If security prices rise, a put writer generally would expect to profit,
although its gain would be limited to the amount of the premium it
received. If security prices remain the same over time, it is likely that
the writer will also profit, because it should be able to close out the
option at a lower price. If security prices fall, the put writer would
expect to suffer a loss. This loss should be less than the loss from
purchasing the underlying instrument directly, however, because the premium
received for writing the option should mitigate the effects of the decline.
Writing a call option obligates the fund to sell or deliver the option's
underlying instrument, in return for the strike price, upon exercise of the
option. The characteristics of writing call options are similar to those of
writing put options, except that writing calls generally is a profitable
strategy if prices remain the same or fall. Through receipt of the option
premium, a call writer mitigates the effects of a price decline. At the
same time, because a call writer must be prepared to deliver the underlying
instrument in return for the strike price, even if its current value is
greater, a call writer gives up some ability to participate in security
price increases.
COMBINED POSITIONS. The fund may purchase and write options in combination
with each other, or in combination with futures or forward contracts, to
adjust the risk and return characteristics of the overall position. For
example, the fund may purchase a put option and write a call option on the
same underlying instrument, in order to construct a combined position whose
risk and return characteristics are similar to selling a futures contract.
Another possible combined position would involve writing a call option at
one strike price and buying a call option at a lower price, in order to
reduce the risk of the written call option in the event of a substantial
price increase. Because combined options positions involve multiple trades,
they result in higher transaction costs and may be more difficult to open
and close out.
CORRELATION OF PRICE CHANGES. Because there are a limited number of types
of exchange-traded options and futures contracts, it is likely that the
standardized contracts available will not match the fund's current or
anticipated investments exactly. The fund may invest in options and futures
contracts based on securities with different issuers, maturities, or other
characteristics from the securities in which it typically invests, which
involves a risk that the options or futures position will not track the
performance of the fund's other investments.
Options and futures prices can also diverge from the prices of their
underlying instruments, even if the underlying instruments match the fund's
investments well. Options and futures prices are affected by such factors
as current and anticipated short-term interest rates, changes in volatility
of the underlying instrument, and the time remaining until expiration of
the contract, which may not affect security prices the same way. Imperfect
correlation may also result from differing levels of demand in the options
and futures markets and the securities markets, from structural differences
in how options and futures and securities are traded, or from imposition of
daily price fluctuation limits or trading halts. The fund may purchase or
sell options and futures contracts with a greater or lesser value than the
securities it wishes to hedge or intends to purchase in order to attempt to
compensate for differences in volatility between the contract and the
securities, although this may not be successful in all cases. If price
changes in the fund's options or futures positions are poorly correlated
with its other investments, the positions may fail to produce anticipated
gains or result in losses that are not offset by gains in other
investments.
LIQUIDITY OF OPTIONS AND FUTURES CONTRACTS. There is no assurance a liquid
secondary market will exist for any particular options or futures contract
at any particular time. Options may have relatively low trading volume and
liquidity if their strike prices are not close to the underlying
instrument's current price. In addition, exchanges may establish daily
price fluctuation limits for options and futures contracts, and may halt
trading if a contract's price moves upward or downward more than the limit
in a given day. On volatile trading days when the price fluctuation limit
is reached or a trading halt is imposed, it may be impossible for the fund
to enter into new positions or close out existing positions. If the
secondary market for a contract is not liquid because of price fluctuation
limits or otherwise, it could prevent prompt liquidation of unfavorable
positions, and potentially could require the fund to continue to hold a
position until delivery or expiration regardless of changes in its value.
As a result, the fund's access to other assets held to cover its options or
futures positions could also be impaired.
OTC OPTIONS. Unlike exchange-traded options, which are standardized with
respect to the underlying instrument, expiration date, contract size and
strike price, the terms of over-the-counter options (options not traded on
exchanges) generally are established through negotiation with the other
party to the option contract. While this type of arrangement allows the
fund greater flexibility to tailor an option to their needs, OTC options
generally involve greater credit risk than exchange-traded options, which
are guaranteed by the clearing organization of the exchanges where they are
traded.
ASSET COVERAGE FOR FUTURES AND OPTIONS POSITIONS. The fund will comply with
guidelines established by the Securities and Exchange Commission with
respect to coverage of options and futures strategies by mutual funds, and
if the guidelines so require will set aside appropriate liquid assets in a
segregated custodial account in the amount prescribed. Securities held in a
segregated account cannot be sold while the futures or option strategy is
outstanding, unless they are replaced with other suitable assets. As a
result, there is a possibility that segregation of a large percentage of
the fund's assets could impede portfolio management or the fund's ability
to meet redemption requests or other current obligations.
SPECIAL FACTORS AFFECTING ARIZONA
Certain Arizona constitutional amendments, legislative measures, executive
orders, administrative regulations, and voter initiatives, as discussed
below, could adversely affect the market values and marketability of, or
result in default of, existing obligations, including obligations that may
be held by the funds. Obligations of the state or local governments may
also be affected by budgetary pressures affecting the State and economic
conditions in the State. The following highlights only some of the more
significant financial trends, and is based on information drawn from
official statements and prospectuses relating to securities offerings of or
on behalf of the State of Arizona, its agencies, instrumentalities and
political subdivisions, and other publicly available documents, as
available on the date of this Statement of Additional Information. FMR has
not independently verified any of the information contained in such
official statements and other publicly available documents, but is not
aware of any fact which would render such information inaccurate.
CONSTITUTIONAL LIMITATIONS ON TAXES,
EXPENDITURES AND REVENUE INCREASES
LIMITATIONS ON TAXES. Certain obligations held by the funds may be
obligations of issuers that rely in whole or in part, directly or
indirectly, on ad valorem property taxes as a source of revenue. The
taxing powers of Arizona local governments and districts are limited by
Arizona Law. Arizona's property tax system was substantially revised by
1980 amendments to the Arizona Constitution and implementing legislation.
There are two separate tax systems: a Primary system for taxes levied to
pay current operation and maintenance expenses; and a Secondary system for
taxes levied to pay principal and interest on bonded indebtedness, special
district assessments and tax overrides. There are specific provisions under
each system governing property value, the basis of assessment and maximum
annual tax levies.
Under the Primary system, property value is the basis for determining
primary property taxes of locally assessed real property and may increase
by more than 10% per year only under certain circumstances. Under the
Secondary system, there is no limitation on annual increases in full cash
value of any property.
Under the Primary system, annual tax levies are limited based on the nature
of the property being taxed, and the nature of the taxing authority. Taxes
levied for Primary purposes on residential property only are limited to 1%
of the full cash value of such property. In addition, taxes levied for
Primary purposes on all types of property by counties, cities, towns and
community college districts are limited to a maximum increase of 2% over
the prior year's levy, plus any amount directly attributable to new
construction and annexation and involuntary tort judgments. The 2%
limitation does not apply to taxes levied for Primary purposes on behalf of
local school districts. Annual tax levies for bonded indebtedness and
special district assessments are unlimited under the secondary system.
EXPENDITURES LIMITS. Provisions of the Arizona Constitution and Arizona
legislation limit increases in annual expenditures by counties, cities and
towns and community college districts and school districts to an amount
determined by the Arizona Economic Estimates Commission. This limitation
is based on the entity's actual expenditures for fiscal year 1979-80, with
this base adjusted annually to reflect changes in population, cost of
living and boundaries.
LIMITATIONS ON REVENUE INCREASES. In November of 1992 an amendment to the
Constitution of Arizona was approved by the voters and signed by the
Governor. The amendment states that any legislation that provides for a
net increase in State revenues will be effective only on the affirmative
vote of two-thirds of the members of each house of the State Legislature,
and Gubernatorial approval. If the Governor vetoes the measure, then the
legislation shall not become effective unless the legislation is approved
by an affirmative vote of three-fourths of the members of each house. The
constitutional amendment does not apply to the effects of inflation,
increasing assessed valuation or any other similar effect that increases
State revenue but which is not caused by an affirmative act of the
Legislature.
The enacted fiscal year 1993-94 and 1994-95 budgets did not provide for any
increases in State revenues that required an approval from two-thirds of
the State Legislature.
OBLIGATIONS OF THE STATE OF ARIZONA
Under the Arizona Constitution, the State's power to contract debt is
limited to an amount of not more than $350,000 to supply casual deficits or
failures in revenues or to meet expenses not otherwise provided for. In
addition to that authority, the State may borrow money to repel invasion,
suppress insurrection or defend the State in time of war.
Certain State agencies and instrumentalities may issue debt secured by
limited special revenue sources. Additionally, obligations such as
lease-purchase agreements and Certificates of Participation that are
subject to annual appropriation are not debt within the meaning of
Arizona's constitutional and statutory limitations. As of June 30, 1993,
various State agencies, boards, departments and instrumentalities
(including the Department of Transportation and State educational
institutions) had approximately $2.087 billion of bonded indebtedness.
Certificates of Participation of State agencies and instrumentalities
outstanding at June 30, 1993 totalled approximately $411.4 million.
ECONOMY
Arizona has been, and is projected to continue to be, one of the fastest
growing areas in the United States. Over the last several decades the
State has outpaced most other states in virtually every major category of
growth, including population, personal income, gross state product and job
creation. From 1981 to 1992, the State's population grew 31.13% and is
currently estimated to be 4 million.
Geographically, Arizona is the nation's sixth largest state. The State is
divided into fifteen counties. Two of these counties, Maricopa County
(including Phoenix) and Pima County (including Tucson), are more urban in
nature and account for approximately 76% of total population and 82% of
total wage and salary employment in Arizona. Significant job growth has
occurred in the areas of aerospace and high technology, construction,
finance, insurance and real estate. Major employers include Motorola,
Allied Signal, the State and Honeywell.
RECENT STATE FINANCIAL RESULTS
REVENUES AND EXPENDITURES. For fiscal year 1993, sales and use taxes and
other excise taxes accounted for approximately 46% of general fund
revenues, while income taxes represented approximately 38%, property taxes
provided approximately 6%, and other taxes represented approximately 10%.
For the fiscal year ended June 30, 1993, actual State revenues exceeded
budgeted revenues by more than 5%, while actual expenditures were
approximately 1% higher than budgeted expenditures, resulting in a fund
balance of approximately $86 million at year end.
Total general fund revenues increased 10.8% from $3.40 billion for the
fiscal year ended June 30, 1992 to $3.77 billion for the fiscal year ended
June 30, 1993. During the same period, the portion of general fund
revenues derived from taxes increased 10.0%.
For the fiscal year ended June 30, 1993, total general fund expenditures
were $3.7 billion. These expenditures fell into the following major
categories: education (approximately 54%), health and welfare
(approximately 29%), protection and safety (approximately 9%), general
government (approximately 6%) and inspection and regulation, natural
resources and transportation (approximately 2%).
CHANGE IN ACCOUNTING POLICY. The State's financial statements are
currently prepared on a cash basis; however, the State is in the process of
implementing an accrual basis reporting system, which is required to
conform with generally accepted accounting principles ("GAAP"). It is
anticipated that the State will begin accrual basis reporting, in addition
to cash basis reporting, during fiscal year 1994.
1993-94 BUDGET. As of April 1, 1994, the State's general fund revenues for
fiscal year 1993-94 were projected at $3.75 billion, which is 3.0% more
than budgeted general fund revenues for fiscal year 1992-93 and 0.5% less
than the actual general fund revenues collected for fiscal year 1992-93.
Total general fund expenditures for fiscal year 1993-94 were budgeted at
$3.8 billion, which is a 1.0% increase over budgeted general fund
expenditures for fiscal year 1992-93 and a 2.6% increase over the actual
total general fund expenditures for fiscal year 1992-93. This would result
in a budgeted fund balance of approximately $80 million at the 1993-94
fiscal year end.
SPENDING DECREASES. State legislation enacted in connection with the 1994
budget is expected to cut spending in the following areas: $94 million in
Education, $52 million in the Arizona Health Care Cost Containment System
(AHCCCS), the State's indigent health care program, and $29 million in
reduced contributions into the Arizona State Retirement System.
REVENUE DECREASES. The State enacted a series of tax reductions, increases
in income tax exemptions and deductions that are estimated to reduce
revenue by a total of $18.7 million.
CERTAIN LITIGATION. Based on a recent U.S. Supreme Court ruling, the State
has determined to refund $197 million, including statutory interest, in
State income taxes previously collected on Federal retirees pensions. This
payment will be made over a four-year period beginning with approximately
$14.6 million in tax refunds in fiscal year 1993-94.
OBLIGATIONS OF OTHER ISSUERS
ASSESSMENT BONDS. Municipal obligations which are assessment bonds or
community facilities district bonds may be adversely affected by a general
decline in real estate values or a slowdown in real estate sales activity.
In many cases, such bonds are secured by land which is undeveloped at the
time of issuance but anticipated to be developed within a few years after
issuance. In the event of such reduction or slowdown, such development may
not occur or may be delayed, thereby increasing the risk of a default on
the bonds. The lien on the property is the only security for such bonds.
LEASE-PURCHASE OBLIGATIONS. Certain Arizona lease-purchase obligations,
though payable from the general fund of the municipality, are subject to
annual appropriation by the governing body of the municipality in amounts
sufficient to pay the lease. Nonappropriation is legally not a default and
there may be no adequate remedies available to the holders of the
certificates evidencing the lease obligation in the event nonappropriation
occurs.
OTHER CONSIDERATIONS. The repayment of mortgage revenue bonds or other
obligations secured by real property may be affected by laws limiting
creditors' rights and subject to the exercise of judicial discretion.
Health care and hospital securities may be affected by changes in State
regulations governing cost reimbursements to health care providers under
AHCCCS (the State's indigent health care program).
In recent years many cities, towns and counties have experienced declines
or slowing growth in the Secondary assessed valuation, causing a reduction
or slower growth in property tax receipts and putting pressure on local
budgets and capital improvement projects supported by such receipts.
Municipalities are responding to these developments by a variety of methods
including increasing the Secondary property tax rate, deferring property
tax-supported bond projects and using other revenue sources to fund
projects.
Legislation has been or may be introduced which would modify existing taxes
or other revenue-raising measures. It is not presently possible to predict
the extent to which any such legislation will be enacted, or if enacted,
how it would affect Arizona municipal obligations.
SPECIAL FACTORS AFFECTING PUERTO RICO
The following only highlights some of the more significant financial trends
and problems affecting the Commonwealth of Puerto Rico (the "Commonwealth"
or "Puerto Rico"), and is based on information drawn from official
statements and prospectuses relating to the securities offerings of Puerto
Rico, its agencies and instrumentalities, as available on the date of this
Statement of Additional Information. FMR has not independently verified any
of the information contained in such official statements, prospectuses and
other publicly available documents, but is not aware of any fact which
would render such information materially inaccurate.
The economy of Puerto Rico is closely linked with that of the United
States, and in fiscal 1992 trade with the United States accounted for
approximately 88% of Puerto Rico's exports and approximately 68% of its
imports. In this regard, in fiscal 1992 Puerto Rico experienced a
$2,940,300,000 positive adjusted merchandise trade balance. Since fiscal
1987 personal income, both aggregate and per capita, have increased
consistently each fiscal year. In fiscal 1992 aggregate personal income was
$22.7 billion and personal per capita income was $6,360. Gross domestic
product in fiscal 1989, 1990, 1991 and 1992 was $19,954,000, $21,619,000,
22,857,000, and $23,620,000, respectively. For fiscal 1993, an increase in
gross domestic product of 2.9% over fiscal 1992 is forecasted. However,
actual growth in the Puerto Rico economy will depend on several factors
including the condition of the U.S. economy, the exchange rate for the U.S.
dollar, the price stability of oil imports, and interest rates. Due to
these factors there is no assurance that the economy of Puerto Rico will
continue to grow.
Puerto Rico has made marked improvements in fighting unemployment.
Unemployment is at a low level compared to that of the late 1970s, but it
still remains significantly above the United States average. Despite long
term improvements the unemployment rate rose from 15.2% to 16.5% from
fiscal 1991 to fiscal 1992. At the end of the third quarter of fiscal 1993
the unemployment rate in Puerto Rico stood at 17.3%. There is a possibility
that the unemployment rate will continue to increase.
The economy of Puerto Rico has undergone a transformation in the later half
of this century from one centered around agriculture, to one dominated by
the manufacturing and service industries. Manufacturing is the cornerstone
of Puerto Rico's economy, accounting for $13.2 billion or 38.7% of gross
domestic product in 1992. However, manufacturing has experienced a basic
change over the years as a result of the influx of higher wage, high
technology industries such as the pharmaceutical industry, electronics,
computers, micro-processors, scientific instruments and high technology
machinery. The service sector, which includes wholesale and retail trade,
finance and real estate, ranks second in its contribution to gross domestic
product and is the sector that employs the greatest number of people. In
fiscal 1992, the service sector generated $13.0 billion in gross domestic
product or 38.3% of the total and employed over 449,000 workers providing
46% of total employment. The government sector and tourism also contribute
to the island economy each accounting for $3.7 billion and $1.5 billion in
fiscal 1992, respectively.
Much of the development of the manufacturing sector of the economy of
Puerto Rico is attributable to federal and Commonwealth tax incentives,
most notably section 936 of the Internal Revenue Code of 1986, as amended
("Section 936") and the Commonwealth's Industrial Incentives Program.
Section 936 currently grants U.S. corporations that meet certain criteria
and elect its application a credit against their U.S. corporate income tax
on the portion of the tax attributable to (i) income derived from the
active conduct of a trade or business in Puerto Rico ("active income"), or
from the sale or exchange of substantially all the assets used in the
active conduct of such trade or business, and (ii) qualified possession
source investment income ("passive income"). The Industrial Incentives
Program, through the 1987 Industrial Incentives Act, grants corporations
engaged in certain qualified activities a fixed 90% exemption from
Commonwealth income and property taxes and a 60% exemption from municipal
license taxes.
On August 16, 1993, President Clinton signed a bill amending Section 936.
Under the amendments, U.S. corporations with operations in Puerto Rico can
elect to receive a federal income tax credit equal to: 40% of the credit
currently available, phased in over a five year period, starting at 60% of
the current credit, or a credit based on investment and wages. The
investment and wage credit would equal the sum of (i) 60% of qualified
compensation to employees, (ii) a specified percentage of depreciation
deductions with respect to tangible property located in Puerto Rico, and
(iii) a portion of income taxed paid to Puerto Rico, up to a 9% effective
tax rate, subject to certain requirements. It is not possible to determine
at this time whether the reductions in tax incentives for operations in
Puerto Rico will have a significant impact on the economy of Puerto Rico or
the time period in which such impact would arise.
PORTFOLIO TRANSACTIONS
All orders for the purchase or sale of portfolio securities are placed on
behalf of the funds by FMR (either directly or through affiliated
sub-advisers) pursuant to authority contained in the management contracts.
With respect to the money market fund, since FMR has granted investment
management authority to the sub-adviser (see the section entitled
"Management Contracts"), the sub-adviser is authorized to place orders for
the purchase and sale of portfolio securities, and will do so in accordance
with the policies described below. FMR is also responsible for the
placement of transaction orders for other investment companies and accounts
for which it or its affiliates act as investment adviser. Securities
purchased and sold by the money market fund generally will be traded on a
net basis (i.e., without commission). In selecting broker-dealers, subject
to applicable limitations of the federal securities laws, FMR will consider
various relevant factors, including, but not limited to, the size and type
of the transaction; the nature and character of the markets for the
security to be purchased or sold; the execution efficiency, settlement
capability, and financial condition of the broker-dealer firm; the
broker-dealer's execution services rendered on a continuing basis; and the
reasonableness of any commissions.
The funds may execute portfolio transactions with broker-dealers who
provide research and execution services to the funds or other accounts over
which FMR or its affiliates exercise investment discretion. Such services
may include advice concerning the value of securities; the advisability of
investing in, purchasing, or selling securities; the availability of
securities or the purchasers or sellers of securities; furnishing analyses
and reports concerning issuers, industries, securities, economic factors
and trends, portfolio strategy, and performance of accounts; and effecting
securities transactions and performing functions incidental thereto (such
as clearance and settlement). FMR maintains a listing of broker-dealers who
provide such services on a regular basis. However, as many transactions on
behalf of the money market fund are placed with broker-dealers (including
broker-dealers on the list) without regard to the furnishing of such
services, it is not possible to estimate the proportion of such
transactions directed to such broker-dealers solely because such services
were provided. The selection of such broker-dealers is generally made by
FMR (to the extent possible consistent with execution considerations) based
upon the quality of research and execution services provided.
The receipt of research from broker-dealers that execute transactions on
behalf of the funds may be useful to FMR in rendering investment management
services to the funds or its other clients, and, conversely, such research
provided by broker-dealers who have executed transaction orders on behalf
of other FMR clients may be useful to FMR in carrying out its obligations
to the funds. The receipt of such research has not reduced FMR's normal
independent research activities; however, it enables FMR to avoid the
additional expenses that could be incurred if FMR tried to develop
comparable information through its own efforts.
Subject to applicable limitations of the federal securities laws,
broker-dealers may receive commissions for agency transactions that are in
excess of the amount of commissions charged by other broker-dealers in
recognition of their research and execution services. In order to cause a
fund to pay such higher commissions, FMR must determine in good faith that
such commissions are reasonable in relation to the value of the brokerage
and research services provided by such executing broker-dealers, viewed in
terms of a particular transaction or FMR's overall responsibilities to the
funds and its other clients. In reaching this determination, FMR will not
attempt to place a specific dollar value on the brokerage and research
services provided, or to determine what portion of the compensation should
be related to those services.
FMR is authorized to use research services provided by and to place
portfolio transactions with brokerage firms that have provided assistance
in the distribution of shares of the funds or shares of other Fidelity
funds to the extent permitted by law. FMR may use research services
provided by and place agency transactions with Fidelity Brokerage Services,
Inc. (FBSI), a subsidiary of FMR Corp., if the commissions are fair,
reasonable, and comparable to commissions charged by non-affiliated,
qualified brokerage firms for similar services.
Section 11(a) of the Securities Exchange Act of 1934 prohibits members of
national securities exchanges from executing exchange transactions for
accounts which they or their affiliates manage, except if certain
requirements are satisfied. Pursuant to such requirements, the Board of
Trustees has authorized FBSI to execute fund portfolio transactions on
national securities exchanges in accordance with approved procedures and
applicable SEC rules.
Each fund's Trustees periodically review FMR's performance of its
responsibilities in connection with the placement of portfolio transactions
on behalf of the fund and review the commissions paid by each fund over
representative periods of time to determine if they are reasonable in
relation to the benefits to the fund.
From time to time the Trustees will review whether the recapture for the
benefit of the funds of some portion of the brokerage commissions or
similar fees paid by the funds on portfolio transactions is legally
permissible and advisable. Each fund seeks to recapture soliciting
broker-dealer fees on the tender of portfolio securities, but at present no
other recapture arrangements are in effect. The Trustees intend to continue
to review whether recapture opportunities are available and are legally
permissible and, if so, to determine in the exercise of their business
judgment whether it would be advisable for each fund to seek such
recapture.
Although the Trustees and officers of the funds are substantially the same
as those of other funds managed by FMR, investment decisions for each fund
are made independently from those of other funds managed by FMR or accounts
managed by FMR affiliates. It sometimes happens that the same security is
held in the portfolio of more than one of these funds or accounts.
Simultaneous transactions are inevitable when several funds and accounts
are managed by the same investment adviser, particularly when the same
security is suitable for the investment objective of more than one fund or
account.
When two or more funds are simultaneously engaged in the purchase or sale
of the same security, the prices and amounts are allocated in accordance
with a formula considered by the officers of the funds involved to be
equitable to each fund. In some cases, this system could have a detrimental
effect on the price or value of the security as far as each fund is
concerned. In other cases, however, the ability of the funds to participate
in volume transactions will produce better executions and prices for the
funds. It is the current opinion of the Board of Trustees that the
desirability of retaining FMR as investment adviser to each fund outweighs
any disadvantages that may be said to exist from exposure to simultaneous
transactions.
VALUATION OF PORTFOLIO SECURITIES
INCOME FUND. Valuations of portfolio securities furnished by the pricing
service employed by the fund are based upon a computerized matrix system or
appraisals by the pricing service, in each case in reliance upon
information concerning market transactions and quotations from recognized
municipal securities dealers. The methods used by the pricing service and
the quality of valuations so established are reviewed by officers of the
fund and FSC under the general supervision of the Board of Trustees. There
are a number of pricing services available, and the Trustees, or officers
acting on behalf of the Trustees, on the basis of on-going evaluation of
these services, may use other pricing services or discontinue the use of
any pricing service in whole or in part.
MONEY MARKET FUND. The money market fund values its investments on the
basis of amortized cost. This technique involves valuing an instrument at
its cost as adjusted for amortization of premium or accretion of discount
rather than its value based on current market quotations or appropriate
substitutes which reflect current market conditions. The amortized cost
value of an instrument may be higher or lower than the price the fund would
receive if it sold the instrument.
Valuing the money market fund's instruments on the basis of amortized cost
and use of the term "money market fund" are permitted by Rule 2a-7 under
the 1940 Act. The fund must adhere to certain conditions under Rule 2a-7.
The Board of Trustees of the fund oversees FMR's adherence to SEC rules
concerning money market funds, and has established procedures designed to
stabilize the fund's NAV at $1.00. At such intervals as they deem
appropriate, the Trustees consider the extent to which NAV calculated by
using market valuations would deviate from $1.00 per share. If the Trustees
believe that a deviation from the fund's amortized cost per share may
result in material dilution or other unfair results to shareholders, the
Trustees have agreed to take such corrective action, if any, as they deem
appropriate to eliminate or reduce, to the extent reasonably practicable,
the dilution or unfair results. Such corrective action could include
selling portfolio instruments prior to maturity to realize capital gains or
losses or to shorten average portfolio maturity; withholding dividends;
redeeming shares in kind; establishing NAV by using available market
quotations; and such other measures as the Trustees may deem appropriate.
During periods of declining interest rates, the money market fund's yield
based on amortized cost may be higher than the yield based on market
valuations. Under these circumstances, a shareholder in the fund would be
able to obtain a somewhat higher yield than would result if the fund
utilized market valuations to determine its NAV. The converse would apply
in a period of rising interest rates.
PERFORMANCE
The funds may quote performance in various ways. All performance
information supplied by the funds in advertising is historical and is not
intended to indicate future returns. The income fund's share price, and
each fund's yields and total returns fluctuate in response to market
conditions and other factors, and the value of the income fund's shares
when redeemed may be more or less than their original cost.
YIELD CALCULATIONS. To compute the money market fund's yield for a period,
the net change in value of a hypothetical account containing one share
reflects the value of additional shares purchased with dividends from the
one original share and dividends declared on both the original share and
any additional shares. The net change is then divided by the value of the
account at the beginning of the period to obtain a base period return. This
base period return is annualized to obtain a current annualized yield. The
money market fund also may calculate a compound effective yield by
compounding the base period return over a one-year period. In addition to
the current yield, the money market fund may quote yields in advertising
based on any historical seven-day period. Yields for the money market fund
are calculated on the same basis as other money market funds, as required
by regulation.
For the income fund, yields used in advertising are computed by dividing
the fund's interest income for a given 30-day or one-month period, net of
expenses, by the average number of shares entitled to receive dividends
during the period, dividing this figure by the fund's net asset value per
share at the end of the period, and annualizing the result (assuming
compounding of income) in order to arrive at an annual percentage rate.
Yields do not reflect the fund's .50% redemption fee, which applies to
shares held less than 180 days. Income is calculated for purposes of the
fund's yield quotations in accordance with standardized methods applicable
to all stock and bond funds. In general, interest income is reduced with
respect to bonds trading at a premium over their par value by subtracting a
portion of the premium from income on a daily basis, and is increased with
respect to bonds trading at a discount by adding a portion of the discount
to daily income. Capital gains and losses generally are excluded from the
calculation.
Income calculated for the purposes of calculating the income fund's yield
differs from income as determined for other accounting purposes. Because of
the different accounting methods used, and because of the compounding of
income assumed in yield calculations, the income fund's yield may not equal
its distribution rate, the income paid to your account, or the income
reported in the fund's financial statements.
A fund's tax-equivalent yield is the rate an investor would have to earn
from a fully taxable investment after taxes to equal the fund's tax-free
yield. Tax-equivalent yields are calculated by dividing a fund's yield by
the result of one minus a stated federal or combined federal and state tax
rate. If only a portion of the fund's yield is tax-exempt, only that
portion is adjusted in the calculation.
The following tables show the effect of a shareholder's tax status on the
effective yield under federal and state income tax laws for 1994. They show
the approximate yield a taxable security must provide at various income
brackets to produce after-tax yields equivalent to those of tax-exempt
obligations yielding from 2% to 7%. Of course, no assurance can be given
that the funds will achieve any specific tax-exempt yield. While the funds
invest principally in obligations whose interest is exempt from federal and
state income tax, other income received by the funds may be taxable. The
funds do not take into account local taxes, if any, payable on fund
distributions.
Use the first table to find your approximate effective tax bracket taking
into account federal and state taxes for 1994.
1994 TAX RATES
Federal State Combined Arizona
Taxable Income* Income Tax Marginal and Federal Effective
Single Return Joint Return Bracket Rate Bracket**
$0-10,000 $0-20,000 15.0% 3.25% 17.76%
10,001-22,750 20,001-38,000 15.0 4.00 18.40
22,751-25,000 38,001-50,000 28.0 4.00 30.88
25,001-50,000 50,001-91,850 28.0 5.05 31.64
50,001-55,100 - 28.0 6.40 32.61
- 91,851-100,000 31.0 5.05 34.48
55,101-115,000 100,001-140,000 31.0 6.40 35.42
115,001-150,000 140,001-250,000 36.0 6.40 40.10
150,001-250,000 - 39.6 6.90 40.42
- 250,001-300,000 39.6 6.40 43.47
250,001+ 300,001+ 39.6 6.90 43.77
* Net amount subject to federal income tax after deductions and
exemptions. Assumes ordinary income only.
** Excludes the impact of the phaseout of personal exemptions, limitations
on itemized deductions, and other credits, exclusions, and adjustments
which may increase a taxpayer's marginal tax rate. An increase in a
shareholder's marginal tax rate would increase that shareholder's
tax-equivalent yield.
Having determined your effective tax bracket, use the following table to
determine the tax-equivalent yield for a given tax-free yield.
If your effective combined federal and state personal tax rate in 1994 is:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
30.88% 31.64% 32.61% 34.48% 35.42% 40.10% 40.42% 43.47% 43.77%
</TABLE>
To Match
These Tax-Free
Yields Your taxable investment would have to earn the following yield:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2% 2.89% 2.93% 2.97% 3.05% 3.10% 3.34% 3.36% 3.54% 3.56%
3% 4.34% 4.39% 4.45% 4.58% 4.65% 5.01% 5.04% 5.31% 5.34%
4% 5.79% 5.85% 5.94% 6.11% 6.19% 6.68% 6.71% 7.08% 7.11%
5% 7.23% 7.31% 7.42% 7.63% 7.74% 8.35% 8.39% 8.84% 8.89%
6% 8.68% 8.78% 8.90% 9.16% 9.29% 10.02% 10.07% 10.61% 10.67%
7% 10.13% 10.24% 10.39% 10.68% 10.84% 11.69% 11.75% 12.38% 12.45%
</TABLE>
Each fund may invest a portion of its assets in obligations that are
subject to state or federal income taxes. When the fund invests in these
obligations, its tax-equivalent yields will be lower. In the table above,
tax-equivalent yields are calculated assuming investments are 100%
federally and state tax-free.
TOTAL RETURN CALCULATIONS. Total returns quoted in advertising reflect all
aspects of a fund's returns, including the effect of reinvesting dividends
and capital gain distributions, and any change in the fund's NAV over a
stated period. Average annual total returns are calculated by determining
the growth or decline in value of a hypothetical historical investment in a
fund over a stated period, and then calculating the annually compounded
percentage rate that would have produced the same result if the rate of
growth or decline in value had been constant over the period. For example,
a cumulative total return of 100% over ten years would produce an average
annual return of 7.18%, which is the steady annual rate that would equal
100% growth on a compounded basis in ten years. Average annual returns
covering periods less than one year are calculated by determining a fund's
total return for the period, extending that return for a full year
(assuming that return remains constant over the year), and quoting the
result as an annual return. While average annual returns are a convenient
means of comparing investment alternatives, investors should realize that a
fund's performance is not constant over time, but changes from year to
year, and that average annual total returns represent averaged figures as
opposed to the actual year-to-year performance of the fund.
In addition to average annual returns, a fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Average annual and cumulative total
returns may be quoted as a percentage or as a dollar amount, and may be
calculated for a single investment, a series of investments, or a series of
redemptions, over any time period. Total returns may be broken down into
their components of income and capital (including capital gains and changes
in share price) in order to illustrate the relationship of these factors
and their contributions to total return. Total returns may be quoted on a
before-tax or after-tax basis, and may or may not include the income fund's
.50% redemption fee on shares held less than 180 days. Excluding the
redemption fee from a total return calculation produces a higher total
return figure. Omitting fees and charges will cause the funds' total
return figures to be higher. Total returns, yields, and other performance
information may be quoted numerically or in a table, graph, or similar
illustration, and may omit or include the effects of each fund's $5.00
account closeout fee.
NET ASSET VALUE. Charts and graphs using a fund's net asset value, adjusted
net asset values, and benchmark indices may be used to exhibit performance.
An adjusted NAV includes any distributions paid by a fund and reflects all
elements of its return. Unless otherwise indicated, a fund's adjusted NAVs
are not adjusted for sales charges, if any.
Each fund may compare its return to the record of the Standard & Poor's
500 Composite Stock Price Index (S&P 500(Registered trademark)), the
Dow Jones Industrial Average (DJIA), and the cost of living (measured by
the Consumer Price Index, or CPI) over the same period. The S&P 500 and
DJIA comparisons would show how each fund's total return compared to the
record of a broad average of common stocks and a narrower set of stocks of
major industrial companies, respectively, over the same period. Of course,
since the income fund invests in fixed-income securities, and the money
market fund invests in short-term fixed-income securities, common stocks
represent a different type of investment from the fund. Common stocks
generally offer greater growth potential than the fund, but generally
experience greater price volatility, which means greater potential for
loss. In addition, common stocks generally provide lower income than a
fixed-income investment such as the funds. Figures for the S&P 500 and
DJIA are based on the prices of unmanaged groups of stocks and, unlike the
fund's returns, their returns do not include the effect of paying brokerage
commissions or other costs of investing.
A fund's performance may be compared to the performance of other mutual
funds in general, or to the performance of particular types of mutual
funds. These comparisons may be expressed as mutual fund rankings
prepared by Lipper Analytical Services, Inc. (Lipper), an independent
service located in Summit, New Jersey that monitors the performance of
mutual funds. Lipper generally ranks funds on the basis of total return,
assuming reinvestment of distributions, but does not take sales charges or
redemption fees into consideration, and is prepared without regard to tax
consequences. Lipper may also rank funds based on yield. In addition to
the mutual fund rankings, a fund's performance may be compared to stock,
bond, and money market mutual fund performance indices prepared by Lipper
or other organizations. When comparing these indices, it is important to
remember the risk and return characteristics of each type of investment.
For example, while stock mutual funds may offer higher potential returns,
they also carry the highest degree of share price volatility. Likewise,
money market funds may offer greater stability of principal, but generally
do not offer the higher potential returns from stock mutual funds.
From time to time, a fund's performance may also be compared to other
mutual funds tracked by financial or business publications and periodicals.
For example, the fund may quote Morningstar, Inc. in its advertising
materials. Morningstar, Inc. is a mutual fund rating service that rates
mutual funds on the basis of risk-adjusted performance. Rankings that
compare the performance of Fidelity funds to one another in appropriate
categories over specific periods of time may also be quoted in advertising.
A fund may be compared in advertising to Certificates of Deposit (CDs) or
other investments issued by banks or other depository institutions. Mutual
funds differ from bank investments in several respects. For example, a fund
may offer greater liquidity or higher potential returns than CDs, the fund
does not guarantee your principal or your return, and fund shares are not
FDIC insured.
Fidelity may provide information designed to help individuals understand
their investment goals and explore various financial strategies. Such
information may include materials that describe general principles of
investing, such as asset allocation, diversification, risk tolerance, and
goal setting; questionnaires designed to help create a personal financial
profile; a worksheet used to project savings needs based on assumed rates
of inflation and hypothetical rates of return; and action plans offering
investment alternatives. Materials may also include discussions of
Fidelity's asset allocation funds and other Fidelity funds, products, and
services.
Ibbotson Associates of Chicago, Illinois (Ibbotson) provides historical
returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury
bills, the U.S. rate of inflation (based on the CPI), and combinations of
various capital markets. The performance of these capital markets is based
on the returns of different indices.
Fidelity funds may use the performance of these capital markets in order to
demonstrate general risk-versus-reward investment scenarios. Performance
comparisons may also include the value of a hypothetical investment in any
of these capital markets. The risks associated with the security types in
any capital market may or may not correspond directly to those of the
funds. Ibbotson calculates total returns in the same method as the funds.
The funds may also compare performance to that of other compilations or
indices that may be developed and made available in the future.
A fund may compare its performance or the performance of securities in
which it may invest to averages published by IBC USA (Publications), Inc.
of Ashland, Massachusetts. These averages assume reinvestment of
distributions. The IBC/Donoghue's MONEY FUND AVERAGES(trademark)/All
Tax-Free, which is reported in the MONEY FUND REPORT(registered trademark),
covers over ___ tax-free money market funds. The Bond Fund Report
AverageS(trademark)/All Tax-Free, which is reported in the BOND FUND
REPORT(trademark), covers over ___ tax-free bond funds. When evaluating
comparisons to money market funds, investors should consider the relevant
differences in investment objectives and policies. Specifically, money
market funds invest in short-term, high-quality instruments and seek to
maintain a stable $1.00 share price. The income fund, however, invests in
longer-term instruments and its share price changes daily in response to a
variety of factors.
The income fund may compare and contrast in advertising the relative
advantages of investing in a mutual fund versus an individual municipal
bond. Unlike tax-free mutual funds, individual municipal bonds offer a
stated rate of interest and, if held to maturity, repayment of principal.
Although some individual municipal bonds might offer a higher return, they
do not offer the reduced risk of a mutual fund that invests in many
different securities. The initial investment requirements and sales charges
of many tax-free mutual funds are lower than the purchase cost of
individual municipal bonds, which are generally issued in $5,000
denominations and are subject to direct brokerage costs.
In advertising materials, Fidelity may reference or discuss its products
and services, which may include: other Fidelity funds; retirement
investing; brokerage products and services; the effects of periodic
investment plans and dollar cost averaging; saving for college; charitable
giving; and the Fidelity credit card. In addition, Fidelity may quote or
reprint financial or business publications and periodicals, including model
portfolios or allocations, as they relate to fund management, portfolio
composition, investment philosophy, investment techniques, the desirability
of owning a particular mutual fund, and Fidelity services and products.
Fidelity may also reprint, and use as advertising and sales literature,
articles from Fidelity Focus, a quarterly magazine provided free of charge
to Fidelity fund shareholders.
A fund may present its fund number, Quotron(trademark) number, and CUSIP
number, and discuss or quote its current portfolio manager.
VOLATILITY. The income fund may quote various measures of volatility and
benchmark correlation in advertising. In addition, the fund may compare
these measures to those of other funds. Measures of volatility seek to
compare the fund's historical share price fluctuations or total returns to
those of a benchmark. Measures of benchmark correlation indicate how valid
a comparative benchmark may be. All measures of volatility and correlation
are calculated using averages of historical data. In advertising, a fund
may also discuss or illustrate examples of interest rate sensitivity.
MOMENTUM INDICATORS indicate a fund's price movements over specific periods
of time. Each point on the momentum indicator represents the fund's
percentage change in price movements over that period.
The income fund may advertise examples of the effects of periodic
investment plans, including the principle of dollar cost averaging. In such
a program, an investor invests a fixed dollar amount in a fund at periodic
intervals, thereby purchasing fewer shares when prices are high and more
shares when prices are low. While such a strategy does not assure a profit
or guard against loss in a declining market, the investor's average cost
per share can be lower than if fixed numbers of shares are purchased at the
same intervals. In evaluating such a plan, investors should consider their
ability to continue purchasing shares during periods of low price levels.
As of August 31, 1994, FMR advised over $__ billion in tax-free fund
assets, $__ billion in money market fund assets, $___ billion in equity
fund assets, $__ billion in international fund assets, and $___ billion in
Spartan fund assets. The funds may reference the growth and variety of
money market mutual funds and the adviser's innovation and participation in
the industry. The equity funds under management figure represents the
largest amount of equity fund assets under management by a mutual fund
investment adviser in the United States, making FMR America's leading
equity (stock) fund manager. FMR, its subsidiaries, and affiliates
maintain a worldwide information and communications network for the purpose
of researching and managing investments abroad, with over __ employees in
over __ foreign countries.
In addition to performance rankings, each fund may compare its total
expense ratio to the average total expense ratio of similar funds tracked
by Lipper. A fund's total expense ratio is a significant factor in
comparing bond and money market investments because of its effect on yield.
ADDITIONAL PURCHASE AND REDEMPTION INFORMATION
Each fund is open for business and its net asset value per share (NAV) is
calculated each day the New York Stock Exchange (NYSE) is open for trading.
The NYSE has designated the following holiday closings for 1994:
Washington's Birthday (observed), Good Friday, Memorial Day (observed),
Independence Day (observed), Labor Day, Thanksgiving Day, and Christmas Day
(observed). Although FMR expects the same holiday schedule, with the
addition of New Year's Day, to be observed in the future, the NYSE may
modify its holiday schedule at any time.
FSC normally determines each fund's NAV as of the close of the NYSE
(normally 4:00 p.m. Eastern time). However, NAV may be calculated earlier
if trading on the NYSE is restricted or as permitted by the SEC. To the
extent that portfolio securities are traded in other markets on days when
the NYSE is closed, a fund's NAV may be affected on days when investors do
not have access to the fund to purchase or redeem shares. In addition,
trading in some of a fund's portfolio securities may not occur on days when
the fund is open for business.
If the Trustees determine that existing conditions make cash payments
undesirable, redemption payments may be made in whole or in part in
securities or other property, valued for this purpose as they are valued in
computing a fund's NAV. Shareholders receiving securities or other property
on redemption may realize a gain or loss for tax purposes, and will incur
any costs of sale, as well as the associated inconveniences.
Pursuant to Rule 11a-3 under the 1940 Act, each fund is required to give
shareholders at least 60 days' notice prior to terminating or modifying its
exchange privilege. Under the Rule, the 60-day notification requirement may
be waived if (i) the only effect of a modification would be to reduce or
eliminate an administrative fee, redemption fee, or deferred sales charge
ordinarily payable at the time of an exchange, or (ii) the fund suspends
the redemption of the shares to be exchanged as permitted under the 1940
Act or the rules and regulations thereunder, or the fund to be acquired
suspends the sale of its shares because it is unable to invest amounts
effectively in accordance with its investment objective and policies.
In the Prospectus, each fund has notified shareholders that it reserves the
right at any time, without prior notice, to refuse exchange purchases by
any person or group if, in FMR's judgment, the fund would be unable to
invest effectively in accordance with its investment objective and
policies, or would otherwise potentially be adversely affected.
DISTRIBUTIONS AND TAXES
DISTRIBUTIONS. If you request to have distributions mailed to you and the
U.S. Postal Service cannot deliver your checks, or if your checks remain
uncashed for six months, Fidelity may reinvest your distributions at the
then-current NAV. All subsequent distributions will then be reinvested
until you provide Fidelity with alternate instructions.
DIVIDENDS. To the extent that each fund's income is derived from federally
tax-exempt interest, the daily dividends declared by each fund are also
federally tax-exempt. The funds will send each shareholder a notice in
January describing the tax status of dividends and capital gain
distributions (if any) for the prior year.
Shareholders are required to report tax-exempt income on their federal tax
returns. Shareholders who earn other income, such as social security
benefits, may be subject to federal income tax on up to one half of such
benefits to the extent that their income, including tax-exempt income,
exceeds certain base amounts.
The funds purchase municipal obligations based on opinions of bond counsel
regarding the federal income tax status of the obligations. These opinions
generally will be based upon covenants by the issuers regarding continuing
compliance with federal tax requirements. If the issuer of an obligation
fails to comply with its covenants at any time, interest on the obligation
could become federally taxable retroactive to the date the obligation was
issued.
As a result of the Tax Reform Act of 1986, interest on certain "private
activity" securities (referred to as "qualified bonds" in the Internal
Revenue Code) is subject to the federal alternative minimum tax (AMT),
although the interest continues to be excludable from gross income for
other purposes. Interest from private activity securities will be
considered tax-exempt for purposes of each fund's policy of investing so
that at least 80% of its assets are in municipal securities whose interest
is free from federal income tax. Interest from private activity securities
is a tax preference item for the purposes of determining whether a taxpayer
is subject to the AMT and the amount of AMT tax to be paid, if any. Private
activity securities issued after August 7, 1986 to benefit a private or
industrial user or to finance a private facility are affected by this rule.
Corporate investors should note that an adjustment for purposes of the
corporate AMT is 75% of the amount by which adjusted current earnings
(which includes tax-exempt interest) exceeds alternative minimum taxable
income of the corporation.
If a shareholder receives an exempt-interest dividend and sells shares at a
loss after holding them for a period of six months or less, the loss will
be disallowed to the extent of the amount of exempt-interest dividend.
CAPITAL GAIN DISTRIBUTIONS. Long-term capital gains earned by the income
fund on the sale of securities and distributed to shareholders are
federally taxable as long-term capital gains, regardless of the length of
time that shareholders have held their shares. If a shareholder receives a
long-term capital gain distribution on shares of the fund and such shares
are held six months or less and are sold at a loss, the portion of the loss
equal to the amount of the long-term capital gain distribution will be
considered a long-term loss for tax purposes.
A portion of the gain on bonds purchased at a discount after April 30, 1993
and short-term capital gains distributed by the funds are federally taxable
to shareholders as dividends, not as capital gains. Distributions from
short-term capital gains do not qualify for the dividends-received
deduction. Dividend distributions resulting from a recharacterization of
gain from the sale of bonds purchased at a discount after April 30, 1993
are not considered income for purposes of the funds' policy of investing so
that at least 80% of their assets are in municipal securities whose
interest is free from federal income tax. The money market fund may
distribute any net realized short-term capital gains once a year or more
often as necessary to maintain its net asset value at $1.00 a share.
TAX STATUS OF THE FUNDS. Each fund has qualified and intends to continue to
qualify each year as a "regulated investment company" for tax purposes so
that it will not be liable for federal tax on income and capital gains
distributed to shareholders. In order to qualify as a regulated investment
company and avoid being subject to federal income or excise taxes at the
fund level, each fund intends to distribute all of its net investment
income and net realized capital gains (if any) within each calendar year as
well as on a fiscal year basis. Each fund intends to comply with other tax
rules applicable to regulated investment companies, including a requirement
that capital gains from the sale of securities held less than three months
constitute less than 30% of the fund's gross income for each fiscal year.
Gains from some futures contracts and options are included in this 30%
calculation, which may limit the income fund's investments in such
instruments. Each fund is treated as a separate entity from the other funds
of Fidelity Union Street Trust and Fidelity Union Street Trust II for tax
purposes.
ARIZONA TAX MATTERS. The Arizona Department of Revenue has ruled that
dividends paid by a regulated investment company are exempt from Arizona
state income tax to the extent such dividends are derived from interest on
obligations the interest on which is exempt from Arizona state income tax.
For purposes of Arizona income taxation, distributions derived from
interest on other types of obligations (i.e., obligations the interest on
which is not exempt from Arizona state income tax) will be taxable as
ordinary income, whether paid in cash or reinvested in additional shares.
Distributions of net capital gains (both short- and long-term net capital
gains) are not exempt from Arizona income taxation and are taxed at
ordinary income tax rates. Interest on indebtedness incurred or continued
by a shareholder in connection with the purchase of shares of a fund will
not be deductible for Arizona personal income tax purposes.
OTHER TAX INFORMATION. The information above is only a summary of some of
the tax consequences generally affecting the funds and their shareholders,
and no attempt has been made to discuss individual tax consequences.
Investors should consult their tax advisers to determine whether the funds
are suitable to their particular tax situations.
FMR
FMR is a wholly owned subsidiary of FMR Corp., a parent company organized
in 1972. At present, the principal operating activities of FMR Corp. are
those conducted by three of its divisions as follows: FSC, which is the
transfer and shareholder servicing agent for certain of the funds advised
by FMR; Fidelity Investments Institutional Operations Company, which
performs shareholder servicing functions for certain institutional
customers; and Fidelity Investments Retail Marketing Company, which
provides marketing services to various companies within the Fidelity
organization.
Several affiliates of FMR are also engaged in the investment advisory
business. Fidelity Management Trust Company provides trustee, investment
advisory, and administrative services to retirement plans and corporate
employee benefit accounts. Fidelity Management & Research (U.K.) Inc.
(FMR U.K.) and Fidelity Management & Research (Far East) Inc. (FMR Far
East), both wholly owned subsidiaries of FMR formed in 1986, supply
investment research, and may supply portfolio management services, to FMR
in connection with certain funds advised by FMR. Analysts employed by FMR,
FMR U.K., and FMR Far East research and visit thousands of domestic and
foreign companies each year. FMR Texas, a wholly owned subsidiary of FMR
formed in 1989, supplies portfolio management and research services in
connection with certain money market funds advised by FMR.
TRUSTEES AND OFFICERS
The Trustees and executive officers of each trust are listed below. Except
as indicated, each individual has held the office shown or other offices in
the same company for the last five years. All persons named as Trustees
also serve in similar capacities for other funds advised by FMR. Unless
otherwise noted, the business address of each Trustee and officer is 82
Devonshire Street, Boston, Massachusetts 02109, which is also the address
of FMR. Those Trustees who are "interested persons" (as defined in the 1940
Act) by virtue of their affiliation with either trust or FMR, are indicated
by an asterisk (*).
*EDWARD C. JOHNSON 3d, Trustee and President, is Chairman, Chief Executive
Officer and a Director of FMR Corp.; a Director and Chairman of the Board
and of the Executive Committee of FMR; Chairman and a Director of FMR Texas
Inc. (1989), Fidelity Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
*J. GARY BURKHEAD, Trustee and Senior Vice President, is President of FMR;
and President and a Director of FMR Texas Inc. (1989), Fidelity Management
& Research (U.K.) Inc., and Fidelity Management & Research (Far
East) Inc.
RALPH F. COX, 200 Rivercrest Drive, Fort Worth, TX, Trustee (1991), is a
consultant to Western Mining Corporation (1994). Prior to February 1994, he
was President of Greenhill Petroleum Corporation (petroleum exploration and
production, 1990). Until March 1990, Mr. Cox was President and Chief
Operating Officer of Union Pacific Resources Company (exploration and
production). He is a Director of Sanifill Corporation (non-hazardous
waste, 1993) and CH2M Hill Companies (engineering). In addition, he served
on the Board of Directors of the Norton Company (manufacturer of industrial
devices, 1983-1990) and continues to serve on the Board of Directors of the
Texas State Chamber of Commerce, and is a member of advisory boards of
Texas A&M University and the University of Texas at Austin.
PHYLLIS BURKE DAVIS, P.O. Box 264, Bridgehampton, NY, Trustee (1992).
Prior to her retirement in September 1991, Mrs. Davis was the Senior Vice
President of Corporate Affairs of Avon Products, Inc. She is currently a
Director of BellSouth Corporation (telecommunications), Eaton Corporation
(manufacturing, 1991), and the TJX Companies, Inc. (retail stores, 1990),
and previously served as a Director of Hallmark Cards, Inc. (1985-1991) and
Nabisco Brands, Inc. In addition, she serves as a Director of the New York
City Chapter of the National Multiple Sclerosis Society, and is a member of
the Advisory Council of the International Executive Service Corps. and the
President's Advisory Council of The University of Vermont School of
Business Administration.
RICHARD J. FLYNN, 77 Fiske Hill, Sturbridge, MA, Trustee, is a financial
consultant. Prior to September 1986, Mr. Flynn was Vice Chairman and a
Director of the Norton Company (manufacturer of industrial devices). He is
currently a Director of Mechanics Bank and a Trustee of College of the Holy
Cross and Old Sturbridge Village, Inc.
E. BRADLEY JONES, 3881-2 Lander Road, Chagrin Falls, OH, Trustee (1990).
Prior to his retirement in 1984, Mr. Jones was Chairman and Chief Executive
Officer of LTV Steel Company. Prior to May 1990, he was Director of
National City Corporation (a bank holding company) and National City Bank
of Cleveland. He is a Director of TRW Inc. (original equipment and
replacement products), Cleveland-Cliffs Inc (mining), NACCO Industries,
Inc. (mining and marketing), Consolidated Rail Corporation, Birmingham
Steel Corporation, Hyster-Yale Materials Handling, Inc. (1989), and RPM,
Inc. (manufacturer of chemical products, 1990). In addition, he serves as
a Trustee of First Union Real Estate Investments, Chairman of the Board of
Trustees and a member of the Executive Committee of the Cleveland Clinic
Foundation, a Trustee and a member of the Executive Committee of University
School (Cleveland), and a Trustee of Cleveland Clinic Florida.
DONALD J. KIRK, 680 Steamboat Road, Apartment #1-North, Greenwich, CT,
Trustee, is a Professor at Columbia University Graduate School of Business
and a financial consultant. Prior to 1987, he was Chairman of the
Financial Accounting Standards Board. Mr. Kirk is a Director of General Re
Corporation (reinsurance) and Valuation Research Corp. (appraisals and
valuations, 1993). In addition, he serves as Vice Chairman of the Board of
Directors of the National Arts Stabilization Fund and Vice Chairman of the
Board of Trustees of the Greenwich Hospital Association.
*PETER S. LYNCH, Trustee (1990) is Vice Chairman of FMR (1992). Prior to
his retirement on May 31, 1990, he was a Director of FMR (1989) and
Executive Vice President of FMR (a position he held until March 31, 1991);
Vice President of Fidelity Magellan Fund and FMR Growth Group Leader; and
Managing Director of FMR Corp. Mr. Lynch was also Vice President of
Fidelity Investments Corporate Services (1991-1992). He is a Director of
W.R. Grace & Co. (chemicals, 1989) and Morrison Knudsen Corporation
(engineering and construction). In addition, he serves as a Trustee of
Boston College, Massachusetts Eye & Ear Infirmary, Historic Deerfield
(1989) and Society for the Preservation of New England Antiquities, and as
an Overseer of the Museum of Fine Arts of Boston (1990).
GERALD C. McDONOUGH, 135 Aspenwood Drive, Cleveland, OH, Trustee (1989), is
Chairman of G.M. Management Group (strategic advisory services). Prior to
his retirement in July 1988, he was Chairman and Chief Executive Officer of
Leaseway Transportation Corp. (physical distribution services). Mr.
McDonough is a Director of ACME-Cleveland Corp. (metal working,
telecommunications and electronic products), Brush-Wellman Inc. (metal
refining), York International Corp. (air conditioning and refrigeration,
1989), Commercial Intertech Corp. (water treatment equipment, 1992), and
Associated Estates Realty Corporation (a real estate investment trust,
1993).
EDWARD H. MALONE, 5601 Turtle Bay Drive #2104, Naples, FL, Trustee. Prior
to his retirement in 1985, Mr. Malone was Chairman, General Electric
Investment Corporation and a Vice President of General Electric Company.
He is a Director of Allegheny Power Systems, Inc. (electric utility),
General Re Corporation (reinsurance) and Mattel Inc. (toy manufacturer). In
addition, he serves as a Trustee of Corporate Property Investors, the EPS
Foundation at Trinity College, the Naples Philharmonic Center for the Arts,
and Rensselaer Polytechnic Institute, and he is a member of the Advisory
Boards of Butler Capital Corporation Funds and Warburg, Pincus Partnership
Funds.
MARVIN L. MANN, 55 Railroad Avenue, Greenwich, CT, Trustee (1993, money
market fund only) is Chairman of the Board, President, and Chief Executive
Officer of Lexmark International, Inc. (office machines, 1991). Prior to
1991, he held the positions of Vice President of International Business
Machines Corporation ("IBM") and President and General Manager of various
IBM divisions and subsidiaries. Mr. Mann is a Director of M.A. Hanna
Company (chemicals, 1993) and Infomart (marketing services, 1991), a
Trammell Crow Co. In addition, he serves as the Campaign Vice Chairman of
the Tri-State United Way (1993) and is a member of the University of
Alabama President's Cabinet (1990).
THOMAS R. WILLIAMS, 21st Floor, 191 Peachtree Street, N.E., Atlanta, GA,
Trustee, is President of The Wales Group, Inc. (management and financial
advisory services). Prior to retiring in 1987, Mr. Williams served as
Chairman of the Board of First Wachovia Corporation (bank holding company),
and Chairman and Chief Executive Officer of The First National Bank of
Atlanta and First Atlanta Corporation (bank holding company). He is
currently a Director of BellSouth Corporation (telecommunications),
ConAgra, Inc. (agricultural products), Fisher Business Systems, Inc.
(computer software), Georgia Power Company (electric utility), Gerber Alley
& Associates, Inc. (computer software), National Life Insurance Company
of Vermont, American Software, Inc. (1989), and AppleSouth, Inc.
(restaurants, 1992).
GARY L. FRENCH, Treasurer (1991). Prior to becoming Treasurer of the
Fidelity funds, Mr. French was Senior Vice President, Fund Accounting -
Fidelity Accounting & Custody Services Co. (1991); Vice President, Fund
Accounting - Fidelity Accounting & Custody Services Co. (1990); and
Senior Vice President, Chief Financial and Operations Officer - Huntington
Advisers, Inc. (1985-1990).
ARTHUR S. LORING, Secretary, is Senior Vice President and General Counsel
of FMR, Vice President-Legal of FMR Corp., and Vice President and Clerk of
FDC.
THOMAS J. STEFFANCI, Vice President (1994) (income fund only), is Vice
President of Fidelity's fixed-income funds and Senior Vice President of FMR
(1993).
FRED L. HENNING, JR., Vice President (1994) (money market fund only), is
Vice President of Fidelity's money market funds and Senior Vice President
of FMR Texas.
THOMAS D. MAHER, Assistant Vice President (1990) (money market fund only),
is Assistant Vice President of Fidelity's money market funds and other Vice
President and Associate General Counsel of FMR Texas Inc. (1990).
Under a retirement program that became effective on November 1, 1989,
Trustees, upon reaching age 72, become eligible to participate in a defined
benefit retirement program under which they receive payments during their
lifetime from the fund based on their basic trustee fees and length of
service. Currently, Messrs. Robert L. Johnson, William R. Spaulding,
Bertram H. Witham, and David L. Yunich participate in the program.
As of this Statement of Additional Information, FMR owns a majority of the
outstanding shares of each fund.
MANAGEMENT CONTRACTS
Each fund employs FMR to furnish investment advisory and other services.
Under its management contract with each fund, FMR acts as investment
adviser and, subject to the supervision of the Board of Trustees, directs
the investments of the fund in accordance with its investment objective,
policies, and limitations. FMR also provides the funds with all necessary
office facilities and personnel for servicing the funds' investments, and
compensates all officers of the trust, all Trustees who are "interested
persons" of the trust or of FMR, and all personnel of the trust or FMR
performing services relating to research, statistical, and investment
activities.
In addition, FMR or its affiliates, subject to the supervision of the Board
of Trustees, provide the management and administrative services necessary
for the operation of each fund. These services include providing facilities
for maintaining the fund's organization; supervising relations with
custodians, transfer and pricing agents, accountants, underwriters, and
other persons dealing with the fund; preparing all general shareholder
communications and conducting shareholder relations; maintaining the fund's
records and the registration of the fund's shares under federal and state
law; developing management and shareholder services for the fund; and
furnishing reports, evaluations, and analyses on a variety of subjects to
the Board of Trustees.
FMR is responsible for the payment of all expenses of the funds with
certain exceptions. Specific expenses payable by FMR include, without
limitation, the fees and expenses of registering and qualifying the funds
and their shares for distribution under federal and state securities laws;
expenses of typesetting for printing the Prospectus and Statement of
Additional Information; custodian charges; audit and legal expenses;
insurance expense; association membership dues; and the expenses of mailing
reports to shareholders, shareholder meetings, and proxy solicitations. FMR
also provides for transfer agent and dividend disbursing services and
portfolio and general accounting record maintenance through FSC.
FMR pays all other expenses of each fund with the following exceptions:
fees and expenses of all Trustees who are not "interested persons" of the
trust or FMR (the non-interested Trustees); interest on borrowings; taxes;
brokerage commissions (if any); and such nonrecurring expenses as may
arise, including costs of any litigation to which the funds may be a party,
and any obligation they may have to indemnify the officers and Trustees
with respect to litigation.
FMR is each fund's manager pursuant to management contracts dated July _,
1994, which were approved by FMR, than sole shareholder of each fund, on
July _, 1994. For the services of FMR under the contracts, the money
market fund and the income fund pay FMR a monthly management fee at the
annual rate of .50% and .55%, respectively, of average net assets
throughout the month. FMR reduces its fee by an amount equal to the fees
and expenses of the non-interested Trustees.
FMR may, from time to time, voluntarily reimburse all or a portion of a
fund's operating expenses (exclusive of interest, taxes, brokerage
commissions, and extraordinary expenses). To defray shareholder service
costs, FMR or its affiliates also collect each fund's $5.00 exchange fee,
$5.00 account closeout fee, $5.00 fees for for wire purchases and
redemptions, and the money market fund's $2.00 checkwriting charge.
SUB-ADVISER. With respect to the money market fund, FMR has entered into a
sub-advisory agreement with FMR Texas pursuant to which FMR Texas has
primary responsibility for providing portfolio investment management
services to the fund. Under the sub-advisory agreement, FMR pays FMR Texas
a fee equal to 50% of the management fee payable to FMR under its current
management contract with the fund. The fees paid to FMR Texas are not
reduced by any voluntary or mandatory expense reimbursements that may be in
effect from time to time.
DISTRIBUTION AND SERVICE PLANS
Each fund has adopted a distribution and service plan (the plan) under Rule
12b-1 of the Investment Company Act of 1940 (the Rule). The Rule provides
in substance that a mutual fund may not engage directly or indirectly in
financing any activity that is primarily intended to result in the sale of
shares of the fund except pursuant to a plan adopted by the fund under the
Rule. Each fund's Board of Trustees has adopted the plan to allow the fund
and FMR to incur certain expenses that might be considered to constitute
indirect payment by the fund of distribution expenses. Under the plan, if
the payment of management fees by the fund to FMR is deemed to be indirect
financing by the fund of the distribution of its shares, such payment is
authorized by the plan.
Each plan specifically recognizes that FMR, either directly or through FDC,
may use its management fee revenues, past profits, or other resources,
without limitation, to pay promotional and administrative expenses in
connection with the offer and sale of shares of the fund. In addition, each
plan provides that FMR may use its resources, including its management fee
revenues, to make payments to third parties that provide assistance in
selling shares of the fund, or to third parties, including banks, that
render shareholder support services. The Trustees have not authorized such
payments to date.
Each fund's plan has been approved by the Trustees. As required by the
Rule, the Trustees carefully considered all pertinent factors relating to
implementation of each plan prior to its approval, and have determined that
there is a reasonable likelihood that the plan will benefit the fund and
its shareholders. In particular, the Trustees noted that each plan does not
authorize payments by the fund other than those made to FMR under its
management contract with the fund. To the extent that each plan gives FMR
and FDC greater flexibility in connection with the distribution of shares
of the fund, additional sales of the fund's shares may result.
Additionally, certain shareholder support services may be provided more
effectively under each plan by local entities with whom shareholders have
other relationships.
Each plan was approved by FMR, as the sole shareholder of each fund, on
_______, 1994.
The Glass-Steagall Act generally prohibits federally and state chartered or
supervised banks from engaging in the business of underwriting, selling, or
distributing securities. Although the scope of this prohibition under the
Glass-Steagall Act has not been clearly defined by the courts or
appropriate regulatory agencies, FDC believes that the Glass-Steagall Act
should not preclude a bank from performing shareholder support services, or
servicing and recordkeeping functions. FDC intends to engage banks only to
perform such functions. However, changes in federal or state statutes and
regulations pertaining to the permissible activities of banks and their
affiliates or subsidiaries, as well as further judicial or administrative
decisions or interpretations, could prevent a bank from continuing to
perform all or a part of the contemplated services. If a bank were
prohibited from so acting, the Trustees would consider what actions, if
any, would be necessary to continue to provide efficient and effective
shareholder services. In such event, changes in the operation of the funds
might occur, including possible termination of any automatic investment or
redemption or other services then provided by the bank. It is not expected
that shareholders would suffer any adverse financial consequences as a
result of any of these occurrences.
Each fund may execute portfolio transactions with and purchase securities
issued by depository institutions that receive payments under the plan. No
preference for the instruments of such depository institutions will be
shown in the selection of investments. In addition, state securities laws
on this issue may differ from the interpretations of federal law expressed
herein, and banks and other financial institutions may be required to
register as dealers pursuant to state law.
INTEREST OF FMR AFFILIATES
United Missouri is each fund's custodian and transfer agent. United
Missouri has entered into sub-contracts with FSC, an affiliate of FMR,
under the terms of which FSC performs the processing activities associated
with providing transfer agent and shareholder servicing functions for each
fund. United Missouri has additional sub-contracts with FSC pursuant to
which FSC performs the calculations necessary to determine each fund's net
asset value per share and dividends and maintains the funds' accounting
records. United Missouri is entitled to reimbursement for fees paid to FSC
from FMR, who must bear these costs pursuant to its management contract
with each fund.
Each fund has a distribution agreement with FDC, a Massachusetts
corporation organized on July 18, 1960. FDC is a broker-dealer registered
under the Securities Exchange Act of 1934 and is a member of the National
Association of Securities Dealers, Inc. The distribution agreement calls
for FDC to use all reasonable efforts, consistent with its other business,
to secure purchasers for shares of each fund, which are continuously
offered at net asset value. Promotional and administrative expenses in
connection with the offer and sale of shares are paid by FMR.
DESCRIPTION OF THE TRUSTS
TRUSTS' ORGANIZATION. Fidelity Union Street Trust (the Massachusetts trust)
is an open-end management investment company organized as a Massachusetts
business trust on March 1, 1974. On April 30, 1990, the Board of Trustees
voted to change the name of the trust from Fidelity Daily Income Trust to
Fidelity Union Street Trust. Currently, there are eight funds of the
Massachusetts trust: Fidelity Export Company Fund, Spartan Aggressive
Municipal Fund, Spartan Ginnie Mae Fund, Spartan Intermediate Municipal
Fund, Spartan Maryland Municipal Income Fund, Spartan Municipal Income
Portfolio, Spartan Short-Intermediate Municipal Fund, and Spartan Arizona
Municipal Income Portfolio. The Massachusetts trust's Declaration of Trust
permits the Trustees to create additional funds.
Fidelity Union Street Trust II (the Delaware trust) is an open-end
management investment company organized as a Delaware Business trust on
June 20, 1991. Currently, there four funds of the Delaware trust: Fidelity
Daily Income Trust, Spartan Municipal Money Fund, Spartan World Money
Market Fund, and Spartan Arizona Municipal Money Market Portfolio. The
Delaware trust's Trust Instrument permits the Trustees to create additional
funds.
In the event that FMR ceases to be investment adviser to a trust or any of
its funds, the right of the trust or the fund to use the identifying names
"Fidelity" and "Spartan" may be withdrawn. There is a remote possibility
that one fund might become liable for any misstatement in its prospectus or
statement of additional information about another fund.
The assets of each trust received for the issue or sale of shares of each
of its funds and all income, earnings, profits and proceeds thereof,
subject only to the rights of creditors, are especially allocated to such
fund, and constitute the underlying assets of such fund. The underlying
assets of each fund are segregated on the books of account, and are to be
charged with the liabilities with respect to such fund and with a share of
the general liabilities of their respective trusts. Expenses with respect
to each trust are to be allocated in proportion to the asset value of their
respective funds, except where allocations of direct expense can otherwise
be fairly made. The officers of the trusts, subject to the general
supervision of the Board of Trustees, have the power to determine which
expenses are allocable to a given fund, or which are general or allocable
to all of the funds of a certain trust. In the event of the dissolution or
liquidation of a trust, shareholders of each fund of that trust are
entitled to receive as a class the underlying assets of such fund available
for distribution.
SHAREHOLDER AND TRUSTEE LIABILITY - MASSACHUSETTS TRUST. The Massachusetts
trust is an entity of the type commonly known as a "Massachusetts business
trust." Under Massachusetts law, shareholders of such a trust may, under
certain circumstances, be held personally liable for the obligations of the
trust. The Declaration of Trust provides that the Massachusetts Trust shall
not have any claim against shareholders except for the payment of the
purchase price of shares and requires that each agreement, obligation, or
instrument entered into or executed by the trust or its Trustees shall
include a provision limiting the obligations created thereby to the
Massachusetts Trust and its assets. The Declaration of Trust provides for
indemnification out of each fund's property of any shareholders held
personally liable for the obligations of the fund. The Declaration of Trust
also provides that each fund shall, upon request, assume the defense of any
claim made against any shareholder for any act or obligation of the fund
and satisfy any judgment thereon. Thus, the risk of a shareholder incurring
financial loss on account of shareholder liability is limited to
circumstances in which the fund itself would be unable to meet its
obligations. FMR believes that, in view of the above, the risk of personal
liability to shareholders is remote.
The Declaration of Trust further provides that the Trustees, if they have
exercised reasonable care, will not be liable for any neglect or
wrongdoing, but nothing in the Declaration of Trust protects Trustees
against any liability to which they would otherwise be subject by reason of
willful misfeasance, bad faith, gross negligence, or reckless disregard of
the duties involved in the conduct of their office.
SHAREHOLDER AND TRUSTEE LIABILITY - DELAWARE TRUST. The Delaware Trust is a
business trust organized under Delaware law. Delaware law provides that
shareholders shall be entitled to the same limitations of personal
liability extended to stockholders of private corporations for profit. The
courts of some states, however, may decline to apply Delaware law on this
point. The Trust Instrument contains an express disclaimer of shareholder
liability for the debts, liabilities, obligations, and expenses of the
Delaware Trust and requires that a disclaimer be given in each contract
entered into or executed by the Delaware Trust or its Trustees. The Trust
Instrument provides for indemnification out of each fund's property of any
shareholder or former shareholder held personally liable for the
obligations of the fund. The Trust Instrument also provides that each fund
shall, upon request, assume the defense of any claim made against any
shareholder for any act or obligation of the fund and satisfy any judgment
thereon. Thus, the risk of a shareholder incurring financial loss on
account of shareholder liability is limited to circumstances in which
Delaware law does not apply, no contractual limitation of liability was in
effect, and the fund is unable to meet its obligations. FMR believes that,
in view of the above, the risk of personal liability to shareholders is
extremely remote.
The Trust Instrument further provides that the Trustees shall not be
personally liable to any person other than the Delaware Trust or its
shareholders; moreover, the Trustees shall not be liable for any conduct
whatsoever, provided that Trustees are not protected against any liability
to which they would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties involved
in the conduct of their office.
VOTING RIGHTS - BOTH TRUSTS. Each fund's capital consists of shares of
beneficial interest. As a shareholder of the Massachusetts trust, you
receive one vote for each dollar value of net asset value per share you
own. The shares have no preemptive or conversion rights; voting and
dividend rights, the right of redemption, and the privilege of exchange are
described in the Prospectus. Shares are fully paid and nonassessable,
except as set forth under the respective "Shareholder and Trustee
Liability" headings above. Shareholders representing 10% or more of a trust
or one of its funds may, as set forth in the Declaration of Trust or Trust
Instrument, call meetings of the trust or fund for any purpose related to
the trust or fund, as the case may be, including, in the case of a meeting
of an entire trust, the purpose on voting on removal of one or more
Trustees.
A trust or any fund may be terminated upon the sale of its assets to (or,
in the case of the Delaware Trust and its funds, merger with) another
open-end management investment company or series thereof, or upon
liquidation and distribution of its assets. Generally such terminations
must be approved by vote of the holders of a majority of the outstanding
shares of the trust or the fund (for the Delaware Trust), or by a vote of
the holders of a majority of the trust or fund, as determined by the
current value of each shareholder's investment in the trust or fund (for
the Massachusetts Trust); however, the Trustees of the Delaware Trust may,
without prior shareholder approval, change the form of the organization of
the Delaware Trust by merger, consolidation, or incorporation. If not so
terminated or reorganized, the trusts and their funds will continue
indefinitely.
Under the Trust Instrument, the Trustees may, without shareholder vote,
cause the Delaware Trust to merge or consolidate into one or more trusts,
partnerships, or corporations, so long as the surviving entity is an
open-end management investment company that will succeed to or assume the
Delaware Trust registration statement, or cause the Delaware Trust to be
incorporated under Delaware law.
Each fund of the Massachusetts and Delaware business trusts may also invest
all of its assets in another investment company.
CUSTODIAN. United Missouri Bank, N.A., 1010 Grand Avenue, Kansas City,
Missouri 64106, is custodian of the assets of the funds. The custodian is
responsible for the safekeeping of the funds' assets and the appointment of
subcustodian banks and clearing agencies. The custodian takes no part in
determining the investment policies of the funds or in deciding which
securities are purchased or sold by the funds. The funds may, however,
invest in obligations of the custodian and may purchase securities from or
sell securities to the custodian.
FMR, its officers and directors, its affiliated companies, and the trusts'
Trustees may from time to time have transactions with various banks,
including banks serving as custodian for certain of the funds advised by
FMR. Transactions that have occurred to date include mortgages and personal
and general business loans. In the judgment of FMR, the terms and
conditions of those transactions were not influenced by existing or
potential custodial or other fund relationships.
AUDITOR. _____________, serves as each trust's independent accountant. The
auditor examines financial statements for the funds and provides other
audit, tax, and related services.
APPENDIX
DOLLAR-WEIGHTED AVERAGE MATURITY is derived by multiplying the value of
each investment by the number of days remaining to its maturity, adding
these calculations, and then dividing the total by the value of the fund's
portfolio. An obligation's maturity is typically determined on a stated
final maturity basis, although there are some exceptions to this rule.
For example, if it is probable that the issuer of an instrument will take
advantage of a maturity-shortening device, such as a call, refunding, or
redemption provision, the date on which the instrument will probably be
called, refunded, or redeemed may be considered to be its maturity date.
When a municipal bond issuer has committed to call an issue of bonds and
has established an independent escrow account that is sufficient to, and is
pledged to, refund that issue, the number of days to maturity for the
prerefunded bond is considered to be the number of days to the announced
call date of the bonds.
The descriptions that follow are examples of eligible ratings for the
income fund. The funds may, however, consider ratings for other types of
investments and the ratings assigned by other ratings organizations when
determining the eligibility of a particular investment.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S RATINGS OF STATE AND
MUNICIPAL NOTES:
Moody's ratings for state and municipal and other short-term obligations
will be designated Moody's Investment Grade (MIG, or VMIG for variable rate
obligations). This distinction is in recognition of the difference between
short-term credit risk and long-term credit risk. Factors affecting the
liquidity of the borrower and short-term cyclical elements are critical in
short-term ratings, while other factors of major importance in bond risk,
long-term secular trends for example, may be less important in the short
run. Symbols used will be as follows:
MIG-1/VMIG-1 - This designation denotes best quality. There is present
strong protection by established cash flows, superior liquidity support or
demonstrated broad-based access to the market for refinancing.
MIG-2/VMIG-2 - This designation denotes high quality. Margins of protection
are ample although not so large as in the preceding group.
MIG-3/VMIG-3 - This designation denotes favorable quality, with all
security elements accounted for but there is lacking the undeniable
strength of the preceding grades. Liquidity and cash flow protection may be
narrow and market access for refinancing is likely to be less well
established.
MIG-4/VMIG-4 - This designation denotes adequate quality protection
commonly regarded as required of an investment security is present and,
although not distinctly or predominantly speculative, there is specific
risk.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S RATINGS OF STATE AND
MUNICIPAL NOTES:
SP-1 - Very strong or strong capacity to pay principal and interest. Those
issues determined to possess overwhelming safety characteristics will be
given a plus (+) designation.
SP-2 - Satisfactory capacity to pay principal and interest.
SP-3 - Speculative capacity to pay principal and interest.
DESCRIPTION OF MOODY'S INVESTORS SERVICE, INC.'S MUNICIPAL BOND RATINGS:
AAA - Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective
elements are likely to change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of such issues.
AA - Bonds rated Aa are judged to be of high quality by all standards.
Together with Aaa group they comprise what are generally known as
high-grade bonds. They are rated lower than the best bonds because margins
of protection may not be as large as in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long term risks appear somewhat larger than
in Aaa securities.
A - Bonds rated A possess many favorable investment attributes and are to
be considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.
BAA - Bonds rated Baa are considered as medium grade obligations, i.e, they
are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
BA - Bonds rated Ba are judged to have speculative elements. Their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded
during both good and bad times in the future. Uncertainty of position
characterizes bonds in this class.
B - Bonds rated B generally lack characteristics of a desirable investment.
Assurance of interest and principal payments of or maintenance of other
terms of the contract over any long period of time may be small.
CAA - Bonds rated Caa are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest.
Those bonds in the Aa, A, Baa, Ba, and B groups which Moody's believes
possess the strongest investment attributes are designated by the symbols
Aa1, A1, Baa1, Ba1, and B1.
DESCRIPTION OF STANDARD & POOR'S CORPORATION'S MUNICIPAL BOND RATINGS:
AAA - Debt rated AAA has the highest rating assigned by Standard &
Poor's to a debt obligation. Capacity to pay interest and repay principal
is extremely strong.
AA - Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the highest-rated debt issues only in small
degree.
A - Debt rated A has a strong capacity to pay interest and repay principal,
although it is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions.
BBB - Debt rated BBB is regarded as having an adequate capacity to pay
interest and repay principal. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to pay
interest and repay principal for debt in this category than in higher-rated
categories.
BB - Debt rated BB has less near-term vulnerability to default than other
speculative issues. However, it faces major ongoing uncertainties or
exposure to adverse business, financial, or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
B - Debt rated B has a greater vulnerability to default but currently has
the capacity to meet interest payments and principal repayments. Adverse
business, financial, or economic conditions will likely impair capacity or
willingness to pay interest and repay principal.
The B rating category is also used for debt subordinated to senior debt
that is assigned an actual or implied BB or BB- rating.
CCC - Debt rated CCC has a currently identifiable vulnerability to default,
and is dependent upon favorable business, financial, and economic
conditions to meet timely payment of interest and repayment of principal.
In the event of adverse business, financial, or economic conditions, it is
not likely to have the capacity to pay interest and repay principal.
The ratings from AA to CCC may be modified by the addition of a plus or
minus to show relative standing within the major rating categories.
PART C - OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) (1) Not applicable.
(b) Exhibits:
1. (a) Declaration of Trust dated March 1, 1974 is incorporated herein by
reference to Exhibit 1 to the initial Registration Statement (File No.
2-50318).
(b) Supplement to Declaration of Trust dated December 26, 1979 is
incorporated herein by reference to Exhibit 1(b)(1) to Post-Effective
Amendment No. 51.
(c) Supplement to Declaration of Trust dated January 20, 1981 is
incorporated herein by reference to Exhibit 1(c)(1) to Post-Effective
Amendment No. 51.
(d) Supplement to Declaration of Trust dated May 11, 1983 is incorporated
herein by reference to Exhibit 1(d) to Post-Effective Amendment No. 55.
(e) Amended and Restated Declaration of Trust dated November 18, 1986 is
incorporated herein by reference to Exhibit 1(e) to Post-Effective
Amendment No. 64.
(f) Supplement to Declaration of Trust dated December 13, 1989 is
incorporated herein by reference to Exhibit 1(f) to Post-Effective
Amendment No. 69.
(g) Supplement to the Declaration of Trust dated April 30, 1990 is
incorporated herein by reference to Exhibit 1(g) to Post-Effective
Amendment No. 72.
2. (a) Bylaws of the Trust, as amended, are filed herein as Exhibit 2(a).
3. Not applicable.
4. Not applicable.
5. (a) Management Contract dated April 19, 1990 between Spartan Municipal
Income Portfolio and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(b) to Post-Effective
Amendment No. 73.
(b) Management Contract dated December 13, 1990 between Spartan Ginnie
Mae Fund and Fidelity Management & Research Company is incorporated
herein by reference to Exhibit 5(c) to Post-Effective Amendment No. 75.
(c) Form of Management Contract between Spartan Maryland Municipal Income
Fund and Fidelity Management & Research Company was filed as Exhibit
5(e) to Post-Effective Amendment No. 81.
(d) Management Contract dated March 18, 1993 between Spartan Aggressive
Municipal Fund and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(f) to Post-Effective
Amendment No. 84.
(e) Management Contract dated March 18, 1993 between Spartan Intermediate
Municipal Fund and Fidelity Management & Research Company is
incorporated herein by reference to Exhibit 5(g) to Post-Effective
Amendment No. 84.
(f) Form of Management Contract between Fidelity Export Company Fund and
Fidelity Management & Research Company was filed as Exhibit 5(f) to
Post-Effective Amendment No. 86.
(g) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company, Fidelity Management & Research Company (U.K.) Inc.,
and Fidelity Union Street Trust on behalf of Fidelity Export Company Fund
was filed as Exhibit 5(g) to Post-Effective Amendment No. 86.
(h) Form of Sub-Advisory Agreement between Fidelity Management &
Research Company, Fidelity Management & Research Company (Far East)
Inc., and Fidelity Union Street Trust on behalf of Fidelity Export Company
Fund was filed as Exhibit 5(h) to Post-Effective Amendment No. 86.
(i) Form of Management Contract between Spartan Arizona Muncipal Income
Portfolio and Fidelity Management & Research Company is filed herein as
Exhibit 5(i).
6. (a) General Distribution Agreement, dated April 19, 1990, between
Spartan Municipal Income Portfolio and Fidelity Distributors Corporation is
incorporated herein by reference to Exhibit 6(c) to Post-Effective
Amendment No. 72.
(b) General Distribution Agreement, dated December 13, 1990, between
Spartan Ginnie Mae Fund and Fidelity Distributors Corporation is
incorporated herein by reference to Exhibit 6(b) to Post-Effective
Amendment No. 84.
(c) Form of General Distribution Agreement between Spartan Maryland
Municipal Income Fund and Fidelity Distributors Corporation was filed as
Exhibit 6(d) to Post-Effective Amendment No. 81.
(d) General Distribution Agreement, dated March 18, 1993, between Spartan
Aggressive Municipal Fund and Fidelity Distributors Corporation is
incorporated herein by reference to Exhibit 6(e) to Post-Effective
Amendment No. 84.
(e) General Distribution Agreement, dated March 18, 1993, between Spartan
Intermediate Municipal Fund and Fidelity Distributors Corporation is
incorporated herein by reference to Exhibit 6(f) to Post-Effective
Amendment No. 84.
(f) Form of General Distribution Agreement between Fidelity Union Street
Trust, on behalf of Fidelity Export Company Fund, and Fidelity Distributors
Corporation was filed as Exhibit 6(g) to Post-Effective Amendment No. 86.
(g) Form of General Distribution Agreement between Fidelity Union Street
Trust, on behalf of Spartan Arizona Municipal Income Portfolio, and
Fidelity Distributors Corporation is filed herein as Exhibit 6(h).
7. Retirement Plan for Non-Interested Person Trustees, Directors or
General Partners, is filed herein as Exhibit 7.
8. (a) Custodian Agreement dated July 18, 1991 between Fidelity Union
Street Trust and The Bank of New York is incorporated herein by reference
to Exhibit 8(a) to Post-Effective Amendment No .78.
(b) Custodian Agreement dated July 18, 1991 between Fidelity Union Street
Trust and United Missouri Bank, N.A. is incorporated herein by reference to
Exhibit 8(b) to Post-Effective Amendment No. 78.
(c) Form of Custodian Agreement between Fidelity Union Street Trust and
Morgan Guaranty Trust Company of New York was filed as Exhibit 8(c) to
Post-Effective Amendment No. 78.
9. (a) Amended Service Agreement dated June 1, 1989 between Registrant,
FMR Corp. and Fidelity Service Co. is incorporated herein by reference to
Exhibit 9(a) to Post-Effective Amendment No. 68.
(b) Forms of Schedules A (transfer, dividend disbursing and shareholders'
servicing agent); B (pricing and bookkeeping); and C (securities lending
transactions) relating to Spartan Maryland Municipal Income Fund, was filed
as Exhibit 9(b) to Post-Effective Amendment No. 81.
(c) Form of Appointment of Sub-Transfer Agent for Spartan Maryland
Municipal Income Fund was filed as Exhibit 9(c) to Post-Effective Amendment
No. 81.
(d) Form of Appointment of Sub-Servicing Agent for Spartan Maryland
Municipal Income Fund was filed as Exhibit 9(d) to Post-Effective Amendment
No. 81.
(e) Forms of Schedules A (transfer, dividend disbursing and shareholders'
servicing agent), B (pricing and bookkeeping), and C (securities lending
transactions) relating to Spartan Aggressive Municipal Fund, was filed as
Exhibit 9(e) to Post-Effective Amendment No. 82.
(f) Form of Appointment of Sub-Transfer Agent for Spartan Aggressive
Municipal Fund was filed as Exhibit 9(f) to Post-Effective Amendment No.
82.
(g) Form of Appointment of Sub-Servicing Agent for Spartan Aggressive
Municipal Fund was filed as Exhibit 9(g) to Post-Effective Amendment No.
82.
(h) Forms of Schedules A (transfer, dividend disbursing and shareholders'
servicing agent), B (pricing and bookkeeping), and C (securities lending
transactions) relating to Spartan Intermediate Municipal Fund, were filed
as Exhibit 9(h) to Post-Effective Amendment No. 82.
(i) Form of Appointment of Sub-Transfer Agent for Spartan Intermediate
Municipal Fund was filed as Exhibit 9(i) to Post-Effective Amendment No.
82.
(j) Form of Appointment of Sub-Servicing Agent for Spartan Intermediate
Municipal Fund was filed as Exhibit 9(j) to Post-Effective Amendment No.
82.
10. Not applicable.
11. Not applicable.
12. Not applicable.
13. Not applicable.
14. (a) Fidelity Individual Retirement Account Custodial Agreement and
Disclosure Statement, as currently in effect, is filed herein as Exhibit
14(a).
(b) Fidelity Defined Contribution Retirement Plan and Trust Agreement, as
currently in effect, is incorporated herein by reference to Exhibit 14(b)
to Post-Effective Amendment No. 72.
(c) Fidelity Defined Benefit Pension Plan and Trust, as currently in
effect, is incorporated herein by reference to Exhibit 14(c) to
Post-Effective Amendment No. 72.
(d) Fidelity Institutional Individual Retirement Account Custodial
Agreement and Disclosure Statement, as currently in effect, is filed herein
as Exhibit 14(d).
(e) Fidelity 403(b)(7) Custodial Account Agreement, as currently in
effect, is filed herein as Exhibit 14(e).
(f) Fidelity Master Plan for Savings and Investments, as currently in
effect, is incorporated herein by reference to Exhibit 14(f) to
Post-Effective Amendment 76.
(g) Fidelity 401(a) Prototype Plan for Tax-Exempt Employers, as currently
in effect, is incorporated herein by reference to Exhibit 14(g) to
Post-Effective Amendment No. 72.
(h) National Financial Services Corporation Individual Retirement Account
Custodial Agreement and Disclosure Statement, as currently in effect, is
filed herein as Exhibit 14(h).
(i) Fidelity Portfolio Advisory Services Individual Retirement Account
Custodial Agreement and Disclosure Statement, as currently in effect, is
filed herein as Exhibit 14(i).
(j) Fidelity Investments Section 403(b)(7) Individual Custodial Account
Agreement and Disclosure Statement, as currently in effect, is filed herein
as Exhibit 14(j).
(k) National Finacial Services Corporation Defined Contribution
Retirement Plan and Trust Agreement, as currently in effect, is filed
herein as Exhibit 14(k).
(l) The CORPORATEplan for Retirement Profit Sharing/401K Plan, as
currently in effect, is filed herein as Exhibit 14(l).
(m) The CORPORATEplan for Retirement Money Purchase Pension Plan, as
currently in effect, is filed herein as Exhibit 14(m).
15. (a) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan
Municipal Income Portfolio is incorporated herein by reference to Exhibit
15(b) to Post-Effective Amendment No. 72.
(b) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan
Ginnie Mae Fund is incorporated herein by reference to 15(c) to
Post-Effective Amendment No. 75.
(c) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan
Maryland Municipal Income Fund is incorporated herein by reference to
Exhibit 15(c) to Post-Effective Amendment No. 84.
(d) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan
Aggressive Municipal Fund is incorporated herein by reference to Exhibit
15(e) to Post-Effective Amendment No. 82.
(e) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan
Intermediate Municipal Fund is incorporated herein by reference to Exhibit
15(f) to Post-Effective Amendment No. 82.
(f) Distribution and Service Plan pursuant to Rule 12b-1 for Spartan
Arizona Municipal Income Portfolio is filed herein as Exhibit 15(g).
16. (a) A schedule for the computation of performance quotations for
Spartan Municipal Income Portfolio is incorporated herein by reference to
Exhibit 16(b) to Post-Effective Amendment No. 72.
(b) A schedule for the computation of performance quotations for Spartan
Ginnie Mae Fund is incorporated herein by reference to Exhibit 16(c) to
Post-Effective Amendment No. 72.
(c) A schedule for the computation of performance quotations for Spartan
Maryland Municipal Income Fund is incorporated herein by reference to
Exhibit 16(d) to Post-Effective Amendment No. 81.
(d) A schedule for the computation of performance calculations on behalf
of portfolios of Fidelity Union Street Trust is incorporated herein by
reference to Exhibit 16(e) to Post-Effective Amendment No. 81.
Item 25. Persons Controlled by or Under Common Control with Registrant
The Board of Trustees of Fidelity Union Street Trust is the same as the
boards of other funds advised by FMR, each of which has Fidelity Management
& Research Company as its investment adviser. In addition, the officers
of these funds are substantially identical. Nonetheless, Registrant takes
the position that it is not under common control with these other funds
since the power residing in the respective boards and officers arises as
the result of an official position with the respective funds.
Item 26. Number of Holders of Securities: May 31, 1994
Title of Class: Shares of Beneficial Interest
Name of Series Number of Record Holders
Spartan Ginnie Mae Fund 17,087
Spartan Short-Intermediate Municipal Fund 2,105
Spartan Municipal Income Portfolio 16,253
Spartan Intermediate Municipal Fund 6,107
Spartan Aggressive Municipal Fund 1,308
Spartan Maryland Municipal Income Fund 1,599
Item 27. Indemnification
Article XI, Section 2 of the Declaration of Trust sets forth the
reasonable and fair means for determining whether indemnification shall be
provided to any past or present Trustee or officer. It states that the
Registrant shall indemnify any present or past Trustee or officer to the
fullest extent permitted by law against liability and all expenses
reasonably incurred by him in connection with any claim, action, suit or
proceeding in which he is involved by virtue of his service as a trustee,
an officer, or both. Additionally, amounts paid or incurred in settlement
of such matters are covered by this indemnification. Indemnification will
not be provided in certain circumstances, however. These include instances
of willful misfeasance, bad faith, gross negligence, and reckless disregard
of the duties involved in the conduct of the particular office involved.
Item 28. Business and Other Connections of Investment Adviser
(1) FIDELITY MANAGEMENT & RESEARCH COMPANY
FMR serves as investment adviser to a number of other investment
companies. The directors and officers of the Adviser have held, during the
past two fiscal years, the following positions of a substantial nature.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman of the Executive Committee of FMR; President
and Chief Executive Officer of FMR Corp.; Chairman of
the Board and a Director of FMR, FMR Corp., FMR Texas
Inc., Fidelity Management & Research (U.K.) Inc. and
Fidelity Management & Research (Far East) Inc.;
President and Trustee of funds advised by FMR;
J. Gary Burkhead President of FMR; Managing Director of FMR Corp.;
President and a Director of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc. and Fidelity
Management & Research (Far East) Inc.; Senior Vice
President and Trustee of funds advised by FMR.
Peter S. Lynch Vice Chairman of FMR (1992).
David Breazzano Vice President of FMR (1993) and of a fund advised by
FMR.
Stephan Campbell Vice President of FMR (1993).
Rufus C. Cushman, Jr. Vice President of FMR and of funds advised by FMR;
Corporate Preferred Group Leader.
Will Danoff Vice President of FMR (1993) and of a fund advised by
FMR.
Scott DeSano Vice President of FMR (1993).
Penelope Dobkin Vice President of FMR and of a fund advised by FMR.
Larry Domash Vice President of FMR (1993).
George Domolky Vice President of FMR (1993) and of a fund advised by
FMR.
Charles F. Dornbush Senior Vice President of FMR; Chief Financial Officer of
the Fidelity funds; Treasurer of FMR Texas Inc., Fidelity
Management & Research (U.K.) Inc., and Fidelity
Management & Research (Far East) Inc.
Robert K. Duby Vice President of FMR.
Margaret L. Eagle Vice President of FMR and of a fund advised by FMR.
Kathryn L. Eklund Vice President of FMR.
Richard B. Fentin Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Daniel R. Frank Vice President of FMR and of funds advised by FMR.
Gary L. French Vice President of FMR and Treasurer of the funds advised
by FMR. Prior to assuming the position as Treasurer he
was Senior Vice President, Fund Accounting - Fidelity
Accounting & Custody Services Co.
Michael S. Gray Vice President of FMR and of funds advised by FMR.
Barry A. Greenfield Vice President of FMR and of a fund advised by FMR.
William J. Hayes Senior Vice President of FMR; Income/Growth Group
Leader and International Group Leader.
Robert Haber Vice President of FMR and of funds advised by FMR.
Daniel Harmetz Vice President of FMR and of a fund advised by FMR.
Ellen S. Heller Vice President of FMR.
</TABLE>
John Hickling Vice President of FMR (1993) and of funds advised by
FMR.
<TABLE>
<CAPTION>
<S> <C>
Robert F. Hill Vice President of FMR; and Director of Technical
Research.
Stephan Jonas Vice President of FMR (1993).
David B. Jones Vice President of FMR (1993).
Steven Kaye Vice President of FMR (1993) and of a fund advised by
FMR.
Frank Knox Vice President of FMR (1993).
Robert A. Lawrence Senior Vice President of FMR (1993); and High Income
Group Leader.
Alan Leifer Vice President of FMR and of a fund advised by FMR.
Harris Leviton Vice President of FMR (1993) and of a fund advised by
FMR.
Bradford E. Lewis Vice President of FMR and of funds advised by FMR.
Robert H. Morrison Vice President of FMR and Director of Equity Trading.
David Murphy Vice President of FMR and of funds advised by FMR.
Jacques Perold Vice President of FMR.
Brian Posner Vice President of FMR (1993) and of a fund advised by
FMR.
Anne Punzak Vice President of FMR and of funds advised by FMR.
Richard A. Spillane Vice President of FMR and of funds advised by FMR; and
Director of Equity Research.
Robert E. Stansky Senior Vice President of FMR (1993) and of funds advised
by FMR.
Thomas Steffanci Senior Vice President of FMR (1993); and Fixed-Income
Division Head.
Gary L. Swayze Vice President of FMR and of funds advised by FMR; and
Tax-Free Fixed-Income Group Leader.
Donald Taylor Vice President of FMR (1993) and of funds advised by
FMR.
Beth F. Terrana Senior Vice President of FMR (1993) and of funds advised
by FMR.
Joel Tillinghast Vice President of FMR (1993) and of a fund advised by
FMR.
Robert Tucket Vice President of FMR (1993).
George A. Vanderheiden Senior Vice President of FMR; Vice President of funds
advised by FMR; and Growth Group Leader.
Jeffrey Vinik Senior Vice President of FMR (1993) and of a fund advised
by FMR.
Guy E. Wickwire Vice President of FMR and of a fund advised by FMR.
Arthur S. Loring Senior Vice President (1993), Clerk and General Counsel of
FMR; Vice President, Legal of FMR Corp.; and Secretary
of funds advised by FMR.
</TABLE>
(2) FIDELITY MANAGEMENT & RESEARCH (U.K.) INC. (FMR U.K.)
FMR U.K. provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following positions
of a substantial nature during the past two fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR U.K.; Chairman of the
Executive Committee of FMR; Chief Executive Officer of FMR
Corp.; Chairman of the Board and a Director of FMR, FMR
Corp., FMR Texas Inc., and Fidelity Management &
Research (Far East) Inc.; President and Trustee of funds advised
by FMR.
J. Gary Burkhead President and Director of FMR U.K.; President of FMR;
Managing Director of FMR Corp.; President and a Director of
FMR Texas Inc. and Fidelity Management & Research (Far
East) Inc.; Senior Vice President and Trustee of funds advised
by FMR.
Richard C. Habermann Senior Vice President of FMR U.K.; Senior Vice President of
Fidelity Management & Research (Far East) Inc.; Director
of Worldwide Research of FMR.
Charles F. Dornbush Treasurer of FMR U.K.; Treasurer of Fidelity Management
& Research (Far East) Inc.; Treasurer of FMR Texas Inc.,
Senior Vice President and Chief Financial Officer of the Fidelity
funds.
David Weinstein Clerk of FMR U.K.; Clerk of Fidelity Management &
Research (Far East) Inc.; Secretary of FMR Texas Inc.
</TABLE>
(3) FIDELITY MANAGEMENT & RESEARCH (FAR EAST) INC. (FMR Far East)
FMR Far East provides investment advisory services to Fidelity Management
& Research Company and Fidelity Management Trust Company. The
directors and officers of the Sub-Adviser have held the following positions
of a substantial nature during the past two fiscal years.
<TABLE>
<CAPTION>
<S> <C>
Edward C. Johnson 3d Chairman and Director of FMR Far East; Chairman of the
Executive Committee of FMR; Chief Executive Officer of
FMR Corp.; Chairman of the Board and a Director of
FMR, FMR Corp., FMR Texas Inc. and Fidelity
Management & Research (U.K.) Inc.; President and
Trustee of funds advised by FMR.
J. Gary Burkhead President and Director of FMR Far East; President of
FMR; Managing Director of FMR Corp.; President and a
Director of FMR Texas Inc. and Fidelity Management
& Research (U.K.) Inc.; Senior Vice President and
Trustee of funds advised by FMR.
Richard C. Habermann Senior Vice President of FMR Far East; Senior Vice
President of Fidelity Management & Research
(U.K.) Inc.; Director of Worldwide Research of FMR.
William R. Ebsworth Vice President of FMR Far East.
Bill Wilder Vice President of FMR Far East (1993).
Charles F. Dornbush Treasurer of FMR Far East; Treasurer of Fidelity
Management & Research (U.K.) Inc.; Treasurer of
FMR Texas Inc.; Senior Vice President and Chief
Financial Officer of the Fidelity funds.
David C. Weinstein Clerk of FMR Far East; Clerk of Fidelity Management
& Research (U.K.) Inc.; Secretary of FMR Texas
Inc.
</TABLE>
Item 29. Principal Underwriters
(a) Fidelity Distributors Corporation (FDC) acts as distributor for most
funds advised by FMR and the following other funds:
CrestFunds, Inc.
The Victory Funds
ARK Funds
(b)
Name and Principal Positions and Offices Positions and Offices
Business Address* With Underwriter With Registrant
Edward C. Johnson 3d Director Trustee and President
Nita B. Kincaid Director None
W. Humphrey Bogart Director None
Kurt A. Lange President and Treasurer None
William L. Adair Senior Vice President None
Thomas W. Littauer Senior Vice President None
Arthur S. Loring Vice President and Clerk Secretary
* 82 Devonshire Street, Boston, MA
(c) Not applicable.
Item 30. Location of Accounts and Records
All accounts, books, and other documents required to be maintained by
Section 31a of the 1940 Act and the Rules promulgated thereunder are
maintained by Fidelity Management & Research Company or Fidelity
Service Co., 82 Devonshire Street, Boston, MA 02109, or the funds'
respective custodian: The Bank of New York, 110 Washington Street, New
York, N.Y., The Chase Manhattan Bank, 1211 Avenue of the Americas, New
York, N.Y., and United Missouri Bank, N.A., 1010 Grand Avenue, Kansas City,
MO.
Item 31. Management Services
Not applicable.
Item 32. Undertakings
(1) The Registrant undertakes for Spartan Maryland Municipal Income Fund:
(1) to call a meeting of shareholders for the purpose of voting upon the
question of removal of a trustee or trustees, when requested to do so by
record holders of not less than 10% of its outstanding shares; and (2) to
assist in communications with other shareholders pursuant to Section
16(c)(1) and (2), whenever shareholders meeting the qualifications set
forth in Section 16(c) seek the opportunity to communicate with other
shareholders with a view toward requesting a meeting.
(2) The Registrant undertakes for Spartan Aggressive Municipal Fund,
Spartan Intermediate Municipal Fund, Fidelity Export Company Fund, and
Spartan Arizona Municipal Income Portfolio: (1) to call a meeting of
shareholders for the purpose of voting upon the questions of removal of a
trustee or trustees, when requested to do so by record holders of not less
than 10% of its outstanding shares; and (2) to assist in communications
with other shareholders pursuant to Section 16(c)(1) and (2), whenever
shareholders meeting the qualifications set forth in Section 16(c) seek the
opportunity to communicate with other shareholders with a view toward
requesting a meeting.
(3) The Registrant on behalf of Spartan Short-Intermediate Municipal
Fund, Spartan Aggressive Municipal Fund, Spartan Intermediate Municipal
Fund, Spartan Ginnie Mae Fund, Spartan Municipal Income Portfolio, Spartan
Maryland Municipal Income Fund, Fidelity Export Company Fund, and Spartan
Arizona Municipal Income Portfolio undertakes, provided the information
required by Item 5A is contained in the annual report, to furnish each
person to whom a prospectus has been delivered, upon their request and
without charge, a copy of the Registrant's latest annual report to
shareholders.
(4) The Registrant undertakes to file a Post-Effective Amendment, using
financial statements for Fidelity Export Company Fund, which need not be
certified, within six months of the fund's effectiveness, unless permitted
by the SEC to extend this period.
(5) The Registrant undertakes to file a Post-Effective Amendment, using
financial statements for Spartan Arizona Municipal Income Portfolio, which
need not be certified, within six months of the fund's effectiveness,
unless permitted by the SEC to extend this period.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment No. 87 to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Boston, and Commonwealth of Massachusetts, on the 20th day of July, 1994.
FIDELITY UNION STREEET TRUST
By /s/Edward C. Johnson 3d (dagger)
Edward C. Johnson 3d, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
(Signature) (Title) (Date)
<TABLE>
<CAPTION>
<S> <C> <C>
/s/Edward C. Johnson 3d(dagger) President and Trustee July 20, 1994
Edward C. Johnson 3d (Principal Executive Officer)
</TABLE>
/s/Gary L. French Treasurer July 20, 1994
Gary L. French
/s/J. Gary Burkhead Trustee July 20, 1994
J. Gary Burkhead
/s/Ralph F. Cox * Trustee July 20, 1994
Ralph F. Cox
/s/Phyllis Burke Davis * Trustee July 20, 1994
Phyllis Burke Davis
/s/Richard J. Flynn * Trustee July 20, 1994
Richard J. Flynn
/s/E. Bradley Jones * Trustee July 20, 1994
E. Bradley Jones
/s/Donald J. Kirk * Trustee July 20, 1994
Donald J. Kirk
/s/Peter S. Lynch * Trustee July 20, 1994
Peter S. Lynch
/s/Edward H. Malone * Trustee July 20, 1994
Edward H. Malone
/s/Gerald C. McDonough* Trustee July 20, 1994
Gerald C. McDonough
/s/Thomas R. Williams * Trustee July 20, 1994
Thomas R. Williams
(dagger) Signatures affixed by J. Gary Burkhead pursuant to a power of
attorney dated October 20, 1993 and filed herewith.
* Signature affixed by Robert C. Hacker pursuant to a power of attorney
dated October 20, 1993 and filed herewith.
POWER OF ATTORNEY
We, the undersigned Directors, Trustees or General Partners, as the case
may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individuals serve as Board Members (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, our true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for us and in our names in the appropriate capacities, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
our names and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS our hands on this twentieth day of October, 1993.
/s/Edward C. Johnson 3d /s/Peter S. Lynch
Edward C. Johnson 3d Peter S. Lynch
/s/J. Gary Burkhead /s/Edward H. Malone
J. Gary Burkhead Edward H. Malone
/s/Richard J. Flynn /s/Gerald C. McDonough
Richard J. Flynn Gerald C. McDonough
/s/E. Bradley Jones /s/Thomas R. Williams
E. Bradley Jones Thomas R. Williams
/s/Donald J. Kirk
Donald J. Kirk
POWER OF ATTORNEY
I, the undersigned President and Director, Trustee or General Partner, as
the case may be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Institutional Trust
Fidelity Advisor Series II Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Magellan Fund
Fidelity Advisor Series IV Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series V Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VII Fidelity Municipal Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Securities Fund
Fidelity Commonwealth Trust Fidelity Select Portfolios
Fidelity Congress Street Fund Fidelity Sterling Performance Portfolio, L.P.
Fidelity Contrafund Fidelity Summer Street Trust
Fidelity Corporate Trust Fidelity Trend Fund
Fidelity Court Street Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Destiny Portfolios Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Union Street Trust
Fidelity Devonshire Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Exchange Fund Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Income Fund
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as President and Board Member (collectively, the
"Funds"), hereby severally constitute and appoint J. Gary Burkhead, my true
and lawful attorney-in-fact, with full power of substitution, and with full
power to sign for me and in my name in the appropriate capacity, all
Pre-Effective Amendments to any Registration Statements of the Funds, any
and all subsequent Post-Effective Amendments to said Registration
Statements, any Registration Statements on Form N-14, and any supplements
or other instruments in connection therewith, and generally to do all such
things in my name and behalf in connection therewith as said
attorney-in-fact deem necessary or appropriate, to comply with the
provisions of the Securities Act of 1933 and Investment Company Act of
1940, and all related requirements of the Securities and Exchange
Commission. I hereby ratify and confirm all that said attorneys-in-fact or
their substitutes may do or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Edward C. Johnson 3d October 20, 1993
Edward C. Johnson 3d
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Magellan Fund
Fidelity Advisor Series III Fidelity Massachusetts Municipal Trust
Fidelity Advisor Series IV Fidelity Money Market Trust
Fidelity Advisor Series VI Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series VIII Fidelity New York Municipal Trust
Fidelity California Municipal Trust Fidelity Puritan Trust
Fidelity Capital Trust Fidelity School Street Trust
Fidelity Charles Street Trust Fidelity Select Portfolios
Fidelity Commonwealth Trust Fidelity Sterling Performance Portfolio, L.P.
Fidelity Congress Street Fund Fidelity Summer Street Trust
Fidelity Contrafund Fidelity Trend Fund
Fidelity Deutsche Mark Performance Fidelity Union Street Trust
Portfolio, L.P. Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Devonshire Trust Fidelity U.S. Investments-Government Securities
Fidelity Financial Trust Fund, L.P.
Fidelity Fixed-Income Trust Fidelity Yen Performance Portfolio, L.P.
Fidelity Government Securities Fund Spartan U.S. Treasury Money Market
Fidelity Hastings Street Trust Fund
Fidelity Income Fund Variable Insurance Products Fund
Fidelity Institutional Trust Variable Insurance Products Fund II
Fidelity Investment Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Ralph F. Cox October 20, 1993
Ralph F. Cox
POWER OF ATTORNEY
I, the undersigned Director, Trustee or General Partner, as the case may
be, of the following investment companies:
<TABLE>
<CAPTION>
<S> <C>
Fidelity Advisor Series I Fidelity Investment Trust
Fidelity Advisor Series III Fidelity Mt. Vernon Street Trust
Fidelity Advisor Series IV Fidelity School Street Trust
Fidelity Advisor Series VI Fidelity Select Portfolios
Fidelity Advisor Series VIII Fidelity Sterling Performance Portfolio, L.P.
Fidelity Beacon Street Trust Fidelity Trend Fund
Fidelity Capital Trust Fidelity Union Street Trust
Fidelity Commonwealth Trust Fidelity U.S. Investments-Bond Fund, L.P.
Fidelity Contrafund Fidelity U.S. Investments-Government Securities
Fidelity Deutsche Mark Performance Fund, L.P.
Portfolio, L.P. Fidelity Yen Performance Portfolio, L.P.
Fidelity Devonshire Trust Spartan U.S. Treasury Money Market
Fidelity Financial Trust Fund
Fidelity Fixed-Income Trust Variable Insurance Products Fund
Fidelity Government Securities Fund Variable Insurance Products Fund II
Fidelity Hastings Street Trust
Fidelity Institutional Trust
</TABLE>
plus any other investment company for which Fidelity Management &
Research Company acts as investment adviser and for which the undersigned
individual serves as a Board Member (collectively, the "Funds"), hereby
severally constitute and appoint Arthur J. Brown, Arthur C. Delibert,
Robert C. Hacker, Richard M. Phillips, Dana L. Platt and Stephanie A.
Xupolos, each of them singly, my true and lawful attorneys-in-fact, with
full power of substitution, and with full power to each of them, to sign
for me and in my name in the appropriate capacity, all Pre-Effective
Amendments to any Registration Statements of the Funds, any and all
subsequent Post-Effective Amendments to said Registration Statements, any
Registration Statements on Form N-14, and any supplements or other
instruments in connection therewith, and generally to do all such things in
my name and behalf in connection therewith as said attorneys-in-fact deem
necessary or appropriate, to comply with the provisions of the Securities
Act of 1933 and Investment Company Act of 1940, and all related
requirements of the Securities and Exchange Commission, hereby ratifying
and confirming all that said attorneys-in-fact or their substitutes may do
or cause to be done by virtue hereof.
WITNESS my hand on the date set forth below.
/s/Phyllis Burke Davis October 20, 1993
Phyllis Burke Davis
Exibit 2(a)
May 19,1994
BYLAWS
of
FIDELITY MASSACHUSETTS BUSINESS TRUSTS
These Bylaws of Fidelity Massachusetts business trusts (individually the
"Trust") are subject to the Declaration of Trust of the Trust, as from time
to time amended, supplemented or restated (the "Declaration of Trust").
Capitalized terms used herein which are defined in the Declaration of Trust
are used as therein defined.
ARTICLE I
PRINCIPAL OFFICE
The principal office of the Trust shall be located in Boston,
Massachusetts, or such other location as the Trustees may, from time to
time, determine. The Trust may establish and maintain such other offices
and places of business as the Trustees may, from time to time, determine.
ARTICLE II
OFFICERS AND THEIR ELECTION
Officers
Section 1. The officers of the Trust shall be a President, a Treasurer, a
Secretary, and such other officers as the Trustees may from time to time
elect. The Trustees may delegate to any officer or committee the power to
appoint any subordinate officers or agents. It shall not be necessary for
any Trustee or other officer to be a holder of Shares in the Trust.
Election of Officers
Section 2. The Treasurer and Secretary shall be chosen by the Trustees.
The President shall be chosen by and from the Trustees. Two or more
offices may be held by a single person except the offices of President and
Secretary. Subject to the provisions of Section 13 of Article III hereof,
the President, the Treasurer and the Secretary shall each hold office until
their successors are chosen and qualified and all other officers shall hold
office at the pleasure of the Trustees.
Resignations
Section 3. Any officer of the Trust may resign, notwithstanding Section 2
hereof, by filing a written resignation with the President, the Trustees or
the Secretary, which resignation shall take effect on being so filed or at
such time as may be therein specified.
ARTICLE III
POWERS AND DUTIES OF OFFICERS AND TRUSTEES
Management Of The Trust-General
Section 1. The business and affairs of the Trust shall be managed by, or
under the direction of, the Trustees, and they shall have all powers
necessary and desirable to carry out their responsibilities, so far as such
powers are not inconsistent with the laws of the Commonwealth of
Massachusetts, the Declaration of Trust or with these Bylaws.
Executive And Other Committees
Section 2. The Trustees may elect from their own number an executive
committee, which shall have any or all the powers of the Trustees while the
Trustees are not in session. The Trustees may also elect from their own
number other committees from time to time. The number composing such
committees and the powers conferred upon the same are to be determined by
vote of a majority of the Trustees. All members of such committees shall
hold such offices at the pleasure of the Trustees. The Trustees may
abolish any such committee at any time. Any committee to which the
Trustees delegate any of their powers or duties shall keep records of its
meetings and shall report its actions to the Trustees. The Trustees shall
have power to rescind any action of any committee, but no such rescission
shall have retroactive effect.
Compensation
Section 3. Each Trustee and each committee member may receive such
compensation for his services and reimbursement for his expenses as may be
fixed from time to time by resolution of the Trustees.
Chairman Of The Trustees
Section 4. The Trustees shall appoint from among their number a Chairman
who shall serve as such at the pleasure of the Trustees. When present, he
shall preside at all meetings of the Shareholders and the Trustees, and he
may, subject to the approval of the Trustees, appoint a Trustee to preside
at such meetings in his absence. He shall perform such other duties as the
Trustees may from time to time designate.
President
Section 5. The President shall be the chief executive officer of the
Trust and, subject to the direction of the Trustees, shall have general
administration of the business and policies of the Trust. Except as the
Trustees may otherwise order, the President shall have the power to grant,
issue, execute or sign such powers of attorney, proxies, agreements or
other documents as may be deemed advisable or necessary in the furtherance
of the interests of the Trust or any Series thereof. He shall also have
the power to employ attorneys, accountants and other advisers and agents
and counsel for the Trust. The President shall perform such duties
additional to all of the foregoing as the Trustees may from time to time
designate.
Treasurer
Section 6. The Treasurer shall be the principal financial and accounting
officer of the Trust. He shall deliver all funds and securities of the
Trust which may come into his hands to such company as the Trustees shall
employ as Custodian in accordance with the Declaration of Trust and
applicable provisions of law. He shall make annual reports regarding the
business and condition of the Trust, which reports shall be preserved in
Trust records, and he shall furnish such other reports regarding the
business and condition of the Trust as the Trustees may from time to time
require. The Treasurer shall perform such additional duties as the
Trustees may from time to time designate.
Secretary
Section 7. The Secretary shall record in books kept for the purpose all
votes and proceedings of the Trustees and the Shareholders at their
respective meetings. He shall have the custody of the seal of the Trust.
The Secretary shall perform such additional duties as the Trustees may from
time to time designate.
Vice President
Section 8. Any Vice President of the Trust shall perform such duties as
the Trustees or the President may from time to time designate. At the
request or in the absence or disability of the President, the Vice
President (or, if there are two or more Vice Presidents, then the senior of
the Vice Presidents present and able to act) may perform all the duties of
the President and, when so acting, shall have all the powers of and be
subject to all the restrictions upon the President.
Assistant Treasurer
Section 9. Any Assistant Treasurer of the Trust shall perform such duties
as the Trustees or the Treasurer may from time to time designate, and, in
the absence of the Treasurer, the senior Assistant Treasurer, present and
able to act, may perform all the duties of the Treasurer.
Assistant Secretary
Section 10. Any Assistant Secretary of the Trust shall perform such
duties as the Trustees or the Secretary may from time to time designate,
and, in the absence of the Secretary, the senior Assistant Secretary,
present and able to act, may perform all the duties of the Secretary.
Subordinate Officers
Section 11. The Trustees from time to time may appoint such other
officers or agents as they may deem advisable, each of whom shall have such
title, hold office for such period, have such authority and perform such
duties as the Trustees may determine. The Trustees from time to time may
delegate to one or more officers or committees of Trustees the power to
appoint any such subordinate officers or agents and to prescribe their
respective terms of office, authorities and duties.
Surety Bonds
Section 12. The Trustees may require any officer or agent of the Trust to
execute a bond (including, without limitation, any bond required by the
Investment Company Act of 1940, as amended ("the 1940 Act") and the rules
and regulations of the Securities and Exchange Commission ("Commission"))
to the Trust in such sum and with such surety or sureties as the Trustees
may determine, conditioned upon the faithful performance of his duties to
the Trust including responsibility for negligence and for the accounting of
any of the Trust's property, funds or securities that may come into his
hands.
Removal
Section 13. Any officer may be removed from office whenever in the
judgment of the Trustees the best interest of the Trust will be served
thereby, by the vote of a majority of the Trustees given at any regular
meeting or any special meeting of the Trustees. In addition, any officer
or agent appointed in accordance with the provisions of Section 11 hereof
may be removed, either with or without cause, by any officer upon whom such
power of removal shall have been conferred by the Trustees.
Remuneration
Section 14. The salaries or other compensation, if any, of the officers
of the Trust shall be fixed from time to time by resolution of the
Trustees.
ARTICLE IV
SHAREHOLDERS' MEETINGS
Special Meetings
Section 1. A special meeting of the shareholders shall be called by the
Secretary whenever (i) ordered by the Trustees or (ii) requested in writing
by the holder or holders of at least 10% of the Outstanding Shares entitled
to vote. If the Secretary, when so ordered or requested, refuses or
neglects for more than 30 days to call such special meeting, the Trustees
or the Shareholders so requesting, may, in the name of the Secretary, call
the meeting by giving notice thereof in the manner required when notice is
given by the Secretary. If the meeting is a meeting of the Shareholders of
one or more Series or classes of Shares, but not a meeting of all
Shareholders of the Trust, then only special meetings of the Shareholders
of such one or more Series or Classes shall be called and only the
shareholders of such one or more Series or Classes shall be entitled to
notice of and to vote at such meeting.
Notices
Section 2. Except as above provided, notices of any meeting of the
Shareholders shall be given by the Secretary by delivering or mailing,
postage prepaid, to each Shareholder entitled to vote at said meeting,
written or printed notification of such meeting at least fifteen days
before the meeting, to such address as may be registered with the Trust by
the Shareholder. Notice of any Shareholder meeting need not be given to
any Shareholder if a written waiver of notice, executed before or after
such meeting, is filed with the record of such meeting, or to any
Shareholder who shall attend such meeting in person or by proxy. Notice of
adjournment of a Shareholders' meeting to another time or place need not be
given, if such time and place are announced at the meeting or reasonable
notice is given to persons present at the meeting and the adjourned meeting
is held within a reasonable time after the date set for the original
meeting.
Voting-Proxies
Section 3. Subject to the provisions of the Declaration of Trust,
shareholders entitled to vote may vote either in person or by proxy,
provided that either (i) an instrument authorizing such proxy to act is
executed in writing by the Shareholder and dated not more than eleven
months before the meeting, unless the instrument specifically provides for
a longer period or (ii) the Trustees adopt by resolution an electronic,
telephonic, computerized or other alternative form of execution authorizing
the proxy to act which authorization is received not more than eleven
months before the meeting. Proxies shall be delivered to the Secretary of
the Trust or other person responsible for recording the proceedings before
being voted. A proxy with respect to Shares held in the name of two or more
persons shall be valid if executed by one of them unless at or prior to
exercise of such proxy the Trust receives a specific written notice to the
contrary from any one of them. Unless otherwise specifically limited by
their terms, proxies shall entitle the holder thereof to vote at any
adjournment of a meeting. A proxy purporting to be exercised by or on
behalf of a Shareholder shall be deemed valid unless challenged at or prior
to its exercise and the burden or proving invalidity shall rest on the
challenger. At all meetings of the Shareholders, unless the voting is
conducted by inspectors, all questions relating to the qualifications of
voters, the validity of proxies, and the acceptance or rejection of votes
shall be decided by the Chairman of the meeting. Except as otherwise
provided herein or in the Declaration of Trust, as these Bylaws or such
Declaration of Trust may be amended or supplemented from time to time, all
matters relating to the giving, voting or validity of proxies shall be
governed by the General Corporation Law of the Commonwealth of
Massachusetts relating to proxies, and judicial interpretations thereunder,
as if the Trust were a Massachusetts corporation and the Shareholders were
shareholders of a Massachusetts corporation.
Place Of Meeting
Section 4. All special meetings of the Shareholders shall be held at the
principal place of business of the Trust or at such other place in the
United States as the Trustees may designate.
Action Without a Meeting
Section 5. Any action to be taken by Shareholders may be taken without a
meeting if all Shareholders entitled to vote on the matter consent to the
action in writing and the written consents are filed with the records of
meetings of Shareholders of the Trust. Such consent shall be treated for
all purposes as a vote at a meeting of the Shareholders held at the
principal place of business of the Trust.
ARTICLE V
TRUSTEES' MEETINGS
Special Meetings
Section 1. Special meetings of the Trustees may be called orally or in
writing by the Chairman of the Board of Trustees or any two other Trustees.
Regular Meetings
Section 2. Regular meetings of the Trustees may be held at such places
and at such times as the Trustees may from time to time determine; each
Trustee present at such determination shall be deemed a party calling the
meeting and no call or notice will be required to such Trustee provided
that any Trustee who is absent when such determination is made shall be
given notice of the determination by the Chairman or any two other
Trustees, as provided for in the Declaration of Trust.
Quorum
Section 3. A majority of the Trustees shall constitute a quorum for the
transaction of business and an action of a majority of the quorum shall
constitute action of the Trustees.
Notice
Section 4. Except as otherwise provided, notice of any special meeting of
the Trustees shall be given by the party calling the meeting to each
Trustee, as provided for in the Declaration of Trust. A written notice may
be mailed, postage prepaid, addressed to him at his address as registered
on the books of the Trust or, if not so registered, at his last known
address.
Place Of Meeting
Section 5. All special meetings of the Trustees shall be held at the
principal place of business of the Trust or such other place as the
Trustees may designate. Any meeting may adjourn to any place.
Special Action
Section 6. When all the Trustees shall be present at any meeting, however
called or wherever held, or shall assent to the holding of the meeting
without notice, or shall sign a written assent thereto filed with the
record of such meeting, the acts of such meeting shall be valid as if such
meeting had been regularly held.
Action By Consent
Section 7. Any action by the Trustees may be taken without a meeting if a
written consent thereto is signed by all the Trustees and filed with the
records of the Trustees' meeting. Such consent shall be treated, for all
purposes, as a vote at a meeting of the Trustees held at the principal
place of business of the Trustees.
Participation in Meetings By Conference Telephone
Section 8. Trustees may participate in a meeting of Trustees by
conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation shall constitute presence in person at such meeting. Any
meeting conducted by telephone shall be deemed to take place at and from
the principal office of the Trust.
ARTICLE VI
SHARES OF BENEFICIAL INTEREST
Beneficial Interest
Section 1. The beneficial interest in the Trust shall at all times be
divided into such transferable Shares of one or more separate and distinct
Series, or classes thereof, as the Trustees shall from time to time create
and establish. The number of Shares is unlimited, and each Share of each
Series or class thereof shall be without par value and shall represent an
equal proportionate interest with each other Share in the Series, none
having priority or preference over another, except to the extent that such
priorities or preferences are established with respect to one or more
classes of shares consistent with applicable law and any rule or order of
the Commission.
Transfer of Shares
Section 2. The Shares of the Trust shall be transferable, so as to affect
the rights of the Trust, only by transfer recorded on the books of the
Trust, in person or by attorney.
Equitable Interest Not Recognized
Section 3. The Trust shall be entitled to treat the holder of record of
any Share or Shares of beneficial interest as the holder in fact thereof,
and shall not be bound to recognize any equitable or other claim or
interest in such Share or Shares on the part of any other person except as
may be otherwise expressly provided by law.
Share Certificate
Section 4. No certificates certifying the ownership of Shares shall be
issued except as the Trustees may otherwise authorize. The Trustees may
issue certificates to a Shareholder of any Series or class thereof for any
purpose and the issuance of a certificate to one or more Shareholders shall
not require the issuance of certificates generally. In the event that the
Trustees authorize the issuance of Share certificates, such certificate
shall be in the form proscribed from time to time by the Trustees and shall
be signed by the President or a Vice President and by the Treasurer,
Assistant Treasurer, Secretary or Assistant Secretary. Such signatures may
be facsimiles if the certificate is signed by a transfer or shareholder
services agent or by a registrar, other than a Trustee, officer or employee
of the Trust. In case any officer who has signed or whose facsimile
signature has been placed on such certificate shall have ceased to be such
officer before such certificate is issued, it may be issued by the Trust
with the same effect as if he or she were such officer at the time of its
issue.
In lieu of issuing certificates for Shares, the Trustees or the transfer
or shareholder services agent may either issue receipts therefor or may
keep accounts upon the books of the Trust for the record holders of such
Shares, who shall in either case be deemed, for all purposes hereunder, to
be the holders of certificates for such Shares as if they had accepted such
certificates and shall be held to have expressly assented and agreed to the
terms hereof.
Loss of Certificate
Section 5. In the case of the alleged loss or destruction or the
mutilation of a Share certificate, a duplicate certificate may be issued in
place thereof, upon such terms as the Trustees may prescribe.
Discontinuance of Issuance Of Certificates
Section 6. The Trustees may at any time discontinue the issuance of Share
certificates and may, by written notice to each Shareholder, require the
surrender of Share certificates to the Trust for cancellation. Such
surrender and cancellation shall not affect the ownership or
transferability of Shares in the Trust.
ARTICLE VII
OWNERSHIP OF ASSETS OF THE TRUST
The Trustees, acting for and on behalf of the Trust, shall be deemed to
hold legal and beneficial ownership of any income earned on securities held
by the Trust issued by any business entity formed, organized or existing
under the laws of any jurisdiction other than a state, commonwealth,
possession or colony of the United States or the laws of the United States.
ARTICLE VIII
INSPECTION OF BOOKS
The Trustees shall from time to time determine whether and to what extent,
and at what times and places, and under what conditions and regulations the
accounts and books of the Trust or any of them shall be open to the
inspection of the Shareholders; and no Shareholder shall have any right to
inspect any account or book or document of the Trust except as conferred by
law or otherwise by the Trustees or by resolution of the Shareholders.
ARTICLE IX
INSURANCE OF OFFICERS, TRUSTEES, AND EMPLOYEES
The Trust may purchase and maintain insurance on behalf of any Covered
Person or employee of the Trust, including any Covered Person or employee
of the Trust who is or was serving at the request of the Trust as a
Trustee, officer or employee of a corporation, partnership, joint venture,
trust or other enterprise against any liability asserted against him and
incurred by him in any such capacity or arising out of his status as such,
whether or not the Trustees would have the power to indemnify him against
such liability.
The Trust may not acquire or obtain a contract for insurance that protects
or purports to protect any Trustee or officer of the Trust against any
liability to the Trust or its Shareholders to which he would otherwise be
subject by reason or willful misfeasance, bad faith, gross negligence, or
reckless disregard of the duties involved in the conduct of his office.
ARTICLE X
SEAL
The seal of the Trust shall be circular in form and bear the name of the
trust and the year of its organization. The form of the seal shall be
subject to alteration by the Trustees and the seal may be used by causing
it or a facsimile to be impressed or affixed or printed or otherwise
reproduced.
Any officer or Trustee of the Trust shall have authority to affix the seal
of the Trust to any document, instrument or other paper executed and
delivered by or on behalf of the Trust; however, unless otherwise required
by the Trustees, the seal shall not be necessary to be placed on and its
absence shall not impair the validity of any document, instrument, or other
paper executed by or on behalf of the Trust.
ARTICLE XI
FISCAL YEAR
The fiscal year of each Series of the Trust shall end on such date as the
Trustees shall from time to time determine.
ARTICLE XII
AMENDMENTS
These Bylaws may be amended at any meeting of the Trustees of the Trust by
a majority vote.
ARTICLE XIII
REPORTS TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the Shareholders a
written financial report of the Trust including financial statements which
shall be certified at least annually by independent public accountants.
XIV
HEADINGS
Headings are placed in these Bylaws for convenience of reference only and
in case of any conflict, the text of these Bylaws rather than the headings
shall control.
Exhibit 5i
FORM OF
MANAGEMENT CONTRACT
between
FIDELITY UNION STREET TRUST:
SPARTAN ARIZONA MUNICIPAL INCOME PORTFOLIO
and
FIDELITY MANAGEMENT & RESEARCH COMPANY
AGREEMENT made this ____ day of _____ 19__, by and between Fidelity Union
Street Trust, a Massachusetts business trust which may issue one or more
series of shares of beneficial interest (hereinafter called the "Fund"), on
behalf of Spartan Arizona Municipal Income Portfolio (hereinafter called
the "Portfolio"), and Fidelity Management & Research Company, a
Massachusetts corporation (hereinafter called the "Adviser").
1. (a) Investment Advisory Services. The Adviser undertakes to act as
investment adviser of the Portfolio and shall, subject to the supervision
of the Fund's Board of Trustees, direct the investments of the Portfolio in
accordance with the investment objective, policies and limitations as
provided in the Portfolio's Prospectus or other governing instruments, as
amended from time to time, the Investment Company Act of 1940 and rules
thereunder, as amended from time to time (the "1940 Act"), and such other
limitations as the Portfolio may impose by notice in writing to the
Adviser. The Adviser shall also furnish for the use of the Portfolio
office space and all necessary office facilities, equipment and personnel
for servicing the investments of the Portfolio; and shall pay the salaries
and fees of all officers of the Fund, of all Trustees of the Fund who are
"interested persons" of the Fund or of the Adviser and of all personnel of
the Fund or the Adviser performing services relating to research,
statistical and investment activities. The Adviser is authorized, in its
discretion and without prior consultation with the Portfolio, to buy, sell,
lend and otherwise trade in any stocks, bonds and other securities and
investment instruments on behalf of the Portfolio. The investment policies
and all other actions of the Portfolio are and shall at all times be
subject to the control and direction of the Fund's Board of Trustees.
(b) Management Services. The Adviser shall perform (or arrange for the
performance by its affiliates of) the management and administrative
services necessary for the operation of the Fund. The Adviser shall,
subject to the supervision of the Board of Trustees, perform various
services for the Portfolio, including but not limited to: (i) providing the
Portfolio with office space, equipment and facilities (which may be its
own) for maintaining its organization; (ii) on behalf of the Portfolio,
supervising relations with, and monitoring the performance of, custodians,
depositories, transfer and pricing agents, accountants, attorneys,
underwriters, brokers and dealers, insurers and other persons in any
capacity deemed to be necessary or desirable; (iii) preparing all general
shareholder communications, including shareholder reports; (iv) conducting
shareholder relations; (v) maintaining the Fund's existence and its
records; (vi) during such times as shares are publicly offered, maintaining
the registration and qualification of the Portfolio's shares under federal
and state law; and (vii) investigating the development of and developing
and implementing, if appropriate, management and shareholder services
designed to enhance the value or convenience of the Portfolio as an
investment vehicle.
The Adviser shall also furnish such reports, evaluations, information or
analyses to the Fund as the Fund's Board of Trustees may request from time
to time or as the Adviser may deem to be desirable. The Adviser shall make
recommendations to the Fund's Board of Trustees with respect to Fund
policies, and shall carry out such policies as are adopted by the Trustees.
The Adviser shall, subject to review by the Board of Trustees, furnish such
other services as the Adviser shall from time to time determine to be
necessary or useful to perform its obligations under this Contract.
(c) The Adviser undertakes to pay all expenses involved in the operation
of the Portfolio, except the following, which shall be paid by the
Portfolio: (i) taxes; (ii) the fees and expenses of all Trustees of the
Fund who are not "interested persons" of the Fund or of the Adviser; (iii)
brokerage fees and commissions; (iv) interest expenses with respect to
borrowings by the Portfolio; and (v) such non-recurring and extraordinary
expenses as may arise, including actions, suits or proceedings to which the
Portfolio is or is threatened to be a party and the legal obligation that
the Portfolio may have to indemnify the Fund's Trustees and officers with
respect thereto. It is understood that service charges billed directly to
shareholders of the Portfolio, including charges for exchanges,
redemptions, or other services, shall not be payable by the Adviser, but
may be received and retained by the Adviser or its affiliates.
(d) The Adviser shall place all orders for the purchase and sale of
portfolio securities for the Portfolio's account with brokers or dealers
selected by the Adviser, which may include brokers or dealers affiliated
with the Adviser. The Adviser shall use its best efforts to seek to
execute portfolio transactions at prices which are advantageous to the
Portfolio and at commission rates which are reasonable in relation to the
benefits received. In selecting brokers or dealers qualified to execute a
particular transaction, brokers or dealers may be selected who also provide
brokerage and research services (as those terms are defined in Section
28(e) of the Securities Exchange Act of 1934) to the Portfolio and/or the
other accounts over which the Adviser or its affiliates exercise investment
discretion. The Adviser is authorized to pay a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for the Portfolio which is in excess of the amount of
commission another broker or dealer would have charged for effecting that
transaction if the Adviser determines in good faith that such amount of
commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer. This determination
may be viewed in terms of either that particular transaction or the overall
responsibilities which the Adviser and its affiliates have with respect to
accounts over which they exercise investment discretion. The Trustees of
the Fund shall periodically review the commissions paid by the Portfolio to
determine if the commissions paid over representative periods of time were
reasonable in relation to the benefits to the Portfolio.
The Adviser shall, in acting hereunder, be an independent contractor. The
Adviser shall not be an agent of the Portfolio.
2. It is understood that the Trustees, officers and shareholders of the
Fund are or may be or become interested in the Adviser as directors,
officers or otherwise and that directors, officers and stockholders of the
Adviser are or may be or become similarly interested in the Fund, and that
the Adviser may be or become interested in the Fund as a shareholder or
otherwise.
3. For the services and facilities to be furnished hereunder, the Adviser
shall receive a monthly management fee, payable monthly as soon as
practicable after the last day of each month, at the annual rate of .55% of
the average daily net assets of the Portfolio (computed in the manner set
forth in the Declaration of Trust) throughout the month; provided that the
fee, so computed, shall be reduced by the compensation, including
reimbursement of expenses, paid by the Portfolio to those Trustees who are
not "interested persons" of the Fund or the Adviser.
In case of initiation or termination of this Contract during any month,
the fee for that month shall be reduced proportionately on the basis of the
number of business days during which it is in effect, and the fee computed
upon the average net assets for the business days it is so in effect for
that month.
4. The services of the Adviser to the Portfolio are not to be deemed
exclusive, the Adviser being free to render services to others and engage
in other activities, provided, however, that such other services and
activities do not, during the term of this Contract, interfere, in a
material manner, with the Adviser's ability to meet all of its obligations
with respect to rendering services to the Portfolio hereunder. In the
absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of obligations or duties hereunder on the part of the Adviser,
the Adviser shall not be subject to liability to the Portfolio or to any
shareholder of the Portfolio for any act or omission in the course of, or
connected with, rendering services hereunder or for any losses that may be
sustained in the purchase, holding or sale of any security.
5. (a) Subject to prior termination as provided in sub-paragraph (d) of
this paragraph 5, this Contract shall continue in force until June 30, 1995
and indefinitely thereafter, but only so long as the continuance after such
date shall be specifically approved at least annually by vote of the
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Portfolio.
(b) This Contract may be modified by mutual consent, such consent on the
part of the Fund to be authorized by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) In addition to the requirements of sub-paragraphs (a) and (b) of this
paragraph 5, the terms of any continuance or modification of this Contract
must have been approved by the vote of a majority of those Trustees of the
Fund who are not parties to the Contract or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval.
(d) Either party hereto may, at any time on sixty (60) days' prior
written notice to the other, terminate this Contract, without payment of
any penalty, by action of its Trustees or Board of Directors, as the case
may be, or with respect to the Portfolio by vote of a majority of the
outstanding voting securities of the Portfolio. This Contract shall
terminate automatically in the event of its assignment.
6. The Adviser is hereby expressly put on notice of the limitation of
shareholder liability as set forth in the Fund's Declaration of Trust or
other organizational documents and agrees that the obligations assumed by
the Fund pursuant to this Contract shall be limited in all cases to the
Portfolio and its assets, and the Adviser shall not seek satisfaction of
any such obligation from the shareholders or any shareholder of the
Portfolio or any other Portfolios of the Fund. In addition, the Adviser
shall not seek satisfaction of any such obligations from the Trustees or
any individual Trustee. The Adviser understands that the rights and
obligations of any Portfolio under the Declaration of Trust or other
organizational document are separate and distinct from those of any and all
other Portfolios.
7. This Agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
The terms "vote of a majority of the outstanding voting securities,"
"assignment," and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, as now in effect or as
hereafter amended, and subject to such orders as may be granted by the
Securities and Exchange Commission.
IN WITNESS WHEREOF the parties have caused this instrument to be signed in
their behalf by their respective officers thereunto duly authorized, and
their respective seals to be hereunto affixed, all as of the date written
above.
[SIGNATURE LINES OMITTED]
Exhibit 6h
FORM OF
GENERAL DISTRIBUTION AGREEMENT
between
FIDELITY UNION STREET TRUST
and
FIDELITY DISTRIBUTORS CORPORATION
Agreement made this ___ day of , 19 , between Fidelity Union
Street Trust, a Massachusetts business trust having its principal place of
business in Boston, Massachusetts and which may issue one or more series of
beneficial interest ("Issuer"), with respect to shares of Spartan Arizona
Municipal Income Portfolio, a series of the Issuer, and Fidelity
Distributors Corporation, a Massachusetts corporation having its principal
place of business in Boston, Massachusetts ("Distributors").
