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)
NEWCOR HOURLY EMPLOYEES' 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 registra-
of registered(3) offering aggregate tion fee
securities price per offering
to be share (2) price(2)
registered(1)
CommonStock 20,000 $8.25 $165,000 $51.56
$1.00 par shares
value
(1) Pursuant to Rule 416(c) under the Securities Act of 1933, as
amended (the "Securities Act"), this registration statement also covers as
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 March 24, 1997.
(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, 1996; (b) Registrant's Quarterly Report on Form 10-Q for the quarter
ended January 31, 1997; and (c) 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. All documents
subsequently filed by Registrant or by the Newcor Hourly Employees' 401(k)
Plan (the "Plan") 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 actin or proceeding, without 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
corporation's 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
ction 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
quivalent, 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 connnnection 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) Prototype Cash or Deferred Profit-Sharing Plan and
Trust sponsored by American Funds Distributors,
Inc.
(4)(c)(i) Nonstandardized Adoption Agreement of the Prototype
Cash or Deferred Profit-Sharing Plan and Trust
sponsored by American Funds Distributors, Inc.,
dated April 1, 1997
The 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.
(5)(a) Opinion and consent of Miller, Canfield, Paddock and
Stone, P.L.C.
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 March 31, 1997.
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,
the undersigned (the Plan Administrator of the Newcor Hourly Employees'
401(k) Plan) has caused the Registration Statement to be signed on behalf
of the Plan by the undersigned, thereunto duly authorized in the City of
Bloomfield Hills, State of Michigan, on March 31, 1997.
Newcor Hourly Employees' 401(k) Plan
By: /s/ Fred Davenport
Fred Davenport
Plan Administrator
Signatures Title Date
(1) Principal Executive
Officer:
/s/W. John Weinhardt President and CEO March 31, 1997
W. John Weinhardt
(2) Principal Fin'l
Officer and Principal
Accounting Officer:
/s/ John J. Garber Treasurer, VP Finance, March 31, 1997
John J. Garber and CFO
(3) Directors:
/s/ William A. Lawson Director and Chairman March 31, 1997
William A. Lawson
/s/ Jerry D. Campbell Director March 31, 1997
Jerry D. Campbell
/s/ Shirley E. Gofrank Director March 31, 1997
Shirley E. Gofrank
/s/ FrankL.Klapperich,Jr. Director March 31, 1997
Frank L. Klapperich, Jr.
/s/ Jack R. Lousma Director March 31, 1997
Jack R. Lousma
/s/ Richard A. Smith Director March 31, 1997
Richard A. Smith
/s/ Kurt O. Tech Director March 31, 1997
Kurt O. Tech
/s/ W. John Weinhardt Director March 31, 1997
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) Prototype Cash or Deferred Profit-Sharing Plan and Trust
sponsored by American Funds Distributors, Inc.
(4)(c)(i) Nonstandardized Adoption Agreement of the Prototype Cash or
Deferred Profit-Sharing Plan and Trust sponsored by American
Funds Distributors, Inc., dated April 1, 1997
(5)(a) Opinion and Consent of Miller, Canfield, Paddock
and Stone, P.L.C.
(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)
[letterhead of Miller, Canfield, Paddock and Stone, P.L.C.]
April 1, 1997
Newcor, Inc.
1825 S. Woodward Avenue, Suite 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 Newcor Hourly Employees' 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 (23)(b)
[letterhead of Coopers & Lybrand, L.L.P.]
Consent of Independent Accountants
We consent to the incorporation by reference in the Registration
Statement of Newcor, Inc. on Form S-8 of our report dated December 5, 1996,
on our audits of the consolidated financial statements of Newcor, Inc.
as of October 31, 1996 and 1995, and for the years ended October 31,
1996, 1995, and 1994, which report is incorporated by reference from the
Annual Report on Form 10-K for the year ended October 31, 1996.
/s/ Coopers & Lybrand L.L.P.
Detroit, Michigan
April 1, 1997
Exhibit 4(c)
PROTOTYPE CASH OR DEFERRED PROFIT-SHARING PLAN
AND TRUST
Sponsored By
AMERICAN FUNDS DISTRIBUTORS, INC.
BASIC PLAN DOCUMENT #03
November 1993
COPYRIGHT 1993 McKAY HOCHMAN CO., INC.
THIS DOCUMENT IS COPYRIGHTED UNDER THE LAWS OF THE UNITED STATES. ITS 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
ARTICLE I
DEFINITIONS
1.1 Actual Deferral Percentage
1.2 Adoption Agreement
1.3 Aggregate Limit
1.4 Allocation Date(s)
1.5 Annual Additions
1.6 Annuity Starting Date
1.7 Applicable Calendar Year
1.8 Applicable Life Expectancy
1.9 Average Contribution Percentage (ACP)
1.10 Average Deferral Percentage (ADP)
1.11 Break In Service
1.12 Code
1.13 Compensation
1.14 Contribution Percentage
1.15 Custodian
1.16 Defined Benefit Plan
1.17 Defined Benefit (Plan) Fraction
1.18 Defined Contribution Dollar Limitation
1.19 Defined Contribution Plan
1.20 Defined Contribution (Plan) Fraction
1.21 Designated Beneficiary
1.22 Disability
1.23 Distribution Calendar Year
1.24 Early Retirement Age
1.25 Earned Income
1.26 Effective Date
1.27 Election Period
1.28 Elective Deferral
1.29 Eligible Participant
1.30 Employee
1.31 Employer
1.32 Entry Date
1.33 Excess Aggregate Contributions
1.34 Excess Amount
1.35 Excess Contribution
1.36 Excess Elective Deferrals
1.37 Family Member
1.38 First Distribution Calendar Year
1.39 Fund
1.40 Hardship
1.41 Highest Average Compensation
1.42 Highly Compensated Employee
1.43 Hour Of Service
1.44 Key Employee
1.45 Leased Employee
1.46 Limitation Year
1.47 Master Or Prototype Plan
1.48 Matching Contribution
1.49 Maximum Permissible Amount
1.50 Net Profit
1.51 Normal Retirement Age
1.52 Owner-Employee
1.53 Paired Plans
1.54 Participant
1.55 Participant's Benefit
1.56 Permissive Aggregation Group
1.57 Plan
1.58 Plan Administrator
1.59 Plan Year
1.60 Present Value
1.61 Projected Annual Benefit
1.62 Qualified Deferred Compensation Plan
1.63 Qualified Domestic Relations Order
1.64 Qualified Early Retirement Age
1.65 Qualified Joint And Survivor Annuity
1.66 Qualified Matching Contribution
1.67 Qualified Non-Elective Contributions
1.68 Qualified Voluntary Contribution
1.69 Recordkeeper
1.70 Required Aggregation Group
1.71 Required Beginning Date
1.72 Rollover Contribution
1.73 Salary Savings Agreement
1.74 Self-Employed Individual
1.75 Service
1.76 Shareholder Employee
1.77 Simplified Employee Pension Plan
1.78 Sponsor
1.79 Spouse (Surviving Spouse)
1.80 Super Top-Heavy Plan
1.81 Taxable Wage Base
1.82 Top-Heavy Determination Date
1.83 Top-Heavy Plan
1.84 Top-Heavy Ratio
1.85 Top-Paid Group
1.86 Transfer Contribution
1.87 Trustee
1.88 Valuation Date
1.89 Vested Account Balance
1.90 Voluntary Contribution
1.91 Welfare Benefit Fund
1.92 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
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-Sharing 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
Qualified Prototype Defined Contribution
Plan, Welfare Benefit Fund, Individual
Medical Account Or Simplified Employee
Pension Plan Maintained By The Employe
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 Average Contribution Percentage (ACP) Test
10.10 Special Rules Relating To Application
Of ACP Test
ARTICLE XI
ADMINISTRATION
11.1 Plan Administrator
11.2 Trustee
11.3 Recordkeeper
11.4 Administrative Fees And Expenses
11.5 Division Of Duties And Indemnification
ARTICLE XII
TRUST FUND
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 (QDRO)
ARTICLE XIII
INVESTMENTS
13.1 Fiduciary Standards
13.2 Funding Arrangement
13.3 Investment Alternatives Of The Trustee
13.4 Participant Loans
13.5 Employer Investment Direction
13.6 Employee Investment Direction
13.7 Appointment Of Additional Trustee And
Allocation Of Responsibilities Thereto
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
ELAPSED TIME RULES AND DEFINITIONS
16.1 Application
16.2 Hour Of Service
16.3 Service Or Period Of Service
16.4 Year Of Service
16.5 Period Of Severance
16.6 Break In Service
16.7 Parental Leave
16.8 Computation Period
16.9 Allocating Employer Contributions
ARTICLE XVII
GOVERNING LAW
PROTOTYPE CASH OR DEFERRED PROFIT-SHARING PLAN AND TRUST
Sponsored By
AMERICAN FUNDS DISTRIBUTORS, INC.
The Sponsor hereby establishes the following Prototype Plan and Trust for
use by those of its customers who qualify and wish to adopt a qualified
retirement program. Any Plan and Trust 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. Unless
otherwise specified in the Adoption Agreement, 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 included with this Plan by which an
Employer elects to establish a qualified retirement plan and trust under
the terms of this Prototype Plan and Trust.
1.3 Aggregate Limit The sum of:
(a) 125 percent of the greater of the ADP of the non-Highly
Compensated Employees for the Plan Year or the ACP of non-
Highly Compensated Employees under the Plan subject to Code
Section 401(m) for the Plan Year beginning with or within
the Plan Year of the cash or deferred arrangement as
described in Code Section 401(k) or Code Section
402(h)(1)(B), and
(b) the lesser of 200% or two 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 Allocation Date(s) The date or dates on which Participant's accounts
are adjusted in accordance with Article V.
1.5 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) allocations under a Simplified Employee Pension Plan,
(e) 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
(f) 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 1.44 at any time during
the Plan Year or any preceding Plan Year. Welfare Benefit
Fund is defined at paragraph 1.91.
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.
1.6 Annuity Starting Date The first day of the first period for which an
amount is paid as an annuity or in any other form.
1.7 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.
1.8 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.
1.9 Average Contribution Percentage (ACP) The average of the Contribution
Percentages for each Highly Compensated Employee and for each non-Highly
Compensated Employee.
1.10 Average Deferral Percentage (ADP) The average of the Actual Deferral
Percentages for each Highly Compensated Employee and for each non-Highly
Compensated Employee.
1.11 Break In Service A 12-consecutive month period during which an Em
ployee fails to complete more than 500 Hours of Service.
1.12 Code The Internal Revenue Code of 1986, including any amendments.
1.13 Compensation The Employer may select one of the following two safe-
harbor definitions of Compensation in the Adoption Agreement. Unless
otherwise specified in the Adoption Agreement, Compensation shall only
include amounts earned while a Participant if Plan Year is chosen as the
determination 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 415 Compensation. Compensation is defined as
Code Section 415 Compensation which is: 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 excludible from the
gross income of the Employee).
