SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
_____________
NEWCOR, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
38-0865770
(I.R.S. Employer Identification No.)
1825 S. Woodward, Suite 240, Bloomfield Hills, Michigan 48302,
(810) 253-2400
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
MIDWEST RUBBER
401(k) PLAN
(Full title of the plan)
W. John Weinhardt
President and Chief Executive Officer
Newcor, Inc.
1825 S. Woodward, Suite 240
Bloomfield Hills, Michigan 48302
(810) 253-2400
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
_____________
Copy to:
Karen A. McCoy, Esq.
Miller, Canfield, Paddock and Stone, P.L.C.
150 West Jefferson, Suite 2500
Detroit, Michigan 48226
(313) 963-6420
CALCULATION OF REGISTRATION FEE
Title of Amount to Proposed Proposed Amount of
each class be maximum maximum regis-
of registered offering aggregate tration
securities (3) price per offering fee
to be share (2) price(2)
registered
(1)
Common 20,000 $8.5 $170,000 $58.62
Stock, shares
$1.00 par
value
(1) Pursuant to Rule 416(c) under the Securities Act of 1933, as
amended (the "Securities Act"), this registration statement also covers an
indeterminate amount of interests to be offered or sold pursuant to the
employee benefit plan described herein.
(2) Pursuant to Rule 457(h)(1) under the Securities Act, the offering
price is based upon the average high and low sales prices of the Common
Stock as reported on the National Association of Securities Dealers
National Market System on September 26, 1996.
(3) Shares that may be contributed as or purchased with matching
contributions are not being registered.
PART II
INFORMATION REQUIRED IN THE REGISTRATION
STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents heretofore filed by Registrant pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), hereby
are incorporated in this Registration Statement by reference: (a)
Registrant's Annual Report on Form 10-K for the fiscal year ended October
31, 1995; (b) Registrant's Quarterly Reports on Form 10-Q for the quarters
ended January 31, 1996, April 30, 1996, and July 31, 1996; (c) Midwest
Rubber 401(k) Plan's Annual Report on Form 11-K for the fiscal year ended
December 31, 1995; (d) the description of Registrant's common stock, $1.00
par value, included in Registrant's Exchange Act Registration Statement on
Form 8-A, dated December 30, 1991; and (e) Registrant's Form 8-Ks filed on
December 8, 1995, April 4, 1996, and May 21, 1996 (acquisitions and
disposition). All documents subsequently filed by Registrant pursuant to
Sections 13(a), 14, and 15(d) of the Exchange Act, prior to the filing of a
post-effective amendment which indicates that all securities offered have
been sold or which deregisters all securities then remaining unsold, shall
be deemed to be incorporated by reference in this Registration Statement
and to be part hereof from the date of filing such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The General Corporation Law ("GCL") of the State of Delaware provides
that a Delaware corporation, such as the registrant, may indemnify a
director or officer against his or her expenses and judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection
with any action, suit or proceeding (other than an action by or in the
right of the corporation) involving such person by reason of the fact that
such person is or was a director or officer, concerning actions taken in
good faith and in a manner reasonably believed to be in or not opposed to
the best interest of the corporation and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct
was unlawful. The GCL also provides that in a derivative action, a
Delaware corporation may indemnify its directors and officers against
expenses actually and reasonably incurred to the extent that such director
or officer acted in good faith and in a manner such director or officer
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification may be made with respect to any
claim, issue or matter as to which such director or officer is adjudged to
be liable to the corporation unless and only to the extent that the court
determines upon application that, despite the adjudication of liability but
in view of all the circumstances of the case, such director or officer is
fairly and reasonably entitled to indemnity for such expenses which the
court deems proper. The GCL also generally permits the advancement of a
director's or officer's expenses, including by means of a mandatory charter
or bylaw provision to that effect, in lieu of requiring the authorization
of such advancement by the Board of Directors in specific cases.
Section 102(b)(7) of the GCL provides that a certificate of
incorporation may contain a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such
provision may not eliminate or limit the liability of a director (i) for
any breach of the director's duty of loyalty to the corporation or its
stockholders; (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) under Section
174 of the GCL (relating to liability for unauthorized acquisitions or
redemptions of, or dividends on, capital stock) or (iv) for any transaction
from which the director derived an improper personal benefit.
Article Ninth of Registrant's Restated Certificate of Incorporation,
as amended, implements the foregoing provisions and provides as follows:
NINTH. (a) The corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation) by reason
of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit
plans, against expenses (including attorneys' fees and ERISA
excise taxes or penalties), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith
and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(b) The corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit
plans, against expenses (including attorneys' fees and ERISA
excise taxes or penalties), actually and reasonably incurred by
him in connection with the defense or settlement of such action
or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless
and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall
deem proper.
(c) To the extent that a director, officer, employee or
agent of the corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred
to in paragraphs (a) and (b) of this Article Ninth or in defense
of any claim, issue or matter therein, he shall be indemnified by
the corporation against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(d) Any indemnification under paragraphs (a) and (b) of
this Article Ninth, unless ordered by a court, shall be made by
the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer,
employee or agent is proper in the circumstances because he has
met the applicable standard of conduct set forth in said
paragraphs (a) and (b). Such determination shall be made (i) by
the Board of Directors by a majority vote of a quorum consisting
of directors who were not parties to such action, suit, or
proceeding, or (ii) if such a quorum is not obtainable, or even
if obtainable and a quorum of disinterested directors so directs,
by independent legal counsel (compensated by the corporation) in
a written opinion, or (iii) by the stockholders.
(e) Expenses incurred in defending a civil or criminal
action, suit or proceeding may be paid by the corporation in
advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the
director, officer, employee or agent to repay such amount if it
shall ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this Article.
(f) The indemnification and advancement of expenses
provided by or granted pursuant to this Article shall not be
deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under
any by-law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a
person.
(g) The corporation may purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of
another 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 corporation would have the
power to indemnify him against such liability under the
provisions of this Article or of applicable law. The
indemnification rights conferred in this Article Ninth shall be
contract rights between the corporation and the officer or
director or other individual entitled to indemnification.
(h) A director of the corporation shall not be personally
liable to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under section 174 of the Delaware
General Corporation Law, or (iv) for any transaction from which
the director derived an improper personal benefit.
Insurance is maintained on a regular basis (and not specifically in
connection with this offering) against liabilities arising on the part of
directors and officers out of their performance in such capacities or
arising on the part of the registrant out of its foregoing indemnification
provisions, subject to certain exclusions and to the policy limits.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
The following exhibits are furnished with this Registration Statement:
Exhibit No. Description
(4)(a) Restated Certificate of
Incorporation of Registrant, dated July 25, 1990
(Filed as Exhibit 3(a) to Registrant's Report on
Form 10-K for the fiscal year ended October 31,
1990 (File number 1-5985) and incorporated herein
by reference)
(4)(a)(i) Certificate of Amendment to
Restated Certificate of Incorporation of
Registrant, filed with the Delaware Secretary of
State on March 31, 1992 (Filed as Exhibit
(4)(a)(i) to Registrant's registration statement
on Form S-8 filed December 15, 1993 (Registration
No. 33-72906) and incorporated herein by
reference)
(4)(b) By Laws of Registrant as
amended to date (Filed as Exhibit 3(b) to
Registrant's Report on Form 10-K for the fiscal
year ended October 31, 1990 (File number 1-5985)
and incorporated herein by reference)
(4)(c) Midwest Rubber 401(k) Plan
(4)(c)(i) Nonstandardized Adoption
Agreement of the Prototype Cash or Deferred Profit-
Sharing Plan and Trust Sponsored by Comerica Bank
dated May 5, 1996
(5)(a) Opinion and consent of Miller,
Canfield, Paddock and Stone, P.L.C.
(5)(b) Internal Revenue Service
Determination Letter, dated December 9, 1993
The undersigned registrant
hereby undertakes that it will submit the Plan and
any amendments thereto to the Internal Revenue
Service (the "IRS") in a timely manner and will
make all changes required by the IRS in order to
qualify the Plan under Section 401 of the Internal
Revenue Code of 1986, as amended, or any successor
thereto.
(15) (not applicable)
(23)(a) Consent of Miller, Canfield,
Paddock and Stone, P.L.C. (contained in Exhibit
(5)(a))
(23)(b) Consent of Coopers & Lybrand,
L.L.P.
(24) Powers of attorney (contained
in the signature pages hereto)
(25) (not applicable)
(28) (not applicable)
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the
registration statement (or the most recent post-
effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information
with respect to the plan of distribution not previously
disclosed in the registration statement or any material
change to such information in the registration
statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference into the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing provisions,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of
1933, Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-8 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Bloomfield Hills, State of
Michigan, on September 27, 1996.
NEWCOR, INC.
By /s/ W. John Weinhardt
W. John Weinhardt
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities indicated and on the dates indicated below. By so signing,
each of the undersigned, in his capacity as a director or officer, or both,
as the case may be, of the registrant, does hereby appoint W. John
Weinhardt, William A. Lawson, John J. Garber, and each of them severally,
his true and lawful attorney to execute in his or her name, place and
stead, in his capacity as a director or officer, or both, as the case may
be, of the registrant, any and all amendments to this Registration
Statement including post-effective amendments thereto and all instruments
necessary or incidental in connection therewith, and to file the same with
the Securities and Exchange Commission. Each of said attorneys shall have
full power and authority to do and perform in the name and on behalf of
each of the undersigned, in any and all capacities, every act whatsoever
requisite or necessary to be done in the premises as fully, and for all
intents and purposes, as each of the undersigned might or could do in
person, the undersigned hereby ratifying and approving the acts of said
attorneys and each of them.
The Plan. Pursuant to the requirements of the Securities Act of 1933,
Fred Davenport (the Plan Administrator of the Midwest Rubber 401(k) Plan)
has caused this Registration Statement to be signed on behalf of the Plan
by the undersigned, thereunto duly authorized in the City of Bay City,
State of Michigan, on June 13, 1996.
MIDWEST RUBBER 401(k) PLAN
By: /s/ Fred Davenport
Fred Davenport
Plan Administrator
Signatures Title Date
(1) Principal
Executive Officer:
/s/ W John Weinhardt President and Chief June 13, 1996
W John Weinhardt Executive Officer
(2) Principal
Financial Officer and
Principal Accounting
Officer:
Treasurer, Vice President June 13, 1996
/s/ John J. Garber Finance, and Chief
John J. Garber Financial
Officer
(3) Directors:
/s/ William A. Lawson Director and Chairman June 13, 1996
William A. Lawson
/s/ Jerry D. Campbell Director June 13, 1996
Jerry D. Campbell
/s/ Shirley E. Gofrank Director June 13, 1996
Shirley E. Gofrank
/s/FrankL.Klapperich Jr Director June 13, 1996
Frank L. Klapperich Jr
/s/ Jack R. Lousma Director June 13, 1996
Jack R. Lousma
/s/ Richard A. Smith Director June 13, 1996
Richard A. Smith
/s/ Kurt O. Tech Director June 13, 1996
Kurt O. Tech
/s/ W. John Weinhardt Director June 13, 1996
W. John Weinhardt
EXHIBIT INDEX
Exhibit No. Description
(4)(a) Restated Certificate of Incorporation of
Registrant, dated July 25, 1990 (Filed as Exhibit 3(a) to
Registrant's Report on Form 10-K for the fiscal year ended
October 31, 1990 (File number 1-5985) and incorporated
herein by reference)
(4)(a)(i) Certificate of Amendment to Restated Certificate
of Incorporation of Registrant, filed with the Delaware
Secretary of State on March 31, 1992 (Filed as Exhibit
(4)(a)(i) to Registrant's registration statement on Form S-8
filed December 15, 1993 (Registration No. 33-72906) and
incorporated herein by reference)
(4)(b) By Laws of Registrant as amended to date (Filed as
Exhibit 3(b) to Registrant's Report on Form 10-K for the
fiscal year ended October 31, 1990 (File number 1-5985) and
incorporated herein by reference)
(4)(c) Midwest Rubber 401(k) Plan
(4)(c)(i) Nonstandardized Adoption Agreement of the
Prototype Cash or Deferred Profit-Sharing Plan and Trust
Sponsored by Comerica Bank dated May 5, 1996
(5)(a) Opinion and Consent of Miller, Canfield, Paddock
and Stone, P.L.C.
(5)(b) Internal Revenue Service Determination Letter,
dated December 9, 1993
(23)(a) Consent of Miller, Canfield, Paddock and Stone,
P.L.C. (contained in Exhibit (5)(a))
(23)(b) Consent of Coopers & Lybrand L.L.P.
(24) Powers of Attorney (contained in the signature
pages hereto)
Exhibit (5)(a)
[Miller, Canfield, Paddock and Stone, P.L.C. Letterhead]
September 27, 1996
Newcor, Inc.
1825 S. Woodward Avenue, Ste. 240
Bloomfield Hills, Michigan 48302
Gentlemen:
With respect to the registration statement on Form S-8 (the
"Registration Statement") being filed today with the Securities and
Exchange Commission (the "Commission") by Newcor, Inc., a Delaware
corporation (the "Company"), for the purpose of registering under the
Securities Act of 1933, as amended (the "Act"), an indeterminate amount of
interests in the Midwest Rubber 401(k) Plan (the "Plan") and 20,000 shares
of the common stock, $1.00 par value, of the Company (the "Registered
Shares") that may be acquired at the election of Plan participants under
and pursuant to the Plan (which Registered Shares may consist of shares
already issued or newly issued shares), we, as your counsel, have examined
such certificates, instruments, and documents and have reviewed such
questions of law as we have considered necessary or appropriate for the
purposes of this opinion, and, on the basis of such examination and review,
we advise you that, in our opinion:
1. The Registered Shares have been legally authorized.
2. When the Registration Statement has become effective and any
newly issued Registered Shares have been acquired at the election of a
participant in accordance with the Plan and paid for, said newly issued
Registered Shares will be validly issued, fully paid, and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not thereby admit
that we are within the category of persons whose consent is required under
Section 7 of the Act or the rules and regulations of the Commission.
Very truly yours,
MILLER, CANFIELD, PADDOCK AND STONE, P.L.C.
Exhibit 5(b)
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
DISTRICT DIRECTOR
P.O. BOX 2508
CINCINNATI, OH 45201 Employer Identification Number:
38-0865770
Date: DEC 09 1993 DLN:
380058034
NEWCOR, INC. Person to Contact:
1825 S. WOODWARD, SUITE 240 JOANNA WEBER
BLOOMFIELD HILLS, MI 48302 Contact Telephone Number:
(513) 684-3347
Plan Name:
MIDWEST RUBBER 401(k) PLAN
Plan Number: 010
Dear Applicant:
We have made a favorable determination on your plan, identified above,
based on the information supplied. Please keep this letter in your
permanent records.
Continued qualification of the plan under its present form will depend
on its effect in operation. (See section 1.401-1(b)(3) of the Income Tax
Regulations.) We will review the status of the plan in operation
periodically.
The enclosed document explains the significance of this favorable
determination letter, points out some features that may affect the
qualified status of your employee retirement plan, and provides information
on the reporting requirements for your plan. It also describes some events
that automatically nullify it. It is very important that you read the
publication.
This letter relates only to the status of your plan under the Internal
Revenue Code. It is not a determination regarding the effect of other
federal or local statutes.
This determination letter is applicable for the plan adopted on
September 3, 1992.
This letter is based upon the certification and demonstrations you
submitted pursuant to Revenue Procedure 91-66. Therefore, the
certification and demonstrations are considered an integral part of this
letter. Accordingly, YOU MUST KEEP A COPY OF THESE DOCUMENTS AS A
PERMANENT RECORD OR YOU WILL NOT BE ABLE TO RELY ON THE ISSUES DESCRIBED IN
REVENUE PROCEDURE 91-66.
We have sent a copy of this letter to your representative as indicated
in the power of attorney.
If you have questions concerning this matter, please contact the
person whose name and telephone number are shown above.
Sincerely yours,
/s/ Robert T. Johnson
Robert T. Johnson
District Director
Enclosures:
Publication 794
Exhibit 23 (b)
Consent of Independent Accountants
We consent to the incorporation by reference in this registration statement
on Form S-8 of our report dated December 7, 1995, except as to the
information presented in the first paragraph of Note B for which the date
is January 2, 1996, on our audits of the financial statements of Newcor,
Inc.
We also consent to the incorporation by reference in this registration
statement on Form S-8 of our report dated August 20, 1996, on our audit of
the financial statements of the Midwest Rubber 401(k) Plan for the year
ended December 31, 1995.
COOPERS & LYBRAND L.L.P.
Detroit, Michigan
September 27, 1996
Exhibit 4(c)(i)
Plan #002
NONSTANDARDIZED
ADOPTION AGREEMENT
PROTOTYPE CASH OR DEFERRED PROFIT-SHARING
PLAN AND TRUST/CUSTODIAL ACCOUNT
Sponsored by
COMERICA BANK
The Employer named below hereby establishes a Cash or Deferred Profit-
Sharing Plan for eligible Employees as provided in this Adoption Agreement
and the accompanying Basic Prototype Plan and Trust/Custodial Account Basic
Plan Document #05.
1. EMPLOYER INFORMATION
NOTE: If multiple Employers are adopting the Plan,
complete this Section based on the lead Employer. Additional
Employers may adopt this Plan by attaching executed signature
pages to the back of the Employer's Adoption Agreement.
(a) NAME AND ADDRESS:
Newcor, Inc.
1825 S. Woodward
Bloomfield Hills, MI 48302
(b) TELEPHONE NUMBER:(810) 253-2405
(c) EMPLOYER TAX ID NUMBER: 38-0865770
TRUST TAX ID NUMBER:
(d) FORM OF BUSINESS:
[ ] (i) Sole Proprietor
[ ] (ii) Partnership
[x] (iii) Corporation
[ ] (iv) "S" Corporation (formerly known as Subchapter S)
[ ] (v) Other:
(e) NAME OF INDIVIDUAL AUTHORIZED TO ISSUE
INSTRUCTIONS TO THE TRUSTEE/CUSTODIAN:
Fred Davenport, John Garber, and Thomas D. Parker
(f) NAME OF PLAN: Midwest Rubber 401(k) Plan
(g) THREE DIGIT PLAN NUMBER
FOR ANNUAL RETURN/REPORT: 010
2. EFFECTIVE DATE
(a) This is a new Plan having an Effective Date of
.
(b) This is an amended Plan.
The Effective Date of the original Plan was August 3, 1992
.
The Effective Date of the amended Plan is May 1, 1996
with the exception of Sections 7(f), 7(g) and 12 herein which shall
be effective as of the first day of the 1989 Plan Year.
(c) If different from above, the Effective Date for the Plan's
Elective Deferral provisions shall be .
(d) The Effective Date of Trustee or Custodian appointment:
August 3, 1992 .
To the extent the Effective Date of the appointment of the
Trustee or the Custodian is later than the Effective Date of the
amended Plan, the Trustee or the Custodian will have no liability
for the acts or the omissions of the prior trustee or prior
custodian. The Employer shall hold the Trustee or the Custodian
harmless with respect to prior acts or omissions of the prior
trustee or prior custodian.
3. DEFINITIONS
(a) "Compensation" Compensation shall be determined on the basis
of the following definition of Compensation:
[x] (i) Code Section 6041 and 6051 Compensation,
[ ] (ii) Code Section 3401(a) Compensation,
[ ] (iii) Code Section 415 Compensation.
Compensation shall be determined on the basis of the:
[ ] (i) Plan Year.
[ ] (ii) Employer's Taxable Year:
[x] (iii) Calendar Year.
Compensation [x] shall [ ] shall not include Employer
contributions made pursuant to a Salary Savings Agreement which are
not includable in the gross income of the Employee for the reasons
indicated in the definition of Compensation at 1.12 of the Basic
Plan Document #05.
If the Employer chooses a non-integrated allocation formula,
Compensation will exclude:
[ ] overtime.
[ ] bonuses.
[ ] commissions.
[ ] other:
NOTE: Any exclusion of Compensation must satisfy the
requirements of Section 1.401(a)(4) of the Income Tax
Regulations and Code Section 414(s) and the regulations
thereunder.
For purposes of the Plan, Compensation shall be limited to $
, the maximum amount which will be considered for Plan purposes.
[If an amount is specified, it will limit the amount of
contributions allowed on behalf of higher compensated Employees.
Completion of this Section is not intended to coordinate with the
$200,000 of Code Section 415(d), thus the amount should be less
than $200,000 as adjusted for cost-of-living increases.]
(b) "Entry Date"
[ ] (i) The first day of the Plan Year nearest the
date on which an Employee meets the eligibility
requirements.
[ ] (ii) The earlier of the first day of the Plan
Year or the first day of the seventh month of the Plan
Year coinciding with or following the date on which an
Employee meets the eligibility requirements.
[ ] (iii) The first day of the Plan Year
following the date on which the Employee meets the
eligibility requirements. If this election is made, the
Service requirement at 4(a)(ii) may not exceed one-half
year and the age requirement at 4(b)(ii) may not exceed
20-1/2.
[ ] (iv) The first day of the month coinciding with
or following the date on which an Employee meets the
eligibility requirements.
[x] (v) The first day of the Plan Year, or the
first day of the fourth month, or the first day of the
seventh month or the first day of the tenth month, of the
Plan Year coinciding with or following the date on which
an Employee meets the eligibility requirements.
(c) "Hours of Service" Shall be determined on the basis of the
method selected below. Only one method may be selected. The method
selected shall be applied to all Employees covered under the Plan
as follows:
[x] (i) On the basis of actual hours for which an
Employee is paid or entitled to payment.
[ ] (ii) On the basis of days worked.
An Employee shall be credited with ten
(10) Hours of Service if under paragraph 1.42 of the
Basic Plan Document #05 such Employee would be credited
with at least one (1) Hour of Service during the day.
[ ] (iii) On the basis of weeks worked.
An Employee shall be credited with forty-
five (45) Hours of Service if under paragraph 1.42 of the
Basic Plan Document #05 such Employee would be credited
with at least one (1) Hour of Service during the week.
[ ] (iv) On the basis of semi-monthly payroll periods.
An Employee shall be credited with ninety-
five (95) Hours of Service if under paragraph 1.42 of the
Basic Plan Document #05 such Employee would be credited
with at least one (1) Hour of Service during the semi-
monthly payroll period.
[ ] (v) On the basis of months worked.
An Employee shall be credited with one-
hundred-ninety (190) Hours of Service if under paragraph
1.42 of the Basic Plan Document #05 such Employee would
be credited with at least one (1) Hour of Service during
the month.
(d) "Limitation Year" The 12-consecutive month period commencing
on January 1 and ending on December 31.
(e) "Net Profit"
[x] (i) Not applicable (profits will not be
required for any contributions to the Plan).
[ ] (ii) As defined in paragraph 1.49 of the Basic
Plan Document #05.
[ ] (iii) Shall be defined as:
(Only use if definition in paragraph 1.49
of the Basic Plan Document #05 is to be superseded.)
(f) "Plan Year" The 12-consecutive month period commencing on
January 1 and ending on December 31.
If applicable, the first Plan Year will be a short Plan Year
commencing on and ending on . Thereafter, the Plan
Year shall be as above.
(g) "Qualified Early Retirement Age" For purposes of making
distributions under the provisions of a Qualified Domestic
Relations Order, the Plan's Qualified Early Retirement Age with
regard to the Participant against whom the order is entered
[x] shall [ ] shall not be the date the order is determined to be
qualified. If "shall" is elected, this will only allow payout to
the alternate payee(s).
(h) "Qualified Joint and Survivor Annuity" The safe-harbor
provisions of paragraph 8.7 of the Basic Plan Document #05 [x] are
[ ] are not applicable. If not applicable, the survivor annuity
shall be % (50%, 66-2/3%, 75% or 100%) of the annuity payable
during the lives of the Participant and Spouse. If no answer is
specified, 50% will be used.
(i) "Taxable Wage Base"
[x] (i) Not Applicable - Plan is not integrated
with Social Security.
[ ] (ii) The maximum earnings considered wages for
such Plan Year under Code Section 3121(a).
[ ] (iii) % (not more than 100%) of the
amount considered wages for such Plan Year under Code
Section 3121(a).
[ ] (iv) $ , provided that such amount is
not in excess of the amount determined under paragraph
3(i)(ii) above.
[ ] (v) For the 1989 Plan Year $10,000. For all
subsequent Plan Years, 20% of the maximum earnings
considered wages for such Plan Year under Code Section
3121(a).
NOTE: Using less than the maximum at (ii) may
result in a change in the allocation formula in Section
7.
(j) "Valuation Date(s)" Allocations to Participant Accounts will
be done in accordance with Article V of the Basic Plan Document
#05:
[ ] (i) Daily
[ ] (ii) Monthly
[x] (iii)Quarterly
[ ] (iv) Semi-Annually
[ ] (v) Annually
(k) "Year of Service"
(i) For Eligibility Purposes: The 12-consecutive month
period during which an Employee is credited with na (not more
than 1,000) Hours of Service.
(ii) For Allocation Accrual Purposes: The 12-consecutive
month period during which an Employee is credited with 1,000
(not more than 1,000) Hours of Service.
(iii)For Vesting Purposes: The 12-consecutive month
period during which an Employee is credited with 1,000 (not
more than 1,000) Hours of Service.
4. ELIGIBILITY REQUIREMENTS
(a) Service:
[ ] (i) The Plan shall have no Service requirement.
[x] (ii) The Plan shall cover only Employees having
completed at least 6 months [not more than three (3)]
Years of Service. If more than one (1) is specified, for
Plan Years beginning in 1989 and later, the answer will
be deemed to be one (1).
NOTE: If the eligibility period selected is less
than one year, an Employee will not be required to
complete any specified number of Hours of Service to
receive credit for such period.
(b) Age:
[ ] (i) The Plan shall have no minimum age requirement.
[x] (ii) The Plan shall cover only Employees having
attained age 21 (not more than age 21).
(c) Classification:
The Plan shall cover all Employees who have met the age and
Service requirements with the following exceptions:
[ ] (i) No exceptions.
[ ] (ii) The Plan shall exclude Employees included
in a unit of Employees covered by a collective bargaining
agreement between the Employer and Employee
Representatives, if retirement benefits were the subject
of good faith bargaining. For this purpose, the term
"Employee Representative" does not include any
organization more than half of whose members are
Employees who are owners, officers, or executives of the
Employer.
[ ] (iii)The Plan shall exclude Employees who are
nonresident aliens and who receive no earned income from
the Employer which constitutes income from sources within
the United States.
[x] (iv) The Plan shall exclude from participation
any nondiscriminatory classification of Employees
determined as follows:
All employees
except those employed by Midwest Rubber
Division
(d) Employees on Effective Date:
[ ] (i) Employees employed on the Plan's Effective
Date do not have to satisfy the Service requirements
specified above.
[ ] (ii) Employees employed on the Plan's Effective
Date do not have to satisfy the age requirements
specified above.
5. RETIREMENT AGES
(a) Normal Retirement Age:
If the Employer imposes a requirement that Employees retire
upon reaching a specified age, the Normal Retirement Age selected
below may not exceed the Employer imposed mandatory retirement age.
[x] (i) Normal Retirement Age shall be 65
(not to exceed age 65).
[ ] (ii) Normal Retirement Age shall be the later
of attaining age (not to exceed age 65) or the
(not to exceed the fifth) anniversary of the first day of
the first Plan Year in which the Participant commenced
participation in the Plan.
(b) Early Retirement Age:
[x] (i) Not Applicable.
[ ] (ii) The Plan shall have an Early Retirement
Age of (not less than 55) and completion of
Years of Service.
6. EMPLOYEE CONTRIBUTIONS
[x] (a) Participants shall be permitted to make Elective
Deferrals in any amount from 1 % up to 15 % of their
Compensation.
If (a) is applicable, Participants shall be
permitted to amend their Salary Savings Agreements to change
the contribution percentage as provided below:
[ ] (i) On the Anniversary Date of the Plan,
[ ] (ii) On the Anniversary Date of the
Plan and on the first day of the seventh month of
the Plan Year,
[ ] (iii)On the Anniversary Date of the
Plan and on the first day following any Valuation
Date, or
[x] (iv) Upon 30 days notice to the Employer on any
calendar quarter.
[ ] (b) Participants shall be permitted to make after-tax
Voluntary Contributions.
[ ] (c) If necessary to pass the Average Deferral Percentage
Test, Participants [ ] may [ ] may not have Elective
Deferrals recharacterized as Voluntary Contributions.
NOTE: The Average Deferral Percentage Test will apply to
contributions under (a) above. The Average Contribution
Percentage Test will apply to contributions under (b) above,
and may apply to (a).
7. EMPLOYER CONTRIBUTIONS AND ALLOCATION THEREOF
NOTE: The Employer shall make contributions to the Plan in
accordance with the formula or formulas selected below. The
Employer's contribution shall be subject to the limitations
contained in Articles III and X. For this purpose, a
contribution for a Plan Year shall be limited for the
Limitation Year which ends with or within such Plan Year.