In consideration of the mutual promises and undertakings herein contained,
the parties agree as follows:
1. Sale of Shares - The Issuer grants to Distributors the right to sell
shares on behalf of the Issuer during the term of this Agreement and
subject to the registration requirements of the Securities Act of 1933, as
amended ("1933 Act"), and of the laws governing the sale of securities in
the various states ("Blue Sky Laws") under the following terms and
conditions: Distributors (i) shall have the right to sell, as agent on
behalf of the Issuer, shares authorized for issue and registered under the
1933 Act, and (ii) may sell shares under offers of exchange, if available,
between and among the funds advised by Fidelity Management & Research
Company ("FMR").
2. Sale of Shares by the Issuer - The rights granted to Distributors shall
be nonexclusive in that the Issuer reserves the right to sell its shares to
investors on applications received and accepted by the Issuer. Further,
the Issuer reserves the right to issue shares in connection with the merger
or consolidation, or acquisition by the Issuer through purchase or
otherwise, with any other investment company, trust, or personal holding
company.
3. Shares Covered by this Agreement - This Agreement shall apply to
unissued shares of the Issuer, shares of the Issuer held in its treasury in
the event that in the discretion of the Issuer treasury shares shall be
sold, and shares of the Issuer repurchased for resale.
4. Public Offering Price - Except as otherwise noted in the Issuer's
current Prospectus and/or Statement of Additional Information, all shares
sold to investors by Distributors or the Issuer will be sold at the public
offering price. The public offering price for all accepted subscriptions
will be the net asset value per share, as determined in the manner
described in the Issuer's current Prospectus and/or Statement of Additional
Information, plus a sales charge (if any) described in the Issuer's current
Prospectus and/or Statement of Additional Information. The Issuer shall in
all cases receive the net asset value per share on all sales. If a sales
charge is in effect, Distributors shall have the right subject to such
rules or regulations of the Securities and Exchange Commission as may then
be in effect pursuant to Section 22 of the Investment Company Act of 1940
to pay a portion of the sales charge to dealers who have sold shares of the
Issuer. If a fee in connection with shareholder redemptions is in effect,
the Issuer shall collect the fee on behalf of Distributors and, unless
otherwise agreed upon by the Issuer and Distributors, Distributors shall be
entitled to receive all of such fees.
5. Suspension of Sales - If and whenever the determination of net asset
value is suspended and until such suspension is terminated, no further
orders for shares shall be processed by Distributors except such
unconditional orders as may have been placed with Distributors before it
had knowledge of the suspension. In addition, the Issuer reserves the
right to suspend sales and Distributors' authority to process orders for
shares on behalf of the Issuer if, in the judgment of the Issuer, it is in
the best interests of the Issuer to do so. Suspension will continue for
such period as may be determined by the Issuer.
6. Solicitation of Sales - In consideration of these rights granted to
Distributors, Distributors agrees to use all reasonable efforts, consistent
with its other business, to secure purchasers for shares of the Issuer.
This shall not prevent Distributors from entering into like arrangements
(including arrangements involving the payment of underwriting commissions)
with other issuers. This does not obligate Distributors to register as a
broker or dealer under the Blue Sky Laws of any jurisdiction in which it is
not now registered or to maintain its registration in any jurisdiction in
which it is now registered. If a sales charge is in effect, Distributors
shall have the right to enter into sales agreements with dealers of its
choice for the sale of shares of the Issuer to the public at the public
offering price only and fix in such agreements the portion of the sales
charge which may be retained by dealers, provided that the Issuer shall
approve the form of the dealer agreement and the dealer discounts set forth
therein and shall evidence such approval by filing said form of dealer
agreement and amendments thereto as an exhibit to its currently effective
Registration Statement under the 1933 Act.
7. Authorized Representations - Distributors is not authorized by the
Issuer to give any information or to make any representations other than
those contained in the appropriate registration statements or Prospectuses
and Statements of Additional Information filed with the Securities and
Exchange Commission under the 1933 Act (as these registration statements,
Prospectuses and Statements of Additional Information may be amended from
time to time), or contained in shareholder reports or other material that
may be prepared by or on behalf of the Issuer for Distributors' use. This
shall not be construed to prevent Distributors from preparing and
distributing sales literature or other material as it may deem appropriate.
8. Portfolio Securities - Portfolio securities of the Issuer may be bought
or sold by or through Distributors, and Distributors may participate
directly or indirectly in brokerage commissions or "spreads" for
transactions in portfolio securities of the Issuer.
9. Registration of Shares - The Issuer agrees that it will take all action
necessary to register shares under the 1933 Act (subject to the necessary
approval of its shareholders) so that there will be available for sale the
number of shares Distributors may reasonably be expected to sell. The
Issuer shall make available to Distributors such number of copies of its
currently effective Prospectus and Statement of Additional Information as
Distributors may reasonably request. The Issuer shall furnish to
Distributors copies of all information, financial statements and other
papers which Distributors may reasonably request for use in connection with
the distribution of shares of the Issuer.
10. Expenses - The Issuer shall pay all fees and expenses (a) in connection
with the preparation, setting in type and filing of any registration
statement, Prospectus and Statement of Additional Information under the
1933 Act and amendments for the issue of its shares, (b) in connection with
the registration and qualification of shares for sale in the various states
in which the Board of Trustees of the Issuer shall determine it advisable
to qualify such shares for sale (including registering the Issuer as a
broker or dealer or any officer of the Issuer as agent or salesman in any
state), (c) of preparing, setting in type, printing and mailing any report
or other communication to shareholders of the Issuer in their capacity as
such, and (d) of preparing, setting in type, printing and mailing
Prospectuses, Statements of Additional Information and any supplements
thereto sent to existing shareholders.
As provided in the Distribution and Service Plan adopted by the Issuer, it
is recognized by the Issuer that FMR may reimburse Distributors for any
direct expenses incurred in the distribution of shares of the Issuer from
any source available to it, including advisory and service or management
fees paid to it by the Issuer.
11. Indemnification - The Issuer agrees to indemnify and hold harmless
Distributors and each of its directors and officers and each person, if
any, who controls Distributors within the meaning of Section 15 of the 1933
Act against any loss, liability, claim, damages or expense (including the
reasonable cost of investigating or defending any alleged loss, liability,
claim, damages, or expense and reasonable counsel fees incurred in
connection therewith) arising by reason of any person acquiring any shares,
based upon the ground that the registration statement, Prospectus,
Statement of Additional Information, shareholder reports or other
information filed or made public by the Issuer (as from time to time
amended) included an untrue statement of a material fact or omitted to
state a material fact required to be stated or necessary in order to make
the statements not misleading under the 1933 Act, or any other statute or
the common law. However, the Issuer does not agree to indemnify
Distributors or hold it harmless to the extent that the statement or
omission was made in reliance upon, and in conformity with, information
furnished to the Issuer by or on behalf of Distributors. In no case (i) is
the indemnity of the Issuer in favor of Distributors or any person
indemnified to be deemed to protect Distributors or any person against any
liability to the Issuer or its security holders to which Distributors or
such person would otherwise be subject by reason of wilful misfeasance, bad
faith or gross negligence in the performance of its duties or by reason of
its reckless disregard of its obligations and duties under this Agreement,
or (ii) is the Issuer to be liable under its indemnity agreement contained
in this paragraph with respect to any claim made against Distributors or
any person indemnified unless Distributors or person, as the case may be,
shall have notified the Issuer in writing of the claim within a reasonable
time after the summons or other first written notification giving
information of the nature of the claim shall have been served upon
Distributors or any such person (or after Distributors or such person shall
have received notice of service on any designated agent). However, failure
to notify the Issuer of any claim shall not relieve the Issuer from any
liability which it may have to Distributors or any person against whom such
action is brought otherwise than on account of its indemnity agreement
contained in this paragraph. The Issuer shall be entitled to participate
at its own expense in the defense, or, if it so elects, to assume the
defense of any suit brought to enforce any claims, but if the Issuer elects
to assume the defense, the defense shall be conducted by counsel chosen by
it and satisfactory to Distributors or person or persons, defendant or
defendants in the suit. In the event the Issuer elects to assume the
defense of any suit and retain counsel, Distributors, officers or directors
or controlling person or persons, defendant or defendants in the suit,
shall bear the fees and expenses of any additional counsel retained by
them. If the Issuer does not elect to assume the defense of any suit, it
will reimburse Distributors, officers or directors or controlling person or
persons, defendant or defendants in the suit, for the reasonable fees and
expenses of any counsel retained by them. The Issuer agrees to notify
Distributors promptly of the commencement of any litigation or proceedings
against it or any of its officers or trustees in connection with the
issuance or sale of any of the shares.
Distributors also covenants and agrees that it will indemnify and hold
harmless the Issuer and each of its Board members and officers and each
person, if any, who controls the Issuer within the meaning of Section 15 of
the 1933 Act, against any loss, liability, damages, claim or expense
(including the reasonable cost of investigating or defending any alleged
loss, liability, damages, claim or expense and reasonable counsel fees
incurred in connection therewith) arising by reason of any person acquiring
any shares, based upon the 1933 Act or any other statute or common law,
alleging any wrongful act of Distributors or any of its employees or
alleging that the registration statement, Prospectus, Statement of
Additional Information, shareholder reports or other information filed or
made public by the Issuer (as from time to time amended) included an untrue
statement of a material fact or omitted to state a material fact required
to be stated or necessary in order to make the statements not misleading,
insofar as the statement or omission was made in reliance upon, and in
conformity with information furnished to the Issuer by or on behalf of
Distributors. In no case (i) is the indemnity of Distributors in favor of
the Issuer or any person indemnified to be deemed to protect the Issuer or
any person against any liability to which the Issuer or such person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under this Agreement, or (ii) is
Distributors to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Issuer or any person
indemnified unless the Issuer or person, as the case may be, shall have
notified Distributors in writing of the claim within a reasonable time
after the summons or other first written notification giving information of
the nature of the claim shall have been served upon the Issuer or any such
person (or after the Issuer or such person shall have received notice of
service on any designated agent). However, failure to notify Distributors
of any claim shall not relieve Distributors from any liability which it may
have to the Issuer or any person against whom the action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. In the case of any notice to Distributors, it shall be entitled
to participate, at its own expense, in the defense or, if it so elects, to
assume the defense of any suit brought to enforce the claim, but if
Distributors elects to assume the defense, the defense shall be conducted
by counsel chosen by it and satisfactory to the Issuer, to its officers and
Board and to any controlling person or persons, defendant or defendants in
the suit. In the event that Distributors elects to assume the defense of
any suit and retain counsel, the Issuer or controlling persons, defendant
or defendants in the suit, shall bear the fees and expense of any
additional counsel retained by them. If Distributors does not elect to
assume the defense of any suit, it will reimburse the Issuer, officers and
Board or controlling person or persons, defendant or defendants in the
suit, for the reasonable fees and expenses of any counsel retained by them.
Distributors agrees to notify the Issuer promptly of the commencement of
any litigation or proceedings against it in connection with the issue and
sale of any of the shares.
12. Effective Date - This agreement shall be effective upon its execution,
and unless terminated as provided, shall continue in force until January
31, 1995 and thereafter from year to year, provided continuance is
approved annually by the vote of a majority of the Board members of the
Issuer, and by the vote of those Board members of the Issuer who are not
"interested persons" of the Issuer and, if a plan under Rule 12b-1 under
the Investment Company Act of 1940 is in effect, by the vote of those Board
members of the Issuer who are not "interested persons" of the Issuer and
who are not parties to the Distribution and Service Plan or this Agreement
and have no financial interest in the operation of the Distribution and
Service Plan or in any agreements related to the Distribution and Service
Plan, cast in person at a meeting called for the purpose of voting on the
approval. This Agreement shall automatically terminate in the event of its
assignment. As used in this paragraph, the terms "assignment" and
"interested persons" shall have the respective meanings specified in the
Investment Company Act of 1940 as now in effect or as hereafter amended.
In addition to termination by failure to approve continuance or by
assignment, this Agreement may at any time be terminated by either party
upon not less than sixty days' prior written notice to the other party.
13. Notice - Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Issuer, at 82 Devonshire Street, Boston, Massachusetts,
and if to Distributors, at 82 Devonshire Street, Boston, Massachusetts.
14. Limitation of Liability - Distributors is expressly put on notice of
the limitation of shareholder liability as set forth in the Declaration of
Trust or other organizational document of the Issuer and agrees that the
obligations assumed by the Issuer under this contract shall be limited in
all cases to the Issuer and its assets. Distributors shall not seek
satisfaction of any such obligation from the shareholders or any
shareholder of the Issuer. Nor shall Distributors seek satisfaction of any
such obligation from the Trustees or any individual Trustee of the Issuer.
Distributors understands that the rights and obligations of each series of
shares of the Issuer under the Issuer's Declaration of Trust or other
organizational document are separate and distinct from those of any and all
other series.
15. This agreement shall be governed by, and construed in accordance with,
the laws of the Commonwealth of Massachusetts, without giving effect to the
choice of laws provisions thereof.
IN WITNESS WHEREOF, the Issuer has executed this instrument in its name
and behalf, and its seal affixed, by one of its officers duly authorized,
and Distributors has executed this instrument in its name and behalf by one
of its officers duly authorized, as of the day and year first above
written.
[SIGNATURE LINES OMITTED]
Exhibit 15g
DISTRIBUTION AND SERVICE PLAN
of Fidelity Union Street Trust:
Spartan Arizona Municipal Income Portfolio
1. This Distribution and Service Plan (the "Plan"), when effective in
accordance with its terms, shall be the written plan contemplated by Rule
12b-1 under the Investment Company Act of 1940 (the "Act") of Spartan
Arizona Municipal Income Portfolio (the "Portfolio"), a series of shares of
Fidelity Union Street Trust (the "Fund").
2. The Fund has entered into a General Distribution Agreement with respect
to the Portfolio with Fidelity Distributors Corporation (the
"Distributor"), a wholly-owned subsidiary of Fidelity Management &
Research Company (the "Adviser"), under which the Distributor uses all
reasonable efforts, consistent with its other business, to secure
purchasers for the Portfolio's shares of beneficial interest ("shares").
Under the agreement, the Distributor pays the expenses of printing and
distributing any prospectuses, reports and other literature used by the
Distributor, advertising, and other promotional activities in connection
with the offering of shares of the Portfolio for sale to the public. It is
understood that the Adviser may reimburse the Distributor for these
expenses from any source available to it, including management fees paid to
it by the Portfolio.
3. The Adviser directly, or through the Distributor, may, subject to the
approval of the Trustees, make payments to securities dealers and other
third parties who engage in the sale of shares or who render shareholder
support services, including but not limited to providing office space,
equipment and telephone facilities, answering routine inquiries regarding
the Portfolio, processing shareholder transactions and providing such other
shareholder services as the Fund may reasonably request.
4. The Portfolio will not make separate payments as a result of this Plan
to the Adviser, Distributor or any other party, it being recognized that
the Portfolio presently pays, and will continue to pay, a management fee to
the Adviser. To the extent that any payments made by the Portfolio to the
Adviser, including payment of management fees, should be deemed to be
indirect financing of any activity primarily intended to result in the sale
of shares of the Portfolio within the context of Rule 12b-1 under the Act,
then such payments shall be deemed to be authorized by this Plan.
5. This Plan shall become effective upon the first business day of the
month following approval by a vote of at least a "majority of the
outstanding voting securities of the Portfolio" (as defined in the Act),
the plan having been approved by a vote of a majority of the Trustees of
the Fund, including a majority of Trustees who are not "interested persons"
of the Fund (as defined in the Act) and who have no direct or indirect
financial interest in the operation of this Plan or in any agreements
related to this Plan (the "Independent Trustees"), cast in person at a
meeting called for the purpose of voting on this Plan.
6. This Plan shall, unless terminated as hereinafter provided, remain in
effect from the date specified above until June 30 199_ and from year to
year thereafter, provided, however, that such continuance is subject to
approval annually by a vote of a majority of the Trustees of the Fund,
including a majority of the Independent Trustees, cast in person at a
meeting called for the purpose of voting on this Plan. This Plan may be
amended at any time by the Board of Trustees, provided that (a) any
amendment to authorize direct payments by the Portfolio to finance any
activity primarily intended to result in the sale of shares of the
Portfolio, to increase materially the amount spent by the Portfolio for
distribution, or any amendment of the Management Contract to increase the
amount to be paid by the Portfolio thereunder shall be effective only upon
approval by a vote of a majority of the outstanding voting securities of
the Portfolio, and (b) any material amendments of this Plan shall be
effective only upon approval in the manner provided in the first sentence
in this paragraph.
7. This Plan may be terminated at any time, without the payment of any
penalty, by vote of a majority of the Independent Trustees or by a vote of
a majority of the outstanding voting securities of the Portfolio.
8. During the existence of this Plan, the Fund shall require the Adviser
and/or Distributor to provide the Fund, for review by the Fund's Board of
Trustees, and the Trustees shall review, at least quarterly, a written
report of the amounts expended in connection with financing any activity
primarily intended to result in the sale of shares of the Portfolio (making
estimates of such costs where necessary or desirable) and the purposes for
which such expenditures were made.
9. This Plan does not require the Adviser or Distributor to perform any
specific type or level of distribution activities or to incur any specific
level of expenses for activities primarily intended to result in the sale
of shares of the Portfolio.
10. Consistent with the limitation of shareholder liability as set forth
in the Fund's Declaration of Trust or other organizational document, any
obligations assumed by the Portfolio pursuant to this Plan and any
agreements related to this Plan shall be limited in all cases to the
Portfolio and its assets, and shall not constitute obligations of any other
series of shares of the Fund.
11. If any provision of this Plan shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of the Plan shall not
be affected thereby.
RETIREMENT PLAN FOR
NON-INTERESTED PERSON TRUSTEES,
DIRECTORS OR GENERAL PARTNERS
Eligibility
Each non-interested trustee ("Independent Trustee") of the Fidelity funds
who at the time of "retirement" has served for at least five years is
eligible to receive retirement benefits under the Retirement Plan for
Non-Interested Person Trustees, Directors or General Partners (the "Plan").
An Independent Trustee's period of eligible service begins on the date of
his election to the Board of any registered investment company which FMR
acts as manager or adviser. Under the Plan, "retirement" means any
termination of service (other than by death) of an Independent Trustee
except any termination which results from the Independent Trustee's willful
misfeasance, bad faith, gross negligence or reckless disregard of his
duties.
Benefits
Retirement. The normal retirement date is the last day of the calendar
month in which an Independent Trustee's seventy-second birthday occurs (the
"Base Retirement Date").
Retirement Benefit. Upon retirement, each Independent Trustee receives,
beginning as of his Base Retirement Date, for the remainder of his life, a
retirement benefit paid at an annual rate equal to 40% of the annual basic
retainer in effect for Independent Trustees on the date of Retirement
(excluding fees related to attendance at meetings or chairing committees),
plus an additional .667% of such annual basic retainer for each full month
of eligible service in excess of five years, up to a maximum of 80% of such
annual basic retainer for ten or more years of eligible service.
Early Payment. An Independent Trustee may, upon showing of good cause,
receive a benefit that is the actuarial equivalent of the retirement
benefit described above, beginning on a date earlier than his Base
Retirement Date. For purposes of this early payment, "good cause" may
include, but is not limited to, the disability of the Independent Trustee
and any substantial medical or other similar expenses of the Independent
Trustee or a member of his family.
Time Of Payment. The benefit for each year is payable in installments
that are as nearly equal as possible, at the same times that payments of
basic retainers are made to Independent Trustees serving at the time of
payment, but in no event less frequently than quarterly.
General
All determinations required under the Plan are made by a committee of
Independent Trustees, the membership of which is at present the same as the
nominating committee.
Unfunded Benefits. Retirement benefits are not "funded": they are general
unsecured obligations of the Funds subordinate to claims of shareholders.
Under generally accepted accounting principles, the Funds make expense
accruals during the Independent Trustee's period of service for the
actuarially-determined expected cost of his retirement benefit. Payments
under the Plan do not have to be taken into account in determining whether
you comply with the maximum benefit provision under any qualified defined
benefit plans in which you participate nor would they be subject to the 15%
excise tax on excess distributions from qualified plans.
Income Taxation. The retirement benefits payable to an Independent
Trustee who has retired will be fully taxable to him in the year of receipt
as income from self-employment. The benefits will not be subject to income
tax withholding; thus, an Independent Trustee may be required to make
estimated tax payments with respect to such retirement benefits.
Social Security Taxes and Benefits. Any retirement benefits paid to any
Independent Trustee will be subject to tax on net earnings from
self-employment in the year in which such benefits are paid (currently the
rate of tax is 15.3%). This tax applies only to net earnings not in excess
of the applicable annual wage base; however, legislation will likely be
passed this year that will eliminate any limit on the wage base beginning
in 1994 for the portion of such tax related to medicare (currently 2.9%).
For purposes of determining the Independent Trustee's entitlement to
social security benefits, the amount payable as retirement benefits will be
treated as though received in the year accrued rather than the year paid.
This is the treatment for corporate directors and we believe that it would
be appropriate for the Independent Trustees. Thus, to the extent an
Independent Trustee retires and receives retirement benefits prior to
attaining age 70, payment of such benefits should not reduce the amount of
benefits payable to the Independent Trustee. An Independent Trustee who is
under age 70, continues as a Trustee and who elects to receive social
security benefits may have his social security benefits reduced by reason
of compensation earned as a Trustee, if the Trustee's earnings exceed a
threshold level of permissible earnings referred to as the "average
earnings test." Thus, if an Independent Trustee is receiving social
security benefits while in office, his benefits may be reduced by the
amounts accrued on his behalf under the retirement plan (as well as by the
fees earned as an Independent Trustee).
FIDELITY INDIVIDUAL RETIREMENT ACCOUNT
CUSTODIAL AGREEMENT
Page
ARTICLE I 1
ARTICLE II 1
ARTICLE III 1
ARTICLE IV 1
ARTICLE V 3
ARTICLE VI 3
ARTICLE VII 3
ARTICLE VIII 1. Definitions 3
(a) "Account" or "Custodial Account" 3
(b) "Agreement" 3
(c) "Application" 3
(d) "Authorized Agent" 3
(e) "Beneficiary" 3
(f) "Code" 3
(g) "Company" 3
(h) "Custodian" 4
(j) "Investment Company Shares" 4
(k) "Money Market Shares" 4
(l) Other Funding Vehicles" 4
2. Investment of Contributions 4
(a) General 4
(b) Initial Contribution 4
(c) Unclear Instructions 5
(d) Minimum Investment 5
(e) No Duty 5
3. Contributions by Divorced or Separated Spouses 5
4. Timing of Contributions 5
5. Rollover Contributions 5
6. Reinvestment of Earnings 6
7. Designation of Beneficiary 6
(a) General 6
(b) Minors 6
(c) QTIPs and QDOTs 6
(d) Judicial Determination 7
(e) No Duty 7
8. Payroll Deduction 7
9. Transfers to or from the Account 7
10. Distributions from the Account 7
11. Actions in the Absence of Specific Instructions 8
12. Responsibility as to Contributions or Distributions 8
13. Written Instructions and Notices 8
14. Effect of Written Instructions and Notices 8
15. Tax Matters 8
(a) General 8
(b) Annual Report 9
(c) Withholding 9
16. Spendthrift Provision 9
17. Fees and Expenses 9
(a) General 9
(b) Advisor Fees 10
(c) Sale of Assets 10
18. Escrow 10
19. Voting with Respect to Securities 10
20. Limitations on Custodial Liability and Indemnification 10
21. Delegation to Agents 11
22. Amendment of Agreement 11
23. Resignation or Removal of Custodian 11
24. Termination of Custodial Account 11
25. Governing Law 11
26. When Effective 11
FIDELITY INDIVIDUAL RETIREMENT ACCOUNT
DISCLOSURE STATEMENT
Page
RIGHT TO CANCEL 12
TYPES OF IRAS
Regular IRA 12
Spousal IRA 12
Rollover IRA 12
DESCRIPTION OF ACCOUNT 13
ELIGIBILITY 13
CONTRIBUTIONS 13
General 13
Spousal Accounts 13
Compensation 13
Adjusted Gross Income 13
Time of Contribution 13
Rollover IRA Contributions 13
Simplified Employee Pension Plan Contributions 13
Excess Contributions 14
DEDUCTIBLE IRA CONTRIBUTIONS 14
LIMITS ON DEDUCTIBLE CONTRIBUTIONS 15
NONDEDUCTIBLE IRA CONTRIBUTIONS 15
INVESTMENT OF ACCOUNT 15
DISTRIBUTIONS 15
General 15
Premature Distributions 16
Latest Time to Withdraw 16
Minimum Distributions 16
Methods of Distribution 16
Distribution Upon Death 16
Distribution of Nondeductible Contributions 16
Excess Distributions 17
Rollover Treatment 17
DIVORCE OR LEGAL SEPARATION 17
FEES AND EXPENSES 17
PROHIBITED TRANSACTIONS 17
OTHER TAX CONSIDERATIONS 17
No Special Tax Treatment 17
Gift Tax 17
Tax Withholding 18
Reporting for Tax Purposes 18
IRS APPROVAL 18
FIDELITY CUSTODIAL Under Section 408(a) of the
INDIVIDUAL AGREEMENT Internal Revenue Code
RETIREMENT
ACCOUNT
The Depositor whose name appears on the attached Application is
establishing an individual retirement account (under Section 408(a) of the
Internal Revenue Code) to provide for his or her retirement and for the
support of his or her beneficiaries after death.
The Custodian named on the attached Application has given the Depositor
the Disclosure Statement required under the Income Tax Regulations under
Section 408(i) of the Code.
The Depositor has deposited with the Custodian an initial contribution in
cash, as set forth in the attached Application.
The Depositor and the Custodian make the following Agreement:
ARTICLE I The Custodian may accept additional cash contributions on behalf
of the Depositor for a tax year of the Depositor. The total cash
contributions are limited to $2,000 for the tax year unless the
contribution is a rollover contribution described in Section 402(c) of the
Code (but only after December 31, 1992), 403(a)(4), 403(b)(8), 408(d)(3),
or an employer contribution to a Simplified Employee Pension plan as
described in Section 408(k). Rollover contributions before January 1,
1993, include rollovers described in Section 402(a)(5), 402(a)(6),
402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to
a Simplified Employee Pension Plan as described in Section 408(k).
ARTICLE II The Depositor's interest in the balance in the Custodial
Account is nonforfeitable.
ARTICLE III 1. No part of the custodial funds may be invested in life
insurance contracts, nor may the assets of the Custodial Account be
commingled with other property except in a common trust fund or common
investment fund (within the meaning of Section 408(a)(5) of the Code).
2. No part of the custodial funds may be invested in collectibles (within
the meaning of Section 408(m) of the Code) except as otherwise permitted by
Section 408(m)(3) which provides an exception for certain gold and silver
coins and coins issued under the laws of any state.
ARTICLE IV 1. Notwithstanding any provision of this agreement to the
contrary, the distribution of the Depositor's interest in the Custodial
Account shall be made in accordance with the following requirements and
shall otherwise comply with Section 408(a)(6) and Proposed Regulations
Section 1.408-8, including the incidental death benefit provisions of
Proposed Regulations Section 1.401(a)(9)-2, the provisions of which are
incorporated by reference.
2. Unless otherwise elected by the time distributions are required to
begin to the Depositor under paragraph 3, or to the surviving spouse under
paragraph 4, other than in the case of a life annuity, life expectancies
shall be recalculated annually. Such election shall be irrevocable as to
the Depositor and the surviving spouse and shall apply to all subsequent
years. The life expectancy of a non-spouse beneficiary may not be
recalculated.
3. The Depositor's entire interest in the Custodial Account must be, or
begin to be, distributed by the Depositor's required beginning date (April
1 following the calendar year end in which the Depositor reaches age 70
1/2). By that date, the Depositor may elect, in a manner acceptable to the
Custodian, to have the balance in the Custodial Account distributed in:
(a) A single-sum payment.
(b) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the life of the Depositor.
(c) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the joint and last survivor lives of the
Depositor and his or her designated Beneficiary.
(d) Equal or substantially equal annual payments over a specified period
that may not be longer than the Depositor's life expectancy.
(e) Equal or substantially equal annual payments over a specified period
that may not be longer than the joint life and last survivor expectancy of
the Depositor and his or her designated Beneficiary.
4. If the Depositor dies before his or her entire interest is distributed
to him or her, the entire remaining interest will be distributed as
follows:
(a) If the Depositor dies on or after distribution of his or her
interest has begun, distribution must continue to be made in accordance
with paragraph 3.
(b) If the Depositor dies before distribution of his or her interest
has begun, the entire remaining interest will, at the election of the
Depositor or, if the Depositor has not so elected, at the election of the
Beneficiary or Beneficiaries, either
(i) Be distributed by the December 31 of the year containing the fifth
anniversary of the Depositor's death, or
(ii) Be distributed in equal or substantially equal payments over the
life or life expectancy of the designated Beneficiary or Beneficiaries
starting by December 31 of the year following the year of the Depositor's
death. If, however, the Beneficiary is the Depositor's surviving spouse,
then this distribution is not required to begin before December 31 of the
year in which the Depositor would have turned age 70 1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of Section 408(b)(3) and its related regulations has
irrevocably commenced, distributions are treated as having begun on the
Depositor's required beginning date, even though payments may actually have
been made before that date.
(d) If the Depositor dies before his or her entire interest has been
distributed and if the Beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may be accepted in
the account.
5. In the case of distribution over life expectancy in equal or
substantially equal annual payments, to determine the minimum annual
payment for each year, divide the Depositor's entire interest in the
Custodial Account as of the close of business on December 31 of the
preceding year by the life expectancy of the Depositor (or the joint life
and last survivor expectancy of the Depositor and the Depositor's
designated Beneficiary, or the life expectancy of the designated
Beneficiary, whichever applies). In the case of distributions under
paragraph 3, determine the initial life expectancy (or joint life and last
survivor expectancy) using the attained ages of the Depositor and
designated Beneficiary as of their birthdays in the year the Depositor
reaches age 70 1/2. In the case of a distribution in accordance with
paragraph 4(b)(ii), determine life expectancy using the attained age of the
designated Beneficiary as of the Beneficiary's birthday in the year
distributions are required to commence.
6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524, to satisfy
the minimum distribution requirements described above. This method permits
an individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for
another.
ARTICLE V 1. The Depositor agrees to provide the Custodian with
information necessary for the Custodian to prepare any reports required
under Section 408(i) of the Code and Regulations Sections 1.408-5 and
1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue Service
and the Depositor prescribed by the Internal Revenue Service.
ARTICLE VI Notwithstanding any other articles which may be added or
incorporated, the provisions of Articles I through Ill and this sentence
will be controlling. Any additional articles that are not consistent with
Section 408(a) of the Code and the related regulations will be invalid.
ARTICLE VII This Agreement will be amended from time to time to comply
with the provisions of the Code and related regulations. Other amendments
may be made with the consent of the Depositor and the Custodian.
ARTICLE VIII 1. DEFINITIONS. The following definitions shall apply to
terms used in this Article VIII:
(a) "Account" or "Custodial Account" means the custodial account
established hereunder for the benefit of the Depositor.
(b) "Agreement" means the Fidelity IRA Custodial Agreement, including
the information and provisions set forth in any Account Application that
goes with this Agreement. This Agreement, including the Account
Application and any designation of Beneficiary filed with the Custodian,
may be proved either by an original copy or by a reproduced copy thereof,
including, without limitation, a copy reproduced by photocopying, facsimile
transmission, or electronic imaging.
(c) "Application" shall mean the Application by which this Agreement,
as may be amended from time to time, is established between the Depositor
and the Custodian. The statements contained therein shall be incorporated
into this Agreement.
(d) "Authorized Agent" means the person or persons authorized by the
Depositor, on a signed form acceptable to and filed with the Custodian, to
purchase or sell Shares in the Depositor's Account.
(e) "Beneficiary" means the person or persons (including a trust or
estate) designated as such by the Depositor on a signed form acceptable to
and filed with the Custodian pursuant to Article VIII, Section 7 of this
Agreement.
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(g) "Company" shall mean FMR Corp., a Massachusetts corporation, or any
successor or affiliate thereof to which FMR Corp. may, from time to time,
delegate or assign any or all of its rights or responsibilities under this
Agreement.
(h) "Custodian" shall mean Fidelity Trust Company of Salt Lake City,
Utah, or Fidelity Management Trust Company of Boston, Massachusetts, or
their successors, as specified in the Account Application.
(i) "Depositor" means the person named in the Account Application.
(j) "Investment Company Shares" or "Shares" shall mean shares of stock,
trust certificates, or other evidences of interest (including fractional
shares) in any corporation, partnership, trust, or other entity registered
under the Investment Company Act of 1940 for which Fidelity Management
& Research Company, a Massachusetts corporation, or its successors or
affiliates, serves as investment advisor.
(k) "Money Market Shares" shall mean any Investment Company Shares which
are issued by a money market mutual fund.
(l) "Other Funding Vehicles"
shall include (i) all marketable securities traded over the counter or on a
recognized securities exchange which are eligible for registration on the
book entry system maintained by Depository Trust Company ("DTC") or its
successor; (ii) if permitted by the Custodian, interest-bearing accounts of
the Custodian, and (iii) such other non-DTC eligible assets (but not
including futures contracts) which are permitted to be acquired under a
custodial account pursuant to Section 408 of the Code and which are
acceptable to the Custodian. Notwithstanding the above, the Custodian
reserves the right to refuse to accept and hold any specific asset.
2. LNVESTMENT OF CONTRIBUTIONS. Contributions to the Account may be
invested only in Investment Company Shares and Other Funding Vehicles, and
shall be invested as follows:
(a) General. Contributions will be invested in accordance with the
Depositor's written instructions in the Application, and with subsequent
instructions given by the Depositor or the Authorized Agent appointed by
the Depositor (or, following the death of the Depositor, his or her
Beneficiary) to the Custodian in a manner acceptable to the Custodian. By
giving such instructions to the Custodian, such person will be deemed to
have acknowledged receipt of the then current prospectus, if any, for any
Investment Company Shares or Other Funding Vehicles in which the Depositor
(or the Authorized Agent appointed by the Depositor) directs the Custodian
to invest assets in his or her Account. All charges incidental to
carrying out such instructions shall be charged and collected in accordance
with Article VIII, Section 17. All Investment Company Shares and Other
Funding Vehicles in the Custodial Account shall be held in the name of the
Custodian or its nominee or nominees.
(b) Initial Contribution. The Custodian will invest all contributions
promptly after their receipt, as set forth below; provided, however, that
the Custodian shall not be obligated to invest the Depositor's initial
contribution to his Custodial Account as indicated on the Application,
until at least seven (7) calendar days have elapsed from the date of
acceptance of the Application by or on behalf of the Custodian.
(c) Unclear Instructions. If the Depositor's Custodial Account at any
time contains cash as to which investment instructions in accordance with
this Section 2 have not been received by the Custodian, or if the Custodian
receives instructions as to investment selection or allocation which are,
in the opinion of the Custodian, not clear, the Custodian may request
instructions from the Depositor (or the Depositor's Authorized Agent,
Beneficiary, executor or administrator). Pending receipt of such
instructions any cash may be invested in Money Market Shares, and any other
investment may remain unchanged. The Custodian shall not be liable to
anyone for any loss resulting from delay in investing such cash or in
implementing such instructions. Notwithstanding the above, the Custodian
may, but need not, for administrative convenience maintain a balance of up
to $100 of uninvested cash in the Depositor's Custodial Account.
(d) Minimum Investment. Any other provision hereof to the contrary
notwithstanding, the Depositor (or the Depositor's Authorized Agent,
Beneficiary, executor, or administrator) may not direct that any part or
all of the Custodial Account be invested in Investment Company Shares or in
Other Funding Vehicles unless the aggregate amount to be invested is at
least such amount as the Custodian shall establish from time to time. The
Custodian may require any Custodial Account which is invested in Other
Funding Vehicles to maintain an investment of not more than five hundred
dollars ($500) in Money Market Shares in order to provide a medium for
investing available cash pending other instructions, and for convenience in
collecting fees and expenses from the Custodial Account.
(e) No Duty. The Custodian shall not have any duty to question the
directions of a Depositor (or the Depositor's Authorized Agent,
Beneficiary, executor, or administrator) in the investment of his or her
Custodial Account or to advise him or her regarding the purchase, retention
or sale of assets credited to the Custodial Account. The Custodian, or
any of its affiliates, shall not be liable for any loss which results from
the Depositor's (or the Depositor's Authorized Agent, Beneficiary,
executor, or administrator) exercise of control (whether by his or her
action or inaction) over the Custodial Account.
3. CONTRIBUTIONS BY DIVORCED OR SEPARATED SPOUSES. All alimony and
separate maintenance payments received by a divorced or separated spouse,
and taxable under Section 71 of the Code, shall be considered compensation
for purposes of computing the maximum annual contribution to the Custodial
Account, and the limitations for contributions by a divorced or separated
spouse shall be the same as for any other individual.
4. TIMING OF CONTRIBUTIONS. A contribution is deemed to have been made
on the last day of the preceding taxable year if the contribution is made
by the deadline for filing the Depositor's income tax return (not including
extensions), or such later date as may be determined by the Department of
the Treasury or the IRS, provided the Depositor (or the Depositor's
Authorized Agent) designates, in a manner acceptable to the Custodian, the
contribution as a contribution for the preceding taxable year.
5. ROLLOVER CONTRIBUTIONS. The Custodian will accept for the Custodial
Account all rollover contributions which consist of cash, and it may, but
shall be under no obligation to, accept all or any part of any other
rollover contribution. The Depositor shall designate each rollover
contribution as such to the Custodian, and by such designation shall
confirm to the Custodian that a proposed rollover contribution qualifies as
a rollover contribution within the meaning of Sections 402(a)(5),
402(a)(6), 402(a)(7), 402(c), 403(a)(4), 403(b)(8), and/or 408(d)(3) of the
Code. Submission by or on behalf of a Depositor of a rollover contribution
consisting of assets other than cash or property permitted as an investment
under this Article VIII shall be deemed to be the instruction of the
Depositor to the Custodian that, if such rollover contribution is accepted,
the Custodian will use its best efforts to sell those assets for the
Depositor's account, and to invest the proceeds of any such sale in
accordance with Section 2. To the extent permitted by law, the Custodian
shall not be liable to anyone for any loss resulting from such sale or
delay in effecting such sale; or for any loss of income or appreciation
with respect to the proceeds thereof after such sale and prior to
investment pursuant to Section 2; or for any failure to effect such sale if
such property proves not readily marketable in the ordinary course of
business. All brokerage and other costs incidental to the sale or
attempted sale of such property will be charged to the Custodial Account in
accordance with Article VIII, Section 17.
6. REINVESTMENT OF EARNINGS. In the absence of other instructions
pursuant to Section 2, distributions of every nature received in respect of
the assets in a Depositor's Custodial Account shall be reinvested as
follows:
(a) in the case of a distribution in respect of Investment Company
Shares which may be received, at the election of the shareholder, in cash
or in additional Shares of such Investment Company, the Custodian shall
elect to receive such distribution in additional Investment Company Shares;
(b) in the case of a cash distribution which is received in respect of
Investment Company Shares, the Custodian shall reinvest such cash in
additional Shares of that Investment Company;
(c) in the case of any other distribution of any nature received in
respect of assets in the Custodial Account, the distribution shall be
liquidated to cash, if necessary, and shall be reinvested in accordance
with the Depositor's instructions pursuant to Section 2.
7. DESIGNATION OF BENEFICIARY. A Depositor may designate a Beneficiary as
follows:
(a) General. A Depositor may designate a Beneficiary or Beneficiaries
at any time, and any such designation may be changed or revoked at any
time, by written designation signed by the Depositor on a form acceptable
to, and filed with, the Custodian; provided, however, that such
designation, or change or revocation of a prior designation, shall not be
effective unless it is received and accepted by the Custodian no later than
thirty (30) days after the death of the Depositor, and provided further
that the latest such designation or change or revocation shall control. If
the Depositor had not by the date of his or her death properly designated a
Beneficiary in accordance with the preceding sentence, or if no designated
Beneficiary survives the Depositor, the Depositor's Beneficiary shall be
his or her surviving spouse, but if he or she has no surviving spouse, his
or her estate. Unless otherwise specified in the Depositor's designation
of Beneficiary, if a Beneficiary dies before receiving his or her entire
interest in the Custodial Account, his or her remaining interest in the
Custodial Account shall be paid to the Beneficiary's estate.
(b) Minors. If a distribution upon the death of the Depositor is
payable to a person known by the Custodian to be a minor or otherwise under
a legal disability, the Custodian may, in its absolute discretion, make
all, or any part of the distribution to (a) a parent of such person, (b)
the guardian , conservator, or other legal representative, wherever
appointed, of such person, (c) a custodial account established under a
Uniform Gifts to Minors Act, Uniform Transfers to Minors Act, or similar
act, (d) any person having control or custody of such person, or (e) to
such person directly.
(c) QTIPs and QDOTs. A Depositor may designate as Beneficiary of his or
her Account a trust for the benefit of his or her surviving spouse that is
intended to satisfy the conditions of Sections 2056(b)(7) or 2056A of the
Code (a "Spousal Trust"). In that event, if the Depositor is survived by
his or her spouse, the following provisions shall apply to the Account,
from and after the death of the Depositor until the death of the
Depositor's surviving spouse: (1) all of the income of the Account shall
be paid to the Spousal Trust annually or at more frequent intervals, and
(2) no person shall have the power to appoint any part of the Account to
any person other than the Spousal Trust. To the extent permitted by
Section 401(a)(9) of the Code, as determined by the trustee(s) of the
Spousal Trust, the surviving spouse of a Depositor who has designated a
Spousal Trust as his or her Beneficiary may be treated as his or her
"designated beneficiary" for purposes of the distribution requirements of
that Code section. The Custodian shall have no responsibility to determine
whether such treatment is appropriate.
(d) Judicial Determination. Anything to the contrary herein
notwithstanding, in the event of reasonable doubt respecting the proper
course of action to be taken, the Custodian may in its sole and absolute
discretion resolve such doubt by judicial determination which shall be
binding on all parties claiming any interest in the Account. In such event
all court costs, legal expenses, reasonable compensation of time expended
by the Custodian in the performance of its duties, and other appropriate
and pertinent expenses and costs shall be collected by the Custodian from
the Custodial Account in accordance with Article VIII, Section 17.
(e) No Duty. The Custodian shall not have any duty to question the
directions of a Depositor (or the Depositor's Authorized Agent,
Beneficiary, executor or administrator) as to the time(s) and amount(s) of
distributions from the Custodial Account, or to advise him or her regarding
the compliance of such distributions with Section 401(a)(9), Section
2056(b)(7) or Section 2056A of the Code.
8. PAYROLL DEDUCTION. Subject to approval of the Custodian, a
Depositor may choose to have contributions to his or her Custodial Account
made through payroll deduction if the Account is maintained as part of a
program sponsored by the Depositor's employer. In order to establish
payroll deduction, the Depositor must authorize his or her employer to
deduct a fixed amount from each pay period's salary up to a total amount of
$2,000 per year, unless such contributions are being made pursuant to a
Simplified Employee Pension Plan described under Section 408(k) of the
Code, in which case, annual contributions up to the limit prescribed by the
Internal Revenue Service can be made (generally, 15% of the Depositor's
earned income, up to $30,000 a year). Contributions to the Custodial
Account of the Depositor's spouse may be made through payroll deduction if
the employer authorizes the use of payroll deductions for such
contributions, but such contributions must be made to a separate Account
maintained for the benefit of the Depositor's spouse. The payroll
deduction authorization shall continue in force until such time as written
amendment or revocation is received by the Depositor's employer and the
Custodian with reasonable advance notice.
9. TRANSFERS TO OR FROM THE ACCOUNT. Assets held on behalf of the
Depositor in another IRA may be transferred by the trustee or custodian
thereof directly to the Custodian, in a form and manner acceptable to the
Custodian, to be held in the Custodial Account for the Depositor under this
Agreement. The Custodian will not be responsible for any losses the
Depositor may incur as a result of the timing of any transfer from another
trustee or custodian that are due to circumstances reasonably beyond the
control of the Custodian.
Assets held on behalf of the Depositor in the Account may be transferred
directly to a trustee or custodian of another IRA established for the
Depositor, if so directed by the Depositor in a form and manner acceptable
to the Custodian; provided, however, that it shall be the Depositor's
responsibility to ensure that any minimum distribution required by Section
401(a)(9) of the Code is made prior to giving the Custodian such transfer
instructions.
10. DISTRIBUTIONS FROM THE ACCOUNT. Subject to Section 12 below,
distributions from the Account will be made only upon the request of the
Depositor (or the Depositor's Authorized Agent, Beneficiary, executor, or
administrator) in such form and in such manner as is acceptable to the
Custodian. For distributions requested pursuant to Article IV, life
expectancy and joint life and last survivor expectancy are calculated based
on information provided by the Depositor (or the Depositor's Authorized
Agent, Beneficiary, executor, or administrator) using the Expected Return
Multiples in Section 1.72-9 of the Income Tax Regulations. The Custodian
shall not incur any liability for errors in such calculations as a result
of its reliance on information provided by the Depositor (or the
Depositor's Authorized Agent, Beneficiary, executor, or administrator).
Without limiting the generality of the foregoing, the Custodian is not
obligated to make any distribution, including a minimum required
distribution as specified in Article IV above, absent a specific written
direction from the Depositor (or the Depositor's Authorized Agent,
Beneficiary, executor, or administrator) to do so.
11. ACTIONS IN THE ABSENCE OF SPECIFIC INSTRUCTIONS. If the Custodian
receives no response to communications sent to the Depositor (or the
Depositor's Authorized Agent, Beneficiary, executor, or administrator) at
the Depositor's (or the Depositor's Authorized Agent, Beneficiary,
executor, or administrator's) last known address as shown in the records of
the Custodian, or if the Custodian determines, on the basis of evidence
satisfactory to it, that the Depositor is legally incompetent, the
Custodian thereafter may make such determinations with respect to
distributions, investments, and other administrative matters arising under
this Agreement as it considers reasonable, notwithstanding any prior
instructions or directions given by or on behalf of the Depositor. Any
determinations so made shall be binding on all persons having or claiming
any interest under the Custodial Account, and the Custodian shall not incur
any obligation or liability for any such determination made in good faith,
for any action taken in pursuance thereof, or for any fluctuations in the
value of the Account in the event of a delay resulting from the Custodian's
good faith decision to await additional information or evidence.
12. RESPONSIBILITY AS TO CONTRIBUTIONS OR DISTRIBUTIONS. The Custodian
will not under any circumstances be responsible for the timing, purpose or
propriety of any contribution or of any distribution made hereunder, nor
shall the Custodian incur any liability or responsibility for any tax
imposed on account of any such contribution or distribution.
Notwithstanding Section 10 above, the Custodian is empowered to make a
distribution absent such an instruction if directed to do so pursuant to a
court order of any kind and the Custodian shall in such event incur no
liability to anyone for acting in accordance with such court order.
13. WRITTEN INSTRUCTIONS AND NOTICES. All written notices or
communications required to be given by the Custodian to the Depositor shall
be deemed to have been given when sent by mail to the last known address of
the Depositor in the records of the Custodian. All written instructions,
notices, or communications required to be given by the Depositor to the
Custodian shall be mailed or delivered to the Custodian at its designated
mailing address as specified on the Application, and no such instruction,
notice, or communication shall be effective until the Custodian's actual
receipt thereof.
14. EFFECT OF WRITTEN INSTRUCTIONS AND NOTICES. The Custodian shall be
entitled to rely conclusively upon, and shall be fully protected in any
action or non-action taken in good faith in reliance upon, any written
instructions, notices, communications or instruments believed to have been
genuine and properly executed. Any such notification may be proved by
original copy or reproduced copy thereof, including, without limitation, a
copy produced by photocopying, facsimile transmission, or electronic
imaging. For this purpose, the Custodian may (but is not required to)
give the same effect to a telephonic instruction as it gives to a written
instruction, and the Custodian's action in doing so shall be protected to
the same extent as if such telephonic instructions were, in fact, a written
instruction. Any such telephonic instruction may be proved by audio
recorded tape.
15. TAX MATTERS.
(a) General. The Custodian shall submit required reports to the IRS and
the Depositor (or the Depositor's Authorized Agent, Beneficiary, executor,
or administrator); provided, however, that such individual shall prepare
any return or report required in connection with maintaining the Account,
or as a result of liability incurred by the Account for tax on unrelated
business taxable income, or windfall profits tax.
(b) Annual Report. As soon as is practicable after the close of each
taxable year, and whenever required by the Code, the Custodian shall
deliver to the Depositor a written report(s) reflecting receipts,
disbursements and other transactions effected in the Custodial Account
during such period and the fair market value of the assets and liabilities
of the Custodial Account as of the close of such period in a manner
prescribed by the Internal Revenue Service. Unless the Depositor sends the
Custodian written objection to a report within ninety (90) days of receipt,
the Depositor shall be deemed to have approved of such report, and the
Custodian and the Company, and their officers, employees and agents shall
be forever released and discharged from all liability and accountability to
anyone with respect to their acts, transactions, duties and
responsibilities as shown on or reflected by such report(s).
(c) Withholding. Any distributions from the Custodial Account may be
made by the Custodian net of any required tax withholding.
16. SPENDTHRIFT PROVISION. The interest of a Depositor in the Account
shall not be transferred or assigned by voluntary or involuntary act of the
Depositor or by operation of law; nor shall it be subject to alienation,
assignment, garnishment, attachment, receivership, execution or levy of any
kind. Notwithstanding the foregoing, in the event of a property settlement
between a Depositor and his or her former spouse pursuant to which the
transfer of a Depositor's interest hereunder, or a portion thereof, is
incorporated in a divorce decree or in a written instrument incident to
such divorce or legal separation, then the interest so decreed by a Court
to be the property of such former spouse shall be transferred to a
separate Custodial Account for the benefit of such former spouse, in
accordance with Section 408(d)(6) of the Code.
17. FEES AND EXPENSES.
(a) General. The fees of the Custodian for performing its duties
hereunder shall be in such amount as it shall establish from time to time.
All such fees, as well as expenses (such as, without limitation, brokerage
commissions upon the investment of funds, fees for special legal services,
taxes levied or assessed, or expenses in connection with the liquidation or
retention of all or part of a rollover contribution), shall be collected by
the Custodian from cash available in the Custodial Account, or if
insufficient cash shall be available, by sale of sufficient assets in the
Custodial Account and application of the sales proceeds to pay such fees
and expenses. Alternatively, but only with the consent of the Custodian,
fees and expenses may be paid directly to the Custodian by the Depositor by
separate check.
(b) Advisor Fees. The Custodian shall, upon direction from the
Depositor, disburse from the Custodial Account payment to the Depositor's
registered investment advisor of any fees for financial advisory services
rendered with regard to the assets held in the Account. Such direction
must be provided in a form and manner acceptable to the Custodian, and the
Custodian shall not incur any liability for executing such direction.
(c) Sale of Assets. Whenever it shall be necessary in accordance with
this Section 17 to sell assets in order to pay fees or expenses, the
Custodian shall request the Depositor (or the Depositor's Authorized Agent,
Beneficiary, executor, or administrator) to provide specific instructions.
If such instructions are not received by the Custodian within ten (10)
business days of the Custodian's request, the Custodian may sell any or all
of the assets credited to the Custodial Account at that time, and shall
invest the portion of the sales proceeds remaining after collection of the
applicable fees and expenses therefrom in accordance with Section 2. The
Custodian shall not incur any liability on account of its sale or retention
of assets under such circumstances.
18. ESCROW. With the consent of the Custodian, the Custodial Account may
serve as an escrow arrangement to hold restricted distributions from
defined benefit plans pursuant to Section 1.401(a)(4)-5(b) of the Income
Tax Regulations. In such event, the Custodian will act in accordance with
an escrow agreement acceptable to it and pursuant to which it will only act
upon the direction of the trustee of the distributing plan with respect to
distributions from the Account. Such agreement will remain in place until
the trustee of the distributing plan releases the Custodian from such
escrow agreement.
19. VOTING WITH RESPECT TO SECURITIES. The Custodian shall mail to the
Depositor all prospectuses and proxies that may come into the Custodian's
possession by reason of its holding of Investment Company Shares or other
securities in the Custodial Account. A Depositor may direct the Custodian
as to the manner in which any securities or Investment Company Shares held
in the Custodial Account shall be voted with respect to any matters as to
which the Custodian as holder of record is entitled to vote, coming before
any meeting of shareholders of the corporation which issued such
securities, or of holders of interest in the Investment Company which
issued such Investment Company Shares. All such directions shall be in
writing on a form approved by the Custodian and signed by the Depositor,
and delivered to the Custodian within the time prescribed by it. The
Custodian shall vote only those securities and Shares with respect to which
it has received timely written directions from the Depositor; provided,
however, that the Custodian may without such direction vote Shares
"present" to the extent that such a vote is needed to establish a quorum.
20. LIMITATIONS ON CUSTODIAL LIABILITY AND INDEMNIFICATION. The
Depositor and the Custodian intend that the Custodian shall have and
exercise no discretion, authority, or responsibility as to any investment
in connection with the Account and the Custodian shall not be responsible
in any way for the purpose, propriety or tax treatment of any contribution,
or of any distribution, or any other action or nonaction taken pursuant to
the Depositor's direction (or that of the Depositor's Authorized Agent,
Beneficiary, executor or administrator). The Depositor who directs the
investment of his or her Account shall bear sole responsibility for the
suitability of any directed investment and for any adverse consequences
arising from such an investment, including, without limitation, the
inability of the Custodian to value or to sell an illiquid investment, or
the generation of unrelated business taxable income with respect to an
investment. To the fullest extent permitted by law, the Depositor (or the
Depositor's Authorized Agent, Beneficiary, executor or administrator, as
appropriate) shall at all times fully indemnify and save harmless the
Custodian, the Company and their agents, affiliates, successors and assigns
and their officers, directors and employees, from any and all liability
arising from the Depositor's investment direction under this Account and
from any and all other liability whatsoever which may arise in connection
with this Agreement except liability arising under applicable law or
liability arising from gross negligence or willful misconduct on the part
of the indemnified person. Although the Custodian shall have no
responsibility to give effect to a direction from anyone other than the
Depositor (or the Depositor's Beneficiary, executor or administrator), the
Custodian may, in its discretion, establish procedures pursuant to which
the Depositor may delegate to a third party any or all of the Depositor's
powers and duties hereunder, provided, however, that in no event may anyone
other than the Depositor execute the application by which this Agreement is
adopted or the form by which the Beneficiary is appointed, and provided,
further, that any such third party to whom the Depositor has so delegated
powers and duties shall be treated as the Depositor for purposes of
applying the preceding sentences of this paragraph and the provisions of
Article VIII, Section 2.
21. DELEGATION TO AGENTS. The Custodian may delegate to one or more
corporations affiliated with the Custodian the performance of record
keeping and other ministerial services in connection with the Custodial
Account, for a reasonable fee to be borne by the Custodian and not by the
Custodial Account. Any such agent's duties and responsibilities shall be
confined solely to the performance of such services, and shall continue
only for so long as the Custodian named in the Application serves as
Custodian.
22. AMENDMENT OF AGREEMENT. The Depositor and Custodian authorize and
direct the Company to amend this Agreement in any respect at any time
(including retroactively), so that it may conform with applicable
provisions of the Internal Revenue Code, or with any other applicable law
as in effect from time to time, or to make such other changes to this
Agreement as the Company deems advisable. Any such amendment shall be
effected by delivery to the Custodian and mailing to the Depositor at his
or her last known address as shown in the records of the Custodian a copy
of such amendment, or a restatement of this Custodial Agreement including
any such amendment. The Depositor shall be deemed to consent to any such
amendment(s) if he or she fails to object thereto by written notice
received by the Custodian within fifteen (15) calendar days from the date
of the Company's mailing to the Depositor a copy of such amendment(s) or
restatement.
23. RESIGNATION OR REMOVAL OF CUSTODIAN. The Company may remove the
Custodian at any time, and the Custodian may resign at any time, upon
thirty (30) days' written notice to the Depositor. Upon the removal or
resignation of the Custodian, the Company may, but shall not be required
to, appoint a successor custodian under this Custodial Agreement; provided
that any successor custodian shall satisfy the requirements of Section
408(a)(2) of the Code. Upon any such successor's acceptance of
appointment, the Custodian shall transfer the assets of the Custodial
Account, together with copies of relevant books and records, to such
successor custodian; provided, however, that the Custodian is authorized to
reserve such sum of money or property as it may deem advisable for payment
of any liabilities constituting a charge on or against the assets of the
Custodial Account, or on or against the Custodian or the Company. The
Custodian shall not be liable for the acts or omissions of any successor to
it. If no successor custodian is appointed by the Company, the Custodial
Account shall be terminated, and the assets of the Account, reduced by the
amount of any unpaid fees or expenses, will be distributed to the
Depositor.
24. TERMINATION OF THE CUSTODIAL ACCOUNT. The Depositor may terminate
the Custodial Account at any time upon notice to the Custodian in a manner
and form acceptable to the Custodian. Upon such termination, the
Custodian shall transfer the assets of the Custodial Account, reduced by
the amount of any unpaid fees or expenses, to the custodian or trustee of
another individual retirement account (within the meaning of Section 408 of
the Code) or other retirement plan designated by the Depositor, as
described in Article VIII, Section 9. The Custodian shall not be liable
for losses arising from the acts, omissions, delays or other inaction of
any such transferee custodian or trustee. If notice of the Depositor's
intention to terminate the Custodial Account is received by the Custodian
and the Depositor had not designated a transferee custodian or trustee for
the assets in the Account, then the Account, reduced by any unpaid fees or
expenses, will be distributed to the Depositor.
25. GOVERNING LAW. THIS AGREEMENT, AND THE DUTIES AND OBLIGATIONS OF THE
COMPANY AND THE CUSTODIAN UNDER THE AGREEMENT, SHALL BE CONSTRUED,
ADMINISTERED AND ENFORCED ACCORDING TO THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS, EXCEPT AS SUPERSEDED BY FEDERAL LAW OR STATUTE.
26. WHEN EFFECTIVE. This Agreement shall not become effective until
acceptance of the Application by or on behalf of the Custodian at its
principal office, as evidenced by a written notice to the Depositor.
FIDELITY DISCLOS
INDIVIDUAL URE
RETIREMENT STATEME
ACCOUNT NT
The following information is provided to you in accordance with the
requirements of the Internal Revenue Code (the "Code") and should be
reviewed in conjunction with both the Custodial Agreement and the
Application for your Individual Retirement Account ("IRA"). This
information reflects the provisions of the Internal Revenue Code as are
effective January 1, 1987 and therefore applies to contributions for years
after, and to distributions taken after 1986.
RIGHT TO CANCEL You may revoke this Account, but only if you had not
received this Disclosure Statement seven (7) calendar days prior to the
establishment of this IRA. In such an instance, revocation of the IRA is
permitted only if your request for revocation is made in writing and is
received by the Custodian within seven (7) calendar days of the
establishment date of your Account.
To revoke this account, send your written revocation request to the
address below:
For mutual fund IRAs: For brokerage IRAs:
Fidelity Investments Southwest Company National Financial Services
Corporation.
P.O. Box 660602 P.O. Box 1676, Church Street Station
Dallas, TX 75266-0602 New York, NY 10008-1676
ATTN. Retirement Services ATTN. Retirement Plan Department
Upon revocation, you will receive a full refund of your initial
contribution, including sales commissions (if any) and/or administrative
fees. To determine where to send a revocation request, or if you have any
questions relative to this procedure, please call our 24-hour toll free
number, 1-800-544-4774.
TYPES OF IRAS REGULAR IRA. You may make a Regular IRA contribution of
$2,000 or 100% of your compensation, whichever is less. (To determine the
amount of your income tax deduction for your IRA contribution, see "Limits
on Deductible Contributions" below.)
SPOUSAL IRA. If you and your spouse file a joint federal income tax
return, you may make a Spousal IRA contribution, even if your spouse has
received compensation during the tax year. Your contribution to a Spousal
IRA must not exceed the lesser of (1) $2,000 or (2) the excess of $2,250
(or if less, 100% of your compensation) over your contribution to your
Regular IRA. Note: If your spouse has more than $250 in compensation for
the tax year, the two of you may make a larger total contribution if you
each contribute to a Regular IRA.
ROLLOVER IRA. If you retire or change jobs, you may be eligible for a
distribution from your employer's retirement plan. To avoid mandatory
withholding of 20% of your distribution for federal income tax, and to
preserve the tax-deferred status of this distribution, you can transfer it
directly to a Rollover IRA. If you choose to have the distribution paid
directly to you, you will be subject to the 20% withholding rules. You may
still reinvest up to 100% of the total amount of your distribution which is
eligible for rollover in a Rollover IRA by replacing the 20% which was
withheld for taxes with other assets you own. You must reinvest in a
Rollover IRA within 60 days of receipt of your distribution. The amount
invested in a Rollover IRA will not be included in your taxable income for
the year in which you receive the qualified plan distribution.
DESCRIPTION Your IRA is a custodial account created for your exclusive
benefit. Your interest
OF ACCOUNT in the account is nonforfeitable.
ELIGIBILITY Employees and self-employed individuals are eligible to
contribute to an IRA even if they are already covered under another
tax-qualified plan. Employers may contribute to IRAs established by their
employees, and employers may contribute to IRAs used as part of a
Simplified Employee Pension plan ("SEP," described below).
CONTRIBUTIONS GENERAL. You may make annual cash contributions to an IRA
in any amount up to 100% of your compensation for the year or $2,000,
whichever is less. Your employer may make contributions to your account,
but, except as noted below under a SEP, the total contributions from you
and your employer may not exceed this limitation. Contributions (other
than rollover contributions described below) must be made in "cash" and not
in "kind." Therefore, securities or other assets already owned cannot be
contributed to an IRA but can be converted to cash and then contributed.
No part of your contribution may be invested in life insurance or be
commingled with other property, except in a common trust fund or common
investment fund.
SPOUSAL ACCOUNTS. If you are married and file a joint tax return, you
may make cash contributions to a "spousal" IRA in addition to your own IRA
(even if your spouse has compensation). The total amounts contributed to
your own and to your spouse's IRA may not exceed 100% of your combined
compensation or $2,250, whichever is less. In no event, however, may the
annual contribution to either your account or your spouse's account exceed
$2,000.
COMPENSATION means wages, salaries, professional fees, or other amounts
derived from or received for personal service actually rendered and
includes the earned income of a self-employed individual, and any alimony
or separate maintenance payment includible in the individual's gross
income.
ADJUSTED GROSS INCOME is determined prior to adjustments for personal
exemptions and itemized deductions. For purposes of determining the IRA
deduction (see below), adjusted gross income is modified to take into
account deductions for IRA contributions, taxable benefits under the Social
Security Act and the Railroad Retirement Act, and passive loss limitations
under Code Section 86.
TIME OF CONTRIBUTION. You may make contributions to your IRA any time up
to and including the due date for filing your tax return for the year. You
may continue to make annual contributions to your IRA up to (but not
including) the calendar year in which you reach age 70 1/2. You may
continue to make annual contributions to your spouse's IRA up to (but not
including) the calendar year in which your spouse reaches age 70 1/2.
ROLLOVER IRA CONTRIBUTIONS. Qualifying distributions from tax-qualified
plans (for example, pension, profit-sharing, and Keogh plans) may be
eligible for rollover into your IRA. However, strict limitations apply to
such rollovers and you should seek competent tax advice regarding these
restrictions.
SIMPLIFIED EMPLOYEE PENSION PLAN CONTRIBUTIONS. A separate IRA may be
established for use by your employer as part of a SEP arrangement. Your
employer may contribute to your SEP-IRA up to a maximum of 15% of your
compensation or $30,000, whichever is less. If your SEP-IRA is used as
part of a salary reduction SEP, you may elect to reduce your annual
compensation, up to a maximum of 15% of your compensation or $7,000
(indexed to reflect cost-of-living adjustments), whichever is less, and
have your employer contribute that amount to your SEP-IRA. If your
employer maintains both a salary reduction SEP and a regular SEP, the
annual contribution limit to both SEPs together is 15% of your compensation
or $30,000, whichever is less. You may contribute, in addition to the
amount contributed by your employer to your SEP-IRA, an amount not in
excess of the limits referred to under "General" above. It is your and
your employer's responsibility to see that contributions in excess of
normal IRA limits are made under a valid SEP and are, therefore, proper.
EXCESS CONTRIBUTIONS. Contributions which exceed the allowable maximum
per year are considered excess contributions. A nondeductible penalty tax
of 6% of the excess amount contributed will be incurred for each year in
which the excess contribution remains in your IRA. If you make a
contribution (or your employer makes a SEP contribution, including a salary
reduction contribution, on your behalf) in excess of your allowable maximum
for any taxable year, you may correct the excess contribution and avoid the
6% penalty tax for that year by withdrawing the excess contribution and its
earnings on or before the date, including extensions, for filing your tax
return for that year.
The amount of the excess contribution withdrawn will not be considered a
premature distribution nor (except in the case of a salary reduction
contribution) be taxed as ordinary income, but the earnings withdrawn will
be taxed as ordinary income to you. Alternatively, excess contributions
for one year may be carried forward and reported in the next year to the
extent that the excess, when aggregated with your IRA contribution (if any)
for the subsequent year, does not exceed the maximum amount for that year.
The 6% excise tax will be imposed on excess contributions in each year they
are neither returned nor carried forward.
DEDUCTIBLE IRA If you are not married and are not an active participant in
an employer-maintained
CONTRIBUTIONS retirement plan, you may make a fully deductible IRA
contribution in any amount up to 100% of your compensation for the year or
$2,000, whichever is less. The same limits apply if you are married and
you file a joint return with your spouse, and neither of you is an active
participant in an employer-maintained retirement plan. An
"employer-maintained retirement plan" includes any of the following types
of retirement plans:
- a qualified pension, profit-sharing, or stock bonus plan established
in
accordance with IRC (sub section)401 (a) or 401 (k).
- a Simplified Employee Pension Plan (SEP) (IRC (sub section)408(k)).
- a deferred compensation plan maintained by a governmental unit or
agency.
- tax sheltered annuities and custodial accounts (IRC (sub
section)403(b) and 403(b)(7)).
- a qualified annuity plan under IRC (sub section)403(a).
You are an active participant in an employer maintained retirement plan
even if you do not have a vested right to any benefits under your
employer's plan. Whether you are an "active participant" depends on the
type of plan maintained by your employer. Generally, you are considered an
active participant in a defined contribution plan if an employer
contribution or forfeiture was credited to your account under the plan
during the year. You are considered an active participant in a defined
benefit plan if you are eligible to participate in the plan, even though
you elect not to participate. You are also treated as an active
participant for a year during which you make a voluntary or mandatory
contribution to any type of plan, even though your employer makes no
contribution to the plan.
If you (or your spouse, if you are filing a joint tax return) are covered
by an employer-maintained retirement plan, your IRA contribution is tax
deductible only to the extent that your adjusted gross income does not
exceed the deductibility limits discussed below.
LIMITS ON The deduction of your IRA contribution is reduced
proportionately for adjusted
DEDUCTIBLE gross income which exceeds the applicable dollar amount. The
applicable dollar
CONTRIBUTIONS amount for an individual is $25,000 and $40,000 for married
couples filing a joint tax return. The applicable dollar limit for married
individuals filing separate returns is $0. If your adjusted gross income
exceeds the applicable dollar amount by not more than $10,000, you may make
a deductible IRA contribution (but the deductible amount will be less than
$2,000). To determine the amount of your deductible contribution, use the
following calculation:
1. Subtract the applicable dollar amount from your adjusted gross income.
If the result is $10,000 or more, stop; you can only make a nondeductible
contribution.
2. Subtract the above figure from $10,000.
3. Divide the above figure by $10,000.
4. Multiply $2,000 by the fraction resulting from the above steps. This
is your maximum deductible contribution limit.
If the deduction limit is not a multiple of $10, then it is to be rounded
up to the next highest $10. There is a $200 minimum floor on the deduction
limit if your adjusted gross income does not exceed $35,000 (for a single
taxpayer), $50,000 (for married taxpayers filing jointly) or $10,000 (for a
married taxpayer filing separately).
Adjusted gross income for married couples filing a joint tax return is
calculated by aggregating the compensation of both spouses. The deduction
limitations on IRA contributions, as determined above, then apply to each
spouse.
NONDEDUCTIBLE Even if your income exceeds the limits described above, you
may make a
IRA contribution to your IRA up to the lesser of $2,000 or 100% of your
compensation. To
CONTRIBUTIONS the extent that your contribution exceeds the deductible
limits, it will be nondeductible. Earnings on all IRA contributions are
tax deferred until distribution.
You are required to designate on your tax return the extent to which your
IRA contribution is nondeductible. Therefore, your designation must be
made by the due date (including extensions) for filing your tax return. If
you overstate the amount of nondeductible contributions for a taxable year,
a penalty of $100 will be assessed for each overstatement unless you can
show that the overstatement was due to a reasonable cause.
INVESTMENT The assets in your IRA will be invested in accordance with your
instructions. As
OF ACCOUNT with any investment, you should read any publicly available
information (e.g., prospectuses, annual reports, the terms and conditions
of any insurance annuity contract, etc.) which would enable you to make an
informed investment decision.
If no investment instructions are received from you, or if the
instructions received are, in the opinion of the Custodian, unclear, you
may be requested to provide instructions. In the absence of such
instructions, your investment may be invested in Money Market Shares, which
strive to maintain a stable $1 per share balance . Keep in mind that with
respect to investments in regulated investment company shares (i.e., mutual
funds) or other securities held in your account, growth in the value of
your account cannot be guaranteed or projected.
DISTRIBUTIONS GENERAL. Distributions from your IRA should begin no
earlier than the date you reach age 59 1/2 (except in cases of your earlier
disability or death) and no later than the April 1 following the year in
which you reach age 70 1/2. Distributions from your account will be
included in your gross income for federal income tax purposes for the year
in which you receive them.
PREMATURE DISTRIBUTIONS. To the extent they are included in income,
distributions from your IRA made before you reach age 59 1/2 will be
subject to a 10% nondeductible penalty tax (in addition to being taxable as
ordinary income) unless the distribution is an exempt withdrawal of an
excess contribution, or the distribution is rolled over to another
qualified retirement plan, or the distribution is made on account of your
death or disability, or the distribution is one of a scheduled series of
payments over your life or life expectancy or the joint life expectancies
of yourself and your Beneficiary.
LATEST TIME TO WITHDRAW. You must begin receiving distributions of the
assets in your account by April 1 of the calendar year following the
calendar year in which you reach age 70 1/2. Subsequent distributions must
be made by December 31 of each year. If you maintain more than one IRA,
you may take from any of your IRAs the aggregate amount to be withdrawn.
MINIMUM DISTRIBUTIONS. Once distributions are required to begin, they
must not be less than the amount each year (determined by actuarial tables)
which would exhaust the value of the account over the required distribution
period, which is generally your life expectancy or the joint life and last
survivor expectancy of you and an individual you have designated as your
Beneficiary. You will be subject to a 50% excise tax on the amount by
which the distribution you actually received in any year falls short of the
minimum distribution required for the year.
METHODS OF DISTRIBUTION. Assets may be distributed from your account
according to one or more of the following methods selected by you:
(A) total distribution
(B) distribution over a certain period
(C) purchase of an annuity contract
(See Article IV of your IRA Custodial Agreement for a full description of
these distribution methods.)
DISTRIBUTION UPON DEATH. The assets remaining in your Account will be
distributed upon your death to the beneficiary(ies) named by you on record
with the Custodian. If there is no beneficiary designated for your Account
in the Custodian's records, or if the beneficiary you had designated dies
before you do, your Account will be paid to your surviving spouse, or if
none, to your estate.
If your spouse was your primary beneficiary and you had started to
receive distributions from your account, but die before receiving the
balance of your account, your spouse has several options. Your spouse can
either keep receiving distributions from your account at least as rapidly,
or roll over all or part of your account into an IRA in his or her name.
If distributions from your account had not yet begun, your spouse may defer
taking distributions until April 1st of the year you would have turned 70
1/2, and then receive distributions over his or her life expectancy, or
roll over the account into an IRA in his or her name, and treat the IRA as
his or her own.
If your beneficiary is not your spouse, and distributions had begun from
your account, your beneficiary may continue to receive them at least as
rapidly as the payment schedule you had established. If distributions had
not yet begun, your beneficiary must deplete your account within 5 years of
your death, or start taking distributions from your account within one year
of your death over his or her own life expectancy.
DISTRIBUTION OF NONDEDUCTIBLE CONTRIBUTIONS. To the extent that a
distribution constitutes a return of your nondeductible contributions, it
will not be included in your income. The amount of any distribution
excludable from income is the portion that bears the same ratio to the
total distribution that your aggregate nondeductible contributions bear to
the balance at the end of the year (calculated after adding back
distributions during the year) of your IRA. For this purpose, all of your
IRAs are treated as a single IRA. Furthermore, all distributions from an
IRA during a taxable year are to be treated as one distribution. The
aggregate amount of distributions excludable from income for all years is
not to exceed the aggregate nondeductible contributions for all calendar
years. There is a 10% additional income tax assessed against premature
distributions to the extent such distributions are includible in income
(See "Premature Distributions" above).
EXCESS DISTRIBUTIONS. There is a 15% excise tax assessed against annual
distributions from tax-favored retirement plans, including IRAs, which
exceed the greater of $150,000 or $112,500 (indexed to reflect
cost-of-living increases). To determine whether you have distributions in
excess of this limit, you must aggregate the amounts of all distributions
received by you during the calendar year from all retirement plans,
including IRAs. Please consult with your tax advisor for more complete
information, including the availability of favorable elections.
ROLLOVER TREATMENT. Distributions from your IRA representing all or any
part of the assets in your IRA account are also eligible for rollover
treatment. You may roll over all or any part of the same property from
this distribution of assets, within 60 days of receipt, into another IRA or
individual retirement annuity, and maintain the tax-deferred status of
these assets. A 60 day rollover can be made once every twelve months per
IRA.
DIVORCE OR If all or any portion of your IRA is awarded to a former
spouse pursuant to divorce
LEGAL or legal separation, such portion can be transferred to an IRA in
the receiving
SEPARATION spouse's name. This transaction can be processed without any
tax implications to you provided a written instrument executed by a court
incident to the divorce or legal separation in accordance with Section
408(d)(6) of the Code is received by the Custodian, and specifically
directs such transfer. In addition, you must also provide the Custodian
with a letter of instruction and an IRA application executed by the
receiving spouse, if she or he doesn't already maintain such IRA at
Fidelity.
FEES AND Fees and other expenses of maintaining your Fidelity IRA account
are described in
EXPENSES the Application and in the letter you receive confirming the
acceptance of your IRA, and may be changed from time to time, as provided
in the Custodial Agreement.
PROHIBITED If any of the events prohibited by Section 4975 of the Code
(such as any sale,
TRANSACTIONS exchange or leasing of any property between you and your IRA)
occurs during the existence of your IRA, your account will be disqualified
and the entire balance in your account will be treated as if distributed to
you as of the first day of the year in which the prohibited event occurs.
This "distribution" would be subject to ordinary income tax and, if you
were under age 59 1/2 at the time, to the 10% penalty tax on premature
distributions.
If you or your Beneficiary use (pledge) all or any part of your IRA as
security for a loan, then the portion so pledged will be treated as if
distributed to you, and will be taxable to you as ordinary income and
subject to the 10% penalty during the year in which you make such a pledge.
The purchase of any securities on margin within your Fidelity IRA will
also result in a prohibited transaction.
OTHER TAX NO SPECIAL TAX TREATMENT. No distribution to you or anyone else
from your
CONSIDERATIONS account can qualify for capital gain treatment under the
federal income tax laws. It is taxed to the person receiving the
distribution as ordinary income. (Similarly, you are not entitled to the
five-year averaging rule for lump sum distributions available to persons
receiving distributions from certain other types of retirement plans.)
GIFT TAX. If you elect during your lifetime to have all or any part of
your account payable to a Beneficiary at or after your death, the election
generally will not subject you to any gift tax liability, but you may want
to check with your tax advisor.
TAX WITHHOLDING. Federal income tax will be withheld from distributions
you receive from an IRA unless you elect not to have tax withheld.
However, if IRA distributions are to be delivered outside of the United
States, this tax is mandatory and you may not elect otherwise unless you
certify to the Custodian that you are not a U.S. citizen residing overseas
or a "tax avoidance expatriate" as described in Code Section 877. Federal
income tax will be withheld at the rate of 10%.
REPORTING FOR TAX PURPOSES. Contributions to your IRA must be reported
on your tax Form 1040 or 1040A for the taxable year contributed. You will
be required to designate your IRA contribution as deductible or
nondeductible. You are also required to attach a Form 8606 to your 1040 or
1040A form. Form 8606 is used to report nondeductible IRA contributions
and to calculate the basis (nontaxable part) of your IRA. Other reporting
will be required by you in the event that special taxes or penalties
described herein are due. You must also file Treasury Form 5329 with the
IRS for each taxable year in which the contribution limits are exceeded, a
premature distribution takes place, or less than the required minimum
amount is distributed from your IRA. The Tax Reform Act of 1986 also
requires you to report the amount of all distributions you received from
your IRA and the aggregate account balance of all IRAs as of the end of the
calendar year.
IRS APPROVAL The form of your Individual Retirement Account has been
approved by the Internal Revenue Service. The Internal Revenue Service
approval is a determination only as to the form and does not represent a
determination of the merits of the Account. You may obtain further
information with respect to your IRA from any district office of the
Internal Revenue Service.
FIDELITY INSTITUTIONAL
INDIVIDUAL RETIREMENT ACCOUNT
CUSTODIAL AGREEMENT
Page
ARTICLE I 1
ARTICLE II 1
ARTICLE III 1
ARTICLE IV 1
ARTICLE V 3
ARTICLE VI 3
ARTICLE VII 3
ARTICLE VIII 1. Definitions 3
(a) "Account" or "Custodial Account" 3
(b) "Agreement" 3
(c) "Application" 3
(d) "Authorized Agent" 3
(e) "Beneficiary" 3
(f) "Broker" 3
(g) "Code" 3
(h) "Company" 3
(i) "Custodian" 3
(j) "Depositor" 4
(k) "Investment Company Shares" 4
(l) "Money Market Shares" 4
2. BROKER 4
3. Investment of Contributions 4
(a) General 4
(b) Initial Contribution 5
(c) Unclear Instructions 5
(d) Minimum Investment 5
(e) No Duty 5
4. Contributions by Divorced or Separated Spouses 5
5. Timing of Contributions 5
6. Rollover Contributions 5
7. Reinvestment of Earnings 6
8. Designation of Beneficiary 6
(a) General 6
(b) Minors 6
(c) QTIPs and QDOTs 6
(d) Judicial Determination 7
(e) No Duty 7
9. Payroll Deduction 7
10. Transfers to or from the Account 7
11. Distributions from the Account 8
12. Actions in the Absence of Specific Instructions 8
13. Responsibility as to Contributions or Distributions 8
14. Written Instructions and Notices 8
15. Effect of Written Instructions and Notices 8
16. Tax Matters 9
(a) General 9
(b) Annual Report 9
(c) Withholding 9
17. Spendthrift Provision 9
18. Fees and Expenses 9
(a) General 9
(b) Advisor Fees 9
(c) Sale of Assets 9
19. Voting with Respect to Securities 10
20. Limitations on Custodial Liability and Indemnification 10
21. Delegation to Agents 10
22. Amendment of Agreement 11
23. Resignation or Removal of Custodian 11
24. Termination of the Custodial Account 11
25. Governing Law 11
26. When Effective 11
FIDELITY INSTITUTIONAL
INDIVIDUAL RETIREMENT ACCOUNT
DISCLOSURE STATEMENT
Page
RIGHT TO CANCEL 12
TYPES OF IRAS
Regular IRA 12
Spousal IRA 12
Rollover IRA 12
DESCRIPTION OF ACCOUNT 12
ELIGIBILITY 12
CONTRIBUTIONS 12
General 12
Spousal Accounts 13
Compensation 13
Adjusted Gross Income 13
Time of Contribution 13
Rollover IRA Contributions 13
Simplified Employee Pension Plan Contributions 13
Excess Contributions 13
DEDUCTIBLE IRA CONTRIBUTIONS 14
LIMITS ON DEDUCTIBLE CONTRIBUTIONS 14
NONDEDUCTIBLE IRA CONTRIBUTIONS 15
INVESTMENT OF ACCOUNT 15
DISTRIBUTIONS 15
General 15
Premature Distributions 15
Latest Time to Withdraw 15
Minimum Distributions 15
Methods of Distribution 15
Distribution Upon Death 16
Distribution of Nondeductible Contributions 16
Excess Distributions 16
Rollover Treatment 16
DIVORCE OR LEGAL SEPARATION 16
FEES AND EXPENSES 17
PROHIBITED TRANSACTIONS 17
OTHER TAX CONSIDERATIONS 17
No Special Tax Treatment 17
Gift Tax 17
Tax Withholding 17
Reporting for Tax Purposes 17
IRS APPROVAL 17
FIDELITY CUSTODIAL Under Section 408(a) of the
INSTITUTIONAL AGREEMENT Internal Revenue Code
INDIVIDUAL
RETIREMENT
ACCOUNT
The Depositor whose name appears on the attached Application is
establishing an individual retirement account (under Section 408(a) of the
Internal Revenue Code) to provide for his or her retirement and for the
support of his or her beneficiaries after death.
The Custodian named on the attached Application has given the Depositor
the Disclosure Statement required under the Income Tax Regulations under
Section 408(i) of the Code.
The Depositor has deposited with the Custodian an initial contribution in
cash, as set forth in the attached Application.
The Depositor and the Custodian make the following Agreement:
ARTICLE I The Custodian may accept additional cash contributions on behalf
of the Depositor for a tax year of the Depositor. The total cash
contributions are limited to $2,000 for the tax year unless the
contribution is a rollover contribution described in Section 402(c) of the
Code (but only after December 31, 1992), 403(a)(4), 403(b)(8), 408(d)(3),
or an employer contribution to a Simplified Employee Pension plan as
described in Section 408(k). Rollover contributions before January 1,
1993, include rollovers described in Section 402(a)(5), 402(a)(6),
402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to
a Simplified Employee Pension Plan as described in Section 408(k).
ARTICLE II The Depositor's interest in the balance in the Custodial
Account is nonforfeitable.
ARTICLE III 1. No part of the custodial funds may be invested in life
insurance contracts, nor may the assets of the Custodial Account be
commingled with other property except in a common trust fund or common
investment fund (within the meaning of Section 408(a)(5) of the Code).
2. No part of the custodial funds may be invested in collectibles (within
the meaning of Section 408(m) of the Code) except as otherwise permitted by
Section 408(m)(3) which provides an exception for certain gold and silver
coins and coins issued under the laws of any state.
ARTICLE IV 1. Notwithstanding any provision of this agreement to the
contrary, the distribution of the Depositor's interest in the Custodial
Account shall be made in accordance with the following requirements and
shall otherwise comply with Section 408(a)(6) and Proposed Regulations
Section 1.408-8, including the incidental death benefit provisions of
Proposed Regulations Section 1.401(a)(9)-2, the provisions of which are
incorporated by reference.
2. Unless otherwise elected by the time distributions are required to
begin to the Depositor under paragraph 3, or to the surviving spouse under
paragraph 4, other than in the case of a life annuity, life expectancies
shall be recalculated annually. Such election shall be irrevocable as to
the Depositor and the surviving spouse and shall apply to all subsequent
years. The life expectancy of a non spouse beneficiary may not be
recalculated.
3. The Depositor's entire interest in the Custodial Account must be, or
begin to be, distributed by the Depositor's required beginning date (April
1 following the calendar year end in which the Depositor reaches age 70
1/2). By that date, the Depositor may elect, in a manner acceptable to the
Custodian, to have the balance in the Custodial Account distributed in:
(a) A single-sum payment.
(b) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the life of the Depositor.
(c) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the joint and last survivor lives of the
Depositor and his or her designated Beneficiary.
(d) Equal or substantially equal annual payments over a specified period
that may not be longer than the Depositor's life expectancy.
(e) Equal or substantially equal annual payments over a specified period
that may not be longer than the joint life and last survivor expectancy of
the Depositor and his or her designated Beneficiary.
4. If the Depositor dies before his or her entire interest is distributed
to him or her, the entire remaining interest will be distributed as
follows:
(a) If the Depositor dies on or after distribution of his or her
interest has begun, distribution must continue to be made in accordance
with paragraph 3.
(b) If the Depositor dies before distribution of his or her interest
has begun, the entire remaining interest will, at the election of the
Depositor or, if the Depositor has not so elected, at the election of the
Beneficiary or Beneficiaries, either
(i) Be distributed by the December 31 of the year containing the fifth
anniversary of the Depositor's death, or
(ii) Be distributed in equal or substantially equal payments over the
life or life expectancy of the designated Beneficiary or Beneficiaries
starting by December 31 of the year following the year of the Depositor's
death. If, however, the Beneficiary is the Depositor's surviving spouse,
then this distribution is not required to begin before December 31 of the
year in which the Depositor would have turned age 70 1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of Section 408(b)(3) and its related regulations has
irrevocably commenced, distributions are treated as having begun on the
Depositor's required beginning date, even though payments may actually have
been made before that date.
(d) If the Depositor dies before his or her entire interest has been
distributed and if the Beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may be accepted in
the account.
5. In the case of distribution over life expectancy in equal or
substantially equal annual payments, to determine the minimum annual
payment for each year, divide the Depositor's entire interest in the
Custodial Account as of the close of business on December 31 of the
preceding year by the life expectancy of the Depositor (or the joint life
and last survivor expectancy of the Depositor and the Depositor's
designated Beneficiary, or the life expectancy of the designated
Beneficiary, whichever applies). In the case of distributions under
paragraph 3, determine the initial life expectancy (or joint life and last
survivor expectancy) using the attained ages of the Depositor and
designated Beneficiary as of their birthdays in the year the Depositor
reaches age 70 1/2. In the case of a distribution in accordance with
paragraph 4(b)(ii), determine life expectancy using the attained age of the
designated Beneficiary as of the Beneficiary's birthday in the year
distributions are required to commence.
6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524, to satisfy
the minimum distribution requirements described above. This method permits
an individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for
another.
ARTICLE V 1. The Depositor agrees to provide the Custodian with
information necessary for the Custodian to prepare any reports required
under Section 408(i) of the Code and Regulations Sections 1.408-5 and
1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue Service
and the Depositor prescribed by the Internal Revenue Service.
ARTICLE VI Notwithstanding any other articles which may be added or
incorporated, the provisions of Articles I through Ill and this sentence
will be controlling. Any additional articles that are not consistent with
Section 408(a) of the Code and the related regulations will be invalid.
ARTICLE VII This Agreement will be amended from time to time to comply
with the provisions of the Code and related regulations. Other amendments
may be made with the consent of the Depositor and the Custodian.
ARTICLE VIII 1. DEFINITIONS. The following definitions shall apply to
terms used in this Article VIII:
(a) "Account" or "Custodial Account" means the custodial account
established hereunder for the benefit of the Depositor.
(b) "Agreement" means the Fidelity Institutional IRA Custodial
Agreement, including the information and provisions set forth in any
Account Application that goes with this Agreement. This Agreement,
including the Account Application and any designation of Beneficiary filed
with the Custodian, may be proved either by an original copy or by a
reproduced copy thereof, including, without limitation, a copy reproduced
by photocopying, facsimile transmission, or electronic imaging.
(c) "Application" shall mean the Application by which this Agreement,
as may be amended from time to time, is established between the Depositor
and the Custodian. The statements contained therein shall be incorporated
into this Agreement.
(d) "Authorized Agent" means the person or persons authorized by the
Depositor, on a signed form acceptable to and filed with the Custodian, to
purchase or sell Shares in the Depositor's Account.
(e) "Beneficiary" means the person or persons (including a trust or
estate) designated as such by the Depositor on a signed form acceptable to
and filed with the Custodian pursuant to Article VIII, Section 8 of this
Agreement.
(f) "Broker" shall mean either a securities broker-dealer registered as
such under the Securities Exchange Act of 1934, or a bank as defined in
Section 3(a)(6) of the Securities Exchange Act of 1934, which the
Depositor has designated as his or her Broker in the Account Application.
(g) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(h) "Company" shall mean FMR Corp., a Massachusetts corporation, or any
successor or affiliate thereof to which FMR Corp. may, from time to time,
delegate or assign any or all of its rights or responsibilities under this
Agreement.
(i) "Custodian" shall mean Fidelity Trust Company of Salt Lake City,
Utah, or its successor, as specified in the Account Application.
(j) "Depositor" means the person named in the Account Application.
(k) "Investment Company Shares" or "Shares" shall mean shares of stock,
trust certificates, or other evidences of interest (including fractional
shares) in any corporation, partnership, trust, or other entity registered
under the Investment Company Act of 1940 (i) for which Fidelity Management
& Research Company, a Massachusetts corporation, or its successors or
affiliates, serves as investment advisor (a "Fidelity Fund"), (ii) the
records of which are maintained on a proprietary transfer agent or
record-keeping system owned or employed by the Company, and (iii) which is
among a group of Fidelity Funds in which investments are permitted for
investment under this Agreement by the Custodian and whose shares may be
exchanged for shares of other Fidelity Funds within such group under the
terms of its then current prospectus or any other agreement maintained by
the Company. Such Investment Company Shares shall in no event include
shares designated by Fidelity Management & Research Company as a
Fidelity Advisor Fund.
(l) "Money Market Shares" shall mean any Investment Company Shares which
are issued by a money market mutual fund.
2. BROKER. The Broker shall be appointed by the Depositor in the
Application as his or her agent to execute such investment directions with
respect to Investment Company Shares as the Depositor may give under the
terms of the Custodial Account, including the execution of purchase and
sale orders through the Company's proprietary remote trading system.
In all cases the Broker, and not the Custodian, shall have the
responsibility FOR delivering to the Depositor all notices and prospectuses
relating to such Investment Company Shares. To the extent that the
Custodian delivers to the Broker confirmations, statements and other
notices with respect to the Account, any such communications delivered to
the Broker shall be deemed to have been delivered to the Depositor. The
Depositor agrees to hold the Custodian and the Company harmless from and
against any losses, cost or expenses arising in connection with the
delivery or receipt of any such communication(s), provided the Custodian
has acted in accordance with the above.
3. LNVESTMENT OF CONTRIBUTIONS. Contributions to the Account may be
invested only in Investment Company Shares, and shall be invested as
follows:
(a) General. Contributions will be invested in accordance with the
Depositor's written instructions in the Application, and with subsequent
instructions given by the Depositor or the Authorized Agent appointed by
the Depositor (or, following the death of the Depositor, his or her
Beneficiary) through the Broker to the Custodian in a manner acceptable to
the Custodian. By giving such instructions to the Custodian, such person
will be deemed to have acknowledged receipt of the then current prospectus,
if any, for any Investment Company Shares in which the Depositor (or the
Authorized Agent appointed by the Depositor), through the Broker directs
the Custodian to invest assets in his or her Account. All charges
incidental to carrying out such instructions shall be charged and collected
in accordance with Article VIII, Section 18. All Investment Company Shares
in the Custodial Account shall be held in the name of the Custodian or its
nominee or nominees.
(b) Initial Contribution. The Custodian will invest all contributions
promptly after their receipt, as set forth below; provided, however, that
the Custodian shall not be obligated to invest the Depositor's initial
contribution to his Custodial Account as indicated on the Application,
until at least seven (7) calendar days have elapsed from the date of
acceptance of the Application by or on behalf of the Custodian.
(c) Unclear Instructions. If the Depositor's Custodial Account at any
time contains cash as to which investment instructions in accordance with
this Section 3 have not been received by the Custodian, or if the Custodian
receives instructions as to investment selection or allocation which are,
in the opinion of the Custodian, not clear, the Custodian may request
instructions from the Depositor (or the Depositor's Authorized Agent,
Beneficiary, executor or administrator). Pending receipt of such
instructions any cash may be invested in Money Market Shares, and any other
investment may remain unchanged. The Custodian shall not be liable to
anyone for any loss resulting from delay in investing such cash or in
implementing such instructions. Notwithstanding the above, the Custodian
may, but need not, for administrative convenience maintain a balance of up
to $100 of uninvested cash in the Depositor's Custodial Account.
(d) Minimum Investment. Any other provision hereof to the contrary
notwithstanding, the Depositor (or the Depositor's Authorized Agent,
Beneficiary, executor, or administrator) may not direct that any part or
all of the Custodial Account be invested in Investment Company Shares
unless the aggregate amount to be invested is at least such amount as the
Custodian shall establish from time to time.
(e) No Duty. The Custodian shall not have any duty to question the
directions of a Depositor (or the Depositor's Broker, Authorized Agent,
Beneficiary, executor, or administrator) in the investment of his or her
Custodial Account or to advise the Depositor or the Depositor's Broker
regarding the purchase, retention or sale of assets credited to the
Custodial Account. The Custodian, or any of its affiliates, shall not be
liable for any loss which results from the Depositor's (or the Depositor's
Broker, Authorized Agent, Beneficiary, executor, or administrator) exercise
of control (whether by his or her action or inaction) over the Custodial
Account.
4. CONTRIBUTIONS BY DIVORCED OR SEPARATED SPOUSES. All alimony and
separate maintenance payments received by a divorced or separated spouse,
and taxable under Section 71 of the Code, shall be considered compensation
for purposes of computing the maximum annual contribution to the Custodial
Account, and the limitations for contributions by a divorced or separated
spouse shall be the same as for any other individual.
5. TIMING OF CONTRIBUTIONS. A contribution is deemed to have been made
on the last day of the preceding taxable year if the contribution is made
by the deadline for filing the Depositor's income tax return (not including
extensions), or such later date as may be determined by the Department of
the Treasury or the IRS, provided the Depositor (or the Depositor's Broker
or Authorized Agent) designates, in a manner acceptable to the Custodian,
the contribution as a contribution for the preceding taxable year.
6. ROLLOVER CONTRIBUTIONS. The Custodian will accept for the Custodial
Account all rollover contributions which consist of cash, and it may, but
shall be under no obligation to, accept all or any part of any other
rollover contribution. The Depositor shall designate each rollover
contribution as such to the Custodian through the Broker, and by such
designation shall confirm to the Custodian that a proposed rollover
contribution qualifies as a rollover contribution within the meaning of
Sections 402(a)(5), 402(a)(6), 402(a)(7), 402(c), 403(a)(4), 403(b)(8),
and/or 408(d)(3) of the Code. Submission by or on behalf of a Depositor of
a rollover contribution consisting of assets other than cash or property
permitted as an investment under this Article VIII shall be deemed to be
the instruction of the Depositor to the Custodian that, if such rollover
contribution is accepted, the Custodian will use its best efforts to sell
those assets for the Depositor's account, and to invest the proceeds of any
such sale in accordance with Section 3. To the extent permitted by law,
the Custodian shall not be liable to anyone for any loss resulting from
such sale or delay in effecting such sale; or for any loss of income or
appreciation with respect to the proceeds thereof after such sale and prior
to investment pursuant to Section 3; or for any failure to effect such sale
if such property proves not readily marketable in the ordinary course of
business. All brokerage and other costs incidental to the sale or
attempted sale of such property will be charged to the Custodial Account in
accordance with Article VIII, Section 18.
7. REINVESTMENT OF EARNINGS. In the absence of other instructions
pursuant to Section 3, distributions of every nature received in respect of
the assets in a Depositor's Custodial Account shall be reinvested as
follows:
(a) in the case of a distribution in respect of Investment Company
Shares which may be received, at the election of the shareholder, in cash
or in additional Shares of such Investment Company, the Custodian shall
elect to receive such distribution in additional Investment Company Shares;
(b) in the case of a cash distribution which is received in respect of
Investment Company Shares, the Custodian shall reinvest such cash in
additional Shares of that Investment Company;
(c) in the case of any other distribution of any nature received in
respect of assets in the Custodial Account, the distribution shall be
liquidated to cash, if necessary, and shall be reinvested in accordance
with the Depositor's instructions pursuant to Section 3.
8. DESIGNATION OF BENEFICIARY. A Depositor may designate a Beneficiary
as follows:
(a) General. A Depositor may designate a Beneficiary or Beneficiaries
at any time, and any such designation may be changed or revoked at any
time, by written designation signed by the Depositor on a form acceptable
to, and filed with, the Custodian; provided, however, that such
designation, or change or revocation of a prior designation, shall not be
effective unless it is received and accepted by the Custodian no later than
thirty (30) days after the death of the Depositor, and provided further
that the latest such designation or change or revocation shall control. If
the Depositor had not by the date of his or her death properly designated a
Beneficiary in accordance with the preceding sentence, or if no designated
Beneficiary survives the Depositor, the Depositor's Beneficiary shall be
his or her surviving spouse, but if he or she has no surviving spouse, his
or her estate. Unless otherwise specified in the Depositor's designation
of Beneficiary, if a Beneficiary dies before receiving his or her entire
interest in the Custodial Account, his or her remaining interest in the
Custodial Account shall be paid to the Beneficiary's estate.
(b) Minors. If a distribution upon the death of the Depositor is
payable to a person known by the Custodian to be a minor or otherwise under
a legal disability, the Custodian may, in its absolute discretion, make
all, or any part of the distribution to (a) a parent of such person, (b)
the guardian , conservator, or other legal representative, wherever
appointed, of such person, (c) a custodial account established under a
Uniform Gifts to Minors Act, Uniform Transfers to Minors Act, or similar
act, (d) any person having control or custody of such person, or (e) to
such person directly.
(c) QTIPs and QDOTs. A Depositor may designate as Beneficiary of his or
her Account a trust for the benefit of his or her surviving spouse that is
intended to satisfy the conditions of Sections 2056(b)(7) or 2056A of the
Code (a "Spousal Trust"). In that event, if the Depositor is survived by
his or her spouse, the following provisions shall apply to the Account,
from and after the death of the Depositor until the death of the
Depositor's surviving spouse: (1) all of the income of the Account shall
be paid to the Spousal Trust annually or at more frequent intervals, and
(2) no person shall have the power to appoint any part of the Account to
any person other than the Spousal Trust. To the extent permitted by
Section 401(a)(9) of the Code, as determined by the trustee(s) of the
Spousal Trust, the surviving spouse of a Depositor who has designated a
Spousal Trust as his or her Beneficiary may be treated as his or her
"designated beneficiary" for purposes of the distribution requirements of
that Code section. The Custodian shall have no responsibility to determine
whether such treatment is appropriate.
(d) Judicial Determination. Anything to the contrary herein
notwithstanding, in the event of reasonable doubt respecting the proper
course of action to be taken, the Custodian may in its sole and absolute
discretion resolve such doubt by judicial determination which shall be
binding on all parties claiming any interest in the Account. In such event
all court costs, legal expenses, reasonable compensation of time expended
by the Custodian in the performance of its duties, and other appropriate
and pertinent expenses and costs shall be collected by the Custodian from
the Custodial Account in accordance with Article VIII, Section 18.
(e) No Duty. The Custodian
shall not have any duty to question the directions of a Depositor (or the
Depositor's Authorized Agent, Beneficiary, executor or administrator) as to
the time(s) and amount(s) of distributions from the Custodial Account, or
to advise him or her regarding the compliance of such distributions with
Section 401(a)(9), Section 2056(b)(7) or Section 2056A of the Code.
9. PAYROLL DEDUCTION. Subject to approval of the Custodian and the
Broker, a Depositor may choose to have contributions to his or her
Custodial Account made through payroll deduction if the Account is
maintained as part of a program sponsored by the Depositor's employer. In
order to establish payroll deduction, the Depositor must authorize his or
her employer to deduct a fixed amount from each pay period's salary up to a
total amount of $2,000 per year, unless such contributions are being made
pursuant to a Simplified Employee Pension Plan described under Section
408(k) of the Code, in which case, annual contributions up to the limit
prescribed by the Internal Revenue Service can be made (generally, 15% of
the Depositor's earned income, up to $30,000 per year). Contribution's to
the Custodial Account of the Depositor's spouse may be made through payroll
deduction if the employer authorizes the use of payroll deductions for such
contributions, but such contributions must be made to a separate Account
maintained for the benefit of the Depositor's spouse. The payroll
deduction authorization shall continue in force until such time as written
amendment or revocation is received by the Depositor's employer and the
Custodian with reasonable advance notice.
10. TRANSFERS TO OR FROM THE ACCOUNT. Assets held on behalf of the
Depositor in another IRA may be transferred by the trustee or custodian
thereof directly to the Custodian, in a form and manner acceptable to the
Custodian, to be held in the Custodial Account for the Depositor under this
Agreement. The Custodian will not be responsible for any losses the
Depositor may incur as a result of the timing of any transfer from another
trustee or custodian that are due to circumstances reasonably beyond the
control of the Custodian.
Assets held on behalf of the Depositor in the Account may be transferred
directly to a trustee or custodian of another IRA established for the
Depositor, if so directed by the Depositor in a form and manner acceptable
to the Custodian; provided, however, that it shall be the Depositor's
responsibility to ensure that any minimum distribution required by Section
401(a)(9) of the Code is made prior to giving the Custodian such transfer
instructions.
11. DISTRIBUTIONS FROM THE ACCOUNT. Subject to Section 13 below,
distributions from the Account will be made only upon the request of the
Depositor (or the Depositor's Authorized Agent, Beneficiary, executor, or
administrator) to the Custodian through the Broker in such form and in such
manner as is acceptable to the Custodian. For distributions requested
pursuant to Article IV, life expectancy and joint life and last survivor
expectancy are calculated based on information provided by the Depositor
(or the Depositor's Authorized Agent, Beneficiary, executor, or
administrator) using the Expected Return Multiples in Section 1.72-9 of the
Income Tax Regulations. The Custodian shall not incur any liability for
errors in such calculations as a result of reliance on information provided
by the Depositor (or the Depositor's Authorized Agent, Beneficiary,
executor, or administrator) or the Depositor's Broker. Without limiting
the generality of the foregoing, the Custodian is not obligated to make any
distribution, including a minimum required distribution as specified in
Article IV above, absent a specific written direction from the Depositor
(or the Depositor's Authorized Agent, Beneficiary, executor, or
administrator) through the Broker to do so.
12. ACTIONS IN THE ABSENCE OF SPECIFIC INSTRUCTIONS. If the Custodian
receives no response to communications sent to the Depositor (or the
Depositor's Authorized Agent, Beneficiary, executor, or administrator) at
the Depositor's (or the Depositor's Authorized Agent, Beneficiary,
executor, or administrator's) last known address as shown in the records of
the Custodian, or if the Custodian determines, on the basis of evidence
satisfactory to it, that the Depositor is legally incompetent, the
Custodian thereafter may make such determinations with respect to
distributions, investments, and other administrative matters arising under
this Agreement as it considers reasonable, notwithstanding any prior
instructions or directions given by or on behalf of the Depositor. Any
determinations so made shall be binding on all persons having or claiming
any interest under the Custodial Account, and the Custodian shall not incur
any obligation or liability for any such determination made in good faith,
for any action taken in pursuance thereof, or for any fluctuations in the
value of the Account in the event of a delay resulting from the Custodian's
good faith decision to await additional information or evidence.
13. RESPONSIBILITY AS TO CONTRIBUTIONS OR DISTRIBUTIONS. The Custodian
will not under any circumstances be responsible for the timing, purpose or
propriety of any contribution or of any distribution made hereunder, nor
shall the Custodian incur any liability or responsibility for any tax
imposed on account of any such contribution or distribution.
Notwithstanding Section 11 above, the Custodian is empowered to make a
distribution absent such an instruction if directed to do so pursuant to a
court order of any kind and neither the Custodian nor the Company shall in
such event incur any liability for acting in accordance with such court
order.
14. WRITTEN INSTRUCTIONS AND NOTICES. All written notices or
communications required to be given by the Custodian to the Depositor shall
be deemed to have been given when sent by mail to either the Broker or to
the last known address of the Depositor in the records of the Custodian.
All written instructions, notices, or communications required to be given
by the Depositor to the Custodian shall be mailed or delivered to the
Custodian at its designated mailing address as specified on the
Application, and no such instruction, notice, or communication shall be
effective until the Custodian's actual receipt thereof.
15. EFFECT OF WRITTEN INSTRUCTIONS AND NOTICES. The Custodian shall be
entitled to rely conclusively upon, and shall be fully protected in any
action or non-action taken in good faith in reliance upon, any written
instructions, notices, communications or instruments believed to have been
genuine and properly executed. Any such notification may be proved by
original copy or reproduced copy thereof, including, without limitation, a
copy produced by photocopying, facsimile transmission, or electronic
imaging. For this purpose, the Custodian may (but is not required to) give
the same effect to a telephonic instruction as it gives to a written
instruction, and the Custodian's action in doing so shall be protected to
the same extent as if such telephonic instructions were, in fact, a written
instruction. Any such telephonic instruction may be proved by audio
recorded tape.
16. TAX MATTERS.
(a) General. The Custodian shall submit required reports to the IRS and
the Depositor (or the Depositor's Authorized Agent, Beneficiary, executor,
or administrator); provided, however, that such individual shall prepare
any return or report required in connection with maintaining the Account,
or as a result of liability incurred by the Account for tax on unrelated
business taxable income, or windfall profits tax.
(b) Annual Report. As soon as is practicable after the close of each
taxable year, and whenever required by the Code, the Custodian shall
deliver to the Depositor a written report(s) reflecting receipts,
disbursements and other transactions effected in the Custodial Account
during such period and the fair market value of the assets and liabilities
of the Custodial Account as of the close of such period in a manner
prescribed by the Internal Revenue Service. Unless the Depositor sends the
Custodian written objection to a report within ninety (90) days of receipt,
the Depositor shall be deemed to have approved of such report, and the
Custodian and the Company, and their officers, employees and agents shall
be forever released and discharged from all liability and accountability to
anyone with respect to their acts, transactions, duties and
responsibilities as shown on or reflected by such report(s). The Company
shall not incur any liability in the event the Custodian does not satisfy
its obligations as described herein.
(c) Withholding. Any distributions from the Custodial Account may be
made by the Custodian net of any required tax withholding.
17. SPENDTHRIFT PROVISION. The interest of a Depositor in the Account
shall not be transferred or assigned by voluntary or involuntary act of the
Depositor or by operation of law; nor shall it be subject to alienation,
assignment, garnishment, attachment, receivership, execution or levy of any
kind. Notwithstanding the foregoing, in the event of a property settlement
between a Depositor and his or her
former spouse pursuant to which the transfer of a Depositor's interest
hereunder, or a
portion thereof, is incorporated in a divorce decree or in a written
instrument incident to such divorce or legal separation, then the interest
so decreed by a Court to be the property of such former spouse shall be
transferred to a separate Custodial Account for the benefit of such
former spouse, in accordance with Section 408(d)(6) of the Code.
18. FEES AND EXPENSES.
(a) General. The fees of the Custodian for performing its duties
hereunder shall be in such amount as it shall establish from time to time.
All such fees, as well as expenses (such as, without limitation, brokerage
commissions upon the investment of funds, fees for special legal services,
taxes levied or assessed, or expenses in connection with the liquidation or
retention of all or part of a rollover contribution), shall be collected by
the Custodian from cash available in the Custodial Account, or if
insufficient cash shall be available, by sale of sufficient assets in the
Custodial Account and application of the sales proceeds to pay such fees
and expenses. Alternatively, but only with the consent of the Custodian,
fees and expenses may be paid directly to the Custodian by the Depositor by
separate check.
(b) Advisor Fees. The Custodian shall, upon direction from the
Depositor, disburse from the Custodial Account payment to the Depositor's
registered investment advisor of any fees for financial advisory services
rendered with regard to the assets held in the Account. Such direction
must be provided in a form and manner acceptable to the Custodian, and the
Custodian shall not incur any liability for executing such direction.
(c) Sale of Assets. Whenever it shall be necessary in accordance with
this Section 18 to sell assets in order to pay fees or expenses, the
Custodian shall request the Depositor (or the Depositor's Authorized Agent,
Beneficiary, executor, or administrator) to provide specific instructions.
If such instructions are not received by the Custodian within ten (10)
business days of the Custodian's request, the Custodian may sell any or all
of the assets credited to the Custodial Account at that time, and shall
invest the portion of the sales proceeds remaining after collection of the
applicable fees and expenses therefrom in accordance with Section 3. The
Custodian shall not incur any liability on account of its sale or retention
of assets under such circumstances.
19. VOTING WITH RESPECT TO SECURITIES. The Custodian shall mail to the
Depositor all prospectuses and proxies that may come into the Custodian's
possession by reason of its holding of Investment Company Shares or other
securities in the Custodial Account. A Depositor may direct the Custodian
as to the manner in which any securities or Investment Company Shares held
in the Custodial Account shall be voted with respect to any matters as to
which the Custodian as holder of record is entitled to vote, coming before
any meeting of shareholders of the corporation which issued such
securities, or of holders of interest in the Investment Company which
issued such Investment Company Shares. All such directions shall be in
writing on a form approved by the Custodian and signed by the Depositor,
and delivered to the Custodian within the time prescribed by it. The
Custodian shall vote only those securities and Shares with respect to which
it has received timely written directions from the Depositor; provided,
however, that the Custodian may without such direction vote Shares
"present" to the extent such a vote is needed to establish a quorum.
20. LIMITATIONS ON CUSTODIAL LIABILITY AND INDEMNIFICATION. The
Depositor and the Custodian intend that the Custodian shall have and
exercise no discretion, authority, or responsibility as to any investment
in connection with the Account and the Custodian shall not be responsible
in any way for the purpose, propriety or tax treatment of any contribution,
or of any distribution, or any other action or nonaction taken pursuant to
the Depositor's direction or that of the Depositor's Authorized Agent,
Beneficiary, executor or administrator. The Depositor who directs the
investment of his or her Account shall bear sole responsibility for the
suitability of any directed investment and for any adverse consequences
arising from such an investment, including, without limitation, the
inability of the Custodian to value or to sell an illiquid investment, or
the generation of unrelated business taxable income with respect to an
investment. To the fullest extent permitted by law, the Depositor (or the
Depositor's Authorized Agent, Beneficiary, executor or administrator, as
appropriate) shall at all times fully indemnify and save harmless the
Custodian, the Company and their agents, affiliates, successors and assigns
and their officers, directors and employees, from any and all liability
arising from the Depositor's investment direction under this Account, or
from the Broker's execution of such direction, and from any and all other
liability whatsoever which may arise in connection with this Agreement
except liability arising under applicable law or liability arising from
gross negligence or willful misconduct on the part of the indemnified
person. Although the Custodian shall have no responsibility to give effect
to a direction from anyone other than the Depositor (or the Depositor's
Beneficiary, executor or administrator), the Custodian may, in its
discretion, establish procedures pursuant to which the Depositor may
delegate to a third party any or all of the Depositor's powers and duties
hereunder, provided, however, that in no event may anyone other than the
Depositor execute the application by which this Agreement is adopted or the
form by which the Beneficiary is appointed, and provided, further, that any
such third party to whom the Depositor has so delegated powers and duties
shall be treated as the Depositor for purposes of applying the preceding
sentences of this paragraph and the provisions of Article VIII, Section 2.
21. DELEGATION TO AGENTS. The Custodian may delegate to one or more
corporations affiliated with the Custodian the performance of record
keeping and other ministerial services in connection with the Custodial
Account, for a reasonable fee to be borne by the Custodian and not by the
Custodial Account. Any such agent's duties and responsibilities shall be
confined solely to the performance of such services, and shall continue
only for so long as the Custodian named in the Application serves as
Custodian.
22. AMENDMENT OF AGREEMENT. The Depositor, the Broker, and Custodian
authorize and direct the Company to amend this Agreement in any respect at
any time (including retroactively), so that it may conform with applicable
provisions of the Internal Revenue Code, or with any other applicable law
as in effect from time to time, or to make such other changes to this
Agreement as the Company deems advisable. Any such amendment shall be
effected by delivery to the Custodian and mailing to the Depositor at his
or her last known address as shown in the records of the Custodian a copy
of such amendment, or a restatement of this Custodial Agreement including
any such amendment. The Depositor shall be deemed to consent to any such
amendment(s) if he or she fails to object thereto by written notice
received by the Custodian within fifteen (15) calendar days from the date
of the Company's mailing to the Depositor a copy of such amendment(s) or
restatement.
23. RESIGNATION OR REMOVAL OF CUSTODIAN. The Company may remove the
Custodian at any time, and the Custodian may resign at any time, upon
thirty (30) days' written notice to the Depositor and the Broker. Upon the
removal or resignation of the Custodian, the Company may, but shall not be
required to, appoint a successor custodian under this Custodial Agreement;
provided that any successor custodian shall satisfy the requirements of
Section 408(a)(2) of the Code. Upon any such successor's acceptance of
appointment, the Custodian shall transfer the assets of the Custodial
Account, together with copies of relevant books and records, to such
successor custodian; provided, however, that the Custodian is authorized to
reserve such sum of money or property as it may deem advisable for payment
of any liabilities constituting a charge on or against the assets of the
Custodial Account, or on or against the Custodian or the Company. The
Custodian shall not be liable for the acts or omissions of any successor to
it. If no successor custodian is appointed by the Company, the Custodial
Account shall be terminated, and the assets of the Account, reduced by the
amount of any unpaid fees or expenses, will be distributed to the
Depositor.
24. TERMINATION OF THE CUSTODIAL ACCOUNT. The Depositor may terminate
the Custodial Account at any time upon notice to the Custodian in a manner
and form acceptable to the Custodian. Upon such termination, the
Custodian shall transfer the assets of the Custodial Account, reduced by
the amount of any unpaid fees or expenses, to the custodian or trustee of
another individual retirement account (within the meaning of Section 408 of
the Code) or other retirement plan designated by the Depositor, as
described in Article VIII, Section 10. The Custodian shall not be liable
for losses arising from the acts, omissions, delays or other inaction of
any such transferee custodian or trustee. If notice of the Depositor's
intention to terminate the Custodial Account is received by the Custodian
and the Depositor had not designated a transferee custodian or trustee for
the assets in the Account, then the Account, reduced by any unpaid fees or
expenses, will be distributed to the Depositor.
25. GOVERNING LAW. THIS AGREEMENT, AND THE DUTIES AND OBLIGATIONS OF THE
COMPANY AND THE CUSTODIAN UNDER THE AGREEMENT, SHALL BE CONSTRUED,
ADMINISTERED AND ENFORCED ACCORDING TO THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS, EXCEPT AS SUPERSEDED BY FEDERAL LAW OR STATUTE.
26. WHEN EFFECTIVE. This Agreement shall not become effective until
acceptance of the Application by or on behalf of the Custodian at its
principal office, as evidenced by a written notice to the Depositor.
FIDELITY DISCLOSURE
INSTITUTIONAL STATEMENT
INDIVIDUAL
RETIREMENT
ACCOUNT
The following information is provided to you in accordance with the
requirements of the Internal Revenue Code (the "Code") and should be
reviewed in conjunction with both the Custodial Agreement and the
Application for your Individual Retirement Account ("IRA"). This
information reflects the provisions of the Internal Revenue Code as are
effective January 1, 1987 and therefore applies to contributions for years
after, and to distributions taken after 1986.
RIGHT TO CANCEL You may revoke this Account at any time within seven
calendar days after it is established by mailing or delivering a written
request for revocation to :
Fidelity Investments Institutional Services Company, Inc.
ATTN. Integrated Transaction Services
P.O. Box 1182, Mailzone ZR5
Boston, Massachusetts 02103-1182
Upon revocation, you will receive a full refund of your initial
contribution, including sales commissions (if any) and/or administrative
fees. To determine where to send a revocation request, or if you have any
questions relative to this procedure, please call our toll free number,
1-800-843-3001.
TYPES OF IRAS REGULAR IRA. You may make a Regular IRA contribution of
$2,000 or 100% of your compensation, whichever is less. (To determine the
amount of your income tax deduction for your IRA contribution, see "Limits
on Deductible Contributions" below.)
SPOUSAL IRA. If you and your spouse file a joint federal income tax
return, you may make a Spousal IRA contribution, even if your spouse has
received compensation during the tax year. Your contribution to a Spousal
IRA must not exceed the lesser of (1) $2,000 or (2) the excess of $2,250
(or if less, 100% of your compensation) over your contribution to your
Regular IRA. Note: If your spouse has more than $250 in compensation for
the tax year, the two of you may make a larger total contribution if you
each contribute to a Regular IRA.
ROLLOVER IRA. If you retire or change jobs, you may be eligible for a
distribution from your employer's retirement plan. To avoid mandatory
withholding of 20% of your distribution for federal income tax, and to
preserve the tax-deferred status of this distribution, you can transfer it
directly to a Rollover IRA. If you choose to have the distribution paid
directly to you, you will be subject to the 20% withholding rules. You may
still reinvest up to 100% of the total amount of your distribution which is
eligible for rollover in a Rollover IRA by replacing the 20% which was
withheld for taxes with other assets you own. You must reinvest in a
Rollover IRA within 60 days of receipt of your distribution. The amount
invested in a Rollover IRA will not be included in your taxable income for
the year in which you receive the qualified plan distribution.
DESCRIPTION Your IRA is a custodial account created for your exclusive
benefit. Your interest
OF ACCOUNT in the account is nonforfeitable.
ELIGIBILITY Employees and self-employed individuals are eligible to
contribute to an IRA even if they are already covered under another
tax-qualified plan. Employers may contribute to IRAs established by their
employees, and employers may contribute to IRAs used as part of a
Simplified Employee Pension plan ("SEP," described below).
CONTRIBUTIONS GENERAL. You may make annual cash contributions to an IRA
in any amount up to 100% of your compensation for the year or $2,000,
whichever is less. Your employer may make contributions to your account,
but, except as noted below under a SEP, the total contributions from you
and your employer may not exceed this limitation. Contributions (other
than rollover contributions described below) must be made in "cash" and not
in "kind." Therefore, securities or other assets already owned cannot be
contributed to an IRA but can be converted to cash and then contributed.
No part of your contribution may be invested in life insurance or be
commingled with other property, except in a common trust fund or common
investment fund.
SPOUSAL ACCOUNTS. If you are married and file a joint tax return, you
may make cash contributions to a "spousal" IRA in addition to your own IRA
(even if your spouse has compensation). The total amounts contributed to
your own and to your spouse's IRA may not exceed 100% of your combined
compensation or $2,250, whichever is less. In no event, however, may the
annual contribution to either your account or your spouse's account exceed
$2,000.
COMPENSATION means wages, salaries, professional fees, or other amounts
derived from or received for personal service actually rendered and
includes the earned income of a self-employed individual, and any alimony
or separate maintenance payment includible in the individual's gross
income.
ADJUSTED GROSS INCOME is determined prior to adjustments for personal
exemptions and itemized deductions. For purposes of determining the IRA
deduction (see below), adjusted gross income is modified to take into
account deductions for IRA contributions, taxable benefits under the Social
Security Act and the Railroad Retirement Act, and passive loss limitations
under Code Section 86.
TIME OF CONTRIBUTION. You may make contributions to your IRA any time up
to and including the due date (not including extensions) for filing your
tax return for the year. You may continue to make annual contributions to
your IRA up to (but not including) the calendar year in which you reach age
70 1/2. You may continue to make annual contributions to your spouse's IRA
up to (but not including) the calendar year in which your spouse reaches
age 70 1/2.
ROLLOVER IRA CONTRIBUTIONS. Qualifying distributions from tax-qualified
plans (for example, pension, profit-sharing, and Keogh plans) may be
eligible for rollover into your IRA. However, strict limitations apply to
such rollovers and you should seek competent tax advice regarding these
restrictions.
SIMPLIFIED EMPLOYEE PENSION PLAN CONTRIBUTIONS. A separate IRA may be
established for use by your employer as part of a SEP arrangement. Your
employer may contribute to your SEP-IRA up to a maximum of 15% of your
compensation or $30,000, whichever is less. If your SEP-IRA is used as
part of a salary reduction SEP, you may elect to reduce your annual
compensation, up to a maximum of 15% of your compensation or $7,000
(indexed to reflect cost-of-living adjustments), whichever is less, and
have your employer contribute that amount to your SEP-IRA. If your
employer maintains both a salary reduction SEP and a regular SEP, the
annual contribution limit to both SEPs together is 15% of your compensation
or $30,000, whichever is less. You may contribute, in addition to the
amount contributed by your employer to your SEP-IRA, an amount not in
excess of the limits referred to under "General" above. It is your and
your employer's responsibility to see that contributions in excess of
normal IRA limits are made under a valid SEP and are, therefore, proper.
EXCESS CONTRIBUTIONS. Contributions which exceed the allowable maximum
per year are considered excess contributions. A nondeductible penalty tax
of 6% of the excess amount contributed will be incurred for each year in
which the excess contribution remains in your IRA. If you make a
contribution (or your employer makes a SEP contribution, including a salary
reduction contribution, on your behalf) in excess of your allowable maximum
for any taxable year, you may correct the excess contribution and avoid the
6% penalty tax for that year by withdrawing the excess contribution and its
earnings on or before the date, including extensions, for filing your tax
return for that year.
The amount of the excess contribution withdrawn will not be considered a
premature distribution nor (except in the case of a salary reduction
contribution) be taxed as ordinary income, but the earnings withdrawn will
be taxed as ordinary income to you. Alternatively, excess contributions
for one year may be carried forward and reported in the next year to the
extent that the excess, when aggregated with your IRA contribution (if any)
for the subsequent year, does not exceed the maximum amount for that year.
The 6% excise tax will be imposed on excess contributions in each year they
are neither returned nor carried forward.
DEDUCTIBLE IRA If you are not married and are not an active participant in
an employer-maintained
CONTRIBUTIONS retirement plan, you may make a fully deductible IRA
contribution in any amount up to 100% of your compensation for the year or
$2,000, whichever is less. The same limits apply if you are married and
you file a joint return with your spouse, and neither of you is an active
participant in an employer-maintained retirement plan. An
"employer-maintained retirement plan" includes any of the following types
of retirement plans:
- a qualified pension, profit-sharing, or stock bonus plan established
in
accordance with IRC (sub section)401 (a) or 401 (k).
- a Simplified Employee Pension Plan (SEP) (IRC (sub section)408(k)).
- a deferred compensation plan maintained by a governmental unit or
agency.
- tax sheltered annuities and custodial accounts (IRC (sub
section)403(b) and 403(b)(7)).
- a qualified annuity plan under IRC (sub section)403(a).
You are an active participant in an employer maintained retirement plan
even if you do not have a vested right to any benefits under your
employer's plan. Whether you are an "active participant" depends on the
type of plan maintained by your employer. Generally, you are considered an
active participant in a defined contribution plan if an employer
contribution or forfeiture was credited to your account under the plan
during the year. You are considered an active participant in a defined
benefit plan if you are eligible to participate in the plan, even though
you elect not to participate. You are also treated as an active
participant for a year during which you make a voluntary or mandatory
contribution to any type of plan, even though your employer makes no
contribution to the plan.
If you (or your spouse, if you are filing a joint tax return) are covered
by an employer-maintained retirement plan, your IRA contribution is tax
deductible only to the extent that your adjusted gross income does not
exceed the deductibility limits discussed below.
LIMITS ON The deduction of your IRA contribution is reduced
proportionately for adjusted
DEDUCTIBLE gross income which exceeds the applicable dollar amount. The
applicable dollar
CONTRIBUTIONS amount for an individual is $25,000 and $40,000 for married
couples filing a joint tax return. The applicable dollar limit for married
individuals filing separate returns is $0. If your adjusted gross income
exceeds the applicable dollar amount by not more than $10,000, you may make
a deductible IRA contribution (but the deductible amount will be less than
$2,000). To determine the amount of your deductible contribution, use the
following calculation:
1. Subtract the applicable dollar amount from your adjusted gross income.
If the result is $10,000 or more, stop; you can only make a nondeductible
contribution.
2. Subtract the above figure from $10,000.
3. Divide the above figure by $10,000.
4. Multiply $2,000 by the fraction resulting from the above steps. This
is your maximum deductible contribution limit.
If the deduction limit is not a multiple of $10, then it is to be rounded
up to the next highest $10. There is a $200 minimum floor on the deduction
limit if your adjusted gross income does not exceed $35,000 (for a single
taxpayer), $50,000 (for married taxpayers filing jointly) or $10,000 (for a
married taxpayer filing separately).
Adjusted gross income for married couples filing a joint tax return is
calculated by aggregating the compensation of both spouses. The deduction
limitations on IRA contributions, as determined above, then apply to each
spouse.
NONDEDUCTIBLE Even if your income exceeds the limits described above, you
may make a
IRA contribution to your IRA up to the lesser of $2,000 or 100% of your
compensation. To
CONTRIBUTIONS the extent that your contribution exceeds the deductible
limits, it will be nondeductible. Earnings on all IRA contributions are
tax deferred until distribution.
You are required to designate on your tax return (and attach to it Form
8606) the extent to which your IRA contribution is nondeductible.
Therefore, your designation must be made by the due date (including
extensions) for filing your tax return. If you overstate the amount of
nondeductible contributions for a taxable year, a penalty of $100 will be
assessed for each overstatement unless you can show that the overstatement
was due to a reasonable cause.
INVESTMENT The assets in your IRA will be invested in accordance with your
instructions. As
OF ACCOUNT with any investment, you should read any publicly available
information (e.g., prospectuses, annual reports, the terms and conditions
of any insurance annuity contract, etc.) which would enable you to make an
informed investment decision.
If no investment instructions are received from you, or if the
instructions received are, in the opinion of the Custodian, unclear, you
may be requested to provide instructions. In the absence of such
instructions, your investment may be invested in Money Market Shares, which
strive to maintain a stable $1 per share balance . Keep in mind that with
respect to investments in regulated investment company shares (i.e., mutual
funds) held in your account, growth in the value of your account cannot be
guaranteed or projected.
DISTRIBUTIONS GENERAL. Distributions from your IRA should begin no
earlier than the date you reach age 59 1/2 (except in cases of your earlier
disability or death) and no later than the April 1 following the year in
which you reach age 70 1/2. Distributions from your account will be
included in your gross income for federal income tax purposes for the year
in which you receive them.
PREMATURE DISTRIBUTIONS. To the extent they are included in income,
distributions from your IRA made before you reach age 59 1/2 will be
subject to a 10% nondeductible penalty tax (in addition to being taxable as
ordinary income) unless the distribution is an exempt withdrawal of an
excess contribution, or the distribution is rolled over to another
qualified retirement plan, or the distribution is made on account of your
death or disability, or the distribution is one of a scheduled series of
payments over your life or life expectancy or the joint life expectancies
of yourself and your Beneficiary.
LATEST TIME TO WITHDRAW. You must begin receiving distributions of the
assets in your account by April 1 of the calendar year following the
calendar year in which you reach age 70 1/2. Subsequent distributions must
be made by December 31 of each year. If you maintain more than one IRA,
you may take from any of your IRAs the aggregate amount to be withdrawn .
MINIMUM DISTRIBUTIONS. Once distributions are required to begin, they
must not be less than the amount each year (determined by actuarial tables)
which would exhaust the value of the account over the required distribution
period, which is generally your life expectancy or the joint life and last
survivor expectancy of you and an individual you have designated as your
Beneficiary. You will be subject to a 50% excise tax on the amount by
which the distribution you actually received in any year falls short of the
minimum distribution required for the year.
METHODS OF DISTRIBUTION. Assets may be distributed from your account
according to one or more of the following methods selected by you:
(A) total distribution
(B) distribution over a certain period
(C) purchase of an annuity contract
(See Article IV of your IRA Custodial Agreement for a full description of
these distribution methods.)
DISTRIBUTION UPON DEATH. The assets remaining in your Account will be
distributed upon your death to the beneficiary(ies) named by you on record
with the Custodian. If there is no beneficiary designated for your Account
in the Custodian's records, or if the beneficiary you had designated dies
before you do, your Account will be paid to your surviving spouse, or if
none, to your estate.
If your spouse was your primary beneficiary and you had started to
receive distributions from your account, but die before receiving the
balance of your account, your spouse has several options. Your spouse can
either keep receiving distributions from your account at least as rapidly,
or roll over all or part of your account into an IRA in his or her name.
If distributions from your account had not yet begun, your spouse may defer
taking distributions until April 1st of the year you would have turned 70
1/2, and then receive distributions over his or her life expectancy, or
roll over the account into an IRA in their name, and treat the IRA as his
or her own.
If your beneficiary is not your spouse, and distributions had begun from
your account, your beneficiary may continue to receive them at least as
rapidly as the payment schedule you had established. If distributions had
not yet begun, your beneficiary must deplete your account within 5 years of
your death, or start taking distributions from your account within one year
of your death over their own life expectancy.
DISTRIBUTION OF NONDEDUCTIBLE CONTRIBUTIONS. To the extent that a
distribution constitutes a return of your nondeductible contributions, it
will not be included in your income. The amount of any distribution
excludable from income is the portion that bears the same ratio to the
total distribution that your aggregate nondeductible contributions bear to
the balance at the end of the year (calculated after adding back
distributions during the year) of your IRA. For this purpose, all of your
IRAs are treated as a single IRA. Furthermore, all distributions from an
IRA during a taxable year are to be treated as one distribution. The
aggregate amount of distributions excludable from income for all years is
not to exceed the aggregate nondeductible contributions for all calendar
years. There is a 10% additional income tax assessed against premature
distributions to the extent such distributions are includible in income
(See "Premature Distributions" above).
EXCESS DISTRIBUTIONS. There is a 15% excise tax assessed against annual
distributions from tax-favored retirement plans, including IRAs, which
exceed the greater of $150,000 or $112,500 (indexed to reflect
cost-of-living increases). To determine whether you have distributions in
excess of this limit, you must aggregate the amounts of all distributions
received by you during the calendar year from all retirement plans,
including IRAs. Please consult with your tax advisor for more complete
information, including the availability of favorable elections.
ROLLOVER TREATMENT. Distributions from your IRA representing all or any
part of the assets in your IRA account are also eligible for rollover
treatment. You may roll over all or any part of the same property from
this distribution of assets, within 60 days of receipt, into another IRA or
individual retirement annuity, and maintain the tax-deferred status of
these assets. A 60 day rollover can be made once every twelve months per
IRA.
DIVORCE OR If all or any portion of your IRA is awarded to a former
spouse pursuant to divorce
LEGAL or legal separation, such portion can be transferred to an IRA in
the receiving
SEPARATION spouse's name. This transaction can be processed without any
tax implications to you provided a written instrument executed by a court
incident to the divorce or legal separation in accordance with Section
408(d)(6) of the Code is received by the Custodian, and specifically
directs such transfer. In addition, you must also provide the Custodian
with a letter of instruction and an IRA application executed by the
receiving spouse, if she or he doesn't already maintain such IRA at
Fidelity.
FEES AND Fees and other expenses of maintaining your Fidelity IRA account
are described in
EXPENSES the Application and may be changed from time to time, as provided
in the Custodial Agreement.
PROHIBITED If any of the events prohibited by Section 4975 of the Code
(such as any sale,
TRANSACTIONS exchange or leasing of any property between you and your IRA)
occurs during the existence of your IRA, your account will be disqualified
and the entire balance in your account will be treated as if distributed to
you as of the first day of the year in which the prohibited event occurs.
This "distribution" would be subject to ordinary income tax and, if you
were under age 59 1/2 at the time, to the 10% penalty tax on premature
distributions.
If you or your Beneficiary use (pledge) all or any part of your IRA as
security for a loan, then the portion so pledged will be treated as if
distributed to you, and will be taxable to you as ordinary income and
subject to the 10% penalty during the year in which you make such a pledge.
OTHER TAX NO SPECIAL TAX TREATMENT. No distribution to you or anyone else
from your
CONSIDERATIONS account can qualify for capital gain treatment under the
federal income tax laws. It is taxed to the person receiving the
distribution as ordinary income. (Similarly, you are not entitled to the
five-year averaging rule for lump sum distributions available to persons
receiving distributions from certain other types of retirement plans.)
GIFT TAX. If you elect during your lifetime to have all or any part of
your account payable to a Beneficiary at or after your death, the election
will not subject you to any gift tax liability.
TAX WITHHOLDING. Federal income tax will be withheld from distributions
you receive from an IRA unless you elect not to have tax withheld.
However, if IRA distributions are to be delivered outside of the United
States, this tax is mandatory and you may not elect otherwise unless you
certify to the Custodian that you are not a U.S. citizen residing overseas
or a "tax avoidance expatriate" as described in Code Section 877. Federal
income tax will be withheld at the rate of 10%.
REPORTING FOR TAX PURPOSES. Contributions to your IRA must be reported
on your tax Form 1040 or 1040A for the taxable year contributed. You will
be required to designate your IRA contribution as deductible or
nondeductible. You are also required to attach a Form 8606 to your 1040 or
1040A form. Form 8606 is used to report nondeductible IRA contributions
and to calculate the basis (nontaxable part) of your IRA. Other reporting
will be required by you in the event that special taxes or penalties
described herein are due. You must also file Treasury Form 5329 with the
IRS for each taxable year in which the contribution limits are exceeded, a
premature distribution takes place, or less than the required minimum
amount is distributed from your IRA. The Tax Reform Act of 1986 also
requires you to report the amount of all distributions you received from
your IRA and the aggregate account balance of all IRAs as of the end of the
calendar year.
IRS APPROVAL The form of your Individual Retirement Account has been
approved by the Internal Revenue Service. The Internal Revenue Service
approval is a determination only as to the form and does not represent a
determination of the merits of the Account. You may obtain further
information with respect to your IRA from any district office of the
Internal Revenue Service.
EXHIBIT 14(E)
FIDELITY INVESTMENTS
SECTION 403(B)(7) CUSTODIAL ACCOUNT AGREEMENT
FIDELITY INVESTMENTS
SECTION 403(B)(7) CUSTODIAL ACCOUNT AGREEMENT
TABLE OF CONTENTS
I. DEFINITIONS 1
II. CONTRIBUTIONS 2
A. Limitations on Contributions 2
B. Method of Contribution 2
III. INVESTMENT OF CONTRIBUTIONS AND ASSETS 2
A. Direction by Participant 2
B. Exchange Among Funds 3
C. Effect of Direction 3
IV. TRANSFER OF ASSETS TO THE ACCOUNT 3
A. Rollover to the Account 3
B. Plan to Plan Transfer 3
C. Effect of Transfer or Rollover 3
V. DESIGNATION OF BENEFICIARY 3
VI. DISTRIBUTIONS 4
A. In General 4
B. Qualified Domestic Relations Orders 4
C. Non-Assignment 4
VII. ADMINISTRATION 4
A. Custodian as Agent 4
B. Voting 5
C. Reports 5
D. Written Notices 5
E. Limitations on Custodian's Liability and Indemnification 5
F. Expenses 6
VIII. RESIGNATION OR REMOVAL OF CUSTODIAN 6
IX. AMENDMENT AND TERMINATION 6
A. Power of Custodian to Amend 6
B. Limitation on Amendment 6
C. Termination 7
D. Distribution upon Termination 7
FIDELITY INVESTMENTS
SECTION 403(B)(7) CUSTODIAL ACCOUNT AGREEMENT
TABLE OF CONTENTS
(CONTINUED)
X. EFFECT OF OTHER 403(B) ARRANGEMENTS 7
XI. GOVERNING LAW 7
CUSTODIAL AGREEMENT
This Fidelity Investments Section 403(b)(7) Custodial Account Agreement
(the "Agreement") is intended for use by Employers who adopt a Plan based
upon the provisions of the Fidelity Investments 403(b) Sample Plan and who
wish to establish custodial accounts for Participants under the Plan, make
contributions to such accounts in accordance with Section 403(b)(7) of the
Internal Revenue Code of 1986, as amended (the "Code"), and invest such
contributions in shares of eligible Fidelity Funds.
ARTICLE I. DEFINITIONS.
As used in the Agreement, the following terms have the meaning set forth
below, unless a different meaning is clearly required by the context:
"Account" means the custodial account established hereunder by the
Employer pursuant to the Plan for the benefit of each Participant.
"Agreement" means the Fidelity Investments Section 403(b)(7) Custodial
Account Agreement as set forth herein between the Employer and the
Custodian. The Agreement, and any designation of Beneficiary filed with
the Custodian, may be proved either by an original copy or a reproduced
copy thereof.
"Authorized Agent" means the person authorized by the Participant to
purchase or sell Funds in the Individual's Account, as specified on, and
subject to the provisions of the 403(b)(7) Limited Trading Authorization
and Indemnification Form.
"Beneficiary" means the person or persons (including a trust or estate)
designated as such by the Participant on a signed form acceptable to and
filed with the Custodian.
"Custodian" shall mean Fidelity Management Trust Company of Boston,
Massachusetts, or its successors.
"Employer" means an employer organization which is eligible to contribute
to an Account on behalf of a Participant and have such contributions
excluded from such Participant's taxable income pursuant to Section 403(b)
of the Code.
"Funds" means those regulated investment companies whose investment
adviser is Fidelity Management & Research Company, or its successors,
and whose shares are authorized (under the terms of the prospectus of the
investment company, and subject to any limitations imposed by the
Employer's plan) for purchase under this Agreement.
"Participant" means each employee named or identified in the Plan as a
Participant in the Plan.
"Plan" means the written plan based upon the provisions of the Fidelity
Investments 403(b) Sample Plan maintained by the Employer pursuant to which
contributions may be made to the Account.
