[LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm
UPI Prototype - Basic Plan
Document 04
8/26/97
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BASIC PLAN DOCUMENT 04
TABLE OF CONTENTS
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SECTION ONE DEFINITIONS...................................................................................................1
1.01 ADOPTION AGREEMENT...............................................................................................1
1.02 BASIC PLAN DOCUMENT..............................................................................................1
1.03 BENEFICIARY......................................................................................................1
1.04 BREAK IN ELIGIBILITY SERVICE.....................................................................................1
1.05 BREAK IN VESTING SERVICE.........................................................................................1
1.06 CODE.............................................................................................................1
1.07 COMPENSATION.....................................................................................................1
1.08 CUSTODIAN........................................................................................................3
1.09 DISABILITY.......................................................................................................3
1.10 EARLY RETIREMENT AGE.............................................................................................3
1.11 EARNED INCOME....................................................................................................3
1.12 EFFECTIVE DATE...................................................................................................3
1.13 ELIGIBILITY COMPUTATION PERIOD...................................................................................3
1.14 EMPLOYEE.........................................................................................................3
1.15 EMPLOYER.........................................................................................................3
1.16 EMPLOYER CONTRIBUTION............................................................................................3
1.17 EMPLOYMENT COMMENCEMENT DATE.....................................................................................3
1.18 EMPLOYER PROFIT SHARING CONTRIBUTION.............................................................................3
1.19 ENTRY DATES......................................................................................................4
1.20 ERISA............................................................................................................4
1.21 FORFEITURE.......................................................................................................4
1.22 FUND.............................................................................................................4
1.23 HIGHLY COMPENSATED EMPLOYEE......................................................................................4
1.24 HOURS OF SERVICE - Means.........................................................................................4
1.25 INDIVIDUAL ACCOUNT...............................................................................................5
1.26 INVESTMENT FUND..................................................................................................5
1.27 KEY EMPLOYEE.....................................................................................................5
1.28 LEASED EMPLOYEE..................................................................................................5
1.29 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS.............................................................................5
1.30 NORMAL RETIREMENT AGE............................................................................................6
1.31 OWNER - EMPLOYEE.................................................................................................6
1.32 PARTICIPANT......................................................................................................6
1.33 PLAN.............................................................................................................6
1.34 PLAN ADMINISTRATOR...............................................................................................6
1.35 PLAN YEAR........................................................................................................6
1.36 PRIOR PLAN.......................................................................................................6
1.37 PROTOTYPE SPONSOR................................................................................................6
1.38 QUALIFYING PARTICIPANT...........................................................................................6
1.39 RELATED EMPLOYER.................................................................................................6
1.40 RELATED EMPLOYER PARTICIPATION AGREEMENT.........................................................................6
1.41 SELF-EMPLOYED INDIVIDUAL.........................................................................................6
1.42 SEPARATE FUND....................................................................................................6
1.43 TAXABLE WAGE BASE................................................................................................6
1.44 TERMINATION OF EMPLOYMENT........................................................................................6
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1.45 TOP-HEAVY PLAN...................................................................................................7
1.46 TRUSTEE..........................................................................................................7
1.47 VALUATION DATE...................................................................................................7
1.48 VESTED...........................................................................................................7
1.49 YEAR OF ELIGIBILITY SERVICE......................................................................................7
1.50 YEAR OF VESTING SERVICE..........................................................................................7
SECTION TWO ELIGIBILITY AND PARTICIPATION.................................................................................7
2.01 ELIGIBILITY TO PARTICIPATE.......................................................................................7
2.02 PLAN ENTRY.......................................................................................................7
2.03 TRANSFER TO OR FROM INELIGIBLE CLASS.............................................................................8
2.04 RETURN AS A PARTICIPANT AFTER BREAK IN ELIGIBILITY SERVICE.......................................................8
2.05 DETERMINATIONS UNDER THIS SECTION................................................................................8
2.06 TERMS OF EMPLOYMENT..............................................................................................8
2.07 SPECIAL RULES WHERE ELAPSED TIME METHOD IS BEING USED............................................................8
2.08 ELECTION NOT TO PARTICIPATE......................................................................................9
SECTION THREE CONTRIBUTIONS...............................................................................................9
3.01 EMPLOYER CONTRIBUTIONS...........................................................................................9
3.02 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS............................................................................12
3.03 ROLLOVER CONTRIBUTIONS..........................................................................................12
3.04 TRANSFER CONTRIBUTIONS..........................................................................................12
3.05 LIMITATION ON ALLOCATIONS.......................................................................................12
SECTION FOUR INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION...........................................................16
4.01 INDIVIDUAL ACCOUNTS.............................................................................................16
4.02 VALUATION OF FUND...............................................................................................16
4.03 VALUATION OF INDIVIDUAL ACCOUNTS................................................................................16
4.04 MODIFICATION OF METHOD FOR VALUING INDIVIDUAL ACCOUNTS..........................................................18
4.05 SEGREGATION OF ASSETS...........................................................................................18
4.06 STATEMENT OF INDIVIDUAL ACCOUNTS................................................................................18
SECTION FIVE TRUSTEE OR CUSTODIAN........................................................................................18
5.01 CREATION OF FUND................................................................................................18
5.02 INVESTMENT AUTHORITY............................................................................................18
5.03 FINANCIAL ORGANIZATION CUSTODIAN OR TRUSTEE WITHOUT FULL TRUST POWERS...........................................18
5.04 FINANCIAL ORGANIZATION TRUSTEE WITH FULL TRUST POWERS AND INDIVIDUAL TRUSTEE....................................19
5.05 DIVISION OF FUND INTO INVESTMENT FUNDS..........................................................................20
5.06 COMPENSATION AND EXPENSES.......................................................................................20
5.07 NOT OBLIGATED TO QUESTION DATA..................................................................................21
5.08 LIABILITY FOR WITHHOLDING ON DISTRIBUTIONS......................................................................21
5.09 RESIGNATION OR REMOVAL OF TRUSTEE (OR CUSTODIAN)................................................................21
5.10 DEGREE OF CARE - LIMITATIONS OF LIABILITY.......................................................................21
5.11 INDEMNIFICATION OF PROTOTYPE SPONSOR AND TRUSTEE (OR CUSTODIAN).................................................22
5.12 INVESTMENT MANAGERS.............................................................................................22
5.13 MATTERS RELATING TO INSURANCE...................................................................................22
5.14 DIRECTION OF INVESTMENTS BY PARTICIPANT.........................................................................23
SECTION SIX VESTING AND DISTRIBUTION.....................................................................................23
6.01 DISTRIBUTION TO PARTICIPANT.....................................................................................23
6.02 FORM OF DISTRIBUTION TO A PARTICIPANT...........................................................................26
6.03 DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT...................................................................27
6.04 FORM OF DISTRIBUTION TO BENEFICIARY.............................................................................28
6.05 JOINT AND SURVIVOR ANNUITY REQUIREMENTS.........................................................................28
6.06 DISTRIBUTION REQUIREMENTS.......................................................................................31
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6.07 ANNUITY CONTRACTS...............................................................................................35
6.08 LOANS TO PARTICIPANTS...........................................................................................35
6.09 DISTRIBUTION IN KIND............................................................................................36
6.10 DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS.............................................................36
6.11 PROCEDURE FOR MISSING PARTICIPANTS OR BENEFICIARIES.............................................................36
SECTION SEVEN CLAIMS PROCEDURE...........................................................................................36
7.01 FILING A CLAIM FOR PLAN DISTRIBUTIONS...........................................................................36
7.02 DENIAL OF CLAIM.................................................................................................37
7.03 REMEDIES AVAILABLE..............................................................................................37
SECTION EIGHT PLAN ADMINISTRATOR.........................................................................................37
8.01 EMPLOYER IS PLAN ADMINISTRATOR..................................................................................37
8.02 POWERS AND DUTIES OF THE PLAN ADMINISTRATOR.....................................................................37
8.03 EXPENSES AND COMPENSATION.......................................................................................38
8.04 INFORMATION FROM EMPLOYER.......................................................................................38
SECTION NINE AMENDMENT AND TERMINATION...................................................................................38
9.01 RIGHT OF PROTOTYPE SPONSOR TO AMEND THE PLAN....................................................................38
9.02 RIGHT OF EMPLOYER TO AMEND THE PLAN.............................................................................39
9.03 LIMITATION ON POWER TO AMEND....................................................................................39
9.04 AMENDMENT OF VESTING SCHEDULE...................................................................................39
9.05 PERMANENCY......................................................................................................39
