As filed with the Securities and Exchange Commission on July 30, 1999
File No. 333-
_________________________________
_________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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PAYCHEX, INC.
(Exact name of issuer as specified in its charter)
DELAWARE 16-1124166
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
911 Panorama Trail South
Rochester, New York 14625
(Address of principal executive offices)
____________________________________
PAYCHEX, INC. 401(k)
INCENTIVE RETIREMENT PLAN
____________________________________
John M. Morphy, Vice President and Chief Financial Officer
Paychex, Inc.
911 Panorama Trail South
Rochester, New York 14625
Telephone (716) 385-6666
(Name, address and telephone number of agent for service)
____________________________________
Copies of Communications to:
Harry P. Messina, Jr., Esq.
Woods, Oviatt, Gilman, Sturman & Clarke LLP
700 Crossroads Building
Rochester, New York 14614
Telephone (716) 987-2800
____________________________________
CALCULATION OF REGISTRATION FEE
__________________________________________________
__________________________________________________
Proposed Proposed
maximum maximum
Title of Amount offering aggregate Amount of
securities to to be price per offering registration
be registered registered share price fee
Common Stock 5,000,000(1) $29.625(2) $148,125,000(2) $41,178.75
$.01 par value shares
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933,
this registration statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
(2) This calculation is made pursuant to Rule 457(h) under the Securities Act
of 1933, as amended, solely for the purpose of determining the amount of
the registration fee and is based upon the average of the high and low
prices of Paychex, Inc. common stock on July 27, 1999.
__________________________________________________
__________________________________________________
Part I
INFORMATION REQUIRED IN SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of Form
S-8 will be sent or given to each employee who is eligible to participate as
specified by Rule 428(b)(1) of the Securities Act of 1933, as amended. These
documents and the documents incorporated by reference into this Registration
Statement pursuant to Item 3 of Part II of this Registration Statement, taken
together, constitute a prospectus that meets the requirements of Section 10(a)
of the Securities Act of 1933, as amended.
Part II
Item 3. Incorporation of Documents by Reference
The following documents which have been filed with the Securities and
Exchange Commission are incorporated by reference as of their respective dates
are a part hereof:
(a) The Company's Annual Report on Form 10-K for the year ended May 31,
1998;
(b) The Company's Current Reports on Form 8-K filed July 2, 1998 and
September 15, 1998, October 1, 1998 and June 29, 1999;
(c) The Company's Annual Report for the Paychex, Inc. 401(k) Incentive
Retirement Plan on Form 11-K for the year ended December 31, 1998, filed
on June 25, 1999;
(d) The Company's Proxy Statement for the Annual Meeting of Stockholders
held on October 1, 1998; and
(e) The description of the Common Stock contained in the Company's
Registration Statement on Form S-1 (No. 2-85103) and in any amendment or
report filed for the purpose of amending such description.
Additionally, all documents subsequently filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as
amended, prior to the filing of a post-effective amendment hereto which
indicates that all of the shares of the Common Stock offered hereby have been
sold or which deregisters all such shares then remaining unsold, shall be
deemed to be incorporated by reference herein and to be part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this registration statement to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this registration
statement.
Item 5. Interests of Named Experts and Counsel
Woods, Oviatt, Gilman, Sturman & Clarke LLP, 700 Crossroads Building,
Rochester, New York 14614 is legal counsel to the Company and to the Plan. A
partner of that firm is a director of the Company and has in the past been a
recipient of option grants under predecessor plans. Attorneys in that firm
beneficially own 417,731 shares of Common Stock on July 21, 1999.
Item 6. Indemnification of Directors and Officers
The general effect of any statute, charter provisions, bylaws, contract
or other arrangements under which any controlling person, director officer of
the registrant is insured or indemnified in any manner against liability which
he may incur in his capacity as such is set forth as follows:
The Company is incorporated in Delaware and, therefore, is
subject to the Delaware General Corporation Law (the "Delaware Law"). The
Delaware Law provides a detailed statutory framework covering indemnification
of directors and officers who have been or are threatened to be made
defendants in legal proceedings by reason of their service as directors or
officers of the Company.
Section 145 of the Delaware Law provides that a director or
officer of a corporation for all expenses of such litigation when he is
successful on the merits (ii) may be indemnified by the corporation for the
expenses, judgments, fines and amounts paid in settlement of third party
proceedings (such as antitrust claims, denial of civil rights, failure to
honor employment contracts) even if he is not successful on the merits, 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, in the vase of a
criminal proceeding, had no reason to believe his conduct was unlawful), and
(iii) may be indemnified by the corporation for expenses alone in a derivative
suit (a suit by a stockholder alleging a breach by a director or officer of a
duty owed to the corporation), even if he is not successful on the merits, but
only 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. No indemnification
is provided under (iii) above if the director or officer is adjudged to be
liable to the corporation unless a court determines that, despite such
adjudication but in view of all of the circumstances, he is entitled to
indemnification. Unless ordered by a court, the indemnification described in
clauses (ii) and (iii) above shall be made only upon a determination, by (a) a
majority of a quorum of disinterested directors, (b) independent legal counsel
or (c) the stockholders, that indemnification is proper because the applicable
standard of conduct has been met. The corporation may advance the
indemnification described in clauses (ii) and (iii) to a director or officer
upon receipt of an undertaking by such director or officer to repay such
expenses if it is ultimately determined that he is not entitled to be
indemnified for them.
In addition, the Company has entered into an Indemnity
Agreement with each of its officers and directors. The Agreement alters or
clarifies the statutory indemnity in the following respects: (i) indemnity is
explicitly provided for settlements in derivative actions, (ii) the Company is
obligated to advance a director's or officer's expenses of defending an action
against him if the director or officer undertakes to repay such advances if he
is ultimately found not to be entitled to indemnification or he is otherwise
reimbursed for the expenses, (iii) indemnification is mandatory unless a
determination is made that the director or officer has not met the required
standard, (iv) the director or officer is permitted to petition a court to
determine whether his actions met the standard required and the burden is
placed on the Company to prove that the director's and officer's conduct did
not meet the required standard, and (v) partial indemnification is permitted
in the event that the director or officer is not entitled to full
indemnification.
In addition, the following provision is contained in the
Company's Certificate of Incorporation: "No director shall be personally
liable to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that this provision shall 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) for paying a dividend or approving a stock
repurchase which was illegal under Section 174 (or any successor section) of
the Delaware General Corporation Law, or (iv) for any transaction from which
the director derived an improper personal benefit. The foregoing provisions
shall not eliminate or limit the liability of a director for any act or
omission occurring prior to the date when such provisions become effective."
Item 8. Exhibits
4.1 Paychex, Inc. 401(k) Incentive Retirement Plan consisting of:
(a) Invesco Trust Company Defined Contribution Master Plan and Trust
Agreement (Basic Plan Document #01).
(b) Adoption Agreement, effective January 1, 1996.
(c) Amendment made January 1, 1997.
(d) Amendment made September 29, 1997.
(e) Amendment made July 1, 1998.
(f) Amendment made July 22, 1998.
5.1 IRS Determination Letter dated April 28, 1995.
23.1 Consent of Ernst & Young LLP.
24.1 Powers of Attorney.
Item 9. Undertakings
The Company hereby undertakes: (3) to file, during any
period in which offers or sales of the Common Stock 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, as
amended (the "Securities Act"); (ii) to reflect in the prospectus any facts or
events arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement; (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 that if the information required in clauses (i) and (ii)
above to be included in a post-effective amendment hereto is contained in one
or more periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, no post-effective
amendment hereto shall be required; (4) that, for the purpose of determining
any liability under the Securities Act, 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; and (5) 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.
Additionally, the undersigned registrant hereby undertakes
that, for purposes of determining any liability under the Securities Act, each
filing of the Company's annual report pursuant to Section 13(a) or Section
15(d) of the Exchange Act that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Company 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 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 in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all 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 Rochester, State of New York on
July 29, 1999.
PAYCHEX, INC.,
(Registrant)
By: /S/ John M. Morphy
------------------------------
John M. Morphy, Vice President
and Chief Financial 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 and on the date indicated.
Signature Title Date
/s/ B. Thomas Golisano President, Chairman of the July 29, 1999
B. Thomas Golisano Board and Chief Executive
Officer
/s/ John M. Morphy Vice President, Chief Financial July 29, 1999
John M. Morphy Officer, Principal Accounting
Officer and Secretary
*Steven D. Brooks Director July 29, 1999
Steven D. Brooks
*David J.S. Flaschen Director July 29, 1999
David J.S. Flaschen
*Phillip Horsley Director July 29, 1999
Phillip Horsley
*Grant M. Inman Director July 29, 1999
Grant M. Inman
*Harry P. Messina, Jr. Director July 29, 1999
Harry P. Messina, Jr.
*J. Robert Sebo Director July 29, 1999
J. Robert Sebo
*By: /s/ B. Thomas Golisano
B. Thomas Golisano, Attorney-in-Fact
The Plan has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of
Rochester, State of New York, on the 29th day of July, 1999.
PAYCHEX, INC. 401(k)
INCENTIVE RETIREMENT PLAN
By: /S/ John M. Morphy
------------------------
John M. Morphy, Chairman
401(k) Committee
Exhibit 4.1(a) - Invesco Trust Company Defined
Contribution Master Plan and Trust Agreement
(Basic Plan Document #01)
TABLE OF CONTENTS
PAGE
ARTICLE I - DEFINITIONS 1
1.01 EMPLOYER 1
1.02 TRUSTEE 1
1.03 PLAN 1
1.04 ADOPTION AGREEMENT 1
1.05 PLAN ADMINISTRATOR 1
1.06 ADVISORY COMMITTEE 1
1.07 EMPLOYEE 1
1.08 SELF-EMPLOYED INDIVIDUAL/OWNER - EMPLOYEE 1
1.09 HIGHLY COMPENSATED EMPLOYEE 1
1.10 PARTICIPANT 2
1.11 BENEFICIARY 2
1.12 COMPENSATION 2
(A) Limitations on Compensation 2
(B) Nondiscrimination 3
1.13 EARNED INCOME 3
1.14 ACCOUNT 3
1.15 ACCRUED BENEFIT 3
1.16 NONFORFEITABLE 3
1.17 PLAN YEAR 3
1.18 EFFECTIVE DATE 3
1.19 PLAN ENTRY DATE 3
1.20 ACCOUNTING DATE 3
1.21 TRUST 3
1.22 TRUST FUND 3
1.23 NONTRANSFERABLE ANNUITY 3
1.24 ERISA 3
1.25 CODE 3
1.26 SERVICE 3
1.27 HOUR OF SERVICE 4
(A) Method of crediting Hours of Service 4
(B) Maternity/paternity leave 4
1.28 DISABILITY 4
1.29 SERVICE FOR PREDECESSOR EMPLOYER 4
1.30 RELATED EMPLOYERS 4
1.31 LEASED EMPLOYEES 5
(A) Safe harbor plan exception 5
(B) Other requirements 5
1.32 SPECIAL RULES FOR OWNERS - EMPLOYEES 5
1.33 DETERMINATION OF TOP HEAVY STATUS 5
(A) Standardized Plan 6
(B) Definitions 6
1.34 PAIRED PLANS 6
ARTICLE II - EMPLOYEE PARTICIPANTS 7
2.01 ELIGIBILITY 7
2.02 YEAR OF SERVICE - PARTICIPATION 7
2.03 BREAK IN SERVICE - PARTICIPATION 7
(A) 2-year Eligibility 7
(B) Suspension of Years of Service 7
2.04 PARTICIPATION UPON RE-EMPLOYMENT 7
2.05 CHANGE IN EMPLOYEE STATUS 7
2.06 ELECTION NOT TO PARTICIPATE 7
ARTICLE III - EMPLOYER CONTRIBUTIONS AND FORFEITURES 8
Part I. Amount of Employer Contributions and Plan Allocations 8
3.01 AMOUNT 8
3.02 DETERMINATION OF CONTRIBUTION 8
3.03 TIME OF PAYMENT OF CONTRIBUTION 8
3.04 CONTRIBUTION ALLOCATION 8
(A) Method of Allocation 8
(B) Top Heavy Minimum Allocation 8
(1) Top Heavy Minimum Allocation Under
Standardized Plan 8
(2) Top Heavy Minimum Allocation Under
Nonstandardized Plan 9
(3) Special Election for Standardized
Code Section 401(k) Plan 9
(4) Special Definitions 9
(5) Determining Contribution Rates 9
(6) No Allocations 9
(7) Election of Method 9
3.05 FORFEITURE ALLOCATION 9
3.06 ACCRUAL OF BENEFIT 9
(A) Compensation Taken Into Account 10
(B) Hours of Service Requirement 10
(C) Employment Requirement 10
(D) Other Requirements 10
(E) Suspension of Accrual Requirements Under
Nonstandardized Plan 10
Part 2. Limitations on Allocations
10
3.07 MAXIMUM PERMISSIBLE AMOUNT 10
3.08 ESTIMATED DETERMINATION BY ADVISORY COMMITTEE 11
3.09 ACTUAL DETERMINATION BY ADVISORY COMMITTEE 11
3.10 EXCESS AMOUNT 11
3.11 EXCESS AMOUNT FOR PARTICIPANTS OF MORE THAN 1 PLAN 11
3.12 ESTIMATED DETERMINATION BY ADVISORY COMMITTEE 11
3.13 ACTUAL DETERMINATION 11
3.14 PLUS FORFEITURES 11
3.15 ALLOCATIONS DATES OF ALL PLANS 12
3.16 DISPOSE OF EXCESS AMOUNTS 12
3.17 SPECIAL ALLOCATION LIMITATION 12
3.18 DEFINED BENEFIT PLAN LIMITATION 12
3.19 DEFINITIONS - ARTICLE III 12
ARTICLE IV - PARTICIPANT CONTRIBUTIONS 13
4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS 14
4.02 PARTICIPANT DEDUCTIBLE CONTRIBUTIONS 14
4.03 PARTICIPANT ROLLOVER CONTRIBUTIONS 14
4.04 PARTICIPANT CONTRIBUTION - FORFEITABILITY 14
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION 14
4.06 PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT 14
ARTICLE V - TERMINATION OF SERVICE -PARTICIPANT VESTING 14
5.01 NORMAL RETIREMENT AGE 14
5.02 PARTICIPANT DISABILITY OR DEATH 14
5.03 VESTING SCHEDULE 14
(A) Election of Special Vesting Formula 15
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED
PARTICIPANTS/RESTORATION OF FORFEITED ACCRUED
BENEFIT 15
(A) Restoration and Conditions upon Restoration 15
(B) Time and Method of Restoration 15
(C) 0% Vested Participant 15
5.05 SEGREGATED ACCOUNT FOR REPAID AMOUNT 16
5.06 YEAR OF SERVICE - VESTING 16
5.07 BREAK IN SERVICE - VESTING 16
5.08 INCLUDED YEARS OF SERVICE - VESTING 16
5.09 FORFEITURE OCCURS 16
ARTICLE VI - TIME AND METHOD OF PAYMENT OF BENEFITS 16
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT 16
(A) Separation from Service for a Reason
Other than Death 16
(1) Participant's Nonforfeitable Accrued
Benefit Not Exceeding $3,500 16
(2) Participant's Nonforfeitable Accrued
Benefit Exceeds $3,500 16
(3) Disability 17
(4) Hardship 17
(B) Required Beginning Date 17
(C) Death of the Participant 17
(1) Deceased Participant's Nonforfeitable
Accrued Benefit Does Not Exceed $3,500 17
(2) Deceased Participant's Nonforfeitable
Accrued Benefit Exceeds $3,500.43 17
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT 17
(A) Minimum Distribution Requirements for
Participants 18
(B) Minimum Distribution Requirements for
Beneficiaries 18
6.03 BENEFIT PAYMENT ELECTIONS 19
(A) Participant Elections After Separation from
Service 19
(B) Participant Elections Prior to Separation
from Service 19
(C) Death Benefit Elections 19
(D) Transitional Elections 19
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND
SURVIVING SPOUSES 19
(A) Joint and Survivor Annuity 19
(B) Preretirement Survivor Annuity 20
(C) Surviving Spouse Elections 20
(D) Special Rules 20
(E) Profit Sharing Plan Election 20
6.05 WAIVER ELECTION-QUALIFIED JOINT AND SURVIVOR
ANNUITY 20
6.06 WAIVER ELECTION-PRERETIREMENT SURVIVOR ANNUITY 21
6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS 21
ARTICLE VII - EMPLOYER ADMINISTRATIVE PROVISIONS 22
7.01 INFORMATION TO COMMITTEE 22
7.02 NO LIABILITY 22
7.03 INDEMNITY OF CERTAIN FIDUCIARIES 22
7.04 EMPLOYER DIRECTION OF INVESTMENT 22
7.05 AMENDMENT TO VESTING SCHEDULE 22
ARTICLE VIII - PARTICIPANT ADMINISTRATIVE PROVISIONS 23
8.01 BENEFICIARY DESIGNATION 23
(A) Coordination with survivor requirements 23
(B) Profit sharing plan exception 23
8.02 NO BENEFICIARY DESIGNATION/DEATH OF BENEFICIARY 23
8.03 PERSONAL DATA TO COMMITTEE 23
8.04 ADDRESS FOR NOTIFICATION 23
8.05 ASSIGNMENT OR ALIENATION 23
8.06 NOTICE OF CHANGE IN TERMS 23
8.07 LITIGATION AGAINST THE TRUST 23
8.08 INFORMATION AVAILABLE 23
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS
8.10 PARTICIPANT DIRECTION OF INVESTMENT
ARTICLE IX - ADVISORY COMMITTEE - DUTIES WITH RESPECT TO
PARTICIPANT'S ACCOUNTS 24
9.01 MEMBERS' COMPENSATION, EXPENSES 24
9.02 TERM 24
9.03 POWERS 24
9.04 GENERAL 24
(A) Loan Policy 25
9.05 FUNDING POLICY 25
9.06 MANNER OF ACTION 25
9.07 AUTHORIZED REPRESENTATIVE 25
9.08 INTERESTED MEMBER 25
9.09 INDIVIDUAL ACCOUNTS 25
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT 25
9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN
OR LOSS 26
(A) Trust Fund Accounts 26
(B) Segregated Investment Accounts 26
(C) Additional Rules 26
9.12 INDIVIDUAL STATEMENT 26
9.13 ACCOUNT CHARGED 26
9.14 UNCLAIMED ACCOUNT PROCEDURE 26
ARTICLE X - TRUSTEE AND CUSTODIAN, POWERS AND DUTIES 27
10.01 ACCEPTANCE 27
10.02 RECEIPT OF CONTRIBUTIONS 27
10.03 INVESTMENT POWERS 27
(A) Discretionary Trustee Designation 27
(B) Nondiscretionary Trustee Designation/
Appointment of Custodian 28
(C) Limitation of Powers of Certain Custodians 29
(D) Named Fiduciary/Limitation of Liability of
Nondiscretionary Trustee or Custodian 29
(E) Participant Loans 29
(F) Investment in qualifying Employer securities
and qualifying Employer real property 29
10.04 RECORDS AND STATEMENTS 29
10.05 FEES AND EXPENSES FROM FUND 30
10.06 PARTIES TO LITIGATION 30
10.07 PROFESSIONAL AGENTS 30
10.08 DISTRIBUTION OF CASH OR PROPERTY 30
10.09 DISTRIBUTION DIRECTIONS 30
10.10 THIRD PARTY/MULTIPLE TRUSTEES 30
10.11 RESIGNATION 30
10.12 REMOVAL 30
10.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE 30
10.14 VALUATION OF TRUST 30
10.15 LIMITATION ON LIABILITY - IF INVESTMENT
MANAGER, ANCILLARY TRUSTEE OR
INDEPENDENT FIDUCIARY APPOINTED 30
10.16 INVESTMENT IN GROUP TRUST FUND 31
10.17 APPOINTMENT OF ANCILLARY TRUSTEE OR
INDEPENDENT FIDUCIARY 31
ARTICLE XI - PROVISIONS RELATING TO INSURANCE AND INSURANCE
COMPANY 31
11.01 INSURANCE BENEFIT 31
(A) Incidental insurance benefits 32
(B) Exception for certain profit sharing plans 32
11.02 LIMITATION ON LIFE INSURANCE PROTECTION 32
11.03 DEFINITIONS 32
11.04 DIVIDEND PLAN 32
11.05 INSURANCE COMPANY NOT A PARTY TO AGREEMENT 33
11.06 INSURANCE COMPANY NOT RESPONSIBLE FOR
TRUSTEE'S ACTIONS 33
11.07 INSURANCE COMPANY RELIANCE ON TRUSTEE'S
SIGNATURE 33
11.08 ACQUITTANCE 33
11.09 DUTIES OF INSURANCE COMPANY 33
ARTICLE XII - MISCELLANEOUS 33
12.01 EVIDENCE 33
12.02 NO RESPONSIBILITY FOR EMPLOYER ACTION 33
12.03 FIDUCIARIES NOT INSURERS 33
12.04 WAIVER OF NOTICE 33
12.05 SUCCESSORS 33
12.06 WORD USAGE 33
12.07 STATE LAW 33
12.08 EMPLOYER'S RIGHT TO PARTICIPATE 33
12.09 EMPLOYMENT NOT GUARANTEED 33
ARTICLE XIII - EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION 34
13.01 EXCLUSIVE BENEFIT 34
13.02 AMENDMENT BY EMPLOYER 34
(A) Code Section 411(d)(6) protected benefits 34
13.03 AMENDMENT BY MASTER PLAN SPONSOR 34
13.04 DISCONTINUANCE 34
13.05 FULL VESTING ON TERMINATION 34
13.06 MERGER/DIRECT TRANSFER 34
(A) Elective transfers 35
(B) Distribution restrictions under Code Section 401(k) 35
13.07 TERMINATION 35
(A) Procedure 35
(B) Distribution restrictions under Code Section 401(k) 35
ARTICLE XIV - CODE Section 401(k) AND CODE Section 401(m) ARRANGEMENTS 36
14.01 APPLICATION 36
14.02 CODE Section 401(k) ARRANGEMENT 36
(A) Salary Reduction Arrangement 36
(B) Cash or Deferred Arrangement 36
(C) Election Not to Participate 36
14.03 DEFINITIONS 36
14.04 MATCHING CONTRIBUTIONS/EMPLOYEE CONTRIBUTIONS 37
(A) Mandatory Contributions 37
14.05 TIME OF PAYMENT OF CONTRIBUTIONS 37
14.06 SPECIAL ALLOCATIONS PROVISIONS - DEFERRAL
CONTRIBUTIONS, MATCHING CONTRIBUTIONS AND
QUALIFIED NONELECTIVE CONTRIBUTIONS 38
(A) Deferral Contributions 38
(B) Matching Contributions 38
(C) Qualified Nonelective Contributions 38
(D) Nonelective Contributions 38
14.07 ANNUAL ELECTIVE DEFERRAL LIMITATION 38
(A) Annual Elective Deferral Limitation 38
(B) Allocable Income 39
14.08 ANNUAL DEFERRAL PERCENTAGE ADP TEST 39
(A) Calculation of ACP 39
(B) Special Aggregation Rule for Highly
Compensated Employees 39
(C) Aggregation of Certain Plans 39
(D) Characterization of Excess Contributions 40
(E) Distribution of Excess Contributions 40
(F) Allocable Income 40
14.09 NONDISCRIMINATORY RULES FOR EMPLOYER MATCHING
CONTRIBUTIONS/PARTICIPANT NONDEDUCTIBLE
CONTRIBUTIONS 40
(A) Calculation of ACP 40
(B) Special Aggregation Rule for Highly
Compensated Employees 41
(C) Aggregation of Certain Plans 41
(D) Distribution of Excess Aggregate Contributions 41
(E) Allocable Income 41
(F) Characterization of Excess Aggregate
Contributions 41
14.10 MULTIPLE USE LIMITATION 41
14.11 DISTRIBUTION RESTRICTIONS 42
(A) Hardship Distributions from Deferral
Contributions Account 42
(1) Definition of Hardship 42
(2) Restrictions 42
(3) Earnings 42
(B) Distributions After Separation of Service 42
(C) Correction of Annual Additions Limitation 42
14.12 SPECIAL ALLOCATION RULES 42
ARTICLE A - APPENDIX TO PLAN AND TRUST AGREEMENT 43
A-1. APPLICATIONS 43
A-2. DEFINITIONS 43
ARTICLE B - APPENDIX TO BASIC PLAN DOCUMENT 43
ARTICLE C - APPENDIX TO BASIC PLAN DOCUMENT 43
ARTICLE D - APPENDIX TO BASIC PLAN DOCUMENT 44
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY. Each Employee becomes a Participant in the
Plan in accordance with the participation option selected by the
Employer in its Adoption Agreement. If this Plan is a restated
Plan, each Employee who was a Participant in the Plan on the day
before the Effective Date continues as a Participant in the Plan,
irrespective of whether he satisfies the participation conditions
in the restated Plan, unless otherwise provided in the Employer's
Adoption Agreement.
2.02 YEAR OF SERVICE - PARTICIPATION. For purposes of an
Employee's participation in the Plan under Adoption Agreement
Section 2.01, the Plan takes into account all of his Years of
Service with the Employer, except as provided in Section 2.03.
"Year of Service" means an eligibility computation period during
which the Employee completes not less than the number of Hours of
Service specified in the Employer's Adoption Agreement. The
initial eligibility computation period is the first 12
consecutive month period measured from the Employment
Commencement Date. The Plan measures succeeding eligibility
computation periods in accordance with the option selected by the
Employer in its Adoption Agreement. If the Employer elects to
measure subsequent periods on a Plan Year basis, an Employee who
receives credit for the required number of Hours of Service
during the initial eligibility computation period and during the
first applicable Plan Year will receive credit for two Years of
Service under Article II. "Employment Commencement Date" means
the date on which the Employee first performs an Hour of Service
for the Employer. If the Employer elects a service condition
under Adoption Agreement Section 2.01 based on months, the Plan
does not apply any Hour of Service requirement after the
completion of the first Hour of Service.
2.03 BREAK IN SERVICE - PARTICIPATION. An Employee incurs
a "Break in Service" if during any 12 consecutive month period he
does not complete more than 500 Hours of Service with the
Employer. The "12 consecutive month period" under this Section
2.03 is the same 12 consecutive month period for which the Plan
measures "Years of Service" under Section 2.02.
(A) 2-year Eligibility. If the Employer elects a 2 years of
service condition for eligibility purposes under Adoption
Agreement Section 2.01, the Plan treats an Employee who incurs a
one year Break in Service and who has never become a Participant
as a new Employee on the date he first performs an Hour of
Service for the Employer after the Break in Service.
(B) Suspension of Years of Service. The Employer must elect in
its Adoption Agreement whether a Participant will incur a
suspension of Years of Service after incurring a one year Break
in Service. If this rule applies under the Employer's Plan, the
Plan disregards a Participant's Years of Service (as defined in
Section 2.02) earned prior to a Break in Service until the
Participant completes another Year of Service and the Plan
suspends the Participant's participation in the Plan. If the
Participant completes a Year of Service following his Break in
Service, the Plan restores that Participant's pre-Break Years of
Service (and the Participant resumes active participation in the
Plan) retroactively to the first day of the computation period in
which the Participant earns the first post-Break Year of Service.
The initial computation period under this Section 2.03(B) is the
12 consecutive month period measured from the date the
Participant first receives credit for an Hour of Service
following the one year Break in Service period. The Plan measures
any subsequent periods, if necessary, in a manner consistent with
the computation period selection in Adoption Agreement Section
2.02. This Section 2.03(B) does not affect a Participant's
vesting credit under Article V and, during a suspension period,
the Participant's Account continues to share fully in Trust Fund
allocations under Section 9.11. Furthermore, this Section 2.03(B)
will not result in the restoration of any Year of Service
disregarded under the Break in Service rule of Section 2.03(A).
2.04 PARTICIPATION UPON RE-EMPLOYMENT. A Participant whose
employment with the Employer terminates will re-enter the Plan as
a Participant on the date of his re-employment, subject to the
Break in Service rule, if applicable, under Section 2.03(B). An
Employee who satisfies the Plan's eligibility conditions but who
terminates employment with the Employer prior to becoming a
Participant will become a Participant on the later of the Plan
Entry Date on which he would have entered the Plan had he not
terminated employment or the date of his re-employment, subject
to the Break in Service rule, if applicable, under Section
2.03(B). Any Employee who terminates employment prior to
satisfying the Plan's eligibility conditions becomes a
Participant in accordance with Adoption Agreement Section 2.01.
2.05 CHANGE IN EMPLOYEE STATUS. If a Participant has not
incurred a Separation from Service but ceases to be eligible to
participate in the Plan, by reason of employment within an
employment classification excluded by the Employer under Adoption
Agreement Section 1.07, the Advisory Committee must treat the
Participant as an Excluded Employee during the period such a
Participant is subject to the Adoption Agreement exclusion. The
Advisory Committee determines a Participant's sharing in the
allocation of Employer contributions and Participant forfeitures,
if applicable, by disregarding his Compensation paid by the
Employer for services rendered in his capacity as an Excluded
Employee. However, during such period of exclusion, the
Participant, without regard to employment classification,
continues to receive credit for vesting under Article V for each
included Year of Service and the Participant's Account continues
to share fully in Trust Fund allocations under Section 9.11.
If an Excluded Employee who is not a Participant becomes
eligible to participate in the Plan by reason of a change in
employment classification, he will participate in the Plan
immediately if he has satisfied the eligibility conditions of
Section 2.01 and would have been a Participant had he not been an
Excluded Employee during his period of Service. Furthermore, the
Plan takes into account all of the Participant's included Years
of Service with the Employer as an Excluded Employee for purposes
of vesting credit under Article V.
2.06 ELECTION NOT TO PARTICIPATE. If the Employer's Plan is
a Standardized Plan, the Plan does not permit an otherwise
eligible Employee nor any Participant to elect not to participate
in the Plan. If the Employer's Plan is a Nonstandardized Plan,
the Employer must specify in its Adoption Agreement whether an
Employee eligible to participate, or any present Participant, may
elect not to participate in the Plan. For an election to be
effective for a particular Plan Year, the Employee or Participant
must file the election in writing with the Plan Administrator not
later than the time specified in the Employer's Adoption
Agreement. The Employer may not make a contribution under the
Plan for the Employee or for the Participant for the Plan Year
for which the election is effective, nor for any succeeding Plan
Year, unless the Employee or Participant re-elects to participate
in the Plan. After an Employee's or Participant's election not to
participate has been effective for at least the minimum period
prescribed by the Employer's Adoption Agreement, the Employee or
Participant may re-elect to participate in the Plan for any Plan
Year and subsequent Plan Years. An Employee or Participant may
re-elect to participate in the Plan by filing his election in
writing with the Plan Administrator not later than the time
specified in the Employer's Adoption Agreement. An Employee or
Participant who re-elects to participate may again elect not to
participate only as permitted in the Employer's Adoption
Agreement. If an Employee is a Self-Employed Individual, the
Employee's election (except as permitted by Treasury regulations
without creating a Code Section 401(k) arrangement with respect to that
Self-Employed Individual) must be effective no later than the
date the Employee first would become a Participant in the Plan
and the election is irrevocable. The Plan Administrator must
furnish an Employee or a Participant any form required for
purposes of an election under this Section 2.06. An election
timely filed is effective for the entire Plan Year.
A Participant who elects not to participate may not receive
a distribution of his Accrued Benefit attributable either to
Employer or to Participant contributions except as provided under
Article IV or under Article VI. However, for each Plan Year for
which a Participant's election not to participate is effective,
the Participant's Account, if any, continues to share in Trust
Fund allocations under Article IX. Furthermore, the Employee or
the Participant receives vesting credit under Article V for each
included Year of Service during the period the election not to
participate is effective.
* * * * * * * * * * * * * * *
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
Part 1. Amount of Employer Contributions and Plan Allocations:
Sections 3.01 through 3.06
3.01 AMOUNT. For each Plan Year, the Employer contributes to
the Trust the amount determined by application of the
contribution option selected by the Employer in its Adoption
Agreement. The Employer may not make a contribution to the Trust
for any Plan Year to the extent the contribution would exceed the
Participants' Maximum Permissible Amounts.
The Employer contributes to this Plan on the condition its
contribution is not due to a mistake of fact and the Revenue
Service will not disallow the deduction for its contribution. The
Trustee, upon written request from the Employer, must return to
the Employer the amount of the Employer's contribution made by
the Employer by mistake of fact or the amount of the Employer's
contribution disallowed as a deduction under Code Section 404. The
Trustee will not return any portion of the Employer's
contribution under the provisions of this paragraph more than one
year after:
(a) The Employer made the contribution by mistake of fact;
or
(b) The disallowance of the contribution as a deduction,
and then, only to the extent of the disallowance.
The Trustee will not increase the amount of the Employer
contribution returnable under this Section 3.01 for any earnings
attributable to the contribution, but the Trustee will decrease
the Employer contribution returnable for any losses attributable
to it. The Trustee may require the Employer to furnish it
whatever evidence the Trustee deems necessary to enable the
Trustee to confirm the amount the Employer has requested be
returned is properly returnable under ERISA.
3.02 DETERMINATION OF CONTRIBUTION. The Employer, from its
records, determines the amount of any contributions to be made by
it to the Trust under the terms of the Plan.
3.03 TIME OF PAYMENT OF CONTRIBUTION. The Employer may pay
its contribution for each Plan Year in one or more installments
without interest. The Employer must make its contribution to the
Plan within the time prescribed by the Code or applicable
Treasury regulations. Subject to the consent of the Trustee, the
Employer may make its contribution in property rather than in
cash, provided the contribution of property is not a prohibited
transaction under the Code or under ERISA.
3.04 CONTRIBUTION ALLOCATION.
(A) Method of Allocation. The Employer must specify in its
Adoption Agreement the manner of allocating each annual Employer
contribution to this Trust.
(B) Top Heavy Minimum Allocation. The Plan must comply with the
provisions of this Section 3.04(B), subject to the elections in
the Employer's Adoption Agreement.
(1) Top Heavy Minimum Allocation Under Standardized Plan.
Subject to the Employer's election under Section 3.04(B)(3), the
top heavy minimum allocation requirement applies to a
Standardized Plan for each Plan Year, irrespective of whether the
Plan is top heavy.
(a) Each Participant employed by the Employer on
the last day of the Plan Year will receive a top heavy
minimum allocation for that Plan Year. The Employer may
elect in Section 3.04 of its Adoption Agreement to
apply this paragraph (a) only to a Participant who is a
Non-Key Employee.
(b) Subject to any overriding elections in Section
3.18 of the Employer's Adoption Agreement, the top
heavy minimum allocation is the lesser of 3% of the
Participant's Compensation for the Plan Year or the
highest contribution rate for the Plan Year made on
behalf of any Participant for the Plan Year. However,
if the Employee participates in Paired Plans, the top
heavy minimum allocation is 3% of his Compensation. If,
under Adoption Agreement Section 3.04, the Employer
elects to apply paragraph (a) only to a Participant who
is a Non-Key Employee, the Advisory Committee will
determine the "highest contribution rate" described in
the first sentence of this paragraph (b) by reference
only to the contribution rates of Participants who are
Key Employees for the Plan Year.
(2) Top Heavy Minimum Allocation Under Nonstandardized Plan.
The top heavy minimum allocation requirement applies to a
Nonstandardized Plan only in Plan Years for which the Plan is top
heavy. Except as provided in the Employer's Adoption Agreement,
if the Plan is top heavy in any Plan Year:
(a) Each Non-Key Employee who is a Participant and
is employed by the Employer on the last day of the Plan
Year will receive a top heavy minimum allocation for
that Plan Year, irrespective of whether he satisfies
the Hours of Service condition under Section 3.06 of
the Employer's Adoption Agreement; and
(b) The top heavy minimum allocation is the lesser
of 3% of the Non-Key Employee's Compensation for the
Plan Year or the highest contribution rate for the Plan
Year made on behalf of any Key Employee. However, if a
defined benefit plan maintained by the Employer which
benefits a Key Employee depends on this Plan to satisfy
the antidiscrimination rules of Code Section 401(a)(4) or the
coverage rules of Code Section 410 (or another plan benefiting
the Key Employee so depends on such defined benefit
plan), the top heavy minimum allocation is 3% of the
Non-Key Employee's Compensation regardless of the
contribution rate for the Key Employees.
(3) Special Election for Standardized Code Section 401(k)
Plan. If the Employer's Plan is a Standardized Code Section 401(k) Plan,
the Employer may elect in Adoption Agreement Section 3.04 to
apply the top heavy minimum allocation requirements of Section
3.04(B)(1) only for Plan Years in which the Plan actually is a
top heavy plan.
(4) Special Definitions. For purposes of this Section
3.04(B), the term "Participant" includes any Employee otherwise
eligible to participate in the Plan but who is not a Participant
because of his Compensation level or because of his failure to
make elective deferrals under a Code Section 401(k) arrangement or
because of his failure to make mandatory contributions. For
purposes of subparagraph (1)(b) or (2)(b), "Compensation" means
Compensation as defined in Section 1.12, except Compensation does
not include elective contributions, irrespective of whether the
Employer has elected to include these amounts in Section 1.12 of
its Adoption Agreement, any exclusion selected in Section 1.12 of
the Adoption Agreement (other than the exclusion of elective
contributions) does not apply, and any modification to the
definition of Compensation in Section 3.06 does not apply.
(5) Determining Contribution Rates. For purposes of this
Section 3.04(B), a Participant's contribution rate is the sum of
all Employer contributions (not including Employer contributions
to Social Security) and forfeitures allocated to the
Participant's Account for the Plan Year divided by his
Compensation for the entire Plan Year. However, for purposes of
satisfying a Participant's top heavy minimum allocation in Plan
Years beginning after December 31, 1988, the Participant's
contribution rate does not include any elective contributions
under a Code Section 401(k) arrangement nor any Employer matching
contributions allocated on the basis of those elective
contributions or on the basis of employee contributions, except a
Nonstandardized Plan may include in the contribution rate any
matching contributions not necessary to satisfy the
nondiscrimination requirements of Code Section 401(k) or of Code
Section 401(m).
If the Employee is a Participant in Paired Plans, the
Advisory Committee will consider the Paired Plans as a single
Plan to determine a Participant's contribution rate and to
determine whether the Plans satisfy this top heavy minimum
allocation requirement. To determine a Participant's contribution
rate under a Nonstandardized Plan, the Advisory Committee must
treat all qualified top heavy defined contribution plans
maintained by the Employer (or by any related Employers described
in Section 1.30) as a single plan.
(6) No Allocations. If, for a Plan Year, there are no
allocations of Employer contributions or forfeitures for any
Participant (for purposes of Section 3.04 (B)(1)(b)) or for any
Key Employee (for purposes of Section 3.04(B)(2)(b)), the Plan
does not require any top heavy minimum allocation for the Plan
Year, unless a top heavy minimum allocation applies because of
the maintenance by the Employer of more than one plan.
(7) Election of Method. The Employer must specify in its
Adoption Agreement the manner in which the Plan will satisfy the
top heavy minimum allocation requirement.
(a) If the Employer elects to make any necessary additional
contribution to this Plan, the Advisory Committee first will
allocate the Employer contributions (and Participant
forfeitures, if any) for the Plan Year in accordance with
the provisions of Adoption Agreement Section 3.04. The
Employer then will contribute an additional amount for the
Account of any Participant entitled under this Section
3.04(B) to a top heavy minimum allocation and whose
contribution rate for the Plan Year, under this Plan and any
other plan aggregated under paragraph (5), is less than the
top heavy minimum allocation. The additional amount is the
amount necessary to increase the Participant's contribution
rate to the top heavy minimum allocation. The Advisory
Committee will allocate the additional contribution to the
Account of the Participant on whose behalf the Employer
makes the contribution.