ARTICLE II. CONTRIBUTIONS.
A. Limitations on Contributions.
An Employer may make contributions in cash to a Participant's Account for
the benefit of the Participant, provided, however, that such contributions
may not exceed the applicable limits of Code sections 402(g), 403(b) and
415 for any period, and further provided, that no contribution which is an
"excess contribution" within the meaning of Code section 4973(c) may be
made. No contributions may be made to an Account on an after-tax basis.
The Custodian shall not be responsible for determining the amount an
Employer may contribute on behalf of a Participant, unless such obligation
is explicitly undertaken by separate written agreement, nor shall the
Custodian be responsible to recommend or compel Employer contributions to
the Account. The disposition of excess contributions will be made in
accordance with instructions from the Employer to the extent they are
consistent with applicable law.
In the event that a Participant determines that an amount contributed
during a calendar year to the Account exceeds the limitation set forth in
Section 402(g) of the Code, and no later than March 1 of the following
calendar year notifies the Custodian in writing of the excess amount he has
determined (the "excess deferral"), the Custodian will distribute to the
Individual no later than the following April 15 the excess deferral and the
net income, if any, attributable to the excess deferral. The
responsibility and liability of the Custodian in connection with the excess
deferral shall be strictly limited in accordance with the terms of the
preceding sentence.
B. Method of Contribution.
The initial contribution to the Account shall be made after proper receipt
by the Custodian or its agent of written instructions, specifying the Fund
or Funds in which contributions are to be invested. Subsequent Employer
contributions shall be identified by the Participant's name, Social
Security number, and contribution amount. Subsequent contributions will
continue to be invested in the Fund(s) previously selected unless
instructions from the Participant, or the Authorized Agent appointed by the
Participant, specifying a different Fund(s) are received by the Custodian.
Such instructions may be given by the Participant or his or her Authorized
Agent, either in writing and signed by the Participant or his or her
Authorized Agent, or by use of the telephone system maintained for such
purposes by the Custodian or its agent. If instructions as to investment
selection or investment allocation are, in the opinion of the Custodian not
clear, the Custodian may hold all or a part of the contribution invested in
Fidelity Money Market Trust - Retirement Government Money Market Portfolio,
(or, if not available, in Fidelity Money Market Trust - Retirement Money
Market Portfolio, or, if not available, in Fidelity U.S. Government
Reserves, or, if not available, in Fidelity Cash Reserves) without
liability, pending receipt of a fully executed Participant enrollment form
or clarifying written instructions from the Participant or his or her
Authorized Agent.
ARTICLE III. INVESTMENT OF CONTRIBUTIONS AND ASSETS.
A. Direction by Participant.
All contributions to the Account and all assets in the Account shall be
invested in the Funds in accordance with instructions given by the
Participant (or the Participant's Authorized Agent, Beneficiary, executor
or administrator) to the Custodian in a manner acceptable to the Custodian.
By giving such instructions to the Custodian the Participant will be deemed
to have acknowledged receipt of the then current prospectus of any Fund in
which the Participant instructs the Custodian to invest such contributions
or assets. All income dividends and capital gains or other distributions
shall be reinvested in additional Fund shares, which shall be credited to
the Account. All Fund shares acquired by the Custodian shall be registered
in the name of the Custodian or its nominee.
B. Exchange Among Funds.
The Participant (or the Participant's Authorized Agent, Beneficiary,
executor or administrator) may instruct the Custodian to exchange all or
any part of the Fund shares held in the Custodial Account for shares of
another Fund to the extent permitted by the Employer's Plan.
C Effect of Direction.
The Custodian, and its agents may conclusively rely upon and shall be
protected in acting upon any written order or telephone instructions from
the Participant or his or her Authorized Agent or any other notice,
request, consent, certificate or other instrument or paper believed by it
to be genuine and to have been properly executed, and, so long as it acts
in good faith, in taking or omitting to take any other action.
The Custodian shall have no duty to question the directions of the
Participant, or the Participant's Authorized Agent, Beneficiary, executor
or administrator, regarding the investment of the assets in the Account or
to advise such persons regarding the purchase, retention or sale of such
investments, nor shall the Custodian, or any of their affiliates be liable
for any loss that results from the exercise of control (whether by his or
her action or inaction) over the Account by the Participant or the
Participant's Authorized Agent, Beneficiary, executor or administrator.
ARTICLE IV. TRANSFER OF ASSETS TO THE ACCOUNT.
A. Rollover to the Account.
If permitted under the Plan, a Participant may make a rollover
contribution to the Account in accordance with the provisions of the Plan,
provided, however, that the Custodian shall have no responsibility for the
tax treatment to the Participant of any such transfer or rollover.
B. Plan to Plan Transfer.
If permitted under the Plan, and pursuant to, and subject to the terms of
Revenue Ruling 90-24 issued by the Internal Revenue Service, a Participant
may transfer to the Account any funds invested in another Custodial Account
or annuity contract described in Code section 403(b). In accordance with
the provisions of the Plan, a Participant may elect to transfer an eligible
rollover distribution (within the meaning of Code section 403(b)(10))
directly to an Individual Retirement Account or another custodial account
or annuity contract described in Code section 403(b).
C. Effect of Transfer or Rollover.
Neither the Custodian nor the Company shall be liable for losses arising
from the acts, omissions, or delays or other inaction of any party
transferring assets to the Account.
ARTICLE V. DESIGNATION OF BENEFICIARY.
A Participant may designate a Beneficiary or Beneficiaries at any time, by
written designation signed by the Participant on a form acceptable to, and
filed with the Custodian. Such designation, or change or revocation of a
prior designation, shall be effective upon its receipt by the Custodian;
provided, however, that no such designation or change or revocation may be
filed with the Custodian later than thirty (30) days after the death of the
Participant. The latest such designation or change or revocation shall
control. If the Participant had not by the date of his or her death
properly designated a Beneficiary in accordance with the preceding
sentence, or if no designated Beneficiary survives the Participant, the
Participant's Beneficiary shall be his or her surviving spouse, but if he
or she has no surviving spouse, his or her estate. Unless otherwise
specified in the Participant's designation of Beneficiary, if a Beneficiary
dies before receiving his or her entire interest in the Custodial Account,
his or her remaining interest in the Custodial Account shall be paid to the
Beneficiary's estate.
Notwithstanding the foregoing, a married Participant's designation of a
primary Beneficiary other than his or her spouse shall be invalid unless
the Participant's spouse consents in writing to the election in a manner
provided for under the Plan and consistent with applicable law.
ARTICLE VI. DISTRIBUTIONS.
A. In General.
Distribution to the Participant or his spouse or other Beneficiary of any
part or all of the assets in the Account shall be made in accordance with
such provisions, restrictions or limitations as to the time, amount or
optional forms of distributions (including, without limitation,
distributions on account of financial hardship within the meaning of
Section 403(b)(7)(A)(ii) of the Code) as the Employer shall have specified
in written instructions to the Custodian. Such instructions of the
Employer shall be consistent with the provisions of the Plan, as well as
applicable law, and shall become effective only if and to the extent
accepted and agreed to in writing by the Custodian.
The Custodian does not assume, and shall not have any responsibility to
make any distribution except in accordance with such written instructions
from the Employer. Any distribution payment shall be made by the Custodian
subject to withholding of any income or other taxes required by federal
law.
B. Qualified Domestic Relations Orders.
Nothing in the Agreement shall prohibit distribution to any person in
accordance with the terms of a "qualified domestic relations order" as
defined in Section 206(d) of the Employee Retirement Income Security Act of
1974, as amended (the "Act"). Any such distribution shall be made only
upon direction by the Employer (or its duly appointed plan administrator)
subject to the restrictions of Section 206(d) of the Act.
C. Non-Assignment.
The interest of the Participant in the Account shall be used for the
exclusive benefit of the Participant or his or her Beneficiaries; shall be
non-forfeitable at all times; shall not be assigned or transferred by the
Participant; and shall not be subject to alienation, assignment, trustee
process, garnishment, attachment, execution or levy of any kind, except
with regard to payment of the expenses of the Custodian and its agent as
authorized by the provisions of the Agreement and except to the extent
required by law.
ARTICLE VII. ADMINISTRATION.
A. Custodian as Agent.
The Custodian is an agent appointed by the Employer on the Participant's
behalf to perform solely the duties assigned to it under the Agreement, it
being acknowledged that certain of such duties may be performed by the
Custodian (or one of its affiliates) in any event pursuant to one or more
other contractual arrangements or relationships. The Custodian shall not
be deemed to be a fiduciary in carrying out the following duties:
(1) To receive contributions pursuant to the provisions of the Agreement;
(2) To hold, invest and reinvest the contributions in Fund shares;
(3) To register any property held by the Custodian in its own name, or in
nominee or bearer form that will pass delivery; and
(4) To make distributions from the Account in cash or in Fund shares
pursuant to the provisions of the Agreement.
B. Voting.
The Custodian shall mail to the Participant all prospectuses and proxies
that may come into the Custodian's possession by reason of its custody of
Fund shares. The Custodian shall not vote any Fund shares held hereunder
except in accordance with the Participant's written instructions; provided,
however, that the Custodian may, in the absence of instructions, vote
"present" for the sole purpose of allowing such shares to be counted for
establishment of a quorum at a shareholders' meeting.
C. Reports.
The Custodian shall keep accurate and detailed account of receipts,
investments and disbursements. The Custodian shall file such reports with
the Internal Revenue Service as may be required to be filed by the
Custodian (not including such reports as may be required to be filed by the
Employer) by its Regulations. The Custodian, the Employer and the
Participant shall furnish to one another such information relevant to the
Account as may be required in connection with any such reports. Unless the
Participant sends the Custodian written objection to a report within sixty
(60) days after its receipt, the Participant shall be deemed to have
approved such report, and in such case the Custodian shall be forever
released and discharged from all liability and accountability to anyone
with respect to all matters and things included therein. The Custodian may
seek a judicial settlement of its accounts. In any such proceeding the
only necessary party thereto in addition to the Custodian shall be the
Participant.
D. Written Notices.
All written notices or communications to the Participant or the Employer
shall be effective when sent by first class mail to the last known address
of the Participant or the Employer on the Custodian's records. All written
notices or communications to the custodian shall be mailed or delivered to
the Custodian at its designated mailing address, and no such written notice
or communication shall be effective until the Custodian's actual receipt
thereof. The Custodian shall be entitled to rely conclusively upon, and
shall be fully protected in any action or nonaction taken in good faith in
reliance upon, any written notice or other communications or instruments
believed to be genuine and to have been properly executed.
E. Limitations on Custodian's Liability and Indemnification.
The Participant, the Employer and the Custodian intend that the Custodian
shall have and exercise no discretion, authority, or responsibility as to
any investment in connection with the Account and the Custodian shall not
be responsible in any way for the purpose, propriety or tax treatment of
any contribution, or of any distribution, or any other action or nonaction
taken pursuant to the Participant's direction or that of the Participant's
Beneficiary, executor or administrator. The Participant who directs the
investment of his or her Account shall bear sole responsibility for the
suitability of any directed investment and for any adverse consequences
arising from such an investment, including, without limitation, the
inability of the Custodian to value or to sell an illiquid investment, or
the generation of unrelated business taxable income with respect to an
investment. To the fullest extent permitted by law, the Participant, the
Participant's spouse, Beneficiary, and the executor or administrator of
each of them, as appropriate, shall at all times fully indemnify and save
harmless the Custodian and its agents, affiliates, successors and assigns
and their officers, directors and employees, from any and all other
liability arising from the Participant's investment direction under this
Account and from any and all other liability whatsoever which may arise in
connection with this Agreement except liability arising under applicable
law or liability arising from gross negligence or willful misconduct on the
part of the indemnified person. The Custodian may, in its discretion,
establish procedures pursuant to which the Participant may delegate to a
third party any or all of the Participant's powers and duties hereunder,
provided, that any such third party to whom the Participant has so
delegated powers and duties shall be treated as the Participant for
purposes of this Agreement.
F. Expenses.
The Custodian shall collect out of the Account expenses of administration,
including, if any, the fees of counsel employed by the Custodian relating
directly to administration of or claims against or on behalf of the
Account, taxes, and fees for maintaining the Account that are effective in
accordance with any schedule of fees adopted by the Custodian upon thirty
(30) days' written notice to the Employer and the Participant. The
Custodian may redeem Fund shares and use the proceeds of redemption to pay
the foregoing expense, taxes or fees or bill the Participant directly for
such expenses, taxes or fees.
ARTICLE VIII. RESIGNATION OR REMOVAL OF CUSTODIAN.
The Employer may remove the Custodian at any time, and the Custodian may
resign at any time, upon thirty (30) days' written notice to the Employer.
Upon the removal or resignation of the Custodian the Employer may, but
shall not be required to, appoint a successor custodian under this
Custodial Agreement; provided that any successor custodian shall satisfy
the requirements of Section 401(f)(2) of the Code. Upon any such
successor's acceptance of appointment, the Custodian shall transfer the
assets of the Account, together with copies of relevant books and records,
to such successor custodian; provided, however, that the Custodian is
authorized to reserve such sum of money or property as it may deem
advisable for payment of any liabilities constituting a charge on or
against the assets of the Account. The Custodian shall not be liable for
the acts or omissions of any successor to it. If no successor custodian is
appointed by the Company, the Custodial Account shall be terminated in
accordance with Article 9.
ARTICLE IX. AMENDMENT AND TERMINATION.
A. Power of Custodian to Amend.
The Custodian shall have the power to amend the Agreement (including
retroactive amendments). The Custodian shall give prompt written notice to
the Employer of any amendment.
B. Limitation on Amendment.
No amendment to the Agreement shall be effective if it would cause or
permit (1) any part of the Account to be used for, or diverted to, any
purpose other than the exclusive benefit of the Participant or the
Participant's Beneficiaries, except with regard to payment of the expenses
of the Custodian as authorized by the provisions of this Agreement and
except to the extent required by law; (2) the Participant to be deprived of
any portion of his or her interest in the Account, unless such amendment is
necessary to conform the Agreement to the conditions of any law,
governmental regulation or ruling; (3) the imposition of any additional
duty on the Custodian without its consent.
C. Termination.
The Employer reserves the right to terminate this Agreement. Upon
termination, the Agreement shall be considered to be rescinded and of no
force and effect. The appointment of a successor custodian pursuant to
Article 6 shall not be termination of the Agreement, nor shall the
amendment of the Agreement by any successor custodian be a termination of
the Account.
D. Distribution upon Termination.
Except as hereinafter provided, termination of the Agreement shall be
effected by distributing all assets thereof. There shall be no liability
on the part of the Custodian for any tax consequences to the Participant or
his Beneficiaries resulting from such distribution. If, upon termination,
a Participant so directs in writing in a manner satisfactory to the
Custodian and consistent with IRS Revenue Ruling 90-24, similar rulings of
the Internal Revenue Service, or Code section 403(b)(8), the Custodian
shall transfer the assets of the Participant's Account, or the redemption
proceeds thereof, to the custodian of another custodial account or to a
specified issuer of an annuity, which account or annuity is qualified under
Section 403(b) of the Code.
ARTICLE X. EFFECT OF OTHER 403(B) ARRANGEMENTS.
The Agreement shall not prevent the Participant or the Employer from
purchasing, for the benefit of and in the name of the Participant, an
annuity contract or contracts that qualify under Section 403(b) of the
Code, or from making contributions for the benefit of the Participant to
any other custodial account or accounts that qualify under Section
403(b)(7) of the Code, provided that the aggregate Employer payments or
contributions to or under such annuity contracts or custodial accounts and
under the Account shall not exceed the maximum permissible amounts under
the law.
ARTICLE XI. GOVERNING LAW.
THE AGREEMENT IS ACCEPTED IN, AND SHALL BE GOVERNED BY THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS, EXCEPT AS SUPERSEDED BY FEDERAL LAWS OR
REGULATIONS.
The Custodian and the Employer have signed this Agreement as of , 19 ,
to acknowledge their agreement to its terms.
Fidelity Management Trust Company [Employer]
By: By:
(Name) (Name)
(Title) (Title)
NATIONAL FINANCIAL SERVICES CORPORATION
INDIVIDUAL RETIREMENT ACCOUNT
CUSTODIAL AGREEMENT
Page
ARTICLE I 1
ARTICLE II 1
ARTICLE III 1
ARTICLE IV 1
ARTICLE V 2
ARTICLE VI 3
ARTICLE VII 3
ARTICLE VIII 1. Definitions 3
(a) "Account" or "Custodial Account" 3
(b) "Agreement" 3
(c) "Application" 3
(d) "Authorized Agent" 3
(e) "Beneficiary" 3
(f) "Broker-Dealer 3
(g) "Code" 3
(h) "Company" 3
(i) "Custodian" 4
(j) "Depositor" 4
(k) "Funding Vehicles" 4
(l) "Money Market Shares" 4
2. Broker-Dealer 4
3. Investment of Contributions 4
(a) General 4
(b) Initial Contribution 5
(c) Unclear Instructions 5
(d) No Duty 5
4. Contributions by Divorced or Separated Spouses 5
5. Timing of Contributions 5
6. Rollover Contributions 5
7. Reinvestment of Earnings 6
8. Designation of Beneficiary 6
(a) General 6
(b) Minors 6
(c) QTIPs and QDOTs 6
(d) Judicial Determination 7
(e) No Duty 7
9. Payroll Deduction 7
10. Transfers to or from the Account 7
11. Distributions from the Account 8
12. Actions in the Absence of Specific Instructions 8
13. Responsibility as to Contributions or Distributions 8
14. Written Instructions and Notices 8
15. Effect of Written Instructions and Notices 8
16. Tax Matters 9
(a) General 9
(b) Annual Report 9
(c) Withholding 9
17. Spendthrift Provision 9
18. Fees and Expenses 9
(a) General 9
(b) Advisor Fees 9
(c) Sale of Assets 10
19. Escrow 10
20. Voting with Respect to Securities 10
21. Limitations on Custodial Liability and Indemnification 10
22. Delegation to Agents 11
23. Amendment of Agreement 11
24. Resignation or Removal of Custodian 11
25. Termination of Custodial Account 11
26. Governing Law 12
27. When Effective 12
NATIONAL FINANCIAL SERVICES CORPORATION
INDIVIDUAL RETIREMENT ACCOUNT
DISCLOSURE STATEMENT
Page
RIGHT TO CANCEL 13
TYPES OF IRAS 13
Regular IRA 13
Spousal IRA 13
Rollover IRA 14
DESCRIPTION OF ACCOUNT 14
ELIGIBILITY 14
CONTRIBUTIONS 14
General 14
Spousal Accounts 14
Compensation 14
Adjusted Gross Income 14
Time of Contribution 14
Rollover IRA Contributions 14
Simplified Employee Pension Plan Contributions 14
Excess Contributions 15
DEDUCTIBLE IRA CONTRIBUTIONS 15
LIMITS ON DEDUCTIBLE CONTRIBUTIONS 15
NONDEDUCTIBLE IRA CONTRIBUTIONS 16
INVESTMENT OF ACCOUNT 16
DISTRIBUTIONS 16
General 16
Premature Distributions 16
Latest Time to Withdraw 17
Minimum Distributions 17
Methods of Distribution 17
Distribution Upon Death 17
Distribution of Nondeductible Contributions 17
Excess Distributions 18
Rollover Treatment 18
DIVORCE OR LEGAL SEPARATION 18
FEES AND EXPENSES 18
PROHIBITED TRANSACTIONS 18
OTHER TAX CONSIDERATIONS 18
No Special Tax Treatment 18
Gift Tax 18
Tax Withholding 18
Reporting for Tax Purposes 19
IRS APPROVAL 19
NATIONAL CUSTODIAL Under Section 408(a) of the
FINANCIAL AGREEMENT Internal Revenue Code
SERVICES
CORPORATION
INDIVIDUAL
RETIREMENT
ACCOUNT
The Depositor whose name appears on the attached Application is
establishing an individual retirement account (under Section 408(a) of the
Internal Revenue Code) to provide for his or her retirement and for the
support of his or her beneficiaries after death.
The Custodian named on the attached Application has given the Depositor
the Disclosure Statement required under the Income Tax Regulations under
Section 408(i) of the Code.
The Depositor has deposited with the Custodian an initial contribution in
cash, as set forth in the attached Application.
The Depositor and the Custodian make the following Agreement:
ARTICLE I The Custodian may accept additional cash contributions on behalf
of the Depositor for a tax year of the Depositor. The total cash
contributions are limited to $2,000 for the tax year unless the
contribution is a rollover contribution described in Section 402(c) of the
Code (but only after December 31, 1992), 403(a)(4), 403(b)(8), 408(d)(3),
or an employer contribution to a Simplified Employee Pension plan as
described in Section 408(k). Rollover contributions before January 1,
1993, include rollovers described in Section 402(a)(5), 402(a)(6),
402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to
a Simplified Employee Pension Plan as described in Section 408(k).
ARTICLE II The Depositor's interest in the balance in the Custodial
Account is nonforfeitable.
ARTICLE III 1. No part of the custodial funds may be invested in life
insurance contracts, nor may the assets of the Custodial Account be
commingled with other property except in a common trust fund or common
investment fund (within the meaning of Section 408(a)(5) of the Code).
2. No part of the custodial funds may be invested in collectibles (within
the meaning of Section 408(m) of the Code) except as otherwise permitted by
Section 408(m)(3) which provides an exception for certain gold and silver
coins and coins issued under the laws of any state.
ARTICLE IV 1. Notwithstanding any provision of this agreement to the
contrary, the distribution of the Depositor's interest in the Custodial
Account shall be made in accordance with the following requirements and
shall otherwise comply with Section 408(a)(6) and Proposed Regulations
Section 1.408-8, including the incidental death benefit provisions of
Proposed Regulations Section 1.401(a)(9)-2, the provisions of which are
incorporated by reference.
2. Unless otherwise elected by the time distributions are required to
begin to the Depositor under paragraph 3, or to the surviving spouse under
paragraph 4, other than in the case of a life annuity, life expectancies
shall be recalculated annually. Such election shall be irrevocable as to
the Depositor and the surviving spouse and shall apply to all subsequent
years. The life expectancy of a nonspouse beneficiary may not be
recalculated.
3. The Depositor's entire interest in the Custodial Account must be, or
begin to be, distributed by the Depositor's required beginning date (April
1 following the calendar year end in which the Depositor reaches age 70
1/2). By that date, the Depositor may elect, in a manner acceptable to the
Custodian, to have the balance in the Custodial Account distributed in:
(a) A single-sum payment.
(b) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the life of the Depositor.
(c) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the joint and last survivor lives of the
Depositor and his or her designated Beneficiary.
(d) Equal or substantially equal annual payments over a specified period
that may not be longer than the Depositor's life expectancy.
(e) Equal or substantially equal annual payments over a specified period
that may not be longer than the joint life and last survivor expectancy of
the Depositor and his or her designated Beneficiary.
4. If the Depositor dies before his or her entire interest is distributed
to him or her, the entire remaining interest will be distributed as
follows:
(a) If the Depositor dies on or after distribution of his or her
interest has begun, distribution must continue to be made in accordance
with paragraph 3.
(b) If the Depositor dies before distribution of his or her interest
has begun, the entire remaining interest will, at the election of the
Depositor or, if the Depositor has not so elected, at the election of the
Beneficiary or Beneficiaries, either
(i) Be distributed by the December 31 of the year containing the fifth
anniversary of the Depositor's death, or
(ii) Be distributed in equal or substantially equal payments over the
life or life expectancy of the designated Beneficiary or Beneficiaries
starting by December 31 of the year following the year of the Depositor's
death. If, however, the Beneficiary is the Depositor's surviving spouse,
then this distribution is not required to begin before December 31 of the
year in which the Depositor would have turned age 70 1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of Section 408(b)(3) and its related regulations has
irrevocably commenced, distributions are treated as having begun on the
Depositor's required beginning date, even though payments may actually have
been made before that date.
(d) If the Depositor dies before his or her entire interest has been
distributed and if the Beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may be accepted in
the account.
5. In the case of distribution over life expectancy in equal or
substantially equal annual payments, to determine the minimum annual
payment for each year, divide the Depositor's entire interest in the
Custodial Account as of the close of business on December 31 of the
preceding year by the life expectancy of the Depositor (or the joint life
and last survivor expectancy of the Depositor and the Depositor's
designated Beneficiary, or the life expectancy of the designated
Beneficiary, whichever applies). In the case of distributions under
paragraph 3, determine the initial life expectancy (or joint life and last
survivor expectancy) using the attained ages of the Depositor and
designated Beneficiary as of their birthdays in the year the Depositor
reaches age 70 1/2. In the case of a distribution in accordance with
paragraph 4(b)(ii), determine life expectancy using the attained age of the
designated Beneficiary as of the Beneficiary's birthday in the year
distributions are required to commence.
6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524, to satisfy
the minimum distribution requirements described above. This method permits
an individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for
another.
ARTICLE V 1. The Depositor agrees to provide the Custodian with
information necessary for the Custodian to prepare any reports required
under Section 408(i) of the Code and Regulations Sections 1.408-5 and
1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue Service
and the Depositor prescribed by the Internal Revenue Service.
ARTICLE VI Notwithstanding any other articles which may be added or
incorporated, the provisions of Articles I through Ill and this sentence
will be controlling. Any additional articles that are not consistent with
Section 408(a) of the Code and the related regulations will be invalid.
ARTICLE VII This Agreement will be amended from time to time to comply
with the provisions of the Code and related regulations. Other amendments
may be made with the consent of the Depositor and the Custodian.
ARTICLE VIII 1. DEFINITIONS. The following definitions shall apply to
terms used in this Article VIII:
(a) "Account" or "Custodial Account" means the custodial account
established hereunder for the benefit of the Depositor.
(b) "Agreement" means the National Financial Services Corporation IRA
Custodial Agreement, including the information and provisions set forth in
any Account Application that goes with this Agreement. This Agreement,
including the Account Application and any designation of Beneficiary filed
with the Custodian, may be proved either by an original copy or by a
reproduced copy thereof, including, without limitation, a copy reproduced
by photocopying, facsimile transmission, or electronic imaging.
(c) "Application" shall mean the Application by which this Agreement,
as may be amended from time to time, is established between the Depositor
and the Custodian. The statements contained therein shall be incorporated
into this Agreement.
(d) "Authorized Agent" means the person or persons authorized by the
Depositor, on a signed form acceptable to and filed with the Custodian, to
purchase or sell Shares in the Depositor's Account.
(e) "Beneficiary" means the person or persons (including a trust or
estate) designated as such by the Depositor on a signed form acceptable to
and filed with the Custodian pursuant to Article VIII, Section 8 of this
Agreement.
(f) "Broker-Dealer" shall mean the securities broker-dealer registered
as such under the Securities Exchange Act of 1934, which the Depositor
has designated as his or her Broker-Dealer in the Account Application . (
g) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(h) "Company" shall mean FMR Corp., a Massachusetts corporation, or any
successor or affiliate thereof to which FMR Corp. may, from time to time,
delegate or assign any or all of its rights or responsibilities under this
Agreement.
(i) "Custodian" shall mean the custodian specified in the Account
Application.
(j) "Depositor" means the person named in the Account Application.
(k) "Funding Vehicles" shall include (i) all marketable securities
traded over the counter or on a recognized securities exchange which are
eligible for registration on the book entry system maintained by Depository
Trust Company ("DTC") or its successor; (ii) if permitted by the Custodian,
interest-bearing accounts of the Custodian, and (iii) such other non-DTC
eligible assets (but not including futures contracts) which are permitted
to be acquired under a custodial account pursuant to Section 408 of the
Code and which are acceptable to the Custodian. Notwithstanding the above,
the Custodian reserves the right to refuse to accept and hold any specific
asset.
(l) "Money Market Shares" shall mean any shares which are issued by a
money market mutual fund.
2. BROKER-DEALER. The Broker-Dealer shall be appointed by the Depositor
in the Application as his or her agent to execute such investment
directions as the Depositor may give under the terms of the Custodial
Account, including the execution of purchase and sale orders. All assets
of the Custodial Account shall be registered in the name of the Custodian
or its nominee, but such assets shall generally be held in a brokerage
account with the Broker-Dealer in the name of the Custodian. Any security
may be held in bearer form, or in a central depository (including National
Financial Services Corporation) so long as
(i) the books and records of the Custodian or its agent show that all
such securities
are part of the Custodial Account,
(ii) a separate account thereof is maintained by the party having actual
custody of such securities, and
(iii) such securities are held in individual or bulk segregation in such
party's vaults or in depositories approved by the Securities and Exchange
Commission under the Securities Exchange Act of 1934.
In all cases the Broker-Dealer, and not the Custodian, shall have the
responsibility for delivering to the Depositor all notices and prospectuses
relating to such Securities. To the extent that the Custodian delivers to
the Broker-Dealer confirmations, statements and other notices with respect
to the Account, any such communications delivered to the Broker-Dealer
shall be deemed to have been delivered to the Depositor. The Depositor
agrees to hold the Custodian and the Company harmless from and against any
losses, cost or expenses arising in connection with the delivery or receipt
of any such communication(s), provided the Custodian has acted in
accordance with the above.
3. LNVESTMENT OF CONTRIBUTIONS. Contributions to the Account may be
invested only in Funding Vehicles, and shall be invested as follows:
(a) General. Contributions will be invested in accordance with the
Depositor's written instructions in the Application, and with subsequent
instructions given by the Depositor or the Authorized Agent appointed by
the Depositor (or, following the death of the Depositor, his or her
Beneficiary) through the Broker-Dealer to the Custodian in a manner
acceptable to the Custodian. By giving such instructions to the Custodian,
such person will be deemed to have acknowledged receipt of the then current
prospectus, if any, for any Funding Vehicles in which the Depositor (or the
Authorized Agent appointed by the Depositor), through the Broker-Dealer
directs the Custodian to invest assets in his or her Account. All charges
incidental to carrying out such instructions shall be charged and collected
in accordance with Article VIII, Section 18.
The Depositor may, by delivery of specific instructions to the
Broker-Dealer, purchase an option or direct that covered call options be
written on securities held in his or her Custodial Account. Covered call
instructions must specify the number and identity of shares to which the
option applies, the term of the option, and the option's exercise price.
(b) Initial Contribution. The Custodian will invest all contributions
promptly after their receipt, as set forth below; provided, however, that
the Custodian shall not be obligated to invest the Depositor's initial
contribution to his Custodial Account as indicated on the Application,
until at least seven (7) calendar days have elapsed from the date of
acceptance of the Application by or on behalf of the Custodian.
(c) Unclear Instructions. If the Depositor's Custodial Account at any
time contains cash as to which investment instructions in accordance with
this Section 3 have not been received by the Custodian, or if the Custodian
receives instructions as to investment selection or allocation which are,
in the opinion of the Custodian, not clear, the Custodian may request
instructions from the Depositor (or the Depositor's Authorized Agent,
Beneficiary, executor or administrator). Pending receipt of such
instructions any cash may be invested in Money Market Shares, and any other
investment may remain unchanged. The Custodian shall not be liable to
anyone for any loss resulting from delay in investing such cash or in
implementing such instructions. Notwithstanding the above, the Custodian
may, but need not, for administrative convenience maintain a balance of up
to $100 of uninvested cash in the Depositor's Custodial Account.
(d) No Duty. The Custodian shall not have any duty to question the
directions of a Depositor (or the Depositor's Broker-Dealer, Authorized
Agent, Beneficiary, executor, or administrator) in the investment of his or
her Custodial Account or to advise the Depositor or the Depositor's
Broker-Dealer regarding the purchase, retention or sale of assets credited
to the Custodial Account. The Custodian, or any of its affiliates, shall
not be liable for any loss which results from the Depositor's (or the
Depositor's Broker-Dealer, Authorized Agent, Beneficiary, executor, or
administrator) exercise of control (whether by his or her action or
inaction) over the Custodial Account.
4. CONTRIBUTIONS BY DIVORCED OR SEPARATED SPOUSES. All alimony and
separate maintenance payments received by a divorced or separated spouse,
and taxable under Section 71 of the Code, shall be considered compensation
for purposes of computing the maximum annual contribution to the Custodial
Account, and the limitations for contributions by a divorced or separated
spouse shall be the same as for any other individual.
5. TIMING OF CONTRIBUTIONS. A contribution is deemed to have been made
on the last day of the preceding taxable year if the contribution is made
by the deadline for filing the Depositor's income tax return (not including
extensions), or such later date as may be determined by the Department of
the Treasury or the IRS, provided the Depositor (or the Depositor's
Broker-Dealer or Authorized Agent) designates, in a manner acceptable to
the Custodian, the contribution as a contribution for the preceding
taxable year.
6. ROLLOVER CONTRIBUTIONS. The Custodian will accept for the Custodial
Account all rollover contributions which consist of cash, and it may, but
shall be under no obligation to, accept all or any part of any other
rollover contribution. The Depositor shall designate each rollover
contribution as such to the Custodian through the Broker-Dealer, and by
such designation shall confirm to the Custodian that a proposed rollover
contribution qualifies as a rollover contribution within the meaning of
Sections 402(a)(5), 402(a)(6), 402(a)(7), 402(c), 403(a)(4), 403(b)(8),
and/or 408(d)(3) of the Code. Submission by or on behalf of a Depositor of
a rollover contribution consisting of assets other than cash or property
permitted as an investment under this Article VIII shall be deemed to be
the instruction of the Depositor to the Custodian that, if such rollover
contribution is accepted, the Custodian will use its best efforts to sell
those assets for the Depositor's account, and to invest the proceeds of any
such sale in accordance with Section 3. To the extent permitted by law,
the Custodian shall not be liable to anyone for any loss resulting from
such sale or delay in effecting such sale; or for any loss of income or
appreciation with respect to the proceeds thereof after such sale and prior
to investment pursuant to Section 3; or for any failure to effect such sale
if such property proves not readily marketable in the ordinary course of
business. All brokerage and other costs incidental to the sale or
attempted sale of such property will be charged to the Custodial Account in
accordance with Article VIII, Section 18.
7. REINVESTMENT OF EARNINGS. In the absence of other instructions
pursuant to Section 3, distributions of every nature received in respect of
the assets in a Depositor's Custodial Account shall be liquidated to cash,
if necessary, and shall be reinvested in accordance with the Depositor's
instructions pursuant to Section 3.
8. DESIGNATION OF BENEFICIARY. A Depositor may designate a Beneficiary
as follows:
(a) General. A Depositor may designate a Beneficiary or Beneficiaries
at any time, and any such designation may be changed or revoked at any
time, by written designation signed by the Depositor on a form acceptable
to, and filed with, the Custodian; provided, however, that such
designation, or change or revocation of a prior designation, shall not be
effective unless it is received and accepted by the Custodian no later than
thirty (30) days after the death of the Depositor, and provided further
that the latest such designation or change or revocation shall control. If
the Depositor had not by the date of his or her death properly designated a
Beneficiary in accordance with the preceding sentence, or if no designated
Beneficiary survives the Depositor, the Depositor's Beneficiary shall be
his or her surviving spouse, but if he or she has no surviving spouse, his
or her estate. Unless otherwise specified in the Depositor's designation
of Beneficiary, if a Beneficiary dies before receiving his or her entire
interest in the Custodial Account, his or her remaining interest in the
Custodial Account shall be paid to the Beneficiary's estate.
(b) Minors. If a distribution upon the death of the Depositor is
payable to a person known by the Custodian to be a minor or otherwise under
a legal disability, the Custodian may, in its absolute discretion, make
all, or any part of the distribution to (a) a parent of such person, (b)
the guardian , conservator, or other legal representative, wherever
appointed, of such person, (c) a custodial account established under a
Uniform Gifts to Minors Act, Uniform Transfers to Minors Act, or similar
act, (d) any person having control or custody of such person, or (e) to
such person directly.
(c) QTIPs and QDOTs. A Depositor may designate as Beneficiary of his or
her Account a trust for the benefit of his or her surviving spouse that is
intended to satisfy the conditions of Sections 2056(b)(7) or 2056A of the
Code (a "Spousal Trust"). In that event, if the Depositor is survived by
his or her spouse, the following provisions shall apply to the Account,
from and after the death of the Depositor until the death of the
Depositor's surviving spouse: (1) all of the income of the Account shall
be paid to the Spousal Trust annually or at more frequent intervals, and
(2) no person shall have the power to appoint any part of the Account to
any person other than the Spousal Trust. To the extent permitted by
Section 401(a)(9) of the Code, as determined by the trustee(s) of the
Spousal Trust, the surviving spouse of a Depositor who has designated a
Spousal Trust as his or her Beneficiary may be treated as his or her
"designated beneficiary" for purposes of the distribution requirements of
that Code section. The Custodian shall have no responsibility to determine
whether such treatment is appropriate.
(d) Judicial Determination. Anything to the contrary herein
notwithstanding, in the event of reasonable doubt respecting the proper
course of action to be taken, the Custodian may in its sole and absolute
discretion resolve such doubt by judicial determination which shall be
binding on all parties claiming any interest in the Account. In such event
all court costs, legal expenses, reasonable compensation of time expended
by the Custodian in the performance of its duties, and other appropriate
and pertinent expenses and costs shall be collected by the Custodian from
the Custodial Account in accordance with Article VIII, Section 18.
(e) No Duty. The Custodian shall not have any duty to question the
directions of a Depositor (or the Depositor's Authorized Agent,
Beneficiary, executor or administrator) as to the time(s) and amount(s) of
distributions from the Custodial Account, or to advise him or her
regarding the compliance of such distributions with Section 401(a)(9),
Section 2056(b)(7) or Section 2056A of the Code.
9. PAYROLL DEDUCTION. Subject to approval of the Custodian and the
Broker-Dealer, a Depositor may choose to have contributions to his or her
Custodial Account made through payroll deduction if the Account is
maintained as part of a program sponsored by the Depositor's employer. In
order to establish payroll deduction, the Depositor must authorize his or
her employer to deduct a fixed amount from each pay period's salary up to a
total amount of $2,000 per year, unless such contributions are being made
pursuant to a Simplified Employee Pension Plan described under Section
408(k) of the Code, in which case, contributions can be made up to 15% of
the Depositor's earned income, up to $30,000 per year. Contributions to the
Custodial Account of the Depositor's spouse may be made through payroll
deduction if the employer authorizes the use of payroll deductions for such
contributions, but such contributions must be made to a separate Account
maintained for the benefit of the Depositor's spouse. The payroll
deduction authorization shall continue in force until such time as written
amendment or revocation is received by the Depositor's employer and the
Custodian with reasonable advance notice.
10. TRANSFERS TO OR FROM THE ACCOUNT. Assets held on behalf of the
Depositor in another IRA may be transferred by the trustee or custodian
thereof directly to the Custodian, in a form and manner acceptable to the
Custodian, to be held in the Custodial Account for the Depositor under this
Agreement. The Custodian will not be responsible for any losses the
Depositor may incur as a result of the timing of any transfer from another
trustee or custodian that are due to circumstances reasonably beyond the
control of the Custodian.
Assets held on behalf of the Depositor in the Account may be transferred
directly to a trustee or custodian of another IRA established for the
Depositor, if so directed by the Depositor in a form and manner acceptable
to the Custodian; provided, however, that it shall be the Depositor's
responsibility to ensure that any minimum distribution required by Section
401(a)(9) of the Code is made prior to giving the Custodian such transfer
instructions.
11. DISTRIBUTIONS FROM THE ACCOUNT. Subject to Section 13 below,
distributions from the Account will be made only upon the request of the
Depositor (or the Depositor's Authorized Agent, Beneficiary, executor, or
administrator) to the Custodian through the Broker-Dealer in such form and
in such manner as is acceptable to the Custodian. For distributions
requested pursuant to Article IV, life expectancy and joint life and last
survivor expectancy are calculated based on information provided by the
Depositor (or the Depositor's Authorized Agent, Beneficiary, executor, or
administrator) using the Expected Return Multiples in Section 1.72-9 of the
Income Tax Regulations. The Custodian shall not incur any liability for
errors in such calculations as a result of reliance on information provided
by the Depositor (or the Depositor's Authorized Agent, Beneficiary,
executor, or administrator) or the Depositor's Broker-Dealer. Without
limiting the generality of the foregoing, the Custodian is not obligated to
make any distribution, including a minimum required distribution as
specified in Article IV above, absent a specific written direction from the
Depositor (or the Depositor's Authorized Agent, Beneficiary, executor, or
administrator) through the Broker-Dealer to do so.
12. ACTIONS IN THE ABSENCE OF SPECIFIC INSTRUCTIONS. If the Custodian
receives no response to communications sent to the Depositor (or the
Depositor's Authorized Agent, Beneficiary, executor, or administrator) at
the Depositor's (or the Depositor's Authorized Agent, Beneficiary,
executor, or administrator's) last known address as shown in the records of
the Custodian, or if the Custodian determines, on the basis of evidence
satisfactory to it, that the Depositor is legally incompetent, the
Custodian thereafter may make such determinations with respect to
distributions, investments, and other administrative matters arising under
this Agreement as it considers reasonable, notwithstanding any prior
instructions or directions given by or on behalf of the Depositor. Any
determinations so made shall be binding on all persons having or claiming
any interest under the Custodial Account, and the Custodian shall not incur
any obligation or liability for any such determination made in good faith,
for any action taken in pursuance thereof, or for any fluctuations in the
value of the Account in the event of a delay resulting from the Custodian's
good faith decision to await additional information or evidence.
13. RESPONSIBILITY AS TO CONTRIBUTIONS OR DISTRIBUTIONS. The Custodian
will not under any circumstances be responsible for the timing, purpose or
propriety of any contribution or of any distribution made hereunder, nor
shall the Custodian incur any liability or responsibility for any tax
imposed on account of any such contribution or distribution.
Notwithstanding Section 11 above, the Custodian is empowered to make a
distribution absent such an instruction if directed to do so pursuant to a
court order of any kind and neither the Custodian nor the Company shall in
such event incur any liability for acting in accordance with such court
order.
14. WRITTEN INSTRUCTIONS AND NOTICES. All written notices or
communications required to be given by the Custodian to the Depositor shall
be deemed to have been given when sent by mail to either the Broker-Dealer
or to the last known address of the Depositor in the records of the
Custodian. All written instructions, notices, or communications required
to be given by the Depositor to the Custodian shall be mailed or delivered
to the Custodian at its designated mailing address as specified on the
Application, and no such instruction, notice, or communication shall be
effective until the Custodian's actual receipt thereof.
15. EFFECT OF WRITTEN INSTRUCTIONS AND NOTICES. The Custodian shall be
entitled to rely conclusively upon, and shall be fully protected in any
action or non-action taken in good faith in reliance upon, any written
instructions, notices, communications or instruments believed to have been
genuine and properly executed. Any such notification may be proved by
original copy or reproduced copy thereof, including, without limitation, a
copy produced by photocopying, facsimile transmission, or electronic
imaging. For this purpose, the Custodian may (but is not required to) give
the same effect to a telephonic instruction as it gives to a written
instruction, and the Custodian's action in doing so shall be protected to
the same extent as if such telephonic instructions were, in fact, a written
instruction. Any such telephonic instruction may be proved by audio
recorded tape.
16. TAX MATTERS.
(a) General. The Custodian shall submit required reports to the IRS and
the Depositor (or the Depositor's Authorized Agent, Beneficiary, executor,
or administrator); provided, however, that such individual shall prepare
any return or report required in connection with maintaining the Account,
or as a result of liability incurred by the Account for tax on unrelated
business taxable income, or windfall profits tax.
(b) Annual Report. As soon as is practicable after the close of each
taxable year, and whenever required by the Code, the Custodian shall
deliver to the Depositor a written report(s) reflecting receipts,
disbursements and other transactions effected in the Custodial Account
during such period and the fair market value of the assets and liabilities
of the Custodial Account as of the close of such period in a manner
prescribed by the Internal Revenue Service. Unless the Depositor sends the
Custodian written objection to a report within ninety (90) days of receipt,
the Depositor shall be deemed to have approved of such report, and the
Custodian and the Company, and their officers, employees and agents shall
be forever released and discharged from all liability and accountability to
anyone with respect to their acts, transactions, duties and
responsibilities as shown on or reflected by such report(s). The Company
shall not incur any liability in the event the Custodian does not satisfy
its obligations as described herein.
(c) Withholding. Any distributions from the Custodial Account may be
made by the Custodian net of any required tax withholding.
17. SPENDTHRIFT PROVISION. The interest of a Depositor in the Account
shall not be transferred or assigned by voluntary or involuntary act of the
Depositor or by operation of law; nor shall it be subject to alienation,
assignment, garnishment, attachment, receivership, execution or levy of any
kind. Notwithstanding the foregoing, in the event of a property settlement
between a Depositor and his or her
former spouse pursuant to which the transfer of a Depositor's interest
hereunder, or a
portion thereof, is incorporated in a divorce decree or in a written
instrument incident to such divorce or legal separation, then the interest
so decreed by a Court to be the property of such former spouse shall be
transferred to a separate Custodial Account for the benefit of such
former spouse, in accordance with Section 408(d)(6) of the Code.
18. FEES AND EXPENSES.
(a) General. The fees of the Custodian for performing its duties
hereunder shall be in such amount as it shall establish from time to time.
All such fees, as well as expenses (such as, without limitation, brokerage
commissions upon the investment of funds, fees for special legal services,
taxes levied or assessed, or expenses in connection with the liquidation or
retention of all or part of a rollover contribution), shall be collected by
the Custodian from cash available in the Custodial Account, or if
insufficient cash shall be available, by sale of sufficient assets in the
Custodial Account and application of the sales proceeds to pay such fees
and expenses. Alternatively, but only with the consent of the Custodian,
fees and expenses may be paid directly to the Custodian by the Depositor by
separate check.
(b) Advisor Fees. The Custodian shall, upon direction from the
Depositor, disburse from the Custodial Account payment to the Depositor's
registered investment advisor of any fees for financial advisory services
rendered with regard to the assets held in the Account. Such direction
must be provided in a form and manner acceptable to the Custodian, and the
Custodian shall not incur any liability for executing such direction.
(c) Sale of Assets. Whenever it shall be necessary in accordance with
this Section 18 to sell assets in order to pay fees or expenses, the
Custodian shall request the Depositor (or the Depositor's Authorized Agent,
Beneficiary, executor, or administrator), through the Broker-Dealer, to
provide specific instructions. If such instructions are not received by
the Custodian within ten (10) business days of the Custodian's request, the
Custodian may sell any or all of the assets credited to the Custodial
Account at that time, and shall invest the portion of the sales proceeds
remaining after collection of the applicable fees and expenses therefrom in
accordance with Section 3. The Custodian shall not incur any liability on
account of its sale or retention of assets under such circumstances.
19. ESCROW. With the consent of the Custodian, the Custodial Account
may serve as an escrow arrangement to hold restricted distributions from
defined benefit plans pursuant to Section 1.401(a)(4)-5(b) of the Income
Tax Regulations. In such event, the Custodian will act in accordance with
an escrow arrangement acceptable to it and pursuant to which it will only
act upon the direction of the trustee of the distributing plan with respect
to distributions from the Account. Such agreement will remain in place
until the trustee of the distributing plan releases the Custodian from such
escrow agreement.
20. VOTING WITH RESPECT TO SECURITIES. The Custodian shall mail to the
Depositor all prospectuses and proxies that may come into the Custodian's
possession by reason of its holding of Funding Vehicles in the Custodial
Account. A Depositor may direct the Custodian as to the manner in which
any securities held in the Custodial Account shall be voted with respect to
any matters as to which the Custodian as holder of record is entitled to
vote, coming before any meeting of shareholders of the corporation which
issued such securities. All such directions shall be in writing on a form
approved by the Custodian and signed by the Depositor, and delivered to the
Custodian within the time prescribed by it. The Custodian shall vote only
those securities with respect to which it has received timely written
directions from the Depositor; provided, however, that that Custodian may
without such direction vote shares of investment companies advised by
Fidelity Management & Research Company "present" to the extent such a
vote is needed to establish a quorum.
21. LIMITATIONS ON CUSTODIAL LIABILITY AND INDEMNIFICATION. The
Depositor, the Depositor's Broker-Dealer, and the Custodian intend that the
Custodian shall have and exercise no discretion, authority, or
responsibility as to any investment in connection with the Account and the
Custodian shall not be responsible in any way for the purpose, propriety or
tax treatment of any contribution, or of any distribution, or any other
action or nonaction taken pursuant to the Depositor's direction (or that of
the Depositor's Authorized Agent, Beneficiary, executor or administrator)
through the Broker-Dealer. The Depositor who directs the investment of his
or her Account shall bear sole responsibility for the suitability of any
directed investment and for any adverse consequences arising from such an
investment, including, without limitation, the inability of the Custodian
to value or to sell an illiquid investment, or the generation of unrelated
business taxable income with respect to an investment. To the fullest
extent permitted by law, the Depositor (or the Depositor's Authorized
Agent, Beneficiary, executor or administrator, as appropriate) shall at all
times fully indemnify and save harmless the Custodian, the Company and
their agents, affiliates, successors and assigns and their officers,
directors and employees, from any and all liability arising from the
Depositor's investment direction under this Account, or from the
Broker-Dealer's execution of such direction, and from any and all other
liability whatsoever which may arise in connection with this Agreement
except liability arising under applicable law or liability arising from
gross negligence or willful misconduct on the part of the indemnified
person. Although the Custodian shall have no responsibility to give
effect to a direction from anyone other than the Depositor (or the
Depositor's Beneficiary, executor or administrator) the Custodian may, in
its discretion, establish procedures pursuant to which the Depositor may
delegate to a third party any or all of the Depositor's powers and duties
hereunder, provided, however, that in no event may anyone other than the
Depositor execute the application by which this Agreement is adopted or the
form by which the Beneficiary is appointed, and provided, further, that any
such third party to whom the Depositor has so delegated powers and duties
shall be treated as the Depositor for purposes of applying the preceding
sentences of this paragraph and the provisions of Article VIII, Section 3.
22. DELEGATION TO AGENTS. The Custodian may delegate to one or more
corporations affiliated with the Custodian the performance of record
keeping and other ministerial services in connection with the Custodial
Account, for a reasonable fee to be borne by the Custodian and not by the
Custodial Account. Any such agent's duties and responsibilities shall be
confined solely to the performance of such services, and shall continue
only for so long as the Custodian named in the Application serves as
Custodian.
23. AMENDMENT OF AGREEMENT. The Depositor, the Broker-Dealer, and
Custodian authorize and direct the Company to amend this Agreement in any
respect at any time (including retroactively), so that it may conform with
applicable provisions of the Internal Revenue Code, or with any other
applicable law as in effect from time to time, or to make such other
changes to this Agreement as the Company deems advisable. Any such
amendment shall be effected by delivery to the Custodian and mailing to the
Depositor at his or her last known address as shown in the records of the
Custodian a copy of such amendment, or a restatement of this Custodial
Agreement including any such amendment. The Depositor shall be deemed to
consent to any such amendment(s) if he or she fails to object thereto by
written notice received by the Custodian within fifteen (15) calendar days
from the date of the Company's mailing to the Depositor a copy of such
amendment(s) or restatement.
24. RESIGNATION OR REMOVAL OF CUSTODIAN. The Company may remove the
Custodian at any time, and the Custodian may resign at any time, upon
thirty (30) days' written notice to the Depositor and the Broker-Dealer.
Upon the removal or resignation of the Custodian, the Company may, but
shall not be required to, appoint a successor custodian under this
Custodial Agreement; provided that any successor custodian shall satisfy
the requirements of Section 408(a)(2) of the Code. Upon any such
successor's acceptance of appointment, the Custodian shall transfer the
assets of the Custodial Account, together with copies of relevant books and
records, to such successor custodian; provided, however, that the Custodian
is authorized to reserve such sum of money or property as it may deem
advisable for payment of any liabilities constituting a charge on or
against the assets of the Custodial Account, or on or against the Custodian
or the Company. The Custodian shall not be liable for the acts or
omissions of any successor to it. If no successor custodian is appointed
by the Company, the Custodial Account shall be terminated, and the assets
of the Account, reduced by the amount of any unpaid fees or expenses, will
be distributed to the Depositor.
25. TERMINATION OF THE CUSTODIAL ACCOUNT. The Depositor may terminate
the Custodial Account at any time upon notice to the Custodian in a manner
and form acceptable to the Custodian. Upon such termination, the
Custodian shall transfer the assets of the Custodial Account, reduced by
the amount of any unpaid fees or expenses, to the custodian or trustee of
another individual retirement account (within the meaning of Section 408 of
the Code) or other retirement plan designated by the Depositor, as
described in Article VIII, Section 10. The Custodian shall not be liable
for losses arising from the acts, omissions, delays or other inaction of
any such transferee custodian or trustee. If notice of the Depositor's
intention to terminate the Custodial Account is received by the Custodian
and the Depositor had not designated a transferee custodian or trustee for
the assets in the Account, then the Account, reduced by any unpaid fees or
expenses, will be distributed to the Depositor.
26. GOVERNING LAW. THIS AGREEMENT, AND THE DUTIES AND OBLIGATIONS OF THE
COMPANY AND THE CUSTODIAN UNDER THE AGREEMENT, SHALL BE CONSTRUED,
ADMINISTERED AND ENFORCED ACCORDING TO THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS, EXCEPT AS SUPERSEDED BY FEDERAL LAW OR STATUTE.
27. WHEN EFFECTIVE. This Agreement shall not become effective until
acceptance of the Application by or on behalf of the Custodian at its
principal office, as evidenced by a written notice to the Depositor.
NATIONAL DISCLOSURE
FINANCIAL STATEMENT
SERVICES
CORPORATION
INDIVIDUAL
RETIREMENT
ACCOUNT
The following information is provided to you in accordance with the
requirements of the Internal Revenue Code (the "Code") and should be
reviewed in conjunction with both the Custodial Agreement and the
Application for your Individual Retirement Account ("IRA"). This
information reflects the provisions of the Internal Revenue Code as are
effective January 1, 1987 and therefore applies to contributions for years
after, and to distributions taken after 1986.
RIGHT TO CANCEL You may revoke this Account, but only if you had not
received this Disclosure Statement within seven (7) calendar days prior to
the establishment of this IRA. In such an instance, revocation of the IRA
is permitted only if your request for revocation is made in writing and is
received by the Custodian within seven (7) calendar days of the
establishment date of your Account.
To revoke this account, send your written revocation request to the
Custodian of your
IRA at the address below:
Fidelity Management Trust Company
c/o National Financial Services Corporation
New Accounts Department
One World Financial Center, Tower A
200 Liberty Street
New York, NY 10281
Upon revocation, you will receive a full refund of your initial
contribution, including sales commissions (if any) and/or administrative
fees. To determine where to send a revocation request, or if you have
any questions relative to this procedure, please call your Broker-Dealer.
TYPES OF IRAS REGULAR IRA. You may make a Regular IRA contribution of
$2,000 or 100% of your compensation, whichever is less. (To determine the
amount of your income tax deduction for your IRA contribution, see "Limits
on Deductible Contributions" below.)
SPOUSAL IRA. If you and your spouse file a joint federal income tax
return, you may make a Spousal IRA contribution, even if your spouse has
received compensation during the tax year. Your contribution to a Spousal
IRA must not exceed the lesser of (1) $2,000 or (2) the excess of $2,250
(or if less, 100% of your compensation) over your contribution to your
Regular IRA. Note: If your spouse has more than $250 in compensation for
the tax year, the two of you may make a larger total contribution if you
each contribute to a Regular IRA.
ROLLOVER IRA. If you retire or change jobs, you may be eligible for a
distribution from your employer's retirement plan. To avoid mandatory
withholding of 20% of your distribution for federal income tax, and to
preserve the tax-deferred status of this distribution, you can transfer it
directly to a Rollover IRA. If you choose to have the distribution paid
directly to you, you will be subject to the 20% withholding rules. You may
still reinvest up to 100% of the total amount of your distribution which is
eligible for rollover in a Rollover IRA by replacing the 20% which was
withheld for taxes with other assets you own. You must reinvest in a
Rollover IRA within 60 days of receipt of your distribution. The amount
invested in a Rollover IRA will not be included in your taxable income for
the year in which you receive the qualified plan distribution.
DESCRIPTION Your IRA is a custodial account created for your exclusive
benefit. Your interest
OF ACCOUNT in the account is nonforfeitable.
ELIGIBILITY Employees and self-employed individuals are eligible to
contribute to an IRA even if they are already covered under another
tax-qualified plan. Employers may contribute to IRAs established by their
employees, and employers may contribute to IRAs used as part of a
Simplified Employee Pension plan ("SEP," described below).
CONTRIBUTIONS GENERAL. You may make annual cash contributions to an IRA
in any amount up to 100% of your compensation for the year or $2,000,
whichever is less. Your employer may make contributions to your account,
but, except as noted below under a SEP, the total contributions from you
and your employer may not exceed this limitation. Contributions (other
than rollover contributions described below) must be made in "cash" and not
in "kind." Therefore, securities or other assets already owned cannot be
contributed to an IRA but can be converted to cash and then contributed.
No part of your contribution may be invested in life insurance or be
commingled with other property, except in a common trust fund or common
investment fund.
SPOUSAL ACCOUNTS. If you are married and file a joint tax return, you
may make cash contributions to a "spousal" IRA in addition to your own IRA
(even if your spouse has compensation). The total amounts contributed to
your own and to your spouse's IRA may not exceed 100% of your combined
compensation or $2,250, whichever is less. In no event, however, may the
annual contribution to either your account or your spouse's account exceed
$2,000.
COMPENSATION means wages, salaries, professional fees, or other amounts
derived from or received for personal service actually rendered and
includes the earned income of a self-employed individual, and any alimony
or separate maintenance payment includible in the individual's gross
income.
ADJUSTED GROSS INCOME is determined prior to adjustments for personal
exemptions and itemized deductions. For purposes of determining the IRA
deduction (see below), adjusted gross income is modified to take into
account deductions for IRA contributions, taxable benefits under the Social
Security Act and the Railroad Retirement Act, and passive loss limitations
under Code Section 86.
TIME OF CONTRIBUTION. You may make contributions to your IRA any time up
to and including the due date for filing your tax return for the year. You
may continue to make annual contributions to your IRA up to (but not
including) the calendar year in which you reach age 70 1/2. You may
continue to make annual contributions to your spouse's IRA up to (but not
including) the calendar year in which your spouse reaches age 70 1/2.
ROLLOVER IRA CONTRIBUTIONS. Qualifying distributions from tax-qualified
plans (for example, pension, profit-sharing, and Keogh plans) may be
eligible for rollover into your IRA. However, strict limitations apply to
such rollovers and you should seek competent tax advice regarding these
restrictions.
SIMPLIFIED EMPLOYEE PENSION PLAN CONTRIBUTIONS. A separate IRA may be
established for use by your employer as part of a SEP arrangement. Your
employer may contribute to your SEP-IRA up to a maximum of 15% of your
compensation or $30,000, whichever is less. If your SEP-IRA is used as
part of a salary reduction SEP, you may elect to reduce your annual
compensation, up to a maximum of 15% of your compensation or $7,000
(indexed to reflect cost-of-living adjustments), whichever is less, and
have your employer contribute that amount to your SEP-IRA. If your
employer maintains both a salary reduction SEP and a regular SEP, the
annual contribution limit to both SEPs together is 15% of your compensation
or $30,000, whichever is less. You may contribute, in addition to the
amount contributed by your employer to your SEP-IRA, an amount not in
excess of the limits referred to under "General" above. It is your and
your employer's responsibility to see that contributions in excess of
normal IRA limits are made under a valid SEP and are, therefore, proper.
EXCESS CONTRIBUTIONS. Contributions which exceed the allowable maximum
per year are considered excess contributions. A nondeductible penalty tax
of 6% of the excess amount contributed will be incurred for each year in
which the excess contribution remains in your IRA. If you make a
contribution (or your employer makes a SEP contribution, including a salary
reduction contribution, on your behalf) in excess of your allowable maximum
for any taxable year, you may correct the excess contribution and avoid the
6% penalty tax for that year by withdrawing the excess contribution and its
earnings on or before the date, including extensions, for filing your tax
return for that year.
The amount of the excess contribution withdrawn will not be considered a
premature distribution nor (except in the case of a salary reduction
contribution) be taxed as ordinary income, but the earnings withdrawn will
be taxed as ordinary income to you. Alternatively, excess contributions
for one year may be carried forward and reported in the next year to the
extent that the excess, when aggregated with your IRA contribution (if any)
for the subsequent year, does not exceed the maximum amount for that year.
The 6% excise tax will be imposed on excess contributions in each year they
are neither returned nor carried forward.
DEDUCTIBLE IRA If you are not married and are not an active participant in
an employer-maintained
CONTRIBUTIONS retirement plan, you may make a fully deductible IRA
contribution in any amount up to 100% of your compensation for the year or
$2,000, whichever is less. The same limits apply if you are married and
you file a joint return with your spouse, and neither of you is an active
participant in an employer-maintained retirement plan. An
"employer-maintained retirement plan" includes any of the following types
of retirement plans:
- a qualified pension, profit-sharing, or stock bonus plan established
in
accordance with IRC (sub section)401 (a) or 401 (k).
- a Simplified Employee Pension Plan (SEP) (IRC (sub section)408(k)).
- a deferred compensation plan maintained by a governmental unit or
agency.
- tax sheltered annuities and custodial accounts (IRC (sub
section)403(b) and 403(b)(7)).
- a qualified annuity plan under IRC (sub section)403(a).
You are an active participant in an employer maintained retirement plan
even if you do not have a vested right to any benefits under your
employer's plan. Whether you are an "active participant" depends on the
type of plan maintained by your employer. Generally, you are considered an
active participant in a defined contribution plan if an employer
contribution or forfeiture was credited to your account under the plan
during the year. You are considered an active participant in a defined
benefit plan if you are eligible to participate in the plan, even though
you elect not to participate. You are also treated as an active
participant for a year during which you make a voluntary or mandatory
contribution to any type of plan, even though your employer makes no
contribution to the plan.
If you (or your spouse, if you are filing a joint tax return) are covered
by an employer-maintained retirement plan, your IRA contribution is tax
deductible only to the extent that your adjusted gross income does not
exceed the deductibility limits discussed below.
LIMITS ON The deduction of your IRA contribution is reduced
proportionately for adjusted
DEDUCTIBLE gross income which exceeds the applicable dollar amount. The
applicable dollar
CONTRIBUTIONS amount for an individual is $25,000 and $40,000 for married
couples filing a joint tax return. The applicable dollar limit for married
individuals filing separate returns is $0. If your adjusted gross income
exceeds the applicable dollar amount by not more than $10,000, you may make
a deductible IRA contribution (but the deductible amount will be less than
$2,000). To determine the amount of your deductible contribution, use the
following calculation:
1. Subtract the applicable dollar amount from your adjusted gross income.
If the result is $10,000 or more, stop; you can only make a nondeductible
contribution.
2. Subtract the above figure from $10,000.
3. Divide the above figure by $10,000.
4. Multiply $2,000 by the fraction resulting from the above steps. This
is your maximum deductible contribution limit.
If the deduction limit is not a multiple of $10, then it is to be rounded
up to the next highest $10. There is a $200 minimum floor on the deduction
limit if your adjusted gross income does not exceed $35,000 (for a single
taxpayer), $50,000 (for married taxpayers filing jointly) or $10,000 (for a
married taxpayer filing separately).
Adjusted gross income for married couples filing a joint tax return is
calculated by aggregating the compensation of both spouses. The deduction
limitations on IRA contributions, as determined above, then apply to each
spouse.
NONDEDUCTIBLE Even if your income exceeds the limits described above, you
may make a
IRA contribution to your IRA up to the lesser of $2,000 or 100% of your
compensation. To
CONTRIBUTIONS the extent that your contribution exceeds the deductible
limits, it will be nondeductible. Earnings on all IRA contributions are
tax deferred until distribution.
You are required to designate on your tax return the extent to which your
IRA contribution is nondeductible. Therefore, your designation must be
made by the due date (including extensions) for filing your tax return. If
you overstate the amount of nondeductible contributions for a taxable year,
a penalty of $100 will be assessed for each overstatement unless you can
show that the overstatement was due to a reasonable cause.
INVESTMENT The assets in your IRA will be invested in accordance with your
instructions. As
OF ACCOUNT with any investment, you should read any publicly available
information (e.g., prospectuses, annual reports, the terms and conditions
of any insurance annuity contract, etc.) which would enable you to make an
informed investment decision.
If no investment instructions are received from you, or if the
instructions received are, in the opinion of the Custodian, unclear, you
may be requested to provide instructions. In the absence of such
instructions, your investment may be invested in Money Market Shares, which
strive to maintain a stable $1 per share balance . Keep in mind that with
respect to investments in regulated investment company shares (i.e., mutual
funds) or other securities held in your account, growth in the value of
your account cannot be guaranteed or projected.
DISTRIBUTIONS GENERAL. Distributions from your IRA should begin no
earlier than the date you reach age 59 1/2 (except in cases of your earlier
disability or death) and no later than the April 1 following the year in
which you reach age 70 1/2. Distributions from your account will be
included in your gross income for federal income tax purposes for the year
in which you receive them.
PREMATURE DISTRIBUTIONS. To the extent they are included in income,
distributions from your IRA made before you reach age 59 1/2 will be
subject to a 10% nondeductible penalty tax (in addition to being taxable as
ordinary income) unless the distribution is an exempt withdrawal of an
excess contribution, or the distribution is rolled over to another
qualified retirement plan, or the distribution is made on account of your
death or disability, or the distribution is one of a scheduled series of
payments over your life or life expectancy or the joint life expectancies
of yourself and your Beneficiary.
LATEST TIME TO WITHDRAW. You must begin receiving distributions of the
assets in your account by April 1 of the calendar year following the
calendar year in which you reach age 70 1/2. Subsequent distributions must
be made by December 31 of each year. If you maintain more than one IRA,
you may take from any of your IRAs the aggregate amount to be withdrawn .
MINIMUM DISTRIBUTIONS. Once distributions are required to begin, they
must not be less than the amount each year (determined by actuarial tables)
which would exhaust the value of the account over the required distribution
period, which is generally your life expectancy or the joint life and last
survivor expectancy of you and an individual you have designated as your
Beneficiary. You will be subject to a 50% excise tax on the amount by
which the distribution you actually received in any year falls short of the
minimum distribution required for the year.
METHODS OF DISTRIBUTION. Assets may be distributed from your account
according to one or more of the following methods selected by you:
(A) total distribution
(B) distribution over a certain period
(C) purchase of an annuity contract
(See Article IV of your IRA Custodial Agreement for a full description of
these distribution methods.)
DISTRIBUTION UPON DEATH. The assets remaining in your Account will be
distributed upon your death to the beneficiary(ies) named by you on record
with the Custodian. If there is no beneficiary designated for your Account
in the Custodian's records, or if the beneficiary you had designated dies
before you do, your Account will be paid to your surviving spouse, or if
none, to your estate.
If your spouse was your primary beneficiary and you had started to
receive distributions from your account, but die before receiving the
balance of your account, your spouse has several options. Your spouse can
either keep receiving distributions from your account at least as rapidly,
or roll over all or part of your account into an IRA in his or her name.
If distributions from your account had not yet begun, your spouse may defer
taking distributions until April 1st of the year you would have turned 70
1/2, and then receive distributions over his or her life expectancy, or
roll over the account into an IRA in their name, and treat the IRA as his
or her own.
If your beneficiary is not your spouse, and distributions had begun from
your account, your beneficiary may continue to receive them at least as
rapidly as the payment schedule you had established. If distributions had
not yet begun, your beneficiary must deplete your account within 5 years of
your death, or start taking distributions from your account within one year
of your death over their own life expectancy.
DISTRIBUTION OF NONDEDUCTIBLE CONTRIBUTIONS. To the extent that a
distribution constitutes a return of your nondeductible contributions, it
will not be included in your income. The amount of any distribution
excludable from income is the portion that bears the same ratio to the
total distribution that your aggregate nondeductible contributions bear to
the balance at the end of the year (calculated after adding back
distributions during the year) of your IRA. For this purpose, all of your
IRAs are treated as a single IRA. Furthermore, all distributions from an
IRA during a taxable year are to be treated as one distribution. The
aggregate amount of distributions excludable from income for all years is
not to exceed the aggregate nondeductible contributions for all calendar
years. There is a 10% additional income tax assessed against premature
distributions to the extent such distributions are includible in income
(See "Premature Distributions" above).
EXCESS DISTRIBUTIONS. There is a 15% excise tax assessed against annual
distributions from tax-favored retirement plans, including IRAs, which
exceed the greater of $150,000 or $112,500 (indexed to reflect
cost-of-living increases). To determine whether you have distributions in
excess of this limit, you must aggregate the amounts of all distributions
received by you during the calendar year from all retirement plans,
including IRAs. Please consult with your tax advisor for more complete
information, including the availability of favorable elections.
ROLLOVER TREATMENT. Distributions from your IRA representing all or any
part of the assets in your IRA account are also eligible for rollover
treatment. You may roll over all or any part of the same property from
this distribution of assets, within 60 days of receipt, into another IRA or
individual retirement annuity, and maintain the tax-deferred status of
these assets. A 60-day rollover can be made once every twelve months per
IRA.
DIVORCE OR If all or any portion of your IRA is awarded to a former
spouse pursuant to divorce
LEGAL or legal separation, such portion can be transferred to an IRA in
the receiving
SEPARATION spouse's name. This transaction can be processed without any
tax implications to you provided a written instrument executed by a court
incident to the divorce or legal separation in accordance with Section
408(d)(6) of the Code is received by the Custodian, and specifically
directs such transfer. In addition, you must also provide the Custodian
with a letter of instruction and an IRA application executed by the
receiving spouse, if she or he doesn't already maintain an NFSC IRA through
your broker-dealer.
FEES AND Fees and other expenses of maintaining your IRA account are
described in
EXPENSES the Application and may be changed from time to time, as provided
in the Custodial Agreement.
PROHIBITED If any of the events prohibited by Section 4975 of the Code
(such as any sale,
TRANSACTIONS exchange or leasing of any property between you and your IRA)
occurs during the existence of your IRA, your account will be disqualified
and the entire balance in your account will be treated as if distributed to
you as of the first day of the year in which the prohibited event occurs.
This "distribution" would be subject to ordinary income tax and, if you
were under age 59 1/2 at the time, to the 10% penalty tax on premature
distributions.
If you or your Beneficiary use (pledge) all or any part of your IRA as
security for a loan, then the portion so pledged will be treated as if
distributed to you, and will be taxable to you as ordinary income and
subject to the 10% penalty during the year in which you make such a pledge.
OTHER TAX NO SPECIAL TAX TREATMENT. No distribution to you or anyone else
from your
CONSIDERATIONS account can qualify for capital gain treatment under the
federal income tax laws. It is taxed to the person receiving the
distribution as ordinary income. (Similarly, you are not entitled to the
five-year averaging rule for lump sum distributions available to persons
receiving distributions from certain other types of retirement plans.)
GIFT TAX. If you elect during your lifetime to have all or any part of
your account payable to a Beneficiary at or after your death, the election
will not subject you to any gift tax liability.
TAX WITHHOLDING. Federal income tax will be withheld from distributions
you receive from an IRA unless you elect not to have tax withheld.
However, if IRA distributions are to be delivered outside of the United
States, this tax is mandatory and you may not elect otherwise unless you
certify to the Custodian that you are not a U.S. citizen residing overseas
or a "tax avoidance expatriate" as described in Code Section 877. Federal
income tax will be withheld at the rate of 10%
. REPORTING FOR TAX PURPOSES. Contributions to your IRA must be reported
on your tax Form 1040 or 1040A for the taxable year contributed. You will
be required to designate your IRA contribution as deductible or
nondeductible. You are also required to attach a Form 8606 to your 1040 or
1040A form. Form 8606 is used to report nondeductible IRA contributions
and to calculate the basis (nontaxable part) of your IRA. Other reporting
will be required by you in the event that special taxes or penalties
described herein are due. You must also file Treasury Form 5329 with the
IRS for each taxable year in which the contribution limits are exceeded, a
premature distribution takes place, or less than the required minimum
amount is distributed from your IRA. The Tax Reform Act of 1986 also
requires you to report the amount of all distributions you received from
your IRA and the aggregate account balance of all IRAs as of the end of the
calendar year.
IRS APPROVAL The form of your Individual Retirement Account has been
approved by the Internal Revenue Service. The Internal Revenue Service
approval is a determination only as to the form and does not represent a
determination of the merits of the Account. You may obtain further
information with respect to your IRA from any district office of the
Internal Revenue Service.
FIDELITY CUSTODIAL UNDER SECTION 408(A) OF THE
PORTFOLIO AGREEMENT INTERNAL REVENUE CODE
ADVISORY
SERVICES
INDIVIDUAL
RETIREMENT
ACCOUNT
The Depositor whose name appears on the attached Application is
establishing an individual retirement account (under Section 408(a) of the
Internal Revenue Code) to provide for his or her retirement and for the
support of his or her beneficiaries after death.
The Custodian named on the attached Application has given the Depositor
the Disclosure Statement required under the Income Tax Regulations under
Section 408(i) of the Code.
The Depositor has deposited with the Custodian an initial contribution in
cash, as set forth in the attached Application.
The Depositor and the Custodian make the following Agreement:
ARTICLE I The Custodian may accept additional cash contributions on behalf
of the Depositor for a tax year of the Depositor. The total cash
contributions are limited to $2,000 for the tax year unless the
contribution is a rollover contribution described in Section 402(c) of the
Code (but only after December 31, 1992), 403(a)(4), 403(b)(8), 408(d)(3),
or an employer contribution to a Simplified Employee Pension plan as
described in Section 408(k). Rollover contributions before January 1,
1993, include rollovers described in Section 402(a)(5), 402(a)(6),
402(a)(7), 403(a)(4), 403(b)(8), 408(d)(3), or an employer contribution to
a Simplified Employee Pension Plan as described in Section 408(k).
ARTICLE II The Depositor's interest in the balance in the Custodial
Account is nonforfeitable.
ARTICLE III 1. No part of the custodial funds may be invested in life
insurance contracts, nor may the assets of the Custodial Account be
commingled with other property except in a common trust fund or common
investment fund (within the meaning of Section 408(a)(5) of the Code).
2. No part of the custodial funds may be invested in collectibles (within
the meaning of Section 408(m) of the Code) except as otherwise permitted by
Section 408(m)(3) which provides an exception for certain gold and silver
coins and coins issued under the laws of any state.
ARTICLE IV 1. Notwithstanding any provision of this agreement to the
contrary, the distribution of the Depositor's interest in the Custodial
Account shall be made in accordance with the following requirements and
shall otherwise comply with Section 408(a)(6) and Proposed Regulations
Section 1.408-8, including the incidental death benefit provisions of
Proposed Regulations Section 1.401(a)(9)-2, the provisions of which are
incorporated by reference.
2. Unless otherwise elected by the time distributions are required to
begin to the Depositor under paragraph 3, or to the surviving spouse under
paragraph 4, other than in the case of a life annuity, life expectancies
shall be recalculated annually. Such election shall be irrevocable as to
the Depositor and the surviving spouse and shall apply to all subsequent
years. The life expectancy of a nonspouse beneficiary may not be
recalculated.
3. The Depositor's entire interest in the Custodial Account must be, or
begin to be, distributed by the Depositor's required beginning date (April
1 following the calendar year end in which the Depositor reaches age 70
1/2). By that date, the Depositor may elect, in a manner acceptable to the
Custodian, to have the balance in the Custodial Account distributed in:
(a) A single-sum payment.
(b) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the life of the Depositor.
(c) An annuity contract that provides equal or substantially equal monthly,
quarterly, or annual payments over the joint and last survivor lives of the
Depositor and his or her designated Beneficiary.
(d) Equal or substantially equal annual payments over a specified period
that may not be longer than the Depositor's life expectancy.
(e) Equal or substantially equal annual payments over a specified period
that may not be longer than the joint life and last survivor expectancy of
the Depositor and his or her designated Beneficiary.
4. If the Depositor dies before his or her entire interest is distributed
to him or her, the entire remaining interest will be distributed as
follows:
(a) If the Depositor dies on or after distribution of his or her
interest has begun, distribution must continue to be made in accordance
with paragraph 3.
(b) If the Depositor dies before distribution of his or her interest
has begun, the entire remaining interest will, at the election of the
Depositor or, if the Depositor has not so elected, at the election of the
Beneficiary or Beneficiaries, either
(i) Be distributed by the December 31 of the year containing the fifth
anniversary of the Depositor's death, or
(ii) Be distributed in equal or substantially equal payments over the
life or life expectancy of the designated Beneficiary or Beneficiaries
starting by December 31 of the year following the year of the Depositor's
death. If, however, the Beneficiary is the Depositor's surviving spouse,
then this distribution is not required to begin before December 31 of the
year in which the Depositor would have turned age 70 1/2.
(c) Except where distribution in the form of an annuity meeting the
requirements of Section 408(b)(3) and its related regulations has
irrevocably commenced, distributions are treated as having begun on the
Depositor's required beginning date, even though payments may actually have
been made before that date.
(d) If the Depositor dies before his or her entire interest has been
distributed and if the Beneficiary is other than the surviving spouse, no
additional cash contributions or rollover contributions may be accepted in
the account.
5. In the case of distribution over life expectancy in equal or
substantially equal annual payments, to determine the minimum annual
payment for each year, divide the Depositor's entire interest in the
Custodial Account as of the close of business on December 31 of the
preceding year by the life expectancy of the Depositor (or the joint life
and last survivor expectancy of the Depositor and the Depositor's
designated Beneficiary, or the life expectancy of the designated
Beneficiary, whichever applies). In the case of distributions under
paragraph 3, determine the initial life expectancy (or joint life and last
survivor expectancy) using the attained ages of the Depositor and
designated Beneficiary as of their birthdays in the year the Depositor
reaches age 70 1/2. In the case of a distribution in accordance with
paragraph 4b(ii), determine life expectancy using the attained age of the
designated Beneficiary as of the Beneficiary's birthday in the year
distributions are required to commence.
6. The owner of two or more individual retirement accounts may use the
"alternative method" described in Notice 88-38, 1988-1 C.B. 524, to satisfy
the minimum distribution requirements described above. This method permits
an individual to satisfy these requirements by taking from one individual
retirement account the amount required to satisfy the requirement for
another.
ARTICLE V 1. The Depositor agrees to provide the Custodian with
information necessary for the Custodian to prepare any reports required
under Section 408(i) of the Code and Regulations Sections 1.408-5 and
1.408-6.
2. The Custodian agrees to submit reports to the Internal Revenue Service
and the Depositor prescribed by the Internal Revenue Service.
ARTICLE VI Notwithstanding any other articles which may be added or
incorporated, the provisions of Articles I through Ill and this sentence
will be controlling. Any additional articles that are not consistent with
Section 408(a) of the Code and the related regulations will be invalid.
ARTICLE VII This Agreement will be amended from time to time to comply
with the provisions of the Code and related regulations. Other amendments
may be made with the consent of the Depositor and the Custodian.
ARTICLE VIII 1. DEFINITIONS. The following definitions shall apply to
terms used in this Article VIII:
(a) "Account" or "Custodial Account" means the custodial account
established hereunder for the benefit of the Depositor.
(b) "Agreement" means the Fidelity Portfolio Advisory Services IRA
Custodial Agreement ("PAS IRA"), including the information and provisions
set forth in any Account Application that goes with this Agreement. This
Agreement, including the Account Application and any designation of
Beneficiary filed with the Custodian, may be proved either by an original
copy or by a reproduced copy thereof, including, without limitation, a copy
reproduced by photocopying, facsimile transmission, or electronic imaging.
(c) "Application" shall mean the Application by which this Agreement,
as may be amended from time to time, is established between the Depositor
and the Custodian. The statements contained therein shall be incorporated
into this Agreement.
(d) "Authorized Agent" means the person or persons authorized by the
Depositor, on a signed form acceptable to and filed with the Custodian, to
purchase or sell Shares in the Depositor's Account.
(e) "Beneficiary" means the person or persons (including a trust or
estate) designated as such by the Depositor on a signed form acceptable to
and filed with the Custodian pursuant to Article VIII, Section 7 of this
Agreement.
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(g) "Company" shall mean FMR Corp., a Massachusetts corporation, or any
successor or affiliate thereof to which FMR Corp. may, from time to time,
delegate or assign any or all of its rights or responsibilities under this
Agreement.
(h) "Custodian" shall mean Fidelity Trust Company of Salt Lake City,
Utah, or its successor, as specified in the Account Application.
(i) "Depositor" means the person named in the Account Application.
(j) "Investment Company Shares" or "Shares" shall mean shares of stock,
trust certificates, or other evidences of interest (including fractional
shares) in any corporation, partnership, trust, or other entity registered
under the Investment Company Act of 1940 for which Fidelity Management
& Research Company, a Massachusetts corporation, or its successors or
affiliates, serves as investment advisor.
(k) "Money Market Shares" shall mean any Investment Company Shares which
are issued by a money market mutual fund.
2. LNVESTMENT OF CONTRIBUTIONS. Contributions to the Account may be
invested only in Investment Company Shares, and shall be invested as
follows:
(a) General. Contributions will be invested in accordance with the
Depositor's written instructions in the Application, and with subsequent
instructions given by the Depositor or the Authorized Agent appointed by
the Depositor (or, following the death of the Depositor, his or her
Beneficiary) to the Custodian in a manner acceptable to the Custodian. By
giving such instructions to the Custodian, such person will be deemed to
have acknowledged receipt of the then current prospectus, if any, for any
Investment Company Shares in which the Depositor (or the Authorized Agent
appointed by the Depositor), directs the Custodian to invest assets in his
or her Account. All charges incidental to carrying out such instructions
shall be charged and collected in accordance with Article VIII, Section 17.
All Investment Company Shares in the Custodial Account shall be held in the
name of the Custodian or its nominee or nominees.
(b) Initial Contribution. The Custodian will invest all contributions
promptly after their receipt, as set forth below; provided, however, that
the Custodian shall not be obligated to invest the Depositor's initial
contribution to his Custodial Account as indicated on the Application,
until at least seven (7) calendar days have elapsed from the date of
acceptance of the Application by or on behalf of the Custodian.
(c) Unclear Instructions. If the Depositor's Custodial Account at any
time contains cash as to which investment instructions in accordance with
this Section 2 have not been received by the Custodian, or if the Custodian
receives instructions as to investment selection or allocation which are,
in the opinion of the Custodian, not clear, the Custodian may request
instructions from the Depositor (or the Depositor's Authorized Agent,
Beneficiary, executor or administrator). Pending receipt of such
instructions any cash may be invested in Money Market Shares, and any other
investment may remain unchanged. The Custodian shall not be liable to
anyone for any loss resulting from delay in investing such cash or in
implementing such instructions. Notwithstanding the above, the Custodian
may, but need not, for administrative convenience maintain a balance of up
to $100 of uninvested cash in the Depositor's Custodial Account.
(d) Minimum Investment. Any other provision hereof to the contrary
notwithstanding, the Depositor (or the Depositor's Authorized Agent,
Beneficiary, executor, or administrator) may not direct that any part or
all of the Custodial Account be invested in Investment Company Shares
unless the aggregate amount to be invested is at least such amount as the
Custodian shall establish from time to time.
(e) No Duty. The Custodian shall not have any duty to question the
directions of a Depositor (or the Depositor's Authorized Agent,
Beneficiary, executor, or administrator) in the investment of his or her
Custodial Account or to advise the Depositor regarding the purchase,
retention or sale of assets credited to the Custodial Account. The
Custodian, or any of its affiliates, shall not be liable for any loss
which results from the Depositor's (or the Depositor's Authorized Agent,
Beneficiary, executor, or administrator) exercise of control (whether by
his or her action or inaction) over the Custodial Account.
3. CONTRIBUTIONS BY DIVORCED OR SEPARATED SPOUSES. All alimony and
separate maintenance payments received by a divorced or separated spouse,
and taxable under Section 71 of the Code, shall be considered compensation
for purposes of computing the maximum annual contribution to the Custodial
Account, and the limitations for contributions by a divorced or separated
spouse shall be the same as for any other individual.
4. TIMING OF CONTRIBUTIONS. A contribution is deemed to have been made
on the last day of the preceding taxable year if the contribution is made
by the deadline for filing the Depositor's income tax return (not including
extensions), or such later date as may be determined by the Department of
the Treasury or the IRS, provided the Depositor (or the Depositor's
Authorized Agent) designates, in a manner acceptable to the Custodian, the
contribution as a contribution for the preceding taxable year.
5. ROLLOVER CONTRIBUTIONS. The Custodian will accept for the Custodial
Account all rollover contributions which consist of cash, and it may, but
shall be under no obligation to, accept all or any part of any other
rollover contribution. The Depositor shall designate each rollover
contribution as such to the Custodian, and by such designation shall
confirm to the Custodian that a proposed rollover contribution qualifies as
a rollover contribution within the meaning of Sections 402(a)(5),
402(a)(6), 402(a)(7), 402(c), 403(a)(4), 403(b)(8), and/or 408(d)(3) of the
Code. Submission by or on behalf of a Depositor of a rollover contribution
consisting of assets other than cash or property permitted as an investment
under this Article VIII shall be deemed to be the instruction of the
Depositor to the Custodian that, if such rollover contribution is accepted,
the Custodian will use its best efforts to sell those assets for the
Depositor's account, and to invest the proceeds of any such sale in
accordance with this Section 2. To the extent permitted by law, the
Custodian shall not be liable to anyone for any loss resulting from such
sale or delay in effecting such sale; or for any loss of income or
appreciation with respect to the proceeds thereof after such sale and prior
to investment pursuant to Section 2; or for any failure to effect such sale
if such property proves not readily marketable in the ordinary course of
business. All brokerage and other costs incidental to the sale or
attempted sale of such property will be charged to the Custodial Account in
accordance with Article VIII, Section 17.
6. REINVESTMENT OF EARNINGS. In the absence of other instructions
pursuant to Section 2, distributions of every nature received in respect of
the assets in a Depositor's Custodial Account shall be reinvested as
follows:
(a) in the case of a distribution in respect of Investment Company
Shares which may be received, at the election of the shareholder, in cash
or in additional Shares of such Investment Company, the Custodian shall
elect to receive such distribution in additional Investment Company Shares;
(b) in the case of a cash distribution which is received in respect of
Investment Company Shares, the Custodian shall reinvest such cash in
additional Shares of that Investment Company;
(c) in the case of any other distribution of any nature received in
respect of assets in the Custodial Account, the distribution shall be
liquidated to cash, if necessary, and shall be reinvested in accordance
with the Depositor's instructions pursuant to Section 2.
7. DESIGNATION OF BENEFICIARY. A Depositor may designate a Beneficiary
as follows:
(a) General. A Depositor may designate a Beneficiary or Beneficiaries
at any time, and any such designation may be changed or revoked at any
time, by written designation signed by the Depositor on a form acceptable
to, and filed with, the Custodian; provided, however, that such
designation, or change or revocation of a prior designation, shall not be
effective unless it is received and accepted by the Custodian no later than
thirty (30) days after the death of the Depositor, and provided further
that the latest such designation or change or revocation shall control. If
the Depositor had not by the date of his or her death properly designated a
Beneficiary in accordance with the preceding sentence, or if no designated
Beneficiary survives the Depositor, the Depositor's Beneficiary shall be
his or her surviving spouse, but if he or she has no surviving spouse, his
or her estate. Unless otherwise specified in the Depositor's designation
of Beneficiary, if a Beneficiary dies before receiving his or her entire
interest in the Custodial Account, his or her remaining interest in the
Custodial Account shall be paid to the Beneficiary's estate.
(b) Minors. If a distribution upon the death of the Depositor is
payable to a person known by the Custodian to be a minor or otherwise under
a legal disability, the Custodian may, in its absolute discretion, make
all, or any part of the distribution to (a) a parent of such person, (b)
the guardian , conservator, or other legal representative, wherever
appointed, of such person, (c) a custodial account established under a
Uniform Gifts to Minors Act, Uniform Transfers to Minors Act, or similar
act, (d) any person having control or custody of such person, or (e) to
such person directly.
(c) QTIPs and QDOTs. A Depositor may designate as Beneficiary of his or
her Account a trust for the benefit of his or her surviving spouse that is
intended to satisfy the conditions of Sections 2056(b)(7) or 2056A of the
Code ("a Spousal Trust"). In that event, if the Depositor is survived by
his or her spouse, the following provisions shall apply to the Account,
from and after the death of the Depositor until the death of the
Depositor's surviving spouse: (1) all of the income of the Account shall
be paid to the Spousal Trust annually or at more frequent intervals, and
(2) no person shall have the power to appoint any part of the Account to
any person other than the Spousal Trust. To the extent permitted by
Section 401(a)(9) of the Code, as determined by the trustee(s) of the
Spousal Trust, the surviving spouse of a Depositor who has designated a
Spousal Trust as his or her Beneficiary may be treated as his or her
"designated beneficiary" for purposes of the distribution requirements of
that Code section. The Custodian shall have no responsibility to determine
whether such treatment is appropriate.
(d) Judicial Determination. Anything to the contrary herein
notwithstanding, in the event of reasonable doubt respecting the proper
course of action to be taken, the Custodian may in its sole and absolute
discretion resolve such doubt by judicial determination which shall be
binding on all parties claiming any interest in the Account. In such event
all court costs, legal expenses, reasonable compensation of time expended
by the Custodian in the performance of its duties, and other appropriate
and pertinent expenses and costs shall be collected by the Custodian from
the Custodial Account in accordance with Article VIII, Section 17.
(e) No Duty. The Custodian shall not have any duty to question the
directions of a Depositor (or the Depositor's Authorized Agent,
Beneficiary, executor or administrator) as to the time(s) and amount(s) of
distributions from the Custodial Account, or to advise him or her regarding
the compliance of such distributions with Section 401(a)(9), Section
2056(b)(7) or Section 2056A of the Code.
8. PAYROLL DEDUCTION. Subject to approval of the Custodian, a Depositor
may choose to have contributions to his or her Custodial Account made
through payroll deduction if the Account is maintained as part of a program
sponsored by the Depositor's employer. In order to establish payroll
deduction, the Depositor must authorize his or her employer to deduct a
fixed amount from each pay period's salary up to a total amount of $2,000
per year, unless such contributions are being made pursuant to a Simplified
Employee Pension Plan described under Section 408(k) of the Code, in which
case, contributions can be made up to 15% of the Depositor's earned income,
up to $30,000 per year. Contribution's to the Custodial Account of the
Depositor's spouse may be made through payroll deduction if the employer
authorizes the use of payroll deductions for such contributions, but such
contributions must be made to a separate Account maintained for the benefit
of the Depositor's spouse. The payroll deduction authorization shall
continue in force until such time as written amendment or revocation is
received by the Depositor's employer and the Custodian within reasonable
advance notice.
9. TRANSFERS TO OR FROM THE ACCOUNT. Assets held on behalf of the
Depositor in another IRA may be transferred by the trustee or custodian
thereof directly to the Custodian, in a form and manner acceptable to the
Custodian, to be held in the Custodial Account for the Depositor under this
Agreement. The Custodian will not be responsible for any losses the
Depositor may incur as a result of the timing of any transfer from another
trustee or custodian that are due to circumstances reasonably beyond the
control of the Custodian.
Assets held on behalf of the Depositor in the Account may be transferred
directly to a trustee or custodian of another IRA established for the
Depositor, if so directed by the Depositor in a form and manner acceptable
to the Custodian; provided, however, that it shall be the Depositor's
responsibility to ensure that any minimum distribution required by Section
401(a)(9) of the Code is made prior to giving the Custodian such transfer
instructions.
10. DISTRIBUTIONS FROM THE ACCOUNT. Subject to Section 12 below,
distributions from the Account will be made only upon the request of the
Depositor (or the Depositor's Authorized Agent, Beneficiary, executor, or
administrator) to the Custodian in such form and in such manner as is
acceptable to the Custodian. For distributions requested pursuant to
Article IV, life expectancy and joint life and last survivor expectancy are
calculated based on information provided by the Depositor (or the
Depositor's Authorized Agent, Beneficiary, executor, or administrator)
using the Expected Return Multiples in Section 1.72-9 of the Income Tax
Regulations. The Custodian shall not incur any liability for errors in
such calculations as a result of reliance on information provided by the
Depositor (or the Depositor's Authorized Agent, Beneficiary, executor, or
administrator). Without limiting the generality of the foregoing, the
Custodian is not obligated to make any distribution, including a minimum
required distribution as specified in Article IV above, absent a specific
written direction from the Depositor (or the Depositor's Authorized Agent,
Beneficiary, executor, or administrator) to do so.
11. ACTIONS IN THE ABSENCE OF SPECIFIC INSTRUCTIONS. If the Custodian
receives no response to communications sent to the Depositor (or the
Depositor's Authorized Agent, Beneficiary, executor, or administrator) at
the Depositor's (or the Depositor's Authorized Agent, Beneficiary,
executor, or administrator's) last known address as shown in the records of
the Custodian, or if the Custodian determines, on the basis of evidence
satisfactory to it, that the Depositor is legally incompetent, the
Custodian thereafter may make such determinations with respect to
distributions, investments, and other administrative matters arising under
this Agreement as it considers reasonable, notwithstanding any prior
instructions or directions given by or on behalf of the Depositor. Any
determinations so made shall be binding on all persons having or claiming
any interest under the Custodial Account, and the Custodian shall not incur
any obligation or liability for any such determination made in good faith,
for any action taken in pursuance thereof, or for any fluctuations in the
value of the Account in the event of a delay resulting from the Custodian's
good faith decision to await additional information or evidence.
12. RESPONSIBILITY AS TO CONTRIBUTIONS OR DISTRIBUTIONS. The Custodian
will not under any circumstances be responsible for the timing, purpose or
propriety of any contribution or of any distribution made hereunder, nor
shall the Custodian incur any liability or responsibility for any tax
imposed on account of any such contribution or distribution.
Notwithstanding Section 10 above, the Custodian is empowered to make a
distribution absent such an instruction if directed to do so pursuant to a
court order of any kind and the Custodian shall not in such event incur any
liability for acting in accordance with such court order.
13. WRITTEN INSTRUCTIONS AND NOTICES. All written notices or
communications required to be given by the Custodian to the Depositor shall
be deemed to have been given when sent by mail to the last known address of
the Depositor in the records of the Custodian. All written instructions,
notices, or communications required to be given by the Depositor to the
Custodian shall be mailed or delivered to the Custodian at its designated
mailing address as specified on the Application, and no such instruction,
notice, or communication shall be effective until the Custodian's actual
receipt thereof.
14. EFFECT OF WRITTEN INSTRUCTIONS AND NOTICES. The Custodian shall be
entitled to rely conclusively upon, and shall be fully protected in any
action or non-action taken in good faith in reliance upon, any written
instructions, notices, communications or instruments believed to have been
genuine and properly executed. Any such notification may be proved by
original copy or reproduced copy thereof, including, without limitation, a
copy produced by photocopying, facsimile transmission, or electronic
imaging. For this purpose, the Custodian may (but is not required to) to
give the same effect to a telephonic instruction as it gives to a written
instruction, and the Custodian's action in doing so shall be protected to
the same extent as if such telephonic instructions were, in fact, a written
instruction. Any such telephonic instruction may be proved by audio
recorded tape.
15. TAX MATTERS.
(a) General. The Custodian shall submit required reports to the IRS and
the Depositor (or the Depositor's Authorized Agent, Beneficiary, executor,
or administrator); provided, however, that such individual shall prepare
any return or report required in connection with maintaining the Account,
or as a result of liability incurred by the Account for tax on unrelated
business taxable income, or windfall profits tax.
(b) Annual Report. As soon as is practicable after the close of each
taxable year, and whenever required by the Code, the Custodian shall
deliver to the Depositor a written report(s) reflecting receipts,
disbursements and other transactions effected in the Custodial Account
during such period and the fair market value of the assets and liabilities
of the Custodial Account as of the close of such period in a manner
prescribed by the Internal Revenue Service. Unless the Depositor sends the
Custodian written objection to a report within ninety (90) days of receipt,
the Depositor shall be deemed to have approved of such report, and the
Custodian and the Company, and their officers, employees and agents shall
be forever released and discharged from all liability and accountability to
anyone with respect to their acts, transactions, duties and
responsibilities as shown on or reflected by such report(s).
(c) Withholding. Any distributions from the Custodial Account may be
made by the Custodian net of any required tax withholding.
16. SPENDTHRIFT PROVISION. The interest of a Depositor in the Account
shall not be transferred or assigned by voluntary or involuntary act of the
Depositor or by operation of law; nor shall it be subject to alienation,
assignment, garnishment, attachment, receivership, execution or levy of any
kind. Notwithstanding the foregoing, in the event of a property settlement
between a Depositor and his or her former spouse pursuant to which the
transfer of a Depositor's interest hereunder, or a portion thereof, is
incorporated in a divorce decree or in a written instrument incident to
such divorce or legal separation, then the interest so decreed by a Court
to be the property of such former spouse shall be transferred to a
separate Custodial Account for the benefit of such former spouse, in
accordance with Section 408(d)(6) of the Code.
17. FEES AND EXPENSES.
(a) General. The fees of the Custodian for performing its duties
hereunder shall be in such amount as it shall establish from time to time.
All such fees, as well as expenses (such as, without limitation, brokerage
commissions upon the investment of funds, fees for special legal services,
taxes levied or assessed, or expenses in connection with the liquidation or
retention of all or part of a rollover contribution), shall be collected by
the Custodian from cash available in the Custodial Account, or if
insufficient cash shall be available, by sale of sufficient assets in the
Custodial Account and application of the sales proceeds to pay such fees
and expenses. Alternatively, but only with the consent of the Custodian,
fees and expenses may be paid directly to the Custodian by the Depositor by
separate check.
(b) Advisor Fees. The Custodian shall, upon direction from the
Depositor, disburse from the Custodial Account payment to the Depositor's
registered investment advisor of any fees for financial advisory services
rendered with regard to the assets held in the Account. Such direction
must be provided in a form and manner acceptable to the Custodian, and the
Custodian shall not incur any liability for executing such direction.
(c) Sale of Assets. Whenever it shall be necessary in accordance with
this Section 17 to sell assets in order to pay fees or expenses, the
Custodian shall request the Depositor (or the Depositor's Authorized Agent,
Beneficiary, executor, or administrator) to provide specific instructions.
If such instructions are not received by the Custodian within ten (10)
business days of the Custodian's request, the Custodian may sell any or all
of the assets credited to the Custodial Account at that time, and shall
invest the portion of the sales proceeds remaining after collection of the
applicable fees and expenses therefrom in accordance with Section 2. The
Custodian shall not incur any liability on account of its sale or retention
of assets under such circumstances.
18. VOTING WITH RESPECT TO SECURITIES. The Custodian shall mail to the
Depositor all prospectuses and proxies that may come into the Custodian's
possession by reason of its holding of Investment Company Shares or other
securities in the Custodial Account. A Depositor may direct the Custodian
as to the manner in which any securities or Investment Company Shares held
in the Custodial Account shall be voted with respect to any matters as to
which the Custodian as holder of record is entitled to vote, coming before
any meeting of shareholders of the corporation which issued such
securities, or of holders of interest in the Investment Company which
issued such Investment Company Shares. All such directions shall be in
writing on a form approved by the Custodian and signed by the Depositor,
and delivered to the Custodian within the time prescribed by it. The
Custodian shall vote only those securities and Shares with respect to which
it has received timely written directions from the Depositor; provided,
however, that the Custodian, may without such direction vote Shares
"present" to the extent such a vote is needed to establish a quorum.
19. LIMITATIONS ON CUSTODIAL LIABILITY AND INDEMNIFICATION. The
Custodian shall mail to the Depositor all prospectuses and proxies that may
come into the Custodian's possession by reason of its holding of Investment
Company Shares or other securities in the Custodial Account. A Depositor
may direct the Custodian as to the manner in which any securities or
Investment Company Shares held in the Custodial Account shall be voted with
respect to any matters as to which the Custodian as holder of record is
entitled to vote, coming before any meeting of shareholders of the
corporation which issued such securities, or of holders of interest in the
Investment Company which issued such Investment Company Shares. All such
directions shall be in writing on a form approved by the Custodian and
signed by the Depositor, and delivered to the Custodian within the time
prescribed by it. The Custodian shall vote only those securities and
Shares with respect to which it has received timely written directions from
the Depositor; provided, however, that the Custodian may without such
direction vote Shares "present" to the extent that such a vote is needed to
establish a quorum.
20. DELEGATION TO AGENTS. The Custodian may delegate to one or more
corporations affiliated with the Custodian the performance of record
keeping and other ministerial services in connection with the Custodial
Account, for a reasonable fee to be borne by the Custodian and not by the
Custodial Account. Any such agent's duties and responsibilities shall be
confined solely to the performance of such services, and shall continue
only for so long as the Custodian named in the Application serves as
Custodian.
21. AMENDMENT OF AGREEMENT. The Depositor and Custodian authorize and
direct the Company to amend this Agreement in any respect at any time
(including retroactively), so that it may conform with applicable
provisions of the Internal Revenue Code, or with any other applicable law
as in effect from time to time, or to make such other changes to this
Agreement as the Company deems advisable. Any such amendment shall be
effected by delivery to the Custodian and mailing to the Depositor at his
address as shown in the records of the Custodian a copy of such amendment,
or a restatement of this Custodial Agreement including any such amendment.
The Depositor shall be deemed to consent to any such amendment(s) if he or
she fails to object thereto by written notice received by the Custodian
within fifteen (15) calendar days from the date of the Company's mailing to
the Depositor a copy of such amendment(s) or restatement.
22. RESIGNATION OR REMOVAL OF CUSTODIAN. The Company may remove the
Custodian at any time, and the Custodian may resign at any time, upon
thirty (30) days' written notice to the Depositor. Upon the removal or
resignation of the Custodian, the Company may, but shall not be required
to, appoint a successor custodian under this Custodial Agreement; provided
that any successor custodian shall satisfy the requirements of Section
408(a)(2) of the Code. Upon any such successor's acceptance of
appointment, the Custodian shall transfer the assets of the Custodial
Account, together with copies of relevant books and records, to such
successor custodian; provided, however, that the Custodian is authorized to
reserve such sum of money or property as it may deem advisable for payment
of any liabilities constituting a charge on or against the assets of the
Custodial Account, or on or against the Custodian or the Company. The
Custodian shall not be liable for the acts or omissions of any successor to
it. If no successor custodian is appointed by the Company, the Custodial
Account shall be terminated, and the assets of the Account, reduced by the
amount of any unpaid fees or expenses, will be distributed to the
Depositor.
23. TERMINATION OF THE CUSTODIAL ACCOUNT. The Depositor may terminate
the Custodial Account at any time upon notice to the Custodian in a manner
and form acceptable to the Custodian. Upon such termination, the
Custodian shall transfer the assets of the Custodial Account, reduced by
the amount of any unpaid fees or expenses, to the custodian or trustee of
another individual retirement account (within the meaning of Section 408 of
the Code) or other retirement plan designated by the Depositor, as
described in this Article VIII, Section 9. The Custodian shall not be
liable for losses arising from the acts, omissions, delays or other
inaction of any such transferee custodian or trustee. If notice of the
Depositor's intention to terminate the Custodial Account is received by the
Custodian and the Depositor had not designated a transferee custodian or
trustee for the assets in the Account, then the Account, reduced by any
unpaid fees or expenses, will be distributed to the Depositor.
24. GOVERNING LAW. THIS AGREEMENT, AND THE DUTIES AND OBLIGATIONS OF THE
COMPANY AND THE CUSTODIAN UNDER THE AGREEMENT, SHALL BE CONSTRUED,
ADMINISTERED AND ENFORCED ACCORDING TO THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS, EXCEPT AS SUPERSEDED BY FEDERAL LAW OR STATUTE.
25. WHEN EFFECTIVE. This Agreement shall not become effective until
acceptance of the Application by or on behalf of the Custodian at its
principal office, as evidenced by a written notice to the Depositor.
FIDELITY DISCLOSURE
PORTFOLIO STATEMENT
ADVISORY
SERVICES
INDIVIDUAL
RETIREMENT
ACCOUNT
The following information is provided to you in accordance with the
requirements of the Internal Revenue Code (the "Code") and should be
reviewed in conjunction with both the Custodial Agreement and the
Application for your Individual Retirement Account ("IRA"). This
information reflects the provisions of the Internal Revenue Code as are
effective January 1, 1987 and therefore applies to contributions for years
after, and to distributions taken after 1986.
RIGHT TO CANCEL You may revoke this Account, but only if you had not
received this Disclosure Statement seven (7) calendar days prior to the
establishment of this IRA. In such an instance, revocation of the IRA is
permitted only if your request for revocation is made in writing and is
received by the Custodian within seven (7) calendar days of the
establishment date of your Account.
To revoke this account, send your written revocation request to the
address below:
[NEED ADDRESS]
Upon revocation, you will receive a full refund of your initial
contribution, including sales commissions (if any) and/or administrative
fees. To determine where to send a revocation request, or if you have any
questions relative to this procedure, please call our 24-hour ??? toll free
number, 1-800-
TYPES OF IRAS REGULAR IRA. You may make a Regular IRA contribution of
$2,000 or 100% of your compensation, whichever is less. (To determine the
amount of your income tax deduction for your IRA contribution, see "Limits
on Deductible Contributions" below.)
SPOUSAL IRA. If you and your spouse file a joint federal income tax
return, you may make a Spousal IRA contribution, even if your spouse has
received compensation during the tax year. Your contribution to a Spousal
IRA must not exceed the lesser of (1) $2,000 or (2) the excess of $2,250
(or if less, 100% of your compensation) over your contribution to your
Regular IRA. Note: If your spouse has more than $250 in compensation for
the tax year, the two of you may make a larger total contribution if you
each contribute to a Regular IRA.
ROLLOVER IRA. If you retire or change jobs, you may be eligible for a
distribution from your employer's retirement plan. To avoid mandatory
withholding of 20% of your distribution for federal income tax, and to
preserve the tax-deferred status of this distribution, you can transfer it
directly to a Rollover IRA. If you choose to have the distribution paid
directly to you, you will be subject to the 20% withholding rules. You may
still reinvest up to 100% of the total amount of your distribution which is
eligible for rollover in a Rollover IRA by replacing the 20% which was
withheld for taxes with other assets you own. You must reinvest in a
Rollover IRA within 60 days of receipt of your distribution. The amount
invested in a Rollover IRA will not be included in your taxable income for
the year in which you receive the qualified plan distribution.
DESCRIPTION Your IRA is a custodial account created for your exclusive
benefit. Your interest
OF ACCOUNT in the account is nonforfeitable.
ELIGIBILITY Employees and self-employed individuals are eligible to
contribute to an IRA even if they are already covered under another
tax-qualified plan. Employers may contribute to IRAs established by their
employees, and employers may contribute to IRAs used as part of a
Simplified Employee Pension plan ("SEP," described below).
CONTRIBUTIONS GENERAL. You may make annual cash contributions to an IRA
in any amount up to 100% of your compensation for the year or $2,000,
whichever is less. Your employer may make contributions to your account,
but, except as noted below under a SEP, the total contributions from you
and your employer may not exceed this limitation. Contributions (other
than rollover contributions described below) must be made in "cash" and not
in "kind." Therefore, securities or other assets already owned cannot be
contributed to an IRA but can be converted to cash and then contributed.
No part of your contribution may be invested in life insurance or be
commingled with other property, except in a common trust fund or common
investment fund.
SPOUSAL ACCOUNTS. If you are married and file a joint tax return, you
may make cash contributions to a "spousal" IRA in addition to your own IRA
(even if your spouse has compensation). The total amounts contributed to
your own and to your spouse's IRA may not exceed 100% of your combined
compensation or $2,250, whichever is less. In no event, however, may the
annual contribution to either your account or your spouse's account exceed
$2,000.
COMPENSATION means wages, salaries, professional fees, or other amounts
derived from or received for personal service actually rendered and
includes the earned income of a self-employed individual, and any alimony
or separate maintenance payment includible in the individual's gross
income.
ADJUSTED GROSS INCOME is determined prior to adjustments for personal
exemptions and itemized deductions. For purposes of determining the IRA
deduction (see below), adjusted gross income is modified to take into
account deductions for IRA contributions, taxable benefits under the Social
Security Act and the Railroad Retirement Act, and passive loss limitations
under Code Section 86.
TIME OF CONTRIBUTION. You may make contributions to your IRA any time up
to and including the due date for filing your tax return for the year. You
may continue to make annual contributions to your IRA up to (but not
including) the calendar year in which you reach age 70 1/2. You may
continue to make annual contributions to your spouse's IRA up to (but not
including) the calendar year in which your spouse reaches age 70 1/2.
ROLLOVER IRA CONTRIBUTIONS. Qualifying distributions from tax-qualified
plans (for example, pension, profit-sharing, and Keogh plans) may be
eligible for rollover into your IRA. However, strict limitations apply to
such rollovers and you should seek competent tax advice regarding these
restrictions.
SIMPLIFIED EMPLOYEE PENSION PLAN CONTRIBUTIONS. A separate IRA may be
established for use by your employer as part of a SEP arrangement. Your
employer may contribute to your SEP-IRA up to a maximum of 15% of your
compensation or $30,000, whichever is less. If your SEP-IRA is used as
part of a salary reduction SEP, you may elect to reduce your annual
compensation, up to a maximum of 15% of your compensation or $7,000
(indexed to reflect cost-of-living adjustments), whichever is less, and
have your employer contribute that amount to your SEP-IRA. If your
employer maintains both a salary reduction SEP and a regular SEP, the
annual contribution limit to both SEPs together is 15% of your compensation
or $30,000, whichever is less. You may contribute, in addition to the
amount contributed by your employer to your SEP-IRA, an amount not in
excess of the limits referred to under General above. It is your and your
employer's responsibility to see that contributions in excess of normal IRA
limits are made under a valid SEP and are, therefore, proper.
EXCESS CONTRIBUTIONS. Contributions which exceed the allowable maximum
per year are considered excess contributions. A nondeductible penalty tax
of 6% of the excess amount contributed will be incurred for each year in
which the excess contribution remains in your IRA. If you make a
contribution (or your employer makes a SEP contribution, including a salary
reduction contribution, on your behalf) in excess of your allowable maximum
for any taxable year, you may correct the excess contribution and avoid the
6% penalty tax for that year by withdrawing the excess contribution and its
earnings on or before the date, including extensions, for filing your tax
return for that year.
The amount of the excess contribution withdrawn will not be considered a
premature distribution nor (except in the case of a salary reduction
contribution) be taxed as ordinary income, but the earnings withdrawn will
be taxed as ordinary income to you. Alternatively, excess contributions
for one year may be carried forward and reported in the next year to the
extent that the excess, when aggregated with your IRA contribution (if any)
for the subsequent year, does not exceed the maximum amount for that year.
The 6% excise tax will be imposed on excess contributions in each year they
are neither returned nor carried forward.
DEDUCTIBLE IRA If you are not married and are not an active participant in
an employer-maintained
CONTRIBUTIONS retirement plan, you may make a fully deductible IRA
contribution in any amount up to 100% of your compensation for the year or
$2,000, whichever is less. The same limits apply if you are married and
you file a joint return with your spouse, and neither of you is an active
participant in an employer-maintained retirement plan. An
"employer-maintained retirement plan" includes any of the following types
of retirement plans:
- a qualified pension, profit-sharing, or stock bonus plan established
in
accordance with IRC (sub section)401 (a) or 401 (k).
- a Simplified Employee Pension Plan (SEP) (IRC (sub section)408(k)).
- a deferred compensation plan maintained by a governmental unit or
agency.
- tax sheltered annuities and custodial accounts (IRC (sub
section)403(b) and 403(b)(7)).
- a qualified annuity plan under IRC (sub section)403(a).
You are an active participant in an employer maintained retirement plan
even if you do not have a vested right to any benefits under your
employer's plan. Whether you are an "active participant" depends on the
type of plan maintained by your employer. Generally, you are considered an
active participant in a defined contribution plan if an employer
contribution or forfeiture was credited to your account under the plan
during the year. You are considered an active participant in a defined
benefit plan if you are eligible to participate in the plan, even though
you elect not to participate. You are also treated as an active
participant for a year during which you make a voluntary or mandatory
contribution to any type of plan, even though your employer makes no
contribution to the plan.
If you (or your spouse, if you are filing a joint tax return) are covered
by an employer-maintained retirement plan, your IRA contribution is tax
deductible only to the extent that your adjusted gross income does not
exceed the deductibility limits discussed below.
LIMITS ON The deduction of your IRA contribution is reduced
proportionately for adjusted
DEDUCTIBLE gross income which exceeds the applicable dollar amount. The
applicable dollar
CONTRIBUTIONS amount for an individual is $25,000 and $40,000 for married
couples filing a joint tax return. The applicable dollar limit for married
individuals filing separate returns is $0. If your adjusted gross income
exceeds the applicable dollar amount by not more than $10,000, you may make
a deductible IRA contribution (but the deductible amount will be less than
$2,000). To determine the amount of your deductible contribution, use the
following calculation:
1. Subtract the applicable dollar amount from your adjusted gross income.
If the result is $10,000 or more, stop; you can only make a nondeductible
contribution.
2. Subtract the above figure from $10,000.
3. Divide the above figure by $10,000.
4. Multiply $2,000 by the fraction resulting from the above steps. This
is your maximum deductible contribution limit.
If the deduction limit is not a multiple of $10, then it is to be rounded
up to the next highest $10. There is a $200 minimum floor on the deduction
limit if your adjusted gross income does not exceed $35,000 (for a single
taxpayer), $50,000 (for married taxpayers filing jointly) or $10,000 (for a
married taxpayer filing separately).
Adjusted gross income for married couples filing a joint tax return is
calculated by aggregating the compensation of both spouses. The deduction
limitations on IRA contributions, as determined above, then apply to each
spouse.
NONDEDUCTIBLE Even if your income exceeds the limits described above, you
may make a
000000IRA contribution to your IRA up to the lesser of $2,000 or 100% of
your compensation. To
CONTRIBUTIONS the extent that your contribution exceeds the deductible
limits, it will be nondeductible. Earnings on all IRA contributions are
tax deferred until distribution.
You are required to designate on your tax return the extent to which your
IRA contribution is nondeductible. Therefore, your designation must be
made by the due date (including extensions) for filing your tax return. If
you overstate the amount of nondeductible contributions for a taxable year,
a penalty of $100 will be assessed for each overstatement unless you can
show that the overstatement was due to a reasonable cause.
INVESTMENT The assets in your IRA will be invested in accordance with your
instructions. As
OF ACCOUNT with any investment, you should read any publicly available
information (e.g., prospectuses, annual reports, the terms and conditions
of any insurance annuity contract, etc.) which would enable you to make an
informed investment decision.
If no investment instructions are received from you, or if the
instructions received are, in the opinion of the Custodian, unclear, you
may be requested to provide instructions. In the absence of such
instructions, your investment may be invested in Money Market Shares, which
strive to maintain a stable $1 per share balance. Keep in mind that with
respect to investments in regulated investment company shares (i.e., mutual
funds) held in your account, growth in the value of your account cannot be
guaranteed or projected.
DISTRIBUTIONS GENERAL. Distributions from your IRA should begin no
earlier than the date you reach age 59 1/2 (except in cases of your earlier
disability or death) and no later than the April 1 following the year in
which you reach age 70 1/2. Distributions from your account will be
included in your gross income for federal income tax purposes for the year
in which you receive them.
PREMATURE DISTRIBUTIONS. To the extent they are included in income,
distributions from your IRA made before you reach age 59 1/2 will be
subject to a 10% nondeductible penalty tax (in addition to being taxable as
ordinary income) unless the distribution is an exempt withdrawal of an
excess contribution, or the distribution is rolled over to another
qualified retirement plan, or the distribution is made on account of your
death or disability, or the distribution is one of a scheduled series of
payments over your life or life expectancy or the joint life expectancies
of yourself and your Beneficiary.
LATEST TIME TO WITHDRAW. You must begin receiving distributions of the
assets in your account by April 1 of the calendar year following the
calendar year in which you reach age 70 1/2. Subsequent distributions must
be made by December 31 of each year. If you maintain more than one IRA,
you may take from any of your IRAs the aggregate amount to be withdrawn .
MINIMUM DISTRIBUTIONS. Once distributions are required to begin, they
must not be less than the amount each year (determined by actuarial tables)
which would exhaust the value of the account over the required distribution
period, which is generally your life expectancy or the joint life and last
survivor expectancy of you and an individual you have designated as your
Beneficiary. You will be subject to a 50% excise tax on the amount by
which the distribution you actually received in any year falls short of the
minimum distribution required for the year.
METHODS OF DISTRIBUTION. Assets may be distributed from your account
according to one or more of the following methods selected by you:
(A) total distribution
(B) distribution over a certain period
(C) purchase of an annuity contract
(See Article IV of your IRA Custodial Agreement for a full description of
these distribution methods.)
DISTRIBUTION UPON DEATH. The assets remaining in your Account will be
distributed upon your death to the beneficiary(ies) named by you on record
with the Custodian. If there is no beneficiary designated for your Account
in the Custodian's records, or if the beneficiary you had designated dies
before you do, your Account will be paid to your surviving spouse, or if
none, to your estate.
If your spouse was your primary beneficiary and you had started to
receive distributions from your account, but die before receiving the
balance of your account, your spouse has several options. Your spouse can
either keep receiving distributions from your account at least as rapidly,
or roll over all or part of your account into an IRA in his or her name.
If distributions from your account had not yet begun, your spouse may defer
taking distributions until April 1st of the year you would have turned 70
1/2, and then receive distributions over his or her life expectancy, or
roll over the account into an IRA in their name, and treat the IRA as his
or her own.
If your beneficiary is not your spouse, and distributions had begun from
your account, your beneficiary may continue to receive them at least as
rapidly as the payment schedule you had established. If distributions had
not yet begun, your beneficiary must deplete your account within 5 years of
your death, or start taking distributions from your account within one year
of your death over their own life expectancy.
DISTRIBUTION OF NONDEDUCTIBLE CONTRIBUTIONS. To the extent that a
distribution constitutes a return of your nondeductible contributions, it
will not be included in your income. The amount of any distribution
excludable from income is the portion that bears the same ratio to the
total distribution that your aggregate nondeductible contributions bear to
the balance at the end of the year (calculated after adding back
distributions during the year) of your IRA. For this purpose, all of your
IRAs are treated as a single IRA. Furthermore, all distributions from an
IRA during a taxable year are to be treated as one distribution. The
aggregate amount of distributions excludable from income for all years is
not to exceed the aggregate nondeductible contributions for all calendar
years. There is a 10% additional income tax assessed against premature
distributions to the extent such distributions are includible in income
(See "Premature Distributions" above).
EXCESS DISTRIBUTIONS. There is a 15% excise tax assessed against annual
distributions from tax-favored retirement plans, including IRAs, which
exceed the greater of $150,000 or $112,500 (indexed to reflect
cost-of-living increases). To determine whether you have distributions in
excess of this limit, you must aggregate the amounts of all distributions
received by you during the calendar year from all retirement plans,
including IRAs. Please consult with your tax advisor for more complete
information, including the availability of favorable elections.
ROLLOVER TREATMENT. Distributions from your IRA representing all or any
part of the assets in your IRA account are also eligible for rollover
treatment. You may roll over all or any part of the same property from
this distribution of assets, within 60 days of receipt, into another IRA or
individual retirement annuity, and maintain the tax-deferred status of
these assets. A 60 day rollover can be made once every twelve months per
IRA.
DIVORCE OR If all or any portion of your IRA is awarded to a former
spouse pursuant to divorce
LEGAL or legal separation, such portion can be transferred to an IRA in
the receiving
SEPARATION spouse's name. This transaction can be processed without any
tax implications to you provided a written instrument executed by a court
incident to the divorce or legal separation in accordance with Section
408(d)(6) of the Code is received by the Custodian, and specifically
directs such transfer. In addition, you must also provide the Custodian
with a letter of instruction and an IRA application executed by the
receiving spouse, if she or he doesn't already maintain such IRA at
Fidelity.
FEES AND Fees and other expenses of maintaining your Fidelity IRA account
are described in
EXPENSES the Application and may be changed from time to time, as provided
in the Custodial Agreement.
PROHIBITED If any of the events prohibited by Section 4975 of the Code
(such as any sale,
TRANSACTIONS exchange or leasing of any property between you and your IRA)
occurs during the existence of your IRA, your account will be disqualified
and the entire balance in your account will be treated as if distributed to
you as of the first day of the year in which the prohibited event occurs.
This "distribution" would be subject to ordinary income tax and, if you
were under age 59 1/2 at the time, to the 10% penalty tax on premature
distributions.
If you or your Beneficiary use (pledge) all or any part of your IRA as
security for a loan, then the portion so pledged will be treated as if
distributed to you, and will be taxable to you as ordinary income and
subject to the 10% penalty during the year in which you make such a pledge.
OTHER TAX NO SPECIAL TAX TREATMENT. No distribution to you or anyone else
from your
CONSIDERATIONS account can qualify for capital gain treatment under the
federal income tax laws. It is taxed to the person receiving the
distribution as ordinary income. (Similarly, you are not entitled to the
five-year averaging rule for lump sum distributions available to persons
receiving distributions from certain other types of retirement plans.)
GIFT TAX. If you elect during your lifetime to have all or any part of
your account payable to a Beneficiary at or after your death, the election
will not subject you to any gift tax liability.
TAX WITHHOLDING. Federal income tax will be withheld from distributions
you receive from an IRA unless you elect not to have tax withheld.
However, if IRA distributions are to be delivered outside of the United
States, this tax is mandatory and you may not elect otherwise unless you
certify to the Custodian that you are not a U.S. citizen residing overseas
or a "tax avoidance expatriate" as described in Code Section 877. Federal
income tax will be withheld at the rate of 10%.
REPORTING FOR TAX PURPOSES. Contributions to your IRA must be reported
on your tax Form 1040 or 1040A for the taxable year contributed. You will
be required to designate your IRA contribution as deductible or
nondeductible. You are also required to attach a Form 8606 to your 1040 or
1040A form. Form 8606 is used to report nondeductible IRA contributions
and to calculate the basis (nontaxable part) of your IRA. Other reporting
will be required by you in the event that special taxes or penalties
described herein are due. You must also file Treasury Form 5329 with the
IRS for each taxable year in which the contribution limits are exceeded, a
premature distribution takes place, or less than the required minimum
amount is distributed from your IRA. The Tax Reform Act of 1986 also
requires you to report the amount of all distributions you received from
your IRA and the aggregate account balance of all IRAs as of the end of the
calendar year.
IRS APPROVAL The form of your Individual Retirement Account has been
approved by the Internal Revenue Service. The Internal Revenue Service
approval is a determination only as to the form and does not represent a
determination of the merits of the Account. You may obtain further
information with respect to your IRA from any district office of the
Internal Revenue Service.
Fidelity Investments Section 403(b)(7) Individual Custodial Account
Agreement
I. Definitions
II. Eligibility
III. Participation
IV. Contributions (a) General Limitations
(b) Additional Limitations for Salary Reduction Contributions
(c) After-Tax Contributions
(d) Method of Contribution
V. Investment
of Contributions
and Assets (a) Direction by Participant
(b) Exchange among Funds
(c) Effect of Direction
VI. Transfer of Assets (a) Transfer or Rollover to the Account
(b) Transfer or Rollover from the Account
(c) Restrictions on Transfer
(d) Effect of Transfer or Rollover
VII. Designation
of Beneficiary
VIII. Distributions
Before Death (a) Events Permitting Distributions
(b) Forms of Distribution
(c) Joint and Survivor Spousal Annuity
(d) Required Beginning Date
(e) Determination of Amount to Be Distributed Each Year
(f) Other 403(b) arrangements
(g) Vesting
IX. Distributions
After Death (a) General
(b) Failure to Elect Form of Distribution
X. Miscellaneous
Provisions
Applicable to
Distributions (a) Effect of Employer Plan
(b) Responsibilities of Custodian
(c) Tax Withholding
(d) Qualified Domestic Relations Orders
(e) Non-Assignment
XI. Administration (a) Custodian as Agent
(b) Voting
(c) Reports
(d) Written Notices
(e) Limitations on Custodian's Liability
and Indemnification
(f) Expenses
XII. Resignation or
Removal of
Custodian
XIII. Amendment and
Termination (a) Power of Company to Amend
(b) Limitation on Amendment
(c) Termination
(d) Distribution upon Termination
XIV. Effect of Other
403(b) Arrangements
XV. Governing Law
Fidelity Investments Section 403(b)(7) Individual Custodial Account
Agreement
This Fidelity Investments Section 403(b)(7) Individual Custodial Account
Agreement (the "Agreement") is intended for use by Employers and by
eligible persons who may wish to have their Employer's contributions held
for their benefit in an account (the "Account") invested in shares of
eligible Fidelity funds, all of which are regulated investment companies
(herein called the "Funds"), upon the terms and conditions set forth in the
Agreement and in accordance with the applicable provisions of the Employee
Retirement Income Security Act of 1974 (the "Act") and the Internal Revenue
Code of 1986, as amended (the "Code").
Article I. Definitions
As used in the Agreement, the following terms have the meaning set forth
below, unless a different meaning is clearly required by the context:
"Account" means the custodial account established hereunder for the
benefit of the Participant.
"Act" means the Employee Retirement Income Security Act of 1974, as
amended.
"Agreement" means the Fidelity Investments Section 403(b)(7) Individual
Custodial Account Agreement, including the information and provisions set
forth in the Account Application. The Agreement, including the Account
Application and any designation of Beneficiary filed with the Custodian,
may be proved either by an original copy or a reproduced copy thereof.
"Authorized Agent" means the person authorized by the Participant to
purchase or sell Funds in the Participant's Account, as specified on, and
subject to the provisions of, the 403(b)(7) Limited Trading Authorization
and Indemnification Form.
"Beneficiary" means the person or persons (including a trust or estate)
designated as such by the Participant on a signed form acceptable to and
filed with the Custodian pursuant to Article VII.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means FMR Corp., a Massachusetts corporation, or any successor
or affiliate thereof to which FMR Corp. may, from time to time, delegate or
assign any or all of its rights or responsibilities under this agreement.
"Custodian" means Fidelity Management Trust Company of Boston,
Massachusetts, or its successors.
"Disabled" means (with respect to a Participant): unable to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or
to be of long-continued or indefinite duration, which definition is the
same as that contained in Section 72(m)(7) of the Code. If such Code
Section shall be hereafter modified, the definition contained herein shall
be correspondingly modified.
"Eligible Employee" means an individual who is an employee of either (i)
an organization described in Section 501(c)(3) of the Code which is exempt
from tax under Section 501(a) of the Code, or (ii) a State or a political
subdivision of a State or an agency or instrumentality of either, and who
performs services for an educational institution (as defined in Section
170(b)(1)(A)(ii) of the Code).
"Eligible Rollover Distribution" means, effective January 1, 1993, any
distribution of all or any portion of the balance to the credit of a
Participant's Account, with the exception of the following distributions:
(1) Substantially equal periodic payments made over any one of the
following periods:
a) the life of the participant (or the joint lives of the Participant and
the Participant's designated Beneficiary);
b) the life expectancy of the participant (or the joint life and last
survivor expectancy of the Participant and the Participant's designated
Beneficiary);
c) a specified period of ten or more years;
(2) Minimum required distributions;
(3) The distribution of after-tax contributions;
(4) Corrective distributions of excess aggregate contributions as
described in
(sub section)1.401(m)-1(e)(3), plus the income attributed to these
corrective distributions;
(5) Loans treated as distributions under Code (sub section)72(p);
(6) Defaulted loans that are deemed distributions;
(7) Death distributions to a non-spouse beneficiary;
(8) Distributions pursuant to a QDRO to a non-spouse alternate payee;
(9) Payments made to a registered Investment Advisor, as authorized by the
Participant
on the 403(b) Financial Advisor Fee Authorization Form.
"Employer" means the employer organization named in the Account
application.
"Funds" means those regulated investment companies whose investment
adviser is Fidelity Management & Research Company, or its successors,
and whose shares are authorized (under the terms of the prospectus of the
investment company, and subject to any limitations imposed by the
Employer's plan) for purchase under this Agreement.
"Participant" means the person named in the Account application who
satisfies the requirements of Eligible Employee, above.
"Salary Reduction Agreement" means a written agreement between the
Participant and the Employer, by which the Participant's salary for future
services is reduced and the amount of such reduction is contributed by the
Employer to the Account.
Article II. Eligibility
Any Eligible Employee may adopt the Agreement upon receiving the consent
of the Employer.
Article III. Participation
A Participant may adopt the Agreement by signing the Account Application
included with the Agreement and mailing or delivering it to the Custodian
or its agent. The Account Application and, if applicable, the Salary
Reduction Agreement are incorporated herein by reference as part of the
Agreement. The Employer shall be deemed to have established this Account
for the Participant upon the Employer's payment to the Custodian of the
initial contribution specified in Article IV. The Account will become
effective upon acceptance of the Account Application by or on behalf of the
Custodian at its offices, as evidenced by a written notice to the
Participant bearing the name of the Custodian or its agent.
Article IV. Contributions
(a) General Limitations
Subject to paragraph (b), an Employer may contribute cash to the
Participant's Account in any taxable year in any amount which is not an
excess contribution as defined in Section 4973(c) of the Code (an "Excess
Contribution"). The Employer or the Participant shall compute the maximum
amount that may be contributed on his behalf in accordance with the
Participant's "exclusion allowance" as defined in Section 403(b)(2) of the
Code, and in accordance with the applicable limitations under Section
415(c) of the Code, which amount, subject to any special election permitted
the Participant under Section 415(c)(4) of the Code, shall not exceed the
lesser of (1) 25% of the Participant's compensation for the year, or (2)
$30,000 (as adjusted from time to time in accordance with regulations
issued pursuant to Section 415(d) of the Code).
The Custodian shall not be responsible for determining the amount an
Employer may contribute on behalf of the Participant, unless such
obligation is explicitly undertaken by separate written agreement, nor
shall the Custodian be responsible to recommend or compel Employer
contributions to the Account. The disposition of Excess Contributions will
be made in accordance with instructions from the Employer to the extent
they are consistent with applicable law.
(b) Additional Limitations for Salary Reduction Contributions
The amount contributed to the Account in any calendar year pursuant to a
voluntary Salary Reduction Agreement between the Participant and the
Employer shall not exceed the greater of (1) $9,500 or (2) $7,000 as
increased periodically pursuant to Section 402(g)(4) of the Code on account
of changes in the cost of living, reduced by the aggregate amounts
contributed in any calendar year at the election of the Participant to any
qualified cash OR deferred arrangement described in Section 401(k) of the
Code, any simplified employee pension described in Section 408(k)(6) of
the Code, and any eligible deferred compensation plan described in Section
457 of the Code; provided, however, that for any calendar year in which the
Participant has completed at least 15 years of service with an educational
organization, hospital, home health service agency, health and welfare
service agency, church or convention or association of churches (including
an organization described in Section 414(e)(3)(B)(ii) of the Code), the
limitation just described shall be increased by the least of the following:
(x) $3,000; (y) $15,000 reduced by any amounts excluded from the
Participant's gross income for prior taxable years by reason of Section
402(h)(i) of the Code; and (z) the excess of the product of $5,000 and the
number of the Participant's years of service with the Employer just
described, over the contributions made by that Employer for prior taxable
years of the Participant, at the Participant's election pursuant to Section
401(k), 408(k)(6) or 403(b) of the Code.
In the event that the Participant determines that an amount contributed
during a calendar year to the Account exceeds the limitation set forth in
the preceding sentence, and no later than March 1 of the following calendar
year notifies the Custodian in writing of the excess amount he has
determined (the "Excess Deferral"), the Custodian will distribute to the
Participant no later than the following April 15 the Excess Deferral and
the net income, if any, attributable to the Excess Deferral. The
responsibility and liability of the Custodian in connection with the Excess
Deferral shall be strictly limited in accordance with the terms of the
preceding sentence.
(c) After-Tax Contributions
The Participant may contribute to the Account, in addition to the amount
contributed on his behalf by the Employer (whether by Salary Reduction
Agreement or otherwise), an amount on an after-tax basis; provided,
however, that subject to any special election permitted the Participant
under Section 415(c)(4) of the Code, in any taxable year the sum of (1) the
amount of such contributions made by the Participant and (2) the amount
contributed to the Account pursuant to paragraph (a) shall not exceed the
lesser of (1) 25% of the Participant's compensation for the year, or (2)
$30,000 as adjusted from time to time in accordance with Regulations issued
pursuant to Section 415(d) of the Code.
Contributions made pursuant to this paragraph (c) must be made through
payroll deduction and must be transmitted to the Custodian by the Employer,
all in accordance with procedures established and approved in writing by
the Custodian. To the extent that the Employer maintains a written Section
403(b) plan for which this Account serves as a funding vehicle, such
contributions must also comply with the terms of such a plan.
(d) Method of Contribution
The initial contribution to the Account shall be made after proper receipt
by the Custodian or its agent of the Account Application, specifying the
Fund or Funds in which contributions are to be invested. Subsequent
Employer contributions shall be identified by the Participant's name,
Social Security number, and contribution amount specified by the
Participant. Subsequent contributions will continue to be invested in the
Fund(s) previously selected unless instructions from the Participant, or
the Authorized Agent appointed by the Participant (or, following the death
of the Participant, his or her Beneficiary, executor or administrator),
specifying a different Fund(s) are received by the Custodian or the
Employer has communicated in writing to the Custodian that certain Funds
are no longer authorized under the Account.. Such instructions may be
given by the Participant or his or her Authorized Agent (or, following the
death of the Participant, his or her Beneficiary, executor or
administrator) either in writing and signed by the Participant or his or
her Authorized Agent (or, following the death of the Participant, his or
her Beneficiary, executor or administrator), or by use of the telephone
system maintained for such purposes by the Custodian or its agent. If
instructions as to investment selection or investment allocation are, in
the opinion of the Custodian not clear, or specify an unauthorized Fund(s),
the Custodian may hold all or a part of the contribution invested in
Fidelity Money Market Trust - Retirement Government Money Market Portfolio
(or, if not available, in Fidelity Money Market Trust - Retirement Money
Market Portfolio, or, if not available, in Fidelity U.S. Government
Reserves, or, if not available, in Fidelity Cash Reserves) without
liability, pending receipt of a fully executed Account Application or
clarifying written instructions from the Participant or his or her
Authorized Agent (or, following the death of the Participant, his or her
Beneficiary, executor or administrator).
Article V. Investment of Contributions and Assets
(a) Direction by Participant
All contributions to the Account and all assets in the Account shall be
invested in the Funds in accordance with instructions given by the
Participant or the Participant's Authorized Agent (or, following the death
of the Participant, his or her Beneficiary, executor or administrator), to
the Custodian in a manner acceptable to the Custodian. By giving such
instructions to the Custodian, the Participant or the Participant's
Authorized Agent (or, following the death of the Participant, his or her
Beneficiary, executor or administrator) will be deemed to have acknowledged
receipt of the then current prospectus of any Fund in which the Participant
or the Participant's Authorized Agent (or, following the death of the
Participant, his or her Beneficiary, executor or administrator) instructs
the Custodian to invest such contributions or assets. All income dividends
and capital gains or other distributions shall be reinvested in additional
Fund shares, which shall be credited to the Account. All Fund shares
acquired by the Custodian shall be registered in the name of the Custodian
or its nominee.
(b) Exchange Among Funds
Except as limited by the Employer's Section 403(b) program (whether
written or not)(and in case of such limitation, as communicated in writing
by the Employer to the Custodian), the Participant or the Participant's
Authorized Agent (or, following the death of the Participant, his or her
Beneficiary, executor or administrator) may instruct the Custodian to
exchange all or any part of the Fund shares held in the Custodial Account
for shares of another Fund.
(c) Effect of Direction
The Custodian and its agents may conclusively rely upon and shall be
protected in acting upon any written order or telephone instructions from
the Participant or the Participant's Authorized Agent (or, following the
death of the Participant, his or her Beneficiary, executor or
administrator) or any other notice, request, consent, certificate or other
instrument or paper believed by it to be genuine and to have been properly
executed, and, so long as it acts in good faith, in taking or omitting to
take any other action.
The Custodian shall have no duty to question the directions of the
Participant, or the Participant's Authorized Agent (or, following the death
of the Participant, his or her Beneficiary, executor or administrator),
regarding the investment of the assets in the Account or to advise such
persons regarding the purchase, retention or sale of such investments, nor
shall the Custodian or the Company, or any of their affiliates, be liable
for any loss that results from the exercise of control (whether by his or
her action or inaction) over the Account by the Participant or the
Participant's Authorized Agent (or, following the death of the Participant,
his or her Beneficiary, executor or administrator).
Article VI. Transfer of Assets
(a) Transfer or Rollover to the Account
(1) The Participant or the Employer may transfer or cause to be
transferred to the Account, by rollover or otherwise, assets available from
an existing annuity contract or custodial account established under Section
403(b) of the Code (or an Individual Retirement Account (IRA) or other plan
established pursuant to Section 408 of the Code whose assets are
attributable solely to a previous rollover contribution thereto from one or
more such annuity contracts or custodial accounts) for which previous
contributions were made on the Participant's behalf; provided, however,
that the Custodian shall have no responsibility for the tax treatment to
the Participant of any such transfer or rollover; and provided, further,
that if the Employer maintains a written Section 403(b) plan for which this
Account serves as a funding vehicle, any restrictions imposed by the terms
of such plan upon incoming transfers of funds shall to the extent that they
are inconsistent with the provisions of this paragraph take precedence over
such provisions. Effective January 1, 1993, the Account will accept direct
rollovers of Eligible Rollover Distributions from another 403(b) annuity
contract or 403(b)(7) custodial account. Any assets which are transferred
or rolled over to the Account become subject to the restrictions on
distributions as outlined in Article VIII, paragraph (a).