9.06 METHOD AND PROCEDURE FOR TERMINATION............................................................................39
9.07 CONTINUANCE OF PLAN BY SUCCESSOR EMPLOYER.......................................................................39
9.08 FAILURE OF PLAN QUALIFICATION...................................................................................40
SECTION TEN MISCELLANEOUS................................................................................................40
10.01 STATE COMMUNITY PROPERTY LAWS..................................................................................40
10.02 HEADINGS.......................................................................................................40
10.03 GENDER AND NUMBER..............................................................................................40
10.04 PLAN MERGER OR CONSOLIDATION...................................................................................40
10.05 STANDARD OF FIDUCIARY CONDUCT..................................................................................40
10.06 GENERAL UNDERTAKING OF ALL PARTIES.............................................................................40
10.07 AGREEMENT BINDS HEIRS, ETC.....................................................................................40
10.08 DETERMINATION OF TOP-HEAVY STATUS..............................................................................40
10.09 SPECIAL LIMITATIONS FOR OWNER-EMPLOYEES........................................................................42
10.10 INALIENABILITY OF BENEFITS.....................................................................................42
10.11 CANNOT ELIMINATE PROTECTED BENEFITS............................................................................42
SECTION ELEVEN 401(k) PROVISIONS........................................................................................43
11.100 DEFINITIONS...................................................................................................43
11.101 ACTUAL DEFERRAL PERCENTAGE (ADP)..............................................................................43
11.102 AGGREGATE LIMIT...............................................................................................43
11.103 AVERAGE CONTRIBUTION PERCENTAGE (ACP).........................................................................43
11.104 CONTRIBUTING PARTICIPANT......................................................................................43
11.105 CONTRIBUTION PERCENTAGE.......................................................................................43
11.106 CONTRIBUTION PERCENTAGE AMOUNTS...............................................................................43
11.107 ELECTIVE DEFERRALS............................................................................................43
11.108 ELIGIBLE PARTICIPANT..........................................................................................44
11.109 EXCESS AGGREGATE CONTRIBUTIONS................................................................................44
11.110 EXCESS CONTRIBUTIONS..........................................................................................44
11.111 EXCESS ELECTIVE DEFERRALS.....................................................................................44
11.112 MATCHING CONTRIBUTION.........................................................................................44
11.113 QUALIFIED NONELECTIVE CONTRIBUTIONS...........................................................................44
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11.114 QUALIFIED MATCHING CONTRIBUTIONS..............................................................................44
11.115 QUALIFYING CONTRIBUTING PARTICIPANT...........................................................................45
11.200 CONTRIBUTING PARTICIPANT......................................................................................45
11.201 REQUIREMENTS TO ENROLL AS A CONTRIBUTING PARTICIPANT..........................................................45
11.202 CHANGING ELECTIVE DEFERRAL AMOUNTS............................................................................45
11.203 CEASING ELECTIVE DEFERRALS....................................................................................45
11.204 RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE DEFERRALS.........................................45
11.205 CERTAIN ONE-TIME IRREVOCABLE ELECTIONS........................................................................45
11.300 CONTRIBUTIONS.................................................................................................45
11.301 CONTRIBUTIONS BY EMPLOYER.....................................................................................45
11.302 MATCHING CONTRIBUTIONS........................................................................................46
11.303 QUALIFIED NONELECTIVE CONTRIBUTIONS...........................................................................46
11.304 QUALIFIED MATCHING CONTRIBUTIONS..............................................................................46
11.305 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS..........................................................................46
11.400 NONDISCRIMINATION TESTING.....................................................................................46
11.401 ACTUAL DEFERRAL PERCENTAGE TEST (ADP).........................................................................46
11.402 LIMITS ON NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS AND MATCHING CONTRIBUTIONS.....................................47
11.500 DISTRIBUTION PROVISIONS.......................................................................................48
11.501 GENERAL RULE..................................................................................................48
11.502 DISTRIBUTION REQUIREMENTS.....................................................................................48
11.503 HARDSHIP DISTRIBUTION.........................................................................................49
11.504 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS.....................................................................49
11.505 DISTRIBUTION OF EXCESS CONTRIBUTIONS..........................................................................50
11.506 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS................................................................50
11.507 RECHARACTERIZATION............................................................................................51
11.508 DISTRIBUTION OF ELECTIVE DEFERRALS IF EXCESS ANNUAL ADDITIONS.................................................51
11.600 VESTING.......................................................................................................51
11.601 100% VESTING ON CERTAIN CONTRIBUTIONS.........................................................................51
11.602 FORFEITURES AND VESTING OF MATCHING CONTRIBUTIONS.............................................................51
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QUALIFIED RETIREMENT PLAN AND TRUST
Defined Contribution Basic Plan Document
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SECTION ONE DEFINITIONS
The following words and phrases when used in the Plan with
initial capital letters shall, for the purpose of this Plan,
have the meanings set forth below unless the context indicates
that other meanings are intended:
1.01 ADOPTION AGREEMENT
Means the document executed by the Employer through which it
adopts the Plan and Trust and thereby agrees to be bound by
all terms and conditions of the Plan and Trust.
1.02 BASIC PLAN DOCUMENT
Means this prototype Plan and Trust document.
1.03 BENEFICIARY
Means the individual or individuals designated pursuant to
Section 6.03(A) of the Plan.
1.04 BREAK IN ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides with an
Eligibility Computation Period during which an Employee fails
to complete more than 500 Hours of Service (or such lesser
number of Hours of Service specified in the Adoption Agreement
for this purpose).
1.05 BREAK IN VESTING SERVICE
Means a Plan Year (or other vesting computation period
described in Section 1.50) during which an Employee fails to
complete more than 500 Hours of Service (or such lesser number
of Hours of Service specified in the Adoption Agreement for
this purpose).
1.06 CODE
Means the Internal Revenue Code of 1986 as amended from
time-to-time.
1.07 COMPENSATION
A. Basic Definition
For Plan Years beginning on or after January 1, 1989,
the following definition of Compensation shall apply:
As elected by the Employer in the Adoption Agreement
(and if no election is made, W-2 wages will be deemed
to have been selected), Compensation shall mean one
of the following:
1. W-2 wages. Compensation is defined as information
required to be reported under Sections 6041 and 6051,
and 6052 of the Code (Wages, tips and other
compensation as reported on Form W-2). Compensation
is defined as wages within the meaning of Section
3401(a) of the Code and all other payments of
compensation to an Employee by the Employer (in the
course of the Employer's trade or business) for which
the Employer is required to furnish the Employee a
written statement under Sections 6041(d) and
6051(a)(3), and 6052 of the Code. Compensation must
be determined without regard to any rules under
Section 3401(a) that limit the remuneration included
in wages based on the nature or location of the
employment or the services performed (such as the
exception for agricultural labor in Section
3401(a)(2)).
2. Section 3401(a) wages. Compensation is defined as
wages within the meaning of Section 3401(a) of the
Code, for the purposes of income tax withholding at
the source but determined without regard to any rules
that limit the remuneration included in wages based
on the nature or location of the employment or the
services performed (such as the exception for
agricultural labor in Section 3401(a)(2)).
3. 415 safe-harbor compensation. Compensation is
defined as wages, salaries, and fees for professional
services and other amounts received (without regard
to whether or not an amount is paid in cash) for
personal services actually rendered in the course of
employment with the Employer maintaining the Plan to
the extent that the amounts are includible in gross
income (including, but not limited to, commissions
paid salesmen, compensation for services on the basis
of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under a
nonaccountable plan (as described in 1.62-2(c)), and
excluding the following:
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a. Employer contributions to a plan of deferred
compensation which are not includible in the
Employee's gross income for the taxable year in which
contributed, or employer contributions under a
simplified employee pension plan to the extent such
contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;
b. Amounts realized from the exercise of a
nonqualified stock option, or when restricted stock
(or property) held by the Employee either becomes
freely transferable or is no longer subject to a
substantial risk of forfeiture;
c. Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
d. Other amounts which received special tax benefits,
or contributions made by the Employer (whether or not
under a salary reduction agreement) towards the
purchase of an annuity contract described in Section
403(b) of the Code (whether or not the contributions
are actually excludable from the gross income of the
Employee).
For any Self-Employed Individual covered under the Plan,
Compensation will mean Earned Income.
B. Determination Period And Other Rules
Compensation shall include only that Compensation which is
actually paid to the Participant during the determination
period. Except as provided elsewhere in this Plan, the
determination period shall be the Plan Year unless the
Employer has selected another period in the Adoption
Agreement. If the Employer makes no election, the
determination period shall be the Plan Year.
Unless otherwise indicated in the Adoption Agreement,
Compensation shall include any amount which is contributed by
the Employer pursuant to a salary reduction agreement and
which is not includible in the gross income of the Employee
under Sections 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the
Code.
Where this Plan is being adopted as an amendment and
restatement to bring a Prior Plan into compliance with the Tax
Reform Act of 1986, such Prior Plan's definition of
Compensation shall apply for Plan Years beginning before
January 1, 1989.
C. Limits On Compensation
For years beginning after December 31, 1988 and before January
1, 1994, the annual Compensation of each Participant taken
into account for determining all benefits provided under the
Plan for any determination period shall not exceed $200,000.
This limitation shall be adjusted by the Secretary at the same
time and in the same manner as under Section 415(d) of the
Code, except that the dollar increase in effect on January 1
of any calendar year is effective for Plan Years beginning in
such calendar year and the first adjustment to the $200,000
limitation is effective on January 1, 1990.
For Plan Years beginning on or after January 1, 1994, the
annual Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any Plan
Year shall not exceed $150,000, as adjusted for increases in
the cost-of-living in accordance with Section 401(a)(17)(B) of
the Internal Revenue Code. The cost-of-living adjustment in
effect for a calendar year applies to any determination period
beginning in such calendar year.
If the period for determining Compensation used in calculating
an Employee's allocation for a determination period is a short
Plan Year (i.e., shorter than 12 months), the annual
Compensation limit is an amount equal to the otherwise
applicable annual Compensation limit multiplied by a fraction,
the numerator of which is the number of months in the short
Plan Year, and the denominator of which is 12.