(b) If the Employer elects to guarantee the top heavy
minimum allocation under another plan, this Plan does not
provide the top heavy minimum allocation and the Advisory
Committee will allocate the annual Employer contributions
(and Participant forfeitures) under the Plan solely in
accordance with the allocation method selected under
Adoption Agreement Section 3.04.
3.05 FORFEITURE ALLOCATION. The amount of a Participant's
Accrued Benefit forfeited under the Plan is a Participant
forfeiture. The Advisory Committee will allocate Participant
forfeitures in the manner specified by the Employer in its
Adoption Agreement. The Advisory Committee will continue to hold
the undistributed, non-vested portion of a terminated
Participant's Accrued Benefit in his Account solely for his
benefit until a forfeiture occurs at the time specified in
Section 5.09 or if applicable, until the time specified in
Section 9.14. Except as provided under Section 5.04, a
Participant will not share in the allocation of a forfeiture of
any portion of his Accrued Benefit.
3.06 ACCRUAL OF BENEFIT. The Advisory Committee will
determine the accrual of benefit (Employer contributions and
Participant forfeitures) on the basis of the Plan Year in
accordance with the Employer's elections in its Adoption
Agreement.
(A) Compensation Taken Into Account. The Employer must specify
in its Adoption Agreement the Compensation the Advisory Committee
is to take into account in allocating an Employer contribution to
a Participant's Account for the Plan Year in which the Employee
first becomes a Participant. For all other Plan Years, the
Advisory Committee will take into account only the Compensation
determined for the portion of the Plan Year in which the Employee
actually is a Participant. The Advisory Committee must take into
account the Employee's entire Compensation for the Plan Year to
determine whether the Plan satisfies the top heavy minimum
allocation requirement of Section 3.04(B). The Employer, in an
addendum to its Adoption Agreement numbered 3.06(A), may elect to
measure Compensation for the Plan Year for allocation purposes on
the basis of a specified period other than the Plan Year.
(B) Hours of Service Requirement. Subject to the applicable
minimum allocation requirement of Section 3.04, the Advisory
Committee will not allocate any portion of an Employer
contribution for a Plan Year to any Participant's Account if the
Participant does not complete the applicable minimum Hours of
Service requirement specified in the Employer's Adoption
Agreement.
(C) Employment Requirement. If the Employer's Plan is a
Standardized Plan, a Participant who, during a particular Plan
Year, completes the accrual requirements of Adoption Agreement
Section 3.06 will share in the allocation of Employer
contributions for that Plan Year without regard to whether he is
employed by the Employer on the Accounting Date of that Plan
Year. If the Employer's Plan is a Nonstandardized Plan, the
Employer must specify in its Adoption Agreement whether the
Participant will accrue a benefit if he is not employed by the
Employer on the Accounting Date of the Plan Year. If the
Employer's Plan is a money purchase plan or a target benefit
plan, whether Nonstandardized or Standardized, the Plan
conditions benefit accrual on employment with the Employer on the
last day of the Plan Year for the Plan Year in which the Employer
terminates the Plan.
(D) Other Requirements. If the Employer's Adoption Agreement
includes options for other requirements affecting the
Participant's accrual of benefits under the Plan, the Advisory
Committee will apply this Section 3.06 in accordance with the
Employer's Adoption Agreement selections.
(E) Suspension of Accrual Requirements Under Nonstandardized
Plan. If the Employer's Plan is a Nonstandardized Plan, the
Employer may elect in its Adoption Agreement to suspend the
accrual requirements elected under Adoption Agreement Section
3.06 if, for any Plan Year beginning after December 31, 1989, the
Plan fails to satisfy the Participation Test or the Coverage
Test. A Plan satisfies the Participation Test if, on each day of
the Plan Year, the number of Employees who benefit under the Plan
is at least equal to the lesser of 50 or 40% of the total number
of Includible Employees as of such day. A Plan satisfies the
Coverage Test if, on the last day of each quarter of the Plan
Year, the number of Nonhighly Compensated Employees who benefit
under the Plan is at least equal to 70% of the total number of
Includible Nonhighly Compensated Employees as of such day.
"Includible" Employees are all Employees other than: (1) those
Employees excluded from participating in the Plan for the entire
Plan Year by reason of the collective bargaining unit exclusion
or the nonresident alien exclusion under Adoption Agreement
Section 1.07 or by reason of the participation requirements of
Sections 2.01 and 2.03; and (2) any Employee who incurs a
Separation from Service during the Plan Year and fails to
complete at least 501 Hours of Service for the Plan Year. A
"Nonhighly Compensated Employee" is an Employee who is not a
Highly Compensated Employee and who is not a family member
aggregated with a Highly Compensated Employee pursuant to Section
1.09 of the Plan.
For purposes of the Participation Test and the Coverage
Test, an Employee is benefiting under the Plan on a particular
date if, under Adoption Agreement Section 3.04, he is entitled to
an allocation for the Plan Year. Under the Participation Test,
when determining whether an Employee is entitled to an allocation
under Adoption Agreement Section 3.04, the Advisory Committee
will disregard any allocation required solely by reason of the
top heavy minimum allocation, unless the top heavy minimum
allocation is the only allocation made under the Plan for the
Plan Year.
If this Section 3.06(E) applies for a Plan Year, the
Advisory Committee will suspend the accrual requirements for the
Includible Employees who are Participants, beginning first with
the Includible Employee(s) employed with the Employer on the last
day of the Plan Year, then the Includible Employee(s) who have
the latest Separation from Service during the Plan Year, and
continuing to suspend in descending order the accrual
requirements for each Includible Employee who incurred an earlier
Separation from Service, from the latest to the earliest
Separation from Service date, until the Plan satisfies both the
Participation Test and the Coverage Test for the Plan Year. If
two or more Includible Employees have a Separation from Service
on the same day, the Advisory Committee will suspend the accrual
requirements for all such Includible Employees, irrespective of
whether the Plan can satisfy the Participation Test and the
Coverage Test by accruing benefits for fewer than all such
Includible Employees. If the Plan suspends the accrual
requirements for an Includible Employee, that Employee will share
in the allocation of Employer contributions and Participant
forfeitures, if any, without regard to the number of Hours of
Service he has earned for the Plan Year and without regard to
whether he is employed by the Employer on the last day of the
Plan Year. If the Employer's Plan includes Employer matching
contributions subject to Code Section 401(m), this suspension of accrual
requirements applies separately to the Code Section 401(m) portion of
the Plan, and the Advisory Committee will treat an Employee as
benefiting under that portion of the Plan if he is an Eligible
Employee for purposes of the Code Section 401(m) nondiscrimination test.
The Employer may modify the operation of this Section 3.06(E) by
electing appropriate modifications in Section 3.06 of its
Adoption Agreement.
Part 2. Limitations On Allocations: Sections 3.07 through 3.19
[Note: Sections 3.07 through 3.10 apply only to Participants
in this Plan who do not participate, and who have never
participated, in another qualified plan or in a welfare benefit
fund (as defined in Code Section 419(e)) maintained by the Employer.]
3.07 The amount of Annual Additions which the Advisory
Committee may allocate under this Plan on a Participant's behalf
for a Limitation Year may not exceed the Maximum Permissible
Amount. If the amount the Employer otherwise would contribute to
the Participant's Account would cause the Annual Additions for
the Limitation Year to exceed the Maximum Permissible Amount, the
Employer will reduce the amount of its contribution so the Annual
Additions for the Limitation Year will equal the Maximum
Permissible Amount. If an allocation of Employer contributions,
pursuant to Section 3.04, would result in an Excess Amount (other
than an Excess Amount resulting from the circumstances described
in Section 3.10) to the Participant's Account, the Advisory
Committee will reallocate the Excess Amount to the remaining
Participants who are eligible for an allocation of Employer
contributions for the Plan Year in which the Limitation Year
ends. The Advisory Committee will make this reallocation on the
basis of the allocation method under the Plan as if the
Participant whose Account otherwise would receive the Excess
Amount is not eligible for an allocation of Employer
contributions.
3.08 Prior to the determination of the Participant's actual
Compensation for a Limitation Year, the Advisory Committee may
determine the Maximum Permissible Amount on the basis of the
Participant's estimated annual Compensation for such Limitation
Year. The Advisory Committee must make this determination on a
reasonable and uniform basis for all Participants similarly
situated. The Advisory Committee must reduce any Employer
contributions (including any allocation of forfeitures) based on
estimated annual Compensation by any Excess Amounts carried over
from prior years.
3.09 As soon as is administratively feasible after the end
of the Limitation Year, the Advisory Committee will determine the
Maximum Permissible Amount for such Limitation Year on the basis
of the Participant's actual Compensation for such Limitation
Year.
3.10 If, pursuant to Section 3.09, or because of the
allocation of forfeitures, there is an Excess Amount with respect
to a Participant for a Limitation Year, the Advisory Committee
will dispose of such Excess Amount as follows:
(a) The Advisory Committee will return any nondeductible
voluntary Employee contributions to the Participant to the
extent the return would reduce the Excess Amount.
(b) If, after the application of paragraph (a), an Excess
Amount still exists, and the Plan covers the Participant at
the end of the Limitation Year, then the Advisory Committee
will use the Excess Amount(s) to reduce future Employer
contributions (including any allocation of forfeitures)
under the Plan for the next Limitation Year and for each
succeeding Limitation Year, as is necessary, for the
Participant. If the Employer's Plan is a profit sharing
plan, the Participant may elect to limit his Compensation
for allocation purposes to the extent necessary to reduce
his allocation for the Limitation Year to the Maximum
Permissible Amount and eliminate the Excess Amount.
(c) If, after the application of paragraph (a), an Excess
Amount still exists, and the Plan does not cover the
Participant at the end of the Limitation Year, then the
Advisory Committee will hold the Excess Amount unallocated
in a suspense account. The Advisory Committee will apply the
suspense account to reduce Employer Contributions (including
allocation of forfeitures) for all remaining Participants in
the next Limitation Year, and in each succeeding Limitation
Year if necessary. Neither the Employer nor any Employee may
contribute to the Plan for any Limitation Year in which the
Plan is unable to allocate fully a suspense account
maintained pursuant to this paragraph (c).
(d) The Advisory Committee will not distribute any Excess
Amount(s) to Participants or to former Participants.
[Note: Sections 3.11 through 3.16 apply only to Participants
who, in addition to this Plan, participate in one or more plans
(including Paired Plans), all of which are qualified Master or
Prototype defined contribution plans or welfare benefit funds (as
defined in Code Section 419(e)) maintained by the Employer during the
Limitation Year.]
3.11 The amount of Annual Additions which the Advisory
Committee may allocate under this Plan on a Participant's behalf
for a Limitation Year may not exceed the Maximum Permissible
Amount, reduced by the sum of any Annual Additions allocated to
the Participant's Accounts for the same Limitation Year under
this Plan and such other defined contribution plan. If the amount
the Employer otherwise would contribute to the Participant's
Account under this Plan would cause the Annual Additions for the
Limitation Year to exceed this limitation, the Employer will
reduce the amount of its contribution so the Annual Additions
under all such plans for the Limitation Year will equal the
Maximum Permissible Amount. If an allocation of Employer
contributions, pursuant to Section 3.04, would result in an
Excess Amount (other than an Excess Amount resulting from the
circumstances described in Section 3.10) to the Participant's
Account, the Advisory Committee will reallocate the Excess Amount
to the remaining Participants who are eligible for an allocation
of Employer contributions for the Plan Year in which the
Limitation Year ends. The Advisory Committee will make this
reallocation on the basis of the allocation method under the Plan
as if the Participant whose Account otherwise would receive the
Excess Amount is not eligible for an allocation of Employer
contributions.
3.12 Prior to the determination of the Participant's actual
Compensation for the Limitation Year, the Advisory Committee may
determine the amounts referred to in 3.11 above on the basis of
the Participant's estimated annual Compensation for such
Limitation Year. The Advisory Committee will make this
determination on a reasonable and uniform basis for all
Participants similarly situated. The Advisory Committee must
reduce any Employer contribution (including allocation of
forfeitures) based on estimated annual Compensation by any Excess
Amounts carried over from prior years.
3.13 As soon as is administratively feasible after the end
of the Limitation Year, the Advisory Committee will determine the
amounts referred to in 3.11 on the basis of the Participant's
actual Compensation for such Limitation Year.
3.14 If pursuant to Section 3.13, or because of the
allocation of forfeitures, a Participant's Annual Additions under
this Plan and all such other plans result in an Excess Amount,
such Excess Amount will consist of the Amounts last allocated.
The Advisory Committee will determine the Amounts last allocated
by treating the Annual Additions attributable to a welfare
benefit fund as allocated first, irrespective of the actual
allocation date under the welfare benefit fund.
3.15 The Employer must specify in its Adoption Agreement the
Excess Amount attributed to this Plan, if the Advisory Committee
allocates an Excess Amount to a Participant on an allocation date
of this Plan which coincides with an allocation date of another
plan.
3.16 The Advisory Committee will dispose of any Excess
Amounts attributed to this Plan as provided in Section 3.10.
[Note: Section 3.17 applies only to Participants who, in
addition to this Plan, participate in one or more qualified plans
which are qualified defined contribution plans other than a
Master or Prototype plan maintained by the Employer during the
Limitation Year.]
3.17 SPECIAL ALLOCATION LIMITATION. The amount of Annual
Additions which the Advisory Committee may allocate under this
Plan on behalf of any Participant are limited in accordance with
the provisions of Section 3.11 through 3.16, as though the other
plan were a Master or Prototype plan, unless the Employer
provides other limitations in an addendum to the Adoption
Agreement, numbered Section 3.17.
3.18 DEFINED BENEFIT PLAN LIMITATION. If the Employer
maintains a defined benefit plan, or has ever maintained a
defined benefit plan which the Employer has terminated, then the
sum of the defined benefit plan fraction and the defined
contribution plan fraction for any Participant for any Limitation
Year must not exceed 1.0. The Employer must provide in Adoption
Agreement Section 3.18 the manner in which the Plan will satisfy
this limitation. The Employer also must provide in its Adoption
Agreement Section 3.18 the manner in which the Plan will satisfy
the top heavy requirements of Code Section 416 after taking into account
the existence (or prior maintenance) of the defined benefit plan.
3.19 DEFINITIONS - ARTICLE III. For purposes of Article III,
the following terms mean:
(a) "Annual Addition" - The sum of the following amounts
allocated on behalf of a Participant for a Limitation Year,
of (i) all Employer contributions; (ii) all forfeitures; and
(iii) all Employee contributions. Except to the extent
provided in Treasury regulations, Annual Additions include
excess contributions described in Code Section 401(k), excess
aggregate contributions described in Code Section 401(m) and excess
deferrals described in Code Section 402(g), irrespective of whether
the plan distributes or forfeits such excess amounts. Annual
Additions also include Excess Amounts reapplied to reduce
Employer contributions under Section 3.10. Amounts allocated
after March 31, 1984, to an individual medical account (as
defined in Code Section 415(l)(2)) included as part of a defined
benefit plan maintained by the Employer are Annual
Additions. Furthermore, Annual Additions include
contributions paid or accrued after December 31, 1985, for
taxable years ending after December 31, 1985, attributable
to post-retirement medical benefits allocated to the
separate account of a key employee (as defined in Code
Section 419A(d)(3)) under a welfare benefit fund (as defined in
Code Section 419(e)) maintained by the Employer.
(b) "Compensation" - For purposes of applying the
limitations of Part 2 of this Article III, "Compensation"
means Compensation as defined in Section 1.12, except
Compensation does not include elective contributions,
irrespective of whether the Employer has elected to include
these amounts as Compensation under Section 1.12 of its
Adoption Agreement, and any exclusion selected in Section
1.12 of the Adoption Agreement (other than the exclusion of
elective contributions) does not apply.
(c) "Employer" - The Employer that adopts this Plan and any
related employers described in Section 1.30. Solely for
purposes of applying the limitations of Part 2 of this
Article III, the Advisory Committee will determine related
employers described in Section 1.30 by modifying Code
''414(b) and (c) in accordance with Code Section 415(h).
(d) "Excess Amount" - The excess of the Participant's
Annual Additions for the Limitation Year over the Maximum
Permissible Amount.
(e) "Limitation Year" - The period selected by the Employer
under Adoption Agreement Section 1.17. All qualified plans
of the Employer must use the same Limitation Year. If the
Employer amends the Limitation Year to a different 12
consecutive month period, the new Limitation Year must begin
on a date within the Limitation Year for which the Employer
makes the amendment, creating a short Limitation Year.
(f) "Master or Prototype Plan" - A plan the form of which
is the subject of a favorable notification letter or a
favorable opinion letter from the Internal Revenue Service.
(g) "Maximum Permissible Amount" - The lesser of (i)
$30,000 (or, if greater, one-fourth of the defined benefit
dollar limitation under Code Section 415(b)(1)(A)), or (ii) 25% of
the Participant's Compensation for the Limitation Year. If
there is a short Limitation Year because of a change in
Limitation Year, the Advisory Committee will multiply the
$30,000 (or adjusted) limitation by the following fraction:
Number of months in the short Limitation Year
12
(h) "Defined contribution plan" - A retirement plan which
provides for an individual account for each participant and
for benefits based solely on the amount contributed to the
participant's account, and any income, expenses, gains and
losses, and any forfeitures of accounts of other
participants which the plan may allocate to such
participant's account. The Advisory Committee must treat all
defined contribution plans (whether or not terminated)
maintained by the Employer as a single plan. Solely for
purposes of the limitations of Part 2 of this Article III,
the Advisory Committee will treat employee contributions
made to a defined benefit plan maintained by the Employer as
a separate defined contribution plan. The Advisory Committee
also will treat as a defined contribution plan an individual
medical account (as defined in Code Section 415(l)(2)) included as
part of a defined benefit plan maintained by the Employer
and, for taxable years ending after December 31, 1985, a
welfare benefit fund under Code Section 419(e) maintained by the
Employer to the extent there are post-retirement medical
benefits allocated to the separate account of a key employee
(as defined in Code Section 419A(d)(3)).
(i) "Defined benefit plan" - A retirement plan which does
not provide for individual accounts for Employer
contributions. The Advisory Committee must treat all defined
benefit plans (whether or not terminated) maintained by the
Employer as a single plan.
[Note: The definitions in paragraphs (j), (k) and (l) apply only
if the limitation described in Section 3.18 applies to the
Employer's Plan.]
(j) "Defined benefit plan fraction" -
Projected annual benefit of the Participant under the defined]
benefit plan(s)
The lesser of (i) 125% (subject to the "100% limitation" in para
graph (l)) of the
dollar limitation in effect under Code Section 415(b)(1)(A) for the Li
limitation Year,
or (ii) 140% of the Participant's average Compensation for his
high three (3) consecutive Years of Service
To determine the denominator of this fraction, the
Advisory Committee will make any adjustment required under
Code Section 415(b) and will determine a Year of Service, unless
otherwise provided in an addendum to Adoption Agreement
Section 3.18, as a Plan Year in which the Employee completed
at least 1,000 Hours of Service. The "projected annual
benefit" is the annual retirement benefit (adjusted to an
actuarially equivalent straight life annuity if the plan
expresses such benefit in a form other than a straight life
annuity or qualified joint and survivor annuity) of the
Participant under the terms of the defined benefit plan on
the assumptions he continues employment until his normal
retirement age (or current age, if later) as stated in the
defined benefit plan, his compensation continues at the same
rate as in effect in the Limitation Year under consideration
until the date of his normal retirement age and all other
relevant factors used to determine benefits under the
defined benefit plan remain constant as of the current
Limitation Year for all future Limitation Years.
Current Accrued Benefit. If the Participant accrued
benefits in one or more defined benefit plans maintained by
the Employer which were in existence on May 6, 1986, the
dollar limitation used in the denominator of this fraction
will not be less than the Participant's Current Accrued
Benefit. A Participant's Current Accrued Benefit is the sum
of the annual benefits under such defined benefit plans
which the Participant had accrued as of the end of the 1986
Limitation Year (the last Limitation Year beginning before
January 1, 1987), determined without regard to any change in
the terms or conditions of the Plan made after May 5, 1986,
and without regard to any cost of living adjustment
occurring after May 5, 1986. This Current Accrued Benefit
rule applies only if the defined benefit plans individually
and in the aggregate satisfied the requirements of Code Section 415
as in effect at the end of the 1986 Limitation Year.
(k) "Defined contribution plan fraction" -
The sum, as of the close of the Limitation Year, of the Annual A
additions
to the Participant's Account under the defined contributions
tion plan(s)
The sum of the lesser of the following amounts determined
for the Limitation Year and for each prior Year of Service with
the Employer:(i) 125%
(subject to the "100% limitation" in paragraph (l)) of the dollar
limitation in effect under Code Section 415(c)(1)(A) for the Limitation
Year (determined without regard to
the special dollar limitations for employee stock ownership plan
s), or
(ii) 35% of the Participant's Compensation for the Limitation Ye
ar
For purposes of determining the defined contribution
plan fraction, the Advisory Committee will not recompute
Annual Additions in Limitation Years beginning prior to
January 1, 1987, to treat all Employee contributions as
Annual Additions. If the Plan satisfied Code Section 415 for
Limitation Years beginning prior to January 1, 1987, the
Advisory Committee will redetermine the defined contribution
plan fraction and the defined benefit plan fraction as of
the end of the 1986 Limitation Year, in accordance with this
Section 3.19. If the sum of the redetermined fractions
exceeds 1.0, the Advisory Committee will subtract
permanently from the numerator of the defined contribution
plan fraction an amount equal to the product of (1) the
excess of the sum of the fractions over 1.0, times (2) the
denominator of the defined contribution plan fraction. In
making the adjustment, the Advisory Committee must disregard
any accrued benefit under the defined benefit plan which is
in excess of the Current Accrued Benefit. This Plan
continues any transitional rules applicable to the
determination of the defined contribution plan fraction
under the Employer's Plan as of the end of the 1986
Limitation Year.
(l) "100% limitation." If the 100% limitation applies, the
Advisory Committee must determine the denominator of the
defined benefit plan fraction and the denominator of the
defined contribution plan fraction by substituting 100% for
125%. If the Employer's Plan is a Standardized Plan, the
100% limitation applies in all Limitation Years, subject to
any override provisions under Section 3.18 of the Employer's
Adoption Agreement. If the Employer overrides the 100%
limitation under a Standardized Plan, the Employer must
specify in its Adoption Agreement the manner in which the
Plan satisfies the extra minimum benefit requirement of Code
Section 416(h) and the 100% limitation must continue to apply if
the Plan's top heavy ratio exceeds 90%. If the Employer's
Plan is a Nonstandardized Plan, the 100% limitation applies
only if: (i) the Plan's top heavy ratio exceeds 90%; or (ii)
the Plan's top heavy ratio is greater than 60%, and the
Employer does not elect in its Adoption Agreement Section
3.18 to provide extra minimum benefits which satisfy Code
Section 416(h)(2).
* * * * * * * * * * * * * * *
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. This Plan does
not permit Participant nondeductible contributions unless the
Employer maintains its Plan under a Code Section 401(k) Adoption
Agreement. If the Employer does not maintain its Plan under a
Code Section 401(k) Adoption Agreement and, prior to the adoption of
this Master Plan, the Plan accepted Participant nondeductible
contributions for a Plan Year beginning after December 31, 1986,
those contributions must satisfy the requirements of Code
Section 401(m). This Section 4.01 does not prohibit the Plan's
acceptance of Participant nondeductible contributions prior to
the first Plan Year commencing after the Plan Year in which the
Employer adopts this Master Plan.
4.02 PARTICIPANT DEDUCTIBLE CONTRIBUTIONS. A qualified Plan
may not accept Participant deductible contributions after April
15, 1987. If the Employer's Plan includes Participant deductible
contributions ("DECs") made prior to April 16, 1987, the Advisory
Committee must maintain a separate accounting for the
Participant's Accrued Benefit attributable to DECs, including
DECs which are part of a rollover contribution described in
Section 4.03. The Advisory Committee will treat the accumulated
DECs as part of the Participant's Accrued Benefit for all
purposes of the Plan, except for purposes of determining the top
heavy ratio under Section 1.33. The Advisory Committee may not
use DECs to purchase life insurance on the Participant's behalf.
4.03 PARTICIPANT ROLLOVER CONTRIBUTIONS. Any Participant,
with the Employer's written consent and after filing with the
Trustee the form prescribed by the Advisory Committee, may
contribute cash or other property to the Trust other than as a
voluntary contribution if the contribution is a "rollover
contribution" which the Code permits an employee to transfer
either directly or indirectly from one qualified plan to another
qualified plan. Before accepting a rollover contribution, the
Trustee may require an Employee to furnish satisfactory evidence
that the proposed transfer is in fact a "rollover contribution"
which the Code permits an employee to make to a qualified plan. A
rollover contribution is not an Annual Addition under Part 2 of
Article III.
The Trustee will invest the rollover contribution in a
segregated investment Account for the Participant's sole benefit
unless the Trustee (or the Named Fiduciary, in the case of a
nondiscretionary Trustee designation), in its sole discretion,
agrees to invest the rollover contribution as part of the Trust
Fund. The Trustee will not have any investment responsibility
with respect to a Participant's segregated rollover Account. The
Participant, however, from time to time, may direct the Trustee
in writing as to the investment of his segregated rollover
Account in property, or property interests, of any kind, real,
personal or mixed; provided however, the Participant may not
direct the Trustee to make loans to his Employer. A Participant's
segregated rollover Account alone will bear any extraordinary
expenses resulting from investments made at the direction of the
Participant. As of the Accounting Date (or other valuation date)
for each Plan Year, the Advisory Committee will allocate and
credit the net income (or net loss) from a Participant's
segregated rollover Account and the increase or decrease in the
fair market value of the assets of a segregated rollover Account
solely to that Account. The Trustee is not liable nor responsible
for any loss resulting to any Beneficiary, nor to any
Participant, by reason of any sale or investment made or other
action taken pursuant to and in accordance with the direction of
the Participant. In all other respects, the Trustee will hold,
administer and distribute a rollover contribution in the same
manner as any Employer contribution made to the Trust.
An eligible Employee, prior to satisfying the Plan's
eligibility conditions, may make a rollover contribution to the
Trust to the same extent and in the same manner as a Participant.
If an Employee makes a rollover contribution to the Trust prior
to satisfying the Plan's eligibility conditions, the Advisory
Committee and Trustee must treat the Employee as a Participant
for all purposes of the Plan except the Employee is not a
Participant for purposes of sharing in Employer contributions or
Participant forfeitures under the Plan until he actually becomes
a Participant in the Plan. If the Employee has a Separation from
Service prior to becoming a Participant, the Trustee will
distribute his rollover contribution Account to him as if it were
an Employer contribution Account.
4.04 PARTICIPANT CONTRIBUTION - FORFEITABILITY. A
Participant's Accrued Benefit is, at all times, 100%
Nonforfeitable to the extent the value of his Accrued Benefit is
derived from his Participant contributions described in this
Article IV.
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. A
Participant, by giving prior written notice to the Trustee, may
withdraw all or any part of the value of his Accrued Benefit
derived from his Participant contributions described in this
Article IV. A distribution of Participant contributions must
comply with the joint and survivor requirements described in
Article VI, if those requirements apply to the Participant. A
Participant may not exercise his right to withdraw the value of
his Accrued Benefit derived from his Participant contributions
more than once during any Plan Year. The Trustee, in accordance
with the direction of the Advisory Committee, will distribute a
Participant's unwithdrawn Accrued Benefit attributable to his
Participant contributions in accordance with the provisions of
Article VI applicable to the distribution of the Participant's
Nonforfeitable Accrued Benefit.
4.06 PARTICIPANT CONTRIBUTION - ACCRUED BENEFIT. The
Advisory Committee must maintain a separate Account(s) in the
name of each Participant to reflect the Participant's Accrued
Benefit under the Plan derived from his Participant
contributions. A Participant's Accrued Benefit derived from his
Participant contributions as of any applicable date is the
balance of his separate Participant contribution Account(s).
* * * * * * * * * * * * * * *
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT AGE. The Employer must define Normal
Retirement Age in its Adoption Agreement. A Participant's Accrued
Benefit derived from Employer contributions is 100%
Nonforfeitable upon and after his attaining Normal Retirement Age
(if employed by the Employer on or after that date).
5.02 PARTICIPANT DISABILITY OR DEATH. The Employer may elect
in its Adoption Agreement to provide a Participant's Accrued
Benefit derived from Employer contributions will be 100%
Nonforfeitable if the Participant's Separation from Service is a
result of his death or his disability.
5.03 VESTING SCHEDULE. Except as provided in Sections 5.01
and 5.02, for each Year of Service, a Participant's
Nonforfeitable percentage of his Accrued Benefit derived from
Employer contributions equals the percentage in the vesting
schedule completed by the Employer in its Adoption Agreement.
(A) Election of Special Vesting Formula. If the Trustee makes a
distribution (other than a cash-out distribution described in
Section 5.04) to a partially-vested Participant, and the
Participant has not incurred a Forfeiture Break in Service at the
relevant time, the Advisory Committee will establish a separate
Account for the Participant's Accrued Benefit. At any relevant
time following the distribution, the Advisory Committee will
determine the Participant's Nonforfeitable Accrued Benefit
derived from Employer contributions in accordance with the
following formula: P(AB + (R x D)) - (R x D).
To apply this formula, "P" is the Participant's current
vesting percentage at the relevant time, "AB" is the
Participant's Employer-derived Accrued Benefit at the relevant
time, "R" is the ratio of "AB" to the Participant's Employer-
derived Accrued Benefit immediately following the earlier
distribution and "D" is the amount of the earlier distribution.
If, under a restated Plan, the Plan has made distribution to a
partially-vested Participant prior to its restated Effective Date
and is unable to apply the cash-out provisions of Section 5.04 to
that prior distribution, this special vesting formula also
applies to that Participant's remaining Account. The Employer, in
an addendum to its Adoption Agreement, numbered Section 5.03, may
elect to modify this formula to read as follows: P(AB + D) - D.
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED
PARTICIPANTS/ RESTORATION OF FORFEITED ACCRUED BENEFIT. If,
pursuant to Article VI, a partially-vested Participant receives a
cash-out distribution before he incurs a Forfeiture Break in
Service (as defined in Section 5.08), the cash-out distribution
will result in an immediate forfeiture of the nonvested portion
of the Participant's Accrued Benefit derived from Employer
contributions. See Section 5.09. A partially-vested Participant
is a Participant whose Nonforfeitable Percentage determined under
Section 5.03 is less than 100%. A cash-out distribution is a
distribution of the entire present value of the Participant's
Nonforfeitable Accrued Benefit.
(A) Restoration and Conditions upon Restoration. A partially-
vested Participant who is re-employed by the Employer after
receiving a cash-out distribution of the Nonforfeitable
percentage of his Accrued Benefit may repay the Trustee the
amount of the cash-out distribution attributable to Employer
contributions, unless the Participant no longer has a right to
restoration by reason of the conditions of this Section 5.04(A).
If a partially-vested Participant makes the cash-out distribution
repayment, the Advisory Committee, subject to the conditions of
this Section 5.04(A), must restore his Accrued Benefit
attributable to Employer contributions to the same dollar amount
as the dollar amount of his Accrued Benefit on the Accounting
Date, or other valuation date, immediately preceding the date of
the cash-out distribution, unadjusted for any gains or losses
occurring subsequent to that Accounting Date, or other valuation
date. Restoration of the Participant's Accrued Benefit includes
restoration of all Code Section 411(d)(6) protected benefits
with respect to that restored Accrued Benefit, in accordance
with applicable Treasury regulations. The Advisory Committee will
not restore a re-employed Participant's Accrued Benefit under this
paragraph if:
(1) 5 years have elapsed since the Participant's first re-
employment date with the Employer following the cash-out
distribution; or
(2) The Participant incurred a Forfeiture Break in Service
(as defined in Section 5.08). This condition also applies if
the Participant makes repayment within the Plan Year in
which he incurs the Forfeiture Break in Service and that
Forfeiture Break in Service would result in a complete
forfeiture of the amount the Advisory Committee otherwise
would restore.
(B) Time and Method of Restoration. If neither of the two
conditions preventing restoration of the Participant's Accrued
Benefit applies, the Advisory Committee will restore the
Participant's Accrued Benefit as of the Plan Year Accounting Date
coincident with or immediately following the repayment. To
restore the Participant's Accrued Benefit, the Advisory
Committee, to the extent necessary, will allocate to the
Participant's Account:
(1) First, the amount, if any, of Participant forfeitures
the Advisory Committee would otherwise allocate under
Section 3.05;
(2) Second, the amount, if any, of the Trust Fund net
income or gain for the Plan Year; and
(3) Third, the Employer contribution for the Plan Year to
the extent made under a discretionary formula.
In an addendum to its Adoption Agreement numbered 5.04(B),
the Employer may eliminate as a means of restoration any of the
amounts described in clauses (1), (2) and (3) or may change the
order of priority of these amounts. To the extent the amounts
described in clauses (1), (2) and (3) are insufficient to enable
the Advisory Committee to make the required restoration, the
Employer must contribute, without regard to any requirement or
condition of Section 3.01, the additional amount necessary to
enable the Advisory Committee to make the required restoration.
If, for a particular Plan Year, the Advisory Committee must
restore the Accrued Benefit of more than one re-employed
Participant, then the Advisory Committee will make the
restoration allocations to each such Participant's Account in the
same proportion that a Participant's restored amount for the Plan
Year bears to the restored amount for the Plan Year of all
re-employed Participants. The Advisory Committee will not take
into account any allocation under this Section 5.04 in applying
the limitation on allocations under Part 2 of Article III.
(C) 0% Vested Participant. The Employer must specify in its
Adoption Agreement whether the deemed cash-out rule applies to a
0% vested Participant. A 0% vested Participant is a Participant
whose Accrued Benefit derived from Employer contributions is
entirely forfeitable at the time of his Separation from Service.
If the Participant's Account is not entitled to an allocation of
Employer contributions for the Plan Year in which he has a
Separation from Service, the Advisory Committee will apply the
deemed cash-out rule as if the 0% vested Participant received a
cash-out distribution on the date of the Participant's Separation
from Service. If the Participant's Account is entitled to an
allocation of Employer contributions or Participant forfeitures
for the Plan Year in which he has a Separation from Service, the
Advisory Committee will apply the deemed cash-out rule as if the
0% vested Participant received a cash-out distribution on the
first day of the first Plan Year beginning after his Separation
from Service. For purposes of applying the restoration provisions
of this Section 5.04, the Advisory Committee will treat the 0%
vested Participant as repaying his cash-out "distribution" on the
first date of his re-employment with the Employer. If the deemed
cash-out rule does not apply to the Employer's Plan, a 0% vested
Participant will not incur a forfeiture until he incurs a
Forfeiture Break in Service.
5.05 SEGREGATED ACCOUNT FOR REPAID AMOUNT. Until the
Advisory Committee restores the Participant's Accrued Benefit, as
described in Section 5.04, the Trustee will invest the cash-out
amount the Participant has repaid in a segregated Account
maintained solely for that Participant. The Trustee must invest
the amount in the Participant's segregated Account in Federally
insured interest bearing savings account(s) or time deposit(s)
(or a combination of both), or in other fixed income investments.
Until commingled with the balance of the Trust Fund on the date
the Advisory Committee restores the Participant's Accrued
Benefit, the Participant's segregated Account remains a part of
the Trust, but it alone shares in any income it earns and it
alone bears any expense or loss it incurs. Unless the repayment
qualifies as a rollover contribution, the Advisory Committee will
direct the Trustee to repay to the Participant as soon as is
administratively practicable the full amount of the Participant's
segregated Account if the Advisory Committee determines either of
the conditions of Section 5.04(A) prevents restoration as of the
applicable Accounting Date, notwithstanding the Participant's
repayment.
5.06 YEAR OF SERVICE - VESTING. For purposes of vesting
under Section 5.03, Year of Service means any 12-consecutive
month period designated in the Employer's Adoption Agreement
during which an Employee completes not less than the number of
Hours of Service (not exceeding 1,000) specified in the
Employer's Adoption Agreement. A Year of Service includes any
Year of Service earned prior to the Effective Date of the Plan,
except as provided in Section 5.08.
5.07 BREAK IN SERVICE - VESTING. For purposes of this
Article V, a Participant incurs a "Break in Service" if during
any vesting computation period he does not complete more than 500
Hours of Service. If, pursuant to Section 5.06, the Plan does not
require more than 500 Hours of Service to receive credit for a
Year of Service, a Participant incurs a Break in Service in a
vesting computation period in which he fails to complete a Year
of Service.
5.08 INCLUDED YEARS OF SERVICE - VESTING. For purposes of
determining "Years of Service" under Section 5.06, the Plan takes
into account all Years of Service an Employee completes with the
Employer except:
(a) For the sole purpose of determining a Participant's
Nonforfeitable percentage of his Accrued Benefit derived
from Employer contributions which accrued for his benefit
prior to a Forfeiture Break in Service, the Plan disregards
any Year of Service after the Participant first incurs a
Forfeiture Break in Service. The Participant incurs a
Forfeiture Break in Service when he incurs 5 consecutive
Breaks in Service.
(b) The Plan disregards any Year of Service excluded under
the Employer's Adoption Agreement.
The Plan does not apply the Break in Service rule under Code
Section 411(a)(6)(B). Therefore, an Employee need not complete a Year of
Service after a Break in Service before the Plan takes into
account the Employee's otherwise includible Years of Service
under this Article V.
5.09 FORFEITURE OCCURS. A Participant's forfeiture, if any,
of his Accrued Benefit derived from Employer contributions occurs
under the Plan on the earlier of:
(a) The last day of the vesting computation period in which
the Participant first incurs a Forfeiture Break in Service;
or
(b) The date the Participant receives a cash-out
distribution.
The Advisory Committee determines the percentage of a
Participant's Accrued Benefit forfeiture, if any, under this
Section 5.09 solely by reference to the vesting schedule of
Section 5.03. A Participant does not forfeit any portion of his
Accrued Benefit for any other reason or cause except as expressly
provided by this Section 5.09 or as provided under Section 9.14.
* * * * * * * * * * * * * * *
ARTICLE VI
TIME AND METHOD OF PAYMENT OF BENEFITS
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT. Unless, pursuant to
Section 6.03, the Participant or the Beneficiary elects in
writing to a different time or method of payment, the Advisory
Committee will direct the Trustee to commence distribution of a
Participant's Nonforfeitable Accrued Benefit in accordance with
this Section 6.01. A Participant must consent, in writing, to any
distribution required under this Section 6.01 if the present
value of the Participant's Nonforfeitable Accrued Benefit, at the
time of the distribution to the Participant, exceeds $3,500 and
the Participant has not attained the later of Normal Retirement
Age or age 62. Furthermore, the Participant's spouse also must
consent, in writing, to any distribution, for which Section 6.04
requires the spouse's consent. For all purposes of this Article
VI, the term "annuity starting date" means the first day of the
first period for which the Plan pays an amount as an annuity or
in any other form. A distribution date under this Article VI,
unless otherwise specified within the Plan, is the date or dates
the Employer specifies in the Adoption Agreement, or as soon as
administratively practicable following that distribution date.
For purposes of the consent requirements under this Article VI,
if the present value of the Participant's Nonforfeitable Accrued
Benefit, at the time of any distribution, exceeds $3,500, the
Advisory Committee must treat that present value as exceeding
$3,500 for purposes of all subsequent Plan distributions to the
Participant.
(A) Separation from Service For a Reason Other Than Death.
(1) Participant's Nonforfeitable Accrued Benefit Not
Exceeding $3,500. If the Participant's Separation from Service
is for any reason other than death, the Advisory Committee will
direct the Trustee to distribute the Participant's Nonforfeitable
Accrued Benefit in a lump sum, on the distribution date the
Employer specifies in the Adoption Agreement, but in no event
later than the 60th day following the close of the Plan Year in
which the Participant attains Normal Retirement Age. If the
Participant has attained Normal Retirement Age at the time of his
Separation from Service, the distribution under this paragraph
will occur no later than the 60th day following the close of the
Plan Year in which the Participant's Separation from Service
occurs.