(2) Any assets transferred to the Account from an existing annuity
contract established under section 403(b) of the Code which are
attributable to pre-1989 contributions, can only be withdrawn from the
Account, while the Participant is still employed by the Employer, on
account of financial hardship. The Participant is solely responsible for
providing such information as is necessary to properly allocate
contributions made prior to 1989. Absent the furnishing of such
information, the Custodian shall not be responsible for maintaining such
data or the consequences of not maintaining it.
(3) Any assets transferred to the Account from an existing annuity
contract established under section 403(b) of the Code which are
attributable to post-1988 non-salary reduction contributions, cannot be
withdrawn from the Account unless one of the events permitting
distribution, as described in Article VIII(a)(1)(A), (B), (C) or (D), has
occurred.
(4) The Participant is solely responsible for providing such information
as is necessary to properly allocate contributions made prior to 1987.
Absent the furnishing of such information, the Custodian shall not be
responsible for maintaining such data or the consequences of not
maintaining it.
(5) If instructions as to the investment of transferred assets or rollover
contributions are, in the opinion of the Custodian, not clear, the
Custodian will invest such assets according to the Fund allocation
currently in effect for the Participant's Account.
(6) The Custodian will not be responsible for any losses the Participant
may incur as a result of the timing of any transfer from another trustee or
custodian that are due to circumstances reasonably beyond the control of
the Custodian.
(7) The Custodian will invest any assets transferred over a period of
years from an existing annuity contract established under section 403(b) of
the Code to the Account according to the instructions of the Participant in
the year of the initial transfer and in subsequent years according to the
Fund allocation currently in effect for the Participant's Account when such
transfers are made.
(b) Transfer or Rollover from the Account
Subject to the restriction described in paragraph (c), the Participant
reserves the right to transfer all or part of the assets of the Account, by
rollover or otherwise, to such other form of annuity contract or custodial
account described in Section 403(b) of the Code or to such Individual
Retirement Account (IRA) or other plan established pursuant to Section 408
of the Code as the Participant may determine, upon written instructions to
the Custodian, in such form as the Custodian may reasonably require;
provided, however, that neither the Custodian nor the Company shall have
any responsibility for the tax treatment to the Participant of any such
transfer or rollover; and provided further, that if the Employer maintains
a written Section 403(b) plan for which this Account serves as a funding
vehicle, any restrictions imposed by the terms of such plan upon transfers
of funds from the Account shall to the extent that they are inconsistent
with the provisions of this paragraph take precedence over such provisions.
If the Participant transfers all or part of the Account by rollover to an
Individual Retirement Account or other plan established pursuant to Section
408 of the Code, all assets so rolled over will become subject to the
minimum distribution rules of Section 401(a)(9) of the Code.
(c) Restrictions on Transfer
The assets in the Account may not be transferred to a contract or account
described in Section 403(b) of the Code under which such transferred assets
would be subject to distribution restrictions less stringent than those
described in Article VIII, paragraph (a).
(d) Effect of Transfer or Rollover
Neither the Custodian nor the Company shall be liable for losses arising
from the acts, omissions, or delays or other inaction of any party
transferring assets to the Account or receiving assets transferred from the
Account pursuant to this Article VI.
Article VII. Designation of Beneficiary
(a) A Participant may designate a Beneficiary or Beneficiaries at any
time, and any such designation may be changed or revoked at any time, by
written designation signed by the Participant on a form acceptable to, and
filed with the Custodian. Such designation, or change or revocation of a
prior designation, shall be effective upon its receipt by the Custodian;
provided, however, that no such designation or change or revocation may be
filed with the Custodian later than thirty (30) days after the death of the
Participant. The latest such designation or change or revocation shall
control, except as determined by applicable law, or unless a married
Participant's Account is subject to the provisions of paragraph (b) of this
Article VII. If the Participant had not by the date of his or her death
properly designated a Beneficiary in accordance with the preceding
sentence, or if no designated Beneficiary survives the Participant, the
Participant's Beneficiary shall be his or her surviving spouse, but if he
or she has no surviving spouse, his or her estate, provided, however, that
if the Employer maintains a written Section 403(b) plan for which this
account serves as a funding vehicle, the plan's provisions with respect to
beneficiaries will prevail. Unless otherwise specified in the
Participant's designation of Beneficiary, if a Beneficiary dies before
receiving his or her entire interest in the Custodial Account, his or her
remaining interest in the Custodial Account shall be paid to the
Beneficiary's estate.
(b) If a married Participant's Custodial Account is part of an "employee
pension benefit plan" (as defined in the Act), a married Participant's
designation of a primary Beneficiary other than his or her spouse shall be
invalid as to 50% of the Participant's Account balance (or a higher
percentage, if so provided under the Employer's Plan) unless the
Participant's spouse consents in writing to the election, and the spouse's
consent acknowledges the effect of the election and is witnessed by a
notary public, or, if agreed to in writing by the Custodian, a
representative of the Employer's Plan. If the consent of the Participant's
spouse is obtained prior to the first day of the plan year in which the
Participant attains age 35, or the date of separation from service, if
earlier, such consent will become ineffective as of the first day of the
plan year in which the Participant attains age 35, or the date of
separation from service, if earlier. In such case the Participant's spouse
must execute a new consent, witnessed by a notary public, or, if agreed to
in writing by the Custodian, a representative of the Employer's Plan.
(c) If a distribution upon the death of the Participant is payable to a
person known by the Custodian to be a minor or otherwise under a legal
disability, the Custodian may, in its absolute discretion, make all, or any
part of the distribution to (1) a parent of such person, (2) the guardian,
conservator, or other legal representative, wherever appointed, of such
person, (3) a custodial account established under a Uniform Gifts to
Minors Act, Uniform Transfers to Minors Act, or similar act, (4) any person
having control or custody of such person, or (5) to such person directly.
Article VIII. Distributions Before Death
(a) Events Permitting Distributions
(1) Distribution of the assets in a Participant's Account shall be made
promptly following the later of (1) receipt by the Custodian of notice that
one of the events upon which distribution is permitted under Section
403(b)(7) of the Code has occurred, and (2) receipt by the Custodian of the
written election described in paragraph (b). The events permitting
distribution under Section 403(b)(7) of the Code are the following:
(A) The Participant has attained age 59 1/2, or the normal retirement age
specified in the Account Application, whichever is later.
(B) The Participant has separated from service with the Employer.
(C) The Participant has become Disabled (within the meaning of Section
72(m)(7) of the Code).
(D) The Participant has died.
(E) Financial hardship, if permitted under the Employer's plan (and then
subject to the conditions described in Article X, paragraph (a)).
(2) A Participant who separates from service with the Employer before the
attainment of age 59 1/2 may take distributions from the Account in the
form of substantially equal periodic payments as provided for in Section
72(t)(2)(A)(iv) of the Internal Revenue Code.
(b) Forms of Distribution
Subject to the other requirements of this Article VIII, the Participant
may elect, on a distribution form approved by the Custodian, to receive
distributions from the Account in any of the following forms:
(1) A total distribution in cash or Fund shares.
(2) Periodic installment payments.
(3) A specific dollar amount as directed by the Participant from time to
time.
(4) In the form of a fixed or variable annuity contract purchased from an
insurance company at the Participant's instruction and distributed to the
Participant, providing for periodic payments over any of the following
periods as specified by the Participant: the life of the Participant, the
lives of the Participant and his or her surviving spouse, or a period
certain not to exceed the period described in subparagraph (e)(1)(A).
(5) In the form of a fixed or variable annuity contract, purchased from
an insurance company at the Participant's instruction and distributed to
the Participant, for the amount of the entire balance of the Account,
payable for the life of the Participant, with a survivor annuity for the
Participant's spouse in an amount equal to 50% of the amount payable during
the joint lives of the Participant and the Participant's spouse, or another
payment method that meets the requirements of Sections 205(a)(1) of Title 1
of the Act (hereinafter termed a "joint and survivor spousal annuity").
(c) Joint and Survivor Spousal Annuity
A Participant must specify one of the forms of distribution listed in
paragraph VIII(b) and the Custodian shall have no obligation to make any
distribution until it receives such specification pursuant to an
instruction acceptable to the Custodian. However, in the case of a
Participant whose Account is part of an "employee pension benefit plan" (as
defined in the Act), a married Participant's election to receive
distributions in any form other than a joint and survivor spousal annuity
shall be invalid unless the Participant's spouse consents in writing to the
election, and the spouse's consent acknowledges the effect of the election
and is witnessed by a notary public or, if agreed to in writing by the
Custodian, a representative of the Employer's plan. If the Participant
does not elect a form of distribution, distribution to a married
Participant shall be made in the form of a joint and survivor spousal
annuity, and distribution to an unmarried Participant shall be made in the
form of an annuity for the Participant's life. Upon its receipt of notice
from a Participant pursuant to paragraph VIII(a), the Custodian shall
provide to the Participant a written explanation of: the terms and
conditions of the joint and survivor spousal annuity; the Participant's
right to make, and the effect of, an election to receive distributions in a
form other than a joint and survivor spousal annuity; the right of the
Participant's spouse to withhold consent to such an election; and the
Participant's right to revoke an election prior to commencement of
distributions. Notwithstanding the foregoing, if the Employer maintains a
written Section 403(b) plan for which this Account serves as a funding
vehicle, the terms and conditions of such plan with regard to distributions
commencing during a Participant's lifetime shall to the extent that they
are inconsistent with the provisions of this paragraph take precedence over
such provisions.
(d) Required Beginning Date
The Participant's entire interest in the Custodial Account must be, or
begin to be, distributed by the Participant's required beginning date. By
that date, the Participant may elect, in a manner acceptable to the
Custodian, to have the balance in the Custodial Account distributed in any
of the forms described in paragraph VIII(b), and subject to the other
requirements of this Article VIII.
(1) General Rule. The required beginning date of a Participant is the
April 1 of the calendar year following the calendar year in which the
Participant attains age 70 1/2.
(2) Transitional Rules. The required beginning date of a Participant who
attained age 70 1/2 before January 1, 1988 is the April 1 of the calendar
year following the calendar year of the Participant's retirement or
attainment of age 70 1/2, whichever is later.
The required beginning date of a Participant who attained age 70 1/2 during
1988 and who has not retired as of January 1, 1989 is April 1, 1990.
(e) Determination of Amount To Be Distributed Each Year
If the Participant's interest is to be distributed in other than a total
distribution, the following minimum distribution rules shall apply on or
after the required beginning date. Subparagraphs VIII(e)(1) through (3)
apply to distributions in forms other than the purchase of an annuity
contract.
(1) If a Participant's Benefit is to be distributed over (A) a period not
extending beyond the Life Expectancy of the Participant or the Joint Life
and Last Survivor Expectancy of the Participant and his Designated
Beneficiary, or (B) 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.
(2) For calendar years beginning after December 31, 1988, the amount to be
distributed each year, beginning with distributions for the first
Distribution Calendar Year, shall not be less than the quotient obtained by
dividing the Participant's Benefit by the lesser of (A) the Applicable Life
Expectancy or (B) if the Participant's spouse is not the Designated
Beneficiary, the applicable divisor determined from the table set forth in
Q&A-4 of Section 1.401(a)(9)-2 of the Income Tax Regulations.
Distributions after the death of the Participant shall be distributed using
the Applicable Life Expectancy in subparagraph (A) above as the relevant
divisor, without regard to Regulations Section 1.401(a)(9)-2.
(3) The minimum distribution required for the Participant's first
Distribution Calendar Year must be made on or before the Participant's
required beginning date. The minimum distribution for other calendar
years, including the minimum distribution for the Distribution Calendar
Year in which the Participant's required beginning date occurs, must be
made on or before December 31 of that Distribution Calendar Year.
(4) If the Participant's Benefit is distributed in the form of an annuity
contract purchased from an insurance company, distributions thereunder
shall be made in accordance with the requirements of Section 401(a)(9) of
the Code and the regulations thereunder.
Applicable Life Expectancy means the Life Expectancy (or Joint and Last
Survivor Expectancy) calculated using the attained age of the Participant
(or Designated Beneficiary) as of the Participant's (or Designated
Beneficiary's) birthday in the applicable calendar year, reduced by one for
each calendar year which has elapsed since the date Life Expectancy was
first calculated. If Life Expectancy is being recalculated, the Applicable
Life Expectancy shall be the Life Expectancy as so recalculated. The
applicable calendar year shall be the first Distribution Calendar Year, and
if Life Expectancy is being recalculated, such succeeding calendar year.
If annuity payments commence in accordance with subparagraph VIII(e)(4)
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 in the Account, the applicable calendar
year is the year of purchase.
Participant's Benefit means the account balance as of December 31 (the
valuation date) of the calendar year immediately preceding the Distribution
Calendar Year (valuation calendar year), increased by the amount of any
contributions allocated to the account balance as of dates in the valuation
calendar year after the valuation date and decreased by (1) distributions
made in the valuation calendar year after the valuation date, and (2) the
account balance as of December 31, 1986, decreased by any amount
distributed in a calendar year after December 31, 1986 which exceeded the
required minimum for such calendar year. For purposes of the preceding
sentence, 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.
Designated Beneficiary means the individual who is designated under
Article VII of the Agreement as the Beneficiary of a Participant, in
accordance with Section 401(a)(9) of the Code and the regulations
thereunder.
Distribution Calendar Year means a calendar year for which a minimum
distribution is required under Section 401(a)(9) of the Code and this
Article VIII. 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.
Life Expectancy and Joint and Last Survivor Expectancy are computed by use
of the expected return multiples in Tables V and VI of Section 1.72-9 of
the Income Tax Regulations. Unless otherwise elected by the Participant
(or his or her spouse, in the case of distributions described in Article
IX) by the time distributions are required to begin, Life Expectancies
shall be recalculated annually. Any such election shall be irrevocable as
to the Participant (or spouse) and shall apply to all subsequent years.
The Life Expectancy of a nonspouse beneficiary may not be recalculated.
(f) Other 403(b) arrangements
The determination of the amount to be distributed each year must be done
for each of the Participant's annuity contracts or custodial accounts
established under Section 403(b) of the Code. However, pursuant to Notice
88-38, 1988-1 C.B. 524, the total amount to be distributed may be taken
from any of such contracts or custodial accounts. The Custodian shall not
have any responsibility for making the determination under this paragraph.
(g) Vesting
Notwithstanding anything in this Agreement to the contrary, if the
Employer maintains a written Section 403(b) plan for which this Account
serves as a funding vehicle, such plan contains a vesting schedule, and the
Custodian has agreed in writing to maintain such vesting schedule, the
Participant's interest in the Custodial Account may, to the extent it is
subject to the plan's vesting schedule, be forfeited in accordance with the
provisions of the plan.
Article IX Distributions After Death
(a) General
If the Participant dies before his or her entire interest is distributed
to him or her, the entire remaining interest will be distributed as
follows:
(1) If the Participant dies on or after the Participant's required
beginning date, distribution must continue to be made at least as rapidly
as under the method of distribution being used before the Participant's
death.
(2) If the Participant dies before the Participant's required beginning
date, the entire remaining interest will, at the election of the
Beneficiary or Beneficiaries, either
(A) Be distributed by the December 31 of the year containing the fifth
anniversary of the Participant's death, or
(B) Be distributed in equal or substantially equal payments over the life
or life expectancy of the Designated Beneficiary or Beneficiaries.
The election of either (A) or (B) must be made by December 31 of the year
following the year of the Participant's death. If the Beneficiary or
Beneficiaries do not elect either of the distribution options described in
(A) or (B), distributions will be made in accordance with (B) if the
Beneficiary is the Participant's surviving spouse and in accordance with
(A) if the Beneficiary or Beneficiaries are or include anyone other than
the surviving spouse. In the case of distributions under (B),
distributions must commence by December 31 of the year following the year
of the Participant's death. If the Participant's spouse is the
Beneficiary, distributions need not commence until December 31 of the year
the Participant would have attained age 70 1/2, if later.
(b) Failure to Elect Form of Distribution
In the absence of an election of a form of distribution by a Beneficiary,
any distribution to the Participant's surviving spouse shall be made in the
form of an immediate annuity contract for the life of the surviving spouse,
purchased from an insurance company and distributed to the surviving
spouse, or another payment method that meets the requirements of Section
205(a)(2) of Title I of the Act. In the absence of such an election by a
Beneficiary other than a surviving spouse, distribution shall be made in a
single sum payment in Fund shares. In the event of the death of a
Beneficiary who has begun to receive distributions pursuant to this Article
IX, any balance remaining in the Account shall be distributed within one
year after the death of the Beneficiary, to the estate of the deceased
Beneficiary. Notwithstanding the foregoing, if the Employer maintains a
written Section 403(b) plan for which this Account serves as a funding
vehicle, the terms and conditions of such plan with regard to distributions
commencing after a Participant's death shall, to the extent that they are
inconsistent with the provisions of this Article IX, take precedence over
such provisions.
Article X. Miscellaneous Provisions Applicable to Distributions
(a) Effect of Employer Plan
Notwithstanding the foregoing provisions of Articles VIII and IX,
distribution to the Participant of any part or all of the assets in the
Account shall be made in accordance with such other provisions,
restrictions, or limitations as to the time, amount, or optional forms of
distributions (including, without limitation, distributions on account of
financial hardship within the meaning of Section 403(b)(7)(A)(ii) of the
Code) as the Employer shall have specified in written instructions to the
Custodian. Such instructions of the Employer shall become effective only
if and to the extent accepted and agreed to in writing by the Custodian.
If such instructions shall have the effect of requiring separate accounting
for contributions made by the Employer and contributions made by the
Employee pursuant to a Salary Reduction Agreement, the Custodian shall
account separately for amounts in the Account attributable to each type of
contribution, but only if the Employer shall provide the Custodian with
information sufficient to identify the source of such contributions to the
Account.
(b) Responsibilities of Custodian
The Custodian does not assume, and shall not have any responsibility to
make, any distribution except in accordance with written instructions, or
to make any distribution in the form of an annuity contract unless and
until the Custodian has received written instructions satisfactory to it
identifying the particular annuity contract and the insurance company from
which it is to be purchased, or to determine or give advice with respect to
life expectancies or the selection of annuity contracts. In addition, no
distribution shall be required unless and until the Custodian shall have
been furnished with all certificates, signature guarantees, and other
documents (including proof of any legal representative's authority) that it
may have requested. When distribution is made in the form of an annuity
contract, the contract must be nontransferable and its payment terms must
comply with those of the form of distribution specified by or for the
payee. The Account shall be deemed terminated upon the distribution of
such a contract, and the provisions of the Agreement shall thereafter be
null and void. Neither the Custodian nor the Company shall be liable for
the acts or omissions of any insurance company from which such an annuity
contract is purchased in accordance with the instructions of the
Participant (or, following the death of the Participant, of his or her
Beneficiary, executor or administrator). Notwithstanding the above, the
Custodian is empowered to make a distribution absent a written instruction
if directed to do so pursuant to a court order or tax levy and the
Custodian shall in such event incur no liability to anyone for acting in
accordance with such court order or tax levy.
(c) Tax Withholding
Any distribution payment shall be made by the Custodian subject to
withholding of any income or other taxes required by federal law.
Effective January 1, 1993, the Custodian shall withhold federal income tax
at the rate of 20% from any Eligible Rollover Distribution from the Account
which is not directly rolled over to another 403(b) annuity, 403(b)(7)
custodial account, or individual retirement account (as defined in Section
408 of the Code). However, payments made by the Custodian to a registered
Investment Advisor, as authorized by the Participant on the 403(b)
Financial Advisor Fee Authorization form, shall not be subject to
withholding of any income or other taxes required by federal law.
(d) Qualified Domestic Relations Orders
Any distribution pursuant to a domestic relations order or qualified
domestic relations order is subject to the Procedures for Distributions
Pursuant to Qualified Domestic Relations Orders under the Fidelity
Investments Section 403(b)(7) Individual Custodial Account Agreement, which
procedures are incorporated herein by reference.
(e) Non-Assignment
The interest of the Participant in the Account shall be used for the
exclusive benefit of the Participant or his or her Beneficiaries; shall be
non-forfeitable at all times (unless subject to a vesting schedule pursuant
to Article VIII, paragraph (g) above); shall not be assigned or transferred
by the Participant; and shall not be subject to alienation, assignment,
trustee process, garnishment, attachment, execution or levy of any kind,
except with regard to payment of the expenses of the Custodian and its
agent as authorized by the provisions of the Agreement and except to the
extent required by law, or as evidenced by a court order or tax levy as
described in Article X, paragraph (b), above.
Article XI. Administration
(a) Custodian as Agent
The Custodian is an agent appointed by the Participant to perform solely
the duties assigned to it under the Agreement, it being acknowledged that
certain of such duties may be performed by the Custodian (or one of its
affiliates) in any event pursuant to one or more other contractual
arrangements or relationships. The Custodian shall not be deemed to be a
fiduciary in carrying out the following duties:
(1) To receive contributions pursuant to the provisions of the Agreement;
(2) To hold, invest and reinvest the contributions in Fund shares;
(3) To register any property held by the Custodian in its own name, or in
nominee or bearer form that will pass delivery; and
(4) To make distributions from the Account in cash or in Fund shares
pursuant to the provisions of the Agreement.
(b) Voting
The Custodian shall mail to the Participant all prospectuses and proxies
that may come into the Custodian's possession by reason of its custody of
Fund shares. The Custodian shall not vote any Fund shares held hereunder
except in accordance with the Participant's written instructions; provided,
however, that the Custodian may, in the absence of instructions, vote
"present" for the sole purpose of allowing such shares to be counted for
establishment of a quorum at a shareholders' meeting.
(c) Reports
The Custodian shall keep accurate and detailed accounts of receipts,
investments and disbursements. The Custodian shall file such reports with
the Internal Revenue Service as may be required to be filed by the
Custodian (not including such reports as may be required to be filed by the
Employer). The Custodian, the Employer and the Participant shall furnish
to one another such information relevant to the Account as may be required
in connection with any such reports. Unless the Participant sends the
Custodian written objection to a report within sixty (60) days after its
receipt, the Participant shall be deemed to have approved such report, and
in such case the Custodian shall be forever released and discharged from
all liability and accountability to anyone with respect to all matters and
things included therein. The Custodian may seek a judicial settlement of
its accounts. In any such proceeding the only necessary party thereto in
addition to the Custodian shall be the Participant.
(d) Written Notices
All written notices or communications to the Participant or the Employer
shall be effective when sent by first class mail to the last known address
of the Participant or the Employer on the Custodian's records All written
notices or communications to the Custodian shall be mailed or delivered to
the Custodian at its designated mailing address, and no such written notice
or communication shall be effective until the Custodian's actual receipt
thereof. The Custodian shall be entitled to rely conclusively upon, and
shall be fully protected in any action or nonaction taken in good faith in
reliance upon, any written notices or other communications or instruments
believed to be genuine and to have been properly executed.
(e) Limitations on Custodian's Liability and Indemnification
The Participant and the Custodian intend that the Custodian shall have and
exercise no discretion, authority, or responsibility as to any investment
in connection with the Account and the Custodian shall not be responsible
in any way for the purpose, propriety or tax treatment of any contribution,
or of any distribution, or any other action or nonaction taken pursuant to
the Participant's direction or that of the Participant's Authorized Agent
(or, following the death of the Participant, of his or her Beneficiary,
executor or administrator). The Participant who directs the investment of
his or her Account shall bear sole responsibility for the suitability of
any directed investment and for any adverse consequences arising from such
an investment, including, without limitation, the inability of the
Custodian to value or to sell an illiquid investment, or the generation of
unrelated business taxable income with respect to an investment. To the
fullest extent permitted by law, the Participant or the Participant's
Authorized Agent (or, following the death of the Participant, his or her
Beneficiary, executor or administrator, as appropriate), shall at all times
fully indemnify and save harmless the Custodian, the Company and their
agents, affiliates, successors and assigns and their officers, directors
and employees, from any and all liability arising from the investment
direction of the Participant or the Participant's Authorized Agent (or,
following the death of the Participant, of his or her Beneficiary, executor
or administrator) under this Account and from any and all other liability
whatsoever which may arise in connection with this Agreement except
liability arising under applicable law or liability arising from gross
negligence or willful misconduct on the part of the indemnified person.
Although the Custodian shall have no responsibility to give effect to a
direction from anyone other than the Participant (or, following the death
of the Participant, his or her Beneficiary, executor or administrator), the
Custodian may, in its discretion, establish procedures pursuant to which
the Participant may delegate to a third party any or all of the
Participant's powers and duties hereunder, provided, however, that in no
event may anyone other than the Participant execute the application by
which this Agreement is adopted or the form by which the Beneficiary is
appointed, and provided, further, that any such third party to whom the
Participant has so delegated powers and duties shall be treated as the
Participant for purposes of applying the preceding sentences of this
paragraph and the provisions of Article V.
(f) Expenses
The Custodian shall collect out of the Account expenses of administration,
including, if any, the fees of counsel employed by the Custodian relating
directly to administration of or claims against or on behalf of the
Account, taxes, and fees for maintaining the Account that are set forth in
the Account Application or are effective in accordance with any schedule of
fees subsequently adopted by the Custodian upon thirty (30) days' written
notice to the Participant. The Custodian may redeem Fund shares and use
the proceeds of redemption to pay the foregoing expenses, taxes or fees or
bill the Participant directly for such expenses, taxes or fees.
Article XII. Resignation or Removal of Custodian
The Company may remove the Custodian at any time, and the Custodian may
resign at any time, upon thirty (30) days' written notice to the
Participant. Upon the removal or resignation of the Custodian, the Company
may, but shall not be required to, appoint a successor custodian under this
Custodial Agreement; provided that any successor custodian shall satisfy
the requirements of Section 401(f)(2) of the Code. Upon any such
successor's acceptance of appointment, the Custodian shall transfer the
assets of the Custodial Account, together with copies of relevant books and
records, to such successor custodian; provided, however, that the Custodian
is authorized to reserve such sum of money or property as it may deem
advisable for payment of any liabilities constituting a charge on or
against the assets of the Custodial Account, or on or against the Custodian
or the Company. The Custodian shall not be liable for the acts or
omissions of any successor to it. If no successor custodian is appointed
by the Company, the Custodial Account shall be terminated in accordance
with Article XIII.
Article XIII. Amendment and Termination
(a) Power of Company to Amend
The Participant, the Employer, and the Custodian delegate to the Company,
or its successors, the power to amend the Agreement (including retroactive
amendments). The Company shall give prompt written notice to the
Participant and the Employer of any amendment.
(b) Limitation on Amendment
No amendment to the Agreement shall be effective if it would cause or
permit (1) any part of the Account to be used for, or diverted to, any
purpose other than the exclusive benefit of the Participant or the
Participant's Beneficiaries, except with regard to payment of the expenses
of the Custodian and the Company as authorized by the provisions of this
Agreement and except to the extent required by law; (2) the Participant to
be deprived of any portion of his or her interest in the Account, unless
such amendment is necessary to conform the Agreement to the conditions of
any law, governmental regulation or ruling; or (3) the imposition of any
additional duty on the Custodian or the Company without its consent.
(c) Termination
The Participant reserves the right to terminate further contributions to
the Account pursuant to a Salary Reduction Agreement, by agreement with the
Employer. Upon termination of the Account, the Agreement shall be
considered to be rescinded and of no force and effect. The appointment of
a successor custodian pursuant to Article XII shall not be a termination of
the Account, nor shall the amendment of the Agreement by any successor
custodian be a termination of the Account.
(d) Distribution upon Termination
Termination of the Account shall be effected by distributing all assets
thereof. There shall be no liability on the part of the Custodian or the
Company for any tax consequences to the Participant or his or her
Beneficiaries resulting from such distribution.
Article XIV. Effect of Other 403(b) Arrangements
The Agreement shall not prevent the Participant or the Employer from
purchasing, for the benefit of and in the name of the Participant, an
annuity contract or contracts that qualify under Section 403(b) of the
Code, or from making contributions for the benefit of the Participant to
any other custodial account or accounts that qualify under Section
403(b)(7) of the Code, provided that the aggregate Employer payments or
contributions to or under such annuity contracts or custodial accounts and
under the Account shall not exceed the maximum permissible amounts as
determined pursuant to Article IV hereof.
Article XV. Governing Law
THE AGREEMENT IS ACCEPTED IN, AND SHALL BE GOVERNED BY, THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS, EXCEPT AS SUPERSEDED BY FEDERAL LAWS OR
REGULATIONS.
Exhibit 14(k)
NATIONAL FINANCIAL SERVICES CORPORATION
DEFINED CONTRIBUTION RETIREMENT PLAN
AND TRUST AGREEMENT
ARTICLE 1 - INTRODUCTION
By executing the Adoption Agreement the Employer has established a
retirement plan (the "Plan") governed by the Adoption Agreement and this
Plan and Trust Agreement. The purpose of the Plan is to create a
retirement fund intended to help provide for the future security of the
Participants and their beneficiaries.
ARTICLE 2 - DEFINITIONS
As used in this Plan the following terms shall have the meanings set forth
below:
2.1. "Account" or "Accounts" shall mean, with respect to any Participant,
the aggregate of his Employer Contribution Account and Participant
Contribution Account.
2.2. "Adoption Agreement" shall mean the original Application executed by
the Employer and any amendment thereto.
2.3. "Affiliated Employer" shall mean the Employer and a trade or
business, whether or not incorporated, which is any of the following:
(a) a member of a group of controlled corporations (within the meaning of
Section 414(b) of the Code) which includes the Employer; or
(b) a trade or business under common control (within the meaning of Section
414(c) of the Code) with the Employer; or
(c) a member of an affiliated service group (within the meaning of Section
414(m) of the Code) which includes the Employer; or
(d) an entity otherwise required to be aggregated with the Employer
pursuant to Section 414(o) of the Code.
In determining service for eligibility to participate in the Plan, all
employees of Affiliated Employers will be treated as employed by a single
employer.
2.4. "Break in Service" shall mean a period of 12 consecutive months,
commencing on the date on which an individual first performs an Hour of
Service or on any anniversary thereof, during which he is not credited with
more than 500 Hours of Service.
2.5. "Business" shall mean the trade or business of any Employer which is
not a corporation.
2.6. "Code" shall mean the Internal Revenue Code of 1986, as amended, or
any successor provisions of law.
2.7. "Compensation" shall mean all of a Participant's earnings which are
reported on Internal Revenue Service Form W-2, excluding deferred
compensation, but increased by amounts withheld under a salary reduction
agreement in connection with a cafeteria plan under Section 125 of the
Code, a cash or deferred plan under Section 401(k) of the Code, a
simplified employee pension under Section 408(k) of the Code or a tax
deferred annuity under Section 403(b) of the Code. If the Plan is adopted
as an amendment to an existing plan, the definition in this Section 2.7 is
effective as of the first day of the Plan Year in which the Plan is
adopted.
2.8. "Earned Income" shall mean the net earnings from self- employment
derived by a Self-employed Individual from the Business with respect to
which the Plan is established, for which personal services of the
individual are a material income producing factor, excluding items not
included in gross income and the deductions allocated to such items; and
reduced by (i) contributions by the Employer to qualified plans, to the
extent deductible under Section 404 of the Code, and (ii) any deduction
allowed to the Employer under Section 164(f) of the Code for taxable years
beginning after December 31, 1989.
2.9. "Earnings" shall mean the first $200,000 (as adjusted by the
Secretary at the same time and in the same manner as prescribed under
Section 415(d) of the Code) of the sum of the Compensation and the Earned
Income received by each Participant during a Plan Year. In determining the
Earnings of a Participant, the rules of Section 414(q)(6) of the Code shall
apply, but in applying those rules the term "family" shall include only the
Participant's spouse and the Participant's lineal descendants who have not
reached age 19 by the last day 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 Earnings 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 Earnings as determined under this Section 2.9
prior to the application of this limitation.
2.10. "Effective Date" shall mean the date specified in the Adoption
Agreement. If the Adoption Agreement indicates that the Employer is
adopting the Plan as an amendment to an existing plan, the provisions of
the existing plan apply to all events preceding the Effective Date, except
as to specific provisions of the Plan which set forth a retroactive
effective date in accordance with Section 1140 of the Tax Reform Act of
1986.
2.11. "Employee" shall mean (i) a common law employee of an Affiliated
Employer; (ii) in the case of an Affiliated Employer which is a sole
proprietorship, the sole proprietor thereof; (iii) in the case of an
Affiliated Employer which is a partnership, a partner thereof; and (iv) any
individual treated as an employee of an Affiliated Employer under the
"leased employee" rules in Section 11.9 of the Plan. The term "Employee"
shall include a Self-employed Individual and an Owner-Employee, but for
purposes of participation in accordance with Section 3.1 shall exclude (i)
any individual who is a nonresident alien receiving no earned income from
an Affiliated Employer which constitutes income from sources within the
United States, and (ii) any individual included in a unit of employees
covered by a collective bargaining agreement as to which retirement
benefits were the subject of good faith bargaining, unless the agreement
specifically provides for coverage by the Plan. For this purpose, the term
"unit of employees" does not include any organization of which more than
half the members are employees who are owners, officers or executives of
the Employer.
2.12. "Employer" shall mean the Employer named in the Adoption Agreement,
and any successor thereto.
2.13. "Employer Contribution Account" shall mean an account established on
the books of the Trust for the purpose of recording the Employer
contributions made on behalf of a Participant and any income, expenses,
gains or losses incurred thereon.
2.14. "Hour of Service" shall mean:
(a) Each hour for which an Employee is paid, or entitled to payment, for
the performance of duties for an Affiliated Employer. These hours shall be
credited to the Employee for the computation period or periods in which the
duties are performed.
(b) Each hour for which an Employee is paid, or entitled to payment, by an
Affiliated 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), jury duty, military duty, lay off or leave of absence;
provided, however, that no more than 501 Hours of Service shall be credited
under this Paragraph (b) to an Employee on account of any single continuous
period during which the Employee performs no services (whether or not such
period occurs in a single Plan Year or other computation period). Hours
under this paragraph shall be calculated and credited pursuant to Section
2530.200b-2(b) and (c) of the Department of Labor regulations, which are
incorporated herein by this reference; and
(c) Each hour for which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by an Affiliated Employer; provided, however,
that the same Hours of Service shall not be credited under both Paragraph
(a) above and this Paragraph (c), and provided, further, that no more than
501 Hours of Service shall be credited under this Paragraph (c) with
respect to payments of back pay, to the extent that such back pay is agreed
to or awarded for a period of time described in Paragraph (b) above, during
which the Employee did not or would not have performed any duties. These
hours shall be credited to the Employee for the computation period or
periods to which the award or payment pertains, rather than the computation
period in which the award, agreement or payment is made.
Hours of Service will be credited to leased employees in accordance with
Section 11.9. If the Employer maintains the plan of a predecessor
employer, Hours of Service will be credited for service with such
predecessor employer. An Employee who is absent from work on account of
pregnancy of the Employee, or of the birth of a child of the Employee, or
adoption of a child by the Employee, or for purposes of caring for a
newborn or newly adopted child, shall be credited during such absence with
the number of Hours of Service which would normally have been credited to
him but for such absence (or, if the number just described cannot be
determined, with eight Hours of Service per day of such absence); provided,
however, that no more than 501 Hours of Service shall be credited with
respect to any such pregnancy, birth or adoption; and provided, further,
that Hours of Service shall be credited under this sentence solely for the
purpose of determining whether an Employee has incurred a Break in Service.
The Employee must furnish to the Employer such information as shall be
reasonably required to establish the reason for an absence and the number
of days for which the absence continued. Hours of Service credited in
accordance with the preceding sentence shall be credited for the
computation period (determined under Section 2.26) in which the absence
begins, if necessary to prevent the Employee from incurring a Break in
Service in such period, or if not, in the period following the period in
which the absence begins.
2.15. "Insurance Contract" shall mean a guaranteed investment contract, a
fixed or variable annuity contract, or other investment product issued by
an insurance company and approved by the Sponsor as an investment medium
under the Plan, provided that (i) an Insurance Contract shall contain no
life insurance element, (ii) the mode or modes of distribution of funds
under an Insurance Contract shall in all events be subject to the direction
of the Trustee in accordance with Section 9.2, and (iii) an Insurance
Contract held under the Plan shall be convertible to any extent necessary
for compliance with Section 6.4.
2.16. "Life Insurance Policy" shall have the meaning set forth in Section
9.1.
2.17. "Owner-Employee" shall mean the sole proprietor, if the Employer is
a sole proprietorship, or a partner who owns more than 10% of either the
capital interest or the profits interest, if the Employer is a partnership.
2.18. "Participant" shall mean an Employee who has met the requirements of
Section 3.1 or Section 3.2.
2.19. "Participant Contribution Account" shall mean an account established
on the books of the Trust for the purpose of recording the contributions
made by a Participant and any income, expenses, gains or losses incurred
thereon.
2.20. "Plan Year" shall be the period of 12 consecutive months designated
by the Employer in the Adoption Agreement.
2.21. "Prototype Plan" shall mean the form of the Plan, as approved from
time to time by the Internal Revenue Service.
2.22. "Registered Investment Company" shall mean any one or more
corporations or trusts registered under the Investment Company Act of 1940
and approved by the Sponsor for use under the Plan for which Fidelity
Management & Research Company or any of its successors or affiliates
serves as investment advisor, and any other such entity as is acceptable to
the Trustee in its sole discretion; and "Registered Investment Company
Shares" shall mean the shares, trust certificates or other evidences of
ownership in any such Registered Investment Company.
2.23. "Self-employed Individual" shall mean an individual whose personal
services are a material income-producing factor in the Business and who has
Earned Income from the Business (or would have had such Earned Income if
the Business had net profits) for the taxable year, including a partner or
a sole proprietor.
2.24. "Sponsor" shall mean Fidelity Management & Research Company, a
Massachusetts corporation, or its successor.
2.25. "Trust" shall mean the trust fund established under Section 13.1,
and "Trustee" shall mean the Trustee named in the Adoption Agreement or any
successor to such Trustee.
2.26. "Year of Service" shall mean a period of 12 consecutive months,
commencing on the date on which an individual first performs an Hour of
Service or on any anniversary thereof, during which he is credited with at
least 1,000 Hours of Service; except that in the case of an Employee who
returns to service with the Employer after having incurred a Break in
Service, the period of 12 consecutive months shall commence on the date on
which he first performs an Hour of Service after the Break in Service, and
each anniversary thereof.
The following definitions apply only to Plans for which a Broker has been
named in the Adoption Agreement:
2.27."Broker shall mean the broker-dealer named in the Adoption Agreement
and registered under the Securities Exchange Act of 1934 (as now in effect
and hereafter amended, or any successor thereto).
2.28."Broker Plan " shall mean a Plan for which a broker is named in the
Adoption Agreement.
2.29. "Investment Manager" means an entity appointed in accordance with
section 15.2.1, which has acknowledged in writing that it is a fiduciary
with respect to the plan, and which is (1) registered as an investment
adviser under the Investment Advisers Act of 1940, or (2) a bank as defined
in the Investment Advisers Act of 1940, or (3) an insurance company
qualified to manage assets under the laws of more than one state.
ARTICLE 3. - PARTICIPATION
3.1 GENERAL RULE. Each Employee shall become a Participant on the first
day of the calendar month in which he first fulfills the age and service
requirements specified by the Employer in the Adoption Agreement. If the
Employer has specified that the number of Years of Service required for
eligibility shall not be interrupted, then an Employee who incurs a Break
in Service before completing the required number of Years of Service shall
not thereafter be credited with any Year of Service completed prior to the
Break in Service. If the Employer has specified that the number of Years
of Service required for eligibility may be interrupted, then an Employee
who incurs a Break in Service before completing the required number of
Years of Service shall continue to be credited with Years of Service
completed before the Break in Service. If the Employer has specified a
fractional part of a Year of Service, an Employee shall not be required to
complete any specified number of Hours of Service in order to receive
credit for a fractional part of a Year of Service.
In the event a Participant is no longer a member of an eligible class of
Employees and becomes ineligible to participate but has not incurred a
Break in Service, such Employee will participate immediately upon returning
to an eligible class of Employees. If such a Participant incurs a Break in
Service, eligibility will be determined under the Break in Service rules of
this Section 3.1. In the event an Employee who is not a member of an
eligible class of Employees becomes a member of an eligible class, such
Employee will participate immediately if such Employee has satisfied the
minimum age and service requirements and would have otherwise previously
become a Participant.
3.2 SPECIAL RULE FOR FORMER PARTICIPANTS. A former Participant whose
employment with the Employer terminates shall again become a Participant on
the day on which he first performs an Hour of Service for the Employer
after such termination.
3.3 OWNER-EMPLOYEE AS PARTICIPANT: MULTIPLE BUSINESSES. If the Plan
provides contributions or benefits for one or more Owner- Employees who
control both the Business and one or more other trades or businesses, the
Plan and the plans established with respect to such other trades or
businesses must, when looked at as a single plan, satisfy Sections 401(a)
and (d) of the Code with respect to the employees (which term shall include
an employee within the meaning of Section 401(c)(1) of the Code) of the
Employer and all such other trades or businesses. If this Plan provides
contributions or benefits for one or more Owner-Employees who control one
or more other trades or businesses, the employees of each such other trade
or business must be included in a plan which satisfies Sections 401(a) and
(d) of the Code and which provides contributions and benefits not less
favorable than those provided for such Owner-Employees under this Plan.
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 under the most favorable
plan of the trade or business which is not controlled.
For purposes of this Section 3.3, an Owner-Employee, or two or more
Owner-Employees, shall be considered to control a trade or business if such
Owner-Employee, or such two or more Owner- Employees together:
(a) own the entire interest in an unincorporated trade or business, or
(b) in the case of a partnership, own more than 50 percent of either the
capital interest or the profits interest in such partnership.
For this purpose, an Owner-Employee or a group of Owner-Employees shall be
treated as owning any interest in a partnership which is owned, directly or
indirectly, by a partnership controlled by him or them within the meaning
of the preceding sentence.
3.4. PARTICIPATION IN EMPLOYER CONTRIBUTIONS. The Employer's contribution
to the Plan for any Plan Year shall be allocated in accordance with Section
4.1 among the Employer Contribution Accounts of all Participants who are
active Employees on the last day of the Plan Year, or who are credited with
more than 500 Hours of Service during the Plan Year, or who left employment
during the Plan Year on account of death, total disability or attainment of
age 60 59 1/2 or older.
ARTICLE 4. - CONTRIBUTIONS
4.1 CONTRIBUTIONS BY THE EMPLOYER. Subject to the requirements and
limitations contained in this Article 4 and in Article 12, for each Plan
Year beginning with the Plan Year in which the Effective Date falls the
Employer shall make a contribution to the Trust in the amount determined
under the following rules.
(a) PROFIT SHARING PLANS. In the case of a profit sharing plan, the
contribution shall be a discretionary amount determined by the Employer,
not to exceed the amount deductible under Section 404 of the Code.
Contributions for any Plan Year shall be allocated as of the last day of
the Plan Year among the Employer Contribution Accounts of the Participants
in the ratio that each Participant's Earnings bears to the Earnings of all
Participants; provided, however, that if the Employer has selected in the
Adoption Agreement an allocation formula integrated with Social Security,
contributions shall instead be allocated in accordance with the following
formula:
(1) Contributions shall first be allocated among the Accounts of
Participants in the ratio that each Participant's Earnings bears to the
aggregate Earnings of all Participants. The total amount allocated in this
manner shall be equal to at least 3% of all Participants' Earnings, or (if
less) the total amount of the Employer contribution. The amount allocated
under this paragraph (1) shall be designated the "Base Contribution
Percentage."
(2) Contributions shall next be allocated among the Accounts of
Participants in the ratio that each Participant's Earnings in excess of the
taxable wage base (that is, the amount which may be considered "wages"
under Section 3121(a)(1) of the Internal Revenue Code) bears to the
aggregate of such Earnings of all Participants. The total amount to be
allocated in this manner shall not exceed the product of (i) all
Participants' Earnings in excess of the taxable wage base and (ii) the
lesser of the Base Contribution Percentage or 5.7% (or such other tax rate
as may be in effect for employer contributions to old age insurance under
the Social Security Act). Both the taxable wage base and the Social
Security old age insurance tax rate shall be those in effect on the first
day of the Plan Year.
(3) Contributions shall next be allocated among the Accounts of
Participants (whether or not they received an allocation under the
preceding paragraph) in the ratio that each Participant's Earnings bears to
the aggregate Earnings of all Participants.
(b) MONEY PURCHASE PENSION PLANS. In the case of a money purchase pension
plan, the contribution to be made and allocated to the Employer
Contribution Account of each Participant shall be the amount specified in
the Adoption Agreement, but in no event more than the amount deductible
under Section 404 of the Code.
(c) PAIRED PLANS. An Employer that adopts paired Profit Sharing and Money
Purchase Pension plans using this basic plan document must specify in the
Adoption Agreement for one of the plans a contribution rate of no less than
3% of each Participant's Earnings. Only one of the paired plans may be
integrated with Social Security. Fidelity Profit Sharing Plan #001 may be
paired with Fidelity Money Purchase Pension Plan #002, and Fidelity Profit
Sharing Plan #003 may be paired with Fidelity Money Purchase Pension Plan
#004.
4.2. TIME AND MANNER OF EMPLOYER CONTRIBUTIONS. Employer contributions
for a Plan Year shall be remitted to the Trustee not later than the due
date (including extensions) prescribed by law for filing the Employer's
federal income tax return for the fiscal year coinciding with such Plan
Year. Each contribution shall be accompanied by written instructions
specifying (i) the amount thereof which constitutes an Employer
contribution and the names of the Participants who are entitled to
participate in such contribution and (ii) the amount thereof which
constitutes Participants' contributions and the names of the Participants
by whom such contributions were made. If proper written instructions are
not received, the Trustee shall hold the contribution unallocated, and
invested in shares of the "money market" Registered Investment Company
specified in the Adoption Agreement, without liability for rising security
prices or distributions, pending receipt of written instructions or
clarification. Each such contribution shall also be accompanied by
investment instructions pursuant to Section 5.1. The Trustee shall have no
responsibility for determining the correctness of the amount or timing of
any contribution, or for the collection of any contribution if the Employer
should fail to make contributions as provided in the Plan.
4.3.VESTING. A Participant's interest in his Accounts shall immediately
become and at all times remain fully vested and non- forfeitable.
4.4. CONTRIBUTIONS BY PARTICIPANTS. Participants may not make
contributions to the Plan. If the Plan is adopted as an amendment of an
existing plan that permitted employees to make nondeductible contributions
for any Plan Year beginning after December 31, 1986, such contributions in
any such Plan Year may not exceed the maximum allowed under the
nondiscrimination test contained in Code Section 401(m)(2). Any Plan that
has accepted nondeductible employee contributions must maintain Participant
Contribution Accounts so long as any amounts attributable to such
contributions remain in the Trust Fund.
Subject to Article 7, a Participant may at any time withdraw amounts
credited to his Participant Contribution Account by submitting to the
Trustee, through the Employer, a written request specifying the amount to
be withdrawn (which shall not be less than $100, unless the entire amount
credited is less than $100, in which case the entire amount credited must
be withdrawn). Payment of such withdrawals shall be made within 30 days of
the Trustee's receipt of such a request. Except to the extent that such
withdrawals are made, a Participant's Participant Contribution Account
shall be distributable at the same time and in the same manner as his
Employer Contribution Account.
ARTICLE 5. - INVESTMENT OF CONTRIBUTIONS
5.1 DIRECTION BY PARTICIPANT. Each Participant will determine the manner
in which contributions allocated to his Account are to be invested or
reinvested, by providing specific instructions in a form and manner
acceptable to the Trustee. An investment medium must be approved by the
Trustee in order to be available under the Plan. In the event that at any
time there shall be credited to a Participant's Account cash for which no
such instructions have been furnished, or for which the instructions
furnished are unclear to the Trustee, or for which the instructions
furnished would require investment in a medium not approved by the Sponsor
for use under the Plan, such cash shall be invested in shares of the "money
market" Registered Investment Company designated in the Participant's
initial written investment instructions (or, if the Participant has never
provided written investment instructions, in the Adoption Agreement);
provided, however, that a balance of up to $100 of uninvested cash may be
maintained in a Participant's Account for administrative convenience.
While any balance remains in the Account of a deceased Participant, the
beneficiary of the deceased Participant (as determined in accordance with
Section 6.2) shall direct the investment of the Account as though the
beneficiary were the Participant. The Trustee shall have no duty to
question the directions of a Participant in the investment of his Account
or to advise him regarding the purchase, retention or sale of assets
credited to his Account, nor shall the Trustee be liable for any loss which
results from the Participant's exercise of control over his Account. The
Trustee may designate one or more corporations affiliated with the Trustee
as its agent or agents for the purpose of receiving Participants'
investment instructions.
5.2 INVESTMENTS. Subject to such reasonable and nondiscriminatory rules,
limits and procedures as the Trustee or Employer may establish from time to
time to facilitate administration of the Plan, all contributions under the
Plan shall be invested and reinvested in one or more of the following, as
directed by the Participant:
(a) Registered Investment Company Shares;
(b) marketable securities obtainable over the counter or on a recognized
securities exchange or directly from a Registered Investment Company;
(c) Insurance Contracts;
(d) deposits bearing a reasonable rate of interest and maintained by the
Trustee or by any bank acceptable to the Trustee;
(e) Life Insurance Policies meeting the terms and conditions of Article 9;
or
(f) any other investment medium permitted by the Trustee from time to time.
Any other provision hereof to the contrary notwithstanding, a Participant
may not direct that any part or all of an Account be invested in assets
other than Registered Investment Company Shares unless the aggregate amount
which the Participant (or following the death of the Participant, his
beneficiary) proposes to invest in such assets is at least such amount as
the Trustee shall establish from time to time. The Trustee may require any
Account which is invested in assets other than Registered Investment
Company Shares to maintain an investment of not more than $500 in shares of
the "money market" Registered Investment Company designated by the
Participant in his written investment instructions, in order to provide a
medium for investing available cash pending other instructions and for
convenience in collecting fees and expenses from the Account.
Commissions and other costs attributable to the acquisition of an
investment shall be charged to the Account of the Participant for which
such investment is acquired. No charge shall be made for purchase or sale
of stock of a Registered Investment Company managed by Fidelity Management
& Research Company, other than the charges set forth in the most recent
prospectus of such Registered Investment Company.
A Participant may, by delivery of specific instructions, purchase an option
or direct that covered call options be written on securities held in his
Account. Such covered call instructions must specify the number and
identify of shares to which the option applies, the term of the option, and
the option price.
Any assets of the Plan may be held in the name of the Trustee or its
nominee or nominees, and any assets so held may be commingled with other
such assets registered in that name, whether or not held under similar
Trust Agreements or in any fiduciary capacity whatsoever; provided,
however, that the books of the Trustee shall at all times reflect the
identity of the beneficial owners of such assets.
The Trustee shall cause to be delivered to each Participant, at the
Employer's address, all notices, prospectuses, financial statements,
proxies and proxy soliciting materials relating to assets held in his
Account. The Trustee shall not vote or exercise any other rights with
respect to any assets held hereunder except in accordance with the written
instructions of the Participant for whose Account such assets are held.
5.3. REINVESTMENT OF EARNINGS. Except as provided in Article 9, all
dividends, capital gains, income, interest and distributions of every
nature received in respect of the assets in a Participant's Account shall
be reinvested as follows:
(a) a distribution of any nature received in respect of Registered
Investment Company Shares shall be reinvested in additional shares of that
Registered Investment Company;
(b) any other distribution of any nature received in respect of assets in
the Account shall be invested as provided in Section 5.1.
Assets of the Plan shall be valued, at their fair market value, on each
December 31 and on such other dates as the Trustee considers necessary or
convenient. The income, gains, expenses and losses attributable to a
Participant's Account shall be credited or debited, as applicable, to his
Account alone.
ARTICLE 6. - PAYMENT OF BENEFITS
6.1. RETIREMENT OR TERMINATION BENEFITS. A Participant shall become
entitled to benefits under the Plan, in an amount equal to the combined
credit balance of his Accounts at the time of payment, when he (i) reaches
age 59 1/2 ("Normal Retirement Age") or (ii) terminates his service with
the Employer (whether before or after he reaches Normal Retirement Age).
Payment of benefits to such a Participant must commence within 60 days
after the end of the Plan Year in which the Participant reaches Normal
Retirement Age or terminates his service with the Employer, whichever is
later; provided, however, that:
(a) a Participant shall file a claim for benefits with the Employer,
specifying the manner of distribution in accordance with Section 6.3, and
the date on which payment is to commence; and
(b) a Participant may elect to postpone the commencement of benefits to any
date which satisfies the requirements of this Article 6 and Article 7.
For purposes of this Section 6.1, the failure of a Participant (and his
spouse, if spousal consent is required pursuant to Article 8 7) to consent
to a distribution while a benefit is "immediately distributable" within the
meaning of Section 6.4 shall be considered an election to postpone the
commencement of payment.
6.2 .DEATH BENEFITS; DESIGNATION OF BENEFICIARY. Subject to Section 7.3,
the beneficiary of a deceased Participant who had received no distribution
of benefits before his death shall be entitled to benefits under the Plan,
in an amount equal to the combined credit balance of the deceased
Participant's Accounts at the time of payment, commencing within 60 days
after the end of the Plan Year in which the Participant dies; provided,
however, that:
(a) a beneficiary shall file a claim for benefits with the Employer,
specifying the manner of distribution in accordance with Section 6.3, and
the date on which payment is to commence;
(b) a beneficiary who is the surviving spouse of a deceased Participant may
elect to have benefits commence within the 90-day period following the date
of the Participant's death; and
(c) a beneficiary may elect to postpone the commencement of benefits to any
date which satisfies the requirements of this Article 6, Article 7 and
Article 8.
In the case of a Participant who dies after having begun to receive a
distribution of benefits in installments under Section 6.3(b), distribution
of installments shall continue after his death to his beneficiary in
accordance with Section 8.5(a). In the case of a Participant who dies
after having received a distribution under Section 6.3(a), (c) or (d), no
death benefit shall be payable from the Plan.
A Participant may designate a beneficiary by completing and returning to
the Trustee a form provided for this purpose. The form most recently
completed and returned to the Trustee before the Participant's death shall
supersede any earlier form. If no form has been filed with the Trustee
before the death of a Participant, his beneficiary shall be the person(s)
designated in a form filed with the Plan Administrator before the
Participant's death and before March 1, 1990. If a Participant has not
designated any beneficiary by filing a form with the Trustee or the Plan
Administrator before his death, or if no beneficiary so designated survives
the Participant, his beneficiary shall be his surviving spouse, or if there
is no surviving spouse, his estate. A married Participant may designate a
beneficiary other than his spouse only if his spouse consents in writing to
the designation, and the spouse's consent acknowledges the effect of the
consent and is witnessed by a notary public or a representative of the
Plan. The preceding sentence shall apply to any change in the beneficiary
or beneficiaries named in a designation to which the spouse has consented,
unless the terms of the spouse's original written consent expressly permit
such a change, and acknowledge that the spouse voluntarily relinquishes the
right to limit the consent to a specific beneficiary. The marriage of a
Participant shall nullify any designation of a beneficiary previously
executed by the Participant. If it is established to the satisfaction of
the Plan Administrator that the Participant has no spouse or that the
spouse cannot be located, the requirement of spousal consent shall not
apply. Any spousal consent obtained pursuant to this Section 6.2, and any
decision of the Plan Administrator that the consent of a spouse cannot be
obtained, shall apply only with respect to the particular spouse involved.
6.3. MANNER OF DISTRIBUTION. Subject to the rules of Article 7
concerning joint and survivor annuities, benefits shall be distributed in
one or more of the following forms, as designated in writing by the
Participant or beneficiary:
(a) a lump sum in cash or in kind;
(b) a series of substantially equal annual (or more frequent) installments,
in cash or in kind, over a period that meets the requirements of Article 8;
(c) a fixed or variable annuity contract, other than a life annuity
contract, purchased from an insurance company;
(d) a life annuity contract (with or without a period certain or
guaranteed-refund feature) purchased from an insurance company.
If the Plan has been adopted as an amendment of an existing plan, any other
form of benefit available under that plan before its amendment shall be
made available under the Plan in accordance with paragraph (c) or (d) of
this Section 6.3 by the purchase from an insurance company of an annuity
contract providing for payment in the desired form. Subject to Article 7,
the Account balance of a Participant or beneficiary who fails to elect a
manner of distribution shall be distributed in cash in accordance with
paragraph (b) of this Section 6.3.
6.4. RESTRICTION ON IMMEDIATE DISTRIBUTIONS. A Participant's Account
balance is considered "immediately distributable" if any part of the
Account balance could be distributed to the Participant (or his surviving
spouse) before the Participant attains, or would have attained if not
deceased, age 62.
(a) If the value of a Participant's 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 spouse (or where either the
Participant or the spouse has died, the survivor) must consent to any such
distribution, unless an exception described in paragraph (b) applies. The
consent of the Participant and his 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 spouse, no less than 30 days and no more than 90 days before the
annuity starting date, of the right to defer any distribution until the
Participant's sixty-second (62nd) birthday. Such notification shall
include a general description of the material features of the optional
forms of benefit available under the Plan and an explanation of their
relative values, in a manner that would satisfy the notice requirements of
Section 417(a)(3) of the Code.
(b) The following exceptions to paragraph (a) apply:
(1) If the exception in Section 7.1(b) (for certain profit sharing plans)
applies with respect to the Participant, the spouse need not consent to the
distribution of an Account balance that is immediately distributable.
(2) Only the Participant need consent to a distribution in the form of a
Qualified Joint and Survivor Annuity (as defined in Section 7.4(d)) while
the Account balance is immediately distributable.
(3) Neither the Participant's nor the spouse's consent shall be required to
the extent that a distribution is required to satisfy Section 401(a)(9) or
Section 415 of the Code.
(4) For purposes of determining the applicability of the foregoing consent
requirements to distributions made before the first day of the first Plan
Year beginning after December 31, 1988, a Participant's Account balance
shall not include amounts attributable to accumulated deductible employee
contributions within the meaning of section 72(o)(5)(B) of the Code.
6.5. SPECIAL RULES FOR ANNUITY CONTRACTS. The following rules shall
apply to distributions made, in whole or in part, in the form of an annuity
contract:
(a) NONTRANSFERABILITY. Any annuity contract distributed under the Plan
must be nontransferable.
(b) COMPATIBILITY WITH PLAN. The terms of any annuity contract purchased
and distributed by the Plan to a Participant shall comply with the
requirements of this Article 6, Article 7 and Article 8.
(c) INSURANCE CONTRACTS. No distribution in kind shall include an
Insurance Contract unless the mode of payment under the Insurance Contract
meets the requirements of this Section 6.5.
6.6. DISTRIBUTION PROCEDURE. The Trustee shall make or commence
distributions to or for the benefit of Participants only on receipt of a
written order from the Employer certifying that a distribution of a
Participant's benefits is payable pursuant to the Plan, and specifying the
time, manner and amount of payment. The Trustee shall be fully protected
in acting upon the written directions of the Employer in making benefit
distributions, and shall have no duty to determine the rights or benefits
of any person under the Plan or to inquire into the right or power of the
Employer to direct any such distribution. A beneficiary designation form
completed and filed in accordance with Section 6.2 shall be deemed a
written order of the Employer for purposes of this Section 6.6. The
Trustee shall be entitled to assume conclusively that any determination by
the Employer with respect to a distribution meets the requirements of the
Plan. The Trustee shall not be required to make any payment hereunder in
excess of the net realizable value of the assets of the Trust at the time
of such payment, nor to make any payment in cash unless the Employer has
furnished written instructions as to the assets to be converted to cash for
the purposes of making payment.
6.7. CLAIMS. A Participant or beneficiary who believes he is entitled to
benefits under the Plan shall complete and deliver to the Employer a
written claim for benefits on a form provided by the Employer. The
Employer shall respond to such a claim within 60 days either by
commencement of payment of benefits or by a written notice that the claim
has been denied, setting forth the reasons for the denial and citing
relevant provisions of the Plan, indicating if further information is
necessary or if the claimant must satisfy further conditions or
requirements to qualify for benefits, and describing the procedure for
appeal and review established by Section 6.8. A claimant who receives no
response within 90 days may consider his claim denied, and may proceed as
described in Section 6.8.
6.8. APPEAL AND REVIEW. A Participant or beneficiary whose claim for
benefits has been denied, either by notice of denial or by passage of time,
may at any time within 90 days of such denial appeal the denial of his
claim by requesting review by the Employer. Such a request shall be in
writing and may be submitted by the claimant or his representative. The
claimant or his representative or both may also appear personally before
the Employer to submit issues and comments orally. The Employer shall
issue a decision within 60 days of receipt of a written request of for
review (unless special circumstances, such as need for a hearing, justify
delay, but in any event within 120 days of receipt of a written request for
review). Such a decision shall be in writing, and shall include specific
reasons for the decision, with reference to the provisions of the Plan upon
which the decision is based. The Employer's decision on review shall be
final and binding upon all parties.
ARTICLE 7. - JOINT AND SURVIVOR ANNUITY REQUIREMENTS
7.1. APPLICABILITY.
(a) GENERALLY. The provisions of Sections 7.2 through 7.5 shall generally
apply to a Participant who is credited with at least one Hour of Service on
or after August 23, 1984, and such other Participants as provided in
Section 14.2.
(b) EXCEPTION FOR CERTAIN PROFIT SHARING PLANS. The provisions of Sections
7.2 through 7.5 shall not apply to a Participant in a profit sharing plan
if: (i) the Participant does not elect payment of benefits in the form of
a life annuity, and (ii) on the death of the Participant, his Account
Balance will be paid to his surviving spouse (unless there is no surviving
spouse, or the surviving spouse has consented to the designation of another
Beneficiary in a manner conforming to a Qualified Election) and the
surviving spouse may elect to have distribution of the Account Balance
(adjusted in accordance with Section 5.3 for gains or losses occurring
after the Participant's death) commence within the 90-day period following
the date of the Participant's death. (The provisions of Section 6.2 meet
the requirements of clause (ii) of the preceding sentence.) The
Participant may waive the spousal death benefit described in this paragraph
(b) at any time, provided that no such waiver shall be effective unless it
satisfies the conditions applicable under Section 7.4(c) to a Participant's
waiver of a Qualified Preretirement Survivor Annuity. The exception in
this paragraph (b) shall not be operative with respect to a Participant in
a profit sharing plan if the Plan:
(1) Is a direct or indirect transferee of a defined benefit plan, money
purchase pension plan, target benefit plan, stock bonus plan, or profit
sharing plan which is subject to the survivor annuity requirements of
Sections 401(a)(11) and 417 of the Code; or
(2) Is adopted as an amendment of a plan subject to the survivor annuity
requirements of Sections 401(a)(11) and 417 of the Code.
For purposes of this paragraph (b), Account Balance shall have the meaning
provided in Section 7.4(f). The provisions of Sections 7.2 through 7.5 set
forth the survivor annuity requirements of Sections 401(a)(11) and 417 of
the Code.
(c) EXCEPTION FOR CERTAIN AMOUNTS. The provisions of Sections 7.2 through
7.5 shall not apply to any distribution made on or after the first day of
the first Plan Year beginning after December 31, 1988, from or under a
separate account attributable solely to accumulated deductible employee
contributions as defined in Section 72(o)(5)(B) of the Code, and maintained
on behalf of a Participant in a money purchase pension plan or a target
benefit plan, provided that the exceptions applicable to certain profit
sharing plans under paragraph (b) are applicable with respect to the
separate account (for this purpose, Account Balance means the Participant's
separate account balance attributable solely to accumulated deductible
employee contributions within the meaning of Section 72(o)(5)(B) of the
Code).
7.2. 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 Account
Balance will be paid in the form of a Qualified Joint and Survivor Annuity
and an unmarried Participant's Account Balance will be paid in the form of
a life annuity. In either case, the Participant may elect to have such an
annuity distributed upon his attainment of the Earliest Retirement Age
under the Plan.
7.3. QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. Unless an optional form
of benefit has been selected within the Election Period pursuant to a
Qualified Election, the Account Balance of a Participant who dies before
the Annuity Starting Date shall be applied toward the purchase of an
annuity for the life of his surviving spouse (a "Qualified Preretirement
Survivor Annuity"). The surviving spouse may elect to have such an annuity
distributed within a reasonable period after the Participant's death. For
purposes of this Article 7, the term "spouse" means the current spouse or
surviving spouse of a Participant, except 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 Section 414(p) of the
Code.
7.4. DEFINITIONS. The following definitions apply:
(a) ELECTION PERIOD means the period beginning on the first day of the Plan
Year in which a Participant attains age 35 and ending on the date of the
Participant's death. If a Participant separates from service before the
first day of the Plan Year in which he reaches age 35, the Election Period
with respect to his account balance as of the date of separation shall
begin on the date of separation.
(b) EARLIEST RETIREMENT AGE means the earliest date on which the
Participant could elect to receive Retirement benefits under the Plan.
(c) QUALIFIED ELECTION means a waiver of a Qualified Joint and Survivor
Annuity or a Qualified Preretirement Survivor Annuity. Any such waiver
shall not be effective unless: (1) the Participant's spouse consents in
writing to the waiver; (2) the waiver designates a specific Beneficiary,
including any class of beneficiaries or any contingent beneficiaries, which
may not be changed without spousal consent (unless the spouse's consent
expressly permits designations by the Participant without any further
spousal consent); (3) the spouse's consent acknowledges the effect of the
waiver; and (4) the spouse's consent is witnessed by a plan representative
or notary public. Additionally, a Participant's waiver of the Qualified
Joint and Survivor Annuity shall not be effective unless the waiver
designates a form of benefit payment which may not be changed without
spousal consent (unless the spouse's consent expressly permits designations
by the Participant without any further spousal consent). If it is
established to the satisfaction of a plan representative that there is no
spouse or that the spouse cannot be located, a waiver will be deemed a
Qualified Election. Any consent by a spouse obtained under these
provisions (and any establishment that the consent of a spouse may not be
obtained) shall be effective only with respect to the particular spouse
involved. A consent that permits designations by the Participant without
any requirement of further consent by the spouse must acknowledge that the
spouse has the right to limit the 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 those 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
valid unless the Participant has received notice as provided in Section
7.5.
(d) QUALIFIED JOINT AND SURVIVOR ANNUITY means an immediate annuity for the
life of a Participant, with a survivor annuity for the life of the spouse
which is not less than 50 percent and not more than 100 percent of the
amount of the annuity which is payable during the joint lives of the
Participant and the spouse, and which is the amount of benefit that can be
purchased with the Participant's Account Balance. The percentage of the
survivor annuity under the Plan shall be 50 percent.
(e) ANNUITY STARTING DATE means the first day of the first period for which
an amount is paid as an annuity (or any other form).
(f) ACCOUNT BALANCE means the aggregate value of the Participant's Account
balance derived from Employer and Employee contributions (including
rollovers), including the proceeds of insurance contracts, if any, on the
Participant's life. The provisions of this Article 7 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.
7.5 NOTICE REQUIREMENTS. In the case of a Qualified Joint and Survivor
Annuity, no less than 30 days and no more than 90 days before a
Participant's Annuity Starting Date the Plan Administrator shall provide to
him a written explanation of (i) the terms and conditions of a Qualified
Joint and Survivor Annuity, (ii) the Participant's right to make, and the
effect of, an election to waive the Qualified Joint and Survivor Annuity
form of benefit, (iii) the rights of the Participant's spouse, and (iv) the
right to make, and the effect of, a revocation of a previous election to
waive the Qualified Joint and Survivor Annuity.
In the case of a Qualified Preretirement Survivor Annuity, within the
applicable period for a Participant the Plan Administrator shall provide to
him a written explanation of the Qualified Preretirement Survivor Annuity,
in terms and manner comparable to the requirements applicable to the
explanation of a Qualified Joint and Survivor Annuity as described in the
preceding paragraph. The applicable period for a Participant is whichever
of the following periods ends last: (i) 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; (ii) a reasonable period ending after an
individual becomes a Participant; (iii) a reasonable period ending after
this Article 7 first applies to the Participant. Notwithstanding the
foregoing, in the case of a Participant who separates from service before
attaining age 35, notice must be provided within a reasonable period ending
after his separation from service.
For purposes of applying the preceding paragraph, a reasonable period
ending after the enumerated events described in (i), (ii) and (iii) is the
end of the two-year period beginning one year before 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
he reaches age 35, notice shall be provided within the two-year period
beginning one year before the separation and ending one year after the
separation. If such a Participant thereafter returns to employment with
the Employer, the applicable period for the Participant shall be
redetermined.
A Participant who will not attain age 35 as of the end of a Plan Year may
make a special Qualified Election to waive the Qualified Preretirement
Survivor Annuity for the period beginning on the date of such election and
ending of 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 Preretirement Survivor
Annuity in such terms as are comparable to the explanation required under
this Section 7.5. Qualified Preretirement 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.
ARTICLE 8. Minimum Distribution Requirements
8.1. GENERAL RULES. Except as otherwise provided in Article 7, Joint and
Survivor Annuity Requirements, the requirements of this Article 8 shall
apply to any distribution of a Participant's interest and will take
precedence over any inconsistent provisions of the Plan. Unless otherwise
specified, the provisions of this Article 8 apply to calendar years
beginning after December 31, 1984. All distributions required under this
Article 8 shall be determined and made in accordance with the Income Tax
Regulations under Section 401(a)(9) of the Code, including the minimum
distribution incidental benefit requirement of Section 1.401(a)(9)- 2 of
the regulations.
8.2. REQUIRED BEGINNING DATE. The entire interest of a Participant must
be distributed, or begin to be distributed, no later than the Participant's
required beginning date, determined as follows.
(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
attains age 70 1/2 before January 1, 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 his Retirement or his
attainment of age 70 1/2 occurs.
(2) 5-PERCENT OWNERS. The required beginning date of a Participant who is
a 5-percent owner during any year beginning after December 31, 1979, is the
first day of April following the later of:
(i) the calendar year in which the Participant attains age 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.
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 January 1,
1989, is April 1, 1990.
(c) RULES FOR 5-PERCENT OWNERS. A Participant is treated as a 5-percent
owner for purposes of this Section 8.2 if he is a 5-percent owner as
defined in Section 416(i) of the Code (determined in accordance with
Section 416 but without regard to whether the Plan is top heavy) at any
time during the Plan Year ending with or within the calendar year in which
he attains age 66 1/2, or any subsequent Plan Year. Once distributions
have begun to a 5-percent owner under this Section 8.2, they must continue,
even if the Participant ceases to be a 5-percent owner in a subsequent
year.
8.3. LIMITS ON DISTRIBUTION PERIODS. As of the first Distribution
Calendar Year, distributions not made in a single sum may be made only over
one or a combination of the following periods:
(a) the life of the Participant,
(b) the life of the Participant and his 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 his Designated Beneficiary.
DESIGNATED BENEFICIARY means the individual who is designated under Section
6.2 of the Plan as the beneficiary of a Participant, in accordance with
Section 401(a)(9) of the Code and the regulations thereunder.
DISTRIBUTION CALENDAR YEAR means a calendar year for which a minimum
distribution is required under Section 401(a)(9) of the Code and this
Section 8.3. For distributions beginning before the Participant's death,
the first Distribution Calendar Year is the calendar year immediately
preceding the calendar year which contains the Participant's required
beginning date. For distributions beginning after the Participant's death,
the first Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to Section 8.5.
LIFE EXPECTANCY and JOINT AND LAST SURVIVOR EXPECTANCY are computed by use
of the expected return multiples in Tables V and VI of Section 1.72-9 of
the Income Tax Regulations. Unless otherwise elected by the Participant
(or his spouse, in the case of distributions described in Section 8.5(b))
by the time distributions are required to begin, Life Expectancies shall be
recalculated annually. Any such election shall be irrevocable as to the
Participant (or spouse) and shall apply to all subsequent years. The Life
Expectancy of a nonspouse beneficiary may not be recalculated.
8.4 Determination of Amount To Be Distributed Each Year. If the
Participant's interest is to be distributed in other than a single sum, the
following minimum distribution rules shall apply on or after the required
beginning date. Paragraphs (a) through (d) apply to distributions in forms
other than the purchase of an annuity contract.
(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 his Designated
Beneficiary, or (2) a period not extending beyond the Life Expectancy of
the Designated Beneficiary, the amount required to be distributed for each
calendar year, beginning with distributions for the first Distribution
Calendar Year, must at least equal the quotient obtained by dividing the
Participant's Benefit by the Applicable Life Expectancy.
(b) For calendar years beginning before January 1, 1989, if the
Participant's spouse is not the Designated Beneficiary, the method of
distribution selected must assure that at least 50 percent of the present
value of the amount available for distribution is paid within the Life
Expectancy of the Participant.
(c) For calendar years beginning after December 31, 1988, the amount to be
distributed each year, beginning with distributions for the first
Distribution Calendar Year, shall not be less than the quotient obtained by
dividing the Participant's Benefit by the lesser of (1) the Applicable Life
Expectancy or (2) if the Participant's spouse is not the Designated
Beneficiary, the applicable divisor determined from the table set forth in
Q&A-4 of Section 1.401(a)(9)-2 of the Income Tax Regulations.
Distributions after the death of the Participant shall be distributed using
the Applicable Life Expectancy in paragraph (a) above 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 distribution for other calendar
years, including the minimum distribution for the Distribution Calendar
Year in which the Employee's required beginning date occurs, must be made
on or before December 31 of that Distribution Calendar Year.
(e) If the Participant's Benefit is distributed in the form of an annuity
contract purchased from an insurance company, distributions thereunder
shall be made in accordance with the requirements of Section 401(a)(9) of
the Code and the regulations thereunder.
APPLICABLE LIFE EXPECTANCY means the Life Expectancy (or Joint and Last
Survivor Expectancy) calculated using the attained age of the Participant
(or Designated Beneficiary) as of the Participant's (or Designated
Beneficiary's) birthday in the applicable calendar year, reduced by one for
each calendar year which has elapsed since the date Life Expectancy was
first calculated. If Life Expectancy is being recalculated, the Applicable
Life Expectancy shall be the Life Expectancy as so recalculated. The
applicable calendar year shall be the first Distribution Calendar Year, and
if Life Expectancy is being recalculated such succeeding calendar year. If
annuity payments commence in accordance with Section 8.4(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 in the Plan, the applicable calendar year is the year of purchase.
PARTICIPANT'S BENEFIT means the account balance as of the last valuation
date in the calendar year immediately preceding the Distribution Calendar
Year (valuation calendar year), increased by the amount of any
contributions or Forfeitures allocated to the account balance as of dates
in the valuation calendar year after the valuation date and decreased by
distributions made in the valuation calendar year after the valuation date.
For purposes of the preceding sentence, 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.
8.5. DEATH DISTRIBUTION PROVISIONS.
(a) DISTRIBUTION BEGINNING BEFORE DEATH. If the Participant dies after
distribution of his interest has begun, the remaining portion of his
interest will continue to be distributed at least as rapidly as under the
method of distribution being used before the Participant's death.
(b) DISTRIBUTION BEGINNING AFTER DEATH. If the Participant dies before
distribution of his interest begins, distribution of his entire interest
shall be completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death, except to the extent that an
election is made to receive distributions in accordance with (1) or (2)
below:
(1) If any portion of the Participant's interest is payable to a Designated
Beneficiary, distributions may be made over the Designated Beneficiary's
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;
or
(2) If the Designated Beneficiary is the Participant's surviving spouse,
the date distributions are required to begin in accordance with (1) above
shall not be earlier than the later of (i) December 31 of the calendar year
immediately following the calendar year in which the Participant died, and
(ii) 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 Section 8.5 by
the time of his death, the Participant's Designated Beneficiary must elect
the method of distribution no later than the earlier of (i) December 31 of
the calendar year in which distributions would be required to begin under
this Section 8.5, or (ii) December 31 of the calendar year which contains
the fifth anniversary of the date of death of the Participant. If the
Participant has no Designated Beneficiary, or if the Designated Beneficiary
does not elect a method of distribution, distribution of the Participant's
entire interest must be completed by December 31 of the calendar year
containing the fifth anniversary of the Participant's death.
(c) For purposes of paragraph (b), if the surviving spouse dies after the
Participant, but before payments to the spouse begin, the provisions of
paragraph (b), with the exception of subparagraph (2) therein, shall be
applied as if the surviving spouse were the Participant.
(d) For purposes of this Section 8.5, any amount paid to a child of the
Participant will be treated as if it had been paid to the surviving spouse
of the Participant if the amount becomes payable to the surviving spouse
when the child reaches the age of majority.
(e) For the purposes of this Section 8.5, distribution of a Participant's
interest is considered to begin on the Participant's required beginning
date (or, if paragraph (c) above is applicable, the date distribution is
required to begin to the surviving spouse pursuant to paragraph (b) above).
If distribution in the form of an annuity contract described in Section
8.4(e) irrevocably commences to the Participant before the required
beginning date, the date distribution is considered to begin is the date
distribution actually commences.
ARTICLE 9. - LIFE INSURANCE POLICIES
9.1. PURCHASE OF LIFE INSURANCE POLICIES. Subject to such reasonable and
non-discriminatory rules, limits and procedures as the Trustee or Employer
may establish from time to time, a Participant may from time to time direct
the Trustee to apply amounts credited or to be credited to his Account to
the payment of premiums on one or more ordinary life insurance policies or
other insurance contracts containing a life insurance element and approved
by the Trustee for purchase under the Plan ("Life Insurance Policies");
provided that the Participant supplies such information and instructions
and submits to such examination as may be required, and provided further
that the Employer certifies to the Trustee that such direction will not
cause the total premiums paid from the Participant's Account to exceed the
following limitations:
(a) No more than one-half (1/2) of the aggregate amount of Employer
contributions allocated to the Participant may be used to pay premiums on
Life Insurance Policies
providing for both non-decreasing death benefits and non- increasing
premiums; and
(b) No more than one-fourth (1/4) of the aggregate amount of Employer
contributions allocated to the Participant may be used to pay premiums on
Life Insurance Policies other than those described in paragraph (a); and
(c) The sum of one-half (1/2) of the premiums under paragraph (a) and all
other premiums paid may not exceed one fourth (1/4) of the aggregate
Employer contributions allocated to the Participant.
The Life Insurance Policies available to Participants hereunder shall be
nontransferable when held by anyone other than the Trustee, and shall be
limited to those permitted by the Trustee from time to time. Subject to
Article 7, a Life Insurance Policy held under the Plan shall be convertible
distributed to the Participant upon commencement of benefits, or converted
to cash or an annuity to any extent necessary for compliance with Sections
6.3 and 8.5. Any dividends or credits on a Life Insurance Policy shall be
allocated to the Participant's Employer Contribution Account or Participant
Contribution Account, according to the source from which premiums are paid.
No loans may be made on Life Insurance Policies under the Plan.
The Trustee shall apply for and be the owner of any Life Insurance Policy
purchased under the terms of the Plan. The Life Insurance Policy must
provide that the proceeds will be payable to the Trustee; however, the
Trustee shall be required to pay over all proceeds of Life Insurance
Policies to the Participant's Designated Beneficiary in accordance with the
distribution provisions of Section 8.5 of the Plan. A Participant's spouse
will be the Designated Beneficiary in all circumstances unless a Qualified
Election has been made in accordance with Section 7.4(c) (or, in the case
of a Participant in a profit sharing plan to which the spousal annuity
rules of Article 7 do not apply, spousal consent to the designation of
another beneficiary has been obtained in accordance with Section 6.2).
Under no circumstances shall the Trust retain any part of the proceeds. In
case of any conflict between the provisions of a Life Insurance Policy and
the Plan, the provisions of the Plan shall control.
9.2. DISTRIBUTIONS WITH RESPECT TO LIFE INSURANCE POLICIES. Upon the
death of a Participant, any payments which are due or which may become due
under a Life Insurance Policy issued under the Plan shall be paid in
accordance with the terms of the Policy; provided, however, that:
(a) to the extent (if any) that the terms of the Policy do not govern the
disposition of the proceeds, they shall be distributed to the same persons
or estates as are determined under Section 6.2 and the action taken
thereunder; and
(b) the method of distribution under each Policy shall conform with the
provision governing the manner of distribution set out in Section 8.5.
Subject to Article 7, Joint and Survivor Annuity Requirements,
distributions with respect to a Life Insurance Policy other than as a
result of the death of a Participant or the termination of the Plan shall
commence as provided in Section 6.1, and the Life Insurance Policy shall
then be distributed to the Participant after converting it, if necessary,
so that it does not provide any options which do not conform to Section
6.5. The cash value of Life Insurance Policies purchased for a Participant
shall be treated as part of his Employer Contribution Account or
Participant Contribution Account, according to the source from which
premiums are paid. A Policy which cannot be distributed promptly after the
cessation of payment of premiums from Employer contributions shall be made
paid-up for whatever face amount its cash value will provide.
ARTICLE 10 - AMENDMENT AND TERMINATION
10.1. SPONSOR'S RIGHT TO AMEND. The Sponsor may amend any part of the
prototype form of this Plan by mailing written notice of such amendment to
the Employer; provided, however, that:
(a) the Sponsor shall have no power to amend or terminate the Plan in such
manner as would cause or permit any part of the assets in the Trust to be
diverted to purposes other than for the exclusive benefit of Participants
and beneficiaries as described in Section 13.2, or as would cause or permit
any portion of such assets to revert to or become the property of the
Employer in violation of such Section;
(b) the Sponsor shall not have the right to amend the Plan in a manner that
violates Section 10.3; and
(c) the Sponsor shall have no power to amend the Plan in such a manner as
would increase the duties or liabilities of the Trustee unless the Trustee
consents thereto in writing.
10.2. EMPLOYER'S RIGHT TO AMEND. The Employer may at any time and from
time to time modify or amend this Plan in whole or in part (including
retroactive amendments), by delivering to the Trustee a written copy of
such amendment signed by the Employer; provided, however, that any such
amendment other than one described below (including an amendment designed
to allow the Plan to operate under a waiver of the minimum funding standard
pursuant to Section 412(d) of the Code) will constitute substitution by the
Employer of an individually designed plan for the approved Prototype Plan,
upon which event the Trustee named in the Adoption Agreement will resign
pursuant to Section 13.6:
(a) a change of the Employer's prior choice of an optional provision
indicated on the Adoption Agreement;
(b) the addition or modification of provisions stated in the Adoption
Agreement to allow the Plan to satisfy Section 415 of the Code, or to avoid
duplication of minimum benefits under Section 416 of the Code, because of
the required aggregation of multiple plans; or
(c) the addition of certain model amendments published by the Internal
Revenue Service which specifically provide that their adoption will not
cause a plan to be treated as individually designed.
An election made by the Employer within the prototype form of the Plan
shall be deemed to continue after amendment of the prototype form by the
Sponsor and until the Employer expressly further amends the election by
execution of a written document acceptable in form to the Trustee and
delivered to the Trustee.
10.3. CERTAIN AMENDMENTS PROHIBITED. No amendment to the Plan shall be
effective to the extent that it has the effect of reducing a Participant's
accrued benefit. An amendment shall be treated as reducing a Participant's
accrued benefit if it has the effect of reducing his Account balance
(except that a Participant's Account balance may be reduced to the extent
permitted by Section 412(c)(8) of the Code), or of eliminating the
availability of an optional form of benefit with respect to amounts
attributable to contributions made before the adoption of the amendment.
10.4. TERMINATION OF THE PLAN AND TRUST. The Employer may terminate the
Plan, or the Plan and the Trust, at any time by delivering to the Trustee a
written notice signed by or on behalf of the Employer and specifying the
date or dates as of which the Plan and Trust shall terminate.
10.5. PROCEDURE UPON TERMINATION OF TRUST. Upon termination of As soon
as administratively feasible after the stated date that the Plan terminates
pursuant to Section 10.4, the Trust may continue in existence until a date
specified by the Employer for its termination. Upon such termination, the
Trustee shall, after paying all expenses of the Trust, allocating any
unallocated assets of the Trust Fund, and adjusting all Accounts to reflect
such expenses and allocations, distribute to Participants, former
Participants and beneficiaries the assets credited to their Accounts;
provided, however, that the Trustee shall not be required to make any such
distribution until it has received notice of any determination by the
Internal Revenue Service which the Trustee may reasonably require. Each
such distribution shall be made promptly in accordance with Section 6.3.
Upon completion of such distribution the Trustee shall be relieved from all
further liability with respect to all amounts so paid.
ARTICLE 11. - MISCELLANEOUS
11.1. STATUS OF PARTICIPANTS. Neither the establishment of the Plan and
the Trust or any modification thereof, nor the creation of any fund or
account, nor the payment of any benefits, shall be construed as giving to
any Participant or other person any legal or equitable right against the
Employer, the Trustee or a Life Insurance Company, except as provided
herein or by the terms of Life Insurance Policies, and in no event shall
the terms of employment of any Employee or Participant be modified or in
any way be affected hereby.
11.2. ADMINISTRATION AND ENFORCEMENT. The Plan shall be administered by
the Employer, who shall be responsible for the operation of the Plan and
Trust Agreement in accordance with its terms. The Employer shall be the
"Named Fiduciary" and "Plan Administrator" for purposes of the Employee
Retirement Income Security Act of 1974; provided, however, that the
Employer's administrative powers and duties may be delegated to a committee
established for the purpose by the Employer, in which case the committee
shall be the "Named Fiduciary" and "Plan Administrator." From time to time
the Employer shall furnish to the Trustee a written instrument in a form
acceptable to the Trustee, specifying the person or persons authorized to
give instructions and directions on behalf of the Employer under the Plan,
and the Trustee shall be conclusively entitled to rely on the identity of
such person or persons as disclosed in the most recent such instrument.
The Employer shall have discretionary authority to determine all questions
arising out of the administration, interpretation and application of the
Plan, which determinations shall be conclusive and binding on all persons.
11.3. TRANSFERS AND ROLLOVERS. Notwithstanding any other provision
hereof, with the consent of the Trustee the Employer may cause to be
transferred to the Plan all or any of the assets held in any other plan
which satisfies the applicable requirements of Section 401 of the Code, and
which is maintained by the Employer for the benefit of any of the
Participants. Any such assets so transferred shall be accompanied by
written instructions from the Employer, which shall be conclusive, naming
the Participants for whose benefit such assets have been transferred and
showing separately the respective contributions by the Employer and by the
Participants and identifying the assets attributable to the various
contributions.
The Employer, with the consent of the Trustee, may permit an Employee
(whether or not a Participant) to transfer or cause to be transferred to
the Plan any assets held for his benefit in a qualified plan of a former
employer of his or in an individual retirement savings plan which has been
used by the Employee exclusively as a conduit for a prior distribution of
assets held for his benefit in a qualified plan of a former employer of
his. Such a transfer shall be made in the form of cash or property
permitted as an investment hereunder or readily marketable assets, either:
(a) directly between the trustee or custodian of the prior employer's plan
and the Trustee, in which case the transferred assets shall be accompanied
by written instructions showing separately the respective contributions by
the prior employer and by the transferring Employee, and identifying the
assets attributable to the various contributions; or
(b) by the Employee to the Trustee, in which case the assets transferred
must be accompanied by a written representation by the Employee that the
assets meet the requirements for rollover contributions set forth in
Section 402(a)(5) and (6) or Section 408(d)(3) of the Code (whichever is
applicable).
The Trustee will not accept assets which are not either in a medium proper
for investment hereunder or in cash. It shall hold the assets for
investment in accordance with the provisions of Article 5, and shall in
accordance with the written instructions of the Employer make appropriate
credits to the Account(s) of the Employee(s) for whose benefit assets have
been transferred. Any amounts so credited as contributions previously made
by an employer or by an Employee under a transferor plan, as specified by
the Employer, shall be treated as contributions previously made under the
Plan by the Employer or by the Employee, as the case may be. For purposes
of Section 4.4 concerning withdrawal of voluntary contributions, voluntary
contributions made by an Employee under any other plan and transferred to
this Plan pursuant to paragraph (a) of this Section 11.3 shall be
considered contributions made to this Plan pursuant to Section 4.4.
Subject to the provisions of Article 13, the Employer may direct the
Trustee to transfer assets held in the Trust for the account of a former
Participant to the custodian or trustee of any other plan or plans
maintained by the employer of the former Participant for the benefit of the
former Participant, or to the custodian or trustee of an individual
retirement savings plan established by the former Participant, provided
that the Trustee has received evidence satisfactory to it that such other
plan meets all applicable requirements of the Code. The assets so
transferred shall be accompanied by written instructions from the Employer
naming the person for whose benefit such assets have been transferred,
showing separately the respective contributions by the Employer and by the
Participant, and identifying the assets attributable to the various
contributions. The Trustee shall have no further liabilities under the
terms of this Agreement with respect to assets so transferred.
11.4. CONDITION OF PLAN AND TRUST AGREEMENT. It is a condition of this
Plan and Trust Agreement, and each Employee by participating herein
expressly agrees, that he shall look solely to the assets of the Trust for
the payment of any benefit under the Plan.
11.5. INALIENABILITY OF BENEFITS. The benefits provided hereunder shall
not be subject to alienation, pledge, use as security for a loan,
assignment, garnishment, attachment, execution or levy of any kind, and any
attempt to cause such benefits to be so subjected shall not be recognized;
provided, however, that the rule just stated shall not apply in the case of
a qualified domestic relations order, as defined in Section 414(p) of the
Code. A domestic relations order entered before January 1, 1985, will be
treated as a qualified domestic relations order if payment of benefits
pursuant to the order has commenced as of that date, and in the sole
discretion of the Employer as Plan Administrator, may be so treated if such
payment has not commenced, whether or not the order satisfies the
requirements of Section 414(p) of the Code.
11.6. GOVERNING LAW. This Plan shall be construed, administered and
enforced according to the laws of the Commonwealth of Massachusetts to the
extent not pre-empted by the laws of the United States of America
(including the Employee Retirement Income Security Act of 1974); any
provision of this Plan in conflict with applicable federal law shall
survive to the extent permitted by that law.
11.7. MERGER OR CONSOLIDATION OF PLAN. A merger or consolidation of the
Plan with, or transfer in whole or in part of the assets of the Plan to,
any other plan of deferred compensation may be consummated or made if, but
only if, the benefits to which each Participant would become entitled if
the merged, consolidated or transferee plan were terminated immediately
after such merger, consolidation or transfer are at least equal to the
benefits to which such Participant would have been entitled had the Plan
been terminated immediately prior to such merger, consolidation or
transfer.
11.8. FAILURE OF QUALIFICATION. If the Plan as maintained by the
Employer fails to attain or to maintain qualification under the Code, it
shall be considered an individually designed plan and no longer the
Prototype Plan; upon such event the Trustee named in the Adoption Agreement
shall resign pursuant to Section 13.6. An Employer who is not entitled to
rely on the opinion letter issued with respect to the Prototype Plan, as
set forth in the Adoption Agreement, shall promptly apply for a
determination letter as to the Plan, and shall promptly inform the Trustee
of the outcome of such application.
11.9. LEASED EMPLOYEES. Any leased employee within the meaning of
Section 414(n) of the Code 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. The
preceding sentence shall not apply to any person who would otherwise be
considered a leased employee, if leased employees do not constitute more
than 20 percent of the recipient's nonhighly compensated workforce (as
defined by Code Section 414(n)(5)(C)(ii)), and such employee is covered by
a money purchase pension plan providing: (1) a nonintegrated employer
contribution rate of at least 10 percent of compensation (as defined in
Section 415(c)(3) of the Code, but including amounts contributed by the
employer pursuant to a salary reduction agreement which are excludable from
the employee's gross income under Section 125, Section 402(a)(8), Section
402(h) or Section 403(b) of the Code), (2) immediate participation, and (3)
full and immediate vesting. The term "leased employee" means any person
(other than an employee of the Employer) who pursuant to an agreement
between the recipient and any other person ("leasing organization") has
performed services for the recipient (or for the recipient and related
persons determined in accordance with Section 414(n)(6) of the Code) on a
substantially full time basis for a period of at least one year, and such
services are of a type historically performed by employees in the business
field of the recipient employer.
11.10. CHANGES IN VESTING SCHEDULE. In the event that this Plan is
adopted as an amendment to an existing plan, the interest of any
Participant shall become fully vested and non-forfeitable as of the
Effective Date.
ARTICLE 12. - LIMITATIONS ON ALLOCATIONS
12.1. DEFINITIONS. For purposes of this Article 12, the following terms
shall have the meanings set forth below
"Annual additions": The sum of the following amounts credited to a
Participant's Account for the "limitation year":
(a) Employer contributions; and
(b) For any Plan Year beginning after December 31, 1986, Participant
contributions.
For this purpose, any "excess amount" applied under Section 12.2 or 12.3 in
the "limitation year" to reduce employer contributions will be considered
"annual additions" for such "limitation year."
Amounts allocated after March 31, 1984, to an individual medical account,
as defined in Section 415(1)(2) of the Code, which is part of a pension or
annuity plan maintained by the employer, are treated as "annual additions"
to a defined contribution plan. Also, amounts derived from contributions
paid or accrued after December 31, 1985, in taxable years ending after such
date, which are attributable to post-retirement medical benefits allocated
to the separate account of a key employee, as defined in Section 419A(d)(3)
of the Code, under a welfare benefit fund, as defined in Section 419(e) of
the Code, maintained by the employer, are treated as "annual additions" to
a defined contribution plan.
"Compensation": A Participant's earned income, wages, salaries, and fees
for professional services and other amounts received for personal services
actually rendered in the course of employment with the employer maintaining
the plan (including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of profits,
commissions on insurance premiums, tips and bonuses), and excluding the
following:
(a)Employer contributions to a plan of deferred compensation which are not
includible in the employee's gross income for the taxable year in which
contributed, or employer contributions under a simplified employee pension
plan to the extent such contributions are deductible by the employee, or
any distributions from a plan of deferred compensation;
(b)Amounts realized from the exercise of a non-qualified stock option, or
when restricted stock (or property) held by the employee either becomes
freely transferable or is no longer subject to a substantial risk of
forfeiture;
(c)Amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option; and
(d)other amounts which received special tax benefits, or contributions made
by the employer (whether or not under a salary reduction agreement) towards
the purchase of an annuity described in Section 403(b) of the Code (whether
or not the amounts are actually excludable from the gross income of the
employee).
For purposes of applying the limitations of this article, "compensation"
for a "limitation year" is the "compensation" actually paid or includible
in gross income during such year.
"Defined benefit fraction": A fraction, the numerator of which is the sum
of the Participant's "projected annual benefits" under all the defined
benefit plans (whether or not terminated) maintained by the employer, and
the denominator of which is the lesser of 125 percent of the dollar
limitation determined for the "limitation year" under Sections 415(b) and
(d) of the Code or 140 percent of the "highest average compensation,"
including any adjustments under Section 415(b) of the Code.
Notwithstanding the above, if the Participant was a participant as of the
first day of the 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 1 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.
"Defined contribution dollar limitation": $30,000 or if greater,
one-fourth of the defined benefit dollar limitation set forth in Section
415(b)(1) of the Code as in effect for the "limitation year."
"Defined contribution fraction": A fraction, the numerator of which is the
sum of the "annual additions" to the Participant's account under all the
defined contribution plans (whether or not terminated) maintained by the
employer for the current and all prior "limitation years" (including the
"annual additions" attributable to the Participant's nondeductible employee
contributions to all defined benefit plans, whether or not terminated,
maintained by the employer, and the "annual additions," as defined above,
attributable to all welfare benefit funds, as defined in Section 419(e) of
the Code, and individual medical accounts, as defined in Section 415(l)(2)
of the Code, maintained by the employer), and the denominator of which is
the sum of the maximum aggregate amounts for the current and all prior
"limitation years" of service with the employer (regardless of whether a
defined contribution plan was maintained by the employer). The maximum
aggregate amount in any "limitation year" is the lesser of 125 percent of
the dollar limitation determined under Sections 415(b) and (d) of the Code
in effect under Section 415(c)(1)(A) of the Code or 35 percent of the
Participant's "compensation" for such year.
If the employee was a participant as 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 (1) the excess of the sum of the fractions over 1.0 times (2)
the denominator of this fraction, will be permanently subtracted from the
numerator of this fraction. The adjustment is calculated using the
fractions as they would be computed as of the end of the last "limitation
year" beginning before January 1, 1987, and disregarding any changes in the
terms and conditions of the plan made after May 6 5, 1986, but using the
Section 415 limitation applicable to the first "limitation year" beginning
on or after January 1, 1987.
The "annual addition" for any "limitation year" beginning before January 1,
1987, shall not be recomputed to treat all employee contributions as
"annual additions."
Employer: For purposes of this Article 12, "employer" shall mean the
employer that adopts this plan, and all members of a controlled group of
corporations (as defined in Section 414(b) of the Code as modified by
Section 415(h)), all commonly controlled trades or businesses (as defined
in Section 414(c) as modified by Section 415(h)) or affiliated service
groups (as defined in Section 414(m)) of which the adopting employer is a
part, and any other entity required to be aggregated with the employer
pursuant to Section 414(o) of the Code.
"Excess amount": The excess of the Participant's "annual additions" for
the "limitation year" over the "maximum permissible amount."
"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 period of 12
consecutive months defined in Section 2.26.
"Limitation year": A calendar year, or the other period of 12 consecutive
months elected by the Employer in the Adoption Agreement. All qualified
plans maintained by the Employer must use the same "limitation year". If
the "limitation year" is amended to a different period of 12 consecutive
months, the new "limitation year" must begin on a date within the
"limitation year" in which the amendment is made.
"Master or prototype plan": A plan the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
"Maximum permissible amount": 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
Section 401(h) or Section 419(A)(f)(2) of the Code) which is otherwise
treated as an "annual addition" under Section 415(l)(1) or Section
419A(d)(2) of the Code. If a short "limitation year" is created because of
an amendment changing the "limitation year", the "maximum permissible
amount" will not exceed the "defined contribution dollar limitation"
multiplied by a fraction of which the numerator is equal to the number of
months in the short "limitation year," and the denominator is 12.
"Projected annual benefit": The annual retirement benefit (adjusted to an
actuarially equivalent straight life annuity if such benefit is expressed
in a form other than a straight life annuity or qualified joint and
survivor annuity) to which the Participant would be entitled under the
terms of the plan assuming
(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".
12.2 PARTICIPATION ONLY IN THIS PLAN. If the Participant does not
participate in, and has never participated in another qualified plan or a
welfare benefit fund, as defined in Section 419(e) of the Code, maintained
by the employer, or an individual medical account, as defined in Section
415(l)(2) of the Code, maintained by the employer, which provides an
"annual addition" 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 estimation of the
Participant's "compensation" for the "limitation year," uniformly
determined for all Participants similarly situated. As soon as is
administratively feasible after the end of the "limitation year," the
"maximum permissible amount" for the "limitation year" will be determined
on the basis of the Participant's actual "compensation" for the "limitation
year."
If pursuant to the last sentence of the preceding paragraph there is an
"excess amount," the excess will be disposed of as follows:
(a) Any nondeductible voluntary employee contributions, to the extent they
would reduce the "excess amount," will be returned to the Participant;
(b) If after the application of paragraph (a) 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 for such Participant in the next
"limitation year," and each succeeding "limitation year" if necessary;
(c) If after the application of paragraph (a) an "excess amount" still
exists, and the Participant is not covered by the Plan at the end of the
"limitation year," the employer's contribution on behalf of the Participant
will be reduced to the extent necessary to eliminate the "excess amount.";"
(d) If a suspense account is in existence at any time during a "limitation
year" pursuant to this Section 12.2, it will participate in the allocation
of the Trust's investment gains and losses. If a suspense account is in
existence at any time during a particular "limitation year," all amounts in
the suspense account must be allocated and reallocated to Participants'
accounts before any Employer or any Employee contributions may be made to
the Plan for that "limitation year." Excess amounts may not be distributed
to Participants or former Participants.
12.3 PARTICIPATION IN ADDITIONAL PROTOTYPE DEFINED CONTRIBUTION PLAN.
This Section 12.3 applies if, in addition to this Plan, the Participant is
covered under another qualified master or prototype defined contribution
plan or a welfare benefit fund, as defined in Section 419(e) of the Code,
maintained by the employer, or an individual medical account, as defined in
Section 415(l)(2) of the Code, maintained by the employer, which provides
an "annual addition" during any "limitation year." The "annual additions"
which may be credited to a Participant's account under this Plan for any
such "limitation year" will not exceed the "maximum permissible amount"
reduced by the "annual additions" credited to a Participant's Account under
the other plans and welfare benefit funds for the same "limitation year."
If the "annual additions" with respect to the Participant under other
defined contribution plans and welfare benefit funds maintained by the
employer are less than the "maximum permissible amount" and the employer
contribution that would otherwise be contributed or allocated to the
Participant's 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 Section 12.2. 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."
If, pursuant to the preceding paragraph, a Participant's "annual additions"
under this Plan and such other plans would result in an "excess amount" for
a "limitation year," the "excess amount" will be deemed to consist of the
"annual additions" last allocated, except that annual additions
attributable to a welfare benefit fund or individual medical account will
be deemed to have been allocated first regardless of the actual allocation
date.
If an "excess amount" was allocated to a Participant on an allocation date
of this Plan which coincides with an allocation date of another plan, the
"excess amount" attributed to this Plan will be the product of:
(a) the total "excess amount" allocated as of such date, times
(b) the ratio of (i) the "annual additions" allocated to the Participant
for the "limitation year" as of such date under this Plan to (ii) the total
"annual additions" allocated to the Participant for the "limitation year"
as of such date under this and all other qualified master or prototype
defined contribution plans.
Any "excess amount" attributed to this Plan will be disposed of in the
manner described in Section 12.2.
12.4. PARTICIPATION IN OTHER DEFINED CONTRIBUTION PLANS. If the
Participant is covered under another qualified defined contribution plan
maintained by the Employer which is not a "master or prototype plan,"
"annual additions" which may be credited to the Participant's Account under
this plan for any "limitation year" will be limited in accordance with
Section 12.3 as though the other plan were a "master or prototype plan."
12.5. PARTICIPATION IN 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." 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 method described by the Employer in the
Adoption Agreement, which shall preclude Employer discretion.
ARTICLE 13 - RIGHTS AND DUTIES OF TRUSTEE
13.1. ESTABLISHMENT OF TRUST FUND. The Trustee shall accept and hold in
the Trust such contributions by or on behalf of Participants as it may
receive from time to time from the Employer, and shall open and maintain
records of contributions to and withdrawals from Participants' Accounts for
such individuals as the Employer shall from time to time certify to it, by
name and Social Security number, as Participants in the Plan.
13.2. EXCLUSIVE BENEFIT. The Trustee shall hold the assets of the Trust
Fund for the exclusive purpose of providing benefits to Participants and
beneficiaries and defraying the reasonable expenses of administering the
Plan, and no such assets shall ever revert to the Employer except that:
(a) contributions made by the Employer by mistake of fact may be returned
to the Employer within one (1) year of the date of payment,
(b) contributions that are conditioned on the deductibility thereof under
the Code may be returned to the Employer within one (1) year of the
disallowance of the deduction,
(c) contributions that are conditioned on the initial qualification of the
Plan under the Code may be returned to the Employer within one (1) year
after such qualification is denied by determination of the Internal Revenue
Service, but only if an application for determination of such qualification
is made within the time prescribed by law for filing the Employer's federal
income tax return for its taxable year in which the Plan is adopted, or
such later date as the Secretary of the Treasury may prescribe, and
(d) amounts held in a suspense account may be returned to the Employer on
termination of the Plan, to the extent that they may not then be allocated
to any Participant's Account in accordance with Article 12.
All contributions under the Plan are hereby expressly conditioned on the
initial qualification of the Plan and their deductibility under the Code.
13.3 REPORTS OF THE TRUSTEE AND THE EMPLOYER. Not later than 120 days
after the close of each Plan Year (or after the Trustee's resignation or
removal pursuant to Section 13.6) the Trustee shall furnish to the Employer
a written report containing such information as shall be reasonably
necessary to complete reports and disclosures required of the Employer
pursuant to the Employee Retirement Income Security Act of 1974, including,
without limitation, records of the transactions performed in connection
with the Plan during the period in question, and either a statement of the
fair market value of the assets of each Participant's Account as of the end
of the period, or information adequate to permit the Employer to compare
such value. Upon the expiration of 60 days following the date on which
such a report is furnished to the Employer, the Trustee shall be forever
released and discharged from all liability and accountability to anyone
with respect to its acts, transactions, duties, obligations or
responsibilities as shown in or reflected by such report, except with
respect to any such acts or transactions as to which the Employer shall
have filed written objections within such sixty-day period.
The Employer shall be responsible for the preparation and filing of such
reports and disclosures as may be required by the Employee Retirement
Income Security Act of 1974, and for providing notice to interested parties
as required by Section 7476 of the Code. The Employer shall also prepare
any return or report required as a result of liability incurred by the
account for tax on unrelated business taxable income, or windfall profits
tax, or any return or report necessary to preserve the availability of any
credit or deduction with respect thereto.
13.4. FEES AND EXPENSES OF THE TRUST. The Trustee shall be entitled to
the fees set forth in the forms provided for Participants' written
investment instructions or an addendum thereto, as amended from time to
time, and to reimbursement of all reasonable expenses incurred in the
performance of its duties. In the event of the failure of the Employer to
pay agreed compensation or to reimburse expenses, the same shall be paid
from the assets of the Trust.
To the extent incurred by the Trustee, any income, gift, estate and
inheritance taxes and other taxes of any kind whatsoever, including
transfer taxes incurred in connection with the investment or reinvestment
of the assets of the Trust, that may be levied or assessed in respect of
such assets, if allocable to specific Participants shall be charged to
their Accounts, and if not so allocable shall be charged proportionately to
all Participants' Accounts. All other administrative expenses incurred by
the Trustee in the performance of its duties, including fees for legal
services rendered to the Trustee, shall be charged proportionately to all
Accounts. All such fees and taxes and other administrative expenses
charged to a Participant's Account will be collected from the amount of any
contribution or distribution to be credited to such Account, or by selling
assets credited to such Account, and the Trustee is expressly authorized to
cause Registered Investment Company Shares to be redeemed, or other
securities to be sold, for the purpose of paying such amounts. The
Employer shall be responsible for payment of any deficiency.
13.5. LIMITATION OF DUTIES AND LIABILITIES. The Trustee shall not be
responsible in any way for the collection of contributions provided for
under the Plan, the purpose or propriety of any distribution made pursuant
to Section 6.6 or any other action or nonaction taken pursuant to the
request of the Employer, the Plan Administrator or a Participant; the
validity or effect of the Plan and Trust Agreement; the qualification of
the Plan or the Trust under the Code and the Employee Retirement Income
Security Act of 1974; or the examination of the Plan. The Employer and the
executor, administrator, or successor of the Employer, as appropriate,
shall at all times fully indemnify and save harmless the Trustee, and its
successors and assigns from any liability arising from distributions so
made or actions so taken, and from any and all liability whatsoever which
may arise in connection with this Agreement, except liability arising from
the gross negligence or willful misconduct of the Trustee.
The Trustee shall not be under any duty to take any action other than as
herein specified with respect to the Trust, unless the Employer shall
furnish the Trustee with instructions in proper form and such instructions
shall have been specifically agreed to by the Trustee in writing, or to
defend or engage in any suit with respect to the Trust unless the Trustee
shall have first agreed in writing to do so and shall have been fully
indemnified to its satisfaction.
The Trustee and its agents may conclusively rely upon and shall be
protected in acting upon any written order from the Employer or any other
notice, request, consent, certificate or other instrument or paper believed
by it to be genuine and to have been properly executed, and, so long as it
acts in good faith, in taking or omitting to take any other action. The
Trustee may delegate to one or more corporations affiliated with the
Trustee the performance of record keeping and other ministerial services in
connection with the Plan, for a reasonable fee to be borne by the Trustee
and not by the Plan or the Trust. Any such agent's duties and
responsibilities shall be confined solely to the performance of such
services, and shall continue only for so long as the Trustee named in the
Adoption Agreement serves as Trustee. The Trustee shall not have any
liability with respect to money transferred to an Insurance Company
pursuant to the Plan, or be responsible for the validity of any Life
Insurance Policy.
13.6. SUBSTITUTION, RESIGNATION OR REMOVAL OF TRUSTEE. The Sponsor may
at any time appoint as a substitute for the Trustee named in the Adoption
Agreement another institution affiliated with the Sponsor that is a bank or
is qualified to act as a nonbank trustee in accordance with Section
1.401-12(n) of the Income Tax Regulations; provided that the Sponsor shall
notify the Employer in writing at least 30 days in advance of the effective
date of any such appointment.
The Trustee may resign at any time upon 30 days' notice in writing to the
Employer, and may be removed by the Employer at any time upon 30 days'
notice in writing to the Trustee. Upon resignation of the Trustee, the
Sponsor may propose a successor trustee, but the appointment of such a
successor shall be subject to the approval of the Employer. Upon removal
of the Trustee, the Employer shall appoint a successor Trustee, but in that
event the Plan shall be considered an individually designed plan for
purposes of Section 10.1. Upon receipt by the Trustee of written
acceptance of appointment by a substitute or successor trustee, the Trustee
shall transfer and pay over to such successor the assets of the Trust. The
Trustee is authorized, however, to reserve such sum of money or property as
it may deem advisable for payment of all its fees, compensation, costs and
expenses, or for payment of any other liabilities constituting a charge on
or against the assets of the Trust or on or against the Trustee, with any
balance of such reserve remaining after the payment of all such items to be
paid over to the substitute or successor trustee. The Trustee shall not be
liable for the acts or omissions of any substitute or successor trustee.
If within 90 days after the Trustee's resignation or removal the Employer
has not appointed a successor Trustee which has accepted such appointment,
the Trustee shall terminate the Trust pursuant to Section 10.4. The
Trustee named in the Adoption Agreement has accepted its appointment, and
intends to serve, only for so long as the Employer's plan is a Prototype
Plan.
ARTICLE 14. - TRANSITIONAL RULES
14.1. APPLICABILITY. The provisions of this Article 14 apply only to
Employers who maintained a qualified retirement plan prior to the adoption
of this Plan.
14.2. JOINT AND SURVIVOR ANNUITY RULES. Any living Participant not
receiving benefits on August 23, 1984, who would otherwise not receive the
benefits prescribed by Sections 7.2 and 7.3, must be given the opportunity
to elect to have Article 7 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 when he or she separated from service. 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
this Section 14.2. The respective opportunities to elect (as described in
the two preceding sentences) 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.
Any Participant who has elected pursuant to the second sentence of this
Section 14.2, and any Participant who does not elect under the first
sentence of this Section 14.2, or who meets the requirements of the first
sentence except that he does not have at least 10 Years of Service when he
separates from service, shall have his 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:
(i) begins to receive payments under the Plan on or after Normal Retirement
Age; or
(ii) dies on or after Normal Retirement Age while still working for the
Employer; or
(iii) begins to receive payments on or after the
qualified early retirement age; or
(iv) separates from service on or after attaining Normal Retirement Age (or
the qualified early retirement age) and after satisfying the eligibility
requirements for the payment of benefits under the Plan and thereafter dies
before beginning to receive such benefits;
then such benefits will be received under this Plan in the form of a
qualified joint and survivor annuity, unless the Participant has elected
otherwise during the election period. The election period must begin at
least six 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 made in writing and may be changed by the
Participant at any time.
9b) 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 death. Any election
under this provision will be made 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.
(c) For purposes of this Section 14.2:
(i) Qualified early retirement age is the latest of (i) the earliest date,
under the Plan, on which the Participant may elect to receive retirement
benefits, (ii) the first day of the 120th month beginning before the
Participant reaches Normal Retirement Age, or (iii) the date the
Participant begins participation.
(ii) Qualified joint and survivor annuity is an annuity for the life of the
Participant with a survivor annuity for the life of the spouse, as
described in Section 7.4(d).
14.3 CERTAIN DISTRIBUTIONS. Subject to the requirements of Article 7,
and notwithstanding the provisions of Article 8, distribution on behalf of
any Participant, including a 5-percent owner, may be made in accordance
with all of the following requirements (regardless of when such
distribution commences):
(a) The distribution by the trust is one which would not have disqualified
the trust under Section 401(a)(9) of the Internal Revenue Code as in effect
prior to amendment by the Deficit Reduction Act of 1984.
(b) 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.
(c) Such designation was in writing, was signed by the Employee or the
beneficiary, and was made before January 1, 1984.
(d) The Employee had accrued a benefit under the Plan as of December 31,
1983.
(e) 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.
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. For any distribution which commences before January 1,
1984, but continues after December 31, 1983, the Employee or the
beneficiary to whom such distribution is being made will be presumed to
have designated the method of distribution under which the distribution is
being made if the method of distribution was specified in writing and the
distribution satisfies the requirements in subsections (a) and (e). If a
designation is revoked, any subsequent distribution must satisfy the
requirements of Section 401(a)(9) of the Code and the regulations
thereunder. If a designation is revoked after the date distributions are
required to begin, the Trust must distribute by the 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 Section 401(a)(9) of the Code and the regulations
thereunder, but for the designation described in paragraphs (b) through
(e). For calendar years beginning after December 31, 1988, such
distributions must meet the minimum distribution incidental benefit
requirements in Section 1.401(a)(9)-2 of the Income Tax Regulations. Any
changes in the designation generally will be considered to be a revocation
of the designation, but 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 of an amount
transferred or rolled over from one plan to another plan, the rules in
Q&A J-2 and Q&A J-3 of Section 1.401(a)(9)-1 of the Income Tax
Regulations shall apply.
ARTICLE 15. - SPECIAL PROVISIONS FOR BROKER PLANS
15.1. APPLICABILITY. The provisions of this Article 15 apply only to
Broker Plans. In a Broker Plan, to the extent that any provision of this
Article 15 is inconsistent with any other provision of the Plan, this
Article 15 shall control.
15.2 INVESTMENT OF CONTRIBUTIONS. In a Broker Plan, the provisions of this
Section 15.2 override and supersede Article 5.
15.2.1 Directions. Contributions allocated to a Participant's Account
shall be invested and reinvested in accordance with the specific directions
of the applicable party described below:
(a) The Participant for whose benefit the Account is maintained.
(b) With respect to any Account of a deceased Participant, the beneficiary
of the Participant (as determined in accordance with Section 6.2).
(c) With respect to any Account, an Investment Manager appointed in
writing, on a form acceptable to the Trustee and the Broker, by the party
described in clause (a) or (b), whichever applies to the Account in
question. An Investment Manager appointed by a Participant shall continue
after the death of the Participant to direct the investment of the
Account(s) to which his appointment applies, unless and until his
appointment is terminated in writing by the beneficiary of the Participant.
The party directing the investment of an Account pursuant to this Section
15.2.1 shall provide specific instructions to the Broker in a form and
manner acceptable to the Broker. If written instructions accompanying
amounts and regarding investments are not received or are unclear in the
opinion of the Broker, the Broker may hold any part of the assets in such
form as they may be, or return such assets without liability for interest,
rising security prices, or other income, pending receipt of complete
instructions. In the event that at any time there shall be credited to a
Participant's Account cash (including dividends, interest, proceeds from
the sale of securities and any other cash not intended as payment for
securities) for which no such instructions have been furnished, or for
which the instructions furnished are unclear to the Trustees, or for ;which
the instructions furnished would require investment in a medium not
approved by the Sponsor for use under the Plan, such cash shall be invested
in shares of the "money market" Registered Investment Company designated in
the initial written investment instructions with respect to the Account
(or, if written investment instructions have never been provided, in the
Adoption Agreement); provided, however, that a balance of up to $500 of
uninvested cash may be maintained in a Participant's Account for
administrative convenience. While any balance remains in the Account of a
deceased Participant, the beneficiary of the deceased Participant shall
direct the investment of the Account as though the beneficiary were the
Participant. The Broker and the Trustee shall have no duty to question the
directions of a Participant or beneficiary in the investment of his Account
or to advise him regarding the purchase, retention or sale of assets
credited to his Account, nor shall the Trustee or the Broker be liable for
any loss which results from the Participant's exercise of control over his
Account.
15.2.2 INVESTMENTS. Subject to such reasonable and non-discriminatory
rules, limits and procedures as the Trustee or Employer may establish from
time to time to facilitate administration of the Plan, all contributions
under the Plan shall be invested and reinvested in one or more of the
following, as directed in accordance with Section 15.2.1;
(a) Registered Investment Company Shares;
(b) marketable securities obtainable over the counter or on a recognized
securities exchange or directly from a Registered Investment Company;
(c) Insurance Contracts;
(d) deposits bearing a reasonable rate of interest and maintained by the
Trustee or by any bank acceptable to the Trustee;
(e) Life Insurance Policies meeting the terms and conditions of Article 9;
or
(f) any other investment medium permitted by the Trustee from time to
time.
Any other provision hereof to the contrary notwithstanding, no party may
direct that any part of all of an Account be invested in assets other than
Registered Investment Company Shares unless the aggregate amount which the
party proposes to invest in such assets is at least such amount as the
Trustee shall establish from time to time. The Trustee may require any
Account which is invested in assets other than Registered Investment
Company Shares to maintain an investment of not more than $500 in shares of
the "money market" Registered Investment Company designated pursuant to
Section 15.2.1 in order to provide a medium for investing available cash
pending other instructions and for convenience in collecting fees and
expenses from the Account.
Commissions and other costs attributable to the acquisition of an
investment shall be charged to the Account for which such investment is
acquired.
15.2.3 BROKER. The Employer appoints the Broker as its agent to execute
all investment directions made pursuant to Section 15.2.1. The Broker
shall acknowledge its acceptance of its duties under the plan by
establishing and maintaining one or more brokerage accounts in the name of
the Trustee, for the benefit of one or more Participants, in accordance
with the directions of the Employer. The Broker shall be responsible for
effecting all investment directions under this Article 15, executing all
purchases and sales of assets of the Trust, and maintaining adequate
records of all transactions effected by it in connection with the Plan.
All brokerage transactions in connection with the Plan will be cleared
through National Financial Services Corporation, an affiliate of the
Sponsor.
All assets of the Fund shall be registered in the name of the Trustee or of
a suitable nominee (and the same nominee may be used with respect to assets
of other investors whether or not held under agreements similar to this one
or in any fiduciary capacity whatsoever) but shall be generally held in the
brokerage account maintained hereunder, provided however, that the Trustee
may hold any security in bearer form or by or through the Broker, or by or
through a central clearing corporation maintained by an institution active
in the national securities markets; provided further, however that (i) the
books and records of the Trustee shall show that all such investments are
part of the Fund; (ii) a separate account thereof shall be maintained by
the party having actual custody of such assets; and (iii) the assets
thereof shall be held in individual or bulk segregation in such party's
vaults or in depositories approved by the Securities and Exchange
Commission under the Securities Exchange Act of 1934.
The Broker or its designee shall deliver to each party who directs
investments pursuant to Section 15.2.1 all notices and prospectuses
relating to any assets which are invested by the individual. Neither the
Trustee nor the Broker may vote shares of stock unless the Participant or
Investment Manager requests such action in writing.
15.3 REINVESTMENT OF EARNINGS. Except as provided in Article 9, all
dividends, capital gains, income, interest and distributions of every
nature received in respect of the assets in a Participant's Account shall
be reinvested as follows:
(a) a distribution of any nature received in respect of Registered
Investment Company Shares shall be reinvested in additional shares of that
Registered Investment Company.
(b) any other distribution of any nature received in respect of assets in
the Account shall be invested as provided in Section 15.2.1.
Assets of the Plan shall be valued, at their fair market value, on each
December 31 and on such other dates as the Trustee considers necessary or
convenient. In the case of Accounts of which the assets are pooled and
invested at the direction of an Investment Manager appointed by the
Employer, each Participant's Account shall have a ratable interest in all
such assets and the income, gains, expenses and losses attributable
thereto, in the ration that the fair market value of his Account bore to
the fair market value of the applied Accounts, as of the most recent
previous valuation date. In the case of an Account of which the assets are
invested at the direction of a Participant or beneficiary or an Investment
Manger appointed by one of them, the income, gains, expenses and losses
attributable to a Participant's Account shall be credited or debited, as
applicable, to his Account alone.
15.4 REPORTS. In a Broker Plan, the provisions of this Section 15.4
override and supersede Section 13.3.
Each of the Trustee, the Broker and any Investment Manager appointed
hereunder shall keep adequate records of the transactions he performs in
connection with the Plan. Not later than 60 days after the close of each
Plan Year (or after the resignation or removal of any party described in
the preceding sentence) each such party shall furnish to the Employer a
written report containing such information as shall be reasonably necessary
to complete reports and disclosures required of the Employer pursuant tot
he Employee Retirement Income Security Act of 1974, including, without
limitation, records of the transactions performed in connection with the
Plan during the period in question, and either a statement of the fair
market value of the assets of each Participant's Account as of the end of
the period, or information adequate to permit the Employer to compare such
value. Upon the expiration of 60 days following the date on which such a
report is furnished to the Employer, the party submitting the report shall
be forever released and discharged from all liability and accountability to
anyone with respect to its acts, transactions, duties, obligations or
responsibilities as shown in or reflected by such report, except with
respect to any such acts or transactions as to which the Employer shall
have filed written objections within such sixty-day period.
The Employer, the Broker, the Investment Manager and the Trustee shall
furnish to each other such information relevant to the Plan and required
under the Code and any regulations or forms which are issued or adopted by
the Treasury Department thereunder.
The Employer shall be responsible for the preparation and filing of such
reports and disclosures as may be required by the Employee Retirement
Income Security Act of 1974, and for providing notice to interested parties
as required by Section 7476 of the Code.
15.5 LIMITATION OF DUTIES AND LIABILITIES. In a Broker Plan, the
provisions of this Section 15.5 override and supersede Section 13.5.
The Broker, the Investment Manager and the Trustee, respectively, shall
each be responsible solely for performance of those duties expressly
assigned to it in the Plan and each assumes no duty under the Plan which is
assigned herein or by law to others. Neither the Broker, an Investment
Manager nor the Trustee shall be responsible in any way for the collection
of contributions provided for under the Plan; the purpose or propriety of
any distribution made pursuant to Article 6; any other action or nonaction
taken pursuant to the request of the Employer, the Plan Administrator or a
Participant; the validity or effect of the Plan and Trust Agreement; the
qualification of the Plan or the Trust under the Code and the Employee
Retirement Income Security Act of 1974; or the examination of the Plan.
The Employer and the executor, administrator, or successor of the Employer,
as appropriate, and, with respect to directions from a Participant, the
Participant and his legal representative, shall at all times fully
indemnify and save harmless the Trustee, the Broker and their successors
and assigns from any liability arising from distributions so made or
actions so taken, and from any and all liability whatsoever which may arise
in connection with this Agreement, except liability arising from the gross
negligence or willful misconduct of the indemnified person.
Neither the Broker nor the Trustee shall be under any duty to take any
action other than as herein specified with respect to the Trust, unless the
Employer or Participant, as appropriate, shall furnish that person with
instructions in proper form and such instructions shall have been
specifically agreed to by that person in writing, or to defend or engage in
any suit with respect to the Trust unless that person shall have first
agreed in writing to do so and shall have been fully indemnified to its
satisfaction. The Employer and the executor, administrator or successors
of the Employer shall have the sole authority to enforce this agreement on
behalf of any and all persons having or claiming any interest in the Trust.
In order to save the Trust from the expenses which might otherwise be
incurred, it is imposed as a condition to the acquisition of any interest
in the Trust, and it is hereby agreed, that no person other than the
Employer and such other persons as appropriate may institute or maintain
any action or proceeding against the Trustee or the Broker in the absence
of written authority from the Employer or a determination of a court of
competent jurisdiction that, in refusing such authority, the Employer or
such other persons have acted fraudulently or in bad faith.
The Trustee, its agents and the Broker may conclusively rely upon and shall
be protected in acting upon any written order from the Employer or a
Participant or any other notice, request, consent, certificate or other
instrument or paper believed by it to be genuine and to have been properly
executed, and, so long as it acts in good faith, in taking or omitting to
take any other action. The Trustee may delegate to one or more
corporations affiliated with the Trustee the performance of recordkeeping
and other ministerial services in connection with the Plan, for a
reasonable fee to be borne by the Trustee and not by the Plan or the Trust.
Any such agent's duties and responsibilities shall be confined solely to
the performance of such services, and shall continue only for so long as
the Trustee named in the Adoption Agreement serves as Trustee. The Trustee
shall not have any liability with respect to money transferred to an
Insurance Company pursuant to the Plan, or be responsible for the validity
of any Life Insurance Policy.
15.6 RESIGNATION OR REMOVAL OF BROKER. The Broker may at any time resign
upon 30 days' notice in writing to the Employer and the Trustee, whereupon
the Employer shall appoint a successor to the Broker and shall immediately
give written notice in writing to the Broker and the Trustee, accompanied
by the written acceptance of a successor Broker appointed by the Employer.
Upon receipt by the Broker of written acceptance of appointment by its
successor, the Broker shall transfer and pay over to the successor the
assets of the Trust and all records (or copies thereof) pertaining thereto,
provided that the successor agrees not to dispose of any such records
without the Broker's consent. The Broker is authorized, however, to
reserve such sum of money or property as it may deem advisable for payment
of all its fees, compensation, costs and expenses, or for payment of any
other liabilities constituting a charge on or against the assets of the
Trust or on or against the Trustee or the Broker, with any balance of such
reserve remaining after the payment of all such items to be paid over to
the successor broker.
15.7 INDEMNIFICATION. The Employer, the Broker and the Trustee intend that
the Trustee shall have and exercise no discretion, authority, or
responsibility as to any investment in connection with the Plan. The
Employer or Participant who directs the investment of an Account shall bear
sole responsibility for the suitability of any directed investment and for
any adverse consequences arising from such an investment, including,
without limitation, the inability of the Trustee to value or to sell an
illiquid investment, or the generation of unrelated business taxable income
with respect to an investment. The Employer hereby agrees on behalf of
itself, its successors and assigns to indemnify and hold harmless the
Trustee, its affiliates, successors and assigns, and their officers,
directors and employees, from any and all liability arising from investment
directions under the Plan, or the Broker's execution of them and except in
the case of gross negligence or willful misconduct on the part of the
indemnified person, from any other liability whatsoever arising in
connection with the Plan. The Broker hereby agrees on behalf of itself,
its successors and assigns to indemnify and hold harmless the Trustee, its
affiliates, successors and assigns, and their officers, directors and
employees, from any and all liability from losses, claims, damages or
expenses (including reasonable legal fees and expenses) resulting from any
claim, demand, action or suit brought by any person in connection with the
Broker's receipt, recording, forwarding or execution of the Employer's or a
Participant's specific instructions for specific purchases and sales of
securities.
FIDELITY DEFINED CONTRIBUTION RETIREMENT PLAN
AND TRUST AGREEMENT
_________________
TABLE OF CONTENTS
_________________
ARTICLE 1. - INTRODUCTION 1
ARTICLE 2. - DEFINITIONS 1
2.1. "Account" or "Accounts" 1
2.2. "Adoption Agreement" 1
2.3. "Affiliated Employer" 1
2.4. "Break in Service" 2
2.5. "Business" 2
2.6. "Code" 2
2.7. "Compensation" 2
2.8. "Earned Income" 2
2.9. "Earnings" 2
2.10. "Effective Date" 2
2.11. "Employee" 3
2.12. "Employer" 3
2.13. "Employer Contribution Accounts" 3
2.14. "Hour of Service" 3
2.15. "Insurance Contract" 4
2.16. "Life Insurance Policy" 4
2.17."Owner-Employee" 5
2.18. "Participant" 5
2.19. "Participant Contribution Account" 5
2.20. "Plan Year" 5
2.21. "Prototype Plan" 5
2.22. "Registered Investment Company" 5
2.23. "Self-employed Individual" 5
2.24. "Sponsor" 5
2.25. "Trust" 5
2.26. "Year of Service" 5
ARTICLE 3. - PARTICIPATION 6
3.1. General Rule 6
3.2. Special Rule for Former Participants 6
3.3. Owner-Employee as Participant: Multiple Businesses 6
3.4. Participation in Employer Contributions 7
ARTICLE 4. - CONTRIBUTIONS 7
4.1. Contributions By the Employer 7
4.2. Time and Manner of Employer Contributions 8
4.3. Vesting 9
4.4. Contributions By Participants 9
ARTICLE 5. - INVESTMENT OF CONTRIBUTIONS 9
5.1. Direction by Participant 9
5.2. Investments 10
5.3. Reinvestment of Earnings 11
ARTICLE 6. - PAYMENT OF BENEFITS 11
6.1. Retirement or Termination Benefits 11
6.2. Death Benefits; Designation of Beneficiary 12
6.3. Manner of Distribution 13
6.4. Restriction on Immediate Distributions 14
6.5. Special Rules for Annuity Contracts 15
6.6. Distribution Procedure 15
6.7. Claims 15
6.8. Appeal and Review 16
ARTICLE 7. - JOINT AND SURVIVOR ANNUITY REQUIREMENTS 16
7.1. Applicability. 16
7.2. Qualified Joint and Survivor Annuity 17
7.3. Qualified Preretirement Survivor Annuity 17
7.4. Definitions 18
7.5. Notice Requirements 19
ARTICLE 8. - MINIMUM DISTRIBUTION REQUIREMENTS 20
8.1. General Rules 20
8.2. Required Beginning Date 20
8.3. Limits on Distribution Periods 21
8.4. Determination of Amount To Be Distributed Each Year 22
8.5. Death Distribution Provisions 24
ARTICLE 9. - LIFE INSURANCE POLICIES 25
9.1. Purchase of Life Insurance Policies 25
9.2. Distributions with Respect to Life Insurance
Policies 26
ARTICLE 10. - AMENDMENT AND TERMINATION 27
10.1. Sponsor's Right to Amend 27
10.2. Employer's Right to Amend 27
10.3. Certain Amendments Prohibited 28
10.4. Termination of the Plan and Trust 28
10.5. Procedure Upon Termination of Trust 28
ARTICLE 11. - MISCELLANEOUS 28
11.1. Status of Participants 28
11.2. Administration and Enforcement 28
11.3. Transfers and Rollovers 29
11.4. Condition of Plan and Trust Agreement 30
11.5. Inalienability of Benefits 30
11.6. Governing Law 31
11.7. Merger or Consolidation of Plan 31
11.8. Failure of Qualification 31
11.9. Leased Employees 31
11.10. Changes in Vesting Schedule 32
ARTICLE 12. - LIMITATIONS ON ALLOCATIONS 32
12.1. Definitions 32
12.2. Participation Only in This Plan 36
12.3. Participation in Additional Prototype Defined
Contribution Plan 36
12.4. Participation in Other Defined Contribution Plans 38
12.5. Participation in Defined Benefit Plan 38
ARTICLE 13. - RIGHTS AND DUTIES OF TRUSTEE 38
13.1. Establishment of Trust Fund 38
13.2. Exclusive Benefit 38
13.3. Reports of the Trustee and the Employer 39
13.4. Fees and Expenses of the Trust 39
13.5. Limitation of Duties and Liabilities 40
13.6. Substitution, Resignation or Removal of Trustee 41
ARTICLE 14. - TRANSITIONAL RULES 41
14.1. Applicability 41
14.2. Joint and Survivor Annuity Rules 42
14.3. Certain Distributions 43
__________________________________________
FIDELITY DEFINED CONTRIBUTION RETIREMENT
PLAN AND TRUST AGREEMENT
_________________________________________
Application for
Fidelity Defined Contribution
Retirement Plan and Trust Agreement
Fidelity Profit Sharing Plan #001
To open your Profit Sharing Plan at Fidelity, simply fill out this
Application and the Plan Contribution Form. If you have any questions, or
would like help in completing this Application, don't hesitate to call
Fidelity toll-free at 1-800-544-6666. This Application may only be used
with the above Plan and Trust Agreement.
Please give us some information about your business.
Type of Business: ____ Self-Employed ____ Incorporated
Business Name __________________________________________
Business Address _______________________________________
________________________________________________________
(city) (state) (zip)
Business Phone _______________ _______________
(day) (evening)
Employer Tax I.D. Number _______________________
Plan Year and Limitation Year (please check one):
_____ Calendar Year _____ Fiscal Year ending ____________
If left blank, calendar year Calendar Year will be assigned. Please note
that the Effective Date of your Plan will be the first day of the Plan Year
chosen above, unless your Business was not yet established on that date, in
which case the Effective Date will be the date on which your Business was
established.
The Effective Date is: ______________________
month/day/year
Who is eligible to participate in the Plan?
Please indicate the requirements for an Employee to become a participant.
A.Length of Service (please check one).
_____ Need not complete any waiting period.
_____ _____ Years of uninterrupted service must be completed (not more than
two years).
_____ Total of _____ years of accumulated service must be completed (not
more than two years).
B.Age Requirement.
_____ years
(Cannot be more than 21. Unless you indicate otherwise, the age
requirement will be 21.)
Will all employees Employees need to meet these requirements?
(Please check one.)
_____ Yes, all Employees must meet the requirements listed above.
_____ No, anyone who is an Employee on the Effective Date, regardless of
whether he has completed the minimum service requirements above, will
participate immediately. All other Employees will need to complete the
requirements.
Do you currently have or have you ever maintained another qualified plan?
If not, you may skip this section.
If you maintain or ever maintained another qualified defined contribution
plan (other than Fidelity Money Purchase Pension Plan #002) or if you
maintain a welfare benefit fund (as defined in Section 419(e) of the Code)
or an individual medical account (as defined in Section 415(l)(2) of the
Code) under which amounts are treated as annual additions with respect to
any participant in this plan, contributions to this plan will be cut back
to avoid excess contributions. If you maintain or ever maintained a
defined benefit plan, you must indicate below how you will apportion
contributions so that total contributions (for all plans) do not exceed the
limits described in Section 12.3. You must do this in a way that acts
automatically without any further action by you. (See booklet for
details.)
______________________________________________________________
______________________________________________________________
______________________________________________________________
Please sign below to adopt your Plan. Failure to fill out this
Application properly may cause your Plan to be disqualified. Please review
the form before signing it.
Fidelity will inform you of all amendments it makes to the prototype plan,
or if it ever discontinues or abandons the prototype plan.
For Texas residents: pursuant to Section 11.6 of the Fidelity Defined
Contribution Retirement Plan and Trust Agreement, this agreement is
governed by the laws of the Commonwealth of Massachusetts to the extent not
pre-empted by federal law.
The Employer named below hereby ___ establishes or ___ amends (Please
check one. See booklet for details.)
___________________________________________________________
(Name of Business)
Profit Sharing Plan consisting of the Plan and Trust Agreement and this
Application as completed. The Employer appoints
_________________________________ as Trustee and agrees to the fees set
forth in the Plan Contribution Form, as amended from time to time. The
Employer hereby directs the Trustee to invest in Fidelity Cash Reserves any
funds of the Plan transmitted without complete investment instructions.
Although [ Trustee] is a bank, neither Fidelity Distributors
nor any mutual fund in which your retirement Plan may be invested is a
bank, and mutual fund shares are not backed or guaranteed by any bank or
insured by the FDIC.
If you have ever maintained or later adopt any other qualified plan
(including, a welfare benefit fund as defined in Section 419(e) of the
Internal Revenue Code, which provides post- retirement medical benefits
allocated to separate accounts for key employees, as defined in Section
419A(d)(3) of the Internal Revenue Code or an individual medical account,
as defined in Section 415(l)(2) of the Code) in addition to this plan
(other than Fidelity Money Purchase Pension Plan #002) you will not be able
to rely on the opinion letter issued by the National Office of the Internal
Revenue Service to the Fidelity Plans as evidence that your plan is
qualified under Section 401 of the Internal Revenue Code. You will need to
file for your own determination letter with the appropriate Key District
Director of the IRS if you wish to be sure that your plans are qualified.
This Application may be used only in conjunction with basic plan document
number 01, the Fidelity Defined Contribution Retirement Plan and Trust
Agreement.
Signature of Employer
____________________________________________________________
____________________________________________________________
Name of person signing above (please print) ________________
Date ______________
Fidelity Management & Research Company, the sponsor of this prototype
plan, will inform you of all amendments it makes to the prototype plan, or
if it ever discontinues or abandons the prototype plan. You may contact
Fidelity Management & Research Company at:
Fidelity Management & Research Company
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Prototype Plans
Telephone: 1-800-544-6666
Application for
Fidelity Defined Contribution
Retirement Plan and Trust Agreement
Fidelity Money Purchase Pension Plan #002
To open your Money Purchase Pension Plan at Fidelity, simply fill out this
Application and the Plan Contribution Form. If you have any questions, or
would like help in completing this Application, don't hesitate to call
Fidelity toll-free at 1-800-544-6666. This Application may only be used
with the above Plan and Trust Agreement.
Please give us some information about your business.