Also, the integrated allocation formulas below are for Plan
Years beginning in 1989 and later. The Employer's allocation
for earlier years shall be as specified in its Plan prior to
amendment for the Tax Reform Act of 1986.
(a) Profits Requirement:
(i) Current or accumulated Net Profits are required for:
[ ] (A) Matching Contributions.
[ ] (B) Qualified Non-Elective Contribu
tions.
[ ] (C) Discretionary Contributions.
(ii) No Net Profits are required for:
[x] (A) Matching Contributions.
[x] (B) Qualified Non-Elective Contribu
tions.
[x] (C) Discretionary Contributions.
NOTE: Elective Deferrals can always be
contributed regardless of profits.
[x] (b) Salary Savings Agreement:
The Employer shall contribute and allocate to each
Participant's account an amount equal to the amount withheld from
the Compensation of such Participant pursuant to his or her Salary
Savings Agreement. If applicable, the maximum percentage is
specified in Section 6 above.
An Employee who has terminated his or her election under the
Salary Savings Agreement other than for Hardship reasons may not
make another Elective Deferral:
[ ] (i) until the first day of the next Plan Year.
[ ] (ii) until the first day of the next valuation period.
[x] (iii)for a period of 6 month(s) (not to exceed
12 months).
[x] (c) Matching Employer Contribution [See paragraphs (h) and (i)]:
[x] (i) Percentage Match: The Employer shall
contribute in cash or Employer Securities and allocate to
each eligible Participant's account an amount equal to 25
% of the amount contributed and allocated in accordance
with paragraph 7(b) above and (if checked) % of
[ ] the amount of Voluntary Contributions made in
accordance with paragraph 4.1 of the Basic Plan Document
#05. The Employer shall not match Participant Elective
Deferrals as provided above in excess of $ or in
excess of 6% of the Participant's Compensation or if
applicable, Voluntary Contributions in excess of $
or in excess of % of the Participant's
Compensation. In no event will the match on both
Elective Deferrals and Voluntary Contributions exceed a
combined amount of $ or %.
[ ] (ii) Discretionary Match: The Employer shall
contribute and allocate to each eligible Participant's
account a percentage of the Participant's Elective
Deferral contributed and allocated in accordance with
paragraph 7(b) above. The Employer shall set such
percentage prior to the end of the Plan Year. The
Employer shall not match Participant Elective Deferrals
in excess of $ or in excess of % of the
Participant's Compensation.
[ ] (iii)Tiered Match: The Employer shall
contribute and allocate to each Participant's account an
amount equal to % of the first % of the
Participant's contribution,
% of the next % of the
Participant's contribution,
% of the next % of the
Participant's contribution.
NOTE: Percentages specified in (iii) above may not
increase as the percentage of Participant's contribution
increases.
[ ] (iv) Flat Dollar Match: The Employer shall
contribute and allocate to each Participant's account $
if the Participant defers at least 1% of Compensation.
[ ] (v) Percentage of Compensation Match: The
Employer shall contribute and allocate to each
Participant's account % of Compensation if the
Participant defers at least 1% of Compensation.
[ ] (vi) Proportionate Compensation Match: The
Employer shall contribute and allocate to each
Participant who defers at least 1% of Compensation, an
amount determined by multiplying such Employer Matching
Contribution by a fraction the numerator of which is the
Participant's Compensation and the denominator of which
is the Compensation of all Participants eligible to
receive such an allocation.
[x] (vii)Qualified Match: Employer Matching
Contributions will be treated as Qualified Matching
Contributions to the extent specified below:
[ ] (A) All Matching Contributions.
[ ] (B) None.
[ ] (C) % of the
Employer's Matching Contribution.
[ ] (D) Up to % of each
Participant's Compensation.
[x] (E) The amount necessary
to meet the [ ] Average Deferral Percentage
(ADP) Test, [ ] Average Contribution
Percentage (ACP) Test, [x] Both the ADP and ACP
Tests.
(viii)Eligibility for Match: Employer Matching
Contributions, whether or not Qualified, will only be made on
Employee contributions not withdrawn prior to the end of the
[x] valuation period [ ] Plan Year.
[x] (d) Qualified Non-Elective Employer Contribution - [See paragraphs
(h) and (i)] These contributions are fully vested when
contributed:
The Employer shall have the right to make an additional
discretionary contribution which shall be allocated to each
eligible Employee in proportion to his or her Compensation as a
percentage of the Compensation of all eligible Employees. This
part of the Employer's contribution and the allocation thereof
shall be unrelated to any Employee contributions made hereunder.
The amount of Qualified Non-Elective Contributions taken into
account for purposes of meeting the ADP or ACP test requirements
is:
[ ] (i) All such Qualified Non-Elective Contributions.
[x] (ii) The amount necessary to meet [ ] the ADP
test, [ ] the ACP test, [x] Both the ADP and ACP tests.
Qualified non-Elective Contributions will be made to:
[ ] (iii)All Employees eligible to participate.
[x] (iv) Only non-Highly Compensated Employees
eligible to participate.
[x] (e) Additional Employer Contribution Other Than Qualified Non-
Elective Contributions - Non-Integrated [See paragraphs (h) and
(i)]:
The Employer shall have the right to make an additional
discretionary contribution which shall be allocated to each
eligible Employee in proportion to his or her Compensation as a
percentage of the Compensation of all eligible Employees. This
part of the Employer's contribution and the allocation thereof
shall be unrelated to any Employee contributions made hereunder.
[ ] (f) Additional Employer Contribution - Integrated Allocation
Formula [See paragraphs (h) and (i)]:
The Employer shall have the right to make an additional
discretionary contribution. The Employer's contribution for the
Plan Year plus any forfeitures shall be allocated to the accounts
of eligible Participants as follows:
(i) First, to the extent contributions and forfeitures
are sufficient, all Participants will receive an allocation
equal to 3% of their Compensation.
(ii) Next, any remaining Employer contributions and
forfeitures will be allocated to Participants who have
Compensation in excess of the Taxable Wage Base (excess
Compensation). Each such Participant will receive an alloca
tion in the ratio that his or her excess Compensation bears to
the excess Compensation of all Participants. Participants may
only receive an allocation of 3% of excess Compensation.
(iii)Next, any remaining Employer contributions and
forfeitures will be allocated to all Participants in the ratio
that their Compensation plus excess Compensation bears to the
total Compensation plus excess Compensation of all
Participants. Participants may only receive an allocation of
up to 2.7% of their Compensation plus excess Compensation,
under this allocation method. If the Taxable Wage Base
defined at Section 3(i) is less than or equal to the greater
of $10,000 or 20% of the maximum, the 2.7% need not be
reduced. If the amount specified is greater than the greater
of $10,000 or 20% of the maximum Taxable Wage Base, but not
more than 80%, 2.7% must be reduced to 1.3%. If the amount
specified is greater than 80% but less than 100% of the
maximum Taxable Wage Base, the 2.7% must be reduced to 2.4%.
NOTE: If the Plan is not Top-Heavy or if the Top-Heavy
minimum contribution or benefit is provided under another Plan
[see Section 11(c)(ii)] covering the same Employees,
sub-paragraphs (i) and (ii) above may be disregarded and 5.7%,
4.3% or 5.4% may be substituted for 2.7%, 1.3% or 2.4% where
it appears in (iii) above.
(iv) Next, any remaining Employer contributions and
forfeitures will be allocated to all Participants (whether or
not they received an allocation under the preceding
paragraphs) in the ratio that each Participant's Compensation
bears to all Participants' Compensation.
[ ] (g) Additional Employer Contribution - Alternative Integrated
Allocation Formula [See paragraphs (h) and (i)]:
The Employer shall have the right to make an additional discre
tionary contribution. To the extent that such contributions are
sufficient, they shall be allocated as follows:
% of each eligible Participant's Compensation plus
% of Compensation in excess of the Taxable Wage Base defined at
Section 3(i) hereof. The percentage on excess compensation may not
exceed the lesser of (i) the amount first specified in this
paragraph or (ii) the greater of 5.7% or the percentage rate of tax
under Code Section 3111(a) as in effect on the first day of the
Plan Year attributable to the Old Age (OA) portion of the OASDI
provisions of the Social Security Act. If the Employer specifies a
Taxable Wage Base in Section 3(i) which is lower than the Taxable
Wage Base for Social Security purposes (SSTWB) in effect as of the
first day of the Plan Year, the percentage contributed with respect
to excess Compensation must be adjusted. If the Plan's Taxable
Wage Base is greater than the larger of $10,000 or 20% of the SSTWB
but not more than 80% of the SSTWB, the excess percentage is 4.3%.
If the Plan's Taxable Wage Base is greater than 80% of the SSTWB
but less than 100% of the SSTWB, the excess percentage is 5.4%.
NOTE: Only one plan maintained by the Employer may be
integrated with Social Security.
(h) Allocation of Excess Amounts (Annual Additions):
In the event that the allocation formula above results in an
Excess Amount, such excess shall be:
[ ] (i) placed in a suspense account accruing no
gains or losses for the benefit of the Participant.
[x] (ii) reallocated as additional Employer
contributions to all other Participants to the extent
that they do not have any Excess Amount.
(i) Minimum Employer Contribution Under Top-Heavy Plans:
For any Plan Year during which the Plan is Top-Heavy, the sum
of the contributions and forfeitures as allocated to eligible
Employees under paragraphs 7(d), 7(e), 7(f), 7(g) and 9 of this
Adoption Agreement shall not be less than the amount required under
paragraph 14.2 of the Basic Plan document #05. Top-Heavy minimums
will be allocated to:
[ ] (i) all eligible Participants.
[x] (ii) only eligible non-Key Employees who are
Participants.
(j) Return of Excess Contributions and/or Excess Aggregate
Contributions:
In the event that one or more Highly Compensated Employees is
subject to both the ADP and ACP tests and the sum of such tests
exceeds the Aggregate Limit, the limit will be satisfied by
reducing:
[ ] (i) the ADP of the affected Highly Compensated
Employees.
[ ] (ii) the ACP of the affected Highly Compensated
Employees.
[x] (iii)either the ADP and/or ACP of the affected
Highly Compensated Employees.
8. ALLOCATIONS TO TERMINATED EMPLOYEES
[ ] (a) The Employer will not allocate Employer related
contributions to Employees who terminate during a Plan Year,
unless required to satisfy the requirements of Code Section
401(a)(26) and 410(b). (These requirements are effective for
1989 and subsequent Plan Years.)
[x] (b) The Employer will allocate Employer matching and
other related contributions as indicated below to Employees
who terminate during the Plan Year as a result of:
Matching Other
[x] [x] (i) retirement.
[x] [x] (ii) Disability.
[x] [x] (iii)death.
[ ] [ ] (iv) other termination of
employment provided that the Participant has
completed a Year of Service as defined for
Allocation Accrual Purposes.
[ ] [ ] (v) other termination of
employment even though the Participant has not
completed a Year of Service.
9. ALLOCATION OF FORFEITURES
NOTE: Subsections (a), (b) and (c) below apply to
forfeitures of amounts other than Excess Aggregate
Contributions.
(a) Allocation Alternatives:
[ ] (i) Forfeitures shall be allocated to
Participants in the same manner as the Employer's
contribution.
If allocation to other Participants is selected, the
allocation shall be as follows:
[A] Amount attributable to Employer
discretionary contributions and Top-Heavy minimums
will be allocated to:
[ ] all eligible Partici
pants under the Plan.
[ ] only those Partici
pants eligible for an allocation of Employer
contributions in the current year.
[ ] only those Partici
pants eligible for an allocation of Matching
Contributions in the current year.
[B] Amounts attributable to Employer
Matching Contributions will be allocated to:
[ ] all eligible Participants.
[ ] only those Partici
pants eligible for allocations of Matching
Contributions in the current year.
[x] (ii) Forfeitures shall be applied to reduce the
Employer's contribution for such Plan Year.
[ ] (iii)Forfeitures shall be applied to offset
administrative expenses of the Plan. If forfeitures
exceed these expenses, (ii) above shall apply.
(b) Date for Reallocation:
NOTE: If no distribution has been made to a former
Participant, sub-section (i) below will apply to such
Participant even if the Employer elects (ii) or (iii) below as
its normal administrative policy.
[ ] (i) Forfeitures shall be reallocated
at the end of the Plan Year during which the former
Participant incurs his or her fifth consecutive one-
year Break In Service.
[ ] (ii) Forfeitures will be reallocated
immediately (as of the next Valuation Date).
[ ] (iii)Forfeitures shall be reallocated
at the end of the Plan Year during which the former
Employee incurs his or her (first, second,
third, or fourth) consecutive one-year Break In
Service.
[x] (iv) Forfeitures will be reallocated
immediately (as of the Plan Year end, December 31)
(c) Restoration of Forfeitures:
If amounts are forfeited prior to five consecutive one-year
Breaks in Service, the Funds for restoration of account balances
will be obtained from the following resources in the order
indicated (fill in the appropriate number):
[1] (i) Current year's forfeitures.
[2] (ii) Additional Employer contribution.
[3] (iii)Income or gain to the Plan.
(d) Forfeitures of Excess Aggregate Contributions shall be:
[x] (i) Applied to reduce Employer contributions.
[ ] (ii) Allocated, after all other forfeitures
under the Plan, to the Matching Contribution account of
each non-highly compensated Participant who made Elective
Deferrals or Voluntary Contributions in the ratio which
each such Participant's Compensation for the Plan Year
bears to the total Compensation of all Participants for
such Plan Year. Such forfeitures cannot be allocated to
the account of any Highly Compensated Employee.
Forfeitures of Excess Aggregate Contributions will be so
applied at the end of the Plan Year in which they occur.
10. CASH OPTION
[ ] (a) The Employer may permit a Participant to elect to
defer to the Plan, an amount not to exceed % of any
Employer paid cash bonus made for such Participant for any
year. A Participant must file an election to defer such
contribution at least fifteen (15) days prior to the end of
the Plan Year. If the Employee fails to make such an
election, the entire Employer paid cash bonus to which the
Participant would be entitled shall be paid as cash and not to
the Plan. Amounts deferred under this Section shall be
treated for all purposes as Elective Deferrals.
Notwithstanding the above, the election to defer must be made
before the bonus is made available to the Participant.
[x] (b) Not Applicable.
11. LIMITATIONS ON ALLOCATIONS
[ ] This is the only Plan the Employer maintains or ever
maintained, therefore, this Section is not applicable.
[x] The Employer does maintain or has maintained another Plan
(including a Welfare Benefit Fund or an individual medical account
(as defined in Code Section 415(l)(2)), under which amounts are
treated as Annual Additions) and has completed the proper Sections
below.
Complete (a), (b) and (c) only if the Employer maintains or ever
maintained another qualified plan, including a Welfare Benefit Fund or
an individual medical account [as defined in Code Section 415(l)(2)] in
which any Participant in this Plan is (or was) a participant or could
possibly become a participant.
(a) If the Participant is covered under another qualified Defined
Contribution Plan maintained by the Employer, other than a Master
or Prototype Plan:
[x] (i) the provisions of Article X of the Basic
Plan Document #05 will apply, as if the other plan were a
Master or Prototype Plan.
[ ] (ii) Attach provisions stating the method under
which the plans will limit total Annual Additions to the
Maximum Permissible Amount, and will properly reduce any
Excess Amounts, in a manner that precludes Employer
discretion.
(b) If a Participant is or ever has been a participant in a
Defined Benefit Plan maintained by the Employer:
Attach provisions which will satisfy the 1.0 limitation of
Code Section 415(e). Such language must preclude Employer dis
cretion. The Employer must also specify the interest and mortality
assumptions used in determining Present Value in the Defined
Benefit Plan.
(c) The minimum contribution or benefit required under Code
Section 416 relating to Top-Heavy Plans shall be satisfied by:
[x] (i) this Plan.
[ ] (ii) _______________________________________
(Name of other qualified plan of the Employer).
[ ] (iii)Attach provisions stating the method under
which the minimum contribution and benefit provisions of
Code Section 416 will be satisfied. If a Defined Benefit
Plan is or was maintained, an attachment must be provided
showing interest and mortality assumptions used in the
Top-Heavy Ratio.
12. VESTING
Employees shall have a fully vested and nonforfeitable interest in any
Employer contribution and the investment earnings thereon made in
accordance with paragraphs (select one or more options) [ ] 7(c),
[ ] 7(e), [ ] 7(f), [ ] 7(g) and [ ] 7(i) hereof. Contributions
under paragraph 7(b), 7(c)(vii) and 7(d) are always fully vested. If
one or more of the foregoing options are not selected, such Employer
contributions shall be subject to the vesting table selected by the
Employer.
Each Participant shall acquire a vested and nonforfeitable percentage in
his or her account balance attributable to Employer contributions and
the earnings thereon under the procedures selected below except with
respect to any Plan Year during which the Plan is Top-Heavy, in which
case the Two-twenty vesting schedule [option (b)(iv)] shall
automatically apply unless the Employer has already elected a faster
vesting schedule. If the Plan is switched to option (b)(iv) because of
its Top-Heavy status, that vesting schedule will remain in effect even
if the Plan later becomes non-Top-Heavy until the Employer executes an
amendment of this Adoption Agreement indicating otherwise.
(a) Computation Period:
The computation period for purposes of determining Years of
Service and Breaks in Service for purposes of computing a
Participant's nonforfeitable right to his or her account balance
derived from Employer contributions:
[ ] (i) shall not be applicable since Participants
are always fully vested,
[ ] (ii) shall commence on the date on which an
Employee first performs an Hour of Service for the
Employer and each subsequent 12-consecutive month period
shall commence on the anniversary thereof, or
[x] (iii)shall commence on the first day of the
Plan Year during which an Employee first performs an Hour
of Service for the Employer and each subsequent 12-
consecutive month period shall commence on the
anniversary thereof.
A Participant shall receive credit for a Year of Service if he or she
completes at least 1,000 Hours of Service [or if lesser, the number of
hours specified at 3(k)(iii) of this Adoption Agreement] at any time
during the 12-consecutive month computation period. Consequently, a
Year of Service may be earned prior to the end of the 12-consecutive
month computation period and the Participant need not be employed at the
end of the 12-consecutive month computation period to receive credit for
a Year of Service.
(b) Vesting Schedules:
NOTE: The vesting schedules below only apply to a
Participant who has at least one Hour of Service during or
after the 1989 Plan Year. If applicable, Participants who
separated from Service prior to the 1989 Plan Year will remain
under the vesting schedule as in effect in the Plan prior to
amendment for the Tax Reform Act of 1986.
(i) Full and immediate vesting.
Years of Service
1 2 3 4 5 6 7
(ii) % 100%
(iii) 30% 60% 100%
(iv) % 20% 40% 60% 80% 100%
(v) % % 20% 40% 60% 80% 100%
(vi) 10% 20% 30% 40% 60% 80% 100%
(vii) % % % % 100%
(viii) % % % % % % 100%
NOTE: The percentages selected for schedule (viii) may not
be less for any year than the percentages shown at schedule
(v).
[x] All contributions other than those which are fully
vested when contributed will vest under schedule iii above.
[ ] Contributions other than those which are fully
vested when contributed will vest as provided below:
Vesting
Option Selected Type Of Employer Contribution
7(c) Employer Match on Salary Savings
7(c) Employer Match on
Employee Voluntary
7(e) Employer Discretionary
7(f) and (g) Employer
Discretionary -Integrated
(c) Service Disregarded for Vesting:
[ ] (i) Service prior to the Effective Date of
this Plan or a predecessor plan shall be disregarded when
computing a Participant's vested and nonforfeitable
interest.
[x] (ii) Service prior to a Participant having
attained age 18 shall be disregarded when computing a
Participant's vested and nonforfeitable interest.
13. SERVICE WITH PREDECESSOR ORGANIZATION
For purposes of satisfying the Service requirements for eligibility,
Hours of Service shall include Service with the following predecessor
organization(s):
(These hours will also be used for vesting purposes.)
Original service date with Midwest Rubber, Inc. will be used to
determine vesting service under this plan.
14. ROLLOVER/TRANSFER CONTRIBUTIONS
(a) Rollover Contributions, as described at paragraph 4.3 of the
Basic Plan Document #05, [x] shall [ ] shall not be permitted. If
permitted, Employees [x] may [ ] may not make Rollover
Contributions prior to meeting the eligibility requirements for
participation in the Plan.
(b) Transfer Contributions, as described at paragraph 4.4 of the
Basic Plan Document #05 [x] shall [ ] shall not be permitted. If
permitted, Employees [x] may [ ] may not make Transfer
Contributions prior to meeting the eligibility requirements for
participation in the Plan.
NOTE: Even if available, the Employer may refuse to accept
such contributions if its Plan meets the safe-harbor rules of
paragraph 8.7 of the Basic Plan Document #05.
15. HARDSHIP WITHDRAWALS
Hardship withdrawals, as provided for in paragraph 6.9 of the Basic Plan
Document #05, [x] are [ ] are not permitted.
16. PARTICIPANT LOANS
Participant loans, as provided for in paragraph 13.5 of the Basic Plan
Document #05, [ ] are [x] are not permitted. If permitted, repayments
of principal and interest shall be repaid to [ ] the Participant's
segregated account or [ ] the general Fund.
17. INSURANCE POLICIES
The insurance provisions of paragraph 13.6 of the Basic Plan Document
#05 [ ] shall [x] shall not be applicable.
18. EMPLOYER INVESTMENT DIRECTION
With respect to Employer Matching Contributions that are not 100%
vested, the Employer investment direction provisions, as set forth in
paragraph 13.7 of the Basic Plan Document #05, [x] shall [ ] shall not
be applicable.
19. EMPLOYEE INVESTMENT DIRECTION
(a) The Employee investment direction provisions, as set forth in
paragraph 13.8 of the Basic Plan Document #05, [x] shall [ ] shall
not be applicable.
If applicable, Participants may direct their investments:
[x] (i) among funds offered by the Trustee.
[ ] (ii) among any allowable investments.
(b) Participants may direct the following kinds of contributions
and the earnings thereon (check all applicable):
[ ] (i) All contributions
[x] (ii) Elective Deferrals
[ ] (iii)Employee Voluntary Contributions (after-tax)
[ ] (iv) Employee Mandatory Contributions (after-tax)
[x] (v) Employer Qualified Matching Contributions
[x] (vi) Other Employer Matching Contributions, but
only to the extent the Participant is 100% vested in
those contributions.
[x] (vii)Employer Qualified Non-Elective Contributions
[x] (viii)Employer discretionary contributions
[x] (ix) Rollover Contributions
[x] (x) Transfer Contributions
[ ] (xi) All of above which are checked, but only
to the extent that the Participant is vested in those
contributions.
NOTE: To the extent that Employee investment direction was
previously allowed, it shall continue to be allowed on those
amounts and the earnings thereon.
20. EARLY PAYMENT OPTION
(a) A Participant who separates from Service prior to retirement,
death or Disability [x] may [ ] may not make application to the
Employer requesting an early payment of his or her Vested Account
Balance.
(b) A Participant who has not separated from Service [ ] may [x]
may not obtain a distribution of his or her vested Employer
contributions. Distribution can only be made if the Participant is
100% vested.
(c) A Participant who has attained the Plan's Normal Retirement
Age and who has not separated from Service [x] may [ ] may not
receive a distribution of his or her Vested Account Balance.
NOTE: If the Participant has had the right to withdraw his
or her account balance in the past, this right may not be
taken away. Notwithstanding the above, to the contrary,
required minimum distributions will be paid. For timing of
distributions, see Section 21 below.
21. DISTRIBUTION OPTIONS
(a) Timing of Distributions:
In cases of termination for other than death, Disability or
retirement, benefits shall be paid:
[ ] (i) As soon as administratively feasible
following the close of the Plan Year during which a
distribution is requested or is otherwise payable.
[x] (ii) As soon as administratively feasible,
following the date on which a distribution is requested
or is otherwise payable.
[ ] (iii)As soon as administratively feasible,
after the close of the Plan Year during which the
Participant incurs consecutive one-year Breaks in
Service.
[ ] (iv) Only after the Participant has achieved
the Plan's Normal Retirement Age, or Early Retirement
Age, if applicable.
In cases of death, Disability or retirement, benefits shall be
paid:
[ ] (v) As soon as administratively feasible
following the close of the Plan Year during which a
distribution is requested or is otherwise payable.
[x] (vi) As soon as administratively feasible,
following the date on which a distribution is requested
or is otherwise payable.
[ ] (vii)As soon as administratively feasible,
after the close of the Plan Year during which the
Participant incurs consecutive one-year Breaks in
Service.
[ ] (viii)Only after the Participant has achieved
the Plan's Normal Retirement Age, or Early Retirement
Age, if applicable.
(b) Optional Forms of Payment:
[x] (i) Lump Sum.
[ ] (ii) Installment Payments.
[ ] (iii)Life Annuity*.
[ ] (iv) Life Annuity Term Certain*.
Life Annuity with payments
guaranteed for years (not to exceed 20
years, specify all applicable).
[ ] (v) Joint and [ ] 50%, [ ] 66-2/3%, [ ] 75%
or [ ] 100% survivor annuity* (specify all applicable).
[ ] (vi) Other form(s) specified:
*Not available in Plan meeting provisions of paragraph 8.7 of
Basic Plan Document #05.
(c) Recalculation of Life Expectancy:
In determining required distributions under the Plan,
Participants and/or their Spouse (Surviving Spouse) [ ] shall
[ ] shall not have the right to have their life expectancy
recalculated annually.
If "shall",
[ ] only the Participant shall be recalculated.
[ ] both the Participant and Spouse shall be recalculated.
[ ] who is recalculated shall be determined by the Participant.
22. PROTECTED BENEFITS UNDER INTERNAL REVENUE CODE SECTION 411(d)(6)
[ ] The Employer is attaching to this Adoption Agreement a list of
Section 411(d)(6) protected benefits from a prior plan document
which this Plan amends.
[x] Not applicable.
23. SPONSOR CONTACT
Employers should direct questions concerning the language contained in
and qualification of the Prototype to:
(Job Title) Kim O'Connor, Trust Administrator
(Phone Number) 313-222-0055
In the event that the Sponsor amends, discontinues or abandons this
Prototype Plan, notification will be provided to the Employer's address
provided on the first page of this Agreement.
24. SIGNATURES:
Due to the significant tax ramifications, the Sponsor recommends that
before you execute this Adoption Agreement, you contact your attorney or
tax advisor, if any.
(a) EMPLOYER:
Name and address of Employer if different than specified in
Section 1 above.
This Agreement and the corresponding provisions of the Plan
and Trust/Custodial Account Basic Plan Document #05 were adopted by
the Employer the 5th day of May 1996.
Signed for the Employer by:Thomas D. Parker
Title: VP Human Resources
Signature: /s/Thomas D. Parker
The Employer understands that its failure to properly complete
the Adoption Agreement may result in disqualification of its Plan.
Employer's Reliance: The adopting Employer may not rely on an
opinion letter issued by the National Office of the Internal
Revenue Service as evidence that the Plan is qualified under Code
Section 401. In order to obtain reliance with respect to Plan
qualification, the Employer must apply to the appropriate Key
District Office for a determination letter.
This Adoption Agreement may only be used in conjunction with
Basic Plan Document #05.
[x] (b) TRUSTEE:
Name of Trustee:
Comerica Bank
The assets of the Fund shall be invested in accordance with
paragraph 13.3 of the Basic Plan Document #05 as a Trust. As such,
the Employer's Plan as contained herein was accepted by the Trustee
the 5th day of May 1996.
Signed for the Trustee by: Kim O'Connor
Title: Trust Administrator
Signature: /s/Kimberly O'Connor
[ ] (c) CUSTODIAN:
Name of Custodian:
The assets of the Fund shall be invested in accordance with
paragraph 13.4 of the Basic Plan Document #05 as a Custodial
Account. As such, the Employer's Plan as contained herein was
accepted by the Custodian the day of ,
19 .
Signed for the Custodian by:
Title:
Signature:
(d) SPONSOR:
The Employer's Agreement and the corresponding provisions of
the Plan and Trust/Custodial Account Basic Plan Document #05 were
accepted by the Sponsor the 5th day of May 1996.
Signed for the Sponsor by: Kim O'Connor
Title: Trust Administrator
Signature: /s/Kimberly O'Connor
[X] (e) ATTORNEY CONTACT:
Name: Deborah W. Thompson
Firm Name: Miller, Canfield,
Paddock and Stone
Address: 150 W. Jefferson,
Suite 2500
Detroit, MI 48226
Telephone No.: (313)
963-6420
Exhibit 4(c)
PROTOTYPE CASH OR DEFERRED PROFIT-SHARING PLAN
AND TRUST/CUSTODIAL ACCOUNT
Sponsored By
COMERICA BANK
BASIC PLAN DOCUMENT #05
January 1993
COPYRIGHT 1993 THE McKAY HOCHMAN COMPANY, INC.
THIS DOCUMENT IS COPYRIGHTED UNDER THE LAWS OF THE UNITED STATES. USE,
DUPLICATION OR REPRODUCTION, INCLUDING THE USE OF ELECTRONIC MEANS, IS
PROHIBITED BY LAW WITHOUT THE EXPRESS CONSENT OF THE AUTHOR.