For purposes of applying the limitations of Article X and Top-Heavy
Minimums, the definition of Compensation shall be Code Section 415
Compensation described in this paragraph 1.13(b). Also, for purposes of
applying the limitations of Article X, Compensation for a Limitation Year
is the Compensation actually paid or made available during such Limitation
Year. Notwithstanding the preceding sentence, Compensation for a
Participant in a defined contribution plan who is permanently and totally
disabled [as defined in Code Section 22(e)(3)] is the Compensation such
Participant would have received for the Limitation Year if the Participant
had been paid at the rate of Compensation paid immediately before becoming
permanently and totally disabled. Such imputed Compensation for the
disabled Participant may be taken into account only if the participant is
not a Highly Compensated Employee [as defined in Code Section 414(q)] and
contributions made on behalf of such Participant are nonforfeitable when
made.
If the Employer fails to pick the determination period in the
Nonstandardized Adoption Agreement #002, the Plan Year shall be used.
Unless otherwise specified by the Employer in the Adoption Agreement,
Compensation shall be determined as provided in Code Section 3401(a) [as
defined in this paragraph 1.13(a)]. In Nonstandardized Adoption Agreement
#002, the Employer may choose to eliminate or exclude categories of
Compensation which do not violate the provisions of Code Sections
401(a)(4), 414(s) the regulations thereunder and Revenue Procedure 89-65.
Beginning with 1989 Plan Years, the annual Compensation of each Participant
which may be taken into account for determining all benefits provided under
the Plan (including benefits under Article XIV) for any year shall not
exceed the limitation as imposed by Code Section 401(a)(17) and 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 annual
Compensation limitation, as imposed by Code Section 401(a)(17), 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
limitation as imposed by Code Section 401(a)(17) 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. For Plan
Years beginning on or after January 1, 1994, the annual Compensation of
each Participant taken into account for determining all benefits provided
under the Plan for any Plan Year shall not exceed $150,000, as adjusted for
increases in the cost-of-living in accordance with Code Section 401(a)(17).
The cost-of-living adjustment in effect for a calendar year applies to any
determination period beginning in such calendar year.
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.
1.14 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. Unless
otherwise specified in the Adoption Agreement, 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.
1.15 Custodian The Trustee shall serve as Custodian.
1.16 Defined Benefit Plan A Plan under which a Participant's benefit is de
termined by a formula contained in the plan and no individual accounts are
maintained for Participants.
1.17 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.
1.18 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.
1.19 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.
1.20 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 1.91,
individual medical accounts as defined in Code Section 415(l)(2) and
Simplified Employee Pension Plans as defined in paragraph 1.77, 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 the excess of the sum of the fractions over 1.0 multiplied by
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.
1.21 Designated Beneficiary The individual who is designated as the
beneficiary of a Participant's account under the Plan in accordance with
Code Section 401(a)(9) and the regulations thereunder.
1.22 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.
1.23 Distribution Calendar Year A calendar year for which a minimum
distribution is required.
1.24 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.
1.25 Earned Income Net earnings from self-employment in the trade or busi
ness 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.
1.26 Effective Date The date on which the Employer's Plan or amendment to
such plan becomes effective. For amendments reflecting statutory and
regulatory changes post Tax Reform Act of 1986, the Effective Date will be
the earlier of the date upon which such amendment is first administratively
applied or the first day of the Plan Year following the date of adoption of
such amendment.
1.27 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.
1.28 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.
1.29 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.
1.30 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)], all 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.
1.31 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).
1.32 Entry Date The date on which an Employee commences participation in
the Plan as determined by the Employer in the Adoption Agreement.
1.33 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 1.36 and then determining Excess
Contributions pursuant to paragraph 1.35.
1.34 Excess Amount The excess of the Participant's Annual Additions for
the Limitation Year over the Maximum Permissible Amount.
1.35 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).
1.36 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.
1.37 Family Member The Employee's Spouse, any lineal descendants and
ascendants and the Spouse of such lineal descendants and ascendants. 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.
1.38 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.
1.39 Fund All contributions received by the Trustee under this Plan and
Trust, investments thereof and earnings and appreciation thereon.
1.40 Hardship An immediate and heavy financial need of the Employee where
such Employee lacks other available resources.
1.41 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, or, if not indicated in the
Adoption Agreement, as defined in paragraph 1.92.
1.42 Highly Compensated Employee Any Employee who performs service for the
Employer during the determination year and who, during the immediate prior
year:
(a) received Compensation from the Employer in excess of $75,000
[as adjusted pursuant to Code Section 415(d)], or
(b) received Compensation from the Employer in excess of $50,000
[as adjusted pursuant to Code Section 415(d)] and was a
member of the Top-Paid Group for such year, or
(c) was an officer of the Employer and received Compensation
during such year that is greater than 50 percent of the
dollar limitation in effect under Code Section 415(b)(1)(A).
Notwithstanding (a), (b) and (c), an Employee who was not Highly
Compensated during the preceding Plan Year shall not be treated as a
Highly Compensated Employee with respect to the current Plan Year unless
such Employee is a member of the 100 Employees paid the greatest
Compensation during the year for which such determination is being made.
(d) Employees who are five percent (5%) Owners at any time
during the immediate prior year or determination year.
Highly Compensated Employee includes Highly Compensated active Employees
and Highly Compensated former Employees. At the election of the Employer,
the calendar year, ending with or within the current determination year,
may be treated as the immediate prior year. Such an election is made with
respect to all plans of the Employer.
1.43 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 1.11, for participation and
vesting purposes has occurred in a computation period, an
individual who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of
Service which would otherwise have been credited to such
individual but for such absence, or in any case in which
such hours cannot be determined, 8 Hours of Service per day
of such absence. For purposes of this paragraph, an absence
from work for maternity or paternity reasons means an
absence by reason of the pregnancy of the individual, by
reason of a birth of a child of the individual, by reason of
the placement of a child with the individual in connection
with the adoption of such child by such individual, or for
purposes of caring for such child for a period beginning
immediately following such birth or placement. The Hours of
Service credited under this paragraph shall be credited in
the computation period in which the absence begins if the
crediting is necessary to prevent 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
indicated in the Adoption Agreement.
1.44 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 five-percent owner of the Employer, or a one-percent 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 in paragraph 1.12(b), 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.
1.45 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.
1.46 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.
1.47 Master Or Prototype Plan A plan, the form of which is the subject of a
favorable opinion letter from the Internal Revenue Service.
1.48 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.
1.49 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.
1.50 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.
1.51 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.
1.52 Owner-Employee A sole proprietor, or a partner owning more than 10% of
either the capital or profits interest of the partnership.
1.53 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.
1.54 Participant Any Employee who has met the eligibility requirements and is
participating in the Plan.
1.55 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.
1.56 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.
1.57 Plan The Employer's retirement plan as embodied herein and in the
Adoption Agreement.
1.58 Plan Administrator The Employer.
1.59 Plan Year The 12-consecutive month-period designated by the Employer in
the Adoption Agreement.
1.60 Present Value Used for Top-Heavy test and determination purposes.
When determining the Present Value of accrued benefits with respect to any
Defined Benefit Plan maintained by the Employer, interest and mortality rates
shall be determined in accordance with the provisions of the respective plan.
If applicable, interest and mortality assumptions will be specified in the
Adoption Agreement.
1.61 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.
1.62 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 section 408(a) of the Code, an individual retirement annuity (IRA)
as described in section 408(b) of the Code, an annuity plan as described in
section 403(a) of the Code, or a qualified trust as described in section 401(a)
of the Code, 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.
1.63 Qualified Domestic Relations Order A Qualified Domestic Relations Order
(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.
1.64 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.
1.65 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.
1.66 Qualified Matching Contribution Matching Contributions which, when made
are subject to the distribution and nonforfeitability requirements under Code
Section 401(k).
1.67 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.
1.68 Qualified Voluntary Contribution A tax-deductible voluntary Employee
contribution. These contributions may no longer be made to the Plan.
1.69 Recordkeeper The person or entity retained by the Plan Administrator on
behalf of the Plan to provide specified administrative services to the Plan.
1.70 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 de
termination period (regardless of whether the plan has termi
nated), 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.
1.71 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.
1.72 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 section 401(a)(9) of the Code, 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.
1.73 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.
1.74 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.
1.75 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.
1.76 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 five-percent of such corporation's outstanding stock.
1.77 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.
1.78 Sponsor AMERICAN FUNDS DISTRIBURTORS, INC., or any successor(s) or
assign(s).
1.79 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).
1.80 Super Top-Heavy Plan A Plan described at paragraph 1.83 under which the
Top-Heavy Ratio [as defined at paragraph 1.84] exceeds 90%.
1.81 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 contribution and benefit base in effect under the Social
Security Act [Code Section 203] at the beginning of the Plan Year, or the
amount elected by the Employer in the Adoption Agreement.
1.82 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.
1.83 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 Per
missive 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%.
1.84 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 5-year period ending on the
Determination Date(s)], and
(2) the denominator of which is the sum of all account
balances [including any part of any account balance
distributed in the 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 who is not
a Key Employee but who was a Key Employee in a prior year, or 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 Contribu
tions will not be taken into account for purposes of computing
the Top-Heavy Ratio. When aggregating plans, the value of ac
count balances and accrued benefits will be calculated with refer
ence 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 the method, if any, that
uniformly applies for accrual purposes under all Defined Benefit
Plans maintained by the Employer, or 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).
1.85 Top-Paid Group The group consisting of the top 20% of Employees when
ranked on the basis of Compensation paid during such year. For purposes of
determining the number of Employees in the group (but not who is in it), the
following Employees shall be excluded:
(a) Employees who have not completed 6 months of Service.
(b) Employees who normally work less than 17-1/2 hours per week.
(c) Employees who normally work during not more than 6 months during
any year.
(d) Employees who have not attained age 21.
(e) Employees included in a collective bargaining unit, covered by
an agreement between employee representatives and the Employer,
where retirement benefits were the subject of good faith
bargaining and provided that 90% or more of the Employer's
Employees are covered by the agreement.
(f) Employees who are nonresident aliens and who receive no earned
income which constitutes income from sources within the United
States.
1.86 Transfer Contribution A non-taxable transfer of a Participant's benefit
directly from a Qualified Deferred Compensation Plan to this Plan.
1.87 Trustee CAPITAL GUARDIAN TRUST COMPANY shall serve as Trustee.
1.88 Valuation Date The last day of the Plan Year or such other date as
determined by the Employer 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.
1.89 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.
1.90 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.
1.91 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
Employees' 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.
1.92 Year Of Service Unless otherwise elected in Nonstandardized Adoption
Agreement #002, or unless Elapsed Time is elected in either Adoption Agreement
#001 or #002, a 12-consecutive-month period during which an Employee is
credited with not less than 1,000 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, upon meeting the eligibility requirements, shall become
Participants on the Entry Date selected in the Adoption Agreement. 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 at the next Entry
Date. For this purpose, Participant's Compensation and Service shall be
considered from date of rehire.
2.2 Change In Classification Of Employment In the event a Participant becomes
ineligible to participate because he or she is no longer a member of an
eligible class of Employees, such Employee shall participate upon his or her
return to an eligible class of Employees.
2.3 Computation Period To determine Years of Service and Breaks in Service
for purposes of eligibility, the 12-consecutive-month period shall commence on
the date on which an Employee first performs an Hour of Service for the
Employer and each anniversary thereof, such that the succeeding 12-consecutive-
month period commences with the Employee's first anniversary of employment and
so on. If, however, the period so specified is one year or less, the
succeeding 12-consecutive-month period shall commence on the first day of the
Plan Year prior to the anniversary of the date they first performed an Hour of
Service regardless of whether the Employee is entitled to be credited with
1,000 (or such lesser number as specified by the Employer in the Adoption
Agreement) Hours of Service during his or her first employment year.