Type of Business: ____ Self-Employed ____ Incorporated
Business Name __________________________________________
Business Address _______________________________________
________________________________________________________
(city) (state) (zip)
Business Phone _______________ _______________
(day) (evening)
Employer Tax I.D. Number _______________________
Plan Year and Limitation Year (please check one):
_____ Calendar Year _____ Fiscal Year ending ____________
If left blank, calendar year Calendar Year will be assigned. Please note
that the Effective Date of your Plan will be the first day of the Plan Year
chosen above, unless your Business was not yet established on that date, in
which case the Effective Date will be the date on which your Business was
established.
The Effective Date is: ______________________
month/day/year
Who is eligible to participate in the Plan?
Please indicate the requirements for an Employee to become a participant.
A.Length of Service (please check one).
_____ Need not complete any waiting period.
_____ _____ Years of uninterrupted service must be completed (not more than
two years).
_____ Total of _____ years of accumulated service must be completed (not
more than two years).
B.Age Requirement.
_____ years
(Cannot be more than 21. Unless you indicate otherwise, the age
requirement will be 21.)
Will all employees Employees need to meet these requirements?
(Please check one.)
_____ Yes, all Employees must meet the requirements listed above.
_____ No, anyone who is an Employee on the Effective Date, regardless of
whether he has completed the minimum service requirements above, will
participate immediately. All other Employees will need to complete the
requirements.
How much will you contribute each year to the Plan?
_____% of each Participant's Earnings (not less than 3% or
more than 25%)
(Note: if you maintain both Fidelity Profit Sharing Plan #001 and Money
Purchase Pension Plan #002, total contributions should not exceed 25%.)
Do you currently have or have you ever maintained another qualified plan?
If not, you may skip this section.
If you maintain or ever maintained another qualified defined contribution
plan (other than Fidelity Profit Sharing Plan #001) or if you maintain a
welfare benefit fund (as defined in Section 419(e) of the Code) or an
individual medical account (as defined in Section 415(l)(2) of the Code)
under which amounts are treated as annual additions with respect to any
participant in this plan, contributions to this plan will be cut back to
avoid excess contributions. If you maintain or ever maintained a defined
benefit plan, you must indicate below how you will apportion contributions
so that total contributions (for all plans) do not exceed the limits
described in Section 12.3. You must do this in a way that acts
automatically without any further action by you. (See booklet for
details.)
______________________________________________________________
______________________________________________________________
______________________________________________________________
Please sign below to adopt your Plan. Failure to fill out this
Application properly may cause your Plan to be disqualified. Please review
the form before signing it.
Fidelity will inform you of all amendments it makes to the prototype plan,
or if it ever discontinues or abandons the prototype plan.
For Texas residents: pursuant to Section 11.6 of the Fidelity Defined
Contribution Retirement Plan and Trust Agreement, this agreement is
governed by the laws of the Commonwealth of Massachusetts to the extent not
pre-empted by federal law.
The Employer named below hereby ___ establishes or ___ amends (Please
check one. See booklet for details.)
___________________________________________________________
(Name of Business)
Money Purchae Purchase Pension Plan consisting of the Plan and Trust
Agreement and this Application as completed. The Employer appoints
_________________________________ as Trustee and agrees to the fees set
forth in the Plan Contribution Form, as amended from time to time. The
Employer hereby directs the Trustee to invest in Fidelity Cash Reserves any
funds of the Plan transmitted without complete investment instructions.
Although [ Trustee] is a bank, neither Fidelity Distributors
nor any mutual fund in which your retirement Plan may be invested is a
bank, and mutual fund shares are not backed or guaranteed by any bank or
insured by the FDIC.
If you have ever maintained or later adopt any other qualified plan
(including, a welfare benefit fund as defined in Section 419(e) of the
Internal Revenue Code, which provides post- retirement medical benefits
allocated to separate accounts for key employees, as defined in Section
419A(d)(3) of the Internal Revenue Code or an individual medical account,
as defined in Section 415(l)(2) of the Code) in addition to this plan
(other than Fidelity Profit Sharing Plan #001) you will not be able to rely
on the opinion letter issued by the National Office of the Internal Revenue
Service to the Fidelity Plans as evidence that your plan is qualified under
Section 401 of the Internal Revenue Code. You will need to file for your
own determination letter with the appropriate Key District Director of the
IRS if you wish to be sure that your plans are qualified.
This Application may be used only in conjunction with basic plan document
number 01, the Fidelity Defined Contribution Retirement Plan and Trust
Agreement.
Signature of Employer
____________________________________________________________
____________________________________________________________
Name of person signing above (please print) ________________
Date ______________
Fidelity Management & Research Company, the sponsor of this prototype
plan, will inform you of all amendments it makes to the prototype plan, or
if it ever discontinues or abandons the prototype plan. You may contact
Fidelity Management & Research Company at:
Fidelity Management & Research Company
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Prototype Plans
Telephone: 1-800-544-6666
Application for
Fidelity Defined Contribution
Retirement Plan and Trust Agreement
Fidelity Profit Sharing Plan #003
To open your Profit Sharing Plan at Fidelity, simply fill out this
Application and the Plan Contribution Form. If you have any questions, or
would like help in completing this Application, don't hesitate to call
Fidelity toll-free at 1-800-544-6666. This Application may only be used
with the above Plan and Trust Agreement.
Please give us some information about your business.
Type of Business: ____ Self-Employed ____ Incorporated
Business Name __________________________________________
Business Address _______________________________________
________________________________________________________
(city) (state) (zip)
Business Phone _______________ _______________
(day) (evening)
Employer Tax I.D. Number _______________________
Plan Year and Limitation Year (please check one):
_____ Calendar Year _____ Fiscal Year ending ____________
If left blank, calendar year Calendar Year will be assigned. Please note
that the Effective Date of your Plan will be the first day of the Plan Year
chosen above, unless your Business was not yet established on that date, in
which case the Effective Date will be the date on which your Business was
established.
The Effective Date is: ______________________
month/day/year
Who is eligible to participate in the Plan?
Please indicate the requirements for an Employee to become a participant.
A.Length of Service (please check one).
_____ Need not complete any waiting period.
_____ _____ Years of uninterrupted service must be completed (not more than
two years).
_____ Total of _____ years of accumulated service must be completed (not
more than two years).
B.Age Requirement.
_____ years
(Cannot be more than 21. Unless you indicate otherwise, the age
requirement will be 21.)
Will all employees Employees need to meet these requirements?
(Please check one.)
_____ Yes, all Employees must meet the requirements listed above.
_____ No, anyone who is an Employee on the Effective Date, regardless of
whether he has completed the minimum service requirements above, will
participate immediately. All other Employees will need to complete the
requirements.
Will your Plan be integrated with Social Security? If not, you may skip
this section.
Contributions will be allocated as follows (fill in both blanks):
A. First, allocate to all Participants' Accounts, in proportion to their
Earnings, an amount equal to ____% (not less than 3%) of the aggregate
Earnings of all Participants, or the total amount of the Employer's
contribution for the Plan Year, whichever is less.
B. Second, allocate to the Account of each Participant who has any
Earnings in excess of the Social Security Wage base, an amount equal to
____% (not more than 5.7% or the percentage in paragraph A, whichever is
less) of his Earnings in excess of the Social Security wage base.
C. If any Employer contribution remains to be allocated, allocate it to
all Participant's Participants' Accounts in proportion to their Earnings.
Do you currently have or have you ever maintained another qualified plan?
If not, you may skip this section.
If you maintain or ever maintained another qualified defined contribution
plan (other than Fidelity Money Purchase Pension Plan #002), #004) or if
you maintain a welfare benefit fund (as defined in Section 419(e) of the
Code) or an individual medical account (as defined in Section 415(l)(2) of
the Code) under which amounts are treated as annual additions with respect
to any participant in this plan, contributions to this plan will be cut
back to avoid excess contributions. If you maintain or ever maintained a
defined benefit plan, you must indicate below how you will apportion
contributions so that total contributions (for all plans) do not exceed the
limits described in Section 12.3. You must do this in a way that acts
automatically without any further action by you. (See booklet for
details.)
______________________________________________________________
______________________________________________________________
______________________________________________________________
Please sign below to adopt your Plan. Failure to fill out this
Application properly may cause your Plan to be disqualified. Please review
the form before signing it.
Fidelity will inform you of all amendments it makes to the prototype plan,
or if it ever discontinues or abandons the prototype plan.
For Texas residents: pursuant to Section 11.6 of the Fidelity Defined
Contribution Retirement Plan and Trust Agreement, this agreement is
governed by the laws of the Commonwealth of Massachusetts to the extent not
pre-empted by federal law.
The Employer named below hereby ___ establishes or ___ amends (Please
check one. See booklet for details.)
___________________________________________________________
(Name of Business)
Profit Sharing Plan consisting of the Plan and Trust Agreement and this
Application as completed. The Employer appoints
_________________________________ as Trustee and agrees to the fees set
forth in the Plan Contribution Form, as amended from time to time. The
Employer hereby directs the Trustee to invest in Fidelity Cash Reserves any
funds of the Plan transmitted without complete investment instructions.
Although [ Trustee] is a bank, neither Fidelity Distributors
nor any mutual fund in which your retirement Plan may be invested is a
bank, and mutual fund shares are not backed or guaranteed by any bank or
insured by the FDIC.
If you have ever maintained or later adopt any other qualified plan
(including, a welfare benefit fund as defined in Section 419(e) of the
Internal Revenue Code, which provides post- retirement medical benefits
allocated to separate accounts for key employees, as defined in Section
419A(d)(3) of the Internal Revenue Code or an individual medical account,
as defined in Section 415(l)(2) of the Code) in addition to this plan
(other than Fidelity Money Purchase Pension Plan #002 #004) you will not be
able to rely on the opinion letter issued by the National Office of the
Internal Revenue Service to the Fidelity Plans as evidence that your plan
is qualified under Section 401 of the Internal Revenue Code. You will need
to file for your own determination letter with the appropriate Key District
Director of the IRS if you wish to be sure that your plans are qualified.
This Application may be used only in conjunction with basic plan document
number 01, the Fidelity Defined Contribution Retirement Plan and Trust
Agreement.
Signature of Employer
____________________________________________________________
____________________________________________________________
Name of person signing above (please print) ________________
Date ______________
Fidelity Management & Research Company, the sponsor of this prototype
plan, will inform you of all amendments it makes to the prototype plan, or
if it ever discontinues or abandons the prototype plan. You may contact
Fidelity Management & Research Company at:
Fidelity Management & Research Company
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Prototype Plans
Telephone: 1-800-544-6666
Application for
Fidelity Defined Contribution
Retirement Plan and Trust Agreement
Fidelity Money Purchase Pension Plan #004
To open your Money Purchase Pension Plan at Fidelity, simply fill out this
Application and the Plan Contribution Form. If you have any questions, or
would like help in completing this Application, don't hesitate to call
Fidelity toll-free at 1-800-544-6666. This Application may only be used
with the above Plan and Trust Agreement.
Please give us some information about your business.
Type of Business: ____ Self-Employed ____ Incorporated
Business Name __________________________________________
Business Address _______________________________________
________________________________________________________
(city) (state) (zip)
Business Phone _______________ _______________
(day) (evening)
Employer Tax I.D. Number _______________________
Plan Year and Limitation Year (please check one):
_____ Calendar Year _____ Fiscal Year ending ____________
If left blank, calendar year Calendar Year will be assigned. Please note
that the Effective Date of your Plan will be the first day of the Plan Year
chosen above, unless your Business was not yet established on that date, in
which case the Effective Date will be the date on which your Business was
established.
The Effective Date is: ______________________
month/day/year
Who is eligible to participate in the Plan?
Please indicate the requirements for an Employee to become a participant.
A.Length of Service (please check one).
_____ Need not complete any waiting period.
_____ _____ Years of uninterrupted service must be completed (not more than
two years).
_____ Total of _____ years of accumulated service must be completed (not
more than two years).
B.Age Requirement.
_____ years
(Cannot be more than 21. Unless you indicate otherwise, the age
requirement will be 21.)
Will all employees Employees need to meet these requirements?
(Please check one.)
_____ Yes, all Employees must meet the requirements listed above.
_____ No, anyone who is an Employee on the Effective Date, regardless of
whether he has completed the minimum service requirements above, will
participate immediately. All other Employees will need to complete the
requirements.
How much will you contribute to the Plan each year?
1. Fill in only the blank below if your Plan will not be integrated with
Social Security.
_____% of each Participant's Earnings (not less than 3%
or more than 25%)
2. Fill in both blanks below if your Plan will be integrated with Social
Security.
A. _____% of each Participant's Earnings (not less than 3% nor more than
19.3%)
plus
B. _____% of each Participant's Earnings in excess of the Social
Security wage base (not more than 5.7% or the percentage in A, whichever is
less)
(Note: if you maintain both Fidelity Profit Sharing Plan #003 and Money
Purchase Pension Plan #004, total contributions should not exceed 25%.)
Do you currently have or have you ever maintained another qualified plan?
If not, you may skip this section.
If you maintain or ever maintained another qualified defined contribution
plan (other than Fidelity Money Purchase Pension Profit Sharing Plan #002),
#003) or if you maintain a welfare benefit fund (as defined in Section
419(e) of the Code) or an individual medical account (as defined in Section
415(l)(2) of the Code) under which amounts are treated as annual additions
with respect to any participant in this plan, contributions to this plan
will be cut back to avoid excess contributions. If you maintain or ever
maintained a defined benefit plan, you must indicate below how you will
apportion contributions so that total contributions (for all plans) do not
exceed the limits described in Section 12.3. You must do this in a way
that acts automatically without any further action by you. (See booklet
for details.)
______________________________________________________________
______________________________________________________________
______________________________________________________________
Please sign below to adopt your Plan. Failure to fill out this
Application properly may cause your Plan to be disqualified. Please review
the form before signing it.
Fidelity will inform you of all amendments it makes to the prototype plan,
or if it ever discontinues or abandons the prototype plan.
For Texas residents: pursuant to Section 11.6 of the Fidelity Defined
Contribution Retirement Plan and Trust Agreement, this agreement is
governed by the laws of the Commonwealth of Massachusetts to the extent not
pre-empted by federal law.
The Employer named below hereby ___ establishes or ___ amends (Please
check one. See booklet for details.)
___________________________________________________________
(Name of Business)
Profit Sharing Plan consisting of the Plan and Trust Agreement and this
Application as completed. The Employer appoints
_________________________________ as Trustee and agrees to the fees set
forth in the Plan Contribution Form, as amended from time to time. The
Employer hereby directs the Trustee to invest in Fidelity Cash Reserves any
funds of the Plan transmitted without complete investment instructions.
Although [ Trustee] is a bank, neither Fidelity Distributors
nor any mutual fund in which your retirement Plan may be invested in a
bank, and mutual fund shares are not backed or guaranteed by any bank or
insured by the FDIC.
If you have ever maintained or later adopt any other qualified plan
(including, a welfare benefit fund as defined in Section 419(e) of the
Internal Revenue Code, which provides post- retirement medical benefits
allocated to separate accounts for key employees, as defined in Section
419A(d)(3) of the Internal Revenue Code or an individual medical account,
as defined in Section 415(l)(2) of the Code) in addition to this plan
(other than Fidelity Money Purchase Pension Profit Sharing Plan #002)
#003), you will not be able to rely on the opinion letter issued by the
National Office of the Internal Revenue Service to the Fidelity Plans as
evidence that your plan is qualified under Section 401 of the Internal
Revenue Code. You will need to file for your own determination letter with
the appropriate Key District Director of the IRS if you wish to be sure
that your plans are qualified.
This Application may be used only in conjunction with basic plan document
number 01, the Fidelity Defined Contribution Retirement Plan and Trust
Agreement.
Signature of Employer
____________________________________________________________
____________________________________________________________
Name of person signing above (please print) ________________
Date ______________
Fidelity Management & Research Company, the sponsor of this prototype
plan, will inform you of all amendments it makes to the prototype plan, or
if it ever discontinues or abandons the prototype plan. You may contact
Fidelity Management & Research Company at:
Fidelity Management & Research Company
82 Devonshire Street
Boston, Massachusetts 02109
Attention: Prototype Plans
Telephone: 1-800-544-6666
8/1/93
Exhibit 14(l)
THE CORPORATEPLAN FOR RETIREMENT
THE PROFIT SHARING/401(K) PLAN
FIDELITY BASIC PLAN DOCUMENT NO. 07
THE CORPORATE PLAN FOR RETIREMENT
PROFIT SHARING/401(K) PLAN
ARTICLE 1
ADOPTION AGREEMENT
ARTICLE 2
DEFINITIONS
2.01 - Definitions
ARTICLE 3
PARTICIPATION
3.01 - Date of Participation
3.02 - Resumption of Participation Following Reemployment
3.03 - Cessation or Resumption of Participation Following a Change in
Status
3.04 - Participation by Owner-Employee; Controlled Businesses
3.05 - Omission of Eligible Employee
ARTICLE 4
CONTRIBUTIONS
4.01 - Deferral Contributions
4.02 - Additional Limit on Deferral Contributions
4.03 - Matching Contributions
4.04 - Limit on Matching Contributions and Employee Contributions
4.05 - Special Rules
4.06 - Fixed/Discretionary Employer Contributions
4.07 - Time of Making Employer Contributions
4.08 - Return of Employer Contributions
4.09 - Employee Contributions
4.10 - Rollover Contributions
4.11 - Deductible Voluntary Employee Contributions
4.12 - Additional Rules for Paired Plans
ARTICLE 5
PARTICIPANTS' ACCOUNTS
5.01 - Individual Accounts
5.02 - Valuation of Accounts
5.03 - Code Section 415 Limitations
ARTICLE 6
INVESTMENT OF CONTRIBUTIONS
6.01 - Manner of Investment
6.02 - Investment Decisions
6.03 - Participant Directions to Trustee
ARTICLE 7
RIGHT TO BENEFITS
7.01 - Normal or Early Retirement
7.02 - Late Retirement
7.03 - Disability Retirement
7.04 - Death
7.05 - Other Termination of Employment
7.06 - Separate Account
7.07 - Forfeitures
7.08 - Adjustment for Investment Experience
7.09 - Participant Loans
7.10 - In-Service Withdrawals
7.11 - Prior Plan In-Service Distribution Rules
ARTICLE 8
DISTRIBUTION OF BENEFITS PAYABLE AFTER TERMINATION OF SERVICE
8.01 - Distribution of Benefits to Participants and Beneficiaries
8.02 - Annuity Distributions
8.03 - Joint and Survivor Annuities/Preretirement Survivor Annuities
8.04 - Installment Distributions
8.05 - Immediate Distributions
8.06 - Determination of Method of Distribution
8.07 - Notice to Trustee
8.08 - Time of Distribution
8.09 - Whereabouts of Participants and Beneficiaries
ARTICLE 9
TOP-HEAVY PROVISIONS
9.01 - Application
9.02 - Definitions
9.03 - Minimum Contribution
9.04 - Adjustment to the Limitation on Contributions and Benefits
9.05 - Minimum Vesting
ARTICLE 10
AMENDMENT AND TERMINATION
10.01 - Amendment by Employer
10.02 - Amendment by Prototype Sponsor
10.03 - Amendments Affecting Vested and/or Accrued Benefits
10.04 - Retroactive Amendments
10.05 - Termination
10.06 - Distribution Upon Termination of the Plan
10.07 - Merger or Consolidation of Plan; Transfer of Plan Assets
ARTICLE 11
AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN; TRANSFER OF FUNDS
TO OR FROM OTHER QUALIFIED PLANS
11.01 - Amendment and Continuation of Predecessor Plan
11.02 - Transfer of Funds from an Existing Plan
11.03 - Acceptance of Assets by Trustee
11.04 - Transfer of Assets from Trust
ARTICLE 12
MISCELLANEOUS
12.01 - Communication to Participants
12.02 - Limitation of Rights
12.03 - Nonalienability of Benefits and Qualified Domestic Relations
Orders
12.04 - Facility of Payment
12.05 - Information Between Employer and Trustee
12.06 - Effect of Failure to Qualify Under Code
12.07 - Notices
12.08 - Governing Law
ARTICLE 13
PLAN ADMINISTRATION
13.01 - Powers and Responsibilities of the Administrator
13.02 - Nondiscriminatory Exercise of Authority
13.03 - Claims and Review Procedures
13.04 - Named Fiduciary
13.05 - Costs of Administration
ARTICLE 14
TRUST AGREEMENT
14l01 - Acceptance of Trust Responsibilities
14.02 - Establishment of Trust Fund
14.03 - Exclusive Benefit
14.04 - Powers of Trustee
14.05 - Accounts
14.06 - Approving of Accounts
14.07 - Distribution from Trust Fund
14.08 - Transfer of Amounts from Qualified Plan
14.09 - Transfer of Assets from Trust
14.10 - Separate Trust or Fund for Existing Plan Assets
14.11 - Voting; Delivery of Information
14.12 - Compensation and Expenses of Trustee
14.13 - Reliance by Trustee on other Persons
14.14 - Indemnification by Employer
14.15 - Consultation by Trustee with Counsel
14.16 - Persons Dealing with the Trustee
14.17 - Resignation or Removal of Trustee
14.18 - Fiscal Year of the Trust
14.19 - Discharge of Duties by Fiduciaries
14.20 - Amendment
14.21 - Plan Termination
14.22 - Permitted Reversion of Funds to Employer
14.23 - Governing Law
ARTICLE 1. ADOPTION AGREEMENT.
ARTICLE 2. DEFINITIONS.
2.01. DEFINITIONS.
(a) Wherever used herein, the following terms have the meanings set forth
below, unless a different meaning is clearly required by the context:
(1) "Account" means an account established on the books of the Trust for
the purpose of recording contributions made on behalf of a Participant and
any income, expenses, gains or losses incurred thereon.
(2) "Administrator" means the Employer adopting this Plan, or other
person designated by the Employer in Section 1.01(c).
(3) "Adoption Agreement" means Article 1, under which the Employer
establishes and adopts, or amends, the Plan and Trust and designates the
optional provisions selected by the Employer, and the Trustee accepts its
responsibilities under Article 14. The provisions of the Adoption
Agreement shall be an integral part of the Plan.
(4) "Annuity Starting Date" means the first day of the first period for
which an amount is payable as an annuity or in any other form.
(5) "Beneficiary" means the person or persons entitled under Section
7.04 to receive benefits under the Plan upon the death of a Participant,
provided that for purposes of Section 7.04 such term shall be applied in
accordance with Section 401(a)(9) of the Code and the regulations
thereunder.
(6) "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
(7) "Compensation" shall mean
(A) for purposes of Article 4 (Contributions), compensation as defined
in Section 5.03(e)(2) excluding any items elected by the Employer in
Section 1.04(a), reimbursements or other expense allowances, fringe
benefits (cash and non-cash), moving expenses, deferred compensation and
welfare benefits, but including amounts that are not includable in the
gross income of the Participant under a salary reduction agreement by
reason of the application of Sections 125, 402(a)(8), 402(h), or 403(b) of
the Code; and
(B) for purposes of Section 2.01(a)(16) (Highly Compensated Employees),
Section 5.03 (Code Section 415 Limitations), and Section 9.03 (Top-Heavy
Plan Minimum Contribution), compensation as defined in Section 5.03(e)(2).
Compensation shall generally be based on the amount actually paid to the
Participant during the Plan Year or, for purposes of Article 4 if so
elected by the Employer in Section 1.04(b), during that portion of the Plan
Year during which the Employee is eligible to participate. Notwithstanding
the preceding sentence, compensation for purposes of Section 5.03 (Code
Section 415 Limitations) shall be based on the amount actually paid or made
available to the Participant during the Limitation Year. Compensation for
the initial Plan Year for a new plan shall be based upon eligible
Participant Compensation, subject to Section 1.04(b), from the Effective
Date listed in Section 1.01(g)(1) through the end of the first Plan Year.
In the case of any Self-Employed Individual, Compensation shall mean the
Individual's Earned Income.
For years beginning after December 31, 1988, the annual Compensation of
each Participant taken into account for determining all benefits provided
under the plan for any determination period shall not exceed $200,000.
This limitation shall be adjusted by the Secretary at the same time and in
the same manner as under Section 415(d) of the Code, except that the dollar
increase in effect on January 1 of any calendar year is effective for years
beginning in such calendar year and the first adjustment to the $200,000
limitation is effected on January 1, 1990. If a plan determines
Compensation on a period of time that contains fewer than 12 calendar
months, then the annual Compensation limit is the amount equal to the
annual Compensation limit for the calendar year in which the Compensation
period begins multiplied by the ratio obtained by dividing the number of
full months in the period by 12.
If Compensation for any prior determination period is taken into account
in determining an Employee's allocations or benefits for the current
determination period, the Compensation for such prior year is subject to
the applicable annual compensation limit in effect for that prior year.
For this purpose, for years beginning before January 1, 1990, the
applicable annual compensation limit is $200,000.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of Section 414(q)(6) of the Code shall apply, except
that in applying such rules, the term "family" shall include only the
spouse of the Participant and any lineal descendants of the Participant who
have not attained age 19 before the close of the year. If the $200,000
limitation is exceeded as a result of the application of these rules, then
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.
(8) "Earned Income" means the net earnings of a Self-Employed Individual
derived from the trade or business with respect to which the Plan is
established and for which the personal services of such individual are a
material income-providing factor, excluding any items not included in gross
income and the deductions allocated to such items, except that for taxable
years beginning after December 31, 1989 net earnings shall be determined
with regard to the deduction allowed under Section 164(f) of the Code, to
the extent applicable to the Employer. Net earnings shall be reduced by
contributions of the Employer to any qualified plan, to the extent a
deduction is allowed to the Employer for such contributions under Section
404 of the Code.
(9) "Eligibility Computation Period" means each 12-consecutive month
period beginning with the Employment Commencement Date and each anniversary
thereof or, in the case of an Employee who, before completing the
eligibility requirements set forth in Section 1.03(a)(1), incurs a break in
service for participation purposes and thereafter returns to the employ of
the Employer or Related Employer, each 12-consecutive month period
beginning with the first day of reemployment and each anniversary thereof.
A "break in service for participation purposes" shall mean an Eligibility
Computation Period during which the participant does not complete more than
500 Hours of Service with the Employer.
(10) "Employee" means any employee of the Employer, any Self-Employed
Individual or Owner-Employee. The Employer must specify in Section
1.03(a)(3) any Employee or class of Employees not eligible to participate
in the Plan. If the Employer elects to exclude collective bargaining
employees, the exclusion applies to any employee of the Employer included
in a unit of employees covered by an agreement which the Secretary of Labor
finds to be a collective bargaining agreement between employee
representatives and one or more employers unless the collective bargaining
agreement requires the employee to be included within the Plan. The term
"employee representatives" does not include any organization more than half
the members of which are owners, officers, or executives of the Employer.
For purposes of the Plan, an individual shall be considered to become an
Employee on the date on which he first completes an Hour of Service and he
shall be considered to have ceased to be an Employee on the date on which
he last completes an Hour of Service. The term also includes a Leased
Employee, such that contributions or benefits provided by the leasing
organization which are attributable to services performed for the Employer
shall be treated as provided by the Employer. Notwithstanding the above, a
Leased Employee shall not be considered an Employee if Leased Employees do
not constitute more than 20 percent of the Employer's non-highly
compensated work-force (taking into account all Related Employers) and the
Leased Employee is covered by a money purchase pension plan maintained by
the leasing organization and providing (A) a nonintegrated employer
contribution rate of at least 10 percent of compensation, as defined for
purposes of Section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are excludable
from gross income under Section 125, Section 402(a)(8), Section 402(h) or
Section 403(b) of the Code, (B) full and immediate vesting, and (C)
immediate participation by each employee of the leasing organization.
(11) "Employer" means the employer named in Section 1.02(a) and any
Related Employers required by this Section 2.01(a)(11). If Article 1 of
the Employer's Plan is the Standardized Adoption Agreement, the term
"Employer" includes all Related Employers. If Article 1 of the Employer's
Plan is the Non-standardized Adoption Agreement, the term "Employer"
includes those Related Employers designated in Section 1.02(b).
(12) "Employment Commencement Date" means the date on which the Employee
first performs an Hour of Service.
(13) "ERISA" means the Employee Retirement Income Security Act of 1974,
as from time to time amended.
(14) "Fidelity Fund" means any Registered Investment Company or Managed
Income Portfolio of the Fidelity Group Trust for Employee Benefit Plans
which is made available to plans utilizing the CORPORATEplan for
Retirement.
(15) "Fund Share" means the share, unit, or other evidence of ownership
in a Fidelity Fund.
(16) "Highly Compensated Employee" means both highly compensated active
Employees and highly compensated former Employees.
A highly compensated active Employee includes any Employee who performs
service for the Employer during the determination year and who, during the
look-back year, (A) received compensation from the Employer in excess of
$75,000 (as adjusted pursuant to Section 415(d) of the Code), (B) received
compensation from the Employer in excess of $50,000 (as adjusted pursuant
to Section 415(d) of the Code) and was a member of the top-paid group for
such year, or (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 Section 415(b)(1)(A) of the Code. The term highly
compensated Employee also includes (i) Employees who are both described in
the preceding sentence if the term "determination year" is substituted for
the term "look-back year" and the Employee is one of the 100 Employees who
received the most compensation from the Employer during the determination
year, and (ii) Employees who are 5-percent owners at any time during the
look-back year or determination year.
If no officer has satisfied the compensation requirement of (C) above
during either a determination year or look-back year, the highest paid
officer for such year shall be treated as a highly compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding the
determination year. The Employer may elect to make the look-back year
calculation for a determination on the basis of the calendar year ending
with or within the applicable determination year, as prescribed by Section
414(q) of the Code and the regulations issued thereunder.
A highly compensated former Employee includes any Employee who separated
from service (or was deemed to have separated) prior to the determination
year, performs no service for the Employer during the determination year,
and was a highly compensated active Employee for either the separation year
or any determination year ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a
family member of either a 5-percent owner who is an active or former
Employee or a highly compensated Employee who is one of the 10 most highly
compensated Employees ranked on the basis of compensation paid by the
Employer during such year, then the family member and the 5-percent owner
or top-ten highly compensated Employee shall be aggregated. In such case,
the family member and 5-percent owner or top-ten highly compensated
Employee shall be treated as a single Employee receiving compensation and
plan contributions or benefits equal to the sum of such compensation and
contributions or benefits of the family member and 5-percent owner or
top-ten highly compensated Employee. For purposes of this Section, family
member includes the spouse, lineal ascendants and descendants of the
Employee or former Employee and the spouses of such lineal ascendants and
descendants.
The determination of who is a highly compensated Employee, including the
determinations of the number and identity of Employees in the top-paid
group, the top 100 Employees, the number of Employees treated as officers,
and the compensation that is considered, will be made in accordance with
Section 414(q) of the Code and the regulations thereunder.
(17) "Hour of Service" means, with respect to any Employee,
(A) Each hour for which the Employee is directly or indirectly paid, or
entitled to payment, for the performance of duties for the Employer or a
Related Employer, each such hour to be credited to the Employee for the
Eligibility Computation Period in which the duties were performed;
(B) Each hour for which the Employee is directly or indirectly paid, or
entitled to payment, by the Employer or Related Employer (including
payments made or due from a trust fund or insurer to which the Employer
contributes or pays premiums) 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,
disability, layoff, jury duty, military duty, or leave of absence, each
such hour to be credited to the Employee for the Eligibility Computation
Period in which such period of time occurs, subject to the following rules:
(i) No more than 501 Hours of Service shall be credited under this
paragraph (B) on account of any single contin-uous period during which the
Employee performs no duties;
(ii) Hours of Service shall not be credited under this paragraph (B) for
a payment which solely reimburses the Employee for medically-related
expenses, or which is made or due under a plan maintained solely for the
purpose of complying with applicable workmen's compensation, unemployment
compensation or disability insurance laws; and
(iii) If the period during which the Employee performs no duties falls
within two or more Eligibility Computation Periods and if the payment made
on account of such period is not calculated on the basis of units of time,
the Hours of Service credited with respect to such period shall be
allocated between not more than the first two such Eligibility Computation
Periods on any reasonable basis consistently applied with respect to
similarly situated Employees; and
(C) Each hour not counted under paragraph (A) or (B) for which back pay,
irrespective of mitigation of damages, has been either awarded or agreed to
be paid by the Employer or a Related Employer, shall be credited to the
Employee for the Eligibility Computation Period to which the award or
agreement pertains rather than the Eligibility Computation Period in which
the award agreement or payment is made.
For purposes of determining Hours of Service, Employees of the Employer
and of all Related Employers will be treated as employed by a single
employer. For purposes of paragraphs (B) and (C) above, Hours of Service
will be calculated in accordance with the provisions of Section
2530.200b-2(b) of the Department of Labor regulations, which are
incorporated herein by reference.
Solely for purposes of determining whether a break in service for
participation 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 (i) by reason of the pregnancy of the individual,
(ii) by reason of a birth of a child of the individual, (iii) by reason of
the placement of a child with the individual in connection with the
adoption of such child by such individual, or (iv) for purposes of caring
for such child for a period beginning immediately following such birth or
placement. The hours of service credited under this paragraph shall be
credited (a) in the computation period in which the absence begins if the
crediting is necessary to prevent a break in service in that period, or (b)
in all other cases, in the following computation period.
(18) "Leased Employee" means any individual who provides services to the
Employer or a Related Employer (the "recipient") but is not otherwise an
employee of the recipient if (A) such services are provided pursuant to an
agreement between the recipient and any other person (the "leasing
organization"), (B) such individual has performed services for the
recipient (or for the recipient and any related persons within the meaning
of Section 414(n)(6) of the Code) on a substantially full-time basis for at
least one year, and (C) such services are of a type historically performed
by employees in the business field of the recipient.
(19) "Normal Retirement Age" means the normal retirement age specified in
Section 1.06(a) of the Adoption Agreement. If the Employer enforces a
mandatory retirement age, the Normal Retirement Age is the lesser of that
mandatory age or the age specified in Section 1.06(a).
(20) "Owner-Employee" means, if the Employer is a sole proprietorship,
the individual who is the sole proprietor, or if the Employer is a
partnership, a partner who owns more than 10 percent of either the capital
interest or the profits interest of the partnership.
(21) "Participant" means any Employee who participates in the Plan in
accordance with Article 3 hereof.
(22) "Plan" means the plan established by the Employer in the form of the
prototype plan, as set forth herein as a new plan or as an amendment to an
existing plan, by executing the Adoption Agreement, together with any and
all amendments hereto.
(23) "Plan Year" means the 12-consecutive-month period ending on the date
designated by the Employer in Section 1.01(f).
(24) "Prototype Sponsor" means Fidelity Management and Research Company
or its successor.
(25) "Registered Investment Company" means any one or more corporations,
partnerships or trusts registered under the Investment Company Act of 1940
for which Fidelity Management and Research Company serves as investment
advisor.
(26) "Related Employer" means any employer other than the Employer named
in Section 1.02(a) if the Employer and such other employer are members of a
controlled group of corporations (as defined in Section 414(b) of the Code)
or an affiliated service group (as defined in Section 414(m)), or are
trades or businesses (whether or not incorporated) which are under common
control (as defined in Section 414(c)), or such other employer is required
to be aggregated with the Employer pursuant to regulations issued under
Section 414(o).
(27) "Self-Employed Individual" means an individual who has Earned Income
for the taxable year from the Employer or who would have had Earned Income
but for the fact that the trade or business had no net profits for the
taxable year.
(28) "Trust" means the trust created by the Employer in accordance with
the provisions of Section 14.01.
(29) "Trust Agreement" means the agreement between the Employer and the
Trustee, as set forth in Article 14, under which the assets of the Plan are
held, administered, and managed.
(30) "Trust Fund" means the property held in Trust by the Trustee for the
Accounts of the Participants and their Beneficiaries.
(31) "Trustee" means the Fidelity Management Trust Company, or its
successor.
(32) "Year of Service for Participation" means, with respect to any
Employee, an Eligibility Computation Period during which the Employee has
been credited with at least 1,000 Hours of Service. If the Plan maintained
by the Employer is the plan of a predecessor employer, an Employee's Years
of Service for Participation shall include years of service with such
predecessor employer. In any case in which the Plan maintained by the
Employer is not the plan maintained by a predecessor employer, service for
such predecessor shall be treated as service for the Employer, to the
extent provided in Section 1.08.
(33) "Years of Service for Vesting" means, with respect to any Employee,
the number of whole years of his periods of service with the Employer or a
Related Employer (the elapsed time method to compute vesting service),
subject to any exclusions elected by the Employer in Section 1.07(b). An
Employee will receive credit for the aggregate of all time period(s)
commencing with the Employee's Employment Commencement Date and ending on
the date a break in service begins, unless any such years are excluded by
Section 1.07(b). An Employee will also receive credit for any period of
severance of less than 12 consecutive months. Fractional periods of a year
will be expressed in terms of days.
In the case of a Participant who has 5 consecutive 1-year breaks in
service, all years of service after such breaks in service will be
disregarded for the purpose of vesting the Employer-derived account balance
that accrued before such breaks, but both pre-break and post-break service
will count for the purposes of vesting the Employer-derived account balance
that accrues after such breaks. Both accounts will share in the earnings
and losses of the fund.
In the case of a Participant who does not have 5 consecutive 1-year
breaks in service, both the pre-break and post-break service will count in
vesting both the pre-break and post-break employer-derived account balance.
A break in service is a period of severance of at least 12 consecutive
months. Period of severance is a continuous period of time during which
the Employee is not employed by the Employer. Such period begins on the
date the Employee retires, quits or is discharged, or if earlier, the
12-month anniversary of the date on which the Employee was otherwise first
absent from service.
In the case of an individual who is absent from work for maternity or
paternity reasons, the 12-consecutive month period beginning on the first
anniversary of the first date of such absence shall not constitute a break
in service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (A) by reason of the
pregnancy of the individual, (B) by reason of the birth of a child of the
individual, (C) by reason of the placement of a child with the individual
in connection with the adoption of such child by such individual, or (D)
for purposes of caring for such child for a period beginning immediately
following such birth or placement.
If the Plan maintained by the Employer is the plan of a predecessor
employer, an Employee's Years of Service for Vesting shall include years of
service with such predecessor employer. In any case in which the Plan
maintained by the Employer is not the plan maintained by a predecessor
employer, service for such predecessor shall be treated as service for the
Employer to the extent provided in Section 1.08.
(b) Pronouns used in the Plan are in the masculine gender but include the
feminine gender unless the context clearly indicates otherwise.
ARTICLE 3. PARTICIPATION.
3.01. DATE OF PARTICIPATION. All Employees in the eligible class (as
defined in Section 1.03(a)(3)) who are in the service of the Employer on
the Effective Date will become Participants on the date elected by the
Employer in Section 1.03(c). Any other Employee will become a Participant
in the Plan as of the first Entry Date on which he first satisfies the
eligibility requirements set forth in Section 1.03(a). In the event that
an Employee who is not a member of an eligible class (as defined in Section
1.03(a)(3)) becomes a member of an eligible class, the individual shall
participate immediately if such individual had already satisfied the
eligibility requirements and would have otherwise previously become a
Participant.
If an eligibility requirement other than one Year of Service is elected in
1.03(a)(1), an Employee may not be required to complete a minimum number of
Hours of Service before becoming a Participant. An otherwise eligible
Employee subject to a minimum months of service requirement shall become a
Participant on the first Entry Date following his completion of the
required number of consecutive months of employment measured from his
Employment Commencement Date to the coinciding date in the applicable
following month. For purposes of determining consecutive months of
service, the Related Employer and predecessor employer rules contained in
Sections 2.01(a)(17) and 2.01(a)(32) shall apply.
3.02. RESUMPTION OF PARTICIPATION FOLLOWING REEMPLOYMENT. If a
Participant ceases to be an Employee and thereafter returns to the employ
of the Employer he will be treated as follows:
(a) he will again become a Participant on the first date on which he
completes an Hour of Service for the Employer following his reemployment
and is in the eligible class of Employees as defined in Section 1.03(a)(3),
and
(b) any distribution which he is receiving under the Plan will cease except
as otherwise required under Section 8.08.
3.03. CESSATION OR RESUMPTION OF PARTICIPATION FOLLOWING A CHANGE IN
STATUS. If any Participant continues in the employ of the Employer or
Related Employer but ceases to be a member of an eligible class as defined
in Section 1.03(a)(3), the individual shall continue to be a Participant
for most purposes until the entire amount of his benefit is distributed;
however, the individual shall not be entitled to receive an allocation of
contributions or forfeitures during the period that he is not a member of
the eligible class. Such Participant shall continue to receive credit for
service completed during the period for purposes of determining his vested
interest in his Accounts. In the event that the individual subsequently
again becomes a member of an eligible class of Employees, the individual
shall resume full participation immediately upon the date of such change in
status.
3.04. PARTICIPATION BY OWNER-EMPLOYEE; CONTROLLED BUSINESSES.
If the Plan provides contributions or benefits for one or more
Owner-Employees who control both the trade or business with respect to
which the Plan is established and one or more other trades or businesses,
the Plan and any plan established with respect to such other trades or
businesses must, when looked at as a single plan, satisfy Sections 401(a)
and 401(d) of the Code with respect to the employees of this and all such
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 each such other trade or business must be
included in a plan which satisfies Sections 401(a) and 401(d) of the Code
and which provides contributions and benefits not less favorable than
provided for Owner-Employees under the Plan.
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 under the most favorable
plan of the trade or business which is not controlled.
For purposes of this Section, an Owner-Employee, or two or more
Owner-Employees, shall be considered to control a trade or business if such
Owner-Employee, or such 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 percent of either the capital interest or the
profits interest in such partnership. For this purpose, 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
controlled by such Owner-Employee or such Owner-Employees.
3.05. OMISSION OF ELIGIBLE EMPLOYEE. If any Employee who should be
included as a Participant in the Plan is erroneously omitted and discovery
of such omission is not made until after a contribution by his Employer for
the year has been made, the Employer shall make a subsequent contribution,
if necessary, so that the omitted Employee receives the total amount which
the said Employee would have received had he not been omitted. For
purposes of this Section 3.05, the term "contribution" shall not include
Deferral Contributions and Matching Contributions made pursuant to Sections
4.01 and 4.03, respectively.
ARTICLE 4. CONTRIBUTIONS.
4.01. DEFERRAL CONTRIBUTIONS.
(a) 4.01. Deferral Contributions. If so provided by the Employer in
Section 1.05(b), each Participant may elect to execute a salary reduction
agreement with the Employer to reduce his Compensation by a specified
percentage not exceeding 15% per payroll period, subject to any exceptions
elected by the Employer in Section 1.05(b)(2) and 1.05(b)(3) and equal to a
whole number multiple of one (1) percent. Such agreement shall become
effective on the first day of the first payroll period for which the
Employer can reasonably process the request. The Employer shall make a
Deferral Contribution on behalf of the Participant corresponding to the
amount of said reduction, subject to the restrictions set forth below.
Under no circumstances may a salary reduction agreement be adopted
retroactively.
(b) A Participant may elect to change or discontinue the percentage by
which his Compensation is reduced by notice to the Employer as provided in
Section 1.05(b)(1).
(c) No Participant shall be permitted to have Deferral Contributions made
under the Plan, or any other qualified plan maintained by the Employer,
during the taxable year, in excess of the dollar limitation contained in
Section 402(g) of the Code in effect at the beginning of such taxable year.
A Participant may assign to the Plan any Excess Deferrals made during the
taxable year of the Participant by notifying the Plan Administrator on or
before March 15 following the taxable year of the amount of the Excess
Deferrals to be assigned to the Plan. A Participant is deemed to notify
the Administrator of any Excess Deferrals that arise by taking into account
only those Deferral Contributions made to the Plan and any other plan of
the Employer. Notwithstanding any other provision of the Plan, Excess
Deferrals, plus any income and minus any loss allocable thereto, shall be
distributed no later than April 15 to any Participant to whose Account
Excess Deferrals were so assigned for the preceding year and who claims
Excess Deferrals for such taxable year.
"Excess Deferrals" shall mean those Deferral Contributions that are
includable in a Participant's gross income under Section 402(g) of the Code
to the extent such Participant's Deferral Contributions for a taxable year
exceed the dollar limitation under such Code section. For purposes of
determining Excess Deferrals, the term "Deferral Contributions" shall
include the sum of all Employer Contributions made on behalf of such
Participant pursuant to an election to defer under any qualified CODA as
described in Section 401(k) of the Code, any simplified employee pension
cash or deferred arrangement as described in Section 402(h)(1)(B) of the
Code, any eligible deferred compensation plan under Section 457 of the
Code, any plan as described under Section 501(c)(18) of the Code, and any
Employer Contributions made on the behalf of a Participant for the purchase
of an annuity contract under Section 403(b) of the Code pursuant to a
salary reduction agreement. Deferral Contributions shall not include any
deferrals properly distributed as excess annual additions. Excess
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.
Excess Deferrals shall be adjusted for any income or loss up to the date
of distribution. The income or loss allocable to Excess Deferrals is (1)
income or loss allocable to the Participant's Deferral Contributions
Account for the taxable year multiplied by a fraction, the numerator of
which is such Participant's Excess Deferrals for the year and the
denominator is the Participant's Account balance attributable to Deferral
Contributions without regard to any income or loss occurring during such
taxable year, or (2) such other amount determined under any reasonable
method, provided that such method is used consistently for all Participants
in calculating the distributions required under this Section 4.01(c) and
Sections 4.02(d) and 4.04(d) for the Plan Year, and is used by the Plan in
allocating income or loss to Participants' Accounts. Income or loss
allocable to the period between the end of the Plan Year and the date of
distribution shall be disregarded in determining income or loss.
(d) In order for the Plan to comply with the requirements of Sections
401(k), 402(g) and 415 of the Code and the regulations promulgated
thereunder, at any time in a Plan Year the Administrator may reduce the
rate of Deferral Contributions to be made on behalf of any Participant, or
class of Participants, for the remainder of that Plan Year, or the
Administrator may require that all Deferral Contributions to be made on
behalf of a Participant be discontinued for the remainder of that Plan
Year. Upon the close of the Plan Year or such earlier date as the
Administrator may determine, any reduction or discontinuance in Deferral
Contributions shall automatically cease until the Administrator again
determines that such a reduction or discontinuance of Deferral
Contributions is required.
4.02. ADDITIONAL LIMIT ON DEFERRAL CONTRIBUTIONS.
(a) The Actual Deferral Percentage (hereinafter "ADP") for Participants who
are Highly Compensated Employees for each Plan Year and the ADP for
participants who are Non-highly Compensated Employees for the same Plan
Year must satisfy one of the following tests:
(1) The ADP for Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the ADP for Participants who are Non-highly
Compensated Employees for the same Plan Year multiplied by 1.25; or
(2) The ADP for Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the ADP for Participants who are Non-highly
Compensated Employees for the same Plan Year multiplied by 2.0, provided
that the ADP for Participants who are Highly Compensated Employees does not
exceed the ADP for Participants who are Non-highly Compensated Employees by
more than two (2) percentage points.
(b) The following special rules apply for the purposes of this Section:
(1) The ADP for any Participant who is a Highly Compensated Employee for
the Plan Year and who is eligible to have Deferral Contributions (and
Qualified Discretionary Contributions if treated as Deferral Contributions
for purposes of the ADP test) allocated to his or her accounts under two or
more arrangements described in Section 401(k) of the Code that are
maintained by the Employer, shall be determined as if such Deferral
Contributions (and, if applicable, such Qualified Discretionary
Contributions) 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. Notwithstanding the foregoing, certain plans
shall be treated as separate if mandatorily disaggregated under regulations
under Section 401(k) of the Code.
(2) In the event that this Plan satisfies the requirements of Sections
401(k), 401(a)(4), or 410(b) of the Code only if aggregated with one or
more other plans, or if one or more other plans satisfy the requirements of
such Sections of the Code only if aggregated with this plan, then this
Section shall be applied by determining the ADP of Employees as if all such
plans were a single plan. For Plan Years beginning after December 31,
1989, plans may be aggregated in order to satisfy section 401(k) of the
Code only if they have the same Plan Year.
(3) For purposes of determining the ADP of a Participant who is a
5-percent owner or one of the ten most highly-paid Highly Compensated
Employees, the Deferral Contributions (and Qualified Discretionary
Contributions if treated as Deferral Contributions for purposes of the ADP
test) and Compensation of such Participant shall include the Deferral
Contributions (and, if applicable, Qualified Discretionary Contributions)
and Compensation for the Plan Year of Family Members (as defined in Section
414(q)(6) of the Code). Family Members, with respect to between the end of
the Plan Year and the date of distribution shall be disregarded in
determining income or loss.
Excess Contributions shall be distributed from the Participant's Qualified
Discretionary Contribution account only to the extent that such Excess
Contributions exceed the balance in the Participant's Deferral
Contributions account.
4.03. MATCHING CONTRIBUTIONS. If so provided by the Employer in Section
1.05(c), the Employer shall make a Matching Contribution on behalf of each
Participant who had Deferral Contributions made on his behalf during the
year and who meets the requirement, if any, of Section 1.05(c)(4). The
amount of the Matching Contribution shall be determined in accordance with
Section 1.05(c), subject to the limitations set forth in Section 4.04 and
Section 404 of the Code. Matching Contributions will not be allowed to be
made by the Employer on any voluntary non-deductible Employee
Contributions.
4.04. LIMIT ON MATCHING CONTRIBUTIONS AND EMPLOYEE CONTRIBUTIONS.
(a) The Average Contribution Percentage (hereinafter "ACP") for
Participants who are Highly Compensated Employees for each Plan Year and
the ACP for Participants who are Non-highly Compensated Employees for the
same Plan Year must satisfy one of the following tests:
(1) The ACP for Participants who are Highly Compensated 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.
(4) For purposes of determining the ADP test, Deferral Contributions and
Qualified Discretionary Contributions must be made before the last day of
the twelve-month period immediately following the Plan Year to which
contributions relate.
(5) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of Qualified Discretionary
Contributions used in such test.
(6) The determination and treatment of the ADP amounts of any Participant
shall satisfy such other requirements as may be prescribed by the Secretary
of the Treasury.
(c) The following definitions shall apply for purposes of this Section:
(1) "Actual Deferral Percentage" shall mean, for a specified group of
Participants for a Plan Year, the average of the ratios (calculated
separately for each Participant in such group) of (A) the amount of
Employer contributions actually paid over to the Trust on behalf of such
Participant for the Plan Year to (B) the Participant's Compensation for
such Plan Year. Employer contributions on behalf of any Participant shall
include (i) any Deferral Contributions made pursuant to the Participant's
deferral election, including Excess Deferrals of Highly Compensated
Employees, but excluding (a) Excess Deferrals of Non-highly Compensated
Employees that arise solely from Deferral Contributions made under the Plan
or plans of the Employer and (b) Deferral Contributions that are taken
into account in the Contribution Percentage test (provided the ADP test is
satisfied both with and without exclusion of these Deferral Contributions)
and (ii) at the election of the Employer, Qualified Discretionary
Contributions. Matching Contributions, whether or not non-forfeitable when
made, shall not be considered as Employer Contributions for purposes of
this paragraph. For purposes of computing Actual Deferral Percentages, an
Employee who would be a Participant but for the failure to make Deferral
Contributions shall be treated as a Participant on whose behalf no Deferral
Contributions are made.
(2) "Excess Contributions" shall mean, with respect to any Plan Year, the
excess of
(a) The aggregate amount of Employer contributions actually taken into
account in computing 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).
(3) "Qualified Discretionary Contributions" shall mean contributions made
by the Employer as elected in Section 1.05(g) and allocated to Participant
Accounts of Non-highly Compensated Employees that such 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 Deferral
Contributions. Participants shall not be required to satisfy any hours of
service or employment requirement in order to receive an allocation of such
contributions.
(D) 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 1/2 months 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 of Participants who are subject to the family member
aggregation rules of Section 414(q)(6) of the Code shall be allocated
among the family members in proportion to the Deferral Contributions (and
amounts treated as Deferral Contributions) of each family member that is
combined to determine the combined ADP.
Excess Contributions shall be treated as annual additions under the Plan.
Excess Contributions shall be adjusted for any income or loss up to the
date of distribution. The income or loss allocable to Excess Contributions
is (1) income or loss allocable to the Participant's Deferral Contribution
Account (and if applicable, the Qualified Discretionary Contribution
Account) for the Plan Year multiplied by a fraction, the numerator of which
is such Participant's Excess Contributions for the year and the denominator
is the Participant's Account balance attributable to Deferral Contributions
without regard to any income or loss occurring during such Plan Year, or
(2) an amount determined under any reasonable method, provided that such
method is used consistently for all Participants in calculating any
distributions required under Section 4.02(d) and Sections 4.01(c) and
4.04(d) for the Plan Year, and is used by the Plan in allocating income or
loss to the Participants' Accounts. Income or loss allocable to the period
between the end of the Plan Year and the date of distibution shall be
disregarded in determining income or loss.
Excess Contributions shall be distributed from the Participant's Qualified
Discretionary Contribution Account only to the extent that such Excess
Contributions exceed the balance in the Participant's Deferral
Contributions Account.
4.03 Matching Contributions: If so provided by the Employer in Section
1.05(c), the Employer shall make a Matching Contribution on behalf of each
Participant who had Deferral Contributions made on his behalf during the
year and who meets the requirement, if any, of Section 1.05(c)(4). The
amount of the Matching Contribution shall be determined in accordance with
Section 1.05(c), subject to the limitations set forth in Section 4.04 and
Section 404 of the Code. Matching Contributions will not be allowed to be
made by the Employer on any voluntary non-deductible Employee
Contributions.
4.04 Limit on Matching Contributions and Employee Contributions:
(a) The Average Contribution Percentage (hereinafter "ACP") for
Participants who are Highly Compensated Employees for each Plan Year and
the ACP for Participants who are Non-highly Compensated Employees for the
same Plan Year must satisfy one of the following tests:
(1) The ACP for Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the ACP for Participants who are Non-highly
Compensated Employees for the same Plan Year multiplied by 1.25; or
(2) The ACP for Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the ACP for Participants who are Non-highly
Compensated Employees for the same Plan Year multiplied by two (2),
provided that the ACP for Participants who are Highly Compensated Employees
does not exceed the ACP for Participants who are Non-highly Compensated
Employees by more than two (2) percentage points.
(b) The following special rules apply for purposes of this section:
(1) If one or more Highly Compensated Employees participate in both a
qualified cash or deferred arrangement described in Section 401(k) of the
Code (hereafter "CODA") 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 ACP of those Highly Compensated Employees who also participate in a
CODA will be reduced (beginning with such Highly Compensated Employee whose
ACP is the highest) 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 either the ADP or ACP of the Highly Compensated Employees does not
exceed 1.25 multiplied by the ADP and ACP of the Non-highly Compensated
Employees.
(2) For purposes of this section, 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 section 401(a) of the Code, or arrangements
described in section 401(k) of the Code that are maintained by 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.
Notwithstanding the foregoing, certain plans shall be treated as separate
if mandatorily disaggregated under regulations under Section 401(m) of the
Code.
(3) In the event that this Plan satisfies the requirements of Sections
401(m), 401(a)(4) or 410(b) of the Code only if aggregated with one or more
other plans, or if one or more other plans satisfy the requirements of such
sections of the Code only if aggregated with this Plan, then this 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
December 31, 1989, plans may be aggregated in order to satisfy Section
401(m) of the Code only if they have the same Plan Year.
(4) For purposes of determining the Contribution percentage of a
Participant who is a five-percent owner or one of the ten most highly-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
Section 414(q)(6) of the Code). 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.
(5) For purposes of determining the Contribution Percentage test, Employee
Contributions made pursuant to Section 1.05(d)(1) are considered to have
been made in the Plan Year in which contributed to the Trust. Matching
Contributions and Qualified Discretionary 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.
(6) The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Qualified Discretionary
Contributions used in such test.
(7) The determination and treatment of the Contribution Percentage of any
Participant shall satisfy such other requirements as may be prescribed by
the Secretary of Treasury.
(c) The following definitions shall apply for purposes of this Section:
(1) "Aggregate Limit" shall mean the greater of (A) or (B) where (A) is
the sum of (i) 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 Section 401(m) of the Code
for the Plan Year beginning with or within the Plan Year of the CODA and
(ii) the lesser of 200% or two plus the lesser of such ADP or ACP and where
(B) is the sum of (i) 125 percent of the lesser 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 Section 401(m) of the Code
for the Plan Year beginning with or within the Plan Year of the CODA and
(ii) the lesser of 200% or two plus the greater of such ADP or ACP.
(2) "Average Contribution Percentage" or "ACP" shall mean the average of
the Contribution Percentages of the Eligible Participants in a group.
(3) "Contribution Percentage" shall mean the ratio (expressed as a
percentage) of the Participant's Contribution Percentage Amounts to the
Participant's Compensation for the Plan Year.
(4) "Contribution Percentage Amounts" shall mean the sum of the Employee
Contributions and Matching Contributions made under the plan on behalf of
the Participant for the Plan Year. Such Contribution Percentage Amounts
shall not include Matching Contributions 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. If so elected by the Employer in Section
1.05(b)(4), the Employer may include Qualified Discretionary Contributions
in the Contribution Percentage Amounts. The Employer also may elect to use
Deferral Contributions in the Contribution Percentage Amounts so long as
the ADP test is met before the Deferral Contributions are used in the ACP
test and continues to be met following the exclusion of those Deferral
Contributions that are used to meet the ACP test.
(5) "Deferral Contribution" shall mean any contribution made at the
election of the Participant pursuant to a salary reduction agreement in
accordance with Section 4.01(a).
(6) "Eligible Participant" shall mean any Employee who is eligible to
make an Employee Contribution, or a Deferral Contribution (if the Employer
takes such contributions into account in the calculation of the
Contribution Percentage), or to receive a Matching Contribution.
(7) "Employee Contribution" shall mean any voluntary non-deductible
contribution made to the plan by or on behalf of a Participant that is
included in the Participant's gross income in the year in which made and
that is maintained in a separate Account to which earnings and losses are
allocated.
(8) "Matching Contribution" shall mean an Employer Contribution made to
this or any other defined contribution plan on behalf of a Participant on
account of a Participant's Deferral Contribution.
(9) "Excess Aggregate Contributions" shall mean, with respect to any Plan
Year, the excess 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 the order of their Contribution Percentages
beginning with the highest of such percentages).
Such determination shall be made after first determining Excess
Deferrals pursuant to Section 4.01 and then determining Excess
Contributions pursuant to Section 4.02.
(d) Notwithstanding any other provision of the 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 of Participants who are subject to the
family member aggregation rules of Section 414(q)(6) of the Code shall be
allocated among the family members in proportion to the Employee and
Matching Contributions of each family member that is combined to determine
the combined ACP. If such Excess Aggregate Contributions are distributed
more than 2 1/2 months 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.
Excess Aggregate Contributions shall be adjusted for any income or loss up
to the date of distribution. The income or loss allocable to Excess
Aggregate Contributions is (1) income or loss allocable to the
Participant's Employee 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 for the Plan Year
multiplied by a fraction, the numerator of which is such Participant's
Excess Aggregate Contributions for the year and the denominator is the
Participant's Account balance(s) attributable to Contribution Percentage
Amounts without regard to income or loss occurring during such Plan Year,
or (2) such other amount determined under any reasonable method, provided
that such method is used consistently for all Participants in calculating
any distributions required under Section 4.04(d) and Sections 4.01(c) and
4.02(d) for the Plan Year, and is used by the Plan in allocating income or
loss to the Participants' Accounts. Income or loss allocable to the period
between the end of the Plan Year and the date of distribution shall be
disregarded in determining income or loss.
Forfeitures of Excess Aggregate Contributions shall be applied to reduce
Employer contributions; the forfeitures shall be held in the money market
fund, if any, listed in Section 1.14(b) pending such application.
Excess Aggregate Contributions shall be forfeited, if forfeitable, or
distributed on a PRORATA basis from the Participant's Employee Contribution
Account, Matching Contribution Account and if applicable, the Participant's
Deferral Contributions Account or Qualified Discretionary Contribution
Account or both.
4.05. SPECIAL RULES. Deferral Contributions and Qualified Discretionary
Contributions and income 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, except as
otherwise provided in Section 7.10, 7.11 or 10.06. Such amounts may also
be distributed, but after March 31, 1988, in the form of a lump sum only,
upon
(a) Termination of the Plan without establishment of another defined
contribution plan, other than an employee stock ownership plan (as defined
in Section 4975(e) or Section 409 of the Code) or a simplified employee
pension plan as defined in Section 408(k) of the Code.
(b) The disposition by a corporation to an unrelated corporation of
substantially all of the assets (within the meaning of Section 409(d)(2) of
the Code) 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 Section
409(d)(2) of the Code) if such corporation continues to maintain this Plan,
but only with respect to Employees who continue employment with such
subsidiary.
The Participant's accrued benefit derived from Deferral Contributions,
Qualified Discretionary Contributions and Employee Contributions (as
defined in Section 4.09) is nonforfeitable. Separate Accounts for Deferral
Contributions, Qualified Discretionary Contributions, Employee
Contributions and Matching Contributions will be maintained for each
Participant. Each Account will be credited with the applicable
contributions and earnings thereon.
4.06. FIXED/DISCRETIONARY EMPLOYER CONTRIBUTIONS. If so provided by the
Employer in Sections 1.05(a)(1) or 1.05(a)(2), for the Plan Year in which
the Plan is adopted and for each Plan Year thereafter, the Employer will
make Fixed or Discretionary Employer Contributions to the Trust in
accordance with Section 1.05 to be allocated as follows:
(a) Fixed Employer Contributions shall be allocated among eligible
Participants (as determined in accordance with Section 1.05(a)(3)) in the
manner specified in Section 1.05(a).
(b) Discretionary Employer Contributions shall be allocated among
eligible Participants, as determined in accordance with Section 1.05(a)(3),
as follows:
(1) If the Non-Integrated Formula is elected in Section 1.05(a)(2)(A), such
contributions shall be allocated to eligible Participants in the ratio that
each Participant's Compensation bears to the total Compensation paid to all
eligible Participants for the Plan Year; or
(2) If the Integrated Formula is elected in Section 1.05(a)(2)(B),
such contributions shall be allocated in the following steps:
(A) First, to each eligible Participant in the same ratio that the sum of
the Participant's Compensation and Excess Compensation for the Plan Year
bears to the sum of the Compensation and Excess Compensation of all
Participants for the Plan Year. This allocation as a percentage of the sum
of each Participant's Compensation and Excess Compensation shall not exceed
5.7%.
(B) Any remaining Discretionary Employer Contribution shall be allocated
to each eligible Participant in the same ratio that each Participant's
Compensation for the Plan Year bears to the total Compensation of all
Participants for the Plan Year.
For purposes of this Section, "Excess Compensation" means Compensation in
excess of the taxable wage base, as determined under Section 230 of the
Social Security Act, in effect on the first day of the Plan Year. Further,
this Section 4.06(b)(2) shall be modified as provided in Section 9.03 for
years in which the Plan is top heavy under Article 9.
4.07. TIME OF MAKING EMPLOYER CONTRIBUTIONS. The Employer will pay its
contribution for each Plan Year not later than the time prescribed by law
for filing the Employer's federal income tax return for the fiscal (or
taxable) year with or within which such Plan Year ends (including
extensions thereof). The Trustee will have no authority to inquire into
the correctness of the amounts contributed and paid over to the Trustee, to
determine whether any contribution is payable under this Article 4, or to
enforce, by suit or otherwise, the Employer's obligation, if any, to make a
contribution to the Trustee.
4.08. RETURN OF EMPLOYER CONTRIBUTIONS. The Trustee shall, upon request
by the Employer, return to the Employer the amount (if any) determined
under Section 14.22. Such amount shall be reduced by amounts attributable
thereto which have been credited to the Accounts of Participants who have
since received distributions from the Trust, except to the extent such
amounts continue to be credited to such Participants' Accounts at the time
the amount is returned to the Employer. Such amount shall also be reduced
by the losses of the Trust attributable thereto, if and to the extent such
losses exceed the gains and income attributable thereto, but will not be
increased by the gains and income of the Trust attributable thereto, if and
to the extent such gains and income exceed the losses attributable thereto.
In no event will the return of a contribution hereunder cause the balance
of the individual Account of any Participant to be reduced to less than the
balance which would have been credited to the Account had the mistaken
amount not been contributed.
4.09. EMPLOYEE CONTRIBUTIONS. If the Employer elected to permit Deferral
Contributions in Section 1.05(b) and if so provided by the Employer in
Section 1.05(d), each Participant may elect to make Employee Contributions
to the Plan in accordance with the rules and procedures established by the
Employer and in an amount not less than one percent (1%) and not greater
than ten percent (10%) of such Participant's Compensation for the Plan
Year. Such contributions and all Employee Contributions for Plan Years
beginning after December 31, 1986, shall be subject to the
nondiscrimination requirements of Section 401(m) of the Code as set forth
in Section 4.04.
For purposes of this Plan, "Employee Contributions" shall mean any
voluntary non-deductible contribution made to a plan by or on behalf of a
Participant that is or was included in the Participant's gross income in
the year in which made and that is maintained under a separate account to
which applicable earnings and losses are allocated. Excess Contributions
may not be recharacterized as Employee Contributions.
Employee Contributions shall be paid over to the Trustee not later than
thirty (30) days following the end of the month in which the Participant
makes the contribution. A Participant shall have a fully vested 100%
nonforfeitable right to his Employee Contributions and the earnings or
losses allocated thereon. Distributions of Employee Contributions shall be
made in accordance with Section 7.10.
4.10. ROLLOVER CONTRIBUTIONS.
(a) Rollover of Eligible Rollover Distributions
(1) An Employee who is or was a distributee of an "eligible rollover
distribution"(as defined in Section 402(c)(4) of the Code and the
regulations issued thereunder) from a qualified plan or Section 403(b)
annuity may directly transfer all or any portion of such distribution to
the Trust or transfer all or any portion of such distribution to the Trust
within sixty (60) days of payment. The transfer shall be made in the form
of cash or allowable Fund Shares only.
(2) The Employer may refuse to accept rollover contributions or instruct
the Trustee not to accept rollover contributions under the Plan.
(b) Treatment of Rollover Amount.
(1) An account will be established for the transferring Employee under
Article 5, the rollover amount will be credited to the account and such
amount will be subject to the terms of the Plan, including Section 8.01,
except as otherwise provided in this Section 4.10.
(2) The rollover account will at all times be fully vested in and
nonforfeitable by the Employee.
(c) Entry into Plan by Transferring Employee. Although an amount may be
transferred to the Trust Fund under this Section 4.10 by an Employee who
has not yet become a Participant in accordance with Article 3, and such
amount is subject to the terms of the Plan as described in paragraph (b)
above, the Employee will not become a Participant entitled to share in
Employer contributions until he has satisfied such requirements.
(d) Monitoring of Rollovers.
(1) The Administrator shall develop such procedures and require such
information from transferring Employees as it deems necessary to insure
that amounts transferred under this Section 4.10 meet the requirements for
tax-free rollovers established by such Section and by Section 402(c) of the
Code. No such amount may be transferred until approved by the
Administrator.
(2) If a transfer made under this Section 4.10 is later determined by
the Administrator not to have met the requirements of this Section or of
the Code or Treasury regulations, the Trustee shall, within a reasonable
time after such determination is made, and on instructions from the
Administrator, distribute to the Employee the amounts then held in the
Trust attributable to the transferred amount.
4.11. DEDUCTIBLE VOLUNTARY EMPLOYEE CONTRIBUTIONS. The Administrator will
not accept deductible employee contributions which are made for a taxable
year beginning after December 31, 1986. Contributions made prior to that
date will be maintained in a separate Account which will be nonforfeitable
at all times and which will share in the gains and losses of the trust in
the same manner as described in Section 5.02. No part of the deductible
voluntary contribution Account will be used to purchase life insurance.
Subject to Article 8, the Participant may withdraw any part of the
deductible voluntary contribution Account upon request.
4.12. ADDITIONAL RULES FOR PAIRED PLANS. If the Employer has adopted a
qualified plan under Fidelity Basic Plan Document No. 09 which is to be
considered as a paired plan with this Plan, the elections in Section 1.03
must be identical to the Employer's corresponding elections for the other
plan. When the paired plans are top-heavy or are deemed to be top-heavy as
provided in Section 9.01, the plan paired with this Plan will provide a
minimum contribution to each non-key Employee which is equal to 3 percent
(or such other percent elected by the Employer in Section 1.12(c)) of such
Employee's Compensation. Notwithstanding the preceding sentence, the
minimum contribution shall be provided by this Plan if contributions under
the other plan paired with this Plan are frozen.
ARTICLE 5. PARTICIPANTS' ACCOUNTS.
5.01. INDIVIDUAL ACCOUNTS. The Administrator will establish and maintain
an Account for each Participant which will reflect Employer and Employee
Contributions made on behalf of the Participant and earnings, expenses,
gains and losses attributable thereto, and investments made with amounts in
the Participant's Account. The Administrator will establish and maintain
such other accounts and records as it decides in its discretion to be
reasonably required or appropriate in order to discharge its duties under
the Plan.
5.02. VALUATION OF ACCOUNTS. Participant Accounts will be valued at their
fair market value at least annually as of a date specified by the
Administrator in accordance with a method consistently followed and
uniformly applied, and on such date earnings, expenses, gains and losses on
investments made with amounts in each Participant's Account will be
allocated to such Account. Participants will be furnished statements of
their Account values at least once each Plan Year.
5.03. CODE SECTION 415 LIMITATIONS. Notwithstanding any other provisions
of the Plan:
Subsections (a)(1) through (a)(4)--(These subsections apply to Employers
who do not maintain any qualified plan, including a Welfare Benefit Fund,
an Individual Medical Account, or a simplified employee pension in addition
to this Plan.)
(a)(1) If the Participant does not participate in, and has never
participated in any other qualified plan, Welfare Benefit Fund, Individual
Medical Account, or a simplified employee pension, as defined in section
408(k) of the Code, maintained by the Employer, which provides an annual
addition as defined in Section 5.03(e)(1), the amount of Annual Additions
to a Participant's Account for a Limitation Year shall not exceed the
lesser of the Maximum Permissible Amount or any other limitation contained
in this Plan. If the Employer contribution that would otherwise be
contributed or allocated to the Participant's 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.
(a)(2) Prior to the determination of the Participant's actual Compensation
for a Limitation Year, the Maximum Permissible Amount may be determined on
the basis of a reasonable estimation of the Participant's compensation for
such Limitation Year, uniformly determined for all Participants similarly
situated. Any Employer contributions based on estimated annual
compensation shall be reduced by any Excess Amounts carried over from prior
years.
(a)(3) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for such Limitation Year
shall be determined on the basis of the Participant's actual Compensation
for such Limitation Year.
(a)(4) If, pursuant to subsection (a)(3) or as a result of the allocation
of forfeitures or a reasonable error in determining the total Elective
Deferrals there is an Excess Amount with respect to a Participant for a
Limitation Year, such Excess Amount shall be disposed of as follows:
(A) Any nondeductible voluntary employee contributions ("employee
contributions") or Elective Deferrals, to the extent they would reduce the
Excess Amount, will be returned to the Participant. Any gains attributable
to returned employee contributions will also be returned or will be treated
as additional employee contributions for the Limitation Year in which the
employee contributions were made.
(B) If after the application of paragraph (A) an Excess amount still
exists and the Participant is in the service of the Employer which is
covered by the Plan at the end of the Limitation Year, then such Excess
Amount shall be reapplied to reduce future Employer contributions under
this Plan for the next Limitation Year (and for each succeeding year, as
necessary) for such Participant, so that in each such Year the sum of
actual Employer contributions plus the reapplied amount shall equal the
amount of Employer contributions which would otherwise be made to such
Participant's Account.
(C) If after the application of paragraph (A) an Excess Amount still
exists and the Participant is not in the service of the Employer which is
covered by the Plan at the end of a Limitation Year, then such Excess
Amount will be held unallocated in a suspense account. The suspense
account will be applied to reduce future Employer contributions for all
remaining Participants in the next Limitation Year and each succeeding
Limitation Year if necessary.
(D) If a suspense account is in existence at any time during the
Limitation Year pursuant to this subsection, it will not participate in the
allocation of the Trust Fund's investment gains and losses. All amounts in
the suspense account must be allocated to the Accounts of Participants
before any Employer contribution may be made for the Limitation Year.
Except as provided in paragraph (A), Excess Amounts may not be distributed
to Participants or former Participants.
Subsections (b)(1) through (b)(6)--(These subsections apply to Employers
who, in addition to this Plan, maintain one or more plans, all of which are
qualified Master or Prototype defined contribution Plans, any Welfare
Benefit Fund, any Individual Medical Account, or any simplified employee
pension.)
(b)(1) If, in addition to this Plan, the Participant is covered under any
other qualified defined contribution plans (all of which are qualified
Master or Prototype Plans), Welfare Benefit Funds, Individual Medical
Accounts, or simplified employee pension Plans, maintained by the Employer,
that provide an annual addition as defined in Section 5.03(e)(1), the
amount of Annual Additions to a Participant's Account for a Limitation Year
shall not exceed the lesser of
(A) the Maximum Permissible Amount, reduced by the sum of any Annual
Additions to the Participant's accounts for the same Limitation Year under
such other qualified Master or Prototype defined contribution plans, and
Welfare Benefit Funds, Individual Medical Accounts, and simplified employee
pensions, or
(B) any other limitation contained in this Plan.
If the annual additions with respect to the Participant under other
qualified Master or Prototype defined contribution Plans, Welfare Benefit
Funds, Individual Medical Accounts, and simplified employee pensions
maintained by the Employer are less than the maximum permissible amount and
the Employer 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 qualified Master or Prototype defined
contribution Plans, Welfare Benefit Funds, Individual Medical Accounts, and
simplified employee pensions in the aggregate are equal to or greater than
the maximum permissible amount, no amount will be contributed or allocated
to the Participant's account under this plan for the limitation year.
(b)(2) Prior to the determination of the Participant's actual Compensation
for the Limitation Year, the amounts referred to in (b)(1)(A) above may be
determined on the basis of a reasonable estimation of the Participant's
compensation for such Limitation Year, uniformly determined for all
Participants similarly situated. Any Employer contribution based on
estimated annual compensation shall be reduced by any Excess Amounts
carried over from prior years.
(b)(3) As soon as is administratively feasible after the end of the
Limitation Year, the amounts referred to in (b)(1)(A) shall be determined
on the basis of the Participant's actual Compensation for such Limitation
Year.
(b)(4) If a Participant's Annual Additions under this Plan and all such
other plans result in an Excess Amount, such Excess Amount shall be deemed
to consist of the Annual Additions last allocated, except that Annual
Additions attributable to a simplified employee pension will be deemed to
have been allocated first, followed by Annual Additions to a Welfare
Benefit Fund or Individual Medical Account regardless of the actual
allocation date.
(b)(5) If an Excess Amount was allocated to a Participant on an allocation
date of this Plan which coincides with an allocation date of another plan,
the Excess Amount attributed to this Plan will be the product of
(A) the total Excess Amount allocated as of such date (including any
amount which would have been allocated but for the limitations of Section
415 of the Code), and
(B) the ratio of (i) the Annual Additions allocated to the Participant as
of such date under this Plan, and (ii) the Annual Additions allocated as of
such date under all qualified defined contribution plans (determined
without regard to the limitations of Section 415 of the Code).
(b)(6) Any Excess Amounts attributed to this Plan shall be disposed of as
provided in subsection (a)(4).
Subsection (c)--(This subsection applies only to Employers who, in
addition to this Plan, maintain one or more qualified plans which are
qualified defined contribution plans other than Master or Prototype Plans.)
(c) If the Employer also maintains another plan which is a qualified
defined contribution plan other than a Master or Prototype Plan, Annual
Additions allocated under this Plan on behalf of any Participant shall be
limited in accordance with the provisions of (b)(1) through (b)(6), as
though the other plan were a Master or Prototype Plan, unless the Employer
provides other limitations in the Adoption Agreement.
Subsection (d)--(This subsection applies only to Employers who, in
addition to this Plan, maintain or at any time maintained a qualified
defined benefit plan.)
(d) If the Employer maintains, or at any time maintained, a qualified
defined benefit plan, the sum of any Participant's Defined Benefit Fraction
and Defined Contribution Fraction shall not exceed the combined plan
limitation of 1.0 in any Limitation Year. The combined plan limitation
will be met as provided by the Employer in the Adoption Agreement.
Subsections (e)(1) through (e)(11)--(Definitions.)
(e)(1) "Annual Additions" means the sum of the following amounts credited
to a Participant for a Limitation Year:
(A) all Employer contributions,
(B) all Employee contributions,
(C) all forfeitures,
(D) amounts allocated, after March 31, 1984, to an Individual Medical
Account which is part of a pension or annuity plan maintained by the
Employer are treated as Annual Additions to a defined contribution plan.
Also, amounts derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate account of a key
employee, as defined in Section 419A(d)(3) of the Code, under a Welfare
Benefit Fund maintained by the Employer are treated as Annual Additions to
a defined contribution plan, and
(E) allocations under a simplified employee pension.
For purposes of this Section 5.03, amounts reapplied to reduce Employer
contributions under subsection (a)(4) shall also be included as Annual
Additions.
(e)(2) "Compensation" means wages as defined in Section 3401(a) of the
Code and all other payments of compensation to an employee by the employer
(in the course of the employer's trade or business) for which the employer
is required to furnish the employee a written statement under Sections
6041(d) and 6051(a)(3) of the Code. Compensation must be determined
without regard to any rules under Section 3401(a) of the Code that limit
the remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in Section 3401(a)(2) of the Code.)
For any Self-Employed Individual compensation will mean Earned Income.
For limitation years beginning after December 31, 1991, for purposes of
applying the limitations of this article, compensation for a limitation
year is the compensation actually paid or made available during such
limitation year.
(e)(3) "Defined Benefit Fraction" means a fraction, the numerator of which
is the sum of the Participant's annual benefits (adjusted to an actuarially
equivalent straight life annuity if such benefit is expressed in a form
other than a straight life annuity or qualified joint and survivor annuity)
under all the defined benefit plans (whether or not terminated) maintained
by the Employer, each such annual benefit computed on the assumptions that
the Participant will remain in employment until the normal retirement age
under each such plan (or the Participant's current age, if later) and that
all other factors used to determine benefits under such plan will remain
constant for all future Limitation Years, and the denominator of which is
the lesser of 125 percent of the dollar limitation determined for the
Limitation Year under Sections 415(b)(1)(A) and 415(d) of the Code or 140
percent of the Participant's highest average Compensation for 3 consecutive
calendar years of service during which the Participant was active in each
such plan, including any adjustments under Section 415(b) of the Code.
However, 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 then the denominator of the Defined Benefit Fraction shall not
be less than 125 percent of the Participant's total accrued benefit 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, under all such defined benefit plans that met, individually and in
the aggregate, the requirements of Section 415 of the Code for all
Limitation Years beginning before January 1, 1987.
(e)(4) "Defined Contribution Fraction" means a fraction, the numerator of
which is the sum for the current and all prior Limitation Years of (A) all
Annual Additions (if any) to the Participant's accounts under each defined
contribution plan (whether or not terminated) maintained by the Employer
and (B) all 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 Participant's Annual
Additions attributable to all Welfare Benefit Funds, Individual Medical
Accounts, and simplified employee pensions, maintained by the Employer, and
the denominator of which is the sum of the maximum aggregate amounts for
the current and all prior Limitation Years during which the Participant was
an Employee (regardless of whether the Employer maintained a defined
contribution plan in any such year).
The maximum aggregate amount in any Limitation Year is the lesser of 125
percent of the dollar limitation in effect under Section 415(c)(1)(A) of
the Code for each such year or 35 percent of the Participant's Compensation
for each such year.
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
contribution plans maintained by the Employer which were in existence on
May 6, 1986, then the numerator of the Defined Contribution Fraction shall
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 (i) the excess of the sum of
the fractions over 1.0 and (ii) 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 recomputed to treat all employee contributions as annual
additions.
(e)(5) "Employer" means the Employer and any Related Employer that adopts
this Plan. In the case of a group of employers which constitutes a
controlled group of corporations (as defined in Section 414(b) of the Code
as modified by Section 415(h)) or which constitutes trades or businesses
(whether or not incorporated) which are under common control (as defined in
Section 414(c) of the Code as modified by Section 415(h) of the Code) or
which constitutes an affiliated service group (as defined in Section
414(m)of the Code) and any other entity required to be aggregated with the
Employer pursuant to regulations issued under Section 414(o) of the Code,
all such employers shall be considered a single employer for purposes of
applying the limitations of this Section 5.03.
(e)(6) "Excess Amount" means the excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
(e)(7) "Individual Medical Account" means an individual medical account as
defined in Section 415(l)(2) of the Code.
(e)(8) "Limitation Year" means the Plan Year. All qualified plans of the
Employer must use the same Limitation Year. If the Limitation Year is
amended to a different 12-consecutive month period, the new Limitation Year
must begin on a date within the Limitation Year in which the amendment is
made.
(e)(9) "Master or Prototype Plan" means a plan the form of which is the
subject of a favorable opinion letter from the Internal Revenue Service.
(e)(10) "Maximum Permissible Amount" means for a Limitation Year with
respect to any Participant the lesser of (A) $30,000 or, if greater, 25
percent of the dollar limitation set forth in Section 415(b)(1) of the
Code, as in effect for the Limitation Year, or (B) 25 percent of the
Participant's Compensation for the Limitation Year. 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 limitation in (e)(10)(A) multiplied by a fraction whose
numerator is the number of months in the short Limitation Year and whose
denominator is 12.
The compensation limitation referred to in subsection (e)(10)(B) shall not
apply to any contribution for medical benefits within the meaning of
Section 401(h) or Section 419A(f)(2) of the Code after separation from
service which is otherwise treated as an Annual Addition under Section
419A(d)(2) or Section 415(l)(1) of the Code.
(e)(11) "Welfare Benefit Fund" means a welfare benefit fund as defined in
Section 419(e) of the Code.
ARTICLE 6. INVESTMENT OF CONTRIBUTIONS.
6.01. MANNER OF INVESTMENT. All contributions made to the Accounts of
Participants shall be held for investment by the Trustee. The Accounts of
Participants shall be invested and reinvested only in eligible investments
selected by the Employer in Section 1.14(b), subject to Section 14.10.
6.02. INVESTMENT DECISIONS. Investments shall be directed by the Employer
or by each Participant or both, in accordance with the Employer's election
in Section 1.14(a). Pursuant to Section 14.04, the Trustee shall have no
discretion or authority with respect to the investment of the Trust Fund.
(a) With respect to those Participant Accounts for which Employer
investment direction is elected, the Employer has the right to direct the
Trustee in writing with respect to the investment and reinvestment of
assets comprising the Trust Fund in the Fidelity Fund(s) designated in
Section 1.14(b) and as allowed by the Trustee.
(b) If Participant investment direction is elected, each Participant shall
direct the investment of his Account among the Fidelity Funds listed in
Section 1.14(b). The Participant shall file initial investment
instructions with the Administrator, on such form as the Administrator may
provide, selecting the Funds in which amounts credited to his Account will
be invested.
(1) Except as provided in this Section 6.02, only authorized Plan contacts
and the Participant shall have access to a Participant's Account. While
any balance remains in the Account of a Participant after his death, the
Beneficiary of the Participant shall make decisions as to the investment of
the Account as though the Beneficiary were the Participant. To the extent
required by a qualified domestic relations order as defined in Section
414(p) of the Code, an alternate payee shall make investment decisions with
respect to a Participant's Account as though such alternate payee were the
Participant.
(2) If the Trustee receives any contribution under the Plan as to which
investment instructions have not been provided, the Trustee shall promptly
notify the Administrator and the Administrator shall take steps to elicit
instructions from the Participant. The Trustee shall credit any such
contribution to the Participant's Account and such amount shall be invested
in the Fidelity Fund selected by the Employer for such purposes or, absent
Employer selection, in the most conservative Fidelity Fund listed in
Section 1.14(b), until investment instructions have been received by the
Trustee.
(c) All dividends, interest, gains and distributions of any nature received
in respect of Fund Shares shall be reinvested in additional shares of that
Fidelity Fund.
(d) Expenses attributable to the acquisition of investments shall be
charged to the Account of the Participant for which such investment is
made.
6.03. PARTICIPANT DIRECTIONS TO TRUSTEE. All Participant initial
investment instructions filed with the Administrator pursuant to the
provisions of Section 6.02 shall be promptly transmitted by the
Administrator to the Trustee. A Participant shall transmit subsequent
investment instructions directly to the Trustee by means of the telephone
exchange system maintained by the Trustee for such purposes. The method
and frequency for change of investments will be determined under the (a)
rules applicable to the investments selected by the Employer in Section
1.14(b) and (b) the additional rules of the Employer, if any, limiting the
frequency of investment changes, which are included in a separate written
administrative procedure adopted by the Employer and accepted by the
Trustee. The Trustee shall have no duty to inquire into the investment
decisions of a Participant or to advise him regarding the purchase,
retention or sale of assets credited to his Account.
ARTICLE 7. RIGHT TO BENEFITS.
7.01. NORMAL OR EARLY RETIREMENT. Each Participant who attains his Normal
Retirement Age or, if so provided by the Employer in Section 1.06(b), Early
Retirement Age, will have a 100-percent nonforfeitable interest in his
Account regardless of any vesting schedule elected in Section 1.07. If a
Participant retires upon the attainment of Normal or Early Retirement Age,
such retirement is referred to as a normal retirement. Upon his normal
retirement the balance of the Participant's Account, plus any amounts
thereafter credited to his Account, subject to the provisions of Section
7.08, will be distributed to him in accordance with Article 8.
If a Participant separates from service before satisfying the age
requirements for early retirement, but has satisfied the service
requirement, the Participant will be entitled to elect an early retirement
distribution upon satisfaction of such age requirement.
7.02. LATE RETIREMENT. If a Participant continues in the service of the
Employer after attainment of Normal Retirement Age, he will continue to
have a 100-percent nonforfeitable interest in his Account and will continue
to participate in the Plan until the date he establishes with the Employer
for his late retirement. Until he retires, he has a continuing election to
receive all or any portion of his Account. Upon the earlier of his late
retirement or the distribution date required under Section 8.08, the
balance of his Account, plus any amounts thereafter credited to his
Account, subject to the provisions of Section 7.08, will be distributed to
him in accordance with Article 8 below.
7.03. DISABILITY RETIREMENT. If so provided by the Employer in Section
1.06(c), a Participant who becomes disabled will have a 100-percent
nonforfeitable interest in his Account, the balance of which Account, plus
any amounts thereafter credited to his Account, subject to the provisions
of Section 7.08, will be distributed to him in accordance with Article 8
below. A Participant is considered disabled if he cannot engage in any
substantial, gainful activity because of a medically determinable physical
or mental impairment likely to result in death or to be of a continuous
period of not less than 12 months, and terminates his employment with the
Employer. Such termination of employment is referred to as a disability
retirement. Determinations with respect to disability shall be made by the
Administrator who may rely on the criteria set forth in Section 1.06(c) as
evidence that the Participant is disabled.
7.04. DEATH. Subject, if applicable, to Section 8.04, if a Participant
dies before the distribution of his Account has commenced, or before such
distribution has been completed, his Account shall become 100 percent
vested and his designated Beneficiary or Beneficiaries will be entitled to
receive the balance or remaining balance of his Account, plus any amounts
thereafter credited to his Account, subject to the provisions of Section
7.08. Distribution to the Beneficiary or Beneficiaries will be made in
accordance with Article 8.
A Participant may designate a Beneficiary or Beneficiaries, or change any
prior designation of Beneficiary or Beneficiaries by giving notice to the
Administrator on a form designated by the Administrator. If more than one
person is designated as the Beneficiary, their respective interests shall
be as indicated on the designation form. In the case of a married
Participant, the Participant's spouse shall be deemed to be the designated
Beneficiary unless the Participant's spouse has consented to another
designation in the manner described in Section 8.03(d).
A copy of the death notice or other sufficient documentation must be filed
with and approved by the Administrator. If upon the death of the
Participant there is, in the opinion of the Administrator, no designated
Beneficiary for part or all of the Participant's Account, such amount will
be paid to his surviving spouse or, if none, to his estate (such spouse or
estate shall be deemed to be the Beneficiary for purposes of the Plan). If
a Beneficiary dies after benefits to such Beneficiary have commenced, but
before they have been completed, and, in the opinion of the Administrator,
no person has been designated to receive such remaining benefits, then such
benefits shall be paid in a lump sum to the deceased Beneficiary's estate.
7.05. OTHER TERMINATION OF EMPLOYMENT. If a Participant terminates his
employment for any reason other than death or normal, late, or disability
retirement, he will be entitled to a termination benefit equal to the sum
of (a) the vested percentage(s) of the value of the Matching and/or
Fixed/Discretionary Contributions to his Account, as adjusted for income,
expense, gain, or loss, such percentage(s) determined in accordance with
the vesting schedule(s) selected by the Employer in Section 1.07, and (b)
the value of the Deferral, Employee, Qualified Discretionary and Rollover
Contributions to his Account as adjusted for income, expense, gain or loss.
The amount payable under this Section 7.05 will be subject to the
provisions of Section 7.08 and will be distributed in accordance with
Article 8 below.
7.06. SEPARATE ACCOUNT. If a distribution from a Participant's Account
has been made to him at a time when he has a nonforfeitable right to less
than 100 percent of his Account, the vesting schedule in Section 1.07 will
thereafter apply only to amounts in his Account attributable to Employer
contributions allocated after such distribution. The balance of his
Account immediately after such distribution will be transferred to a
separate account which will be maintained for the purpose of determining
his interest therein according to the following provisions.
At any relevant time prior to a forfeiture of any portion thereof under
Section 7.07, a Participant's nonforfeitable interest in his Account held
in a separate account described in the preceding paragraph will be equal to
P(AB + (RxD))-(RxD), where P is the nonforfeitable percentage at the
relevant time determined under Section 7.05; AB is the account balance of
the separate account 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. Following a forfeiture of
any portion of such separate account under Section 7.07 below, any balance
in the Participant's separate account will remain fully vested and
nonforfeitable.
7.07. FORFEITURES. If a Participant terminates his employment, any
portion of his Account (including any amounts credited after his
termination of employment) not payable to him under Section 7.05 will be
forfeited by him upon the complete distribution to him of the vested
portion of his Account, if any, subject to the possibility of
reinstatement as described in the following paragraph. For purposes of
this paragraph, if the value of an Employee's vested Account balance is
zero, the Employee shall be deemed to have received a distribution of his
vested interest immediately following termination of employment. Such
forfeitures will be applied to reduce the contributions of the Employer
next payable under the Plan (or administrative expenses of the Plan); the
forfeitures shall be held in a money market fund pending such application.
If a Participant forfeits any portion of his Account under the preceding
paragraph but again becomes an Employee after such date, then the amount so
forfeited, without any adjustment for the earnings, expenses, or losses or
gains of the assets credited to his Account since the date forfeited, will
be recredited to his Account (or to a separate account as described in
Section 7.06, if applicable) but only if he repays to the Plan before the
earlier of five years after the date of his reemployment or the date he
incurs 5 consecutive 1-year breaks in service following the date of the
distribution the amount previously distributed to him, without interest,
under Section 7.05. If an Employee is deemed to receive a distribution
pursuant to this Section 7.07, and the Employee resumes employment before 5
consecutive 1-year breaks in service, the Employee shall be deemed to have
repaid such distribution on the date of his reemployment. Upon such an
actual or deemed repayment, the provisions of the Plan (including Section
7.06) will thereafter apply as if no forfeiture had occurred. The amount
to be recredited pursuant to this paragraph will be derived first from the
forfeitures, if any, which as of the date of recrediting have yet to be
applied as provided in the preceding paragraph and, to the extent such
forfeitures are insufficient, from a special Employer contribution to be
made by the Employer.
If a Participant elects not to receive the nonforfeitable portion of his
Account following his termination of employment, the non-vested portion of
his Account shall be forfeited after the Participant has incurred five
consecutive 1-year breaks in service as defined in Section 2.01(a)(33).
No forfeitures will occur solely as a result of a Participant's withdrawal
of Employee contributions.
7.08. ADJUSTMENT FOR INVESTMENT EXPERIENCE. If any distribution under
this Article 7 is not made in a single payment, the amount retained by the
Trustee after the distribution will be subject to adjustment until
distributed to reflect the income and gain or loss on the investments in
which such amount is invested and any expenses properly charged under the
Plan and Trust to such amounts.
7.09. PARTICIPANT LOANS. If permitted under Section 1.09, the
Administrator shall allow Participants to apply for a loan from the Plan,
subject to the following:
(a) Loan Application. All Plan loans shall be administered by the
Administrator. Applications for loans shall be made to the Administrator
on forms available from the Administrator. Loans shall be made available
to all Participants on a reasonably equivalent basis. For this purpose,
the term "Participant" means any Participant or Beneficiary, including an
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, who is a party-in-interest (as determined under
ERISA Section 3(14)) with respect to the Plan except no loans will be made
to (1) an Employee who makes a rollover contribution in accordance with
Section 4.10 who has not satisfied the requirements of Section 3.01 or (2)
a shareholder-employee or Owner-Employee. For purposes of this
requirement, a shareholder-employee means an employee or officer of an
electing small business (Subchapter S) corporation who owns (or is
considered as owning within the meaning of Section 318(a)(1) of the Code),
on any day during the taxable year of such corporation, more than 5% of the
outstanding stock of the corporation.
A Participant with an existing loan may not apply for another loan until
the existing loan is paid in full and may not refinance an existing loan or
attain a second loan for the purpose of paying off the existing loan. A
Participant may not apply for more than one loan during each Plan Year.
(b) Limitation of Loan Amount/Purpose of Loan. Loans shall not be made
available to Highly Compensated Employees in an amount greater than the
amount made available to other Employees. No loan to any Participant or
Beneficiary can be made to the extent that such loan when added to the
outstanding balance of all other loans to the Participant or Beneficiary
would exceed the lesser of (1) $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 (2) one-half the present
value of the nonforfeitable Account of the Participant. For the purpose of
the above limitation, all loans from all plans of the Employer and Related
Employers are aggregated. A Participant may not request a loan for less
than $1,000. The Employer may provide that loans only be made from certain
contribution sources within Participant Account(s) by notifying the Trustee
in writing of the restricted source.
Loans may be made for any purpose or if elected by the Employer in
Section 1.09(a), on account of hardship only. A loan will be considered to
be made on account of hardship only if made on account of an immediate and
heavy financial need described in Section 7.10(b)(1).
(c) Terms of Loan. All loans shall bear a reasonable rate of interest as
determined by the Administrator based on the prevailing interest rates
charged by persons in the business of lending money for loans which would
be made under similar circumstances. The determination of a reasonable
rate of interest must be based on appropriate regional factors unless the
Plan is administered on a national basis in which case the Administrator
may establish a uniform reasonable rate of interest applicable to all
regions.
All loans shall by their terms require that repayment (principal and
interest) be amortized in level payments, not less than quarterly, over a
period not extending beyond five years from the date of the loan unless
such loan is for the purchase of a Participant's primary residence, in
which case the repayment period may not extend beyond ten years from the
date of the loan. A Participant may prepay the outstanding loan balance
prior to maturity without penalty.
(d) Security. Loans must be secured by the Participant's Accounts not to
exceed 50 percent of the Participant's vested Account. A Participant must
obtain the consent of his or her spouse, if any, to use a Participant
Account as security for the loan, if the provisions of Section 8.03 apply
to the Participant. Spousal consent shall be obtained no earlier than the
beginning of the 90-day period that ends on the date on which the loan is
to be so secured. The consent must be in writing, must acknowledge the
effect of the loan, and must be witnessed by a Plan representative or
notary public. Such consent shall thereafter be binding with respect to
the consenting spouse or any subsequent spouse with respect to that loan.
(e) Default. The Administrator shall treat a loan in default if
(1) any scheduled repayment remains unpaid more than 90 days or
(2) there is an outstanding principal balance existing on a loan after the
last scheduled repayment date.
Upon default or termination of employment, the entire outstanding
principal and accrued interest shall be immediately due and payable. If a
distributable event (as defined by the Code) has occurred, the
Administrator shall direct the Trustee to foreclose on the promissory note
and offset the Participant's vested Account by the outstanding balance of
the loan. If a distributable event has not occurred, the Administrator
shall direct the Trustee to foreclose on the promissory note and offset the
Participant's vested Account as soon as a distributable event occurs.
(f) Pre-existing loans. The provision in paragraph (a) of this Section
7.09 limiting a Participant to one outstanding loan shall not apply to
loans made before the Employer adopted this prototype plan document. A
Participant may not apply for a new loan until all outstanding loans made
before the Employer adopted this prototype plan have been paid in full.
The Trustee may accept any loans made before the Employer adopted this
prototype plan document except such loans which require the Trustee to hold
as security for the loan property other than the Participant's vested
Account.
As of the effective date of amendment of this Plan in Section 1.01(g)(2),
the Trustee shall have the right to reamortize the outstanding principal
balance of any Participant loan that is delinquent. Such reamortization
shall be based upon the remaining life of the loan and the original
maturity date may not be extended.
Notwithstanding any other provision of this Plan, the portion of the
Participant's vested Account 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 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 (determined without regard to the preceding sentence) is payable to
the surviving spouse, then the Account shall be adjusted by first reducing
the vested Account by the amount of the security used as repayment of the
loan, and then determining the benefit payable to the surviving spouse.
No loan to any Participant or Beneficiary can be made to the extent that
such loan when added to the outstanding balance of all other loans to the
Participant or Beneficiary would exceed the lesser of (1) $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
(2) one-half the present value of the nonforfeitable Account of the
Participant. For the purpose of the above limitation, all loans from all
plans of the Employer and Related Employers are aggregated.
7.10. IN-SERVICE/HARDSHIP WITHDRAWALS. Subject to the provisions of
Article 8, a Participant shall not be permitted to withdraw any Employer or
Employee Contributions (and earnings thereon) prior to retirement or
termination of employment, except as follows:
(a) AGE 59 1/2. If permitted under Section 1.11(b), a Participant who
has attained the age of 59 1/2 is permitted to withdraw upon request all or
any portion of the Accounts specified by the Employer in 1.11(b).
(b) HARDSHIP. If permitted under Section 1.10, a Participant may apply to
the Administrator to withdraw some or all of his Deferral Contributions
(and earnings thereon accrued as of December 31, 1988) and, if applicable,
Rollover Contributions and such other amounts allowed by a predecessor
plan, if such withdrawal is made on account of a hardship. For purposes of
this Section, a distribution is made on account of hardship if made on
account of an immediate and heavy financial need of the Employee where such
Employee lacks other available resources. Determinations with respect to
hardship shall be made by the Administrator and shall be conclusive for
purposes of the Plan, and shall be based on the following special rules:
(1) The following are the only financial needs considered immediate and
heavy: expenses incurred or necessary for medical care (within the meaning
of Section 213(d) of the Code) of the Employee, the Employee's spouse,
children, or dependents; the purchase (excluding mortgage payments) of a
principal residence for the Employee; payment of tuition and related
educational fees for the next twelve (12) months of post-secondary
education for the Employee, the Employee's spouse, children or dependents;
or the need to prevent the eviction of the Employee from, or a foreclosure
on the mortgage of, the Employee's principal residence.
(2) A distribution will be considered as necessary to satisfy an immediate
and heavy financial need of the Employee only if:
(i) The Employee has obtained all distributions, other than the hardship
distributions, and all nontaxable (at the time of the loan) loans
currently available under all plans maintained by the Employer;
(ii) The Employee suspends Deferral Contributions and Employee
Contributions to the Plan for the 12-month period following the date of his
hardship distribution. The suspension must also apply to all elective
contributions and employee contributions to all other qualified plans and
non-qualified plans maintained by the Employer, other than any mandatory
employer contribution portion of a defined benefit plan, including stock
option, stock purchase and other similar plans, but not including health
and welfare benefit plans (other than the cash or deferred arrangement
portion of a cafeteria plan);
(iii) The distribution is not in excess of the amount of an
immediate and heavy financial need (including amounts necessary to pay any
Federal, state or local income taxes or penalties reasonably anticipated to
result from the distribution); and
(iv) The Employee agrees to limit Deferral Contributions (elective
contributions)to the Plan and any other qualified plan maintained by the
Employer for the Employee's taxable year immediately following the taxable
year of the hardship distribution to the applicable limit under Section
402(g) of the Code for such taxable year less the amount of such Employee's
Deferral Contributions for the taxable year of the hardship distribution.
(3) A Participant must obtain the consent of his or her spouse, if any, to
obtain a hardship withdrawal, if the provisions of Section 8.03 apply to
the Participant.
(c) EMPLOYEE CONTRIBUTIONS. A Participant may elect to withdraw, in cash,
up to one hundred percent of the amount then credited to his Employee
Contribution Account. Such withdrawals shall be limited to one (1) per
Plan Year unless this prototype plan document is an amendment of a prior
plan document, in which case the rules and restrictions governing employee
contribution withdrawals, if any, are incorporated herein by reference.
7.11. PRIOR PLAN IN-SERVICE DISTRIBUTION RULES. If designated by the
Employer in Section 1.11(b), a Participant shall be entitled to withdraw at
anytime prior to his termination of employment, subject to the provisions
of Article 8 and the prior plan, any vested Employer Contributions
maintained in a Participant's Account for the specified period of time.
ARTICLE 8. DISTRIBUTION OF BENEFITS PAYABLE AFTER TERMINATION OF SERVICE.
8.01. DISTRIBUTION OF BENEFITS TO PARTICIPANTS AND BENEFICIARIES.
(a) Distributions from the Trust to a Participant or to the Beneficiary of
the Participant shall be made in a lump sum in cash or, if elected by the
Employer in Section 1.11, under a systematic withdrawal plan
(installment(s)) upon retirement, death, disability, or other termination
of employment, unless another form of distribution is required or permitted
in accordance with paragraph (d) of this Section 8.01 or Sections 1.11(c),
8.02, 8.03, 8.04 or 11.02. A distribution may be made in Fund Shares, at
the election of the Participant, pursuant to the qualifying rollover of
such distribution to a Fidelity Investments individual retirement account.
(b) Distributions under a systematic withdrawal plan must be made in
substantially equal annual, or more frequent, installments, in cash, over a
period certain which does not extend beyond the life expectancy of the
Participant or the joint life expectancies of the Participant and his
Beneficiary, or, if the Participant dies prior to the commencement of his
benefits the life expectancy of the Participant's Beneficiary, as further
described in Section 8.04.
(c) Notwithstanding the provisions of Section 8.01(b) above, if a
Participant's Account is, and at the time of any prior distribution(s) was,
$3,500 or less, the balance of such Account shall be distributed in a lump
sum as soon as practicable following retirement, disability, death or other
termination of employment.
(d) This paragraph (d) applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Article 8, a
distributee may elect, at the time and in the manner prescribed by the
Administrator, to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by the distributee
in a direct rollover. The following definitions shall apply for purposes
of this paragraph (d):
(1) Eligible rollover distribution: An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not
include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or
life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Section
401(a)(9) of the Code; and 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).
(2) Eligible retirement plan: An eligible retirement plan is an individual
retirement account described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the distributee's eligible
rollover distribution. 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.
(3) Distributee: A distributee includes an Employee or former Employee.
In addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with regard to the interest of
the spouse or former spouse.
(4) Direct rollover: A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributee.
8.02. ANNUITY DISTRIBUTIONS. If so provided in Section 1.11(C), a
Participant may elect distributions made in whole or in part in the form of
an annuity contract subject to the provisions of Section 8.03.
(a) An annuity contract distributed under the Plan must be purchased from
an insurance company and must be nontransferable. The terms of an annuity
contract shall comply with the requirements of the Plan and distributions
under such contract shall be made in accordance with Section 401(a)(9) of
the Code and the regulations thereunder.
(b) The payment period of an annuity contract distributed to the
Participant pursuant to this Section may be as long as the Participant
lives. If the annuity is payable to the Participant and his spouse or
designated Beneficiary, the payment period of an annuity contract may be
for as long as either the Participant or his spouse or designated
Beneficiary lives. Such an annuity may provide for an annuity certain
feature for a period not exceeding the life expectancy of the Participant.
If the annuity is payable to the Participant and his spouse such period may
not exceed the joint life and last survivor expectancy of the Participant
and his spouse, or, if the annuity is payable to the Participant and a
designated Beneficiary, the joint life and last survivor expectancy of the
Participant and such Beneficiary. If the Participant dies prior to the
commencement of his benefits, the payment period of an annuity contract
distributed to the Beneficiary of the Participant may be as long as the
Participant's Beneficiary lives, and may provide for an annuity certain
feature for a period not exceeding the life expectancy of the Beneficiary.
Any annuity contract distributed under the Plan must provide for
nonincreasing payments.
8.03. JOINT AND SURVIVOR ANNUITIES/PRERETIREMENT SURVIVOR ANNUITIES.
(a) Application. The provisions of this Section supersede any conflicting
provisions of the Plan; however, paragraph (b) of this Section shall not
apply if the Participant's Account does not exceed or at the time of any
prior distribution did not exceed $3,500. A Participant is described in
this Section only if (i) the Participant has elected distribution of his
Account in the form of an Annuity Contract in accordance with Section 8.02,
or (ii) the Trustee has directly or indirectly received a transfer of
assets from another plan (including a predecessor plan) to which Section
401(a)(11) of the Code applies with respect to such Participant.
(b) Retirement Annuity. Unless the Participant elects to waive the
application of this subsection in a manner satisfying the requirements of
subsection (d) below, to the extent applicable to the Participant, within
the 90-day period preceding his Annuity Starting Date (which election may
be revoked, and if revoked, remade, at any time in such period), the vested
Account due any Participant to whom this subsection (b) applies will be
paid to him by the purchase and delivery to him of an annuity contract
described in Section 8.02 providing a life annuity only form of benefit or,
if the Participant is married as of his Annuity Starting Date, providing an
immediate annuity for the life of the Participant with a survivor annuity
for the life of the Participant's spouse (determined as of the date of
distribution of the contract) which is 50 percent of the amount of the
annuity which is payable during the joint lives of the Participant and such
spouse. The Participant may elect to receive distribution of his benefits
in the form of such annuity as of the earliest date on which he could elect
to receive retirement benefits under the Plan. Within the period beginning
90 days prior to the Participant's Annuity Starting Date and ending 30 days
prior to such Date, the Administrator will provide such Participant with a
written explanation of (1) the terms and conditions of the annuity contract
described herein, (2) the Participant's right to make, and the effect of,
an election to waive application of this subsection, (3) the rights of the
Participant's spouse under subsection (d), and (4) the right to revoke and
the period of time necessary to revoke the election to waive application of
this subsection.
(c) Annuity Death Benefit. Unless the Participant elects to waive the
application of this subsection in a manner satisfying the requirements of
subsection (d) below at any time within the applicable election period
(which election may be revoked, and if revoked, remade, at any time in such
period), if a married Participant to whom this Section applies dies before
his Annuity Starting Date, then notwithstanding any designation of a
Beneficiary to the contrary, 50 percent of his vested Account will be
applied to purchase an annuity contract described in Section 8.02 providing
an annuity for the life of the Participant's surviving spouse, which
contract will then be promptly distributed to such spouse. In lieu of the
purchase of such an annuity contract, the spouse may elect in writing to
receive distributions under the Plan as if he or she had been designated by
the Participant as his Beneficiary with respect to 50 percent of his
Account. For purposes of this subsection, the applicable election period
will commence on the first day of the Plan Year in which the Participant
attains age 35 and will end on the date of the Participant's death,
provided that in the case of a Participant who terminates his employment
the applicable election period with respect to benefits accrued prior to
the date of such termination will in no event commence later than the date
of his termination of employment. A Participant may elect to waive the
application of this subsection prior to the Plan Year in which he attains
age 35, provided that any such waiver will cease to be effective as of the
first day of the Plan Year in which the Participant attains age 35.
The Administrator will provide a Participant to whom this subsection
applies with a written explanation with respect to the annuity death
benefit described in this subsection (c) comparable to that required under
subsection (b) above. Such explanation shall be furnished within whichever
of the following periods ends last: (1) the period beginning with the
first day of the Plan Year in which the Participant reaches age 32 and
ending with the end of the Plan Year preceding the Plan Year in which he
reaches age 35, (2) a reasonable period ending after the Employee becomes a
Participant, (3) a reasonable period ending after this Section 8.04 first
becomes applicable to the Participant in accordance with Section 8.04(a),
(4) in the case of a Participant who separates from service before age 35,
a reasonable period of time ending after separation from service. For
purposes of the preceding sentence, the two-year period beginning one year
prior to the date of the event described in clause (2), (3) or (4),
whichever is applicable, and ending one year after such date shall be
considered reasonable, provided, that in the case of a Participant who
separates from service under (4) above and subsequently recommences
employment with the Employer, the applicable period for such Participant
shall be redetermined in accordance with this subsection.
(d) Requirements of Elections. This subsection will be satisfied with
respect to a waiver or designation which is required to satisfy this
subsection if such waiver or designation is in writing and either
(1) the Participant's spouse consents thereto in writing, which consent
must acknowledge the effect of such waiver or designation and be witnessed
by a notary public or Plan representative, or
(2) the Participant establishes to the satisfaction of the Administrator
that the consent of the Participant's spouse cannot be obtained because
there is no spouse, because the spouse cannot be located, or because of
such other circumstances as the Secretary of Treasury may prescribe.
Any consent by a spouse, or establishment that the consent of a spouse
may not be obtained, will be effective only with respect to a specific
Beneficiary (including any class of Beneficiaries or any contingent
Beneficiaries) or form of benefits identified in the Participant's waiver
or designation, unless the consent of the spouse expressly permits
designations by the Participant without any requirement of further consent
by the spouse. A consent which permits such designations by the
Participant shall acknowledge that the spouse has the right to limit
consent to a specific Beneficiary and form of benefits and that the spouse
voluntarily elects to relinquish both such rights. A consent by a spouse
shall be irrevocable once made. Any such consent, or establishment that
such consent may not be obtained, will be effective only with respect to
such spouse. For purposes of subsections (b) and (c) above, no consent of
a spouse shall be valid unless the notice required by whichever subsection
is applicable has been provided to the Participant.
(e) Former Spouse. For purposes of this Section 8.03, a former spouse of a
Participant will be treated as the spouse or surviving spouse of the
Participant, and a current spouse will not be so treated, to the extent
required under a qualified domestic relations order, as defined in Section
414(p) of the Code.
(f) Vested Account Balance. For purposes of this Section, vested Account
shall the aggregate value of the Participant's vested Account derived from
Employer and Employee contributions (including rollovers), whether vested
before or upon death. The provisions of this Section shall apply to a
Participant who is vested in amounts attributable to Employer
contributions, Employee contributions, or both, upon death or at the time
of distribution.
8.04 INSTALLMENT DISTRIBUTIONS. This Section shall be interpreted and
applied in accordance with the regulations under Section 401(a)(9) of the
Code, including the minimum distribution incidental benefit requirement of
Section 1.401(a)(9)-2 of the Proposed Treasury Regulations, or any
successor regulations of similar import.
(a) In General. If a Participant's benefit may be distributed in
accordance with Section 8.01(b), the amount to be distributed for each
calendar year for which a minimum distribution is required shall be at
least an amount equal to the quotient obtained by dividing the
Participant's interest in his Account by the life expectancy of the
Participant or Beneficiary or the joint life and last survivor expectancy
of the Participant and his Beneficiary, whichever is applicable. For
calendar years beginning before January 1, 1989, if a Participant's
Beneficiary is not his spouse, the method of distribution selected must
insure that at least 50 percent of the present value of the amount
available for distribution is paid within the life expectancy of the
Participant. For calendar years beginning after December 31, 1988, the
amount to be distributed for each calendar year shall not be less than an
amount equal to the quotient obtained by dividing the Participant's
interest in his Account by the lesser of (1) the applicable life expectancy
under Section 8.01(b), or (2) if a Participant's Beneficiary is not his
spouse, the applicable divisor determined under Section 1.401(a)(9)-2,
Q&A 4 of the Proposed Treasury Regulations, or any successor
regulations of similar import. Distributions after the death of the
Participant shall be made using the applicable life expectancy under (1)
above, without regard to Section 1.401(a)(9)-2 of such regulations.
The minimum distribution required under this subsection (a) for the
calendar year immediately preceding the calendar year in which the
Participant's required beginning date, as determined under Section 8.08(b),
occurs shall be made on or before the Participant's required beginning
date, as so determined. Minimum distributions for other calendar years
shall be made on or before the close of such calendar year.
(b) Additional Requirements for Distributions After Death of Participant.
(1) Distribution beginning before Death. If the Participant dies before
distribution of his benefits has begun, distributions shall be made in
accordance with the provisions of this paragraph. Distributions under
Section 8.01(a) shall be completed by the close of the calendar year in
which the fifth anniversary of the death of the Participant occurs.
Distributions under Section 8.01(b) shall commence, if the Beneficiary is
not the Participant's spouse, not later than the close of the calendar year
immediately following the calendar year in which the death of the
Participant occurs. Distributions under Section 8.01(b) to a Beneficiary
who is the Participant's surviving spouse shall commence not later than the
close of the calendar year in which the Participant would have attained age
70 1/2 or, if later, the close of the calendar year immediately following
the calendar year in which the death of the Participant occurs. In the
event such spouse dies prior to the date distribution to him or her
commences, he or she will be treated for purposes of this subsection (other
than the preceding sentence) as if he or she were the Participant. If the
Participant has not designated a Beneficiary, or the Participant or
Beneficiary has not effectively selected a method of distribution,
distribution of the Participant's benefit shall be completed by the close
of the calendar year in which the fifth anniversary of the death of the
Participant occurs.
Any amount paid to a child of the Participant will be treated as if it had
been paid to the surviving spouse if the amount becomes payable to the
surviving spouse when the child reaches the age of majority.
For purposes of this subsection (b)(1), the life expectancy of a
Beneficiary who is the Participant's surviving spouse shall be recalculated
annually unless the Participant's spouse irrevocably elects otherwise prior
to the time distributions are required to begin. Life expectancy shall be
computed in accordance with the provisions of subsection (a) above.
(2) Distribution beginning after Death. If the Participant dies after
distribution of his benefits has begun, distributions to the Participant's
Beneficiary will be made at least as rapidly as under the method of
distribution being used as of the date of the Participant's death.
For purposes of this Section 8.04(b), distribution of a Participant's
interest in his Account will be considered to begin as of the Participant's
required beginning date, as determined under Section 8.08(b). If
distribution in the form of an annuity irrevocably commences prior to such
date, distribution will be considered to begin as of the actual date
distribution commences.
(c) Life Expectancy. For purposes of this Section, life expectancy shall
be recalculated annually in the case of the Participant or a Beneficiary
who is the Participant's spouse unless the Participant or Beneficiary
irrevocably elects otherwise prior to the time distributions are required
to begin. If not recalculated in accordance with the foregoing, life
expectancy shall be calculated using the attained age of the Participant or
Beneficiary, whichever is applicable, as of such individual's birth date in
the first year for which a minimum distribution is required reduced by one
for each elapsed calendar year since the date life expectancy was first
calculated. For purposes of this Section, life expectancy and joint life
and last survivor expectancy shall be computed by use of the expected
return multiples in Table V and VI of section 1.72-9 of the income tax
Regulations.
A Participant's interest in his Account for purposes of this Section 8.04
shall be determined as of the last valuation date in the calendar year
immediately preceding the calendar year for which a minimum distribution is
required, increased by the amount of any contributions allocated to, and
decreased by any distributions from, such Account after the valuation date.
Any distribution for the first year for which a minimum distribution is
required made after the close of such year shall be treated as if made
prior to the close of such year.
8.05. IMMEDIATE DISTRIBUTIONS. If the Account distributable to a
Participant exceeds, or at the time of any prior distribution exceeded,
$3,500, no distribution will be made to the Participant before he reaches
his Normal Retirement Age (or age 62, if later), unless the written consent
of the Participant has been obtained. Such consent shall be made in
writing within the 90-day period ending on the Participant's Annuity
Starting Date. Within the period beginning 90 days before the
Participant's Annuity Starting Date and ending 30 days before such Date,
the Administrator will provide such Participant with written notice
comparable to the notice described in Section 8.03(b) containing a general
description of the material features and an explanation of the relative
values of the optional forms of benefit available under the Plan and
informing the Participant of his right to defer receipt of the distribution
until his Normal Retirement Age (or age 62, if later).
The consent of the Participant's spouse must also be obtained if the
Participant is subject to the provisions of Section 8.03(a), unless the
distribution will be made in the form of the applicable retirement annuity
contract described in Section 8.03(b). A spouse's consent to early
distribution, if required, must satisfy the requirements of Section
8.03(d).
Neither the consent of the Participant nor the Participant's spouse shall
be required to the extent that a distribution is required to satisfy
Section 401(a)(9) or Section 415 of the Code. In addition, upon termination
of the Plan if it does not offer an annuity option (purchased from a
commercial provider) and if the Employer or any Related Employer does not
maintain another defined contribution plan (other than an employee stock
ownership plan as defined in Code Section 4975(e)(7)) the Participant's
Account will, without the Participant's consent, be distributed to the
Participant. However, if any Related Employer maintains another defined
contribution plan (other than an employee stock ownership plan as defined
in Section 4975(e)(7) of the Code) then the Participant's Account will be
transferred, without the Participant's consent, to the other plan if the
Participant does not consent to an immediate distribution.
8.06. DETERMINATION OF METHOD OF DISTRIBUTION. The Participant will
determine the method of distribution of benefits to himself and may
determine the method of distribution to his Beneficiary. Such
determination will be made prior to the time benefits become payable under
the Plan. If the Participant does not determine the method of distribution
to his Beneficiary or if the Participant permits his Beneficiary to
override his determination, the Beneficiary, in the event of the
Participant's death, will determine the method of distribution of benefits
to himself as if he were the Participant. A determination by the
Beneficiary must be made no later than the close of the calendar year in
which distribution would be required to begin under Section 8.04(b) or, if
earlier, the close of the calendar year in which the fifth anniversary of
the death of the Participant occurs.
8.07. NOTICE TO TRUSTEE. The Administrator will notify the Trustee in
writing whenever any Participant or Beneficiary is entitled to receive
benefits under the Plan. The Administrator's notice shall indicate the
form of benefits that such Participant or Beneficiary shall receive and (in
the case of distributions to a Participant) the name of any designated
Beneficiary or Beneficiaries.
8.08. TIME OF DISTRIBUTION. In no event will distribution to a
Participant be made latest than the earlier of the dates described in (a)
and (b) below:
(a) Absent the consent of the Participant (and his spouse, if appropriate),
the 60th day after the close of the Plan Year in which occurs the later of
the date on which the Participant attains age 65, the date on which the
Participant ceases to be employed by the Employer, or the 10th anniversary
of the year in which the Participant commenced participation in the Plan;
and
(b) April 1 of the calendar year first following the calendar year in which
the Participant attains age 70 1/2 or, in the case of a Participant who had
attained age 70 1/2 before January 1, 1988, the required beginning date
determined in accordance with (1) or (2) below:
(1) 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.
(2) The required beginning date of a Participant who is a 5-percent owner
during any year beginning after December 31, 1979, is the first day of
April following the later of
(A) the calendar year in which the Participant attains age 70 1/2, or
(B) the earlier of the calendar year with or within which ends the Plan
Year in which the Participant becomes a 5-percent owner, or the calendar
year in which the Participant retires.
Notwithstanding the foregoing, in the case of a Participant who attained
age 70 1/2 during 1988 and who had not retired prior to January 1, 1989,
the required beginning date described in this paragraph shall be April 1,
1990.
Notwithstanding (a) above, the failure of a Participant (and spouse) to
consent to a distribution while a benefit is immediately distributable,
within the meaning of Section 8.05, shall be deemed to be an election to
defer commencement of payment of any benefit sufficient to satisfy (a)
above.
Once distributions have begun to a 5-percent owner under (b) above, they
must continue to be distributed, even if the Participant ceases to be a
5-percent owner in a subsequent year.
For purposes of (b) above, a Participant is treated as a 5-percent owner
if such Participant is a 5-percent owner as defined in Section 416(i) of
the Code (determined in accordance with Section 416 but without regard to
whether the Plan is top-heavy) at any time during the Plan Year ending with
or within the calendar year in which such owner attains age 66 1/2 or any
subsequent Plan Year.
The Administrator shall notify the Trustee in writing whenever a
distribution is necessary in order to comply with the minimum distribution
rules set forth in this Section.
8.09. WHEREABOUTS OF PARTICIPANTS AND BENEFICIARIES. The Administrator
will at all times be responsible for determining the whereabouts of each
Participant or Beneficiary who may be entitled to benefits under the Plan
and will at all times be responsible for instructing the Trustee in writing
as to the current address of each such Participant or Beneficiary. The
Trustee will be entitled to rely on the latest written statement received
from the Administrator as to such addresses. The Trustee will be under no
duty to make any distributions under the Plan unless and until it has
received written instructions from the Administrator satisfactory to the
Trustee containing the name and address of the distributee, the time when
the distribution is to occur, and the form which the distribution will
take. Notwithstanding the foregoing, if the Trustee attempts to make a
distribution in accordance with the Administrator's instructions but is
unable to make such distribution because the whereabouts of the distributee
is unknown, the Trustee will notify the Administrator of such situation and
thereafter the Trustee will be under no duty to make any further
distributions to such distributee until it receives further written
instructions from the Administrator. If a benefit is forfeited because the
Administrator determines that the Participant or Beneficiary cannot be
found, such benefit will be reinstated by the Sponsor if a claim is filed
by the Participant or Beneficiary with the Administrator and the
Administrator confirms the claim to the Sponsor.
ARTICLE 9. TOP-HEAVY PROVISIONS.
9.01 APPLICATION. If the Plan is or becomes a Top-Heavy Plan in any Plan
Year or is automatically deemed to be Top-Heavy in accordance with the
Employer's election in Section 1.12(a)(1) of the Adoption Agreement, the
provisions of this Article 9 shall supersede any conflicting provision in
the Plan.
9.02 DEFINITIONS. For purposes of this Article 9, the following terms
have the meanings set forth below:
(a) Key Employee. Any Employee or former Employee (and the Beneficiary of
any such Employee) who at any time during the determination period was (1)
an officer of the Employer whose annual compensation exceeds 50 percent of
the dollar limitation under Section 415(b)(1)(A) of the Code, (2) an owner
(or considered an owner under Section 318 of the Code) of one of the ten
largest interests in the Employer if such individual's annual compensation
exceeds the dollar limitation under Section 415(c)(1)(A) of the Code, (3) a
5-percent owner of the Employer, or (4) a 1-percent owner of the Employer
who has annual compensation of more than $150,000. For purposes of this
paragraph, 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 shall be made in accordance with Section 416(i)(1) of
the Code and the regulations thereunder. Annual compensation means
compensation as defined in Section 5.03(e)(2), but including amounts
contributed by the Employer pursuant to a salary reduction agreement which
are excludable from the employee's gross income under Section 125, Section
402(a)(8), and Section 403(b) of the Code.
(b) Top-Heavy Plan. The Plan is a Top-Heavy Plan if any of the following
conditions exists:
(1) the Top-Heavy Ratio for the Plan exceeds 60 percent and the Plan is
not part of any Required Aggregation Group or Permissive Aggregation Group,
(2) the Plan is a part of a Required Aggregation Group but not part of a
Permissive Aggregation Group and the Top-Heavy Ratio for the Required
Aggregation Group exceeds 60 percent, or
(3) the Plan is a part of a Required Aggregation Group and a Permissive
Aggregation Group and the Top-Heavy Ratio for both Groups exceeds 60
percent.
(c) Top-Heavy Ratio.
(1) With respect to this Plan, or with respect to any Required
Aggregation Group or Permissive Aggregation Group that consists solely of
defined contribution plans (including any simplified employee pension
plans) 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 is a fraction, the numerator of which
is the sum of the account balances of all Key Employees under the plans as
of the Determination Date (including any part of any account balance
distributed in the 5-year period ending on the Determination Date), and the
denominator of which is the sum of all account balances (including any part
of any account balance distributed in the 5-year period ending on the
Determination Date) of all participants under the plans as of the
Determination Date. Both the numerator and denominator of the Top-Heavy
Ratio shall be increased, to the extent required by Section 416 of the
Code, to reflect any contribution which is due but unpaid as of the
Determination Date.
(2) With respect to any Required Aggregation Group or Permissive
Aggregation Group that includes one or more defined benefit plans which,
during the 5-year period ending on the Determination Date, has covered or
could cover a Participant in this Plan, the Top-Heavy Ratio is a fraction,
the numerator of which is the sum of the account balances under the defined
contribution plans for all Key Employees and the present value of accrued
benefits under the defined benefit plans for all Key Employees, and the
denominator of which is the sum of the account balances under the defined
contribution plans for all participants and the present value of accrued
benefits under the defined benefit plans for all participants. Both the
numerator and denominator of the Top-Heavy Ratio shall be increased for any
distribution of an account balance or an accrued benefit made in the 5-year
period ending on the Determination Date and any contribution due but unpaid
as of the Determination Date.
(3) For purposes of (1) and (2) above, the value of Accounts and the
present value of accrued benefits will be determined as of the most recent
Valuation Date that falls within or ends with the 12-month period ending on
the Determination Date, except as provided in Section 416 of the Code and
the regulations thereunder for the first and second plan years of a defined
benefit plan. The Account and accrued benefits of a Participant (A) who is
not a Key Employee but who was a Key Employee in a prior year, or (B) who
has not been credited with at least one Hour of Service with the Employer
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, shall
be made in accordance with Section 416 of the Code and the regulations
thereunder. Deductible employee contributions shall not be taken into
account for purposes of computing the Top-Heavy Ratio. When aggregating
plans, the value of Accounts and accrued benefits shall be calculated with
reference to the Determination Dates that fall within the same calendar
year.
For purposes of determining if the Plan, or any other plan included in a
Required Aggregation Group of which this Plan is a part, is a Top-Heavy
Plan, the accrued benefit in a defined benefit plan of an Employee other
than a Key Employee shall be determined under (i) the method, if any, that
uniformly applies for accrual purposes under all plans maintained by the
Employer, or (ii) if there is no such method, as if such benefit accrued
not more rapidly than the slowest accrual rate permitted under the
fractional accrual rate of Section 411(b)(1)(C) of the Code.
(d) Permissive Aggregation Group. The Required Aggregation Group plus any
other qualified plans of the Employer or a Related Employer which, when
considered as a group with the Required Aggregation Group, would continue
to satisfy the requirements of Sections 401(a)(4) and 410 of the Code.
(e) Required Aggregation Group.
(1) Each qualified plan of the Employer or Related Employer in which at
least one Key Employee participates, or has participated at any time during
the determination period (regardless of whether the plan has terminated),
and
(2) any other qualified plan of the Employer or Related Employer which
enables a plan described in (1) above to meet the requirements of Sections
401(a)(4) or 410 of the Code.
(f) Determination Date. For any Plan Year of the Plan subsequent to the
first Plan Year, the last day of the preceding Plan Year. For the first
Plan Year of the Plan, the last day of that Plan Year.
(g) Valuation Date. The Determination Date.
(h) Present Value. Present value shall be based only on the interest rate
and mortality table specified in the Adoption Agreement.
9.03. MINIMUM CONTRIBUTION.
(a) Except as otherwise provided in (b) and (c) below, the
Fixed/Discretionary Contributions made on behalf of any Participant who is
not a Key Employee shall not be less than the lesser of 3 percent (or such
other percent elected by the Employer in Section 1.12(c)) of such
Participant's Compensation or, in the case where the Employer has no
defined benefit plan which designates this Plan to satisfy Section 401 of
the Code, the largest percentage of Employer contributions, as a percentage
of the first $200,000 of the Key Employee's Compensation, made on behalf of
any Key Employee for that year. If the Employer selected the Integrated
Formula in Section 1.05(a)(2), the minimum contribution shall be determined
under paragraph (e) of this Section 9.03. Further, the minimum
contribution under this Section 9.03 shall be made even though, under other
Plan provisions, the Participant would not otherwise be entitled to receive
a contribution, or would have received a lesser contribution for the year,
because (1) the Participant failed to complete 1,000 Hours of Service or
any equivalent service requirement provided in the Adoption Agreement; or
(2) the Participant's Compensation was less than a stated amount.
(b) The provisions of (a) above shall not apply to any Participant who was
not employed by the Employer on the last day of the Plan Year.
(c) The Employer contributions for the Plan Year made on behalf of each
Participant who is not a Key Employee and who is a participant in a defined
benefit plan maintained by the Employer shall not be less than 5 percent of
such Participant's Compensation, unless the Employer has provided in
Section 1.12(c) that the minimum contribution requirement will be met in
the other plan or plans of the Employer.
(d) The minimum contribution required under (a) above (to the extent
required to be nonforfeitable under Section 416(b) of the Code) may not be
forfeited under Section 411(a)(3)(B) or 411(a)(3)(D) of the Code.
(e) If the Employer elected an Integrated Formula in Section 1.05(a)(2),
the allocation steps in Section 4.06(b)(2) shall be preceded by the
following steps:
(1) The Discretionary Employer Contributions will be allocated to each
eligible Participant (as determined under this Section 9.03) in the ratio
that the Participant's Compensation bears to all Participants'
Compensation, but not in excess of 3%(or such other percent elected by the
Employer in Section 1.12(c).
(2) Any Discretionary Employer Contributions remaining after (e)(1) above
will be allocated to each eligible Participant in the ratio that the
Participant's Excess Compensation for the Plan Year bears to the Excess
Compensation of all eligible Participants, but not in excess of 3%(or such
other percent elected by the Employer in Section 1.12(c)).
9.04. ADJUSTMENT TO THE LIMITATION ON CONTRIBUTIONS AND BENEFITS. If this
Plan is in Top-Heavy status, the number 100 shall be substituted for the
number 125 in subsections (e)(3) and (e)(4) of Section 5.03. However, this
substitution shall not take effect with respect to this Plan in any Plan
Year in which the following requirements are satisfied:
(a) The Employer contributions for such Plan Year made on behalf of each
Participant who is not a Key Employee and who is a participant in a defined
benefit plan maintained by the Employer is not less than 7 1/2 percent of
such Participant's Compensation.
(b) The sum of the present value as of the Determination Date of (1) the
aggregate accounts of all Key Employees under all defined contribution
plans of the Employer and (2) the cumulative accrued benefits of all Key
Employees under all defined benefit plans of the Employer does not exceed
90 percent of the same amounts determined for all Participants under all
plans of the Employer that are Top-Heavy Plans, excluding Accounts and
accrued benefits for Employees who formerly were but are no longer Key
Employees.
The substitutions of the number 100 for 125 shall not take effect in any
Limitation Year with respect to any Participant for
whom no benefits are accrued or contributions made for such Year.
9.05. MINIMUM VESTING. For any Plan Year in which the Plan is a Top-Heavy
Plan and all Plan Years thereafter, the Top-Heavy vesting schedule elected
in Section 1.12(d) will automatically apply to the Plan. The Top-Heavy
vesting schedule applies to all benefits within the meaning of Section
411(a)(7) of the Code except those attributable to Employee Contributions
or those already subject to a vesting schedule which vests at least as
rapidly in all cases as the schedule elected in Section 1.12(d), including
benefits accrued before the Plan becomes a Top-Heavy Plan. Further, no
decrease in a Participant's nonforfeitable percentage may occur in the
event the Plan's status as a Top-Heavy Plan changes for any Plan Year.
However, this Section 9.05 does not apply to the Account of any Employee
who does not have an Hour of Service after the Plan has initially become a
Top-Heavy Plan and such Employee's Account attributable to Employer
Contributions will be determined without regard to this Section 9.05.
ARTICLE 10. AMENDMENT AND TERMINATION.
10.01 AMENDMENT BY EMPLOYER. The Employer reserves the authority, subject
to the provisions of Article 1 and Section 10.03, to amend the Plan:
(a) Changes to Elections Contained in the Adoption Agreement. By filing
with the Trustee an amended Adoption Agreement, executed by the Employer
only, on which said Employer has indicated a change or changes in
provisions previously elected by it. Such changes are to be effective on
the effective date of such amended Adoption Agreement except that
retroactive changes to a previous election or elections pursuant to the
regulations issued under Section 401(a)(4) of the Code shall be permitted.
Any such change notwithstanding, no Participant's Account shall be reduced
by such change below the amount to which the Participant would have been
entitled if he had voluntarily left the employ of the Employer immediately
prior to the date of the change. The Employer may from time to time make
any amendment to the Plan that may be necessary to satisfy Sections 415 or
416 of the Code because of the required aggregation of multiple plans by
completing overridingplan language in the Adoption Agreement. The Employer
may also add certain model amendments published by the Internal Revenue
Service which specifically provide that their adoption will not cause the
Plan to be treated as an individually designed plan; or
(b) Other Changes. By amending any provision of the Plan for any reason
other than those specified in (a) above. However, upon making such
amendment, including a waiver of the minimum funding requirement under
Section 412(d) of the Code, the Employer may no longer participate in this
prototype plan arrangement and will be deemed to have an individually
designed plan. Following such amendment, the Trustee may transfer the
assets of the Trust to the trust forming part of such newly adopted plan
upon receipt of sufficient evidence (such as a determination letter or
opinion letter from the Internal Revenue Service or an opinion of counsel
satisfactory to the Trustee) that such trust will be a qualified trust
under the Code.
10.02. AMENDMENT BY PROTOTYPE SPONSOR. The Prototype Sponsor may in its
discretion amend the Plan or the Adoption Agreement at any time, subject to
the provisions of Article 1 and Section 10.03, and provided that the
Prototype Sponsor mails a copy of such amendment to the Employer at its
last known address as shown on the books of the Prototype Sponsor.
10.03. AMENDMENTS AFFECTING VESTED AND/OR ACCRUED BENEFITS.
(a) Except as permitted by Section 10.04, no amendment to the Plan shall be
effective to the extent that it has the effect of decreasing a
Participant's Account or eliminating an optional form of benefit with
respect to benefits attributable to service before the amendment.
Furthermore, if the vesting schedule of the Plan is amended, the
nonforfeitable interest of a Participant in his Account, determined as of
the later of the date the amendment is adopted or the date it becomes
effective, will not be less than the Participant's nonforfeitable interest
in his Account determined without regard to such amendment.
(b) If the Plan's vesting schedule is amended, including any amendment
resulting from a change to or from Top-Heavy Plan status, or the Plan is
amended in any way that directly or indirectly affects the computation of a
Participant's nonforfeitable interest in his Account, each Participant with
at least three (3) Years of Service for Vesting with the Employer may
elect, within a reasonable period after the adoption of the amendment, to
have the nonforfeitable percentage of his Account computed under the Plan
without regard to such amendment. The Participant's election may be made
within 60 days from the latest of (1) the date the amendment is adopted,
(2) the date the amendment becomes effective, or (3) the date the
Participant is issued written notice of the amendment by the Employer or
the Administrator.
10.04. RETROACTIVE AMENDMENTS. An amendment made by the Prototype Sponsor
in accordance with Section 10.02 may be made effective on a date prior to
the first day of the Plan Year in which it is adopted if such amendment is
necessary or appropriate to enable the Plan and Trust to satisfy the
applicable requirements of the Code or to conform the Plan to any change in
federal law, or to any regulations or ruling thereunder. Any retroactive
amendment by the Employer shall be subject to the provisions of Section
10.01.
10.05. TERMINATION. The Employer has adopted the Plan with the intention
and expectation that contributions will be continued indefinitely.
However, said Employer has no obligation or liability whatsoever to
maintain the Plan for any length of time and may discontinue contributions
under the Plan or terminate the Plan at any time by written notice
delivered to the Trustee without any liability hereunder for any such
discontinuance or termination.
10.06. DISTRIBUTION UPON TERMINATION OF THE PLAN. Upon termination or
partial termination of the Plan or complete discontinuance of contributions
thereunder, each Participant (including a terminated Participant with
respect to amounts not previously forfeited by him) who is affected by such
termination or partial termination or discontinuance will have a fully
vested interest in his Account, and, subject to Section 4.05 and Article 8,
the Trustee will distribute to each Participant or other person entitled to
distribution the balance of the Participant's Account in a single lump sum
payment. In the absence of such instructions, the Trustee will notify the
Administrator of such situation and the Trustee will be under no duty to
make any distributions under the Plan until it receives written
instructions from the Administrator. Upon the completion of such
distributions, the Trust will terminate, the Trustee will be relieved from
all liability under the Trust, and no Participant or other person will have
any claims thereunder, except as required by applicable law.
10.07. MERGER OR CONSOLIDATION OF PLAN; TRANSFER OF PLAN ASSETS. In case
of any merger or consolidation of the Plan with, or transfer of assets and
liabilities of the Plan to, any other plan, provision must be made so that
each Participant would, if the Plan then terminated, receive a benefit
immediately after the merger, consolidation or transfer which is equal to
or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation or transfer if the Plan had
then terminated.
ARTICLE 11. AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN; TRANSFER OF
FUNDS TO OR FROM OTHER QUALIFIED PLANS.