(2) Participant's Nonforfeitable Accrued Benefit Exceeds
$3,500. If the Participant's Separation from Service is for any
reason other than death, the Advisory Committee will direct the
Trustee to commence distribution of the Participant's
Nonforfeitable Accrued Benefit in a form and at the time elected
by the Participant, pursuant to Section 6.03. In the absence of
an election by the Participant, the Advisory Committee will
direct the Trustee to distribute the Participant's Nonforfeitable
Accrued Benefit in a lump sum (or, if applicable, the normal
annuity form of distribution required under Section 6.04), on the
60th day following the close of the Plan Year in which the latest
of the following events occurs: (a) the Participant attains
Normal Retirement Age; (b) the Participant attains age 62; or (c)
the Participant's Separation from Service.
(3) Disability. If the Participant's Separation from
Service is because of his disability, the Advisory Committee will
direct the Trustee to pay the Participant's Nonforfeitable
Accrued Benefit in lump sum, on the distribution date the
Employer specifies in the Adoption Agreement, subject to the
notice and consent requirements of this Article VI and subject to
the applicable mandatory commencement dates described in
Paragraphs (1) and (2).
(4) Hardship. Prior to the time at which the Participant
may receive distribution under Paragraphs (1), (2) or (3), the
Participant may request a distribution from his Nonforfeitable
Accrued Benefit in an amount necessary to satisfy a hardship, if
the Employer elects in the Adoption Agreement to permit hardship
distributions. Unless the Employer elects otherwise in the
Adoption Agreement, a hardship distribution must be on account of
any of the following: (a) medical expenses; (b) the purchase
(excluding mortgage payments) of the Participant's principal
residence; (c) post-secondary education tuition, for the next
semester or quarter, for the Participant or for the Participant's
spouse, children or dependents; (d) to prevent the eviction of
the Participant from his principal residence or the foreclosure
on the mortgage of the Participant's principal residence; (e)
funeral expenses of the Participant's family member; or (f) the
Participant's disability. A partially-vested Participant may not
receive a hardship distribution described in this Paragraph
(A)(4) prior to incurring a Forfeiture Break in Service, unless
the hardship distribution is a cash-out distribution (as defined
in Article V). The Advisory Committee will direct the Trustee to
make the hardship distribution as soon as administratively
practicable after the Participant makes a valid request for the
hardship distribution.
(B) Required Beginning Date. If any distribution commencement
date described under Paragraph (A) of this Section 6.01, either
by Plan provision or by Participant election (or nonelection), is
later than the Participant's Required Beginning Date, the
Advisory Committee instead must direct the Trustee to make
distribution on the Participant's Required Beginning Date,
subject to the transitional election, if applicable, under
Section 6.03(D). A Participant's Required Beginning Date is the
April 1 following the close of the calendar year in which the
Participant attains age 70 1/2. However, if the Participant, prior
to incurring a Separation from Service, attained age 70 1/2 by
January 1, 1988, and, for the five Plan Year period ending in the
calendar year in which he attained age 70 1/2 and for all subsequent
years, the Participant was not a more than 5% owner, the Required
Beginning Date is the April 1 following the close of the calendar
year in which the Participant separates from Service or, if
earlier, the April 1 following the close of the calendar year in
which the Participant becomes a more than 5% owner. Furthermore,
if a Participant who was not a more than 5% owner attained age
70 1/2 during 1988 and did not incur a Separation from Service prior
to January 1, 1989, his Required Beginning Date is April 1, 1990.
A mandatory distribution at the Participant's Required Beginning
Date will be in lump sum (or, if applicable, the normal annuity
form of distribution required under Section 6.04) unless the
Participant, pursuant to the provisions of this Article VI, makes
a valid election to receive an alternative form of payment.
(C) Death of the Participant. The Advisory Committee will direct
the Trustee, in accordance with this Section 6.01(C), to
distribute to the Participant's Beneficiary the Participant's
Nonforfeitable Accrued Benefit remaining in the Trust at the time
of the Participant's death. Subject to the requirements of
Section 6.04, the Advisory Committee will determine the death
benefit by reducing the Participant's Nonforfeitable Accrued
Benefit by any security interest the Plan has against that
Nonforfeitable Accrued Benefit by reason of an outstanding
Participant loan.
(1) Deceased Participant's Nonforfeitable Accrued Benefit
Does Not Exceed $3,500. The Advisory Committee, subject to the
requirements of Section 6.04, must direct the Trustee to
distribute the deceased Participant's Nonforfeitable Accrued
Benefit in a single sum, as soon as administratively practicable
following the Participant's death or, if later, the date on which
the Advisory Committee receives notification of or otherwise
confirms the Participant's death.
(2) Deceased Participant's Nonforfeitable Accrued Benefit
Exceeds $3,500. The Advisory Committee will direct the Trustee to
distribute the deceased Participant's Nonforfeitable Accrued
Benefit at the time and in the form elected by the Participant
or, if applicable by the Beneficiary, as permitted under this
Article VI. In the absence of an election, subject to the
requirements of Section 6.04, the Advisory Committee will direct
the Trustee to distribute the Participant's undistributed
Nonforfeitable Accrued Benefit in a lump sum on the first
distribution date following the close of the Plan Year in which
the Participant's death occurs or, if later, the first
distribution date following the date the Advisory Committee
receives notification of or otherwise confirms the Participant's
death.
If the death benefit is payable in full to the Participant's
surviving spouse, the surviving spouse, in addition to the
distribution options provided in this Section 6.01(C), may elect
distribution at any time or in any form (other than a joint and
survivor annuity) this Article VI would permit for a Participant.
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. Subject to the
annuity distribution requirements, if any, prescribed by Section
6.04, and any restrictions prescribed by Section 6.03, a
Participant or Beneficiary may elect distribution under one, or
any combination, of the following methods: (a) by payment in a
lump sum; or (b) by payment in monthly, quarterly or annual
installments over a fixed reasonable period of time, not
exceeding the life expectancy of the Participant, or the joint
life and last survivor expectancy of the Participant and his
Beneficiary. The Employer may elect in its Adoption Agreement to
modify the methods of payment available under this Section 6.02.
The distribution options permitted under this Section 6.02
are available only if the present value of the Participant
Nonforfeitable Accrued Benefit, at the time of the distribution
to the Participant, exceeds $3,500. To facilitate installment
payments under this Article VI, the Advisory Committee may direct
the Trustee to segregate all or any part of the Participant's
Accrued Benefit in a separate Account. The Trustee will invest
the Participant's segregated Account in Federally insured
interest bearing savings account(s) or time deposit(s) (or a
combination of both), or in other fixed income investments. A
segregated Account remains a part of the Trust, but it alone
shares in any income it earns, and it alone bears any expense or
loss it incurs. A Participant or Beneficiary may elect to receive
an installment distribution in the form of a Nontransferable
Annuity Contract. Under an installment distribution, the
Participant or Beneficiary, at any time, may elect to accelerate
the payment of all, or any portion, of the Participant's unpaid
Nonforfeitable Accrued Benefit, subject to the requirements of
Section 6.04.
(A) Minimum Distribution Requirements for Participants. The
Advisory Committee may not direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit, nor may the
Participant elect to have the Trustee distribute his
Nonforfeitable Accrued Benefit, under a method of payment which,
as of the Required Beginning Date, does not satisfy the minimum
distribution requirements under Code Section 401(a)(9) and the
applicable Treasury regulations. The minimum distribution for a
calendar year equals the Participant's Nonforfeitable Accrued
Benefit as of the latest valuation date preceding the beginning
of the calendar year divided by the Participant's life expectancy
or, if applicable, the joint and last survivor expectancy of the
Participant and his designated Beneficiary (as determined under
Article VIII, subject to the requirements of the Code Section 401(a)(9)
regulations). The Advisory Committee will increase the
Participant's Nonforfeitable Accrued Benefit, as determined on
the relevant valuation date, for contributions or forfeitures
allocated after the valuation date and by December 31 of the
valuation calendar year, and will decrease the valuation by
distributions made after the valuation date and by December 31 of
the valuation calendar year. For purposes of this valuation, the
Advisory Committee will treat any portion of the minimum
distribution for the first distribution calendar year made after
the close of that year as a distribution occurring in that first
distribution calendar year. In computing a minimum distribution,
the Advisory Committee must use the unisex life expectancy
multiples under Treas. Reg. Section 1.72-9. The Advisory Committee, only
upon the Participant's written request, will compute the minimum
distribution for a calendar year subsequent to the first calendar
year for which the Plan requires a minimum distribution by
redetermining the applicable life expectancy. However, the
Advisory Committee may not redetermine the joint life and last
survivor expectancy of the Participant and a nonspouse designated
Beneficiary in a manner which takes into account any adjustment
to a life expectancy other than the Participant's life
expectancy.
If the Participant's spouse is not his designated
Beneficiary, a method of payment to the Participant (whether by
Participant election or by Advisory Committee direction) may not
provide more than incidental benefits to the Beneficiary. For
Plan Years beginning after December 31, 1988, the Plan must
satisfy the minimum distribution incidental benefit ("MDIB")
requirement in the Treasury regulations issued under Code
Section 401(a)(9) for distributions made on or after the Participant's
Required Beginning Date and before the Participant's death. To
satisfy the MDIB requirement, the Advisory Committee will compute
the minimum distribution required by this Section 6.02(A) by
substituting the applicable MDIB divisor for the applicable life
expectancy factor, if the MDIB divisor is a lesser number.
Following the Participant's death, the Advisory Committee will
compute the minimum distribution required by this Section 6.02(A)
solely on the basis of the applicable life expectancy factor and
will disregard the MDIB factor. For Plan Years beginning prior to
January 1, 1989, the Plan satisfies the incidental benefits
requirement if the distributions to the Participant satisfied the
MDIB requirement or if the present value of the retirement
benefits payable solely to the Participant is greater than 50% of
the present value of the total benefits payable to the
Participant and his Beneficiaries. The Advisory Committee must
determine whether benefits to the Beneficiary are incidental as
of the date the Trustee is to commence payment of the retirement
benefits to the Participant, or as of any date the Trustee
redetermines the payment period to the Participant.
The minimum distribution for the first distribution calendar
year is due by the Participant's Required Beginning Date. The
minimum distribution for each subsequent distribution calendar
year, including the calendar year in which the Participant's
Required Beginning Date occurs, is due by December 31 of that
year. If the Participant receives distribution in the form of a
Nontransferable Annuity Contract, the distribution satisfies this
Section 6.02(A) if the contract complies with the requirements of
Code Section 401(a)(9) and the applicable Treasury regulations.
(B) Minimum Distribution Requirements for Beneficiaries. The
method of distribution to the Participant's Beneficiary must
satisfy Code Section 401(a)(9) and the applicable Treasury regulations.
If the Participant's death occurs after his Required Beginning
Date or, if earlier, the date the Participant commences an
irrevocable annuity pursuant to Section 6.04, the method of
payment to the Beneficiary must provide for completion of payment
over a period which does not exceed the payment period which had
commenced for the Participant. If the Participant's death occurs
prior to his Required Beginning Date, and the Participant had not
commenced an irrevocable annuity pursuant to Section 6.04, the
method of payment to the Beneficiary, subject to Section 6.04,
must provide for completion of payment to the Beneficiary over a
period not exceeding: (i) 5 years after the date of the
Participant's death; or (ii) if the Beneficiary is a designated
Beneficiary, the designated Beneficiary's life expectancy. The
Advisory Committee may not direct payment of the Participant's
Nonforfeitable Accrued Benefit over a period described in clause
(ii) unless the Trustee will commence payment to the designated
Beneficiary no later than the December 31 following the close of
the calendar year in which the Participant's death occurred or,
if later, and the designated Beneficiary is the Participant's
surviving spouse, December 31 of the calendar year in which the
Participant would have attained age 70 1/2. If the Trustee will make
distribution in accordance with clause (ii), the minimum
distribution for a calendar year equals the Participant's
Nonforfeitable Accrued Benefit as of the latest valuation date
preceding the beginning of the calendar year divided by the
designated Beneficiary's life expectancy. The Advisory Committee
must use the unisex life expectancy multiples under Treas. Reg.
Section 1.72-9 for purposes of applying this paragraph. The Advisory
Committee, only upon the written request of the Participant or of
the Participant's surviving spouse, will recalculate the life
expectancy of the Participant's surviving spouse not more
frequently than annually, but may not recalculate the life
expectancy of a nonspouse designated Beneficiary after the
Trustee commences payment to the designated Beneficiary. The
Advisory Committee will apply this paragraph by treating any
amount paid to the Participant's child, which becomes payable to
the Participant's surviving spouse upon the child's attaining the
age of majority, as paid to the Participant's surviving spouse.
Upon the Beneficiary's written request, the Advisory Committee
must direct the Trustee to accelerate payment of all, or any
portion, of the Participant's unpaid Accrued Benefit, as soon as
administratively practicable following the effective date of that
request.
6.03 BENEFIT PAYMENT ELECTIONS. Not earlier than 90 days,
but not later than 30 days, before the Participant's annuity
starting date, the Advisory Committee must provide a benefit
notice to a Participant who is eligible to make an election under
this Section 6.03. The benefit notice must explain the optional
forms of benefit in the Plan, including the material features and
relative values of those options, and the Participant's right to
defer distribution until he attains the later of Normal
Retirement Age or age 62.
If a Participant or Beneficiary makes an election prescribed
by this Section 6.03, the Advisory Committee will direct the
Trustee to distribute the Participant's Nonforfeitable Accrued
Benefit in accordance with that election. Any election under this
Section 6.03 is subject to the requirements of Section 6.02 and
of Section 6.04. The Participant or Beneficiary must make an
election under this Section 6.03 by filing his election with the
Advisory Committee at any time before the Trustee otherwise would
commence to pay a Participant's Accrued Benefit in accordance
with the requirements of Article VI.
(A) Participant Elections After Separation from Service. If the
present value of a Participant's Nonforfeitable Accrued Benefit
exceeds $3,500, he may elect to have the Trustee commence
distribution as of any distribution date permitted under the
Employer's Adoption Agreement Section 6.03. The Participant may
reconsider an election at any time prior to the annuity starting
date and elect to commence distribution as of any other
distribution date permitted under the Employer's Adoption
Agreement Section 6.03. If the Participant is partially-vested in
his Accrued Benefit, an election under this Paragraph (A) to
distribute prior to the Participant's incurring a Forfeiture
Break in Service (as defined in Section 5.08), must be in the
form of a cash-out distribution (as defined in Article V). A
Participant may not receive a cash-out distribution if, prior to
the time the Trustee actually makes the cash-out distribution,
the Participant returns to employment with the Employer.
Following his attainment of Normal Retirement Age, a Participant
who has separated from Service may elect distribution as of any
distribution date, irrespective of the elections under Adoption
Agreement Section 6.03.
(B) Participant Elections Prior to Separation from Service. The
Employer must specify in its Adoption Agreement the distribution
election rights, if any, a Participant has prior to his
Separation from Service. A Participant must make an election
under this Section 6.03(B) on a form prescribed by the Advisory
Committee at any time during the Plan Year for which his election
is to be effective. In his written election, the Participant must
specify the percentage or dollar amount he wishes the Trustee to
distribute to him. The Participant's election relates solely to
the percentage or dollar amount specified in his election form
and his right to elect to receive an amount, if any, for a
particular Plan Year greater than the dollar amount or percentage
specified in his election form terminates on the Accounting Date.
The Trustee must make a distribution to a Participant in
accordance with his election under this Section 6.03(B) within
the 90 day period (or as soon as administratively practicable)
after the Participant files his written election with the
Trustee. The Trustee will distribute the balance of the
Participant's Accrued Benefit not distributed pursuant to his
election(s) in accordance with the other distribution provisions
of this Plan.
(C) Death Benefit Elections. If the present value of the deceased
Participant's Nonforfeitable Accrued Benefit exceeds $3,500, the
Participant's Beneficiary may elect to have the Trustee
distribute the Participant's Nonforfeitable Accrued Benefit in a
form and within a period permitted under Section 6.02. The
Beneficiary's election is subject to any restrictions designated
in writing by the Participant and not revoked as of his date of
death.
(D) Transitional Elections. Notwithstanding the provisions of
Sections 6.01 and 6.02, if the Participant (or Beneficiary)
signed a written distribution designation prior to January 1,
1984, the Advisory Committee must distribute the Participant's
Nonforfeitable Accrued Benefit in accordance with that
designation, subject however, to the survivor requirements, if
applicable, of Sections 6.04, 6.05 and 6.06. This Section 6.03(D)
does not apply to a pre-1984 distribution designation, and the
Advisory Committee will not comply with that designation, if any
of the following applies: (1) the method of distribution would
have disqualified the Plan under Code Section 401(a)(9) as in effect on
December 31, 1983; (2) the Participant did not have an Accrued
Benefit as of December 31, 1983; (3) the distribution designation
does not specify the timing and form of the distribution and the
death Beneficiaries (in order of priority); (4) the substitution
of a Beneficiary modifies the payment period of the distribution;
or, (5) the Participant (or Beneficiary) modifies or revokes the
distribution designation. In the event of a revocation, the Plan
must distribute, no later than December 31 of the calendar year
following the year of revocation, the amount which the
Participant would have received under Section 6.02(A) if the
distribution designation had not been in effect or, if the
Beneficiary revokes the distribution designation, the amount
which the Beneficiary would have received under Section 6.02(B)
if the distribution designation had not been in effect. The
Advisory Committee will apply this Section 6.03(D) to rollovers
and transfers in accordance with Part J of the Code Section 401(a)(9)
Treasury regulations.
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND
SURVIVING SPOUSES.
(A) Joint and Survivor Annuity. The Advisory Committee must
direct the Trustee to distribute a married or unmarried
Participant's Nonforfeitable Accrued Benefit in the form of a
qualified joint and survivor annuity, unless the Participant
makes a valid waiver election (described in Section 6.05) within
the 90 day period ending on the annuity starting date. If, as of
the annuity starting date, the Participant is married, a
qualified joint and survivor annuity is an immediate annuity
which is purchasable with the Participant's Nonforfeitable
Accrued Benefit and which provides a life annuity for the
Participant and a survivor annuity payable for the remaining life
of the Participant's surviving spouse equal to 50% of the amount
of the annuity payable during the life of the Participant. If, as
of the annuity starting date, the Participant is not married, a
qualified joint and survivor annuity is an immediate life annuity
for the Participant which is purchasable with the Participant's
Nonforfeitable Accrued Benefit. On or before the annuity starting
date, the Advisory Committee, without Participant or spousal
consent, must direct the Trustee to pay the Participant's
Nonforfeitable Accrued Benefit in a lump sum, in lieu of a
qualified joint and survivor annuity, in accordance with Section
6.01, if the Participant's Nonforfeitable Accrued Benefit is not
greater than $3,500. This Section 6.04(A) applies only to a
Participant who has completed at least one Hour of Service with
the Employer after August 22, 1984.
(B) Preretirement Survivor Annuity. If a married Participant dies
prior to his annuity starting date, the Advisory Committee will
direct the Trustee to distribute a portion of the Participant's
Nonforfeitable Accrued Benefit to the Participant's surviving
spouse in the form of a preretirement survivor annuity, unless
the Participant has a valid waiver election (as described in
Section 6.06) in effect, or unless the Participant and his spouse
were not married throughout the one year period ending on the
date of his death. A preretirement survivor annuity is an annuity
which is purchasable with 50% of the Participant's Nonforfeitable
Accrued Benefit (determined as of the date of the Participant's
death) and which is payable for the life of the Participant's
surviving spouse. The value of the preretirement survivor annuity
is attributable to Employer contributions and to Employee
contributions in the same proportion as the Participant's
Nonforfeitable Accrued Benefit is attributable to those
contributions. The portion of the Participant's Nonforfeitable
Accrued Benefit not payable under this paragraph is payable to
the Participant's Beneficiary, in accordance with the other
provisions of this Article VI. If the present value of the
preretirement survivor annuity does not exceed $3,500, the
Advisory Committee, on or before the annuity starting date, must
direct the Trustee to make a lump sum distribution to the
Participant's surviving spouse, in lieu of a preretirement
survivor annuity. This Section 6.04(B) applies only to a
Participant who dies after August 22, 1984, and either (i)
completes at least one Hour of Service with the Employer after
August 22, 1984, or (ii) separated from Service with at least 10
Years of Service (as defined in Section 5.06) and completed at
least one Hour of Service with the Employer in a Plan Year
beginning after December 31, 1975.
(C) Surviving Spouse Elections. If the present value of the
preretirement survivor annuity exceeds $3,500, the Participant's
surviving spouse may elect to have the Trustee commence payment
of the preretirement survivor annuity at any time following the
date of the Participant's death, but not later than the mandatory
distribution periods described in Section 6.02, and may elect any
of the forms of payment described in Section 6.02, in lieu of the
preretirement survivor annuity. In the absence of an election by
the surviving spouse, the Advisory Committee must direct the
Trustee to distribute the preretirement survivor annuity on the
first distribution date following the close of the Plan Year in
which the latest of the following events occurs: (i) the
Participant's death; (ii) the date the Advisory Committee
receives notification of or otherwise confirms the Participant's
death; (iii) the date the Participant would have attained Normal
Retirement Age; or (iv) the date the Participant would have
attained age 62.
(D) Special Rules. If the Participant has in effect a valid
waiver election regarding the qualified joint and survivor
annuity or the preretirement survivor annuity, the Advisory
Committee must direct the Trustee to distribute the Participant's
Nonforfeitable Accrued Benefit in accordance with Sections 6.01,
6.02 and 6.03. The Advisory Committee will reduce the
Participant's Nonforfeitable Accrued Benefit by any security
interest (pursuant to any offset rights authorized by Section
10.03[E]) held by the Plan by reason of a Participant loan to
determine the value of the Participant's Nonforfeitable Accrued
Benefit distributable in the form of a qualified joint and
survivor annuity or preretirement survivor annuity, provided any
post-August 18, 1985, loan satisfied the spousal consent
requirement described in Section 10.03[E] of the Plan. For
purposes of applying this Article VI, the Advisory Committee
treats a former spouse as the Participant's spouse or surviving
spouse to the extent provided under a qualified domestic
relations order described in Section 6.07. The provisions of this
Section 6.04, and of Sections 6.05 and 6.06, apply separately to
the portion of the Participant's Nonforfeitable Accrued Benefit
subject to the qualified domestic relations order and to the
portion of the Participant's Nonforfeitable Accrued Benefit not
subject to that order.
(E) Profit Sharing Plan Election. If this Plan is a profit
sharing plan, the Employer must elect the extent to which the
preceding provisions of Section 6.04 apply. If the Employer
elects to apply this Section 6.04 only to a Participant described
in this Section 6.04(E), the preceding provisions of this Section
6.04 apply only to the following Participants: (1) a Participant
as respects whom the Plan is a direct or indirect transferee from
a plan subject to the Code Section 417 requirements and the Plan
received the transfer after December 31, 1984, unless the
transfer is an elective transfer described in Section 13.06; (2)
a Participant who elects a life annuity distribution (if Section
6.02 or Section 13.02 of the Plan requires the Plan to provide a
life annuity distribution option); and (3) a Participant whose
benefits under a defined benefit plan maintained by the Employer
are offset by benefits provided under this Plan. If the Employer
elects to apply this Section 6.04 to all Participants, the
preceding provisions of this Section 6.04 apply to all
Participants described in the first two paragraphs of this
Section 6.04, without regard to the limitations of this Section
6.04(E). Sections 6.05 and 6.06 only apply to Participants to
whom the preceding provisions of this Section 6.04 apply.
6.05 WAIVER ELECTION - QUALIFIED JOINT AND SURVIVOR ANNUITY.
Not earlier than 90 days, but not later than 30 days, before the
Participant's annuity starting date, the Advisory Committee must
provide the Participant a written explanation of the terms and
conditions of the qualified joint and survivor annuity, the
Participant's right to make, and the effect of, an election to
waive the joint and survivor form of benefit, the rights of the
Participant's spouse regarding the waiver election and the
Participant's right to make, and the effect of, a revocation of a
waiver election. The Plan does not limit the number of times the
Participant may revoke a waiver of the qualified joint and
survivor annuity or make a new waiver during the election period.
A married Participant's waiver election is not valid unless
(a) the Participant's spouse (to whom the survivor annuity is
payable under the qualified joint and survivor annuity), after
the Participant has received the written explanation described in
this Section 6.05, has consented in writing to the waiver
election, the spouse's consent acknowledges the effect of the
election, and a notary public or the Plan Administrator (or his
representative) witnesses the spouse's consent, (b) the spouse
consents to the alternate form of payment designated by the
Participant or to any change in that designated form of payment,
and (c) unless the spouse is the Participant's sole primary
Beneficiary, the spouse consents to the Participant's Beneficiary
designation or to any change in the Participant's Beneficiary
designation. The spouse's consent to a waiver of the qualified
joint and survivor annuity is irrevocable, unless the Participant
revokes the waiver election. The spouse may execute a blanket
consent to any form of payment designation or to any Beneficiary
designation made by the Participant, if the spouse acknowledges
the right to limit that consent to a specific designation but, in
writing, waives that right. The consent requirements of this
Section 6.05 apply to a former spouse of the Participant, to the
extent required under a qualified domestic relations order
described in Section 6.07.
The Advisory Committee will accept as valid a waiver
election which does not satisfy the spousal consent requirements
if the Advisory Committee establishes the Participant does not
have a spouse, the Advisory Committee is not able to locate the
Participant's spouse, the Participant is legally separated or has
been abandoned (within the meaning of State law) and the
Participant has a court order to that effect, or other
circumstances exist under which the Secretary of the Treasury
will excuse the consent requirement. If the Participant's spouse
is legally incompetent to give consent, the spouse's legal
guardian (even if the guardian is the Participant) may give
consent.
6.06 WAIVER ELECTION - PRERETIREMENT SURVIVOR ANNUITY.
The Advisory Committee must provide a written explanation of the
preretirement survivor annuity to each married Participant,
within the following period which ends last: (1) the period
beginning on the first day of the Plan Year in which the
Participant attains age 32 and ending on the last day of the Plan
Year in which the Participant attains age 34; (2) a reasonable
period after an Employee becomes a Participant; (3) a reasonable
period after the joint and survivor rules become applicable to
the Participant; or (4) a reasonable period after a fully
subsidized preretirement survivor annuity no longer satisfies the
requirements for a fully subsidized benefit. A reasonable period
described in clauses (2), (3) and (4) is the period beginning one
year before and ending one year after the applicable event. If
the Participant separates from Service before attaining age 35,
clauses (1), (2), (3) and (4) do not apply and the Advisory
Committee must provide the written explanation within the period
beginning one year before and ending one year after the
Separation from Service. The written explanation must describe,
in a manner consistent with Treasury regulations, the terms and
conditions of the preretirement survivor annuity comparable to
the explanation of the qualified joint and survivor annuity
required under Section 6.05. The Plan does not limit the number
of times the Participant may revoke a waiver of the preretirement
survivor annuity or make a new waiver during the election period.
A Participant's waiver election of the preretirement
survivor annuity is not valid unless (a) the Participant makes
the waiver election no earlier than the first day of the Plan
Year in which he attains age 35 and (b) the Participant's spouse
(to whom the preretirement survivor annuity is payable) satisfies
the consent requirements described in Section 6.05, except the
spouse need not consent to the form of benefit payable to the
designated Beneficiary. The spouse's consent to the waiver of the
preretirement survivor annuity is irrevocable, unless the
Participant revokes the waiver election. Irrespective of the time
of election requirement described in clause (a), if the
Participant separates from Service prior to the first day of the
Plan Year in which he attains age 35, the Advisory Committee will
accept a waiver election as respects the Participant's Accrued
Benefit attributable to his Service prior to his Separation from
Service. Furthermore, if a Participant who has not separated from
Service makes a valid waiver election, except for the timing
requirement of clause (a), the Advisory Committee will accept
that election as valid, but only until the first day of the Plan
Year in which the Participant attains age 35. A waiver election
described in this paragraph is not valid unless made after the
Participant has received the written explanation described in
this Section 6.06.
6.07 DISTRIBUTIONS UNDER DOMESTIC RELATIONS ORDERS. Nothing
contained in this Plan prevents the Trustee, in accordance with
the direction of the Advisory Committee, from complying with the
provisions of a qualified domestic relations order (as defined in
Code Section 414(p)). This Plan specifically permits distribution to an
alternate payee under a qualified domestic relations order at any
time, irrespective of whether the Participant has attained his
earliest retirement age (as defined under Code Section 414(p)) under the
Plan. A distribution to an alternate payee prior to the
Participant's attainment of earliest retirement age is available
only if: (1) the order specifies distribution at that time or
permits an agreement between the Plan and the alternate payee to
authorize an earlier distribution; and (2) if the present value
of the alternate payee's benefits under the Plan exceeds $3,500,
and the order requires, the alternate payee consents to any
distribution occurring prior to the Participant's attainment of
earliest retirement age. The Employer, in an addendum to its
Adoption Agreement numbered 6.07, may elect to limit distribution
to an alternate payee only when the Participant has attained his
earliest retirement age under the Plan. Nothing in this Section
6.07 gives a Participant a right to receive distribution at a
time otherwise not permitted under the Plan nor does it permit
the alternate payee to receive a form of payment not otherwise
permitted under the Plan.
The Advisory Committee must establish reasonable procedures
to determine the qualified status of a domestic relations order.
Upon receiving a domestic relations order, the Advisory Committee
promptly will notify the Participant and any alternate payee
named in the order, in writing, of the receipt of the order and
the Plan's procedures for determining the qualified status of the
order. Within a reasonable period of time after receiving the
domestic relations order, the Advisory Committee must determine
the qualified status of the order and must notify the Participant
and each alternate payee, in writing, of its determination. The
Advisory Committee must provide notice under this paragraph by
mailing to the individual's address specified in the domestic
relations order, or in a manner consistent with Department of
Labor regulations.
If any portion of the Participant's Nonforfeitable Accrued
Benefit is payable during the period the Advisory Committee is
making its determination of the qualified status of the domestic
relations order, the Advisory Committee must make a separate
accounting of the amounts payable. If the Advisory Committee
determines the order is a qualified domestic relations order
within 18 months of the date amounts first are payable following
receipt of the order, the Advisory Committee will direct the
Trustee to distribute the payable amounts in accordance with the
order. If the Advisory Committee does not make its determination
of the qualified status of the order within the 18-month
determination period, the Advisory Committee will direct the
Trustee to distribute the payable amounts in the manner the Plan
would distribute if the order did not exist and will apply the
order prospectively if the Advisory Committee later determines
the order is a qualified domestic relations order.
To the extent it is not inconsistent with the provisions of
the qualified domestic relations order, the Advisory Committee
may direct the Trustee to invest any partitioned amount in a
segregated subaccount or separate account and to invest the
account in Federally insured, interest-bearing savings account(s)
or time deposit(s) (or a combination of both), or in other fixed
income investments. A segregated subaccount remains a part of the
Trust, but it alone shares in any income it earns, and it alone
bears any expense or loss it incurs. The Trustee will make any
payments or distributions required under this Section 6.07 by
separate benefit checks or other separate distribution to the
alternate payee(s).
* * * * * * * * * * * * * * *
ARTICLE VII
EMPLOYER ADMINISTRATIVE PROVISIONS
7.01 INFORMATION TO COMMITTEE. The Employer must supply
current information to the Advisory Committee as to the name,
date of birth, date of employment, annual compensation, leaves of
absence, Years of Service and date of termination of employment
of each Employee who is, or who will be eligible to become, a
Participant under the Plan, together with any other information
which the Advisory Committee considers necessary. The Employer's
records as to the current information the Employer furnishes to
the Advisory Committee are conclusive as to all persons.
7.02 NO LIABILITY. The Employer assumes no obligation or
responsibility to any of its Employees, Participants or
Beneficiaries for any act of, or failure to act, on the part of
its Advisory Committee (unless the Employer is the Advisory
Committee), the Trustee, the Custodian, if any, or the Plan
Administrator (unless the Employer is the Plan Administrator).
7.03 INDEMNITY OF CERTAIN FIDUCIARIES. The Employer
indemnifies and saves harmless the Plan Administrator and the
members of the Advisory Committee, and each of them, from and
against any and all loss resulting from liability to which the
Plan Administrator and the Advisory Committee, or the members of
the Advisory Committee, may be subjected by reason of any act or
conduct (except willful misconduct or gross negligence) in their
official capacities in the administration of this Trust or Plan
or both, including all expenses reasonably incurred in their
defense, in case the Employer fails to provide such defense. The
indemnification provisions of this Section 7.03 do not relieve
the Plan Administrator or any Advisory Committee member from any
liability he may have under ERISA for breach of a fiduciary duty.
Furthermore, the Plan Administrator and the Advisory Committee
members and the Employer may execute a letter agreement further
delineating the indemnification agreement of this Section 7.03,
provided the letter agreement must be consistent with and does
not violate ERISA. The indemnification provisions of this Section
7.03 extend to the Trustee (or to a Custodian, if any) solely to
the extent provided by a letter agreement executed by the Trustee
(or Custodian) and the Employer.
7.04 EMPLOYER DIRECTION OF INVESTMENT. The Employer has the
right to direct the Trustee with respect to the investment and
re-investment of assets comprising the Trust Fund only if the
Trustee consents in writing to permit such direction. If the
Trustee consents to Employer direction of investment, the Trustee
and the Employer must execute a letter agreement as a part of
this Plan containing such conditions, limitations and other
provisions they deem appropriate before the Trustee will follow
any Employer direction as respects the investment or
re-investment of any part of the Trust Fund.
7.05 AMENDMENT TO VESTING SCHEDULE. Though the Employer
reserves the right to amend the vesting schedule at any time,
the Advisory Committee will not apply the amended vesting
schedule to reduce the Nonforfeitable percentage of any
Participant's Accrued Benefit derived from Employer contributions
(determined as of the later of the date the Employer adopts the
amendment, or the date the amendment becomes effective) to a
percentage less than the Nonforfeitable percentage computed under
the Plan without regard to the amendment. An amended vesting
schedule will apply to a Participant only if the Participant
receives credit for at least one Hour of Service after the new
schedule becomes effective.
If the Employer makes a permissible amendment to the vesting
schedule, each Participant having at least 3 Years of Service
with the Employer may elect to have the percentage of his
Nonforfeitable Accrued Benefit computed under the Plan without
regard to the amendment. For Plan Years beginning prior to
January 1, 1989, the election described in the preceding sentence
applies only to Participants having at least 5 Years of Service
with the Employer. The Participant must file his election with
the Advisory Committee within 60 days of the latest of (a) the
Employer's adoption of the amendment; (b) the effective date of
the amendment; or (c) his receipt of a copy of the amendment. The
Advisory Committee, as soon as practicable, must forward a true
copy of any amendment to the vesting schedule to each affected
Participant, together with an explanation of the effect of the
amendment, the appropriate form upon which the Participant may
make an election to remain under the vesting schedule provided
under the Plan prior to the amendment and notice of the time
within which the Participant must make an election to remain
under the prior vesting schedule. The election described in this
Section 7.05 does not apply to a Participant if the amended
vesting schedule provides for vesting at least as rapid at all
times as the vesting schedule in effect prior to the amendment.
For purposes of this Section 7.05, an amendment to the vesting
schedule includes any Plan amendment which directly or indirectly
affects the computation of the Nonforfeitable percentage of an
Employee's rights to his Employer derived Accrued Benefit.
Furthermore, the Advisory Committee must treat any shift in the
vesting schedule, due to a change in the Plan's top heavy status,
as an amendment to the vesting schedule for purposes of this
Section 7.05.
* * * * * * * * * * * * * * *
ARTICLE VIII
PARTICIPANT ADMINISTRATIVE PROVISIONS
8.01 BENEFICIARY DESIGNATION. Any Participant may from time
to time designate, in writing, any person or persons,
contingently or successively, to whom the Trustee will pay his
Nonforfeitable Accrued Benefit (including any life insurance
proceeds payable to the Participant's Account) in the event of
his death and the Participant may designate the form and method
of payment. The Advisory Committee will prescribe the form for
the written designation of Beneficiary and, upon the
Participant's filing the form with the Advisory Committee, the
form effectively revokes all designations filed prior to that
date by the same Participant.
(A) Coordination with survivor requirements. If the joint and
survivor requirements of Article VI apply to the Participant,
this Section 8.01 does not impose any special spousal consent
requirements on the Participant's Beneficiary designation.
However, in the absence of spousal consent (as required by
Article VI) to the Participant's Beneficiary designation: (1) any
waiver of the joint and survivor annuity or of the preretirement
survivor annuity is not valid; and (2) if the Participant dies
prior to his annuity starting date, the Participant's Beneficiary
designation will apply only to the portion of the death benefit
which is not payable as a preretirement survivor annuity.
Regarding clause (2), if the Participant's surviving spouse is a
primary Beneficiary under the Participant's Beneficiary
designation, the Trustee will satisfy the spouse's interest in
the Participant's death benefit first from the portion which is
payable as a preretirement survivor annuity.
(B) Profit sharing plan exception. If the Plan is a profit
sharing plan, the Beneficiary designation of a married Exempt
Participant is not valid unless the Participant's spouse consents
(in a manner described in Section 6.05) to the Beneficiary
designation. An "Exempt Participant" is a Participant who is not
subject to the joint and survivor requirements of Article VI. The
spousal consent requirement in this paragraph does not apply if
the Exempt Participant and his spouse are not married throughout
the one year period ending on the date of the Participant's
death, or if the Participant's spouse is the Participant's sole
primary Beneficiary.
8.02 NO BENEFICIARY DESIGNATION/DEATH OF BENEFICIARY. If a
Participant fails to name a Beneficiary in accordance with
Section 8.01, or if the Beneficiary named by a Participant
predeceases him, then the Trustee will pay the Participant's
Nonforfeitable Accrued Benefit in accordance with Section 6.02 in
the following order of priority, unless the Employer specifies a
different order of priority in an addendum to its Adoption
Agreement, to:
(a) The Participant's surviving spouse;
(b) The Participant's surviving children, including adopted
children, in equal shares;
(c) The Participant's surviving parents, in equal shares;
or
(d) The Participant's estate.
If the Beneficiary does not predecease the Participant, but
dies prior to distribution of the Participant's entire
Nonforfeitable Accrued Benefit, the Trustee will pay the
remaining Nonforfeitable Accrued Benefit to the Beneficiary's
estate unless the Participant's Beneficiary designation provides
otherwise or unless the Employer provides otherwise in its
Adoption Agreement. If the Plan is a profit sharing plan, and the
Plan includes Exempt Participants, the Employer may not specify a
different order of priority in the Adoption Agreement unless the
Participant's surviving spouse will be first in the different
order of priority. The Advisory Committee will direct the Trustee
as to the method and to whom the Trustee will make payment under
this Section 8.02.
8.03 PERSONAL DATA TO COMMITTEE. Each Participant and each
Beneficiary of a deceased Participant must furnish to the
Advisory Committee such evidence, data or information as the
Advisory Committee considers necessary or desirable for the
purpose of administering the Plan. The provisions of this Plan
are effective for the benefit of each Participant upon the
condition precedent that each Participant will furnish promptly
full, true and complete evidence, data and information when
requested by the Advisory Committee, provided the Advisory
Committee advises each Participant of the effect of his failure
to comply with its request.
8.04 ADDRESS FOR NOTIFICATION. Each Participant and each
Beneficiary of a deceased Participant must file with the Advisory
Committee from time to time, in writing, his post office address
and any change of post office address. Any communication,
statement or notice addressed to a Participant, or Beneficiary,
at his last post office address filed with the Advisory
Committee, or as shown on the records of the Employer, binds the
Participant, or Beneficiary, for all purposes of this Plan.