TABLE OF CONTENTS
PARAGRAPH PAGE
ARTICLE I
DEFINITIONS
1.1 Actual Deferral Percentage
1.2 Adoption Agreement
1.3 Aggregate Limit
1.4 Annual Additions
1.5 Annuity Starting Date
1.6 Applicable Calendar Year
1.7 Applicable Life Expectancy
1.8 Average Contribution Percentage (ACP)
1.9 Average Deferral Percentage (ADP)
1.10 Break In Service
1.11 Code 3
1.12 Compensation
1.13 Contribution Percentage
1.14 Custodian
1.15 Defined Benefit Plan
1.16 Defined Benefit (Plan) Fraction
1.17 Defined Contribution Dollar Limitation
1.18 Defined Contribution Plan
1.19 Defined Contribution (Plan) Fraction
1.20 Designated Beneficiary
1.21 Disability
1.22 Distribution Calendar Year
1.23 Early Retirement Age
1.24 Earned Income
1.25 Effective Date
1.26 Election Period
1.27 Elective Deferral
1.28 Eligible Participant
1.29 Employee
1.30 Employer
1.31 Entry Date
1.32 Excess Aggregate Contributions
1.33 Excess Amount
1.34 Excess Contribution
1.35 Excess Elective Deferrals
1.36 Family Member
1.37 First Distribution Calendar Year
1.38 Fund 8
1.39 Hardship
1.40 Highest Average Compensation
1.41 Highly Compensated Employee
1.42 Hour Of Service
1.43 Key Employee
1.44 Leased Employee
1.45 Limitation Year
1.46 Master Or Prototype Plan
1.47 Matching Contribution
1.48 Maximum Permissible Amount
1.49 Net Profit
1.50 Normal Retirement Age
1.51 Owner-Employee
1.52 Paired Plans
1.53 Participant
1.54 Participant's Benefit
1.55 Permissive Aggregation Group
1.56 Plan 11
1.57 Plan Administrator
1.58 Plan Year
1.59 Present Value
1.60 Projected Annual Benefit
1.61 Qualified Deferred Compensation Plan
1.62 Qualified Domestic Relations Order
1.63 Qualified Early Retirement Age
1.64 Qualified Joint And Survivor Annuity
1.65 Qualified Matching Contribution
1.66 Qualified Non-Elective Contributions
1.67 Qualified Voluntary Contribution
1.68 Required Aggregation Group
1.69 Required Beginning Date
1.70 Rollover Contribution
1.71 Salary Savings Agreement
1.72 Self-Employed Individual
1.73 Service
1.74 Shareholder Employee
1.75 Simplified Employee Pension Plan
1.76 Sponsor
1.77 Spouse (Surviving Spouse)
1.78 Super Top-Heavy Plan
1.79 Taxable Wage Base
1.80 Top-Heavy Determination Date
1.81 Top-Heavy Plan
1.82 Top-Heavy Ratio
1.83 Top-Paid Group
1.84 Transfer Contribution
1.85 Trustee
1.86 Valuation Date
1.87 Vested Account Balance
1.88 Voluntary Contribution
1.89 Welfare Benefit Fund
1.90 Year Of Service
ARTICLE II
ELIGIBILITY REQUIREMENTS
2.1 Participation
2.2 Change In Classification Of Employment
2.3 Computation Period
2.4 Employment Rights
2.5 Service With Controlled Groups
2.6 Owner-Employees
2.7 Leased Employees
2.8 Thrift Plans
ARTICLE III
EMPLOYER CONTRIBUTIONS
3.1 Amount
3.2 Expenses And Fees
3.3 Responsibility For Contributions
3.4 Return Of Contributions
ARTICLE IV
EMPLOYEE CONTRIBUTIONS
4.1 Voluntary Contributions
4.2 Qualified Voluntary Contributions
4.3 Rollover Contribution
4.4 Transfer Contribution
4.5 Employer Approval Of Transfer Contributions
4.6 Elective Deferrals
4.7 Required Voluntary Contributions
4.8 Direct Rollover of Benefits
ARTICLE V
PARTICIPANT ACCOUNTS
5.1 Separate Accounts
5.2 Adjustments To Participant Accounts
5.3 Allocating Employer Contributions
5.4 Allocating Investment Earnings And Losses
5.5 Participant Statements
ARTICLE VI
RETIREMENT BENEFITS AND DISTRIBUTIONS
6.1 Normal Retirement Benefits
6.2 Early Retirement Benefits
6.3 Benefits On Termination Of Employment
6.4 Restrictions On Immediate Distributions
6.5 Normal Form Of Payment
6.6 Commencement Of Benefits
6.7 Claims Procedures
6.8 In-Service Withdrawals
6.9 Hardship Withdrawal
ARTICLE VII
DISTRIBUTION REQUIREMENTS
7.1 Joint And Survivor Annuity Requirements
7.2 Minimum Distribution Requirements
7.3 Limits On Distribution Periods
7.4 Required Distributions On Or After The Required
Beginning Date
7.5 Required Beginning Date
7.6 Transitional Rule
7.7 Designation Of Beneficiary For Death Benefit
7.8 Nonexistence Of Beneficiary
7.9 Distribution Beginning Before Death
7.10 Distribution Beginning After Death
7.11 Distribution Of Excess Elective Deferrals
7.12 Distributions of Excess Contributions
7.13 Distribution Of Excess Aggregate Contributions
7.14 Escheat
ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 Applicability Of Provisions
8.2 Payment Of Qualified Joint And Survivor Annuity
8.3 Payment Of Qualified Pre-Retirement Survivor Annuity
8.4 Qualified Election
8.5 Notice Requirements For Qualified Joint And Survivor
Annuity
8.6 Notice Requirements For Qualified Pre-Retirement
Survivor
Annuity
8.7 Special Safe-Harbor Exception For Certain Profit-Sharin
g
Plans
8.8 Transitional Joint And Survivor Annuity Rules
8.9 Automatic Joint And Survivor Annuity And Early Survivor
Annuity
8.10 Annuity Contracts
ARTICLE IX
VESTING
9.1 Employee Contributions
9.2 Employer Contributions
9.3 Computation Period
9.4 Requalification Prior To Five Consecutive One-Year
Breaks In Service
9.5 Requalification After Five Consecutive One-Year Breaks In
Service
9.6 Calculating Vested Interest
9.7 Forfeitures
9.8 Amendment Of Vesting Schedule
9.9 Service With Controlled Groups
ARTICLE X
LIMITATIONS ON ALLOCATIONS
AND ANTIDISCRIMINATION TESTING
10.1 Participation In This Plan Only
10.2 Disposition Of Excess Annual Additions
10.3 Participation In This Plan And Another Master and
Prototype Defined Contribution Plan, Welfare Benefit
Fund Or Individual Medical Account
Maintained By The Employer
10.4 Disposition Of Excess Annual Additions Under Two Plans
10.5 Participation In This Plan And Another Defined
Contribution Plan
Which Is Not A Master Or Prototype Plan
10.6 Participation In This Plan And A Defined Benefit Plan
10.7 Average Deferral Percentage (ADP) Test
10.8 Special Rules Relating To Application Of ADP Test
10.9 Recharacterization
10.10 Average Contribution Percentage (ACP) Test
10.11 Special Rules Relating To Application Of ACP Test
ARTICLE XI
ADMINISTRATION
11.1 Plan Administrator
11.2 Trustee/Custodian
11.3 Administrative Fees And Expenses
11.4 Division Of Duties And Indemnification
ARTICLE XII
TRUST FUND/CUSTODIAL ACCOUNT
12.1 The Fund
12.2 Control Of Plan Assets
12.3 Exclusive Benefit Rules
12.4 Assignment And Alienation Of Benefits
12.5 Determination Of Qualified Domestic Relations Order (QD
RO)
ARTICLE XIII
INVESTMENTS
13.1 Fiduciary Standards
13.2 Funding Arrangement
13.3 Investment Alternatives Of The Trustee
13.4 Duties Of The Custodian
13.5 Participant Loans
13.6 Insurance Policies
13.7 Employer Investment Direction
13.8 Employee Investment Direction
ARTICLE XIV
TOP-HEAVY PROVISIONS
14.1 Applicability Of Rules
14.2 Minimum Contribution
14.3 Minimum Vesting
14.4 Limitations On Allocations
ARTICLE XV
AMENDMENT AND TERMINATION
15.1 Amendment By Sponsor
15.2 Amendment By Employer
15.3 Termination
15.4 Qualification Of Employer's Plan
15.5 Mergers And Consolidations
15.6 Resignation And Removal
15.7 Qualification Of Prototype
ARTICLE XVI
GOVERNING LAW
PROTOTYPE CASH OR DEFERRED PROFIT-SHARING PLAN AND TRUST/CUSTODIAL
ACCOUNT
Sponsored By
COMERICA BANK
The Sponsor hereby establishes the following Prototype Retirement Plan and
Trust/Custodial Account for use by those of its customers who qualify and
wish to adopt a qualified retirement program. Any Plan and Trust/Custodial
Account established hereunder shall be administered for the exclusive
benefit of Participants and their beneficiaries under the following terms
and conditions:
ARTICLE I
DEFINITIONS
1.1 Actual Deferral Percentage The ratio (expressed as a percentage and
calculated separately for each Participant) of:
(a) the amount of Employer contributions [as
defined at (c) and (d)] actually paid over to the
Fund on behalf of such Participant for the Plan Year
to
(b) the Participant's Compensation for such Plan
Year. Compensation will only include amounts for
the period during which the Employee was eligible to
participate.
Employer contributions on behalf of any Participant shall include:
(c) any Elective Deferrals made pursuant to the
Participant's deferral election, including Excess
Elective Deferrals, but excluding Elective Deferrals
that are either taken into account in the
Contribution Percentage test (provided the ADP test
is satisfied both with and without exclusion of
these Elective Deferrals) or are returned as excess
Annual Additions; and
(d) at the election of the Employer, Qualified
Non-Elective Contributions and Qualified Matching
Contributions.
For purposes of computing Actual Deferral Percentages, an Employee who
would be a Participant but for the failure to make Elective Deferrals shall
be treated as a Participant on whose behalf no Elective Deferrals are made.
1.2 Adoption Agreement The document attached to this Plan by which an
Employer elects to establish a qualified retirement plan and
trust/custodial account under the terms of this Prototype Plan and
Trust/Custodial Account.
1.3 Aggregate Limit The sum of:
(a) 125 percent of the greater of the ADP of the
non-Highly Compensated Employees for the Plan Year
or the ACP of non-Highly Compensated Employees under
the Plan subject to Code Section 401(m) for the Plan
Year beginning with or within the Plan Year of the
cash or deferred arrangement as described in Code
Section 401(k) or Code Section 402(h)(1)(B), and
(b) the lesser of 200% or two percent plus the
lesser of such ADP or ACP.
Alternatively, the aggregate limit can be determined by substituting "the
lesser of 200% or two percent plus" for "125% of" in (a) above, and
substituting "125% of" for "the lesser of 200% or two percent plus" in (b)
above.
1.4 Annual Additions The sum of the following amounts credited to a
Participant's account for the Limitation Year:
(a) Employer Contributions,
(b) Employee Contributions (under Article IV),
(c) forfeitures,
(d) amounts allocated after March 31, 1984 to an
individual medical account, as defined in Code Section
415(l)(2), which is part of a pension or annuity plan
maintained by the Employer (these amounts are treated as
Annual Additions to a Defined Contribution Plan though they
arise under a Defined Benefit Plan), and
(e) amounts derived from contributions paid or accrued
after 1985, in taxable years ending after 1985, which are
either attributable to post-retirement medical benefits
allocated to the account of a Key Employee, or to a Welfare
Benefit Fund maintained by the Employer, are also treated as
Annual Additions to a Defined Contribution Plan. For
purposes of this paragraph, an Employee is a Key Employee if
he or she meets the requirements of paragraph 1.43 at any
time during the Plan Year or any preceding Plan Year.
Welfare Benefit Fund is defined at paragraph 1.89.
Excess amounts applied in a Limitation Year to reduce Employer
contributions will be considered Annual Additions for such Limitation Year,
pursuant to the provisions of Article X.
1.5 Annuity Starting Date The first day of the first period for which an
amount is paid as an annuity or in any other form.
1.6 Applicable Calendar Year The First Distribution Calendar Year, and in
the event of the recalculation of life expectancy, such succeeding calendar
year. If payments commence in accordance with paragraph 7.4(e) before the
Required Beginning Date, the Applicable Calendar Year is the year such
payments commence. If distribution is in the form of an immediate annuity
purchased after the Participant's death with the Participant's remaining
interest, the Applicable Calendar Year is the year of purchase.
1.7 Applicable Life Expectancy Used in determining the required minimum
distribution. The life expectancy (or joint and last survivor expectancy)
calculated using the attained age of the Participant (or Designated
Beneficiary) as of the Participant's (or Designated Beneficiary's) birthday
in the Applicable Calendar Year reduced by one for each calendar year which
has elapsed since the date life expectancy was first calculated. If life
expectancy is being recalculated, the Applicable Life Expectancy shall be
the life expectancy as so recalculated. The life expectancy of a
non-Spouse Beneficiary may not be recalculated.
1.8 Average Contribution Percentage (ACP) The average of the Contribution
Percentages for each Highly Compensated Employee and for each non-Highly
Compensated Employee.
1.9 Average Deferral Percentage (ADP) The average of the Actual Deferral
Percentages for each Highly Compensated Employee and for each non-Highly
Compensated Employee.
1.10 Break In Service A 12-consecutive month period during which an
Employee fails to complete more than 500 Hours of Service.
1.11 Code The Internal Revenue Code of 1986, including any amendments.
1.12 Compensation The Employer may select one of the following three safe-
harbor definitions of Compensation in the Adoption Agreement. Compensation
shall only include amounts earned while a Participant if Plan Year is
chosen as the applicable computation period.
(a) Code Section 3401(a) Wages. Compensation is defined as
wages within the meaning of Code Section 3401(a) for the purposes
of Federal income tax withholding at the source but determined
without regard to any rules that limit the remuneration included
in wages based on the nature or location of the employment or the
services performed [such as the exception for agricultural labor
in Code Section 3401(a)(2)].
(b) Code Section 6041 and 6051 Wages. Compensation is defined
as wages as defined in Code Section 3401(a) and all other
payments of compensation to an Employee by the Employer (in the
course of the Employer's trade or business) for which the
Employer is required to furnish the Employee a written statement
under Code Section 6041(d) and 6051(a)(3). Compensation must be
determined without regard to any rules under Code Section 3401(a)
that limit the remuneration included in wages based on the nature
or location of the employment or the services performed [such as
the exception for agricultural labor in Code Section 3401(a)(2)].
(c) Code Section 415 Compensation. For purposes of applying the
limitations of Article X and Top-Heavy Minimums, the definition
of Compensation shall be Code Section 415 Compensation as
follows: a Participant's Earned Income, wages, salaries, and
fees for professional services and other amounts received
(without regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of employment
with the Employer maintaining the Plan to the extent that the
amounts are includible in gross income [including, but not
limited to, commissions paid salesmen, compensation for services
on the basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits and reimbursements or
other expense allowances under a nonaccountable plan (as
described in Regulation 1.62-2(c)],), and excluding the
following:
1. 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 or any distributions from a plan of deferred
compensation,
2. Amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or
property) held by the Employee either becomes freely
transferable or is no longer subject to a substantial risk
of forfeiture,
3. Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
4. other amounts which received special tax benefits,
or contributions made by the Employer (whether or not under
a salary reduction agreement) towards the purchase of an
annuity contract described in Code Section 403(b) (whether
or not the contributions are actually excludable from the
gross income of the Employee).
For purposes of applying the limitations of Article X, Compensation for a
Limitation Year is the Compensation actually paid or made available during
such Limitation Year. Notwithstanding the preceding sentence, Compensation
for a Participant in a Defined Contribution Plan who is permanently and
totally disabled [as defined in Code Section 22(e)(3)] is the Compensation
such Participant would have received for the Limitation Year if the
Participant had been paid at the rate of Compensation paid immediately
before becoming permanently and totally disabled. Such imputed
Compensation for the disabled Participant may be taken into account only if
the Participant is not a Highly Compensated Employee [as defined in Code
Section 414(q)] and contributions made on behalf of such Participant are
nonforfeitable when made.
If the Employer fails to pick the applicable period in the Adoption
Agreement, the Plan Year shall be used. Unless otherwise specified by the
Employer in the Adoption Agreement, Compensation shall be determined as
provided in 1.12(c).
Beginning with 1989 Plan Years, the annual Compensation of each Participant
which may be taken into account for determining all benefits provided under
the Plan (including benefits under Article XIV) for any year shall not
exceed $200,000, as adjusted under Code Section 415(d). In determining the
Compensation of a Participant for purposes of this limitation, the rules of
Code Section 414(q)(6) shall apply, except in applying such rules, the term
"family" shall include only the Spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19 before the end
of the Plan Year. If, as a result of the application of such rules, the
adjusted $200,000 limitation is exceeded, then (except for purposes of
determining the portion of Compensation up to the integration level if this
Plan provides for permitted disparity), the limitation shall be prorated
among the affected individuals in proportion to each such individual's
Compensation as determined under this section prior to the application of
this limitation.
If a Plan has a Plan Year that contains fewer than 12 Calendar Months, then
the annual Compensation limit for that period is an amount equal to the
$200,000 as adjusted for the calendar year in which the Compensation period
begins, multiplied by a fraction the numerator of which is the number of
full months in the Short Plan Year and the denominator of which is 12. If
Compensation for any prior plan year is taken into account in determining
an employee's contributions or benefits for the current year, the
Compensation for such prior year is subject to the applicable annual
Compensation limit in effect for that prior year. For this purpose, for
years beginning before January 1, 1990, the applicable annual Compensation
limit is $200,000.
Compensation shall not include deferred Compensation other than
contributions through a salary reduction agreement to a cash or deferred
plan under Code Section 401(k), a Simplified Employee Pension Plan under
Code Section 402(h)(1)(B), a cafeteria plan under Code Section 125 or a
tax-deferred annuity under Code Section 403(b). Unless elected otherwise
by the Employer in the Adoption Agreement, these deferred amounts will be
considered as Compensation for Plan purposes. These deferred amounts are
not counted as Compensation for purposes of Articles X and XIV. When
applicable to a Self-Employed Individual, Compensation shall mean Earned
Income.
1.13 Contribution Percentage The ratio (expressed as a percentage and
calculated separately for each Participant) of:
(a) the Participant's Contribution Percentage
Amounts [as defined at (c)-(f)] for the Plan Year,
to
(b) the Participant's Compensation for the Plan
Year. Compensation will only include amounts for
the period during which the Employee was eligible to
participate.
Contribution Percentage Amounts on behalf of any Participant shall include:
(c) the amount of Employee Voluntary Contributions,
Matching Contributions, and Qualified Matching
Contributions (to the extent not taken into account
for purposes of the ADP test) made under the Plan on
behalf of the Participant for the Plan Year,
(d) forfeitures of Excess Aggregate Contributions
or Matching Contributions allocated to the
Participant's account which shall be taken into
account in the year in which such forfeiture is
allocated,
(e) at the election of the Employer, Qualified
Non-Elective Contributions, and
(f) the Employer also may elect to use Elective
Deferrals in the Contribution Percentage amounts so
long as the ADP test is met before the Elective
Deferrals are used in the ACP test and continues to
be met following the exclusion of those Elective
Deferrals that are used to meet the ACP test.
Contribution Percentage amounts shall not include Matching Contributions,
whether or not Qualified, that are forfeited either to correct Excess
Aggregate Contributions, or because the contributions to which they relate
are Excess Deferrals, Excess Contributions, or Excess Aggregate
Contributions.
1.14 Custodian The Sponsor of this Prototype Plan, or, if applicable, an
affiliate or successor, shall serve as Custodian if a Custodian is
appointed in the Adoption Agreement.
1.15 Defined Benefit Plan A Plan under which a Participant's Benefit is
determined by a formula contained in the Plan and no individual accounts
are maintained for Participants.
1.16 Defined Benefit (Plan) Fraction A fraction, the numerator of which is
the sum of the Participant's Projected Annual Benefits under all the
Defined Benefit Plans (whether or not terminated) maintained by the
Employer, and the denominator of which is the lesser of 125 percent of the
dollar limitation determined for the Limitation Year under Code Sections
415(b) and (d) or 140 percent of the Highest Average Compensation,
including any adjustments under Code Section 415(b).
Notwithstanding the above, if the Participant was a Participant as of the
first day of the first Limitation Year beginning after 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 1987, disregarding any changes in the terms and conditions
of the plan after May 5, 1986. The preceding sentence applies only if the
Defined Benefit Plans individually and in the aggregate satisfied the
requirements of Section 415 for all Limitation Years beginning before 1987.
1.17 Defined Contribution Dollar Limitation Thirty thousand dollars
($30,000) or if greater, one-fourth of the defined benefit dollar
limitation set forth in Code Section 415(b)(1) as in effect for the
Limitation Year.
1.18 Defined Contribution Plan A Plan under which individual accounts are
maintained for each Participant to which all contributions, forfeitures,
investment income and gains or losses, and expenses are credited or
deducted. A Participant's Benefit under such Plan is based solely on the
fair market value of his or her account balance.
1.19 Defined Contribution (Plan) Fraction A fraction, the numerator of
which is the sum of the Annual Additions to the Participant's account under
all the Defined Contribution Plans (whether or not terminated) maintained
by the Employer for the current and all prior Limitation Years (including
the Annual Additions attributable to the Participant's nondeductible
Employee contributions to all Defined Benefit Plans, whether or not
terminated, maintained by the Employer, and the Annual Additions
attributable to all Welfare Benefit Funds, as defined in paragraph 1.89 and
individual medical accounts, as defined in Code Section 415(l)(2),
maintained by the Employer), and the denominator of which is the sum of the
maximum aggregate amounts for the current and all prior Limitation Years of
Service with the Employer (regardless of whether a Defined Contribution
Plan was maintained by the Employer). The maximum aggregate amount in the
Limitation Year is the lesser of 125 percent of the dollar limitation
determined under Code Sections 415(b) and (d) in effect under Code Section
415(c)(1)(A) or 35 percent of the Participant's Compensation for such year.
If the Employee was a Participant as of the end of the first day of the
first Limitation Year beginning after 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 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 1987, shall not be re-computed to treat all Employee Contributions
as Annual Additions.
1.20 Designated Beneficiary The individual who is designated as the
beneficiary under the Plan in accordance with Code Section 401(a)(9) and
the regulations thereunder.
1.21 Disability An illness or injury of a potentially permanent nature,
expected to last for a continuous period of not less than 12 months,
certified by a physician selected by or satisfactory to the Employer, which
prevents the Employee from engaging in any occupation for wage or profit
for which the Employee is reasonably fitted by training, education or
experience.
1.22 Distribution Calendar Year A calendar year for which a minimum
distribution is required.
1.23 Early Retirement Age The age set by the Employer in the Adoption
Agreement (but not less than 55), which is the earliest age at which a
Participant may retire and receive his or her benefits under the Plan.
1.24 Earned Income Net earnings from self-employment in the trade or
business with respect to which the Plan is established, determined without
regard to items not included in gross income and the deductions allocable
to such items, provided that personal services of the individual are a
material income-producing factor. Earned income shall be reduced by
contributions made by an Employer to a qualified plan to the extent
deductible under Code Section 404. For tax years beginning after 1989, net
earnings shall be determined taking into account the deduction for one-half
of self-employment taxes allowed to the Employer under Code Section 164(f)
to the extent deductible.
1.25 Effective Date The date on which the Employer's retirement plan or
amendment to such plan becomes effective.
1.26 Election Period The period which begins on the first day of the Plan
Year in which the Participant attains age 35 and ends on the date of the
Participant's death. If a Participant separates from Service prior to the
first day of the Plan Year in which age 35 is attained, the Election Period
shall begin on the date of separation, with respect to the account balance
as of the date of separation.
1.27 Elective Deferral Employer contributions made to the Plan at the
election of the Participant, in lieu of cash Compensation. Elective
Deferrals shall also include contributions made pursuant to a Salary
Savings Agreement or other deferral mechanism, such as a cash option
contribution. With respect to any taxable year, a Participant's Elective
Deferral is the sum of all Employer contributions made on behalf of such
Participant pursuant to an election to defer under any qualified cash or
deferred arrangement as described in Code Section 401(k), any simplified
employee pension cash or deferred arrangement as described in Code Section
402(h)(1)(B), any eligible deferred compensation plan under Code Section
457, any plan as described under Code Section 501(c)(18), and any Employer
contributions made on the behalf of a Participant for the purchase of an
annuity contract under Code Section 403(b) pursuant to a Salary Savings
Agreement. Elective Deferrals shall not include any deferrals properly
distributed as Excess Annual Additions.
1.28 Eligible Participant Any Employee who is eligible to make a Voluntary
Contribution, or an Elective Deferral (if the Employer takes such
contributions into account in the calculation of the Contribution
Percentage), or to receive a Matching Contribution (including forfeitures)
or a Qualified Matching Contribution. If a Voluntary Contribution or
Elective Deferral is required as a condition of participation in the Plan,
any Employee who would be a Participant in the Plan if such Employee made
such a contribution shall be treated as an Eligible Participant even though
no Voluntary Contributions or Elective Deferrals are made.
1.29 Employee Any person employed by the Employer (including Self-Employed
Individuals and partners), all Employees of a member of an affiliated
service group [as defined in Code Section 414(m)], Employees of a
controlled group of corporations [as defined in Code Section 414(b)], all
Employees of any incorporated or unincorporated trade or business which is
under common control [as defined in Code Section 414(c)], leased Employees
[as defined in Code Section 414(n)] and any Employee required to be
aggregated by Code Section 414(o). All such Employees shall be treated as
employed by a single Employer.
1.30 Employer The Self-Employed Individual, partnership, corporation or
other organization which adopts this Plan including any firm that succeeds
the Employer and adopts this Plan. For purposes of Article X, Limitations
on Allocations, Employer shall mean the Employer that adopts this Plan, and
all members of a controlled group of corporations [as defined in Code
Section 414(b) as modified by Code Section 415(h)], all commonly controlled
trades or businesses [as defined in Code Section 414(c) as modified by Code
Section 415(h)] or affiliated service groups [as defined in Code Section
414(m)] of which the adopting Employer is a part, and any other entity
required to be aggregated with the Employer pursuant to regulations under
Code Section 414(o).
1.31 Entry Date The date on which an Employee commences participation in
the Plan as determined by the Employer in the Adoption Agreement.
1.32 Excess Aggregate Contributions The excess, with respect to any Plan
Year, of:
(a) The aggregate Contribution Percentage Amounts
taken into account in computing the numerator of the
Contribution Percentage actually made on behalf of Highly
Compensated Employees for such Plan Year, over
(b) the maximum Contribution Percentage Amounts
permitted by the ACP test (determined by reducing
contributions made on behalf of Highly Compensated Employees
in order of their Contribution Percentages beginning with
the highest of such percentages).
Such determination shall be made after first determining Excess Elective
Deferrals pursuant to paragraph 1.35 and then determining Excess
Contributions pursuant to paragraph 1.34.
1.33 Excess Amount The excess of the Participant's Annual Additions for
the Limitation Year over the Maximum Permissible Amount.
1.34 Excess Contribution 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).
1.35 Excess Elective Deferrals Those Elective Deferrals that are
includible in a Participant's gross income under Code Section 402(g) to the
extent such Participant's Elective Deferrals for a taxable year exceed the
dollar limitation under such Code Section. Excess Elective Deferrals shall
be treated as Annual Additions under the Plan, unless such amounts are
distributed no later than the first April 15th following the close of the
Participant's taxable year.
1.36 Family Member The Employee's Spouse, any lineal descendants and
ascendants and the Spouse of such lineal descendants and ascendants.
1.37 First Distribution Calendar Year For distributions beginning before
the Participant's death, the First Distribution Calendar Year is the
calendar year immediately preceding the calendar year which contains the
Participant's Required Beginning Date. For distributions beginning after
the Participant's death, the First Distribution Calendar Year is the
calendar year in which distributions are required to begin pursuant to
paragraph 7.10.
1.38 Fund All contributions received by the Trustee/Custodian under this
Plan and Trust/Custodial Account, investments thereof and earnings and
appreciation thereon.
1.39 Hardship An immediate and heavy financial need of the Employee where
such Employee lacks other available resources.
1.40 Highest Average Compensation The average Compensation for the three
consecutive Years of Service with the Employer that produces the highest
average. A Year of Service with the Employer is the 12-consecutive month
period defined in the Adoption Agreement.
1.41 Highly Compensated Employee Any Employee who performs Service for the
Employer during the determination year and who, during the immediate prior
year:
(a) received Compensation from the Employer in
excess of $75,000 [as adjusted pursuant to Code
Section 415(d)]; or
(b) received Compensation from the Employer in
excess of $50,000 [as adjusted pursuant to Code
Section 415(d)] and was a member of the Top-Paid
Group for such year; or
(c) was an officer of the Employer and received
Compensation during such year that is greater than
50 percent of the dollar limitation in effect under
Code Section 415(b)(1)(A).