11.01. AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN. In the event the
Employer has previously established a plan (the "predecessor plan") which
is a defined contribution plan under the Code and which on the date of
adoption of the Plan meets the applicable requirements of section 401(a) of
the Code, the Employer may, in accordance with the provisions of the
predecessor plan, amend and continue the predecessor plan in the form of
the Plan and become the Employer hereunder, subject to the following:
(a) Subject to the provisions of the Plan, each individual who was a
Participant or former Participant in the predecessor plan immediately prior
to the effective date of such amendment and continuation will become a
Participant or former Participant in the Plan;
(b) No election may be made under the vesting provisions of the Adoption
Agreement if such election would reduce the benefits of a Participant under
the Plan to less than the benefits to which he would have been entitled if
he voluntarily separated from the service of the Employer immediately prior
to such amendment and continuation;
(c) No amendment to the Plan shall decrease a Participant's accrued benefit
or eliminate an optional form of benefit and if the amendment of the
predecessor plan in the form of the Plan results in a change in the method
of crediting service for vesting purposes between the general method set
forth in Section 2530.200b-2 of the Department of Labor Regulations and the
elapsed-time method in Section 2.01(a)(33) of the Plan, each Participant
with respect to whom the method of crediting vesting service is changed
shall be treated in the manner set forth by the provisions of Section
1.410(a)-7(f)(1) of the Treasury Regulations which are incorporated herein
by reference;
(d) The amounts standing to the credit of a Participant's Account
immediately prior to such amendment and continuation which represent the
amounts properly attributable to (1) contributions by the Participant and
(2) contributions by the Employer and forfeitures will constitute the
opening balance of his Account or Accounts under the Plan;
(e) Amounts being paid to a former Participant or to a Beneficiary in
accordance with the provisions of the predecessor plan will continue to be
paid in accordance with such provisions;
(f) Any election and waiver of the qualified pre-retirement annuity in
effect after August 23, 1984, under the predecessor plan immediately before
such amendment and continuation will be deemed a valid election and waiver
of Beneficiary under Section 8.04 if such designation satisfies the
requirements of Section 8.04(d), unless and until the Participant revokes
such election and waiver under the Plan; and
(g) Unless the Employer and the Trustee agree otherwise, all assets of the
predecessor trust will be deemed to be assets of the Trust as of the
effective date of such amendment. Such assets will be invested by the
Trustee as soon as reasonably practicable pursuant to Article 6. The
Employer agrees to assist the Trustee in any way requested by the Trustee
in order to facilitate the transfer of assets from the predecessor trust to
the Trust Fund.
11.02. TRANSFER OF FUNDS FROM AN EXISTING PLAN. The Employer may from
time to time direct the Trustee, in accordance with such rules as the
Trustee may establish, to accept cash, allowable Fund Shares or participant
loan promissory notes transferred for the benefit of Participants from a
trust forming part of another qualified plan under the Code, provided such
plan is a defined contribution plan. Such transferred assets will become
assets of the Trust as of the date they are received by the Trustee. Such
transferred assets will be credited to Participants' Accounts in accordance
with their respective interests immediately upon receipt by the Trustee. A
Participant's interest under the Plan in transferred assets which were
fully vested and nonforfeitable under the transferring plan will be fully
vested and nonforfeitable at all times. Such transferred assets will be
invested by the Trustee in accordance with the provisions of paragraph (g)
of Section 11.01 as if such assets were transferred from a predecessor
plan. No transfer of assets in accordance with this Section may cause a
loss of an accrued or optional form of benefit protected by Section
411(d)(6) of the Code.
11.03. ACCEPTANCE OF ASSETS BY TRUSTEE. The Trustee will not accept
assets which are not either in a medium proper for investment under the
Plan, as set forth in Section 1.14(b), or in cash. Such assets shall be
accompanied by written instructions showing separately the respective
contributions by the prior employer and by the Employee, and identifying
the assets attributable to such contributions. The Trustee shall establish
such accounts as may be necessary or appropriate to reflect such
contributions under the Plan. The Trustee shall hold such assets for
investment in accordance with the provisions of Article 6, and shall in
accordance with the written instructions of the Employer make appropriate
credits to the Accounts of the Participants for whose benefit assets have
been transferred.
11.04. TRANSFER OF ASSETS FROM TRUST. The Employer may direct the Trustee
to transfer all or a specified portion of the Trust assets to any other
plan or plans maintained by the Employer or the employer or employers of a
former Participant or Participants, provided that the Trustee has received
evidence satisfactory to it that such other plan meets all applicable
requirements of the Code. The assets so transferred shall be accompanied
by written instructions from the Employer naming the persons for whose
benefit such assets have been transferred, showing separately the
respective contributions by the Employer and by each Participant, if any,
and identifying the assets
attributable to the various contributions. The Trustee shall have no
further liabilities with respect to assets so transferred.
ARTICLE 12. MISCELLANEOUS.
12.01. COMMUNICATION TO PARTICIPANTS. The Plan will be communicated to
all Participants by the Employer promptly after the Plan is adopted.
12.02. LIMITATION OF RIGHTS. Neither the establishment of the Plan and
the Trust, nor any amendment thereof, nor the creation of any fund or
account, nor the payment of any benefits, will be construed as giving to
any Participant or other person any legal or equitable right against the
Employer, Administrator or Trustee, except as provided herein; and in no
event will the terms of employment or service of any Participant be
modified or in any way affected hereby. It is a condition of the Plan, and
each Participant expressly agrees by his participation herein, that each
Participant will look solely to the assets held in the Trust for the
payment of any benefit to which he is entitled under the Plan.
12.03. NONALIENABILITY OF BENEFITS AND QUALIFIED DOMESTIC RELATIONS
ORDERS. The benefits provided hereunder will not be subject to alienation,
assignment, garnishment, attachment, execution or levy of any kind, either
voluntarily or involuntarily, and any attempt to cause such benefits to be
so subjected will not be recognized, except to such extent as may be
required by law. The preceding sentence shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with respect
to a Participant pursuant to a domestic relations order, unless such order
is determined by the Plan Administrator to be a qualified domestic
relations order, as defined in Section 414(p) of the Code, or any domestic
relations order entered before January 1, 1985. The Administrator must
establish reasonable procedures to determine the qualified status of a
domestic relations order. Upon receiving a domestic relations order, the
Administrator will promptly notify the Participant and any alternate payee
named in the order, in writing, of the receipt of the order and the Plan's
procedures for determining the qualified status of the order. Within a
reasonable period of time after receiving the domestic relations order, the
Administrator must determine the qualified status of the order and must
notify the Participant and each alternate payee, in writing, of its
determination. The Administrator must provide notice under this paragraph
by mailing to the individual's address specified in the domestic relations
order, or in a manner consistent with the Department of Labor regulations.
If any portion of the Participant's Account is payable during the period
the Administrator is making its determination of the qualified status of
the domestic relations order, the Administrator must make a separate
accounting of the amounts payable. If the Administrator determines the
order is a qualified domestic relations order within 18 months of the date
amounts first are payable following receipt of the order, the Administrator
will direct the Trustee to distribute the payable amounts in accordance
with the order. If the Administrator does not make his determination of
the qualified status of the order within the 18-month determination period,
the Administrator will direct the Trustee to distribute the payable amounts
in the manner the Plan would distribute if the order did not exist and will
apply the order prospectively if the Administrator later determines the
order is a qualified domestic relations order.
A domestic relations order will not fail to be deemed a qualified domestic
relations order merely because it requires the distribution or segregation
of all or part of a Participant's Account with respect to an alternate
payee prior to the Participant's earliest retirement age (as defined in
Section 414(p) of the Code) under the Plan. A distribution to an alternate
payee prior to the Participant's attainment of the earliest retirement age
is available only if (a) the order specifies distribution at that time and
(b) if the present value of the alternate payee's benefits under the Plan
exceeds $3,500, and the order requires, and the alternate payee consents
to, a distribution occurring prior to the Participant's attainment of
earliest retirement age.
12.04. FACILITY OF PAYMENT. In the event the Administrator determines, on
the basis of medical reports or other evidence satisfactory to the
Administrator, that the recipient of any benefit payments under the Plan is
incapable of handling his affairs by reason of minority, illness, infirmity
or other incapacity, the Administrator may direct the Trustee to disburse
such payments to a person or institution designated by a court which has
jurisdiction over such recipient or a person or institution otherwise
having the legal authority under state law for the care and control of such
recipient. The receipt by such person or institution of any such payments
shall be complete acquittance therefore, and any such payment to the extent
thereof, shall discharge the liability of the Trust for the payment of
benefits hereunder to such recipient.
12.05. INFORMATION BETWEEN EMPLOYER AND TRUSTEE. The Employer agrees to
furnish the Trustee, and the Trustee agrees to furnish the Employer, with
such information relating to the Plan and Trust as may be required by the
other in order to carry out their respective duties hereunder, including
without limitation information required under the Code and any regulations
issued or forms adopted by the Treasury Department thereunder or under the
provisions of ERISA and any regulations issued or forms adopted by the
Labor Department thereunder.
12.06. EFFECT OF FAILURE TO QUALIFY UNDER CODE. Notwithstanding any other
provision contained herein, if the Employer fails to obtain or retain
approval of the Plan by the Internal Revenue Service as a qualified Plan
under the Code, the Employer may no longer participate in this prototype
Plan arrangement and will be deemed to have an individually designed plan.
12.07. NOTICES. Any notice or other communication in connection with this
Plan shall be deemed delivered in writing if addressed as provided below
and if either actually delivered at said address or, in the case of a
letter, three business days shall have elapsed after the same shall have
been deposited in the United States mails, first-class postage prepaid and
registered or certified:
(a) If to the Employer or Administrator, to it at the address set forth in
the Adoption Agreement, to the attention of the person specified to receive
notice in the Adoption Agreement;
(b) If to the Trustee, to it at the address set forth in the Adoption
Agreement;
or, in each case at such other address as the addressee shall have
specified by written notice delivered in accordance with the foregoing to
the addressor's then effective notice address.
12.08. GOVERNING LAW. The Plan and the accompanying Adoption Agreement
will be construed, administered and enforced according to ERISA, and to the
extent not preempted thereby, the laws of the Commonwealth of
Massachusetts.
ARTICLE 13. PLAN ADMINISTRATION.
13.01. POWERS AND RESPONSIBILITIES OF THE ADMINISTRATOR. The
Administrator has the full power and the full responsibility to administer
the Plan in all of its details, subject, however, to the requirements of
ERISA. The Administrator's powers and responsibilities include, but are
not limited to, the following:
(a) To make and enforce such rules and regulations as it deems necessary or
proper for the efficient administration of the Plan;
(b) To interpret the Plan, its interpretation thereof in good faith to be
final and conclusive on all persons claiming benefits under the Plan;
(c) To decide all questions concerning the Plan and the eligibility of any
person to participate in the Plan;
(d) To administer the claims and review procedures specified in Section
13.03;
(e) To compute the amount of benefits which will be payable to any
Participant, former Participant or Beneficiary in accordance with the
provisions of the Plan;
(f) To determine the person or persons to whom such benefits will be paid;
(g) To authorize the payment of benefits and provide for the distribution
of Code Section 402(f) notices;
(h) To comply with the reporting and disclosure requirements of Part 1 of
Subtitle B of Title I of ERISA;
(i) To appoint such agents, counsel, accountants, and consultants as may be
required to assist in administering the Plan;
(j) By written instrument, to allocate and delegate its fiduciary
responsibilities in accordance with Section 405 of ERISA including the
formation of an Administrative Committee to administer the Plan;
(k) To provide bonding coverage as required under Section 412 of ERISA.
13.02. NONDISCRIMINATORY EXERCISE OF AUTHORITY. Whenever, in the
administration of the Plan, any discretionary action by the Administrator
is required, the Administrator shall exercise its authority in a
nondiscriminatory manner so that all persons similarly situated will
receive substantially the same treatment.
13.03. CLAIMS AND REVIEW PROCEDURES.
(a) Claims Procedure. If any person believes he is being denied any rights
or benefits under the Plan, such person may file a claim in writing with
the Administrator. If any such claim is wholly or partially denied, the
Administrator will notify such person of its decision in writing. Such
notification will contain (1) specific reasons for the denial, (2) specific
reference to pertinent Plan provisions, (3) a description of any additional
material or information necessary for such person to perfect such claim and
an explanation of why such material or information is necessary, and (4)
information as to the steps to be taken if the person wishes to submit a
request for review. Such notification will be given within 90 days after
the claim is received by the Administrator (or within 180 days, if special
circumstances require an extension of time for processing the claim, and if
written notice of such extension and circumstances is given to such person
within the initial 90-day period). If such notification is not given
within such period, the claim will be considered denied as of the last day
of such period and such person may request a review of his claim.
(b) Review Procedure. Within 60 days after the date on which a person
receives a written notice of a denied claim (or, if applicable, within 60
days after the date on which such denial is considered to have occurred),
such person (or his duly authorized representative) may (1) file a written
request with the Administrator for a review of his denied claim and of
pertinent documents and (2) submit written issues and comments to the
Administrator. The Administrator will notify such person of its decision
in writing. Such notification will be written in a manner calculated to be
understood by such person and will contain specific reasons for the
decision as well as specific references to pertinent Plan provisions. The
decision on review will be made within 60 days after the request for review
is received by the Administrator (or within 120 days, if special
circumstances require an extension of time for processing the request, such
as an election by the Administrator to hold a hearing, and if written
notice of such extension and circumstances is given to such person within
the initial 60-day period). If the decision on review is not made within
such period, the claim will be considered denied.
13.04. NAMED FIDUCIARY. The Administrator is a "named fiduciary" for
purposes of Section 402(a)(1) of ERISA and has the powers and
responsibilities with respect to the management and operation of the Plan
described herein.
13.05. COSTS OF ADMINISTRATION. Unless some or all are paid by the
Employer, all reasonable costs and expenses (including legal, accounting,
and employee communication fees) incurred by the Administrator and the
Trustee in administering the Plan and Trust will be paid first from the
forfeitures (if any) resulting under Section 7.07, then from the remaining
Trust Fund. All such costs and expenses paid from the Trust Fund will,
unless allocable to the Accounts of particular Participants, be charged
against the Accounts of all Participants on a PRORATA basis or in such
other reasonable manner as may be directed by the Employer.
ARTICLE 14. TRUST AGREEMENT.
14.01. ACCEPTANCE OF TRUST RESPONSIBILITIES. By executing the Adoption
Agreement, the Employer establishes a trust to hold the assets of the Plan.
By executing the Adoption Agreement, the Trustee agrees to accept the
rights, duties and responsibilities set forth in this Article 14.
14.02. ESTABLISHMENT OF TRUST FUND. A trust is hereby established under
the Plan and the Trustee will open and maintain a trust account for the
Plan and, as part thereof, Participants' Accounts for such individuals as
the Employer shall from time to time give written notice to the Trustee are
Participants in the Plan. The Trustee will accept and hold in the Trust
Fund such contributions on behalf of Participants as it may receive from
time to time from the Employer. The Trust Fund shall be fully invested and
reinvested in accordance with the applicable provisions of the Plan in Fund
Shares or as otherwise provided in Section 14.10.
14.03. EXCLUSIVE BENEFIT. The Trustee shall hold the assets of the Trust
Fund for the exclusive purpose of providing benefits to Participants and
Beneficiaries and defraying the reasonable expenses of administering the
Plan. No assets of the Plan shall revert to the Employer except as
specifically permitted by the terms of the Plan.
14.04. POWERS OF TRUSTEE. The Trustee shall have no discretion or
authority with respect to the investment of the Trust Fund but shall act
solely as a directed trustee of the funds contributed to it. In addition
to and not in limitation of such powers as the Trustee has by law or under
any other provisions of the Plan, the Trustee will have the following
powers, each of which the Trustee exercises solely as directed Trustee in
accordance with the written direction of the Employer except to the extent
a Plan asset is subject to Participant direction of investment and provided
that no such power shall be exercised in any manner inconsistent with the
provisions of ERlSA:
(a) to deal with all or any part of the Trust Fund and to invest all or a
part of the Trust Fund in investments available under the Plan, without
regard to the law of any state regarding proper investment;
(b) to retain uninvested such cash as it may deem necessary or advisable,
without liability for interest thereon, for the administration of the
Trust;
(c) to sell, convert, redeem, exchange, or otherwise dispose of all or any
part of the assets constituting the Trust Fund;
(d) to enforce by suit or otherwise, or to waive, its rights on behalf of
the Trust, and to defend claims asserted against it or the Trust, provided
that the Trustee is indemnified to its satisfaction against liability and
expenses;
(e) to employ such agents and counsel as may be reasonably necessary in
collecting, managing, administering, investing, distributing and protecting
the Trust Fund or the assets thereof and to pay them reasonable
compensation;
(f) to compromise, adjust and settle any and all claims against or in
favor of it or the Trust;
(g) to oppose, or participate in and consent to the reorganization,
merger, consolidation, or readjustment of the finances of any enterprise,
to pay assessments and expenses in connection therewith, and to deposit
securities under deposit agreements;
(h) to apply for or purchase annuity contracts in accordance with Section
8.02;
(i) to hold securities unregistered, or to register them in its own name
or in the name of nominees;
(j) to appoint custodians to hold investments within the jurisdiction of
the district courts of the United States and to deposit securities with
stock clearing corporations or depositories or similar organizations;
(k) to make, execute, acknowledge and deliver any and all instruments that
it deems necessary or appropriate to carry out the powers herein granted;
and
(l) generally to exercise any of the powers of an owner with respect to
all or any part of the Trust Fund.
The Employer specifically acknowledges and authorizes that affiliates of
the Trustee may act as its agent in the performance of ministerial,
nonfiduciary duties under the Trust. The expenses and compensation of such
agent shall be paid by the Trustee.
The Trustee shall provide the Employer with reasonable notice of any claim
filed against the Plan or Trust or with regard to any related matter, or of
any claim filed by the Trustee on behalf of the Plan or Trust or with
regard to any related matter.
14.05. ACCOUNTS. The Trustee will keep full accounts of all receipts and
disbursements and other transactions hereunder. Within 60 days after the
close of each Plan Year, within 60 days after termination of the Trust, and
at such other times as may be appropriate, the Trustee will determine the
then net fair market value of the Trust Fund as of the close of the Plan
Year, as of the termination of the Trust, or as of such other time,
whichever is applicable, and will render to the Employer and Administrator
an account of its administration of the Trust during the period since the
last such accounting, including all allocations made by it during such
period.
14.06. APPROVING OF ACCOUNTS. To the extent permitted by law, the written
approval of any account by the Employer or Administrator will be final and
binding, as to all matters and transactions stated or shown therein, upon
the Employer, Administrator, Participants and all persons who then are or
thereafter become interested in the Trust. The failure of the Employer or
Administrator to notify the Trustee within six (6) months after the receipt
of any account of its objection to the account will, to the extent
permitted by law, be the equivalent of written approval. If the Employer
or Administrator files any objections within such six (6) month period with
respect to any matters or transactions stated or shown in the account, and
the Employer or Administrator and the Trustee cannot amicably settle the
question raised by such objections, the Trustee will have the right to have
such questions settled by judicial proceedings. Nothing herein contained
will be construed so as to deprive the Trustee of the right to have
judicial settlement of its accounts. In any proceeding for a judicial
settlement of any account or for instructions, the only necessary parties
will be the Trustee, the Employer and the Administrator.
14.07. DISTRIBUTION FROM TRUST FUND. The Trustee shall make such
distribution from the Trust Fund as the Employer or Administrator may in
writing direct, as provided by the terms of the Plan, upon certification by
the Employer or Administrator that the same is for the exclusive benefit of
Participants or their Beneficiaries, or for the payment of expenses of
administering the Plan.
14.08. TRANSFER OF AMOUNTS FROM QUALIFIED PLAN. If the Plan provides that
amounts may be transferred to the Plan from another qualified plan or trust
under Section 401(a) of the Code, such transfer shall be made in accordance
with the provisions of the Plan and with such rules as may be established
by the Trustee. The Trustee will only accept assets which are in a medium
proper for investment under this agreement or in cash. Such amounts shall
be accompanied by written instructions showing separately the respective
contributions by the prior employer and the transferring Employee, and
identifying the assets attributable to such contributions. The Trustee
shall hold such assets for investment in accordance with the provisions of
this agreement.
14.09. TRANSFER OF ASSETS FROM TRUST. Subject to the provisions of the
Plan, the Employer may direct the Trustee to transfer all or a specified
portion of the Trust assets to any other plan or plans maintained by the
Employer or the employer or employers of a former Participant or
Participants, provided that the Trustee has received evidence satisfactory
to it that such other plan meets all applicable requirements of the Code.
The assets so transferred shall be accompanied by written instructions from
the Employer naming the persons for whose benefit such assets have been
transferred, showing separately the respective contributions by the
Employer and by each Participant, if any, and identifying the assets
attributable to the various contributions. The Trustee shall have no
further liabilities with respect to assets so transferred.
14.10. SEPARATE TRUST OR FUND FOR EXISTING PLAN ASSETS. With the consent
of the Trustee, the Employer may maintain a trust or fund (including a
group annuity contract) under this prototype plan document separate from
the Trust Fund for Plan assets purchased prior to the adoption of this
prototype plan document which are not Fidelity Funds listed in Section
1.14(b). The Trustee shall have no authority and no responsibility for the
Plan assets held in such separate trust or fund. The duties and
responsibilities of the trustee of a separate trust shall be provided by a
separate trust agreement, between the Employer and the trustee.
Notwithstanding the preceding paragraph, the Trustee or an affiliate of
the Trustee may agree in writing to provide ministerial recordkeeping
services for guaranteed investment contracts held in the separate trust or
fund. The guaranteed investment contract(s) shall be valued as directed by
the Employer or the Trustee of the separate trust.
The trustee of the separate trust (hereafter referred to as "trustee")
will be the owner of any insurance contract purchased prior to the adoption
of this prototype plan document. The insurance contract(s) must provide
that proceeds will be payable to the trustee; however the trustee shall be
required to pay over all proceeds of the contract(s) to the Participant's
designated Beneficiary in accordance with the distribution provisions of
this plan. 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 Article 8. Under no circumstances shall the trust
retain any part of the proceeds. In the event of any conflict between the
terms of this plan and the terms of any insurance contract purchased
hereunder, the plan provisions shall control.
Any life insurance contracts held in the Trust Fund or in the separate
trust are subject to the following limits:
(a) Ordinary life - For purposes of these incidental insurance provisions,
ordinary life insurance contracts are contracts with both nondecreasing
death benefits and nonincreasing premiums. If such contracts are held,
less than 1/2 of the aggregate employer contributions allocated to any
Participant will be used to pay the premiums attributable to them.
(b) Term and universal life - No more than 1/4 of the aggregate employer
contributions allocated to any participant will be used to pay the premiums
on term life insurance contracts, universal life insurance contracts, and
all other life insurance contracts which are not ordinary life.
(c) Combination - The sum of 1/2 of the ordinary life insurance premiums
and all other life insurance premiums will not exceed 1/4 of the aggregate
employer contributions allocated to any Participant.
14.11. VOTING; DELIVERY OF INFORMATION. The Trustee shall deliver, or
cause to be executed and delivered, to the Employer or Plan Administrator
all notices, prospectuses, financial statements, proxies and proxy
soliciting materials received by the Trustee relating to securities held by
the Trust or, if applicable, deliver these materials to the appropriate
Participant or the Beneficiary of a deceased Participant. The Trustee
shall not vote any securities held by the Trust except in accordance with
the written instructions of the Employer, Participant or the Beneficiary of
the Participant, if the Participant is deceased; however, the Trustee may,
in the absence of instructions, vote "present" for the sole purpose of
allowing such shares to be counted for establishment of a quorum at a
shareholders' meeting. The Trustee shall have no duty to solicit
instructions from Participants, Beneficiaries, or the Employer.
14.12. COMPENSATION AND EXPENSES OF TRUSTEE. The Trustee's fee for
performing its duties hereunder will be such reasonable amounts as the
Trustee may from time to time specify by written agreement with the
Employer. Such fee, any taxes of any kind which may be levied or assessed
upon or with respect to the Trust Fund, and any and all expenses, including
without limitation legal fees and expenses of administrative and judicial
proceedings, reasonably incurred by the Trustee in connection with its
duties and responsibilities hereunder will, unless some or all have been
paid by said Employer, be paid first from forfeitures resulting under
Section 7.07, then from the remaining Trust Fund and will, unless allocable
to the Accounts of particular Participants, be charged against the
respective Accounts of all Participants, in such reasonable manner as the
Trustee may determine.
14.13. RELIANCE BY TRUSTEE ON OTHER PERSONS. The Trustee may rely upon
and act upon any writing from any person authorized by the Employer or
Administrator to give instructions concerning the Plan and may conclusively
rely upon and be protected in acting upon any written order from the
Employer or Administrator or upon any other notice, request, consent,
certificate, or other instructions or paper reasonably believed by it to
have been executed by a duly authorized person, so long as it acts in good
faith in taking or omitting to take any such action. The Trustee need not
inquire as to the basis in fact of any statement in writing received from
the Employer or Administrator.
The Trustee will be entitled to rely on the latest certificate it has
received from the Employer or Administrator as to any person or persons
authorized to act for the Employer or Administrator hereunder and to sign
on behalf of the Employer or Administrator any directions or instructions,
until it receives from the Employer or Administrator written notice that
such authority has been revoked.
Notwithstanding any provision contained herein, the Trustee will be under
no duty to take any action with respect to any Participant's Account (other
than as specified herein) unless and until the Employer or Administrator
furnishes the Trustee with written instructions on a form acceptable to the
Trustee, and the Trustee agrees thereto in writing. The Trustee will not
be liable for any action taken pursuant to the Employer's or
Administrator's written instructions (nor for the collection of
contributions under the Plan, nor the purpose or propriety of any
distribution made thereunder).
14.14. INDEMNIFICATION BY EMPLOYER. The Employer shall indemnify and save
harmless the Trustee from and against any and all liability to which the
Trustee may be subjected by reason of any act or conduct (except willful
misconduct or negligence) in its capacity as Trustee, including all
expenses reasonably incurred in its defense.
14.15. CONSULTATION BY TRUSTEE WITH COUNSEL. The Trustee may consult with
legal counsel (who may be but need not be counsel for the Employer or the
Administrator) concerning any question which may arise with respect to its
rights and duties under the Plan and Trust, and the opinion of such counsel
will, to the extent permitted by law, be full and complete protection in
respect of any action taken or omitted by the Trustee hereunder in good
faith and in accordance with the opinion of such counsel.
14.16. PERSONS DEALING WITH THE TRUSTEE. No person dealing with the
Trustee will be bound to see to the application of any money or property
paid or delivered to the Trustee or to inquire into the validity or
propriety of any transactions.
14.17. RESIGNATION OR REMOVAL OF TRUSTEE. The Trustee may resign at any
time by written notice to the Employer, which resignation shall be
effective 60 days after delivery to the Employer. The Trustee may be
removed by the Employer by written notice to the Trustee, which removal
shall be effective 60 days after delivery to the Trustee.
Upon resignation or removal of the Trustee, the Employer may appoint a
successor trustee. Any such successor trustee will, upon written
acceptance of his appointment, become vested with the estate, rights,
powers, discretion, duties and obligations of the Trustee hereunder as if
he had been originally named as Trustee in this Agreement.
Upon resignation or removal of the Trustee, the Employer will no longer
participate in this prototype plan and will be deemed to have adopted an
individually designed plan. In such event, the Employer shall appoint a
successor trustee within said 60-day period and the Trustee will transfer
the assets of the Trust to the successor trustee upon receipt of sufficient
evidence (such as a determination letter or opinion letter from the
Internal Revenue Service or an opinion of counsel satisfactory to the
Trustee) that such trust will be a qualified trust under the Code.
The appointment of a successor trustee shall be accomplished by delivery
to the Trustee of written notice that the Employer has appointed such
successor trustee, and written acceptance of such appointment by the
successor trustee. The Trustee may, upon transfer and delivery of the
Trust Fund to a successor trustee, reserve such reasonable amount as it
shall deem necessary to provide for its fees, compensation, costs and
expenses, or for the payment of any other liabilities chargeable against
the Trust Fund for which it may be liable. The Trustee shall not be liable
for the acts or omissions of any successor trustee.
14.18. FISCAL YEAR OF THE TRUST. The fiscal year of the Trust will
coincide with the Plan Year.
14.19. DISCHARGE OF DUTIES BY FIDUCIARIES. The Trustee and the Employer
and any other fiduciary shall discharge their duties under the Plan and
this Trust Agreement solely in the interests of Participants and their
Beneficiaries in accordance with the requirements of ERISA.
14.20. AMENDMENT. In accordance with provisions of the Plan, and subject
to the limitations set forth therein, this Trust Agreement may be amended
by an instrument in writing signed by the Employer and the Trustee. No
amendment to this Trust Agreement shall divert any part of the Trust Fund
to any purpose other than as provided in Section 2 hereof.
14.21. PLAN TERMINATION. Upon termination or partial termination of the
Plan or complete discontinuance of contributions thereunder, the Trustee
will make distributions to the Participants or other persons entitled to
distributions as the Employer or Administrator directs in accordance with
the provisions of the Plan. In the absence of such instructions and unless
the Plan otherwise provides, the Trustee will notify the Employer or
Administrator of such situation and the Trustee will be under no duty to
make any distributions under the Plan until it receives written
instructions from the Employer or Administrator. Upon the completion of
such distributions, the Trust will terminate, the Trustee will be relieved
from all liability under the Trust, and no Participant or other person will
have any claims thereunder, except as required by applicable law.
14.22. PERMITTED REVERSION OF FUNDS TO EMPLOYER. If it is determined by
the Internal Revenue Service that the Plan does not initially qualify under
Section 401 of the Code, all assets then held under the Plan will be
returned by the Trustee, as directed by the Administrator, to the Employer,
but only if the application for determination is made by the time
prescribed by law for filing the Employer's return for the taxable year in
which the Plan was adopted or such later date as may be prescribed by
regulations. Such distribution will be made within one year after the date
the initial qualification is denied. Upon such distribution the Plan will
be considered to be rescinded and to be of no force or effect.
Contributions under the Plan are conditioned upon their deductibility
under Section 404 of the Code. In the event the deduction of a
contribution made by the Employer is disallowed under Section 404 of the
Code, such contribution (to the extent disallowed) must be returned to the
Employer within one year of the disallowance of the deduction.
Any contribution made by the Employer because of a mistake of fact must be
returned to the Employer within one year of the contribution.
14.23. GOVERNING LAW. This Trust Agreement will be construed,
administered and enforced according to ERISA and, to the extent not
preempted thereby, the laws of the Commonwealth of Massachusetts.
CORPORATEPLAN FOR RETIREMENTSM
PROFIT SHARING/401(K) PLAN
FIDELITY BASIC PLAN DOCUMENT NO. 7
AMENDMENT ONE
(NOTE: THIS AMENDMENT IS BEING MADE PURSUANT TO IRS REVENUE PROCEDURE
94-13.)
Section 2.01(a)(7) "Compensation" is amended to include:
In addition to other applicable limitations set forth in the plan, and
notwithstanding any other provision of the plan to the contrary, for plan
years beginning on or after January 1, 1994, the annual compensation of
each Employee taken into account under the plan shall not exceed the OBRA
'93 annual compensation limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner for increases in the cost of
living in accordance with section 401(a)(17)(B) of the Internal Revenue
Code. The cost-of-living adjustment in effect for a calendar year applies
to any period, not exceeding 12 months, over which compensation is
determined (determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93 annual
compensation 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.
Notwithstanding 2.01(a)(7)(A), for purpose of Section 4.02 (Additional
Limit on Deferral Contributions) and Section 4.04 (Limit on Matching
Contributions), the Employer may use Compensation as defined in Section
5.03(e)(2) excluding reimbursements or other expense allowances, fringe
benefits (cash and non-cash), moving expenses, deferred compensation and
welfare benefits, but including amounts that are not includable in the
gross income of the Participant under a salary reduction agreement by
reason of the application of Section 125, 402(a)(8), 402(h) or 403(b) of
the Code.
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.
(NOTE: THIS AMENDMENT IS BEING MADE PURSUANT TO IRS REVENUE PROCEDURE
93-47.)
Section 8.01(d) "Distribution of Benefits to Participants and
Beneficiaries" is amended to include:
If a distribution is one to which sections 401(a)(11) and 417 of the
Internal Revenue Code do not apply, such distribution may commence less
than 30 days after the notice required under section 1.411(a)-11(c) of the
Income Tax Regulations is given, provided that:
(1) the 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.
THE CORPORATEPLAN FOR RETIREMENTSM
(PROFIT SHARING/401(K) PLAN)
A FIDELITY PROTOTYPE PLAN
STANDARDIZED ADOPTION AGREEMENT 001
BASIC PLAN NO. 07
ADOPTION AGREEMENT
ARTICLE 1
STANDARDIZED PROFIT SHARING PLAN
1.01 PLAN INFORMATION
(A) NAME OF PLAN:
This is the
Plan (the "Plan").
(B) TYPE OF PLAN:
(1) 401(k) and Profit Sharing
(2) Profit Sharing Only
(3) 401(k) Only
(C) NAME OF PLAN ADMINISTRATOR, IF NOT THE EMPLOYER:
Address:
Phone Number:
The Plan Administrator is the agent for service of legal process for the
Plan.
(D) LIMITATION YEAR (check one):
(1) Calendar Year
(2) Plan Year
(3) Other:
(E) THREE DIGIT PLAN NUMBER:
(F) PLAN YEAR END (month/day):
(G) PLAN STATUS (check one):
(1) Effective Date of new Plan:
(2) Amendment Effective Date: _______________. This is (check one):
(A) an amendment of The CORPORATEplan FOR RETIREMENTSM Adoption Agreement
previously executed by the Employer; or
(B) a conversion from another plan document into The CORPORATEplan FOR
RETIREMENTSM.
The original effective date of the Plan:
The substantive provisions of the Plan shall apply prior to the Effective
Date to the extent required by the Tax Reform Act of 1986 or other
applicable laws.
1.02 EMPLOYER
(A) THE EMPLOYER IS:
Address:
Contact's Name:
Telephone Number:
(1) Employer's Tax Identification Number:
(2) Business form of Employer (check one):
(A) Corporation (D) Governmental
(B) Sole proprietor or partnership (E) Tax-exempt organization
(C) Subchapter S Corporation (F) Rural Electric Cooperative
(3) Employer's fiscal year end:
(4) Date business commenced:
(B) THE TERM "EMPLOYER" INCLUDES THE FOLLOWING RELATED EMPLOYER(S)
(AS DEFINED IN SECTION 2.01(A)(26)) THAT MUST BE INCLUDED IN THE PLAN AND
ARE LISTED BELOW FOR PURPOSES OF REFERENCE:
1.03 COVERAGE
(A) ALL EMPLOYEES WHO MEET THE CONDITIONS SPECIFIED BELOW WILL BE ELIGIBLE
TO PARTICIPATE IN THE PLAN:
(1) SERVICE REQUIREMENT (check one):
(A) no service requirement.
(B) three consecutive months of service (no minimum number Hours of
Service can be required).
(C) six consecutive months of service (no minimum number Hours of Service
can be required).
(D) one Year of Service (1,000 Hours of Service is required during the
Eligibility Computation Period.)
(2) AGE REQUIREMENT (check one):
(A) no age requirement.
(B) must have attained age ______ (not to exceed 21).
(3) THE CLASS OF EMPLOYEES ELIGIBLE TO PARTICIPATE IN THE PLAN (check one):
(A) includes all Employees of the Employer.
(B) includes all Employees of the Employer except for Employees covered
by a collective bargaining agreement.
(B) THE ENTRY DATE(S) SHALL BE (check one):
(1) the first day of each Plan Year (do not select if Section 1.03
(a)(1)(D) is elected or if there is an age requirement of greater than 20
1/2 in Section 1.03(a)(2)(B)).
(2) the first day of each Plan Year and the date six months later.
(3) the first day of each Plan Year and the first day of the fourth,
seventh, and tenth months.
(4) the first day of each month.
(C) DATE OF INITIAL PARTICIPATION - AN EMPLOYEE WILL BECOME A PARTICIPANT
UNLESS EXCLUDED BY SECTION 1.03(A)(3) ABOVE ON THE ENTRY DATE IMMEDIATELY
FOLLOWING THE DATE THE EMPLOYEE COMPLETES THE SERVICE AND AGE
REQUIREMENT(S) IN SECTION 1.03(A), IF ANY, EXCEPT (check one):
(1) No exceptions.
(2) Employees employed on the Effective Date in Section 1.01(g) will
become Participants on that date.
(3) Employees who meet the age and service requirement(s) of Section
1.03(a) on the Effective Date in Section 1.01(g) will become Participants
on that date.
1.04 COMPENSATION
(A) COMPENSATION WILL MEAN ALL OF EACH PARTICIPANT'S WAGES, TIPS, AND OTHER
COMPENSATION AS REPORTED ON IRS FORM W-2. COMPENSATION FOR SELF-EMPLOYED
INDIVIDUALS AND PARTNERS SHALL INCLUDE EARNED INCOME.
(B) COMPENSATION FOR THE FIRST YEAR OF PARTICIPATION
Contributions for the Plan Year in which an Employee first becomes a
Participant shall be determined based on the Employee's Compensation (check
one):
(1) For the entire Plan Year.
(2) For the portion of the Plan Year in which the Employee is eligible to
participate in the Plan.
1.05 CONTRIBUTIONS
(A) EMPLOYER CONTRIBUTIONS:
(1) FIXED FORMULA - NONINTEGRATED FORMULA (check (A) or (B)):
(A) Fixed Percentage Employer Contribution:
For each Plan Year, the Employer will contribute for each eligible
Participant an amount equal to __________% (not to exceed 15%) of such
Participant's Compensation.
(B) Fixed Flat Dollar Employer Contribution:
For each Plan Year, the Employer will contribute for each eligible
Participant an amount equal to $_________.
(2) DISCRETIONARY FORMULA
The Employer may decide each Plan Year whether to make a Discretionary
Employer
Contribution on behalf of eligible Participants in accordance with Section
4.06. Such contributions may only be FUNDED by the Employer AFTER the Plan
Year ends and shall be allocated to eligible Participants based upon the
following (check (A) or (B)):
(A) Nonintegrated Allocation Formula:
In the ratio that each eligible Participant's Compensation bears to the
total Compensation paid to all eligible Participants for the Plan Year.
(B) Integrated Allocation Formula:
In accordance with Section 4.06.
NOTE: An Employer who maintains any other plan that provides for Social
Security Integration (permitted disparity) may not elect (2)(B).
(3) ELIGIBILITY REQUIREMENTS
For purposes of 1.05(a)(1) and/or 1.05(a)(2), the Employer contribution
shall be made for each Participant who is EITHER employed by the Employer
on the last day of the Plan Year or earns more than 500 Hours of Service
during the Plan Year.
(B) DEFERRAL CONTRIBUTIONS
(1) REGULAR CONTRIBUTIONS
The Employer shall make a Deferral Contribution in accordance with Section
4.01 on behalf of each Participant who has an executed salary reduction
agreement in effect with the Employer for the payroll period in question,
not to exceed ___________% (NO MORE THAN 15%) of Compensation for that
period.
(A) A Participant may increase or decrease, on a prospective basis, his
salary reduction agreement percentage (check one):
(i) As of the beginning of each payroll period.
(ii) As of the first day of each month.
(iii) As of the next Entry Date.
(iv) (Specify, but must be at least once per Plan Year)
(B) A Participant may revoke, on a prospective basis, a salary reduction
agreement at any time upon proper notice to the Administrator but in such
case may not file a new salary reduction agreement until (check one):
(i) The first day of the next Plan Year.
(ii) Any subsequent Plan Entry Date.
(iii) (Specify, but must be at least once per Plan Year)
(2) CATCH-UP CONTRIBUTIONS
The Employer may allow Participants upon proper notice and approval to
enter into a special salary reduction agreement to make additional Deferral
Contributions in an amount up to 100% of their Compensation for the payroll
period(s) in the final month of the Plan Year.
(3) BONUS CONTRIBUTIONS
The Employer may allow Participants upon proper notice and approval to
enter into a special salary reduction agreement to make Deferral
Contributions in an amount up to 100% of any Employer paid cash bonuses
made for such Participants during the Plan Year.
NOTE: A Participant's contributions under (2) and/or (3) may not cause the
Participant to exceed the percentage limit specified by the Employer in (1)
for the Plan Year. The Employer has the right to restrict a Participant's
right to make Deferral Contributions if they will adversely affect the
Plan's ability to pass the actual deferral percentage test and/or the
actual contribution percentage test.
(4) QUALIFIED DISCRETIONARY CONTRIBUTIONS
The Employer may contribute an amount which it designates as a Qualified
Discretionary Contribution to be included in the Actual Deferral Percentage
or Actual Contribution Percentage test. Qualified Discretionary
Contributions shall be allocated to Non-highly Compensated Employees (check
one):
(A) in the ratio which each such Participant's Compensation for the Plan
Year bears to the total of all such Participants' Compensation for the
Plan Year.
(B) as a flat dollar amount for each such Participant for the Plan Year.
(C) MATCHING CONTRIBUTIONS (only if Section 1.05(b) is checked)
(1) THE EMPLOYER SHALL MAKE A MANDATORY MATCHING CONTRIBUTION ON BEHALF OF
EACH PARTICIPANT IN AN AMOUNT EQUAL TO THE FOLLOWING PERCENTAGE OF A
PARTICIPANT'S DEFERRAL CONTRIBUTIONS DURING THE PLAN YEAR (check one):
(A) 50%
(B) 100%
(C) %
(D) (Tiered Match) % of the first % of the Participant's
Compensation contributed to the Plan,
% of the next % of the Participant's Compensation contributed to
the Plan,
% of the next % of the Participant's Compensation contributed to
the Plan.
NOTE: THE PERCENTAGES SPECIFIED ABOVE FOR MATCHING CONTRIBUTIONS MAY NOT
INCREASE AS THE PERCENTAGE OF COMPENSATION CONTRIBUTED INCREASES.
(E) The percentage declared for the year, if any, by a Board of
Directors' Resolution.
(2) THE EMPLOYER MAY AT PLAN YEAR END MAKE AN ADDITIONAL MATCHING
CONTRIBUTION EQUAL TO A PERCENTAGE DECLARED BY THE EMPLOYER, THROUGH A
BOARD OF DIRECTORS' RESOLUTION (OR BY A LETTER OF INTENT FOR A SOLE
PROPRIETOR OR PARTNERSHIP), OF THE DEFERRAL CONTRIBUTIONS MADE BY EACH
PARTICIPANT DURING THE PLAN YEAR (only if an option is checked under
Section 1.05(c)(1)).
(3) MATCHING CONTRIBUTION LIMITS (check the appropriate box(es) if any):
(A) Deferral Contributions in excess of ________% of the Participant's
Compensation for the period in question shall not be considered for
Matching Contributions.
Note: If the Employer elects a percentage limit in (A) above and requests
the Trustee to account separately for matched and unmatched Deferral
Contributions, the Matching Contributions allocated to each Participant
must be computed, and the percentage limit applied, based upon each payroll
period.
(B) Matching Contributions for each Participant for each Plan Year shall
be limited to $___________.
(D) EMPLOYEE AFTER-TAX CONTRIBUTIONS (check one):
(1) FUTURE CONTRIBUTIONS
Participants may make voluntary non-deductible Employee Contributions
pursuant to Section 4.09 of the Plan. This option may only be elected if
the Employer has elected to permit Deferral Contributions under Section
1.05(b). Matching Contributions by the Employer are not allowed on any
voluntary non-deductible Employee Contributions. Withdrawals are limited
to one per year unless Employee Contributions were allowed under a previous
plan document which authorized more frequent withdrawals.
(2) FROZEN CONTRIBUTIONS
Participants may not make voluntary non-deductible Employee Contributions,
but the Employer does maintain frozen Participant voluntary non-deductible
Employee Contribution Accounts.
1.06 RETIREMENT AGE(S)
(A) THE NORMAL RETIREMENT AGE UNDER THE PLAN IS (check one):
(1) age 65.
(2) age ____ (specify between 55 and 64).
(3) later of the age ___ (can not exceed 65) or the fifth anniversary
of the Participant's Employment Commencement Date.
(B) THE EARLY RETIREMENT AGE IS THE FIRST DAY OF THE MONTH AFTER THE
PARTICIPANT ATTAINS AGE (SPECIFY 55 OR GREATER) AND COMPLETES
YEARS OF SERVICE FOR VESTING.
(C) A PARTICIPANT IS ELIGIBLE FOR DISABILITY RETIREMENT IF HE/SHE (check
the appropriate box(es)):
(1) satisfies the requirements for benefits under the Employer's
Long-Term
Disability Plan.
(2) satisfies the requirements for Social Security disability benefits.
(3) is determined to be disabled by a physician approved by the
Employer.
1.07 VESTING SCHEDULE
(A) THE PARTICIPANT'S VESTED PERCENTAGE IN EMPLOYER CONTRIBUTIONS (FIXED OR
DISCRETIONARY) ELECTED IN SECTION 1.05(A) AND/OR MATCHING CONTRIBUTIONS
ELECTED IN SECTION 1.05(C) SHALL BE BASED UPON THE SCHEDULE(S) SELECTED
BELOW.
(1) EMPLOYER CONTRIBUTIONS (2) MATCHING CONTRIBUTIONS
(check one): (check one):
(A) N/A - No Employer Contributions (A) N/A - No Matching Contributions
(B) 100% Vesting immediately (B) 100% Vesting immediately
(C) 3 year cliff (see C below) (C) 3 year cliff (see C below)
(D) 6 year graduated (see D below) (D) 6 year graduated (see D below)
(E) Other vesting (complete E1 below) (E) Other vesting (complete E2
below)
YEARS OF VESTING SCHEDULE
SERVICE FOR
VESTING C D E1 E2
0 0% 0% ___ ___
1 0% 0% ___ ___
2 0% 20% ___ ___
3 100% 40% ___ ___
4 100% 60% ___ ___
5 100% 80% ___ ___
6 100% 100% 100% 100%
NOTE: A schedule elected under E1 or E2 above must be at least as
favorable as one of the schedules in C or D above.
(B) YEARS OF SERVICE FOR VESTING SHALL EXCLUDE (check one):
(1) for new plans, service prior to the Effective Date as defined in
Section 1.01(g)(1).
(2) for existing plans converting from another plan document, service
prior to the original Effective Date as defined in Section 1.01(g)(2).
1.08 PREDECESSOR EMPLOYER SERVICE
SERVICE FOR PURPOSES OF ELIGIBILITY IN SECTION 1.03(A)(1) AND VESTING IN
SECTION 1.07(A) OF THIS PLAN SHALL INCLUDE SERVICE WITH THE FOLLOWING
EMPLOYER(S):
(A)
(B)
(C)
(D)
1.09 PARTICIPANT LOANS
PARTICIPANT LOANS (check (a) or (b)):
(A) WILL BE ALLOWED IN ACCORDANCE WITH SECTION 7.09, SUBJECT TO A
$1,000 MINIMUM AMOUNT, AND WILL BE GRANTED (check (1) or (2)):
(1) for any purpose.
(2) for hardship withdrawal (as defined in Section 7.10) purposes only.
(B) WILL NOT BE ALLOWED.
1.10 HARDSHIP WITHDRAWALS
PARTICIPANT WITHDRAWALS FOR HARDSHIP PRIOR TO TERMINATION OF EMPLOYMENT
(check one):
(A) WILL BE ALLOWED IN ACCORDANCE WITH SECTION 7.10, SUBJECT TO A $1,000
MINIMUM AMOUNT.
(B) WILL NOT BE ALLOWED.
1.11 DISTRIBUTIONS
(A) SUBJECT TO ARTICLES 7 AND 8 AND (B) BELOW, DISTRIBUTIONS UNDER THE
PLAN WILL BE PAID (check the appropriate box(es)):
(1) as a lump sum.
(2) under a systematic withdrawal plan (installments).
(B) CHECK IF A PARTICIPANT WILL BE ENTITLED TO RECEIVE A DISTRIBUTION OF
ALL OR ANY PORTION OF THE FOLLOWING ACCOUNTS WITHOUT TERMINATING
EMPLOYMENT UPON ATTAINMENT OF AGE 59 1/2 (CHECK ONE):
(1) Deferral Contribution Account
(2) All Accounts
(C) CHECK IF THE PLAN WAS CONVERTED (BY PLAN AMENDMENT) FROM ANOTHER
DEFINED CONTRIBUTION PLAN, AND THE BENEFITS WERE PAYABLE AS (check the
appropriate box(es)):
(1) a form of single or joint and survivor life annuity.
(2) an in-service withdrawal of vested employer contributions
maintained in a participant's account (check (A) and/or (B)):
(A) for at least (24 or more) months.
(B) after the Participant has at least 60 months of participation.
(3) another distribution option that is a "protected benefit" under
Section 411(d)(6) of the Internal Revenue Code. Please attach a separate
page identifying the distribution option(s).
These additional forms of benefit may be provided for such plans under
Articles 7 or 8.
NOTE: Under Federal Law, distributions to Participants must generally begin
no later than April 1 following the year in which the Participant attains
age 70 1/2.
1.12 TOP HEAVY STATUS
(A) THE PLAN SHALL BE SUBJECT TO THE TOP-HEAVY PLAN REQUIREMENTS OF ARTICLE
9 (check one):
(1) for each Plan Year.
(2) for each Plan Year, if any, for which the Plan is Top-Heavy as
defined in Section 9.02.
(3) Not applicable. (This option is available for plans covering only
employees subject to a collective bargaining agreement and there are no
Employer or Matching Contributions elected in Section 1.05.)
(B) IN DETERMINING TOP-HEAVY STATUS, IF NECESSARY, FOR AN EMPLOYER WITH AT
LEAST ONE DEFINED BENEFIT PLAN, THE FOLLOWING ASSUMPTIONS SHALL APPLY:
(1) Interest rate: _____% per annum
(2) Mortality table: _____________
(3) Not Applicable
(C) IN THE EVENT THAT THE PLAN IS TREATED AS TOP-HEAVY FOR A PLAN YEAR,
EACH NON-KEY EMPLOYEE SHALL RECEIVE AN EMPLOYER CONTRIBUTION OF AT LEAST
(3, 4, 5, OR 7 1/2) % OF COMPENSATION FOR THE PLAN YEAR IN ACCORDANCE
WITH SECTION 9.03 (check one):
(1) under this Plan in any event.
(2) under this Plan only if the Participant is not entitled to such
contribution under another qualified plan of the Employer.
(3) Not applicable. (This option is available for plans covering only
employees subject to a collective bargaining agreement and there are no
Employer or Matching Contributions elected in Section 1.05.)
NOTE: Such minimum Employer contribution may be less than the percentage
indicated in (c) above to the extent provided in Section 9.03(a).
1.13 TWO OR MORE PLANS - CODE SECTION 415 LIMITATION ON ANNUAL ADDITIONS
If the Employer maintains or ever maintained another qualified plan in
which any Participant in this Plan is (or was) a participant or could
become a participant, the Employer must complete this section. The
Employer must also complete this section if it maintains a welfare benefit
fund, as defined in Section 419(e) of the Code, or an individual medical
account, as defined in Section 415(l)(2) of the Code, under which amounts
are treated as annual additions with respect to any Participant in this
Plan.
(A) IF THE EMPLOYER MAINTAINS, OR MAINTAINED, ANY OTHER DEFINED
CONTRIBUTION PLAN(S) WHICH ARE NOT MASTER OR PROTOTYPE PLANS, ANNUAL
ADDITIONS FOR ANY LIMITATION YEAR TO THIS PLAN WILL BE LIMITED (check one):
(1) in accordance with Section 5.03 of this Plan.
(2) in accordance with another method set forth on an attached separate
sheet.
(3) Not Applicable.
(B) IF THE EMPLOYER MAINTAINS, OR MAINTAINED, ANY DEFINED BENEFIT PLAN(S),
THE SUM OF THE DEFINED CONTRIBUTION FRACTION AND DEFINED BENEFIT FRACTION
FOR A LIMITATION YEAR MAY NOT EXCEED THE LIMITATION SPECIFIED IN CODE
SECTION 415(E), MODIFIED BY SECTION 416(H)(1) OF THE CODE. THIS COMBINED
PLAN LIMIT WILL BE MET AS FOLLOWS (check one):
(1) Annual Additions to this Plan are limited so that the sum of the
Defined
Contribution Fraction and the Defined Benefit Fraction does not exceed
1.0.
(2) another method of limiting Annual Additions or reducing projected
annual benefits is set forth on an attached schedule.
(3) Not Applicable.
1.14 ESTABLISHMENT OF TRUST AND INVESTMENT DECISIONS
(A) INVESTMENT DIRECTIONS
Participant Accounts will be invested (check one):
(1) in accordance with investment directions provided to the Trustee by
the Employer for allocating all Participant Accounts among the options
listed in (b) below.
(2) in accordance with investment directions provided to the Trustee by
each Participant for allocating his entire Account among the options listed
in
(b) below.
(3) in accordance with investment directions provided to the Trustee by
each Participant for all contribution sources in a Participant's Account
except the following sources shall be invested as directed by the Employer
(check (A) and/or (B)):
(A) Fixed or Discretionary Employer Contributions
(B) Employer Matching Contributions
The Employer must direct the applicable sources among the same investment
options made available for Participant directed sources listed in (b)
below.
(B) PLAN INVESTMENT OPTIONS
The Employer hereby establishes a Trust under the Plan in accordance with
the provisions of Article 14, and the Trustee signifies acceptance of its
duties under Article 14 by its signature below. Participant Accounts
under the Trust will be invested among the Fidelity Funds listed below
pursuant to Participant and/or Employer directions.
Fund Name Fund Number
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
NOTE: An additional annual recordkeeping fee will be charged for each fund
in excess of five funds.
To the extent that the Employer selects as an investment option the Managed
Income Portfolio of the Fidelity Group Trust for Employee Benefit Plans
(the "Group Trust"), the Employer hereby (A) agrees to the terms of the
Group Trust and adopts said terms as a part of this Agreement and (B)
acknowledges that it has received from the Trustee a copy of the Group
Trust, the Declaration of Separate Fund for the Managed Income Portfolio of
the Group Trust, and the Circular for the Managed Income Portfolio.
NOTE: The method and frequency for change of investments will be determined
under the rules applicable to the selected funds or, if applicable, the
rules of the Employer adopted in accordance with Section 6.03. Information
will be provided regarding expenses, if any, for changes in investment
options.
1.15 RELIANCE ON OPINION LETTER
An adopting Employer who has ever maintained or who later adopts any plan
(including a welfare
benefit fund, as defined in Code Section 419(e)), which provides
post-retirement medical benefits
allocated to separate accounts for key employees, as defined in Code
Section 419A(d)(3), or an
individual medical account, as defined in Code Section 415(1)(2) in
addition to this Plan (other than
Fidelity's Paired Basic Plan Number 09) may not rely on the opinion letter
issued by the National
Office of the Internal Revenue Service as evidence that this Plan is
qualified under Section 401 of
the Code. If the Employer who adopts or maintains multiple plans wishes to
obtain reliance that his or her plan(s) qualified, application for a
determination letter should be made to the appropriate Key District
Director of the Internal Revenue Service. Failure to fill out properly the
Adoption Agreement may result in disqualification of the Plan.
The Employer may not rely on the opinion letter issued by the National
Office of the Internal Revenue Service as evidence that this Plan is
qualified under section 401 of the Code unless the terms of the Plan, as
herein adopted or amended, that pertain to the requirements of sections
401(a)(4), 401(a)(17), 401(1), 401(a)(5), 410(b) and 414(s) of the Code, as
amended by the Tax Reform Act of 1986, or later laws, (a) are made
effective retroactively to the first day of the first Plan Year beginning
after December 31, 1988 (or such later date on which these requirements
first become effective with respect to this Plan) or (b) are made effective
no later than the first day on which the Employer is no longer entitled,
under regulations, to rely on a reasonable, good faith interpretation of
these requirements, and the prior provisions of the Plan constitute such an
interpretation.
This Adoption Agreement may be used only in conjunction with Fidelity
Prototype Plan Basic
Plan Document No. 07. The Prototype Sponsor shall inform the adopting
Employer of any amendments made to the Plan or of the discontinuance or
abandonment of the prototype plan document.
1.16 PROTOTYPE INFORMATION:
Name of Prototype Sponsor: Fidelity Management & Research Co.
Address of Prototype Sponsor: 82 Devonshire Street
Boston, MA 02109
Questions regarding this prototype document may be directed to the
following telephone number:
1-(800) 343-9184.
EXECUTION PAGE
(FIDELITY'S COPY)
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed this ________day of _______________, 19_______.
Employer
By
Title
Employer
By
Title
Accepted by
Fidelity Management Trust Company, as Trustee
By Date
Title
EXECUTION PAGE
(EMPLOYER'S COPY)
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed this ________day of _______________, 19_______.
Employer
By
Title
Employer
By
Title
Accepted by
Fidelity Management Trust Company, as Trustee
By Date
Title
INSTRUCTIONS - STANDARDIZED PROFIT SHARING/401(K) PLAN
ADOPTION AGREEMENT
All sections of this Adoption Agreement must be completed, except where
stated as optional. AN EMPLOYER MAY ONLY SELECT THE OPTIONS LISTED. DUE
TO INTERNAL REVENUE SERVICE REGULATIONS AN EMPLOYER MAY NOT MAKE ANY
CHANGES TO THE PRINTED LANGUAGE IN THIS ADOPTION AGREEMENT, NO MATTER HOW
SLIGHT. AN EMPLOYER SHOULD CONSULT WITH ITS ATTORNEY AND/OR ACCOUNTANT FOR
ASSISTANCE IN COMPLETING THIS AGREEMENT.
1.01. PLAN INFORMATION:
(a) Enter the legal name of the Plan.
(b) Type of Plan (Select one option):
(b)(1) A 401(K) AND PROFIT SHARING PLAN includes Employee Deferral
Contributions, Employer Matching Contributions (optional), Employer Fixed
or Discretionary Contributions and Qualified Discretionary Contributions
(optional).
(b)(2) A PROFIT SHARING PLAN includes only Employer Fixed or Discretionary
Contributions.
(b)(3) A 401(K) PLAN includes Employee Deferral Contributions, Employer
Matching Contributions (optional) and Qualified Discretionary Contributions
(optional). Check this option if the Plan has 401(k) plan features and
there is a frozen profit sharing plan source for Participant Accounts.
(c) Complete only if the Plan Administrator is not the Employer. (Fidelity
is NOT the Plan Administrator). A Committee may be designated to act on
behalf of the Plan Administrator. However, in such case, the Employer or
other Plan Administrator would still be considered the Plan Administrator.
(d) "Limitation Year" refers to the twelve-month period used to determine
if the Internal Revenue Code Section 415 annual addition limitation has
been exceeded for a Participant. If an Employer is a member of a
controlled group of businesses (as defined by the Internal Revenue Code)
and adopts this Plan, then the Limitation Year for all Employer plans,
(regardless of whether the other Related Employers adopt this Plan) must be
the same. (Check one only.)
(e) This is the three digit number assigned to the plan as required by the
Internal Revenue Service. For a new plan, if the Employer does not
currently or has never maintained another qualified retirement plan, then
this Plan Number will be "001." If the Employer currently maintains or has
ever maintained another qualified retirement plan then this Plan will be
"002." If the Employer currently maintains or has ever maintained two
other qualified retirement plans then this Plan will be "003," ETC. An
existing Employer plan that is a conversion from another plan document must
use the same three digit plan number currently in effect.
(f) Enter the month and day of the Plan Year end (I.E., December 31). The
Plan Year must be the last day of a month.
(g)(1) (Select (1) or (2).) If this is a new plan then enter the Effective
Date. Generally, the Effective Date for a new plan may be any date during
the initial year the Plan is established. This date will determine the
appropriate Entry Date(s) for eligible Employees under Section 1.03(b), the
measurement period to determine eligible Compensation for new Participants
under Section 1.04(b), and the maximum Participant annual addition
limitation for the initial Plan Year. An Employer may have an Effective
Date that is different from the Fidelity Implementation Date (This is the
date an Employer's Plan is implemented with Fidelity as identified in the
Fidelity Service Agreement.) For example, an Employer's Plan may have a
January 1, 1994, Effective Date but a June 1, 1994, Implementation Date.
If this Plan is a "spin-off" from a prior plan, then the Employer must
check option (g)(1). A "spin-off" is when an existing qualified retirement
plan is separated into one or more plans. The separation may be the result
of a business entity selling a division or portion of its assets to the
Employer, or when the Employer wants to separate one plan into two or more
plans.
(g)(2) Enter the Effective Date of Amendment to The CORPORATEplan FOR
RETIREMENTSM. This is the date that all Plan assets will be wired to
Fidelity and when the provisions in this Adoption Agreement will become
effective. This date MUST be the first day of a month. The Effective Date
for an Employer checking option (A) below must be the same date as the
Implementation Date. The Implementation Date is also identified in the
Fidelity Service Agreement.
(A) If an Employer previously adopted The CORPORATEplan FOR RETIREMENTSM
and is amending or restating it, then check this option. Also enter the
Plan's original Effective Date on the line below (B). (This is the date
the Plan was originally established by the Employer.)
(B) If this is an amendment or conversion of the Employer's Plan from
another plan document then check this option. Also enter the Plan's
original Effective Date on the line below (B). (This is the date the Plan
was originally established by the Employer.)
1.02. EMPLOYER:
(a) Enter the Employer's legal name, principal address, contact name and
phone number. If one or more Related Employers are adopting this Plan then
the Employer identified in this section should be the Employer sponsoring
the Plan. A union may not be listed as an Employer, but an Employer may
establish a Plan for its employees covered by a collective bargaining
agreement with a union. An association may establish a Plan only for its
own Employees. The association may not establish a Plan for its members.
(a)(1) Enter the Employer's Federal tax identification number. This is not
the Federal tax identification number of the Plan.
(a)(2) Select the business form(s) of the Employer. Related Employers
under 1.02.(b) adopting The CORPORATEplan FOR RETIREMENTSM that have
multiple business forms may select more than one business form, if
applicable.
NOTE: Tax-exempt employers and plans of government employers are not
allowed to establish 401(k) plans. However, plans of tax-exempt employers
adopted before July 2, 1986, and plans of state and local governments
adopted before May 6, 1986, are not subject to this restriction.
(a)(3) Enter the month and day of the Employer's, not the Plan's, fiscal
tax year end.
(a)(4) Enter the date the Employer's business commenced.
(b) If an Employer is part of an affiliated service group or controlled
group of employers (collectively defined as "Related Employers") then all
Related Employers MUST be included in this Plan. List all Related
Employers in this section. (Unrelated Employers CANNOT be included as part
of the Employer's Plan. Please consult your attorney and/or accountant
for assistance on the definition of legally Related Employers.) Each
Related Employer must take the appropriate legal action (i.e., Board of
Directors' Resolution for a corporation) to be included as part of the
Employer's Plan. Furthermore, all eligible Participants, regardless of
whether employed by the Employer or a Related Employer must receive a
uniform allocation percentage of compensation (I.E., 5% of eligible
Compensation) under Section 1.05(a), if any, and/or the same uniform
matching percentage (I.E., 50% match for each $1.00 of Deferral
Contributions) under Section 1.05(c).
1.03. COVERAGE:
(a) An Employer may require Employees to complete a specified minimum
period of employment and/or attain a minimum age to be eligible to
participate in the Plan. An Employer's Plan that is a 401(k) and a Profit
Sharing Plan must select the same service requirement for the 401(k) and
profit sharing portion of the Plan.
(a)(1) (Select one option.) The maximum Employee eligibility service
requirement allowed by the Internal Revenue Service for an Employer's
401(k) plan is one year of service. An Employer may elect no service
requirement (Option A), a three consecutive months requirement (Option B),
or a six consecutive months requirement (Option C). However, if Option B
or C is elected, the Employer CANNOT require an Employee to work a
specified number of hours. For this purpose, "consecutive" means
uninterrupted period of employment with the Employer or Related Employer.
If the one year service requirement is selected (Option D) then the
Employee MUST complete 1,000 Hours of Service with the Employer during the
twelve month period beginning on his/her date-of-hire and ending on his/her
employment anniversary date.
(a)(2) (Select one option.) An Employer may elect not to have an age
requirement (Option A) or an Employer may specify an age requirement as
long as it is not greater than 21 (Option B).
(a)(3)(A) If ALL Employees of the Employer and Related Employers are
eligible to participate in the Plan after meeting the service and age
requirement(s), if any, then select this option.
(a)(3)(B) An Employer may exclude certain non-discriminatory groups of
Employees from participating in the Plan. An Employer may exclude
collective bargaining employees as defined in Section 2.01(a)(10) of the
Basic Plan Document by checking this option.
(b) (Select one option.) The Entry Date is the date an eligible Employee
may actually begin participating in the Plan. Participation may occur only
ON OR AFTER the date an Employee satisfies the service and age
requirement(s). Option (1) provides for an annual Entry Date. Option (1)
may not be selected if an Employer elected a one-year service requirement
in Section 1.03(a)(1)(D) or an age requirement greater than 20 1/2 in
Section 1.03(a)(2)(B). Option (2) provides for semi-annual Entry Dates,
Option (3) provides for quarterly Entry Dates and Option (4) provides for
monthly Entry Dates. An Employee may become eligible to participate in the
Plan on the Effective Date if Section 1.03(c)(2) or (3) is selected.
(c) (Select one option.) Upon adoption of The CORPORATEplan FOR
RETIREMENTSM, an Employer may determine when an Employee who is not yet
otherwise eligible may become a Participant in the Plan. The Employer has
three different options.
(c)(1) If this option is selected then an Employee must satisfy the service
and age requirement(s) in Section 1.03(a)(1) and (2) before being eligible
to participate in the Plan on the Entry Date(s) elected in Section 1.03(b).
(c)(2) If this option is checked then an Employee who is employed by the
Employer on the Effective Date in Section 1.01(g) is eligible to
participate in the Plan on the Effective Date regardless of whether or not
he/she has satisfied the service and age requirement(s) in Section 1.03(a).
This is a special ONE-TIME election for the Employer due to the adoption of
The CORPORATEplan FOR RETIREMENTSM. An eligible Employee is considered a
Participant and will be included in the appropriate annual Internal Revenue
Code tests (I.E. minimum coverage, minimum participation, annual addition,
actual deferral percentage and actual contribution percentage tests, ETC.).
Therefore, an eligible Participant who elects not to make any Employee
Deferral Contributions under Section 1.05(b)(1) as of the Effective Date in
Section 1.01(g) may make them on the next available date under Section
1.05(b)(1)(A).
(c)(3) If this option is checked then an Employee must satisfy the service
and age requirement(s) in Section 1.03(a) before being eligible to
participate in the Plan on the earlier of the Effective Date in Section
1.01(g) or the next Entry Date. Checking this option creates a special
ONE-TIME Entry Date based upon the Effective Date.
1.04. COMPENSATION (SELECT ONE OPTION):
(a) Compensation is defined under the Plan as total paid Compensation which
is reportable as earnings in the wages, tips and other Compensation box on
the annual IRS tax Form W-2 ("W-2 Compensation"). For purposes of
determining Employee and Employer contributions under Section 1.05, W-2
Compensation is modified as follows:
to include:
Internal Revenue Code Section 401(k) salary deferrals (known as Deferral
Contributions under this Plan);
Internal Revenue Code Section 125 salary deferrals (Employee pre-tax
contributions to a "cafeteria plan");
Elective contributions under Internal Revenue Code Sections 402(h)
(Simplified Employee Pension), 403(b) (Tax Sheltered Annuities), other
deferred compensation described in Code Section 457(b) (Plan of State and
Local Governments and Tax-Exempt Organizations) or 414(h)(2) (Plan of a
State or Political Subdivision of the Government); and
to exclude:
Deferred compensation;
Fringe benefits (cash and non-cash);
Moving expenses;
Reimbursements or other expense allowances;
Welfare benefits.
This modified W-2 Compensation definition meets the "safe harbor"
requirements of the regulations under Internal Revenue Code Section 414(s).
Compensation for purposes of the Internal Revenue Code actual deferral
percentage test and the actual contribution percentage test will be based
upon the aforementioned definition.
SECTION 1.04 CONTINUED ON NEXT PAGE.
(b)(1) Employer Contributions may be allocated to a first-year eligible
Participant on the basis of his/her Compensation for the entire Plan Year.
(b)(2) Employer Contributions may be allocated to a first year eligible
Participant only for the portion of the Plan Year that he/she is eligible
to participate in the Plan. Compensation paid prior to a Participant's
date of participation will be not be considered in allocating Employer
contributions in Section 1.05(a), Deferral Contributions in Section
1.05(b)(2) and (3), Matching Contributions in Section 1.05(c) and Employee
After-Tax Contributions in Section 1.05(d). For example, assume a
Participant satisfied the service and age requirements in Section 1.03(a)
and is eligible to participate in a calendar Plan Year on July 1.
Compensation for purposes of allocating all of the aforementioned
contributions for the initial Plan Year will be based upon the
Participant's Compensation from July 1 through December 31. Thereafter,
the Participant's Compensation will be based upon the entire Plan Year
unless he/she terminates employment before the end of a Plan Year.
Regardless of which option in Section 1.04(b) is selected, Compensation
for the initial Plan Year for a new Plan should be based upon eligible
Participant Compensation, subject to Section 1.04(b), from the Effective
Date in Section 1.01(g)(1) through the end of the first Plan Year. If the
time from the Effective Date in Section 1.01(g)(1) through the end of the
first Plan Year is less than twelve months, then the Plan has a short Plan
Year for the initial year. The Internal Revenue Code Section 415 annual
addition limitation for each Participant in the initial Plan Year must be
adjusted accordingly.
1.05. EMPLOYER CONTRIBUTIONS:
To establish a 401(K) AND PROFIT SHARING PLAN, complete (a) and (b).
Options (c) and (d) are optional.
To establish only a PROFIT SHARING PLAN, complete (a) only.
To establish only a 401(K) PLAN, complete (b). Options (c) and (d) are
optional.
(a) (Optional) The contributions in Section 1.05(a) are EMPLOYER PROFIT
SHARING CONTRIBUTIONS. An Employer with a 401(k) and Profit Sharing or a
Profit Sharing only Plan must select an option in Section 1.05(a)(1) and/or
Section 1.05(a)(2). All Employer Contributions (Fixed, Discretionary,
Matching, and Qualified Discretionary) and Employee Deferral Contributions
are subject to the Internal Revenue Code Section 404(a) annual tax
deductible limit. A profit sharing and/or 401(k) plan deduction is limited
annually to 15% of total Compensation for all eligible Participants.
Participants who are employed on the last day of the Plan Year OR have
worked at least 500 hours of service during the Plan Year ARE ENTITLED to
receive an Employer Contribution, if one is made by the Employer for that
Plan Year.
(a)(1) (Optional) An Employer may annually elect to contribute a profit
sharing contribution to each eligible Participant based upon the same fixed
percentage of Participant Compensation (Option (A)) or based upon the same
fixed flat dollar amount for each eligible Participant (Option (B)).
Employer Contributions under either of these two options are made according
to a pre-determined Participant allocation formula and are considered
profit sharing contributions. The Employer will be legally obligated to
make the required contributions within the prescribed time limit each year
regardless of profits.
(a)(2) (Optional) An Employer may elect to contribute a discretionary
profit sharing contribution, if any, each year by adoption of a corporate
Board of Directors' Resolution. A Sole Proprietor or a Partnership must
write a Letter of Intent declaring the Employer contribution for a
particular Plan Year.
(A) If the non-integrated profit sharing contribution formula is elected,
contributions are allocated for the particular Plan Year to each eligible
Participant in the ratio that each eligible Participant's Compensation
bears to the total Compensation of all eligible Participants for that Plan
Year.
(B) If the integrated profit sharing contribution formula is elected,
contributions are allocated for the particular Plan Year to each eligible
Participant using a formula that is integrated with Social Security.
Employer contributions are allocated in two steps.
SECTION 1.5 continued on next page.
FIRST - Contributions are allocated to each eligible Participant in the
ratio that each eligible Participant's total Compensation, plus
Compensation in excess of the Social Security Taxable Wage Base (known as
"Excess Compensation") bears to the total eligible Compensation of all
eligible Participants, plus the Compensation of all eligible Participants
in excess of the Social Security Taxable Wage Base. The Social Security
Taxable Wage Base is the annual FICA limit determined by the Social
Security Administration. The allocation to each participant in the first
step may not exceed 5.7% of each Participant's total Compensation plus
Excess Compensation.
SECOND - Remaining contributions are allocated in the ratio that each
eligible Participant's Compensation bears to the total Compensation of all
eligible Participants.
NOTE: If the Plan is top-heavy in accordance with Internal Revenue Code
Section 416 then the Employer must contribute the required minimum
top-heavy contribution specified in Section 1.12(c). The top-heavy
minimum contribution is allocated prior to the aforementioned two steps.
(a)(3) Participants who are employed on the last day of the Plan Year OR
have worked at least 500 Hours of Service during the Plan Year ARE ENTITLED
to receive an Employer contribution, if one is made by the Employer for
that Plan Year.
(b)(1) (Optional). An Employer with a 401(k) and Profit Sharing or a
401(k) Plan only must complete Section 1.05(b)(1). An Employer may allow a
Participant to elect to contribute Regular Deferral Contributions in a
whole percentage, from 1% to 15%, of Compensation into the Plan. Deferral
Contributions may only be withheld from a Participant's Compensation on a
prospective basis after he/she has properly completed and executed a
written salary deferral election. An Employer cannot require a minimum
Deferral Contribution of more than one percent of his/her Compensation.
The Internal Revenue Code's annual calendar-year limit for a Participant's
Deferral Contributions is $8,994 for 1993 (adjusted annually by the
Secretary of Treasury). The specified percentage cannot be exceeded for
any particular payroll, unless the Participant elects a Catch-Up Deferral
Contribution in Section (b)(2) or a Bonus Deferral Contribution in Section
(b)(3). In either of these two circumstances an electing Participant must
properly complete and execute the appropriate salary deferral election
form. All Participant Deferral Contributions must be withheld by the
Employer through payroll deduction.
(b)(1)(A) (Select one option.) Select the frequency of deferral percentage
changes (must be at least once per Plan Year) that a Participant may make
in a Plan Year. A Participant may increase, decrease or suspend his/her
Regular Deferral Contributions based upon this frequency.
(B) (Select one option.) Select the date(s) on which a Participant who
COMPLETELY suspends his/her Regular Deferral Contributions may resume such
contributions (must be at least once per Plan Year) on the elected date.
(b)(2) (Optional) If Regular Employee Deferral Contributions are elected
under (b)(1) then an Employer may also allow a Participant to make Catch-Up
Deferral Contributions under certain conditions. If Catch-Up Deferral
Contributions are elected, a Participant may defer up to 100% of his/her
Compensation for one or more payroll periods in the FINAL month of the Plan
Year. However, Catch-Up Deferral Contributions for a Participant may not
exceed any of the following limits; the Deferral Contribution percentage
specified in (b)(1), the Internal Revenue Code's annual calendar year
Deferral Contribution limit ( $8,994 for 1993), and other appropriate
Internal Revenue Code limits.
A Participant must complete a special election form to make a Catch-Up
Deferral Contribution. If Section 1.04(b)(2) is selected, then eligible
Compensation for a first year eligible Participant for purposes of Catch-Up
Deferral Contributions will be limited. Compensation will be measured from
the Participant's Entry Date or the Effective Date, as appropriate, through
the end of his/her initial Plan Year.
(b)(3) (Optional.) In addition or as an alternative to Regular Deferral
Contributions or Catch-Up Deferral Contributions, an Employer may permit a
Participant to make a special bonus deferral election. However, an
Employer may not exclude bonuses from the definition of Compensation in
Section 1.04(a) if it wants to allow a Participant to make Bonus Deferral
Contributions. If elected, a Participant may defer up to 100% of his/her
bonus but it may not exceed any of the following limits; the Deferral
Contribution percentage specified in (b)(1), the Internal Revenue Code's
annual calendar year Deferral Contribution limit ($8,994 for 1993), and
other appropriate Internal Revenue Code limits. A Participant must
complete a special election form to make a Bonus Deferral Contribution. If
Section 1.04(b)(2) is selected, then Compensation for a first year eligible
Participant for purposes of Bonus Deferral Contributions will be limited.
Compensation will be measured from the Participant's Entry Date or the
Effective Date, as appropriate, through the end of his/her initial Plan
Year.
NOTE: An Employer electing Catch-Up and/or Bonus Deferral Contributions
has the right to refuse to accept these Contributions if they will
adversely affect the Plan's actual deferral percentage or actual
contribution percentage test(s).
(b)(4) (Optional). Check this option if you would like Qualified
Discretionary Contributions (QDC's) to be treated as additional Deferral
Contributions for all Non-highly Compensated Employees to the extent
necessary to satisfy the requirements of the actual deferral percentage and
actual contribution percentage tests. QDC's are treated as Employer profit
sharing contributions except they are always 100% vested and may not be
withdrawn as a hardship by a Participant. (A separate source will be set
up in the Employer's Plan to properly account for any QDC's.) QDC's may
also be used to satisfy any required Internal Revenue Code top-heavy
minimum Employer contributions for non-key Employees under Section 1.12(c).
If an Employer wants to make a QDC then it must be made for each Non-highly
Compensated Employee who was eligible to participate in the Plan during the
Plan Year. An Employer CANNOT require a Participant to work a certain
number of hours during the Plan Year and/or be employed as of the last day
of the Plan Year to be eligible to receive a QDC. An Employer must
contribute QDC's to the Plan within the prescribed legal time limit.
(A) An Employer may allocate QDC's to Non-highly Compensated Employees for
a Plan Year on a percentage of Compensation basis.
(B) An Employer may allocate QDC's to Non-highly Compensated Employees for
a Plan Year on a flat dollar basis.
(c)(1) (Optional) Employer Matching Contributions can only be selected if
Employee Deferral Contributions are selected in Section 1.05(b). An
Employer may elect to match ALL Employee Deferral Contributions, subject to
any percentage of Compensation and/or dollar limit(s) under Section
1.05(c)(3), based upon 50% (Option (A)), 100% (Option (B)), a specified
percentage (Option (C)), or a tiered match (Option (D)). If Option (D) is
selected, the matching contribution percentage may not increase as the
percentage of compensation contributed to the plan increases. For example:
Percent of Eligible Employer
Participant Compensation Matching
Tier Contributed to the Plan Contributions
First First 2% 100%
Second Next 2% 75%
Third Next 2% 50%
In the above example an Employer may not have a first tier match of 50%, a
second tier match of 75% and a third tier match of 100%.
An Employer may make Discretionary Matching Contributions, if any, each
Plan Year based upon a percentage of Participant Employee Deferral
Contributions (Option (E)). This option enables the Employer to vary the
Matching Contribution annually without having to amend The CORPORATEplan
FOR RETIREMENTSM Adoption Agreement. The amount of Matching Contributions,
if any, will be determined annually by the Employer and then communicated
to the Participants. The Employer may declare the Matching Contributions
at any time during the Plan Year. A corporate Employer must pass a Board
of Directors Resolution declaring the Matching Contribution for a
particular Plan Year. A Sole Proprietor or a Partnership must write a
Letter of Intent declaring the Matching Contribution for a particular Plan
Year.
SECTION 1.05 CONTINUED ON NEXT PAGE.
Employer Matching Contributions MUST be computed based upon the amount of
a Participant's Deferral Contributions, subject to any percentage of
Compensation and/or dollar limit(s) under Section 1.05(c)(3). Matching
Contributions are UNCONDITIONAL. An Employer CANNOT require a Participant
to be employed as of Plan Year end and/or work a specified number of hours
of service during a Plan Year to be entitled to receive Matching
Contributions. An Employer may NOT
compute Matching Contributions on Employee Deferral Contributions using a
formula based upon a Participant's Years of Service with the Employer,
make any Matching Contributions on Employee After-Tax Contributions,
make any Qualified Matching Contributions (QMAC's).
(c)(2) (Optional) If Matching Contributions are selected in (c)(1) then an
Employer may elect to make additional Matching Contributions at the end of
the Plan Year through a Board of Directors Resolution for a Corporation or
a Letter of Intent for a Sole Proprietor or a Partnership.
(c)(3)(A) (Optional) An Employer may select to limit the percentage of a
Participant's Deferral Contributions that are eligible for the Matching
Contributions specified in (c)(1) to a certain percentage of his/her
eligible Compensation.
EXAMPLE: An Employer wants to match 50% of each dollar contributed to the
Plan as Deferral Contributions but only on the first six percent of a
Participant's eligible Compensation. A Participant's eligible Compensation
for one payroll is $1,000 and he contributes 10% of it into the Plan as
Deferral Contributions. The Matching Contribution will be limited to $30
[($1,000 of Compensation) x (6% limit) = $60, $60 x 50% = $30].
If an Employer directs Fidelity to establish a Basic Employee Deferral
Contribution and a Supplemental Employee Deferral Contribution source for
contributions made pursuant to Section 1.05(b) on the Fidelity Participant
Recordkeeping System and the Employer elects a percentage limit on Matching
Contributions then the match must be computed based upon each payroll
period. A Basic Deferral Contribution represents the portion of a
Participant's Deferral Contributions that will be matched by the Employer.
A Supplemental Deferral Contribution represents the portion of a
Participant's Deferral Contributions that will NOT BE matched by the
Employer. Please refer to the CPR Compliance Section of the CORPORATEplan
FOR RETIREMENTSM for further details.
(c)(3)(B) (Optional) An Employer may select to limit the total Matching
Contributions to a fixed dollar amount.
NOTE: An Employer may select (3)(A), (3)(B) or both (3)(A) and (3)(B). If
the last of these choices is selected, then the Matching Contributions will
be limited to whichever limit occurs first, either the percentage of
Compensation in (A) or the fixed dollar amount in (B).
(d)(1) (Optional) An Employer that elects Employee Deferral Contributions
in Section 1.05(b), may also elect to allow Employee After-Tax
Contributions to be made by a Participant by selecting Option (1).
Employee After-Tax Contributions may be limited due to the actual
contribution percentage test and/or the annual addition limitation.
Employee After-Tax Contributions ARE NOT eligible for Matching
Contributions and may be withdrawn only once per year unless Employee
After-Tax Contributions under the Employer's prior plan document allowed
more frequent withdrawals.
(d)(2) (Optional) An Employer that previously allowed Participant Employee
After-Tax Contributions or accepted transfers of such contributions from
another qualified retirement plan may elect not to allow such contributions
in the future under Option (2).
1.06. RETIREMENT AGE(S):
Retirement Age in a qualified retirement plan is a "protected benefit"
under the Internal Revenue Code. An Employer converting to The
CORPORATEplan FOR RETIREMENTSM from another plan document may not eliminate
any protected benefits for Participants attaining the Retirement Age(s)
that were specified in the prior document.
SECTION 1.06 CONTINUED ON NEXT PAGE.
(a) This is the age at which a Participant becomes 100% vested in his/her
Employer and Matching Contribution Account, regardless of his/her length of
service with the Employer or a Related Employer. An Employer may select
age 65 (Option (1)), any other age between 55 and 64 (Option (2)), or the
later of a specified age between 55 and 65 and the fifth anniversary of the
date the Participant commenced employment (Option (3)). A Participant is
not required to retire once he/she attains Normal Retirement Age. (Select
one option.)
(b) (Optional) A Participant becomes 100% vested in his/her Employer and
Matching Contribution Accounts upon satisfying the early retirement
requirement(s). If an Employer converted to The CORPORATEplan FOR
RETIREMENTSM and had an Early Retirement Age in its prior plan document,
then this Plan must offer the same or a more favorable Early Retirement
Age. Specify the early retirement age (must be at least 55) and required
years of service, if applicable.
(c) (Optional) A Participant becomes 100% vested in his/her Employer and
Matching Contribution Account upon Disability Retirement. If an Employer
converted to The CORPORATEplan FOR RETIREMENTSM and previously had a
Disability Retirement in its prior plan document then it must select one or
more of the options in this section. Option (1) requires a Participant to
satisfy the Employer's normal requirements for benefits under its Long-Term
Disability Plan. Option (2) requires a Participant to be eligible for
Social Security disability benefits. Option (3) requires a Participant to
be determined disabled by a physician that is approved by the Employer. An
Employer may select more than one option in this Section.
1.07. VESTING SCHEDULE:
(a) Vesting refers to the nonforfeitable interest of a Participant in
Employer and/or Matching Contributions and the earnings thereon. A
Participant is always 100% vested in Employee Deferral Contributions and
Qualified Discretionary Contributions and the earnings thereon. Vesting
under The CORPORATEplan FOR RETIREMENTSM is based upon the ELAPSED-TIME
METHOD that is defined under "Years of Service for Vesting" in Section
2.01(a)(33) of the Basic Plan Document. Only vesting schedules that
satisfy the top-heavy requirements under Internal Revenue Code Section 416
are used in this Standardized Adoption Agreement. Participant Years of
Service for Vesting Employer and/or Matching Contributions includes all
years of service subject to any exclusion in Section 1.07(b). Amounts
which are not fully vested when a Participant terminates employment will be
used in the current Plan Year to reduce future Employer and/or Matching
Contributions and/or to pay Plan expenses. An Employer's Plan that is
converted from another plan document that previously allowed vesting under
another method will be subject to the transitional rules in accordance with
governmental regulations to convert it to the elapsed-time method.
(a)(1) (Select one option.) An Employer must elect Option (A) if there are
no Employer contributions. An Employer electing Employer contributions in
Section 1.05(a) (Fixed or Discretionary) MUST select one of the Vesting
Schedules listed in Options (B) through (E1). An Employer may create its
own Vesting Schedule by inserting the elected vesting percentage in the
blanks in (E1). However, the percentages elected in (E1) must be at least
as favorable as the ones listed in (D) (I.E., the vesting percentage for a
Participant with two Years of Service must be at least 20%, four Years of
Service must be at least 40%, ETC.).
(a)(2) (Select one.) An Employer must select Option (A) if there are no
Matching Contributions. An Employer electing Matching Contributions in
Section 1.05(c) MUST select only one of the Vesting Schedules listed in
Options (B) through (E2). An Employer may create its own vesting schedule
by inserting the elected vesting percentage in the blanks in (E2).
However, the percentages must be at least as favorable as the ones listed
above in (D) or (F) (I.E., the vesting percentage for a Participant with
two Years of Service must be at least 20%, three Years of Service must be
at least 40%, ETC.). An Employer electing Option (B), which provides that
Matching Contributions are 100% vested, MAY NOT include these Contributions
in the actual deferral percentage or actual contribution percentage test as
Qualified Matching Contributions.
An Employer that elected two different Vesting Schedules, one in Option
(1) for Employer contributions and another in Option (2) for Matching
Contributions has dual vesting. For example, Employer Fixed or
Discretionary Contributions may be subject to a six year graded Vesting
Schedule as elected in Option (D) and Matching Contributions may be 100%
vested immediately as elected in Option (B).
(b) (Optional) Years of Service for Participant Vesting includes ALL Years
of Service for an Employee except an Employer may elect to exclude service
prior to the Effective Date of a new plan (Option (1)) or prior to the
original Effective Date of a pre-existing plan (Option (2)).
1.08. PREDECESSOR EMPLOYER SERVICE:
(Optional) An Employer may elect to include an Employee's Years of
Service with any predecessor employer(s) listed in (a) through (d) for both
eligibility AND vesting purposes. (If this Plan is a continuation of a
plan of a predecessor employer, Years of Service with the Predecessor
Employer(s) are automatically included for eligibility and vesting
purposes).
1.09. PARTICIPANT LOANS (SELECT ONE OPTION):
(a) (Optional) An Employer may elect to allow Participant loans (Option
(a)). If Option (a) is selected, then the Employer may allow Participant
loans for any purpose (Option (1)) or only for hardship withdrawal reasons
(Option (2)) as defined in Section 7.10 of The CORPORATEplan FOR
RETIREMENTSM Basic Plan Document. All loans are subject to a $1,000
minimum. An outstanding Participant loan becomes due and payable in full
as of the date a Participant dies, becomes disabled (as defined in Section
1.06(c), retires (as defined in Section 1.06(a) or (b)), or terminates
employment with the Employer or a Related Employer.
The loan feature provides for a Participant loan with a five-year maximum
term, except a ten-year term is permitted for a loan used for the purchase
of the Participant's primary residence. Funds for a loan may be withdrawn
from Deferral Contributions, Matching Contributions, Qualified
Discretionary Contributions, Discretionary Contributions and Employee After
- -Tax Contributions for a loan unless the Employer restricts the
contribution sources in a separate written administrative procedure
delivered to Fidelity. A Participant may have only one loan outstanding at
any one time and may request only one loan per Plan Year. A Participant
may NOT refinance, renegotiate or extend the maturity date of an existing
loan. Also, a Participant may not obtain a second loan for the purpose of
paying off the first loan. All loans are governed in accordance with the
loan procedures disclosed in Section 7.09 of the CORPORATEplan FOR
RETIREMENTSM Basic Plan Document. Loan set up and annual maintenance fees
will be charged to the affected Participant's Account, unless they are paid
by the Employer. Loan fees are disclosed in the CORPORATEplan FOR
RETIREMENTSM Service Agreement.
In accordance with governmental regulations, a Plan may not permit
Participant loans to Owner-Employees (sole proprietor or a partner owning a
10%-or-more interest in a partnership) of non-corporate entities or to
Shareholder-Employees of Subchapter S corporations (I.E., an employee or
officer who owns more than 5% of the outstanding stock of the Subchapter S
corporation).
(b) An Employer may elect not to offer Participant loans by selecting this
option.
1.10. HARDSHIP WITHDRAWALS (SELECT ONE OPTION):
(a) (Optional) An Employer may elect to make hardship withdrawals
available with a $1,000 minimum.
A Participant may request a hardship withdrawal from his/her Deferral and
Rollover Contributions. However, amounts may be available for withdrawal
from Employer and/or Matching Contribution Account(s) if allowed under the
Employer's prior plan document. Hardship withdrawals will be made in
accordance with the Internal Revenue Code safe harbor provisions: for the
purchase of a Participant's primary residence, to prevent eviction or
foreclosure from the Participant's primary residence, for post-secondary
educational expenses for the next twelve months for the Participant or
his/her dependents, or for unreimbursed medical expenses of the Participant
and his/her dependents.
If the Participant receives the hardship withdrawal he/she must suspend
all Employee Deferral Contributions for a twelve month period from this
Plan and any other Employer qualified and non-qualified Plan. The
Participant must also exhaust all other resources, including obtaining a
loan if this feature is offered under Section 1.09 of this Plan or other
plans maintained by the Employer, and by withdrawing all Employee After-Tax
Contributions in his/her account before obtaining a hardship withdrawal.
The amount of the withdrawal may not exceed the amount of the hardship. A
Participant may increase the amount of his/her hardship withdrawal, only to
the extent his/her account balance is available, to cover Federal, state,
and local income taxes along with any penalties.
(b) An Employer may elect not to make hardship withdrawals available by
selecting this option.
1.11. DISTRIBUTIONS:
(a) Generally, distributions from the Plan may be paid to a Participant
only as a lump sum (Option (1)) or as systematic installment withdrawals
(Option (2)). A Participant's right to receive a distribution from an
Employer's Plan is a legally protected right. If the Employer converted
from another plan document that allowed a Participant the right to receive
his/her distribution from the Plan in a lump sum and/or installment
option(s), it must select the same option(s) in this section. (Select one
or both options.)
(b) (Optional) Check this option to allow a Participant who has not yet
terminated employment with the Employer to receive a distribution of part
or all of his/her Employee Deferral Contributions Account or of his/her
entire Account, on or after attainment of age 59 1/2. If an Employer
converted from another plan document, it must select (1) or (2). Option
(1) allows a Participant to withdraw part or all of his/her Employee
Deferral Contribution Accounts only, while Option (2) allows a Participant
to withdraw part or all of his/her entire Account.
(c) An Employer may be required under Internal Revenue Service regulations
to continue to provide for such method(s) of Participant distribution in
addition to a lump sum and/or installments. If an Employer's Plan is an
amendment or conversion from another plan document which previously
provided for annuity payments (Option (1)), in-service withdrawals of
Employer Contributions (Option (2)), or any other distribution option that
is a "protected benefit" under Internal Revenue Code Section 411(d)(6)
(Option (3)), then the Employer must check (c) and elect the appropriate
option(s). (Check as many as apply, or leave blank if none apply.)
The Plan Administrator is responsible for identifying any Participant
older than age 70 1/2. These Participants must receive the minimum
required distribution in accordance with the Internal Revenue Code. The
Plan Administrator is responsible for computing the amount of the minimum
distribution and providing Fidelity with the appropriate written direction.
1.12. TOP-HEAVY STATUS:
Generally, a defined contribution plan is considered top-heavy if more
than 60% of the account balances are for the benefit of key employees. A
key employee is defined under Internal Revenue Code Section 416.
(a) Option (1) allows an Employer to assume its Plan is always top-heavy
and automatically to comply with the top-heavy plan requirements each Plan
Year. Thus, each Plan Year the Employer will make the required top-heavy
minimum contribution listed in Section 1.12(c). Option (2) requires an
Employer to perform the top-heavy test each Plan Year. If the Plan is
determined to be top-heavy then it will be subject to the top-heavy
requirements under Section 1.12(c). (Select one option.)
(b) If an Employer's Plan is top-heavy and the Employer currently maintains
a defined benefit plan, then an actuary should assist in the completion of
the information in Option (1) and (2). If an Employer does not currently
maintain a defined benefit plan then check Option (3).
(c) Generally, every non-key employee who is a participant in a top-heavy
plan at the end of the Plan Year must receive minimum Employer
contributions under such plan, if any key employee as defined by the
Internal Revenue Code is receiving a contribution for that Plan Year. A
Participant who is a non-key employee must receive the minimum top-heavy
Employer Contribution regardless of any Hours of Service eligibility
requirement elected under Section 1.05(a)(3)(B) or (C) (Employer
contributions), or Section 1.05(c)(4)(B) or (C) (Matching Contributions).
Only Employer and Qualified Discretionary Contributions are counted as
top-heavy minimum contributions. Employee Deferral, Employee After-Tax,
and Employer Matching Contributions are not counted as top-heavy minimum
contributions for non-key employees.
Use the table below to determine the minimum top-heavy contribution to be
inserted in this Section 1.12(c) and the appropriate selection from options
(c)(1) through (c)(3).
<TABLE>
<CAPTION>
<S> <C> <C>
SITUATION MINIMUM SELECT
CONTRIBUTION OPTION
Employer maintains this Plan only. 3% (c)(1)
Employer maintains a defined benefit plan or another defined 3% (c)(2)
contribution plan which provides the top-heavy minimum benefit or
contribution for employees who participate in both plans.
Employer maintains another defined contribution plan and the top-heavy 3% (c)(1)
minimum contribution for employees who participate in both plans is
made to this Plan.
Employer also maintains a defined benefit plan which does not provide 5% (c)(1)
the minimum benefit to employees who participate in both plans.
The Employer also maintains a defined benefit plan which does not 7 1/2% (c)(1)
provide the minimum benefit to employees who participate in both plans,
the top-heavy ratio does not exceed 90%, and the plan provides an extra
minimum contribution in order to use the 125% limitation under Internal
Revenue Code Section 415(e).
The Employer also maintains a defined benefit plan, the top-heavy ratio 4% (c)(1)
does not exceed 60%, and both plans provide minimum benefits or
contributions and provide extra minimums in order to use the 125%
limitation under Internal Revenue Code Section 415(e).
The Plan covers only employees subject to a collective bargaining N/A (c)(3)
agreement and there are no Employer or Matching Contributions.
</TABLE>
NOTE: COMPENSATION FOR TOP-HEAVY PURPOSES IS DEFINED AS TOTAL ANNUAL
COMPENSATION FOR A PARTICIPANT
LESS ANY EMPLOYEE DEFERRAL CONTRIBUTIONS.
1.13. TWO OR MORE PLANS:
(a) (Select one option.) Annual Participant contributions (Employee
Deferral and After-Tax) and all Employer Contributions and benefits under
all Employer and Related Employer qualified retirement plans are subject to
one overall annual addition limit. Section 1.13 is designed to determine
how the Employer's Plan will comply with these limitations under all
Employer plans. The maximum permissible annual addition limit for a
limitation year for a Participant in one or more defined contribution plans
is the lesser of $30,000 (as indexed) or 25% of a Participant's
compensation. For purposes of the latter limit, a Participant's
Compensation must be reduced by any elective contributions under Internal
Revenue Code Sections 402(h) (Simplified Employee Pension), 403(b) (Tax
Sheltered Annuities), other deferred compensation described in 457(b) (Plan
of State and Local Governments and Tax-Exempt Organizations) or 414(h)(2)
(Plan of a State or Political Subdivision of the Government). Option (a)
is required by the Internal Revenue Service, unless (1) this is the only
Plan ever maintained by the Employer, or (2) the Employer maintains other
defined contribution plans, but they are master or prototype plans. An
Employer cafeteria (Internal Revenue Code Section 125) plan is not
considered a plan for purposes of Section 1.13.
(a)(1) Excess annual additions for an affected Participant will be refunded
from both the Employer's other defined contribution plan and this Plan on a
PRORATA basis.
(a)(2) If the Employer does not want excess annual additions for an
affected Participant to be refunded in accordance with (a)(1) then the
Employer should select this option. The Employer may designate how excess
annual additions will be refunded from the Employer's other defined
contribution plan and this Plan by attaching a separate schedule.
(a)(3) Check this option if this is the only Plan the Employer maintains.
Excess annual additions for a Participant will be refunded from this Plan.
(b) (Select one option.) Completion of Option (b) is required by the
Internal Revenue Service unless this is the only plan ever maintained by
the Employer or the Employer never had or maintained a defined benefit
plan.
(b)(1) If an Employer maintains or has ever maintained a defined benefit
plan in addition to this defined contribution plan then there are certain
Internal Revenue Code fractions that must be computed annually. An
Employer must compute each Participant's defined benefit fraction under the
defined benefit plan and defined contribution fraction under the defined
contribution plan. The sum of these two fractions for each Participant may
not exceed 1.0.
(b)(2) An Employer not electing (b)(1) may reduce excess annual additions
for an affected Participant participating at one time or another in both a
defined benefit plan and a defined contribution plan maintained by the
Employer by attaching a separate schedule.
(b)(3) Check this option if the Employer does not currently or has never
maintained a defined benefit plan.
1.14. ESTABLISHMENT OF TRUST AND INVESTMENT DECISIONS:
This section establishes the Trust under the Plan and permits the Employer
to designate who directs the investments (Employer, Participants, or both)
and the Fidelity Mutual Funds available for investment under the Plan.
(Select one option from (a) and complete Option (b).)
(a)(1) An Employer may direct all Participant account balances
between/among the available Fidelity Funds offered under the Plan by
electing Option (1). The Employer is responsible for sending Fidelity
written direction for any exchanges between/among available Funds based
upon procedures established by Fidelity.
(a)(2) An Employer may allow each Participant to direct his/her entire
account balance between/among the available Fidelity Funds offered under
the Plan by selecting Option (2). (A Participant's spouse or a third party
may NOT
SECTION 1.14 CONTINUED ON NEXT PAGE.
direct Participant account balances.) Each Participant should receive a
prospectus in accordance with Securities and Exchange Commission
requirements before investing money in any Fidelity Mutual Fund.
Participant exchanges will be based upon instructions given by Participants
to Fidelity Telephone Representatives during predetermined business hours.
An Employer electing this Option may also elect to comply with Section
404(c) of the Employee Retirement Income Security Act of 1974 (ERISA). If
the requirements of ERISA 404(c) are satisfied by the Plan then each
Participant is responsible for any investment gains/losses in his/her
Accounts. However, election of ERISA 404(c) by an Employer does not fully
relieve it of all fiduciary liability. The Employer is still responsible
for the selection and monitoring of Plan investment options.
(a)(3) An Employer may direct certain sources of Participant account
balances and allow a Participant to direct his/her remaining account
balances between/among the available Fidelity Funds by selecting Option
(3). The Employer may direct Participant Fixed and/or Discretionary
Employer Contributions by selecting Option (A) or only direct Employer
Matching Contributions by selecting Option (B). All remaining sources will
be directed by each Participant. An Employer may not elect ERISA 404(c)
protection for the portion of Participant's Account it directs. The
Employer and Participant must select from the available Funds listed in
Option (b). The Employer must provide Fidelity with written instructions
for the investment of Participant accounts that it will direct
between/among Fidelity Funds.
(b) The Employer may only select Fidelity Funds offered under The
CORPORATEplan FOR RETIREMENTSM. An additional recordkeeping fee will be
charged for each Fidelity Fund selected in excess of five (5).
An Employer that selects the Fidelity Managed Income Portfolio (formerly
known as the GIC Open-End Portfolio) MUST receive the Group Trust, the
Declaration of Separate Fund, and the Circular for the Managed Income
Portfolio from the Fidelity Account Executive prior to the execution of
this Adoption Agreement. The Employer by executing the Adoption Agreement
agrees to all of the requirements in the aforementioned documentation.
Certain restrictions apply on investment exchanges from the Managed Income
Portfolio into a "competing" Fund. Please refer to the aforementioned
documentation for further information.
1.15. RELIANCE ON OPINION LETTER:
If an Employer does not maintain, or has never maintained, another
qualified retirement plan it may rely on the opinion letter issued by the
National Office of the IRS that this plan document for its Plan satisfies
the qualification requirements of IRC Section 401(a). If an Employer
maintains, or has ever maintained, another qualified retirement plan then
it should apply for a determination letter to the appropriate Key District
Director of the Internal Revenue Service by completing the appropriate IRS
forms. Failure by the Employer to properly complete the Adoption Agreement
may result in disqualification of this Plan.
Fidelity originally received an Internal Revenue Service "Opinion Letter
"dated June 12, 1991"(Letter Serial No. D258677a) for The CORPORATEplan FOR
RETIREMENTSM Basic Plan Document No. 07 and the Standardized Adoption
Agreement. On August 24, 1993, Fidelity received an IRS "Opinion Letter "
on the Plan as amended and restated (Letter Serial No. D258677b). The Plan
Administrator is RESPONSIBLE for applying for an individual determination
letter for the Plan from the appropriate Key District Director of the
Internal Revenue Service. The Plan Administrator should consult with their
attorney and/or accountant for further information. Failure by the
Employer to complete properly and execute the Adoption Agreement may result
in disqualification of the Plan.
This document includes two (2) identical signature pages. An authorized
officer (if the Employer is incorporated) or the authorized individual(s)
(if the Employer is unincorporated) must sign pages ___ and ___ and return
them to Fidelity. Only one authorized signature is required to execute
this Adoption Agreement, unless the Employer's corporate policy mandates
two authorized signatures. Fidelity Management Trust Company will sign
both pages and return one signature page (page ___) with the original
Adoption Agreement to the Employer. The Employer should take the
appropriate Board of Director's action to adopt The CORPORATEplan FOR
RETIREMENTSM.
THIS AGREEMENT SHOULD BE REVIEWED BY YOUR ATTORNEY AND/OR ACCOUNTANT BEFORE
IT IS EXECUTED.
This document includes two (2) identical signature pages. An authorized
officer (if the Employer is incorporated) or the authorized individual(s)
(if the Employer is unincorporated) must sign pages ___ and ___ and return
them to Fidelity. Only one authorized signature is required to execute
this Adoption Agreement, unless the Employer's corporate policy mandates
two authorized signatures. Fidelity Management Trust Company will sign
both pages and return one signature page (page ____) with the original
Adoption Agreement to the Employer. The Employer should take the
appropriate Board of Directors' action to adopt The CORPORATEplan FOR
RETIREMENTSM.
THIS AGREEMENT SHOULD BE REVIEWED BY YOUR ATTORNEY AND/OR ACCOUNTANT BEFORE
IT IS EXECUTED.
ADOPTION AGREEMENT
ARTICLE 1
NON-STANDARDIZED PROFIT SHARING PLAN
1.01 PLAN INFORMATION
(A) NAME OF PLAN:
This is the
Plan (the "Plan").
(B) TYPE OF PLAN:
(1) 401(k) and Profit Sharing
(2 ) Profit Sharing Only
(3) 401(k) Only
(C) NAME OF PLAN ADMINISTRATOR, IF NOT THE EMPLOYER:
Address:
Phone Number:
The Plan Administrator is the agent for service of legal process for the
Plan.
(D) LIMITATION YEAR (check one):
(1) Calendar Year
(2) Plan Year
(3) Other:
(E) THREE DIGIT PLAN NUMBER:
(F) PLAN YEAR END (month/day):
(G) PLAN STATUS (check one):
(1) Effective Date of new Plan:
(2) Amendment Effective Date: _______________. This is (check one):
(A) an amendment of The CORPORATEplan for RetirementSM Adoption
Agreement previously executed by the Employer; or
(B) a conversion from another plan document into The CORPORATEplan for
RetirementSM.
The original effective date of the Plan:
The substantive provisions of the Plan shall apply prior to the Effective
Date to the extent required by the Tax Reform Act of 1986 or other
applicable laws.
1.02 EMPLOYER
(A) THE EMPLOYER IS
Address:
Contact's Name:
Telephone Number:
(1) Employer's Tax Identification Number:
(2) Business form of Employer (check one):
(A) Corporation (D) Governmental
(B) Sole proprietor or partnership (E) Tax-exempt organization
(C) Subchapter S Corporation (F) Rural Electric Cooperative
(3) Employer's fiscal year end:
(4) Date business commenced:
(B) THE TERM "EMPLOYER" INCLUDES THE FOLLOWING RELATED EMPLOYER(S)
(as defined in Section 2.01(a)(26)):
1.03 COVERAGE
(A) ALL EMPLOYEES WHO MEET THE CONDITIONS SPECIFIED BELOW WILL BE ELIGIBLE
TO PARTICIPATE IN THE PLAN:
(1) SERVICE REQUIREMENT (check one):
(A) no service requirement.
(B) three consecutive months of service (no minimum number Hours of
Service can be required).
(C) six consecutive months of service (no minimum number Hours of Service
can be required).
(D) one Year of Service (1,000 Hours of Service is required during the
Eligibility Computation Period.)
(2) AGE REQUIREMENT (check one):
(A) no age requirement.
(B) must have attained age ______ (not to exceed 21).
(3) THE CLASS OF EMPLOYEES ELIGIBLE TO PARTICIPATE IN THE PLAN (check one):
(A) includes all Employees of the Employer.
(B) includes all Employees of the Employer except for (check the
appropriate box(es)):
(I) Employees covered by a collective bargaining agreement.
(II) Highly Compensated Employees as defined in Code Section 414(q).
(III) Leased Employees as defined in Section 2.01(a)(18).
(IV) Nonresident aliens who do not receive any earned income from the
Employer which constitutes United States source income.
(V) Other
NOTE: No exclusion in this section may create a discriminatory class of
employees. An Employer's Plan must still pass the Internal Revenue Code
coverage and participation requirements if one or more of the above groups
of Employees have been excluded from the Plan.
(B) THE ENTRY DATE(S) SHALL BE (check one):
(1) the first day of each Plan Year (do not select if Section 1.03
(a)(1)(D) is elected or if there is an age requirement of greater than 20
1/2 in Section 1.03(a)(2)(B)).
(2) the first day of each Plan Year and the date six months later.
(3) the first day of each Plan Year and the first day of the fourth,
seventh, and tenth months.
(4) the first day of each month.
(C) DATE OF INITIAL PARTICIPATION - AN EMPLOYEE WILL BECOME A PARTICIPANT
UNLESS EXCLUDED BY SECTION 1.03(A)(3) ABOVE ON THE ENTRY DATE IMMEDIATELY
FOLLOWING THE DATE THE EMPLOYEE COMPLETES THE SERVICE AND AGE
REQUIREMENT(S) IN SECTION 1.03(A), IF ANY, EXCEPT (check one):
(1) No exceptions.
(2) Employees employed on the Effective Date in Section 1.01(g) will
become Participants on that date.
(3) Employees who meet the age and service requirement(s) of Section
1.03(a) on the Effective Date in Section 1.01(g) will become Participants
on that date.
1.04 COMPENSATION
(A) FOR PURPOSES OF DETERMINING CONTRIBUTIONS UNDER THE PLAN, COMPENSATION
SHALL BE AS DEFINED IN SECTION 2.01(A)(7), BUT EXCLUDING (check the
appropriate box(es)):
(1) Overtime Pay.
(2) Bonuses.
(3) Commissions.
(4) The value of a qualified or a non-qualified stock option granted to
an Employee by the Employer to the extent such value is includable in the
Employee's taxable income.
NOTE: These exclusions shall not apply for purposes of the "Top Heavy"
requirements in Section 9.03 or for allocating Discretionary Employer
Contributions if an Integrated Formula is elected in Section 1.05(a)(2).
(5) No exclusions.
(B) COMPENSATION FOR THE FIRST YEAR OF PARTICIPATION
Contributions for the Plan Year in which an Employee first becomes a
Participant shall be determined based on the Employee's Compensation (check
one):
(1) For the entire Plan Year.
(2) For the portion of the Plan Year in which the Employee is eligible
to participate in the Plan.
1.05 CONTRIBUTIONS
(A) EMPLOYER CONTRIBUTIONS :
(1) FIXED FORMULA - NONINTEGRATED FORMULA (check (A) or (B)):
(A) Fixed Percentage Employer Contribution:
For each Plan Year, the Employer will contribute for each eligible
Participant an amount equal to __________% (not to exceed 15%) of such
Participant's Compensation.
(B) Fixed Flat Dollar Employer Contribution:
For each Plan Year, the Employer will contribute for each eligible
Participant an amount equal to $_________.
(2) DISCRETIONARY FORMULA
The Employer may decide each Plan Year whether to make a discretionary
Employer
contribution on behalf of eligible Participants in accordance with Section
4.06. Such contributions shall be allocated to eligible Participants based
upon the following (check (A) or (B)):
(A) Nonintegrated Allocation Formula:
In the ratio that each eligible Participant's Compensation bears to the
total Compensation paid to all eligible Participants for the Plan Year.
(B) Integrated Allocation Formula:
In accordance with Section 4.06.
NOTE: An Employer who maintains any other plan that provides for Social
Security Integration (permitted disparity) may not elect (2)(B).
(3) ELIGIBILITY REQUIREMENT(S)
A Participant shall be entitled to Employer Contributions for a Plan Year
under this Subsection (a) if the Participant satisfies the following
requirement(s) (Check the appropriate box(es) - Options (B) and (C) may not
be elected together):
(A) is employed by the Employer on the last day of the Plan Year.
(B) earns at least 500 Hours of Service during the Plan Year.
(C) earns at least 1,000 Hours of Service during the Plan Year.
(D) no requirements.
NOTE: If option (A), (B) or (C) above is selected then Employer
contributions can only be FUNDED by the Employer AFTER Plan Year end.
(B) DEFERRAL CONTRIBUTIONS
(1) REGULAR CONTRIBUTIONS
The Employer shall make a Deferral Contribution in accordance with Section
4.01 on behalf of each Participant who has an executed salary reduction
agreement in effect with the Employer for the payroll period in question,
not to exceed ___________% (NO MORE THAN 15%) of Compensation for that
period.
(A) A Participant may increase or decrease, on a prospective basis, his
salary reduction agreement percentage (check one):
(i) As of the beginning of each payroll period.
(ii) As of the first day of each month.
(iii) As of the next Entry Date.
(iv) (Specify, but must be at least once per Plan Year)
(B) A Participant may revoke, on a prospective basis, a salary reduction
agreement at any time upon proper notice to the Administrator but in such
case may not file a new salary reduction agreement until (check one):
(i) The first day of the next Plan Year.
(ii) Any subsequent Plan Entry Date.
(iii) (Specify, but must be at least once per Plan Year)
(2) CATCH-UP CONTRIBUTIONS
The Employer may allow Participants upon proper notice and approval to
enter into a special salary reduction agreement to make additional Deferral
Contributions in an amount up to 100% of their Compensation for the payroll
period(s) in the final month of the Plan Year.
(3) BONUS CONTRIBUTIONS
The Employer may allow Participants upon proper notice and approval to
enter into a special salary reduction agreement to make Deferral
Contributions in an amount up to 100% of any Employer paid cash bonuses
made for such Participants during the Plan Year. The Compensation
definition elected by the Employer in Section 1.04(a) must include bonuses
if bonus contributions are permitted.
NOTE: A Participant's contributions under (2) and/or (3) may not cause the
Participant to exceed the percentage limit specified by the Employer in (1)
after the Plan Year. The Employer has the right to restrict a
Participant's right to make Deferral Contributions if they will adversely
affect the Plan's ability to pass the actual deferral percentage and/or the
actual contribution percentage test.
(4) QUALIFIED DISCRETIONARY CONTRIBUTIONS
The Employer may contribute an amount which it designates as a Qualified
Discretionary Contribution to be included in the actual deferral percentage
or actual contribution percentage test. Qualified Discretionary
Contributions shall be allocated to Non-highly Compensated Employees (check
one):
(A) in the ratio which each such Participant's Compensation for the Plan
Year bears to the total of all such Participants' Compensation for the
Plan Year.
(B) as a flat dollar amount for each such Participant for the Plan Year.
(C) MATCHING CONTRIBUTIONS (only if Section 1.05(b) is checked)
(1) THE EMPLOYER SHALL MAKE A MATCHING CONTRIBUTION ON BEHALF OF EACH
PARTICIPANT IN AN AMOUNT EQUAL TO THE FOLLOWING PERCENTAGE OF A
PARTICIPANT'S DEFERRAL CONTRIBUTIONS DURING THE PLAN YEAR (check one):
(A) 50%
(B) 100%
(C) %
(D) (Tiered Match) % of the first % of the Participant's
Compensation contributed to the Plan,
% of the next % of the Participant's Compensation contributed to
the Plan,
% of the next % of the Participant's Compensation contributed to
the Plan.
NOTE: THE PERCENTAGES SPECIFIED ABOVE FOR MATCHING CONTRIBUTIONS MAY NOT
INCREASE AS THE PERCENTAGE OF COMPENSATION CONTRIBUTED INCREASES.
(E) The percentage declared for the year, if any, by a Board of
Directors' Resolution (or by a Letter of Intent for a Sole Proprietor or
Partnership).
(2) THE EMPLOYER MAY AT PLAN YEAR END MAKE AN ADDITIONAL MATCHING
CONTRIBUTION EQUAL TO A PERCENTAGE DECLARED BY THE EMPLOYER, THROUGH A
BOARD OF DIRECTORS' RESOLUTION (OR BY A LETTER OF INTENT FOR A SOLE
PROPRIETOR OR PARTNERSHIP), OF THE DEFERRAL CONTRIBUTIONS MADE BY EACH
PARTICIPANT DURING THE PLAN YEAR (only if an option is checked under
Section 1.05(c)(1)).
(3) MATCHING CONTRIBUTION LIMITS (check the appropriate box(es)):
(A) Deferral Contributions in excess of ________% of the
Participant's Compensation for the period in question shall not be
considered for Matching Contributions.
Note: If the Employer elects a percentage limit in (A) above and requests
the Trustee to account separately for matched and unmatched Deferral
Contributions, the Matching Contributions allocated to each Participant
must be computed, and the percentage limit applied, based upon each payroll
period.
(B) Matching Contributions for each Participant for each Plan Year shall
be limited to $___________.
(4) ELIGIBILITY REQUIREMENT(S)
A Participant who makes Deferral Contributions during the Plan Year under
Section 1.05(b) shall be entitled to Matching Contributions for that Plan
Year if the Participant satisfies the following requirement(s) (Check the
appropriate box(es). Options (B) and (C) may not be elected together):
(A) Is employed by the Employer on the last day of the Plan Year.
(B) Earns at least 500 Hours of Service during the Plan Year.
(C) Earns at least 1,000 Hours of Service during the Plan Year.
(D) Is not a Highly Compensated Employee for the Plan Year.
(E) Is not a Partner of the Employer, if the Employer is a Partnership.
(F) No requirements.
NOTE: If option (A), (B) or (C) above is selected then Matching
Contributions can only be FUNDED by the Employer AFTER the Plan Year ends.
Any Matching Contribution funded before Plan Year end shall not be subject
to the eligibility requirements of this Section 1.05(c)(4)). If option
(A), (B), or (C) is adopted during a Plan Year, such option shall not
become effective until the first day of the next Plan Year.
(D) EMPLOYEE AFTER-TAX CONTRIBUTIONS (check one):
(1) FUTURE CONTRIBUTIONS
Participants may make voluntary non-deductible Employee Contributions
pursuant to Section 4.09 of the Plan. This option may only be elected if
the Employer has elected to permit Deferral Contributions under Section
1.05(b). Matching Contributions by the Employer are not allowed on any
voluntary non-deductible Employee Contributions. Withdrawals are limited
to one per year unless Employee Contributions were allowed under a previous
plan document which authorized more frequent withdrawals.
(2) FROZEN CONTRIBUTIONS
Participants may not make voluntary non-deductible Employee Contributions,
but the Employer does maintain frozen Participant voluntary non-deductible
Employee Contribution Accounts.
1.06 RETIREMENT AGE(S)
(A) THE NORMAL RETIREMENT AGE UNDER THE PLAN IS (check one):
(1) age 65.
(2) age ____ (specify between 55 and 64).
(3) later of the age ___ (can not exceed 65) or the fifth anniversary of
the Participant's Employment Commencement Date.
(B) THE EARLY RETIREMENT AGE IS THE FIRST DAY OF THE MONTH AFTER THE
PARTICIPANT ATTAINS AGE (SPECIFY 55 OR GREATER) AND COMPLETES
YEARS OF SERVICE FOR VESTING.
(C) A PARTICIPANT IS ELIGIBLE FOR DISABILITY RETIREMENT IF HE/SHE (check
the appropriate box(es)):
(1) satisfies the requirements for benefits under the Employer's Long-Term
Disability Plan.
(2) satisfies the requirements for Social Security disability benefits.
(3) is determined to be disabled by a physician approved by the Employer.
1.07 VESTING SCHEDULE
(A) THE PARTICIPANT'S VESTED PERCENTAGE IN EMPLOYER CONTRIBUTIONS (FIXED
OR DISCRETIONARY) ELECTED IN SECTION 1.05(A) AND/OR MATCHING CONTRIBUTIONS
ELECTED IN SECTION 1.05(C) SHALL BE BASED UPON THE SCHEDULE(S) SELECTED
BELOW, EXCEPT WITH RESPECT TO ANY PLAN YEAR DURING WHICH THE PLAN IS
TOP-HEAVY. THE SCHEDULE ELECTED IN SECTION 1.12(D) SHALL AUTOMATICALLY
APPLY FOR A TOP-HEAVY PLAN YEAR AND ALL PLAN YEARS THEREAFTER UNLESS THE
EMPLOYER HAS ALREADY ELECTED A MORE FAVORABLE VESTING SCHEDULE BELOW.
(1) EMPLOYER CONTRIBUTIONS (2) MATCHING CONTRIBUTIONS
(check one): (check one):
(A) N/A - No Employer Contributions (A) N/A - No Matching Contributions
(B) 100% Vesting immediately (B) 100% Vesting immediately
(C) 3 year cliff (see C below) (C) 3 year cliff (see C below)
(D) 5 year cliff (see D below) (D) 5 year cliff (see D below)
(E) 6 year graduated (see E below) (E) 6 year graduated (see E below)
(F) 7 year graduated (see F below) (F) 7 year graduated (see F below)
(G) Other vesting (complete G1 below) (G) Other vesting (complete G2
below)
YEARS OF VESTING SCHEDULE
SERVICE FOR
VESTING C D E F G1 G2
0 0% 0% 0% 0% ___ ___
1 0% 0% 0% 0% ___ ___
2 0% 0% 20% 0% ___ ___
3 100% 0% 40% 20% ___ ___
4 100% 0% 60% 40% ___ ___
5 100% 100% 80% 60% ___ ___
6 100% 100% 100% 80% ___ ___
7 100% 100% 100% 100% 100% 100%
NOTE: A schedule elected under G1 or G2 above must be at least as
favorable as one of the schedules in C, D, E or F above.
(B) YEARS OF SERVICE FOR VESTING SHALL EXCLUDE (check one):
(1) for new plans, service prior to the Effective Date as defined in
Section 1.01(g)(1).
(2) for existing plans converting from another plan document, service
prior to the original Effective Date as defined in Section 1.01(g)(2).
1.08 PREDECESSOR EMPLOYER SERVICE
SERVICE FOR PURPOSES OF ELIGIBILITY IN SECTION 1.03(A)(1) AND VESTING IN
SECTION 1.07(A) OF THIS PLAN SHALL INCLUDE SERVICE WITH THE FOLLOWING
EMPLOYER(S):
(A)
(B)
(C)
(D)
1.09 PARTICIPANT LOANS
PARTICIPANT LOANS (check (a) or (b)):
(A) WILL BE ALLOWED IN ACCORDANCE WITH SECTION 7.09, SUBJECT TO A
$1,000 MINIMUM AMOUNT AND WILL BE GRANTED (check (1) or (2)):
(1) for any purpose.
(2) for hardship withdrawal (as defined in Section 7.10) purposes only.
(B) WILL NOT BE ALLOWED.
1.10 HARDSHIP WITHDRAWALS
PARTICIPANT WITHDRAWALS FOR HARDSHIP PRIOR TO TERMINATION OF EMPLOYMENT
(check one):
(A) WILL BE ALLOWED IN ACCORDANCE WITH SECTION 7.10, SUBJECT TO A
$1,000 MINIMUM AMOUNT.
(B) WILL NOT BE ALLOWED.
1.11 DISTRIBUTIONS
(A) SUBJECT TO ARTICLES 7 AND 8 AND (B) BELOW, DISTRIBUTIONS UNDER THE
PLAN WILL BE PAID (check the appropriate box(es)):
(1) as a lump sum.
(2) under a systematic withdrawal plan (installments).
(B) CHECK IF A PARTICIPANT WILL BE ENTITLED TO RECEIVE A DISTRIBUTION
OF ALL OR ANY PORTION OF THE FOLLOWING ACCOUNTS WITHOUT TERMINATING
EMPLOYMENT UPON ATTAINMENT OF AGE 59 1/2 (CHECK ONE):
(1) Deferral Contribution Account
(2) All Accounts
(C) CHECK IF THE PLAN WAS CONVERTED (BY PLAN AMENDMENT) FROM ANOTHER
DEFINED CONTRIBUTION PLAN, AND THE BENEFITS WERE PAYABLE AS (check the
appropriate box(es)):
(1) a form of single or joint and survivor life annuity.
(2) an in-service withdrawal of vested employer contributions
maintained in a participant's account (check (A) and/or (B)):
(A) for at least (24 or more) months.
(B) after the Participant has at least 60 months of participation.
(3) another distribution option that is a "protected benefit" under
Section 411(d)(6) of the Internal Revenue Code. Please attach a separate
page identifying the distribution option(s).
These additional forms of benefit may be provided for such plans under
Articles 7 or 8.
NOTE: Under Federal Law, distributions to Participants must generally begin
no later than April 1 following the year in which the Participant attains
age 70 1/2.
1.12 TOP HEAVY STATUS
(A) THE PLAN SHALL BE SUBJECT TO THE TOP-HEAVY PLAN REQUIREMENTS OF ARTICLE
9 (check one):
(1) for each Plan Year.
(2) for each Plan Year, if any, for which the Plan is Top-Heavy as defined
in Section 9.02.
(3) Not applicable. (This option is available for plans covering only
employees subject to a collective bargaining agreement and there are no
Employer or Matching Contributions elected in Section 1.05.)
(B) IN DETERMINING TOP-HEAVY STATUS, IF NECESSARY, FOR AN EMPLOYER WITH AT
LEAST ONE DEFINED BENEFIT PLAN, THE FOLLOWING ASSUMPTIONS SHALL APPLY:
(1) Interest rate: _____% per annum
(2) Mortality table: _____________
(3) Not Applicable.
(C) IN THE EVENT THAT THE PLAN IS TREATED AS TOP-HEAVY FOR A PLAN YEAR,
EACH NON-KEY EMPLOYEE SHALL RECEIVE AN EMPLOYER CONTRIBUTION OF AT LEAST
(3, 4, 5, OR 7 1/2) % OF COMPENSATION FOR THE PLAN YEAR IN ACCORDANCE
WITH SECTION 9.03 (check one):
(1) under this Plan in any event.
(2) under this Plan only if the Participant is not entitled to such
contribution under another qualified plan of the Employer.
(3) Not applicable. (This option is available for plans covering only
employees subject to a collective bargaining agreement and there are no
Employer or Matching Contributions elected in Section 1.05.)
NOTE: Such minimum Employer contribution may be less than the percentage
indicated in (c) above to the extent provided in Section 9.03(a).
(D) IN THE EVENT THAT THE PLAN IS TREATED AS TOP-HEAVY FOR A PLAN YEAR, THE
FOLLOWING VESTING SCHEDULE SHALL APPLY INSTEAD OF THE SCHEDULE(S) ELECTED
IN SECTION 1.07(A) FOR SUCH PLAN YEAR AND EACH PLAN YEAR THEREAFTER (check
one):
(1) 100% vested after ______________ (not in excess of 3) Years of
Service for Vesting.
(2) Years of Service for Vesting Vesting Percentage Must be at Least
0 ________ 0%
1 ________ 0%
2 ________ 20%
3 ________ 40%
4 ________ 60%
5 ________ 80%
6 ________ 100%
NOTE: If the schedule(s) elected in Section 1.07(a) is(are) more favorable
in all cases than the schedule elected in (d) above, then such schedule(s)
will continue to apply even in Plan Years in which the Plan is Top-Heavy.
1.13 TWO OR MORE PLANS - CODE SECTION 415 LIMITATION ON ANNUAL ADDITIONS
If the Employer maintains or ever maintained another qualified plan in
which any Participant in this Plan is (or was) a participant or could
become a participant, the Employer must complete this section. The
Employer must also complete this section if it maintains a welfare benefit
fund, as defined in Section 419(e) of the Code, or an individual medical
account, as defined in Section 415(l)(2) of the Code, under which amounts
are treated as annual additions with respect to any Participant in this
Plan.
(A) IF THE EMPLOYER MAINTAINS, OR MAINTAINED, ANY OTHER DEFINED
CONTRIBUTION PLAN OR PLANS WHICH ARE NOT MASTER OR PROTOTYPE PLANS, ANNUAL
ADDITIONS FOR ANY LIMITATION YEAR TO THIS PLAN WILL BE LIMITED (check one):
(1) in accordance with Section 5.03 of this Plan.
(2) in accordance with another method set forth on an attached separate
sheet.
(3) Not Applicable.
(B) IF THE EMPLOYER MAINTAINS, OR MAINTAINED, ANY DEFINED BENEFIT PLAN(S),
THE SUM OF THE DEFINED CONTRIBUTION FRACTION AND DEFINED BENEFIT FRACTION
FOR A LIMITATION YEAR MAY NOT EXCEED THE LIMITATION SPECIFIED IN CODE
SECTION 415(E), MODIFIED BY SECTION 416(H)(1) OF THE CODE. THIS COMBINED
PLAN LIMIT WILL BE MET AS FOLLOWS (check one):
(1) Annual Additions to this Plan are limited so that the sum of the
Defined Contribution Fraction and the Defined Benefit Fraction does not
exceed 1.0.
(2) another method of limiting Annual Additions or reducing projected
annual benefits is set forth on an attached schedule.
(3) Not Applicable.
1.14 ESTABLISHMENT OF TRUST AND INVESTMENT DECISIONS
(A) INVESTMENT DIRECTIONS
Participant Accounts will be invested (check one):
(1) in accordance with investment directions provided to the Trustee by
the Employer for allocating all Participant Accounts among the options
listed in (b) below.
(2) in accordance with investment directions provided to the Trustee by
each Participant for allocating his entire Account among the options listed
in (b) below.
(3) in accordance with investment directions provided to the Trustee by
each Participant for all contribution sources in a Participant's Account
except the following sources shall be invested as directed by the Employer
(check (A) and/or (B)):
(A) Fixed or Discretionary Employer Contributions
(B) Employer Matching Contributions
The Employer must direct the applicable sources among the same investment
options made available for Participant directed sources listed in (b)
below.
(B) PLAN INVESTMENT OPTIONS
The Employer hereby establishes a Trust under the Plan in accordance with
the provisions of Article 14, and the Trustee signifies acceptance of its
duties under Article 14 by its signature below. Participant Accounts
under the Trust will be invested among the Fidelity Funds listed below
pursuant to Participant and/or Employer directions.
Fund Name Fund Number
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
NOTE: An additional annual recordkeeping fee will be charged for each fund
in excess of five funds.
To the extent that the Employer selects as an investment option the Managed
Income Portfolio of the Fidelity Group Trust for Employee Benefit Plans
(the "Group Trust"), the Employer hereby (A) agrees to the terms of the
Group Trust and adopts said terms as a part of this Agreement and (B)
acknowledges that it has received from the Trustee a copy of the Group
Trust, the Declaration of Separate Fund for the Managed Income Portfolio of
the Group Trust, and the Circular for the Managed Income Portfolio.
NOTE: The method and frequency for change of investments will be determined
under the rules applicable to the selected funds or, if applicable, the
rules of the Employer adopted in accordance with Section 6.03. Information
will be provided regarding expenses, if any, for changes in investment
options.
1.15 RELIANCE ON OPINION LETTER
An adopting Employer may not rely on the opinion letter issued by the
National Office of the
Internal Revenue Service as evidence that this Plan is qualified under
Section 401 of the Code.
If the Employer wishes to obtain reliance that his or her Plan(s) are
qualified, application for a determination letter should be made to the
appropriate Key District Director of the Internal
Revenue Service. Failure to fill out the Adoption Agreement properly may
result in
disqualification of the Plan.
This Adoption Agreement may be used only in conjunction with Fidelity
Prototype Plan Basic
Plan Document No. 07. The Prototype Sponsor shall inform the adopting
Employer of any amendments made to the Plan or of the discontinuance or
abandonment of the prototype plan document.
1.16 PROTOTYPE INFORMATION:
Name of Prototype Sponsor: Fidelity Management & Research Co.
Address of Prototype Sponsor: 82 Devonshire Street
Boston, MA 02109
Questions regarding this prototype document may be directed to the
following telephone number:
1-(800) 343-9184.
EXECUTION PAGE
(FIDELITY'S COPY)
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed this ________day of _______________, 19_______.
Employer
By
Title
Employer
By
Title
Accepted by
Fidelity Management Trust Company, as Trustee
By Date
Title
EXECUTION PAGE
(EMPLOYER'S COPY)
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed this ________day of _______________, 19_______.
Employer
By
Title
Employer
By
Title
Accepted by
Fidelity Management Trust Company, as Trustee
By Date
Title
INSTRUCTIONS - NON-STANDARDIZED PROFIT SHARING/401(K) PLAN
ADOPTION AGREEMENT
All sections of this Adoption Agreement must be completed, except where
stated as optional. AN EMPLOYER MAY ONLY SELECT THE OPTIONS LISTED. DUE
TO INTERNAL REVENUE SERVICE REGULATIONS AN EMPLOYER MAY NOT MAKE ANY
CHANGES TO THE PRINTED LANGUAGE IN THIS ADOPTION AGREEMENT, NO MATTER HOW
SLIGHT. AN EMPLOYER SHOULD CONSULT WITH ITS ATTORNEY AND/OR ACCOUNTANT FOR
ASSISTANCE IN COMPLETING THIS AGREEMENT.
1.01. PLAN INFORMATION:
(a) Enter the legal name of the Plan.
(b) Type of Plan (Select one option):
(b)(1) A 401(K) AND PROFIT SHARING PLAN includes Employee Deferral
Contributions, Employer Matching Contributions (optional), Employer Fixed
or Discretionary Contributions and Qualified Discretionary Contributions
(optional).
(b)(2) A PROFIT SHARING PLAN includes only Employer Fixed or Discretionary
Contributions.
(b)(3) A 401(K) PLAN includes Employee Deferral Contributions, Employer
Matching Contributions (optional) and Qualified Discretionary Contributions
(optional). Check this option if the Plan has 401(k) plan features and
there is a frozen profit sharing plan source for Participant Accounts.
(c) Complete only if the Plan Administrator is not the Employer. (Fidelity
is NOT the Plan Administrator). A Committee may be designated to act on
behalf of the Plan Administrator. However, in such case, the Employer or
other Plan Administrator would still be considered the Plan Administrator.
(d) "Limitation Year" refers to the twelve-month period used to determine
if the Internal Revenue Code Section 415 annual addition limitation has
been exceeded for a Participant. If an Employer is a member of a
controlled group of businesses (as defined by the Internal Revenue Code)
and adopts this Plan, then the Limitation Year for all Employer plans,
(regardless of whether the other Related Employers adopt this Plan) must be
the same. (Check one only).
(e) This is the three digit number assigned to the plan as required by the
Internal Revenue Service. For a new plan, if the Employer does not
currently or has never maintained another qualified retirement plan, then
this Plan Number will be "001." If the Employer currently maintains or has
ever maintained another qualified retirement plan then this Plan will be
"002." If the Employer currently maintains or has ever maintained two
other qualified retirement plans then this Plan will be "003," ETC. An
existing Employer plan that is a conversion from another plan document must
use the same three digit plan number currently in effect.
(f) Enter the month and day of the Plan Year end (i.e., December 31). The
Plan Year must be the last day of a month.
(g)(1) (Select (1) or (2).) If this is a new plan then enter the Effective
Date. Generally, the Effective Date for a new plan may be any date during
the initial year the Plan is established. This date will determine the
appropriate Entry Date(s) for eligible Employees under Section 1.03(b), the
measurement period to determine eligible Compensation for new Participants
under Section 1.04(b), and the maximum Participant annual addition
limitation for the initial Plan Year. An Employer may have an Effective
Date that is different from the Fidelity Implementation Date (This is the
date an Employer's Plan is implemented with Fidelity as identified in the
Fidelity Service Agreement.) For example, an Employer's Plan may have a
January 1, 1994, Effective Date but a June 1, 1994, Implementation Date.
If this Plan is a "spin-off" from a prior plan, then the Employer must
check option (g)(1). A "spin-off" is when an existing qualified retirement
plan is separated into one or more plans. The separation may be the result
of a business entity selling a division or portion of its assets to the
Employer, or when the Employer wants to separate one plan into two or more
plans.
(g)(2) Enter the Effective Date of Amendment to The CORPORATEplan FOR
RETIREMENTSM. This is the date that all Plan assets will be wired to
Fidelity and when the provisions in this Adoption Agreement will become
effective. This date MUST be the first day of a month. The Effective Date
for an Employer checking option (A) below must be the same date as the
Implementation Date. The Implementation Date is also identified in the
Fidelity Service Agreement.
(A) If an Employer previously adopted The CORPORATEplan FOR RETIREMENTSM
and is amending or restating it then check this option. Also enter the
Plan's original Effective Date on the line below (B). (This is the date
the Plan was originally established by the Employer.)
(B) If this is an amendment or conversion of the Employer's Plan from
another plan document then check this option. Also enter the Plan's
original Effective Date on the line below (B). (This is the date the Plan
was originally established by the Employer.)
1.02. EMPLOYER:
(a) Enter the Employer's legal name, principal address, contact name and
phone number. If one or more Related Employers are adopting this Plan then
the Employer identified in this section should be the Employer sponsoring
the plan. A union may not be listed as an Employer, but an Employer may
establish a Plan for its employees covered by a collective bargaining
agreement with a union. An association may establish a Plan only for its
own Employees. The association may not establish a Plan for its members.
(a)(1) Enter the Employer's Federal tax identification number. This is not
the Federal tax identification number of the Plan.
(a)(2) Select the business form(s) of the Employer. Related Employers
under 1.02.(b) adopting The CORPORATEplan FOR RETIREMENTSM that have
multiple business forms may select more than one business form, if
applicable.
NOTE: Tax-exempt employers and plans of government employers are not
allowed to establish 401(k) plans. However, plans of tax-exempt employers
adopted before July 2, 1986, and plans of state and local governments
adopted before May 6, 1986, are not subject to this restriction.
(a)(3) Enter the month and day of the Employer's, not the Plan's, fiscal
tax year end.
(a)(4) Enter the date the Employer's business commenced.
(b) (Optional) If an Employer is part of an affiliated service group or
controlled group of employers (collectively defined as "Related Employers")
then it may include one or more Related Employers, in the definition of
"Employer" under this Plan. (Unrelated Employers CANNOT be included as
part of the Employer's Plan. Please consult your attorney and/or
accountant for assistance on the definition of legally Related Employers.)
Each Related Employer must take the appropriate legal action (i.e., Board
of Directors' Resolution for a corporation) to be included as part of the
Employer's Plan. If any Related Employer(s) is/are excluded from this Plan
then the Employer is still responsible for insuring that this Plan complies
with the minimum coverage requirements of Internal Revenue Code Section
410(b), the nondiscrimination requirements of Internal Revenue Code
Section 401(a)(4) the minimum participation requirements of Internal
Revenue Code Section 401(a)(26) and any other Internal Revenue Code
requirements. Employees of Related Employers, even if those Employees do
not participate in this Plan, will be considered in applying the minimum
coverage and participation tests. Furthermore, all eligible Participants,
regardless of whether employed by the Employer or a Related Employer must
receive a uniform allocation percentage of compensation (I.E., 5% of
eligible Compensation) under Section 1.05(a), if any, and/or the same
uniform matching percentage (I.E., 50% match for each $1.00 of Deferral
Contributions) under Section 1.05(c).
1.03. COVERAGE:
(a) An Employer may require Employees to complete a specified minimum
period of employment and/or attain a minimum age to be eligible to
participate in the Plan. An Employer's Plan that is a 401(k) and a Profit
Sharing Plan must select the same service requirement for the 401(k) and
profit sharing portion of the Plan.