In determining the Compensation of a Participant for purposes
of this limitation, the rules of Section 414(q)(6) of the Code
shall apply, except in applying such rules, the term "family"
shall include only the spouse of the Participant and any
lineal descendants of the Participant who have not attained
age 19 before the close of the year. If, as a result of the
application of such rules the adjusted $200,000 limitation is
exceeded, then (except for purposes of determining the portion
of Compensation up to the integration level, if this Plan
provides for permitted disparity), the limitation shall be
prorated among the affected individuals in proportion to each
such individual's Compensation as determined under this
Section prior to the application of this limitation.
If Compensation for any prior determination period is taken
into account in determining an Employee's allocations or
benefits for the current determination period, the
Compensation for such prior determination period is subject to
the applicable annual Compensation limit in effect for that
prior period. For this purpose, in determining allocations in
Plan Years beginning on or after January 1, 1989, the annual
Compensation limit in effect for determination periods
beginning before that date is $200,000. In addition, in
determining allocations in Plan Years beginning on or after
January 1, 1994, the annual Compensation limit in effect for
determination periods beginning before that date is $150,000.
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1.08 CUSTODIAN
Means an entity specified in the Adoption Agreement as
Custodian or any duly appointed successor as provided in
Section 5.09.
1.09 DISABILITY
Unless the Employer has elected a different definition in the
Adoption Agreement, Disability means the inability to engage
in any substantial, gainful activity by reason of any
medically determinable physical or mental impairment that can
be expected to result in death or which has lasted or can be
expected to last for a continuous period of not less than 12
months. The permanence and degree of such impairment shall be
supported by medical evidence.
1.10 EARLY RETIREMENT AGE
Means the age specified in the Adoption Agreement. The Plan
will not have an Early Retirement Age if none is specified in
the Adoption Agreement.
1.11 EARNED INCOME
Means the net earnings from self-employment in the trade or
business with respect to which the Plan is established, for
which personal services of the individual are a material
income-producing factor. Net earnings will be determined
without regard to items not included in gross income and the
deductions allocable to such items. Net earnings are reduced
by contributions by the Employer to a qualified plan to the
extent deductible under Section 404 of the Code.
Net earnings shall be determined with regard to the deduction
allowed to the Employer by Section 164(f) of the Code for
taxable years beginning after December 31, 1989.
1.12 EFFECTIVE DATE
Means the date the Plan becomes effective as indicated in the
Adoption Agreement. However, as indicated in the Adoption
Agreement, certain provisions may have specific effective
dates. Further, where a separate date is stated in the Plan as
of which a particular Plan provision becomes effective, such
date will control with respect to that provision.
1.13 ELIGIBILITY COMPUTATION PERIOD
An Employee's initial Eligibility Computation Period shall be
the 12 consecutive month period commencing on the Employee's
Employment Commencement Date. The Employee's subsequent
Eligibility Computation Periods shall be the 12 consecutive
month periods commencing on the anniversaries of his or her
Employment Commencement Date; provided, however, if pursuant
to the Adoption Agreement, an Employee is required to complete
one or less Years of Eligibility Service to become a
Participant, then his or her subsequent Eligibility
Computation Periods shall be the Plan Years commencing with
the Plan Year beginning during his or her initial Eligibility
Computation Period. An Employee does not complete a Year of
Eligibility Service before the end of the 12 consecutive month
period regardless of when during such period the Employee
completes the required number of Hours of Service.
1.14 EMPLOYEE
Means any person employed by an Employer maintaining the Plan
or of any other employer required to be aggregated with such
Employer under Sections 414(b), (c), (m) or (o) of the Code.
The term Employee shall also include any Leased Employee
deemed to be an Employee of any Employer described in the
previous paragraph as provided in Section 414(n) or (o) of the
Code.
1.15 EMPLOYER
Means any corporation, partnership, sole-proprietorship or
other entity named in the Adoption Agreement and any successor
who by merger, consolidation, purchase or otherwise assumes
the obligations of the Plan. A partnership is considered to be
the Employer of each of the partners and a sole-proprietorship
is considered to be the Employer of a sole proprietor. Where
this Plan is being maintained by a union or other entity that
represents its member Employees in the negotiation of
collective bargaining agreements, the term Employer shall mean
such union or other entity.
1.16 EMPLOYER CONTRIBUTION
Means the amount contributed by the Employer each year as
determined under this Plan.
1.17 EMPLOYMENT COMMENCEMENT DATE
An Employee's Employment Commencement date means the date the
Employee first performs an Hour of Service for the Employer.
1.18 EMPLOYER PROFIT SHARING CONTRIBUTION
Means an Employer Contribution made pursuant to the Section of
the Adoption Agreement titled "Employer Profit Sharing
Contributions." The Employer may make Employer Profit Sharing
Contributions without regard to current or accumulated
earnings or profits.
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1.19 ENTRY DATES
Means the first day of the Plan Year and the first day of the
seventh month of the Plan Year, unless the Employer has
specified different dates in the Adoption Agreement.
1.20 ERISA
Means the Employee Retirement Income Security Act of 1974 as
amended from time-to-time.
1.21 FORFEITURE
Means that portion of a Participant's Individual Account
derived from Employer Contributions which he or she is not
entitled to receive (i.e., the nonvested portion).
1.22 FUND
Means the Plan assets held by the Trustee for the
Participants' exclusive benefit.
1.23 HIGHLY COMPENSATED EMPLOYEE
The term Highly Compensated Employee includes highly
compensated active employees and highly compensated former
employees.
A highly compensated active employee includes any Employee who
performs service for the Employer during the determination
year and who, during the look-back year: (a) received
Compensation from the Employer in excess of $75,000 (as
adjusted pursuant to Section 415(d) of the Code); (b) received
Compensation from the Employer in excess of $50,000 (as
adjusted pursuant to Section 415(d) of the Code) and was a
member of the top-paid group for such year; or (c) was an
officer of the Employer and received Compensation during such
year that is greater than 50% of the dollar limitation in
effect under Section 415(b)(1)(A) of the Code. The term Highly
Compensated Employee also includes: (a) Employees who are both
described in the preceding sentence if the term "determination
year" is substituted for the term "look-back year" and the
Employee is one of the 100 Employees who received the most
Compensation from the Employer during the determination year;
and (b) Employees who are 5% owners at any time during the
look-back year or determination year.
If no officer has satisfied the Compensation requirement of
(c) above during either a determination year or look-back
year, the highest paid officer for such year shall be treated
as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan
Year. The look-back year shall be the 12 month period
immediately preceding the determination year.
A highly compensated former employee includes any Employee who
separated from service (or was deemed to have separated) prior
to the determination year, performs no service for the
Employer during the determination year, and was a highly
compensated active employee for either the separation year or
any determination year ending on or after the Employee's 55th
birthday.
If an Employee is, during a determination year or look-back
year, a family member of either a 5% owner who is an active or
former Employee or a Highly Compensated Employee who is one of
the 10 most Highly Compensated Employees ranked on the basis
of Compensation paid by the Employer during such year, then
the family member and the 5% owner or top 10 Highly
Compensated Employee shall be aggregated. In such case, the
family member and 5% owner or top 10 Highly Compensated
Employee shall be treated as a single Employee receiving
Compensation and Plan contributions or benefits equal to the
sum of such Compensation and contributions or benefits of the
family member and 5% owner or top 10 Highly Compensated
Employee. For purposes of this Section, family member includes
the spouse, lineal ascendants and descendants of the Employee
or former Employee and the spouses of such lineal ascendants
and descendants.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of
Employees in the top-paid group, the top 100 Employees, the
number of Employees treated as officers and the Compensation
that is considered, will be made in accordance with Section
414(q) of the Code and the regulations thereunder.
1.24 HOURS OF SERVICE - Means
A. Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer. These
hours will be credited to the Employee for the computation
period in which the duties are performed; and
B. Each hour for which an Employee is paid, or entitled to
payment, by the Employer on account of a period of time during
which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including disability), layoff,
jury duty, military duty or leave of absence. No more than 501
Hours of Service will be credited under this paragraph for any
single continuous period (whether or not such period occurs in
a single computation period). Hours under this paragraph shall
be calculated and credited pursuant to Section 2530.200b-2 of
the Department of Labor Regulations which is incorporated
herein by this reference; and
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C. Each hour for which back pay, irrespective of mitigation of
damages, is either awarded or agreed to by the Employer. The
same Hours of Service will not be credited both under
paragraph (A) or paragraph (B), as the case may be, and under
this paragraph (C). These hours will be credited to the
Employee for the computation period or periods to which the
award or agreement pertains rather than the computation period
in which the award, agreement, or payment is made.