Notwithstanding (a), (b) and (c), an Employee who was not Highly
Compensated during the preceding Plan Year shall not be treated as a Highly
Compensated Employee with respect to the current Plan Year unless such
Employee is a member of the 100 Employees paid the greatest Compensation
during the year for which such determination is being made.
(d) Employees who are five percent owners at any
time during the immediate prior year or
determination year.
Highly Compensated Employee includes Highly Compensated active Employees
and Highly Compensated former Employees.
1.42 Hour Of Service
(a) Each hour for which an Employee is paid, or
entitled to payment, for the performance of duties
for the Employer. These hours shall be credited to
the Employee for the computation period in which the
duties are performed; and
(b) Each hour for which an Employee is paid, or
entitled to payment, by the Employer on account of a
period of time during which no duties are performed
(irrespective of whether the employment relationship
has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty,
military duty or leave of absence. No more than 501
Hours of Service shall be credited under this
paragraph for any single continuous period (whether
or not such period occurs in a single computation
period). Hours under this paragraph shall be
calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor Regulations
which are incorporated herein by this reference; and
(c) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to
by the Employer. The same Hours of Service shall not
be credited both under paragraph (a) or paragraph
(b), as the case may be, and under this paragraph
(c). These hours shall be credited to the Employee
for the computation period or periods to which the
award or agreement pertains rather than the
computation period in which the award, agreement or
payment is made.
(d) Hours of Service shall be credited for
employment with the Employer and with other members
of an affiliated service group [as defined in Code
Section 414(m)], a controlled group of corporations
[as defined in Code Section 414(b)], or a group of
trades or businesses under common control [as defined
in Code Section 414(c)] of which the adopting
Employer is a member, and any other entity required
to be aggregated with the Employer pursuant to Code
Section 414(o) and the regulations thereunder. Hours
of Service shall also be credited for any individual
considered an Employee for purposes of this Plan
under Code Section 414(n) or Code Section 414(o) and
the regulations thereunder.
(e) Solely for purposes of determining whether a
Break in Service, as defined in paragraph 1.10, for
participation and vesting purposes has occurred in a
computation period, an individual who is absent from
work for maternity or paternity reasons shall receive
credit for the Hours of Service which would otherwise
have been credited to such individual but for such
absence, or in any case in which such hours cannot be
determined, eight Hours of Service per day of such
absence. For purposes of this paragraph, an absence
from work for maternity or paternity reasons means an
absence by reason of the pregnancy of the individual,
by reason of a birth of a child of the individual, by
reason of the placement of a child with the
individual in connection with the adoption of such
child by such individual, or for purposes of caring
for such child for a period beginning immediately
following such birth or placement. The Hours of
Service credited under this paragraph shall be
credited in the computation period in which the
absence begins if the crediting is necessary to
prevent a Break in Service in that period, or in all
other cases, in the following computation period. No
more than 501 hours will be credited under this
paragraph.
(f) Hours of Service shall be determined on the
basis of the method selected in the Adoption
Agreement.
1.43 Key Employee Any Employee or former Employee (and the beneficiaries
of such employee) who at any time during the determination period was an
officer of the Employer if such individual's annual Compensation exceeds
50% of the dollar limitation under Code Section 415(b)(1)(A) (the defined
benefit maximum annual benefit), an owner (or considered an owner under
Code Section 318) of one of the ten largest interests in the Employer if
such individual's Compensation exceeds 100% of the dollar limitation under
Code Section 415(c)(1)(A), a 5% owner of the Employer, or a 1% owner of the
Employer who has an annual Compensation of more than $150,000. For
purposes of determining who is a Key Employee, annual Compensation shall
mean Compensation as defined for Article X, but including amounts deferred
through a salary reduction agreement to a cash or deferred plan under Code
Section 401(k), a Simplified Employee Pension Plan under Code Section
408(k), a cafeteria plan under Code Section 125 or a tax-deferred annuity
under Code Section 403(b). The determination period is the Plan Year
containing the Determination Date and the four preceding Plan Years. The
determination of who is a Key Employee will be made in accordance with Code
Section 416(i)(1) and the regulations thereunder.
1.44 Leased Employee Any person (other than an Employee of the recipient)
who, pursuant to an agreement between the recipient and any other person
("leasing organization"), has performed services for the recipient [or for
the recipient and related persons determined in accordance with Code
Section 414(n)(6)] on a substantially full-time basis for a period of at
least one year, and such services are of a type historically performed by
Employees in the business field of the recipient Employer.
1.45 Limitation Year The calendar year or such other 12-consecutive month
period designated by the Employer in the Adoption Agreement for purposes of
determining the maximum Annual Addition to a Participant's account. All
qualified plans maintained by the Employer must use the same Limitation
Year. If the Limitation Year is amended to a different 12-consecutive
month period, the new Limitation Year must begin on a date within the
Limitation Year in which the amendment is made.
1.46 Master Or Prototype Plan A plan, the form of which is the subject of
a favorable opinion letter from the Internal Revenue Service.
1.47 Matching Contribution An Employer contribution made to this or any
other Defined Contribution Plan on behalf of a Participant on account of an
Employee Voluntary Contribution made by such Participant, or on account of
a Participant's Elective Deferral, under a Plan maintained by the Employer.
1.48 Maximum Permissible Amount The maximum Annual Addition that may be
contributed or allocated to a Participant's account under the Plan for any
Limitation Year shall not exceed the lesser of:
(a) the Defined Contribution Dollar Limitation, or
(b) 25% of the Participant's Compensation for the
Limitation Year.
The Compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits [within the meaning of Code Section
401(h) or Code Section 419A(f)(2)] which is otherwise treated as an Annual
Addition under Code Section 415(l)(1) or 419(d)(2). If a short Limitation
Year is created because of an amendment changing the Limitation Year to a
different 12-consecutive month period, the Maximum Permissible Amount will
not exceed the Defined Contribution Dollar Limitation multiplied by the
following fraction: Number of months in the short Limitation Year divided
by 12.
1.49 Net Profit The current and accumulated operating earnings of the
Employer before Federal and State income taxes, excluding nonrecurring or
unusual items of income, and before contributions to this and any other
qualified plan of the Employer. Alternatively, the Employer may fix
another definition in the Adoption Agreement.
1.50 Normal Retirement Age The age, set by the Employer in the Adoption
Agreement, at which a Participant may retire and receive his or her
benefits under the Plan.
1.51 Owner-Employee A sole proprietor, or a partner owning more than 10%
of either the capital or profits interest of the partnership.
1.52 Paired Plans Two or more Plans maintained by the Sponsor designed so
that a single or any combination of Plans adopted by an Employer will meet
the antidiscrimination rules, the contribution and benefit limitations, and
the Top-Heavy provisions of the Code.
1.53 Participant Any Employee who has met the eligibility requirements and
is participating in the Plan.
1.54 Participant's Benefit The account balance as of the last Valuation
Date in the calendar year immediately preceding the Distribution Calendar
Year (valuation calendar year) increased by the amount of any contributions
or forfeitures allocated to the account balance as of the dates in the
valuation calendar year after the Valuation Date and decreased by
distributions made in the valuation calendar year after the Valuation Date.
A special exception exists for the second distribution Calendar Year. For
purposes of this paragraph, if any portion of the minimum distribution for
the First Distribution Calendar Year is made in the second Distribution
Calendar Year on or before the Required Beginning Date, the amount of the
minimum distribution made in the second distribution calendar year shall be
treated as if it had been made in the immediately preceding Distribution
Calendar Year.
1.55 Permissive Aggregation Group Used for Top-Heavy testing purposes, it
is the Required Aggregation Group of plans plus any other plan or plans of
the Employer which, when considered as a group with the Required
Aggregation Group, would continue to satisfy the requirements of Code
Sections 401(a)(4) and 410.
1.56 Plan The Employer's retirement plan as embodied herein and in the
Adoption Agreement.
1.57 Plan Administrator The Employer.
1.58 Plan Year The 12-consecutive month period designated by the Employer
in the Adoption Agreement.
1.59 Present Value Used for Top-Heavy test and determination
purposes, when determining the Present Value of accrued benefits, with
respect to any Defined Benefit Plan maintained by the Employer, interest
and mortality rates shall be determined in accordance with the provisions
of the respective plan. If applicable, interest and mortality assumptions
will be specified in Section 11 of the Adoption Agreement.
1.60 Projected Annual Benefit Used to test the maximum benefit which may
be obtained from a combination of retirement plans, it is the annual
retirement benefit (adjusted to an actuarial equivalent straight life
annuity if such benefit is expressed in a form other than a straight life
annuity or Qualified Joint and Survivor Annuity) to which the Participant
would be entitled under the terms of a Defined Benefit Plan or plans,
assuming:
(a) the Participant will continue employment until
Normal Retirement Age under the plan (or current
age, if later), and
(b) the Participant's Compensation for the current
Limitation Year and all other relevant factors used
to determine benefits under the Plan will remain
constant for all future Limitation Years.
1.61 Qualified Deferred Compensation Plan Any pension, profit-sharing,
stock bonus, or other plan which meets the requirements of Code Section 401
and includes a trust exempt from tax under Code Section 501(a) or any
annuity plan described in Code Section 403(a).
An Eligible Retirement Plan is an individual retirement account (IRA) as
described in Code Section 408(a), an individual retirement annuity (IRA) as
described in Code Section 408(b), an annuity plan as described in Code
Section 403(a), or a qualified trust as described in Code Section 401(a),
which accepts Eligible Rollover Distributions. However, in the case of an
Eligible Rollover Distribution to a Surviving Spouse, an Eligible
Retirement Plan is an individual retirement account or individual
retirement annuity.
1.62 Qualified Domestic Relations Order A QDRO is a signed domestic
relations order issued by a state court which creates, recognizes or
assigns to an alternate payee(s) the right to receive all or part of a
Participant's Plan Benefit and which meets the requirements of Code Section
414(p). An alternate payee is a Spouse, former Spouse, child, or other
dependent who is treated as a beneficiary under the Plan as a result of the
QDRO.
1.63 Qualified Early Retirement Age For purposes of paragraph 8.9,
Qualified Early Retirement Age is the latest of:
(a) the earliest date, under the Plan, on which the
Participant may elect to receive retirement
benefits, or
(b) the first day of the 120th month beginning
before the Participant reaches Normal Retirement
Age, or
(c) the date the Participant begins participation.
1.64 Qualified Joint And Survivor Annuity An immediate annuity for the
life of the Participant with a survivor annuity for the life of the
Participant's Spouse which is at least one-half of but not more than the
amount of the annuity payable during the joint lives of the Participant and
the Participant's Spouse. The exact amount of the Survivor Annuity is to
be specified by the Employer in the Adoption Agreement. If not designated
by the Employer, the Survivor Annuity will be one-half of the amount paid
to the Participant during his or her lifetime. The Qualified Joint and
Survivor Annuity will be the amount of benefit which can be provided by the
Participant's Vested Account Balance.
1.65 Qualified Matching Contribution Matching Contributions which when
made are subject to the distribution and nonforfeitability requirements
under Code Section 401(k).
1.66 Qualified Non-Elective Contributions Contributions (other than
Matching Contributions or Qualified Matching Contributions) made by the
Employer and allocated to Participants' accounts that the Participants may
not elect to receive in cash until distributed from the Plan; that are
nonforfeitable when made; and that are distributable only in accordance
with the distribution provisions that are applicable to Elective Deferrals
and Qualified Matching Contributions.
1.67 Qualified Voluntary Contribution A tax-deductible Voluntary Employee
contribution. These contributions may no longer be made to the Plan.
1.68 Required Aggregation Group Used for Top-Heavy testing purposes, it
consists of:
(a) each qualified plan of the Employer in which at
least one Key Employee participates or participated
at any time during the determination period
(regardless of whether the plan has terminated), and
(b) any other qualified plan of the Employer which
enables a plan described in (a) to meet the
requirements of Code Sections 401(a)(4) or 410.
1.69 Required Beginning Date The date on which a Participant is required
to take his or her first minimum distribution under the Plan. The rules
are set forth at paragraph 7.5.
1.70 Rollover Contribution A contribution made by a Participant of an
amount distributed to such Participant from another Qualified Deferred
Compensation Plan in accordance with Code Sections 402(a)(5), (6), and (7).
An Eligible Rollover Distribution is any distribution of all or any portion
of the balance to the credit of the Participant except that an Eligible
Rollover Distribution does not include:
(a) any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually) made
for the life (or life expectancy) of the Participant or the joint
lives (or joint life expectancies) of the Participant and the
Participant's Designated Beneficiary, or for a specified period
of ten years or more;
(b) any distribution to the extent such distribution is required
under Code Section 401(a)(9); and
(c) the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to Employer securities).
A Direct Rollover is a payment by the Plan to the Eligible Retirement Plan
specified by the Participant.
1.71 Salary Savings Agreement An agreement between the Employer and a
participating Employee where the Employee authorizes the Employer to
withhold a specified percentage of his or her Compensation for deposit to
the Plan on behalf of such Employee.
1.72 Self-Employed Individual An individual who has Earned Income for the
taxable year from the trade or business for which the Plan is established
including an individual who would have had Earned Income but for the fact
that the trade or business had no Net Profit for the taxable year.
1.73 Service The period of current or prior employment with the Employer.
If the Employer maintains a plan of a predecessor employer, Service for
such predecessor shall be treated as Service for the Employer.
1.74 Shareholder Employee An Employee or officer who owns [or is
considered as owning within the meaning of Code Section 318(a)(1)], on any
day during the taxable year of an electing small business corporation
(S Corporation), more than 5% of such corporation's outstanding stock.
1.75 Simplified Employee Pension Plan An individual retirement account
which meets the requirements of Code Section 408(k), and to which the
Employer makes contributions pursuant to a written formula. These plans
are considered for contribution limitation and Top-Heavy testing purposes.
1.76 Sponsor Comerica Bank.
1.77 Spouse (Surviving Spouse) The Spouse or Surviving Spouse of the
Participant, provided that a former Spouse will be treated as the Spouse or
Surviving Spouse and a current Spouse will not be treated as the Spouse or
Surviving Spouse to the extent provided under a Qualified Domestic
Relations Order as described in Code Section 414(p).
1.78 Super Top-Heavy Plan A Plan described at paragraph 1.81 under which
the Top-Heavy Ratio [as defined at paragraph 1.82] exceeds 90%.
1.79 Taxable Wage Base For plans with an allocation formula which takes
into account the Employer's contribution under the Federal Insurance
Contributions Act (FICA), the maximum amount of earnings which may be
considered wages for such Plan Year under the Social Security Act [Code
Section 3121(a)(1)], or the amount elected by the Employer in the Adoption
Agreement.
1.80 Top-Heavy Determination Date For any Plan Year subsequent to the
first Plan Year, the last day of the preceding Plan Year. For the first
Plan Year of the Plan, the last day of that year.
1.81 Top-Heavy Plan For any Plan Year beginning after 1983, the Employer's
Plan is Top-Heavy if any of the following conditions exist:
(a) If the Top-Heavy Ratio for the Employer's Plan exceeds 60%
and this Plan is not part of any required Aggregation Group or
Permissive Aggregation Group of Plans.
(b) If the Employer's Plan is a part of a Required Aggregation
Group of plans but not part of a Permissive Aggregation Group and
the Top-Heavy Ratio for the group of plans exceeds 60%.
(c) If the Employer's Plan is a part of a Required Aggregation
Group and part of a Permissive Aggregation Group of plans and the
Top-Heavy Ratio for the Permissive Aggregation Group exceeds 60%.
1.82 Top-Heavy Ratio
(a) If the Employer maintains one or more Defined
Contribution plans (including any Simplified Employee
Pension Plan) and the Employer has not maintained any
Defined Benefit Plan which during the five year
period ending on the Determination Date(s) has or has
had accrued benefits, the Top-Heavy Ratio for this
Plan alone, or for the Required or Permissive
Aggregation Group as appropriate, is a fraction,
(1) the numerator of which is the sum of
the account balances of all Key Employees
as of the Determination Date(s) [including
any part of any account balance
distributed in the five year period ending
on the Determination Date(s)], and
(2) the denominator of which is the sum
of all account balances [including any
part of any account balance distributed in
the five year period ending on the
Determination Date(s)], both computed in
accordance with Code Section 416 and the
regulations thereunder.
Both the numerator and denominator of the Top-Heavy
Ratio are increased to reflect any contribution not
actually made as of the Determination Date, but which
is required to be taken into account on that date
under Code Section 416 and the regulations
thereunder.
(b) If the Employer maintains one or more Defined
Contribution Plans (including any Simplified Employee
Pension Plan) and the Employer maintains or has
maintained one or more Defined Benefit Plans which
during the five year period ending on the
Determination Date(s) has or has had any accrued
benefits, the Top-Heavy Ratio for any Required or
Permissive Aggregation Group as appropriate is a
fraction, the numerator of which is the sum of
account balances under the aggregated Defined
Contribution Plan or Plans for all Key Employees,
determined in accordance with (a) above, and the
Present Value of accrued benefits under the
aggregated Defined Benefit Plan or Plans for all Key
Employees as of the Determination Date(s), and the
denominator of which is the sum of the account
balances under the aggregated Defined Contribution
Plan or Plans for all Participants, determined in
accordance with (a) above, and the Present Value of
accrued benefits under the Defined Benefit Plan or
Plans for all Participants as of the Determination
Date(s), all determined in accordance with Code
Section 416 and the regulations thereunder. The
accrued benefits under a Defined Benefit Plan in both
the numerator and denominator of the Top-Heavy Ratio
are increased for any distribution of an accrued
benefit made in the five year period ending on the
Determination Date.
(c) For purposes of (a) and (b) above, the value of
account balances and the Present Value of accrued
benefits will be determined as of the most recent
Valuation Date that falls within or ends with the
12-month period ending on the Determination Date,
except as provided in Code Section 416 and the
regulations thereunder for the first and second plan
years of a Defined Benefit Plan. The account
balances and accrued benefits of a participant (1)
who is not a Key Employee but who was a Key Employee
in a prior year, or (2) who has not been credited
with at least one hour of Service with any Employer
maintaining the Plan at any time during the five year
period ending on the Determination Date, will be
disregarded. The calculation of the Top-Heavy Ratio,
and the extent to which distributions, rollovers, and
transfers are taken into account will be made in
accordance with Code Section 416 and the regulations
thereunder. Qualified Voluntary Employee
Contributions will not be taken into account for
purposes of computing the Top-Heavy Ratio. When
aggregating plans the value of account balances and
accrued benefits will be calculated with reference to
the Determination Dates that fall within the same
calendar year. The accrued benefit of a Participant
other than a Key Employee shall be determined under
(1) the method, if any, that uniformly applies for
accrual purposes under all Defined Benefit Plans
maintained by the Employer, or (2) if there is no
such method, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under
the fractional rule of Code Section 411(b)(1)(C).
1.83 Top-Paid Group The group consisting of the top 20% of Employees when
ranked on the basis of Compensation paid during such year. For purposes of
determining the number of Employees in the group (but not who is in it),
the following Employees shall be excluded:
(a) Employees who have not completed six months of
Service.
(b) Employees who normally work less than 17-1/2
hours per week.
(c) Employees who normally do not work more than
six months during any year.
(d) Employees who have not attained age 21.
(e) Employees included in a collective bargaining
unit, covered by an agreement between Employee
representatives and the Employer, where retirement
benefits were the subject of good faith bargaining
and provided that 90% or more of the Employer's
Employees are covered by the agreement.
(f) Employees who are nonresident aliens and who
receive no Earned Income which constitutes income
from sources within the United States.
1.84 Transfer Contribution A non-taxable transfer of a Participant's
benefit directly from a Qualified Deferred Compensation Plan to this Plan.
1.85 Trustee The individual(s) or institution appointed by the Employer to
invest the Fund.
1.86 Valuation Date The last day of the Plan Year or such other date as
agreed to by the Employer and the Trustee/Custodian on which Participant
accounts are revalued in accordance with Article V hereof. For Top-Heavy
purposes, the date selected by the Employer as of which the Top-Heavy Ratio
is calculated.
1.87 Vested Account Balance The aggregate value of the Participant's
Vested Account Balances derived from Employer and Employee contributions
(including Rollovers), whether vested before or upon death, including the
proceeds of insurance contracts, if any, on the Participant's life. The
provisions of Article VIII shall apply to a Participant who is vested in
amounts attributable to Employer contributions, Employee contributions (or
both) at the time of death or distribution.
1.88 Voluntary Contribution An Employee 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 under a separate
account to which earnings and losses are allocated.
1.89 Welfare Benefit Fund Any fund that is part of a plan of the Employer,
or has the effect of a plan, through which the Employer provides Welfare
Benefits to Employees or their beneficiaries. For these purposes, Welfare
Benefits means any benefit other than those with respect to which Code
Section 83(h) (relating to transfers of property in connection with the
performance of services), Code Section 404 (relating to deductions for
contributions to an Employee's trust or annuity and Compensation under a
deferred payment plan), Code Section 404A (relating to certain foreign
deferred compensation plans) apply. A "Fund" is any social club, voluntary
employee benefit association, supplemental unemployment benefit trust or
qualified group legal service organization described in Code Section
501(c)(7), (9), (17) or (20); any trust, corporation, or other organization
not exempt from income tax, or to the extent provided in regulations, any
account held for an Employer by any person.
1.90 Year Of Service A 12-consecutive month period during which an
Employee is credited with not less than 1,000 (or such lesser number as
specified by the Employer in the Adoption Agreement) Hours of Service.
ARTICLE II
ELIGIBILITY REQUIREMENTS
2.1 Participation Employees who meet the eligibility requirements in the
Adoption Agreement on the Effective Date of the Plan shall become
Participants as of the Effective Date of the Plan. If so elected in the
Adoption Agreement, all Employees employed on the Effective Date of the
Plan may participate, even if they have not satisfied the Plan's specified
eligibility requirements. Other Employees shall become Participants on the
Entry Date coinciding with or immediately following the date on which they
meet the eligibility requirements. The Employee must satisfy the
eligibility requirements specified in the Adoption Agreement and be
employed on the Entry Date to become a Participant in the Plan. In the
event an Employee who is not a member of the eligible class of Employees
becomes a member of the eligible class, such Employee shall participate
immediately if such Employee has satisfied the minimum age and service
requirements and would have previously become a Participant had he or she
been in the eligible class. A former Participant shall again become a
Participant upon returning to the employ of the Employer as of the next
Entry Date or if earlier, the next Valuation Date.
2.2 Change In Classification Of Employment In the event a Participant
becomes ineligible to participate because he or she is no longer a member
of an eligible class of Employees, such Employee shall participate upon his
or her return to an eligible class of Employees.
2.3 Computation Period To determine Years of Service and Breaks in
Service for purposes of eligibility, the 12-consecutive month period shall
commence on the date on which an Employee first performs an Hour of Service
for the Employer and each anniversary thereof, such that the succeeding
12-consecutive month period commences with the Employee's first anniversary
of employment and so on.
2.4 Employment Rights Participation in the Plan shall not confer upon a
Participant any employment rights, nor shall it interfere with the
Employer's right to terminate the employment of any Employee at any time.
2.5 Service With Controlled Groups All Years of Service with other
members of a controlled group of corporations [as defined in Code Section
414(b)], trades or businesses under common control [as defined in Code
Section 414(c)], or members of an affiliated service group [as defined in
Code Section 414(m)] shall be credited for purposes of determining an
Employee's eligibility to participate.
2.6 Owner-Employees If this Plan provides contributions or benefits for
one or more Owner-Employees who control both the business for which this
Plan is established and one or more other trades or businesses, this Plan
and the Plan established for other trades or businesses must, when looked
at as a single Plan, satisfy Code Sections 401(a) and (d) for the Employees
of this and all other trades or businesses.
If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or businesses, the
Employees of the other trades or businesses must be included in a plan
which satisfies Code Sections 401(a) and (d) and which provides
contributions and benefits not less favorable than provided for
Owner-Employees under this Plan.
If an individual is covered as an Owner-Employee under the plans of two or
more trades or businesses which are not controlled, and the individual
controls a trade or business, then the contributions or benefits of the
Employees under the plan of the trades or businesses which are controlled
must be as favorable as those provided for him or her under the most
favorable plan of the trade or business which is not controlled.
For purposes of the preceding sentences, an Owner-Employee, or two or more
Owner-Employees, will be considered to control a trade or business if the
Owner-Employee, or two or more Owner-Employees together:
(a) own the entire interest in an unincorporated
trade or business, or
(b) in the case of a partnership, own more than 50%
of either the capital interest or the profits
interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees shall be treated as owning any interest in a partnership
which is owned, directly or indirectly, by a partnership which such
Owner-Employee, or such two or more Owner-Employees, are considered to
control within the meaning of the preceding sentence.
2.7 Leased Employees Any leased Employee shall be treated as an Employee
of the recipient Employer; however, contributions or benefits provided by
the leasing organization which are attributable to services performed for
the recipient Employer shall be treated as provided by the recipient
Employer. A leased Employee shall not be considered an Employee of the
recipient if such Employee is covered by a money purchase pension plan
providing:
(a) a non-integrated Employer contribution rate of
at least 10% of Compensation, [as defined in Code
Section 415(c)(3) but including amounts contributed
by the Employer pursuant to a salary reduction
agreement, which are excludable from the Employee's
gross income under a cafeteria plan covered by Code
Section 125, a cash or deferred profit-sharing plan
under Code Section 401(k), a Simplified Employee
Pension Plan under Code Section 402(h)(1)(B ) and a
tax-sheltered annuity under Code Section 403(b)],
(b) immediate participation, and
(c) full and immediate vesting.
This exclusion is only available if Leased Employees do not constitute more
than twenty percent (20%) of the recipient's non-highly compensated work
force.
2.8 Thrift Plans If the Employer makes an election in the Adoption
Agreement to require Voluntary Contributions to participate in this Plan,
the Employer shall notify each eligible Employee in writing of his or her
eligibility for participation at least 30 days prior to the appropriate
Entry Date. The Employee shall indicate his or her intention to join the
Plan by authorizing the Employer to withhold a percentage of his or her
Compensation as provided in the Plan. Such authorization shall be returned
to the Employer at least ten days prior to the Employee's Entry Date. The
Employee may decline participation by so indicating on the enrollment form
or by failure to return the enrollment form to the Employer prior to the
Employee's Entry Date. If the Employee declines to participate, such
Employee shall be given the opportunity to join the Plan on the next Entry
Date. The taking of a Hardship withdrawal under the provisions of
paragraph 6.9 will impact the Participant's ability to make these
contributions.
ARTICLE III
EMPLOYER CONTRIBUTIONS
3.1 Amount The Employer intends to make periodic contributions to the
Plan in accordance with the formula or formulas selected in the Adoption
Agreement. However, the Employer's contribution for any Plan Year shall be
subject to the limitations on allocations contained in Article X.
3.2 Expenses And Fees The Employer shall also be authorized to reimburse
the Fund for all expenses and fees incurred in the administration of the
Plan or Trust/Custodial Account and paid out of the assets of the Fund.
Such expenses shall include, but shall not be limited to, fees for
professional services, printing and postage. Brokerage commissions may not
be reimbursed.
3.3 Responsibility For Contributions Neither the Trustee/Custodian nor
the Sponsor shall be required to determine if the Employer has made a
contribution or if the amount contributed is in accordance with the
Adoption Agreement or the Code. The Employer shall have sole
responsibility in this regard. The Trustee/Custodian shall be accountable
solely for contributions actually received by it, within the limits of
Article XI.
3.4 Return Of Contributions Contributions made to the Fund by the
Employer shall be irrevocable except as provided below:
(a) Any contribution forwarded to the
Trustee/Custodian because of a mistake of fact,
provided that the contribution is returned to the
Employer within one year of the contribution.
(b) In the event that the Commissioner of Internal
Revenue determines that the Plan is not initially
qualified under the Internal Revenue Code, any
contribution made incident to that initial
qualification by the Employer must be returned to
the Employer within one year after the date the
initial qualification is denied, but only if the
application for the qualification is made by the
time prescribed by law for filing the Employer's
return for the taxable year in which the Plan is
adopted, or such later date as the Secretary of the
Treasury may prescribe.
(c) Contributions forwarded to the
Trustee/Custodian are presumed to be deductible and
are conditioned on their deductibility.
Contributions which are determined to not be
deductible will be returned to the Employer.
ARTICLE IV
EMPLOYEE CONTRIBUTIONS
4.1 Voluntary Contributions An Employee may make Voluntary Contributions
to the Plan established hereunder if so authorized by the Employer in a
uniform and nondiscriminatory manner. Such contributions are subject to
the limitations on Annual Additions and are subject to antidiscrimination
testing.
4.2 Qualified Voluntary Contributions A Participant may no longer make
Qualified Voluntary Contributions to the Plan. Amounts already contributed
may remain in the Trust Fund/Custodial Account until distributed to the
Participant. Such amounts will be maintained in a separate account which
will be nonforfeitable at all times. The account will share in the gains
and losses of the Trust in the same manner as described at paragraph 5.4 of
the Plan. No part of the Qualified Voluntary Contribution account will be
used to purchase life insurance. Subject to Article VIII, Joint and
Survivor Annuity Requirements (if applicable), the Participant may withdraw
any part of the Qualified Voluntary Contribution account by making a
written application to the Plan Administrator.