8.05 ASSIGNMENT OR ALIENATION. Subject to Code Section 414(p)
relating to qualified domestic relations orders, neither a
Participant nor a Beneficiary may anticipate, assign or alienate
(either at law or in equity) any benefit provided under the Plan,
and the Trustee will not recognize any such anticipation,
assignment or alienation. Furthermore, a benefit under the Plan
is not subject to attachment, garnishment, levy, execution or
other legal or equitable process.
8.06 NOTICE OF CHANGE IN TERMS. The Plan Administrator,
within the time prescribed by ERISA and the applicable
regulations, must furnish all Participants and Beneficiaries a
summary description of any material amendment to the Plan or
notice of discontinuance of the Plan and all other information
required by ERISA to be furnished without charge.
8.07 LITIGATION AGAINST THE TRUST. A court of competent
jurisdiction may authorize any appropriate equitable relief to
redress violations of ERISA or to enforce any provisions of ERISA
or the terms of the Plan. A fiduciary may receive reimbursement
of expenses properly and actually incurred in the performance of
his duties with the Plan.
8.08 INFORMATION AVAILABLE. Any Participant in the Plan or
any Beneficiary may examine copies of the Plan description,
latest annual report, any bargaining agreement, this Plan and
Trust, contract or any other instrument under which the Plan was
established or is operated. The Plan Administrator will maintain
all of the items listed in this Section 8.08 in his office, or in
such other place or places as he may designate from time to time
in order to comply with the regulations issued under ERISA, for
examination during reasonable business hours. Upon the written
request of a Participant or Beneficiary the Plan Administrator
must furnish him with a copy of any item listed in this Section
8.08. The Plan Administrator may make a reasonable charge to the
requesting person for the copy so furnished.
8.09 APPEAL PROCEDURE FOR DENIAL OF BENEFITS. A Participant
or a Beneficiary ("Claimant") may file with the Advisory
Committee a written claim for benefits, if the Participant or
Beneficiary determines the distribution procedures of the Plan
have not provided him his proper Nonforfeitable Accrued Benefit.
The Advisory Committee must render a decision on the claim within
60 days of the Claimant's written claim for benefits. The Plan
Administrator must provide adequate notice in writing to the
Claimant whose claim for benefits under the Plan the Advisory
Committee has denied. The Plan Administrator's notice to the
Claimant must set forth:
(a) The specific reason for the denial;
(b) Specific references to pertinent Plan provisions on
which the Advisory Committee based its denial;
(c) A description of any additional material and
information needed for the Claimant to perfect his claim and
an explanation of why the material or information is needed;
and
(d) That any appeal the Claimant wishes to make of the
adverse determination must be in writing to the Advisory
Committee within 75 days after receipt of the Plan
Administrator's notice of denial of benefits. The Plan
Administrator's notice must further advise the Claimant that
his failure to appeal the action to the Advisory Committee
in writing within the 75-day period will render the Advisory
Committee's determination final, binding and conclusive.
If the Claimant should appeal to the Advisory Committee, he,
or his duly authorized representative, may submit, in writing,
whatever issues and comments he, or his duly authorized
representative, feels are pertinent. The Claimant, or his duly
authorized representative, may review pertinent Plan documents.
The Advisory Committee will re-examine all facts related to the
appeal and make a final determination as to whether the denial of
benefits is justified under the circumstances. The Advisory
Committee must advise the Claimant of its decision within 60 days
of the Claimant's written request for review, unless special
circumstances (such as a hearing) would make the rendering of a
decision within the 60-day limit unfeasible, but in no event may
the Advisory Committee render a decision respecting a denial for
a claim for benefits later than 120 days after its receipt of a
request for review.
The Plan Administrator's notice of denial of benefits must
identify the name of each member of the Advisory Committee and
the name and address of the Advisory Committee member to whom the
Claimant may forward his appeal.
8.10 PARTICIPANT DIRECTION OF INVESTMENT. A Participant has
the right to direct the Trustee with respect to the investment or
re-investment of the assets comprising the Participant's
individual Account only if the Trustee consents in writing to
permit such direction. If the Trustee consents to Participant
direction of investment, the Trustee will accept direction from
each Participant on a written election form (or other written
agreement), as a part of this Plan, containing such conditions,
limitations and other provisions the parties deem appropriate.
The Trustee or, with the Trustee's consent, the Advisory
Committee, may establish written procedures, incorporated
specifically as part of this Plan, relating to Participant
direction of investment under this Section 8.10. The Trustee will
maintain a segregated investment Account to the extent a
Participant's Account is subject to Participant self-direction.
The Trustee is not liable for any loss, nor is the Trustee liable
for any breach, resulting from a Participant's direction of the
investment of any part of his directed Account.
The Advisory Committee, to the extent provided in a written
loan policy adopted under Section 9.04, will treat a loan made to
a Participant as a Participant direction of investment under this
Section 8.10. To the extent of the loan outstanding at any time,
the borrowing Participant's Account alone shares in any interest
paid on the loan, and it alone bears any expense or loss it
incurs in connection with the loan. The Trustee may retain any
principal or interest paid on the borrowing Participant's loan in
an interest bearing segregated Account on behalf of the borrowing
Participant until the Trustee (or the Named Fiduciary, in the
case of a nondiscretionary Trustee) deems it appropriate to add
the amount paid to the Participant's separate Account under the
Plan.
If the Trustee consents to Participant direction of
investment of his Account, the Plan treats any post-December 31,
1981, investment by a Participant's directed Account in
collectibles (as defined by Code Section 408(m)) as a deemed
distribution to the Participant for Federal income tax purposes.
* * * * * * * * * * * * * * *
ARTICLE IX
ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUN
TS
9.01 MEMBERS' COMPENSATION, EXPENSES. The Employer must
appoint an Advisory Committee to administer the Plan, the members
of which may or may not be Participants in the Plan, or which may
be the Plan Administrator acting alone. In the absence of an
Advisory Committee appointment, the Plan Administrator assumes
the powers, duties and responsibilities of the Advisory
Committee. The members of the Advisory Committee will serve
without compensation for services as such, but the Employer will
pay all expenses of the Advisory Committee, except to the extent
the Trust properly pays for such expenses, pursuant to Article X.
9.02 TERM. Each member of the Advisory Committee serves
until the appointment of his successor.
9.03 POWERS. In case of a vacancy in the membership of the
Advisory Committee, the remaining members of the Advisory
Committee may exercise any and all of the powers, authority,
duties and discretion conferred upon the Advisory Committee
pending the filling of the vacancy.
9.04 GENERAL. The Advisory Committee has the following
powers and duties:
(a) To select a Secretary, who need not be a member of the
Advisory Committee;
(b) To determine the rights of eligibility of an Employee
to participate in the Plan, the value of a Participant's
Accrued Benefit and the Nonforfeitable percentage of each
Participant's Accrued Benefit;
(c) To adopt rules of procedure and regulations necessary
for the proper and efficient administration of the Plan
provided the rules are not inconsistent with the terms of
this Agreement;
(d) To construe and enforce the terms of the Plan and the
rules and regulations it adopts, including interpretation of
the Plan documents and documents related to the Plan's
operation;
(e) To direct the Trustee as respects the crediting and
distribution of the Trust;
(f) To review and render decisions respecting a claim for
(or denial of a claim for) a benefit under the Plan;
(g) To furnish the Employer with information which the
Employer may require for tax or other purposes;
(h) To engage the service of agents whom it may deem
advisable to assist it with the performance of its duties;
(i) To engage the services of an Investment Manager or
Managers (as defined in ERISA Section 3(38)), each of whom will
have full power and authority to manage, acquire or dispose
(or direct the Trustee with respect to acquisition or
disposition) of any Plan asset under its control;
(j) To establish, in its sole discretion, a
nondiscriminatory policy (see Section 9.04(A)) which the
Trustee must observe in making loans, if any, to
Participants and Beneficiaries; and
(k) To establish and maintain a funding standard account
and to make credits and charges to the account to the extent
required by and in accordance with the provisions of the
Code.
The Advisory Committee must exercise all of its powers,
duties and discretion under the Plan in a uniform and
nondiscriminatory manner.
(A) Loan Policy. If the Advisory Committee adopts a loan policy,
pursuant to paragraph (j), the loan policy must be a written
document and must include: (1) the identity of the person or
positions authorized to administer the participant loan program;
(2) a procedure for applying for the loan; (3) the criteria for
approving or denying a loan; (4) the limitations, if any, on the
types and amounts of loans available; (5) the procedure for
determining a reasonable rate of interest; (6) the types of
collateral which may secure the loan; and (7) the events
constituting default and the steps the Plan will take to preserve
plan assets in the event of default. This Section 9.04
specifically incorporates a written loan policy as part of the
Employer's Plan.
9.05 FUNDING POLICY. The Advisory Committee will review, not
less often than annually, all pertinent Employee information and
Plan data in order to establish the funding policy of the Plan
and to determine the appropriate methods of carrying out the
Plan's objectives. The Advisory Committee must communicate
periodically, as it deems appropriate, to the Trustee and to any
Plan Investment Manager the Plan's short-term and long-term
financial needs so investment policy can be coordinated with Plan
financial requirements.
9.06 MANNER OF ACTION. The decision of a majority of the
members appointed and qualified controls.
9.07 AUTHORIZED REPRESENTATIVE. The Advisory Committee
may authorize any one of its members, or its Secretary, to
sign on its behalf any notices, directions, applications,
certificates, consents, approvals, waivers, letters or other
documents. The Advisory Committee must evidence this authority by
an instrument signed by all members and filed with the Trustee.
9.08 INTERESTED MEMBER. No member of the Advisory
Committee may decide or determine any matter concerning the
distribution, nature or method of settlement of his own benefits
under the Plan, except in exercising an election available to
that member in his capacity as a Participant, unless the Plan
Administrator is acting alone in the capacity of the Advisory
Committee.
9.09 INDIVIDUAL ACCOUNTS. The Advisory Committee will
maintain, or direct the Trustee to maintain, a separate Account,
or multiple Accounts, in the name of each Participant to reflect
the Participant's Accrued Benefit under the Plan. If a
Participant re-enters the Plan subsequent to his having a
Forfeiture Break in Service, the Advisory Committee, or the
Trustee, must maintain a separate Account for the Participant's
pre-Forfeiture Break in Service Accrued Benefit and a separate
Account for his post-Forfeiture Break in Service Accrued Benefit,
unless the Participant's entire Accrued Benefit under the Plan is
100% Nonforfeitable.
The Advisory Committee will make its allocations, or request
the Trustee to make its allocations, to the Accounts of the
Participants in accordance with the provisions of Section 9.11.
The Advisory Committee may direct the Trustee to maintain a
temporary segregated investment Account in the name of a
Participant to prevent a distortion of income, gain or loss
allocations under Section 9.11. The Advisory Committee must
maintain records of its activities.
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. The value of
each Participant's Accrued Benefit consists of that proportion
of the net worth (at fair market value) of the Employer's Trust
Fund which the net credit balance in his Account (exclusive of
the cash value of incidental benefit insurance contracts) bears
to the total net credit balance in the Accounts (exclusive of the
cash value of the incidental benefit insurance contracts) of all
Participants plus the cash surrender value of any incidental
benefit insurance contracts held by the Trustee on the
Participant's life.
For purposes of a distribution under the Plan, the value of
a Participant's Accrued Benefit is its value as of the valuation
date immediately preceding the date of the distribution. Any
distribution (other than a distribution from a segregated
Account) made to a Participant (or to his Beneficiary) more than
90 days after the most recent valuation date may include interest
on the amount of the distribution as an expense of the Trust
Fund. The interest, if any, accrues from such valuation date to
the date of the distribution at the rate established in the
Employer's Adoption Agreement.
9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS.
A "valuation date" under this Plan is each Accounting Date and
each interim valuation date determined under Section 10.14. As of
each valuation date the Advisory Committee must adjust Accounts
to reflect net income, gain or loss since the last valuation
date. The valuation period is the period beginning the day after
the last valuation date and ending on the current valuation date.
(A) Trust Fund Accounts. The allocation provisions of this
paragraph apply to all Participant Accounts other than segregated
investment Accounts. The Advisory Committee first will adjust the
Participant Accounts, as those Accounts stood at the beginning of
the current valuation period, by reducing the Accounts for any
forfeitures arising under Section 5.09 or under Section 9.14, for
amounts charged during the valuation period to the Accounts in
accordance with Section 9.13 (relating to distributions) and
Section 11.01 (relating to insurance premiums), and for the cash
value of incidental benefit insurance contracts. The Advisory
Committee then, subject to the restoration allocation
requirements of Section 5.04 or of Section 9.14, will allocate
the net income, gain or loss pro rata to the adjusted Participant
Accounts. The allocable net income, gain or loss is the net
income (or net loss), including the increase or decrease in the
fair market value of assets, since the last valuation date.
(B) Segregated investment Accounts. A segregated investment
Account receives all income it earns and bears all expense or
loss it incurs. The Advisory Committee will adopt uniform and
nondiscriminatory procedures for determining income or loss of a
segregated investment Account in a manner which reasonably
reflects investment directions relating to pooled investments and
investment directions occurring during a valuation period. As of
the valuation date, the Advisory Committee must reduce a
segregated Account for any forfeiture arising under Section 5.09
after the Advisory Committee has made all other allocations,
changes or adjustments to the Account for the Plan Year.
(C) Additional rules. An Excess Amount or suspense account
described in Part 2 of Article III does not share in the
allocation of net income, gain or loss described in this Section
9.11. If the Employer maintains its Plan under a Code Section 401(k)
Adoption Agreement, the Employer may specify in its Adoption
Agreement alternate valuation provisions authorized by that
Adoption Agreement. This Section 9.11 applies solely to the
allocation of net income, gain or loss of the Trust. The Advisory
Committee will allocate the Employer contributions and
Participant forfeitures, if any, in accordance with Article III.
9.12 INDIVIDUAL STATEMENT. As soon as practicable after the
Accounting Date of each Plan Year, but within the time
prescribed by ERISA and the regulations under ERISA, the Plan
Administrator will deliver to each Participant (and to each
Beneficiary) a statement reflecting the condition of his Accrued
Benefit in the Trust as of that date and such other information
ERISA requires be furnished the Participant or Beneficiary. No
Participant, except a member of the Advisory Committee, has the
right to inspect the records reflecting the Account of any other
Participant.
9.13 ACCOUNT CHARGED. The Advisory Committee will charge a
Participant's Account for all distributions made from that
Account to the Participant, to his Beneficiary or to an alternate
payee. The Advisory Committee also will charge a Participant's
Account for any administrative expenses incurred by the Plan
directly related to that Account.
9.14 UNCLAIMED ACCOUNT PROCEDURE. The Plan does not
require either the Trustee or the Advisory Committee to search
for, or to ascertain the whereabouts of, any Participant or
Beneficiary. At the time the Participant's or Beneficiary's
benefit becomes distributable under Article VI, the Advisory
Committee, by certified or registered mail addressed to his last
known address of record with the Advisory Committee or the
Employer, must notify any Participant, or Beneficiary, that he is
entitled to a distribution under this Plan. The notice must quote
the provisions of this Section 9.14 and otherwise must comply
with the notice requirements of Article VI. If the Participant,
or Beneficiary, fails to claim his distributive share or make his
whereabouts known in writing to the Advisory Committee within 6
months from the date of mailing of the notice, the Advisory
Committee will treat the Participant's or Beneficiary's unclaimed
payable Accrued Benefit as forfeited and will reallocate the
unclaimed payable Accrued Benefit in accordance with Section
3.05. A forfeiture under this paragraph will occur at the end of
the notice period or, if later, the earliest date applicable
Treasury regulations would permit the forfeiture. Pending
forfeiture, the Advisory Committee, following the expiration of
the notice period, may direct the Trustee to segregate the
Nonforfeitable Accrued Benefit in a segregated Account and to
invest that segregated Account in Federally insured interest
bearing savings accounts or time deposits (or in a combination of
both), or in other fixed income investments.
If a Participant or Beneficiary who has incurred a
forfeiture of his Accrued Benefit under the provisions of the
first paragraph of this Section 9.14 makes a claim, at any time,
for his forfeited Accrued Benefit, the Advisory Committee must
restore the Participant's or Beneficiary's forfeited Accrued
Benefit to the same dollar amount as the dollar amount of the
Accrued Benefit forfeited, unadjusted for any gains or losses
occurring subsequent to the date of the forfeiture. The Advisory
Committee will make the restoration during the Plan Year in which
the Participant or Beneficiary makes the claim, first from the
amount, if any, of Participant forfeitures the Advisory Committee
otherwise would allocate for the Plan Year, then from the amount,
if any, of the Trust Fund net income or gain for the Plan Year
and then from the amount, or additional amount, the Employer
contributes to enable the Advisory Committee to make the required
restoration. The Advisory Committee must direct the Trustee to
distribute the Participant's or Beneficiary's restored Accrued
Benefit to him not later than 60 days after the close of the Plan
Year in which the Advisory Committee restores the forfeited
Accrued Benefit. The forfeiture provisions of this Section 9.14
apply solely to the Participant's or to the Beneficiary's Accrued
Benefit derived from Employer contributions.
* * * * * * * * * * * * * * *
ARTICLE X
TRUSTEE AND CUSTODIAN, POWERS AND DUTIES
10.01 ACCEPTANCE. The Trustee accepts the Trust created
under the Plan and agrees to perform the obligations imposed. The
Trustee must provide bond for the faithful performance of its
duties under the Trust to the extent required by ERISA.
10.02 RECEIPT OF CONTRIBUTIONS. The Trustee is
accountable to the Employer for the funds contributed to it by
the Employer, but does not have any duty to see that the
contributions received comply with the provisions of the Plan.
The Trustee is not obliged to collect any contributions from the
Employer, nor is obliged to see that funds deposited with it are
deposited according to the provisions of the Plan.
10.03 INVESTMENT POWERS.
[A] Discretionary Trustee Designation. If the Employer, in
Adoption Agreement Section 1.02, designates the Trustee to
administer the Trust as a discretionary Trustee, then the Trustee
has full discretion and authority with regard to the investment
of the Trust Fund, except with respect to a Plan asset under the
control or direction of a properly appointed Investment Manager
or with respect to a Plan asset properly subject to Employer,
Participant or Advisory Committee direction of investment. The
Trustee must coordinate its investment policy with Plan financial
needs as communicated to it by the Advisory Committee. The
Trustee is authorized and empowered, but not by way of
limitation, with the following powers, rights and duties:
(a) To invest any part or all of the Trust Fund in any
common or preferred stocks, open-end or closed-end mutual
funds, put and call options traded on a national exchange,
United States retirement plan bonds, corporate bonds,
debentures, convertible debentures, commercial paper, U.S.
Treasury bills, U.S. Treasury notes and other direct or
indirect obligations of the United States Government or its
agencies, improved or unimproved real estate situated in the
United States, limited partnerships, insurance contracts of
any type, mortgages, notes or other property of any kind,
real or personal, to buy or sell options on common stock on
a nationally recognized exchange with or without holding the
underlying common stock, to buy and sell commodities,
commodity options and contracts for the future delivery of
commodities, and to make any other investments the Trustee
deems appropriate, as a prudent man would do under like
circumstances with due regard for the purposes of this Plan.
Any investment made or retained by the Trustee in good faith
is proper but must be of a kind constituting a
diversification considered by law suitable for trust
investments.
(b) To retain in cash so much of the Trust Fund as it may
deem advisable to satisfy liquidity needs of the Plan and to
deposit any cash held in the Trust Fund in a bank account at
reasonable interest.
(c) To invest, if the Trustee is a bank or similar
financial institution supervised by the United States or by
a State, in any type of deposit of the Trustee (or of a bank
related to the Trustee within the meaning of Code Section 414(b))
at a reasonable rate of interest or in a common trust fund,
as described in Code Section 584, or in a collective investment
fund, the provisions of which govern the investment of such
assets and which the Plan incorporates by this reference,
which the Trustee (or its affiliate, as defined in Code
Section 1504) maintains exclusively for the collective investment
of money contributed by the bank (or the affiliate) in its
capacity as trustee and which conforms to the rules of the
Comptroller of the Currency.
(d) To manage, sell, contract to sell, grant options to
purchase, convey, exchange, transfer, abandon, improve,
repair, insure, lease for any term even though commencing in
the future or extending beyond the term of the Trust, and
otherwise deal with all property, real or personal, in such
manner, for such considerations and on such terms and
conditions as the Trustee decides.
(e) To credit and distribute the Trust as directed by the
Advisory Committee. The Trustee is not obliged to inquire as
to whether any payee or distributee is entitled to any
payment or whether the distribution is proper or within the
terms of the Plan, or as to the manner of making any payment
or distribution. The Trustee is accountable only to the
Advisory Committee for any payment or distribution made by
it in good faith on the order or direction of the Advisory
Committee.
(f) To borrow money, to assume indebtedness, extend
mortgages and encumber by mortgage or pledge.
(g) To compromise, contest, arbitrate or abandon claims and
demands, in its discretion.
(h) To have with respect to the Trust all of the rights of
an individual owner, including the power to give proxies, to
participate in any voting trusts, mergers, consolidations or
liquidations, and to exercise or sell stock subscriptions or
conversion rights.
(i) To lease for oil, gas and other mineral purposes and to
create mineral severances by grant or reservation; to pool
or unitize interests in oil, gas and other minerals; and to
enter into operating agreements and to execute division and
transfer orders.
(j) To hold any securities or other property in the name of
the Trustee or its nominee, with depositories or agent
depositories or in another form as it may deem best, with or
without disclosing the trust relationship.
(k) To perform any and all other acts in its judgment
necessary or appropriate for the proper and advantageous
management, investment and distribution of the Trust.
(l) To retain any funds or property subject to any dispute
without liability for the payment of interest, and to
decline to make payment or delivery of the funds or property
until final adjudication is made by a court of competent
jurisdiction.
(m) To file all tax returns required of the Trustee.
(n) To furnish to the Employer, the Plan Administrator and
the Advisory Committee an annual statement of account
showing the condition of the Trust Fund and all investments,
receipts, disbursements and other transactions effected by
the Trustee during the Plan Year covered by the statement
and also stating the assets of the Trust held at the end of
the Plan Year, which accounts are conclusive on all persons,
including the Employer, the Plan Administrator and the
Advisory Committee, except as to any act or transaction
concerning which the Employer, the Plan Administrator or the
Advisory Committee files with the Trustee written exceptions
or objections within 90 days after the receipt of the
accounts or for which ERISA authorizes a longer period
within which to object.
(o) To begin, maintain or defend any litigation necessary
in connection with the administration of the Plan, except
that the Trustee is not obliged or required to do so unless
indemnified to its satisfaction.
[B] Nondiscretionary Trustee Designation/Appointment of
Custodian. If the Employer, in its Adoption Agreement Section
1.02, designates the Trustee to administer the Trust as a
nondiscretionary Trustee, then the Trustee will not have any
discretion or authority with regard to the investment of the
Trust Fund, but must act solely as a directed trustee of the
funds contributed to it. A nondiscretionary Trustee, as directed
trustee of the funds held by it under the Employer's Plan, is
authorized and empowered, by way of limitation, with the
following powers, rights and duties, each of which the
nondiscretionary Trustee exercises solely as directed trustee in
accordance with the written direction of the Named Fiduciary
(except to the extent a Plan asset is subject to the control and
management of a properly appointed Investment Manager or subject
to Advisory Committee or Participant direction of investment):
(a) To invest any part or all of the Trust Fund in any
common or preferred stocks, open-end or closed-end mutual
funds, put and call options traded on a national exchange,
United States retirement plan bonds, corporate bonds,
debentures, convertible debentures, commercial paper, U.S.
Treasury bills, U.S. Treasury notes and other direct or
indirect obligations of the United States Government or its
agencies, improved or unimproved real estate situated in the
United States, limited partnerships, insurance contracts of
any type, mortgages, notes or other property of any kind,
real or personal, to buy or sell options on common stock on
a nationally recognized options exchange with or without
holding the underlying common stock, to buy and sell
commodities, commodity options and contracts for the future
delivery of commodities, and to make any other investments
the Named Fiduciary deems appropriate.
(b) To retain in cash so much of the Trust Fund as the
Named Fiduciary may direct in writing to satisfy liquidity
needs of the Plan and to deposit any cash held in the Trust
Fund in a bank account at reasonable interest, including,
specific authority to invest in any type of deposit of the
Trustee (or of a bank related to the Trustee within the
meaning of Code Section 414(b)) at a reasonable rate of interest.
(c) To sell, contract to sell, grant options to purchase,
convey, exchange, transfer, abandon, improve, repair,
insure, lease for any term even though commencing in the
future or extending beyond the term of the Trust, and
otherwise deal with all property, real or personal, in such
manner, for such considerations and on such terms and
conditions as the Named Fiduciary directs in writing.
(d) To credit and distribute the Trust as directed by the
Advisory Committee. The Trustee is not obliged to inquire as
to whether any payee or distributee is entitled to any
payment or whether the distribution is proper or within the
terms of the Plan, or as to the manner of making any payment
or distribution. The Trustee is accountable only to the
Advisory Committee for any payment or distribution made by
it in good faith on the order or direction of the Advisory
Committee.
(e) To borrow money, to assume indebtedness, extend
mortgages and encumber by mortgage or pledge.
(f) To have with respect to the Trust all of the rights of
an individual owner, including the power to give proxies, to
participate in any voting trusts, mergers, consolidations or
liquidations, and to exercise or sell stock subscriptions or
conversion rights, provided the exercise of any such powers
is in accordance with and at the written direction of the
Named Fiduciary.
(g) To lease for oil, gas and other mineral purposes and to
create mineral severances by grant or reservation; to pool
or unitize interests in oil, gas and other minerals; and to
enter into operating agreements and to execute division and
transfer orders, provided the exercise of any such powers is
in accordance with and at the written direction of the Named
Fiduciary.
(h) To hold any securities or other property in the name of
the nondiscretionary Trustee or its nominee, with
depositories or agent depositories or in another form as the
Named Fiduciary may deem best, with or without disclosing
the custodial relationship.
(i) To retain any funds or property subject to any dispute
without liability for the payment of interest, and to
decline to make payment or delivery of the funds or property
until a court of competent jurisdiction makes final
adjudication.
(j) To file all tax returns required of the Trustee.
(k) To furnish to the Named Fiduciary, the Employer, the
Plan Administrator and the Advisory Committee an annual
statement of account showing the condition of the Trust Fund
and all investments, receipts, disbursements and other
transactions effected by the nondiscretionary Trustee during
the Plan Year covered by the statement and also stating the
assets of the Trust held at the end of the Plan Year, which
accounts are conclusive on all persons, including the Named
Fiduciary, the Employer, the Plan Administrator and the
Advisory Committee, except as to any act or transaction
concerning which the Named Fiduciary, the Employer, the Plan
Administrator or the Advisory Committee files with the
nondiscretionary Trustee written exceptions or objections
within 90 days after the receipt of the accounts or for
which ERISA authorizes a longer period within which to
object.
(l) To begin, maintain or defend any litigation necessary
in connection with the administration of the Plan, except
that the Trustee is not obliged or required to do so unless
indemnified to its satisfaction.
Appointment of Custodian. The Employer may appoint a
Custodian under the Plan, the acceptance by the Custodian
indicated on the execution page of the Employer's Adoption
Agreement. If the Employer appoints a Custodian, the Employer's
Plan must have a discretionary Trustee, as described in Section
10.03[A]. A Custodian has the same powers, rights and duties as a
nondiscretionary Trustee, as described in this Section 10.03[B].
The Custodian accepts the terms of the Plan and Trust by
executing the Employer's Adoption Agreement. Any reference in the
Plan to a Trustee also is a reference to a Custodian where the
context of the Plan dictates. A limitation of the Trustee's
liability by Plan provision also acts as a limitation of the
Custodian's liability. Any action taken by the Custodian at the
discretionary Trustee's direction satisfies any provision in the
Plan referring to the Trustee's taking that action.
Modification of Powers/Limited Responsibility. The Employer
and the Custodian or nondiscretionary Trustee, by letter
agreement, may limit the powers of the Custodian or
nondiscretionary Trustee to any combination of powers listed
within this Section 10.03[B]. If there is a Custodian or a
nondiscretionary Trustee under the Employer's Plan, then the
Employer, in adopting this Plan acknowledges the Custodian or
nondiscretionary Trustee has no discretion with respect to the
investment or re-investment of the Trust Fund and that the
Custodian or nondiscretionary Trustee is acting solely as
custodian or as directed trustee with respect to the assets
comprising the Trust Fund.
[C] Limitation of Powers of Certain Custodians. If a Custodian
is a bank which, under its governing state law, does not possess
trust powers, then paragraphs (a), (c), (e), (f), (g) of Section
10.03[B], Section 10.16 and Article XI do not apply to that bank
and that bank only has the power and authority to exercise the
remaining powers, rights and duties under Section 10.03[B].
[D] Named Fiduciary/Limitation of Liability of Nondiscretionary
Trustee or Custodian. Under a nondiscretionary Trustee
designation, the Named Fiduciary under the Employer's Plan has
the sole responsibility for the management and control of the
Employer's Trust Fund, except with respect to a Plan asset under
the control or direction of a properly appointed Investment
Manager or with respect to a Plan asset properly subject to
Participant or Advisory Committee direction of investment. If the
Employer appoints a Custodian, the Named Fiduciary is the
discretionary Trustee. Under a nondiscretionary Trustee
designation, unless the Employer designates in writing another
person or persons to serve as Named Fiduciary, the Named
Fiduciary under the Plan is the president of a corporate
Employer, the managing partner of a partnership Employer or the
sole proprietor, as appropriate. The Named Fiduciary will
exercise its management and control of the Trust Fund through its
written direction to the nondiscretionary Trustee or to the
Custodian, whichever applies to the Employer's Plan.
The nondiscretionary Trustee or Custodian has no duty to
review or to make recommendations regarding investments made at
the written direction of the Named Fiduciary. The
nondiscretionary Trustee or Custodian must retain any investment
obtained at the written direction of the Named Fiduciary until
further directed in writing by the Named Fiduciary to dispose of
such investment. The nondiscretionary Trustee or Custodian is not
liable in any manner or for any reason for making, retaining or
disposing of any investment pursuant to any written direction
described in this paragraph. Furthermore, the Employer agrees to
indemnify and to hold the nondiscretionary Trustee or Custodian
harmless from any damages, costs or expenses, including
reasonable counsel fees, which the nondiscretionary Trustee or
Custodian may incur as a result of any claim asserted against the
nondiscretionary Trustee, the Custodian or the Trust arising out
of the nondiscretionary Trustee's or Custodian's compliance with
any written direction described in this paragraph.
[E] Participant Loans. This Section 10.03[E] specifically
authorizes the Trustee to make loans on a nondiscriminatory basis
to a Participant or to a Beneficiary in accordance with the loan
policy established by the Advisory Committee, provided: (1) the
loan policy satisfies the requirements of Section 9.04; (2) loans
are available to all Participants and Beneficiaries on a
reasonably equivalent basis and are not available in a greater
amount for Highly Compensated Employees than for other Employees;
(3) any loan is adequately secured and bears a reasonable rate of
interest; (4) the loan provides for repayment within a specified
time; (5) the default provisions of the note prohibit offset of
the Participant's Nonforfeitable Accrued Benefit prior to the
time the Trustee otherwise would distribute the Participant's
Nonforfeitable Accrued Benefit; (6) the amount of the loan does
not exceed (at the time the Plan extends the loan) the present
value of the Participant's Nonforfeitable Accrued Benefit; and
(7) the loan otherwise conforms to the exemption provided by Code
Section 4975(d)(1). If the joint and survivor requirements of Article VI
apply to the Participant, the Participant may not pledge any
portion of his Accrued Benefit as security for a loan made after
August 18, 1985, unless, within the 90 day period ending on the
date the pledge becomes effective, the Participant's spouse, if
any, consents (in a manner described in Section 6.05 other than
the requirement relating to the consent of a subsequent spouse)
to the security or, by separate consent, to an increase in the
amount of security. If the Employer is an unincorporated trade or
business, a Participant who is an Owner-Employee may not receive
a loan from the Plan, unless he has obtained a prohibited
transaction exemption from the Department of Labor. If the
Employer is an "S Corporation," a Participant who is a
shareholder-employee (an employee or an officer) who, at any time
during the Employer's taxable year, owns more than 5%, either
directly or by attribution under Code Section 318(a)(1), of the
Employer's outstanding stock may not receive a loan from the
Plan, unless he has obtained a prohibited transaction exemption
from the Department of Labor. If the Employer is not an
unincorporated trade or business nor an "S Corporation," this
Section 10.03[E] does not impose any restrictions on the class of
Participants eligible for a loan from the Plan.
[F] Investment in qualifying Employer securities and qualifying
Employer real property. The investment options in this Section
10.03[F] include the ability to invest in qualifying Employer
securities or qualifying Employer real property, as defined in
and as limited by ERISA. If the Employer's Plan is a
Nonstandardized profit sharing plan, it may elect in its Adoption
Agreement to permit the aggregate investments in qualifying
Employer securities and in qualifying Employer real property to
exceed 10% of the value of Plan assets.
10.04 RECORDS AND STATEMENTS. The records of the
Trustee pertaining to the Plan must be open to the inspection of
the Plan Administrator, the Advisory Committee and the Employer
at all reasonable times and may be audited from time to time by
any person or persons as the Employer, Plan Administrator or
Advisory Committee may specify in writing. The Trustee must
furnish the Plan Administrator or Advisory Committee with
whatever information relating to the Trust Fund the Plan
Administrator or Advisory Committee considers necessary.
10.05 FEES AND EXPENSES FROM FUND. A Trustee or
Custodian will receive reasonable annual compensation as may be
agreed upon from time to time between the Employer and the
Trustee or Custodian. No person who is receiving full pay from
the Employer may receive compensation for services as Trustee or
as Custodian. The Trustee will pay from the Trust Fund all fees
and expenses reasonably incurred by the Plan, to the extent such
fees and expenses are for the ordinary and necessary
administration and operation of the Plan, unless the Employer
pays such fees and expenses. Any fee or expense paid, directly or
indirectly, by the Employer is not an Employer contribution to
the Plan, provided the fee or expense relates to the ordinary and
necessary administration of the Fund.
10.06 PARTIES TO LITIGATION. Except as otherwise
provided by ERISA, no Participant or Beneficiary is a necessary
party or is required to receive notice of process in any court
proceeding involving the Plan, the Trust Fund or any fiduciary of
the Plan. Any final judgment entered in any proceeding will be
conclusive upon the Employer, the Plan Administrator, the
Advisory Committee, the Trustee, Custodian, Participants and
Beneficiaries.
10.07 PROFESSIONAL AGENTS. The Trustee may employ and
pay from the Trust Fund reasonable compensation to agents,
attorneys, accountants and other persons to advise the Trustee as
in its opinion may be necessary. The Trustee may delegate to any
agent, attorney, accountant or other person selected by it any
non-Trustee power or duty vested in it by the Plan, and the
Trustee may act or refrain from acting on the advice or opinion
of any agent, attorney, accountant or other person so selected.
10.08 DISTRIBUTION OF CASH OR PROPERTY. The Trustee may
make distribution under the Plan in cash or property, or partly
in each, at its fair market value as determined by the Trustee.
For purposes of a distribution to a Participant or to a
Participant's designated Beneficiary or surviving spouse,
"property" includes a Nontransferable Annuity Contract, provided
the contract satisfies the requirements of this Plan.
10.09 DISTRIBUTION DIRECTIONS. If no one claims a
payment or distribution made from the Trust, the Trustee must
promptly notify the Advisory Committee and then dispose of the
payment in accordance with the subsequent direction of the
Advisory Committee.
10.10 THIRD PARTY/MULTIPLE TRUSTEES. No person dealing
with the Trustee is obligated to see to the proper application of
any money paid or property delivered to the Trustee, or to
inquire whether the Trustee has acted pursuant to any of the
terms of the Plan. Each person dealing with the Trustee may act
upon any notice, request or representation in writing by the
Trustee, or by the Trustee's duly authorized agent, and is not
liable to any person in so acting. The certificate of the Trustee
that it is acting in accordance with the Plan will be conclusive
in favor of any person relying on the certificate. If more than
two persons act as Trustee, a decision of the majority of such
persons controls with respect to any decision regarding the
administration or investment of the Trust Fund or of any portion
of the Trust Fund with respect to which such persons act as
Trustee. However, the signature of only one Trustee is necessary
to effect any transaction on behalf of the Trust.
10.11 RESIGNATION. The Trustee or Custodian may resign
its position at any time by giving 30 days' written notice in
advance to the Employer and to the Advisory Committee. If the
Employer fails to appoint a successor Trustee within 60 days of
its receipt of the Trustee's written notice of resignation, the
Trustee will treat the Employer as having appointed itself as
Trustee and as having filed its acceptance of appointment with
the former Trustee. The Employer, in its sole discretion, may
replace a Custodian. If the Employer does not replace a
Custodian, the discretionary Trustee will assume possession of
Plan assets held by the former Custodian.
10.12 REMOVAL. The Employer, by giving 30 days' written
notice in advance to the Trustee, may remove any Trustee or
Custodian. In the event of the resignation or removal of a
Trustee, the Employer must appoint a successor Trustee if it
intends to continue the Plan. If two or more persons hold the
position of Trustee, in the event of the removal of one such
person, during any period the selection of a replacement is
pending, or during any period such person is unable to serve for
any reason, the remaining person or persons will act as the
Trustee.
10.13 INTERIM DUTIES AND SUCCESSOR TRUSTEE. Each
successor Trustee succeeds to the title to the Trust vested in
his predecessor by accepting in writing his appointment as
successor Trustee and by filing the acceptance with the former
Trustee and the Advisory Committee without the signing or filing
of any further statement. The resigning or removed Trustee, upon
receipt of acceptance in writing of the Trust by the successor
Trustee, must execute all documents and do all acts necessary to
vest the title of record in any successor Trustee. Each successor
Trustee has and enjoys all of the powers, both discretionary and
ministerial, conferred under this Agreement upon his predecessor.
A successor Trustee is not personally liable for any act or
failure to act of any predecessor Trustee, except as required
under ERISA. With the approval of the Employer and the Advisory
Committee, a successor Trustee, with respect to the Plan, may
accept the account rendered and the property delivered to it by a
predecessor Trustee without incurring any liability or
responsibility for so doing.
10.14 VALUATION OF TRUST. The Trustee must value the
Trust Fund as of each Accounting Date to determine the fair
market value of each Participant's Accrued Benefit in the Trust.
The Trustee also must value the Trust Fund on such other
valuation dates as directed in writing by the Advisory Committee
or as required by the Employer's Adoption Agreement.
10.15 LIMITATION ON LIABILITY - IF INVESTMENT MANAGER,
ANCILLARY TRUSTEE OR INDEPENDENT FIDUCIARY APPOINTED. The Trustee
is not liable for the acts or omissions of any Investment Manager
the Advisory Committee may appoint, nor is the Trustee under any
obligation to invest or otherwise manage any asset of the Plan
which is subject to the management of a properly appointed
Investment Manager. The Advisory Committee, the Trustee and any
properly appointed Investment Manager may execute a letter
agreement as a part of this Plan delineating the duties,
responsibilities and liabilities of the Investment Manager with
respect to any part of the Trust Fund under the control of the
Investment Manager.
The limitation on liability described in this Section 10.15
also applies to the acts or omissions of any ancillary trustee or
independent fiduciary properly appointed under Section 10.17 of
the Plan. However, if a discretionary Trustee, pursuant to the
delegation described in Section 10.17 of the Plan, appoints an
ancillary trustee, the discretionary Trustee is responsible for
the periodic review of the ancillary trustee's actions and must
exercise its delegated authority in accordance with the terms of
the Plan and in a manner consistent with ERISA. The Employer, the
discretionary Trustee and an ancillary trustee may execute a
letter agreement as a part of this Plan delineating any
indemnification agreement between the parties.
10.16 INVESTMENT IN GROUP TRUST FUND. The Employer, by
adopting this Plan, specifically authorizes the Trustee to invest
all or any portion of the assets comprising the Trust Fund in any
group trust fund which at the time of the investment provides for
the pooling of the assets of plans qualified under Code Section 401(a).