D. Solely for purposes of determining whether a Break in
Eligibility Service or a Break in Vesting Service has occurred
in a computation period (the computation period for purposes
of determining whether a Break in Vesting Service has occurred
is the Plan Year or other vesting computation period described
in Section 1.50), an individual who is absent from work for
maternity or paternity reasons shall receive credit for the
Hours of Service which would otherwise have been credited to
such individual but for such absence, or in any case in which
such hours cannot be determined, 8 Hours of Service per day of
such absence. For purposes of this paragraph, an absence from
work for maternity or paternity reasons means an absence (1)
by reason of the pregnancy of the individual, (2) by reason of
a birth of a child of the individual, (3) by reason of the
placement of a child with the individual in connection with
the adoption of such child by such individual, or (4) for
purposes of caring for such child for a period beginning
immediately following such birth or placement. The Hours of
Service credited under this paragraph shall be credited (1) in
the Eligibility Computation Period or Plan Year or other
vesting computation period described in Section 1.50 in which
the absence begins if the crediting is necessary to prevent a
Break in Eligibility Service or a Break in Vesting Service in
the applicable period, or (2) in all other cases, in the
following Eligibility Computation Period or Plan Year or other
vesting computation period described in Section 1.50.
E. Hours of Service will be credited for employment with other
members of an affiliated service group (under Section 414(m)
of the Code), a controlled group of corporations (under
Section 414(b) of the Code), or a group of trades or
businesses under common control (under Section 414(c) of the
Code) of which the adopting Employer is a member, and any
other entity required to be aggregated with the Employer
pursuant to Section 414(o) of the Code and the regulations
thereunder.
Hours of Service will also be credited for any individual
considered an Employee for purposes of this Plan under Code
Sections 414(n) or 414(o) and the regulations thereunder.
F. Where the Employer maintains the plan of a predecessor
employer, service for such predecessor employer shall be
treated as service for the Employer.
G. The above method for determining Hours of Service may be
altered as specified in the Adoption Agreement.
1.25 INDIVIDUAL ACCOUNT
Means the account established and maintained under this Plan
for each Participant in accordance with Section 4.01.
1.26 INVESTMENT FUND
Means a subdivision of the Fund established pursuant to
Section 5.05.
1.27 KEY EMPLOYEE
Means any person who is determined to be a Key Employee under
Section 10.08.
1.28 LEASED EMPLOYEE
Means any person (other than an Employee of the recipient) who
pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the
recipient (or for the recipient and related persons determined
in accordance with Section 414(n)(6) of the Code) on a
substantially full time basis for a period of at least one
year, and such services are of a type historically performed
by Employees in the business field of the recipient Employer.
Contributions or benefits provided a Leased Employee by the
leasing organization which are attributable to services
performed for the recipient Employer shall be treated as
provided by the recipient Employer.
A Leased Employee shall not be considered an Employee of the
recipient if: (1) such employee is covered by a money purchase
pension plan providing: (a) a nonintegrated employer
contribution rate of at least 10% of compensation, as defined
in Section 415(c)(3) of the Code, but including amounts
contributed pursuant to a salary reduction agreement which are
excludable from the employee's gross income under Section 125,
Section 402(e)(3), Section 402(h)(1)(B) or Section 403(b) of
the Code, (b) immediate participation, and (c) full and
immediate vesting; and (2) Leased Employees do not constitute
more than 20% of the recipient's nonhighly compensated work
force.
1.29 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Means any contribution made to the Plan by or on behalf of a
Participant that is included in the Participant's gross income
in the year in which made and that is maintained under a
separate account to which earnings and losses are allocated.
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<PAGE>
1.30 NORMAL RETIREMENT AGE
Means the age specified in the Adoption Agreement. However, if
the Employer enforces a mandatory retirement age which is less
than the Normal Retirement Age, such mandatory age is deemed
to be the Normal Retirement Age. If no age is specified in the
Adoption Agreement, the Normal Retirement Age shall be age 65.
1.31 OWNER - EMPLOYEE
Means an individual who is a sole proprietor, or who is a
partner owning more than 10% of either the capital or profits
interest of the partnership.
1.32 PARTICIPANT
Means any Employee or former Employee of the Employer who has
met the Plan's eligibility requirements, has entered the Plan
and who is or may become eligible to receive a benefit of any
type from this Plan or whose Beneficiary may be eligible to
receive any such benefit.
1.33 PLAN
Means the prototype defined contribution plan adopted by the
Employer. The Plan consists of this Basic Plan Document plus
the corresponding Adoption Agreement as completed and signed
by the Employer.
1.34 PLAN ADMINISTRATOR
Means the person or persons determined to be the Plan
Administrator in accordance with Section 8.01.
1.35 PLAN YEAR
Means the 12 consecutive month period which coincides with the
Employer's fiscal year or such other 12 consecutive month
period as is designated in the Adoption Agreement.
1.36 PRIOR PLAN
Means a plan which was amended or replaced by adoption of this
Plan document as indicated in the Adoption Agreement.
1.37 PROTOTYPE SPONSOR
Means the entity specified in the Adoption Agreement that
makes this prototype plan available to employers for adoption.
1.38 QUALIFYING PARTICIPANT
Means a Participant who has satisfied the requirements
described in Section 3.01(B)(2) to be entitled to share in any
Employer Contribution (and Forfeitures, if applicable) for a
Plan Year.
1.39 RELATED EMPLOYER
Means an employer that may be required to be aggregated with
the Employer adopting this Plan for certain qualification
requirements under Sections 414(b), (c), (m) or (o) of the
Code (or any other employer that has ownership in common with
the Employer). A Related Employer may participate in this Plan
if so indicated in the Section of the Adoption Agreement
titled "Employer Information" or if such Related Employer
executes a Related Employer Participation Agreement.
1.40 RELATED EMPLOYER PARTICIPATION AGREEMENT
Means the agreement under this prototype Plan that a Related
Employer may execute to participate in this Plan.
1.41 SELF-EMPLOYED INDIVIDUAL
Means an individual who has Earned Income for the taxable year
from the trade or business for which the Plan is established;
also, an individual who would have had Earned Income but for
the fact that the trade or business had no net profits for the
taxable year.
1.42 SEPARATE FUND
Means a subdivision of the Fund held in the name of a
particular Participant representing certain assets held for
that Participant. The assets which comprise a Participant's
Separate Fund are those assets earmarked for him or her and
those assets subject to the Participant's individual direction
pursuant to Section 5.14.
1.43 TAXABLE WAGE BASE
Means, with respect to any taxable year, the contribution and
benefit base in effect under Section 230 of the Social
Security Act at the beginning of the Plan Year.
1.44 TERMINATION OF EMPLOYMENT
A Termination of Employment of an Employee of an Employer
shall occur whenever his or her status as an Employee of such
Employer ceases for any reason other than death. An Employee
who does not return to work for the Employer on or before the
expiration of an authorized leave of absence from such
Employer shall be deemed to have incurred a Termination of
Employment when such leave ends.
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1.45 TOP-HEAVY PLAN
This Plan is a Top-Heavy Plan for any Plan Year if it is
determined to be such pursuant to Section 10.08.
1.46 TRUSTEE
Means an individual, individuals or corporation specified in
the Adoption Agreement as Trustee or any duly appointed
successor as provided in Section 5.09. Trustee shall mean
Custodian in the event the financial organization named as
Trustee does not have full trust powers.
1.47 VALUATION DATE
Means the date or dates as specified in the Adoption
Agreement. If no date is specified in the Adoption Agreement,
the Valuation Date shall be the last day of the Plan Year and
each other date designated by the Plan Administrator which is
selected in a uniform and nondiscriminatory manner when the
assets of the Fund are valued at their then fair market value.
1.48 VESTED
Means nonforfeitable, that is, a claim which is unconditional
and legally enforceable against the Plan obtained by a
Participant or the Participant's Beneficiary to that part of
an immediate or deferred benefit under the Plan which arises
from a Participant's Years of Vesting Service.
1.49 YEAR OF ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides with an
Eligibility Computation Period during which an Employee
completes at least 1,000 Hours of Service (or such lesser
number of Hours of Service specified in the Adoption Agreement
for this purpose). An Employee does not complete a Year of
Eligibility Service before the end of the 12 consecutive month
period regardless of when during such period the Employee
completes the required number of Hours of Service.
1.50 YEAR OF VESTING SERVICE
Means a Plan Year during which an Employee completes at least
1,000 Hours of Service (or such lesser number of Hours of
Service specified in the Adoption Agreement for this purpose).
Notwithstanding the preceding sentence, where the Employer so
indicates in the Adoption Agreement, vesting shall be computed
by reference to the 12 consecutive month period beginning with
the Employee's Employment Commencement Date and each
successive 12 month period commencing on the anniversaries
thereof.
In the case of a Participant who has 5 or more consecutive
Breaks in Vesting Service, all Years of Vesting Service after
such Breaks in Vesting Service will be disregarded for the
purpose of determining the Vested portion of his or her
Individual Account derived from Employer Contributions that
accrued before such breaks. Such Participant's prebreak
service will count in vesting the postbreak Individual Account
derived from Employer Contributions only if either:
(A) such Participant had any Vested right to any portion of
his or her Individual Account derived from Employer
Contributions at the time of his or her Termination of
Employment; or
(B) upon returning to service, the number of consecutive
Breaks in Vesting Service is less than his or her number of
Years of Vesting Service before such breaks.
Separate subaccounts will be maintained for the Participant's
prebreak and postbreak portions of his or her Individual
Account derived from Employer Contributions. Both subaccounts
will share in the gains and losses of the Fund.
Years of Vesting Service shall not include any period of time
excluded from Years of Vesting Service in the Adoption
Agreement.
In the event the Plan Year is changed to a new 12-month
period, Employees shall receive credit for Years of Vesting
Service, in accordance with the preceding provisions of this
definition, for each of the Plan Years (the old and new Plan
Years) which overlap as a result of such change.