2.4 Employment Rights Participation in the Plan shall not confer upon a
Participant any employment rights, nor shall it interfere with the Employer's
right to terminate the employment of any Employee at any time.
2.5 Service With Controlled Groups All Years of Service with other members of
a controlled group of corporations [as defined in Code Section 414(b)], trades
or businesses under common control [as defined in Code Section 414(c)], or
members of an affiliated service group [as defined in Code Section 414(m)]
shall be credited for purposes of determining an Employee's eligibility to
participate.
2.6 Owner-Employees If this Plan provides contributions or benefits for one
or more Owner-Employees who control both the business for which this Plan is
established and one or more other trades or businesses, this Plan and the plan
established for other trades or businesses must, when looked at as a single
plan, satisfy Code Sections 401(a) and (d) for the Employees of this and all
other trades or businesses.
If the Plan provides contributions or benefits for one or more Owner-Employees
who control one or more other trades or businesses, the Employees of the other
trades or businesses must be included in a plan which satisfies Code Sections
401(a) and (d) and which provides contributions and benefits not less favorable
than provided for Owner-Employees under this Plan.
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
Section 401(k) of the Code, 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 10
days prior to the Employee's Entry Date. The Employee may decline
participation by so indicating on the enrollment form or by failure to return
the enrollment form to the Employer prior to the Employee's Entry Date. If the
Employee declines to participate, such Employee shall be given the opportunity
to join the Plan on the next Entry Date. The taking of a Hardship Withdrawal
under the provisions of paragraph 6.9 will impact the Participant's ability to
make these contributions.
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 and paid out of the assets of the Fund. Such expenses shall include, but
shall not be limited to, fees for professional services, recordkeeping
services, printing and postage. Brokerage commissions may not be reimbursed.
3.3 Responsibility For Contributions Neither the Trustee nor the Sponsor
shall be required to determine if the Employer has made a contribution or if
the amount contributed is in accordance with the Adoption Agreement or the
Code. The Employer shall have sole responsibility in this regard. The Trustee
shall be accountable solely for contributions actually received by it, 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 because of a mistake
of fact, provided that the contribution is returned to the
Employer within one year of the contribution.
(b) in the event that the Commissioner of Internal Revenue
determines that the Plan is not initially qualified under the
Internal Revenue Code, any contribution made incident to that
initial qualification by the Employer must be returned to the
Employer within one year after the date the initial
qualification is denied, but only if the application for the
qualification is made by the time prescribed by law for filing
the Employer's return for the taxable year in which the Plan is
adopted, or such later date as the Secretary of the Treasury may
prescribe.
(c) contributions forwarded to the Trustee are presumed to be
deductible and are conditioned on their deductibility.
Contributions which are determined by the Internal Revenue
Service 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 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 section 401(a)(9)
of the Code,
(d) if the amount distributed included property such property is
rolled over, or if sold the proceeds of such property may be
rolled over,
(e) the amount distributed is not 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
1.72) directly to the Plan.
Rollover Contributions, which relate to distributions prior to January 1, 1993,
must be made in accordance with paragraphs (a) through (e) and additionally
meet the requirements of paragraph (f):
(f) The distribution from the Qualified Deferred Compensation Plan
constituted the Participant's entire interest in such Plan and
was distributed within one taxable year to the Participant:
(1) on account of separation from Service, a Plan
termination, or in the case of a profit-sharing or
stock bonus plan, a complete discontinuance of
contributions under such plan within the meaning of
Section 402(a)(6)(A)of the Code, or
(2) in one or more distributions which constitute a
qualified lump sum distribution within the meaning of
Code Section 402(e)(4)(A), determined without
reference to subparagraphs (B) and (H).
Such Rollover Contribution may also be made through an Individual Retirement
Account qualified under Code Section 408 where the IRA was used as a conduit
from the Qualified Deferred Compensation Plan, the Rollover Contribution is
made in accordance with the rules provided under paragraphs (a) through (e) and
the Rollover Contribution does not include any regular IRA contributions, or
earnings thereon, which the Participant may have made to the IRA. Rollover
Contributions which relate to distributions prior to January 1, 1993, may be
made through an IRA in accordance with paragraphs (a) through (f) and
additional requirements as provided in the previous sentence. The Trustee
shall not be held responsible for determining the tax-free status of any
Rollover Contribution made under this Plan.
4.4 Transfer Contribution Unless provided otherwise in the Adoption
Agreement a Participant may, subject to the provisions of paragraph 4.5, also
arrange for the direct transfer of his or her benefit from a Qualified Deferred
Compensation Plan to this Plan. For accounting and record keeping purposes,
Transfer Contributions shall be treated in the same manner as Rollover
Contributions.
Notwithstanding the above, the Employer may refuse to accept such Transfer
Contributions.
4.5 Employer Approval Of Transfer Contributions The Employer, maintaining a
Safe-Harbor Profit-Sharing Plan in accordance with the provisions of paragraph
8.7, acting in a nondiscriminatory manner, may in its sole discretion refuse to
allow Transfer Contributions to its profit-sharing plan, if such contributions
are directly or indirectly being transferred from a defined benefit plan, a
money purchase pension plan (including a target benefit plan), a stock bonus
plan, or another profit-sharing plan which would otherwise provide for a life
annuity form of payment to the Participant.
4.6 Elective Deferrals A Participant may enter into a 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 on the first day of any month
after providing written notice to the Employer. 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. 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 as agreed between the Employer and Recordkeeper. A
Participant may discontinue participation or change his or her Voluntary
Contribution percentage by so advising the Employer at least 30 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 Section 414(p)
of the Code, 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 distribu
tions" 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 Allocation 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 Allocation 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
Allocation 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 Allocation Date, and
(f) the Participant's proportionate share of any decrease in the
fair market value of the Fund since the last Allocation 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 1993 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 All Employer contributions will
be credited with an allocation of the actual investment earnings and gains and
losses from the actual date of deposit of each such contribution until the end
of the period. The actual investment earnings shall be credited to
Participants' accounts as of the Allocation Date following date of deposit.
Participants will share in the earnings of the investment fund(s) in which they
have monies as of the date such earnings are either credited or accrued.
Accounts with segregated investments shall receive only the income or loss on
such segregated investments. In no event shall the selection of a method of
allocating gains and losses be used to discriminate in favor of the Highly
Compensated Employees.
Alternately, a Participant's share of the actual investment earnings shall be
based on the proportionate value of all active accounts (other than accounts
with segregated investments) as of the last Allocation Date less withdrawals
since the last Allocation Date. If Employer contributions are made monthly,
quarterly, or on some other systematic basis, the adjusted value of such
accounts for allocation of investment income and gains or losses shall include
one-half the Employer contributions for such period. If Employer contributions
are not made on a systematic basis, it is assumed that they are made at the end
of the Allocation period and therefore will not receive an allocation of
investment earnings and gains or losses for such period. 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.
5.5 Participant Statements Upon completing the allocations described above
for the Allocation 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 Allocation Date. Employers
so choosing may prepare Participant statements for each quarterly Allocation
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 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 Retire
ment 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, in accordance
with a consistent policy followed for all Participants the
Employer may or may not require the Participant to receive a
lump sum distribution of the value of the entire vested portion
of such account balance and the non-vested portion will be
treated as a forfeiture. The Employer shall continue to follow
its consistent policy, as may be established, regarding
immediate cash-outs of Vested Account Balances of $3,500 or
less. For purposes of this Article, if the value of a
Participant's Vested Account Balance is zero, the Participant
shall be deemed to have received a distribution of such Vested
Account Balance immediately following termination. Likewise, if
the Participant is reemployed prior to incurring five
consecutive one-year Breaks in Service he or she will be deemed
to have immediately repaid such distribution. 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 1.22, 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.
(e) If a distribution is one to which Code Sections 401(a)(11) and 417 do
not apply, such distribution may commence less than 30 days after the
notice required under Regulations Section 1.411(a)-11(c) is given,
provided that:
(1) the Participant is clearly informed of his or her 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 to receive a distribution.
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 10th anniversary of the year in which the
Participant commenced participation in the Plan, or
(3) the Participant terminates Service with the Employer.
(b) Notwithstanding the foregoing, the failure of a Participant and
Spouse (if necessary) to consent to a distribution while a
benefit is immediately distributable within the meaning of
paragraph 6.4 hereof, shall be deemed an election to defer
commencement of payment of any benefit sufficient to satisfy
this paragraph.
6.7 Claims Procedures Upon retirement, death, or other severance of employ
ment, 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 6.6. If an application for benefits is made, the Employer shall
accept, reject, or modify such request and shall notify the Participant in
writing setting forth the response of the Employer and in the case of a denial
or modification the Employer shall:
(a) state the specific reason or reasons for the denial,
(b) provide specific reference to pertinent Plan provisions on which
the denial is based,
(c) provide a description of any additional material or information
necessary for the Participant or his representative to perfect
the claim and an explanation of why such material or information
is necessary, and
(d) explain the Plan's claim review procedure as contained in this
Plan.
In the event the request is rejected or modified, the Participant or his 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 Thrift Contributions, Voluntary Contributions,
Qualified Voluntary Contributions or Rollover Contributions, upon written
request to the Employer. Transfer Contributions which originate from a plan
meeting the safe-harbor provisions of paragraph 8.7, may also be withdrawn by
an Employee upon written request to the Employer. Transfer Contributions not
meeting the safe-harbor provisions may only be withdrawn upon retirement,
death, Disability, termination or termination of the Plan, and will be subject
to Spousal consent requirements contained in Code Sections 411(a)(11) and 417.
A request for an In-Service Withdrawal shall include the Employee'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. The Employer may provide
in the Adoption Agreement, that certain actively employed Participants in a
profit-sharing plan be eligible to withdraw all or any part of the fair market
value of any of his or her vested Employer contributions plus the investment
earnings thereon. 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 other than an employee stock ownership
plan [as defined in Code Sections 4975(e) or 409] or a
Simplified Employee Pension Plan [as defined in Code Section
408(k)].
(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) on account of the Hardship withdrawal 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 Participant and Spousal consent
requirements, if applicable, contained in Code Sections 401(a)(11) and 417. In
addition, distributions after March 31, 1988 that are triggered by any of the
first three events enumerated above must be made in a lump sum.
6.9 Hardship Withdrawal If elected by the Employer in the Adoption Agreement,
a Participant may request a Hardship withdrawal, as provided in this section.
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, including but not limited to Matching
Contributions plus the investment earnings thereon, to the extent vested.