(a)(1) (Select one option.) The maximum Employee eligibility service
requirement allowed by the Internal Revenue Service for an Employer's
401(k) plan is one year of service. An Employer may elect no service
requirement (Option A), a three consecutive months requirement (Option B),
or a six-consecutive-months requirement (Option C). However, if Option B
or C is elected, the Employer CANNOT require an Employee to work a
specified number of hours. For this purpose, "consecutive" means
uninterrupted period of employment with the Employer or Related Employer.
If the one year service requirement is selected (Option D) then the
Employee MUST complete 1,000 Hours of Service with the Employer during the
twelve-month period beginning on his/her date-of-hire and ending on his/her
employment anniversary date.
(a)(2) (Select one option.) An Employer may elect not to have an age
requirement (Option A) or an Employer may specify an age requirement as
long as it is not greater than 21 (Option B).
(a)(3)(A) If ALL Employees of the Employer and Related Employers, if
applicable, are eligible to participate in the Plan after meeting the
service and age requirement(s), if any, then select this option.
(a)(3)(B) An Employer may exclude certain non-discriminatory groups of
Employees from participating in the Plan. An Employer may exclude
Employees by checking the appropriate option(s) in (B):
(i) Collective bargaining employees as defined in Section 2.01(a)(10) of
the Basic Plan Document,
(ii) Highly Compensated Employees as defined in Internal Revenue Code
Section 414(q),
(iii) Leased Employees as defined in Section 2.01(a)(18) of the Basic Plan
Document,
(iv) Nonresident aliens who do not receive any earned income from the
Employer which constitutes United States source income,
(v) Any other non-discriminatory group of Employees in accordance with the
Internal Revenue Code, Internal Revenue Service regulations and other
governmental regulations.
The Employer will be responsible for compliance with the appropriate
annual required Internal Revenue Code tests if any group(s) of Employees
is/are excluded from the Plan. The term "Employer" includes the Employer
and any Related Employer(s).
(b) (Select one option.) The Entry Date is the date an eligible Employee
may actually begin participating in the Plan. Participation may occur only
ON OR AFTER the date an Employee satisfies the service and age
requirement(s). Option (1) provides for an annual Entry Date. Option (1)
may not be selected if an Employer elected a one-year service requirement
in Section 1.03(a)(1)(D) or an age requirement greater than 20 1/2 in
Section 1.03(a)(2)(B). Option (2) provides for semi-annual Entry Dates,
Option (3) provides for quarterly Entry Dates, and Option (4) provides for
monthly Entry Dates. An Employee may become eligible to participate in the
Plan on the Effective Date if Section 1.03(c)(2) or (3) is selected.
(c) (Select one option.) Upon adoption of The CORPORATEplan FOR
RETIREMENTSM, an Employer may determine when an Employee who is not yet
otherwise eligible may become a Participant in the Plan. The Employer has
three different options.
(c)(1) If this option is selected then an Employee must satisfy the service
and age requirement(s) in Section 1.03(a)(1) and (2) before being eligible
to participate in the Plan on the Entry Date(s) elected in Section 1.03(b).
(c)(2) If this option is checked then an Employee who is employed by the
Employer on the Effective Date in Section 1.01(g) is eligible to
participate in the Plan on the Effective Date regardless of whether or not
he/she has satisfied the service and age requirement(s) in Section 1.03(a).
This is a special ONE-TIME election for the Employer due to the adoption of
the Fidelity CORPORATEplan FOR RETIREMENTSM. An eligible Employee is
considered a Participant and will be included in the appropriate annual
Internal Revenue Code tests (I.E. minimum coverage, minimum participation,
annual addition, actual deferral percentage and actual contribution
percentage tests, ETC.). Therefore, an eligible Participant who elects not
to make any Employee Deferral Contributions under Section 1.05(b)(1) as of
the Effective Date in Section 1.01(g) may make them on the next available
date under Section 1.05(b)(1)(A).
(c)(3) If this option is checked then an Employee must satisfy the service
and age requirement(s) in Section 1.03(a) before being eligible to
participate in the Plan on the earlier of the Effective Date in Section
1.01(g) or the next Entry Date. Checking this option creates a special
ONE-TIME Entry Date based upon the Effective Date.
1.04. COMPENSATION (SELECT ONE OPTION):
(a) Compensation is defined under the Plan as total paid Compensation which
is reportable as earnings in the wages, tips and other Compensation box on
the annual IRS tax Form W-2 ("W-2 Compensation"), subject to any elections
in Section 1.04(a)(1) through (4). For purposes of determining Employee
and Employer contributions under Section 1.05, W-2 Compensation is modified
as follows:
to include:
Internal Revenue Code Section 401(k) salary deferrals (known as Deferral
Contributions under this Plan);
Internal Revenue Code Section 125 salary deferrals (Employee pre-tax
contributions to a "cafeteria plan");
Elective contributions under Internal Revenue Code Sections 402(h)
(Simplified Employee Pension), 403(b) (Tax Sheltered Annuities), other
deferred compensation described in Code Section: 457(b) (Plan of State and
Local Governments and Tax-Exempt Organizations) or 414(h)(2) (Plan of a
State or Political Subdivision of the Government), and
to exclude:
Deferred compensation;
Fringe benefits (cash and non-cash);
Moving expenses;
Reimbursements or other expense allowances;
Welfare benefits.
This modified W-2 Compensation definition meets the safe harbor
requirements of the regulations under Internal Revenue Code Section 414(s).
However, Compensation for purposes of the Internal Revenue Code actual
deferral percentage test and the actual contribution percentage test will
be based upon the aforementioned definition of Compensation regardless of
any items excluded from the definition of Compensation in Section
1.04(a)(1) through (4).
An Employer may exclude overtime pay, bonuses, commissions, and/or the
value of a qualified or non-qualified stock option granted from an
Employee's Compensation by checking the appropriate option(s) in (a)(1)
through (4). However, an Employer MAY NOT exclude bonuses from the
definition of Compensation in Section 1.04(a)(2)
if it elects to allow a Participant to make Bonus Deferral Contributions in
Section 1.05(b)(3). The Employer must demonstrate that these Compensation
exclusions are non-discriminatory when the Plan is submitted to the
Internal Revenue Service for an individual determination letter. If the
Plan's Compensation will be defined as W-2 Compensation without any of the
exclusions in (a)(1) through (4), then select option (a)(5).
(b)(1) Employer Contributions may be allocated to a first year eligible
Participant on the basis of his/her Compensation for the entire Plan Year.
(b)(2) Employer Contributions may be allocated to a first year eligible
Participant only for the portion of the Plan Year that he/she is eligible
to participate in the Plan. Compensation paid prior to a Participant's
date of participation will be not be considered in allocating Employer
contributions in Section 1.05(a), Deferral Contributions in Section
1.05(b)(2) and (3), Matching Contributions in Section 1.05(c) and Employee
After-Tax Contributions in Section 1.05(d). For example, assume a
Participant satisfied the service and age requirement(s) in Section 1.03(a)
and is eligible to participate in a calendar Plan Year on July 1.
Compensation for purposes of allocating all of the aforementioned
contributions for the initial Plan Year will be based upon the
Participant's Compensation from July 1 through December 31. Thereafter,
the Participant's Compensation will be based upon the entire Plan Year
unless he/she terminates employment before the end of a Plan Year.
Regardless of which option in Section 1.04(b) is selected, Compensation
for the initial Plan Year for a new Plan should be based upon eligible
Participant Compensation, subject to Section 1.04(b), from the Effective
Date in Section 1.01(g)(1) through the end of the first Plan Year. If the
time from the Effective Date in Section 1.01(g)(1) through the end of the
first Plan Year is less than twelve months then the Plan has a short Plan
Year for the initial year. The Internal Revenue Code Section 415 annual
addition limitation for each Participant in the initial Plan Year must be
adjusted accordingly.
1.05. EMPLOYER CONTRIBUTIONS:
To establish a 401(K) AND PROFIT SHARING PLAN, complete (a) and (b).
Options (c) and (d) are optional.
To establish only a PROFIT SHARING PLAN, complete (a) only.
To establish only a 401(K) PLAN, complete (b). Options (c) and (d) are
optional.
(a) (Optional) The contributions in Section 1.05(a) are EMPLOYER PROFIT
SHARING CONTRIBUTIONS. An Employer with a 401(k) and Profit Sharing or a
Profit Sharing only Plan must select an option in Section 1.05(a)(1) and/or
Section 1.05(a)(2). All Employer Contributions (Fixed, Discretionary,
Matching, and Qualified Discretionary) and Employee Deferral Contributions
are subject to the Internal Revenue Code Section 404(a) annual tax
deductible limit. A profit sharing and/or 401(k) plan deduction is limited
annually to 15% of total Compensation for all eligible Participants.
(a)(1) (Optional) An Employer may annually elect to contribute a profit
sharing contribution to each eligible Participant based upon the same fixed
percentage of Participant Compensation (Option (A)) or based upon the same
fixed flat dollar amount for each eligible Participant (Option (B)).
Employer Contributions under either of these two options are made according
to a pre-determined Participant allocation formula and are considered
profit sharing contributions. The Employer will be legally obligated to
make the required contributions within the prescribed time limit each year
regardless of profits.
(a)(2) (Optional) An Employer may elect to contribute a discretionary
profit sharing contribution, if any, each year by adoption of a corporate
Board of Directors' Resolution. A Sole Proprietor or a Partnership must
write a Letter of Intent declaring the Employer contribution for a
particular Plan Year.
(A) If the non-integrated profit sharing contribution formula is elected,
contributions are allocated for the particular Plan Year to each eligible
Participant in the ratio that each eligible Participant's Compensation
bears to the total Compensation of all eligible Participants for that Plan
Year.
(B) If the integrated profit sharing contribution formula is elected,
contributions are allocated for the particular Plan Year to each eligible
Participant using a formula that is integrated with Social Security. (The
Employer may not exclude any items from Compensation in Section 1.04(a)(1)
through (4) for purposes of allocating Employer contributions if the Plan
elects Option B.) Employer contributions are allocated in two steps.
FIRST - Contributions are allocated to each eligible Participant in the
ratio that each eligible Participant's total Compensation plus Compensation
in excess of the Social Security Taxable Wage Base (known as "Excess
Compensation") bears to the total eligible Compensation of all eligible
Participants plus the Compensation of all eligible Participants in excess
of the Social Security Taxable Wage Base. The Social Security Taxable Wage
Base is the annual FICA limit determined by the Social Security
Administration. The allocation to each Participant in the first step may
not exceed 5.7% of each Participant's total Compensation plus Excess
Compensation.
SECOND - Remaining contributions are allocated in the ratio that each
eligible Participant's Compensation bears to the total Compensation of all
eligible Participants.
NOTE: If the Plan is top-heavy in accordance with Internal Revenue Code
Section 416 then the Employer must contribute the required minimum
top-heavy contribution specified in Section 1.12(c). The top-heavy
minimum contribution is allocated prior to the aforementioned two steps.
(a)(3) (Select one option.) The Eligibility Requirement(s) in Section
1.05(a)(3) apply to all Fixed and/or Discretionary Employer Contributions.
The allocation of Employer Fixed or Discretionary Contributions to each
Participant may be conditioned on the Participant completing one or more
requirements. The Employer may require the Participant to be employed by
the Employer on the last day of the Plan Year (Option (A)) and/or either
earn at least 500 Hours of Service during the Plan Year (Option (B)) or
earn at least 1,000 Hours of Service during the Plan Year (Option (C)).
The Employer contribution can only be funded after Plan Year end if Option
(A), (B), or (C) is elected. Employer contributions funded during the
applicable Plan Year will become unconditional contributions. Participants
who die, become disabled or retire during the Plan Year must meet the
requirement(s) elected in Option (A), and/or (B) or (C), if any, to
receive a Fixed or Discretionary Employer Contribution. The Employer
should elect Option (D) if Participants are not required to meet any of the
aforementioned conditions to receive Employer Fixed or Discretionary
Contributions.
NOTE: CONDITIONAL EMPLOYER CONTRIBUTIONS ELECTED IN OPTION (A), (B), OR (C)
THAT ARE FUNDED DURING THE PLAN YEAR WILL BE TREATED AS UNCONDITIONAL
EMPLOYER CONTRIBUTIONS.
(b)(1) (Optional). An Employer with a 401(k) and Profit Sharing or a
401(k) Plan only must complete Section 1.05(b)(1). An Employer may allow a
Participant to elect to contribute Regular Deferral Contributions in a
whole percentage, from 1% to 15%, of Compensation into the Plan. Deferral
Contributions may only be withheld from a Participant's Compensation on a
prospective basis after he/she has properly completed and executed a
written salary deferral election. An Employer cannot require a minimum
Deferral Contribution of more than one percent of his/her Compensation.
The Internal Revenue Code's annual calendar year limit for a Participant's
Deferral Contributions is $8,994 for 1993 (adjusted annually by the
Secretary of Treasury). The specified percentage cannot be exceeded for
any particular payroll, unless the Participant elects a Catch-Up Deferral
Contribution in Section (b)(2) or a Bonus Deferral Contribution in Section
(b)(3). In either of these two circumstances an electing Participant must
properly complete and execute the appropriate salary deferral election
form. All Participant Deferral Contributions must be withheld by the
Employer through payroll deduction.
(b)(1)(A) (Select one option.) Select the frequency of deferral percentage
changes (must be at least once per Plan Year) that a Participant may make
in a Plan Year. A Participant may increase, decrease or suspend his/her
Regular Deferral Contributions based upon this frequency.
(B) (Select one option.) Select the date(s) on which a Participant who
COMPLETELY suspends his/her Regular Deferral Contributions may resume such
contributions (must be at least once per Plan Year) on the elected date.
(b)(2) (Optional) If Regular Employee Deferral Contributions are elected
under (b)(1) then an Employer may also allow a Participant to make Catch-Up
Deferral Contributions under certain conditions. If Catch-Up Deferral
Contributions are elected, a Participant may defer up to 100% of his/her
Compensation for one or more payroll periods in the FINAL month of the Plan
Year. However, Catch-Up Deferral Contributions for a Participant may not
exceed any of the following limits; the Deferral Contribution percentage
specified in (b)(1), the Internal Revenue Code's annual calendar year
Deferral Contribution limit ( $8,994 for 1993) and other appropriate
Internal Revenue Code limits.
A Participant must complete a special election form to make a Catch-Up
Deferral Contribution. If Section 1.04(b)(2) is selected, then eligible
Compensation for a first year eligible Participant for purposes of Catch-Up
Deferral Contributions will be limited. Compensation will be measured from
the Participant's Entry Date or the Effective Date, as appropriate, through
the end of his/her initial Plan Year.
(b)(3) (Optional) In addition or as an alternative to Regular Deferral
Contributions or Catch-Up Deferral Contributions, an Employer may permit a
Participant to make a special bonus deferral election. However, an
Employer may not exclude bonuses from the definition of Compensation in
Section 1.04(a) if it wants to allow a Participant to make Bonus Deferral
Contributions. If elected, a Participant may defer up to 100% of his/her
bonus but it may not exceed any of the following limits: the Deferral
Contribution percentage specified in (b)(1), the Internal Revenue Code's
annual calendar year Deferral Contribution limit ($8,994 for 1993), and
other appropriate Internal Revenue Code limits. A Participant must
complete a special election form to make a Bonus Deferral Contribution. If
Section 1.04(b)(2) is selected, then Compensation for a first year eligible
Participant for purposes of Bonus Deferral Contributions will be limited.
Compensation will be measured from the Participant's Entry Date or the
Effective Date, as appropriate, through the end of his/her initial Plan
Year.
NOTE: An Employer electing Catch-Up and/or Bonus Deferral Contributions
has the right to refuse to accept these Contributions if they will
adversely affect the Plan's actual deferral percentage or actual
contribution percentage test(s).
(b)(4) (Optional). Check this option if you would like Qualified
Discretionary Contributions (QDC's) to be treated as additional Deferral
Contributions for all Non-highly Compensated Employees to the extent
necessary to satisfy the requirements of the actual deferral percentage and
actual contribution percentage tests. QDC's are treated as Employer profit
sharing contributions except they are always 100% vested and may not be
withdrawn as a hardship by a Participant. (A separate source will be set
up in the Employer's Plan to properly account for any QDC's.) QDC's may
also be used to satisfy any required Internal Revenue Code top-heavy
minimum Employer contributions for non-key Employees under Section 1.12(c).
If an Employer wants to make a QDC then it must be made for each Non-highly
Compensated Employee who was eligible to participate in the Plan during the
Plan Year. An Employer CANNOT require a Participant to work a certain
number of hours during the Plan Year and/or be employed as of the last day
of the Plan Year to be eligible to receive a QDC. An Employer must
contribute QDC's to the Plan within the prescribed legal time limit.
(A) An Employer may allocate QDC's to Non-highly Compensated Employees for
a Plan Year on a percentage of Compensation basis.
(B) An Employer may allocate QDC's to Non-highly Compensated Employees for
a Plan Year on a flat dollar basis.
(c)(1) (Optional). Employer Matching Contributions can only be selected if
Employee Deferral Contributions are selected in Section 1.05(b). An
Employer may elect to match ALL Employee Deferral Contributions, subject to
any percentage of Compensation and/or dollar limit(s) under Section
1.05(c)(3), based upon 50% (Option (A)), 100% (Option (B)), a specified
percentage (Option (C)), or a tiered match (Option (D)). If Option (D) is
selected, the matching contribution percentage may not increase as the
percentage of compensation contributed to the plan increases. For example:
Percent of Eligible Employer
Participant Compensation Matching
Tier Contributed to the Plan Contributions
First First 2% 100%
Second Next 2% 75%
Third Next 2% 50%
In the above example an Employer may not have a first tier match of 50%, a
second tier match of 75% and a third tier match of 100%.
An Employer may make Discretionary Matching Contributions, if any, each
Plan Year based upon a percentage of Participant Employee Deferral
Contributions (Option (E)). This option enables the Employer to vary the
Matching Contribution annually without having to amend The CORPORATEplan
FOR RETIREMENTSM Adoption Agreement. The amount of Matching Contributions,
if any, will be determined annually by the Employer and then communicated
to the Participants. The Employer may declare the Matching Contributions
at any time during the Plan Year. A corporate Employer must pass a Board
of Directors' Resolution declaring the Matching Contribution for a
particular Plan Year. A Sole Proprietor or a Partnership must write a
Letter of Intent declaring the Matching Contribution for a particular Plan
Year.
Employer Matching Contributions MUST be computed based upon the amount of
a Participant's Deferral Contributions, subject to any percentage of
Compensation and/or dollar limit(s) under Section 1.05(c)(3). An Employer
may NOT:
compute Matching Contributions on Employee Deferral Contributions using a
formula based upon a Participant's Years of Service with the Employer,
make any Matching Contributions on Employee After-Tax Contributions,
make any Qualified Matching Contributions (QMAC's).
(c)(2) (Optional) If Matching Contributions are selected in (c)(1) then an
Employer may elect to make additional Matching Contributions at the end of
the Plan Year through a Board of Directors' Resolution for a Corporation or
a Letter of Intent for a Sole Proprietor or a Partnership.
(c)(3)(A) (Optional. An Employer may select to limit the percentage of a
Participant's Deferral Contributions that are eligible for the Matching
Contributions specified in (c)(1) to a certain percentage of his/her
eligible Compensation.
EXAMPLE: An Employer wants to match 50% of each dollar contributed to the
Plan as Deferral Contributions but only on the first six percent of a
Participant's eligible Compensation. A Participant's eligible Compensation
for one payroll is $1,000 and he contributes 10% of it into the Plan as
Deferral Contributions. The Matching Contribution will be limited to $30
[($1,000 of Compensation) x (6% limit) = $60, $60 x 50% = $30].
If an Employer directs Fidelity to establish a Basic Employee Deferral
Contribution and a Supplemental Employee Deferral Contribution source for
contributions made pursuant to Section 1.05(b) on the Fidelity Participant
Recordkeeping System and the Employer elects a percentage limit on Matching
Contributions then the match must be computed based upon each payroll
period. A Basic Deferral Contribution represents the portion of a
Participant's Deferral Contributions that will be matched by the Employer.
A Supplemental Deferral Contribution represents the portion of a
Participant's Deferral Contributions that will NOT BE matched by the
Employer. Please refer to the CPR Compliance Section of The CORPORATEplan
FOR RETIREMENTSM for further details.
(c)(3)(B) (Optional) An Employer may select to limit the total Matching
Contributions to a fixed dollar amount.
NOTE: An Employer may select (3)(A), (3)(B) or both (3)(A) and (3)(B). If
the last of these choices is selected, then the Matching Contributions will
be limited to whichever limit occurs first, either the percentage of
Compensation in (A) or the fixed dollar amount in (B).
(c)(4) (Select one or more options.) If a Matching Contribution is
selected in Section 1.05(c)(1) then the Employer must select one of the
Options (A through F) listed in this section. An Employer may specify that
a Participant must satisfy certain conditions during a Plan Year to be
eligible to receive Matching Contributions. The Employer may require a
Participant to be employed on the last day of the Plan Year (Option (A))
and/or either earn at least 500 Hours of Service during the Plan Year
(Option (B)) or earn at least 1,000 Hours of Service during the Plan Year
(Option (C)). Matching Contributions made pursuant to (A),(B), or (C) are
referred to as conditional contributions and must be FUNDED AFTER PLAN YEAR
END. Participants who die, become disabled, or retire during the Plan Year
must meet the requirement(s) selected, if any, to receive Matching
Contributions on their Deferral Contributions. If Option (A), (B), or (C)
is adopted DURING a Plan Year then it will not become effective until the
first day of the next Plan Year. An Employer may also exclude a Highly
Compensated Employee (Option (D)) and/or a Partner in a partnership (Option
(E)), from eligibility for Matching Contributions. If the Employer wants
to make MANDATORY or unconditional Matching Contributions to Participants
making Employee Deferral Contributions then select Option (F). Matching
Contributions are subject to the Internal Revenue Code's annual actual
contribution percentage test and annual addition limitation.
NOTE: CONDITIONAL MATCHING CONTRIBUTIONS ELECTED IN OPTION (A), (B), OR (C)
THAT ARE FUNDED DURING THE PLAN YEAR WILL BE TREATED AS UNCONDITIONAL
MATCHING CONTRIBUTIONS. ADDITIONALLY, IF AN EMPLOYER HAS BEEN MAKING
UNCONDITIONAL MATCHING CONTRIBUTIONS AND ELECTS OPTION (A), (B), OR (C)
DURING A PLAN YEAR, THEN SUCH OPTION WILL NOT BECOME EFFECTIVE UNTIL THE
FIRST DAY OF THE NEXT PLAN YEAR.
(d)(1) (Optional) An Employer that elects Employee Deferral Contributions
in Section 1.05(b), may also elect to allow Employee After-Tax
Contributions to be made by a Participant by selecting Option (1).
Employee After-Tax Contributions may be limited due to the actual
contribution percentage test and/or the annual addition limitation.
Employee After-Tax Contributions ARE NOT eligible for Matching
Contributions and may be withdrawn only once per year unless Employee
After-Tax Contributions under the Employer's prior plan document allowed
more frequent withdrawals.
(d)(2) (Optional) An Employer that previously allowed Participant Employee
After-Tax Contributions or accepted transfers of such contributions from
another qualified retirement plan may elect not to allow such contributions
in the future under Option (2).
1.06. RETIREMENT AGE(S):
Retirement Age in a qualified retirement plan is a "protected benefit"
under the Internal Revenue Code. An Employer converting to The
CORPORATEplan FOR RETIREMENTSM from another plan document may not eliminate
any protected benefits for Participants attaining the Retirement Age(s)
that were specified in the prior document.
(a) This is the age at which a Participant becomes 100% vested in his/her
Employer and Matching Contribution Accounts, regardless of his/her length
of service with the Employer or a Related Employer. An Employer may select
age 65 (Option (1)), any other age between 55 and 64 (Option (2)), or the
later of a specified age between 55 and 65 and the fifth anniversary of the
date the Participant commenced employment (Option (3)). A Participant is
not required to retire once he/she attains Normal Retirement Age. (Select
one option.)
(b) (Optional). A Participant becomes 100% vested in his/her Employer and
Matching Contribution Accounts upon satisfying the early retirement
requirement(s). If an Employer converted to The CORPORATEplan FOR
RETIREMENTSM and had an Early Retirement Age in its prior plan document,
then this Plan must offer the same or a more favorable Early Retirement
Age. Specify the early retirement age (must be at least 55) and required
years of service, if applicable.
(c) (Optional). A Participant becomes 100% vested in his/her Employer and
Matching Contribution Accounts upon Disability Retirement. If an Employer
converted to the CORPORATEplan FOR RETIREMENTSM and previously had
Disability Retirement in its prior plan document, then it must select one
or more of the options in this section. Option (1) requires a Participant
to satisfy the Employer's normal requirements for benefits under its
Long-Term Disability Plan. Option (2) requires a Participant to be
eligible for Social Security disability benefits. Option (3) requires a
Participant to be determined disabled by a physician that is approved by
the Employer. An Employer may select more than one option in this Section.
1.07. VESTING SCHEDULE:
(a) Vesting refers to the nonforfeitable interest of a Participant in
Employer and/or Matching Contributions and the earnings thereon. A
Participant is always 100% vested in Employee Deferral Contributions and
Qualified Discretionary Contributions and the earnings thereon. Vesting
under The CORPORATEplan FOR RETIREMENTSM is based upon the ELAPSED-TIME
METHOD that is defined under "Years of Service for Vesting" in Section
2.01(a)(33) of the Basic Plan Document. Participant Years of Service for
Vesting Employer and/or Matching Contributions include all years of service
subject to any exclusion in Section 1.07(b). Amounts which are not fully
vested when a Participant terminates employment will be used in the current
Plan Year to reduce future Employer and/or Matching Contributions and/or to
pay Plan expenses. An Employer's Plan that is converted from another plan
document that previously allowed vesting under another method will be
subject to the transitional rules in accordance with governmental
regulations to convert it to the elapsed-time method.
(a)(1) (Select one option.) An Employer must elect Option (A) if there are
no Employer contributions. An Employer electing Employer contributions in
Section 1.05(a) (Fixed or Discretionary) MUST select one of the Vesting
Schedules listed in Options (B) through (G1). An Employer may create its
own Vesting Schedule by inserting the elected vesting percentage in the
blanks in (G1). However, the percentages elected in (G1) must be at least
as favorable as the ones listed in (D) or (F) (I.E., the vesting percentage
for a Participant with three Years of Service must be at least 20%, four
Years of Service must be at least 40%, ETC.).
If an Employer previously adopted The CORPORATEplan FOR RETIREMENTSM
Adoption Agreement and elected a top-heavy schedule then it may not elect a
non top-heavy schedule in Option (D), (F) or (G1) if it is not as favorable
as Option (E). If a Plan becomes top-heavy then the top-heavy Vesting
Schedule elected in Section 1.12(d) will AUTOMATICALLY be used for each
Plan Year thereafter unless the schedule elected here is the same or more
favorable in all cases.
(a)(2) (Select one.) An Employer must select Option (A) if there are no
Matching Contributions. An Employer electing Matching Contributions in
Section 1.05(c) MUST select only one of the Vesting Schedules listed in
Options (B) through (G2). An Employer may create its own vesting schedule
by inserting the elected vesting percentage in the blanks in (G2).
However, the percentages must be at least as favorable as the ones listed
in (D) or (F) (I.E., the vesting percentage for a Participant with three
Years of Service must be at least 20%, four Years of Service must be at
least 40%, ETC.). An Employer electing Option (B), which provides that
Matching Contributions are immediately 100% vested, MAY NOT include these
Contributions in the actual deferral percentage or actual contribution
percentage test as Qualified Matching Contributions.
If an Employer previously adopted The CORPORATEplan FOR RETIREMENTSM
Adoption Agreement and elected a top-heavy schedule, then it may not elect
a non top-heavy schedule in Option (D), (F) or (G2) if it is not as
favorable as Option (E). If a Plan becomes top-heavy then the top-heavy
Vesting Schedule elected in Section 1.12(d) will automatically be used for
each Plan Year thereafter unless the schedule elected here is the same or
more favorable in all cases.
An Employer that elected two different Vesting Schedules, one in Option
(1) for Employer contributions and another in Option (2) for Matching
Contributions has dual vesting. For example, Employer Fixed or
Discretionary Contributions may be subject to a six year graded Vesting
Schedule as elected in Option (E) and Matching Contributions may be 100%
vested immediately as elected in Option (B).
(b) (Optional) Years of Service for Participant Vesting includes ALL Years
of Service for an Employee except an Employer may elect to exclude service
prior to the Effective Date of a new plan (Option (1)) or prior to the
original Effective Date of a pre-existing plan (Option (2)).
1.08. PREDECESSOR EMPLOYER SERVICE:
(Optional). An Employer may elect to include an Employee's Years of
Service with any predecessor employer(s) listed in (a) through (d) for both
eligibility AND vesting purposes. (If this Plan is a continuation of a
plan of a predecessor employer, Years of Service with the Predecessor
Employer(s) are automatically included for eligibility and vesting
purposes).
1.09. PARTICIPANT LOANS (SELECT ONE OPTION):
(a) (Optional) An Employer may elect to allow Participant loans (Option
(a)). If Option (a) is selected, then the Employer may allow Participant
loans for any purpose (Option (1)) or only for hardship withdrawal reasons
(Option (2)) as defined in Section 7.10 of The CORPORATEplan FOR
RETIREMENTSM Basic Plan Document. All loans are subject to a $1,000
minimum. An outstanding Participant loan becomes due and payable in full
as of the date a Participant dies, becomes disabled (as defined in Section
1.06(c), retires (as defined in Section 1.06(a) or (b)), or terminates
employment with the Employer or a Related Employer.
The loan feature provides for a Participant loan with a five-year maximum
term, except a ten-year term is permitted for a loan used for the purchase
of the Participant's primary residence. Funds for a loan may be withdrawn
from Deferral Contributions, Matching Contributions, Qualified
Discretionary Contributions, Discretionary Contributions and Employee After
- -Tax Contributions for a loan unless the Employer restricts the
contribution sources in a separate written administrative procedure
delivered to Fidelity. A Participant may have only one loan outstanding at
any one time and may request only one loan per Plan Year. A Participant
may NOT refinance, renegotiate or extend the maturity date of an existing
loan. Also, a Participant may not obtain a second loan for the purpose of
paying off the first loan. All loans are governed in accordance with the
loan procedures disclosed in Section 7.09 of The CORPORATEplan FOR
RETIREMENTSM Basic Plan Document. Loan set up and annual maintenance fees
will be charged to the affected Participant's Account, unless they are paid
by the Employer. Loan fees are disclosed in The CORPORATEplan FOR
RETIREMENTSM Service Agreement.
In accordance with governmental regulations, a Plan may not permit
Participant loans to Owner-Employees (sole proprietor or a partner owning a
10%-or-more interest in a Partnership) of non-corporate entities or to
Shareholder-Employees of Subchapter S corporations (I.E., an employee or
officer who owns more than 5% of the outstanding stock of the Subchapter S
corporation).
(b) An Employer may elect not to offer Participant loans by selecting this
option.
1.10. HARDSHIP WITHDRAWALS (SELECT ONE OPTION):
(a) (Optional) An Employer may elect to make hardship withdrawals
available with a $1,000 minimum.
A Participant may request a hardship withdrawal from his/her Deferral and
Rollover Contributions. However, amounts may be available for withdrawal
from Employer and/or Matching Contribution Account(s) if allowed under the
Employer's prior plan document. Hardship withdrawals will be made in
accordance with the Internal Revenue Code safe harbor provisions: for the
purchase of a Participant's primary residence, to prevent eviction or
foreclosure from the Participant's primary residence, for post-secondary
educational expenses for the next twelve months for the Participant or
his/her dependents, or for unreimbursed medical expenses of the Participant
and his/her dependents.
If the Participant receives the hardship withdrawal he/she must suspend
all Employee Deferral Contributions for a twelve month period from this
Plan and any other Employer qualified and non-qualified Plan. The
Participant must also exhaust all other resources, including obtaining a
loan if this feature is offered under Section 1.09 of this Plan or other
plans maintained by the Employer, and by withdrawing all Employee After-Tax
Contributions in his/her account before obtaining a hardship withdrawal.
The amount of the withdrawal may not exceed the amount of the hardship. A
Participant may increase the amount of his/her hardship withdrawal, only to
the extent his/her account balance is available, to cover Federal, state,
and local income taxes along with any penalties.
(b) An Employer may elect not to make hardship withdrawals available by
selecting this option.
1.11. DISTRIBUTIONS:
(a) Generally, distributions from the Plan may be paid to a Participant
only as a lump sum (Option (1)) or as systematic installment withdrawals
(Option (2)). A Participant's right to receive a distribution from an
Employer's Plan is a legally protected right. If the Employer converted
from another plan document that allowed a Participant the right to receive
his/her distribution from the Plan in a lump sum and/or installment
option(s), it must select the same option(s) in this section. (Select one
or both options.)
(b) (Optional) Check this option to allow a Participant who has not yet
terminated employment with the Employer to receive a distribution of part
or all of his/her Employee Deferral Contributions Account or of his/her
entire Account, on or after attainment of age 59 1/2. If an Employer
converted from another plan document, it must select (1) or (2). Option
(1) allows a Participant to withdraw part or all of his/her Employee
Deferral Contribution Account only, while Option (2) allows a Participant
to withdraw part or all of his/her entire Account.
(c) An Employer may be required under Internal Revenue Service regulations
to continue to provide for such method(s) of Participant distribution in
addition to a lump sum and/or installments. If an Employer's Plan is an
amendment or conversion from another plan document which previously
provided for annuity payments (Option (1)), in-service withdrawals of
Employer Contributions (Option (2)), or any other distribution option that
is a "protected benefit" under Internal Revenue Code Section 411(d)(6)
(Option (3)), then the Employer must check (c) and elect the appropriate
option(s). (Check as many as apply, or leave blank if none apply.)
The Plan Administrator is responsible for identifying any Participant
older than age 70 1/2. These Participants must receive the minimum
required distribution in accordance with the Internal Revenue Code. The
Plan Administrator is responsible for computing the amount of the minimum
distribution and providing Fidelity with the appropriate written direction.
1.12. TOP-HEAVY STATUS:
Generally, a defined contribution plan is considered top-heavy if more
than 60% of the account balances are for the benefit of key employees. A
key employee is defined under Internal Revenue Code Section 416.
(a) Option (1) allows an Employer to assume its Plan is always top-heavy
and automatically to comply with the top-heavy plan requirements each Plan
Year. Thus, each Plan Year the Employer will make the required top-heavy
minimum contribution listed in Section 1.12(c) and be subject to the
top-heavy Vesting Schedule in Section 1.12(d). Option (2) requires an
Employer to perform the top-heavy test each Plan Year. If the Plan is
determined to be top-heavy then it will be subject to the top-heavy
requirements under Section 1.12(c) and 1.12(d). (Select one option.)
(b) If an Employer's Plan is top-heavy and the Employer currently maintains
a defined benefit plan, then an actuary should assist in the completion of
the information in Option (1) and (2). If an Employer does not currently
maintain a defined benefit plan then check Option (3).
(c) Generally, every non-key employee who is a participant in a top-heavy
plan at the end of the Plan Year must receive minimum Employer
contributions under such plan, if any key employee as defined by the
Internal Revenue Code is receiving a contribution for that Plan Year. A
Participant who is a non-key employee must receive the minimum top-heavy
Employer contribution regardless of any Hours of Service eligibility
requirement elected under Section 1.05(a)(3)(B) or (C) (Employer
Contributions), or Section 1.05(c)(4)(B) or (C) (Matching Contributions).
Only Employer and Qualified Discretionary Contributions are counted as
top-heavy minimum contributions. Employee Deferral, Employee After-Tax,
and Employer Matching Contributions are not counted as top-heavy minimum
contributions for non-key employees.
Use the table below to determine the minimum top-heavy contribution to be
inserted in this Section 1.12(c) and the appropriate selection from options
(c)(1) through (c)(3).
<TABLE>
<CAPTION>
<S> <C> <C>
SITUATION MINIMUM SELECT
CONTRIBUTION OPTION
Employer maintains this Plan only. 3% (c)(1)
Employer maintains a defined benefit plan or another defined 3% (c)(2)
contribution plan which provides the top-heavy minimum benefit or
contribution for employees who participate in both plans.
Employer maintains another defined contribution plan and the top-heavy 3% (c)(1)
minimum contribution for employees who participate in both plans is
made to this Plan.
Employer also maintains a defined benefit plan which does not provide 5% (c)(1)
the minimum benefit to employees who participate in both plans.
The Employer also maintains a defined benefit plan which does not 7 1/2% (c)(1)
provide the minimum benefit to employees who participate in both plans,
the top-heavy ratio does not exceed 90%, and the plan provides an extra
minimum contribution in order to use the 125% limitation under Internal
Revenue Code Section 415(e).
The Employer also maintains a defined benefit plan, the top-heavy ratio 4% (c)(1)
does not exceed 60%, and both plans provide minimum benefits or
contributions and provide extra minimums in order to use the 125%
limitation under Internal Revenue Code Section 415(e).
The Plan covers only employees subject to a collective bargaining N/A (c)(3)
agreement and there are no Employer or Matching Contributions.
</TABLE>
NOTE: COMPENSATION FOR TOP-HEAVY PURPOSES IS DEFINED AS TOTAL ANNUAL
COMPENSATION FOR A PARTICIPANT LESS ANY EMPLOYEE DEFERRAL CONTRIBUTIONS.
(d) An Employer MUST elect a top-heavy Vesting Schedule for its Plan
unless the Plan is covering only Employees subject to a collective
bargaining agreement and there are no Employer or Matching Contributions.
Even an Employer that allows only Employee Deferral Contributions MUST
elect a top-heavy Vesting Schedule since the Plan could become top-heavy
under certain circumstances.
The Vesting Schedule(s) elected in Section 1.07(a) will apply unless the
Plan is top-heavy. Once an Employer's Plan is top-heavy and subject to the
Vesting Schedule elected in this Section, then it will continue to apply
even in subsequent Plan Years when the Plan is not top-heavy. An Employer
must elect a top-heavy Vesting Schedule under either Option (1) or (2)
unless the Vesting Schedule(s) in Section 1.07(a) is/are more favorable to
the Participants.
1.13. TWO OR MORE PLANS:
(a) (Select one option.) Annual Participant contributions (Employee
Deferral and After-Tax) and all Employer contributions and benefits under
all Employer and Related Employer qualified retirement plans are subject to
one overall annual addition limit. Section 1.13 is designed to determine
how the Employer's Plan will comply with these limitations under all
Employer plans. The maximum permissible annual addition limit for a
limitation year for a Participant in one or more defined contribution plans
is the lesser of $30,000 (as indexed) or 25% of a Participant's
compensation. For purposes of the latter limit, a Participant's
Compensation must be reduced by any elective contributions under Internal
Revenue Code Sections 402(h) (Simplified Employee Pension), 403(b)
(Tax-Sheltered Annuities), other deferred compensation described in 457(b)
(Plan of State and Local Governments and Tax-Exempt Organizations) or
414(h)(2) (Plan of a State or Political Subdivision of the Government).
Option (a) is required by the Internal Revenue Service, unless (1) this is
the only Plan ever maintained by the Employer, or (2) the Employer
maintains other defined contribution plans, but they are master or
prototype plans. An Employer cafeteria (Internal Revenue Code Section 125)
plan is not considered a plan for purposes of Section 1.13.
(a)(1) Excess annual additions for an affected Participant will be refunded
from both the Employer's other defined contribution plan and this Plan on a
PRORATA basis.
(a)(2) If the Employer does not want excess annual additions for an
affected Participant to be refunded in accordance with (a)(1) then the
Employer should select this option. The Employer may designate how excess
annual additions will be refunded from the Employer's other defined
contribution plan and this Plan by attaching a separate schedule.
(a)(3) Check this option if this is the only Plan the Employer maintains.
Excess annual additions for a Participant will be refunded from this Plan.
(b) (Select one option.) Completion of Option (b) is required by the
Internal Revenue Service unless this is the only plan ever maintained by
the Employer or the Employer never had or maintained a defined benefit
plan.
(b)(1) If an Employer maintains or has ever maintained a defined benefit
plan in addition to this defined contribution plan then there are certain
Internal Revenue Code fractions that must be computed annually. An
Employer must compute each Participant's defined benefit fraction under the
defined benefit plan and defined contribution fraction under the defined
contribution plan. The sum of these two fractions for each Participant may
not exceed 1.0.
(b)(2) An Employer not electing (b)(1) may reduce excess annual additions
for an affected Participant participating at one time or another in both a
defined benefit plan and a defined contribution plan maintained by the
Employer by attaching a separate schedule.
(b)(3) Check this option if the Employer does not currently or has never
maintained a defined benefit plan.
1.14. ESTABLISHMENT OF TRUST AND INVESTMENT DECISIONS:
This section establishes the Trust under the Plan and permits the Employer
to designate who directs the investments (Employer, Participants, or both)
and the Fidelity Mutual Funds available for investment under the Plan.
(Select one option from (a) and complete Option (b).)
(a)(1) An Employer may direct all Participant account balances
between/among the available Fidelity Funds offered under the Plan by
electing Option (1). The Employer is responsible for sending Fidelity
written direction for any exchanges between/among available Funds based
upon procedures established by Fidelity.
(a)(2) An Employer may allow each Participant to direct his/her entire
account balance between/among the available Fidelity Funds offered under
the Plan by selecting Option (2). (A Participant's spouse or a third party
may NOT direct Participant account balances.) Each Participant should
receive a prospectus in accordance with Securities and Exchange Commission
requirements before investing money in any Fidelity Mutual Fund.
Participant exchanges will be based upon instructions given by Participants
to Fidelity Telephone Representatives during predetermined business hours.
An Employer electing this Option may also elect to comply with Section
404(c) of the Employee Retirement Income Security Act of 1974 (ERISA). If
the requirements of ERISA 404(c) are satisfied by the Plan then each
Participant is responsible for any investment gains/losses in his/her
Accounts. However, election of ERISA 404(c) by an Employer does not fully
relieve it of all fiduciary liability. The Employer is still responsible
for the selection and monitoring of Plan investment options.
(a)(3) An Employer may direct certain sources of Participant account
balances and allow a Participant to direct his/her remaining account
balances between/among the available Fidelity Funds by selecting Option
(3). The Employer may direct Participant Fixed and/or Discretionary
Employer Contributions by selecting Option (A) or only direct Employer
Matching Contributions by selecting Option (B). All remaining sources will
be directed by each Participant. An Employer may not elect ERISA 404(c)
protection for the portion of Participant's Account it directs. The
Employer and Participant must select from the available Funds listed in
Option (b). The Employer must provide Fidelity with written instructions
for the investment of Participant Accounts that it will direct
between/among Fidelity Funds.
(b) The Employer may only select Fidelity Funds offered under The
CORPORATEplan FOR RETIREMENTSM. An additional recordkeeping fee will be
charged for each Fidelity Fund selected in excess of five (5).
An Employer that selects the Fidelity Managed Income Portfolio (formerly
known as the GIC Open-End Portfolio) MUST receive the Group Trust, the
Declaration of Separate Fund, and the Circular for the Managed Income
Portfolio from the Fidelity Account Executive prior to the execution of
this Adoption Agreement. The Employer by executing the Adoption Agreement
agrees to all of the requirements in the aforementioned documentation.
Certain restrictions apply on investment exchanges from the Managed Income
Portfolio into a "competing" Fund. Please refer to the aforementioned
documentation for further information.
1.15. RELIANCE ON OPINION LETTER:
Because this is a non-standardized prototype plan an adopting Employer may
not rely on the opinion letter issued by the National Office of the IRS
that its Plan satisfies the qualification requirements of Internal Revenue
Code Section 401(a). Fidelity originally received an Internal Revenue
Service "Opinion Letter" dated June 12, 1991 (Letter Serial No. D358678a)
for The CORPORATEplan FOR RETIREMENTSM Basic Plan Document No. 7 and the
Non-Standardized Adoption Agreement. On August 24, 1993, Fidelity received
an IRS "Opinion Letter " on the Plan as amended and restated (Letter Serial
No. D358678b). The Plan Administrator is RESPONSIBLE for applying for an
individual determination letter for the Plan from the appropriate Key
District Director of the Internal Revenue Service. The Plan Administrator
should consult with their attorney and/or accountant for further
information. Failure by the Employer to complete properly and execute the
Adoption Agreement may result in disqualification of the Plan.
This document includes two (2) identical signature pages. An authorized
officer (if the Employer is incorporated) or the authorized individual(s)
(if the Employer is unincorporated) must sign pages 24 and 25 and return
them to Fidelity. Only one authorized signature is required to execute
this Adoption Agreement, unless the Employer's corporate policy mandates
two authorized signatures. Fidelity Management Trust Company will sign
both pages and return one signature page (page 21) with the original
Adoption Agreement to the Employer. The Employer should take the
appropriate Board of Directors, action to adopt The CORPORATEplan FOR
RETIREMENTSM.
THIS AGREEMENT SHOULD BE REVIEWED BY YOUR ATTORNEY AND/OR ACCOUNTANT BEFORE
IT IS EXECUTED.
This document includes two (2) identical signature pages. An authorized
officer (if the Employer is incorporated) or an authorized individual(s)
(if the Employer is unincorporated) must sign pages 24 and 25 and return
them to Fidelity. Only one authorized signature is required to execute
this Adoption Agreement, unless the Employer's corporate policy mandates
two authorized signatures. Fidelity Management Trust Company will sign
both pages and return one signature page (page 21) with the original
Adoption Agreement to the Employer. The Employer should take the
appropriate Board of Directors' action to adopt the Fidelity CORPORATEplan
FOR RETIREMENTSM.
THIS AGREEMENT SHOULD BE REVIEWED BY YOUR ATTORNEY AND/OR ACCOUNTANT BEFORE
IT IS EXECUTED.
8/2/93
Exhibit 14(M)
THE CORPORATEPLAN FOR RETIREMENT
THE MONEY PURCHASE PENSION PLAN
FIDELITY BASIC PLAN DOCUMENT NO. 09
THE CORPORATEPLAN FOR RETIREMENT
MONEY PURCHASE PENSION PLAN
ARTICLE 1
ADOPTION AGREEMENT
ARTICLE 2
DEFINITIONS
2.01 - Definitions
ARTICLE 3
PARTICIPATION
3.01 - Date of Participation
3.02 - Resumption of Participation Following Reemployment
3.03 - Cessation or Resumption of Participation Following a Change in
Status
3.04 - Participation by Owner-Employee; Controlled Businesses
3.05 - Omission of Eligible Employee
ARTICLE 4
CONTRIBUTIONS
4.01 - Employer Contributions (Nonintegrated Formula)
4.02 - Employer Contributions (Integrated Formula)
4.03 - (Reserved)
4.04 - (Reserved)
4.05 - (Reserved)
4.06 - (Reserved)
4.07 - Time of Making Employer Contributions
4.08 - Return of Employer Contributions
4.09 - No Contributions by Participants
4.10 - Rollover Contributions
4.11 - Additional Rules for Paired Plans
ARTICLE 5
PARTICIPANTS' ACCOUNTS
5.01 - Individual Accounts
5.02 - Valuation of Accounts
5.03 - Code Section 415 Limitations
ARTICLE 6
INVESTMENT OF CONTRIBUTIONS
6.01 - Manner of Investment
6.02 - Investment Decisions
6.03 - Participant Directions to Trustee
ARTICLE 7
RIGHT TO BENEFITS
7.01 - Normal or Early Retirement
7.02 - Late Retirement
7.03 - Disability Retirement
7.04 - Death
7.05 - Other Termination of Employment
7.06 - Separate Account
7.07 - Forfeitures
7.08 - Adjustment for Investment Experience
7.09 - Participant Loans
7.10 - In-Service Withdrawals
7.11 - Prior Plan In-Service Distribution Rules
ARTICLE 8
DISTRIBUTION OF BENEFITS PAYABLE AFTER TERMINATION OF SERVICE
8.01 - Distribution of Benefits to Participants and Beneficiaries
8.02 - Annuity Distributions
8.03 - Joint and Survivor Annuities/Preretirement Survivor Annuities
8.04 - Installment Distributions
8.05 - Immediate Distributions
8.06 - Determination of Method of Distribution
8.07 - Notice to Trustee
8.08 - Time of Distribution
8.09 - Whereabouts of Participants and Beneficiaries
ARTICLE 9
TOP-HEAVY PROVISIONS
9.01 - Application
9.02 - Definitions
9.03 - Minimum Contribution
9.04 - Adjustment to the Limitation on Contributions and Benefits
9.05 - Minimum Vesting
ARTICLE 10
AMENDMENT AND TERMINATION
10.01 - Amendment by Employer
10.02 - Amendment by Prototype Sponsor
10.03 - Amendments Affecting Vested and/or Accrued Benefits
10.04 - Retroactive Amendments
10.05 - Termination
10.06 - Distribution Upon Termination of the Plan
10.07 - Merger or Consolidation of Plan; Transfer of Plan Assets
ARTICLE 11
AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN; TRANSFER OF FUNDS
TO OR FROM OTHER QUALIFIED PLANS
11.01 - Amendment and Continuation of Predecessor Plan
11.02 - Transfer of Funds from an Existing Plan
11.03 - Acceptance of Assets by Trustee
11.04 - Transfer of Assets from Trust
ARTICLE 12
MISCELLANEOUS
12.01 - Communication to Participants
12.02 - Limitation of Rights
12.03 - Nonalienability of Benefits and Qualified Domestic Relations
Orders
12.04 - Facility of Payment
12.05 - Information Between Employer and Trustee
12.06 - Effect of Failure to Qualify Under Code
12.07 - Notices
12.08 - Governing Law
ARTICLE 13
PLAN ADMINISTRATION
13.01 - Powers and Responsibilities of the Administrator
13.02 - Nondiscriminatory Exercise of Authority
13.03 - Claims and Review Procedures
13.04 - Named Fiduciary
13.05 - Costs of Administration
ARTICLE 14
TRUST AGREEMENT
14.01 - Acceptance of Trust Responsibilities
14.02 - Establishment of Trust Fund
14.03 - Exclusive Benefit
14.04 - Powers of Trustee
14.05 - Accounts
14.06 - Approving of Accounts
14.07 - Distribution from Trust Fund
14.08 - Transfer of Amounts from Qualified Plan
14.09 - Transfer of Assets from Trust
14.10 - Separate Trust or Fund for Existing Plan Assets
14.11 - Voting; Delivery of Information
14.12 - Compensation and Expenses of Trustee
14.13 - Reliance by Trustee on Other Persons
14.14 - Indemnification by Employer
14.15 - Consultation by Trustee with Counsel
14.16 - Persons Dealing with the Trustee
14.17 - Resignation or Removal of Trustee
14.18 - Fiscal Year of the Trust
14.19 - Discharge of Duties by Fiduciaries
14.20 - Amendment
14.21 - Plan Termination
14.22 - Permitted Reversion of Funds to Employer
14.23 - Governing Law
ARTICLE 1. ADOPTION AGREEMENT.
ARTICLE 2. DEFINITIONS.
2.01. DEFINITIONS.
(a) Wherever used herein, the following terms have the meanings set forth
below, unless a different meaning is clearly required by the context:
(1) "Account" means an account established on the books of the Trust for
the purpose of recording contributions made on behalf of a Participant and
any income, expenses, gains or losses incurred thereon.
(2) "Administrator" means the Employer adopting this Plan, or other
person designated by the Employer in Section 1.01(c).
(3) "Adoption Agreement" means Article 1 under which the Employer
establishes and adopts, or amends, the Plan and Trust and designates the
optional provisions selected by the Employer, and the Trustee accepts its
responsibilities under Article 14. The provisions of the Adoption
Agreement shall be an integral part of the Plan.
(4) "Annuity Starting Date" means the first day of the first period for
which an amount is payable as an annuity or in any other form.
(5) "Beneficiary" means the person or persons entitled under Section
7.04 to receive benefits under the Plan upon the death of a Participant,
provided that for purposes of Section 7.04 such term shall be applied in
accordance with Section 401(a)(9) of the Code and the regulations
thereunder.
(6) "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
(7) "Compensation" shall mean
(A) for purposes of Article 4 (Contributions), compensation as defined
in Section 5.03(e)(2) excluding any items elected by the Employer in
Section 1.04(a), reimbursements or other expense allowances, fringe
benefits (cash and non-cash), moving expenses, deferred compensation and
welfare benefits, but including amounts that are not includable in the
gross income of the Participant under a salary reduction agreement by
reason of the application of Sections 125, 402(a)(8), 402(h), or 403(b) of
the Code; and
(B) for purposes of Section 2.01(a)(16) (Highly Compensated Employees),
Section 5.03 (Code Section 415 Limitations), and Section 9.03 (Top-Heavy
Plan Minimum Contribution), compensation as defined in Section 5.03(e)(2).
Compensation shall generally be based on the amount actually paid to the
Participant during the Plan Year or, for purposes of Article 4 if so
elected by the Employer in Section 1.04(b), during that portion of the Plan
Year during which the Employee is eligible to participate. Notwithstanding
the preceding sentence, compensation for purposes of Section 5.03 (Code
Section 415 Limitations) shall be based on the amount actually paid or made
available to the Participant during the Limitation Year. Compensation for
the initial Plan Year for a new plan shall be based upon eligible
Participant Compensation, subject to Section 1.04(b), from the Effective
Date listed in Section 1.01(g)(1) through the end of the first Plan Year.
In the case of any Self-Employed Individual, Compensation shall mean the
Individual's Earned Income.
For years beginning after December 31, 1988, the annual Compensation of
each Participant taken into account for determining all benefits provided
under the plan for any determination period shall not exceed $200,000.
This limitation shall be adjusted by the Secretary at the same time and in
the same manner as under Section 415(d) of the Code, except that the dollar
increase in effect on January 1 of any calendar year is effective for years
beginning in such calendar year and the first adjustment to the $200,000
limitation is effected on January 1, 1990. If a plan determines
Compensation on a period of time that contains fewer than 12 calendar
months, then the annual Compensation limit is the amount equal to the
annual Compensation limit for the calendar year in which the Compensation
period begins multiplied by the ratio obtained by dividing the number of
full months in the period by 12.
If Compensation for any prior determination period is taken into account
in determining an Employee's allocations or benefits for the current
determination period, the Compensation for such prior year is subject to
the applicable annual compensation limit in effect for that prior year.
For this purpose, for years beginning before January 1, 1990, the
applicable annual compensation limit is $200,000.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of Section 414(q)(6) of the Code shall apply, except
that in applying such rules, the term "family" shall include only the
spouse of the Participant and any lineal descendants of the Participant who
have not attained age 19 before the close of the year. If the $200,000
limitation is exceeded as a result of the application of these rules, then
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.
(8) "Earned Income" means the net earnings of a Self-Employed Individual
derived from the trade or business with respect to which the Plan is
established and for which the personal services of such individual are a
material income-providing factor, excluding any items not included in gross
income and the deductions allocated to such items, except that for taxable
years beginning after December 31, 1989 net earnings shall be determined
with regard to the deduction allowed under Section 164(f) of the Code, to
the extent applicable to the Employer. Net earnings shall be reduced by
contributions of the Employer to any qualified plan, to the extent a
deduction is allowed to the Employer for such contributions under Section
404 of the Code.
(9) "Eligibility Computation Period" means each 12-consecutive month
period beginning with the Employment Commencement Date and each anniversary
thereof or, in the case of an Employee who before completing the
eligibility requirements set forth in Section 1.03(a)(1) incurs a break in
service for participation purposes and thereafter returns to the employ of
the Employer or Related Employer, each 12-consecutive month period
beginning with the first day of reemployment and each anniversary thereof.
A "break in service for participation purposes" shall mean an Eligibility
Computation Period during which the participant does not complete more than
500 Hours of Service with the Employer.
(10) "Employee" means any employee of the Employer, any Self-Employed
Individual or Owner-Employee. The Employer must specify in Section
1.03(a)(3) any Employee, or class of Employees, not eligible to participate
in the Plan. If the Employer elects to exclude collective bargaining
employees, the exclusion applies to any employee of the Employer included
in a unit of employees covered by an agreement which the Secretary of Labor
finds to be a collective bargaining agreement between employee
representatives and one or more employers unless the collective bargaining
agreement requires the employee to be included within the Plan. The term
"employee representatives" does not include any organization more than half
the members of which are owners, officers, or executives of the Employer.
For purposes of the Plan, an individual shall be considered to become an
Employee on the date on which he first completes an Hour of Service and he
shall be considered to have ceased to be an Employee on the date on which
he last completes an Hour of Service. The term also includes a Leased
Employee, such that contributions or benefits provided by the leasing
organization which are attributable to services performed for the Employer
shall be treated as provided by the Employer. Notwithstanding the above, a
Leased Employee shall not be considered an Employee if Leased Employees do
not constitute more than 20 percent of the Employer's non-highly
compensated work force (taking into account all Related Employers) and the
Leased Employee is covered by a money purchase pension plan maintained by
the leasing organization and providing (A) a nonintegrated employer
contribution rate of at least 10 percent of compensation, as defined for
purposes of Section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are excludable
from gross income under Section 125, Section 402(a)(8), Section 402(h) or
Section 403(b) of the Code, (B) full and immediate vesting, and (C)
immediate participation by each employee of the leasing organization.
(11) "Employer" means the employer named in Section 1.02(a) and any
Related Employers required by this Section 2.01(a)(11). If Article 1 of
the Employer's Plan is the Standardized Adoption Agreement, the term
"Employer" includes all Related Employers. If Article 1 of the Employer's
Plan is the Non-standardized Adoption Agreement, the term "Employer"
includes those Related Employers designated in Section 1.02(b).
(12) "Employment Commencement Date" means the date on which the Employee
first performs an Hour of Service.
(13) "ERISA" means the Employee Retirement Income Security Act of 1974,
as from time to time amended.
(14) "Fidelity Fund" means any Registered Investment Company or Managed
Income Portfolio of the Fidelity Group Trust for Employee Benefit Plans
which is made available to plans utilizing the CORPORATEplan for
Retirement.
(15) "Fund Share" means the share, unit, or other evidence of ownership
in a Fidelity Fund.
(16) "Highly Compensated Employee" means both highly compensated active
Employees and highly compensated former Employees.
A highly compensated active Employee includes any Employee who performs
service for the Employer during the determination year and who, during the
look-back year (A) received compensation from the Employer in excess of
$75,000 (as adjusted pursuant to Section 415(d) of the Code), (B) received
compensation from the Employer in excess of $50,000 (as adjusted pursuant
to Section 415(d) of the Code) and was a member of the top-paid group for
such year, or (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 Section 415(b)(1)(A) of the Code. The term highly
compensated Employee also includes (i) Employees who are both described in
the preceding sentence if the term "determination year" is substituted for
the term "look-back year" and the Employee is one of the 100 Employees who
received the most compensation from the Employer during the determination
year; and (ii) Employees who are 5 percent owners at any time during the
look-back year or determination year.
If no officer has satisfied the compensation requirement of (C) above
during either a determination year or look-back year, the highest paid
officer for such year shall be treated as a highly compensated Employee.
For this purpose, the determination year shall be the Plan Year. The
look-back year shall be the twelve-month period immediately preceding the
determination year. The Employer may elect to make the look-back year
calculation for a determination on the basis of the calendar year ending
with or within the applicable determination year, as prescribed by Section
414(q) of the Code and the regulations issued thereunder.
A highly compensated former Employee includes any Employee who separated
from service (or was deemed to have separated) prior to the determination
year, performs no service for the Employer during the determination year,
and was a highly compensated active Employee for either the separation year
or any determination year ending on or after the Employee's 55th birthday.
If an Employee is, during a determination year or look-back year, a
family member of either a 5-percent owner who is an active or former
Employee or a highly compensated Employee who is one of the 10 most highly
compensated Employees ranked on the basis of compensation paid by the
Employer during such year, then the family member and the 5-percent owner
or top-ten highly compensated Employee shall be aggregated. In such case,
the family member and 5-percent owner or top-ten highly compensated
Employee shall be treated as a single Employee receiving compensation and
plan contributions or benefits equal to the sum of such compensation and
contributions or benefits of the family member and 5-percent owner or
top-ten highly compensated Employee. For purposes of this Section, family
member includes the spouse, lineal ascendants and descendants of the
Employee or former Employee and the spouses of such lineal ascendants and
descendants.
The determination of who is a highly compensated Employee, including the
determinations of the number and identity of Employees in the top-paid
group, the top 100 Employees, the number of Employees treated as officers
and the compensation that is considered, will be made in accordance with
Section 414(q) of the Code and the regulations thereunder.
(17) "Hour of Service" means, with respect to any Employee,
(A) Each hour for which the Employee is directly or indirectly paid, or
entitled to payment, for the performance of duties for the Employer or a
Related Employer, each such hour to be credited to the Employee for the
Eligibility Computation Period in which the duties were performed;
(B) Each hour for which the Employee is directly or indirectly paid, or
entitled to payment, by the Employer or Related Employer (including
payments made or due from a trust fund or insurer to which the Employer
contributes or pays premiums) 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,
disability, layoff, jury duty, military duty, or leave of absence, each
such hour to be credited to the Employee for the Eligibility Computation
Period in which such period of time occurs, subject to the following rules:
(i) No more than 501 Hours of Service shall be credited under this
paragraph (B) on account of any single contin-uous period during which the
Employee performs no duties;
(ii) Hours of Service shall not be credited under this paragraph (B) for
a payment which solely reimburses the Employee for medically-related
expenses, or which is made or due under a plan maintained solely for the
purpose of complying with applicable workmen's compensation, unemployment
compensation or disability insurance laws; and
(iii) If the period during which the Employee performs no duties falls
within two or more Eligibility Computation Periods and if the payment made
on account of such period is not calculated on the basis of units of time,
the Hours of Service credited with respect to such period shall be
allocated between not more than the first two such Eligibility Computation
Periods on any reasonable basis consistently applied with respect to
similarly situated Employees; and
(C) Each hour not counted under paragraph (A) or (B) for which back pay,
irrespective of mitigation of damages, has been either awarded or agreed to
be paid by the Employer or a Related Employer shall be credited to the
Employee for the Eligibility Computation Period to which the award or
agreement pertains rather than the Eligibility Computation Period in which
the award agreement or payment is made.
For purposes of determining Hours of Service, Employees of the Employer
and of all Related Employers will be treated as employed by a single
employer. For purposes of paragraphs (B) and (C) above, Hours of Service
will be calculated in accordance with the provisions of Section
2530.200b-2(b) of the Department of Labor regulations which are
incorporated herein by reference.
Solely for purposes of determining whether a break in service for
participation 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 (i) by reason of the pregnancy of the individual,
(ii) by reason of a birth of a child of the individual, (iii) by reason of
the placement of a child with the individual in connection with the
adoption of such child by such individual, or (iv) for purposes of caring
for such child for a period beginning immediately following such birth or
placement. The Hours of Service credited under this paragraph shall be
credited (a) in the computation period in which the absence begins if the
crediting is necessary to prevent a break in service in that period, or (b)
in all other cases, in the following computation period.
(18) "Leased Employee" means any individual who provides services to the
Employer or a Related Employer (the "recipient") but is not otherwise an
employee of the recipient if (A) such services are provided pursuant to an
agreement between the recipient and any other person (the "leasing
organization"), (B) such individual has performed services for the
recipient (or for the recipient and any related persons within the meaning
of Section 414(n)(6) of the Code) on a substantially full-time basis for at
least one year, and (C) such services are of a type historically performed
by employees in the business field of the recipient.
(19) "Normal Retirement Age" means the normal retirement age specified in
Section 1.06(a) of the Adoption Agreement. If the Employer enforces a
mandatory retirement age, the Normal Retirement Age is the lesser of that
mandatory age or the age specified in Section 1.06(a).
(20) "Owner-Employee" means, if the Employer is a sole proprietorship,
the individual who is the sole proprietor, or if the Employer is a
partnership, a partner who owns more than 10 percent of either the capital
interest or the profits interest of the partnership.
(21) "Participant" means any Employee who participates in the Plan in
accordance with Article 3 hereof.
(22) "Plan" means the plan established by the Employer in the form of the
prototype plan as set forth herein as a new plan or as an amendment to an
existing plan, by executing the Adoption Agreement, together with any and
all amendments hereto.
(23) "Plan Year" means the 12-consecutive month period ending on the date
designated by the Employer in Section 1.01(f).
(24) "Prototype Sponsor" means Fidelity Management and Research Company,
or its successor.
(25) "Registered Investment Company" means any one or more corporations,
partnerships or trusts registered under the Investment Company Act of 1940
for which Fidelity Management and Research Company serves as investment
advisor.
(26) "Related Employer" means any employer other than the Employer named
in Section 1.02(a) if the Employer and such other employer are members of a
controlled group of corporations (as defined in Section 414(b) of the Code)
or an affiliated service group (as defined in Section 414(m)), or are
trades or businesses (whether or not incorporated) which are under common
control (as defined in Section 414(c)), or such other employer is required
to be aggregated with the Employer pursuant to regulations issued under
Section 414(o).
(27) "Self-Employed Individual" means an individual who has Earned Income
for the taxable year from the Employer or who would have had Earned Income
but for the fact that the trade or business had no net profits for the
taxable year.
(28) "Trust" means the trust created by the Employer in accordance with
the provisions of Section 14.01.
(29) "Trust Agreement" means the agreement between the Employer and the
Trustee, as set forth in Article 14, under which the assets of the Plan are
held, administered, and managed.
(30) "Trust Fund" means the property held in Trust by the Trustee for the
Accounts of the Participants and their Beneficiaries.
(31) "Trustee" means the Fidelity Management Trust Company, or its
successor.
(32) "Year of Service for Participation" means, with respect to any
Employee, an Eligibility Computation Period during which the Employee has
been credited with at least 1,000 Hours of Service. If the Plan maintained
by the Employer is the plan of a predecessor employer, an Employee's Years
of Service for Participation shall include years of service with such
predecessor employer. In any case in which the Plan maintained by the
Employer is not the plan maintained by a predecessor employer, service for
such predecessor shall be treated as service for the Employer, to the
extent provided in Section 1.08.
(33) "Years of Service for Vesting" means, with respect to any Employee,
the number of whole years of his periods of service with the Employer or a
Related Employer (the elapsed time method to compute vesting service),
subject to any exclusions elected by the Employer in Section 1.07(b). An
Employee will receive credit for the aggregate of all time period(s)
commencing with the Employee's Employment Commencement Date and ending on
the date a break in service begins, unless any such years are excluded by
Section 1.07(b). An Employee will also receive credit for any period of
severance of less than 12 consecutive months. Fractional periods of a year
will be expressed in terms of days.
In the case of a Participant who has 5 consecutive 1-year breaks in
service, all years of service after such breaks in service will be
disregarded for the purpose of vesting the Employer-derived account balance
that accrued before such breaks, but both pre-break and post-break service
will count for the purposes of vesting the Employer-derived account balance
that accrues after such breaks. Both accounts will share in the earnings
and losses of the fund.
In the case of a Participant who does not have 5 consecutive 1-year
breaks in service, both the pre-break and post-break service will count in
vesting both the pre-break and post-break employer-derived account balance.
A break in service is a period of severance of at least 12 consecutive
months. Period of severance is a continuous period of time during which
the Employee is not employed by the Employer. Such period begins on the
date the Employee retires, quits or is discharged, or if earlier, the 12
month anniversary of the date on which the Employee was otherwise first
absent from service.
In the case of an individual who is absent from work for maternity or
paternity reasons, the 12-consecutive month period beginning on the first
anniversary of the first date of such absence shall not constitute a break
in service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (A) by reason of the
pregnancy of the individual, (B) by reason of the birth of a child of the
individual, (C) by reason of the placement of a child with the individual
in connection with the adoption of such child by such individual, or (D)
for purposes of caring for such child for a period beginning immediately
following such birth or placement.
If the Plan maintained by the Employer is the plan of a predecessor
employer, an Employee's Years of Service for Vesting shall include years of
service with such predecessor employer. In any case in which the Plan
maintained by the Employer is not the plan maintained by a predecessor
employer, service for such predecessor shall be treated as service for the
Employer to the extent provided in Section 1.08.
(b) Pronouns used in the Plan are in the masculine gender but include the
feminine gender unless the context clearly indicates otherwise.
ARTICLE 3. PARTICIPATION.
3.01. DATE OF PARTICIPATION. All Employees in the eligible class (as
defined in Section 1.03(a)(3)) who are in the service of the Employer on
the Effective Date will become Participants on the date elected by the
Employer in Section 1.03(c). Any other Employee will become a Participant
in the Plan as of the first Entry Date on which he first satisfies the
eligibility requirements set forth in Section 1.03(a). In the event that
an Employee who is not a member of an eligible class (as defined in Section
1.03(a)(3)) becomes a member of an eligible class, the individual shall
participate immediately if such individual had already satisfied the
eligibility requirements and would have otherwise previously become a
Participant.
If an eligibility requirement other than one Year of Service is elected in
1.03(a)(1), an Employee may not be required to complete a minimum number of
Hours of Service before becoming a Participant. An otherwise eligible
Employee subject to a minimum months of service requirement shall become a
Participant on the first Entry Date following his completion of the
required number of consecutive months of employment measured from his
Employment Commencement Date to the coinciding date in the applicable
following month. For purposes of determining consecutive months of
service, the Related Employer and predecessor employer rules contained in
Sections 2.01(a)(17) and 2.01(a)(32) shall apply.
3.02. RESUMPTION OF PARTICIPATION FOLLOWING REEMPLOYMENT. If a
Participant ceases to be an Employee and thereafter returns to the employ
of the Employer he will be treated as follows:
(a) he will again become a Participant on the first date on which he
completes an Hour of Service for the Employer following his reemployment
and is in the eligible class of Employees as defined in Section 1.03(a)(3),
and
(b) any distribution which he is receiving under the Plan will cease except
as otherwise required under Section 8.08.
3.03. CESSATION OR RESUMPTION OF PARTICIPATION FOLLOWING A CHANGE IN
STATUS. If any Participant continues in the employ of the Employer or
Related Employer but ceases to be a member of an eligible class as defined
in Section 1.03(a)(3), the individual shall continue to be a Participant
for most purposes until the entire amount of his benefit is distributed;
however, the individual shall not be entitled to receive an allocation of
contributions or forfeitures during the period that he is not a member of
the eligible class. Such Participant shall continue to receive credit for
service completed during the period for purposes of determining his vested
interest in his Accounts. In the event that the individual subsequently
again becomes a member of an eligible class of Employees, the individual
shall resume full participation immediately upon the date of such change in
status.
3.04. PARTICIPATION BY OWNER-EMPLOYEE; CONTROLLED BUSINESSES.
If the Plan provides contributions or benefits for one or more
Owner-Employees who control both the trade or business with respect to
which the Plan is established and one or more other trades or businesses,
the Plan and any plan established with respect to such other trades or
businesses must, when looked at as a single plan, satisfy Sections 401(a)
and 401(d) of the Code with respect to the employees of this and all such
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 each such other trade or business must be
included in a plan which satisfies Sections 401(a) and 401(d) of the Code
and which provides contributions and benefits not less favorable than
provided for Owner-Employees under the Plan.
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 under the most favorable
plan of the trade or business which is not controlled.
For purposes of this Section, an Owner-Employee, or two or more
Owner-Employees, shall be considered to control a trade or business if such
Owner-Employee, or such 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 percent of either the capital interest or the
profits interest in such partnership. For this purpose, 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
controlled by such Owner-Employee or such Owner-Employees.
3.05. OMISSION OF ELIGIBLE EMPLOYEE. If any Employee who should be
included as a Participant in the Plan is erroneously omitted and discovery
of such omission is not made until after a contribution by his Employer for
the year has been made, the Employer shall make a subsequent contribution,
if necessary, so that the omitted Employee receives the total amount which
the said Employee would have received had he not been omitted. For
purposes of this Section 3.05, the term "contribution" shall not include
Deferral Contributions and Matching Contributions made pursuant to Sections
4.01 and 4.03, respectively.
ARTICLE 4. CONTRIBUTIONS.
4.01. EMPLOYER CONTRIBUTIONS (NONINTEGRATED FORMULA). The Employer shall
make a contribution to the Plan for each Plan Participant in accordance
with the Employer's election in Section 1.05(a)(1). Each such contribution
shall be allocated to the Participant's account under the Plan.
4.02. EMPLOYER CONTRIBUTIONS (INTEGRATED FORMULA). The Employer shall make
a contribution to the Plan for each Plan Participant in accordance with the
Employer's election in Section 1.05(a)(2). Each such contribution shall be
allocated to the Participant's account under the Plan. This plan may not
provide for permitted disparity if the Employer maintains any other plan
that provides for permitted disparity and benefits any of the same
participants.
4.03. (RESERVED.)
4.04. (RESERVED.)
4.05. (RESERVED.)
4.06. (RESERVED.)
4.07. TIME OF MAKING EMPLOYER CONTRIBUTIONS. The Employer will pay its
contribution for each Plan Year not later than the time prescribed by law
for filing the Employer's Federal income tax return for the fiscal (or
taxable) year with or within which such Plan Year ends (including
extensions thereof). The Trustee will have no authority to inquire into
the correctness of the amounts contributed and paid over to the Trustee, to
determine whether any contribution is payable under this Article 4, or to
enforce, by suit or otherwise, the Employer's obligation, if any, to make a
contribution to the Trustee.
4.08. RETURN OF EMPLOYER CONTRIBUTIONS. The Trustee shall, upon request
by the Employer, return to the Employer the amount (if any) determined
under Section 14.22. Such amount shall be reduced by amounts attributable
thereto which have been credited to the Accounts of Participants who have
since received distributions from the Trust, except to the extent such
amounts continue to be credited to such Participants' Accounts at the time
the amount is returned to the Employer. Such amount shall also be reduced
by the losses of the Trust attributable thereto, if and to the extent such
losses exceed the gains and income attributable thereto, but will not be
increased by the gains and income of the Trust attributable thereto, if and
to the extent such gains and income exceed the losses attributable thereto.
In no event will the return of a contribution hereunder cause the balance
of the individual Account of any Participant to be reduced to less than the
balance which would have been credited to the Account had the mistaken
amount not been contributed.
4.09. NO CONTRIBUTIONS BY PARTICIPANTS. No Participant is required or
permitted to make contributions under the Plan. A Participant's Account
may include Employee Contributions (but not deductible voluntary employee
contributions) made prior to the first Plan Year in which this Plan was
adopted as a replacement plan. Employee Contributions for plan years
beginning after December 31, 1986, and prior to the adoption of this Plan,
will be limited so as to meet the nondiscrimination requirements of the
Section 401(m) of the Code. The Participant's accrued benefit derived from
such Employee Contributions is always nonforfeitable. For purposes of this
Plan, "Employee Contributions" shall mean any contribution made to a plan
by or on behalf of a Participant that was included in the Participant's
gross income in the year in which made and that is maintained under a
separate account to which applicable earnings and losses are allocated.
4.10. ROLLOVER CONTRIBUTIONS.
(a) Rollover of Eligible Rollover Distributions
(1) An Employee who is or was a distributee of an "eligible rollover
distribution"(as defined in Section 402(c)(4) of the Code and the
regulations issued thereunder) from a qualified plan or Section 403(b)
annuity may directly transfer all or any portion of such distribution to
the Trust or transfer all or any portion of such distribution to the Trust
within sixty (60) days of payment. The transfer shall be made in the form
of cash or allowable Fund Shares only.
(2) The Employer may refuse to accept rollover contributions or instruct
the Trustee not to accept rollover contributions under the Plan.
(b) Treatment of Rollover Amount.
(1) An account will be established for the transferring Employee under
Article 5, the rollover amount will be credited to the account and such
amount will be subject to the terms of the Plan, including Section 8.01,
except as otherwise provided in this Section 4.10.
(2) The rollover account will at all times be fully vested in and
nonforfeitable by the Employee.
(c) Entry into Plan by Transferring Employee. Although an amount may be
transferred to the Trust Fund under this Section 4.10 by an Employee who
has not yet become a Participant in accordance with Article 3, and such
amount is subject to the terms of the Plan as described in paragraph (b)
above, the Employee will not become a Participant entitled to share in
Employer contributions until he has satisfied such requirements.
(d) Monitoring of Rollovers.
(1) The Administrator shall develop such procedures and require such
information from transferring Employees as it deems necessary to insure
that amounts transferred under this Section 4.10 meet the requirements for
tax-free rollovers established by such Section and by Section 402(c) of the
Code. No such amount may be transferred until approved by the
Administrator.
(2) If a transfer made under this Section 4.10 is later determined by
the Administrator not to have met the requirements of this Section or of
the Code or Treasury regulations, the Trustee shall, within a reasonable
time after such determination is made, and on instructions from the
Administrator, distribute to the Employee the amounts then held in the
Trust attributable to the transferred amount.
4.11. DEDUCTIBLE VOLUNTARY EMPLOYEE CONTRIBUTIONS. The Administrator will
not accept deductible employee contributions which are made for a taxable
year beginning after December 31, 1986. Contributions made prior to that
date will be maintained in a separate account which will be nonforfeitable
at all times and which will share in the gains and losses of the trust in
the same manner as described in Section 5.02. No part of the deductible
voluntary contribution account will be used to purchase life insurance.
Subject to Article 8, the Participant may withdraw any part of the
deductible voluntary contribution account upon request.
4.12. ADDITIONAL RULES FOR PAIRED PLANS. If the Employer has adopted a
qualified plan under Fidelity Basic Plan Document No. 07 which is to be
considered as a paired plan with this Plan, the elections in Section 1.03
must be identical to the Employer's corresponding elections for the other
plan. When the paired plans are top-heavy as provided in Section 9.01,
this Plan will provide a minimum contribution to each non-key Employee
which is equal to 3 percent (or such other percent elected by the Employer
in Section 1.12(c)) of such Employee's Compensation. Notwithstanding the
preceding sentence, the minimum contribution shall be provided by the other
paired plan if contributions under this Plan are frozen.
ARTICLE 5. PARTICIPANTS' ACCOUNTS.
5.01. INDIVIDUAL ACCOUNTS. The Administrator will establish and maintain
an Account for each Participant which will reflect Employer and Employee
Contributions made on behalf of the Participant and earnings, expenses,
gains and losses attributable thereto, and investments made with amounts in
the Participant's Account. The Administrator will establish and maintain
such other accounts and records as it decides in its discretion to be
reasonably required or appropriate in order to discharge its duties under
the Plan.
5.02. VALUATION OF ACCOUNTS. Participant Accounts will be valued at their
fair market value at least annually as of a date specified by the
Administrator in accordance with a method consistently followed and
uniformly applied, and on such date earnings, expenses, gains and losses on
investments made with amounts in each Participant's Account will be
allocated to such Account. Participants will be furnished statements of
their Account values at least once each Plan Year.
5.03. CODE SECTION 415 LIMITATIONS. Notwithstanding any other provisions
of the Plan:
Subsections (a)(1) through (a)(4)--(These subsections apply to Employers
who do not maintain any qualified plan including a Welfare Benefit Fund, an
Individual Medical Account, or a simplified employee pension in addition to
this Plan.)
(a)(1) If the Participant does not participate in, and has never
participated in any other qualified plan, Welfare Benefit Fund, Individual
Medical Account, or a simplified employee pension, as defined in section
408(k) of the Code, maintained by the Employer, which provides an annual
addition as defined in Section 5.03(e)(1), the amount of Annual Additions
to a Participant's Account for a Limitation Year shall not exceed the
lesser of the Maximum Permissible Amount or any other limitation contained
in this Plan. If the Employer contribution that would otherwise be
contributed or allocated to the Participant's 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.
(a)(2) Prior to the determination of the Participant's actual Compensation
for a Limitation Year, the Maximum Permissible Amount may be determined on
the basis of a reasonable estimation of the Participant's compensation for
such Limitation Year, uniformly determined for all Participants similarly
situated. Any Employer contributions based on estimated annual
compensation shall be reduced by any Excess Amounts carried over from prior
years.
(a)(3) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for such Limitation Year
shall be determined on the basis of the Participant's actual Compensation
for such Limitation Year.
(a)(4) If, pursuant to subsection (a)(3) or as a result of the allocation
of forfeitures there is an Excess Amount with respect to a Participant for
a Limitation Year, such Excess Amount shall be disposed of as follows:
(A) In the event that the Participant is in the service of the Employer
which is covered by the Plan at the end of the Limitation Year, then such
Excess Amount shall be reapplied to reduce future Employer contributions
under this Plan for the next Limitation Year (and for each succeeding year,
as necessary) for such Participant, so that in each such Year the sum of
actual Employer contributions plus the reapplied amount shall equal the
amount of Employer contributions which would otherwise be made to such
Participant's Account.
(B) In the event that the Participant is not in the service of the
Employer which is covered by the Plan at the end of a Limitation Year, then
such Excess Amount will be held unallocated in a suspense account. The
suspense account will be applied to reduce future Employer contributions
for all remaining Participants in the next Limitation Year and each
succeeding Limitation Year if necessary.
(C) If a suspense account is in existence at any time during the
Limitation Year pursuant to this subsection, it will not participate in the
allocation of the Trust Fund's investment gains and losses. All amounts in
the suspense account must be allocated to the Accounts of Participants
before any Employer contribution may be made for the Limitation Year.
Excess Amounts may not be distributed to Participants or former
Participants.
Subsections (b)(1) through (b)(6)--(These subsections apply to Employers
who, in addition to this Plan, maintain one or more plans, all of which are
qualified Master or Prototype defined contribution Plans, any Welfare
Benefit Fund, any Individual Medical Account, or any simplified employee
pension.)
(b)(1) If, in addition to this Plan, the Participant is covered under any
other qualified defined contribution plans (all of which are qualified
Master or Prototype Plans), Welfare Benefit Funds, Individual Medical
Accounts, or simplified employee pension Plans, maintained by the Employer,
that provide an annual addition as defined in Section 5.03(e)(1), the
amount of Annual Additions to a Participant's Account for a Limitation Year
shall not exceed the lesser of
(A) the Maximum Permissible Amount, reduced by the sum of any Annual
Additions to the Participant's accounts for the same Limitation Year under
such other qualified Master or Prototype defined contribution plans, and
Welfare Benefit Funds, Individual Medical Accounts, and simplified employee
pensions, or
(B) any other limitation contained in this Plan.
If the annual additions with respect to the Participant under other
qualified Master or Prototype defined contribution Plans, Welfare Benefit
Funds, Individual Medical Accounts and simplified employee pensions
maintained by the Employer are less than the maximum permissible amount and
the Employer 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 qualified Master or Prototype defined
contribution Plans, Welfare Benefit Funds, Individual Medical Accounts, and
simplified employee pensions in the aggregate are equal to or greater than
the maximum permissible amount, no amount will be contributed or allocated
to the Participant's account under this plan for the limitation year.
(b)(2) Prior to the determination of the Participant's actual Compensation
for the Limitation Year, the amounts referred to in (b)(1)(A) above may be
determined on the basis of a reasonable estimation of the Participant's
compensation for such Limitation Year, uniformly determined for all
Participants similarly situated. Any Employer contribution based on
estimated annual compensation shall be reduced by any Excess Amounts
carried over from prior years.
(b)(3) As soon as is administratively feasible after the end of the
Limitation Year, the amounts referred to in (b)(1)(A) shall be determined
on the basis of the Participant's actual Compensation for such Limitation
Year.
(b)(4) If a Participant's Annual Additions under this Plan and all such
other plans result in an Excess Amount, such Excess Amount shall be deemed
to consist of the Annual Additions last allocated, except that Annual
Additions attributable to a simplified employee pension will be deemed to
have been allocated first, followed by Annual Additions to a Welfare
Benefit Fund or Individual Medical Account regardless of the actual
allocation date.
(b)(5) If an Excess Amount was allocated to a Participant on an allocation
date of this Plan which coincides with an allocation date of another plan,
the Excess Amount attributed to this Plan will be the product of
(A) the total Excess Amount allocated as of such date (including any
amount which would have been allocated but for the limitations of Section
415 of the Code) and
(B) the ratio of (i) the Annual Additions allocated to the Participant as
of such date under this Plan, to (ii) the Annual Additions allocated as of
such date under all qualified defined contribution plans (determined
without regard to the limitations of Section 415 of the Code).
(b)(6) Any Excess Amounts attributed to this Plan shall be disposed of as
provided in subsection (a)(4).
Subsection (c)--(This subsection applies only to Employers who, in
addition to this Plan, maintain one or more qualified plans which are
qualified defined contribution plans other than Master or Prototype Plans.)
(c) If the Employer also maintains another plan which is a qualified
defined contribution plan other than a Master or Prototype Plan, Annual
Additions allocated under this Plan on behalf of any Participant shall be
limited in accordance with the provisions of (b)(1) through (b)(6), as
though the other plan were a Master or Prototype Plan, unless the Employer
provides other limitations in the Adoption Agreement.
Subsection (d)--(This subsection applies only to Employers who, in
addition to this Plan, maintain or at any time maintained a qualified
defined benefit plan.)
(d) If the Employer maintains, or at any time maintained, a qualified
defined benefit plan, the sum of any Participant's Defined Benefit Fraction
and Defined Contribution Fraction shall not exceed the combined plan
limitation of 1.0 in any Limitation Year. The combined plan limitation
will be met as provided by the Employer in the Adoption Agreement.
Subsections (e)(1) through (e)(11)--(Definitions.)
(e)(1) "Annual Additions" means the sum of the following amounts credited
to a Participant for a Limitation Year:
(A) all Employer contributions,
(B) all Employee contributions,
(C) all forfeitures,
(D) amounts allocated, after March 31, 1984, to an Individual Medical
Account which is part of a pension or annuity plan maintained by the
Employer are treated as Annual Additions to a defined contribution plan.
Also, amounts derived from contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which are attributable to
post-retirement medical benefits allocated to the separate account of a key
employee, as defined in Section 419A(d)(3) of the Code, under a Welfare
Benefit Fund maintained by the Employer are treated as Annual Additions to
a defined contribution plan, and
(E) allocations under a simplified employee pension.
For purposes of this Section 5.03, amounts reapplied to reduce Employer
contributions under subsection (a)(4) shall also be included as Annual
Additions.
(e)(2) "Compensation" means wages as defined in Section 3401(a) of the
Code and all other payments of compensation to an employee by the employer
(in the course of the employer's trade or business) for which the employer
is required to furnish the employee a written statement under Sections
6041(d) and 6051(a)(3) of the Code. Compensation must be determined
without regard to any rules under Section 3401(a) of the Code that limit
the remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in Section 3401(a)(2) of the Code.)
For any Self-Employed Individual compensation will mean Earned Income.
For limitation years beginning after December 31, 1991, for purposes of
applying the limitations of this article, compensation for a limitation
year is the compensation actually paid or made available during such
limitation year.
(e)(3) "Defined Benefit Fraction" means a fraction, the numerator of which
is the sum of the Participant's annual benefits (adjusted to an actuarially
equivalent straight life annuity if such benefit is expressed in a form
other than a straight life annuity or qualified joint and survivor annuity)
under all the defined benefit plans (whether or not terminated) maintained
by the Employer, each such annual benefit computed on the assumptions that
the Participant will remain in employment until the normal retirement age
under each such plan (or the Participant's current age, if later) and that
all other factors used to determine benefits under such plan will remain
constant for all future Limitation Years, and the denominator of which is
the lesser of 125 percent of the dollar limitation determined for the
Limitation Year under Sections 415(b)(1)(A) and 415(d) of the Code or 140
percent of the Participant's highest average Compensation for 3 consecutive
calendar years of service during which the Participant was active in each
such plan, including any adjustments under Section 415(b) of the Code.
However, 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 then the denominator of the Defined Benefit Fraction shall not
be less than 125 percent of the Participant's total accrued benefit 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, under all such defined benefit plans that met, individually and in
the aggregate, the requirements of Section 415 of the Code for all
Limitation Years beginning before January 1, 1987.
(e)(4) "Defined Contribution Fraction" means a fraction, the numerator of
which is the sum for the current and all prior Limitation Years of (A) all
Annual Additions (if any) to the Participant's accounts under each defined
contribution plan (whether or not terminated) maintained by the Employer
and (B) all 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 Participant's Annual
Additions attributable to all Welfare Benefit Funds, Individual Medical
Accounts, and simplified employee pensions, maintained by the Employer, and
the denominator of which is the sum of the maximum aggregate amounts for
the current and all prior Limitation Years during which the Participant was
an Employee (regardless of whether the Employer maintained a defined
contribution plan in any such year).
The maximum aggregate amount in any Limitation Year is the lesser of 125
percent of the dollar limitation in effect under Section 415(c)(1)(A) of
the Code for each such year or 35 percent of the Participant's Compensation
for each such year.
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
contribution plans maintained by the Employer which were in existence on
May 6, 1986, then the numerator of the Defined Contribution Fraction shall
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 (i) the excess of the sum of
the fractions over 1.0 and (ii) 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 recomputed to treat all employee contributions as annual
additions.
(e)(5) "Employer" means the Employer and any Related Employer that adopts
this Plan. In the case of a group of employers which constitutes a
controlled group of corporations (as defined in Section 414(b) of the Code
as modified by Section 415(h)) or which constitutes trades or businesses
(whether or not incorporated) which are under common control (as defined in
Section 414(c) of the Code as modified by Section 415(h) of the Code) or
which constitutes an affiliated service group (as defined in Section 414(m)
of the Code) and any other entity required to be aggregated with the
Employer pursuant to regulations issued under Section 414(o) of the Code,
all such employers shall be considered a single employer for purposes of
applying the limitations of this Section 5.03.
(e)(6) "Excess Amount" means the excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible Amount.
(e)(7) "Individual Medical Account" means an individual medical account as
defined in Section 415(l)(2) of the Code.
(e)(8) "Limitation Year" means the Plan Year. All qualified plans of the
Employer must use the same Limitation Year. If the Limitation Year is
amended to a different 12-consecutive month period, the new Limitation Year
must begin on a date within the Limitation Year in which the amendment is
made.
(e)(9) "Master or Prototype Plan" means a plan the form of which is the
subject of a favorable opinion letter from the Internal Revenue Service.
(e)(10) "Maximum Permissible Amount" means for a Limitation Year with
respect to any Participant the lesser of (A) $30,000 or, if greater, 25
percent of the dollar limitation set forth in Section 415(b)(1) of the
Code, as in effect for the Limitation Year, or (B) 25 percent of the
Participant's Compensation for the Limitation Year. 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 limitation in (e)(10)(A) multiplied by a fraction whose
numerator is the number of months in the short Limitation Year and whose
denominator is 12.
The compensation limitation referred to in subsection (e)(10)(B) shall not
apply to any contribution for medical benefits within the meaning of
Section 401(h) or Section 419A(f)(2) of the Code after separation from
service which is otherwise treated as an Annual Addition under Section
419A(d)(2) or Section 415(l)(1) of the Code.
(e)(11) "Welfare Benefit Fund" means a welfare benefit fund as defined in
Section 419(e) of the Code.
ARTICLE 6. INVESTMENT OF CONTRIBUTIONS.
6.01. MANNER OF INVESTMENT. All contributions made to the Accounts of
Participants shall be held for investment by the Trustee. The Accounts of
Participants shall be invested and reinvested only in eligible investments
selected by the Employer in Section 1.14(b), subject to Section 14.10.
6.02. INVESTMENT DECISIONS. Investments shall be directed by the Employer
or by each Participant, in accordance with the Employer's election in
Section 1.14(a). Pursuant to Section 14.04, the Trustee shall have no
discretion or authority with respect to the investment of the Trust Fund.
(a) If Employer investment direction is elected, the Employer has the right
to direct the Trustee in writing with respect to the investment and
reinvestment of assets comprising the Trust Fund in the Fidelity Fund(s)
designated in Section 1.14(b) and as allowed by the Trustee.
(b) If Participant investment direction is elected, each Participant shall
direct the investment of his Account among the Fidelity Funds listed in
Section 1.14(b). The Participant shall file initial investment
instructions with the Administrator, on such form as the Administrator may
provide, selecting the Fund(s) in which amounts credited to his Account
will be invested.
(1) Except as provided in this Section 6.02, only authorized Plan contacts
and the Participant shall have access to a Participant's Account. While
any balance remains in the Account of a Participant after his death, the
Beneficiary of the Participant shall make decisions as to the investment of
the Account as though the Beneficiary were the Participant. To the extent
required by a qualified domestic relations order as defined in Section
414(p) of the Code, an alternate payee shall make investment decisions with
respect to a Participant's Account as though such alternate payee were the
Participant.
(2) If the Trustee receives any contribution under the Plan as to which
investment instructions have not been provided, the Trustee shall promptly
notify the Administrator and the Administrator shall take steps to elicit
instructions from the Participant. The Trustee shall credit any such
contribution to the Participant's Account and such amount shall be invested
in the Fidelity Fund selected by the Employer for such purposes or, absent
Employer selection, in the most conservative Fidelity Fund listed in
Section 1.14(b), until investment instructions have been received by the
Trustee.
(c) All dividends, interest, gains and distributions of any nature received
in respect of Fund Shares shall be reinvested in additional shares of that
Fidelity Fund.
(d) Expenses attributable to the acquisition of investments shall be
charged to the Account of the Participant for which such investment is
made.
6.03. PARTICIPANT DIRECTIONS TO TRUSTEE. All Participant initial
investment instructions filed with the Administrator pursuant to the
provisions of Section 6.02 shall be promptly transmitted by the
Administrator to the Trustee. A Participant shall transmit subsequent
investment instructions directly to the Trustee by means of the telephone
exchange system maintained by the Trustee for such purposes. The method
and frequency for change of investments will be determined under the (a)
rules applicable to the investments selected by the Employer in Section
1.14(b) and (b) the additional rules of the Employer, if any, limiting the
frequency of investment changes, which are included in a separate written
administrative procedure adopted by the Employer and accepted by the
Trustee. The Trustee shall have no duty to inquire into the investment
decisions of a Participant or to advise him regarding the purchase,
retention or sale of assets credited to his Account.
ARTICLE 7. RIGHT TO BENEFITS.
7.01. NORMAL OR EARLY RETIREMENT. Each Participant who attains his Normal
Retirement Age or, if so provided by the Employer in Section 1.06(b), Early
Retirement Age, will have a 100-percent nonforfeitable interest in his
Account regardless of any vesting schedule elected in Section 1.07. If a
Participant retires upon the attainment of Normal or Early Retirement Age,
such retirement is referred to as a normal retirement. Upon his normal
retirement the balance of the Participant's Account, plus any amounts
thereafter credited to his Account, subject to the provisions of Section
7.08, will be distributed to him in accordance with Article 8.
If a Participant separates from service before satisfying the age
requirements for early retirement, but has satisfied the service
requirement, the Participant will be entitled to elect an early retirement
distribution upon satisfaction of such age requirement.
7.02. LATE RETIREMENT. If a Participant continues in the service of the
Employer after attainment of Normal Retirement Age, he will continue to
have a 100-percent nonforfeitable interest in his Account and will continue
to participate in the Plan until the date he establishes with the Employer
for his late retirement. Upon the earlier of his late retirement or the
distribution date required under Section 8.08, the balance of his Account,
plus any amounts thereafter credited to his Account, subject to the
provisions of Section 7.08, will be distributed to him in accordance with
Article 8 below.
7.03. DISABILITY RETIREMENT. If so provided by the Employer in Section
1.06(c), a Participant who becomes disabled will have a 100-percent
nonforfeitable interest in his Account, the balance of which Account, plus
any amounts thereafter credited to his Account, subject to the provisions
of Section 7.08, will be distributed to him in accordance with Article 8
below. A Participant is considered disabled if he cannot engage in any
substantial, gainful activity because of a medically determinable physical
or mental impairment likely to result in death or to be of a continuous
period of not less than 12 months, and terminates his employment with the
Employer. Such termination of employment is referred to as a disability
retirement. Determinations with respect to disability shall be made by the
Administrator who may rely on the criteria set forth in Section 1.06(c) as
evidence that the Participant is disabled.
7.04. DEATH. Subject, if applicable, to Section 8.04, if a Participant
dies before the distribution of his Account has commenced, or before such
distribution has been completed, his Account shall become 100 percent
vested and his designated Beneficiary or Beneficiaries will be entitled to
receive the balance or remaining balance of his Account, plus any amounts
thereafter credited to his Account, subject to the provisions of Section
7.08. Distribution to the Beneficiary or Beneficiaries will be made in
accordance with Article 8.
A Participant may designate a Beneficiary or Beneficiaries, or change any
prior designation of Beneficiary or Beneficiaries by giving notice to the
Administrator on a form designated by the Administrator. If more than one
person is designated as the Beneficiary, their respective interests shall
be as indicated on the designation form. In the case of a married
Participant, the Participant's spouse shall be deemed to be the designated
Beneficiary unless the Participant's spouse has consented to another
designation in the manner described in Section 8.03(d).
A copy of the death notice or other sufficient documentation must be filed
with and approved by the Administrator. If upon the death of the
Participant there is, in the opinion of the Administrator, no designated
Beneficiary for part or all of the Participant's Account, such amount will
be paid to his surviving spouse or, if none, to his estate (such spouse or
estate shall be deemed to be the Beneficiary for purposes of the Plan). If
a Beneficiary dies after benefits to such Beneficiary have commenced, but
before they have been completed, and, in the opinion of the Administrator,
no person has been designated to receive such remaining benefits, then such
benefits shall be paid in a lump sum to the deceased Beneficiary's estate.
7.05. OTHER TERMINATION OF EMPLOYMENT. If a Participant terminates his
employment for any reason other than death or normal, late, or disability
retirement, he will be entitled to a termination benefit equal to the sum
of (a) the vested percentage of the value of the Employer Contributions in
his Account, as adjusted for income, expense, gain, or loss, such
percentage determined in accordance with the vesting schedule selected by
the Employer in Section 1.07, and (b) the value of the Employee and
Rollover Contributions in his Account as adjusted for income, expense, gain
or loss. The amount payable under this Section 7.05 will be subject to the
provisions of Section 7.08 and will be distributed in accordance with
Article 8 below.
7.06. SEPARATE ACCOUNT. If a distribution from a Participant's Account
has been made to him at a time when he has a nonforfeitable right to less
than 100 percent of his Account, the vesting schedule in Section 1.07 will
thereafter apply only to amounts in his Account attributable to Employer
contributions allocated after such distribution. The balance of his
Account immediately after such distribution will be transferred to a
separate account which will be maintained for the purpose of determining
his interest therein according to the following provisions.
At any relevant time prior to a forfeiture of any portion thereof under
Section 7.07, a Participant's nonforfeitable interest in his Account held
in a separate account described in the preceding paragraph will be equal to
P(AB + (RxD))-(RxD), where P is the nonforfeitable percentage at the
relevant time determined under Section 7.05; AB is the account balance of
the separate account 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. Following a forfeiture of
any portion of such separate account under Section 7.07 below, any balance
in the Participant's separate account will remain fully vested and
nonforfeitable.
7.07. FORFEITURES. If a Participant terminates his employment, any
portion of his Account (including any amounts credited after his
termination of employment) not payable to him under Section 7.05 will be
forfeited by him upon the complete distribution to him of the vested
portion of his Account, if any, subject to the possibility of
reinstatement as described in the following paragraph. For purposes of
this paragraph, if the value of an Employee's vested Account balance is
zero, the Employee shall be deemed to have received a distribution of his
vested interest immediately following termination of employment. Such
forfeitures will be applied to reduce the contributions of the Employer
next payable under the Plan (or administrative expenses of the Plan); the
forfeitures shall be held in a money market fund pending such application.
If a Participant forfeits any portion of his Account under the preceding
paragraph but again becomes an Employee after such date, then the amount so
forfeited, without any adjustment for the earnings, expenses, or losses or
gains of the assets credited to his Account since the date forfeited, will
be recredited to his Account (or to a separate account as described in
Section 7.06, if applicable) but only if he repays to the Plan before the
earlier of five years after the date of his reemployment or the date he
incurs 5 consecutive 1-year breaks in service following the date of the
distribution the amount previously distributed to him, without interest,
under Section 7.05. If an Employee is deemed to receive a distribution
pursuant to this Section 7.07, and the Employee resumes employment before 5
consecutive 1-year breaks in service, the Employee shall be deemed to have
repaid such distribution on the date of his reemployment. Upon such an
actual or deemed repayment, the provisions of the Plan (including Section
7.06) will thereafter apply as if no forfeiture had occurred. The amount
to be recredited pursuant to this paragraph will be derived first from the
forfeitures, if any, which as of the date of recrediting have yet to be
applied as provided in the preceding paragraph and, to the extent such
forfeitures are insufficient, from a special Employer contribution to be
made by the Employer.
If a Participant elects not to receive the nonforfeitable portion of his
Account following his termination of employment, the non-vested portion of
his Account shall be forfeited after the Participant has incurred five
consecutive 1-year breaks in service as defined in Section 2.01(a)(33).
No forfeitures will occur solely as a result of a Participant's withdrawal
of Employee contributions.
7.08. ADJUSTMENT FOR INVESTMENT EXPERIENCE. If any distribution under
this Article 7 is not made in a single payment, the amount retained by the
Trustee after the distribution will be subject to adjustment until
distributed to reflect the income and gain or loss on the investments in
which such amount is invested and any expenses properly charged under the
Plan and Trust to such amounts.
7.09. PARTICIPANT LOANS. If permitted under Section 1.09, the
Administrator shall allow Participants to apply for a loan from the Plan,
subject to the following:
(a) Loan Application. All Plan loans shall be administered by the
Administrator. Applications for loans shall be made to the Administrator
on forms available from the Administrator. Loans shall be made available
to all Participants on a reasonably equivalent basis. For this purpose,
the term "Participant" means any Participant or Beneficiary, including an
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, who is a party-in-interest (as determined under
ERISA Section 3(14)) with respect to the Plan except no loans will be made
to: (1) an Employee who makes a rollover contribution in accordance with
Section 4.10 who has not satisfied the requirements of Section 3.01 or (2)
a shareholder-employee or Owner-Employee. For purposes of this
requirement, a shareholder-employee means an employee or officer of an
electing small business (Subchapter S) corporation who owns (or is
considered as owning within the meaning of Section 318(a)(1) of the Code),
on any day during the taxable year of such corporation, more than 5% of the
outstanding stock of the corporation.
A Participant with an existing loan may not apply for another loan until
the existing loan is paid in full and may not refinance an existing loan or
attain a second loan for the purpose of paying off the existing loan. A
Participant may not apply for more than one loan during each Plan Year.
(b) Limitation of Loan Amount/Purpose of Loan. Loans shall not be made
available to Highly Compensated Employees in an amount greater than the
amount made available to other employees. No loan to any Participant or
Beneficiary can be made to the extent that such loan when added to the
outstanding balance of all other loans to the Participant or Beneficiary
would exceed the lesser of (1) $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 (2) one-half the present
value of the nonforfeitable Account of the Participant. For the purpose of
the above limitation, all loans from all plans of the Employer and Related
Employers are aggregated. A Participant may not request a loan for less
than $1,000. The Employer may provide that loans only be made from certain
contribution sources within Participant Account(s) by notifying the Trustee
in writing of the restricted source.
Loans may be made for any purpose or if elected by the Employer in
Section 1.09(a), on account of hardship only. A loan will be considered to
be made on account of hardship only if made on account of the following
immediate and heavy financial needs: expenses incurred or necessary for
medical care (within the meaning of Section 213(d) of the Code) of the
Employee, the Employee's spouse, children or dependents; the purchase
(excluding mortgage payments) of a principal residence for the Employee;
payment of tuition and related educational fees for the next twelve (12)
months of post-secondary education for the Employee, the Employee's spouse,
children or dependents; or the need to prevent the eviction of the Employee
from, or a foreclosure on the mortgage of, the Employee's principal
residence.
(c) Terms of Loan. All loans shall bear a reasonable rate of interest as
determined by the Administrator based on the prevailing interest rates
charged by persons in the business of lending money for loans which would
be made under similar circumstances. The determination of a reasonable
rate of interest must be based on appropriate regional factors unless the
Plan is administered on a national basis in which case the Administrator
may establish a uniform reasonable rate of interest applicable to all
regions.
All loans shall by their terms require that repayment (principal and
interest) be amortized in level payments, not less than quarterly, over a
period not extending beyond five years from the date of the loan unless
such loan is for the purchase of a Participant's primary residence, in
which case the repayment period may not extend beyond ten years from the
date of the loan. A Participant may prepay the outstanding loan balance
prior to maturity without penalty.
(d) Security. Loans must be secured by the Participant's Accounts not to
exceed 50 percent of the Participant's vested Account . A Participant must
obtain the consent of his or her spouse, if any, to use a Participant
Account as security for the loan, if the provisions of Section 8.03 apply
to the Participant. Spousal consent shall be obtained no earlier than the
beginning of the 90-day period that ends on the date on which the loan is
to be so secured. The consent must be in writing, must acknowledge the
effect of the loan, and must be witnessed by a Plan representative or
notary public. Such consent shall thereafter be binding with respect to
the consenting spouse or any subsequent spouse with respect to that loan.
(e) Default. The Administrator shall treat a loan in default if
(1) any scheduled repayment remains unpaid more than 90 days, or
(2) there is an outstanding principal balance existing on a loan after the
last scheduled repayment date.
Upon default or termination of employment, the entire outstanding
principal and accrued interest shall be immediately due and payable. If a
distributable event (as defined by the Code) has occurred, the
Administrator shall direct the Trustee to foreclose on the promissory note
and offset the Participant's vested Account by the outstanding balance of
the loan. If a distributable event has not occurred, the Administrator
shall direct the Trustee to foreclose on the promissory note and offset the
Participant's vested Account as soon as a distributable event occurs.
(f) Pre-existing loans. The provision in paragraph (a) of this Section
7.09 limiting a Participant to one outstanding loan shall not apply to
loans made before the Employer adopted this prototype plan document. A
Participant may not apply for a new loan until all outstanding loans made
before the Employer adopted this prototype plan have been paid in full.
The Trustee may accept any loans made before the Employer adopted this
prototype plan document except such loans which require the Trustee to hold
as security for the loan property other than the Participant's vested
Account.
As of the effective date of amendment of this Plan in Section 1.01(g)(2),
the Trustee shall have the right to reamortize the outstanding principal
balance of any Participant loan that is delinquent. Such reamortization
shall be based upon the remaining life of the loan and the original
maturity date may not be extended.
Notwithstanding any other provision of this Plan, the portion of the
Participant's vested Account 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 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 (determined without regard to the preceding sentence) is payable to
the surviving spouse, then the Account shall be adjusted by first reducing
the vested Account by the amount of the security used as repayment of the
loan, and then determining the benefit payable to the surviving spouse.
No loan to any Participant or Beneficiary can be made to the extent that
such loan when added to the outstanding balance of all other loans to the
Participant or Beneficiary would exceed the lesser of (1) $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
(2) one-half the present value of the nonforfeitable Account of the
Participant. For the purpose of the above limitation, all loans from all
plans of the Employer and Related Employers are aggregated.
7.10. IN-SERVICE WITHDRAWALS. A Participant shall not be permitted to
withdraw any Employer contributions (and earnings thereon) prior to the
termination of employment. A Participant shall be permitted to withdraw
some or all of his Rollover Contributions (and earnings thereon) upon
request.
7.11. PRIOR PLAN IN-SERVICE DISTRIBUTION RULES. If designated by the
Employer in Section 1.11(b), a Participant shall be entitled to withdraw
any after-tax contributions made prior to the adoption of this Plan at
anytime prior to his termination of employment, subject to the provisions
of Section 8.05.
ARTICLE 8. DISTRIBUTION OF BENEFITS PAYABLE AFTER TERMINATION OF SERVICE.
8.01. DISTRIBUTION OF BENEFITS TO PARTICIPANTS AND BENEFICIARIES.
(a) Distributions from the Trust to a Participant or to the Beneficiary of
the Participant shall be made in a lump sum in cash or, if elected by the
Employer in Section 1.11, under a systematic withdrawal plan
(installment(s)) upon retirement, death, disability, or other termination
of employment, unless another form of distribution is required or permitted
in accordance with paragraph (d) of this Section 8.01 or Sections 1.11(c),
8.02, 8.03, 8.04 or 11.02. A distribution may be made in Fund Shares, at
the election of the Participant, pursuant to the qualifying rollover of
such distribution to a Fidelity Investments individual retirement account.
(b) Distributions under a systematic withdrawal plan must be made in
substantially equal annual, or more frequent, installments, in cash, over a
period certain which does not extend beyond the life expectancy of the
Participant or the joint life expectancies of the Participant and his
Beneficiary, or, if the Participant dies prior to the commencement of his
benefits the life expectancy of the Participant's Beneficiary, as further
described in Section 8.04.
(c) Notwithstanding the provisions of Section 8.01(b) above, if a
Participant's Account is, and at the time of any prior distribution(s) was,
$3,500 or less, the balance of such Account shall be distributed in a lump
sum as soon as practicable following retirement, disability, death or other
termination of employment.
(d) This paragraph (d) applies to distributions made on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Article 8, a
distributee may elect, at the time and in the manner prescribed by the
Administrator, to have any portion of an eligible rollover distribution
paid directly to an eligible retirement plan specified by the distributee
in a direct rollover. The following definitions shall apply for purposes
of this paragraph (d):
(1) Eligible rollover distribution: An eligible rollover distribution is
any distribution of all or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution does not
include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or
life expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under Section
401(a)(9) of the Code; and 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).
(2) Eligible retirement plan: An eligible retirement plan is an individual
retirement account described in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of the Code, an annuity plan
described in Section 403(a) of the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the distributee's eligible
rollover distribution. 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.
(3) Distributee: A distributee includes an Employee or former Employee.
In addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with regard to the interest of
the spouse or former spouse.
(4) Direct rollover: A direct rollover is a payment by the plan to the
eligible retirement plan specified by the distributee.
8.02. ANNUITY DISTRIBUTIONS. A Participant may elect distributions made
in whole or in part in the form of an annuity contract, subject to the
provisions of Section 8.03.
(a) An annuity contract distributed under the Plan must be purchased from
an insurance company and must be nontransferable. The terms of an annuity
contract shall comply with the requirements of the Plan and distributions
under such contract shall be made in accordance with Section 401(a)(9) of
the Code and the regulations thereunder.
(b) The payment period of an annuity contract distributed to the
Participant pursuant to this Section may be as long as the Participant
lives. If the annuity is payable to the Participant and his spouse or
designated Beneficiary, the payment period of an annuity contract may be
for as long as either the Participant or his spouse or designated
Beneficiary lives. Such an annuity may provide for an annuity certain
feature for a period not exceeding the life expectancy of the Participant.
If the annuity is payable to the Participant and his spouse such period may
not exceed the joint life and last survivor expectancy of the Participant
and his spouse, or, if the annuity is payable to the Participant and a
designated Beneficiary, the joint life and last survivor expectancy of the
Participant and such Beneficiary. If the Participant dies prior to the
commencement of his benefits, the payment period of an annuity contract
distributed to the Beneficiary of the Participant may be as long as the
Participant's Beneficiary lives, and may provide for an annuity certain
feature for a period not exceeding the life expectancy of the Beneficiary.
Any annuity contract distributed under the Plan must provide for
nonincreasing payments.
8.03. JOINT AND SURVIVOR ANNUITIES/PRERETIREMENT SURVIVOR ANNUITIES.
(a) Application. The provisions of this Section supersede any conflicting
provisions of the Plan; however, paragraph (b) of this Section shall not
apply if the Participant's Account does not exceed or at the time of any
prior distribution did not exceed $3,500.
(b) Retirement Annuity. Unless the Participant elects to waive the
application of this subsection in a manner satisfying the requirements of
subsection (d) below, to the extent applicable to the Participant, within
the 90-day period preceding his Annuity Starting Date (which election may
be revoked, and if revoked, remade, at any time in such period), the vested
Account due any Participant to whom this subsection (b) applies will be
paid to him by the purchase and delivery to him of an annuity contract
described in Section 8.02 providing a life annuity only form of benefit or,
if the Participant is married as of his Annuity Starting Date, providing an
immediate annuity for the life of the Participant with a survivor annuity
for the life of the Participant's spouse (determined as of the date of
distribution of the contract) which is 50 percent of the amount of the
annuity which is payable during the joint lives of the Participant and such
spouse. The Participant may elect to receive distribution of his benefits
in the form of such annuity as of the earliest date on which he could elect
to receive retirement benefits under the Plan. Within the period beginning
90 days prior to the Participant's Annuity Starting Date and ending 30 days
prior to such Date, the Administrator will provide such Participant with a
written explanation of (1) the terms and conditions of the annuity contract
described herein, (2) the Participant's right to make, and the effect of,
an election to waive application of this subsection, (3) the rights of the
Participant's spouse under subsection (d), and (4) the right to revoke and
the period of time necessary to revoke the election to waive application of
this subsection.
(c) Annuity Death Benefit. Unless the Participant elects to waive the
application of this subsection in a manner satisfying the requirements of
subsection (d) below at any time within the applicable election period
(which election may be revoked, and if revoked, remade, at any time in such
period), if a married Participant to whom this Section applies dies before
his Annuity Starting Date, then notwithstanding any designation of a
Beneficiary to the contrary, 50 percent of his vested Account will be
applied to purchase an annuity contract described in Section 8.02 providing
an annuity for the life of the Participant's surviving spouse, which
contract will then be promptly distributed to such spouse. In lieu of the
purchase of such an annuity contract, the spouse may elect in writing to
receive distributions under the Plan as if he or she had been designated by
the Participant as his Beneficiary with respect to 50 percent of his
Account. For purposes of this subsection, the applicable election period
will commence on the first day of the Plan Year in which the Participant
attains age 35 and will end on the date of the Participant's death,
provided that in the case of a Participant who terminates his employment
the applicable election period with respect to benefits accrued prior to
the date of such termination will in no event commence later than the date
of his termination of employment. A Participant may elect to waive the
application of this subsection prior to the Plan Year in which he attains
age 35, provided that any such waiver will cease to be effective as of the
first day of the Plan Year in which the Participant attains age 35.
The Administrator will provide a Participant to whom this subsection
applies with a written explanation with respect to the annuity death
benefit described in this subsection (c) comparable to that required under
subsection (b) above. Such explanation shall be furnished within whichever
of the following periods ends last: (1) the period beginning with the
first day of the Plan Year in which the Participant reaches age 32 and
ending with the end of the Plan Year preceding the Plan Year in which he
reaches age 35, (2) a reasonable period ending after the Employee becomes a
Participant, (3) a reasonable period ending after this Section 8.04 first
becomes applicable to the Participant in accordance with Section 8.04(a),
(4) in the case of a Participant who separates from service before age 35,
a reasonable period of time ending after separation from service. For
purposes of the preceding sentence, the two-year period beginning one year
prior to the date of the event described in clause (2), (3) or (4),
whichever is applicable, and ending one year after such date shall be
considered reasonable, provided, that in the case of a Participant who
separates from service under (4) above and subsequently recommences
employment with the Employer, the applicable period for such Participant
shall be redetermined in accordance with this subsection.
(d) Requirements of Elections. This subsection will be satisfied with
respect to a waiver or designation which is required to satisfy this
subsection if such waiver or designation is in writing and either
(1) the Participant's spouse consents thereto in writing, which consent
must acknowledge the effect of such waiver or designation and be witnessed
by a notary public or Plan representative, or
(2) the Participant establishes to the satisfaction of the Administrator
that the consent of the Participant's spouse cannot be obtained because
there is no spouse, because the spouse cannot be located or because of such
other circumstances as the Secretary of Treasury may prescribe.
Any consent by a spouse, or establishment that the consent of a spouse
may not be obtained, will be effective only with respect to a specific
Beneficiary (including any class of Beneficiaries or any contingent
Beneficiaries) or form of benefits identified in the Participant's waiver
or designation, unless the consent of the spouse expressly permits
designations by the Participant without any requirement of further consent
by the spouse. A consent which permits such designations by the
Participant shall acknowledge that the spouse has the right to limit
consent to a specific Beneficiary and form of benefits and that the spouse
voluntarily elects to relinquish both such rights. A consent by a spouse
shall be irrevocable once made. Any such consent, or establishment that
such consent may not be obtained, will be effective only with respect to
such spouse. For purposes of subsections (b) and (c) above, no consent of
a spouse shall be valid unless the notice required by whichever subsection
is applicable has been provided to the Participant.
(e) Former Spouse. For purposes of this Section 8.03, a former spouse of a
Participant will be treated as the spouse or surviving spouse of the
Participant, and a current spouse will not be so treated, to the extent
required under a qualified domestic relations order, as defined in Section
414(p) of the Code.
(f) Vested Account. For purposes of this Section, vested Account shall
include the aggregate value of the Participant's vested Account derived
from Employer and Employee contributions (including rollovers), whether
vested before or upon death. The provisions of this Section shall apply to
a Participant who is vested in amounts attributable to Employer
contributions, Employee contributions, or both, upon death or at the time
of distribution.
8.04 INSTALLMENT DISTRIBUTIONS. This Section shall be interpreted and
applied in accordance with the regulations under Section 401(a)(9) of the
Code, including the minimum distribution incidental benefit requirement of
Section 1.401(a)(9)-2 of the Proposed Treasury Regulations, or any
successor regulations of similar import.
(a) In General. If a Participant's benefit may be distributed in
accordance with Section 8.01(b), the amount to be distributed for each
calendar year for which a minimum distribution is required shall be at
least an amount equal to the quotient obtained by dividing the
Participant's interest in his Account by the life expectancy of the
Participant or Beneficiary or the joint life and last survivor expectancy
of the Participant and his Beneficiary, whichever is applicable. For
calendar years beginning before January 1, 1989, if a Participant's
Beneficiary is not his spouse, the method of distribution selected must
insure that at least 50 percent of the present value of the amount
available for distribution is paid within the life expectancy of the
Participant. For calendar years beginning after December 31, 1988, the
amount to be distributed for each calendar year shall not be less than an
amount equal to the quotient obtained by dividing the Participant's
interest in his Account by the lesser of (1) the applicable life expectancy
under Section 8.01(b), or (2) if a Participant's Beneficiary is not his
spouse, the applicable divisor determined under Section 1.401(a)(9)-2,
Q&A 4 of the Proposed Treasury Regulations, or any successor
regulations of similar import. Distributions after the death of the
Participant shall be made using the applicable life expectancy under (1)
above, without regard to Section 1.401(a)(9)-2 of such regulations.
The minimum distribution required under this subsection (a) for the
calendar year immediately preceding the calendar year in which the
Participant's required beginning date, as determined under Section 8.08(b),
occurs shall be made on or before the Participant's required beginning
date, as so determined. Minimum distributions for other calendar years
shall be made on or before the close of such calendar year.
(b) Additional Requirements for Distributions After Death of Participant.
(1) Distribution beginning before Death. If the Participant dies before
distribution of his benefits has begun, distributions shall be made in
accordance with the provisions of this paragraph. Distributions under
Section 8.01(a) shall be completed by the close of the calendar year in
which the fifth anniversary of the death of the Participant occurs.
Distributions under Section 8.01(b) shall commence, if the Beneficiary is
not the Participant's spouse, not later than the close of the calendar year
immediately following the calendar year in which the death of the
Participant occurs. Distributions under Section 8.01(b) to a Beneficiary
who is the Participant's surviving spouse shall commence not later than the
close of the calendar year in which the Participant would have attained age
70 1/2 or, if later, the close of the calendar year immediately following
the calendar year in which the death of the Participant occurs. In the
event such spouse dies prior to the date distribution to him or her
commences, he or she will be treated for purposes of this subsection (other
than the preceding sentence) as if he or she were the Participant. If the
Participant has not designated a Beneficiary, or the Participant or
Beneficiary has not effectively selected a method of distribution,
distribution of the Participant's benefit shall be completed by the close
of the calendar year in which the fifth anniversary of the death of the
Participant occurs.
Any amount paid to a child of the Participant will be treated as if it had
been paid to the surviving spouse if the amount becomes payable to the
surviving spouse when the child reaches the age of majority.
For purposes of this subsection (b)(1), the life expectancy of a
Beneficiary who is the Participant's surviving spouse shall be recalculated
annually unless the Participant's spouse irrevocably elects otherwise prior
to the time distributions are required to begin. Life expectancy shall be
computed in accordance with the provisions of subsection (a) above.
(2) Distribution beginning after Death. If the Participant dies after
distribution of his benefits has begun, distributions to the Participant's
Beneficiary will be made at least as rapidly as under the method of
distribution being used as of the date of the Participant's death.
For purposes of this Section 8.04(b), distribution of a Participant's
interest in his Account will be considered to begin as of the Participant's
required beginning date, as determined under Section 8.08(b). If
distribution in the form of an annuity irrevocably commences prior to such
date, distribution will be considered to begin as of the actual date
distribution commences.
(c) Life Expectancy. For purposes of this Section, life expectancy shall
be recalculated annually in the case of the Participant or a Beneficiary
who is the Participant's spouse unless the Participant or Beneficiary
irrevocably elects otherwise prior to the time distributions are required
to begin. If not recalculated in accordance with the foregoing, life
expectancy shall be calculated using the attained age of the Participant or
Beneficiary, whichever is applicable, as of such individual's birth date in
the first year for which a minimum distribution is required reduced by one
for each elapsed calendar year since the date life expectancy was first
calculated. For purposes of this Section, life expectancy and joint life
and last survivor expectancy shall be computed by use of the expected
return multiples in Table V and VI of section 1.72-9 of the income tax
Regulations.
A Participant's interest in his Account for purposes of this Section 8.04
shall be determined as of the last valuation date in the calendar year
immediately preceding the calendar year for which a minimum distribution is
required, increased by the amount of any contributions allocated to, and
decreased by any distributions from, such Account after the valuation date.
Any distribution for the first year for which a minimum distribution is
required made after the close of such year shall be treated as if made
prior to the close of such year.
8.05. IMMEDIATE DISTRIBUTIONS. If the Account distributable to a
Participant exceeds, or at the time of any prior distribution exceeded,
$3,500, no distribution will be made to the Participant before he reaches
his Normal Retirement Age (or age 62, if later), unless the written consent
of the Participant has been obtained. Such consent shall be made in
writing within the 90-day period ending on the Participant's Annuity
Starting Date. Within the period beginning 90 days before the
Participant's Annuity Starting Date and ending 30 days before such Date,
the Administrator will provide such Participant with written notice
comparable to the notice described in Section 8.03(b) containing a general
description of the material features and an explanation of the relative
values of the optional forms of benefit available under the Plan and
informing the Participant of his right to defer receipt of the distribution
until his Normal Retirement Age (or age 62, if later).
The consent of the Participant's spouse must also be obtained if the
Participant is subject to the provisions of Section 8.03(a), unless the
distribution will be made in the form of the applicable retirement annuity
contract described in Section 8.03(b). A spouse's consent to early
distribution, if required, must satisfy the requirements of Section
8.03(d).
Neither the consent of the Participant nor the Participant's spouse shall
be required to the extent that a distribution is required to satisfy
Section 401(a)(9) or Section 415 of the Code. In addition, upon termination
of the Plan if it does not offer an annuity option (purchased from a
commercial provider) and if the Employer or any Related Employer does not
maintain another defined contribution plan (other than an employee stock
ownership plan as defined in Code Section 4975(e)(7)) the Participant's
Account will, without the Participant's consent, be distributed to the
Participant. However, if any Related Employer maintains another defined
contribution plan (other than an employee stock ownership plan as defined
in Section 4975(e)(7) of the Code) then the Participant's Account will be
transferred, without the Participant's consent, to the other plan if the
Participant does not consent to an immediate distribution.
8.06. DETERMINATION OF METHOD OF DISTRIBUTION. The Participant will
determine the method of distribution of benefits to himself and may
determine the method of distribution to his Beneficiary. Such
determination will be made prior to the time benefits become payable under
the Plan. If the Participant does not determine the method of distribution
to his Beneficiary or if the Participant permits his Beneficiary to
override his determination, the Beneficiary, in the event of the
Participant's death, will determine the method of distribution of benefits
to himself as if he were the Participant. A determination by the
Beneficiary must be made no later than the close of the calendar year in
which distribution would be required to begin under Section 8.04(b) or, if
earlier, the close of the calendar year in which the fifth anniversary of
the death of the Participant occurs.
8.07. NOTICE TO TRUSTEE. The Administrator will notify the Trustee in
writing whenever any Participant or Beneficiary is entitled to receive
benefits under the Plan. The Administrator's notice shall indicate the
form of benefits that such Participant or Beneficiary shall receive and (in
the case of distributions to a Participant) the name of any designated
Beneficiary or Beneficiaries.
8.08. TIME OF DISTRIBUTION. In no event will distribution to a
Participant be made later than the earlier of the dates described in (a)
and (b) below:
(a) Absent the consent of the Participant (and his spouse, if appropriate),
the 60th day after the close of the Plan Year in which occurs the latest of
the date on which the Participant attains age 65, the date on which the
Participant ceases to be employed by the Employer, or the 10th anniversary
of the year in which the Participant commenced participation in the Plan;
and
(b) April 1 of the calendar year first following the calendar year in which
the Participant attains age 70 1/2 or, in the case of a Participant who had
attained age 70 1/2 before January 1, 1988, the required beginning date
determined in accordance with (1) or (2) below:
(1) 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.
(2) The required beginning date of a Participant who is a 5-percent owner
during any year beginning after December 31, 1979, is the first day of
April following the later of
(A) the calendar year in which the Participant attains age 70 1/2, or
(B) the earlier of the calendar year with or within which ends the Plan
Year in which the Participant becomes a 5-percent owner, or the calendar
year in which the Participant retires.
Notwithstanding the foregoing, in the case of a Participant who attained
age 70 1/2 during 1988 and who had not retired prior to January 1, 1989,
the required beginning date described in this paragraph shall be April 1,
1990.
Notwithstanding (a) above, the failure of a Participant (and spouse) to
consent to a distribution while a benefit is immediately distributable,
within the meaning of Section 8.05, shall be deemed to be an election to
defer commencement of payment of any benefit sufficient to satisfy (a)
above.
Once distributions have begun to a 5-percent owner under (b) above, they
must continue to be distributed, even if the Participant ceases to be a
5-percent owner in a subsequent year.
For purposes of (b) above, a Participant is treated as a 5-percent owner
if such Participant is a 5-percent owner as defined in Section 416(i) of
the Code (determined in accordance with Section 416 but without regard to
whether the Plan is top-heavy) at any time during the Plan Year ending with
or within the calendar year in which such owner attains age 66 1/2 or any
subsequent Plan Year.
The Administrator shall notify the Trustee in writing whenever a
distribution is necessary in order to comply with the minimum distribution
rules set forth in this Section.
8.09. WHEREABOUTS OF PARTICIPANTS AND BENEFICIARIES. The Administrator
will at all times be responsible for determining the whereabouts of each
Participant or Beneficiary who may be entitled to benefits under the Plan
and will at all times be responsible for instructing the Trustee in writing
as to the current address of each such Participant or Beneficiary. The
Trustee will be entitled to rely on the latest written statement received
from the Administrator as to such addresses. The Trustee will be under no
duty to make any distributions under the Plan unless and until it has
received written instructions from the Administrator satisfactory to the
Trustee containing the name and address of the distributee, the time when
the distribution is to occur, and the form which the distribution will
take. Notwithstanding the foregoing, if the Trustee attempts to make a
distribution in accordance with the Administrator's instructions but is
unable to make such distribution because the whereabouts of the distributee
is unknown, the Trustee will notify the Administrator of such situation and
thereafter the Trustee will be under no duty to make any further
distributions to such distributee until it receives further written
instructions from the Administrator. If a benefit is forfeited because the
Administrator determines that the Participant or Beneficiary cannot be
found, such benefit will be reinstated by the Sponsor if a claim is filed
by the Participant or Beneficiary with the Administrator and the
Administrator confirms the claim to the Sponsor.
ARTICLE 9. TOP-HEAVY PROVISIONS.
9.01 APPLICATION. If the Plan is or becomes a Top-Heavy Plan in any Plan
Year or is automatically deemed to be Top-Heavy in accordance with the
Employer's election in Section 1.12(a)(1) of the Adoption Agreement, the
provisions of this Article 9 shall supersede any conflicting provision in
the Plan.
9.02 DEFINITIONS. For purposes of this Article 9, the following terms
have the meanings set forth below:
(a) Key Employee. Any Employee or former Employee (and the Beneficiary of
any such Employee) who at any time during the determination period was (1)
an officer of the Employer whose annual compensation exceeds 50 percent of
the dollar limitation under Section 415(b)(1)(A) of the Code, (2) an owner
(or considered an owner under Section 318 of the Code) of one of the ten
largest interests in the Employer if such individual's annual compensation
exceeds the dollar limitation under Section 415(c)(1)(A) of the Code, (3) a
5-percent owner of the Employer, or (4) a 1-percent owner of the Employer
who has annual compensation of more than $150,000. For purposes of this
paragraph, 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 shall be made in accordance with Section 416(i)(1) of
the Code and the regulations thereunder. Annual compensation means
compensation as defined in Section 5.03(e)(2), but including amounts
contributed by the Employer pursuant to a salary reduction agreement which
are excludable from the employee's gross income under Section 125, Section
402(a)(8), and Section 403(b) of the Code.
(b) Top-Heavy Plan. The Plan is a Top-Heavy Plan if any of the following
conditions exists:
(1) the Top-Heavy Ratio for the Plan exceeds 60 percent and the Plan is
not part of any Required Aggregation Group or Permissive Aggregation Group,
(2) the Plan is a part of a Required Aggregation Group but not part of a
Permissive Aggregation Group and the Top-Heavy Ratio for the Required
Aggregation Group exceeds 60 percent, or
(3) the Plan is a part of a Required Aggregation Group and a Permissive
Aggregation Group and the Top-Heavy Ratio for both Groups exceeds 60
percent.
(c) Top-Heavy Ratio.
(1) With respect to this Plan, or with respect to any Required
Aggregation Group or Permissive Aggregation Group that consists solely of
defined contribution plans (including any simplified employee pension
plans) 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 is a fraction, the numerator of which
is the sum of the account balances of all Key Employees under the plans as
of the Determination Date (including any part of any account balance
distributed in the 5-year period ending on the Determination Date), and the
denominator of which is the sum of all account balances (including any part
of any account balance distributed in the 5-year period ending on the
Determination Date) of all participants under the plans as of the
Determination Date. Both the numerator and denominator of the Top-Heavy
Ratio shall be increased, to the extent required by Section 416 of the
Code, to reflect any contribution which is due but unpaid as of the
Determination Date.
(2) With respect to any Required Aggregation Group or Permissive
Aggregation Group that includes one or more defined benefit plans which,
during the 5-year period ending on the Determination Date, has covered or
could cover a Participant in this Plan, the Top-Heavy Ratio is a fraction,
the numerator of which is the sum of the account balances under the defined
contribution plans for all Key Employees and the present value of accrued
benefits under the defined benefit plans for all Key Employees, and the
denominator of which is the sum of the account balances under the defined
contribution plans for all participants and the present value of accrued
benefits under the defined benefit plans for all participants. Both the
numerator and denominator of the Top-Heavy Ratio shall be increased for any
distribution of an account balance or an accrued benefit made in the 5-year
period ending on the Determination Date and any contribution due but unpaid
as of the Determination Date.
(3) For purposes of (1) and (2) above, the value of Accounts and the
present value of accrued benefits will be determined as of the most recent
Valuation Date that falls within or ends with the 12-month period ending on
the Determination Date, except as provided in Section 416 of the Code and
the regulations thereunder for the first and second plan years of a defined
benefit plan. The Account and accrued benefits of a Participant (A) who is
not a Key Employee but who was a Key Employee in a prior year, or (B) who
has not been credited with at least one Hour of Service with the Employer
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, shall
be made in accordance with Section 416 of the Code and the regulations
thereunder. Deductible employee contributions shall not be taken into
account for purposes of computing the Top-Heavy Ratio. When aggregating
plans, the value of Accounts and accrued benefits shall be calculated with
reference to the Determination Dates that fall within the same calendar
year.
For purposes of determining if the Plan, or any other plan included in a
Required Aggregation Group of which this Plan is a part, is a Top-Heavy
Plan, the accrued benefit in a defined benefit plan of an Employee other
than a Key Employee shall be determined under (i) the method, if any, that
uniformly applies for accrual purposes under all plans maintained by the
Employer, or (ii) if there is no such method, as if such benefit accrued
not more rapidly than the slowest accrual rate permitted under the
fractional accrual rate of Section 411(b)(1)(C) of the Code.
(d) Permissive Aggregation Group. The Required Aggregation Group plus any
other qualified plans of the Employer or a Related Employer which, when
considered as a group with the Required Aggregation Group, would continue
to satisfy the requirements of Sections 401(a)(4) and 410 of the Code.
(e) Required Aggregation Group.
(1) Each qualified plan of the Employer or Related Employer in which at
least one Key Employee participates, or has participated at any time during
the determination period (regardless of whether the plan has terminated),
and
(2) any other qualified plan of the Employer or Related Employer which
enables a plan described in (1) above to meet the requirements of Sections
401(a)(4) or 410 of the Code.
(f) Determination Date. For any Plan Year of the Plan subsequent to the
first Plan Year, the last day of the preceding Plan Year. For the first
Plan Year of the Plan, the last day of that Plan Year.
(g) Valuation Date. The Determination Date.
(h) Present Value. Present value shall be based only on the interest rate
and mortality table specified in the Adoption Agreement.
9.03. MINIMUM CONTRIBUTION.
(a) Except as otherwise provided in (b) and (c) below, the Employer
contributions made on behalf of any Participant who is not a Key Employee
shall not be less than the lesser of 3 percent (or such other percent
elected by the Employer in Section 1.12(c)) of such Participant's
Compensation or, in the case where the Employer has no defined benefit plan
which designates this Plan to satisfy Section 401 of the Code, the largest
percentage of Employer contributions, as a percentage of the first $200,000
of the Key Employee's Compensation, made on behalf of any Key Employee for
that year. The minimum contribution under this Section 9.03 shall be
determined without regard to permitted disparity under Section 4.02.
Further, the minimum contribution under this Section 9.03 shall be made
even though, under other Plan provisions, the Participant would not
otherwise be entitled to receive a contribution, or would have received a
lesser contribution for the year, because (1) the Participant failed to
complete 1,000 Hours of Service or any equivalent service requirement
provided in the Adoption Agreement; or (2) the Participant's Compensation
was less than a stated amount.
(b) The provisions of (a) above shall not apply to any Participant who was
not employed by the Employer on the last day of the Plan Year.
(c) The Employer contributions for the Plan Year made on behalf of each
Participant who is not a Key Employee and who is a participant in a defined
benefit plan maintained by the Employer shall not be less than 5 percent of
such Participant's Compensation, unless the Employer has provided in
Section 1.12(c) that the minimum contribution requirement will be met in
the other plan or plans of the Employer.
(d) The minimum contribution required under (a) above (to the extent
required to be nonforfeitable under Section 416(b) of the Code) may not be
forfeited under Sections 411(a)(3)(B) or 411(a)(3)(D) of the Code.
9.04. ADJUSTMENT TO THE LIMITATION ON CONTRIBUTIONS AND BENEFITS. If this
Plan is in Top-Heavy status, the number 100 shall be substituted for the
number 125 in subsections (e)(3) and (e)(4) of Section 5.03. However, this
substitution shall not take effect with respect to this Plan in any Plan
Year in which the following requirements are satisfied:
(a) The Employer contributions for such Plan Year made on behalf of each
Participant who is not a Key Employee and who is a participant in a defined
benefit plan maintained by the Employer is not less than 7 1/2 percent of
such Participant's Compensation.
(b) The sum of the present value as of the Determination Date of (1) the
aggregate accounts of all Key Employees under all defined contribution
plans of the Employer and (2) the cumulative accrued benefits of all Key
Employees under all defined benefit plans of the Employer does not exceed
90 percent of the same amounts determined for all Participants under all
plans of the Employer that are Top-Heavy Plans, excluding Accounts and
accrued benefits for Employees who formerly were but are no longer Key
Employees.
The substitutions of the number 100 for 125 shall not take effect in any
Limitation Year with respect to any Participant for
whom no benefits are accrued or contributions made for such Year.
9.05. MINIMUM VESTING. For any Plan Year in which the Plan is a Top-Heavy
Plan and all Plan Years thereafter, the Top-Heavy vesting schedule elected
in Section 1.12(d) will automatically apply to the Plan. The Top-Heavy
vesting schedule applies to all benefits within the meaning of Section
411(a)(7) of the Code except those attributable to Employee Contributions
or those already subject to a vesting schedule which vests at least as
rapidly in all cases as the schedule elected in Section 1.12(d), including
benefits accrued before the Plan becomes a Top-Heavy Plan. Further, no
decrease in a Participant's nonforfeitable percentage may occur in the
event the Plan's status as a Top-Heavy Plan changes for any Plan Year.
However, this Section 9.05 does not apply to the Account of any Employee
who does not have an Hour of Service after the Plan has initially become a
Top-Heavy Plan and such Employee's Account attributable to Employer
Contributions will be determined without regard to this Section 9.05.
ARTICLE 10. AMENDMENT AND TERMINATION.