SECTION TWO ELIGIBILITY AND PARTICIPATION
2.01 ELIGIBILITY TO PARTICIPATE
Each Employee of the Employer, except those Employees who
belong to a class of Employees which is excluded from
participation as indicated in the Adoption Agreement, shall be
eligible to participate in this Plan upon the satisfaction of
the age and Years of Eligibility Service requirements
specified in the Adoption Agreement.
2.02 PLAN ENTRY
A. If this Plan is a replacement of a Prior Plan by amendment
or restatement, each Employee of the Employer who was a
Participant in said Prior Plan before the Effective Date shall
continue to be a Participant in this Plan.
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B. An Employee will become a Participant in the Plan as of the
Effective Date if the Employee has met the eligibility
requirements of Section 2.01 as of such date. After the
Effective Date, each Employee shall become a Participant on
the first Entry Date following the date the Employee satisfies
the eligibility requirements of Section 2.01 unless otherwise
indicated in the Adoption Agreement.
C. The Plan Administrator shall notify each Employee who
becomes eligible to be a Participant under this Plan and shall
furnish the Employee with the application form, enrollment
forms or other documents which are required of Participants.
The eligible Employee shall execute such forms or documents
and make available such information as may be required in the
administration of the Plan.
2.03 TRANSFER TO OR FROM INELIGIBLE CLASS
If an Employee who had been a Participant becomes ineligible
to participate because he or she is no longer a member of an
eligible class of Employees, but has not incurred a Break in
Eligibility Service, such Employee shall participate
immediately upon his or her return to an eligible class of
Employees. If such Employee incurs a Break in Eligibility
Service, his or her eligibility to participate shall be
determined by Section 2.04.
An Employee who is not a member of the eligible class of
Employees will become a Participant immediately upon becoming
a member of the eligible class provided such Employee has
satisfied the age and Years of Eligibility Service
requirements. If such Employee has not satisfied the age and
Years of Eligibility Service requirements as of the date he or
she becomes a member of the eligible class, such Employee
shall become a Participant on the first Entry Date following
the date he or she satisfies those requirements unless
otherwise indicated in the Adoption Agreement.
2.04 RETURN AS A PARTICIPANT AFTER BREAK IN ELIGIBILITY SERVICE
A. Employee Not Participant Before Break - If an Employee
incurs a Break in Eligibility Service before satisfying the
Plan's eligibility requirements, such Employee's Years of
Eligibility Service before such Break in Eligibility Service
will not be taken into account.
B. Nonvested Participants - In the case of a Participant who
does not have a Vested interest in his or her Individual
Account derived from Employer Contributions, Years of
Eligibility Service before a period of consecutive Breaks in
Eligibility Service will not be taken into account for
eligibility purposes if the number of consecutive Breaks in
Eligibility Service in such period equals or exceeds the
greater of 5 or the aggregate number of Years of Eligibility
Service before such break. Such aggregate number of Years of
Eligibility Service will not include any Years of Eligibility
Service disregarded under the preceding sentence by reason of
prior breaks.
If a Participant's Years of Eligibility Service are
disregarded pursuant to the preceding paragraph, such
Participant will be treated as a new Employee for eligibility
purposes. If a Participant's Years of Eligibility Service may
not be disregarded pursuant to the preceding paragraph, such
Participant shall continue to participate in the Plan, or, if
terminated, shall participate immediately upon reemployment.
C. Vested Participants - A Participant who has sustained a
Break in Eligibility Service and who had a Vested interest in
all or a portion of his or her Individual Account derived from
Employer Contributions shall continue to participate in the
Plan, or, if terminated, shall participate immediately upon
reemployment.
2.05 DETERMINATIONS UNDER THIS SECTION
The Plan Administrator shall determine the eligibility of each
Employee to be a Participant. This determination shall be
conclusive and binding upon all persons except as otherwise
provided herein or by law.
2.06 TERMS OF EMPLOYMENT
Neither the fact of the establishment of the Plan nor the fact
that a common law Employee has become a Participant shall give
to that common law Employee any right to continued employment;
nor shall either fact limit the right of the Employer to
discharge or to deal otherwise with a common law Employee
without regard to the effect such treatment may have upon the
Employee's rights under the Plan.
2.07 SPECIAL RULES WHERE ELAPSED TIME METHOD IS BEING USED
This Section 2.07 shall apply where the Employer has indicated
in the Adoption Agreement that the elapsed time method will be
used. When this Section applies, the definitions of year of
service, break in service and hour of service in this Section
will replace the definitions of Year of Eligibility Service,
Year of Vesting Service, Break in Eligibility Service, Break
in Vesting Service and Hours of Service found in the
Definitions Section of the Plan (Section One).
For purposes of determining an Employee's initial or continued
eligibility to participate in the Plan or the Vested interest
in the Participant's Individual Account balance derived from
Employer Contributions, (except for periods of service which
may be disregarded on account of the "rule of parity"
described in Sections 1.50 and 2.04) an Employee will receive
credit for the aggregate of all time period(s) commencing with
the Employee's first day of employment or reemployment and
ending on the date a break in service begins. The first day of
employment or reemployment is the first day the Employee
performs an hour of service. An Employee will also receive
credit for any period of severance of less than 12 consecutive
months. Fractional periods of a year will be expressed in
terms of days.
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<PAGE>
For purposes of this Section, hour of service will mean each
hour for which an Employee is paid or entitled to payment for
the performance of duties for the Employer. Break in service
is a period of severance of at least 12 consecutive months.
Period of severance is a continuous period of time during
which the Employee is not employed by the Employer. Such
period begins on the date the Employee retires, quits or is
discharged, or if earlier, the 12 month anniversary of the
date on which the Employee was otherwise first absent from
service.
In the case of an individual who is absent from work for
maternity or paternity reasons, the 12 consecutive month
period beginning on the first anniversary of the first date of
such absence shall not constitute a break in service. For
purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence (1) by reason of the
pregnancy of the individual, (2) by reason of the birth of a
child of the individual, (3) by reason of the placement of a
child with the individual in connection with the adoption of
such child by such individual, or (4) for purposes of caring
for such child for a period beginning immediately following
such birth or placement.
Each Employee will share in Employer Contributions for the
period beginning on the date the Employee commences
participation under the Plan and ending on the date on which
such Employee severs employment with the Employer or is no
longer a member of an eligible class of Employees.
If the Employer is a member of an affiliated service group
(under Section 414(m) of the Code), a controlled group of
corporations (under Section 414(b) of the Code), a group of
trades or businesses under common control (under Section
414(c) of the Code), or any other entity required to be
aggregated with the Employer pursuant to Section 414(o) of the
Code, service will be credited for any employment for any
period of time for any other member of such group. Service
will also be credited for any individual required under
Section 414(n) or Section 414(o) to be considered an Employee
of any Employer aggregated under Section 414(b), (c), or (m)
of the Code.
2.08 ELECTION NOT TO PARTICIPATE
This Section 2.08 will apply if this Plan is a nonstandardized
plan and the Adoption Agreement so provides. If this Section
applies, then an Employee or a Participant may elect not to
participate in the Plan for one or more Plan Years. The
Employer may not contribute for an Employee or Participant for
any Plan Year during which such Employee's or Participant's
election not to participate is in effect. Any election not to
participate must be in writing and filed with the Plan
Administrator.
The Plan Administrator shall establish such uniform and
nondiscriminatory rules as it deems necessary or advisable to
carry out the terms of this Section, including, but not
limited to, rules prescribing the timing of the filing of
elections not to participate and the procedures for electing
to re-participate in the Plan.
An Employee or Participant continues to earn credit for
vesting and eligibility purposes for each Year of Vesting
Service or Year of Eligibility Service he or she completes and
his or her Individual Account (if any) will share in the gains
or losses of the Fund during the periods he or she elects not
to participate.
SECTION THREE CONTRIBUTIONS
3.01 EMPLOYER CONTRIBUTIONS
A. Obligation to Contribute - The Employer shall make
contributions to the Plan in accordance with the contribution
formula specified in the Adoption Agreement. If this Plan is a
profit sharing plan, the Employer shall, in its sole
discretion, make contributions without regard to current or
accumulated earnings or profits.
B. Allocation Formula and the Right to Share in the Employer
Contribution -
1. General - The Employer Contribution for any Plan Year will
be allocated or contributed to the Individual Accounts of
Qualifying Participants in accordance with the allocation or
contribution formula specified in the Adoption Agreement. The
Employer Contribution for any Plan Year will be allocated to
each Participant's Individual Account as of the last day of
that Plan Year.
Any Employer Contribution for a Plan Year must satisfy Section
401(a)(4) and the regulations thereunder for such Plan Year.
2. Qualifying Participants - A Participant is a Qualifying
Participant and is entitled to share in the Employer
Contribution for any Plan Year if the Participant was a
Participant on at least one day during the Plan Year and
satisfies any additional conditions specified in the Adoption
Agreement. If this Plan is a standardized plan, unless the
Employer specifies more favorable conditions in the Adoption
Agreement, a Participant will not be a qualifying Participant
for a Plan Year if he or she incurs a Termination of
Employment during such Plan Year with not more than 500 Hours
of Service if he or she is not an Employee on the last day of
the Plan Year. The determination of whether a Participant is
entitled to share in the Employer Contribution shall be made
as of the last day of each Plan Year.