Qualified Matching Contributions, Qualified Non-Elective Contributions and
Elective Deferrals reclassified as Voluntary Contributions plus the investment
earnings thereon are only available for 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) expenses incurred or necessary for medical care, [described in
Code Section 213(d)] of the Participant, his or her Spouse,
children and other dependents,
(b) the purchase (excluding mortgage payments) of the principal
residence for the Participant,
(c) payment of tuition and related educational expenses for the next
twelve (12) months of post-secondary education for the
Participant, his or her Spouse, children or other dependents, or
(d) the need to prevent eviction of the Participant from or a foreclo
sure on the mortgage of, the Participant'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 hard
ship distributions, and all nontaxable loans under all plans main
tained by the Employer,
(f) the Participant's Elective Deferrals and Voluntary Contributions
will be suspended for all plans maintained by the Employer (other
than nondeferred benefits under Code Section 125 plans) 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 a Participant
may not make Elective Deferrals for the Participant's taxable
year immediately following the taxable year of the Hardship dis
tribution in excess of the applicable limit under Code Section
402(g) for such taxable year, less the amount of such
Participant'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:
(a) A separate account will be established for the Participant's
interest in the Plan as of the time of the distribution, and
(b) At any relevant time the Participant's nonforfeitable portion of
the separate account will be equal to an amount ("X") determined
by the formula:
X = P [AB + (R X D)] - (R X D)
For purposes of applying the formula: "P" is the nonforfeitable
percentage at the relevant time, "AB" is the account balance at
the relevant time, "D" is the amount of the distribution and "R"
is the ratio of the account balance at the relevant time to the
account balance after distribution.
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 expectancies 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.
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 distri
bution 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 distri
bution 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 ac
cordance 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 subparagraph (b) therein, shall be applied as if
the Surviving Spouse were the Participant. For the purposes of this paragraph
and paragraph 7.9, distribution of a Participant's interest is considered to
begin on the Participant's Required Beginning Date (or, if the preceding
sentence is applicable, the date distribution is required to begin to the
Surviving Spouse). If distribution in the form of an annuity described in
paragraph 7.4(e) irrevocably commences to the Participant before the Required
Beginning Date, the date distribution is considered to begin is the date
distribution actually commences.
For purposes of paragraph 7.9 and this paragraph, if an amount is payable to
either a minor or an individual who has been declared incompetent, the benefits
shall be paid to the legally appointed guardian for the benefit of said minor or
incompetent individual, unless the court which appointed the guardian has
ordered otherwise.
7.11 Distribution Of Excess Elective Deferrals
(a) Notwithstanding any other provision of the Plan, Excess Elective
Deferrals plus any income and minus any loss allocable thereto,
shall be distributed no later than April 15, 1988, and each April
15 thereafter, to Participants to whose accounts Excess Elective
Deferrals were allocated for the preceding taxable year, and who
claim Excess Elective Deferrals for such taxable year. Excess
Elective Deferrals shall be treated as Annual Additions under the
Plan unless such amounts are distributed no later than the first
April 15th following the close of the Participant's taxable year.
A Participant is deemed to notify the Plan Administrator of any
Excess Elective Deferrals that arise by taking into account only
those Elective Deferrals made to this Plan and any other plans of
this Employer.
(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 Participant'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 (10) percent excise tax will be imposed on the Employer
maintaining the Plan with respect to such amounts. Such
distributions shall be made to Highly Compensated Employees on
the basis of the respective portions of the Excess Contributions
attributable to each of such Employees. Excess Contributions of
Participants who are subject to the Family Member aggregation
rules 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 ADP.
(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 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
Employee and Matching Contributions (or amounts treated as
Matching Contributions) of each family member that is combined to
determine the ACP. If such Excess Aggregate Contributions are
distributed more than 2-1/2 months after the last day of the Plan
Year in which such excess amounts arose, a ten (10) percent
excise tax will be imposed on the Employer maintaining the Plan
with respect to those amounts. Excess Aggregate Contributions
shall be treated as Annual Additions under the plan.
(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 shall be applied to
reduce Employer contributions at the end of the Plan Year in
which they occur.
(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, and/or Elective Deferral
account).
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, such an
annuity is a Qualified Pre-Retirement Survivor Annuity. The Surviving
Spouse may elect to have such annuity distributed within a reasonable
period after the Participant's death.
A Participant who does not meet the age 35 requirement set forth in the
Election Period as of the end of any current Plan Year may make a special
qualified election to waive the Qualified Pre-retirement Survivor Annuity
for the period beginning on the date of such election and ending on the
first day of the Plan Year in which the Participant will attain age 35.
Such election shall not be valid unless the Participant receives a written
explanation of the Qualified Pre-retirement Survivor Annuity in such terms
as are comparable to the explanation required under paragraph 8.5.
Qualified Pre-retirement Survivor Annuity coverage will be automatically
reinstated as of the first day of the Plan Year in which the Participant
attains age 35. Any new waiver on or after such date shall be subject to
the full requirements of this Article.
8.4 Qualified Election A 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 redetermined.
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 10 Years
of Service for vesting purposes when he or she separated
from Service.
(b) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one Hour of Service
under this Plan or a predecessor Plan on or after September
2, 1974, and who is not otherwise credited with any Service
in a Plan Year beginning on or after January 1, 1976, must
be given the opportunity to have his or her benefits paid in
accordance with paragraph 8.9.
(c) The respective opportunities to elect [as described in (a)
and (b) above] must be afforded to the appropriate
Participants during the period commencing on August 23, 1984
and ending on the date benefits would otherwise commence to
said Participants.
8.9 Automatic Joint And Survivor Annuity And Early Survivor Annuity Any
Participant who has elected pursuant to paragraph 8.8(b) and any
Participant who does not elect under paragraph 8.8(a) or who meets the
requirements of paragraph 8.8(a), except that such Participant does not
have at least 10 years of vesting Service when he or she separates from
Service, shall have his or her benefits distributed in accordance with all
of the following requirements if benefits would have been payable in the
form of a life annuity.
(a) Automatic Joint and Survivor Annuity. If benefits in the
form of a life annuity become payable to a married
Participant who:
(1) begins to receive payments under the Plan on or
after Normal Retirement Age, or
(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.
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 Con
tributions, 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
concurrent with or 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 one-year Breaks in Service. For purposes of this
paragraph, 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. 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. If the
Trustee 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 section 412(c)(8) of the Code (relating to financial
hardships). For purposes of this paragraph, a Plan amendment which has the
effect of decreasing a Participant's account balance or eliminating an
optional form of benefit, with respect to benefits attributable to service
before the amendment, shall be treated as reducing an accrued benefit.
9.9 Service With Controlled Groups All Years of Service with other
members of a controlled group of corporations [as defined in Code Section
414(b)], trades or businesses under common control [as defined in Code
Section 414(c)], or members of an affiliated service group [as defined in
Code Section 414(m)] shall be considered for purposes of determining a
Participant's nonforfeitable percentage.
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 described in paragraph 1.91, individual medical
account as defined in Code Section 415(l)(2), or a Simplifed Employee
Pension Plan (as defined in paragraph 1.77) maintained by the adopting
Employer, which provides an Annual Addition as defined in paragraph 1.5,
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) (1) Any nondeductible Employee Voluntary,
Required Voluntary Contributions and unmatched
Elective Deferrals to the extent they would reduce
the Excess Amount will be returned to the
Participant. To the extent necessary to reduce
the Excess Amount, non-Highly Compensated
Employees will have all Elective Deferrals
returned whether or not there was a corresponding
match.
(2) If after the application of paragraph (1) an
Excess Amount still exists, and the Participant is
covered by the Plan at the end of the Limitation
Year, the Excess Amount in the Participant's
account will be used to reduce Employer
contributions (including any allocation of
forfeitures) for such Participant in the next
Limitation Year, and each succeeding Limitation
Year if necessary.
(3) If after the application of paragraph (1) an
Excess Amount still exists, and the Participant is
not covered by the Plan at the end of the
Limitation Year, the Excess Amount will be held
unallocated in a suspense account. The suspense
account will be applied to reduce future Employer
contributions (including allocation of any
forfeitures) for all remaining Participants in the
next Limitation Year, and each succeeding
Limitation Year if necessary.
(4) If a suspense account is in existence at any time
during the Limitation Year pursuant to this
paragraph, it will not participate in the
allocation of investment gains and losses. If a
suspense account is in existence at any 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 nondeductible Employee Voluntary, Required
Voluntary Contributions and unmatched Elective
Deferrals to the extent they would reduce the
Excess Amount will be returned to the Participant.
To the extent necessary to reduce the Excess
Amount, non-Highly Compensated Employees will have
all Elective Deferrals returned whether or not
there was a corresponding match.
(2) Any Excess Amount which would be allocated to the
account of an individual Participant under the
Plan's allocation formula will be reallocated to
other Participants in the same manner as other
Employer contributions. No such reallocation
shall be made to the extent that it will result in
an Excess Amount being created in such
Participant's own account.
(3) To the extent that amounts cannot be reallocated
under (1) above, the suspense account provisions
of (a) above will apply.
10.3 Participation In This Plan And Another Qualified Master and Prototype
Defined Contribution Plan, Welfare Benefit Fund, Individual Medical Account
Or Simplified Employee Pension Plan 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 qualified Master or Prototype Defined Contribution Plans, Welfare
Benefit Funds, individual medical accounts as defined in Code Section
415(l)(2), and Simplified Employee Pension Plans maintained by the
Employer, which provide an Annual Addition as defined in paragraph 1.5 for
the same Limitation Year. If the Annual Additions with respect to the
Participant under other Defined Contribution Plans, Welfare Benefit Funds,
individual medical accounts and Simplified Employee Pension Plans
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 Simplified Employee Pension Plan will be deemed to have
been allocated first followed by Annual Additions to a Welfare Benefit Fund
or individual medical account as defined in Code Section 415(l)(2) will be
deemed to have been allocated next 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.
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. Notwithstanding the foregoing, certain plans
shall be treated as separate if mandatorily disaggregated under
regulations under Code Section 401(k).
(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) and
Compensation for the Plan Year of Family Members as defined in
paragraph 1.37 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 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 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 two (2), provided that the Average
Contribution Percentage for Participants who are Highly
Compensated Employees does not exceed the Average Contribution
Percentage for Participants who are non-Highly Compensated
Employees by more than two (2) percentage points.
10.10 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 Amount 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. Notwithstanding
the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under regulations under Code Section
401(k).
(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 1.37 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. The Plan Administrator's duties shall include but are not
limited to:
(a) appointing the Plan's attorney, accountant, actuary, or any
other party needed to administer the Plan,
(b) directing the Trustee or Recordkeeper 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 Ser
vice, Department of Labor, or any other governmental agency,
(e) reviewing and approving any financial reports, investment re
views, or other reports prepared by any party appointed by
the Employer under paragraph (a),
(f) ensuring that any and all Plan loans are in compliance with
all requirements of law, including but not limited to, the
requirements of the Internal Revenue Code and the
regulations thereunder and the regulations of the Department
of Labor,
(g) obtaining a legal determination of the qualified status of
all Qualified Domestic Relations Orders and complying with
all requirements of the law with regard thereto, in
accordance with paragraph 12.5,
(h) establishing a funding policy and investment objectives
consistent with the purposes of the Plan and the Employee
Retirement Income Security Act of 1974, and
(i) construing and resolving any question of Plan
interpretation. The Plan Administrator's interpretation of
Plan provisions including eligibility and benefits under the
Plan is final, and unless it can be shown to be arbitrary
and capricious will not be subject to "de novo" review.
11.2 Trustee The Trustee shall be responsible for the safekeeping of
investments held in the Fund and shall act solely as a directed Trustee.