10.01 AMENDMENT BY EMPLOYER. The Employer reserves the authority, subject
to the provisions of Article 1 and Section 10.03, to amend the Plan:
(a) Changing Elections Contained in the Adoption Agreement. By filing with
the Trustee an amended Adoption Agreement, executed by the Employer only,
on which said Employer has indicated a change or changes in provisions
previously elected by it. Such changes are to be effective on the
effective date of such amended Adoption Agreement except that retroactive
changes to a previous election or elections pursuant to the regulations
issued under Section 401(a)(4) of the Code shall be permitted. Any such
change notwithstanding, no Participant's Account shall be reduced by such
change below the amount to which the Participant would have been entitled
if he had voluntarily left the employ of the Employer immediately prior to
the date of the change. The Employer may from time to time make any
amendment to the Plan that may be necessary to satisfy Sections 415 or 416
of the Code because of the required aggregation of multiple plans by
completing overriding plan language in the Adoption Agreement. The
Employer may also add certain model amendments published by the Internal
Revenue Service which specifically provide that their adoption will not
cause the Plan to be treated as an individually designed plan; or
(b) Other Changes. By amending any provision of the Plan for any reason
other than those specified in (a) above. However, upon making such
amendment, including a waiver of the minimum funding requirement under
Section 412(d) of the Code, the Employer may no longer participate in this
prototype plan arrangement and will be deemed to have an individually
designed plan. Following such amendment, the Trustee may transfer the
assets of the Trust to the trust forming part of such newly adopted plan
upon receipt of sufficient evidence (such as a determination letter or
opinion letter from the Internal Revenue Service or an opinion of counsel
satisfactory to the Trustee) that such trust will be a qualified trust
under the Code.
10.02. AMENDMENT BY PROTOTYPE SPONSOR. The Prototype Sponsor may in its
discretion amend the Plan or the Adoption Agreement at any time, subject to
the provisions of Article 1 and Section 10.03, and provided that the
Prototype Sponsor mails a copy of such amendment to the Employer at its
last known address as shown on the books of the Prototype Sponsor.
10.03. AMENDMENTS AFFECTING VESTED AND/OR ACCRUED BENEFITS.
(a) Except as permitted by Section 10.04, no amendment to the Plan shall be
effective to the extent that it has the effect of decreasing a
Participant's Account or eliminating an optional form of benefit with
respect to benefits attributable to service before the amendment.
Furthermore, if the vesting schedule of the Plan is amended, the
nonforfeitable interest of a Participant in his Account, determined as of
the later of the date the amendment is adopted or the date it becomes
effective, will not be less than the Participant's nonforfeitable interest
in his Account determined without regard to such amendment.
(b) If the Plan's vesting schedule is amended, including any amendment
resulting from a change to or from Top-Heavy Plan status, or the Plan is
amended in any way that directly or indirectly affects the computation of a
Participant's nonforfeitable interest in his Account, each Participant with
at least three (3) Years of Service for Vesting with the Employer may
elect, within a reasonable period after the adoption of the amendment, to
have the nonforfeitable percentage of his Account computed under the Plan
without regard to such amendment. The Participant's election may be made
within 60 days from the latest of (1) the date the amendment is adopted,
(2) the date the amendment becomes effective, or (3) the date the
Participant is issued written notice of the amendment by the Employer or
the Administrator.
10.04. RETROACTIVE AMENDMENTS. An amendment made by the Prototype Sponsor
in accordance with Section 10.02 may be made effective on a date prior to
the first day of the Plan Year in which it is adopted if such amendment is
necessary or appropriate to enable the Plan and Trust to satisfy the
applicable requirements of the Code or to conform the Plan to any change in
federal law, or to any regulations or ruling thereunder. Any retroactive
amendment by the Employer shall be subject to the provisions of Section
10.01.
10.05. TERMINATION. The Employer has adopted the Plan with the intention
and expectation that contributions will be continued indefinitely.
However, said Employer has no obligation or liability whatsoever to
maintain the Plan for any length of time and may discontinue contributions
under the Plan or terminate the Plan at any time by written notice
delivered to the Trustee without any liability hereunder for any such
discontinuance or termination.
10.06. DISTRIBUTION UPON TERMINATION OF THE PLAN. Upon termination or
partial termination of the Plan or complete discontinuance of contributions
thereunder, each Participant (including a terminated Participant with
respect to amounts not previously forfeited by him) who is affected by such
termination or partial termination or discontinuance will have a fully
vested interest in his Account, and, subject to Article 8, the Trustee will
distribute to each Participant or other person entitled to distribution the
balance of the Participant's Account in a single lump sum payment. In the
absence of such instructions, the Trustee will notify the Administrator of
such situation and the Trustee will be under no duty to make any
distributions under the Plan until it receives written instructions from
the Administrator. Upon the completion of such distributions, the Trust
will terminate, the Trustee will be relieved from all liability under the
Trust, and no Participant or other person will have any claims thereunder,
except as required by applicable law.
10.07. MERGER OR CONSOLIDATION OF PLAN; TRANSFER OF PLAN ASSETS. In case
of any merger or consolidation of the Plan with, or transfer of assets and
liabilities of the Plan to, any other plan, provision must be made so that
each Participant would, if the Plan then terminated, receive a benefit
immediately after the merger, consolidation or transfer which is equal to
or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation or transfer if the Plan had
then terminated.
ARTICLE 11. AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN; TRANSFER OF
FUNDS TO OR FROM OTHER QUALIFIED PLANS.
11.01. AMENDMENT AND CONTINUATION OF PREDECESSOR PLAN. In the event the
Employer has previously established a plan (the "predecessor plan") which
is a defined contribution plan under the Code and which on the date of
adoption of the Plan meets the applicable requirements of section 401(a) of
the Code, the Employer may, in accordance with the provisions of the
predecessor plan, amend and continue the predecessor plan in the form of
the Plan and become the Employer hereunder, subject to the following:
(a) Subject to the provisions of the Plan, each individual who was a
Participant or former Participant in the predecessor plan immediately prior
to the effective date of such amendment and continuation will become a
Participant or former Participant in the Plan;
(b) No election may be made under the vesting provisions of the Adoption
Agreement if such election would reduce the benefits of a Participant under
the Plan to less than the benefits to which he would have been entitled if
he voluntarily separated from the service of the Employer immediately prior
to such amendment and continuation;
(c) No amendment to the Plan shall decrease a Participant's accrued benefit
or eliminate an optional form of benefit and if the amendment of the
predecessor plan in the form of the Plan results in a change in the method
of crediting service for vesting purposes between the general method set
forth in Section 2530.200b-2 of the Department of Labor Regulations and the
elapsed time method in Section 2.01(a)(33) of the Plan, each Participant
with respect to whom the method of crediting vesting service is changed
shall be treated in the manner set forth by the provisions of Section
1.410(a)-7(f)(1) of the Treasury Regulations which are incorporated herein
by reference;
(d) The amounts standing to the credit of a Participant's Account
immediately prior to such amendment and continuation which represent the
amounts properly attributable to (1) contributions by the Participant and
(2) contributions by the Employer and forfeitures will constitute the
opening balance of his Account or Accounts under the Plan;
(e) Amounts being paid to a former Participant or to a Beneficiary in
accordance with the provisions of the predecessor plan will continue to be
paid in accordance with such provisions;
(f) Any election and waiver of the qualified pre-retirement annuity in
effect after August 23, 1984, under the predecessor plan immediately before
such amendment and continuation will be deemed a valid election and waiver
of Beneficiary under Section 8.04 if such designation satisfies the
requirements of Section 8.04(d), unless and until the Participant revokes
such election and waiver under the Plan; and
(g) Unless the Employer and the Trustee agree otherwise, all assets of the
predecessor trust will be deemed to be assets of the Trust as of the
effective date of such amendment. Such assets will be invested by the
Trustee as soon as reasonably practicable pursuant to Article 6. The
Employer agrees to assist the Trustee in any way requested by the Trustee
in order to facilitate the transfer of assets from the predecessor trust to
the Trust Fund.
11.02. TRANSFER OF FUNDS FROM AN EXISTING PLAN. The Employer may from
time to time direct the Trustee, in accordance with such rules as the
Trustee may establish, to accept cash, allowable Fund Shares or participant
loan promissory notes transferred for the benefit of Participants from a
trust forming part of another qualified plan under the Code, provided such
plan is a defined contribution plan. Such transferred assets will become
assets of the Trust as of the date they are received by the Trustee. Such
transferred assets will be credited to Participants' Accounts in accordance
with their respective interests immediately upon receipt by the Trustee. A
Participant's interest under the Plan in transferred assets which were
fully vested and nonforfeitable under the transferring plan will be fully
vested and nonforfeitable at all times. Such transferred assets will be
invested by the Trustee in accordance with the provisions of paragraph (g)
of Section 11.01 as if such assets were transferred from a predecessor
plan. No transfer of assets in accordance with this Section may cause a
loss of an accrued or optional form of benefit protected by Section
411(d)(6) of the Code.
11.03. ACCEPTANCE OF ASSETS BY TRUSTEE. The Trustee will not accept
assets which are not either in a medium proper for investment under the
Plan, as set forth in Section 1.14(b), or in cash. Such assets shall be
accompanied by written instructions showing separately the respective
contributions by the prior employer and by the Employee, and identifying
the assets attributable to such contributions. The Trustee shall establish
such accounts as may be necessary or appropriate to reflect such
contributions under the Plan. The Trustee shall hold such assets for
investment in accordance with the provisions of Article 6, and shall in
accordance with the written instructions of the Employer make appropriate
credits to the Accounts of the Participants for whose benefit assets have
been transferred.
11.04. TRANSFER OF ASSETS FROM TRUST. The Employer may direct the Trustee
to transfer all or a specified portion of the Trust assets to any other
plan or plans maintained by the Employer or the employer or employers of a
former Participant or Participants, provided that the Trustee has received
evidence satisfactory to it that such other plan meets all applicable
requirements of the Code. The assets so transferred shall be accompanied
by written instructions from the Employer naming the persons for whose
benefit such assets have been transferred, showing separately the
respective contributions by the Employer and by each Participant, if any,
and identifying the assets
attributable to the various contributions. The Trustee shall have no
further liabilities with respect to assets so transferred.
ARTICLE 12. MISCELLANEOUS.
12.01. COMMUNICATION TO PARTICIPANTS. The Plan will be communicated to
all Participants by the Employer promptly after the Plan is adopted.
12.02. LIMITATION OF RIGHTS. Neither the establishment of the Plan and
the Trust, nor any amendment thereof, nor the creation of any fund or
account, nor the payment of any benefits, will be construed as giving to
any Participant or other person any legal or equitable right against the
Employer, Administrator or Trustee, except as provided herein; and in no
event will the terms of employment or service of any Participant be
modified or in any way affected hereby. It is a condition of the Plan, and
each Participant expressly agrees by his participation herein, that each
Participant will look solely to the assets held in the Trust for the
payment of any benefit to which he is entitled under the Plan.
12.03. NONALIENABILITY OF BENEFITS AND QUALIFIED DOMESTIC RELATIONS
ORDERS. The benefits provided hereunder will not be subject to alienation,
assignment, garnishment, attachment, execution or levy of any kind, either
voluntarily or involuntarily, and any attempt to cause such benefits to be
so subjected will not be recognized, except to such extent as may be
required by law. The preceding sentence shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with respect
to a Participant pursuant to a domestic relations order, unless such order
is determined by the Plan Administrator to be a qualified domestic
relations order, as defined in Section 414(p) of the Code, or any domestic
relations order entered before January 1, 1985. The Administrator must
establish reasonable procedures to determine the qualified status of a
domestic relations order. Upon receiving a domestic relations order, the
Administrator will promptly notify the Participant and any alternate payee
named in the order, in writing, of the receipt of the order and the Plan's
procedures for determining the qualified status of the order. Within a
reasonable period of time after receiving the domestic relations order, the
Administrator must determine the qualified status of the order and must
notify the Participant and each alternate payee, in writing, of its
determination. The Administrator must provide notice under this paragraph
by mailing to the individual's address specified in the domestic relations
order, or in a manner consistent with the Department of Labor regulations.
If any portion of the Participant's Account is payable during the period
the Administrator is making its determination of the qualified status of
the domestic relations order, the Administrator must make a separate
accounting of the amounts payable. If the Administrator determines the
order is a qualified domestic relations order within 18 months of the date
amounts first are payable following receipt of the order, the Administrator
will direct the Trustee to distribute the payable amounts in accordance
with the order. If the Administrator does not make his determination of
the qualified status of the order within the 18 month determination period,
the Administrator will direct the Trustee to distribute the payable amounts
in the manner the Plan would distribute if the order did not exist and will
apply the order prospectively if the Administrator later determines the
order is a qualified domestic relations order.
A domestic relations order will not fail to be deemed a qualified domestic
relations order merely because it requires the distribution or segregation
of all or part of a Participant's Account with respect to an alternate
payee prior to the Participant's earliest retirement age (as defined in
Section 414(p) of the Code) under the Plan. A distribution to an alternate
payee prior to the Participant's attainment of the earliest retirement age
is available only if (a) the order specifies distribution at that time, and
(b) if the present value of the alternate payee's benefits under the Plan
exceeds $3,500, and the order requires, the alternate payee consents to, a
distribution occurring prior to the Participant's attainment of earliest
retirement age.
12.04. FACILITY OF PAYMENT. In the event the Administrator determines, on
the basis of medical reports or other evidence satisfactory to the
Administrator, that the recipient of any benefit payments under the Plan is
incapable of handling his affairs by reason of minority, illness, infirmity
or other incapacity, the Administrator may direct the Trustee to disburse
such payments to a person or institution designated by a court which has
jurisdiction over such recipient or a person or institution otherwise
having the legal authority under state law for the care and control of such
recipient. The receipt by such person or institution of any such payments
shall be complete acquittance therefore, and any such payment to the extent
thereof, shall discharge the liability of the Trust for the payment of
benefits hereunder to such recipient.
12.05. INFORMATION BETWEEN EMPLOYER AND TRUSTEE. The Employer agrees to
furnish the Trustee, and the Trustee agrees to furnish the Employer with
such information relating to the Plan and Trust as may be required by the
other in order to carry out their respective duties hereunder, including
without limitation information required under the Code and any regulations
issued or forms adopted by the Treasury Department thereunder or under the
provisions of ERISA and any regulations issued or forms adopted by the
Labor Department thereunder.
12.06. EFFECT OF FAILURE TO QUALIFY UNDER CODE. Notwithstanding any other
provision contained herein, if the Employer fails to obtain or retain
approval of the Plan by the Internal Revenue Service as a qualified Plan
under the Code, the Employer may no longer participate in this prototype
Plan arrangement and will be deemed to have an individually designed plan.
12.07. NOTICES. Any notice or other communication in connection with this
Plan shall be deemed delivered in writing if addressed as provided below
and if either actually delivered at said address or, in the case of a
letter, three business days shall have elapsed after the same shall have
been deposited in the United States mails, first-class postage prepaid and
registered or certified:
(a) If to the Employer or Administrator, to it at the address set forth in
the Adoption Agreement, to the attention of the person specified to receive
notice in the Adoption Agreement;
(b) If to the Trustee, to it at the address set forth in the Adoption
Agreement;
or, in each case at such other address as the addressee shall have
specified by written notice delivered in accordance with the foregoing to
the addressor's then effective notice address.
12.08. GOVERNING LAW. The Plan and the accompanying Adoption Agreement
will be construed, administered and enforced according to ERISA, and to the
extent not preempted thereby, the laws of the Commonwealth of
Massachusetts.
ARTICLE 13. PLAN ADMINISTRATION.
13.01. POWERS AND RESPONSIBILITIES OF THE ADMINISTRATOR. The
Administrator has the full power and the full responsibility to administer
the Plan in all of its details, subject, however, to the requirements of
ERISA. The Administrator's powers and responsibilities include, but are
not limited to, the following:
(a) To make and enforce such rules and regulations as it deems necessary or
proper for the efficient administration of the Plan;
(b) To interpret the Plan, its interpretation thereof in good faith to be
final and conclusive on all persons claiming benefits under the Plan;
(c) To decide all questions concerning the Plan and the eligibility of any
person to participate in the Plan;
(d) To administer the claims and review procedures specified in Section
13.03;
(e) To compute the amount of benefits which will be payable to any
Participant, former Participant or Beneficiary in accordance with the
provisions of the Plan;
(f) To determine the person or persons to whom such benefits will be paid;
(g) To authorize the payment of benefits and provide for the distribution
of Code Section 402(f) notices;
(h) To comply with the reporting and disclosure requirements of Part 1 of
Subtitle B of Title I of ERISA;
(i) To appoint such agents, counsel, accountants, and consultants as may be
required to assist in administering the Plan;
(j) By written instrument, to allocate and delegate its fiduciary
responsibilities in accordance with Section 405 of ERISA including the
formation of an Administrative Committee to administer the Plan;
(k) To provide bonding coverage as required under Section 412 of ERISA.
13.02. NONDISCRIMINATORY EXERCISE OF AUTHORITY. Whenever, in the
administration of the Plan, any discretionary action by the Administrator
is required, the Administrator shall exercise its authority in a
nondiscriminatory manner so that all persons similarly situated will
receive substantially the same treatment.
13.03. CLAIMS AND REVIEW PROCEDURES.
(a) Claims Procedure. If any person believes he is being denied any rights
or benefits under the Plan, such person may file a claim in writing with
the Administrator. If any such claim is wholly or partially denied, the
Administrator will notify such person of its decision in writing. Such
notification will contain (1) specific reasons for the denial, (2) specific
reference to pertinent Plan provisions, (3) a description of any additional
material or information necessary for such person to perfect such claim and
an explanation of why such material or information is necessary, and (4)
information as to the steps to be taken if the person wishes to submit a
request for review. Such notification will be given within 90 days after
the claim is received by the Administrator (or within 180 days, if special
circumstances require an extension of time for processing the claim, and if
written notice of such extension and circumstances is given to such person
within the initial 90-day period). If such notification is not given
within such period, the claim will be considered denied as of the last day
of such period and such person may request a review of his claim.
(b) Review Procedure. Within 60 days after the date on which a person
receives a written notice of a denied claim (or, if applicable, within 60
days after the date on which such denial is considered to have occurred),
such person (or his duly authorized representative) may (1) file a written
request with the Administrator for a review of his denied claim and of
pertinent documents and (2) submit written issues and comments to the
Administrator. The Administrator will notify such person of its decision
in writing. Such notification will be written in a manner calculated to be
understood by such person and will contain specific reasons for the
decision as well as specific references to pertinent Plan provisions. The
decision on review will be made within 60 days after the request for review
is received by the Administrator (or within 120 days, if special
circumstances require an extension of time for processing the request, such
as an election by the Administrator to hold a hearing, and if written
notice of such extension and circumstances is given to such person within
the initial 60-day period). If the decision on review is not made within
such period, the claim will be considered denied.
13.04. NAMED FIDUCIARY. The Administrator is a "named fiduciary" for
purposes of Section 402(a)(1) of ERISA and has the powers and
responsibilities with respect to the management and operation of the Plan
described herein.
13.05. COSTS OF ADMINISTRATION. Unless some or all are paid by the
Employer, all reasonable costs and expenses (including legal, accounting,
and employee communication fees) incurred by the Administrator and the
Trustee in administering the Plan and Trust will be paid first from the
forfeitures (if any) resulting under Section 7.07, then from the remaining
Trust Fund. All such costs and expenses paid from the Trust Fund will,
unless allocable to the Accounts of particular Participants, be charged
against the Accounts of all Participants on a PRORATA basis or in such
other reasonable manner as may be directed by the Employer.
ARTICLE 14. TRUST AGREEMENT.
14.01. ACCEPTANCE OF TRUST RESPONSIBILITIES. By executing the Adoption
Agreement, the Employer establishes a trust to hold the assets of the Plan.
By executing the Adoption Agreement, the Trustee agrees to accept the
rights, duties and responsibilities set forth in this Article 14.
14.02. ESTABLISHMENT OF TRUST FUND. A trust is hereby established under
the Plan and the Trustee will open and maintain a trust account for the
Plan and, as part thereof, Participants' Accounts for such individuals as
the Employer shall from time to time give written notice to the Trustee are
Participants in the Plan. The Trustee will accept and hold in the Trust
Fund such contributions on behalf of Participants as it may receive from
time to time from the Employer. The Trust Fund shall be fully invested and
reinvested in accordance with the applicable provisions of the Plan in Fund
Shares or as otherwise provided in Section 14.10.
14.03. EXCLUSIVE BENEFIT. The Trustee shall hold the assets of the Trust
Fund for the exclusive purpose of providing benefits to Participants and
Beneficiaries and defraying the reasonable expenses of administering the
Plan. No assets of the Plan shall revert to the Employer except as
specifically permitted by the terms of the Plan.
14.04. POWERS OF TRUSTEE. The Trustee shall have no discretion or
authority with respect to the investment of the Trust Fund but shall act
solely as a directed trustee of the funds contributed to it. In addition
to and not in limitation of such powers as the Trustee has by law or under
any other provisions of the Plan, the Trustee will have the following
powers, each of which the Trustee exercises solely as directed Trustee in
accordance with the written direction of the Employer except to the extent
a Plan asset is subject to Participant direction of investment and provided
that no such power shall be exercised in any manner inconsistent with the
provisions of ERlSA:
(a) to deal with all or any part of the Trust Fund and to invest all or a
part of the Trust Fund in investments available under the Plan, without
regard to the law of any state regarding proper investment;
(b) to retain uninvested such cash as it may deem necessary or advisable,
without liability for interest thereon, for the administration of the
Trust;
(c) to sell, convert, redeem, exchange, or otherwise dispose of all or any
part of the assets constituting the Trust Fund;
(d) to enforce by suit or otherwise, or to waive, its rights on behalf of
the Trust, and to defend claims asserted against it or the Trust, provided
that the Trustee is indemnified to its satisfaction against liability and
expenses;
(e) to employ such agents and counsel as may be reasonably necessary in
collecting, managing, administering, investing, distributing and protecting
the Trust Fund or the assets thereof and to pay them reasonable
compensation;
(f) to compromise, adjust and settle any and all claims against or in
favor of it or the Trust;
(g) to oppose, or participate in and consent to the reorganization,
merger, consolidation, or readjustment of the finances of any enterprise,
to pay assessments and expenses in connection therewith, and to deposit
securities under deposit agreements;
(h) to apply for or purchase annuity contracts in accordance with Section
8.02;
(i) to hold securities unregistered, or to register them in its own name
or in the name of nominees;
(j) to appoint custodians to hold investments within the jurisdiction of
the district courts of the United States and to deposit securities with
stock clearing corporations or depositories or similar organizations;
(k) to make, execute, acknowledge and deliver any and all instruments that
it deems necessary or appropriate to carry out the powers herein granted;
and
(l) generally to exercise any of the powers of an owner with respect to
all or any part of the Trust Fund.
The Employer specifically acknowledges and authorizes that affiliates of
the Trustee may act as its agent in the performance of ministerial,
nonfiduciary duties under the Trust. The expenses and compensation of such
agent shall be paid by the Trustee.
The Trustee shall provide the Employer with reasonable notice of any claim
filed against the Plan or Trust or with regard to any related matter, or of
any claim filed by the Trustee on behalf of the Plan or Trust or with
regard to any related matter.
14.05. ACCOUNTS. The Trustee will keep full accounts of all receipts and
disbursements and other transactions hereunder. Within 60 days after the
close of each Plan Year, within 60 days after termination of the Trust, and
at such other times as may be appropriate, the Trustee will determine the
then net fair market value of the Trust Fund as of the close of the Plan
Year, as of the termination of the Trust, or as of such other time,
whichever is applicable, and will render to the Employer and Administrator
an account of its administration of the Trust during the period since the
last such accounting, including all allocations made by it during such
period.
14.06. APPROVING OF ACCOUNTS. To the extent permitted by law, the written
approval of any account by the Employer or Administrator will be final and
binding, as to all matters and transactions stated or shown therein, upon
the Employer, Administrator, Participants and all persons who then are or
thereafter become interested in the Trust. The failure of the Employer or
Administrator to notify the Trustee within six (6) months after the receipt
of any account of its objection to the account will, to the extent
permitted by law, be the equivalent of written approval. If the Employer
or Administrator files any objections within such six (6) month period with
respect to any matters or transactions stated or shown in the account, and
the Employer or Administrator and the Trustee cannot amicably settle the
question raised by such objections, the Trustee will have the right to have
such questions settled by judicial proceedings. Nothing herein contained
will be construed so as to deprive the Trustee of the right to have
judicial settlement of its accounts. In any proceeding for a judicial
settlement of any account or for instructions, the only necessary parties
will be the Trustee, the Employer and the Administrator.
14.07. DISTRIBUTION FROM TRUST FUND. The Trustee shall make such
distribution from the Trust Fund as the Employer or Administrator may in
writing direct, as provided by the terms of the Plan, upon certification by
the Employer or Administrator that the same is for the exclusive benefit of
Participants or their Beneficiaries, or for the payment of expenses of
administering the Plan.
14.08. TRANSFER OF AMOUNTS FROM QUALIFIED PLAN. If the Plan provides that
amounts may be transferred to the Plan from another qualified plan or trust
under Section 401(a) of the Code, such transfer shall be made in accordance
with the provisions of the Plan and with such rules as may be established
by the Trustee. The Trustee will only accept assets which are in a medium
proper for investment under this agreement or in cash. Such amounts shall
be accompanied by written instructions showing separately the respective
contributions by the prior employer and the transferring Employee, and
identifying the assets attributable to such contributions. The Trustee
shall hold such assets for investment in accordance with the provisions of
this agreement.
14.09. TRANSFER OF ASSETS FROM TRUST. Subject to the provisions of the
Plan, the Employer may direct the Trustee to transfer all or a specified
portion of the Trust assets to any other plan or plans maintained by the
Employer or the employer or employers of a former Participant or
Participants, provided that the Trustee has received evidence satisfactory
to it that such other plan meets all applicable requirements of the Code.
The assets so transferred shall be accompanied by written instructions from
the Employer naming the persons for whose benefit such assets have been
transferred, showing separately the respective contributions by the
Employer and by each Participant, if any, and identifying the assets
attributable to the various contributions. The Trustee shall have no
further liabilities with respect to assets so transferred.
14.10. SEPARATE TRUST OR FUND FOR EXISTING PLAN ASSETS. With the consent
of the Trustee, the Employer may maintain a trust or fund (including a
group annuity contract) under this prototype plan document separate from
the Trust Fund for Plan assets purchased prior to the adoption of this
prototype plan document which are not Fidelity Funds listed in Section
1.14(b). The Trustee shall have no authority and no responsibility for the
Plan assets held in such separate trust or fund. The duties and
responsibilities of the trustee of a separate trust shall be provided by a
separate trust agreement, between the Employer and the trustee.
Notwithstanding the preceding paragraph, the Trustee or an affiliate of
the Trustee may agree in writing to provide ministerial recordkeeping
services for guaranteed investment contracts held in the separate trust or
fund. The guaranteed investment contract(s) shall be valued as directed by
the Employer or the Trustee of the separate trust.
The trustee of the separate trust (hereafter referred to as "trustee")
will be the owner of any insurance contract purchased prior to the adoption
of this prototype plan document. The insurance contract(s) must provide
that proceeds will be payable to the trustee; however the trustee shall be
required to pay over all proceeds of the contract(s) to the Participant's
designated Beneficiary in accordance with the distribution provisions of
this plan. 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 Article 8. Under no circumstances shall the trust
retain any part of the proceeds. In the event of any conflict between the
terms of this plan and the terms of any insurance contract purchased
hereunder, the plan provisions shall control.
Any life insurance contracts held in the Trust Fund or in the separate
trust are subject to the following limits:
(a) Ordinary life - For purposes of these incidental insurance provisions,
ordinary life insurance contracts are contracts with both nondecreasing
death benefits and nonincreasing premiums. If such contracts are held,
less than 1/2 of the aggregate employer contributions allocated to any
Participant will be used to pay the premiums attributable to them.
(b) Term and universal life - No more than 1/4 of the aggregate employer
contributions allocated to any participant will be used to pay the premiums
on term life insurance contracts, universal life insurance contracts, and
all other life insurance contracts which are not ordinary life.
(c) Combination - The sum of 1/2 of the ordinary life insurance premiums
and all other life insurance premiums will not exceed 1/4 of the aggregate
employer contributions allocated to any Participant.
14.11. VOTING; DELIVERY OF INFORMATION. The Trustee shall deliver, or
cause to be executed and delivered, to the Employer or Plan Administrator
all notices, prospectuses, financial statements, proxies and proxy
soliciting materials received by the Trustee relating to securities held by
the Trust or, if applicable, deliver these materials to the appropriate
Participant or the Beneficiary of a deceased Participant. The Trustee
shall not vote any securities held by the Trust except in accordance with
the written instructions of the Employer, Participant or the Beneficiary of
the Participant, if the Participant is deceased; however, the Trustee may,
in the absence of instructions, vote "present" for the sole purpose of
allowing such shares to be counted for establishment of a quorum at a
shareholders' meeting. The Trustee shall have no duty to solicit
instructions from Participants, Beneficiaries or the Employer.
14.12. COMPENSATION AND EXPENSES OF TRUSTEE. The Trustee's fee for
performing its duties hereunder will be such reasonable amounts as the
Trustee may from time to time specify by written agreement with the
Employer. Such fee, any taxes of any kind which may be levied or assessed
upon or with respect to the Trust Fund and any and all expenses, including
without limitation legal fees and expenses of administrative and judicial
proceedings, reasonably incurred by the Trustee in connection with its
duties and responsibilities hereunder will, unless some or all have been
paid by said Employer, be paid first from forfeitures resulting under
Section 7.07, then from the remaining Trust Fund and will, unless allocable
to the Accounts of particular Participants, be charged against the
respective Accounts of all Participants, in such reasonable manner as the
Trustee may determine.
14.13. RELIANCE BY TRUSTEE ON OTHER PERSONS. The Trustee may rely upon
and act upon any writing from any person authorized by the Employer or
Administrator to give instructions concerning the Plan and may conclusively
rely upon and be protected in acting upon any written order from the
Employer or Administrator or upon any other notice, request, consent,
certificate, or other instructions or paper reasonably believed by it to
have been executed by a duly authorized person, so long as it acts in good
faith in taking or omitting to take any such action. The Trustee need not
inquire as to the basis in fact of any statement in writing received from
the Employer or Administrator.
The Trustee will be entitled to rely on the latest certificate it has
received from the Employer or Administrator as to any person or persons
authorized to act for the Employer or Administrator hereunder and to sign
on behalf of the Employer or Administrator any directions or instructions,
until it receives from the Employer or Administrator written notice that
such authority has been revoked.
Notwithstanding any provision contained herein, the Trustee will be under
no duty to take any action with respect to any Participant's Account (other
than as specified herein) unless and until the Employer or Administrator
furnishes the Trustee with written instructions on a form acceptable to the
Trustee, and the Trustee agrees thereto in writing. The Trustee will not
be liable for any action taken pursuant to the Employer's or
Administrator's written instructions (nor for the collection of
contributions under the Plan, nor the purpose or propriety of any
distribution made thereunder).
14.14. INDEMNIFICATION BY EMPLOYER. The Employer shall indemnify and save
harmless the Trustee from and against any and all liability to which the
Trustee may be subjected by reason of any act or conduct (except willful
misconduct or negligence) in its capacity as Trustee, including all
expenses reasonably incurred in its defense.
14.15. CONSULTATION BY TRUSTEE WITH COUNSEL. The Trustee may consult with
legal counsel (who may be but need not be counsel for the Employer or the
Administrator) concerning any question which may arise with respect to its
rights and duties under the Plan and Trust, and the opinion of such counsel
will, to the extent permitted by law, be full and complete protection in
respect of any action taken or omitted by the Trustee hereunder in good
faith and in accordance with the opinion of such counsel.
14.16. PERSONS DEALING WITH THE TRUSTEE. No person dealing with the
Trustee will be bound to see to the application of any money or property
paid or delivered to the Trustee or to inquire into the validity or
propriety of any transactions.
14.17. RESIGNATION OR REMOVAL OF TRUSTEE. The Trustee may resign at any
time by written notice to the Employer, which resignation shall be
effective 60 days after delivery to the Employer. The Trustee may be
removed by the Employer by written notice to the Trustee, which removal
shall be effective 60 days after delivery to the Trustee.
Upon resignation or removal of the Trustee, the Employer may appoint a
successor trustee. Any such successor trustee will, upon written
acceptance of his appointment, become vested with the estate, rights,
powers, discretion, duties and obligations of the Trustee hereunder as if
he had been originally named as Trustee in this Agreement.
Upon resignation or removal of the Trustee, the Employer will no longer
participate in this prototype plan and will be deemed to have adopted an
individually designed plan. In such event, the Employer shall appoint a
successor trustee within said 60-day period and the Trustee will transfer
the assets of the Trust to the successor trustee upon receipt of sufficient
evidence (such as a determination letter or opinion letter from the
Internal Revenue Service or an opinion of counsel satisfactory to the
Trustee) that such trust will be a qualified trust under the Code.
The appointment of a successor trustee shall be accomplished by delivery
to the Trustee of written notice that the Employer has appointed such
successor trustee, and written acceptance of such appointment by the
successor trustee. The Trustee may, upon transfer and delivery of the
Trust Fund to a successor trustee, reserve such reasonable amount as it
shall deem necessary to provide for its fees, compensation, costs and
expenses, or for the payment of any other liabilities chargeable against
the Trust Fund for which it may be liable. The Trustee shall not be liable
for the acts or omissions of any successor trustee.
14.18. FISCAL YEAR OF THE TRUST. The fiscal year of the Trust will
coincide with the Plan Year.
14.19. DISCHARGE OF DUTIES BY FIDUCIARIES. The Trustee and the Employer
and any other fiduciary shall discharge their duties under the Plan and
this Trust Agreement solely in the interests of Participants and their
Beneficiaries in accordance with the requirements of ERISA.
14.20. AMENDMENT. In accordance with provisions of the Plan, and subject
to the limitations set forth therein, this Trust Agreement may be amended
by an instrument in writing signed by the Employer and the Trustee. No
amendment to this Trust Agreement shall divert any part of the Trust Fund
to any purpose other than as provided in Section 2 hereof.
14.21. PLAN TERMINATION. Upon termination or partial termination of the
Plan or complete discontinuance of contributions thereunder, the Trustee
will make distributions to the Participants or other persons entitled to
distributions as the Employer or Administrator directs in accordance with
the provisions of the Plan. In the absence of such instructions and unless
the Plan otherwise provides, the Trustee will notify the Employer or
Administrator of such situation and the Trustee will be under no duty to
make any distributions under the Plan until it receives written
instructions from the Employer or Administrator. Upon the completion of
such distributions, the Trust will terminate, the Trustee will be relieved
from all liability under the Trust, and no Participant or other person will
have any claims thereunder, except as required by applicable law.
14.22. PERMITTED REVERSION OF FUNDS TO EMPLOYER. If it is determined by
the Internal Revenue Service that the Plan does not initially qualify under
Section 401 of the Code, all assets then held under the Plan will be
returned by the Trustee, as directed by the Administrator, to the Employer,
but only if the application for determination is made by the time
prescribed by law for filing the Employer's return for the taxable year in
which the Plan was adopted or such later date as may be prescribed by
regulations. Such distribution will be made within one year after the date
the initial qualification is denied. Upon such distribution the Plan will
be considered to be rescinded and to be of no force or effect.
Contributions under the Plan are conditioned upon their deductibility
under Section 404 of the Code. In the event the deduction of a
contribution made by the Employer is disallowed under Section 404 of the
Code, such contribution (to the extent disallowed) must be returned to the
Employer within one year of the disallowance of the deduction.
Any contribution made by the Employer because of a mistake of fact must be
returned to the Employer within one year of the contribution.
14.23. GOVERNING LAW. This Trust Agreement will be construed,
administered and enforced according to ERISA and, to the extent not
preempted thereby, the laws of the Commonwealth of Massachusetts.
CORPORATEPLAN FOR RETIREMENTSM
MONEY PURCHASE PENSION PLAN
FIDELITY BASIC PLAN DOCUMENT NO. 09
AMENDMENT ONE
Section 2.01(a)(7) "Compensation" is amended to include:
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 emEloyee taken into account under the plan shall not exceed the OBRA
'93 annual compensation limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner for increases in the cost of
living in accordance with section 401(a)(17)(B) of the Internal Revenue
Code. The cost-of-living adjustment in effect for a calendar year applies
to any period, not exceeding 12 months, over which compensation is
determined (determination period) beginning in such calendar year. If a
determination period consists of fewer than 12 months, the OBRA '93 annual
compensation 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.
THE CORPORATEPLAN FOR RETIREMENT
(MONEY PURCHASE PENSION PLAN)
A FIDELITY PROTOTYPE PLAN
STANDARDIZED ADOPTION AGREEMENT 001
BASIC PLAN NO. 09
ADOPTION AGREEMENT
ARTICLE 1
STANDARDIZED MONEY PURCHASE PENSION PLAN
1.01 PLAN INFORMATION
(A) NAME OF PLAN:
This is the
Plan (the "Plan").
(B) TYPE OF PLAN: Money Purchase Pension Plan
(C) NAME OF PLAN ADMINISTRATOR, IF NOT THE EMPLOYER:
Address:
Phone Number:
The Plan Administrator is the agent for service of legal process for the
Plan.
(D) LIMITATION YEAR (check one):
(1) Calendar Year
(2) Plan Year
(3) Other:
(E) THREE DIGIT PLAN NUMBER:
(F) PLAN YEAR END (month/day):
(G) PLAN STATUS (check one):
(1) Effective Date of new Plan:
(2) Amendment Effective Date: _______________. This is (check one):
(A) an amendment of The CORPORATEplan for Retirement Adoption Agreement
previously executed by the Employer; or
(B) a conversion from another plan document into The CORPORATEplan for
Retirement.
The original effective date of the Plan:
The substantive provisions of the Plan shall apply prior to the Effective
Date to the extent required by the Tax Reform Act of 1986 or other
applicable laws.
1.02 EMPLOYER
(A) THE EMPLOYER IS
Address:
Contact's Name:
Telephone Number:
(1) Employer's Tax Identification Number:
(2) Business form of Employer (check one):
(A) Corporation (D) Governmental
(B) Sole proprietor or partnership (E) Tax-exempt organization
(C) Subchapter S Corporation (F) Rural Electric Cooperative
(3) Employer's fiscal year end:
(4) Date business commenced:
(B) THE TERM "EMPLOYER" INCLUDES THE FOLLOWING RELATED EMPLOYER(S) (AS
DEFINED IN SECTION 2.01(A)(26)), WHICH MUST BE INCLUDED IN THE PLAN AND ARE
LISTED BELOW FOR PURPOSES OF REFERENCE:
1.03 COVERAGE
(A) ALL EMPLOYEES WHO MEET THE CONDITIONS SPECIFIED BELOW WILL BE ELIGIBLE
TO PARTICIPATE IN THE PLAN:
(1) SERVICE REQUIREMENT (check one):
(A) no service requirement.
(B) three consecutive months of service (no minimum number Hours of
Service can be required).
(C) six consecutive months of service (no minimum number Hours of Service
can be required).
(D) one Year of Service (1,000 Hours of Service is required during the
Eligibility Computation Period.)
(2) AGE REQUIREMENT (check one):
(A) no age requirement.
(B) must have attained age ______ (not to exceed 21).
(3) THE CLASS OF EMPLOYEES ELIGIBLE TO PARTICIPATE IN THE PLAN (check one):
(A) includes all Employees of the Employer.
(B) includes all Employees of the Employer except for Employees covered
by a collective bargaining agreement.
(B) THE ENTRY DATE(S) SHALL BE (check one):
(1) the first day of each Plan Year (do not select if Section 1.03
(a)(1)(D) is elected or if there is an age requirement of greater than 20
1/2 in Section 1.03(a)(2)(B)).
(2) the first day of each Plan Year and the date six months later.
(3) the first day of each Plan Year and the first day of the fourth,
seventh, and tenth months.
(4) the first day of each month.
(C) DATE OF INITIAL PARTICIPATION - AN EMPLOYEE WILL BECOME A PARTICIPANT
UNLESS EXCLUDED BY SECTION 1.03(A)(3) ABOVE ON THE ENTRY DATE IMMEDIATELY
FOLLOWING THE DATE THE EMPLOYEE COMPLETES THE SERVICE AND AGE
REQUIREMENT(S) IN SECTION 1.03(A), IF ANY, EXCEPT (check one):
(1) No exceptions.
(2) Employees employed on the Effective Date in Section 1.01(g) will
become Participants on that date.
(3) Employees who meet the age and service requirement(s) of Section
1.03(a) on the Effective Date in Section 1.01(g) will become Participants
on that date.
1.04 COMPENSATION
(A) COMPENSATION WILL MEAN ALL OF EACH PARTICIPANT'S WAGES, TIPS, AND OTHER
COMPENSATION AS REPORTED ON IRS FORM W-2. COMPENSATION FOR SELF-EMPLOYED
INDIVIDUALS AND PARTNERS SHALL INCLUDE EARNED INCOME.
(B) COMPENSATION FOR THE FIRST YEAR OF PARTICIPATION
Contributions for the Plan Year in which an Employee first becomes a
Participant shall be determined based on the Employee's Compensation (check
one):
(1) For the entire Plan Year.
(2) For the portion of the Plan Year in which the Employee is eligible
to participate in the Plan.
1.05 CONTRIBUTIONS
(A) EMPLOYER CONTRIBUTIONS (check (1) or (2)):
(1) NONINTEGRATED FORMULA :
For each Plan Year, the Employer will contribute for each eligible
Participant an amount equal to __________% (not to exceed 25%) of such
Participant's Compensation.
(2) INTEGRATED FORMULA:
For each Plan Year, the Employer shall contribute for each Participant an
amount equal to (complete both (A) and (B)):
(A) ______% (not less than 3%) of each Participant's Compensation.
PLUS
(B) % of each Participant's Compensation in excess of the Integration
Level as defined in (2)(A) below. This percentage may not exceed the
lesser of:
(i) the percentage elected in (A) above, or
(ii) the Applicable Percentage as defined in (2)(B) below.
The following definitions apply for the purposes of (B) above (check one):
(A) "Integration Level" shall mean the Taxable Wage Base as defined in (C)
below, unless the Employer elects a lesser amount in (i) or (ii) below:
(i) $________ (a flat dollar amount that is less than the Taxable Wage
Base), or
(ii) ________% (not to exceed 100%) of the Taxable Wage Base.
(B) "Applicable Percentage" shall mean the percentage provided by the
following table:
IF THE INTEGRATION LEVEL BUT LESS THAN THE APPLICABLE
IS AT LEAST __% OF THE __% OF THE PERCENTAGE IS:
TAXABLE WAGE BASE TAXABLE WAGE BASE
0% 20% 5.7%
20% 80% 4.3%
80% 100% 5.4%
100% N/A 5.7%
(C) "Taxable Wage Base" is the contribution and benefit base in effect
under Section 230 of the Social Security Act at the beginning of the Plan
Year. The Taxable Wage Base for 1993 is $57,600.
NOTE: An Employer who maintains any other plan that provides for Social
Security Integration (permitted disparity) may not elect (a)(2).
(3) ELIGIBILITY REQUIREMENT(S)
For purposes of 1.05(a)(1) and/or 1.05(a)(2), the Employer contribution
shall be made for each Participant who is EITHER employed by the Employer
on the last day of the Plan Year or earns more than 500 Hours of Service
during the Plan Year.
1.06 RETIREMENT AGE(S)
(A) THE NORMAL RETIREMENT AGE UNDER THE PLAN IS (check one):
(1) age 65.
(2) age ____ (specify between 55 and 64).
(3) later of the age ___ (can not exceed 65) or the fifth anniversary of
the Participant's Employment Commencement Date.
(B) THE EARLY RETIREMENT AGE IS THE FIRST DAY OF THE MONTH AFTER THE
PARTICIPANT ATTAINS AGE (SPECIFY 55 OR GREATER) AND COMPLETES
YEARS OF SERVICE FOR VESTING.
(C) A PARTICIPANT IS ELIGIBLE FOR DISABILITY RETIREMENT IF HE/SHE (check
the appropriate box(es)):
(1) satisfies the requirements for benefits under the Employer's Long-Term
Disability Plan.
(2) satisfies the requirements for Social Security disability benefits.
(3) is determined to be disabled by a physician approved by the Employer.
1.07 VESTING SCHEDULE
(A) THE PARTICIPANT'S VESTED PERCENTAGE IN EMPLOYER CONTRIBUTIONS ELECTED
IN SECTION 1.05(A) SHALL BE BASED UPON THE SCHEDULE SELECTED BELOW.
(1) EMPLOYER CONTRIBUTIONS (check one):
(A) [Reserved]
(B) 100% vesting immediately
(C) 3 year cliff (see C below)
(D) 6 year graduated (see D below)
(E) Other vesting (complete E below)
YEARS OF VESTING SCHEDULE
SERVICE FOR
VESTING C D E
0 0% 0% ___
1 0% 0% ___
2 0% 20% ___
3 100% 40% ___
4 100% 60% ___
5 100% 80% ___
6 100% 100% 100%
NOTE: A schedule elected under E above must be at least as favorable as
one of the schedules in C or D above.
(B) YEARS OF SERVICE FOR VESTING SHALL EXCLUDE (check one):
(1) for new plans, service prior to the Effective Date as defined in
Section 1.01(g)(1).
(2) for existing plans converting from another plan document, service
prior to the original Effective Date as defined in Section 1.01(g)(2).
1.08 PREDECESSOR EMPLOYER SERVICE
SERVICE FOR PURPOSES OF ELIGIBILITY IN SECTION 1.03(A)(1) AND VESTING IN
SECTION 1.07(A) OF THIS PLAN SHALL INCLUDE SERVICE WITH THE FOLLOWING
EMPLOYER(S):
(A)
(B)
(C)
(D)
1.09 PARTICIPANT LOANS
PARTICIPANT LOANS (check (a) or (b)):
(A) WILL BE ALLOWED IN ACCORDANCE WITH SECTION 7.09, SUBJECT TO A $1,000
MINIMUM AMOUNT AND WILL BE GRANTED (check (1) or (2)):
(1) for any purpose.
(2) for hardship purposes (as defined in Section 7.09) only.
(B) WILL NOT BE ALLOWED.
1.10 RESERVED
1.11 DISTRIBUTIONS
(A) SUBJECT TO ARTICLES 7 AND 8, AND (B) BELOW, DISTRIBUTIONS UNDER THE
PLAN WILL BE PAID AS A SINGLE LUMP SUM OR UNDER A SYSTEMATIC WITHDRAWAL
PLAN (INSTALLMENTS) FOLLOWING RETIREMENT, DEATH, DISABILITY OR OTHER
TERMINATION OF EMPLOYMENT.
(B) CHECK IF THE PLAN WAS CONVERTED (BY PLAN AMENDMENT) FROM ANOTHER
DEFINED CONTRIBUTION PLAN, AND THE BENEFITS WERE PAYABLE WITH RESPECT TO
VOLUNTARY AFTER-TAX EMPLOYEE CONTRIBUTIONS, PRIOR TO TERMINATION OF
EMPLOYMENT.
NOTE: Under Federal Law, distributions to Participants must generally begin
no later than April 1 following the year in which the Participant attains
age 70 1/2.
1.12 TOP HEAVY STATUS
(A) THE PLAN SHALL BE SUBJECT TO THE TOP-HEAVY PLAN REQUIREMENTS OF ARTICLE
9 (check one):
(1) for each Plan Year.
(2) for each Plan Year, if any, for which the Plan is Top-Heavy as
defined in Section 9.02.
(B) IN DETERMINING TOP-HEAVY STATUS, IF NECESSARY, FOR AN EMPLOYER WITH AT
LEAST ONE DEFINED BENEFIT PLAN, THE FOLLOWING ASSUMPTIONS SHALL APPLY:
(1) Interest rate: _____% per annum
(2) Mortality table: _____________
(3) Not Applicable
(C) IN THE EVENT THAT THE PLAN IS TREATED AS TOP-HEAVY FOR A PLAN YEAR,
EACH NON-KEY EMPLOYEE SHALL RECEIVE AN EMPLOYER CONTRIBUTION OF AT LEAST
(3, 4, 5, OR 7 1/2) % OF COMPENSATION FOR THE PLAN YEAR IN ACCORDANCE
WITH SECTION 9.03 (check one):
(1) under this Plan in any event.
(2) under this Plan only if the Participant is not entitled to such
contribution under another qualified plan of the Employer.
NOTE: Such minimum Employer contribution may be less than the percentage
indicated in (c) above to the extent provided in Section 9.03(a).
1.13 TWO OR MORE PLANS - CODE SECTION 415 LIMITATION ON ANNUAL ADDITIONS
If the Employer maintains or ever maintained another qualified plan in
which any Participant in this Plan is (or was) a participant or could
become a participant, the Employer must complete this section. The
Employer must also complete this section if it maintains a welfare benefit
fund, as defined in Section 419(e) of the Code, or an individual medical
account, as defined in Section 415(l)(2) of the Code, under which amounts
are treated as annual additions with respect to any Participant in this
Plan.
(A) IF THE EMPLOYER MAINTAINS, OR MAINTAINED, ANY OTHER DEFINED
CONTRIBUTION PLAN OR PLANS WHICH ARE NOT MASTER OR PROTOTYPE PLANS, ANNUAL
ADDITIONS FOR ANY LIMITATION YEAR TO THIS PLAN WILL BE LIMITED (check one):
(1) in accordance with Section 5.03 of this Plan.
(2) in accordance with another method set forth on an attached separate
sheet.
(3) Not Applicable.
(B) IF THE EMPLOYER MAINTAINS, OR MAINTAINED, ANY DEFINED BENEFIT PLAN(S),
THE SUM OF THE DEFINED CONTRIBUTION FRACTION AND DEFINED BENEFIT FRACTION
FOR A LIMITATION YEAR MAY NOT EXCEED THE LIMITATION SPECIFIED IN CODE
SECTION 415(E), MODIFIED BY SECTION 416(H)(1) OF THE CODE. THIS COMBINED
PLAN LIMIT WILL BE MET AS FOLLOWS (check one):
(1) Annual Additions to this Plan are limited so that the sum of the
Defined
Contribution Fraction and the Defined Benefit Fraction does not exceed
1.0.
(2) another method of limiting Annual Additions or reducing projected
annual benefits is set forth on an attached schedule.
(3) Not Applicable.
1.14 ESTABLISHMENT OF TRUST AND INVESTMENT DECISIONS
(A) INVESTMENT DIRECTIONS
Participant Accounts will be invested (check one):
(1) in accordance with investment directions provided to the Trustee by
the Employer for allocating all Participant accounts among the options
listed in (b) below.
(2) in accordance with investment directions provided to the Trustee by
each Participant for allocating his entire Account among the options
listed in
(b) below.
(B) PLAN INVESTMENT OPTIONS
The Employer hereby establishes a Trust under the Plan in accordance with
the provisions of Article 14, and the Trustee signifies acceptance of its
duties under Article 14 by its signature below. Participant Accounts
under the Trust will be invested among the Fidelity Funds listed below
pursuant to Participant or Employer directions.
Fund Name Fund Number
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
NOTE: An additional annual recordkeeping fee will be charged for each fund
in excess of five funds.
To the extent that the Employer selects as an investment option the Managed
Income Portfolio of the Fidelity Group Trust for Employee Benefit Plans
(the "Group Trust"), the Employer hereby (A) agrees to the terms of the
Group
Trust and adopts said terms as a part of this Agreement and (B)
acknowledges that it has received from the Trustee a copy of the Group
Trust, the Declaration of Separate Fund for the Managed Income Portfolio of
the Group Trust, and the Circular for the Managed Income Portfolio.
NOTE: The method and frequency for change of investments will be determined
under the rules applicable to the selected funds or, if applicable, the
rules of the Employer adopted in accordance with Section 6.03. Information
will be provided regarding expenses, if any, for changes in investment
options.
1.15 RELIANCE ON OPINION LETTER
An adopting Employer who has ever maintained or who later adopts any plan
(including a welfare benefit fund, as defined in Code Section 419(e)),
which provides post-retirement medical benefits allocated to separate
accounts for key employees, as defined in Code Section 419A(d)(3), or an
individual medical account, as defined in Code Section 415(1)(2) in
addition to this Plan (other than Fidelity's Paired Basic Plan Number 07)
may not rely on the opinion letter issued by the National Office of the
Internal Revenue Service as evidence that this Plan is qualified under
Section 401 of the Code. If the Employer who adopts or maintains multiple
plans wishes to obtain reliance that his or her plan(s) qualified,
application for a determination letter should be made to the appropriate
Key District Director of the Internal Revenue Service. Failure to properly
fill out the Adoption Agreement may result in disqualification of the Plan.
The Employer may not rely on the opinion letter issued by the National
Office of the Internal Revenue Service as evidence that this Plan is
qualified under section 401 of the Code unless the terms of the Plan, as
herein adopted or amended, that pertain to the requirements of sections
401(a)(4), 401(a)(17), 401(1), 401(a)(5), 410(b) and 414(s) of the Code, as
amended by the Tax Reform Act of 1986, or later laws, (a) are made
effective retroactively to the first day of the first Plan Year beginning
after December 31, 1988 (or such later date on which these requirements
first become effective with respect to this plan); or (b) are made
effective no later than the first day on which the Employer is no longer
entitled, under regulations, to rely on a reasonable, good faith
interpretation of these requirements, and the prior provisions of the plan
constitute such an interpretation.
This Adoption Agreement may be used only in conjunction with Fidelity
Prototype Plan Basic
Plan Document No. 09. The Prototype Sponsor shall inform the adopting
Employer of any amendments made to the Plan or of the discontinuance or
abandonment of the prototype plan document.
1.16 PROTOTYPE INFORMATION:
Name of Prototype Sponsor: Fidelity Management & Research Co.
Address of Prototype Sponsor: 82 Devonshire Street
Boston, MA 02109
Questions regarding this prototype document may be directed to the
following telephone number:
1-(800) 343-9184.
EXECUTION PAGE
(FIDELITY'S COPY)
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed this ________day of _______________, 19_______.
Employer
By
Title
Employer
By
Title
Accepted by
Fidelity Management Trust Company, as Trustee
By Date
Title
EXECUTION PAGE
(EMPLOYER'S COPY)
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed this ________day of _______________, 19_______.
Employer
By
Title
Employer
By
Title
Accepted by
Fidelity Management Trust Company, as Trustee
By Date
Title
INSTRUCTIONS - STANDARDIZED MONEY PURCHASE PENSION PLAN
ADOPTION AGREEMENT
All sections of this Adoption Agreement must be completed, except where
stated as optional. AN EMPLOYER MAY ONLY SELECT THE OPTIONS LISTED. DUE
TO INTERNAL REVENUE SERVICE REGULATIONS AN EMPLOYER MAY NOT MAKE ANY
CHANGES TO THE PRINTED LANGUAGE IN THIS ADOPTION AGREEMENT, NO MATTER HOW
SLIGHT. AN EMPLOYER SHOULD CONSULT WITH ITS ATTORNEY AND/OR ACCOUNTANT FOR
ASSISTANCE IN COMPLETING THIS AGREEMENT.
1.01. PLAN INFORMATION:
(a) Enter the legal name of the Plan.
(b) Type of Plan: Money Purchase Pension Plan
(c) Complete only if the Plan Administrator is not the Employer. (Fidelity
is NOT the Plan Administrator). A Committee may be designated to act on
behalf of the Plan Administrator. However, in such case, the Employer or
other Plan Administrator would still considered the Plan Administrator.
(d) "Limitation Year" refers to the twelve-month period used to determine
if the Internal Revenue Code Section 415 annual addition limitation has
been exceeded for a Participant. If an Employer is a member of a
controlled group of businesses (as defined by the Internal Revenue Code)
and adopts this Plan, then the Limitation Year for all Employer plans
(regardless of whether the other Related Employers adopt this Plan) must be
the same. (Check one only).
(e) This is the three digit number assigned to the Plan as required by the
Internal Revenue Service. For a new plan, if the Employer does not
currently or has never maintained another qualified retirement then this
Plan Number will be "001." If the Employer currently maintains or has ever
maintained another qualified retirement plan then this Plan will be "002."
If the Employer currently maintains or has ever maintained two other
qualified retirement plans then this Plan will be "003," ETC. An existing
Employer plan that is a conversion from another plan document must use the
same three digit plan number currently in effect.
(f) Enter the month and day of the Plan Year end (I.E., December 31). The
Plan Year must be the last day of a month.
(g)(1) (Select (1) or (2).) If this is a new plan then enter the Effective
Date. Generally, the Effective Date for a new plan may be any date during
the initial year the Plan is established. This date will determine the
appropriate Entry Date(s) for eligible Employees under Section 1.03(b), the
measurement period to determine eligible Compensation for new Participants
under Section 1.04(b), and the maximum Participant annual addition
limitation for the initial Plan Year. An Employer may have an Effective
Date that is different from the Fidelity Implementation Date. (the date an
Employer's Plan is implemented with Fidelity as identified in the Fidelity
Service Agreement). For example, an Employer's Plan may have a January 1,
1994, Effective Date but a June 1, 1994, Implementation Date.
If this Plan is a "spin-off" from a prior plan, then the Employer must
check option (g)(1). A "spin-off" is when an existing qualified retirement
plan is separated into one or more plans. The separation may be the result
of a business entity selling a division or portion of its assets to the
Employer, or when the Employer wants to separate one plan into two or more
plans.
(g)(2) Enter the Effective Date of Amendment to The CORPORATEplan FOR
RETIREMENTSM. This is the date that all Plan assets will be wired to
Fidelity and when the provisions in this Adoption Agreement will become
effective. This date MUST be the first day of a month. The Effective Date
for an Employer checking option (A) below must be the same date as the
Implementation Date. The Implementation Date is also identified in the
Fidelity Service Agreement.
(A) If an Employer previously adopted The CORPORATEplan FOR RETIREMENTSM
and is amending or restating it, then check this option. Also enter the
Plan's original Effective Date on the line below (B). (This is the date
the Plan was originally established by the Employer.)
(B) If this is an amendment or conversion of the Employer's Plan from
another plan document then check this option. Also enter the Plan's
original Effective Date on the line below (B). (This is the date the Plan
was originally established by the Employer.)
1.02. EMPLOYER:
(a) Enter the Employer's legal name, principal address, contact name and
phone number. If one or more Related Employers are adopting this Plan then
the Employer identified in this section should be the Employer sponsoring
the plan. A union may not be listed as an Employer, but an Employer may
establish a Plan for its employees covered by a collective bargaining
agreement with a union. An association may establish a Plan only for its
own Employees. The association may not establish a Plan for its members.
(a)(1) Enter the Employer's Federal tax identification number. This is not
the Federal tax identification number of the Plan.
(a)(2) Select the business form(s) of the Employer. Related Employers
under 1.02.(b) adopting The CORPORATEplan FOR RETIREMENTSM that have
multiple business forms may select more than one business form, if
applicable.
(a)(3) Enter the month and day of the Employer's, not the Plan's, fiscal
tax year end.
(a)(4) Enter the date the Employer's business commenced.
(b) If an Employer is part of an affiliated service group or controlled
group of employers (collectively defined as "Related Employers") then all
Related Employers MUST be included in this Plan. List all Related
Employers in this section. (Unrelated Employers CANNOT be included as part
of the Employer's Plan. Please consult your attorney and/or accountant for
assistance on the definition of legally Related Employers.) Each Related
Employer must take the appropriate legal action (i.e., Board of Directors'
Resolution for a corporation) to be included as part of the Employer's
Plan. Furthermore, all eligible Participants, regardless of whether
employed by the Employer or a Related Employer must receive a uniform
allocation percentage of compensation (i.e., 5% of eligible Compensation)
under Section 1.05(a).
1.03. COVERAGE:
(a) An Employer may require Employees to complete a specified minimum
period of employment and/or attain a minimum age to be eligible to
participate in the Plan.
(a)(1) (Select one option.) An Employer may elect no service requirement
(Option A), a three-consecutive-months requirement (Option B), or a
six-consecutive-months requirement (Option C). However, if Option B or C
is elected, the Employer CANNOT require an Employee to work a specified
number of hours. For this purpose, "consecutive" means uninterrupted
period of employment with the Employer or Related Employer. If the
one-year service requirement is selected (Option D) then the Employee MUST
complete 1,000 Hours of Service with the Employer during the twelve-month
period beginning on his/her date-of-hire and ending on his/her employment
anniversary date.
(a)(2) (Select one option.) An Employer may elect not to have an age
requirement (Option A) or an Employer may specify an age requirement as
long as it is not greater than 21 (Option B).
(a)(3)(A) If ALL Employees of the Employer, and of Related Employers if
applicable, are eligible to participate in the Plan after meeting the
service and age requirement(s), if any, then select this option.
(a)(3)(B) An Employer may exclude certain non-discriminatory groups of
Employees from participating in the Plan. An Employer may exclude
collective bargaining employees as defined in Section 2.01(a)(10) of the
Basic Plan Document by checking this option.
(b) (Select one option.) The Entry Date is the date an eligible Employee
may actually begin participating in the Plan. Participation may occur only
ON OR AFTER the date an Employee satisfies the service and/or age
requirement(s). Option (1) provides for an annual Entry Date. Option (1)
may not be selected if an Employer elected a one-year service requirement
in Section 1.03(a)(1)(D) or an age requirement greater than 20 1/2 in
Section 1.03(a)(2)(B). Option (2) provides for semi-annual Entry Dates,
Option (3) provides for quarterly entry dates and Option (4) provides for
monthly Entry Dates. An Employee may become eligible to participate in the
plan on the Effective Date if Section 1.03(c)(2) or (3) is selected.
(Select one option)
(c) (Select one option.) Upon adoption of The CORPORATEplan FOR
RETIREMENTSM, an Employer may determine when an Employee who is not yet
otherwise eligible may become a Participant in the Plan. The Employer has
three different options.
(c)(1) If this option is selected then an Employee must satisfy the service
and age requirement(s) in Section 1.03(a)(1) and (2) before being eligible
to participate in the Plan on the Entry Date(s) elected in Section 1.03(b).
(c)(2) If this option is checked then an Employee who is employed by the
Employer on the Effective Date in Section 1.01(g) is eligible to
participate in the Plan on the Effective Date regardless of whether or not
he/she has satisfied the service and age requirement(s) in Section 1.03(a).
This is a special ONE-TIME election for the Employer due to the adoption of
the Fidelity CORPORATEplan FOR RETIREMENTSM. An eligible Employee is
considered a Participant and will be included in the appropriate annual
Internal Revenue Code tests (I.E. minimum coverage, minimum participation,
annual addition, ETC.).
(c)(3) If this option is checked then an Employee must satisfy the service
and age requirement(s) in Section 1.03(a) before being eligible to
participate in the Plan on the earlier of the Effective Date in Section
1.01(g) or the next Entry Date. Checking this option creates a special
ONE-TIME Entry Date based upon the Effective Date.
1.04. COMPENSATION (SELECT ONE OPTION):
(a) Compensation is defined under the Plan as total paid Compensation which
is reportable as earnings in the wages, tips and other Compensation box on
the annual IRS tax Form W-2 ("W-2 Compensation"). For purposes of
determining Employer contributions under Section 1.05, W-2 Compensation is
modified as follows:
to include:
Internal Revenue Code Section 401(k) salary deferrals (known as Deferral
Contributions under this Plan);
Internal Revenue Code Section 125 salary deferrals (Employee pre-tax
contributions to a "cafeteria plan");
Elective contributions under Internal Revenue Code Sections 402(h)
(Simplified Employee Pension), 403(b) (Tax Sheltered Annuities), other
deferred compensation described in Section 457(b) (Plan of State and Local
Governments and Tax-Exempt Organizations) or 414(h)(2) (Plan of a State or
Political Subdivision of the Government); and
to exclude:
Deferred compensation;
Fringe benefits (cash and non-cash);
Moving expenses;
Reimbursements or other expense allowances;
Welfare benefits.
This modified W-2 Compensation definition meets the "safe harbor"
requirements of the regulations under Internal Revenue Code Section 414(s).
(b)(1) Employer contributions may be allocated to a first-year eligible
Participant on the basis of his/her Compensation for the entire Plan Year.
(b)(2) Employer contributions may be allocated to a first-year eligible
Participant only for the portion of the Plan Year that he/she is eligible
to participate in the Plan. Compensation paid prior to a Participant's
date of participation will be not be considered in allocating Employer
Contributions in Section 1.05(a). For example, assume a Participant
satisfied the service and age requirements in Section 1.03(a) and is
eligible to participate in a calendar Plan Year on July 1. Compensation
for purposes of allocating the Employer Contribution for the initial Plan
Year will be based upon the Participant's Compensation from July 1 through
December 31. Thereafter, the Participant's Compensation will be based upon
the entire Plan Year unless he/she terminates employment before the end of
a Plan Year.
Regardless of which option in Section 1.04(b) is selected, Compensation
for the initial Plan Year for a new Plan should be based upon eligible
Participant Compensation, subject to Section 1.04(b), from the Effective
Date in Section 1.01(g)(1) through the end of the first Plan Year. If the
Effective Date in Section 1.01(g)(1) for a new Plan is less than twelve
months then the Plan has a short Plan Year for the initial year. The
Internal Revenue Code Section 415 annual addition limitation for each
Participant in the initial Plan Year must be adjusted accordingly.
(SECTION 1.05 IS ON THE NEXT PAGE.)
1.05. EMPLOYER CONTRIBUTIONS (SELECT ONE OPTION):
The contributions in Section 1.05(a) are EMPLOYER MONEY PURCHASE PENSION
CONTRIBUTIONS. Employer contributions are subject to the Internal Revenue
Code Section 404(a) annual tax deductible limit. A money purchase pension
plan deduction is limited annually to 25% of total Compensation for all
eligible Participants. Employer contributions to a money purchase pension
plan are made according to a pre-determined formula. The Employer will be
legally obligated to make the contribution required by the formula
regardless of profits. Participants who are employed on the last day of
the Plan Year OR have worked at least 500 hours of service during the Plan
Year ARE ENTITLED to receive an Employer Contribution, for that Plan Year.
The contributions are allocated to Participants based on a nonintegrated
formula or an integrated formula (select (a) or (b)):
(a)(1) (Non-integrated Formula) This formula requires that each eligible
Participant receive the same specified percentage (not to exceed 25%) of
Compensation.
(a)(2) (Integrated Formula) This formula considers Employer Contributions
to Social Security, or "permitted disparity," in the allocation of the
Employer contribution to Participants.
Under an integrated formula, each Participant must receive a specified
percentage of total Compensation (which is at least 3%) (Option (A)) and a
specified percentage of Compensation in excess of the Integration Level
(Option (B)). The percentage specified in (B) may not exceed the lesser of
the percentage specified in (A) or the Applicable Percentage defined in
(2)(B) below.
(a)(2)(A) The Integration Level is the Social Security Taxable Wage Base in
effect at the beginning of the Plan Year or such lesser amount specified in
(i) as a flat dollar amount or (ii) as a percentage of the Taxable Wage
Base.
(a)(2)(B) The Applicable Percentage is 5.7% unless the Integration Level is
less than 100% of the Taxable Wage Base, in which case the percentage is
determined from the Table in (B).
NOTE: If the Plan is top-heavy in accordance with Internal Revenue Code
Section 416 then the Employer must contribute the required minimum
top-heavy contribution specified in Section 1.12(c).
(a)(3) Participants who are employed on the last day of the Plan Year OR
have worked at least 500 Hours of Service during the Plan Year ARE ENTITLED
to receive an Employer contribution for that Plan Year.
1.06. RETIREMENT AGE(S):
Retirement Age in a qualified retirement plan is a "protected benefit"
under the Internal Revenue Code. An Employer converting to The
CORPORATEplan FOR RETIREMENTSM from another plan document may not eliminate
any protected benefits for Participants attaining the Retirement Age(s)
that were specified in the prior document.
(a) This is the age at which a Participant becomes 100% vested in his/her
Employer Contribution Account, regardless of his/her length of service with
the Employer or a Related Employer. An Employer may select age 65 (Option
(1)), any other age between 55 and 64 (Option (2)), or the later of a
specified age between 55 and 65 and the fifth anniversary of the date the
Participant commenced employment (Option (3)). A Participant is not
required to retire once he/she attains normal retirement age. (Select one
option.)
(b) (Optional) A Participant becomes 100% vested in his/her Employer
Contribution Account upon satisfying the early retirement requirement(s).
If an Employer converted to The CORPORATEplan FOR RETIREMENTSM and had an
Early Retirement Age in its prior plan document then this Plan must offer
the same or a more favorable Early Retirement Age. Specify the early
retirement age (must be at least 55) and required years of service, if
applicable.
(c) (Optional) A Participant becomes 100% vested in his/her Employer
Contribution Account upon Disability Retirement. If an Employer converted
to The CORPORATEplan FOR RETIREMENTSM and previously had a Disability
Retirement in its prior plan document then it must select one or more of
the options in this section. Option (1) requires a Participant to satisfy
the Employer's normal requirements for benefits under its Long Term
Disability Plan. Option (2) requires a Participant to be eligible for
Social Security disability benefits. Option (3) requires a Participant to
be determined disabled by a physician that is approved by the Employer. An
Employer may select more than one option in this Section.
1.07. VESTING SCHEDULE:
(a) Vesting refers to the nonforfeitable interest of a Participant in
Employer Contributions and the earnings thereon. Vesting under The
CORPORATEplan FOR RETIREMENTSM is based upon the ELAPSED-TIME METHOD that
is defined under "Years of Service for Vesting" in Section 2.01(a)(33) of
the Basic Plan Document. Only vesting schedules that satisfy the top-heavy
requirements under Internal Revenue Code Section 416 are used in this
Standardized Adoption Agreement. Participant Years of Service for vesting
Employer Contributions includes all years of service subject to any such
exclusion in Section 1.07(b). Amounts which are not fully vested when a
Participant terminates employment will be used in the current Plan Year to
reduce future Employer Contributions and/or to pay Plan expenses. An
Employer's Plan that is converted from another plan document that
previously allowed vesting under another method will be subject to the
transitional rules in accordance with governmental regulations to convert
it to the elapsed-time method.
(a)(1) (Select one option.) An Employer MUST select one of the Vesting
Schedules listed in Options (B) through (G). An Employer may create its
own Vesting Schedule by inserting the elected vesting percentage in the
blanks in (G). However, the percentages elected in (G) must be at least as
favorable as the ones listed in (D) or (F) (I.E., The vesting percentage
for a Participant with three Years of Service must be at least 20%, four
Years of Service must be at least 40%, ETC.).
If an Employer previously adopted The CORPORATEplan FOR RETIREMENTSM
Adoption Agreement and elected a top-heavy schedule then it may not elect a
non top-heavy schedule in Option (D), (F) or (G) if it is not as favorable
as Option (E). If a Plan becomes top-heavy then the top-heavy Vesting
Schedule elected in Section 1.12(d) will AUTOMATICALLY be used for each
Plan Year thereafter unless the schedule elected here is the same or more
favorable in all cases.
(b) (Optional) Years of Service for Participant Vesting includes ALL Years
of Service for an Employee except an Employer may elect to exclude service
prior to the Effective Date of a new plan (Option (1)) or prior to the
original Effective Date of a pre-existing plan (Option (2)).
1.08. PREDECESSOR EMPLOYER SERVICE:
(Optional) An Employer may elect to include an Employee's Years of
Service with any predecessor employer(s) listed in (a) through (d) for both
eligibility AND vesting purposes. (If this Plan is a continuation of a
plan of a predecessor employer, Years of Service with the Predecessor
Employer(s) are automatically included for eligibility and vesting
purposes).
1.09. PARTICIPANT LOANS (SELECT ONE OPTION):
(a) If Option (a) is selected, then the Employer may allow Participant
loans for any purpose (Option (1)) or only hardship withdrawal reasons
(Option (2)) as defined in Section 7.09 of The CORPORATEplan FOR
RETIREMENTSM Basic Plan Document.) All loans are subject to a $1,000
minimum. An outstanding Participant loan becomes due and payable in full
as of the date a Participant dies, becomes disabled (as defined in Section
1.06(c), retires (as defined in Section 1.06(a) or (b)) or terminates
employment with the Employer or a Related Employer.
The loan feature provides for a Participant loan with a five-year maximum
term, except a ten-year term is permitted for a loan used for the purchase
of the Participant's primary residence. Funds for a loan may be withdrawn
from Employer contributions and Employee After-Tax Contributions for a loan
unless the Employer restricts the contribution sources in a separate
written administrative procedure delivered to Fidelity. A Participant may
have only one loan outstanding at any one time and may request only one
loan per Plan Year. A Participant may NOT refinance, renegotiate or extend
the maturity date of an existing loan. Also, a Participant may not obtain
a second loan for the purpose of paying off the first loan. All loans are
governed in accordance with the loan procedures disclosed in Section 7.09
of The CORPORATEplan FOR RETIREMENTSM Basic Plan Document. Loan set up and
annual maintenance fees will be charged to the affected Participant's
Account, unless they are paid by the Employer. Loan fees are disclosed in
The CORPORATEplan FOR RETIREMENTSM Service Agreement.
In accordance with governmental regulations, a Plan may not permit
Participant loans to Owner-Employees (sole proprietor or a partner owning a
10% or more interest in a Partnership) of non-corporate entities or to
Shareholder-Employees of Subchapter S corporations (I.E., an employee or
officer who owns more than 5% of the outstanding stock of the Subchapter S
corporation).
(b) An Employer may elect not to offer Participant loans by selecting this
option.
1.10. RESERVED
1.11. DISTRIBUTIONS:
(a) As a pension plan, the Internal Revenue Code requires that the normal
form of benefit payment for this Plan be a qualified joint and survivor
annuity for married Participants and a life annuity for single
Participants. If a Participant, and his/her spouse, if applicable,
waive(s) the annuity option, payments are made as a lump sum or under a
systematic withdrawal plan (installments). If a Participant terminates
with a vested account balance of less than $3,500, then in accordance with
Section 8.01(c), the Plan Administrator will distribute the money to the
Participant in a lump sum distribution.
(b) If, however, the Plan was converted from another defined contribution
plan which provided for in-service withdrawals of employee after-tax
contributions, the Employer may be required under Internal Revenue Service
regulations to continue to provide for such method of distribution in
addition to a lump sum and/or installments. (Check if applicable.)
The Plan Administrator is responsible for identifying any Participant
older than age 70 1/2. These Participants must receive the minimum
required distribution in accordance with the Internal Revenue Code. The
Plan Administrator is responsible for computing the amount of the minimum
distribution and providing Fidelity with the appropriate written direction.
1.12. TOP-HEAVY STATUS:
Generally, a defined contribution plan is considered top-heavy if more
than 60% of the account balances are for the benefit of key employees. A
key employee is defined under Internal Revenue Code Section 416.
(a) Option (1) allows an Employer to assume its Plan is always top-heavy
and automatically to comply with the top-heavy plan requirements each Plan
Year. Thus, each Plan Year the Employer will make the required top-heavy
minimum contribution listed in Section 1.12(c). Option (2) requires an
Employer to perform the top-heavy test each Plan Year. If the Plan is
determined to be top-heavy then it will be subject to the top-heavy
requirements under Section 1.12(c). (Select one option).
(b) If an Employer's Plan is top-heavy and the Employer currently maintains
a defined benefit plan then an actuary should assist in the completion of
the information in Option (1) and (2). If an Employer does not currently
maintain a defined benefit plan then check Option (3).
(c) Generally, every non-key employee who is a participant in a top-heavy
plan at the end of the Plan Year must receive minimum Employer
contributions under such plan, if any key employee as defined by the
Internal Revenue Code is receiving a contribution for that Plan Year. A
Participant who is a non-key employee must receive the minimum top-heavy
Employer contribution. Employer contributions are counted as top-heavy
minimum contributions.
Use the table below to determine the minimum top-heavy contribution to be
inserted in this Section 1.12(c) and the appropriate selection from options
(c)(1) through (c)(2).
<TABLE>
<CAPTION>
<S> <C> <C>
SITUATION MINIMUM SELECT
CONTRIBUTION OPTION
Employer maintains this Plan only. 3% (c)(1)
Employer maintains a defined benefit plan or another defined 3% (c)(2)
contribution plan which provides the top-heavy minimum benefit or
contribution for employees who participate in both plans.
Employer maintains another defined contribution plan and the top-heavy 3% (c)(1)
minimum contribution for employees who participate in both plans is
made to this Plan.
Employer also maintains a defined benefit plan which does not provide 5% (c)(1)
the minimum benefit to employees who participate in both plans.
The Employer also maintains a defined benefit plan which does not 7 1/2% (c)(1)
provide the minimum benefit to employees who participate in both plans,
the top-heavy ratio does not exceed 90%, and the plan provides an extra
minimum contribution in order to use the 125% limitation under Internal
Revenue Code Section 415(e).
The Employer also maintains a defined benefit plan, the top-heavy ratio 4% (c)(1)
does not exceed 60%, and both plans provide minimum benefits or
contributions and provide extra minimums in order to use the 125%
limitation under Internal Revenue Code Section 415(e).
The Plan covers only employees subject to a collective bargaining N/A (c)(3)
agreement and there are no Employer or Matching Contributions.
</TABLE>
NOTE: COMPENSATION FOR TOP-HEAVY PURPOSES IS DEFINED AS TOTAL ANNUAL
COMPENSATION FOR A PARTICIPANT LESS ANY EMPLOYEE DEFERRAL CONTRIBUTIONS.
1.13. TWO OR MORE PLANS:
(a) (Select one option.) Employer contributions and benefits under all
Employer and Related Employer qualified retirement plans are subject to one
overall annual addition limit. Section 1.13 is designed to determine how
the Employer's Plan will comply with these limitations under all Employer
plans. The maximum permissible annual addition limit for a limitation year
for a Participant in one or more defined contribution plans is the lesser
of $30,000 (as indexed) or 25% of a Participant's compensation. For
purposes of the latter limit, a Participant's Compensation must be reduced
by any elective contributions under Internal Revenue Code Sections 402(h)
(Simplified Employee Pension), 403(b) (Tax Sheltered Annuities), other
deferred compensation described in 457(b) (Plan of State and Local
Governments and Tax-Exempt Organizations) or 414(h)(2) (Plan of a State or
Political Subdivision of the Government). Option (a) is required by the
Internal Revenue Service, unless (1) this is the only Plan ever maintained
by the Employer, or (2) the Employer maintains other defined contribution
plans, but they are master or prototype plans. An Employer cafeteria
(Internal Revenue Code Section 125) plan is not considered a plan for
purposes of Section 1.13.
(a)(1) Excess annual additions for an affected Participant will be refunded
from both the Employer's other defined contribution plan and this Plan on a
PRORATA basis.
(a)(2) If the Employer does not want excess annual additions for an
affected Participant to be refunded in accordance with (a)(1) then the
Employer should select this option. The Employer may designate how excess
annual additions will be refunded from the Employer's other defined
contribution plan and this Plan by attaching a separate schedule.
(a)(3) Check this option if this is the only Plan the Employer maintains.
Excess annual additions for a Participant will be refunded from this Plan.
(b) (Select one option.) Completion of Option (b) is required by the
Internal Revenue Service unless this is the only plan ever maintained by
the Employer or the Employer never had or maintained a defined benefit
plan.
(b)(1) If an Employer maintains or has ever maintained a defined benefit
plan in addition to this defined contribution plan then there are certain
Internal Revenue Code fractions that must be computed annually. An
Employer must compute each Participant's defined benefit fraction under the
defined benefit plan and defined contribution fraction under the defined
contribution plan. The sum of these two fractions for each Participant may
not exceed 1.0.
(b)(2) An Employer not electing (b)(1) may reduce excess annual additions
for an affected Participant participating at one time or another in both a
defined benefit plan and a defined contribution plan maintained by the
Employer by attaching a separate schedule.
(b)(3) Check this option if the Employer does not currently or has never
maintained a defined benefit plan.
1.14. ESTABLISHMENT OF TRUST AND INVESTMENT DECISIONS:
This section establishes the Trust under the Plan and permits the Employer
to designate who directs the investments (Employer, Participants, or both)
and the Fidelity Mutual Funds available for investment under the Plan.
(Select one option from (a) and complete Option (b).)
(a)(1) An Employer may direct all Participant account balances
between/among the available Fidelity Funds offered under the Plan by
electing Option (1). The Employer is responsible for sending Fidelity
written direction for any exchanges between/among available Funds based
upon procedures established by Fidelity.
(a)(2) An Employer may allow each Participant to direct his/her entire
account balance between/among the available Fidelity Funds offered under
the Plan by selecting Option (2). (A Participant's spouse or a third party
may NOT direct Participant account balances.) Each Participant should
receive a prospectus in accordance with Securities and Exchange Commission
requirements before investing money in any Fidelity Mutual Fund.
Participant exchanges will be based upon instructions given by Participants
to Fidelity Telephone Representatives during predetermined business hours.
An Employer electing this Option may also elect to comply with Section
404(c) of the Employee Retirement Income Security Act of 1974 (ERISA). If
the requirements of ERISA 404(c) are satisfied by the Plan then each
Participant is responsible for any investment gains/losses in his/her
Accounts. However, election of ERISA 404(c) by an Employer does not fully
relieve it of all fiduciary liability. The Employer is still responsible
for the selection and monitoring of Plan investment options.
(b) The Employer may only select Fidelity Funds offered under The
CORPORATEplan FOR RETIREMENTSM. An additional recordkeeping fee will be
charged for each Fidelity Fund selected in excess of five (5).
An Employer that selects the Fidelity Managed Income Portfolio (formerly
known as the GIC Open-End Portfolio) MUST receive the Group Trust, the
Declaration of Separate Fund, and the Circular for the Managed Income
Portfolio from the Fidelity Account Executive prior to the execution of
this Adoption Agreement. The Employer by executing the Adoption Agreement
agrees to all of the requirements in the aforementioned documentation.
Certain restrictions apply on investment exchanges from the Managed Income
Portfolio into a "competing" Fund. Please refer to the aforementioned
documentation for further information.
1.15. RELIANCE ON OPINION LETTER:
If an Employer does not maintain, or has never maintained, another
qualified retirement plan, it may rely on the opinion letter issued by the
National Office of the IRS that this plan document for its Plan satisfies
the qualification requirements of IRC Section 401(a). If an Employer
maintains, or has ever maintained, another qualified retirement plan then
it should apply for a determination letter to the appropriate Key District
Director of the Internal Revenue Service by completing the appropriate IRS
forms. Failure by the Employer to properly complete the Adoption Agreement
may result in disqualification of this Plan.
Fidelity received an Internal Revenue Service "Opinion Letter" dated August
24, 1993 (Letter Serial No. D261367a) for The CORPORATEplan FOR
RETIREMENTSM Basic Plan Document No. 09 and the Standardized Adoption
Agreement. The Plan Administrator is RESPONSIBLE for applying for an
individual determination letter for the Plan from the appropriate Key
District Director of the Internal Revenue Service. The Plan Administrator
should consult with their attorney and/or accountant for further
information. Failure by the Employer to properly complete and execute the
Adoption Agreement may result in disqualification of the Plan.
This document includes two (2) identical signature pages. An authorized
officer (if the Employer is incorporated) or the authorized individual(s)
(if the Employer is unincorporated) must sign pages 12 and 13 and return
them to Fidelity. Only one authorized signature is required to execute
this Adoption Agreement, unless the Employer's corporate policy mandates
two authorized signatures. Fidelity Management Trust Company will sign
both pages and return one signature page (page 13) with the original
Adoption Agreement to the Employer. The Employer should take the
appropriate Board of Director's action to adopt The CORPORATEplan FOR
RETIREMENTSM.
THIS AGREEMENT SHOULD BE REVIEWED BY YOUR ATTORNEY AND/OR ACCOUNTANT BEFORE
IT IS EXECUTED.
This document includes two (2) identical signature pages. An authorized
officer (if the Employer is incorporated) or the authorized individual(s)
(if the Employer is unincorporated) must sign pages 12 and 13 and return
them to Fidelity. Only one authorized signature is required to execute
this Adoption Agreement, unless the Employer's corporate policy mandates
two authorized signatures. Fidelity Management Trust Company will sign
both pages and return one signature page (page 13) with the original
Adoption Agreement to the Employer. The Employer should take the
appropriate Board of Director's action to adopt The CORPORATEplan FOR
RETIREMENTSM.
THIS AGREEMENT SHOULD BE REVIEWED BY YOUR ATTORNEY AND/OR ACCOUNTANT BEFORE
IT IS EXECUTED.
THE CORPORATEPLAN FOR RETIREMENTSM
(MONEY PURCHASE PENSION PLAN)
A FIDELITY PROTOTYPE PLAN
NON-STANDARDIZED ADOPTION AGREEMENT 002
BASIC PLAN NO. 09
ADOPTION AGREEMENT
ARTICLE 1
NON-STANDARDIZED MONEY PURCHASE PENSION PLAN
1.01 PLAN INFORMATION
(A) NAME OF PLAN:
This is the
Plan (the "Plan").
(B) TYPE OF PLAN: Money Purchase Pension Plan
(C) NAME OF PLAN ADMINISTRATOR, IF NOT THE EMPLOYER:
Address:
Phone Number:
The Plan Administrator is the agent for service of legal process for the
Plan.
(D) LIMITATION YEAR (check one):
(1) Calendar Year
(2) Plan Year
(3) Other:
(E) THREE DIGIT PLAN NUMBER:
(F) PLAN YEAR END (month/day):
(G) PLAN STATUS (check one):
(1) Effective Date of new Plan:
(2) Amendment Effective Date: _______________. This is (check one):
(A) an amendment of The CORPORATEplan for Retirement Adoption Agreement
previously executed by the Employer; or
(B) a conversion from another plan document into The CORPORATEplan for
Retirement.
The original effective date of the Plan:
The substantive provisions of the Plan shall apply prior to the Effective
Date to the extent required by the Tax Reform Act of 1986 or other
applicable laws.
1.02 EMPLOYER
(A) THE EMPLOYER IS:
Address:
Contact's Name:
Telephone Number:
(1) Employer's Tax Identification Number:
(2) Business form of Employer (check one):
(A) Corporation (D) Governmental
(B) Sole proprietor or partnership (E) Tax-exempt organization
(C) Subchapter S Corporation (F) Rural Electric Cooperative
(3) Employer's fiscal year end:
(4) Date business commenced:
(B) THE TERM "EMPLOYER" INCLUDES THE FOLLOWING RELATED EMPLOYER(S)
(as defined in Section 2.01(a)(26)):
1.03 COVERAGE
(A) ALL EMPLOYEES WHO MEET THE CONDITIONS SPECIFIED BELOW WILL BE ELIGIBLE
TO PARTICIPATE IN THE PLAN:
(1) SERVICE REQUIREMENT (check one):
(A) no service requirement.
(B) three consecutive months of service (no minimum number Hours of
Service can be required).
(C) six consecutive months of service (no minimum number Hours of Service
can be required).
(D) one Year of Service (1,000 Hours of Service is required during the
Eligibility Computation Period.)
(2) AGE REQUIREMENT (check one):
(A) no age requirement.
(B) must have attained age ______ (not to exceed 21).
(3) THE CLASS OF EMPLOYEES ELIGIBLE TO PARTICIPATE IN THE PLAN (check one):
(A) includes all Employees of the Employer.
(B) includes all Employees of the Employer except for (check the
appropriate box(es)):
(I) Employees covered by a collective bargaining agreement.
(II) Highly Compensated Employees as defined in Code Section 414(q).
(III) Leased Employees as defined in Section 2.01(a)(18).
(IV) Nonresident aliens who do not receive any earned income from the
Employer which constitutes United States source income.
(V) Other
NOTE: No exclusion in this section may create a discriminatory class of
employees. An Employer's Plan must still pass the Internal Revenue Code
coverage and participation requirements if one or more of the above groups
of Employees have been excluded from the Plan.
(B) THE ENTRY DATE(S) SHALL BE (check one):
(1) the first day of each Plan Year (do not select if Section 1.03
(a)(1)(D) is elected or if there is an age requirement of greater than 20
1/2 in Section 1.03(a)(2)(B)).
(2) the first day of each Plan Year and the date six months later.
(3) the first day of each Plan Year and the first day of the fourth,
seventh, and tenth months.
(4) the first day of each month.
(C) DATE OF INITIAL PARTICIPATION - AN EMPLOYEE WILL BECOME A PARTICIPANT
UNLESS EXCLUDED BY SECTION 1.03(A)(3) ABOVE ON THE ENTRY DATE IMMEDIATELY
FOLLOWING THE DATE THE EMPLOYEE COMPLETES THE SERVICE AND AGE
REQUIREMENT(S) IN SECTION 1.03(A), IF ANY, EXCEPT (check one):
(1) No exceptions.
(2) Employees employed on the Effective Date in Section 1.01(g) will
become Participants on that date.
(3) Employees who meet the age and service requirement(s) of Section
1.03(a) on the Effective Date in Section 1.01(g) will become Participants
on that date.
1.04 COMPENSATION
(A) FOR PURPOSES OF DETERMINING CONTRIBUTIONS UNDER THE PLAN, COMPENSATION
SHALL BE AS DEFINED IN SECTION 2.01(A)(7), BUT EXCLUDING (check the
appropriate box(es)):
(1) Overtime Pay.
(2) Bonuses.
(3) Commissions.
(4) The value of a qualified or a non-qualified stock option granted to
an Employee by the Employer to the extent such value is includable in the
Employee's taxable income.
NOTE: These exclusions shall not apply for purposes of the "Top Heavy"
requirements in Section 9.03 or for allocating Discretionary Employer
Contributions if an Integrated Formula is elected in Section 1.05(a)(2).
(5) No exclusions.
(B) COMPENSATION FOR THE FIRST YEAR OF PARTICIPATION
Contributions for the Plan Year in which an Employee first becomes a
Participant shall be determined based on the Employee's Compensation (check
one):
(1) For the entire Plan Year.
(2) For the portion of the Plan Year in which the Employee is eligible
to participate in the Plan.
1.05 CONTRIBUTIONS
(A) EMPLOYER CONTRIBUTIONS (check (1) or (2)):
(1) NONINTEGRATED FORMULA :
For each Plan Year, the Employer will contribute for each eligible
Participant an amount equal to __________% (not to exceed 25%) of such
Participant's Compensation.
(2) INTEGRATED FORMULA:
For each Plan Year, the Employer shall contribute for each Participant an
amount equal to (complete both (A) and (B)):
(A) ______% (not less than 3%) of each Participant's Compensation.
PLUS
(B) % of each Participant's Compensation in excess of the Integration
Level as defined in (2)(A) below. This percentage may not exceed the
lesser of:
(i) the percentage elected in (A) above, or
(ii) the Applicable Percentage as defined in (2)(B) below.
The following definitions apply for the purposes of (1) above (check one):
(A) "Integration Level" shall mean the Taxable Wage Base as defined in (C)
below, unless the Employer elects a lesser amount in (i) or (ii) below:
(i) $________ (a flat dollar amount that is less than the Taxable Wage
Base), or
(ii) ________% (not to exceed 100%) of the Taxable Wage Base.
(B) "Applicable Percentage" shall mean the percentage provided by the
following table:
IF THE INTEGRATION LEVEL BUT LESS THAN THE APPLICABLE
IS AT LEAST __% OF THE __% OF THE PERCENTAGE IS:
TAXABLE WAGE BASE TAXABLE WAGE BASE
0% 20% 5.7%
20% 80% 4.3%
80% 100% 5.4%
100% N/A 5.7%
(C) "Taxable Wage Base" is the contribution and benefit base in effect
under Section 230 of the Social Security Act at the beginning of the Plan
Year. The Taxable Wage Base for 1993 is $57,600.
NOTE: An Employer who maintains any other plan that provides for Social
Security Integration (permitted disparity) may not elect (a)(2).
(3) ELIGIBILITY REQUIREMENT(S)
A Participant shall be entitled to Employer contributions for a Plan Year
under this Subsection (a) if the Participant satisfies the following
requirement(s) (Check the appropriate box(es) - Options (B) and (C) may not
be elected together):
(A) is employed by the Employer on the last day of the Plan Year.
(B) earns at least 500 Hours of Service during the Plan Year.
(C) earns at least 1,000 Hours of Service during the Plan Year.
(D) no requirements.
NOTE: If option (A), (B) or (C) above is selected then Employer
contributions can only be FUNDED by the Employer AFTER Plan Year end.
1.06 RETIREMENT AGE(S)
(A) THE NORMAL RETIREMENT AGE UNDER THE PLAN IS (check one):
(1) age 65.
(2) age ____ (specify between 55 and 64).
(3) later of the age ___ (can not exceed 65) or the fifth anniversary
of the Participant's Employment Commencement Date.
(B) THE EARLY RETIREMENT AGE IS THE FIRST DAY OF THE MONTH AFTER THE
PARTICIPANT ATTAINS AGE (SPECIFY 55 OR GREATER) AND COMPLETES
YEARS OF SERVICE FOR VESTING.
(C) A PARTICIPANT IS ELIGIBLE FOR DISABILITY RETIREMENT IF HE/SHE (check
the appropriate box(es)):
(1) satisfies the requirements for benefits under the Employer's Long-Term
Disability Plan.
(2) satisfies the requirements for Social Security disability benefits.
(3) is determined to be disabled by a physician approved by the Employer.
1.07 VESTING SCHEDULE
(A) THE PARTICIPANT'S VESTED PERCENTAGE IN EMPLOYER CONTRIBUTIONS ELECTED
IN SECTION 1.05(A) SHALL BE BASED UPON THE SCHEDULE SELECTED BELOW, EXCEPT
WITH RESPECT TO ANY PLAN YEAR DURING WHICH THE PLAN IS TOP-HEAVY. THE
SCHEDULE ELECTED IN SECTION 1.12(D) SHALL AUTOMATICALLY APPLY FOR A
TOP-HEAVY PLAN YEAR AND ALL PLAN YEARS THEREAFTER UNLESS THE EMPLOYER HAS
ALREADY ELECTED A MORE FAVORABLE VESTING SCHEDULE BELOW.
(1) EMPLOYER CONTRIBUTIONS
(check one):
(A) [Reserved]
(B) 100% Vesting immediately
(C) 3 year cliff (see C below)
(D) 5 year cliff (see D below)
(E) 6 year graduated (see E below)
(F) 7 year graduated (see F below)
(G) Other vesting (complete G below)
YEARS OF VESTING SCHEDULE
SERVICE FOR
VESTING C D E F G
0 0% 0% 0% 0% ___
1 0% 0% 0% 0% ___
2 0% 0% 20% 0% ___
3 100% 0% 40% 20% ___
4 100% 0% 60% 40% ___
5 100% 100% 80% 60% ___
6 100% 100% 100% 80% ___
7 100% 100% 100% 100% 100%
NOTE: A schedule elected under G above must be at least as favorable as
one of the schedules in C, D, E or F above.
(B) YEARS OF SERVICE FOR VESTING SHALL EXCLUDE (check one):
(1) for new plans, service prior to the Effective Date as defined in
Section 1.01(g)(1).
(2) for existing plans converting from another plan document, service
prior to the original Effective Date as defined in Section 1.01(g)(2).
1.08 PREDECESSOR EMPLOYER SERVICE
SERVICE FOR PURPOSES OF ELIGIBILITY IN SECTION 1.03(A)(1) AND VESTING IN
SECTION 1.07(A) OF THIS PLAN SHALL INCLUDE SERVICE WITH THE FOLLOWING
EMPLOYER(S):
(A)
(B)
(C)
(D)
1.09 PARTICIPANT LOANS
PARTICIPANT LOANS (check (a) or (b)):
(A) WILL BE ALLOWED IN ACCORDANCE WITH SECTION 7.09, SUBJECT TO A
$1,000 MINIMUM AMOUNT AND WILL BE GRANTED (check (1) or (2)):
(1) for any purpose.
(2) for hardship purposes (as defined in Section 7.09) only.
(B) WILL NOT BE ALLOWED.
1.10 RESERVED
1.11 DISTRIBUTIONS
(A) SUBJECT TO ARTICLES 7 AND 8, AND (B) BELOW, DISTRIBUTIONS UNDER THE
PLAN WILL BE PAID AS A SINGLE LUMP SUM OR UNDER A SYSTEMATIC WITHDRAWAL
PLAN (INSTALLMENTS) FOLLOWING RETIREMENT, DEATH, DISABILITY OR OTHER
TERMINATION OF EMPLOYMENT.
(B) CHECK IF THE PLAN WAS CONVERTED (BY PLAN AMENDMENT) FROM ANOTHER
DEFINED CONTRIBUTION PLAN, AND THE BENEFITS WERE PAYABLE WITH RESPECT TO
VOLUNTARY AFTER-TAX EMPLOYEE CONTRIBUTIONS, PRIOR TO TERMINATION OF
EMPLOYMENT.
NOTE: Under Federal Law, distributions to Participants must generally begin
no later than April 1 following the year in which the Participant attains
age 70 1/2.
1.12 TOP HEAVY STATUS
(A) THE PLAN SHALL BE SUBJECT TO THE TOP-HEAVY PLAN REQUIREMENTS OF ARTICLE
9 (check one):
(1) for each Plan Year.
(2) for each Plan Year, if any, for which the Plan is Top-Heavy as
defined in Section 9.02.
(B) IN DETERMINING TOP-HEAVY STATUS, IF NECESSARY, FOR AN EMPLOYER WITH AT
LEAST ONE DEFINED BENEFIT PLAN, THE FOLLOWING ASSUMPTIONS SHALL APPLY:
(1) Interest rate: _____% per annum
(2) Mortality table: _____________
(3) Not Applicable
(C) IN THE EVENT THAT THE PLAN IS TREATED AS TOP-HEAVY FOR A PLAN YEAR,
EACH NON-KEY EMPLOYEE SHALL RECEIVE AN EMPLOYER CONTRIBUTION OF AT LEAST
(3, 4, 5, OR 7 1/2) % OF COMPENSATION FOR THE PLAN YEAR IN ACCORDANCE
WITH SECTION 9.03 (check one):
(1) under this Plan in any event.
(2) under this Plan only if the Participant is not entitled to such
contribution under another qualified plan of the Employer.
NOTE: Such minimum Employer contribution may be less than the percentage
indicated in (c) above to the extent provided in Section 9.03(a).
(D) IN THE EVENT THAT THE PLAN IS TREATED AS TOP-HEAVY FOR A PLAN YEAR, THE
FOLLOWING VESTING SCHEDULE SHALL APPLY INSTEAD OF THE SCHEDULE ELECTED IN
SECTION 1.07(A) FOR SUCH PLAN YEAR AND EACH PLAN YEAR THEREAFTER (check
one):
(1) 100% vested after ______________ (not in excess of 3) Years of
Service for Vesting.
(2) Years of Service for Vesting Vesting Percentage Must be at Least
0 ________ 0%
1 ________ 0%
2 ________ 20%
3 ________ 40%
4 ________ 60%
5 ________ 80%
6 ________ 100%
NOTE: If the schedule elected in Section 1.07(a) is more favorable in all
cases than the schedule elected in (d) above then such schedule will
continue to apply even in Plan Years in which the Plan is Top-Heavy.
1.13 TWO OR MORE PLANS - CODE SECTION 415 LIMITATION ON ANNUAL ADDITIONS
If the Employer maintains or ever maintained another qualified plan in
which any Participant in this Plan is (or was) a participant or could
become a participant, the Employer must complete this section. The
Employer must also complete this section if it maintains a welfare benefit
fund, as defined in Section 419(e) of the Code, or an individual medical
account, as defined in Section 415(l)(2) of the Code, under which amounts
are treated as annual additions with respect to any Participant in this
Plan.
(A) IF THE EMPLOYER MAINTAINS, OR MAINTAINED, ANY OTHER DEFINED
CONTRIBUTION PLAN OR PLANS WHICH ARE NOT MASTER OR PROTOTYPE PLANS, ANNUAL
ADDITIONS FOR ANY LIMITATION YEAR TO THIS PLAN WILL BE LIMITED (check one):
(1) in accordance with Section 5.03 of this Plan.
(2) in accordance with another method set forth on an attached separate
sheet.
(3) Not Applicable.
(B) IF THE EMPLOYER MAINTAINS, OR MAINTAINED, ANY DEFINED BENEFIT PLAN(S),
THE SUM OF THE DEFINED CONTRIBUTION FRACTION AND DEFINED BENEFIT FRACTION
FOR A LIMITATION YEAR MAY NOT EXCEED THE LIMITATION SPECIFIED IN CODE
SECTION 415(E), MODIFIED BY SECTION 416(H)(1) OF THE CODE. THIS COMBINED
PLAN LIMIT WILL BE MET AS FOLLOWS (check one):
(1) Annual Additions to this Plan are limited so that the sum of the
Defined
Contribution Fraction and the Defined Benefit Fraction does not exceed
1.0.
(2) another method of limiting Annual Additions or reducing projected
annual benefits is set forth on an attached schedule.
(3) Not Applicable.
1.14 ESTABLISHMENT OF TRUST AND INVESTMENT DECISIONS
(A) INVESTMENT DIRECTIONS
Participant Accounts will be invested (check one):
(1) in accordance with investment directions provided to the Trustee by
the Employer for allocating all Participant Accounts among the options
listed in (b) below.
(2) in accordance with investment directions provided to the Trustee by
each Participant for allocating his entire Account among the options
listed in
(b) below.
(B) PLAN INVESTMENT OPTIONS
The Employer hereby establishes a Trust under the Plan in accordance with
the provisions of Article 14, and the Trustee signifies acceptance of its
duties under Article 14 by its signature below. Participant Accounts
under the Trust will be invested among the Fidelity Funds listed below
pursuant to Participant or Employer directions.
Fund Name Fund Number
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)
(10)
NOTE: An additional annual recordkeeping fee will be charged for each fund
in excess of five funds.
To the extent that the Employer selects as an investment option the Managed
Income Portfolio of the Fidelity Group Trust for Employee Benefit Plans
(the "Group Trust"), the Employer hereby (A) agrees to the terms of the
Group Trust and adopts said terms as a part of this Agreement and (B)
acknowledges that it has received from the Trustee a copy of the Group
Trust, the Declaration of Separate Fund for the Managed Income Portfolio of
the Group Trust, and the Circular for the Managed Income Portfolio.
NOTE: The method and frequency for change of investments will be determined
under the rules applicable to the selected funds or, if applicable, the
rules of the Employer adopted in accordance with Section 6.03. Information
will be provided regarding expenses, if any, for changes in investment
options.
1.15 RELIANCE ON OPINION LETTER
An adopting Employer may not rely on the opinion letter issued by the
National Office of the
Internal Revenue Service as evidence that this Plan is qualified under
Section 401 of the Code.
If the Employer wishes to obtain reliance that his or her Plan(s) are
qualified, application for a determination letter should be made to the
appropriate Key District Director of the Internal
Revenue Service. Failure to fill out properly the Adoption Agreement may
result in
disqualification of the Plan.
This Adoption Agreement may be used only in conjunction with Fidelity
Prototype Plan Basic
Plan Document No. 09. The Prototype Sponsor shall inform the adopting
Employer of any amendments made to the Plan or of the discontinuance or
abandonment of the prototype plan document.
1.16 PROTOTYPE INFORMATION:
Name of Prototype Sponsor: Fidelity Management & Research Co.
Address of Prototype Sponsor: 82 Devonshire Street
Boston, MA 02109
Questions regarding this prototype document may be directed to the
following telephone number:
1-(800) 343-9184.
EXECUTION PAGE
(FIDELITY'S COPY)
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed this ________day of _______________, 19_______.
Employer
By
Title
Employer
By
Title
Accepted by
Fidelity Management Trust Company, as Trustee
By Date
Title
EXECUTION PAGE
(EMPLOYER'S COPY)
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed this ________day of _______________, 19_______.
Employer
By
Title
Employer
By
Title
Accepted by
Fidelity Management Trust Company, as Trustee
By Date
Title
INSTRUCTIONS - NON-STANDARDIZED MONEY PURCHASE PENSION PLAN
ADOPTION AGREEMENT
All sections of this Adoption Agreement must be completed, except where
stated as optional. AN EMPLOYER MAY ONLY SELECT THE OPTIONS LISTED. DUE
TO INTERNAL REVENUE SERVICE REGULATIONS AN EMPLOYER MAY NOT MAKE ANY
CHANGES TO THE PRINTED LANGUAGE IN THIS ADOPTION AGREEMENT, NO MATTER HOW
SLIGHT. AN EMPLOYER SHOULD CONSULT WITH ITS ATTORNEY AND/OR ACCOUNTANT FOR
ASSISTANCE IN COMPLETING THIS AGREEMENT.
1.01. PLAN INFORMATION:
(a) Enter the legal name of the Plan.
(b) Type of Plan: Money Purchase Pension Plan
(c) Complete only if the Plan Administrator is not the Employer. (Fidelity
is NOT the Plan Administrator). A Committee may be designated to act on
behalf of the Plan Administrator. However, in such case, the Employer or
other Plan Administrator would still be considered the Plan Administrator.
(d) "Limitation Year" refers to the twelve-month period used to determine
if the Internal Revenue Code Section 415 annual addition limitation has
been exceeded for a Participant. If an Employer is a member of a
controlled group of businesses (as defined by the Internal Revenue Code)
and adopts this Plan, then the Limitation Year for all Employer plans
(regardless of whether the other Related Employers adopt this Plan) must be
the same. (Check one only).
(e) This is the three digit number assigned to the Plan as required by the
Internal Revenue Service. For a new plan, if the Employer does not
currently or has never maintained another qualified retirement plan, then
this Plan Number will be "001." If the Employer currently maintains or has
ever maintained another qualified retirement plan, then this Plan will be
"002." If the Employer currently maintains or has ever maintained two
other qualified retirement plans, then this Plan will be "003," etc. An
existing Employer plan that is a conversion from another plan document must
use the same three digit plan number currently in effect.
(f) Enter the month and day of the Plan Year end (i.e., December 31). The
Plan Year must be the last day of a month.
(g)(1) (Select (1) or (2).) If this is a new plan then enter the Effective
Date. Generally, the Effective Date for a new plan may be any date during
the initial year the Plan is established. This date will determine the
appropriate Entry Date(s) for eligible Employees under Section 1.03(b), the
measurement period to determine eligible Compensation for new Participants
under Section 1.04(b), and the maximum Participant annual addition
limitation for the initial Plan Year. An Employer may have an Effective
Date that is different from the Fidelity Implementation Date (the date an
Employer's Plan is implemented with Fidelity as identified in the Fidelity
Service Agreement), For example, an Employer's Plan may have a January 1,
1994, Effective Date but a June 1, 1994, Implementation Date.
If this Plan is a "spin-off" from a prior plan, then the Employer must
check option (g)(1). A "spin-off" is when an existing qualified retirement
plan is separated into one or more plans. The separation may be the result
of a business entity selling a division or portion of its assets to the
Employer, or when the Employer wants to separate one plan into two or more
plans.
(g)(2) Enter the Effective Date of Amendment to The CORPORATEplan FOR
RETIREMENTSM. This is the date that all Plan assets will be wired to
Fidelity and when the provisions in this Adoption Agreement will become
effective. This date MUST be the first day of a month. The Amendment
Effective Date for an Employer checking option (A) below must be the same
date as the Implementation Date. The Implementation Date is identified in
the Fidelity Service Agreement.
(A) If an Employer previously adopted The CORPORATEplan FOR RETIREMENTSM
and is amending or restating it, then check this option. Also enter the
Plan's original Effective Date on the line below (B). (This is the date
the Plan was originally established by the Employer.)
(B) If this is an amendment or conversion of the Employer's Plan from
another plan document then check this option. Also enter the Plan's
original Effective Date on the line below (B). (This is the date the Plan
was originally established by the Employer.)
1.02. EMPLOYER:
(a) Enter the Employer's legal name, principal address, contact name and
phone number. If one or more Related Employers are adopting this Plan then
the Employer identified in this section should be the Employer sponsoring
the plan. A union may not be listed as an Employer, but an Employer may
establish a Plan for its employees covered by a collective bargaining
agreement with a union. An association may establish a Plan only for its
own Employees. The association may not establish a Plan for its members.
(a)(1) Enter the Employer's Federal tax identification number. This is not
the Federal tax identification number of the Plan.
(a)(2) Select the business form(s) of the Employer. Related Employers
under 1.02.(b) adopting The CORPORATEplan FOR RETIREMENTSM that have
multiple business forms may select more than one business form, if
applicable.
(a)(3) Enter the month and day of the Employer's, not the Plan's, fiscal
tax year end.
(a)(4) Enter the date the Employer's business commenced.
(b) (Optional) If an Employer is part of an affiliated service group or
controlled group of employers (collectively defined as "Related Employers")
then it may include one or more Related Employers, in the definition of
"Employer" under this Plan. (Unrelated Employers CANNOT be included as
part of the Employer's Plan. Please consult your attorney and/or
accountant for assistance on the definition of legally Related Employers.)
Each Related Employer must take the appropriate legal action (i.e., Board
of Directors' Resolution for a corporation) to be included as part of the
Employer's Plan. If any Related Employer(s) is/are excluded from this Plan
then the Employer is still responsible for insuring that this Plan complies
with the minimum coverage requirements of Internal Revenue Code Section
410(b), the nondiscrimination requirements of Internal Revenue Code
Section 401(a)(4) the minimum participation requirements of Internal
Revenue Code Section 401(a)(26) and any other Internal Revenue Code
requirements. Employees of Related Employers, even if those Employees do
not participate in this Plan, will be considered in applying the minimum
coverage and participation tests. Furthermore, all eligible Participants,
regardless of whether employed by the Employer or a Related Employer must
receive a uniform allocation percentage of compensation (i.e., 5% of
eligible Compensation) under Section 1.05(a).
1.03. COVERAGE:
(a) An Employer may require Employees to complete a specified minimum
period of employment and/or attain a minimum age to be eligible to
participate in the Plan.
(a)(1) (Select one option.) An Employer may elect no service requirement
(Option A), a three-consecutive-months requirement (Option B), or a
six-consecutive-months requirement (Option C). However, if Option B or C
is elected, the Employer CANNOT require an Employee to work a specified
number of hours. For this purpose, "consecutive" means uninterrupted
period of employment with the Employer or Related Employer. If the one
year service requirement is selected (Option D), then the Employee MUST
complete 1,000 Hours of Service with the Employer during the twelve-month
period beginning on his/her date-of-hire and ending on his/her employment
anniversary date.
(a)(2) (Select one option.) An Employer may elect not to have an age
requirement (Option A) or an Employer may specify an age requirement as
long as it is not greater than 21 (Option B).
(a)(3)(A) If ALL Employees of the Employer, and Related Employers if
applicable, are eligible to participate in the Plan after meeting the
service and age requirement(s), if any, then select this option.
(a)(3)(B) An Employer may exclude certain non-discriminatory groups of
Employees from participating in the Plan. An Employer may exclude
Employees by checking the appropriate option(s) in (B):
(i) Collective bargaining employees as defined in Section 2.01(a)(10) of
the Basic Plan Document,
(ii) Highly Compensated Employees as defined in Internal Revenue Code
Section 414(q),
(iii) Leased Employees as defined in Section 2.01(a)(18) of the Basic Plan
Document,
(iv) Nonresident aliens who do not receive any earned income from the
Employer which constitutes United States source income.
(v) Any other non-discriminatory group of Employees in accordance with the
Internal Revenue Code, Internal Revenue Service regulations and other
governmental regulations.
The Employer will be responsible for compliance with the appropriate
required annual Internal Revenue Code tests if any group(s) of Employees
is/are excluded from the Plan. The term "Employer" includes the Employer
and any Related Employer(s).
(b) (Select one option.) The Entry Date is the date an eligible Employee
may actually begin participating in the Plan. Participation may occur only
ON OR AFTER the date an Employee satisfies the service and/or age
requirement(s). Option (1) provides for an annual Entry Date. Option (1)
may not be selected if an Employer elected a one-year service requirement
in Section 1.03(a)(1)(D) or an age requirement greater than 20 1/2 in
Section 1.03(a)(2)(B). Option (2) provides for semi-annual Entry Dates,
Option (3) provides for quarterly entry dates and Option (4) provides for
monthly Entry Dates. An Employee may become eligible to participate in the
plan on the Effective Date if Section 1.03(c)(2) or (3) is selected.
(Select one option)
(c) (Select one option.) Upon adoption of The CORPORATEplan FOR
RETIREMENTSM, an Employer may determine when an Employee who is not yet
otherwise eligible may become a Participant in the Plan. The Employer has
three different options.
(c)(1) If this option is selected then an Employee must satisfy the service
and age requirement(s) in Section 1.03(a)(1) and (2) before being eligible
to participate in the Plan on the Entry Date(s) elected in Section 1.03(b).
(c)(2) If this option is checked then an Employee who is employed by the
Employer on the Effective Date in Section 1.01(g) is eligible to
participate in the Plan on the Effective Date regardless of whether or not
he/she has satisfied the service and age requirement(s) in Section 1.03(a).
This is a special ONE-TIME election for the Employer due to the adoption of
the Fidelity CORPORATEplan FOR RETIREMENTSM. An eligible Employee is
considered a Participant and will be included in the appropriate annual
Internal Revenue Code tests (I.E. minimum coverage, minimum participation,
annual addition, ETC.).
(c)(3) If this option is checked then an Employee must satisfy the service
and age requirement(s) in Section 1.03(a) before being eligible to
participate in the Plan on the earlier of the Effective Date in Section
1.01(g) or the next Entry Date. Checking this option creates a special
ONE-TIME Entry Date based upon the Effective Date.
1.04. COMPENSATION (SELECT ONE OPTION):
(a) Compensation is defined under the Plan as total paid Compensation which
is reportable as earnings in the wages, tips and other Compensation box on
the annual IRS tax Form W-2 ("W-2 Compensation"), subject to any elections
in Section 1.04(a)(1) through (4). For purposes of determining Employee
and Employer Contributions under Section 1.05, W-2 Compensation is modified
as follows:
to include:
Internal Revenue Code Section 401(k) salary deferrals (known as Deferral
Contributions under this Plan);
Internal Revenue Code Section 125 salary deferrals (Employee pre-tax
contributions to a "cafeteria plan");
Elective contributions under Internal Revenue Code Sections 402(h)
(Simplified Employee Pension), 403(b) (Tax Sheltered Annuities), other
deferred compensation described in Section 457(b) (Plan of State and Local
Governments and Tax-Exempt Organizations) or 414(h)(2) (Plan of a State or
Political Subdivision of the Government); and
to exclude:
Deferred compensation;
Fringe benefits (cash and non-cash);
Moving expenses;
Reimbursements or other expense allowances;
Welfare benefits.
This modified W-2 Compensation definition meets the "safe harbor"
requirements of the regulations under Internal Revenue Code Section 414(s).
However, Compensation for purposes of the Internal Revenue Code actual
deferral percentage test and the actual contribution percentage test will
be based upon the aforementioned definition of Compensation regardless of
any items excluded from the definition of Compensation in Section
1.04(a)(1) through (4).
SECTION 1.04 CONTINUED ON NEXT PAGE.
An Employer may exclude overtime pay, bonuses, commissions, and/or the
value of a qualified or non-qualified stock option granted from an
Employee's Compensation by checking the appropriate option(s) in (a)(1)
through (4). The Employer must demonstrate that these Compensation
exclusions are non-discriminatory when the Plan is submitted to the
Internal Revenue Service for an individual determination letter. If the
Plan's Compensation will be defined as W-2 Compensation without any of the
exclusions in (a)(1) through (4) then select option (a)(5).
(b)(1) Employer contributions may be allocated to a first year eligible
Participant on the basis of his/her Compensation for the entire Plan Year.
(b)(2) Employer contributions may be allocated to a first year eligible
Participant only for the portion of the Plan Year that he/she is eligible
to participate in the Plan. Compensation paid prior to a Participant's
date of participation will be not be considered in allocating Employer
Contributions in Section 1.05(a). For example, assume a Participant
satisfied the service and age requirements in Section 1.03(a) and is
eligible to participate in a calendar Plan Year on July 1. Compensation
for purposes of allocating the Employer Contribution for the initial Plan
Year will be based upon the Participant's Compensation from July 1 through
December 31. Thereafter, the Participant's Compensation will be based upon
the entire Plan Year unless he/she terminates employment before the end of
a Plan Year.
Regardless of which option in Section 1.04(b) is selected, Compensation
for the initial Plan Year for a new Plan should be based upon eligible
Participant Compensation, subject to Section 1.04(b), from the Effective
Date in Section 1.01(g)(1) through the end of the first Plan Year. If the
Effective Date in Section 1.01(g)(1) for a new Plan is less than twelve
months then the Plan has a short Plan Year for the initial year. The
Internal Revenue Code Section 415 annual addition limitation for each
Participant in the initial Plan Year must be adjusted accordingly.
1.05. EMPLOYER CONTRIBUTIONS (SELECT ONE OPTION):
The contributions in Section 1.05(a) are EMPLOYER MONEY PURCHASE PENSION
CONTRIBUTIONS. Employer contributions are subject to the Internal Revenue
Code Section 404(a) annual tax deductible limit. A money purchase pension
plan deduction is limited annually to 25% of total Compensation for all
eligible Participants. Employer contributions to a money purchase pension
plan are made according to a pre-determined formula. The Employer will be
legally obligated to make the contribution required by the formula
regardless of profits. The contributions are allocated to Participants
based on a nonintegrated formula or an integrated formula (select (a) or
(b)):
(a)(1) (Non-integrated Formula) This formula requires that each eligible
Participant receive the same specified percentage (not to exceed 25%) of
Compensation.
(a)(2) (Integrated Formula) This formula considers Employer contributions
to Social Security or "permitted disparity" in the allocation of the
Employer contribution to Participants. If elected, an Employer may not
choose any Compensation exclusions in Section 1.04(a).
Under an integrated formula, each Participant must receive a specified
percentage of total Compensation (which is at least 3%) (Option (A)) and a
specified percentage of Compensation in excess of the Integration Level
(Option (B)), if any. The percentage specified in (B) may not exceed the
lesser of the percentage specified in (A) or the Applicable Percentage
defined in (2)(B) below.
(A) The Integration Level is the Social Security Taxable Wage Base in
effect at the beginning of the Plan Year or such lesser amount specified in
(i) as a flat dollar amount or (ii) as a percentage of the Taxable Wage
Base.
(B) The Applicable Percentage is 5.7% unless the Integration Level is less
than 100% of the Taxable Wage Base, in which case the percentage is
determined from the Table in (B).
NOTE: If the Plan is top-heavy in accordance with Internal Revenue Code
Section 416 then the Employer must contribute the required minimum
top-heavy contribution specified in Section 1.12(c). The top-heavy
minimum contribution is allocated prior to the aforementioned two steps.
(a)(3) (Select one option.) The Eligibility Requirement(s) in Section
1.05(a)(3) apply to Employer contributions. The allocation of Employer
contributions to each Participant may be conditioned on the Participant
completing one or more requirements. The Employer may require the
Participant to be employed by the Employer on the last day of the Plan Year
(Option (A)) and/or either earn at least 500 hours of service during the
Plan Year (Option (B)) or earn at least 1,000 hours of service during the
Plan Year (Option (C)). The Employer contribution can only be funded after
Plan Year end if Option (A), (B) or (C) is elected. Employer contributions
funded during the applicable Plan Year will become unconditional
contributions. Participants who die, become disabled or retire during the
Plan Year must meet the requirement(s) elected in Option (A), and/or (B) or
(C), if any, to receive an Employer contribution. The Employer should
elect Option (D) if Participants are not required to meet any of the
aforementioned conditions to receive Employer contributions.
NOTE: CONDITIONAL EMPLOYER CONTRIBUTIONS ELECTED IN OPTION (A), (B), OR (C)
THAT ARE FUNDED DURING THE PLAN YEAR WILL BE TREATED AS UNCONDITIONAL
EMPLOYER CONTRIBUTIONS.
1.06. RETIREMENT AGE(S):
Retirement Age in a qualified retirement plan is a "protected benefit"
under the Internal Revenue Code. An Employer converting to The
CORPORATEplan FOR RETIREMENTSM from another plan document may not eliminate
any protected benefits for Participants attaining the Retirement Age(s)
that were specified in the prior document.
(a) This is the age at which a Participant becomes 100% vested in his/her
Employer Contribution Account, regardless of his/her length of service with
the Employer or a Related Employer. An Employer may select age 65 (Option
(1)), any other age between 55 and 64 (Option (2)), or the later of a
specified age between 55 and 65 and the fifth anniversary of the date the
Participant commenced employment (Option (3)). A Participant is not
required to retire once he/she attains normal retirement age. (Select one
option.)
(b) (Optional) A Participant becomes 100% vested in his/her Employer
Contribution Account upon satisfying the early retirement requirement(s).
If an Employer converted to The CORPORATEplan FOR RETIREMENTSM and had an
Early Retirement Age in its prior plan document then this Plan must offer
the same or a more favorable Early Retirement Age. Specify the early
retirement age (must be at least 55) and required years of service, if
applicable.
(c) (Optional) A Participant becomes 100% vested in his/her Employer
Contribution Account upon Disability Retirement. If an Employer converted
to The CORPORATEplan FOR RETIREMENTSM and previously had a Disability
Retirement in its prior plan document then it must select one or more of
the options in this section. Option (1) requires a Participant to satisfy
the Employer's normal requirements for benefits under its Long Term
Disability Plan. Option (2) requires a Participant to be eligible for
Social Security disability benefits. Option (3) requires a Participant to
be determined disabled by a physician that is approved by the Employer. An
Employer may select more than one option in this Section.
1.07. VESTING SCHEDULE:
(a) Vesting refers to the nonforfeitable interest of a Participant in
Employer Contributions and the earnings thereon. Vesting under The
CORPORATEplan FOR RETIREMENTSM is based upon the ELAPSED-TIME METHOD that
is defined under "Years of Service for Vesting" in Section 2.01(a)(33) of
the Basic Plan Document. Participant Years of Service for vesting Employer
Contributions includes all years of service subject to any such exclusion
in Section 1.07(b). Amounts which are not fully vested when a Participant
terminates employment will be used in the current Plan Year to reduce
future Employer Contributions and/or to pay Plan expenses. An Employer's
Plan that is converted from another plan document that previously allowed
vesting under another method will be subject to the transitional rules in
accordance with governmental regulations to convert it to the elapsed-time
method.
(a)(1) (Select one option.) An Employer MUST select one of the Vesting
Schedules listed in Options (B) through (G). An Employer may create its
own Vesting Schedule by inserting the elected vesting percentage in the
blanks in (G). However, the percentages elected in (G) must be at least as
favorable as the ones listed in (D) or (F) (I.E., The vesting percentage
for a Participant with three Years of Service must be at least 20%, four
Years of Service must be at least 40%, ETC.).
If an Employer previously adopted The CORPORATEplan FOR RETIREMENTSM
Adoption Agreement and elected a top-heavy schedule then it may not elect a
non top-heavy schedule in Option (D), (F) or (G) if it is not as favorable
as Option (E). If a Plan becomes top-heavy then the top-heavy Vesting
Schedule elected in Section 1.12(d) will AUTOMATICALLY be used for each
Plan Year thereafter unless the schedule elected here is the same or more
favorable in all cases.
(b) (Optional) Years of Service for Participant vesting includes ALL Years
of Service for an Employee except an Employer may elect to exclude service
prior to the Effective Date of a new plan (Option (1)) or prior to the
original Effective Date of a pre-existing plan (Option (2)).
1.08. PREDECESSOR EMPLOYER SERVICE:
(Optional) An Employer may elect to include an Employee's Years of
Service with any predecessor employer(s) listed in (a) through (d) for both
eligibility AND vesting purposes. (If this Plan is a continuation of a
plan of a predecessor employer, Years of Service with Predecessor
Employer(s) are automatically included for eligibility and vesting
purposes).
1.09. PARTICIPANT LOANS (SELECT ONE OPTION):
(a) (Optional) An Employer may elect to allow Participant loans (Option
(a)). If Option (a) is selected, then the Employer may allow Participant
loans for any purpose (Option (1)) or only hardship withdrawal reasons
(Option (2)), as defined in Section 7.10 of The CORPORATEplan FOR
RETIREMENTSM Basic Plan Document. All loans are subject to a $1,000
minimum. An outstanding Participant loan becomes due and payable in full
as of the date a Participant dies, becomes disabled (as defined in Section
1.06(c), retires (as defined in Section 1.06(a) or (b)) or terminates
employment with the Employer or a Related Employer.
The loan feature provides for a Participant loan with a five-year maximum
term, except a ten-year term is permitted for a loan used for the purchase
of the Participant's primary residence. Funds for a loan may be withdrawn
from Employer contributions and Employee After-Tax Contributions for a loan
unless the Employer restricts the contribution sources in a separate
written administrative procedure delivered to Fidelity. A Participant may
have only one loan outstanding at any one time and may request only one
loan per Plan Year. A Participant may NOT refinance, renegotiate or extend
the maturity date of an existing loan. Also, a Participant may not obtain
a second loan for the purpose of paying off the first loan. All loans are
governed in accordance with the loan procedures disclosed in Section 7.09
of The CORPORATEplan FOR RETIREMENTSM Basic Plan Document. Loan set up and
annual maintenance fees will be charged to the affected Participant's
Account, unless they are paid by the Employer. Loan fees are disclosed in
The CORPORATEplan FOR RETIREMENTSM Service Agreement.
In accordance with governmental regulations, a Plan may not permit
Participant loans to Owner-Employees (sole proprietor or a partner owning a
10% or more interest in a Partnership) of non-corporate entities or to
Shareholder-Employees of Subchapter S corporations (I.E., an employee or
officer who owns more than 5% of the outstanding stock of the Subchapter S
corporation).
(b) An Employer may elect not to offer Participant loans by selecting this
option.
1.10. RESERVED
1.11. DISTRIBUTIONS:
(a) As a pension plan, the Internal Revenue Code requires that the normal
form of benefit payment for this Plan be a qualified joint and survivor
annuity for married Participants and a life annuity for single
Participants. If a Participant, and his/her spouse, if applicable,
waive(s) the annuity option, payments are made as a lump sum or under a
systematic withdrawal plan (installments). If a Participant terminates
with a vested account balance of less than $3,500, then in accordance with
Section 8.01(c), the Plan Administrator will distribute the money to the
Participant in a lump sum distribution.
(b) If, however, the Plan was converted from another defined contribution
plan which provided for in-service withdrawals of voluntary after-tax
employee contributions, the Employer may be required under Internal Revenue
Service regulations to continue to provide for such method of distribution
in addition to a lump sum and/or installments. (Check if applicable.)
SECTION 1.11 CONTINUED ON THE NEXT PAGE.
The Plan Administrator is responsible for identifying any Participant
older than age 70 1/2. These Participants must receive the minimum
required distribution in accordance with the Internal Revenue Code. The
Plan Administrator is responsible for computing the amount of the minimum
distribution and providing Fidelity with the appropriate written direction.
1.12. TOP-HEAVY STATUS:
Generally, a defined contribution plan is considered top-heavy if more
than 60% of the account balances are for the benefit of key employees. A
key employee is defined under Internal Revenue Code Section 416.
(a) Option (1) allows an Employer to assume its Plan is always top-heavy
and automatically to comply with the top-heavy plan requirements each Plan
Year. Thus, each Plan Year the Employer will make the required top-heavy
minimum contribution listed in Section 1.12(c) and be subject to the
top-heavy Vesting Schedule in Section 1.12(d). Option (2) requires an
Employer to perform the top-heavy test each Plan Year. If the Plan is
determined to be top-heavy then it will be subject to the top-heavy
requirements under Section 1.12(c) and 1.12(d). (Select one option).
(b) If an Employer's Plan is top-heavy and the Employer currently maintains
a defined benefit plan then an actuary should assist in the completion of
the information in Option (1) and (2). If an Employer does not currently
maintain a defined benefit plan then check Option (3).
(c) Generally, every non-key employee who is a participant in a top-heavy
plan at the end of the Plan Year must receive minimum Employer
contributions under such plan, if any key employee as defined by the
Internal Revenue Code is receiving a contribution for that Plan Year. A
Participant who is a non-key employee must receive the minimum top-heavy
Employer contribution regardless of any Hours of Service eligibility
requirement elected under Section 1.05(a)(3)(B) or (C) (Employer
Contributions). Employer contributions are counted as top-heavy minimum
contributions.
Use the table below to determine the minimum top-heavy contribution to be
inserted in this Section 1.12(c) and the appropriate selection from options
(c)(1) and (c)(2).
<TABLE>
<CAPTION>
<S> <C> <C>
SITUATION MINIMUM SELECT
CONTRIBUTION OPTION
Employer maintains this Plan only. 3% (c)(1)
Employer maintains a defined benefit plan or another defined 3% (c)(2)
contribution plan which provides the top-heavy minimum benefit or
contribution for employees who participate in both plans.
Employer maintains another defined contribution plan and the top-heavy 3% (c)(1)
minimum contribution for employees who participate in both plans is
made to this Plan.
Employer also maintains a defined benefit plan which does not provide 5% (c)(1)
the minimum benefit to employees who participate in both plans.
The Employer also maintains a defined benefit plan which does not 7 1/2% (c)(1)
provide the minimum benefit to employees who participate in both plans,
the top-heavy ratio does not exceed 90%, and the plan provides an extra
minimum contribution in order to use the 125% limitation under Internal
Revenue Code Section 415(e).
</TABLE>
SECTION 1.12 CONTINUED ON NEXT PAGE
<TABLE>
<CAPTION>
<S> <C> <C>
The Employer also maintains a defined benefit plan, the top-heavy ratio 4% (c)(1)
does not exceed 60%, and both plans provide minimum benefits or
contributions and provide extra minimums in order to use the 125%
limitation under Internal Revenue Code Section 415(e).
The Plan covers only employees subject to a collective bargaining N/A (c)(3)
agreement and there are no Employer or Matching Contributions.
</TABLE>
NOTE: COMPENSATION FOR TOP-HEAVY PURPOSES IS DEFINED AS TOTAL ANNUAL
COMPENSATION FOR A PARTICIPANT
LESS ANY EMPLOYEE DEFERRAL CONTRIBUTIONS.
(d) An Employer MUST elect a top-heavy Vesting Schedule for its Plan.
The Vesting Schedule elected in Section 1.07(a) will apply unless the Plan
is top-heavy. Once an Employer's Plan is top-heavy and subject to the
Vesting Schedule elected in this Section, then it will continue to apply
even in subsequent Plan Years when the Plan is not top-heavy. An Employer
must elect a top-heavy Vesting Schedule under either Option (1) or (2)
unless the Vesting Schedules in Section 1.07(a) is more favorable to the
Participants.
1.13. TWO OR MORE PLANS:
(a) (Select one option.) Employer contributions and benefits under all
Employer and Related Employer qualified retirement plans are subject to one
overall annual addition limit. Section 1.13 is designed to determine how
the Employer's Plan will comply with these limitations under all Employer
plans. The maximum permissible annual addition limit for a limitation year
for a Participant in one or more defined contribution plans is the lesser
of $30,000 (as indexed) or 25% of a Participant's compensation. For
purposes of the latter limit, a Participant's Compensation must be reduced
by any elective contributions under Internal Revenue Code Sections 402(h)
(Simplified Employee Pension), 403(b) (Tax Sheltered Annuities), other
deferred compensation described in 457(b) (Plan of State and Local
Governments and Tax-Exempt Organizations) or 414(h)(2) (Plan of a State or
Political Subdivision of the Government). Option (a) is required by the
Internal Revenue Service, unless (1) this is the only Plan ever maintained
by the Employer, or (2) the Employer maintains other defined contribution
plans, but they are master or prototype plans. An Employer cafeteria
(Internal Revenue Code Section 125 plan) is not considered a plan for
purposes of Section 1.13.
(a)(1) Excess annual additions for an affected Participant will be refunded
from both the Employer's other defined contribution plan and this Plan on a
PRORATA basis.
(a)(2) If the Employer does not want excess annual additions for an
affected Participant to be refunded in accordance with (a)(1) then the
Employer should select this option. The Employer may designate how excess
annual additions will be refunded from the Employer's other defined
contribution plan and this Plan by attaching a separate schedule.
(a)(3) Check this option if this is the only Plan the Employer maintains.
Excess annual additions for a Participant will be refunded from this Plan.
(b) (Select one option.) Completion of Option (b) is required by the
Internal Revenue Service unless this is the only plan ever maintained by
the Employer or the Employer never had or maintained a defined benefit
plan.
(b)(1) If an Employer maintains or has ever maintained a defined benefit
plan in addition to this defined contribution plan, then there are certain
Internal Revenue Code fractions that must be computed annually. An
Employer must compute each Participant's defined benefit fraction under the
defined benefit plan and defined contribution fraction under the defined
contribution plan. The sum of these two fractions for each Participant may
not exceed 1.0.
SECTION 1.13 CONTINUED ON NEXT PAGE.
(b)(2) An Employer not electing (b)(1) may reduce excess annual additions
for an affected Participant participating at one time or another in both a
defined benefit plan and a defined contribution plan maintained by the
Employer by attaching a separate schedule.
(b)(3) Check this option if the Employer does not currently or has never
maintained a defined benefit plan.
1.14. ESTABLISHMENT OF TRUST AND INVESTMENT DECISIONS:
This section establishes the Trust under the Plan and permits the Employer
to designate who directs the investments (Employer, Participants, or both)
and the Fidelity Mutual Funds available for investment under the Plan.
(Select one option from (a) and complete Option (b).)
(a)(1) An Employer may direct all Participant account balances
between/among the available Fidelity Funds offered under the Plan by
electing Option (1). The Employer is responsible for sending Fidelity
written direction for any exchanges between/among available Funds based
upon procedures established by Fidelity.
(a)(2) An Employer may allow each Participant to direct his/her entire
account balance between/among the available Fidelity Funds offered under
the Plan by selecting Option (2). (A Participant's spouse or a third party
may NOT direct Participant account balances.) Each Participant should
receive a prospectus in accordance with Securities and Exchange Commission
requirements before investing money in any Fidelity Mutual Fund.
Participant exchanges will be based upon instructions given by Participants
to Fidelity Telephone Representatives during predetermined business hours.
An Employer electing this Option may also elect to comply with Section
404(c) of the Employee Retirement Income Security Act of 1974 (ERISA). If
the requirements of ERISA 404(c) are satisfied by the Plan then each
Participant is responsible for any investment gains/losses in his/her
Accounts. However, election of ERISA 404(c) by an Employer does not fully
relieve it of all fiduciary liability. The Employer is still responsible
for the selection and monitoring of Plan investment options.
(b) The Employer may only select Fidelity Funds offered under The
CORPORATEplan FOR RETIREMENTSM. An additional recordkeeping fee will be
charged for each Fidelity Fund selected in excess of five (5).
An Employer that selects the Fidelity Managed Income Portfolio (formerly
known as the GIC Open-End Portfolio) MUST receive the Group Trust, the
Declaration of Separate Fund, and the Circular for the Managed Income
Portfolio from the Fidelity Account Executive prior to the execution of
this Adoption Agreement. The Employer by executing the Adoption Agreement
agrees to all of the requirements in the aforementioned documentation.
Certain restrictions apply on investment exchanges from the Managed Income
Portfolio into a "competing" Fund. Please refer to the aforementioned
documentation for further information.
1.15. RELIANCE ON OPINION LETTER:
Because this is a non-standardized prototype plan an adopting Employer may
not rely on the opinion letter issued by the National Office of the IRS
that its plan satisfies the qualification requirements of Internal Revenue
Code Section 401(a). On August 24, 1993, Fidelity received an Internal
Revenue Service "Opinion Letter " on the Plan (Letter Serial No. D361368a).
The Plan Administrator is RESPONSIBLE for applying for an individual
determination letter for the Plan from the appropriate Key District
Director of the Internal Revenue Service. The Plan Administrator should
consult with their attorney and/or accountant for further information.
Failure by the Employer to complete properly and execute the Adoption
Agreement may result in disqualification of the Plan.
This document includes two (2) identical signature pages. An authorized
officer (if the Employer is incorporated) or the authorized individual(s)
(if the Employer is unincorporated) must sign pages 13 and 14 and return
them to Fidelity. Only one authorized signature is required to execute
this Adoption Agreement, unless the Employer's corporate policy mandates
two authorized signatures. Fidelity Management Trust Company will sign
both pages and return one signature page (page 13) with the original
Adoption Agreement to the Employer. The Employer should take the
appropriate Board of Director's action to adopt the Fidelity CORPORATEplan
FOR RETIREMENTSM.
THIS AGREEMENT SHOULD BE REVIEWED BY YOUR ATTORNEY AND/OR ACCOUNTANT BEFORE
IT IS EXECUTED.
This document includes two (2) identical signature pages. An authorized
officer (if the Employer is incorporated) or the authorized individual(s)
(if the Employer is unincorporated) must sign pages 13 and 14 and return
them to Fidelity. Only one authorized signature is required to execute
this Adoption Agreement, unless the Employer's corporate policy mandates
two authorized signatures. Fidelity Management Trust Company will sign
both pages and return one signature page (page 14) with the original
Adoption Agreement to the Employer. The Employer should take the
appropriate Board of Director's action to adopt the Fidelity CORPORATEplan
FOR RETIREMENTSM.
THIS AGREEMENT SHOULD BE REVIEWED BY YOUR ATTORNEY AND/OR ACCOUNTANT BEFORE
IT IS EXECUTED.