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<PAGE>
3. Special Rules for Integrated Plans - This Plan may not
allocate contributions based on an integrated formula if the
Employer maintains any other plan that provides for allocation
of contributions based on an integrated formula that benefits
any of the same Participants. If the Employer has selected the
integrated contribution or allocation formula in the Adoption
Agreement, then the maximum disparity rate shall be determined
in accordance with the following table.
MAXIMUM DISPARITY RATE
<S> <C> <C> <C>
Top-Heavy Nonstandardized and
Integration Level Money Purchase Profit Sharing Non-Top-Heavy Profit Sharing
-------------------------------------------------------------------------------------------------------
Taxable Wage Base (TWB) 5.7% 2.7% 5.7%
More than $0 but not more
than 20% of TWB 5.7% 2.7% 5.7%
More than 20% of TWB but
not more than 80% of TWB 4.3% 1.3% 4.3%
More than 80% of TWB but
not more than TWB 5.4% 2.4% 5.4%
C. Allocation of Forfeitures - Forfeitures for a Plan Year
which arise as a result of the application of Section 6.01(D)
shall be allocated as follows:
1. Profit Sharing Plan - If this is a profit sharing plan,
unless the Adoption Agreement indicates otherwise, Forfeitures
shall be allocated in the manner provided in Section 3.01(B)
(for Employer Contributions) to the Individual Accounts of
Qualifying Participants who are entitled to share in the
Employer Contribution for such Plan Year. Forfeitures shall be
allocated as of the last day of the Plan Year during which the
Forfeiture arose (or any subsequent Plan Year if indicated in
the Adoption Agreement).
2. Money Purchase Pension and Target Benefit Plan - If this
Plan is a money purchase plan or a target benefit plan, unless
the Adoption Agreement indicates otherwise, Forfeitures shall
be applied towards the reduction of Employer Contributions to
the Plan. Forfeitures shall be allocated as of the last day of
the Plan Year during which the Forfeiture arose (or any
subsequent Plan Year if indicated in the Adoption Agreement).
D. Timing of Employer Contribution - The Employer Contribution
for each Plan Year shall be delivered to the Trustee (or
Custodian, if applicable) not later than the due date for
filing the Employer's income tax return for its fiscal year in
which the Plan Year ends, including extensions thereof.
E. Minimum Allocation for Top-Heavy Plans - The contribution
and allocation provisions of this Section 3.01(E) shall apply
for any Plan Year with respect to which this Plan is a
Top-Heavy Plan.
1. Except as otherwise provided in (3) and (4) below, the
Employer Contributions and Forfeitures allocated on behalf of
any Participant who is not a Key Employee shall not be less
than the lesser of 3% of such Participant's Compensation or
(in the case where the Employer has no defined benefit plan
which designates this Plan to satisfy Section 401 of the Code)
the largest percentage of Employer Contributions and
Forfeitures, as a percentage of the first $200,000 ($150,000
for Plan Years beginning after December 31, 1993), (increased
by any cost of living adjustment made by the Secretary of
Treasury or the Secretary's delegate) of the Key Employee's
Compensation, allocated on behalf of any Key Employee for that
year. The minimum allocation is determined without regard to
any Social Security contribution. The Employer may, in the
Adoption Agreement, limit the Participants who are entitled to
receive the minimum allocation. This minimum allocation shall
be made even though under other Plan provisions, the
Participant would not otherwise be entitled to receive an
allocation, or would have received a lesser allocation for the
year because of (a) the Participant's failure to complete
1,000 Hours of Service (or any equivalent provided in the
Plan), or (b) the Participant's failure to make mandatory
Nondeductible Employee Contributions to the Plan, or (c)
Compensation less than a stated amount.
2. For purposes of computing the minimum allocation,
Compensation shall mean Compensation as defined in Section
1.07 of the Plan and shall exclude any amounts contributed by
the Employer pursuant to a salary reduction agreement and
which is not includible in the gross income of the Employee
under Sections 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the
Code even if the Employer has elected to include such
contributions in the definition of Compensation used for other
purposes under the Plan.
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<PAGE>
3. The provision in (1) above shall not apply to any
Participant who was not employed by the Employer on the last
day of the Plan Year.
4. The provision in (1) above shall not apply to any
Participant to the extent the Participant is covered under any
other plan or plans of the Employer and the Employer has
provided in the adoption agreement that the minimum allocation
or benefit requirement applicable to Top-Heavy Plans will be
met in the other plan or plans.
5. The minimum allocation required under this Section 3.01(E)
and Section 3.01(F)(1) (to the extent required to be
nonforfeitable under Code Section 416(b)) may not be forfeited
under Code Section 411(a)(3)(B) or 411(a)(3)(D).
F. Special Requirements for Paired Plans - The Employer
maintains paired plans if the Employer has adopted both a
standardized profit sharing plan and a standardized money
purchase pension plan using this Basic Plan Document.
1. Minimum Allocation - When the paired plans are top-heavy,
the top-heavy requirements set forth in Section 3.01(E)(1) of
the Plan shall apply.
a. Same eligibility requirements. In satisfying the top-heavy
minimum allocation requirements set forth in Section 3.01(E)
of the Plan, if the Employees benefiting under each of the
paired plans are identical, the top-heavy minimum allocation
shall be made to the money purchase pension plan.
b. Different eligibility requirements. In satisfying the
top-heavy minimum allocation requirements set forth in Section
3.01(E) of the Plan, if the Employees benefiting under each of
the paired plans are not identical, the top-heavy minimum
allocation will be made to both of the paired plans.
A Participant is treated as benefiting under the Plan for any
Plan Year during which the Participant received or is deemed
to receive an allocation in accordance with Section 1.410(b)-3(a).
2. Only One Plan Can Be Integrated - If the Employer maintains
paired plans, only one of the Plans may provide for the
disparity in contributions which is permitted under Section
401(l) of the Code. In the event that both Adoption Agreements
provide for such integration, only the money purchase pension
plan shall be deemed to be integrated.
G. Return of the Employer Contribution to the Employer Under
Special Circumstances - Any contribution made by the Employer
because of a mistake of fact must be returned to the Employer
within one year of the contribution.
In the event that the Commissioner of Internal Revenue
determines that the Plan is not initially qualified under the
Code, any contributions made incident to that initial
qualification by the Employer must be returned to the Employer
within one year after the date the initial qualification is
denied, but only if the application for qualification is made
by the time prescribed by law for filing the Employer's return
for the taxable year in which the Plan is adopted, or such
later date as the Secretary of the Treasury may prescribe.
In the event that a contribution made by the Employer under
this Plan is conditioned on deductibility and is not
deductible under Code Section 404, the contribution, to the
extent of the amount disallowed, must be returned to the
Employer within one year after the deduction is disallowed.
H. Omission of Participant
1. If the Plan is a money purchase plan or a target benefit
plan and, if in any Plan Year, any Employee who should be
included as a Participant is erroneously omitted and discovery
of such omission is not made until after a contribution by the
Employer for the year has been made and allocated, the
Employer shall make a subsequent contribution to include
earnings thereon, with respect to the omitted Employee in the
amount which the Employer would have contributed with respect
to that Employee had he or she not been omitted.
2. If the Plan is a profit sharing plan, and if in any Plan
Year, any Employee who should be included as a Participant is
erroneously omitted and discovery of such omission is not made
until after the Employer Contribution has been made and
allocated, then the Plan Administrator must re-do the
allocation (if a correction can be made) and inform the
Employee. Alternatively, the Employer may choose to contribute
for the omitted Employee the amount to include earnings
thereon, which the Employer would have contributed for the
Employee.
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<PAGE>
3.02 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
This Plan will not accept Nondeductible Employee Contributions
and matching contributions for Plan Years beginning after the
Plan Year in which this Plan is adopted by the Employer.
Nondeductible Employee Contributions for Plan Years beginning
after December 31, 1986, together with any matching
contributions as defined in Section 401(m) of the Code, will
be limited so as to meet the nondiscrimination test of Section
401(m) of the Code. A separate account will be maintained by
the Plan Administrator for the Nondeductible Employee
Contributions of each Participant.
A Participant may, upon a written request submitted to the
Plan Administrator withdraw the lesser of the portion of his
or her Individual Account attributable to his or her
Nondeductible Employee Contributions or the amount he or she
contributed as Nondeductible Employee Contributions.
Nondeductible Employee Contributions and earnings thereon will
be nonforfeitable at all times. No Forfeiture will occur
solely as a result of an Employee's withdrawal of
Nondeductible Employee Contributions.
The Plan Administrator will not accept deductible employee
contributions which are made for a taxable year beginning
after December 31, 1986. Contributions made prior to that date
will be maintained in a separate account which will be
nonforfeitable at all times. The account will share in the
gains and losses of the Fund in the same manner as described
in Section 4.03 of the Plan. No part of the deductible
employee contribution account will be used to purchase life
insurance. Subject to Section 6.05, joint and survivor annuity
requirements (if applicable), the Participant may withdraw any
part of the deductible employee contribution account by making
a written application to the Plan Administrator.