The Trustee's 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, including any Recordkeeper,
and
(c) filing with the Employer, within 90 days after each Plan
Year, and within 90 days after its removal or resignation as
Trustee, an accounting of its safekeeping of the Fund during
such year or from the end of the preceding Plan Year to the
date of removal or resignation. Such accounting shall
include a statement of cash receipts and disbursements since
the date of its last accounting and shall contain an asset
list showing the fair market value of investments held in
the Fund as of the end of the Plan Year. The value of
marketable investments shall be determined using the most
recent price quoted on a national securities exchange or
over the counter market. The value of non-marketable
investments shall be determined in the sole judgement of the
Trustee, which determination shall be binding and
conclusive. The value of investments in securities or
obligations of the Employer in which there is no market
shall be determined in the sole judgement of the Employer,
and the Trustee shall have no responsibility with respect to
the valuation of such assets. The Employer shall review the
Trust accounting and notify the Trustee in the event of its
disapproval of the report within 90 days, providing the
Trustee with a written description of the items in question.
Upon expiration of 90 days after furnishing such Trust
accounting to the Employer, the Trustee shall be forever
released and discharged from all liability and
accountability to anyone with respect to its acts, actions,
duties, obligations or responsibilities as shown in or
reflected by such statement, except with respect to any such
acts or transactions as to which the Employer shall have
filed written objections with the Trustee within such 90-day
period. The Trustee shall have 60 days to provide the
Employer with a written explanation of the items in
question. If the Employer again disapproves, the Trustee
shall file its accounting in a court of competent
jurisdiction for audit and adjudication.
(d) employing such agents, attorneys or other professionals as
the Trustee may deem necessary or advisable in the
performance of its duties.
The Trustee's duties shall be limited to those described above. The Em
ployer shall be responsible for any other duties required under the Plan or
by applicable law.
11.3 Recordkeeper The Recordkeeper shall be responsible for maintaining
Plan administrative records. The Recordkeeper's duties shall include but
are not limited to:
(a) transmitting Employer directives, as agent of the Employer, to
the Trustee,
(b) keeping accurate records reflecting the administration of the
Fund,
(c) making such records available to the Employer for review and
audit,
(d) accounting of any loans made to Participants, and
(e) any and all duties agreed upon between the Employer and
Recordkeeper.
11.4 Administrative Fees And Expenses All reasonable costs, charges and
expenses incurred by the Trustee in connection with its duties hereunder,
and all reasonable costs, charges and expenses, including any recordkeeping
fees incurred by the Plan Administrator in connection with the
administration of the Plan (including fees for legal services rendered to
the Trustee or Plan Administrator) may be paid by the Employer, but if not
paid by the Employer when due, shall be paid from the Fund. Such
reasonable compensation to the Trustee as may be agreed upon from time to
time between the Employer and the Trustee and such reasonable compensation
to the Plan Administrator as may be agreed upon from time to time between
the Employer and Plan Administrator may be paid by the Employer, but if not
paid by the Employer when due shall be paid by the Fund. The Trustee shall
have the right to liquidate trust assets to cover its fees.
Notwithstanding the foregoing, no compensation other than reimbursement for
expenses shall be paid to a Plan Administrator who is the Employer or a
full-time Employee of the Employer. In the event any part of the Trust
becomes subject to tax, all taxes incurred will be paid from the Fund
unless the Plan Administrator advises the Trustee not to pay such tax.
11.5 Division Of Duties And Indemnification
(a) The Trustee shall have no authority except pursuant to the
Employer's direction or that of any authorized agent of the
Employer.
(b) The Trustee shall not be liable for the making, retention or
sale of any investment or reinvestment made by it, as
herein provided, or for any loss to, or diminution of the
Fund, or for any other loss or damage which may result from
the discharge of its duties hereunder except to the extent
it is judicially determined that the Trustee has failed to
exercise the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting
in a like capacity and familiar with such matters would use
in the conduct of an enterprise of a like character with
like aims.
(c) The Employer warrants that all directions issued by it to
the Trustee or the Recordkeeper 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) Neither the Trustee nor the Recordkeeper shall 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 or Recordkeeper, if any, 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 or Recordkeeper, if any,
in writing and shall deliver to the Trustee or Recordkeeper,
if any, specimens of their signatures.
(e) The duties and obligations of the Trustee and the
Recordkeeper shall be limited to those expressly imposed
upon it by this instrument or otherwise agreed upon in
writing. Responsibility for administrative duties required
under the Plan or applicable law not expressly imposed upon
or agreed to by the Trustee and the Recordkeeper, shall rest
solely with the Employer.
(f) The Trustee shall be indemnified and saved harmless by the
Employer from and against any and all liability to which the
Trustee may be subjected, including all expenses reasonably
incurred in its defense for any action or failure to act
resulting from compliance with the instructions of the
Employer, the employees or agents of the Employer, the Plan
Administrator, the Recordkeeper, or any other fiduciary to
the Plan, and for any liability arising from the actions or
non-actions of any predecessor Trustee or fiduciary or other
fiduciaries of the Plan.
(g) Neither the Trustee nor the Recordkeeper shall 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
12.1 The Fund The Fund shall consist of all contributions made under
Article III and Article IV of the Plan and the investment thereof and
earnings thereon. All contributions and the earnings thereon less
payments made under the terms of the Plan, shall constitute the Fund.
The Fund shall be administered as provided in this document.
12.2 Control Of Plan Assets The assets of the Fund or evidence of
ownership shall be held by the Trustee under the terms of the Plan and
Trust. If the assets represent amounts transferred from another
trustee under a former plan, the Trustee named hereunder shall not be
responsible for any actions of the prior fiduciary, including the
review of the propriety of any investment under the former plan. Any
such review is to be the responsibility of the Employer.
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. Any attempt to assign, transfer,
sell, mortgage, pledge, hypothecate, commute, or anticipate the same,
except to the extent required by law, shall not be recognized. 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 ("Order"), unless
such order is determined to be a qualified domestic relations order,
as defined in Code Section 414(p), or any Order entered before
January 1, 1985 determined to be qualified.
12.5 Determination Of Qualified Domestic Relations Order (QDRO) An
Order shall specifically state all of the following 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 Order applies.
The 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 an 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 obtain a legal determination 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, a legal determination shall be made 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 respect to the Participant against whom the Order is
entered shall be the date the Order is determined to be qualified. This
will only allow payments to the 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 appoint Capital Guardian Trust
Company to serve as Trustee of the Fund. The Fund shall be invested in
any of the alternatives available to the Trustee under paragraph 13.3
herein.
13.3 Investment Alternatives Of The Trustee The Trustee shall invest
assets in accordance with the Employer's investment instructions and the
Employee Retirement Income Security Act of 1974. In addition to powers
given by law, the Trustee may:
(a) invest the Fund in any form of property, including common
and preferred stocks, exchange traded put and call options,
bonds, money market instruments, mutual funds (including
funds for which the Trustee or any of its affiliates serve
as investment advisor), savings accounts, certificates of
deposit, Treasury bills, insurance policies and group
annuity or other 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;
provided, however, that the Trustee must consent to
investments other than mutual funds or insurance policies
and contracts issued by an insurer acceptable to the
Trustee. 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-di
rected investment, in tangible personal property
characterized by the IRS as a collectible,
(b) invest any assets of the Fund in 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 and/or affiliates
of the Trustee. Such commingling of assets of the Fund with
assets of other qualified trusts is specifically authorized,
and to the extent of the investment of the Fund in such a
group or collective trust, the terms of the instrument
establishing the group or collective trust shall be a part
hereof as though set forth herein,
(c) invest up to 100% of the Fund in the common stock
(Qualifying Employer Securities), 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 or
the banking department of an affiliate,
(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; however, with regard
to registered investment company shares advised by an
affiliate of the Trustee, deliver to the Employer, and the
Employer will in turn deliver to the Participants, copies of
any notices of shareholder meetings, prospectuses, proxies
and proxy information and such shareholder reports which are
received by the Trustee with respect to such investment
company shares. The Trustee shall not vote any of such
shares except in accordance with the written instructions of
the Employer.
(h) exercise all ownership rights with respect to assets held in
the Fund.
13.4 Participant Loans If agreed upon by the Trustee and permitted by
the Employer in the Adoption Agreement, a Participant may make applica
tion to the Employer requesting a loan from the Fund. The Employer
shall have the sole right and responsibility of approving or
disapproving Participant applications. Loans shall be made available
to all Participants on a reasonably equivalent basis. Loans shall not
be made available to Highly Compensated Employees [as defined in Code
Section 414(q)] in an amount greater than the amount made available
to other Employees. Any loan granted under the Plan shall be made
subject to the following rules:
(a) no loan, when aggregated with any outstanding Participant
loan(s), shall exceed the lesser of (i) $50,000 reduced by
the excess, if any, of the highest outstanding balance of
loans during the one year period ending on the day before
the loan is made, over the outstanding balance of loans from
the Plan on the date the loan is made or (ii) one-half of
the fair market value of a Participant's vested account
balance built up from Employer contributions, Voluntary
Contributions, and Rollover Contributions. 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 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. 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. Loans are 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
subsequently be binding with respect to the consenting
Spouse or any subsequent Spouse.
(g) if a valid Spousal consent has been obtained, then, notwith
standing 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) 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.
(i) no loans will be made to Owner-Employees (as defined in para
graph 1.52) or Shareholder-Employees (as defined in
paragraph 1.76), unless the Employer obtains a prohibited
transaction exemption from the Department of Labor.
13.5 Employer Investment Direction If elected by the Employer in the
Adoption Agreement, the Employer, or the Recordkeeper shall have the right
to direct the Trustee with respect to investments of the Fund or, the
Employer may appoint an investment manager (registered as an investment
advisor under the Investment Advisors Act of 1940) to direct investments.
Such investments shall be restricted to investments acceptable to the
Trustee. The Employer may purchase and sell interests in a registered
investment company (i.e., mutual funds) for which the Sponsor, its parent,
affiliates, or successors, may serve as investment advisor and for which
the Sponsor receives 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 or the
appointment of an investment manager. Any investment directive under this
Plan shall be made in writing by the Employer or investment manager, as the
case may be. Such instructions regarding the delegation of investment
responsibility shall remain in force until revoked or amended in writing.
The Trustee shall not be responsible for the propriety of any investment
made at the direction of the Employer or Recordkeeper and shall not be
required to consult with or advise the Employer regarding the investment
quality of any directed investment held hereunder. If the Employer or
Recordkeeper does not issue investment directions, the Trustee shall invest
the assets in cash, cash-equivalents or a money market mutual fund advised
by an affiliate of the Trustee until the Employer designates an investment.
While the Employer may direct the Trustee or Recordkeeper 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.
13.6 Employee Investment Direction If elected 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. Such investment funds shall be restricted to
funds acceptable to the Trustee. If investments outside the Trustee's
control are allowed, Participants may not direct that investments be made
in collectibles. 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 to participate in
the Plan, he or she shall complete an investment designation
form stating the percentage of his or her contributions to
be invested in the selected 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, the Employer, the Recordkeeper 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.