This authorization applies solely to a group trust fund exempt
from taxation under Code Section 501(a) and the trust agreement of which
satisfies the requirements of Revenue Ruling 81-100. The
provisions of the group trust fund agreement, as amended from
time to time, are by this reference incorporated within this Plan
and Trust. The provisions of the group trust fund will govern any
investment of Plan assets in that fund. The Employer must specify
in an attachment to its adoption agreement the group trust
fund(s) to which this authorization applies. If the Trustee is
acting as a nondiscretionary Trustee, the investment in the group
trust fund is available only in accordance with a proper
direction, by the Named Fiduciary, in accordance with Section
10.03[B]. Pursuant to paragraph (c) of Section 10.03[A] of the
Plan, a Trustee has the authority to invest in certain common
trust funds and collective investment funds without the need for
the authorizing addendum described in this Section 10.16.
Furthermore, at the Employer's direction, the Trustee, for
collective investment purposes, may combine into one trust fund
the Trust created under this Plan with the Trust created under
any other qualified retirement plan the Employer maintains.
However, the Trustee must maintain separate records of account
for the assets of each Trust in order to reflect properly each
Participant's Accrued Benefit under the plan(s) in which he is a
Participant.
10.17 APPOINTMENT OF ANCILLARY TRUSTEE OR INDEPENDENT
FIDUCIARY. The Employer, in writing, may appoint any person in
any State to act as ancillary trustee with respect to a
designated portion of the Trust Fund, subject to the consent
required under Section 1.02 if the Master Plan Sponsor is a
financial institution. An ancillary trustee must acknowledge in
writing its acceptance of the terms and conditions of its
appointment as ancillary trustee and its fiduciary status under
ERISA. The ancillary trustee has the rights, powers, duties and
discretion as the Employer may delegate, subject to any
limitations or directions specified in the instrument evidencing
appointment of the ancillary trustee and to the terms of the Plan
or of ERISA. The investment powers delegated to the ancillary
trustee may include any investment powers available under Section
10.03 of the Plan including the right to invest any portion of
the assets of the Trust Fund in a common trust fund, as described
in Code Section 584, or in any collective investment fund, the
provisions of which govern the investment of such assets and
which the Plan incorporates by this reference, but only if the
ancillary trustee is a bank or similar financial institution
supervised by the United States or by a State and the ancillary
trustee (or its affiliate, as defined in Code Section 1504) maintains
the common trust fund or collective investment fund exclusively
for the collective investment of money contributed by the
ancillary trustee (or its affiliate) in a trustee capacity and
which conforms to the rules of the Comptroller of the Currency.
The Employer also may appoint as an ancillary trustee, the
trustee of any group trust fund designated for investment
pursuant to the provisions of Section 10.16 of the Plan.
The ancillary trustee may resign its position at any time by
providing at least 30 days' advance written notice to the
Employer, unless the Employer waives this notice requirement. The
Employer, in writing, may remove an ancillary trustee at any
time. In the event of resignation or removal, the Employer may
appoint another ancillary trustee, return the assets to the
control and management of the Trustee or receive such assets in
the capacity of ancillary trustee. The Employer may delegate its
responsibilities under this Section 10.17 to a discretionary
Trustee under the Plan, but not to a nondiscretionary Trustee or
to a Custodian, subject to the acceptance by the discretionary
Trustee of that delegation.
If the U.S. Department of Labor ("the Department") requires
engagement of an independent fiduciary to have control or
management of all or a portion of the Trust Fund, the Employer
will appoint such independent fiduciary, as directed by the
Department. The independent fiduciary will have the duties,
responsibilities and powers prescribed by the Department and will
exercise those duties, responsibilities and powers in accordance
with the terms, restrictions and conditions established by the
Department and, to the extent not inconsistent with ERISA, the
terms of the Plan. The independent fiduciary must accept its
appointment in writing and must acknowledge its status as a
fiduciary of the Plan.
* * * * * * * * * * * * * * *
ARTICLE XI
PROVISIONS RELATING TO INSURANCE AND INSURANCE COMPANY
11.01 INSURANCE BENEFIT. The Employer may elect to
provide incidental life insurance benefits for insurable
Participants who consent to life insurance benefits by signing
the appropriate insurance company application form. The Trustee
will not purchase any incidental life insurance benefit for any
Participant prior to an allocation to the Participant's Account.
At an insured Participant's written direction, the Trustee will
use all or any portion of the Participant's nondeductible
voluntary contributions, if any, to pay insurance premiums
covering the Participant's life. This Section 11.01 also
authorizes the purchase of life insurance, for the benefit of the
Participant, on the life of a family member of the Participant or
on any person in whom the Participant has an insurable interest.
However, if the policy is on the joint lives of the Participant
and another person, the Trustee may not maintain that policy if
that other person predeceases the Participant.
The Employer will direct the Trustee as to the insurance
company and insurance agent through which the Trustee is to
purchase the insurance contracts, the amount of the coverage and
the applicable dividend plan. Each application for a policy, and
the policies themselves, must designate the Trustee as sole
owner, with the right reserved to the Trustee to exercise any
right or option contained in the policies, subject to the terms
and provisions of this Agreement. The Trustee must be the named
beneficiary for the Account of the insured Participant. Proceeds
of insurance contracts paid to the Participant's Account under
this Article XI are subject to the distribution requirements of
Article V and of Article VI. The Trustee will not retain any such
proceeds for the benefit of the Trust.
The Trustee will charge the premiums on any incidental
benefit insurance contract covering the life of a Participant
against the Account of that Participant. The Trustee will hold
all incidental benefit insurance contracts issued under the Plan
as assets of the Trust created under the Plan.
(A) Incidental insurance benefits. The aggregate of life
insurance premiums paid for the benefit of a Participant, at all
times, may not exceed the following percentages of the aggregate
of the Employer's contributions allocated to any Participant's
Account: (i) 49% in the case of the purchase of ordinary life
insurance contracts; or (ii) 25% in the case of the purchase of
term life insurance or universal life insurance contracts. If the
Trustee purchases a combination of ordinary life insurance
contract(s) and term life insurance or universal life insurance
contract(s), then the sum of one-half of the premiums paid for
the ordinary life insurance contract(s) and the premiums paid for
the term life insurance or universal life insurance contract(s)
may not exceed 25% of the Employer contributions allocated to any
Participant's Account.
(B) Exception for certain profit sharing plans. If the
Employer's Plan is a profit sharing plan, the incidental
insurance benefits requirement does not apply to the Plan if the
Plan purchases life insurance benefits only from Employer
contributions accumulated in the Participant's Account for at
least two years (measured from the allocation date).
11.02 LIMITATION ON LIFE INSURANCE PROTECTION. The
Trustee will not continue any life insurance protection for any
Participant beyond his annuity starting date (as defined in
Article VI). If the Trustee holds any incidental benefit
insurance contract(s) for the benefit of a Participant when he
terminates his employment (other than by reason of death), the
Trustee must proceed as follows:
(a) If the entire cash value of the contract(s) is vested
in the terminating Participant, or if the contract(s) will
have no cash value at the end of the policy year in which
termination of employment occurs, the Trustee will transfer
the contract(s) to the Participant endorsed so as to vest in
the transferee all right, title and interest to the
contract(s), free and clear of the Trust; subject however,
to restrictions as to surrender or payment of benefits as
the issuing insurance company may permit and as the Advisory
Committee directs;
(b) If only part of the cash value of the contract(s) is
vested in the terminating Participant, the Trustee, to the
extent the Participant's interest in the cash value of the
contract(s) is not vested, may adjust the Participant's
interest in the value of his Account attributable to Trust
assets other than incidental benefit insurance contracts and
proceed as in (a), or the Trustee must effect a loan from
the issuing insurance company on the sole security of the
contract(s) for an amount equal to the difference between
the cash value of the contract(s) at the end of the policy
year in which termination of employment occurs and the
amount of the cash value that is vested in the terminating
Participant, and the Trustee must transfer the contract(s)
endorsed so as to vest in the transferee all right, title
and interest to the contract(s), free and clear of the
Trust; subject however, to the restrictions as to surrender
or payment of benefits as the issuing insurance company may
permit and the Advisory Committee directs;
(c) If no part of the cash value of the contract(s) is
vested in the terminating Participant, the Trustee must
surrender the contract(s) for cash proceeds as may be
available.
In accordance with the written direction of the Advisory
Committee, the Trustee will make any transfer of contract(s)
under this Section 11.02 on the Participant's annuity starting
date (or as soon as administratively practicable after that
date). The Trustee may not transfer any contract under this
Section 11.02 which contains a method of payment not specifically
authorized by Article VI or which fails to comply with the joint
and survivor annuity requirements, if applicable, of Article VI.
In this regard, the Trustee either must convert such a contract
to cash and distribute the cash instead of the contract, or
before making the transfer, require the issuing company to delete
the unauthorized method of payment option from the contract.
11.03 DEFINITIONS. For purposes of this Article XI:
(a) "Policy" means an ordinary life insurance contract or a
term life insurance contract issued by an insurer on the
life of a Participant.
(b) "Issuing insurance company" is any life insurance
company which has issued a policy upon application by the
Trustee under the terms of this Agreement.
(c) "Contract" or "Contracts" means a policy of insurance.
In the event of any conflict between the provisions of this
Plan and the terms of any contract or policy of insurance
issued in accordance with this Article XI, the provisions of
the Plan control.
(d) "Insurable Participant" means a Participant to whom an
insurance company, upon an application being submitted in
accordance with the Plan, will issue insurance coverage,
either as a standard risk or as a risk in an extra mortality
classification.
11.04 DIVIDEND PLAN. The dividend plan is premium
reduction unless the Advisory Committee directs the Trustee to
the contrary. The Trustee must use all dividends for a contract
to purchase insurance benefits or additional insurance benefits
for the Participant on whose life the insurance company has
issued the contract. Furthermore, the Trustee must arrange, where
possible, for all policies issued on the lives of Participants
under the Plan to have the same premium due date and all ordinary
life insurance contracts to contain guaranteed cash values with
as uniform basic options as are possible to obtain. The term
"dividends" includes policy dividends, refunds of premiums and
other credits.
11.05 INSURANCE COMPANY NOT A PARTY TO AGREEMENT. No
insurance company, solely in its capacity as an issuing insurance
company, is a party to this Agreement nor is the company
responsible for its validity.
11.06 INSURANCE COMPANY NOT RESPONSIBLE FOR TRUSTEE'S
ACTIONS. No insurance company, solely in its capacity as an
issuing insurance company, need examine the terms of this
Agreement nor is responsible for any action taken by the Trustee.
11.07 INSURANCE COMPANY RELIANCE ON TRUSTEE'S SIGNATURE.
For the purpose of making application to an insurance company and
in the exercise of any right or option contained in any policy,
the insurance company may rely upon the signature of the Trustee
and is saved harmless and completely discharged in acting at the
direction and authorization of the Trustee.
11.08 ACQUITTANCE. An insurance company is discharged
from all liability for any amount paid to the Trustee or paid in
accordance with the direction of the Trustee, and is not obliged
to see to the distribution or further application of any moneys
it so pays.
11.09 DUTIES OF INSURANCE COMPANY. Each insurance
company must keep such records, make such identification of
contracts, funds and accounts within funds, and supply such
information as may be necessary for the proper administration of
the Plan under which it is carrying insurance benefits.
Note: The provisions of this Article XI are not applicable,
and the Plan may not invest in insurance contracts, if a
Custodian signatory to the Adoption Agreement is a bank which has
not acquired trust powers from its governing state banking
authority.
* * * * * * * * * * * * * * *
ARTICLE XII
MISCELLANEOUS
12.01 EVIDENCE. Anyone required to give evidence under
the terms of the Plan may do so by certificate, affidavit,
document or other information which the person to act in reliance
may consider pertinent, reliable and genuine, and to have been
signed, made or presented by the proper party or parties. The
Advisory Committee and the Trustee are fully protected in acting
and relying upon any evidence described under the immediately
preceding sentence.
12.02 NO RESPONSIBILITY FOR EMPLOYER ACTION. Neither the
Trustee nor the Advisory Committee has any obligation or
responsibility with respect to any action required by the Plan to
be taken by the Employer, any Participant or eligible Employee,
or for the failure of any of the above persons to act or make any
payment or contribution, or to otherwise provide any benefit
contemplated under this Plan. Furthermore, the Plan does not
require the Trustee or the Advisory Committee to collect any
contribution required under the Plan, or to determine the
correctness of the amount of any Employer contribution. Neither
the Trustee nor the Advisory Committee need inquire into or be
responsible for any action or failure to act on the part of the
others, or on the part of any other person who has any
responsibility regarding the management, administration or
operation of the Plan, whether by the express terms of the Plan
or by a separate agreement authorized by the Plan or by the
applicable provisions of ERISA. Any action required of a
corporate Employer must be by its Board of Directors or its
designate.
12.03 FIDUCIARIES NOT INSURERS. The Trustee, the
Advisory Committee, the Plan Administrator and the Employer in no
way guarantee the Trust Fund from loss or depreciation. The
Employer does not guarantee the payment of any money which may be
or becomes due to any person from the Trust Fund. The liability
of the Advisory Committee and the Trustee to make any payment
from the Trust Fund at any time and all times is limited to the
then available assets of the Trust.
12.04 WAIVER OF NOTICE. Any person entitled to notice
under the Plan may waive the notice, unless the Code or Treasury
regulations prescribe the notice or ERISA specifically or
impliedly prohibits such a waiver.
12.05 SUCCESSORS. The Plan is binding upon all persons
entitled to benefits under the Plan, their respective heirs and
legal representatives, upon the Employer, its successors and
assigns, and upon the Trustee, the Advisory Committee, the Plan
Administrator and their successors.
12.06 WORD USAGE. Words used in the masculine also apply
to the feminine where applicable, and wherever the context of the
Employer's Plan dictates, the plural includes the singular and
the singular includes the plural.
12.07 STATE LAW. The law of the state of the Employer's
principal place of business (unless otherwise designated in an
addendum to the Employer's Adoption Agreement) will determine all
questions arising with respect to the provisions of this
Agreement except to the extent superseded by Federal law.
12.08 EMPLOYER'S RIGHT TO PARTICIPATE. If the Employer's
Plan fails to qualify or to maintain qualification or if the
Employer makes any amendment or modification to a provision of
this Plan (other than a proper completion of an elective
provision under the Adoption Agreement or the attachment of an
addendum authorized by the Plan or by the Adoption Agreement),
the Employer may no longer participate under this Master Plan.
The Employer also may not participate (or continue to
participate) in this Master Plan if the Trustee or Custodian (or
a change in the Trustee or Custodian) does not satisfy the
requirements of Section 1.02 of the Plan. If the Employer is not
entitled to participate under this Master Plan, the Employer's
Plan is an individually-designed plan and the reliance procedures
specified in the applicable Adoption Agreement no longer will
apply.
12.09 EMPLOYMENT NOT GUARANTEED. Nothing contained in
this Plan, or with respect to the establishment of the Trust, or
any modification or amendment to the Plan or Trust, or in the
creation of any Account, or the payment of any benefit, gives any
Employee, Employee-Participant or any Beneficiary any right to
continue employment, any legal or equitable right against the
Employer, or Employee of the Employer, or against the Trustee, or
its agents or employees, or against the Plan Administrator,
except as expressly provided by the Plan, the Trust, ERISA or by
a separate agreement.
* * * * * * * * * * * * * * *
ARTICLE XIII
EXCLUSIVE BENEFIT, AMENDMENT, TERMINATION
13.01 EXCLUSIVE BENEFIT. Except as provided under
Article III, the Employer has no beneficial interest in any asset
of the Trust and no part of any asset in the Trust may ever
revert to or be repaid to an Employer, either directly or
indirectly; nor, prior to the satisfaction of all liabilities
with respect to the Participants and their Beneficiaries under
the Plan, may any part of the corpus or income of the Trust Fund,
or any asset of the Trust, be (at any time) used for, or diverted
to, purposes other than the exclusive benefit of the Participants
or their Beneficiaries. However, if the Commissioner of Internal
Revenue, upon the Employer's request for initial approval of this
Plan, determines the Trust created under the Plan is not a
qualified trust exempt from Federal income tax, then (and only
then) the Trustee, upon written notice from the Employer, will
return the Employer's contributions (and increment attributable
to the contributions) to the Employer. The Trustee must make the
return of the Employer contribution under this Section 13.01
within one year of a final disposition of the Employer's request
for initial approval of the Plan. The Employer's Plan and Trust
will terminate upon the Trustee's return of the Employer's
contributions.
13.02 AMENDMENT BY EMPLOYER. The Employer has the
right at any time and from time to time:
(a) To amend the elective provisions of the Adoption
Agreement in any manner it deems necessary or advisable in
order to qualify (or maintain qualification of) this Plan
and the Trust created under it under the provisions of Code
Section 401(a);
(b) To amend the Plan to allow the Plan to operate under a
waiver of the minimum funding requirement; and
(c) To amend this Agreement in any other manner.
No amendment may authorize or permit any of the Trust Fund
(other than the part which is required to pay taxes and
administration expenses) to be used for or diverted to purposes
other than for the exclusive benefit of the Participants or their
Beneficiaries or estates. No amendment may cause or permit any
portion of the Trust Fund to revert to or become a property of
the Employer. The Employer also may not make any amendment which
affects the rights, duties or responsibilities of the Trustee,
the Plan Administrator or the Advisory Committee without the
written consent of the affected Trustee, the Plan Administrator
or the affected member of the Advisory Committee. The Employer
must make all amendments in writing. Each amendment must state
the date to which it is either retroactively or prospectively
effective. See Section 12.08 for the effect of certain amendments
adopted by the Employer.
(A) Code Section 411(d)(6) protected benefits. An amendment (including
the adoption of this Plan as a restatement of an existing plan)
may not decrease a Participant's Accrued Benefit, except to the
extent permitted under Code Section 412(c)(8), and may not reduce or
eliminate Code Section 411(d)(6) protected benefits determined
immediately prior to the adoption date (or, if later, the
effective date) of the amendment. An amendment reduces or
eliminates Code Section 411(d)(6) protected benefits if the amendment
has the effect of either (1) eliminating or reducing an early
retirement benefit or a retirement-type subsidy (as defined in
Treasury regulations), or (2) except as provided by Treasury
regulations, eliminating an optional form of benefit. The
Advisory Committee must disregard an amendment to the extent
application of the amendment would fail to satisfy this
paragraph. If the Advisory Committee must disregard an amendment
because the amendment would violate clause (1) or clause (2), the
Advisory Committee must maintain a schedule of the early
retirement option or other optional forms of benefit the Plan
must continue for the affected Participants.
13.03 AMENDMENT BY MASTER PLAN SPONSOR. The Master Plan
Sponsor (or PPD, as agent of the Master Plan Sponsor), without
the Employer's consent, may amend the Plan and Trust, from time
to time, in order to conform the Plan and Trust to any
requirement for qualification of the Plan and Trust under the
Internal Revenue Code. The Master Plan Sponsor may not amend the
Plan in any manner which would modify any election made by the
Employer under the Plan without the Employer's written consent.
Furthermore, the Master Plan Sponsor may not amend the Plan in
any manner which would violate the proscription of Section 13.02.
A Trustee does not have the power to amend the Plan or Trust.
13.04 DISCONTINUANCE. The Employer has the right, at any
time, to suspend or discontinue its contributions under the Plan,
and to terminate, at any time, this Plan and the Trust created
under this Agreement. The Plan will terminate upon the first to
occur of the following:
(a) The date terminated by action of the Employer;
(b) The dissolution or merger of the Employer, unless the
successor makes provision to continue the Plan, in which
event the successor must substitute itself as the Employer
under this Plan. Any termination of the Plan resulting from
this paragraph (b) is not effective until compliance with
any applicable notice requirements under ERISA.
13.05 FULL VESTING ON TERMINATION. Upon either full or
partial termination of the Plan, or, if applicable, upon complete
discontinuance of profit sharing plan contributions to the Plan,
an affected Participant's right to his Accrued Benefit is 100%
Nonforfeitable, irrespective of the Nonforfeitable percentage
which otherwise would apply under Article V.
13.06 MERGER/DIRECT TRANSFER. The Trustee may not
consent to, or be a party to, any merger or consolidation with
another plan, or to a transfer of assets or liabilities to
another plan, unless immediately after the merger, consolidation
or transfer, the surviving Plan provides each Participant a
benefit equal to or greater than the benefit each Participant
would have received had the Plan terminated immediately before
the merger or consolidation or transfer. The Trustee possesses
the specific authority to enter into merger agreements or direct
transfer of assets agreements with the trustees of other
retirement plans described in Code Section 401(a), including an elective
transfer, and to accept the direct transfer of plan assets, or to
transfer plan assets, as a party to any such agreement.
The Trustee may accept a direct transfer of plan assets on
behalf of an Employee prior to the date the Employee satisfies
the Plan's eligibility conditions. If the Trustee accepts such a
direct transfer of plan assets, the Advisory Committee and
Trustee must treat the Employee as a Participant for all purposes
of the Plan except the Employee is not a Participant for purposes
of sharing in Employer contributions or Participant forfeitures
under the Plan until he actually becomes a Participant in the
Plan.
(A) Elective transfers. The Trustee, after August 9, 1988, may
not consent to, or be a party to a merger, consolidation or
transfer of assets with a defined benefit plan, except with
respect to an elective transfer, or unless the transferred
benefits are in the form of paid-up individual annuity contracts
guaranteeing the payment of the transferred benefits in
accordance with the terms of the transferor plan and in a manner
consistent with the Code and with ERISA. The Trustee will hold,
administer and distribute the transferred assets as a part of the
Trust Fund and the Trustee must maintain a separate Employer
contribution Account for the benefit of the Employee on whose
behalf the Trustee accepted the transfer in order to reflect the
value of the transferred assets. Unless a transfer of assets to
this Plan is an elective transfer, the Plan will preserve all
Code Section 411(d)(6) protected benefits with respect to those
transferred assets, in the manner described in Section 13.02. A
transfer is an elective transfer if: (1) the transfer satisfies
the first paragraph of this Section 13.06; (2) the transfer is
voluntary, under a fully informed election by the Participant;
(3) the Participant has an alternative that retains his Code
Section 411(d)(6) protected benefits (including an option to leave his
benefit in the transferor plan, if that plan is not terminating);
(4) the transfer satisfies the applicable spousal consent
requirements of the Code; (5) the transferor plan satisfies the
joint and survivor notice requirements of the Code, if the
Participant's transferred benefit is subject to those
requirements; (6) the Participant has a right to immediate
distribution from the transferor plan, in lieu of the elective
transfer; (7) the transferred benefit is at least the greater of
the single sum distribution provided by the transferor plan for
which the Participant is eligible or the present value of the
Participant's accrued benefit under the transferor plan payable
at that plan's normal retirement age; (8) the Participant has a
100% Nonforfeitable interest in the transferred benefit; and (9)
the transfer otherwise satisfies applicable Treasury regulations.
An elective transfer may occur between qualified plans of any
type. Any direct transfer of assets from a defined benefit plan
after August 9, 1988, which does not satisfy the requirements of
this paragraph will render the Employer's Plan individually-
designed. See Section 12.08.
(B) Distribution restrictions under Code Section 401(k). If the Plan
receives a direct transfer (by merger or otherwise) of elective
contributions (or amounts treated as elective contributions)
under a Plan with a Code Section 401(k) arrangement, the distribution
restrictions of Code Section Section 401(k)(2) and (10) continue to apply to
those transferred elective contributions.
13.07 TERMINATION.
(A) Procedure. Upon termination of the Plan, the distribution
provisions of Article VI remain operative, with the following
exceptions:
(1) if the present value of the Participant's Nonforfeitable
Accrued Benefit does not exceed $3,500, the Advisory
Committee will direct the Trustee to distribute the
Participant's Nonforfeitable Accrued Benefit to him in lump
sum as soon as administratively practicable after the Plan
terminates; and
(2) if the present value of the Participant's Nonforfeitable
Accrued Benefit exceeds $3,500, the Participant or the
Beneficiary, in addition to the distribution events
permitted under Article VI, may elect to have the Trustee
commence distribution of his Nonforfeitable Accrued Benefit
as soon as administratively practicable after the Plan
terminates.
To liquidate the Trust, the Advisory Committee will purchase
a deferred annuity contract for each Participant which protects
the Participant's distribution rights under the Plan, if the
Participant's Nonforfeitable Accrued Benefit exceeds $3,500 and
the Participant does not elect an immediate distribution pursuant
to Paragraph (2).
If the Employer's Plan is a profit sharing plan, in lieu of
the preceding provisions of this Section 13.07 and the
distribution provisions of Article VI, the Advisory Committee
will direct the Trustee to distribute each Participant's
Nonforfeitable Accrued Benefit, in lump sum, as soon as
administratively practicable after the termination of the Plan,
irrespective of the present value of the Participant's
Nonforfeitable Accrued Benefit and whether the Participant
consents to that distribution. This paragraph does not apply if:
(1) the Plan provides an annuity option; or (2) as of the period
between the Plan termination date and the final distribution of
assets, the Employer maintains any other defined contribution
plan (other than an ESOP). The Employer, in an addendum to its
Adoption Agreement numbered 13.07, may elect not to have this
paragraph apply.
The Trust will continue until the Trustee in accordance with
the direction of the Advisory Committee has distributed all of
the benefits under the Plan. On each valuation date, the Advisory
Committee will credit any part of a Participant's Accrued Benefit
retained in the Trust with its proportionate share of the Trust's
income, expenses, gains and losses, both realized and unrealized.
Upon termination of the Plan, the amount, if any, in a suspense
account under Article III will revert to the Employer, subject to
the conditions of the Treasury regulations permitting such a
reversion. A resolution or amendment to freeze all future benefit
accrual but otherwise to continue maintenance of this Plan, is
not a termination for purposes of this Section 13.07.
(B) Distribution restrictions under Code Section 401(k). If the
Employer's Plan includes a Code Section 401(k) arrangement or if
transferred assets described in Section 13.06 are subject to the
distribution restrictions of Code Section Section 401(k)(2) and (10), the
special distribution provisions of this Section 13.07 are subject
to the restrictions of this paragraph. The portion of the
Participant's Nonforfeitable Accrued Benefit attributable to
elective contributions (or to amounts treated under the Code
Section 401(k) arrangement as elective contributions) is not
distributable on account of Plan termination, as described in
this Section 13.07, unless: (a) the Participant otherwise is
entitled under the Plan to a distribution of that portion of his
Nonforfeitable Accrued Benefit; or (b) the Plan termination
occurs without the establishment of a successor plan. A
successor plan under clause (b) is a defined contribution plan
(other than an ESOP) maintained by the Employer (or by a related
employer) at the time of the termination of the Plan or within
the period ending twelve months after the final distribution of
assets. A distribution made after March 31, 1988, pursuant to
clause (b), must be part of a lump sum distribution to the
Participant of his Nonforfeitable Accrued Benefit.
* * * * * * * * * * * * * * *
ARTICLE XIV
CODE Section 401(k) AND CODE Section 401(m) ARRANGEMENTS
14.01 APPLICATION. This Article XIV applies to an Employer's
Plan only if the Employer is maintaining its Plan under a Code
Section 401(k) Adoption Agreement.
14.02 CODE Section 401(k) ARRANGEMENT. The Employer will elect in
Section 3.01 of its Adoption Agreement the terms of the Code
Section 401(k) arrangement, if any, under the Plan. If the Employer's
Plan is a Standardized Plan, the Code Section 401(k) arrangement must be
a salary reduction arrangement. If the Employer's Plan is a
Nonstandardized Plan, the Code Section 401(k) arrangement may be a
salary reduction arrangement or a cash or deferred arrangement.
(A) Salary Reduction Arrangement. If the Employer elects a
salary reduction arrangement, any Employee eligible to
participate in the Plan may file a salary reduction agreement
with the Advisory Committee. The salary reduction agreement may
not be effective earlier than the following date which occurs
last: (i) the Employee's Plan Entry Date (or, in the case of a
reemployed Employee, his reparticipation date under Article II);
(ii) the execution date of the Employee's salary reduction
agreement; (iii) the date the Employer adopts the Code Section 401(k)
arrangement by executing the Adoption Agreement; or (iv) the
effective date of the Code Section 401(k) arrangement, as specified in
the Employer's Adoption Agreement. Regarding clause (i), an
Employee subject to the Break in Service rule of Section 2.03(B)
of the Plan may not enter into a salary reduction agreement until
the Employee has completed a sufficient number of Hours of
Service to receive credit for a Year of Service (as defined in
Section 2.02) following his reemployment commencement date. A
salary reduction agreement must specify the amount of
Compensation (as defined in Section 1.12) or percentage of
Compensation the Employee wishes to defer. The salary reduction
agreement will apply only to Compensation which becomes currently
available to the Employee after the effective date of the salary
reduction agreement. The Employer will apply a reduction election
to all Compensation (and to increases in such Compensation)
unless the Employee specifies in his salary reduction agreement
to limit the election to certain Compensation. The Employer will
specify in Adoption Agreement Section 3.01 the rules and
restrictions applicable to the Employees salary reduction
agreements.
(B) Cash or deferred arrangement. If the Employer elects a cash
or deferred arrangement, a Participant may elect to make a cash
election against his proportionate share of the Employer's Cash
or Deferred Contribution, in accordance with the Employer's
elections in Adoption Agreement Section 3.01. A Participant's
proportionate share of the Employer's Cash or Deferred
Contribution is the percentage of the total Cash or Deferred
Contribution which bears the same ratio that the Participant's
Compensation for the Plan Year bears to the total Compensation of
all Participants for the Plan Year. For purposes of determining
each Participant's proportionate share of the Cash or Deferred
Contribution, a Participant's Compensation is his Compensation as
determined under Section 1.12 of the Plan (as modified by Section
3.06 for allocation purposes), excluding any effect the
proportionate share may have on the Participant's Compensation
for the Plan Year. The Advisory Committee will determine the
proportionate share prior to the Employer's actual contribution
to the Trust, to provide the Participants the opportunity to file
cash elections. The Employer will pay directly to the Participant
the portion of his proportionate share the Participant has
elected to receive in cash.
(C) Election not to participate. A Participant's or Employee's
election not to participate, pursuant to Section 2.06, includes
his right to enter into a salary reduction agreement or to share
in the allocation of a Cash or Deferred Contribution, unless the
Participant or Employee limits the effect of the election to the
non-401(k) portions of the Plan.
14.03 DEFINITIONS. For purposes of this Article XIV:
(a) "Highly Compensated Employee" means an Eligible
Employee who satisfies the definition in Section 1.09 of the
Plan. Family members aggregated as a single Employee under
Section 1.09 constitute a single Highly Compensated
Employee, whether a particular family member is a Highly
Compensated Employee or a Nonhighly Compensated Employee
without the application of family aggregation.
(b) "Nonhighly Compensated Employee" means an Eligible
Employee who is not a Highly Compensated Employee and who is
not a family member treated as a Highly Compensated
Employee.
(c) "Eligible Employee" means, for purposes of the ADP test
described in Section 14.08, an Employee who is eligible to
enter into a salary reduction agreement for the Plan Year,
irrespective of whether he actually enters into such an
agreement, and a Participant who is eligible for an
allocation of the Employer's Cash or Deferred Contribution
for the Plan Year. For purposes of the ACP test described in
Section 14.09, an "Eligible Employee" means a Participant
who is eligible to receive an allocation of matching
contributions (or would be eligible if he made the type of
contributions necessary to receive an allocation of matching
contributions) and a Participant who is eligible to make
nondeductible contributions, irrespective of whether he
actually makes nondeductible contributions. An Employee
continues to be an Eligible Employee during a period the
Plan suspends the Employee's right to make elective
deferrals or nondeductible contributions following a
hardship distribution.
(d) "Highly Compensated Group" means the group of Eligible
Employees who are Highly Compensated Employees for the Plan
Year.
(e) "Nonhighly Compensated Group" means the group of
Eligible Employees who are Nonhighly Compensated Employees
for the Plan Year.
(f) "Compensation" means, except as specifically provided
in this Article XIV, Compensation as defined for
nondiscrimination purposes in Section 1.12(B) of the Plan.
To compute an Employee's ADP or ACP, the Advisory Committee
may limit Compensation taken into account to Compensation
received only for the portion of the Plan Year in which the
Employee was an Eligible Employee and only for the portion
of the Plan Year in which the Plan or the Code Section 401(k)
arrangement was in effect.
(g) "Deferral contributions" are Salary Reduction
Contributions and Cash or Deferred Contributions the
Employer contributes to the Trust on behalf of an Eligible
Employee, irrespective of whether, in the case of Cash or
Deferred Contributions, the contribution is at the election
of the Employee. For Salary Reduction Contributions, the
terms "deferral contributions" and "elective deferrals" have
the same meaning.
(h) "Elective deferrals" are all Salary Reduction
Contributions and that portion of any Cash or Deferred
Contribution which the Employer contributes to the Trust at
the election of an Eligible Employee. Any portion of a Cash
or Deferred Contribution contributed to the Trust because of
the Employee's failure to make a cash election is an
elective deferral. However, any portion of a Cash or
Deferred Contribution over which the Employee does not have
a cash election is not an elective deferral. Elective
deferrals do not include amounts which have become currently
available to the Employee prior to the election nor amounts
designated as nondeductible contributions at the time of
deferral or contribution.
(i) "Matching contributions" are contributions made by the
Employer on account of elective deferrals under a Code
Section 401(k) arrangement or on account of employee contributions.
Matching contributions also include Participant forfeitures
allocated on account of such elective deferrals or employee
contributions.
(j) "Nonelective contributions" are contributions made by
the Employer which are not subject to a deferral election by
an Employee and which are not matching contributions.
(k) "Qualified matching contributions" are matching
contributions which are 100% Nonforfeitable at all times and
which are subject to the distribution restrictions described
in paragraph (m). Matching contributions are not 100%
Nonforfeitable at all times if the Employee has a 100%
Nonforfeitable interest because of his Years of Service
taken into account under a vesting schedule. Any matching
contributions allocated to a Participant's Qualified
Matching Contributions Account under the Plan automatically
satisfy the definition of qualified matching contributions.
(l) "Qualified nonelective contributions" are nonelective
contributions which are 100% Nonforfeitable at all times and
which are subject to the distribution restrictions described
in paragraph (m). Nonelective contributions are not 100%
Nonforfeitable at all times if the Employee has a 100%
Nonforfeitable interest because of his Years of Service
taken into account under a vesting schedule. Any nonelective
contributions allocated to a Participant's Qualified
Nonelective Contributions Account under the Plan
automatically satisfy the definition of qualified
nonelective contributions.
(m) "Distribution restrictions" means the Employee may not
receive a distribution of the specified contributions (nor
earnings on those contributions) except in the event of (1)
the Participant's death, disability, termination of
employment or attainment of age 59 1/2, (2) financial hardship
satisfying the requirements of Code Section 401(k) and the
applicable Treasury regulations, (3) a plan termination,
without establishment of a successor defined contribution
plan (other than an ESOP), (4) a sale of substantially all
of the assets (within the meaning of Code Section 409(d)(2)) used
in a trade or business, but only to an employee who
continues employment with the corporation acquiring those
assets, or (5) a sale by a corporation of its interest in a
subsidiary (within the meaning of Code Section 409(d)(3)), but only
to an employee who continues employment with the subsidiary.
For Plan Years beginning after December 31, 1988, a
distribution on account of financial hardship, as described
in clause (2), may not include earnings on elective
deferrals credited as of a date later than December 31,
1988, and may not include qualified matching contributions
and qualified nonelective contributions, nor any earnings on
such contributions, credited after December 31, 1988. A plan
does not violate the distribution restrictions if, instead
of the December 31, 1988, date in the preceding sentence the
plan specifies a date not later than the end of the last
Plan Year ending before July 1, 1989. A distribution
described in clauses (3), (4) or (5), if made after March
31, 1988, must be a lump sum distribution, as required under
Code Section 401(k)(10).
(n) "Employee contributions" are contributions made by a
Participant on an after-tax basis, whether voluntary or
mandatory, and designated, at the time of contribution, as
an employee (or nondeductible) contribution. Elective
deferrals and deferral contributions are not employee
contributions. Participant nondeductible contributions, made
pursuant to Section 4.01 of the Plan, are employee
contributions.
14.04 MATCHING CONTRIBUTIONS/EMPLOYEE CONTRIBUTIONS. The
Employer may elect in Adoption Agreement Section 3.01 to provide
matching contributions. The Employer also may elect in Adoption
Agreement Section 4.01 to permit or to require a Participant to
make nondeductible contributions.
(A) Mandatory contributions. Any Participant nondeductible
contributions eligible for matching contributions are mandatory
contributions. The Advisory Committee will maintain a separate
accounting, pursuant to Section 4.06 of the Plan, to reflect the
Participant's Accrued Benefit derived from his mandatory
contributions. The Employer, under Adoption Agreement Section
4.05, may prescribe special distribution restrictions which will
apply to the Mandatory Contributions Account prior to the
Participant's Separation from Service. Following his Separation
from Service, the general distribution provisions of Article VI
apply to the distribution of the Participant's Mandatory
Contributions Account.
14.05 TIME OF PAYMENT OF CONTRIBUTIONS. The Employer must
make Salary Reduction Contributions to the Trust within an
administratively reasonable period of time after withholding the
corresponding Compensation from the Participant. Furthermore, the
Employer must make Salary Reduction Contributions, Cash or
Deferred Contributions, Employer matching contributions
(including qualified Employer matching contributions) and
qualified Employer nonelective contributions no later than the
time prescribed by the Code or by applicable Treasury
regulations. Salary Reduction Contributions and Cash or Deferred
Contributions are Employer contributions for all purposes under
this Plan, except to the extent the Code or Treasury regulations
prohibit the use of these contributions to satisfy the
qualification requirements of the Code.
14.06 SPECIAL ALLOCATION PROVISIONS - DEFERRAL
CONTRIBUTIONS, MATCHING CONTRIBUTIONS AND QUALIFIED NONELECTIVE
CONTRIBUTIONS. To make allocations under the Plan, the
Advisory Committee must establish a Deferral Contributions
Account, a Qualified Matching Contributions Account, a Regular
Matching Contributions Account, a Qualified Nonelective
Contributions Account and an Employer Contributions Account for
each Participant.
(A) Deferral contributions. The Advisory Committee will allocate
to each Participant's Deferral Contributions Account the amount
of Deferral Contributions the Employer makes to the Trust on
behalf of the Participant. The Advisory Committee will make this
allocation as of the last day of each Plan Year unless, in
Adoption Agreement Section 3.04, the Employer elects more
frequent allocation dates for salary reduction contributions.
(B) Matching contributions. The Employer must specify in its
Adoption Agreement whether the Advisory Committee will allocate
matching contributions to the Qualified Matching Contributions
Account or to the Regular Matching Contributions Account of each
Participant. The Advisory Committee will make this allocation as
of the last day of each Plan Year unless, in Adoption Agreement
Section 3.04, the Employer elects more frequent allocation dates
for matching contributions.
(1) To the extent the Employer makes matching contributions
under a fixed matching contribution formula, the Advisory
Committee will allocate the matching contribution to the
Account of the Participant on whose behalf the Employer
makes that contribution. A fixed matching contribution
formula is a formula under which the Employer contributes a
certain percentage or dollar amount on behalf of a
Participant based on that Participant's deferral
contributions or nondeductible contributions eligible for a
match, as specified in Section 3.01 of the Employer's
Adoption Agreement. The Employer may contribute on a
Participant's behalf under a specific matching contribution
formula only if the Participant satisfies the accrual
requirements for matching contributions specified in Section
3.06 of the Employer's Adoption Agreement and only to the
extent the matching contribution does not exceed the
Participant's annual additions limitation in Part 2 of
Article III.