3.03 ROLLOVER CONTRIBUTIONS
If so indicated in the Adoption Agreement, an Employee may
contribute a rollover contribution to the Plan. The Plan
Administrator may require the Employee to submit a written
certification that the contribution qualifies as a rollover
contribution under the applicable provisions of the Code. If
it is later determined that all or part of a rollover
contribution was ineligible to be rolled into the Plan, the
Plan Administrator shall direct that any ineligible amounts,
plus earnings attributable thereto, be distributed from the
Plan to the Employee as soon as administratively feasible.
A separate account shall be maintained by the Plan
Administrator for each Employee's rollover contributions which
will be nonforfeitable at all times. Such account will share
in the income and gains and losses of the Fund in the manner
described in Section 4.03 and shall be subject to the Plan's
provisions governing distributions.
The Employer may, in a uniform and nondiscriminatory manner,
only allow Employees who have become Participants in the Plan
to make rollover contributions.
3.04 TRANSFER CONTRIBUTIONS
If so indicated in the Adoption Agreement, the Trustee (or
Custodian, if applicable) may receive any amounts transferred
to it from the trustee or custodian of another plan qualified
under Code Section 401(a). If it is later determined that all
or part of a transfer contribution was ineligible to be
transferred into the Plan, the Plan Administrator shall direct
that any ineligible amounts, plus earnings attributable
thereto, be distributed from the Plan to the Employee as soon
as administratively feasible.
A separate account shall be maintained by the Plan
Administrator for each Employee's transfer contributions which
will be nonforfeitable at all times. Such account will share
in the income and gains and losses of the Fund in the manner
described in Section 4.03 and shall be subject to the Plan's
provisions governing distributions. Notwithstanding any
provisions 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 benefit 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 Section 414(l) of the
Internal Revenue Code, to this Plan from a money purchase
pension plan qualified under Section 401(a) of the Internal
Revenue Code (other than any portion of those assets and
liabilities attributable to voluntary employee contributions).
The Employer may, in a uniform and nondiscriminatory manner,
only allow Employees who have become Participants in the Plan
to make transfer contributions.
3.05 LIMITATION ON ALLOCATIONS
A. If the Participant does not participate in, and has never
participated in another qualified plan maintained by the
Employer or a welfare benefit fund, as defined in Section
419(e) of the Code maintained by the Employer, or an
individual medical account, as defined in Section 415(l)(2) of
the Code, or a simplified employee pension plan, as defined in
Section 408(k) of the Code, maintained by the Employer, which
provides an annual addition as defined in Section 3.08(E)(1),
the following rules shall apply:
1. The amount of annual additions which may be credited to the
Participant's Individual Account for any limitation year will
not exceed the lesser of the maximum permissible amount or any
other limitation contained in this Plan. If the Employer
Contribution that would otherwise be contributed or allocated
to the Participant's Individual Account would cause the annual
additions for the limitation year to exceed the maximum
permissible amount, the amount contributed or allocated will
be reduced so that the annual additions for the limitation
year will equal the maximum permissible amount.
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2. Prior to determining the Participant's actual Compensation
for the limitation year, the Employer may determine the
maximum permissible amount for a Participant on the basis of a
reasonable estimation of the Participant's Compensation for
the limitation year, uniformly determined for all Participants
similarly situated.
3. As soon as is administratively feasible after the end of
the limitation year, the maximum permissible amount for the
limitation year will be determined on the basis of the
Participant's actual Compensation for the limitation year.
4. If pursuant to Section 3.05(A)(3) or as a result of the
allocation of Forfeitures there is an excess amount, the
excess will be disposed of as follows:
a. Any Nondeductible Employee Contributions, to the extent
they would reduce the excess amount, will be returned to the
Participant;
b. If after the application of paragraph (a) an excess amount
still exists, and the Participant is covered by the Plan at
the end of the limitation year, the excess amount in the
Participant's Individual Account will be used to reduce
Employer Contributions (including any allocation of
Forfeitures) for such Participant in the next limitation year,
and each succeeding limitation year if necessary;
c. If after the application of paragraph (b) an excess amount
still exists, and the Participant is not covered by the Plan
at the end of a limitation year, the excess amount will be
held unallocated in a suspense account. The suspense account
will be applied to reduce future Employer Contributions
(including allocation of any Forfeitures) for all remaining
Participants in the next limitation year, and each succeeding
limitation year if necessary;
d. If a suspense account is in existence at any time during a
limitation year pursuant to this Section, it will not
participate in the allocation of the Fund's investment gains
and losses. If a suspense account is in existence at any time
during a particular limitation year, all amounts in the
suspense account must be allocated and reallocated to
Participants' Individual Accounts before any Employer
Contributions or any Nondeductible Employee Contributions may
be made to the Plan for that limitation year. Excess amounts
may not be distributed to Participants or former Participants.
B. If, in addition to this Plan, the Participant is covered
under another qualified master or prototype defined
contribution plan maintained by the Employer, a welfare
benefit fund maintained by the Employer, an individual medical
account maintained by the Employer, or a simplified employee
pension maintained by the Employer that provides an annual
addition as defined in Section 3.05(E)(1), during any
limitation year, the following rules apply:
1. The annual additions which may be credited to a
Participant's Individual Account under this Plan for any such
limitation year will not exceed the maximum permissible amount
reduced by the annual additions credited to a Participant's
Individual Account under the other qualified master or
prototype plans, welfare benefit funds, individual medical
accounts and simplified employee pensions for the same
limitation year. If the annual additions with respect to the
Participant under other qualified master or prototype defined
contribution plans, welfare benefit funds, individual medical
accounts and simplified employee pensions maintained by the
Employer are less than the maximum permissible amount and the
Employer Contribution that would otherwise be contributed or
allocated to the Participant's Individual Account under this
Plan would cause the annual additions for the limitation year
to exceed this limitation, the amount contributed or allocated
will be reduced so that the annual additions under all such
plans and funds for the limitation year will equal the maximum
permissible amount. If the annual additions with respect to
the Participant under such other qualified master or prototype
defined contribution plans, welfare benefit funds, individual
medical accounts and simplified employee pensions in the
aggregate are equal to or greater than the maximum permissible
amount, no amount will be contributed or allocated to the
Participant's Individual Account under this Plan for the
limitation year.
2. Prior to determining the Participant's actual Compensation
for the limitation year, the Employer may determine the
maximum permissible amount for a Participant in the manner
described in Section 3.05(A)(2).
3. As soon as is administratively feasible after the end of
the limitation year, the maximum permissible amount for the
limitation year will be determined on the basis of the
Participant's actual Compensation for the limitation year.
4. If, pursuant to Section 3.05(B)(3) or as a result of the
allocation of Forfeitures a Participant's annual additions
under this Plan and such other plans would result in an excess
amount for a limitation year, the excess amount will be deemed
to consist of the annual additions last allocated, except that
annual additions attributable to a simplified employee pension
will be deemed to have been allocated first, followed by
annual additions to a welfare benefit fund or individual
medical account, regardless of the actual allocation date.
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5. If an excess amount was allocated to a Participant on an
allocation date of this Plan which coincides with an
allocation date of another plan, the excess amount attributed
to this Plan will be the product of,
a. the total excess amount allocated as of such date, times
b. the ratio of (i) the annual additions allocated to the
Participant for the limitation year as of such date under this
Plan to (ii) the total annual additions allocated to the
Participant for the limitation year as of such date under this
and all the other qualified prototype defined contribution
plans.
6. Any excess amount attributed to this Plan will be disposed
in the manner described in Section 3.05(A)(4).
C. If the Participant is covered under another qualified
defined contribution plan maintained by the Employer which is
not a master or prototype plan, annual additions which may be
credited to the Participant's Individual Account under this
Plan for any limitation year will be limited in accordance
with Sections 3.05(B)(1) through 3.05(B)(6) as though the
other plan were a master or prototype plan unless the Employer
provides other limitations in the Section of the Adoption
Agreement titled "Limitation on Allocation - More Than One
Plan."
D. If the Employer maintains, or at any time maintained, a
qualified defined benefit plan covering any Participant in
this Plan, the sum of the Participant's defined benefit plan
fraction and defined contribution plan fraction will not
exceed 1.0 in any limitation year. The annual additions which
may be credited to the Participant's Individual Account under
this Plan for any limitation year will be limited in
accordance with the Section of the Adoption Agreement titled
"Limitation on Allocation - More Than One Plan."
E. The following terms shall have the following meanings when
used in this Section 3.05:
1. Annual additions: The sum of the following amounts credited
to a Participant's Individual Account for the limitation year:
a. Employer Contributions,
b. Nondeductible Employee Contributions,
c. Forfeitures,
d. amounts allocated, after March 31, 1984, to an individual
medical account, as defined in Section 415(l)(2) of the Code,
which is part of a pension or annuity plan maintained by the
Employer are treated as annual additions to a defined
contribution plan. Also amounts derived from contributions
paid or accrued after December 31, 1985, in taxable years
ending after such date, which are attributable to
post-retirement medical benefits, allocated to the separate
account of a key employee, as defined in Section 419A(d)(3) of
the Code, under a welfare benefit fund, as defined in Section
419(e) of the Code, maintained by the Employer are treated as
annual additions to a defined contribution plan, and
e. allocations under a simplified employee pension.
For this purpose, any excess amount applied under Section
3.05(A)(4) or 3.05(B)(6) in the limitation year to reduce
Employer Contributions will be considered annual additions for
such limitation year.