13.7 Appointment of Additional Trustee And Allocation Of
Responsibilities Thereto If the Employer selects Qualifying Employer
Securities or other specific investments for which the Trustee is not
serving as trustee, as an investment of the Plan, then an additional
trustee will be appointed by the Employer to serve as trustee of the
Qualifying Employer Securities or other specific investments. In the
event that an additional trustee is appointed for the Plan to serve as
the trustee of Qualifying Employer Securities or other specific
investments which are permitted by the Plan, but for which this
Trustee is not serving as trustee, this Trustee shall have no
responsibilities to these assets other than as set forth herein. The
duties of the Trustee shall be limited to the assets held in the Fund
and the Trustee shall have no duties with respect to assets held by
any other person including, without limitation, any other trustee for
the Plan. Inversely, any other trustee of the Plan shall have no
duties with respect to assets held in the Fund by the Trustee.
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 three-percent of
such Participant's Compensation or the largest percentage of Employer
contributions and forfeitures, as a percentage of the Participant's
Compensation as imposed by Code Section 401(a)(17) and, as adjusted
under Code Section 415(d), of the Key Employee's Compensation,
allocated on behalf of any Key Employee for that year.
Each Participant who is employed by the Employer on the last day of
the Plan Year shall be entitled to receive an allocation of the
Employer's minimum contribution for such Plan Year. The minimum
allocation applies even though under other Plan provisions the
Participant would not otherwise be entitled to receive an allocation,
or would have received a lesser allocation for the year because the
Participant fails to make 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 as may be required in Section 3(k)(ii) of Adoption Agreement
#002) 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 1.13
of the Plan.
The Top-Heavy minimum contribution does not apply to any Participant
to the extent the Participant is covered under any other plan(s) of
the Employer and the Employer has provided in the Adoption Agreement
that the minimum allocation or benefit requirements applicable to Top-
Heavy Plans will be met in the other plan(s).
If a Key Employee makes an Elective Deferral or has an allocation of
Matching Contributions made to his or her account, a Top-Heavy minimum
will be required for 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 para
graph 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
1.17) and Defined Contribution Fraction (as defined in paragraph 1.20)
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 at any time without obtaining the approval or
consent of any Employer which has adopted this Plan and Trust 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 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. 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 are
affected by such partial termination shall be fully vested. In the event
of termination, the Employer or Recordkeeper shall direct the Trustee with
respect to the distribution of accounts. The Trustee shall dispose of the
Fund in accordance with the written directions of the Plan Administrator or
Recordkeeper, provided that no liquidation of assets and payment of
benefits, (or provision therefor), shall actually be made by the Trustee
until after it is established by the Employer in a manner satisfactory to
the Trustee, that the applicable requirements, if any, of the Employee
Retirement Income Security Act of 1974 and the Internal Revenue Code
governing the termination of employee benefit plans, have been or are
being, complied with, or that appropriate authorizations, waivers,
exemptions, or variances have been, or are being obtained.
15.4 Qualification Of Employer's Plan If the adopting Employer fails to at
tain 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 or any successor
trustee may be merged or with which it may be consolidated,
or any corporation resulting from any merger or
consolidation to which the Trustee or any successor trustee
may be a party, or any corporation to which all or
substantially all the trust business of the Trustee or any
successor trustee may be transferred, shall be the successor
of such Trustee without the filing of any instrument or
performance of any further act, before any court.
15.6 Resignation And Removal The Trustee may resign by written notice to
the Employer which shall be effective 60 days after delivery. The Employer
may discontinue its participation in this Prototype Plan and Trust
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 and appoint a
successor trustee or arrange for another funding agent. The Trustee shall
deliver the Fund to its successor on the effective date of the resignation
or removal, or as soon thereafter as practicable, provided that this shall
not waive any lien the Trustee may have upon the Fund for its compensation
or expenses. If the Employer fails to amend the Plan and appoint a
successor trustee, or other funding agent within the said 60 days, or such
longer period as the Trustee may specify in writing, the Plan shall be
deemed individually designed and the Employer shall be deemed the successor
trustee. The Employer must then obtain its own determination letter.
15.7 Qualification Of Prototype The Sponsor intends that this Prototype
Plan will meet the requirements of the Code as a qualified Prototype
Retirement Plan and Trust. Should the Commissioner of Internal Revenue or
any delegate of the Commissioner at any time determine that the Plan and
Trust fails to meet the requirements of the Code, the Sponsor will amend
the Plan and Trust to maintain its qualified status.
ARTICLE XVI
ELAPSED TIME RULES AND DEFINITIONS
16.1 Application If the Adoption Agreement specifies the Elapsed Time
method of determining Service, the rules and definitions provided in this
Article XVI shall supersede the corresponding provisions of the Plan to the
extent provided herein.
16.2 Hour Of Service In lieu of the provisions of paragraph 1.43(a), (b)
and (c), an Hour of Service shall mean an hour for which an Employee is
paid or entitled to payment for the performance of duties for the Employer.
16.3 Service Or Period Of Service In lieu of the provisions of paragraph
1.75, Service shall mean the aggregate of all years and fractions of years
of an Employee's employment by the Employer. Fractions of a year shall be
expressed in terms of days. A Period of Service shall mean the period
beginning on the date on which the Employee first performs an Hour of
Service upon employment or reemployment, and ending on the date on which a
Period of Severance begins. A Period of Service shall also include any
Periods of Severance of less than 12 consecutive months.
16.4 Year Of Service In lieu of the provisions of paragraph 1.92, a Year
of Service shall mean a Period of Service of 12 months, whether or not
consecutive.
16.5 Period Of Severance A Period of Severance shall mean a continuous
period during which the Employee is not employed by the Employer. A Period
of Severance shall begin on the earlier of:
(a) the date on which the Employee retires, dies, quits or is
discharged, or
(b) the first 12-month anniversary of the date on which the Employee
is first absent from employment for reasons other than
retirement, death, quit or discharge;
provided, however, that in the case of an Employee who is absent from
employment beyond the first 12-month anniversary of the first day of
absence by reason of Parental Leave, the Period of Severance shall begin on
the second 12-month anniversary of the date of such absence. The period
between the first and second 12-month anniversaries of the first day of
absence from employment shall be neither a Period of Service nor a Period
of Severance.
A Period of Severance shall end on the date on which the Employee again
performs an Hour of Service.
16.6 Break In Service In lieu of the provisions of paragraph 1.11, a Break
in Service shall mean a Period of Severance of 12 consecutive months.
16.7 Parental Leave For purposes of paragraph 16.5 and in lieu of the
provisions of paragraph 1.43(e), Parental Leave shall mean any period
during which an individual is absent from employment,
(a) by reason of the pregnancy of the individual,
(b) by reason of the birth of a child of the individual,
(c) by reason of placement of a child with the individual in
connection with the adoption of such child by the individual, or
(d) for purposes of caring for such child for a period beginning
immediately following the birth or placement.
An absence from employment shall not be a Parental Leave unless the
Employee furnishes to the Employer such timely information as the Employer
may reasonably require in order to establish that the nature and period of
absence from employment meet the requirements of this pargraph 16.7.
Nothing contained in this Article XVI shall be construed to establish an
Employer leave policy or treat a Parental Leave as an authorized leave of
absence.
16.8 Computation Period In lieu of the provisions of paragraphs 2.3 and
9.3, Years of Service and Breaks in Service shall be determined as provided
below:
(a) all Periods of Serivce shall be aggregated so that a Year of
Service shall be completed as of the date that the Employee
completes 12 months of Service (30 days shall be considered to be
one month in the case of aggregation of fractional months), and
(b) all Breaks in Service shall be determined in accordance with
paragraph 16.6.
16.9 Allocationg Employer Contributions In lieu of the provisions of
paragraph 5.3, 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; provided, however, that each
Participant shall share in Employer contributions for the period beginning
on the date on which the Participant begins participation under the Plan
and ending on the earlier of:
(a) the date on which the Participant severs employment with the
Employer, or
(b) the date on which the Participant is no longer a member of an
eligible class of Employees.
ARTICLE XVII
GOVERNING LAW
Construction, validity and administration of the Prototype Plan and Trust,
and any Employer Plan and Trust 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
in which the principal office of the Sponsor is located.
NONSTANDARDIZED
ADOPTION AGREEMENT
PROTOTYPE CASH OR DEFERRED PROFIT-SHARING
PLAN AND TRUST
Sponsored by
AMERICAN FUNDS DISTRIBUTORS, INC.
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/Basic Plan Document #03
(the "Plan"). If multiple Employers are adopting the Plan, complete
Section 1 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.
1. EMPLOYER INFORMATION
EMPLOYER'S NAME:
Newcor, Inc.
ADDRESS:
1825 S. Woodward, Suite 240
Bloomfield Hills, MI 48302
PRINCIPAL ADDRESS (if different):
TELEPHONE NUMBER: 810-253-2405
TAX ID NUMBER: 38-0865770
EMPLOYER'S FISCAL YEAR: 10/31
FORM OF BUSINESS:
[ ] Sole Proprietor
[ ] Partnership
[ ] "S" Corporation
[ X] Corporation
[ ] Other:
MEMBER OF:
[ ] Controlled Group
[ ] Affiliated Service Group
[ ] Group of trade or businesses under common control
DATE OF INCORPORATION:
June 3, 1933
NAME OF PLAN:
Newcor Hourly Employees' 401(k) Plan
THREE DIGIT PLAN NUMBER
FOR ANNUAL RETURN/REPORT: 013
2. EFFECTIVE DATE
2.(a) This is a new Plan having an effective date of April 1, 1997
2.(b) This is an amended Plan.
The effective date of the original Plan was
The effective date of the amended Plan is
2.(c) If different from above, the Effective Date for the Plan's
Elective Deferral provisions shall be .
3. DEFINITIONS
3.(a) "Allocation Date(s)" Allocations to Participant Accounts will
be done in accordance with Article V of the Plan:
[ ] (i) daily. [ ] (iv) semi-annually.
[X ] (ii) monthly. [ ] (v) annually.
[ ] (iii) quarterly.
3.(b) "Compensation" Compensation shall be determined on the basis
of the:
[X ] (i) Plan Year.
[ ] (ii) Employer's taxable year.
[ ] (iii) calendar year.
Compensation [X ] shall [ ] shall not include Employer
contributions made pursuant to a Salary Savings Agreement, for this
Plan or any other plan, which are not includable in the gross
income of the Employee for the reasons indicated in the definition
of Compensation at 1.13 of the Plan.
Compensation [X ] shall [ ] shall not be limited to Compensation
earned while a Participant in the Plan. "Shall" may only be
elected if Plan Year is chosen as the computation period at 3(b).
Compensation shall be determined on the basis of the following safe-
harbor definition of Compensation in IRS Regulation Section
1.414(s)-1(c):
[X ] (iv) Code Section 3401(a) - W-2 income subject to income
tax witholding.
[ ] (v) Code Section 415 - W-2 income, share of profits and
other taxable income.
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
limitation on Compensation under Code Section 401(a)(17), thus the
amount should be less than such limitation as adjusted for cost-of-
living increases.]
Exclusions From Compensation:
[ ] (vi) overtime.
[ ] (vii) bonuses.
[ ] (viii) commissions.
[ ] (ix)
NOTE: Any exclusion of Compensation only applies to Employer
discretionary contributions under Section 7(e) and does not
apply to any contribution which is qualified or subject to
antidiscrimination testing. Such exclusions must also satisfy
the requirements of Section 1.401(a)(4) of the Income Tax
Regulations and Code Section 414(s) and the regulations
thereunder.