(2) To the extent the Employer makes matching contributions
under a discretionary formula, the Advisory Committee will
allocate the discretionary matching contributions to the
Account of each Participant who satisfies the accrual
requirements for matching contributions specified in Section
3.06 of the Employer's Adoption Agreement. The allocation of
discretionary matching contributions to a Participant's
Account is in the same proportion that each Participant's
eligible contributions bear to the total eligible
contributions of all Participants. If the discretionary
formula is a tiered formula, the Advisory Committee will
make this allocation separately with respect to each tier of
eligible contributions, allocating in such manner the amount
of the matching contributions made with respect to that
tier. "Eligible contributions" are the Participant's
deferral contributions or nondeductible contributions
eligible for an allocation of matching contributions, as
specified in Section 3.01 of the Employer's Adoption
Agreement.
If the matching contribution formula applies both to
deferral contributions and to Participant nondeductible
contributions, the matching contributions apply first to deferral
contributions. Furthermore, the matching contribution formula
does not apply to deferral contributions that are excess
deferrals under Section 14.07. For this purpose: (a) excess
deferrals relate first to deferral contributions for the Plan
Year not otherwise eligible for a matching contribution; and (2)
if the Plan Year is not a calendar year, the excess deferrals for
a Plan Year are the last elective deferrals made for a calendar
year. Under a Standardized Plan, an Employee forfeits any
matching contribution attributable to an excess contribution or
to an excess aggregate contribution, unless distributed pursuant
to Sections 14.08 or 14.09. Under a Nonstandardized Plan, this
forfeiture rule applies only if specified in Adoption Agreement
Section 3.06. The provisions of Section 3.05 govern the treatment
of any forfeiture described in this paragraph, and the Advisory
Committee will compute a Participant's ACP under 14.09 by
disregarding the forfeiture.
(C) Qualified nonelective contributions. If the Employer, at the
time of contribution, designates a contribution to be a qualified
nonelective contribution for the Plan Year, the Advisory
Committee will allocate that qualified nonelective contribution
to the Qualified Nonelective Contributions Account of each
Participant eligible for an allocation of that designated
contribution, as specified in Section 3.04 of the Employer's
Adoption Agreement. The Advisory Committee will make the
allocation to each eligible Participant's Account in the same
ratio that the Participant's Compensation for the Plan Year bears
to the total Compensation of all eligible Participants for the
Plan Year. The Advisory Committee will determine a Participant's
Compensation in accordance with the general definition of
Compensation under Section 1.12 of the Plan, as modified by the
Employer in Sections 1.12 and 3.06 of its Adoption Agreement.
(D) Nonelective contributions. To the extent the Employer makes
nonelective contributions for the Plan Year which, at the time of
contribution, it does not designate as qualified nonelective
contributions, the Advisory Committee will allocate those
contributions in accordance with the elections under Section 3.04
of the Employer's Adoption Agreement. For purposes of the special
nondiscrimination tests described in Sections 14.08 and 14.09,
the Advisory Committee may treat nonelective contributions
allocated under this paragraph as qualified nonelective
contributions, if the contributions otherwise satisfy the
definition of qualified nonelective contributions.
14.07 ANNUAL ELECTIVE DEFERRAL LIMITATION.
(A) Annual Elective Deferral Limitation. An Employee's elective
deferrals for a calendar year beginning after December 31, 1986,
may not exceed the 402(g) limitation. The 402(g) limitation is
the greater of $7,000 or the adjusted amount determined by the
Secretary of the Treasury. If, pursuant to a salary reduction
agreement or pursuant to a cash or deferral election, the
Employer determines the Employee's elective deferrals to the Plan
for a calendar year would exceed the 402(g) limitation, the
Employer will suspend the Employee's salary reduction agreement,
if any, until the following January 1 and pay in cash the portion
of a cash or deferral election which would result in the
Employee's elective deferrals for the calendar year exceeding the
402(g) limitation. If the Advisory Committee determines an
Employee's elective deferrals already contributed to the Plan for
a calendar year exceed the 402(g) limitation, the Advisory
Committee will distribute the amount in excess of the 402(g)
limitation (the "excess deferral"), as adjusted for allocable
income, no later than April 15 of the following calendar year. If
the Advisory Committee distributes the excess deferral by the
appropriate April 15, it may make the distribution irrespective
of any other provision under this Plan or under the Code. The
Advisory Committee will reduce the amount of excess deferrals for
a calendar year distributable to the Employee by the amount of
excess contributions (as determined in Section 14.08), if any,
previously distributed to the Employee for the Plan Year
beginning in that calendar year.
If an Employee participates in another plan under which he
makes elective deferrals pursuant to a Code Section 401(k) arrangement,
elective deferrals under a Simplified Employee Pension, or salary
reduction contributions to a tax-sheltered annuity, irrespective
of whether the Employer maintains the other plan, he may provide
the Advisory Committee a written claim for excess deferrals made
for a calendar year. The Employee must submit the claim no later
than the March 1 following the close of the particular calendar
year and the claim must specify the amount of the Employee's
elective deferrals under this Plan which are excess deferrals. If
the Advisory Committee receives a timely claim, it will
distribute the excess deferral (as adjusted for allocable income)
the Employee has assigned to this Plan, in accordance with the
distribution procedure described in the immediately preceding
paragraph.
(B) Allocable income. For purposes of making a distribution of
excess deferrals pursuant to this Section 14.07, allocable income
means net income or net loss allocable to the excess deferrals
for the calendar year in which the Employee made the excess
deferral, determined in a manner which is uniform,
nondiscriminatory and reasonably reflective of the manner used by
the Plan to allocate income to Participants' Accounts.
14.08 ACTUAL DEFERRAL PERCENTAGE ("ADP") TEST. For each Plan
Year, the Advisory Committee must determine whether the Plan's
Code Section 401(k) arrangement satisfies either of the following ADP
tests:
(i) The average ADP for the Highly Compensated Group does
not exceed 1.25 times the average ADP of the Nonhighly
Compensated Group; or
(ii) The average ADP for the Highly Compensated Group does
not exceed the average ADP for the Nonhighly Compensated
Group by more than two percentage points (or the lesser
percentage permitted by the multiple use limitation in
Section 14.10) and the average ADP for the Highly
Compensated Group is not more than twice the average ADP for
the Nonhighly Compensated Group.
(A) Calculation of ADP. The average ADP for a group is the
average of the separate ADPs calculated for each Eligible
Employee who is a member of that group. An Eligible Employee's
ADP for a Plan Year is the ratio of the Eligible Employee's
deferral contributions for the Plan Year to the Employee's
Compensation for the Plan Year. For aggregated family members
treated as a single Highly Compensated Employee, the ADP of the
family unit is the ADP determined by combining the deferral
contributions and Compensation of all aggregated family members.
A Nonhighly Compensated Employee's ADP does not include elective
deferrals made to this Plan or to any other Plan maintained by
the Employer, to the extent such elective deferrals exceed the
402(g) limitation described in Section 14.07(A).
The Advisory Committee, in a manner consistent with Treasury
regulations, may determine the ADPs of the Eligible Employees by
taking into account qualified nonelective contributions or
qualified matching contributions, or both, made to this Plan or
to any other qualified Plan maintained by the Employer. The
Advisory Committee may not include qualified nonelective
contributions in the ADP test unless the allocation of
nonelective contributions is nondiscriminatory when the Advisory
Committee takes into account all nonelective contributions
(including the qualified nonelective contributions) and also when
the Advisory Committee takes into account only the nonelective
contributions not used in either the ADP test described in this
Section 14.08 or the ACP test described in Section 14.09. For
Plan Years beginning after December 31, 1989, the Advisory
Committee may not include in the ADP test any qualified
nonelective contributions or qualified matching contributions
under another qualified plan unless that plan has the same plan
year as this Plan. The Advisory Committee must maintain records
to demonstrate compliance with the ADP test, including the extent
to which the Plan used qualified nonelective contributions or
qualified matching contributions to satisfy the test.
For Plan Years beginning prior to January 1, 1992, the
Advisory Committee may elect to apply a separate ADP test to each
component group under the Plan. Each component group separately
must satisfy the commonality requirement of the Code Section 401(k)
regulations and the minimum coverage requirements of Code
Section 410(b). A component group consists of all the allocations and
other benefits, rights and features provided that group of
Employees. An Employee may not be part of more than one component
group. The correction rules described in this Section 14.08 apply
separately to each component group.
(B) Special aggregation rule for Highly Compensated Employees.
To determine the ADP of any Highly Compensated Employee, the
deferral contributions taken into account must include any
elective deferrals made by the Highly Compensated Employee under
any other Code Section 401(k) arrangement maintained by the Employer,
unless the elective deferrals are to an ESOP. If the plans
containing the Code Section 401(k) arrangements have different plan
years, the Advisory Committee will determine the combined
deferral contributions on the basis of the plan years ending in
the same calendar year.
(C) Aggregation of certain Code Section 401(k) arrangements. If the
Employer treats two plans as a unit for coverage or
nondiscrimination purposes, the Employer must combine the Code
Section 401(k) arrangements under such plans to determine whether either
plan satisfies the ADP test. This aggregation rule applies to the
ADP determination for all Eligible Employees, irrespective of
whether an Eligible Employee is a Highly Compensated Employee or
a Nonhighly Compensated Employee. For Plan Years beginning after
December 31, 1989, an aggregation of Code Section 401(k) arrangements
under this paragraph does not apply to plans which have different
plan years and, for Plan Years beginning after December 31, 1988,
the Advisory Committee may not aggregate an ESOP (or the ESOP
portion of a plan) with a non-ESOP plan (or non-ESOP portion of a
plan).
(D) Characterization of excess contributions. If, pursuant to
this Section 14.08, the Advisory Committee has elected to include
qualified matching contributions in the average ADP, the Advisory
Committee will treat excess contributions as attributable
proportionately to deferral contributions and to qualified
matching contributions allocated on the basis of those deferral
contributions. If the total amount of a Highly Compensated
Employee's excess contributions for the Plan Year exceeds his
deferral contributions or qualified matching contributions for
the Plan Year, the Advisory Committee will treat the remaining
portion of his excess contributions as attributable to qualified
nonelective contributions. The Advisory Committee will reduce the
amount of excess contributions for a Plan Year distributable to a
Highly Compensated Employee by the amount of excess deferrals (as
determined in Section 14.07), if any, previously distributed to
that Employee for the Employee's taxable year ending in that Plan
Year.
(E) Distribution of excess contributions. If the Advisory
Committee determines the Plan fails to satisfy the ADP test for a
Plan Year, it must distribute the excess contributions, as
adjusted for allocable income, during the next Plan Year.
However, the Employer will incur an excise tax equal to 10% of
the amount of excess contributions for a Plan Year not
distributed to the appropriate Highly Compensated Employees
during the first 2 1/2 months of that next Plan Year. The excess
contributions are the amount of deferral contributions made by
the Highly Compensated Employees which causes the Plan to fail to
satisfy the ADP test. The Advisory Committee will distribute to
each Highly Compensated Employee his respective share of the
excess contributions. The Advisory Committee will determine the
respective shares of excess contributions by starting with the
Highly Compensated Employee(s) who has the greatest ADP, reducing
his ADP (but not below the next highest ADP), then, if necessary,
reducing the ADP of the Highly Compensated Employee(s) at the
next highest ADP level (including the ADP of the Highly
Compensated Employee(s) whose ADP the Advisory Committee already
has reduced), and continuing in this manner until the average ADP
for the Highly Compensated Group satisfies the ADP test. If the
Highly Compensated Employee is part of an aggregated family
group, the Advisory Committee, in accordance with the applicable
Treasury regulations, will determine each aggregated family
member's allocable share of the excess contributions assigned to
the family unit.
(F) Allocable income. To determine the amount of the corrective
distribution required under this Section 14.08, the Advisory
Committee must calculate the allocable income for the Plan Year
in which the excess contributions arose. "Allocable income" means
net income or net loss. To calculate allocable income for the
Plan Year, the Advisory Committee will use a uniform and
nondiscriminatory method which reasonably reflects the manner
used by the Plan to allocate income to Participants' Accounts.
14.09 NONDISCRIMINATION RULES FOR EMPLOYER MATCHING
CONTRIBUTIONS/PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. For Plan
Years beginning after December 31, 1986, the Advisory Committee
must determine whether the annual Employer matching contributions
(other than qualified matching contributions used in the ADP
under Section 14.08), if any, and the Employee contributions, if
any, satisfy either of the following average contribution
percentage ("ACP") tests:
(i) The ACP for the Highly Compensated Group does not
exceed 1.25 times the ACP of the Nonhighly Compensated
Group; or
(ii) The ACP for the Highly Compensated Group does not
exceed the ACP for the Nonhighly Compensated Group by more
than two percentage points (or the lesser percentage
permitted by the multiple use limitation in Section 14.10)
and the ACP for the Highly Compensated Group is not more
than twice the ACP for the Nonhighly Compensated Group.
(A) Calculation of ACP. The average contribution percentage for
a group is the average of the separate contribution percentages
calculated for each Eligible Employee who is a member of that
group. An Eligible Employee's contribution percentage for a Plan
Year is the ratio of the Eligible Employee's aggregate
contributions for the Plan Year to the Employee's Compensation
for the Plan Year. "Aggregate contributions" are Employer
matching contributions (other than qualified matching
contributions used in the ADP test under Section 14.08) and
employee contributions (as defined in Section 14.03). For
aggregated family members treated as a single Highly Compensated
Employee, the contribution percentage of the family unit is the
contribution percentage determined by combining the aggregate
contributions and Compensation of all aggregated family members.
The Advisory Committee, in a manner consistent with Treasury
regulations, may determine the contribution percentages of the
Eligible Employees by taking into account qualified nonelective
contributions (other than qualified nonelective contributions
used in the ADP test under Section 14.08) or elective deferrals,
or both, made to this Plan or to any other qualified Plan
maintained by the Employer. The Advisory Committee may not
include qualified nonelective contributions in the ACP test
unless the allocation of nonelective contributions is
nondiscriminatory when the Advisory Committee takes into account
all nonelective contributions (including the qualified
nonelective contributions) and also when the Advisory Committee
takes into account only the nonelective contributions not used in
either the ADP test described in Section 14.08 or the ACP test
described in this Section 14.09. The Advisory Committee may not
include elective deferrals in the ACP test, unless the Plan which
includes the elective deferrals satisfies the ADP test both with
and without the elective deferrals included in this ACP test. For
Plan Years beginning after December 31, 1989, the Advisory
Committee may not include in the ACP test any qualified
nonelective contributions or elective deferrals under another
qualified plan unless that plan has the same plan year as this
Plan. The Advisory Committee must maintain records to demonstrate
compliance with the ACP test, including the extent to which the
Plan used qualified nonelective contributions or elective
deferrals to satisfy the test. For Plan Years beginning prior to
January 1, 1992, the component group testing rule permitted under
Section 14.08(A) also applies to the ACP test under this Section
14.09.
(B) Special aggregation rule for Highly Compensated Employees.
To determine the contribution percentage of any Highly
Compensated Employee, the aggregate contributions taken into
account must include any matching contributions (other than
qualified matching contributions used in the ADP test) and any
Employee contributions made on his behalf to any other plan
maintained by the Employer, unless the other plan is an ESOP. If
the plans have different plan years, the Advisory Committee will
determine the combined aggregate contributions on the basis of
the plan years ending in the same calendar year.
(C) Aggregation of certain plans. If the Employer treats two
plans as a unit for coverage or nondiscrimination purposes, the
Employer must combine the plans to determine whether either plan
satisfies the ACP test. This aggregation rule applies to the
contribution percentage determination for all Eligible Employees,
irrespective of whether an Eligible Employee is a Highly
Compensated Employee or a Nonhighly Compensated Employee. For
Plan Years beginning after December 31, 1989, an aggregation of
plans under this paragraph does not apply to plans which have
different plan years and, for Plan Years beginning after December
31, 1988, the Advisory Committee may not aggregate an ESOP (or
the ESOP portion of a plan) with a non-ESOP plan (or non-ESOP
portion of a plan).
(D) Distribution of excess aggregate contributions. The Advisory
Committee will determine excess aggregate contributions after
determining excess deferrals under Section 14.07 and excess
contributions under Section 14.08. If the Advisory Committee
determines the Plan fails to satisfy the ACP test for a Plan
Year, it must distribute the excess aggregate contributions, as
adjusted for allocable income, during the next Plan Year.
However, the Employer will incur an excise tax equal to 10% of
the amount of excess aggregate contributions for a Plan Year not
distributed to the appropriate Highly Compensated Employees
during the first 2 1/2 months of that next Plan Year. The excess
aggregate contributions are the amount of aggregate contributions
allocated on behalf of the Highly Compensated Employees which
causes the Plan to fail to satisfy the ACP test. The Advisory
Committee will distribute to each Highly Compensated Employee his
respective share of the excess aggregate contributions. The
Advisory Committee will determine the respective shares of excess
aggregate contributions by starting with the Highly Compensated
Employee(s) who has the greatest contribution percentage,
reducing his contribution percentage (but not below the next
highest contribution percentage), then, if necessary, reducing
the contribution percentage of the Highly Compensated Employee(s)
at the next highest contribution percentage level (including the
contribution percentage of the Highly Compensated Employee(s)
whose contribution percentage the Advisory Committee already has
reduced), and continuing in this manner until the ACP for the
Highly Compensated Group satisfies the ACP test. If the Highly
Compensated Employee is part of an aggregated family group, the
Advisory Committee, in accordance with the applicable Treasury
regulations, will determine each aggregated family member's
allocable share of the excess aggregate contributions assigned to
the family unit.
(E) Allocable income. To determine the amount of the corrective
distribution required under this Section 14.09, the Advisory
Committee must calculate the allocable income for the Plan Year
in which the excess aggregate contributions arose. "Allocable
income" means net income or net loss. The Advisory Committee will
determine allocable income in the same manner as described in
Section 14.08(F) for excess contributions.
(F) Characterization of excess aggregate contributions. The
Advisory Committee will treat a Highly Compensated Employee's
allocable share of excess aggregate contributions in the
following priority: (1) first as attributable to his Employee
contributions which are voluntary contributions, if any; (2) then
as matching contributions allocable with respect to excess
contributions determined under the ADP test described in Section
14.08; (3) then on a pro rata basis to matching contributions and
to the deferral contributions relating to those matching
contributions which the Advisory Committee has included in the
ACP test; (4) then on a pro rata basis to Employee contributions
which are mandatory contributions, if any, and to the matching
contributions allocated on the basis of those mandatory
contributions; and (5) last to qualified nonelective
contributions used in the ACP test. To the extent the Highly
Compensated Employee's excess aggregate contributions are
attributable to matching contributions, and he is not 100% vested
in his Accrued Benefit attributable to matching contributions,
the Advisory Committee will distribute only the vested portion
and forfeit the nonvested portion. The vested portion of the
Highly Compensated Employee's excess aggregate contributions
attributable to Employer matching contributions is the total
amount of such excess aggregate contributions (as adjusted for
allocable income) multiplied by his vested percentage (determined
as of the last day of the Plan Year for which the Employer made
the matching contribution). The Employer will specify in Adoption
Agreement Section 3.05 the manner in which the Plan will allocate
forfeited excess aggregate contributions.
14.10 MULTIPLE USE LIMITATION. For Plan Years beginning
after December 31, 1988, if at least one Highly Compensated
Employee is includible in the ADP test under Section 14.08 and in
the ACP test under Section 14.09, the sum of the Highly
Compensated Group's ADP and ACP may not exceed the multiple use
limitation.
The multiple use limitation is the sum of (i) and (ii):
(i) 125% of the greater of: (a) the ADP of the Nonhighly
Compensated Group under the Code Section 401(k) arrangement; or (b)
the ACP of the Nonhighly Compensated Group for the Plan Year
beginning with or within the Plan Year of the Code Section 401(k)
arrangement.
(ii) 2% plus the lesser of (i)(a) or (i)(b), but no more
than twice the lesser of (i)(a) or (i)(b).
The Advisory Committee, in lieu of determining the multiple
use limitation as the sum of (i) and (ii), may elect to determine
the multiple use limitation as the sum of (iii) and (iv):
(iii) 125% of the lesser of: (a) the ADP of the
Nonhighly Compensated Group under the Code Section 401(k)
arrangement; or (b) the ACP of the Nonhighly Compensated
Group for the Plan Year beginning with or within the Plan
Year of the Code Section 401(k) arrangement.
(iv) 2% plus the greater of (iii)(a) or (iii)(b), but no
more than twice the greater of (iii)(a) or (iii)(b).
The Advisory Committee will determine whether the Plan
satisfies the multiple use limitation after applying the ADP test
under Section 14.08 and the ACP test under Section 14.09 and
after making any corrective distributions required by those
Sections. If, after applying this Section 14.10, the Advisory
Committee determines the Plan has failed to satisfy the multiple
use limitation, the Advisory Committee will correct the failure
by treating the excess amount as excess contributions under
Section 14.08 or as excess aggregate contributions under Section
14.09, as it determines in its sole discretion. This Section
14.10 does not apply unless, prior to application of the multiple
use limitation, the ADP and the ACP of the Highly Compensated
Group each exceeds 125% of the respective percentages for the
Nonhighly Compensated Group.
14.11 DISTRIBUTION RESTRICTIONS. The Employer must elect in
Section 6.03 the Adoption Agreement the distribution events
permitted under the Plan. The distribution events applicable to
the Participant's Deferral Contributions Account, Qualified
Nonelective Contributions Account and Qualified Matching
Contributions Account must satisfy the distribution restrictions
described in paragraph (m) of Section 14.03.
(A) Hardship distributions from Deferral Contributions Account.
The Employer must elect in Adoption Agreement Section 6.03
whether a Participant may receive hardship distributions from his
Deferral Contributions Account prior to the Participant's
Separation from Service. Hardship distributions from the Deferral
Contributions Account must satisfy the requirements of this
Section 14.11. A hardship distribution option may not apply to
the Participant's Qualified Nonelective Contributions Account or
Qualified Matching Contributions Account, except as provided in
paragraph (3).
(1) Definition of hardship. A hardship distribution under this
Section 14.11 must be on account of one or more of the following
immediate and heavy financial needs: (1) medical care described
in Code Section 213(d) incurred by the Participant, by the Participant's
spouse, or by any of the Participant's dependents, or necessary
to obtain such medical care; (2) the purchase (excluding mortgage
payments) of a principal residence for the Participant; (3) the
payment of post-secondary education tuition and related
educational fees, for the next 12-month period, for the
Participant, for the Participant's spouse, or for any of the
Participant's dependents (as defined in Code Section 152); (4) to
prevent the eviction of the Participant from his principal
residence or the foreclosure on the mortgage of the Participant's
principal residence; or (5) any need prescribed by the Revenue
Service in a revenue ruling, notice or other document of general
applicability which satisfies the safe harbor definition of
hardship.
(2) Restrictions. The following restrictions apply to a
Participant who receives a hardship distribution: (a) the
Participant may not make elective deferrals or employee
contributions to the Plan for the 12-month period following the
date of his hardship distribution; (b) the distribution is not in
excess of the amount of the immediate and heavy financial need
(including any amounts necessary to pay any federal, state or
local income taxes or penalties reasonably anticipated to result
from the distribution); (c) the Participant must have obtained
all distributions, other than hardship distributions, and all
nontaxable loans (determined at the time of the loan) currently
available under this Plan and all other qualified plans
maintained by the Employer; and (d) the Participant agrees to
limit elective deferrals under this Plan and under any other
qualified Plan maintained by the Employer, for the Participant's
taxable year immediately following the taxable year of the
hardship distribution, to the 402(g) limitation (as described in
Section 14.07), reduced by the amount of the Participant's
elective deferrals made in the taxable year of the hardship
distribution. The suspension of elective deferrals and employee
contributions described in clause (a) also must apply to all
other qualified plans and to all nonqualified plans of deferred
compensation maintained by the Employer, other than any mandatory
employee contribution portion of a defined benefit plan,
including stock option, stock purchase and other similar plans,
but not including health or welfare benefit plans (other than the
cash or deferred arrangement portion of a cafeteria plan).
(3) Earnings. For Plan Years beginning after December 31,
1988, a hardship distribution under this Section 14.11 may not
include earnings on an Employee's elective deferrals credited
after December 31, 1988. Qualified matching contributions and
qualified nonelective contributions, and any earnings on such
contributions, credited as of December 31, 1988, are subject to
the hardship withdrawal only if the Employer specifies in an
addendum to this Section 14.11. The addendum may modify the
December 31, 1988, date for purposes of determining credited
amounts provided the date is not later than the end of the last
Plan Year ending before July 1, 1989.
(B) Distributions after Separation from Service. Following the
Participant's Separation from Service, the distribution events
applicable to the Participant apply equally to all of the
Participant's Accounts, except as elected in Section 6.03 of the
Employer's Adoption Agreement.
(C) Correction of Annual Additions Limitation. If, as a result
of a reasonable error in determining the amount of elective
deferrals an Employee may make without violating the limitations
of Part 2 of Article III, an Excess Amount results, the Advisory
Committee will return the Excess Amount (as adjusted for
allocable income) attributable to the elective deferrals. The
Advisory Committee will make this distribution before taking any
corrective steps pursuant to Section 3.10 or to Section 3.16. The
Advisory Committee will disregard any elective deferrals returned
under this Section 14.11(C) for purposes of Sections 14.07, 14.08
and 14.09.
14.12 SPECIAL ALLOCATION RULES. If the Code Section 401(k)
arrangement provides for salary reduction contributions, if the
Plan accepts Employee contributions, pursuant to Adoption
Agreement Section 4.01, or if the Plan allocates matching
contributions as of any date other than the last day of the Plan
Year, the Employer must elect in Adoption Agreement 9.11 whether
any special allocation provisions will apply under Section 9.11
of the Plan. For purposes of the elections:
(a) A "segregated Account" direction means the Advisory
Committee will establish a segregated Account for the
applicable contributions made on the Participant's behalf
during the Plan Year. The Trustee must invest the segregated
Account in Federally insured interest bearing savings
account(s) or time deposits, or a combination of both, or in
any other fixed income investments, unless otherwise specified
in the Employer's Adoption Agreement. As of the last day of
each Plan Year (or, if earlier, an allocation date coinciding
with a valuation date described in Section 9.11), the Advisory
Committee will reallocate the segregated Account to the
Participant's appropriate Account, in accordance with Section
3.04 or Section 4.06, whichever applies to the contributions.
(b) A "weighted average allocation" method will treat a
weighted portion of the applicable contributions as if
includible in the Participant's Account as of the beginning of
the valuation period. The weighted portion is a fraction, the
numerator of which is the number of months in the valuation
period, excluding each month in the valuation period which
begins prior to the contribution date of the applicable
contributions, and the denominator of which is the number of
months in the valuation period. The Employer may elect in its
Adoption Agreement to substitute a weighting period other than
months for purposes of this weighted average allocation.
* * * * * * * * * * * * * * *
ARTICLE A
APPENDIX TO BASIC PLAN DOCUMENT
This Article is necessary to comply with the Unemployment
Compensation Amendments Act of 1992 and is an integral part of
the basic plan document. Section 12.08 applies to any
modification or amendment of this Article.
A-1. APPLICATIONS. This Article applies to distributions
made on or after January 1, 1993. Notwithstanding any provision
of the Plan to the contrary that would otherwise limit a
distributee's election under this Article, a distributee 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 distributee in a direct rollover.
A-2. DEFINITIONS.
(a) "Eligible rollover distribution." An eligible
rollover distribution is any distribution of all or any portion
of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any distribution
that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life
expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any
distribution to the extent such distribution is required under
Code Section 401(a)(9); and the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion of net unrealized appreciation with respect to employer
securities).
(b) "Eligible retirement plan." An eligible retirement
plan is an individual retirement account described in Code
Section 408(a), an individual retirement annuity described in Code
Section 408(b), an annuity plan described in Code Section 403(a), or a
qualified trust described in Code Section 401(a), that accepts the
distributee's eligible rollover distribution. However, in the
case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual retirement
account or individual retirement annuity.
(c) "Distributee." A distributee includes an Employee
or former Employee. In addition, the Employee's or former
Employee's surviving spouse and the employee's or former
Employee's spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in Code
Section 414(p), are distributees with regard to the interest of the
spouse or former spouse.
(d) "Direct rollover." A direct rollover is a payment
by the Plan to the eligible retirement plan specified by the
distributee.
ARTICLE B
APPENDIX TO BASIC PLAN DOCUMENT
This Article is necessary to comply with the Omnibus Budget
Reconciliation Act of 1993 (OBRA '93) and is an integral part of
the basic plan document. Section 12.08 applies to any
modification or amendment of this Article.
In addition to other applicable limitations set forth in the
plan, and notwithstanding any other provision of the plan to the
contrary, for plan years beginning on or after January 1, 1994,
the annual compensation of each employee taken into account under
the plan shall not exceed the OBRA '93 annual compensation limit.
The OBRA '93 annual compensation limit is $150,000, as adjusted
by the Commissioner for increases in the cost of living in
accordance with Section 401(a)(17)(B) of the Internal Revenue
Code. The cost-of-living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over which
compensation is determined (determination period) beginning in
such calendar year. If a determination period consists of fewer
than 12 months, the OBRA '93 annual compensation limit will be
multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which
is 12.
For plan years beginning on or after January 1, 1994, any
reference in this plan to the limitation under Section 401(a)(17)
of the Code shall mean the OBRA '93 annual compensation limit set
forth in this provision.
If compensation for any prior determination period is taken
into account in determining an employee's benefits accruing in
the current plan year, the compensation for that prior
determination period is subject to the OBRA '93 annual
compensation limit in effect for that prior determination period.
For this purpose, for determination periods beginning before the
first day of the first plan year beginning on or after January 1,
1994, the OBRA '93 annual compensation limit is $150,000.
ARTICLE C
APPENDIX TO BASIC PLAN DOCUMENT
Rev. Rul. 94-76 Model Amendment
This amendment is effective on the first day of the first
Plan Year beginning on or after December 12, 1994, or, if later,
March 12, 1995.
Notwithstanding any provision of this Plan to the contrary,
to the extent that any optional form of benefit under this Plan
permits a distribution prior to the Employee's retirement, death,
disability, or severance from employment, and prior to plan
termination, the optional form of benefits is not available with
respect to benefits attributable to assets (including the post-
transfer earnings thereon) and liabilities that are transferred,
within the meaning of Code Section 414(l), to this Plan from a money
purchase pension plan qualified under Code Section 401(a) (other than
any portion of those assets and liabilities attributable to
voluntary Employee contributions).
ARTICLE D
APPENDIX TO BASIC PLAN DOCUMENT
USERRA Model Amendment
This amendment is effective as of December 12, 1994.
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with
Code Section 414(u). Loan repayments will be suspended under this Plan
as permitted under Code Section 414(u)(4).
* * * * * * * * * * * * *
Exhibit 4.1(b) - Adoption Agreement
Effective January 1, 1997
ADOPTION AGREEMENT #005
NONSTANDARDIZED CODE 401(k) PROFIT SHARING PLAN
The undersigned, PAYCHEX, Inc. ("Employer"), by executing this Adoption
Agreement, elects to become a participating Employer in the INVESCO
Trust Company Defined Contribution Master Plan (basic plan document #01) by
adopting the accompanying Plan and Trust in full as if the Employer
were a signatory to that Agreement. The Employer makes the following
elections granted under the provisions of the Master Plan.
ARTICLE I
DEFINITIONS
1.02 TRUSTEE. The Trustee executing this Adoption Agreement is:
(Choose (a) or (b))
[ ] (a) A discretionary Trustee. See Section 10.03[A] of the Plan.
[X] (b) A nondiscretionary Trustee. See Section 10.03[B] of the
Plan. [Note: The Employer may not elect Option (b) if a
Custodian executes the Adoption Agreement.]
1.03 PLAN. The name of the Plan as adopted by the Employer is
PAYCHEX, Inc. 401(k) Incentive Retirement Plan.
1.07 EMPLOYEE. The following Employees are not eligible to
participate in the Plan: (Choose (a) or at least one of (b) through (g))
[ ] (a) No exclusions.
[X] (b) Collective bargaining employees (as defined in Section 1.07 of
the Plan). [Note: If the Employer excludes union
employees from the Plan, the Employer must be able to
provide evidence that retirement benefits were the subject
of good faith bargaining.]
[X] (c) Nonresident aliens who do not receive any earned income (as
defined in Code 911(d)(2)) from the Employer which
constitutes United States source income (as defined in Code
861(a)(3)).
[ ] (d) Commission Salesmen.
[ ] (e) Any Employee compensated on a salaried basis.
[ ] (f) Any Employee compensated on an hourly basis.
[ ] (g) (Specify). Leased Employees. Any Leased Employee treated as
an Employee under Section 1.31 of the Plan, is: (Choose (h)
or (i))
[ ] (h) Not eligible to participate in the Plan.
[X] (i) Eligible to participate in the Plan, unless excluded by reason
of an exclusion classification elected under this Adoption
Agreement Section 1.07.
Related Employers. If any member of the Employer's related group (as
defined in Section 1.30 of the Plan) executes a Participation
Agreement to this Adoption Agreement, such member's Employees are
eligible to participate in this Plan, unless excluded by reason of an
exclusion classification elected under this Adoption Agreement
Section 1.07. In addition: (Choose (j) or (k))
[X] (j) No other related group member's Employees are eligible to
participate in the Plan.
[ ] (k) The following nonparticipating related group member's Employees
are eligible to participate in the Plan unless excluded by
reason of an exclusion classification elected under this
Adoption Agreement Section 1.07:
1.12 COMPENSATION.
Treatment of elective contributions. (Choose (a) or (b))
[X] (a) "Compensation" includes elective contributions made by the
Employer on the Employee's behalf.
[ ] (b) "Compensation" does not include elective contributions.
Modifications to Compensation definition. (Choose (c) or at least one of (d)
through (j))
[ ] (c) No modifications other than as elected under Options (a) or
(b).
[ ] (d) The Plan excludes Compensation in excess of $ .
[ ] (e) In lieu of the definition in Section 1.12 of the Plan,
Compensation means any earnings reportable as W-2 wages for
Federal income tax withholding purposes, subject to any other
election under this Adoption Agreement Section 1.12.
[ ] (f) The Plan excludes bonuses.
[ ] (g) The Plan excludes overtime.
[ ] (h) The Plan excludes Commissions.
[X] (i) Compensation will not include Compensation from a related
employer (as defined in Section 1.30 of the Plan) that has not
executed a Participation Agreement in this Plan unless,
pursuant to Adoption Agreement Section 1.07, the Employees of
that related employer are eligible to participate in this Plan.
[X] (j) (Specify) Excluding Relocation Fund, Stock Options Income and
Imputed Value of Group Life Insurance .
If, for any Plan Year, the Plan uses permitted disparity in the contribution
or allocation formula elected under Article III, any
election of Options (f), (g), (h) or (j) is ineffective for such Plan
Year with respect to any Nonhighly Compensated Employee.
Special definition for matching contributions. "Compensation" for
purposes of any matching contribution formula under Article III
means: (Choose (k) or (l) only if applicable)
[X] (k) Compensation as defined in this Adoption Agreement
Section 1.12.
[ ] (l) (Specify). Special definition for salary reduction
contributions. An Employee's salary reduction agreement
applies to his Compensation determined prior to the reduction
authorized by that salary reduction agreement, with the
following exceptions: (Choose (m) or at least one of (n) or
(o), if applicable)
[X] (m) No exceptions.
[ ] (n) If the Employee makes elective contributions to another plan
maintained by the Employer, the Advisory Committee will
determine the amount of the Employee's salary reduction
contribution for the withholding period: (Choose (1) or (2))
[ ] (1) After the reduction for such period of elective
contributions to the other plan(s).
[ ] (2) Prior to the reduction for such period of elective
contributions to the other plan(s).
[ ] (o) (Specify).
1.17 PLAN YEAR/LIMITATION YEAR.
Plan Year. Plan Year means: (Choose (a) or (b))
[X] (a) The 12 consecutive month period ending every December 31.
[ ] (b) (Specify).
Limitation Year. The Limitation Year is: (Choose (c) or (d))
[X] (c) The Plan Year.
[ ] (d) The 12 consecutive month period ending every.
1.18 EFFECTIVE DATE.
New Plan. The "Effective Date" of the Plan is
Restated Plan. The restated Effective Date is January 1, 1996. This Plan is
a substitution and amendment of an existing retirement plan(s) originally
established July 1, 1984. [Note: See the Effective Date Addendum.]
1.27 HOUR OF SERVICE. The crediting method for Hours of Service
is: (Choose (a) or (b))
[X] (a) The actual method.
[ ] (b) The equivalency method, except:
[ ] (1) No exceptions.
[ ] (2) The actual method applies for purposes of:
(Choose at least one)
[ ] (i) Participation under Article II.
[ ] (ii) Vesting under Article V.
[ ] (iii) Accrual of benefits under Section 3.06.
[Note: On the blank line, insert "daily," "weekly," "semi-monthly payroll
periods" or "monthly."]
1.29 SERVICE FOR PREDECESSOR EMPLOYER. In addition to the predecessor
service the Plan must credit by reason of Section 1.29 of the Plan, the Plan
credits Service with the following predecessor employer(s): PAYCHEX Inc. For
PAYCHEX Management Corp.; Payday-The Payroll Company, Inc; Pay-Fone Systems,
Inc.; The Payroll Service, Inc. and PAYCHEX Business Solutions. Service with
the designated predecessor employer(s) applies: (Choose at least one of (a) or
(b); (c) is available only in addition to (a) or (b))
[X] (a) For purposes of participation under Article II.
[X] (b) For purposes of vesting under Article V.
[ ] (c) Except the following Service:
[Note: If the Plan does not credit any predecessor service under this
provision, insert "N/A" in the first blank line. The Employer may attach a
schedule to this Adoption Agreement, in the same format as this Section 1.29,
designating additional predecessor employers and the applicable service
crediting elections.]
1.31 LEASED EMPLOYEES. If a Leased Employee is a Participant in the Plan
and also participates in a plan maintained by the leasing organization:
(Choose (a) or (b))
[ ] (a) The Advisory Committee will determine the Leased Employee's
allocation of Employer contributions under Article III without
taking into account the Leased Employee's allocation, if any,
under the leasing organization's plan.
[X] (b) The Advisory Committee will reduce a Leased Employee's
allocation of Employer nonelective contributions (other than
designated qualified nonelective contributions) under this Plan
by the Leased Employee's allocation under the leasing
organization's plan, but only to the extent that allocation is
attributable to the Leased Employee's service provided to the
Employer. The leasing organization's plan:
[X] (1) Must be a money purchase plan which would satisfy the
definition under Section 1.31 of a safe harbor plan,
irrespective of whether the safe harbor exception applies.
[ ] (2) Must satisfy the features and, if a defined benefit
plan, the method of reduction described in an addendum to
this Adoption Agreement, numbered 1.31.
ARTICLE II
EMPLOYEE PARTICIPANTS
2.01 ELIGIBILITY.
Eligibility conditions. To become a Participant in the Plan, an Employee must
satisfy the following eligibility conditions: (Choose (a) or (b) or both; (c)
is optional as an additional election)
[N/A] (a) Attainment of age (specify age, not exceeding 21).
[X] (b) Service requirement. (Choose one of (1) through (3))
[X] (1) One Year of Service.
[ ] (2) Months (not exceeding 12) following the Employee's
Employment Commencement Date.
[ ] (3) One Hour of Service.
[ ] (c) Special requirements for non-401(k) portion of plan.
(Make elections under (1) and under (2))
(1) The requirements of this Option (c) apply to participation
in: (Choose at least one of (i) through (iii))
[ ] (i) The allocation of Employer nonelective
contributions and Participant forfeitures.
[ ] (ii) The allocation of Employer matching
contributions (including forfeitures allocated as
matching contributions).
[ ] (iii) The allocation of Employer qualified
nonelective contributions.
(2) For participation in the allocations described in (1),
the eligibility conditions are: (Choose at least one of (i)
through (iv))
[ ] (i) (One or two) Year(s) of Service, without an
intervening Break in Service (as described in Section
2.03(A) of the Plan) if the requirement is two Years
of Service.