4.3 Rollover Contribution Unless provided otherwise in the Adoption
Agreement, a Participant may make a Rollover Contribution to any Defined
Contribution Plan established hereunder of all or any part of an amount
distributed or distributable to him or her from a Qualified Deferred
Compensation Plan provided:
(a) the amount distributed to the Participant is
deposited to the Plan no later than the sixtieth day
after such distribution was received by the
Participant,
(b) the amount distributed is not one of a series of
substantially equal periodic payments made for the life (or life
expectancy) of the Participant or the joint lives (or joint life
expectancies) of the Participant and the Participant's Designated
Beneficiary, or for a specified period of ten years or more;
(c) the amount distributed is not required under Code Section
401(a)(9);
(d) if the amount distributed included property such property is
rolled over, or if sold the proceeds of such property may be
rolled over; and
(e) the amount distributed is not includible in gross income
(determined without regard to the exclusion for net unrealized
appreciation with respect to Employer securities).
In addition, if the Adoption Agreement allows Rollover Contributions, the
Plan will also accept any Eligible Rollover Distribution (as defined at
paragraph 1.55) directly to the Plan.
Rollover Contributions, which relate to distributions prior to January 1,
1993, must be made in accordance with paragraphs (a) through (e) and
additionally meet the requirements of paragraph (f):
(f) The distribution from the Qualified Deferred
Compensation Plan constituted the Participant's entire
interest in such Plan and was distributed within one
taxable year to the Participant:
(1) on account of separation from
Service, a Plan termination, or in the case
of a profit-sharing or stock bonus plan, a
complete discontinuance of contributions
under such Plan within the meaning of Code
Section 402(a)(6)(A), or
(2) in one or more distributions which
constitute a qualified lump sum distribution
within the meaning of Code Section
402(e)(4)(A), determined without reference to
subparagraphs (B) and (H).
Such Rollover Contribution may also be made through an individual
retirement account qualified under Code Section 408 where the IRA was used
as a conduit from the Qualified Deferred Compensation Plan, the Rollover
Contribution is made in accordance with the rules provided under paragraph
(a) through (e) and the Rollover Contribution does not include any regular
IRA contributions, or earnings thereon, which the Participant may have made
to the IRA. Rollover Contributions, which relate to distributions prior to
January 1, 1993, may be made through an IRA in accordance with paragraphs
(a) through (f) and additional requirements as provided in the previous
sentence. The Trustee/Custodian shall not be held responsible for
determining the tax-free status of any Rollover Contribution made under
this Plan.
4.4 Transfer Contribution Unless provided otherwise in the Adoption
Agreement a Participant may, subject to the provisions of paragraph 4.5,
also arrange for the direct transfer of his or her benefit from a Qualified
Deferred Compensation Plan to this Plan. For accounting and record keeping
purposes, Transfer Contributions shall be treated in the same manner as
Rollover Contributions.
4.5 Employer Approval Of Transfer Contributions The Employer maintaining
a safe-harbor profit-sharing plan in accordance with the provisions of
paragraph 8.7, acting in a nondiscriminatory manner, may in its sole
discretion refuse to allow Transfer Contributions to its profit-sharing
plan, if such contributions are directly or indirectly being transferred
from a defined benefit plan, a money purchase pension plan (including a
target benefit plan), a stock bonus plan, or another profit-sharing plan
which would otherwise provide for a life annuity form of payment to the
Participant.
4.6 Elective Deferrals A Participant may enter into a Salary Savings
Agreement with the Employer authorizing the Employer to withhold a portion
of such Participant's Compensation not to exceed $7,000 per calendar year
as adjusted under Code Section 415(d) or, if lesser, the percentage of
Compensation specified in the Adoption Agreement and to deposit such amount
to the Plan. No Participant shall be permitted to have Elective Deferrals
made under this Plan or any other qualified plan maintained by the
Employer, during any taxable year, in excess of the dollar limitation
contained in Code Section 402(g) in effect at the beginning of such taxable
year. Thus, the $7,000 limit may be reduced if a Participant contributes
pre-tax contributions to qualified plans of this or other Employers. Any
such contribution shall be credited to the Employee's Salary Savings
Account. Unless otherwise specified in the Adoption Agreement, a
Participant may amend his or her Salary Savings Agreement to increase,
decrease or terminate the percentage upon 30 days written notice to the
Employer. If a Participant terminates his or her agreement, such
Participant shall not be permitted to put a new Salary Savings Agreement
into effect until the first pay period in the next Plan Year, unless
otherwise stated in the Adoption Agreement. The Employer may also amend or
terminate said agreement on written notice to the Participant. If a
Participant has not authorized the Employer to withhold at the maximum rate
and desires to increase the total withheld for a Plan Year, such
Participant may authorize the Employer upon 30 days notice to withhold a
supplemental amount up to 100% of his or her Compensation for one or more
pay periods. In no event may the sum of the amounts withheld under the
Salary Savings Agreement plus the supplemental withholding exceed 25% of a
Participant's Compensation for a Plan Year. The Employer may also
recharacterize as after-tax Voluntary Contributions all or any portion of
amounts previously withheld under any Salary Savings Agreement within the
Plan Year as provided for at paragraph 10.9. This may be done to insure
that the Plan will meet one of the antidiscrimination tests under Code
Section 401(k). Elective Deferrals shall be deposited in the Trust within
30 days after being withheld from the Participant's pay.
4.7 Required Voluntary Contributions If the Employer makes a thrift
election in the Adoption Agreement, each eligible Participant shall be
required to make Voluntary Contributions to the Plan for credit to his or
her account as provided in the Adoption Agreement. Such Voluntary
Contributions shall be withheld from the Employee's Compensation and shall
be transmitted by the Employer to the Trustee/Custodian as agreed between
the Employer and Trustee/Custodian. A Participant may discontinue
participation or change his or her Voluntary Contribution percentage by so
advising the Employer at least ten days prior to the date on which such
discontinuance or change is to be effective. If a Participant discontinues
his or her Voluntary Contributions, such Participant may not again
authorize Voluntary Contributions for a period of one year from the date of
discontinuance. A Participant may voluntarily change his or her Voluntary
Contribution percentage once during any Plan Year and may also agree to
have a reduction in his or her contribution, if required to satisfy the
requirements of the ACP test.
4.8 Direct Rollover of Benefits Notwithstanding any provision of the Plan
to the contrary that would otherwise limit a Participant's election under
this paragraph, for distributions made on or after January 1, 1993, a
Participant may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover Distribution
paid directly to an Eligible Retirement Plan specified by the Participant
in a Direct Rollover. Any portion of a distribution which is not paid
directly to an Eligible Retirement Plan shall be distributed to the
Participant. For purposes of this paragraph, a Surviving Spouse or a
Spouse or former Spouse who is an alternate payee under a Qualified
Domestic Relations Order as defined in Code Section 414(p), will be
permitted to elect to have any Eligible Rollover Distribution paid directly
to an individual retirement account (IRA) or an individual retirement
annuity (IRA).
The plan provisions otherwise applicable to distributions continue to apply
to Rollover and Transfer Contributions.
ARTICLE V
PARTICIPANT ACCOUNTS
5.1 Separate Accounts The Employer shall establish a separate bookkeeping
account for each Participant showing the total value of his or her interest
in the Fund. Each Participant's account shall be separated for bookkeeping
purposes into the following sub-accounts:
(a) Employer contributions.
(1) Matching Contributions.
(2) Qualified Matching Contributions.
(3) Qualified Non-Elective Contributions.
(4) Discretionary Contributions.
(5) Elective Deferrals.
(b) Voluntary Contributions (and additional amounts
including required contributions and, if applicable,
either repayments of loans previously defaulted on
and treated as "deemed distributions" on which a tax
report has been issued, and amounts paid out upon a
separation from Service which have been included in
income and which are repaid after being re-hired by
the Employer).
(c) Qualified Voluntary Contributions (if the Plan
previously accepted these).
(d)
Rollover Contributions and Transfer Contributions.
5.2 Adjustments To Participant Accounts As of each Valuation Date of the
Plan, the Employer shall add to each account:
(a) the Participant's share of the Employer's
contribution and forfeitures as determined in the
Adoption Agreement,
(b) any Elective Deferrals, Voluntary, Rollover or
Transfer Contributions made by the Participant,
(c) any repayment of amounts previously paid out to
a Participant upon a separation from Service and
repaid by the Participant since the last Valuation
Date, and
(d) the Participant's proportionate share of any
investment earnings and increase in the fair market
value of the Fund since the last Valuation Date, as
determined at paragraph 5.4.
The Employer shall deduct from each account:
(e) any withdrawals or payments made from the
Participant's account since the last Valuation Date,
and
(f) the Participant's proportionate share of any
decrease in the fair market value of the Fund since
the last Valuation Date, as determined at paragraph
5.4.
5.3 Allocating Employer Contributions The Employer's contribution shall
be allocated to Participants in accordance with the allocation formula
selected by the Employer in the Adoption Agreement, and the minimum
contribution and allocation requirements for Top-Heavy Plans. Beginning
with the 1990 Plan Year and thereafter, for plans on Standardized Adoption
Agreement 001, Participants who are credited with more than 500 Hours of
Service or are employed on the last day of the Plan Year must receive a
full allocation of Employer contributions. In Nonstandardized Adoption
Agreement 002, Employer contributions shall be allocated to the accounts of
Participants employed by the Employer on the last day of the Plan Year
unless indicated otherwise in the Adoption Agreement. In the case of a non-
Top-Heavy, Nonstandardized Plan, Participants must also have completed a
Year of Service unless otherwise specified in the Adoption Agreement. For
Nonstandardized Adoption Agreement 002, the Employer may only apply the
last day of the Plan Year and Year of Service requirements if the Plan
satisfies the requirements of Code Sections 401(a)(26) and 410(b) and the
regulations thereunder including the exception for 401(k) plans. If, when
applying the last day and Year of Service requirements, the Plan fails to
satisfy the aforementioned requirements, additional Participants will be
eligible to receive an allocation of Employer contributions until the
requirements are satisfied. Participants who are credited with a Year of
Service, but not employed at Plan Year end, are the first category of
additional Participants eligible to receive an allocation. If the
requirements are still not satisfied, Participants credited with more than
500 Hours of Service and employed at Plan Year end are the next category of
Participants eligible to receive an allocation. Finally, if necessary to
satisfy the said requirements, any Participant credited with more than 500
Hours of Service will be eligible for an allocation of Employer
Contributions. The Service requirement is not applicable with respect to
any Plan Year during which the Employer's Plan is Top-Heavy.
5.4 Allocating Investment Earnings And Losses A Participant's share of
investment earnings and any increase or decrease in the fair market value
of the Fund shall be based on the proportionate value of all active
accounts (other than accounts with segregated investments) as of the last
Valuation Date minus withdrawals, minus fees, plus/minus transfers, and
plus the average balance, as defined by the Plan Administrator, of the
current period's contributions and loan payments except for Employer
contributions made on an annual basis after the end of the Plan Year since
the last Valuation Date. Account balances not yet forfeited shall receive
an allocation of earnings and/or losses. Accounts with segregated
investments shall receive only the income or loss on such segregated
investments.
Alternatively, at the Plan Administrator's option, all financial activity
will be credited with an allocation of the actual investment earnings and
gains and losses from the actual date of deposit of each such activity
until the end of the period. Accounts with segregated investments shall
receive only the income or loss on such segregated investments. In no
event shall the selection of a method allocating gains and losses be used
to discriminate in favor of the Highly Compensated Employees.
5.5 Participant Statements Upon completing the allocations described
above for the Valuation Date coinciding with the end of the Plan Year, the
Employer shall prepare a statement for each Participant showing the
additions to and subtractions from his or her account since the last such
statement and the fair market value of his or her account as of the current
Valuation Date. Employers so choosing may prepare Participant statements
for each Valuation Date.
ARTICLE VI
RETIREMENT BENEFITS AND DISTRIBUTIONS
6.1 Normal Retirement Benefits A Participant shall be entitled to receive
the balance held in his or her account from Employer contributions upon
attaining Normal Retirement Age or at such earlier dates as the provisions
of this Article VI may allow. If the Participant elects to continue
working past his or her Normal Retirement Age, he or she will continue as
an active Plan Participant and no distribution shall be made to such
Participant until his or her actual retirement date unless the employer
elects otherwise in the Adoption Agreement, or a minimum distribution is
required by law. Settlement shall be made in the normal form, or if
elected, in one of the optional forms of payment provided below.
6.2 Early Retirement Benefits If the Employer so provides in the Adoption
Agreement, an early retirement benefit will be available to individuals who
meet the age and Service requirements. An individual who meets the Early
Retirement Age requirements and separates from Service, will become fully
vested, regardless of any vesting schedule which otherwise might apply. If
a Participant separates from Service before satisfying the age
requirements, but after having satisfied the Service requirement, the
Participant will be entitled to elect an Early Retirement benefit upon
satisfaction of the age requirement.
6.3 Benefits On Termination Of Employment
(a) If a Participant terminates employment prior to
Normal Retirement Age, such Participant shall be
entitled to receive the vested balance held in his
or her account payable at Normal Retirement Age in
the normal form, or if elected, in one of the
optional forms of payment provided hereunder. If
applicable, the Early Retirement Benefit provisions
may be elected. Notwithstanding the preceding
sentence, a former Participant may, if allowed in
the Adoption Agreement, make application to the
Employer requesting early payment of any deferred
vested and nonforfeitable benefit due.
(b) If a Participant terminates employment, and the
value of that Participant's vested account balance
derived from Employer and Employee contributions is
not greater than $3,500, the Participant will
receive a lump sum distribution of the value of the
entire vested portion of such account balance and
the non-vested portion will be treated as a
forfeiture. For purposes of this Article, if the
value of a Participant's Vested Account Balance is
zero, the Participant shall be deemed to have
received a distribution of such Vested Account
Balance. For Plan Years beginning prior to 1989, a
Participant's Vested Account Balance shall not
include Qualified Voluntary Contributions.
Notwithstanding the above, if the Employer maintains
or has maintained a policy of not distributing any
amounts until the Participant's Normal Retirement
Age, the Employer can continue to uniformly apply
such policy.
(c) If a Participant terminates employment with a
vested account balance derived from Employer and
Employee contributions in excess of $3,500, and
elects (with his or her Spouse's consent, if
required) to receive 100% of the value of his or her
Vested Account Balance in a lump sum, the non-vested
portion will be treated as a forfeiture. The
Participant (and his or her Spouse, if required)
must consent to any distribution, when the Vested
Account Balance described above exceeds $3,500 or if
at the time of any prior distribution it exceeded
$3,500. For purposes of this paragraph, for Plan
Years beginning prior to 1989, a Participant's
Vested Account Balance shall not include Qualified
Voluntary Contributions.
(d) Distribution of less than 100% of the
Participant's Vested Account Balance shall only be
permitted if the Participant is fully vested upon
termination of employment.
(e) If a Participant who is not 100% vested
receives or is deemed to receive a distribution
pursuant to this paragraph and resumes employment
covered under this Plan, the Participant shall have
the right to repay to the Plan the full amount of
the distribution attributable to Employer
contributions on or before the earlier of the date
that the Participant incurs five consecutive
one-year Breaks in Service following the date of
distribution or five years after the first date on
which the Participant is subsequently reemployed.
In such event, the Participant's account shall be
restored to the value thereof at the time the
distribution was made and may further be increased
by the Plan's income and investment gains and/or
losses on the undistributed amount from the date of
distribution to the date of repayment.
(f) A Participant shall also have the option, to
postpone payment of his or her Plan benefits until
the first day of April following the calendar year
in which he or she attains age 70-1/2. Any balance
of a Participant's account resulting from his or her
Employee contributions not previously withdrawn, if
any, may be withdrawn by the Participant immediately
following separation from Service.
(g) If a Participant ceases to be an active
Employee as a result of a Disability as defined at
paragraph 1.21, such Participant shall be able to
make an application for a disability retirement
benefit payment. The Participant's account balance
will be deemed "immediately distributable" as set
forth in paragraph 6.4, and will be fully vested
pursuant to paragraph 9.2.
6.4 Restrictions On Immediate Distributions
(a) An account balance is immediately distributable
if any part of the account balance could be
distributed to the Participant (or Surviving Spouse)
before the Participant attains (or would have
attained if not deceased) the later of the Normal
Retirement Age or age 62.
(b) If the value of a Participant's Vested Account
Balance derived from Employer and Employee
Contributions exceeds (or at the time of any prior
distribution exceeded) $3,500, and the account
balance is immediately distributable, the
Participant and his or her Spouse (or where either
the Participant or the Spouse has died, the
survivor) must consent to any distribution of such
account balance. The consent of the Participant and
the Spouse shall be obtained in writing within the
90-day period ending on the Annuity Starting Date,
which is the first day of the first period for which
an amount is paid as an annuity or any other form.
The Plan Administrator shall notify the Participant
and the Participant's Spouse of the right to defer
any distribution until the Participant's account
balance is no longer immediately distributable.
Such notification shall include a general
description of the material features, and an
explanation of the relative values of, the optional
forms of benefit available under the plan in a
manner that would satisfy the notice requirements of
Code Section 417(a)(3), and shall be provided no
less than 30 days and no more than 90 days prior to
the Annuity Starting Date.
(c) Notwithstanding the foregoing, only the
Participant need consent to the commencement of a
distribution in the form of a Qualified Joint and
Survivor Annuity while the account balance is
immediately distributable. Furthermore, if payment
in the form of a Qualified Joint and Survivor
Annuity is not required with respect to the
Participant pursuant to paragraph 8.7 of the Plan,
only the Participant need consent to the
distribution of an account balance that is
immediately distributable. Neither the consent of
the Participant nor the Participant's Spouse shall
be required to the extent that a distribution is
required to satisfy Code Section 401(a)(9) or Code
Section 415. In addition, upon termination of this
Plan if the Plan does not offer an annuity option
(purchased from a commercial provider), the
Participant's account balance may, without the
Participant's consent, be distributed to the
Participant or transferred to another Defined
Contribution Plan [other than an employee stock
ownership plan as defined in Code Section
4975(e)(7)] within the same controlled group.
(d) For purposes of determining the applicability
of the foregoing consent requirements to
distributions made before the first day of the first
Plan Year beginning after 1988, the Participant's
Vested Account Balance shall not include amounts
attributable to Qualified Voluntary Contributions.
6.5 Normal Form Of Payment The normal form of payment for a profit-
sharing plan satisfying the requirements of paragraph 8.7 hereof shall be a
lump sum with no option for annuity payments. For all other plans, the
normal form of payment hereunder shall be a Qualified Joint and Survivor
Annuity as provided under Article VIII. A Participant whose Vested Account
Balance derived from Employer and Employee contributions exceeds $3,500, or
if at the time of any prior distribution it exceeded $3,500, shall (with
the consent of his or her Spouse) have the right to receive his or her
benefit in a lump sum or in monthly, quarterly, semi-annual or annual
payments from the Fund over any period not extending beyond the life
expectancy of the Participant and his or her Beneficiary. For purposes of
this paragraph, for Plan Years prior to 1989, a Participant's Vested
Account Balance shall not include Qualified Voluntary Contributions. The
normal form of payment shall be automatic, unless the Participant files a
written request with the Employer prior to the date on which the benefit is
automatically payable, electing a lump sum or installment payment option.
No amendment to the Plan may eliminate one of the optional distribution
forms listed above.
6.6 Commencement Of Benefits
(a) Unless the Participant elects otherwise,
distribution of benefits will begin no later than
the 60th day after the close of the Plan Year in
which the latest of the following events occurs:
(1) the Participant attains age 65 (or
normal retirement age if earlier),
(2) the tenth anniversary of the year in
which the Participant commenced
participation in the Plan, or
(3) the Participant terminates Service
with the Employer.
(b) Notwithstanding the foregoing, the failure of a
Participant and Spouse (if necessary) to consent to
a distribution while a benefit is immediately
distributable, within the meaning of paragraph 6.4
hereof, shall be deemed an election to defer
commencement of payment of any benefit sufficient to
satisfy this paragraph.
6.7 Claims Procedures Upon retirement, death, or other severance of
employment, the Participant or his or her representative may make
application to the Employer requesting payment of benefits due and the
manner of payment. If no application for benefits is made, the Employer
shall automatically pay any vested benefit due hereunder in the normal form
at the time prescribed at paragraph 6.4. If an application for benefits is
made, the Employer shall accept, reject, or modify such request and shall
notify the Participant in writing setting forth the response of the
Employer and in the case of a denial or modification the Employer shall:
(a) state the specific reason or reasons for the
denial,
(b) provide specific reference to pertinent Plan
provisions on which the denial is based,
(c) provide a description of any additional
material or information necessary for the
Participant or his representative to perfect the
claim and an explanation of why such material or
information is necessary, and
(d) explain the Plan's claim review procedure as
contained in this Plan.
In the event the request is rejected or modified, the Participant or his or
her representative may within 60 days following receipt by the Participant
or representative of such rejection or modification, submit a written
request for review by the Employer of its initial decision. Within 60 days
following such request for review, the Employer shall render its final
decision in writing to the Participant or representative stating specific
reasons for such decision. If the Participant or representative is not
satisfied with the Employer's final decision, the Participant or
representative can institute an action in a federal court of competent
jurisdiction; for this purpose, process would be served on the Employer.
6.8 In-Service Withdrawals An Employee may withdraw all or any part of
the fair market value of his or her Mandatory Contributions, Voluntary
Contributions, Qualified Voluntary Contributions, Rollover Contributions,
or Transfer Contributions upon written request to the Employer. Transfer
contributions which originate from a Plan meeting the safe-harbor
provisions of paragraph 8.7 may also be withdrawn by an Employee upon
written request to the Employer. Transfer Contributions not meeting the
safe-harbor provisions may only be withdrawn upon retirement, death,
Disability, termination or termination of the Plan and will be subject to
Spousal consent requirements contained in Code Sections 411(a)(11) and 417.
Such request shall include the Participant's address, social security
number, birthdate, and amount of the withdrawal. If at the time a
distribution of Qualified Voluntary Contributions is received the
Participant has not attained age 59-1/2 and is not disabled, as defined at
Code Section 22(e)(3), the Participant will be subject to a federal income
tax penalty, unless the distribution is rolled over to a qualified plan or
individual retirement plan within 60 days of the date of distribution. A
Participant may withdraw all or any part of the fair market value of his or
her pre-1987 Voluntary Contributions with or without withdrawing the
earnings attributable thereto. Post-1986 Voluntary Contributions may only
be withdrawn along with a portion of the earnings thereon. The amount of
the earnings to be withdrawn is determined by using the
formula: DA [1-(V , V+E)], where DA is the distribution amount, V is the
amount of Voluntary Contributions and V+E is the amount of Voluntary
Contributions plus the earnings attributable thereto. A Participant
withdrawing his or her other contributions prior to attaining age 59-1/2,
will be subject to a federal tax penalty to the extent that the withdrawn
amounts are includible in income. Unless the Employer provides otherwise
in the Adoption Agreement, any Participant in a profit-sharing plan who is
100% fully vested in his or her Employer contributions may, if permitted by
the Employer in the Adoption Agreement, withdraw all or any part of the
fair market value of any of such contributions that have been in the
account at least two years, plus the investment earnings thereon, without
separation from Service. Such distributions shall not be eligible for
redeposit to the Fund. A withdrawal under this paragraph shall not
prohibit such Participant from sharing in any future Employer contribution
he or she would otherwise be eligible to share in. A request to withdraw
amounts pursuant to this paragraph must if applicable, be consented to by
the Participant's Spouse. The consent shall comply with the requirements
of paragraph 6.4 relating to immediate distributions. Elective Deferrals,
Qualified Non-elective Contributions, and Qualified Matching Contributions,
and income allocable to each are not distributable to a Participant or his
or her beneficiary or beneficiaries, in accordance with such Participant's
or beneficiary's or beneficiaries' election, earlier than upon separation
from Service, death, or Disability. Such amounts may also be distributed
upon:
(a) Termination of the Plan without the
establishment of another Defined Contribution Plan.
(b) The disposition by a corporation to an
unrelated corporation of substantially all of the
assets [within the meaning of Code Section
409(d)(2)] used in a trade or business of such
corporation if such corporation continues to
maintain this Plan after the disposition, but only
with respect to Employees who continue employment
with the corporation acquiring such assets.
(c) The disposition by a corporation to an
unrelated entity of such corporation's interest in a
subsidiary [within the meaning of Code Section
409(d)(3)] if such corporation continues to maintain
this Plan, but only with respect to Employees who
continue employment with such subsidiary.
(d) The attainment of age 59-1/2.
(e) The Hardship of the Participant as described in
paragraph 6.9.
All distributions that may be made pursuant to one or more of the foregoing
distributable events are subject to the Spousal and Participant consent
requirements, if applicable, contained in Code Sections 401(a)(11) and 417.
6.9 Hardship Withdrawal If permitted by the Trustee/Custodian and the
Employer in the Adoption Agreement, a Participant may request a Hardship
withdrawal prior to attaining age 59-1/2. If the Participant has not
attained age 59-1/2, the Participant may be subject to a federal income tax
penalty. Such request shall be in writing to the Employer who shall have
sole authority to authorize a Hardship withdrawal, pursuant to the rules
below. Hardship withdrawals may include Elective Deferrals regardless of
when contributed and any earnings accrued and credited thereon as of the
last day of the Plan Year ending before July 1, 1989 and Employer related
contributions plus the investment earnings thereon to the extent vested.
Qualified Matching Contributions, Qualified Non-Elective Contributions and
Elective Deferrals reclassified as Voluntary Contributions plus the
investment earnings thereon are not available for Hardship withdrawal prior
to age 59-1/2 to the extent that they were credited to the Participant's
account as of the last day of the Plan Year ending prior to July 1, 1989.
The Plan Administrator may limit withdrawals to Elective Deferrals and the
earnings thereon as stipulated above. Hardship withdrawals are subject to
the Spousal consent requirements contained in Code Sections 401(a)(11) and
417. Only the following reasons are valid to obtain Hardship withdrawal:
(a) medical expenses [within the meaning of Code
Section 213(d)] incurred or necessary for the medical
care of the Participant, his or her Spouse, children
and other dependents,
(b) the purchase (excluding mortgage payments) of
the principal residence for the Participant,
(c) payment of tuition and related educational
expenses for the next twelve months of post-secondary
education for the Participant, his or her Spouse,
children or other dependents, or
(d) the need to prevent eviction of the Employee
from or a foreclosure on the mortgage of, the
Employee's principal residence.
Furthermore, the following conditions must be met in order for a withdrawal
to be authorized:
(e) the Participant has obtained all distributions,
other than Hardship distributions, and all nontaxable
loans under all plans maintained by the Employer,
(f) all plans maintained by the Employer, other than
flexible benefit plans under Code Section 125
providing for current benefits, provide that the
Employee's Elective Deferrals and Voluntary
Contributions will be suspended for twelve months
after the receipt of the Hardship distribution,
(g) the distribution is not in excess of the amount
of the immediate and heavy financial need [(a)
through (d)] above, including amounts necessary to
pay any federal, state or local income tax or
penalties reasonably anticipated to result from the
distribution, and
(h) all plans maintained by the Employer provide
that an Employee may not make Elective Deferrals for
the Employee's taxable year immediately following
the taxable year of the Hardship distribution in
excess of the applicable limit under Code Section
402(g) for such taxable year, less the amount of
such Employee's pre-tax contributions for the
taxable year of the Hardship distribution.
If a distribution is made at a time when a Participant has a nonforfeitable
right to less than 100% of the account balance derived from Employer
contributions and the Participant may increase the nonforfeitable
percentage in the account:
(i) a separate account will be established for the
Participant's interest in the Plan as of the
time of the distribution, and
(j) at any relevant time the Participant's
nonforfeitable portion of the separate account will
be equal to an amount ("X") determined by the
formula:
X = P [AB + (R X D)] - (R X D)
For purposes of applying the formula: "P" is the nonforfeitable percentage
at the relevant time, "AB" is the account balance at the relevant time, "D"
is the amount of the distribution and "R" is the ratio of the account
balance at the relevant time to the account balance after distribution.
ARTICLE VII
DISTRIBUTION REQUIREMENTS
7.1 Joint And Survivor Annuity Requirements All distributions made under
the terms of this Plan must comply with the provisions of Article VIII
including, if applicable, the safe harbor provisions thereunder.
7.2 Minimum Distribution Requirements All distributions required under
this Article shall be determined and made in accordance with the minimum
distribution requirements of Code Section 401(a)(9) and the regulations
thereunder, including the minimum distribution incidental benefit rules
found at Regulations Section 1.401(a)(9)-2. The entire interest of a
Participant must be distributed or begin to be distributed no later than
the Participant's Required Beginning Date. Life expectancy and joint and
last survivor life expectancy are computed by using the expected return
multiples found in Tables V and VI of Regulations Section 1.72-9.