3.(c) "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 1/2 year and the
age requirement at 4(b)(ii) may not exceed 20-1/2.
[ ] (iv) The first day of the month or if earlier the first
day of the Plan Year 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, seventh or tenth month of the Plan Year
coinciding with or following the date on which an
Employee meets the eligibility requirements.
3.(d) "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 1.43 of the Plan 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 1.43 of the Plan 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 1.43 of the Plan such Em
ployee 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 1.43 of the
Plan such Employee would be credited with at least one
(1) Hour of Service during the month.
[ ] (vi) on the basis of Elapsed Time, as provided in Article
XVI of the Plan.
3.(e) "Limitation Year" The 12-consecutive month period commencing
on January 1 and ending on December 31.
If applicable, the Limitation Year will be a short Limitation Year
commencing on April 1, 1997 and ending on December 31, 1997.
Thereafter, the Limitation Year shall end on the date last
specified.
3.(f) "Net Profit"
[X ] (i) Not applicable. Profits will not be required for
any contributions to the Plan.
[ ] (ii) As defined in paragraph 1.50 of the Plan.
[ ] (iii) Shall be defined as:
(Only use if definition in paragraph 1.50 of the Plan is
to be superseded.)
3.(g) "Plan Year" The 12-consecutive month period commencing on
January 1 and ending on December 31.
If applicable, the Plan Year will be a short Plan Year commencing
on April 1, 1997 and ending on December 31, 1997. Thereafter, the
Plan Year shall end on the date last specified.
3.(h) "Qualified Early Retirement Age" For purposes of making
distributions under the provisions of a Qualified Domestic
Relations Order, the Plan's Qualified Early Retirement Age with
regard to the Participant against whom the Order is entered
[X ] shall [ ] shall not be the date the Order is determined to be
qualified. If "shall" is elected, this will only allow payout to
the alternate payee(s).
3.(i) "Qualified Joint and Survivor Annuity" The safe-harbor
provisions of paragraph 8.7 of the Plan [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.
3.(j) "Taxable Wage Base" [paragraph 1.81]
[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 subsection (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 subsection (ii) may result
in a change in the allocation formula in Section 7(f)
hereof.
3.(k) "Year of Service" (This option is not applicable if Hours of
Service are determined on the basis of Elapsed Time selected under
Section 3(d)(vi) above.)
(i) For Eligibility Purposes: The 12-consecutive month period
during which an Employee is credited with 0 (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
Employees meeting the following Service and Age requirements shall be
eligible to participate in the Plan unless excluded under Section 4(c)
below.
4.(a) Service:
[ ] (i) The Plan shall have no Service requirement.
[X ] (ii) The Plan shall cover only Employees having completed
at least 3 mos. [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.
4.(b) Age:
[ ] (i) The Plan shall have no minimum age requirement.
[X ] (ii) The Plan shall cover only Employees having attained
age 21 (not more than age 21).
4.(c) Classification:
The Plan shall cover all Employees who have met the age and Service
requirements with the following exceptions:
[ ] (i) no exceptions.
[X ] (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 bar
gaining and the agreement benefits Employeess of whom two
percent or less are professionals, as defined in Section
1.410(b)-9 of the Regulations. 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.
[X ] (iii) the Plan shall exclude Employees who are
nonresident aliens [within the meaning of Section
7701(b)(1)(B)] and who receive no earned income [within
the meaning of Section 911(d)(2)] from the Employer which
constitutes income from sources within the United States
[within the meaning of Section 861(a)(3)].
[X ] (iv) the Plan shall exclude from participation any
nondiscriminatory classification of Employees determined
as follows:
Salaried Employees and hourly Employees
who are participants in another 401(k) plan maintained
by the Employer or by a member of the Employer's
controlled group.
4.(d) Initial Participants:
[X ] (i) Employees employed on the Plan's Effective Date will
be required to satisfy both the age and Service
requirements specified above.
[ ] (ii) Employees employed on the Plan's Effective Date do
not have to satisfy the Service requirements specified
above.
[ ] (iii) Employees employed on the Plan's Effective Date
do not have to satisfy the age requirements specified
above.
5. RETIREMENT AGES
5.(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 63 (not to exceed
age 65).
[ ] (ii) Normal Retirement Age shall be the later of
attaining age (not to exceed age 65) or the
(not to exceed the 5th) anniversary of the first day of
the first Plan Year in which the Participant commenced
participation in the Plan.
5.(b) Early Retirement Age:
[ ] (i) Not Applicable.
[X ] (ii) The Plan shall have an Early Retirement Age of 60
(not less than 55) and completion of 0 Years of Service.
6. EMPLOYEE CONTRIBUTIONS
[X ] 6.(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 may amend their Salary
Savings Agreements to change the contribution percentage as
provided below:
[ ] (i) on the first day of each month of the Plan Year.
[X ] (ii) on the first day of the Plan Year and on the
first day of the fourth, seventh and tenth months of
the Plan Year.
[ ] (iii) on the first day of the Plan Year and on
the first day of the seventh month of the Plan Year.
[ ] 6.(b) Participants shall be permitted to make after tax
Voluntary Contributions.
[ ] 6.(c) Participants shall be required to make after tax
Voluntary Contributions as follows (Thrift Savings Plan):
[ ] (i) % of Compensation.
[ ] (ii) a percentage determined by the Employee on his
or her enrollment form.
NOTE: Elective Deferrals may not be recharacterized as Voluntary
Contributions for purposes of the Average Deferral Percentage
(ADP) Test. The ADP Test will apply to contributions under
(a) above. The Average Contribution Percentage (ACP) Test
will apply to contributions under (b) and (c) above and may
apply to (a).
7. EMPLOYER CONTRIBUTIONS AND ALLOCATION
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 of the
Plan. 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.
7.(a) Profits Requirement:
Current or Accumulated Net Profits are not required unless
otherwise indicated below:
[ ] (i) Matching Contributions.
[ ] (ii) Qualified Non-Elective Contributions.
[ ] (iii) Discretionary contributions.
NOTE: Elective Deferrals can always be contributed regardless
of profits. Complete this Section in conjunction with
Section 3(f).
[X ] 7.(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.
[X ] (ii) for a period of 3 month(s) (not to exceed 12
months).
[X ] 7.(c) Matching Contribution [See Sections (g) and (h)]: in cash
or Employer Securities
[X ] (i) Percentage Match on Elective Deferrals: 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 Section 7(b) above. The
Employer shall not match Participant Elective Deferrals
as provided above in excess of $ or in excess of
6 % of the Participant's Compensation.
[ ] (ii) Percentage Match On Voluntary Contributions: The
Employer shall contribute and allocate to each eligible
Participant's account an amount equal to % of the
amount of Voluntary Contributions (if provided for under
Section 6(b) or 6(c) above) made in accordance with
paragraphs 4.1 or 4.7 of the Plan. The Employer shall
not match Voluntary Contributions in excess of $
or in excess of % of the Participant's
Compensation.
[ ] (iii) 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
Section 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.
[ ] (iv) Tiered Match: The Employer shall contribute and
allocate to each Participant's account an amount equal to
% of the first % of the Participant's Compensation,
to the extent deferred.
% of the next % of the Participant's
Compensation, to the extent deferred.
% of the next % of the Participant's
Compensation, to the extent deferred.
NOTE: Percentages specified in subsection (iv) above may
not increase as the percentage of Participant's
contribution increases.
[X ] (v) Qualified Match: Matching Contributions will be
treated as Qualified Matching Contributions to the extent
specified below:
[ ] (A) all Matching Contributions.
[ ] (B) none.
[X ] (C) the amount necessary to meet [ ] the ADP
Test, [ ] the ACP Test, [X ] both the ADP and
ACP Tests.
[X ] (vi) Eligibility for Match: Matching Contributions,
whether or not Qualified, will only be made on Employee
Contributions:
[X ] (A) not withdrawn prior to the end of the
valuation period.
[ ] (B) not withdrawn prior to the end of the Plan
Year.
[ ] (C) without regard to their withdrawal.
(vii) Matching Contribution Computation Period: The time
period upon which matching contributions will be based
shall be:
[ ] (A) weekly.
[ ] (B) bi-weekly.
[ ] (C) semi-monthly.
[X ] (D) monthly.
[ ] (E) quarterly.
[ ] (F) semi-annually.
[ ] (G) annually.
[X ] 7.(d) Qualified Non-Elective Employer Contribution - [See
Sections (g) and (h)]: These contributions are fully vested when
contributed.
The Employer shall have the right to make an additional
discretionary contribution which shall be allocated to each
eligible Employee in proportion to his or her Compensation as a
percentage of the Compensation of all eligible Employees. This
part of the Employer's contribution and the allocation thereof
shall be unrelated to any Employee contributions made hereunder.
The amount of Qualified Non-Elective Contributions taken into
account for purposes of meeting the ADP or ACP Test requirements
is:
[ ] (i) all such Qualified Non-Elective Contributions.
[ ] (ii) none.
[X ] (iii) the amount necessary to meet [ ] the ADP Test,
[ ] the ACP Test, [X ] both the ADP and ACP Tests.
Qualified Non-Elective Contributions will be allocated to:
[ ] (iv) all Employees eligible to participate.
[X ] (v) only non-Highly Compensated Employees eligible to
participate.
[X ] 7.(e) Additional Employer Contribution Other Than Qualified Non-
Elective Contributions - Non-Integrated [See Sections (g) and (h)]:
The Employer shall have the right to make an additional
discretionary contribution in cash or Employer Securities 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.
[ ] 7.(f) Additional Employer Contribution - Integrated Allocation
Formula [See Sections (g) and (h)]:
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 allocation in the ratio that
his or her excess Compensation bears to the excess
Compensation of all Participants. Participants may only re
ceive an allocation of 3% of excess Compensation.
(iii) Next, any remaining Employer contributions and
forfeitures will be allocated to all Participants in the ratio
that their Compensation plus excess Compensation bears to the
total Compensation plus excess Compensation of all
Participants. Participants may only receive an allocation of
up to 2.7% of their Compensation plus excess Compensation,
under this allocation method. If the Taxable Wage Base
defined at Section 3(j) is less than or equal to the greater
of $10,000 or 20% of the maximum, the 2.7% need not be
reduced. If the amount specified is greater than the greater
of $10,000 or 20% of the maximum Taxable Wage Base, but not
more than 80%, 2.7% must be reduced to 1.3%. If the amount
specified is greater than 80% but less than 100% of the
maximum Taxable Wage Base, the 2.7% must be reduced to 2.4%.
NOTE: If the Plan is not Top-Heavy or if the Top-Heavy
minimum contribution or benefit is provided under
another Plan [see Section 11(c)(ii)] covering the
same Employees, subsections (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.
NOTE: Only one plan maintained by the Employer may be integrated
with Social Security.
[X ] 7.(g) Allocation of Excess Amounts (Annual Additions)
In the event that the allocation formula above results in an Excess
Amount, such excess shall be distributed to the Participant to the
extent such excess does not exceed the Participant's Elective
Deferrals, non-deductible Employee Voluntary and Required Voluntary
Contributions. To the extent the Excess Amount exceeds the sum of
the aforementioned Employee contributions, such excess shall be:
[X ] (i) placed in a suspense account accruing no gains or
losses for the benefit of the Participant.