[ ] (ii) Months (not exceeding 24) following the
Employee's Employment Commencement Date.
[ ] (iii) One Hour of Service.
[ ] (iv) Attainment of age (Specify age, not exceeding
21).
Plan Entry Date. "Plan Entry Date" means the Effective Date and:
(Choose (d), (e) or (f))
[ ] (d) Semi-annual Entry Dates. The first day of the Plan Year and the
first day of the seventh month of the Plan Year.
[ ] (e) The first day of the Plan Year.
[X] (f) (Specify entry dates) Effective for all Plan Years after
12/31/95 - The first day of each month following the completion
of one year of service in which a minimum of 1,000 hours has
been worked. For Administrative purposes, this provision will
go into effect on May 1, 1996.
Time of Participation. An Employee will become a Participant (and, if
applicable, will participate in the allocations described in Option (c)(1)),
unless excluded under Adoption Agreement Section 1.07, on the Plan Entry Date
(if employed on that date): (Choose (g), (h) or (i))
[X] (g) Immediately following
[ ] (h) Immediately preceding
[ ] (i) Nearest
the date the Employee completes the eligibility conditions described in
Options (a) and (b) (or in Option (c)(2) if applicable) of this Adoption
Agreement Section 2.01. [Note: The Employer must coordinate the selection of
(g), (h) or (i) with the "Plan Entry Date" selection in (d), (e) or (f).
Unless otherwise excluded under Section 1.07, the Employee must become a
Participant by the earlier of: (1) the first day of the Plan Year beginning
after the date the Employee completes the age and service requirements of Code
410(a); or (2) 6 months after the date the Employee completes those
requirements.]
Dual eligibility. The eligibility conditions of this Section 2.01 apply to:
(Choose (j) or (k))
[X] (j) All Employees of the Employer, except: (Choose (1) or (2))
[X] (1) No exceptions.
[ ] (2) Employees who are Participants in the Plan as of the
Effective Date.
[ ] (k) Solely to an Employee employed by the Employer after. If the
Employee was employed by the Employer on or before the specified
date, the Employee will become a Participant:
(Choose (1), (2) or (3))
[ ] (1) On the latest of the Effective Date, his Employment
Commencement Date or the date he attains age (not to exceed
21).
[ ] (2) Under the eligibility conditions in effect under the Plan
prior to the restated Effective Date. If the restated Plan
required more than one Year of Service to participate, the
eligibility condition under this Option (2) for participation
in the Code 401(k) arrangement under this Plan is one Year of
Service for Plan Years beginning after December 31, 1988.
[For restated plans only]
[ ] (3) (Specify).
2.02 YEAR OF SERVICE - PARTICIPATION.
Hours of Service. An Employee must complete: (Choose (a) or (b))
[X] (a) 1,000 Hours of Service
[ ] (b) Hours of Service
during an eligibility computation period to receive credit for a Year of
Service. [Note: The Hours of Service requirement may not exceed 1,000.]
Eligibility computation period. After the initial eligibility computation
period described in Section 2.02 of the Plan, the Plan measures the
eligibility computation period as: (Choose (c) or (d))
[ ] (c) The 12 consecutive month period beginning with each anniversary of
an Employee's Employment Commencement Date.
[X] (d) The Plan Year, beginning with the Plan Year which includes the
first anniversary of the Employee's Employment Commencement Date.
2.03 BREAK IN SERVICE - PARTICIPATION. The Break in Service rule
described in Section 2.03(B) of the Plan: (Choose (a) or (b))
[X] (a) Does not apply to the Employer's Plan.
[ ] (b) Applies to the Employer's Plan.
2.06 ELECTION NOT TO PARTICIPATE. The Plan: (Choose (a) or (b))
[X] (a) Does not permit an eligible Employee or a Participant to
elect not to participate.
[ ] (b) Does permit an eligible Employee or a Participant to
elect not to participate in accordance with Section 2.06 and
with the following rules: (Complete (1), (2), (3) and (4))
(1) An election is effective for a Plan Year if filed no
later than.
(2) An election not to participate must be effective for at
least Plan Year(s).
(3) Following a re-election to participate, the Employee or
Participant:
[ ] (i) May not again elect not to participate for any
subsequent Plan Year.
[ ] (ii) May again elect not to participate, but
not earlier than the Plan Year following the
Plan Year in which the re-election first was effective.
(4) (Specify) [Insert "N/A" if no other rules apply].
ARTICLE III
EMPLOYER CONTRIBUTIONS AND FORFEITURES
3.01 AMOUNT.
Part I. [Options (a) through (g)] Amount of Employer's contribution.
The Employer's annual contribution to the Trust will equal the total
amount of deferral contributions, matching contributions, qualified
nonelective contributions and nonelective contributions, as
determined under this Section 3.01. (Choose any combination of (a),
(b), (c) and (d), or choose (e))
[X] (a) Deferral contributions (Code 401(k) arrangement).
(Choose (1) or (2) or both)
[X] (1) Salary reduction arrangement. The Employer
must contribute the amount by which the Participants have
reduced their Compensation for the Plan Year, pursuant to
their salary reduction agreements on file with the Advisory
Committee. A reference in the Plan to salary reduction
contributions is a reference to these amounts.
[ ] (2) Cash or deferred arrangement. The Employer
will contribute on behalf of each Participant the portion
of the Participant's proportionate share of the cash or
deferred contribution which he has not elected to receive
in cash. See Section 14.02 of the Plan. The Employer's
cash or deferred contribution is the amount the Employer
may from time to time deem advisable which the Employer
designates as a cash or deferred contribution prior to
making that contribution to the Trust.
[X] (b) Matching contributions. The Employer will make matching
contributions in accordance with the formula(s) elected in Part
II of this Adoption Agreement Section 3.01.
[X] (c) Designated qualified nonelective contributions. The
Employer, in its sole discretion, may contribute an amount
which it designates as a qualified nonelective contribution.
[X] (d) Nonelective contributions. (Choose any combination of (1) through
(4))
[X] (1) Discretionary contribution. The amount (or additional
amount) the Employer may from time to time deem advisable.
[ ] (2) The amount (or additional amount) the Employer may from
time to time deem advisable, separately determined for each
of the following classifications of Participants: (Choose
(i) or (ii))
[ ] (i) Nonhighly Compensated Employees and Highly
Compensated Employees.
[ ] (ii) (Specify classifications)
Under this Option (2), the Advisory Committee will
allocate the amount contributed for each Participant
classification in accordance with Part II of Adoption
Agreement Section 3.04, as if the Participants in that
classification were the only Participants in the Plan.
[ ] (3) % of the Compensation of all Participants under the
Plan, determined for the Employer's taxable year for which
it makes the contribution. [Note: The percentage selected
may not exceed 15%.]
[ ] (4) % of Net Profits but not more than $ .
[ ] (e) Frozen Plan. This Plan is a frozen Plan effective. The Employer
will not contribute to the Plan with respect to any period
following the stated date.
Net Profits. The Employer: (Choose (f) or (g))
[X] (f) Need not have Net Profits to make its annual contribution under
this Plan.
[ ] (g) Must have current or accumulated Net Profits exceeding $ to
make the following contributions: (Choose at least one)
[ ] (1) Cash or deferred contributions described in Option
(a)(2).
[ ] (2) Matching contributions described in Option (b), except:
[ ] (3) Qualified nonelective contributions described in Option
(c).
[ ] (4) Nonelective contributions described in Option (d).
The term "Net Profits" means the Employer's net income or profits for any
taxable year determined by the Employer upon the basis of its books of
account in accordance with generally accepted accounting practices
consistently applied without any deductions for Federal and state taxes upon
income or for contributions made by the Employer under this Plan or under any
other employee benefit plan the Employer maintains. The term "Net Profits"
specifically excludes. [Note: Enter "N/A" if no exclusions apply.]
If the Employer requires Net Profits for matching contributions and the
Employer does not have sufficient Net Profits under Option (g), it will reduce
the matching contribution under a fixed formula on a prorata basis for all
Participants. A Participant's share of the reduced contribution will bear
the same ratio as the matching contribution the Participant would have
received if Net Profits were sufficient bears to the total matching
contribution all Participants would have received if Net Profits were
sufficient. If more than one member of a related group (as defined in Section
1.30) execute this Adoption Agreement, each participating member will
determine Net Profits separately but will not apply this reduction unless,
after combining the separately determined Net Profits, the aggregate Net
Profits are insufficient to satisfy the matching contribution liability.
"Net Profits" includes both current and accumulated Net Profits.
Part II. [Options (h) through (j)] Matching contribution formula.
[Note: If the Employer elected Option (b), complete Options (h), (i)
and (j).]
[X] (h) Amount of matching contributions. For each Plan Year, the
Employer's matching contribution is: (Choose any combination of
(1), (2), (3), (4) and (5))
[ ] (1) An amount equal to % of each Participant's
eligible contributions for the Plan Year.
[ ] (2) An amount equal to % of each Participant's first
tier of eligible contributions for the Plan Year, plus the
following matching percentage(s) for the following subsequent
tiers of eligible contributions for the Plan.
[X] (3) Discretionary formula.
[X] (i) An amount (or additional amount) equal to a matching
percentage the Employer from time to time may deem advisable
of the Participant's eligible contributions for the Plan
Year.
[ ] (ii) An amount (or additional amount) equal to a matching
percentage the Employer from time to time may deem advisable
of each tier of the Participant's eligible contributions for
the Plan Year.
[ ] (4) An amount equal to the following percentage of each
Participant's eligible contributions for the Plan Year,
based on the Participant's Years of Service:
Number of Years of Service Matching Percentage
The Advisory Committee will apply this formula by determining Years of Service
as follows:
[ ] (5) A Participant's matching contributions may not:
(Choose (i) or (ii))
[ ] (i) Exceed
[ ] (ii) Be less than
Related Employers. If two or more related employers (as defined in
Section 1.30) contribute to this Plan, the related employers may elect
different matching contribution formulas by attaching to the Adoption
Agreement a separately completed copy of this Part II. Note: Separate
matching contribution formulas create separate current benefit structures that
must satisfy the minimum participation test of Code 401(a)(26).]
[X] (i) Definition of eligible contributions. Subject to the requirements
of Option (j), the term "eligible contributions" means: (Choose
any combination of (1) through (3))
[X] (1) Salary reduction contributions.
[ ] (2) Cash or deferred contributions (including any part of the
Participant's proportionate share of the cash or deferred
contribution which the Employer defers without the
Participant's election).
[ ] (3) Participant mandatory contributions, as designated in
Adoption Agreement Section 4.01. See Section 14.04 of the
Plan.
[X] (j) Amount of eligible contributions taken into account. When
determining a Participant's eligible contributions taken into
account under the matching contributions formula(s), the
following rules apply: (Choose any combination of (1) through
(4))
[ ] (1) The Advisory Committee will take into account all
eligible contributions credited for the Plan Year.
[X] (2) The Advisory Committee will disregard eligible
contributions exceeding 6 % of employee compensation.
[ ] (3) The Advisory Committee will treat as the first tier of
eligible contributions, an amount not exceeding:
The subsequent tiers of eligible contributions are:
[ ] (4) (Specify).
Part III. [Options (k) and (l)]. Special rules for Code 401(k)
Arrangement. (Choose (k) or (l), or both, as applicable)
[X] (k) Salary Reduction Agreements. The following rules and
restrictions apply to an Employee's salary reduction agreement:
(Make a selection under (1), (2), (3) and (4))
(1) Limitation on amount. The Employee's salary reduction
contributions: (Choose (i) or at least one of (ii) or (iii))
[ ] (i) No maximum limitation other than as provided in the
Plan.
[X] (ii) May not exceed 15% of Compensation for the Plan
Year, subject to the annual additions limitation
described in Part 2 of Article III and the 402(g)
limitation described in Section 14.07 of the Plan.
[X] (iii) Based on percentages of Compensation must equal at
least 2 %.
(2) An Employee may revoke, on a prospective basis, a salary
reduction agreement: (Choose (i), (ii), (iii) or (iv))
[ ] (i) Once during any Plan Year but not later than of the
Plan Year.
[ ] (ii) As of any Plan Entry Date.
[ ] (iii) As of the first day of any month.
[X] (iv) (Specify, but must be at least once per Plan Year)
a.) As of each January 1 or July 1.
b.) Terminated employees are deemed to have revoked
their agreement as of their date of termination.
(3) An employee who revokes his salary reduction agreement may
file a new salary reduction agreement with an effective date:
(Choose (i), (ii), (iii) or (iv))
[ ] (i) No earlier than the first day of the next Plan Year.
[ ] (ii) As of any subsequent Plan Entry Date.
[X] (iii) As of the first day of any month subsequent to the
month in which he revoked an Agreement.
[ ] (iv) (Specify, but must be at least once per Plan Year
following the Plan Year of revocation).
(4) A Participant may increase or may decrease, on a prospective
basis, his salary reduction percentage or dollar amount: (Choose
(i), (ii), (iii) or (iv))
[ ] (i) As of the beginning of each payroll period.
[ ] (ii) As of the first day of each month.
[ ] (iii) As of any Plan Entry Date.
[X] (iv) (Specify, but must permit an increase or a decrease
at least once per Plan Year) As of each January 1 or
July 1.
[ ] (l) Cash or deferred contributions. For each Plan Year for which the
Employer makes a designated cash or deferred contribution, a
Participant may elect to receive directly in cash not more than the
following portion (or, if less, the 402(g) limitation described in
Section 14.07 of the Plan) of his proportionate share of that cash or
deferred contribution: (Choose (1) or (2))
[ ] (1) All or any portion.
[ ] (2) _______%.
3.04 CONTRIBUTION ALLOCATION. The Advisory Committee will allocate deferral
contributions, matching contributions, qualified nonelective contributions
and nonelective contributions in accordance with Section 14.06 and the
elections under this Adoption Agreement Section 3.04.
Part I. [Options (a) through (d)]. Special Accounting Elections. (Choose
whichever elections are applicable to the Employer's Plan)
[X] (a) Matching Contributions Account. The Advisory Committee will
allocate matching contributions to a Participant's: (Choose (1) or (2);
(3) is available only in addition to (1))
[X] (1) Regular Matching Contributions Account.
[ ] (2) Qualified Matching Contributions Account.
[ ] (3) Except, matching contributions under Option(s) of Adoption
Agreement Section 3.01 are allocable to the Qualified Matching
Contributions Account.
[ ] (b) Special Allocation Dates for Salary Reduction Contributions. The
Advisory Committee will allocate salary reduction contributions as of
the Accounting Date and as of the following additional allocation
dates:
[ ] (c) Special Allocation Dates for Matching Contributions. The Advisory
Committee will allocate matching contributions as of the Accounting
Date and as of the following additional allocation dates:
[X] (d) Designated Qualified Nonelective Contributions - Definition of
Participant. For purposes of allocating the designated qualified
nonelective contribution, "Participant" means: (Choose (1), (2) or (3))
[ ] (1) All Participants.
[X] (2) Participants who are Nonhighly Compensated Employees for the
Plan Year.
[ ] (3) (Specify).
Part II. Method of Allocation - Nonelective Contribution. Subject to any
restoration allocation required under Section 5.04, the Advisory Committee
will allocate and credit each annual nonelective contribution (and
Participant forfeitures treated as nonelective contributions) to the Employer
Contributions Account of each Participant who satisfies the conditions of
Section 3.06, in accordance with the allocation method selected under this
Section 3.04. If the Employer elects Option (e)(2), Option (g)(2) or Option
(h), for the first 3% of Compensation allocated to all Participants,
"Compensation" does not include any exclusions elected under Adoption
Agreement Section 1.12 (other than the exclusion of elective contributions),
and the Advisory Committee must take into account the Participant's
Compensation for the entire Plan Year. (Choose an allocation method under
(e), (f), (g) or (h); (i) is mandatory if the Employer elects (f), (g) or (h);
(j) is optional in addition to any other election.)
[X] (e) Nonintegrated Allocation Formula. (Choose (1) or (2))
[ ] (1) The Advisory Committee will allocate the annual nonelective
contributions in the same ratio that each Participant's
Compensation for the Plan Year bears to the total Compensation of
all Participants for the Plan Year.
[X] (2) The Advisory Committee will allocate the annual nonelective
contributions in the same ratio that each Participant's
Compensation for the Plan Year bears to the total Compensation of
all Participants for the Plan Year. For purposes of this Option
(2), "Participant" means, in addition to a Participant who
satisfies the requirements of Section 3.06 for the Plan Year, any
other Participant entitled to a top heavy minimum allocation under
Section 3.04(B), but such Participant's allocation will not exceed
3% of his Compensation for the Plan Year.
[ ] (f) Two-Tiered Integrated Allocation Formula - Maximum Disparity.
First, the Advisory Committee will allocate the annual Employer
nonelective contributions in the same ratio that each Participant's
Compensation plus Excess Compensation for the Plan Year bears to the
total Compensation plus Excess Compensation of all Participants for the
Plan Year. The allocation under this paragraph, as a percentage of
each Participant's Compensation plus Excess Compensation, must not
exceed the applicable percentage (5.7%, 5.4% or 4.3%) listed under the
Maximum Disparity Table following Option (i).
The Advisory Committee then will allocate any remaining nonelective
contributions in the same ratio that each Participant's Compensation
for the Plan Year bears to the total Compensation of all Participants
for the Plan Year.
[ ] (g) Three-Tiered Integrated Allocation Formula. First, the Advisory
Committee will allocate the annual Employer nonelective contributions
in the same ratio that each Participant's Compensation for the Plan
Year bears to the total Compensation of all Participants for the Plan
Year. The allocation under this paragraph, as a percentage of each
Participant's Compensation may not exceed the applicable percentage
(5.7%, 5.4% or 4.3%) listed under the Maximum Disparity Table
following Option (i). Solely for purposes of the allocation in this
first paragraph, "Participant" means, in addition to a Participant who
satisfies the requirements of Section 3.06 for the Plan Year: (Choose
(1) or (2))
[ ] (1) No other Participant.
[ ] (2) Any other Participant entitled to a top heavy minimum
allocation under Section 3.04(B), but such Participant's
allocation under this Option (g) will not exceed 3% of his
Compensation for the Plan Year.
As a second tier allocation, the Advisory Committee will allocate the
nonelective contributions in the same ratio that each Participant's
Excess Compensation for the Plan Year bears to the total Excess
Compensation of all Participants for the Plan Year. The allocation
under this paragraph, as a percentage of each Participant's Excess
Compensation, may not exceed the allocation percentage in the first
paragraph.
Finally, the Advisory Committee will allocate any remaining
nonelective contributions in the same ratio that each Participant's
Compensation for the Plan Year bears to the total Compensation of all
Participants for the Plan Year.
[ ] (h) Four-Tiered Integrated Allocation Formula. First, the Advisory
Committee will allocate the annual Employer nonelective contributions
in the same ratio that each Participant's Compensation for the Plan
Year bears to the total Compensation of all Participants for the Plan
Year, but not exceeding 3% of each Participant's Compensation.
Solely for purposes of this first tier allocation, a "Participant"
means, in addition to any Participant who satisfies the requirements
of Section 3.06 for the Plan Year, any other Participant entitled to a
top heavy minimum allocation under Section 3.04(B) of the Plan.
As a second tier allocation, the Advisory Committee will allocate the
nonelective contributions in the same ratio that each Participant's
Excess Compensation for the Plan Year bears to the total Excess
Compensation of all Participants for the Plan Year, but not exceeding
3% of each Participant's Excess Compensation.
As a third tier allocation, the Advisory Committee will allocate the
annual Employer contributions in the same ratio that each
Participant's Compensation plus Excess Compensation for the Plan Year
bears to the total Compensation plus Excess Compensation of all
Participants for the Plan Year. The allocation under this paragraph,
as a percentage of each Participant's Compensation plus Excess
Compensation, must not exceed the applicable percentage (2.7%, 2.4%
or 1.3%) listed under the Maximum Disparity Table following Option (i).
The Advisory Committee then will allocate any remaining nonelective
contributions in the same ratio that each Participant's Compensation
for the Plan Year bears to the total Compensation of all Participants
for the Plan Year.
[ ] (i) Excess Compensation. For purposes of Option (f), (g) or (h),
"Excess Compensation" means Compensation in excess of the following
Integration Level: (Choose (1) or (2))
[ ] (1) % (not exceeding 100%) of the taxable wage base, as
determined under Section 230 of the Social Security Act, in effect
on the first day of the Plan Year: (Choose any combination of (i)
and (ii) or choose (iii))
[ ] (i) Rounded to (but not exceeding the taxable wage base).
[ ] (ii) But not greater than $ .
[ ] (iii) Without any further adjustment or limitation.
[ ] (2) $ [Note: Not exceeding the taxable wage base for the
Plan Year in which this Adoption Agreement first is effective.]
Maximum Disparity Table. For purposes of Options (f), (g) and (h), the
applicable percentage is:
Integration Level (as Applicable Percentages for Applicable Percentages
percentage of taxable Option (f) or Option (g) for Option (h)
wage base
100% 5.7% 2.7%
More than 80% but less
than 100% 5.4% 2.4%
More than 20% (but not less
than $10,001) and not more
than 80%^ 4.3% 1.3%
20% (or $10,000, if greater)
or less 5.7% 2.7%
[ ] (j) Allocation offset. The Advisory Committee will reduce a
Participant's allocation otherwise made under Part II of this Section
3.04 by the Participant's allocation under the following qualified
plan(s) maintained by the Employer:
The Advisory Committee will determine this allocation reduction:
(Choose (1) or (2))
[ ] (1) By treating the term "nonelective contribution" as including
all amounts paid or accrued by the Employer during the Plan Year
to the qualified plan(s) referenced under this Option (j). If a
Participant under this Plan also participates in that other plan,
the Advisory Committee will treat the amount the Employer
contributes for or during a Plan Year on behalf of a particular
Participant under such other plan as an amount allocated under
this Plan to that Participant's Account for that Plan Year. The
Advisory Committee will make the computation of allocation
required under the immediately preceding sentence before making
any allocation of nonelective contributions under this Section
3.04.
[ ] (2) In accordance with the formula provided in an addendum to this
Adoption Agreement, numbered 3.04(j).
Top Heavy Minimum Allocation - Method of Compliance. If a Participant's
allocation under this Section 3.04 is less than the top heavy minimum
allocation to which he is entitled under Section 3.04(B): (Choose (k) or (l))
[X] (k) The Employer will make any necessary additional contribution to
the Participant's Account, as described in Section 3.04(B)(7)(a) of the
Plan.
[ ] (l) The Employer will satisfy the top heavy minimum allocation under
the following plan(s) it maintains: ____________. However, the
Employer will make any necessary additional contribution to satisfy
the top heavy minimum allocation for an Employee covered only under
this Plan and not under the other plan(s) designated in this Option
(l). See Section 3.04(B)(7)(b) of the Plan.
If the Employer maintains another plan, the Employer may provide in an
addendum to this Adoption Agreement, numbered Section 3.04, any modifications
to the Plan necessary to satisfy the top heavy requirements under Code 416.
Related employers. If two or more related employers (as defined in Section
1.30) contribute to this Plan, the Advisory Committee must allocate all
Employer nonelective contributions (and forfeitures treated as nonelective
contributions) to each Participant in the Plan, in accordance with the
elections in this Adoption Agreement Section 3.04: (Choose (m) or (n))
[N/A] (m) Without regard to which contributing related group member employs
the Participant.
[ ] (n) Only to the Participants directly employed by the contributing
Employer. If a Participant receives Compensation from more than one
contributing Employer, the Advisory Committee will determine the
allocations under this Adoption Agreement Section 3.04 by prorating
among the participating Employers the Participant's Compensation and,
if applicable, the Participant's Integration Level under Option (i).
3.05 FORFEITURE ALLOCATION. Subject to any restoration allocation required
under Sections 5.04 or 9.14, the Advisory Committee will allocate a
Participant forfeiture in accordance with Section 3.04: (Choose (a) or (b);
(c) and (d) are optional in addition to (a) or (b))
[ ] (a) As an Employer nonelective contribution for the Plan Year in which
the forfeiture occurs, as if the Participant forfeiture were an
additional nonelective contribution for that Plan Year.
[X] (b) To reduce the Employer matching contributions and nonelective
contributions for the Plan Year: (Choose (1) or (2))
[ ] (1) in which the forfeiture occurs.
[X] (2) immediately following the Plan Year in which the forfeiture
occurs.
[X] (c) To the extent attributable to matching contributions:
(Choose (1), (2) or (3))
[ ] (1) In the manner elected under Options (a) or (b).
[X] (2) First to reduce Employer matching contributions for the Plan
Year: (Choose (i) or (ii))
[ ] (i) in which the forfeiture occurs,
[X] (ii) immediately following the Plan Year in which the
forfeiture occurs,
then as elected in Options (a) or (b).
[ ] (3) As a discretionary matching contribution for the Plan Year in
which the forfeiture occurs, in lieu of the manner elected under
Options (a) or (b).
[ ] (d) First to reduce the Plan's ordinary and necessary administrative
expenses for the Plan Year and then will allocate any remaining
forfeitures in the manner described in Options (a), (b) or (c),
whichever applies. If the Employer elects Option (c), the forfeitures
used to reduce Plan expenses: (Choose (1) or (2))
[ ] (1) relate proportionately to forfeitures described in Option (c)
and to forfeitures described in Options (a) or (b).
[ ] (2) relate first to forfeitures described in Option.
Allocation of forfeited excess aggregate contributions. The Advisory Committee
will allocate any forfeited excess aggregate contributions (as described in
Section 14.09): (Choose (e), (f) or (g))
[ ] (e) To reduce Employer matching contributions for the Plan Year:
(Choose (1) or (2))
[ ] (1) in which the forfeiture occurs.
[ ] (2) immediately following the Plan Year in which the forfeiture
occurs.
[ ] (f) As Employer discretionary matching contributions for the Plan Year
in which forfeited, except the Advisory Committee will not allocate
these forfeitures to the Highly Compensated Employees who incurred the
forfeitures.
[X] (g) In accordance with Options (a) through (d), whichever applies,
except the Advisory Committee will not allocate these forfeitures under
Option (a) or under Option (c)(3) to the Highly Compensated Employees
who incurred the forfeitures.
3.06 ACCRUAL OF BENEFIT.
Compensation taken into account. For the Plan Year in which the Employee
first becomes a Participant, the Advisory Committee will determine the
allocation of any cash or deferred contribution, designated qualified
nonelective contribution or nonelective contribution by taking into account:
(Choose (a) or (b))
[ ] (a) The Employee's Compensation for the entire Plan Year.
[X] (b) The Employee's Compensation for the portion of the Plan Year in
which the Employee actually is a Participant in the Plan.
Accrual Requirements. Subject to the suspension of accrual requirements of
Section 3.06(E) of the Plan, to receive an allocation of cash or deferred
contributions, matching contributions, designated qualified nonelective
contributions, nonelective contributions and Participant forfeitures, if
any, for the Plan Year, a Participant must satisfy the conditions described in
the following elections: (Choose (c) or at least one of (d) through (f))
[ ] (c) Safe harbor rule. If the Participant is employed by the Employer
on the last day of the Plan Year, the Participant must complete at
least one Hour of Service for that Plan Year. If the Participant is
not employed by the Employer on the last day of the Plan Year, the
Participant must complete at least 501 Hours of Service during the Plan
Year.
[X] (d) Hours of Service condition. The Participant must complete the
following minimum number of Hours of Service during the Plan Year:
(Choose at least one of (1) through (5))
[ ] (1) 1,000 Hours of Service.
[X] (2) (Specify, but the number of Hours of Service may not exceed
1,000) One (1).
[X] (3) No Hour of Service requirement if the Participant terminates
employment during the Plan Year on account of: (Choose (i), (ii)
or (iii))
[X] (i) Death.
[X] (ii) Disability.
[X] (iii) Attainment of Normal Retirement Age
in the current Plan Year or in a prior Plan Year.
[ ] (4) Hours of Service (not exceeding 1,000) if the Participant
terminates employment with the Employer during the Plan Year,
subject to any election in Option (3).
[X] (5) No Hour of Service requirement for an allocation of the
following contributions: Salary Deferral and Matching
Contributions.
[X] (e) Employment condition. The Participant must employed by the
Employer on the last day of the Plan Year, irrespective of whether he
satisfies any Hours of Service condition under Option (d), with the
following exceptions: (Choose (1) or atleast one of (2) through (5))
[ ] (1) No exceptions.
[ ] (2) Termination of employment because of death.
[ ] (3) Termination of employment because of disability.
[ ] (4) Termination of employment following attainment
of Normal Retirement Age.
[X] (5) No employment condition for the following contributions:
Salary Deferral and Matching Contributions.
[ ] (f) (Specify other conditions, if applicable):
Suspension of Accrual Requirements. The suspension of accrual requirements of
Section 3.06(E) of the Plan: (Choose (g), (h) or (i))
[X] (g) Applies to the Employer's Plan.
[ ] (h) Does not apply to the Employer's Plan.
[ ] (i) Applies in modified form to the Employer's Plan, as described in
an addendum to this Adoption Agreement, numbered Section 3.06(E).
Special accrual requirements for matching contributions. If the Plan
allocates matching contributions on two or more allocation dates for a Plan
Year, the Advisory Committee, unless otherwise specified in Option (l), will
apply any Hours of Service condition by dividing the required Hours of Service
on a prorata basis to the allocation periods included in that Plan Year.
Furthermore, a Participant who satisfies the conditions described in this
Adoption Agreement Section 3.06 will receive an allocation of matching
contributions (and forfeitures treated as matching contributions) only if
the Participant satisfies the following additional condition(s): (Choose (j)
or at least one of (k) or (l))
[X] (j) No additional conditions.
[ ] (k) The Participant is not a Highly Compensated Employee for the Plan
Year. This Option (k) applies to: (Choose (1) or (2))
[ ] (1) All matching contributions.
[ ] (2) Matching contributions described in Option(s) of Adoption
Agreement Section 3.01.
[ ] (l) (Specify)
3.15 MORE THAN ONE PLAN LIMITATION. If the provisions of Section 3.15 apply,
the Excess Amount attributed to this Plan equals: (Choose (a), (b) or (c))
[ ] (a) The product of:
(i) the total Excess Amount allocated as of such date
(including any amount which the Advisory Committee would
have allocated but for the limitations of Code 415), times
(ii) the ratio of (1) the amount allocated to the
Participant as of such date under this Plan divided by (2)
the total amount allocated as of such date under all
qualified defined contribution plans (determined without
regard to the limitations of Code 415).
[X] (b) The total Excess Amount.
[ ] (c) None of the Excess Amount.
3.18 DEFINED BENEFIT PLAN LIMITATION.
Application of limitation. The limitation under Section 3.18 of the Plan:
(Choose (a) or (b))
[X] (a) Does not apply to the Employer's Plan because the
Employer does not maintain and never has maintained a defined
benefit plan covering any Participant in this Plan.
[ ] (b) Applies to the Employer's Plan. To the extent necessary
to satisfy the limitation under Section 3.18, the Employer will
reduce: (Choose (1) or (2))
[ ] (1) The Participant's projected annual benefit under the
defined benefit plan under which the Participant participates.
[ ] (2) Its contribution or allocation on behalf of the
Participant to the defined contribution plan under which the
Participant participates and then, if necessary, the
Participant's projected annual benefit under the defined
benefit plan under which the Participant participates.
[Note: If the Employer selects (a), the remaining options in this Section
3.18 do not apply to the Employer's Plan.]
Coordination with top heavy minimum allocation. The Advisory Committee will
apply the top heavy minimum allocation provisions of Section 3.04(B) of the
Plan with the following modifications: (Choose (c) or at least one of (d) or
(e))
[ ] (c) No modifications.
[ ] (d) For Non-Key Employees participating only in this Plan, the top
heavy minimum allocation is the minimum allocation described in Section
3.04(B) determined by substituting % (not less than 4%) for "3%,"
except: (Choose (i) or (ii))
[ ] (i) No exceptions.
[ ] (ii) Plan Years in which the top heavy ratio exceeds 90%.
[ ] (e) For Non-Key Employees also participating in the defined benefit
plan, the top heavy minimum is: (Choose (1) or (2))
[ ] (1) 5% of Compensation (as determined under Section 3.04(B) or the
Plan) irrespective of the contribution rate of any Key Employee,
except: (Choose (i) or (ii))
[ ] (i) No exceptions.
[ ] (ii) Substituting "7%" for "5%" if the top heavy ratio does
not exceed 90%.
[ ] (2) 0%. [Note: The Employer may not select this Option (2) unless
the defined benefit plan satisfies the top heavy minimum benefit
requirements of Code 416 for these Non-Key Employees.]
Actuarial Assumptions for Top Heavy Calculation. To determine the top heavy
ratio, the Advisory Committee will use the following interest rate and
mortality assumptions to value accrued benefits under a defined benefit plan:
If the elections under this Section 3.18 are not appropriate to satisfy the
limitations of Section 3.18, or the top heavy requirements under Code 416, the
Employer must provide the appropriate provisions in an addendum to this
Adoption Agreement.
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
4.01 PARTICIPANT NONDEDUCTIBLE CONTRIBUTIONS. The Plan: (Choose (a) or (b);
(c) is available only with (b))
[X] (a) Does not permit Participant nondeductible contributions.
[ ] (b) Permits Participant nondeductible contributions, pursuant to
Section 14.04 of the Plan.
[ ] (c) The following portion of the Participant's nondeductible
contributions for the Plan Year are mandatory contributions
under Option (i)(3) of Adoption Agreement Section 3.01: (Choose
(1) or (2))
[ ] (1) The amount which is not less than:
[ ] (2) The amount which is not greater than:
Allocation dates. The Advisory Committee will allocate nondeductible
contributions for each Plan Year as of the Accounting Date and the following
additional allocation dates: (Choose (d) or (e))
[ ] (d) No other allocation dates.
[ ] (e) (Specify)
As of an allocation date, the Advisory Committee will credit all nondeductible
contributions made for the relevant allocation period. Unless otherwise
specified in (e), a nondeductible contribution relates to an allocation period
only if actually made to the Trust no later than 30 days after that allocation
period ends.
4.05 PARTICIPANT CONTRIBUTION - WITHDRAWAL/DISTRIBUTION. Subject to the
restrictions of Article VI, the following distribution options apply to a
Participant's Mandatory Contributions Account, if any, prior to his Separation
from Service: (Choose (a) or at least one of (b) through (d))
[ ] (a) No distribution options prior to Separation from Service.
[ ] (b) The same distribution options applicable to the Deferral
Contributions Account prior to the Participant's Separation from
Service, as elected in Adoption Agreement Section 6.03.
[ ] (c) Until he retires, the Participant has a continuing election to
receive all or any portion of his Mandatory Contributions Account if:
(Choose (1) or at least one of (2) through (4))
[ ] (1) No conditions.
[ ] (2) The mandatory contributions have accumulated for at least Plan
Years since the Plan Year for which contributed.
[ ] (3) The Participant suspends making nondeductible contributions
for a period of months.
[ ] (4) (Specify)
[ ] (d) (Specify)
ARTICLE V
TERMINATION OF SERVICE - PARTICIPANT VESTING
5.01 NORMAL RETIREMENT. Normal Retirement Age under the Plan is:
(Choose (a) or (b))
[X] (a) 65 [State age, but may not exceed age 65].
[ ] (b) The later of the date the Participant attains years of age or the
5th anniversary of the first day of the Plan Year in which the
Participant commenced participation in the Plan. [The age selected may
not exceed age 65 and the anniversary selected may not exceed the 5th.]
5.02 PARTICIPANT DEATH OR DISABILITY. The 100% vesting rule under Section
5.02 of the Plan: (Choose (a) or choose one or both of (b) and (c))
[ ] (a) Does not apply.
[X] (b) Applies to death.
[X] (c) Applies to disability.
5.03 VESTING SCHEDULE.
Deferral Contributions Account/Qualified Matching Contributions
Account/Qualified Nonelective Contributions Account/Mandatory Contributions
Account. A Participant has a 100% Nonforfeitable interest at all times in
his Deferral Contributions Account, his Qualified Matching Contributions
Account, his Qualified Nonelective Contributions Account and in his
Mandatory Contributions Account.
Regular Matching Contributions Account/Employer Contributions Account. With
respect to a Participant's Regular Matching Contributions Account and
Employer Contributions Account, the Employer elects the following vesting
schedule: (Choose (a) or (b); (c) and (d) are available only as additional
options)
[ ] (a) Immediate vesting. 100% Nonforfeitable at all times. [Note: The
Employer must elect Option (a) if the eligibility conditions under
Adoption Agreement Section 2.01(c) require 2 years of service or more
than 12 months of employment.]
[X] (b) Graduated Vesting Schedules.
Top Heavy Schedule Non Top Heavy
(Mandatory) Schedule
(Optional)
Years of Nonforfeitable Years of Nonforfeitable
Service Percentage Service Percentage
Less than 1 0% Less than 1 0%
1 0% 1 0%
2 0% 2 0%
3 100% 3 100%
4 100% 4 100%
5 100% 5 100%
6 100% 6 100%
7 or more 100%
[ ] (c) Special vesting election for Regular Matching Contributions
Account. In lieu of the election under Options (a) or (b), the
Employer elects the following vesting schedule for a Participant's
Regular Matching Contributions Account: (Choose (1) or (2))
[ ] (1) 100% Nonforfeitable at all times.
[ ] (2) In accordance with the vesting schedule described in the
addendum to this Adoption Agreement, numbered 5.03(c). [Note: If
the Employer elects this Option (c)(2), the addendum must
designate the applicable vesting schedule(s) using the same format
as used in Option (b).]
[Note: Under Options (b) and (c)(2), the Employer must complete a Top Heavy
Schedule which satisfies Code 416. The Employer, at its option, may complete
a Non Top Heavy Schedule. The Non Top Heavy Schedule must satisfy Code
411(a)(2). Also see Section 7.05 of the Plan.]
[X] (d) The Top Heavy Schedule under Option (b) (and, if applicable, under
Option (c)(2)) applies: (Choose (1) or (2))
[X] (1) Only in a Plan Year for which the Plan is top heavy.
[ ] (2) In the Plan Year for which the Plan first is top heavy and
then in all subsequent Plan Years. [Note: The Employer may not
elect Option (d) unless it has completed a Non Top Heavy
Schedule.]
Minimum vesting. (Choose (e) or (f))
[X] (e) The Plan does not apply a minimum vesting rule.
[ ] (f) A Participant's Nonforfeitable Accrued Benefit will never be less
than the lesser of $ or his entire Accrued Benefit, even if the
application of a graduated vesting schedule under Options (b) or (c)
would result in a smaller Nonforfeitable Accrued Benefit.
Life Insurance Investments. The Participant's Accrued Benefit attributable to
insurance contracts purchased on his behalf under Article XI is: (Choose (g)
or (h))
[N/A] (g) Subject to the vesting election under Options (a), (b) or (c).
[ ] (h) 100% Nonforfeitable at all times, irrespective of the vesting
election under Options (b) or (c)(2).
5.04 CASH-OUT DISTRIBUTIONS TO PARTIALLY-VESTED PARTICIPANTS/RESTORATION OF
FORFEITED ACCRUED BENEFIT. The deemed cash-out rule described in Section
5.04(C) of the Plan: (Choose (a) or (b))
[ ] (a) Does not apply.
[X] (b) Will apply to determine the timing of forfeitures for 0% vested
Participants. A Participant is not a 0% vested Participant if he has a
Deferral Contributions Account.
5.06 YEAR OF SERVICE - VESTING.
Vesting computation period. The Plan measures a Year of Service on the basis
of the following 12 consecutive month periods: (Choose (a) or (b))
[X] (a) Plan Years.
[ ] (b) Employment Years. An Employment Year is the 12 consecutive month
period measured from the Employee's Employment Commencement Date and
each successive 12 consecutive month period measured from each
anniversary of that Employment Commencement Date.