7.3 Limits On Distribution Periods As of the First Distribution Calendar
Year, distributions if not made in a single-sum may only be made over one
of the following periods (or a combination thereof):
(a) the life of the Participant,
(b) the life of the Participant and a
Designated Beneficiary,
(c) a period certain not extending beyond the
life expectancy of the Participant, or
(d) a period certain not extending beyond the
joint and last survivor expectancy of the
Participant and a Designated Beneficiary.
7.4 Required Distributions On Or After The Required Beginning Date
(a) If a Participant's benefit is to be distributed
over (1) a period not extending beyond the life
expectancy of the Participant or the joint life and
last survivor expectancy of the Participant and the
Participant's Designated Beneficiary or (2) a period
not extending beyond the life expectancy of the
Designated Beneficiary, the amount required to be
distributed for each calendar year, beginning with
distributions for the First Distribution Calendar
Year, must at least equal the quotient obtained by
dividing the Participant's benefit by the Applicable
Life Expectancy.
(b) For calendar years beginning before 1989, if
the Participant's Spouse is not the Designated
Beneficiary, the method of distribution selected
must have assured that at least 50% of the Present
Value of the amount available for distribution was
to be paid within the life expectancy of the
Participant.
(c) For calendar years beginning after 1988, the
amount to be distributed each year, beginning with
distributions for the First Distribution Calendar
Year shall not be less than the quotient obtained by
dividing the Participant's benefit by the lesser of
(1) the Applicable Life Expectancy or (2) if the
Participant's Spouse is not the Designated
Beneficiary, the applicable divisor determined from
the table set forth in Q&A-4 of Regulations Section
1.401(a)(9)-2. Distributions after the death of the
Participant shall be distributed using the
Applicable Life Expectancy as the relevant divisor
without regard to Regulations Section 1.401(a)(9)-2.
(d) The minimum distribution required for the
Participant's First Distribution Calendar Year must
be made on or before the Participant's Required
Beginning Date. The minimum distribution for other
calendar years, including the minimum distribution
for the Distribution Calendar Year in which the
Participant's Required Beginning Date occurs, must
be made on or before December 31 of that
Distribution Calendar Year.
(e) If the Participant's benefit is distributed in
the form of an annuity purchased from an insurance
company, distributions thereunder shall be made in
accordance with the requirements of Code Section
401(a)(9) and the regulations thereunder.
(f) For purposes of determining the amount of the
required distribution for each Distribution Calendar
Year, the account balance to be used is the account
balance determined as of the last valuation
preceding the Distribution Calendar Year. This
balance will be increased by the amount of any
contributions or forfeitures allocated to the
account balance after the Valuation Date in such
preceding calendar year. Such balance will also be
decreased by distributions made after the Valuation
Date in such preceding Calendar Year.
(g) For purposes of subparagraph 7.4(f), if any
portion of the minimum distribution for the First
Distribution Calendar Year is made in the second
Distribution Calendar Year on or before the Required
Beginning Date, the amount of the minimum
distribution made in the second Distribution
Calendar Year shall be treated as if it had been
made in the immediately preceding Distribution
Calendar Year.
7.5 Required Beginning Date
(a) General Rule. The Required Beginning Date of a
Participant is the first day of April of the
calendar year following the calendar year in which
the Participant attains age 70-1/2.
(b) Transitional Rules. The Required Beginning
Date of a Participant who attains age 70-1/2 before
1988, shall be determined in accordance with (1) or
(2) below:
(1) Non-five percent owners. The
Required Beginning Date of a Participant
who is not a five-percent owner is the
first day of April of the calendar year
following the calendar year in which the
later of retirement or attainment of age
70-1/2 occurs. In the case of a
Participant who is not a five-percent
owner who attains age 70-1/2 during 1988
and who has not retired as of
January 1, 1989, the Required Beginning
Date is April 1, 1990.
(2) Five-percent owners. The Required
Beginning Date of a Participant who is a
five-percent owner during any year
beginning after 1979, is the first day of
April following the later of:
(i) the calendar year in which
the Participant attains age
70-1/2, or
(ii) the earlier of the calendar
year with or within which ends
the Plan Year in which the
Participant becomes a
five-percent owner, or the
calendar year in which the
Participant retires.
(c) A Participant is treated as a five-percent
owner for purposes of this Paragraph if such
Participant is a five-percent owner as defined in
Code Section 416(i) (determined in accordance with
Code Section 416 but without regard to whether the
Plan is Top-Heavy) at any time during the Plan Year
ending with or within the calendar year in which
such owner attains age 66-1/2 or any subsequent Plan
Year.
(d) Once distributions have begun to a five-percent
owner under this paragraph, they must continue to be
distributed, even if the Participant ceases to be a
five-percent owner in a subsequent year.
7.6 Transitional Rule
(a) Notwithstanding the other requirements of this
Article and subject to the requirements of Article
VIII, Joint and Survivor Annuity Requirements,
distribution on behalf of any Employee, including a
five-percent owner, may be made in accordance with
all of the following requirements (regardless of
when such distribution commences):
(1) The distribution by the Trust is one
which would not have disqualified such
Trust under Code Section 401(a)(9) as in
effect prior to amendment by the Deficit
Reduction Act of 1984.
(2) 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.
(3) Such designation was in writing, was
signed by the Employee or the beneficiary,
and was made before 1984.
(4) The Employee had accrued a benefit
under the Plan as of December 31, 1983.
(5) The method of distribution designated
by the Employee or the beneficiary
specifies the time at which distribution
will commence, the period over which
distributions will be made, and in the
case of any distribution upon the
Employee's death, the beneficiaries of the
Employee listed in order of priority.
(b) A distribution upon death will not be covered
by this transitional rule unless the information in
the designation contains the required information
described above with respect to the distributions to
be made upon the death of the Employee.
(c) For any distribution which commences before
1984, but continues after 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 subparagraphs (a)(1) and (5)
above.
(d) If a designation is revoked, any subsequent
distribution must satisfy the requirements of Code
Section 401(a)(9) and the regulations thereunder.
If a designation is revoked subsequent to the date
distributions are required to begin, the 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
Code Section 401(a)(9) and the regulations
thereunder, but for the section 242(b)(2) election
of the Tax Equity and Fiscal Responsibility Act of
1982. For calendar years beginning after 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 will be considered to be
a revocation of the designation. However, the mere
substitution or addition of another beneficiary (one
not named in the designation) under the designation
will not be considered to be a revocation of the
designation, so long as such substitution or
addition does not alter the period over which
distributions are to be made under the designation,
directly or indirectly (for example, by altering the
relevant measuring life). In the case in which an
amount is transferred or rolled over from one plan
to another plan, the rules in Q&A J-2 and Q&A J-3 of
the Regulations shall apply.
7.7 Designation Of Beneficiary For Death Benefit Each Participant shall
file a written designation of beneficiary with the Employer upon qualifying
for participation in this Plan. Such designation shall remain in force
until revoked by the Participant by filing a new beneficiary form with the
Employer. The Participant may elect to have a portion of his or her
account balance invested in an insurance contract. If an insurance
contract is purchased under the Plan, the Trustee must be named as
beneficiary under the terms of the contract. However, the Participant
shall designate a beneficiary to receive the proceeds of the contract after
settlement is received by the Trustee. Under a profit-sharing plan
satisfying the requirements of paragraph 8.7, the Designated Beneficiary
shall be the Participant's Surviving Spouse, if any, unless such Spouse
properly consents otherwise.
7.8 Nonexistence Of Beneficiary Any portion of the amount payable
hereunder which is not disposed of because of the Participant's or former
Participant's failure to designate a beneficiary, or because all of the
Designated Beneficiaries predeceased the Participant, shall be paid to his
or her Spouse. If the Participant had no Spouse at the time of death,
payment shall be made to the personal representative of his or her estate
in a lump sum.
7.9 Distribution Beginning Before Death If the Participant dies after
distribution of his or her interest has begun, the remaining portion of
such interest will continue to be distributed at least as rapidly as under
the method of distribution being used prior to the Participant's death.
7.10 Distribution Beginning After Death If the Participant dies before
distribution of his or her interest begins, distribution of the
Participant's entire interest shall be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant's death
except to the extent that an election is made to receive distributions in
accordance with (a) or (b) below:
(a) If any portion of the Participant's
interest is payable to a Designated
Beneficiary, distributions may be made over the
life or over a period certain not greater than
the life expectancy of the Designated
Beneficiary commencing on or before December 31
of the calendar year immediately following the
calendar year in which the Participant died;
(b) If the Designated Beneficiary is the
Participant's Surviving Spouse, the date
distributions are required to begin in
accordance with (a) above shall not be earlier
than the later of (1) December 31 of the
calendar year immediately following the
calendar year in which the Participant died or
(2) December 31 of the calendar year in which
the Participant would have attained age 70-1/2.
If the Participant has not made an election pursuant to this paragraph 7.10
by the time of his or her death, the Participant's Designated Beneficiary
must elect the method of distribution no later than the earlier of (1)
December 31 of the calendar year in which distributions would be required
to begin under this section, or (2) December 31 of the calendar year which
contains the fifth anniversary of the date of death of the participant. If
the Participant has no Designated Beneficiary, or if the Designated
Beneficiary does not elect a method of distribution, then distribution of
the Participant's entire interest must be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant's death.
For purposes of this paragraph if the Surviving Spouse dies after the
Participant, but before payments to such Spouse begin, the provisions of
this paragraph with the exception of paragraph (b) therein, shall be
applied as if the Surviving Spouse were the Participant. For the purposes
of this paragraph and paragraph 7.9, distribution of a Participant's
interest is considered to begin on the Participant's Required Beginning
Date (or, if the preceding sentence is applicable, the date distribution is
required to begin to the Surviving Spouse). If distribution in the form of
an annuity described in paragraph 7.4(e) irrevocably commences to the
Participant before the Required Beginning Date, the date distribution is
considered to begin is the date distribution actually commences.
For purposes of paragraph 7.9 and this paragraph, 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 attains the age of majority.
7.11 Distribution Of Excess Elective Deferrals
(a) Notwithstanding any other provision of the
Plan, Excess Elective Deferrals plus any income and
minus any loss allocable thereto, shall be
distributed no later than April 15, 1988, and each
April 15 thereafter, to Participants to whose
accounts Excess Elective Deferrals were allocated
for the preceding taxable year, and who claim Excess
Elective Deferrals for such taxable year. Excess
Elective Deferrals shall be treated as Annual
Additions under the Plan, unless such amounts are
distributed no later than the first April 15th
following the close of the Participant's taxable
year. A Participant is deemed to notify the Plan
Administrator of any Excess Elective Deferrals that
arise by taking into account only those Elective
Deferrals made to this Plan and any other plans of
this Employer. Furthermore, a Participant who
participates in another plan allowing Elective
Deferrals may assign to this Plan any Excess
Elective Deferrals made during a taxable year of the
Participant, by notifying the Plan Administrator of
the amount of the Excess Elective Deferrals to be
assigned.
(b) Furthermore, a Participant who participates in
another plan allowing Elective Deferrals may assign
to this Plan any Excess Elective Deferrals made
during a taxable year of the Participant, by
notifying the Plan Administrator of the amount of
the Excess Elective Deferrals to be assigned. The
Participant's claim shall be in writing; shall be
submitted to the Plan Administrator not later than
March 1 of each year; shall specify the amount of
the Participant's Excess Elective Deferrals for the
preceding taxable year; and shall be accompanied by
the Participant's written statement that if such
amounts are not distributed, such Excess Elective
Deferrals, when added to amounts deferred under
other plans or arrangements described in Code
Sections 401(k), 408(k) [Simplified Employee
Pensions], or 403(b) [annuity programs for public
schools and charitable organizations] will exceed
the $7,000 limit as adjusted under Code Section
415(d) imposed on the Participant by Code Section
402(g) for the year in which the deferral occurred.
(c) Excess Elective Deferrals shall be adjusted for
any income or loss up to the end of the taxable
year, during which such excess was deferred. Income
or loss will be calculated under the method used to
calculate investment earnings and losses elsewhere
in the Plan.
(d) If the Participant receives a return of his or
her Elective Deferrals, the amount of such
contributions which are returned must be brought
into the Employee's taxable income.
7.12 Distributions of Excess Contributions
(a) Notwithstanding any other provision of this
Plan, Excess Contributions, plus any income and
minus any loss allocable thereto, shall be
distributed no later than the last day of each Plan
Year to Participants to whose accounts such Excess
Contributions were allocated for the preceding Plan
Year. If such excess amounts are distributed more
than 2-1/2 months after the last day of the Plan
Year in which such excess amounts arose, a ten
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 Code Section 414(q)(6) shall be
allocated among the Family Members in proportion to
the Elective Deferrals (and amounts treated as
Elective Deferrals) of each Family Member that is
combined to determine the Average Deferral
Percentage.
(b) Excess Contributions (including the amounts
recharacterized) shall be treated as Annual
Additions under the Plan.
(c) Excess Contributions shall be adjusted for any
income or loss up to the end of the Plan Year.
Income or loss will be calculated under the method
used to calculate investment earnings and losses
elsewhere in the Plan.
(d) Excess Contributions shall be distributed from
the Participant's Elective Deferral account and
Qualified Matching Contribution account (if
applicable) in proportion to the Participant's
Elective Deferrals and Qualified Matching
Contributions (to the extent used in the ADP test)
for the Plan Year. Excess Contributions shall be
distributed from the Participant's Qualified
Non-Elective Contribution account only to the extent
that such Excess Contributions exceed the balance in
the Participant's Elective Deferral account and
Qualified Matching Contribution account.
7.13 Distribution Of Excess Aggregate Contributions
(a) Notwithstanding any other provision of this
Plan, Excess Aggregate Contributions, plus any
income and minus any loss allocable thereto, shall
be forfeited, if forfeitable, or if not forfeitable,
distributed no later than the last day of each Plan
Year to Participants to whose accounts such Excess
Aggregate Contributions were allocated for the
preceding Plan Year. Excess Aggregate Contributions
shall be allocated to Participants who are subject
to the Family Member aggregation rules of Code
Section 414(q)(6) in the manner prescribed by the
regulations. If such Excess Aggregate Contributions
are distributed more than two and one-half months
after the last day of the Plan Year in which such
excess amounts arose, a ten percent excise tax will
be imposed on the Employer maintaining the Plan with
respect to those amounts. Excess Aggregate
Contributions shall be treated as Annual Additions
under the Plan.
(b) Excess Aggregate Contributions shall be
adjusted for any income or loss up to the end of the
Plan Year. The income or loss allocable to Excess
Aggregate Contributions is the sum of income or loss
for the Plan Year allocable to the Participant's
Voluntary Contribution account, Matching
Contribution account (if any, and if all amounts
therein are not used in the ADP test) and, if
applicable, Qualified Non-Elective Contribution
account and Elective Deferral account. Income or
loss will be calculated under the method used to
calculate investment earnings and losses elsewhere
in the Plan.
(c) Forfeitures of Excess Aggregate Contributions
may either be reallocated to the accounts of
non-Highly Compensated Employees or applied to
reduce Employer contributions, as elected by the
Employer in the Adoption Agreement.
(d) Excess Aggregate Contributions shall be
forfeited if such amount is not vested. If vested,
such excess shall be distributed on a pro-rata basis
from the Participant's Voluntary Contribution
account (and, if applicable, the Participant's
Qualified Non-Elective Contribution account,
Matching Contribution account, Qualified Matching
Contribution account, or Elective Deferral account,
or both).
7.14 Escheat In the event any Vested Account Balance is unclaimed and the
Plan Administrator is unable to determine the whereabouts of the
Participant, beneficiary or any other person whose benefits from the Plan
are due, within three years from the date such benefit would otherwise be
payable, such Vested Account Balance shall be forfeited and revert to and
become part of the Trust upon written direction of the Plan Administrator;
provided, however, such unclaimed benefits shall be reinstated from
earnings and forfeitures, and Employer Contributions designated for that
purpose if the claimant to whom such benefit is due and owing subsequently
makes written application to the Plan Administrator. The Plan
Administrator also reserves the right, with the consent of the
Trustee/Custodian, to direct the Trustee/Custodian to dispose of any
unclaimed benefits under the escheat statutes of the applicable state law,
as defined in Article XVI.
ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 Applicability Of Provisions The provisions of this Article shall
apply to any Participant who is credited with at least one Hour of Service
with the Employer on or after August 23, 1984 and such other Participants
as provided in paragraph 8.8.
8.2 Payment Of Qualified Joint And Survivor Annuity Unless an optional
form of benefit is selected pursuant to a Qualified Election within the
90-day period ending on the Annuity Starting Date, a married Participant's
Vested Account Balance will be paid in the form of a Qualified Joint and
Survivor Annuity and an unmarried Participant's Vested Account Balance will
be paid in the form of a life annuity. The Participant may elect to have
such annuity distributed upon attainment of the Early Retirement Age under
the Plan.
8.3 Payment Of Qualified Pre-Retirement Survivor Annuity Unless an
optional form of benefit has been selected within the Election Period
pursuant to a Qualified Election, if a Participant dies before benefits
have commenced then the Participant's vested account balance shall be paid
in the form of an annuity for the life of the Surviving Spouse. The
Surviving Spouse may elect to have such annuity distributed within a
reasonable period after the Participant's death.
A Participant who does not meet the age 35 requirement set forth in the
Election Period as of the end of any current Plan Year may make a special
Qualified Election to waive the qualified pre-retirement survivor annuity
for the period beginning on the date of such election and ending on the
first day of the Plan Year in which the Participant will attain age 35.
Such election shall not be valid unless the Participant receives a written
explanation of the qualified pre-retirement survivor annuity in such terms
as are comparable to the explanation required under paragraph 8.5.
Qualified pre-retirement survivor annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which the Participant
attains age 35. Any new waiver on or after such date shall be subject to
the full requirements of this Article.
8.4 Qualified Election A Qualified Election is an election to either
waive a Qualified Joint and Survivor Annuity or a qualified pre-retirement
survivor annuity. Any such election shall not be effective unless:
(a) the Participant's Spouse consents in writing to
the election;
(b) the election designates a specific beneficiary,
including any class of beneficiaries or any
contingent beneficiaries, which may not be changed
without spousal consent (or the Spouse expressly
permits designations by the Participant without any
further spousal consent);
(c) the Spouse's consent acknowledges the effect of
the election; and
(d) the Spouse's consent is witnessed by a Plan
representative or notary public.
Additionally, a Participant's waiver of the Qualified Joint and Survivor
Annuity shall not be effective unless the election designates a form of
benefit payment which may not be changed without spousal consent (or the
Spouse expressly permits designations by the Participant without any
further spousal consent). If it is established to the satisfaction of the
Plan Administrator that there is no Spouse or that the Spouse cannot be
located, a waiver will be deemed a Qualified Election. Any consent by a
Spouse obtained under this provision (or establishment that the consent of
a Spouse may not be obtained) shall be effective only with respect to such
Spouse. A consent that permits designations by the Participant without any
requirement of further consent by such Spouse must acknowledge that the
Spouse has the right to limit consent to a specific beneficiary, and a
specific form of benefit where applicable, and that the Spouse voluntarily
elects to relinquish either or both of such rights. A revocation of a
prior waiver may be made by a Participant without the consent of the Spouse
at any time before the commencement of benefits. The number of revocations
shall not be limited. No consent obtained under this provision shall be
valid unless the Participant has received notice as provided in paragraphs
8.5 and 8.6 below.
8.5 Notice Requirements For Qualified Joint And Survivor Annuity In the
case of a Qualified Joint and Survivor Annuity, the Plan Administrator
shall, no less than 30 days and no more than 90 days prior to the Annuity
Starting date, provide each Participant a written explanation of:
(a) the terms and conditions of a Qualified Joint
and Survivor Annuity;
(b) the Participant's right to make and the effect
of an election to waive the Qualified Joint and
Survivor Annuity form of benefit;
(c) the rights of a Participant's Spouse; and
(d) the right to make, and the effect of, a
revocation of a previous election to waive the
Qualified Joint and Survivor Annuity.
8.6 Notice Requirements For Qualified Pre-Retirement Survivor Annuity In
the case of a qualified pre-retirement survivor annuity as described in
paragraph 8.3, the Plan Administrator shall provide each Participant within
the applicable period for such Participant a written explanation of the
qualified pre-retirement survivor annuity in such terms and in such manner
as would be comparable to the explanation provided for meeting the
requirements of paragraph 8.5 applicable to a Qualified Joint and Survivor
Annuity. The applicable period for a Participant is whichever of the
following periods ends last:
(a) the period beginning with the first day of the
Plan Year in which the Participant attains age 32
and ending with the close of the Plan Year preceding
the Plan Year in which the Participant attains age
35;
(b) a reasonable period ending after the individual
becomes a Participant;
(c) a reasonable period ending after this Article
first applies to the Participant. Notwithstanding
the foregoing, notice must be provided within a
reasonable period ending after separation from
Service in the case of a Participant who separates
from Service before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable period
ending after the events described in (b) and (c) is the end of the two-year
period beginning one-year prior to the date the applicable event occurs,
and ending one-year after that date. In the case of a Participant who
separates from Service before the Plan Year in which age 35 is attained,
notice shall be provided within the two-year period beginning one year
prior to separation and ending one year after separation. If such a
Participant subsequently returns to employment with the Employer, the
applicable period for such Participant shall be re-determined.
8.7 Special Safe-Harbor Exception For Certain Profit-Sharing Plans
(a) This paragraph shall apply to a Participant in
a profit-sharing plan, and to any distribution, made
on or after the first day of the first Plan Year
beginning after 1988, from or under a separate
account attributable solely to Qualified Voluntary
contributions, as maintained on behalf of a
Participant in a money purchase pension plan,
(including a target benefit plan) if the following
conditions are satisfied:
(1) the Participant does not or cannot
elect payments in the form of a life
annuity; and
(2) on the death of a Participant, the
Participant's Vested Account Balance will
be paid to the Participant's Surviving
Spouse, but if there is no Surviving
Spouse, or if the Surviving Spouse has
consented in a manner conforming to a
Qualified Election, then to the
Participant's Designated Beneficiary.
The Surviving Spouse may elect to have distribution
of the Vested Account Balance commence within the
90-day period following the date of the
Participant's death. The account balance shall be
adjusted for gains or losses occurring after the
Participant's death in accordance with the
provisions of the Plan governing the adjustment of
account balances for other types of distributions.
These safe-harbor rules shall not be operative with
respect to a Participant in a profit-sharing plan if
that plan is a direct or indirect transferee of a
Defined Benefit Plan, money purchase plan, a target
benefit plan, stock bonus plan, or profit-sharing
plan which is subject to the survivor annuity
requirements of Code Section 401(a)(11) and Code
Section 417, and would therefore have a Qualified
Joint and Survivor Annuity as its normal form of
benefit.
(b) The Participant may waive the spousal death
benefit described in this paragraph at any time
provided that no such waiver shall be effective
unless it satisfies the conditions (described in
paragraph 8.4) that would apply to the Participant's
waiver of the qualified pre-retirement survivor
annuity.
(c) If this paragraph 8.7 is operative, then all
other provisions of this Article other than
paragraph 8.8 are inoperative.
8.8 Transitional Joint And Survivor Annuity Rules Special transition
rules apply to Participants who were not receiving benefits on August 23,
1984.
(a) Any living Participant not receiving benefits
on August 23, 1984, who would otherwise not receive
the benefits prescribed by the previous paragraphs
of this Article, must be given the opportunity to
elect to have the prior paragraphs of this Article
apply if such Participant is credited with at least
one Hour of Service under this Plan or a predecessor
plan in a Plan Year beginning on or after January 1,
1976 and such Participant had at least ten Years of
Service for vesting purposes when he or she
separated from Service.
(b) Any living Participant not receiving benefits
on August 23, 1984, who was credited with at least
one Hour of Service under this Plan or a predecessor
plan on or after September 2, 1974, and who is not
otherwise credited with any Service in a Plan Year
beginning on or after January 1, 1976, must be given
the opportunity to have his or her benefits paid in
accordance with paragraph 8.9.
(c) The respective opportunities to elect [as
described in (a) and (b) above] must be afforded to
the appropriate Participants during the period
commencing on August 23, 1984 and ending on the date
benefits would otherwise commence to said
Participants.
8.9 Automatic Joint And Survivor Annuity And Early Survivor Annuity Any
Participant who has elected pursuant to paragraph 8.8(b) and any
Participant who does not elect under paragraph 8.8(a) or who meets the
requirements of paragraph 8.8(a), except that such Participant does not
have at least ten years of vesting Service when he or she separates from
Service, shall have his or her benefits distributed in accordance with all
of the following requirements if benefits would have been payable in the
form of a life annuity.
(a) Automatic Joint and Survivor Annuity. If
benefits in the form of a life annuity become
payable to a married Participant who:
(1) begins to receive payments under the
Plan on or after Normal Retirement Age, or
(2) dies on or after Normal Retirement
Age while still working for the Employer,
or
(3) begins to receive payments on or
after the Qualified Early Retirement Age,
or
(4) separates from Service on or after
attaining Normal Retirement (or the
Qualified Early Retirement Age) and after
satisfying the eligibility requirements
for the payment of benefits under the Plan
and thereafter dies before beginning to
receive such benefits, then such benefits
will be received under this Plan in the
form of a Qualified Joint and Survivor
Annuity, unless the Participant has
elected otherwise during the Election
Period. The Election Period must begin at
least 6 months before the Participant
attains Qualified Early Retirement Age and
end not more than 90 days before the
commencement of benefits. Any election
will be in writing and may be changed by
the Participant at any time.
(b) Election of Early Survivor Annuity. A
Participant who is employed after attaining the
Qualified Early Retirement Age will be given the
opportunity to elect, during the Election Period, to
have a survivor annuity payable on death. If the
Participant elects the survivor annuity, payments
under such annuity must not be less than the
payments which would have been made to the Spouse
under the Qualified Joint and Survivor Annuity if
the Participant had retired on the day before his or
her death. Any election under this provision will
be in writing and may be changed by the Participant
at any time. The Election Period begins on the
later of:
(1) the 90th day before the Participant
attains the Qualified Early Retirement
Age, or
(2) the date on which participation
begins, and ends on the date the
Participant terminates employment.
and ends on the date the Participant terminates employment.
8.10 Annuity Contracts Any annuity contract distributed under this Plan
must be nontransferable. The terms of any annuity contract purchased and
distributed by the Plan to a Participant or Spouse shall comply with the
requirements of this Plan.
ARTICLE IX
VESTING
9.1 Employee Contributions A Participant shall always have a 100% vested
and nonforfeitable interest in his or her Elective Deferrals, Voluntary
Contributions, Qualified Voluntary Contributions, Rollover Contributions,
and Transfer Contributions plus the earnings thereon. No forfeiture of
Employer related contributions (including any minimum contributions made
under paragraph 14.2) will occur solely as a result of an Employee's
withdrawal of any Employee contributions.
9.2 Employer Contributions A Participant shall acquire a vested and
nonforfeitable interest in his or her account attributable to Employer
contributions in accordance with the table selected in the Adoption
Agreement, provided that if a Participant is not already fully vested, he
or she shall become so upon attaining Normal Retirement Age, Early
Retirement Age, on death prior to normal retirement, on retirement due to
Disability, or on termination of the Plan.
9.3 Computation Period The computation period for purposes of determining
Years of Service and Breaks in Service for purposes of computing a
Participant's nonforfeitable right to his or her account balance derived
from Employer contributions shall be determined by the Employer in the
Adoption Agreement. In the event a former Participant with no vested
interest in his or her Employer contribution account requalifies for
participation in the Plan after incurring a Break in Service, such
Participant shall be credited for vesting with all pre-break and post-break
Service.
9.4 Requalification Prior To Five Consecutive One-Year Breaks In Service
The account balance of such Participant shall consist of any undistributed
amount in his or her account as of the date of re-employment plus any
future contributions added to such account plus the investment earnings on
the account. The Vested Account Balance of such Participant shall be
determined by multiplying the Participant's account balance (adjusted to
include any distribution or redeposit made under paragraph 6.3) by such
Participant's vested percentage. All Service of the Participant, both
prior to and following the break, shall be counted when computing the
Participant's vested percentage.
9.5 Requalification After Five Consecutive One-Year Breaks In Service If
such Participant is not fully vested upon re-employment, a new account
shall be established for such Participant to separate his or her deferred
vested and nonforfeitable account, if any, from the account to which new
allocations will be made. The Participant's deferred account to the extent
remaining shall be fully vested and shall continue to share in earnings and
losses of the Fund. When computing the Participant's vested portion of the
new account, all pre-break and post-break Service shall be counted.
However, notwithstanding this provision, no such former Participant who has
had five consecutive one-year Breaks in Service shall acquire a larger
vested and nonforfeitable interest in his or her prior account balance as a
result of requalification hereunder.