[ ] (ii) reallocated as additional Employer contributions to
all other Participants to the extent that they do not
have any Excess Amount.
[X ] 7.(h) 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 Sections 7(e), 7(f) and 9 of this Adoption
Agreement shall not be less than the amount required under
paragraph 14.2 of the Plan. Top-Heavy minimums will be allocated
to:
[ ] (i) all eligible Participants.
[X ] (ii) only eligible non-Key Employees who are
Participants.
[X ] 7.(i) 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 the ADP and/or the ACP of the affected Highly Compensated
Employees.
8. ALLOCATIONS TO TERMINATED EMPLOYEES
(This option is not applicable if Hours of Service are determined on the
basis of Elapsed Time selected under Section 3(d)(vi) above.)
[ ] 8.(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
1993 Plan Year and for subsequent Plan Years.)
[X ] 8.(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.
[X ] [ ] (v) other termination of employment even
though the Participant has not completed a Year
of Service.
[ ] [ ] (vi) termination of employment (for any
reason) provided that the Participant had
completed a Year of Service for Allocation
Accrual Purposes.
9. ALLOCATION OF FORFEITURES
NOTE: Forfeitures of Excess Aggregate Contributions shall be applied
at the end of the Plan Year in which they occur to reduce
Employer Contributions. Subsections (a), (b), (c) and (d)
below apply to forfeitures of amounts other than Excess
Aggregate Contributions.
9.(a) Allocation Alternatives:
If forfeitures are allocated to Participants, such allocation shall
be done in the same manner as the Employer's contribution.
[ ] (i) Not Applicable. All contributions are always fully
vested.
[X ] (ii) Forfeitures shall be applied to reduce the
Employer's contributuon for such Plan Year.
[ ] (iii) Forfeitures shall be allocated to Participants
in the same manner as the Employer's contribution.
(A) Amount attributable to Employer discretionary
contributions and Top-Heavy minimums will be
allocated to:
[ ] all eligible Participants under the Plan.
[ ] only those Participants eligible for an
allocation of matching contributions in the cur
rent year.
(B) Amounts attributable to Employer Matching
contributions will be allocated to:
[ ] all eligible Participants.
[ ] only those Participants eligible for
allocations of matching contributions in the
current year.
9.(b) Reallocation Date for Plans using daily valuations shall be
the end of the next Plan Year immediately following receipt of a
cash out distribution.
9.(c) Date for Reallocation (for Plans using other than daily
valuations):
[ ] (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 as of the next
Valuation Date.
[ ] (iii) Forfeitures shall be reallocated at the end of
the Plan Year during which the former Employee incurs a
one-year Break In Service.
[ ] (iv) Forfeitures will be reallocated as of the Plan Year
end.
9.(d) 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 contributions.
[3 ] (iii)income or gain to the Plan.
10. CASH OPTION
[ ] 10.(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.
Nothwithstanding the above, the election to defer must be made
before the bonus is made available to the Participant.
[X ] 10.(b) Not Applicable.
11. LIMITATIONS ON ALLOCATIONS
This Section is not applicable if this is the only Plan the Employer
maintains or ever maintained. Plans include Welfare Benefit Funds as
described in Code Section 419(e) or an individual medical account as
defined under Code Section 415(l)(2) under which amounts are treated as
Annual Additions.
[ ] 11.(a) If the Participant is covered under another qualified
Defined Contribution Plan maintained by the Employer, other than a
Master or Prototype Plan:
[ ] (i) the provisions of Article X of the Plan 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.
[X ] 11.(b) If a Participant is or ever has been a participant in a
Defined Benefit Plan maintained by the Employer:
Attach provisions which will satisfy the 1.0 limitation of Code
Section 415(e). Such language must preclude Employer discretion.
The Employer must also specify the interest and mortality
assumptions used in determining Present Value in the Defined
Benefit Plan.
[X ] 11.(c) The minimum contribution or benefit required under
Code Section 416 relating to Top-Heavy Plans shall be
satisfied by either:
[ ] (i) this Plan.
[X ] (ii) Newcor, Inc. Retirement Plan
(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
12(a) Computation Period: (This option is not applicable if Hours
of Service are determined on the basis of Elapsed Time selected
under Section 3(d)(vi) above.)
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.
[X ] (ii) 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 such 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.
12.(b) Vesting Schedules:
Contributions under Sections 6(a),(b),(c), 7(c)(v) and (d) are
always fully vested.
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%
[X ] (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 ] (A) All contributions other than those which are
fully vested when contributed will vest under
schedule iii above.
[ ] (B) All Matching Contributions will vest under
schedule above. All other Employer contributions
other than those which are fully vested when
contributed will vest under schedule above.
12.(c) Service disregarded for Vesting:
[X ] (i) Not Applicable. All Service shall be considered.
[ ] (ii) Service prior to the Effective Date of this Plan or
a predecessor plan shall be disregarded when computing a
Participant's vested and nonforfeitable interest.
[ ] (iii) Service prior to a Participant having attained
age 18 shall be disregarded when computing a
Participant's vested and nonforfeitable interest.
12.(d) Top-Heavy Vesting:
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 above except with respect to any Plan Year during which
the Plan is Top-Heavy, in which case the [X ] Two-twenty vesting
schedule [Section 12(b)(iv)] [ ] Three-Year Cliff vesting
schedule [Section 12(b)(iii)] shall automatically apply unless the
Employer has already elected a faster vesting schedule. If the
Plan is switched to Section 12(b)(iii) or 12(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.
13. SERVICE WITH PREDECESSOR ORGANIZATION
For purposes of satisfying the Service requirements for Eligibility and
Vesting, Hours of Service shall include Service with the following
predecessor organization(s): The predecessor of any Newcor unit or
division.
14. ROLLOVER/TRANSFER CONTRIBUTIONS
14.(a) Rollover Contributions, as described at paragraph 4.3 of the
Plan, [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.
14.(b) Transfer Contributions, as described at paragraph 4.4 of the
Plan [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 Plan.
15. HARDSHIP WITHDRAWALS
Hardship withdrawals, as provided for in paragraph 6.9 of the Plan
[X ] are [ ] are not permitted.
16. PARTICIPANT LOANS
Participant loans, as provided for in paragraph 13.4 of the Plan,
[ ] are [X ] are not permitted. If permitted, repayments of principal
and interest shall be repaid to the Participant's segregated account.
17. EMPLOYER INVESTMENT DIRECTION
The Employer investment direction provisions, as set forth in paragraph
13.5 of the Plan [X ] shall [ ] shall not be applicable, with respect
to Matching Contributions that are not 100% vested.
18. EMPLOYEE INVESTMENT DIRECTION
The Employee investment direction provisions, as set forth in paragraph
13.6 of the Plan [X ] shall [ ] shall not be applicable, with respect
to all Elective Deferrals discretionary contributions and Matching
Contributions that are 100% vested.
NOTE: To the extent that Employee investment direction was
previously allowed, the Trustee shall have the right to either
make the assets part of the general Trust, or leave them as
separately invested subject to the provisions of paragraph
13.6 of the Plan.
19. EARLY PAYMENT OPTION
19.(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. Amounts under $3,500 [X ] will [ ] will not be cashed
out immediately.
19.(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
has completed five Years of Service.
19.(c) A Participant who has attained age 59-1/2 and has not
separated from Service [X ] may [ ] may not obtain a distribution
of his or her vested Employer contributions.
19.(d) 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 20(a) below.
20. DISTRIBUTION OPTIONS
20.(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 valuation period during which a distribution
is requested or is otherwise payable.
[ ] (ii) as soon as administratively feasible following the
close of the Plan Year during which a distribution is
requested or is otherwise payable.
[X ] (iii)as soon as administratively feasible following the
date on which a distribution is requested or is otherwise
payable.
[ ] (iv) as soon as administratively feasible after the close
of the Plan Year during which the Participant incurs a
one-year Break in Service.
[ ] (v) only after the Participant has achieved the Plan's
Normal Retirement Age, or Early Retirement Age, if
applicable.
In cases of death, Disability or retirement, benefits shall be
paid:
[ ] (vi) as soon as administratively feasible following the
close of the valuation period during which a distribution
is requested or is otherwise payable.
[ ] (vii) as soon as administratively feasible following
the close of the Plan Year during which a distribution is
requested or is otherwise payable.
[X ] (viii) as soon as administratively feasible following
the date on which a distribution is requested or is
otherwise payable.
20.(b) Optional Forms of Payment:
[X ](i) Lump Sum. In cash or in kind.
[X ](ii) Installment Payments. In cash or in kind.
[ ] (iii) Other form(s) as previously provided.
(Indicate all forms that apply):
20.(c) Recalculation of Life Expectancy:
In determining required distributions under the Plan, a
Participant and/or Spouse (Surviving Spouse) [X ] 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.
[X ]who is recalculated shall be determined by the Participant.
21. SPONSOR CONTACT
Employers should direct questions concerning the language contained in
and the qualification of the Prototype to:
Capital Guardian Trust Company
Corporate Employee Benefits Department
(Phone Number) (714) 671-7000
In the event that the Sponsor amends, discontinues or abandons this
Prototype Plan, notification will be provided to the Employer at the
address provided on the first page of this Adoption Agreement.
22. SIGNATURES:
Due to the significant tax ramifications, the Sponsor recommends that
before the Employer execute this Adoption Agreement, the Employer
contact its attorney or tax advisor.
(a) EMPLOYER DELEGATE OR COMMITTEE APPOINTMENT:
The Employer has appointed the following individual(s) to act on behalf
of the Employer regarding all communications and requests between the
Employer and the Recordkeeper, pursuant to the terms and conditions of
the Plan. Unless otherwise directed by the Employer in written
directions to the Recordkeeper, the Recordkeeper may act upon the
instructions of any one of the persons listed below.
NAME(S) (please type or print)
1. Fred Davenport
SIGNATURE(S)
/s/ Fred Davenport
Address
1825 S. Woodward, #240
Bloomfield Hills, MI 48302
2.
Address
3.
Address
(b) EMPLOYER:
Name and address of Employer if different than specified in
Section 1 above.
The Employer hereby adopts the Plan, appoints Capital Guardian
Trust Company as Trustee and directs that contributions to the
Plan shall be invested in accordance with the instructions
provided by it. The Employer has read the Plan and Trust and
Adoption Agreement, agrees to the terms and conditions set forth
therein and has consulted with an attorney about the effect of
establishing the Plan.
This agreement and the corresponding provisions of the Plan and
Trust Basic Plan Document #03 were adopted by the Employer the
1st day of April, 1997.
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 #03.
(c) TRUSTEE APPOINTMENT AND ACCEPTANCE:
The Employer hereby appoints Capital Guardian Trust Company to
serve as Trustee, and such Trustee hereby confirms acceptance of
the appointment and duties pursuant to the accompanying Plan and
this Adoption Agreement.
Signed for the Trustee by: Herman Martinez
Title: Trust Administrator
Signature: /s/Herman Martinez
NOTE: In accordance with paragraph 13.7 of Basic Plan Document #03 an
additional trustee may be appointed to govern Plan assets held
outside the Fund. If so, the additional trustee shall be
appointed in a separate trust agreement.