Hours of Service. The minimum number of Hours of Service an Employee must
complete during a vesting computation period to receive credit for a Year of
Service is: (Choose (c) or (d))
[X] (c) 1,000 Hours of Service.
[ ] (d) Hours of Service. [Note: The Hours of Service requirement may not
exceed 1,000.]
5.08 INCLUDED YEARS OF SERVICE - VESTING. The Employer specifically excludes
the following Years of Service: (Choose (a) or at least one of (b) through
(e))
[ ] (a) None other than as specified in Section 5.08(a) of the Plan.
[X] (b) Any Year of Service before the Participant attained the age of 18.
[Note: The age selected may not exceed age 18.]
[ ] (c) Any Year of Service during the period the Employer did not maintain
this Plan or a predecessor plan.
[X] (d) Any Year of Service before a Break in Service if the number of
consecutive Breaks in Service equals or exceeds the greater of 5 or the
aggregate number of the Years of Service prior to the Break. This
exception applies only if the Participant is 0% vested in his Accrued
Benefit derived from Employer contributions at the time he has a Break
in Service. Furthermore, the aggregate number of Years of Service
before a Break in Service do not include any Years of Service not
required to be taken into account under this exception by reason of any
prior Break in Service.
[ ] (e) Any Year of Service earned prior to the effective date of ERISA if
the Plan would have disregarded that Year of Service on account of an
Employee's Separation from Service under a Plan provision in effect and
adopted before January 1, 1974.
ARTICLE VI
TIME AND METHOD OF PAYMENTS OF BENEFITS
Code 411(d)(6) Protected Benefits. The elections under this Article
VI may not eliminate Code 411(d)(6) protected benefits. To the
extent the elections would eliminate a Code 411(d)(6) protected
benefit, see Section 13.02 of the Plan. Furthermore, if the
elections liberalize the optional forms of benefit under the Plan,
the more liberal options apply on the later of the adoption date or
the Effective Date of this Adoption Agreement.
6.01 TIME OF PAYMENT OF ACCRUED BENEFIT.
Distribution date. A distribution date under the Plan means as soon as
administratively possible within two months following an employee's
separation from service, death, disability or attainment of Normal Retirement
Age. [Note: The Employer must specify the appropriate date(s). The specified
distribution dates primarily establish annuity starting dates and the notice
and consent periods prescribed by the Plan. The Plan allows the Trustee an
administratively practicable period of time to make the actual distribution
relating to a particular distribution date.]
Nonforfeitable Accrued Benefit Not Exceeding $3,500. Subject to the
limitations of Section 6.01(A)(1), the distribution date for distribution
of a Nonforfeitable Accrued Benefit not exceeding $3,500 is: (Choose (a), (b),
(c), (d) or (e))
[ ] (a) of the Plan Year beginning after the Participant's Separation from
Service.
[X] (b) The first distribution date following the Participant's Separation
from Service.
[ ] (c) of the Plan Year after the Participant incurs Break(s) in Service
(as defined in Article V).
[ ] (d) following the Participant's attainment of Normal Retirement Age,
but not earlier than days following his Separation from Service.
[ ] (e) (Specify)
Nonforfeitable Accrued Benefit Exceeds $3,500. See the elections under
Section 6.03.
Disability. The distribution date, subject to Section 6.01(A)(3), is: (Choose
(f), (g) or (h))
[ ] (f) after the Participant terminates employment because of disability.
[X] (g) The same as if the Participant had terminated employment without
disability.
[ ] (h) (Specify)
Hardship. (Choose (i) or (j))
[X] (i) The Plan does not permit a hardship distribution to a Participant
who has separated from Service.
[ ] (j) The Plan permits a hardship distribution to a Participant who has
separated from Service in accordance with the hardship distribution
policy stated in: (Choose (1), (2) or (3))
[ ] (1) Section 6.01(A)(4) of the Plan.
[ ] (2) Section 14.11 of the Plan.
[ ] (3) The addendum to this Adoption Agreement, numbered Section
6.01.
Default on a Loan. If a Participant or Beneficiary defaults on a loan made
pursuant to a loan policy adopted by the Advisory Committee pursuant to
Section 9.04, the Plan: (Choose (k), (l) or (m))
[X] (k) Treats the default as a distributable event. The Trustee, at the
time of the default, will reduce the Participant's Nonforfeitable
Accrued Benefit by the lesser of the amount in default (plus accrued
interest) or the Plan's security interest in that Nonforfeitable
Accrued Benefit. To the extent the loan is attributable to the
Participant's Deferral Contributions Account, Qualified Matching
Contributions Account or Qualified Nonelective Contributions Account,
the Trustee will not reduce the Participant's Nonforfeitable Accrued
Benefit unless the Participant has separated from Service or unless
the Participant has attained age 59 1/2.
[ ] (l) Does not treat the default as a distributable event. When an
otherwise distributable event first occurs pursuant to Section 6.01 or
Section 6.03 of the Plan, the Trustee will reduce the Participant's
Nonforfeitable Accrued Benefit by the lesser of the amount in default
(plus accrued interest) or the Plan's security interest in that
Nonforfeitable Accrued Benefit.
[ ] (m) (Specify)
6.02 METHOD OF PAYMENT OF ACCRUED BENEFIT. The Advisory Committee will apply
Section 6.02 of the Plan with the following modifications: (Choose (a) or at
least one of (b), (c), (d) and (e))
[ ] (a) No modifications.
[ ] (b) Except as required under Section 6.01 of the Plan, a lump sum
distribution is not available:
[ ] (c) An installment distribution: (Choose (1) or at least one of (2) or
(3))
[ ] (1) Is not available under the Plan.
[ ] (2) May not exceed the lesser of years or the maximum period
permitted under Section 6.02.
[ ] (3) (Specify)
[ ] (d) The Plan permits the following annuity options:
Any Participant who elects a life annuity option is subject to the
requirements of Sections 6.04(A), (B), (C) and (D) of the Plan. See
Section 6.04(E). [Note: The Employer may specify additional annuity
options in an addendum to this Adoption Agreement, numbered 6.02(d).]
[X] (e) If the Plan invests in qualifying Employer securities, as described
in Section 10.03(F), a Participant eligible to elect distribution under
Section 6.03 may elect to receive that distribution in Employer
securities only in accordance with the provisions of the addendum to
this Adoption Agreement, numbered 6.02(e).
6.03 BENEFIT PAYMENT ELECTIONS.
Participant Elections After Separation from Service. A Participant who is
eligible to make distribution elections under Section 6.03 of the Plan may
elect to commence distribution of his Nonforfeitable Accrued Benefit: (Choose
at least one of (a) through (c))
[ ] (a) As of any distribution date, but not earlier than of the Plan Year
beginning after the Participant's Separation from Service.
[X] (b) As of the following date(s): (Choose at least one of Options (1)
through (6))
[X] (1) Any distribution date after the close of the Plan Year in
which the Participant attains Normal Retirement Age.
[X] (2) Any distribution date following his Separation from Service
with the Employer.
[ ] (3) Any distribution date in the Plan Year(s) beginning after his
Separation from Service.
[ ] (4) Any distribution date in the Plan Year after the Participant
incurs Break(s) in Service (as defined in Article V).
[ ] (5) Any distribution date following attainment of age and
completion of at least Years of Service (as defined in
Article V).
[ ] (6) (Specify)
[ ] (c) (Specify)
The distribution events described in the election(s) made under Options (a),
(b) or (c) apply equally to all Accounts maintained for the Participant unless
otherwise specified in Option (c).
Participant Elections Prior to Separation from Service - Regular Matching
Contributions Account and Employer Contributions Account. Subject to the
restrictions of Article VI, the following distribution options apply to a
Participant's Regular Matching Contributions Account and Employer
Contributions Account prior to his Separation from Service: (Choose (d) or at
least one of (e) through (h))
[X] (d) No distribution options prior to Separation from Service.
[ ] (e) Attainment of Specified Age. Until he retires, the Participant has
a continuing election to receive all or any portion of his
Nonforfeitable interest in these Accounts after he attains: (Choose (1)
or (2))
[ ] (1) Normal Retirement Age.
[ ] (2) _______ years of age and is at least _______% vested in
these Accounts. [Note: If the percentage is less than 100%, see
the special vesting formula in Section 5.03.]
[ ] (f) After a Participant has participated in the Plan for a period of
not less than _______ years and he is 100% vested in these Accounts,
until he retires, the Participant has a continuing election to receive
all or any portion of the Accounts. [Note: The number in the blank
space may not be less than 5.]
[ ] (g) Hardship. A Participant may elect a hardship distribution prior to
his Separation from Service in accordance with the hardship
distribution policy: (Choose (1), (2) or (3); (4) is available only as
an additional option)
[ ] (1) Under Section 6.01(A)(4) of the Plan.
[ ] (2) Under Section 14.11 of the Plan.
[ ] (3) Provided in the addendum to this Adoption Agreement, numbered
Section 6.03.
[ ] (4) In no event may a Participant receive a hardship distribution
before he is at least _____% vested in these Accounts. [Note: If
the percentage in the blank is less than 100%, see the special
vesting formula in Section 5.03.]
[ ] (h) (Specify)
[Note: The Employer may use an addendum, numbered 6.03, to provide additional
language authorized by Options (b)(6), (c), (g)(3) or (h) of this Adoption
Agreement Section 6.03.]
Participant Elections Prior to Separation from Service - Deferral
Contributions Account, Qualified Matching Contributions Account and Qualified
Nonelective Contributions Account. Subject to the restrictions of Article
VI, the following distribution options apply to a Participant's Deferral
Contributions Account, Qualified Matching Contributions Account and Qualified
Nonelective Contributions Account prior to his Separation from Service:
(Choose (i) or at least one of (j) through (l))
[X] (i) No distribution options prior to Separation from Service.
[ ] (j) Until he retires, the Participant has a continuing election to
receive all or any portion of these Accounts after he attains: (Choose
(1) or (2))
[ ] (1) The later of Normal Retirement Age or age 59 1/2.
[ ] (2) Age _______ (at least 59 1/2).
[ ] (k) Hardship. A Participant, prior to this Separation from Service,
may elect a hardship distribution from his Deferral Contributions
Account in accordance with the hardship distribution policy under
Section 14.11 of the Plan.
[ ] (l) (Specify) . [Note: Option (l) may not permit in service
distributions prior to age 59 1/2 (other than hardship) and may not
modify the hardship policy described in Section 14.11.]
Sale of trade or business/subsidiary. If the Employer sells substantially all
of the assets (within the meaning of Code 409(d)(2)) used in a trade or
business or sells a subsidiary (within the meaning of Code 409(d)(3)), a
Participant who continues employment with the acquiring corporation is
eligible for distribution from his Deferral Contributions Account,
Qualified Matching Contributions Account and Qualified Nonelective
Contributions Account: (Choose (m) or (n))
[X] (m) Only as described in this Adoption Agreement Section 6.03 for
distributions prior to Separation from Service.
[ ] (n) As if he has a Separation from Service. After March 31, 1988, a
distribution authorized solely by reason of this Option (n) must
constitute a lump sum distribution, determined in a manner consistent
with Code 401(k)(10) and the applicable Treasury regulations.
6.04 ANNUITY DISTRIBUTIONS TO PARTICIPANTS AND SURVIVING SPOUSES.
The annuity distribution requirements of Section 6.04: (Choose (a) or (b))
[X] (a) Apply only to a Participant described in Section 6.04(E) of the
Plan (relating to the profit sharing exception to the joint and
survivor requirements).
[ ] (b) Apply to all Participants.
ARTICLE IX
ADVISORY COMMITTEE - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
9.10 VALUE OF PARTICIPANT'S ACCRUED BENEFIT. If a distribution (other than a
distribution from a segregated Account and other than a corrective
distribution described in Sections 14.07, 14.08, 14.09 or 14.10 of the Plan)
occurs more than 90 days after the most recent valuation date, the
distribution will include interest at: (Choose (a), (b) or (c))
[X] (a) 0% per annum. [Note: The percentage may equal 0%.]
[ ] (b) The 90 day Treasury bill rate in effect at the beginning of the
current valuation period.
[ ] (c) (Specify)
9.11 ALLOCATION AND DISTRIBUTION OF NET INCOME GAIN OR LOSS.
Pursuant to Section 14.12, to determine the allocation of net income, gain or
loss: (Complete only those items, if any, which are applicable to the
Employer's Plan)
[X] (a) For salary reduction contributions, the Advisory Committee will:
(Choose (1), (2), (3), (4) or (5))
[ ] (1) Apply Section 9.11 without modification.
[ ] (2) Use the segregated account approach described in Section
14.12.
[X] (3) Use the weighted average method described in Section 14.12,
based on a daily weighting period.
[ ] (4) Treat as part of the relevant Account at the beginning of the
valuation period % of the salary reduction contributions:
(Choose (i) or (ii))
[ ] (i) made during that valuation period.
[ ] (ii) made by the following specified time: _________
[ ] (5) Apply the allocation method described in the addendum to this
Adoption Agreement numbered 9.11(a).
[X] (b) For matching contributions, the Advisory Committee will:
(Choose (1), (2), (3) or (4))
[ ] (1) Apply Section 9.11 without modification.
[X] (2) Use the weighted average method described in Section 14.12,
based on a daily weighting period.
[ ] (3) Treat as part of the relevant Account at the beginning of the
valuation period % of the matching contributions allocated
during the valuation period.
[ ] (4) Apply the allocation method described in the addendum to this
Adoption Agreement numbered 9.11(b).
[ ] (c) For Participant nondeductible contributions, the Advisory Committee
will: (Choose (1), (2), (3), (4) or (5))
[ ] (1) Apply Section 9.11 without modification.
[ ] (2) Use the segregated account approach described in Section 14.12.
[ ] (3) Use the weighted average method described in Section 14.12,
based on a weighting period.
[ ] (4) Treat as part of the relevant Account at the beginning of the
valuation period % of the Participant nondeductible
contributions: (Choose (i) or (ii))
[ ] (i) made during that valuation period.
[ ] (ii) made by the following specified time:
[ ] (5) Apply the allocation method described in the addendum to this
Adoption Agreement numbered 9.11(c).
ARTICLE X
TRUSTEE AND CUSTODIAN, POWERS AND DUTIES
10.03 INVESTMENT POWERS. Pursuant to Section 10.03[F] of the Plan, the
aggregate investments in qualifying Employer securities and in qualifying
Employer real property: (Choose (a) or (b))
[ ] (a) May not exceed 10% of Plan assets.
[X] (b) May not exceed 100% of Plan assets. [Note: The percentage may not
exceed 100%.]
10.14 VALUATION OF TRUST. In addition to each Accounting Date, the Trustee
must value the Trust Fund on the following valuation date(s): (Choose (a) or
(b))
[ ] (a) No other mandatory valuation dates.
[X] (b) (Specify) March 31, June 30, September 30, and December 31
EFFECTIVE DATE ADDENDUM
(Restated Plans Only)
The Employer must complete this addendum only if the restated Effective
Date specified in Adoption Agreement Section 1.18 is different than the
restated effective date for at least one of the provisions listed in this
addendum. In lieu of the restated Effective Date in Adoption Agreement
Section 1.18, the following special effective dates apply: (Choose whichever
elections apply)
[ ] (a) Compensation definition. The Compensation definition of Section
1.12 (other than the $200,000 limitation) is effective for Plan Years
beginning after . [Note: May not be effective
later than the first day of the first Plan Year beginning after the
Employer executes this Adoption Agreement to restate the Plan for the
Tax Reform Act of 1986, if applicable.]
[X] (b) Eligibility conditions. The eligibility conditions specified in
Adoption Agreement Section 2.01 are effective for Plan Years beginning
after December 31, 1995.
[ ] (c) Suspension of Years of Service. The suspension of Years of Service
rule elected under Adoption Agreement Section 2.03 is effective for
Plan Years beginning after _________.
[ ] (d) Contribution/allocation formula. The contribution formula elected
under Adoption Agreement Section 3.01 and the method of allocation
elected under Adoption Agreement Section 3.04 is effective for Plan
Years beginning after __________.
[ ] (e) Accrual requirements. The accrual requirements of Section 3.06 are
effective for Plan Years beginning after ____________.
[ ] (f) Employment condition. The employment condition of Section 3.06 is
effective for Plan Years beginning after ________________.
[ ] (g) Elimination of Net Profits. The requirement for the Employer not
to have net profits to contribute to this Plan is effective for Plan
Years beginning after _________________.
[Note: The date specified may not be earlier than December 31, 1985.]
[X] (h) Vesting Schedule. The vesting schedule elected under Adoption
Agreement Section 5.03 is effective for Plan Years beginning after
January 1, 1988.
[ ] (i) Allocation of Earnings. The special allocation provisions elected
under Adoption Agreement Section 9.11 are effective for Plan Years
beginning after __________________.
[X] (j) (Specify)
1.) Method of Payment of Accrued Benefit. - see Addendum 6.02(e)
2.) Eligibility conditions. - Effective for all Plan Years after
12/31/95 - The Plan Entry Date is the first day of each month
following the completion of one year of service in which a minimum
of 1,000 hours has been worked. For Administrative purposes,
this provision will go into effect on May 1, 1996.
ADDENDUM 6.02(e)
Participants whose Accounts are invested (partially or entirely) in PAYCHEX,
Inc. stock may at their request receive distribution "in kind" of their whole
share value of PAYCHEX, Inc. stock. A minimum number of shares may be set by
the Advisory Committee.
For Plan Years prior to the special Effective Date, the terms of the Plan
prior to its restatement under this Adoption Agreement will control for
purposes of the designated provisions. A special Effective Date may not
result in the delay of a Plan provision beyond the permissible Effective Date
under any applicable law requirements.
Execution Page
The Trustee (and Custodian, if applicable), by executing this Adoption
Agreement, accepts its position and agrees to all of the obligations,
responsibilities and duties imposed upon the Trustee (or Custodian) under the
Master Plan and Trust. The Employer hereby agrees to the provisions of this
Plan and Trust, and in witness of its agreement, the Employer by its duly
authorized officers, has executed this Adoption Agreement, and the Trustee
(and Custodian, if applicable) signified its acceptance, on this 30th
day of December, 1996.
Name and EIN of Employer: PAYCHEX, Inc. 16-1124166
Signed:
Name and Title: ___________________________________________
Name(s) of Trustee: INVESCO Trust Company
Signed:
Name and Title: ___________________________________________
Name of Custodian:
Signed:
[Note: A Trustee is mandatory, but a Custodian is optional. See Section 10.03
of the Plan.]
Plan Number. The 3-digit plan number the Employer assigns to this Plan for
ERISA reporting purposes (Form 5500 Series) is: 001.
Use of Adoption Agreement. Failure to complete properly the
elections in this Adoption Agreement may result in disqualification of the
Employer's Plan. The 3-digit number assigned to this Adoption Agreement (see
page 1) is solely for the Master Plan Sponsor's recordkeeping purposes
and does not necessarily correspond to the plan number the Employer
designated in the prior paragraph.
Master Plan Sponsor. The Master Plan Sponsor identified on the first page of
the basic plan document will notify all adopting employers of any amendment
of this Master Plan or of any abandonment or discontinuance by the
Master Plan Sponsor of its maintenance of this Master Plan. For inquiries
regarding the adoption of the Master Plan, the Master Plan Sponsor's
intended meaning of any plan provisions or the effect of the opinion
letter issued to the Master Plan Sponsor, please contact the Master
Plan Sponsor at the following address and telephone number: 7800 E.
Union Ave., Suite 900 Denver Colorado 80237 (303) 779-0731.
Reliance on Opinion Letter. The Employer may not rely on the Master Plan
Sponsor's opinion letter covering this Adoption Agreement. For reliance on
the Plan's qualification, the Employer must obtain a determination letter
from the applicable IRS Key District office.
PARTICIPATION AGREEMENT
For Participation by Related Group Members (Plan Section 1.30)
The undersigned Employer, by executing this Participation Agreement,
elects to become a Participating Employer in the Plan identified in
Section 1.03 of the accompanying Adoption Agreement, as if the Participating
Employer were a signatory to that Agreement. The Participating Employer
accepts, and agrees to be bound by, all of the elections granted under the
provisions of the Master Plan as made by PAYCHEX, Inc., the Signatory Employer
to the Execution Page of the Adoption Agreement.
1. The Effective Date of the undersigned Employer's
participation in the designated Plan is: January 1, 1996.
2. The undersigned Employer's adoption of this Plan constitutes:
[ ] (a) The adoption of a new plan by the Participating Employer.
[X] (b) The adoption of an amendment and restatement of a plan
currently maintained by the Employer, identified as PAYCHEX,
Inc., and having an original effective date of January 1, 1992
Dated this _______ day of ________________, 1996.
Name of Participating Employer: PAYCHEX Management Corp.
Signed:_________________________________________________
Participating Employer's EIN: 16-1449040
Acceptance by the Signatory Employer to the Execution Page of the Adoption
Agreement and by the Trustee.
Name of Signatory Employer: PAYCHEX, Inc.
Accepted:__________________
[Date] Signed:___________________________________
Name(s) of Trustee: INVESCO Trust Company
Accepted:___________________
[Date] Signed:___________________________________
[Note: Each Participating Employer must execute a separate Participation
Agreement. See the Execution Page of the Adoption Agreement for important
Master Plan information.]
EXHIBIT 4.1(c) - AMENDMENT TO THE
PAYCHEX, INC. 401(k) INCENTIVE RETIREMENT PLAN
EFFECTIVE: JANUARY 1, 1997
WHEREAS, Paychex, Inc. (the "Employer") established the above Plan
effective July 1, 1984; and
WHEREAS, the Employer has the right to amend said Plan under Section
13.02 thereof; and
WHEREAS, the Employer desires to amend the Plan and to reduce such
amendment to writing as required by Section 13.02 thereof; and
WHEREAS, because this amendment affects the rights, duties and
responsibilities of the Advisory Committee or Plan Administrator, the
Advisory Committee or Plan Administrator appears herein to consent to the
amendment as required by Section 13.02 of the Plan.
NOW, THEREFORE, in consideration of the mutual agreement of the parties,
the Plan is hereby amended, effective January 1, 1997, as follows:
Section 3.01(j)(2) is hereby amended to read "The Advisory Committee
will disregard eligible contributions exceeding 6% of Compensation per pay
period."
Except as specifically amended hereby, the Plan shall remain unchanged.
This amendment shall be effective as of the date set forth above.
BY: Richard L. S. Girard
______________________________________________
TITLE: Chairperson 401(k) Committee
___________________________________________
ADVISORY COMMITTEE OR PLAN ADMINISTRATOR:
/s/ Richard L. S. Girard
________________________________________________
EXHIBIT 4.1(d) - AMENDMENT TO THE
PAYCHEX, INC. 401(k) INCENTIVE RETIREMENT PLAN
AND PLAN MERGER AGREEMENT
EFFECTIVE: SEPTEMBER 29, 1997
This amendment to the Paychex, Inc. 401(k) Incentive Retirement Plan is
made and entered into on the 29th day of September, 1997 by and between
Paychex, Inc. (hereafter the "Employer"), Olsen Computer Systems, Inc.
(hereafter the "Merging Employer") and INVESCO Trust Company ( hereinafter
the "Trustee").
WHEREAS, the Employer established the Paychex, Inc. 401(k) Incentive
Retirement Plan (hereafter the "Receiving Plan") effective July 1, 1984; and
WHEREAS, the "Merging Employer" established the Employees' 401(k) Plan
of Olsen Computer Systems, Inc. (hereafter the "Merging Plan") effective
January 1, 1984; and
WHEREAS, the Employer and the Trustee of the Receiving Plan have
specific authority under the Master Plan and Trust Agreement to enter into
this amendment to Plan and Plan Merger Agreement.
WHEREAS, the Employer and Merging Employer Plan deem it is in the best
interest of the participants and beneficiaries of the Merging Plan and
Receiving Plan to merge the two Plans effective July 1, 1997, with the
Receiving Plan as the surviving Plan, and to accept the transfer of plan
assets, or to transfer plan assets, as may be required by any such merger.
NOW THEREFORE, the Employer, the Merging Employer and the Trustee of the
Receiving Plan do hereby agree as follows:
(1) Section 1.29 of the Adoption Agreement of the Receiving
Plan is hereby amended to credit service with Olsen Computer
Systems, Inc. for all purposes of the Plan.
(2) Sections 6.03(e)(2) and 6.03(j)(2) of the Adoption
Agreement of the Receiving Plan are hereby amended to provide
that participants in the Merging Plan may make in-service
withdrawals from the vested balances in their "Merger
Accounts" as of July 1, 1997, after attaining age 59 1/2.
(3) TRANSFER OF ASSETS. The Merging Plan shall transfer and
assign directly to the Receiving Plan the "Merger Account"
for each participant in the Merging Plan. The Merger Account
is defined as the single sum value of the participant's
accrued benefit under the Merging Plan determined in
accordance with provision of such Plan as of the date of
transfer.
(4) HOLDING AND INVESTMENT OF ASSETS. The Employer and the
Trustee shall hold, invest, administer and distribute the
assets transferred and assigned in accordance with the terms
of the Receiving Plan, as amended and restated herein.
(5) PARTICIPANT ACCOUNT. With respect to the account
balances of the participants under the Merging Plan, the
following conditions shall apply;
a. The sum of the account balances of the participants
under the Merging Plan will be 100 percent vested prior to
transfer and under the Receiving Plan immediately prior to
the transfer and assignment shall equal the fair market value
of the entire assets of the Receiving Plan immediately after
the transfer and assignment;
b. Immediately after the transfer and assignment, each
participant shall have an account balance in the Receiving
Plan equal to the sum of the Merger Account the participant
had in the Merging Plan, if any, and the amount the
participant had in the Receiving Plan, if any';
(1) UPDATE OF PLAN. Any amendment and restatement of the
Receiving Plan in order to bring the Plan compliance with
current legislation and regulations shall be made
retroactively as prescribed by the regulations and shall be
considered as having been made to the Merging Plan as of the
date of the merger.
(2) BINDING EFFECT. The terms and conditions of this Merger
Agreement shall bind the Employer and the Trustee (and their
successors) of the Receiving Plan and shall operate as if
fully set forth within the Receiving Plan.
(3) EFFECTIVE DATE. The effective date of this Merger
Agreement is July 1, 1997, and the transfer and assignment of
account balances in the Merging Plan to the Receiving Plan
shall take place as of the effective date.
(4) RESIGNATION OF MERGING PLAN TRUSTEES. The current
Trustees of the Merging Plan, Cindy Olsen and Theodore Olsen,
hereby submit written notice of their resignations as
Trustees as set forth in "Appendix A" effective in accordance
with the requirement of the Section 7.8 of the Merging Plan.
PAYCHEX, INC.
/S/ JOHN M. MORPHY
BY:______________________
VICE PRESIDENT, CHIEF FINANCIAL
OFFICER
Title:___________________
OLSEN COMPUTER SYSTEMS, INC.
/S/ TED OLSEN
BY:_______________________
PRESIDENT
Title:____________________
INVESCO
/S/ JOE JENNINGS
BY:_______________________
TRUST OFFICER
Title:___________________________
EXHIBIT 4.1(e) - AMENDMENT TO THE
PAYCHEX, INC. INCENTIVE RETIREMENT PLAN
EFFECTIVE: JULY 1, 1998
WHEREAS, Paychex, Inc. (the "Employer") adopted the Paychex, Inc. 401(k)
Incentive Retirement Plan on July 1, 1984 (the "Plan"); and
WHEREAS, the Employer has the right to amend said Plan under Section
13.02 thereof; and
WHEREAS, the Employer desires to amend the Plan and to reduce such
amendment to writing as required by Section 13.02 thereof; and
WHEREAS, because this amendment affects the rights, duties and
responsibilities of the Retirement Plan Committee, the Retirement Plan
Committee appears herein to consent to the amendment as required by Section
13.02 of the Plan.
NOW, THEREFORE, in consideration of the mutual agreement of the parties,
the Plan is hereby amended, effective July 1998, as follows:
Section 3.01(k) of the Plan's Adoption Agreement is hereby amended to
read as follows:
[X] (k) Salary Reduction Agreements. The following rules and
restrictions apply to an Employee's salary reduction agreement:
(Make a selection under (1), (2), (3) and (4))
(1) Limitation on amount. The Employee's salary reduction
contributions: (Choose (i) or at least one of (ii) or (iii))
[ ] (i) No maximum limitation other than as provided in the
Plan.
[X] (ii) May not exceed 15% of Compensation for the Plan
Year, subject to the annual additions limitation
described in Part 2 of Article III and the 402(g)
limitation described in Section 14.07 of the Plan.
[X] (iii) Based on percentages of Compensation must equal at
least 2%.
(2) An Employee may revoke, on a prospective basis, a salary
reduction agreement: (Choose (I), (ii), (iii) or (iv))
[ ] (i) Once during any Plan Year but not later than_________
of the Plan Year.
[ ] (ii) As of any Plan Entry Date.
[ ] (iii) As of the first day of any month.
[X] (iv) (Specify, but must be at least once per Plan Year)
a.) As of the first day of each month.
b.) Terminated employees are deemed to have revoked
their agreement as of their date of termination.
(3) An Employee who revokes his salary reduction agreement
may file a new salary reduction agreement with an effective
date: (Choose (I), (ii), (iii) or (iv))
[ ] (i) No earlier than the first day of the next Plan Year.
[ ] (ii) As of any subsequent Plan Entry Date.
[X] (iii) As of the first day of any month subsequent to the
month in which he/she revoked an Agreement.
[ ] (iv) (Specify, but must be at least once per Plan Year
following the Plan Year of revocation) __________.
(4) A Participant may increase or may decrease, on a
prospective basis, his salary reduction percentage or dollar
amount: (Choose (I), (ii), (iii) or (iv))
[ ] (i) As of the beginning of each payroll period.
[ ] (ii) As of the first day of each month.
[ ] (iii) As of Plan Entry Date.
[X] (iv) (Specify, but must be at least once per Plan Year
following the Plan Year of revocation) _________.
This amendment shall be effective as of the date set forth above.
Paychex, Inc.
/S/ JOHN M. MORPHY
BY:______________________________________
VICE PRESIDENT, CHIEF FINANCIAL
OFFICER
Title:___________________________________
RETIREMENT PLAN COMMITTEE
EXHIBIT 4.1(f) - AMENDMENT TO THE
PAYCHEX, INC. 401(k) INCENTIVE RETIREMENT PLAN
AND PLAN MERGER AGREEMENT
EFFECTIVE: JULY 22, 1998
This Amendment to the Paychex, Inc. 401(k) Incentive Retirement Plan is
made and entered into on the 22nd day of July, 1998, by and between Paychex,
Inc. (hereafter the "Employer"), Paychex Business Solutions, Inc. (hereafter
the "Merging Employer") and INVESCO Trust Company (hereinafter the "Trustee").
WHEREAS, the Employer established the Paychex, Inc. 401(k) Incentive
Retirement Plan (hereafter the "Receiving Plan") effective July 1, 1984; and
WHEREAS, the "Merging Employer" established the Paychex Business
Solutions 401(k) Retirement Savings Plan (hereafter the "Merging Plan")
effective January 1, 1992; and
WHEREAS, the Employer and the Trustee of the Receiving Plan have
specific authority under the Master Plan and Trust Agreement to enter into
this amendment to Plan and Plan Merger Agreement.
WHEREAS, the Employer and Merging Employer Plan deem it is in the best
interest of the participants and beneficiaries of the Merging Plan and
Receiving Plan to merge the two Plans effective July 1, 1998, with the
Receiving Plan as the surviving Plan, and to accept the transfer of plan
assets, or to transfer plan assets, as may be required by any such merger.
NOW THEREFORE, the Employer, the Merging Employer and the Trustee of the
Receiving Plan do hereby agree as follows:
(1) Section 1.29 of the Adoption Agreement of the Receiving Plan is
hereby amended to credit service with Paychex Business Solutions,
Inc. for all purposes of the Plan.
(2) Sections 6.03(e)(2) and 6.03(j)(2) of the Adoption Agreement of the
Receiving Plan are hereby amended to provide that participants in
the Merging Plan may make in-service withdrawals from the vested
balances in their "Merger Accounts" as of July 1, 1998, after
attaining age 59 1/2.
(3) TRANSFER OF ASSETS. The Merging Plan shall transfer and assign
directly to the Receiving Plan the "Merger Account" for each
participant in the Merging Plan. The Merger Account is defined as
the single sum value of the participant's accrued benefit under
the Merging Plan determined in accordance with provision of such
Plan as of the date of transfer.
(4) HOLDING AND INVESTMENT OF ASSETS. The Employer and the Trustee
shall hold, invest, administer and distribute the assets
transferred and assigned in accordance with the terms of the
Receiving Plan, as amended and restated herein.
(5) PARTICIPANT ACCOUNT. With respect to the account balances of the
participants under the Merging Plan, the following conditions shall
apply;
a. The sum of the account balances of the participants under the
Merging Plan will be 100 percent vested prior to transfer and
under the Receiving Plan immediately prior to the transfer and
assignment shall equal the fair market value of the entire
assets of the Receiving Plan immediately after the transfer and
assignment;
b. Immediately after the transfer and assignment, each participant
shall have an account balance in the Receiving Plan equal to
the sum of the Merger Account the participant had in the
Merging Plan, if any, and the amount the participant had in the
Receiving Plan, if any;
c. The transfer of the account shall not eliminate any Code
(411(d)(6)) protected benefit provided by the Merger.
(1) UPDATE OF PLAN. Any amendment and restatement of the Receiving
Plan in order to bring the Plan compliance with current
legislation and regulations shall be made retroactively as
prescribed by the regulations and shall be considered as having
been made to the Merging Plan as of the date of the merger.
(2) BINDING EFFECT. The terms and conditions of this Merger Agreement
shall bind the Employer and the Trustee (and their successors) of
the Receiving Plan and shall operate as if fully set forth within
the Receiving Plan.
(3) EFFECTIVE DATE. The effective date of this Merger Agreement is
July 1, 1998, and the transfer and assignment of account balances
in the Merging Plan to the Receiving Plan shall take place as of
March 30, 1998.
PAYCHEX, INC.
/S/ AUGUSTINE MELENDEZ
BY:______________________________________
DIRECTOR, HUMAN RESOURCES
Title_______________________________
PAYCHEX BUSINESS SOLUTIONS, INC.
/S/ JOHN M. MORPHY
BY:________________________________________
VICE PRESIDENT, CHIEF FINANCIAL
OFFICER
Title_________________________________
INVESCO
/S/ RICHARD L.S. GIRARD
BY_________________________________________
CHAIRPERSON 401(k) COMMITTEE
Title_________________________________
EXHIBIT 5.1 - IRS DETERMINATION LETTER DATED APRIL 28, 1995
INTERNAL REVENUE SERVICE
DISTRICT DIRECTOR
G.P.O. BOX 1680
BROOKLYN, NY 11202 Employer Identification Number:
16-1124166
DATE: APRIL 28, 1995 Filo Folder Number:
163001736
Person to Contact:
DAWN LUCAS
PAYCHEX, INC. Contact Telephone Number:
P.O. BOX 25397 (718) 488-2204
ROCHESTER, NY 14625 Plan Name:
PAYCHEX, INC.
401 (k) INCENTIVE
RETIREMENT PLAN
Plan Number: 001
Dear Applicant:
We have made a favorable determination on your plan,
identified above, based on the information supplied. Please
keep this letter in your permanent records.
Continued qualification of the plan under its present
form will depend on its effect in operation. (See section
1.401-1(b)(3) of the Income Tax Regulations.) We will review
the status of the plan in operation periodically.
The enclosed document explains the significance of this
favorable determination letter, points out some features that
may affect the qualified status of your employee retirement
plan, and provides information on the reporting requirements
for your plan. It also describes some events that
automatically nullify it. It is very important that you read
the publication.
This letter relates only to the status of your plan
under the Internal Revenue Code. It is not a determination
regarding the effect of other federal or local statutes.
This determination letter is also applicable for the
amendment(s) adopted on Nov. 9, 1994.
This plan has been mandatorily disaggregated,
permissively aggregated, or restructured to satisfy the
nondiscrimination requirements.
This plan satisfies the nondiscrimination in amount
requirement of section 1.401(a)(4)-1(b)(2) of the regulations
on the basis of a design-based cafe harbor described in the
regulations.
This letter is issued under Rev. Proc. 93-39 and
considers the amendments required by the Tax Reform Act of
1986 except as otherwise specified in this letter.
This plan satisfies the nondiscriminatory current
availability requirements of section 1.401(a)(4)-4(b) of the
regulations with respect to those benefits, rights, and
features that are currently available to all employees in the
plan's coverage group. For this purpose, the plan's coverage
group consists of those employees treated as currently
benefiting for purposes of demonstrating that the plan
satisfies the minimum coverage requirements of section 410(b)
of the Code.
This letter may not be relied upon with respect to
whether the plan satisfies the qualification requirements as
amended by the Uruguay Round Agreements Act, Pub. L. 103-465.
We have sent a copy of this letter to your
representative as indicated in the power of attorney.
If you have any questions concerning this matter, please
contact the person whose name and telephone number are shown
above.
Sincerely yours,
/S/ HERBERT J. HUFF
Herbert J. Huff
District Director
Enclosures:
Publication 794
Reporting & Disclosure Guide
For Employee Benefit Plans
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 dated July 30, 1999) pertaining to the Paychex, Inc. 401(k)
Incentive Retirement Plan of Paychex, Inc. of our reports (a) dated June 25,
1998, with respect to the consolidated financial statements of Paychex, Inc.
incorporated by reference in its Annual Report (Form 10-K) for the year ended
May 31, 1998, and (b) dated May 20, 1999, with respect to the financial
statements of the Paychex, Inc. 401(k) Incentive Retirement Plan included in
the Plan's Annual Report (Form 11-K) for the year ended December 31, 1998,
filed with the Securities and Exchange Commission.
July 27, 1999 /s/ Ernst & Young LLP
Syracuse, New York
EXHIBIT 24.1 - POWER OF ATTORNEY
WE, the undersigned directors and officers of Paychex, Inc. (the
"Corporation"), do hereby constitute and appoint B. THOMAS GOLISANO and JOHN
M. MORPHY, severally, our true and lawful attorneys and agents, to do any and
all acts and things in our name and on our behalf in our capacities as
directors and officers of the Corporation, and to execute any and all
instruments for us and in our names in the capacities indicated below which
either of them may deem necessary or advisable to the Corporation to comply
with the Securities Act of 1933, as amended, and any rules, regulations and
requirements of the Securities and Exchange Commission, in connection with the
registration of 5,000,000 shares of the Corporation's $.01 par value per share
common stock, including, specifically, but not limited to, the power and
authority to sign for us, or any of us, in our names, in the capacities
indicated below, a Registration Statement on Form S-8 and any and all
amendments (including pre- and post-effective amendments) thereto and to file
the same with all exhibits thereto and other documents in connection
therewith, and to perform each and every other act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, and we do hereby ratify and
confirm all that B. Thomas Golisano or John M. Morphy or their agents or
substitute, of either, may lawfully do or cause to be done by virtue hereof.
Signature Title Date
/s/ Steven D. Brooks Director July 8, 1999
Steven D. Brooks
/s/ G. Thomas Clark Director July 8, 1999
G. Thomas Clark
/s/ B. Thomas Golisano Chairman, President July 8, 1999
B. Thomas Golisano and Chief Executive
Officer
/s/ Phillip Horsley Director July 8, 1999
Phillip Horsley
/s/ Grant M. Inman Director July 8, 1999
Grant M. Inman
/s/ J. Robert Sebo Director July 8, 1999
J. Robert Sebo
/s/ Harry P. Messina, Jr. Director July 8, 1999
Harry P. Messina, Jr.
/s/ David J.S. Flaschen Director July 8, 1999
David J.S. Flaschen
/s/ John M. Morphy Vice President, Chief July 8, 1999
John M. Morphy Financial Officer,
Principal Accounting Officer and Secretary