9.6 Calculating Vested Interest A Participant's vested and nonforfeitable
interest shall be calculated by multiplying the fair market value of his or
her account attributable to Employer contributions on the Valuation Date
preceding distribution by the decimal equivalent of the vested percentage
as of his or her termination date. The amount attributable to Employer
contributions for purposes of the calculation includes amounts previously
paid out pursuant to paragraph 6.3 and not repaid. The Participant's
vested and nonforfeitable interest, once calculated above, shall be reduced
to reflect those amounts previously paid out to the Participant and not
repaid by the Participant. The Participant's vested and nonforfeitable
interest so determined shall continue to share in the investment earnings
and any increase or decrease in the fair market value of the Fund up to the
Valuation Date preceding or coinciding with payment.
9.7 Forfeitures Any balance in the account of a Participant who has
separated from Service to which he or she is not entitled under the
foregoing provisions, shall be forfeited and applied as provided in the
Adoption Agreement. A forfeiture may only occur if the Participant has
received a distribution from the Plan or if the Participant has incurred
five consecutive 1-year Breaks in Service. Furthermore, a Highly
Compensated Employee's Matching Contributions may be forfeited, even if
vested, if the contributions to which they relate are Excess Deferrals,
Excess Contributions or Excess Aggregate Contributions.
9.8 Amendment Of Vesting Schedule No amendment to the Plan shall have the
effect of decreasing a Participant's vested interest determined without
regard to such amendment as of the later of the date such amendment is
adopted or the date it becomes effective. Further, if the vesting schedule
of the Plan is amended, or the Plan is amended in any way that directly or
indirectly affects the computation of any Participant's nonforfeitable
percentage or if the Plan is deemed amended by an automatic change to or
from a Top-Heavy vesting schedule, each Participant with at least three
Years of Service with the Employer may elect, within a reasonable period
after the adoption of the amendment, to have his or her nonforfeitable
percentage computed under the Plan without regard to such amendment. For
Participants who do not have at least one Hour of Service in any Plan Year
beginning after 1988, the preceding sentence shall be applied by
substituting "five Years of Service" for "three Years of Service" where
such language appears. The period during which the election may be made
shall commence with the date the amendment is adopted and shall end on the
later of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective;
or
(c) 60 days after the Participant is issued written
notice of the amendment by the Employer or the
Trustee/Custodian. If the Trustee/Custodian is
asked to so notify, the Fund will be charged for the
costs thereof.
No amendment to the Plan shall be effective to the extent that it has the
effect of decreasing a Participant's accrued benefit. Notwithstanding the
preceding sentence, a Participant's account balance may be reduced to the
extent permitted under Code Section 412(c)(8) (relating to financial
hardships). For purposes of this paragraph, a Plan amendment which has the
effect of decreasing a Participant's account balance or eliminating an
optional form of benefit, with respect to benefits attributable to service
before the amendment, shall be treated as reducing an accrued benefit.
9.9 Service With Controlled Groups All Years of Service with other
members of a controlled group of corporations [as defined in Code Section
414(b)], trades or businesses under common control [as defined in Code
Section 414(c)], or members of an affiliated service group [as defined in
Code Section 414(m)] shall be considered for purposes of determining a
Participant's nonforfeitable percentage.
ARTICLE X
LIMITATIONS ON ALLOCATIONS
AND ANTIDISCRIMINATION TESTING
10.1 Participation In This Plan Only If the Participant does not
participate in and has never participated in another qualified plan, a
Welfare Benefit Fund (as defined in paragraph 1.89) or an individual
medical account, as defined in Code Section 415(l)(2), maintained by the
adopting Employer, which provides an Annual Addition as defined in
paragraph 1.4, the amount of Annual Additions which may be credited to the
Participant's account for any Limitation Year will not exceed the lesser of
the Maximum Permissible Amount or any other limitation contained in this
Plan. If the Employer contribution that would otherwise be contributed or
allocated to the Participant's account would cause the Annual Additions for
the Limitation Year to exceed the Maximum Permissible Amount, the amount
contributed or allocated will be reduced so that the Annual Additions for
the Limitation Year will equal the Maximum Permissible Amount. Prior to
determining the Participant's actual Compensation for the Limitation Year,
the Employer may determine the Maximum Permissible Amount for a Participant
on the basis of a reasonable estimate of the Participant's Compensation for
the Limitation Year, uniformly determined for all Participants similarly
situated. As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation Year
will be determined on the basis of the Participant's actual Compensation
for the Limitation Year.
10.2 Disposition Of Excess Annual Additions If, pursuant to paragraph 10.1
or as a result of the allocation of forfeitures, there is an Excess Amount,
the excess will be disposed of under one of the following methods as
determined in the Adoption Agreement. If no election is made in the
Adoption Agreement then method "(a)" below shall apply.
(a) Suspense Account Method
(1) Any Elective Deferrals and
nondeductible Employee Voluntary
Contributions or Required Voluntary
Contributions, to the extent they would
reduce the Excess Amount, will be returned
to the Participant;
(2) If after the application of paragraph
(1) an Excess Amount still exists, and the
Participant is covered by the Plan at the
end of the Limitation Year, the Excess
Amount in the Participant's account will
be used to reduce Employer contributions
(including any allocation of forfeitures)
for such Participant in the next
Limitation Year, and each succeeding
Limitation Year if necessary;
(3) If after the application of paragraph
(1) an Excess Amount still exists, and the
Participant is not covered by the Plan at
the end of the Limitation Year, the Excess
Amount will be held unallocated in a
suspense account. The suspense account
will be applied to reduce future Employer
contributions (including allocation of any
forfeitures) for all remaining
Participants in the next Limitation Year,
and each succeeding Limitation Year if
necessary;
(4) If a suspense account is in existence
at any time during the Limitation Year
pursuant to this paragraph, it will not
participate in the allocation of
investment gains and losses. If a
suspense account is in existence at any
time during a particular Limitation Year,
all amounts in the suspense account must
be allocated and reallocated to
Participants' accounts before any Employer
contributions or any Employee
Contributions may be made to the Plan for
that Limitation Year. Excess amounts may
not be distributed to Participants or
former Participants.
(b) Spillover Method
(1) Any Elective Deferrals and
nondeductible Employee Voluntary or
Required Voluntary Contributions, to the
extent they would reduce the Excess
Amount, will be returned to the
Participant;
(2) Any Excess Amount which would be
allocated to the account of an individual
Participant under the Plan's allocation
formula will be reallocated to other
Participants in the same manner as other
Employer contributions. No such
reallocation shall be made to the extent
that it will result in an Excess Amount
being created in such Participant's own
account.
(3) To the extent that amounts cannot be
reallocated under (1) above, the suspense
account provisions of (a) above will
apply.
10.3 Participation In This Plan And Another Master and Prototype Defined
Contribution Plan, Welfare Benefit Fund Or Individual Medical Account
Maintained By The Employer The Annual Additions which may be credited to a
Participant's account under this Plan for any Limitation Year will not
exceed the Maximum Permissible Amount reduced by the Annual Additions
credited to a Participant's account under the other Master or Prototype
Defined Contribution Plans, Welfare Benefit Funds, and individual medical
accounts as defined in Code Section 415(l)(2), maintained by the Employer,
which provide an Annual Addition as defined in paragraph 1.4 for the same
Limitation Year. If the Annual Additions, with respect to the Participant
under other Defined Contribution Plans and Welfare Benefit Funds maintained
by the Employer, are less than the Maximum Permissible Amount and the
Employer contribution that would otherwise be contributed or allocated to
the Participant's account under this Plan would cause the Annual Additions
for the Limitation Year to exceed this limitation, the amount contributed
or allocated will be reduced so that the Annual Additions under all such
plans and funds for the Limitation Year will equal the Maximum Permissible
Amount. If the Annual Additions with respect to the Participant under such
other Defined Contribution Plans and Welfare Benefit Funds in the aggregate
are equal to or greater than the Maximum Permissible Amount, no amount will
be contributed or allocated to the Participant's account under this Plan
for the Limitation Year. Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer may determine the
Maximum Permissible Amount for a Participant in the manner described in
paragraph 10.1. As soon as administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the Limitation Year
will be determined on the basis of the Participant's actual Compensation
for the Limitation Year.
10.4 Disposition Of Excess Annual Additions Under Two Plans If, pursuant
to paragraph 10.3 or as a result of forfeitures, a Participant's Annual
Additions under this Plan and such other plans would result in an Excess
Amount for a Limitation Year, the Excess Amount will be deemed to consist
of the Annual Additions last allocated except that Annual Additions
attributable to a Welfare Benefit Fund or Individual Medical Account as
defined in Code Section 415(l)(2) will be deemed to have been allocated
first regardless of the actual allocation date. If an Excess Amount was
allocated to a Participant on an allocation date of this Plan which
coincides with an allocation date of another plan, the Excess Amount
attributed to this Plan will be the product of:
(a) the total Excess Amount allocated as of such
date, times
(b) the ratio of:
(1) the Annual Additions allocated to the
Participant for the Limitation Year as of
such date under the Plan, to
(2) the total Annual Additions allocated
to the Participant for the Limitation Year
as of such date under this and all the
other qualified Master or Prototype
Defined Contribution Plans.
Any Excess Amount attributed to this Plan will be disposed of in the manner
described in paragraph 10.2.
10.5 Participation In This Plan And Another Defined Contribution Plan
Which Is Not A Master Or Prototype Plan 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 paragraphs 10.3 and 10.4
as though the other plan were a Master or Prototype Plan, unless the
Employer provides other limitations in the Adoption Agreement.
10.6 Participation In This Plan And A Defined Benefit Plan If the Employer
maintains, or at any time maintained, a qualified Defined Benefit Plan
covering any Participant in this Plan, the sum of the Participant's Defined
Benefit Plan Fraction and Defined Contribution Plan Fraction will not
exceed 1.0 in any Limitation Year. For any Plan Year during which the Plan
is Top-Heavy, the Defined Benefit and Defined Contribution Plan Fractions
shall be calculated in accordance with Code Section 416(h). The Annual
Additions which may be credited to the Participant's account under this
Plan for any Limitation Year will be limited in accordance with the
provisions set forth in the Adoption Agreement.
10.7 Average Deferral Percentage (ADP) Test With respect to any Plan Year,
the Average Deferral Percentage for Participants who are Highly Compensated
Employees and the Average Deferral Percentage for Participants who are
non-Highly Compensated Employees must satisfy one of the following tests:
(a) Basic Test - The Average Deferral Percentage
for Participants who are Highly Compensated
Employees for the Plan Year is not more than 1.25
times the Average Deferral Percentage for
Participants who are non-Highly Compensated
Employees for the same Plan Year, or
(b) Alternative Test - The Average Deferral
Percentage for Participants who are Highly
Compensated Employees for the Plan Year does not
exceed the Average Deferral Percentage for
Participants who are non-Highly Compensated
Employees for the same Plan Year by more than two
percentage points provided that the Average Deferral
Percentage for Participants who are Highly
Compensated Employees is not more than 2.0 times the
Average Deferral Percentage for Participants who are
non-Highly Compensated Employees.
10.8 Special Rules Relating To Application Of ADP Test
(a) The Actual Deferral Percentage for any
Participant who is a Highly Compensated Employee for
the Plan Year and who is eligible to have Elective
Deferrals (and Qualified Non-Elective Contributions
or Qualified Matching Contributions, or both, if
treated as Elective Deferrals for purposes of the
ADP test) allocated to his or her accounts under two
or more arrangements described in Code Section
401(k), that are maintained by the Employer, shall
be determined as if such Elective Deferrals (and, if
applicable, such Qualified Non-Elective
Contributions or Qualified Matching Contributions,
or both) were made under a single arrangement. If a
Highly Compensated Employee participates in two or
more cash or deferred arrangements that have
different Plan Years, all cash or deferred
arrangements ending with or within the same calendar
year shall be treated as a single arrangement.
(b) In the event that this Plan satisfies the
requirements of Code Sections 401(k), 401(a)(4), or
410(b), only if aggregated with one or more other
plans, or if one or more other plans satisfy the
requirements of such Code Sections only if
aggregated with this Plan, then this Section shall
be applied by determining the Actual Deferral
Percentage of Employees as if all such plans were a
single plan. For Plan Years beginning after 1989,
plans may be aggregated in order to satisfy Code
Section 401(k) only if they have the same Plan Year.
(c) For purposes of determining the Actual Deferral
Percentage of a Participant who is a five-percent
owner or one of the ten most highly-paid Highly
Compensated Employees, the Elective Deferrals (and
Qualified Non-Elective Contributions or Qualified
Matching Contributions, or both, if treated as
Elective Deferrals for purposes of the ADP test) and
Compensation of such Participant shall include the
Elective Deferrals (and, if applicable, Qualified
Non-Elective Contributions and Qualified Matching
Contributions, or both) for the Plan Year of Family
Members as defined in paragraph 1.36 of this Plan.
Family Members, with respect to such Highly
Compensated Employees, shall be disregarded as
separate Employees in determining the ADP both for
Participants who are non-Highly Compensated
Employees and for Participants who are Highly
Compensated Employees. In the event of repeal of the
family aggregation rules under Code Section
414(q)(6), all applications of such rules under this
Plan will cease as of the effective date of such
repeal.
(d) For purposes of determining the ADP test,
Elective Deferrals, Qualified Non-Elective
Contributions and Qualified Matching Contributions
must be made before the last day of the twelve-month
period immediately following the Plan Year to which
contributions relate.
(e) The Employer shall maintain records sufficient
to demonstrate satisfaction of the ADP test and the
amount of Qualified Non-Elective Contributions or
Qualified Matching Contributions, or both, used in
such test.
(f) The determination and treatment of the Actual
Deferral Percentage amounts of any Participant shall
satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
10.9 Recharacterization If the Employer allows for Voluntary Contributions
in the Adoption Agreement, a Participant may treat his or her Excess
Contributions as an amount distributed to the Participant and then
contributed by the Participant to the Plan. Recharacterized amounts will
remain nonforfeitable and subject to the same distribution requirements as
Elective Deferrals. Amounts may not be recharacterized by a Highly
Compensated Employee to the extent that such amount in combination with
other Employee Contributions made by that Employee would exceed any stated
limit under the Plan on Voluntary Contributions. Recharacterization must
occur no later than two and one-half months after the last day of the Plan
Year in which such Excess Contributions arose and is deemed to occur no
earlier than the date the last Highly Compensated Employee is informed in
writing of the amount recharacterized and the consequences thereof.
Recharacterized amounts will be taxable to the Participant for the
Participant's tax year in which the Participant would have received them in
cash.
10.10 Average Contribution Percentage (ACP) Test If the Employer makes
Matching Contributions or if the Plan allows Employees to make Voluntary
Contributions the Plan must meet additional nondiscrimination requirements
provided under Code Section 401(m). If Employee Contributions (including
any Elective Deferrals recharacterized as Voluntary Contributions) are made
pursuant to this Plan, then in addition to the ADP test referenced in
paragraph 10.7, the Average Contribution Percentage test is also
applicable. The Average Contribution Percentage for Participants who are
Highly Compensated Employees for each Plan Year and the Average
Contribution Percentage for Participants who are Non-Highly Compensated
Employees for the same Plan Year must satisfy one of the following tests:
(a) Basic Test - The Average Contribution
Percentage for Participants who are Highly
Compensated Employees for the Plan Year shall not
exceed the Average Contribution Percentage for
Participants who are non-Highly Compensated
Employees for the same Plan Year multiplied by 1.25;
or
(b) Alternative Test - The ACP for Participants who
are Highly Compensated Employees for the Plan Year
shall not exceed the Average Contribution Percentage
for Participants who are non-Highly Compensated
Employees for the same Plan Year multiplied by two ,
provided that the Average Contribution Percentage
for Participants who are Highly Compensated
Employees does not exceed the Average Contribution
Percentage for Participants who are non-Highly
Compensated Employees by more than two percentage
points.
10.11 Special Rules Relating To Application Of ACP Test
(a) If one or more Highly Compensated Employees
participate in both a cash or deferred arrangement
and a plan subject to the ACP test maintained by the
Employer and the sum of the ADP and ACP of those
Highly Compensated Employees subject to either or
both tests exceeds the Aggregate Limit, then the ADP
or ACP of those Highly Compensated Employees who
also participate in a cash or deferred arrangement
will be reduced (beginning with such Highly
Compensated Employee whose ADP or ACP is the
highest) as set forth in the Adoption Agreement so
that the limit is not exceeded. The amount by which
each Highly Compensated Employee's Contribution
Percentage Amounts is reduced shall be treated as an
Excess Aggregate Contribution. The ADP and ACP of
the Highly Compensated Employees are determined
after any corrections required to meet the ADP and
ACP tests. Multiple use does not occur if both the
ADP and ACP of the Highly Compensated Employees does
not exceed 1.25 multiplied by the ADP and ACP of the
non-Highly Compensated Employees.
(b) For purposes of this Article, the Contribution
Percentage for any Participant who is a Highly
Compensated Employee and who is eligible to have
Contribution Percentage Amounts allocated to his or
her account under two or more plans described in
Code Section 401(a), or arrangements described in
Code Section 401(k) that are maintained by the
Employer, shall be determined as if the total of
such Contribution Percentage amounts was made under
each Plan. If a Highly Compensated Employee
participates in two or more cash or deferred
arrangements that have different Plan Years, all
cash or deferred arrangements ending with or within
the same calendar year shall be treated as a single
arrangement.
(c) In the event that this Plan satisfies the
requirements of Code Sections 401(a)(4), 401(m), or
410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the
requirements of such Code Sections only if
aggregated with this Plan, then this Section shall
be applied by determining the Contribution
Percentage of Employees as if all such plans were a
single plan. For plan years beginning after 1989,
plans may be aggregated in order to satisfy Code
Section 401(m) only if the aggregated plans have the
same Plan Year.
(d) For purposes of determining the Contribution
percentage of a Participant who is a five-percent
owner or one of the ten most 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 Paragraph 1.36 of this Plan. Family
Members, with respect to Highly Compensated
Employees, shall be disregarded as separate
Employees in determining the Contribution Percentage
both for Participants who are non-Highly Compensated
Employees and for Participants who are Highly
Compensated Employees. In the event of repeal of
the family aggregation rules under Code Section
414(q)(6), all applications of such rules under this
Plan will cease as of the effective date of such
repeal.
(e) For purposes of determining the Contribution
Percentage test, Employee Contributions are
considered to have been made in the Plan Year in
which contributed to the trust. Matching
Contributions and Qualified Non-Elective
Contributions will be considered made for a Plan
Year if made no later than the end of the
twelve-month period beginning on the day after the
close of the Plan Year.
(f) The Employer shall maintain records sufficient
to demonstrate satisfaction of the ACP test and the
amount of Qualified Non-Elective Contributions or
Qualified Matching Contributions, or both, used in
such test.
(g) The determination and treatment of the
Contribution Percentage of any Participant shall
satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
(h) Qualified Matching Contributions and Qualified
Non-Elective Contributions used to satisfy the ADP
test may not be used to satisfy the ACP test.
ARTICLE XI
ADMINISTRATION
11.1 Plan Administrator The Employer shall be the named fiduciary and Plan
Administrator. These duties shall include:
(a) appointing the Plan's attorney, accountant,
actuary, or any other party needed to administer the
Plan,
(b) directing the Trustee/Custodian with respect to
payments from the Fund,
(c) communicating with Employees regarding their
participation and benefits under the Plan, including
the administration of all claims procedures,
(d) filing any returns and reports with the
Internal Revenue Service, Department of Labor, or
any other governmental agency,
(e) reviewing and approving any financial reports,
investment reviews, or other reports prepared by any
party appointed by the Employer under paragraph (a),
(f) establishing a funding policy and investment
objectives consistent with the purposes of the Plan
and the Employee Retirement Income Security Act of
1974, and
(g) construing and resolving any question of Plan
interpretation. The Plan Administrator's
interpretation of Plan provisions including
eligibility and benefits under the Plan is final,
and unless it can be shown to be arbitrary and
capricious will not be subject to "de novo" review.
11.2 Trustee/Custodian The Trustee/Custodian shall be responsible for the
administration of investments held in the Fund. These duties shall
include:
(a) receiving contributions under the terms of the
Plan,
(b) making distributions from the Fund in
accordance with written instructions received from
an authorized representative of the Employer, and
(c) keeping accurate records reflecting its
administration of the Fund and making such records
available to the Employer for review and audit.
Within 90 days after each Plan Year, and within 90
days after its removal or resignation, the
Trustee/Custodian shall file with the Employer an
accounting of its administration of the Fund during
such year or from the end of the preceding Plan Year
to the date of removal or resignation. Such
accounting shall include a statement of cash
receipts and disbursements since the date of its
last accounting and shall contain an asset list
showing the fair market value of investments held in
the Fund as of the end of the Plan Year. The value
of marketable investments shall be determined using
the most recent price quoted on a national
securities exchange or over the counter market. The
value of non-marketable investments shall be
determined in the sole judgement of the
Trustee/Custodian which determination shall be
binding and conclusive. The value of investments in
securities or obligations of the Employer in which
there is no market shall be determined in the sole
judgement of the Employer and the Trustee/Custodian
shall have no responsibility with respect to the
valuation of such assets. The Employer shall review
the Trustee/Custodian's accounting and notify the
Trustee/Custodian in the event of its disapproval of
the report within 90 days, providing the
Trustee/Custodian with a written description of the
items in question. The Trustee/Custodian shall have
60 days to provide the Employer with a written
explanation of the items in question. If the
Employer again disapproves, the Trustee/Custodian
shall file its accounting in a court of competent
jurisdiction for audit and adjudication.
(d) employing such agents, including but not
limited to an investment advisor which may or may
not be a subsidiary or an affiliate of the Trustee,
attorneys or other professionals as the Trustee may
deem necessary or advisable in the performance of
its duties.
The Trustee's/Custodian's duties shall be limited to those described above.
The Employer shall be responsible for any other administrative duties
required under the Plan or by applicable law.
11.3 Administrative Fees And Expenses All reasonable costs, charges and
expenses incurred by the Trustee/Custodian in connection with the
administration of the Fund and all reasonable costs, charges and expenses
incurred by the Plan Administrator in connection with the administration of
the Plan (including fees for legal services rendered to the
Trustee/Custodian or Plan Administrator) may be paid by the Employer, but
if not paid by the Employer when due, shall be paid from the Fund. Such
reasonable compensation to the Trustee/Custodian as may be agreed upon from
time to time between the Employer and the Trustee/Custodian and such
reasonable compensation to the Plan Administrator as may be agreed upon
from time to time between the Employer and Plan Administrator may be paid
by the Employer, but if not paid by the Employer when due shall be paid by
the Fund. The Trustee shall have the right to liquidate trust assets to
cover its fees. Notwithstanding the foregoing, no compensation other than
reimbursement for expenses shall be paid to a Plan Administrator who is the
Employer or a full-time Employee of the Employer. In the event any part of
the Trust/Custodial Account becomes subject to tax, all taxes incurred will
be paid from the Fund unless the Plan Administrator advises the
Trustee/Custodian not to pay such tax.
11.4 Division Of Duties And Indemnification
(a) The Trustee/Custodian shall have the authority
and discretion to manage and govern the Fund to the
extent provided in this instrument, but does not
guarantee the Fund in any manner against investment
loss or depreciation in asset value, or guarantee
the adequacy of the Fund to meet and discharge all
or any liabilities of the Plan.
(b) The Trustee/Custodian shall not be liable for
the making, retention or sale of any investment or
reinvestment made by it, as herein provided, or for
any loss to, or diminution of the Fund, or for any
other loss or damage which may result from the
discharge of its duties hereunder except to the
extent it is judicially determined that the
Trustee/Custodian has failed to exercise the care,
skill, prudence and diligence under the
circumstances then prevailing that a prudent person
acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of
a like character with like aims.
(c) The Employer warrants that all directions
issued to the Trustee/Custodian by it, the Plan
Administrator, an investment manager appointed
pursuant to paragraph 13.7, or any other authorized
person, will be in accordance with the terms of the
Plan and not contrary to the provisions of the
Employee Retirement Income Security Act of 1974 and
regulations issued thereunder.
(d) The Trustee/Custodian shall not be answerable
for any action taken pursuant to any direction,
consent, certificate, or other paper or document on
the belief that the same is genuine and signed by
the proper person. All directions by the Employer,
Participant or the Plan Administrator shall be in
writing. The Employer shall deliver to the
Trustee/Custodian certificates evidencing the
individual or individuals authorized to act as set
forth in the Adoption Agreement or as the Employer
may subsequently inform the Trustee/Custodian in
writing and shall deliver to the Trustee/Custodian
specimens of their signatures.
(e) The duties and obligations of the
Trustee/Custodian shall be limited to those
expressly imposed upon it by this instrument or
subsequently agreed upon by the parties.
Responsibility for administrative duties required
under the Plan or applicable law not expressly
imposed upon or agreed to by the Trustee/Custodian,
shall rest solely with the Employer.
(f) The Trustee/Custodian shall be indemnified and
saved harmless by the Employer from and against any
and all liability to which the Trustee/Custodian may
be subjected, including all expenses reasonably
incurred in its defense, for any action or failure
to act resulting from compliance with the
instructions of the Employer, the Employees or
agents of the Employer, the Plan Administrator, or
any other fiduciary to the Plan, and for any
liability arising from the actions or non-actions of
any predecessor Trustee/Custodian or fiduciary or
other fiduciaries of the Plan.
(g) The Trustee/Custodian shall not be responsible
in any way for the application of any payments it is
directed to make or for the adequacy of the Fund to
meet and discharge any and all liabilities under the
Plan.
ARTICLE XII
TRUST FUND/CUSTODIAL ACCOUNT
12.1 The Fund The Fund shall consist of all contributions made under
Article III and Article IV of the Plan and the investment thereof and
earnings thereon. All contributions and the earnings thereon less payments
made under the terms of the Plan, shall constitute the Fund. The Fund
shall be administered as provided in this document.
12.2 Control Of Plan Assets The assets of the Fund or evidence of
ownership shall be held by the Trustee/Custodian under the terms of the
Plan and Trust/Custodial Account. If the assets represent amounts
transferred from another trustee/custodian under a former plan, the
Trustee/Custodian named hereunder shall not be responsible for the
propriety of any investment under the former plan.
12.3 Exclusive Benefit Rules No part of the Fund shall be used for, or
diverted to, purposes other than for the exclusive benefit of Participants,
former Participants with a vested interest, and the beneficiary or
beneficiaries of deceased Participants having a vested interest in the Fund
at death.
12.4 Assignment And Alienation Of Benefits No right or claim to, or
interest in, any part of the Fund, or any payment from the Fund, shall be
assignable, transferable, or subject to sale, mortgage, pledge,
hypothecation, commutation, anticipation, garnishment, attachment,
execution, or levy of any kind. The Trustee/Custodian shall not recognize
any attempt to assign, transfer, sell, mortgage, pledge, hypothecate,
commute, or anticipate the same, except to the extent required by law. The
preceding sentences shall also apply to the creation, assignment, or
recognition of a right to any benefit payable with respect to a Participant
pursuant to a domestic relations order, unless such order is determined to
be a Qualified Domestic Relations Order, as defined in Code Section 414(p),
or any domestic relations order entered before January 1, 1985 which the
Plan attorney and Plan Administrator deem to be qualified.
12.5 Determination Of Qualified Domestic Relations Order (QDRO) A Domestic
Relations Order shall specifically state all of the following in order to
be deemed a Qualified Domestic Relations Order ("QDRO"):
(a) The name and last known mailing address (if
any) of the Participant and of each alternate payee
covered by the QDRO. However, if the QDRO does not
specify the current mailing address of the alternate
payee, but the Plan Administrator has independent
knowledge of that address, the QDRO will still be
valid.
(b) The dollar amount or percentage of the
Participant's benefit to be paid by the Plan to each
alternate payee, or the manner in which the amount
or percentage will be determined.
(c) The number of payments or period for which the
order applies.
(d) The specific plan (by name) to which the
domestic relations order applies.
The Domestic Relations Order shall not be deemed a QDRO if it requires the
Plan to provide:
(e) any type or form of benefit, or any option not
already provided for in the Plan;
(f) increased benefits, or benefits in excess of
the Participant's vested rights;
(g) payment of a benefit earlier than allowed by
the Plan's earliest retirement provisions or in the
case of a profit-sharing plan, prior to the
allowability of in-service withdrawals, or
(h) payment of benefits to an alternate payee which
are required to be paid to another alternate payee
under another QDRO.
Promptly, upon receipt of a domestic relations order ("order") which may or
may not be "qualified", the Plan Administrator shall notify the Participant
and any alternate payee(s) named in the order of such receipt, and include
a copy of this paragraph 12.5. The Plan Administrator shall then forward
the order to the Plan's legal counsel for an opinion as to whether or not
the order is in fact "Qualified" as defined in Code Section 414(p). Within
a reasonable time after receipt of the order, not to exceed 60 days, the
Plan's legal counsel shall make a determination as to its "qualified"
status and the Participant and any alternate payee(s) shall be promptly
notified in writing of the determination.
If the "qualified" status of the order is in question, there will be a
delay in any payout to any payee including the Participant, until the
status is resolved. In such event, the Plan Administrator shall segregate
the amount that would have been payable to the alternate payee(s) if the
order had been deemed a QDRO. If the order is not qualified, or the status
is not resolved (for example, it has been sent back to the court for
clarification or modification) within 18 months beginning with the date the
first payment would have to be made under the Order, the Plan Administrator
shall pay the segregated amounts plus interest to the person(s) who would
have been entitled to the benefits had there been no order. If a
determination as to the qualified status of the order is made after the
18-month period described above, then the order shall only be applied on a
prospective basis. If the order is determined to be a QDRO, the
Participant and alternate payee(s) shall again be notified promptly after
such determination. Once an order is deemed a QDRO, the Plan Administrator
shall pay to the alternate payee(s) all the amounts due under the QDRO,
including segregated amounts plus interest which may have accrued during a
dispute as to the order's qualification.
Unless specified otherwise in the Adoption Agreement, the earliest
retirement age with regard to the Participant against whom the order is
entered shall be the date the order is determined to be qualified. This
will only allow payouts to alternate payee(s) and not the Participant.
ARTICLE XIII
INVESTMENTS
13.1 Fiduciary Standards The Trustee shall invest and reinvest principal
and income in the same Fund in accordance with the investment objectives
established by the Employer, provided that:
(a) such investments are prudent under the Employee
Retirement Income Security Act of 1974 and the
regulations thereunder,
(b) such investments are sufficiently diversified
or otherwise insured or guaranteed to minimize the
risk of large losses, and
(c) such investments are similar to those which
would be purchased by another professional money
manager for a like plan with similar investment
objectives.
13.2 Funding Arrangement The Employer shall, in the Adoption Agreement,
appoint a Trustee to administer the Fund and/or a Custodian to have custody
of the Fund. The Trustee shall invest the Fund in any of the alternatives
available under paragraph 13.3. If a Custodian is appointed, the Fund
shall be invested as provided in paragraph 13.4.
13.3 Investment Alternatives Of The Trustee The Trustee shall implement an
investment program based on the Employer's investment objectives and the
Employee Retirement Income Security Act of 1974. In addition to powers
given by law, the Trustee may:
(a) invest the Fund in any form of property,
including common and preferred stocks, exchange
traded put and call options, bonds, money market
instruments, mutual funds (including funds for which
the Trustee/Custodian or its subsidiaries or its
affiliates serve as investment advisor), savings
accounts, certificates of deposit, Treasury bills,
insurance policies and contracts, or in any other
property, real or personal, having a ready market
including securities issued by the Trustee and/or
affiliates of the Trustee. The Trustee may also
make loans to Plan Participants in accordance with
paragraph 13.5 hereof. The Trustee may invest in
its own deposits and, if applicable, those of
affiliates, which bear a reasonable interest rate.
No portion of any Qualified Voluntary Contribution,
or the earnings thereon, may be invested in life
insurance contracts or, as with any
Participant-directed investment, in tangible
personal property characterized by the IRS as a
collectible,
(b) transfer any assets of the Fund to a group or
collective trust established to permit the pooling
of funds of separate pension and profit-sharing
trusts, provided the Internal Revenue Service has
ruled such group or collective trust to be qualified
under Code Section 401(a) and exempt under Code
Section 501(a) (or the applicable corresponding
provision of any other Revenue Act) or to any other
common, collective, or commingled trust fund which
has been or may hereafter be established and
maintained by the Trustee/Custodian and/or
affiliates of the Trustee/Custodian. Such
commingling of assets of the Fund with assets of
other qualified trusts is specifically authorized,
and to the extent of the investment of the Fund in
such a group or collective trust, the terms of the
instrument establishing the group or collective
trust shall be a part hereof as though set forth
herein. The terms of said instrument(s) may
authorize the Trustee of the group or collective
trust to engage in securities lending transactions
where fees may be deducted from the group or
collective trust's loan income,
(c) invest the Fund in the common stock, debt
obligations, or any other security issued by the
Employer or by an affiliate of the Employer within
the limitations provided under Sections 406, 407,
and 408 of the Employee Retirement Income Security
Act of 1974 and further provided that such
investment does not constitute a prohibited
transaction under Code Section 4975. Any such
investment in Employer securities shall only be made
upon written direction of the Employer who shall be
solely responsible for propriety of such investment,
(d) hold cash uninvested and deposit same with any
banking or savings institution, including its own
banking department,
(e) join in or oppose the reorganization,
recapitalization, consolidation, sale or merger of
corporations or properties, including those in which
it is interested as Trustee, upon such terms as it
deems wise,
(f) hold investments in nominee or bearer form,
(g) vote proxies and, if appropriate, pass them on
to any investment manager which may have directed
the investment in the equity giving rise to the
proxy,
(h) exercise all ownership rights with respect to
assets held in the Fund.
13.4 Duties Of The Custodian The Custodian shall be depository of all or
part of the Fund and shall, at the written direction of the Trustee hold
any assets received from the Trustee or its agents. The Custodian may rely
upon any order, certificate, notice, direction or other written directive
issued by the Trustee or its agents. The Custodian shall receive and
deliver assets as instructed by the Trustee or its agents. To the extent
that the Custodian holds title to Plan assets and such ownership requires
action on the part of the registered owner, such action will be taken by
the Custodian only upon receipt of specific instructions from the Trustee
or its agents or an investment manager. Proxies shall be voted by or
pursuant to the express direction of the Trustee or authorized agent of the
Trustee. The Custodian shall not give any investment advice, including any
opinion on the prudence of directed investments. The Employer and Trustee
and the agents thereof assume all responsibility for adherence to fiduciary
standards under the Employee Retirement Income Security Act of 1974 (ERISA)
and all amendments thereof, and regulations thereunder.
13.5 Participant Loans If agreed upon by the Trustee and permitted by the
Employer in the Adoption Agreement, a Plan Participant may make application
to the Employer requesting a loan from the Fund. The Employer shall have
the sole right to approve or disapprove a Participant's application
provided that loans shall be made available to all Participants on a
reasonably equivalent basis. Loans shall not be made available to Highly
Compensated Employees [as defined in Code Section 414(q)] in an amount
greater than the amount made available to other Employees. Any loan
granted hereunder shall be made subject to the following rules:
(a) No loan granted hereunder shall exceed the lesser of
(i) $50,000 reduced by the excess, if any, of the highest
outstanding balance of loans during the one year period ending on
the day before the loan is made, over the outstanding balance of
loans from the Plan on the date the loan is made or (ii) one-half
of the fair market value of a Participant's Vested Account
Balance built up from Employer Contributions, Voluntary
Contributions, and Rollover Contributions. If the Participant's
Vested Account Balance is $20,000 or less, the maximum loan shall
not exceed the lesser of $10,000 or 100% of the Participant's
Vested Account Balance. For the purpose of the above limitation,
all loans from all plans of the Employer and other members of a
group of employers described in Code Sections 414(b), 414(c), and
414(m) are aggregated. An assignment or pledge of any portion of
the Participant's interest in the Plan and a loan, pledge, or
assignment with respect to any insurance contract purchased under
the Plan, will be treated as a loan under this paragraph.
(b) All applications must be made on forms provided by the
Employer and must be signed by the Participant.
(c) Any loan shall bear interest at a rate reasonable at the
time of application, considering the purpose of the loan and the
rate being charged by representative commercial banks in the
local area for a similar loan unless the Employer sets forth a
different method for determining loan interest rates in its loan
procedures. The loan agreement shall also provide that the
payment of principal and interest be amortized in level payments
not less than quarterly.
(d) The term of such loan shall not exceed five years except in
the case of a loan for the purpose of acquiring any house,
apartment, condominium, or mobile home (not used on a transient
basis) which is used or is to be used within a reasonable time as
the principal residence of the Participant or a member of the
Participant's family. The term of such loan shall be determined
by the Employer considering the maturity dates quoted by
representative commercial banks in the local area for a similar
loan.
(e) The principal and interest paid by a Participant on his or
her loan shall be credited to the Fund in the same manner as for
any other Plan investment. If elected in the Adoption Agreement,
loans may be treated as segregated investments of the individual
Participants. This provision is not available if its election
will result in discrimination in operation of the Plan.
(f) If a Participant's loan application is approved by the
Employer, such Participant shall be required to sign a note, loan
agreement, and assignment of 50% of his or her interest in the
Fund as collateral for the loan. The Participant, except in the
case of a profit-sharing plan satisfying the requirements of
paragraph 8.7 must obtain the consent of his or her Spouse, if
any, within the 90 day period before the time his or her account
balance is used as security for the loan. A new consent is
required if the account balance is used for any renegotiation,
extension, renewal or other revision of the loan, including an
increase in the amount thereof. The consent must be written,
must acknowledge the effect of the loan, and must be witnessed by
a plan representative or notary public. Such consent shall
thereafter be binding with respect to the consenting Spouse or
any subsequent Spouse.
(g) If a valid Spousal consent has been obtained, then,
notwithstanding any other provision of this Plan, the portion of
the Participant's vested account balance used as a security
interest held by the Plan by reason of a loan outstanding to the
Participant shall be taken into account for purposes of
determining the amount of the account balance payable at the time
of death or distribution, but only if the reduction is used as
repayment of the loan. If less than 100% of the Participant's
Vested Account Balance (determined without regard to the
preceding sentence) is payable to the surviving Spouse, then the
account balance shall be adjusted by first reducing the vested
account balance by the amount of the security used as repayment
of the loan, and then determining the benefit payable to the
Surviving Spouse.
(h) The Employer may also require additional collateral in order
to adequately secure the loan.
(i) A Participant's loan shall immediately become due and
payable if such Participant terminates employment for any reason
or fails to make a principal and/or interest payment as provided
in the loan agreement. If such Participant terminates
employment, the Employer shall immediately request payment of
principal and interest on the loan. If the Participant refuses
payment following termination, the Employer shall reduce the
Participant's Vested Account Balance by the remaining principal
and interest on his or her loan. If the Participant's Vested
Account Balance is less than the amount due, the Employer shall
take whatever steps are necessary to collect the balance due
directly from the Participant. However, no foreclosure on the
Participant's note or attachment of the Participant's account
balance will occur until a distributable event occurs in the
Plan.
(j) No loans will be made to Owner-Employees (as defined in
paragraph 1.51) or Shareholder-Employees (as defined in paragraph
1.74), unless the Employer obtains a prohibited transaction
exemption from the Department of Labor.
13.6 Insurance Policies If agreed upon by the Trustee and permitted by the
Employer in the Adoption Agreement, Employees may elect the purchase of
life insurance policies under the Plan. If elected, the maximum annual
premium for a whole life policy shall not exceed 50% of the aggregate
Employer contributions allocated to the account of a Participant. For
profit-sharing plans the 50% test need only be applied against Employer
contributions allocated in the last two years. Whole life policies are
policies with both nondecreasing death benefits and nonincreasing premiums.
The maximum annual premium for term contracts or universal life policies
and all other policies which are not whole life shall not exceed 25% of
aggregate Employer contributions allocated to the account of a Participant.
The two year rule for profit-sharing plans again applies. The maximum
annual premiums for a Participant with both a whole life and a term
contract or universal life policies shall be limited to one-half of the
whole life premiums plus the term premium but shall not exceed one-half of
the whole life premium plus the term premium shall not exceed 25% of the
aggregate Employer contributions allocated to the account of a Participant,
subject to the two year rule for profit-sharing plans. Any policies
purchased under this Plan shall be held subject to the following rules:
(a) The Trustee shall be applicant and owner of any
policies issued hereunder.
(b) All policies or contracts purchased hereunder,
shall be endorsed as nontransferable, and must provide that
proceeds will be payable to the Trustee; however, the
Trustee shall be required to pay over all proceeds of the
contracts to the Participant's Designated Beneficiary in
accordance with the distribution provisions of this Plan.
Under no circumstances shall the Trust retain any part of
the proceeds.
(c) Each Participant shall be entitled to designate a
beneficiary under the terms of any contract issued; however,
such designation will be given to the Trustee which must be
the named beneficiary on any policy. Such designation shall
remain in force, until revoked by the Participant, by filing
a new beneficiary form with the Trustee. A Participant's
Spouse will be the Designated Beneficiary of the proceeds in
all circumstances unless a Qualified Election has been made
in accordance with paragraph 8.4. The beneficiary of a
deceased Participant shall receive in addition to the
proceeds of the Participant's policy or policies, the amount
credited to such Participant's investment account.
(d) A Participant who is uninsurable or insurable at
substandard rates, may elect to receive a reduced amount of
insurance, if available, or may waive the purchase of any
insurance.
(e) All dividends or other returns received on any
policy purchased, shall be applied to reduce the next
premium due on such policy, or if no further premium is due,
such amount shall be credited to the Fund as part of the
account of the Participant for whom the policy is held.
(f) If Employer contributions are inadequate to pay
all premiums on all insurance policies, the Trustee may, at
the option of the Employer, utilize other amounts remaining
in each Participant's account to pay the premiums on his
respective policy or policies, allow the policies to lapse,
reduce the policies to a level at which they may be
maintained, or borrow against the policies on a prorated
basis, provided that the borrowing does not discriminate in
favor of the policies on the lives of officers,
Shareholders, and Highly Compensated Employees.
(g) On retirement or termination of employment of a
Participant, the Employer shall direct the Trustee to cash
surrender the Participant's policy and credit the proceeds
to his or her account for distribution under the terms of
the Plan. However, before so doing, the Trustee shall first
offer to transfer ownership of the policy to the Participant
in exchange for payment by the Participant of the cash value
of the policy at the time of transfer. Such payment shall
be credited to the Participant's account for distribution
under the terms of the Plan. All distributions resulting
from the application of this paragraph shall be subject to
the Joint and Survivor Annuity Rules of Article VIII, if
applicable.
(h) The Employer shall be solely responsible to see
that these insurance provisions are administered properly
and that if there is any conflict between the provisions of
this Plan and any insurance contracts issued that the terms
of this Plan will control.
13.7 Employer Investment Direction If agreed upon by the Trustee and
approved by the Employer in the Adoption Agreement, the Employer shall have
the right to direct the Trustee with respect to investments of the Fund,
may appoint an investment manager (registered as an investment advisor
under the Investment Advisors Act of 1940) to direct investments, or may
give the Trustee investment management responsibility. The Employer may
purchase and sell interests in a registered investment company (i.e.,
mutual funds) for which the Sponsor, its parent, affiliates, subsidiaries
or successors, may serve as investment advisor and receive compensation
from the registered investment company for its services as investment
advisor. The Employer shall advise the Trustee in writing regarding the
retention of investment powers, the appointment of an investment manager,
or the delegation of investment powers to the Trustee. The Trustee may
rely upon any order, certificate, notice, direction or other written
directive issued by the Employer, investment manager or any other
authorized party which the Trustee believes to be genuine. In the absence
of such written directive, the Trustee may invest the available cash in its
discretion in an appropriate interim investment until specific investment
directions are received and shall not be responsible for a resulting loss.
Such instructions regarding the delegation of investment responsibility
shall remain in force until revoked or amended in writing. The Employer
must provide the Trustee with written notice of the termination of the
appointment of an investment manager. The Trustee shall not be responsible
for the propriety of any directed investment made and shall not be required
to consult with or advise the Employer regarding the investment quality of
any directed investment held hereunder. The Trustee shall not be
responsible for any loss resulting to the Fund by reason of any sale or
investment made pursuant to the direction of the Employer or an investment
manager. Notwithstanding anything in this Plan to the contrary, the
Trustee shall be indemnified and saved harmless by the Employer from any
and all personal liability to which the Trustee may be subjected by
carrying out any directions of the Employer or an investment manager,
including all expenses reasonably incurred in its defense in the event the
Employer fails to provide such; provided, however, the Trustee shall not be
so indemnified if it participates knowingly in, or knowingly undertakes to
conceal, an act or omission of an investment manager, having actual
knowledge that such is a breach of a fiduciary duty. The Trustee shall not
be deemed to have knowingly participated in or knowingly undertaken to
conceal an act or omission of an investment manager with knowledge that
such act or omission was a breach of fiduciary duty by merely complying
with directions of an investment manager, or for failure to act in the
absence of directions of an investment manager, or by reason of maintaining
accounting records. If the Employer fails to designate an investment
manager, the Trustee shall have full investment authority. If the Employer
does not issue investment directions, the Trustee shall have authority to
invest the Fund in its sole discretion. While the Employer may direct the
Trustee with respect to Plan investments, the Employer may not:
(a) borrow from the Fund or pledge any of the assets of the Fund as
security for a loan,
(b) buy property or assets from or sell property or assets to the
Fund,
(c) charge any fee for services rendered to the Fund, or
(d) receive any services from the Fund on a preferential basis.
13.8 Employee Investment Direction If agreed to by the Trustee and
approved by the Employer in the Adoption Agreement, Participants shall be
given the option to direct the investment of their personal contributions
and their share of the Employer's contribution among alternative investment
funds established as part of the overall Fund. Unless otherwise specified
by the Employer in the Adoption Agreement, such investment funds shall be
restricted to funds offered by the Trustee. If investments outside the
Trustee's/Custodian's control are allowed, Participants may not direct that
investments be made in collectibles, other than U.S. Government or State
issued gold and silver coins. In this connection, a Participant's right to
direct the investment of any contribution shall apply only to selection of
the desired fund. The following rules shall apply to the administration of
such funds.
(a) At the time an Employee becomes eligible for the Plan, he or
she shall complete an investment designation form stating the
percentage of his or her contributions to be invested in the
available funds.
(b) A Participant may change his or her election with respect to
future contributions by filing a new investment designation form
with the Employer in accordance with the procedures established
by the Plan Administrator.
(c) A Participant may elect to transfer all or part of his or
her balance from one investment fund to another by filing an
investment designation form with the Employer in accordance with
the procedures established by the Plan Administrator.
(d) The Employer shall be responsible when transmitting Employee
and Employer contributions to show the dollar amount to be
credited to each investment fund for each Employee.
(e) Except as otherwise provided in the Plan, neither the
Trustee, nor the Custodian, nor the Employer, nor any fiduciary
of the Plan shall be liable to the Participant or any of his or
her beneficiaries for any loss resulting from action taken at the
direction of the Participant and shall be indemnified and held
harmless.
ARTICLE XIV
TOP-HEAVY PROVISIONS
14.1 Applicability Of Rules If the Plan is or becomes Top-Heavy in any
Plan Year beginning after 1983, the provisions of this Article will
supersede any conflicting provisions in the Plan or Adoption Agreement.
14.2 Minimum Contribution Notwithstanding any other provision in the
Employer's Plan, for any Plan Year in which the Plan is Top-Heavy or Super
Top-Heavy, the aggregate Employer contributions and forfeitures allocated
on behalf of any Participant (without regard to any Social Security
contribution) under this Plan and any other Defined Contribution Plan of
the Employer shall be lesser of 3% of such Participant's Compensation or
the largest percentage of Employer contributions and forfeitures, as a
percentage of the first $200,000 of the Key Employee's Compensation,
allocated on behalf of any Key Employee for that year.
Each Participant who is employed by the Employer on the last day of the
Plan Year shall be entitled to receive an allocation of the Employer's
minimum contribution for such Plan Year. The minimum allocation applies
even though under other Plan provisions the Participant would not otherwise
be entitled to receive an allocation, or would have received a lesser
allocation for the year because the Participant fails to make Mandatory
Contributions to the Plan, the Participant's Compensation is less than a
stated amount, or the Participant fails to complete 1,000 Hours of Service
(or such lesser number designated by the Employer in the Adoption
Agreement) during the Plan Year. A Paired profit-sharing plan designated
to provide the minimum Top-Heavy contribution must do so regardless of
profits. An Employer may make the minimum Top-Heavy contribution available
to all Participants or just non-Key Employees.
For purposes of computing the minimum allocation, Compensation shall mean
Compensation as defined in the second paragraph of paragraph 1.12 of the
Plan.
The Top-Heavy minimum contribution does not apply to any Participant to the
extent the Participant is covered under any other plan(s) of the Employer
and the Employer has provided in Section 11 of the Adoption Agreement that
the minimum allocation or benefit requirements applicable to Top-Heavy
Plans will be met in the other plan(s).
If a Key Employee makes an Elective Deferral or has an allocation of
Matching Contributions made to his or her account, a Top-Heavy minimum will
be required for non-Key Employees who are Participants, however, neither
Elective Deferrals by nor Matching Contributions to non-Key Employees may
be taken into account for purposes of satisfying the top-heavy Minimum
Contribution requirement.
14.3 Minimum Vesting For any Plan Year in which this Plan is Top-Heavy,
the minimum vesting schedule elected by the Employer in the Adoption
Agreement will automatically apply to the Plan. If the vesting schedule
selected by the Employer in the Adoption Agreement is less liberal than the
allowable schedule, the schedule will automatically be modified. If the
vesting schedule under the Employer's Plan shifts in or out of the
Top-Heavy schedule for any Plan Year, such shift is an amendment to the
vesting schedule and the election in paragraph 9.8 of the Plan applies.
The minimum vesting schedule applies to all accrued benefits within the
meaning of Code Section 411(a)(7) except those attributable to Employee
contributions, including benefits accrued before the effective date of Code
Section 416 and benefits accrued before the Plan became Top-Heavy.
Further, no reduction in vested benefits may occur in the event the Plan's
status as Top-Heavy changes for any Plan Year. However, this paragraph
does not apply to the account balances of any Employee who does not have an
Hour of Service after the Plan initially becomes Top-Heavy and such
Employee's account balance attributable to Employer contributions and
forfeitures will be determined without regard to this paragraph.
14.4 Limitations On Allocations In any Plan Year in which the Top-Heavy
Ratio exceeds 90% (i.e., the Plan becomes Super Top-Heavy), the
denominators of the Defined Benefit Fraction (as defined in paragraph 1.16)
and Defined Contribution Fraction (as defined in paragraph 1.19) shall be
computed using 100% of the dollar limitation instead of 125%.
ARTICLE XV
AMENDMENT AND TERMINATION
15.1 Amendment By Sponsor The Sponsor may amend any or all provisions of
this Plan and Trust/Custodial Account at any time without obtaining the
approval or consent of any Employer which has adopted this Plan and
Trust/Custodial Account provided that no amendment shall authorize or
permit any part of the corpus or income of the Fund to be used for or
diverted to purposes other than for the exclusive benefit of Participants
and their beneficiaries, or eliminate an optional form of distribution. In
the case of a mass-submitted plan, the mass-submitter shall amend the Plan
on behalf of the Sponsor.
15.2 Amendment By Employer The Employer may amend any option in the
Adoption Agreement, and may include language as permitted in the Adoption
Agreement,
(a) to satisfy Code Section 415, or
(b) to avoid duplication of minimums under Code
Section 416
because of the required aggregation of multiple plans.
The Employer may add certain model amendments published by the Internal
Revenue Service which specifically provide that their adoption will not
cause the Plan to be treated as an individually designed plan for which the
Employer must obtain a separate determination letter.
If the Employer amends the Plan and Trust/Custodial Account other than as
provided above, the Employer's Plan shall no longer participate in this
Prototype Plan and will be considered an individually designed plan.
15.3 Termination Employers shall have the right to terminate their Plans
upon 60 days notice in writing to the Trustee/Custodian. If the Plan is
terminated, partially terminated, or if there is a complete discontinuance
of contributions under a profit-sharing plan maintained by the Employer,
all amounts credited to the accounts of Participants shall vest and become
nonforfeitable. In the event of a partial termination, only those who
separate from Service shall be fully vested. In the event of termination,
the Employer shall direct the Trustee/Custodian with respect to the
distribution of accounts to or for the exclusive benefit of Participants or
their beneficiaries. The Trustee/Custodian shall dispose of the Fund in
accordance with the written directions of the Plan Administrator, provided
that no liquidation of assets and payment of benefits, (or provision
therefor), shall actually be made by the Trustee/Custodian until after it
is established by the Employer in a manner satisfactory to the
Trustee/Custodian, that the applicable requirements, if any, of the
Employee Retirement Income Security Act of 1974 and the Internal Revenue
Code governing the termination of employee benefit plans, have been or are
being, complied with, or that appropriate authorizations, waivers,
exemptions, or variances have been, or are being obtained. The
Trustee/Custodian shall not be obliged to distribute the Fund until it
receives notice of a favorable ruling from the Internal Revenue Service
upon the Employer's application for determination as to the effect of
termination.
15.4 Qualification Of Employer's Plan If the adopting Employer fails to
attain or retain Internal Revenue Service qualification, such Employer's
Plan shall no longer participate in this Prototype Plan and will be
considered an individually designed plan.
15.5 Mergers And Consolidations
(a) In the case of any merger or consolidation of
the Employer's Plan with, or transfer of assets or
liabilities of the Employer's Plan to, any other
plan, Participants in the Employer's Plan shall be
entitled to receive benefits immediately after the
merger, consolidation, or transfer which are equal
to or greater than the benefits they would have been
entitled to receive immediately before the merger,
consolidation, or transfer if the Plan had then
terminated.
(b) Any corporation into which the
Trustee/Custodian or any successor trustee/custodian
may be merged or with which it may be consolidated,
or any corporation resulting from any merger or
consolidation to which the Trustee/Custodian or any
successor trustee/custodian may be a party, or any
corporation to which all or substantially all the
trust business of the Trustee/Custodian or any
successor trustee/custodian may be transferred,
shall be the successor of such Trustee/Custodian
without the filing of any instrument or performance
of any further act, before any court.
15.6 Resignation And Removal The Trustee/Custodian may resign by written
notice to the Employer which shall be effective 60 days after delivery.
The Employer may discontinue its participation in this Prototype Plan and
Trust/Custodial Account effective upon 60 days written notice to the
Sponsor. In such event the Employer shall, prior to the effective date
thereof, amend the Plan to eliminate any reference to this Prototype Plan
and Trust/Custodial Account and appoint a successor trustee or custodian or
arrange for another funding agent. The Trustee/Custodian shall deliver the
Fund to its successor on the effective date of the resignation or removal,
or as soon thereafter as practicable, provided that this shall not waive
any lien the Trustee/Custodian may have upon the Fund for its compensation
or expenses. If the Employer fails to amend the Plan and appoint a
successor trustee, custodian, or other funding agent within the said 60
days, or such longer period as the Trustee/Custodian may specify in
writing, the Plan shall be deemed individually designed and the Employer
shall be deemed the successor trustee/custodian. The Employer must then
obtain its own determination letter.
15.7 Qualification Of Prototype The Sponsor intends that this Prototype
Plan will meet the requirements of the Code as a qualified Prototype
Retirement Plan and Trust/Custodial Account. Should the Commissioner of
Internal Revenue or any delegate of the Commissioner at any time determine
that the Plan and Trust/Custodial Account fails to meet the requirements of
the Code, the Sponsor will amend the Plan and Trust/Custodial Account to
maintain its qualified status.
ARTICLE XVI
GOVERNING LAW
Construction, validity and administration of the Prototype Plan and
Trust/Custodial Account, and any Employer Plan and Trust/Custodial Account
as embodied in the Prototype document and accompanying Adoption Agreement,
shall be governed by Federal law to the extent applicable and to the extent
not applicable by the laws of the State/Commonwealth in which the principal
office of the Sponsor or its affiliate which is designated as Trustee or
Custodian in the Adoption Agreement, is located.
PART I - SECTION 401(a)(17) LIMITATION
[MAY BE ADOPTED BY DEFINED CONTRIBUTION
AND DEFINED BENEFIT PLANS]
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for Plan
Years beginning on or after January 1, 1994, the annual Compensation of
each Employee taken into account under the Plan shall not exceed the OBRA
'93 annual compensation limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner for increases in the cost of
living in accordance with Section 401(a)(17)(B) of the Internal Revenue
Code. The cost-of-living in effect for a calendar year applies to any
period, not exceeding 12 months, over which Compensation is determined
(determination period) beginning in such calendar year. If a determination
period consists of fewer than 12 months, the OBRA '93 annual compensation
limit will be multiplied by a fraction, the numerator of which is the
number of months in the determination period, and the denominator of which
is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Section 401(a)(17) of the Code shall mean
the OBRA '93 annual compensation limit set forth in this provision.
If Compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current Plan
Year, the Compensation for that prior determination period is subject to
the OBRA '93 annual compensation limit in effect for that prior
determination period. For this purpose, for determination periods
beginning before the first day of the first Plan Year beginning on or after
January 1, 1994, the OBRA '93 annual compensation limit is $150,000.
MODEL AMENDMENT
Revenue Procedure 93-47
(This model amendment allows Participants receiving distribution from safe-
harbored profit sharing plans to waive the 30-day period required under the
Unemployment Compensation Act of 1992. Non-safe harbored plans must still
provide notice not less than 30 days and not more than 90 days prior to the
distribution.)
If a distribution is one to which Section 401(a)(11) and 417 of the
Internal Revenue Code do not apply, such distribution may commence less
than 30 days after the notice required under Section 1.411(a)-11(c) of the
Income Tax Regulations is given, provided that:
(1) the plan administrator clearly informs the Participant that
the Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not
to elect a distribution (and, if applicable, a particular
distribution option), and
(2) the Participant, after receiving the notice, affirmatively
elects a distribution.