2. Compensation: Means Compensation as defined in Section 1.07
of the Plan except that Compensation for purposes of this
Section 3.05 shall not include any amounts contributed by the
Employer pursuant to a salary reduction agreement and which is
not includible in the gross income of the Employee under
Sections 125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code
even if the Employer has elected to include such contributions
in the definition of Compensation used for other purposes
under the Plan. Further, any other exclusion the Employer has
elected (such as the exclusion of certain types of pay or pay
earned before the Employee enters the Plan) will not apply for
purposes of this Section.
Notwithstanding the preceding sentence, Compensation for a
Participant in a defined contribution plan who is permanently
and totally disabled (as defined in Section 22(e)(3) of the
Code) is the Compensation such Participant would have received
for the limitation year if the Participant had been paid at
the rate of Compensation paid immediately before becoming
permanently and totally disabled; such imputed Compensation
for the disabled Participant may be taken into account only if
the Participant is not a Highly Compensated Employee (as
defined in Section 414(q) of the Code) and contributions made
on behalf of such Participant are nonforfeitable when made.
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3. Defined benefit fraction: A fraction, the numerator of
which is the sum of the Participant's projected annual
benefits under all the defined benefit plans (whether or not
terminated) maintained by the Employer, and the denominator of
which is the lesser of 125% of the dollar limitation
determined for the limitation year under Section 415(b) and
(d) of the Code or 140% of the highest average compensation,
including any adjustments under Section 415(b) of the Code.
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first limitation year
beginning after December 31, 1986, in one or more defined
benefit plans maintained by the Employer which were in
existence on May 6, 1986, the denominator of this fraction
will not be less than 125% of the sum of the annual benefits
under such plans which the Participant had accrued as of the
close of the last limitation year beginning before January 1,
1987, disregarding any changes in the terms and conditions of
the plan after May 5, 1986. The preceding sentence applies
only if the defined benefit plans individually and in the
aggregate satisfied the requirements of Section 415 of the
Code for all limitation years beginning before January 1, 1987.
4. Defined contribution dollar limitation: $30,000 or if
greater, one-fourth of the defined benefit dollar limitation
set forth in Section 415(b)(1) of the Code as in effect for
the limitation year.
5. Defined contribution fraction: A fraction, the numerator of
which is the sum of the annual additions to the Participant's
account under all the defined contribution plans (whether or
not terminated) maintained by the Employer for the current and
all prior limitation years (including the annual additions
attributable to the Participant's nondeductible employee
contributions to all defined benefit plans, whether or not
terminated, maintained by the Employer, and the annual
additions attributable to all welfare benefit funds, as
defined in Section 419(e) of the Code, individual medical
accounts, and simplified employee pensions, maintained by the
Employer), and the denominator of which is the sum of the
maximum aggregate amounts for the current and all prior
limitation years of service with the Employer (regardless of
whether a defined contribution plan was maintained by the
Employer). The maximum aggregate amount in any limitation year
is the lesser of 125% of the dollar limitation determined
under Section 415(b) and (d) of the Code in effect under
Section 415(c)(1)(A) of the Code or 35% of the Participant's
Compensation for such year.
If the Employee was a Participant as of the end of the first
day of the first limitation year beginning after December 31,
1986, in one or more defined contribution plans maintained by
the Employer which were in existence on May 6, 1986, the
numerator of this fraction will be adjusted if the sum of this
fraction and the defined benefit fraction would otherwise
exceed 1.0 under the terms of this Plan. Under the adjustment,
an amount equal to the product of (1) the excess of the sum of
the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of
this fraction. The adjustment is calculated using the
fractions as they would be computed as of the end of the last
limitation year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the
Plan made after May 5, 1986, but using the Section 415
limitation applicable to the first limitation year beginning
on or after January 1, 1987.
The annual addition for any limitation year beginning before
January 1, 1987, shall not be recomputed to treat all
Nondeductible Employee Contributions as annual additions.
6. Employer: For purposes of this Section 3.05, Employer shall
mean the Employer that adopts this Plan, and all members of a
controlled group of corporations (as defined in Section 414(b)
of the Code as modified by Section 415(h)), all commonly
controlled trades or businesses (as defined in Section 414(c)
as modified by Section 415(h)) or affiliated service groups
(as defined in Section 414(m)) of which the adopting Employer
is a part, and any other entity required to be aggregated with
the Employer pursuant to regulations under Section 414(o) of
the Code.
7. Excess amount: The excess of the Participant's annual
additions for the limitation year over the maximum permissible
amount.
8. Highest average compensation: The average compensation for
the three consecutive years of service with the Employer that
produces the highest average.
9. Limitation year: A calendar year, or the 12-consecutive
month period elected by the Employer in the Adoption
Agreement. All qualified plans maintained by the Employer must
use the same limitation year. If the limitation year is
amended to a different 12-consecutive month period, the new
limitation year must begin on a date within the limitation
year in which the amendment is made.
10. Master or prototype plan: A plan the form of which is the
subject of a favorable opinion letter from the Internal
Revenue Service.
11. Maximum permissible amount: The maximum annual addition
that may be contributed or allocated to a Participant's
Individual Account under the Plan for any limitation year
shall not exceed the lesser of:
a. the defined contribution dollar limitation, or
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<PAGE>
b. 25% of the Participant's Compensation for the limitation year.
The compensation limitation referred to in (b) shall not apply
to any contribution for medical benefits (within the meaning
of Section 401(h) or Section 419A(f)(2) of the Code) which is
otherwise treated as an annual addition under Section
415(l)(1) or 419A(d)(2) of the Code.
If a short limitation year is created because of an amendment
changing the limitation year to a different 12-consecutive
month period, the maximum permissible amount will not exceed
the defined contribution dollar limitation multiplied by the
following fraction:
Number of months in the short limitation year
---------------------------------------------
12
12. Projected annual benefit: The annual retirement benefit
(adjusted to an actuarially equivalent straight life annuity
if such benefit is expressed in a form other than a straight
life annuity or qualified joint and survivor annuity) to which
the Participant would be entitled under the terms of the Plan
assuming:
a. the Participant will continue employment until Normal
Retirement Age under the Plan (or current age, if later), and
b. the Participant's Compensation for the current limitation
year and all other relevant factors used to determine benefits
under the Plan will remain constant for all future limitation
years.
Straight life annuity means an annuity payable in equal
installments for the life of the Participant that terminates
upon the Participant's death.
SECTION FOUR INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION
4.01 INDIVIDUAL ACCOUNTS
A. The Plan Administrator shall establish and maintain an
Individual Account in the name of each Participant to reflect
the total value of his or her interest in the Fund. Each
Individual Account established hereunder shall consist of such
subaccounts as may be needed for each Participant including:
1. a subaccount to reflect Employer Contributions and Forfeitures allocated on
behalf of a Participant;
2. a subaccount to reflect a Participant's rollover contributions;
3. a subaccount to reflect a Participant's transfer contributions;
4. a subaccount to reflect a Participant's Nondeductible Employee Contributions; and
5. a subaccount to reflect a Participant's deductible employee contributions.
B. The Plan Administrator may establish additional accounts as
it may deem necessary for the proper administration of the
Plan, including, but not limited to, a suspense account for
Forfeitures as required pursuant to Section 6.01(D).
4.02 VALUATION OF FUND
The Fund will be valued each Valuation Date at fair market
value.
4.03 VALUATION OF INDIVIDUAL ACCOUNTS
A. Where all or a portion of the assets of a Participant's
Individual Account are invested in a Separate Fund for the
Participant, then the value of that portion of such
Participant's Individual Account at any relevant time equals
the sum of the fair market values of the assets in such
Separate Fund, less any applicable charges or penalties.
B. The fair market value of the remainder of each Individual
Account is determined in the following manner:
1. First, the portion of the Individual Account invested in
each Investment Fund as of the previous Valuation Date is
determined. Each such portion is reduced by any withdrawal
made from the applicable Investment Fund to or for the benefit
of a Participant or the Participant's Beneficiary, further
reduced by any amounts forfeited by the Participant pursuant
to Section 6.01(D) and further reduced by any transfer to
another Investment Fund since the previous Valuation Date and
is increased by any amount transferred from another Investment
Fund since the previous Valuation Date. The resulting amounts
are the net Individual Account portions invested in the
Investment Funds.
2. Secondly, the net Individual Account portions invested in
each Investment Fund are adjusted upwards or downwards, pro
rata (i.e., ratio of each net Individual Account portion to
the sum of all net Individual Account portions) so that the
sum of all the net Individual Account portions invested in an
Investment Fund will equal the then fair market value of the
Investment Fund. Notwithstanding the previous sentence, for
the first Plan
16
<PAGE>
Year only, the net Individual Account portions shall be the
sum of all contributions made to each Participant's Individual
Account during the first Plan Year.
17
<PAGE>
3. Thirdly, any contributions to the Plan and Forfeitures are
allocated in accordance with the appropriate allocation
provisions of Section 3. For purposes of Section 4,
contributions made by the Employer for any Plan Year but after
that Plan Year will be considered to have been made on the
last day of that Plan Year regardless of when paid to the
Trustee (or Custodian, if applicable).
Amounts contributed between Valuation Dates will not be
credited with investment gains or losses until the next
following Valuation Date.
4. Finally, the portions of the Individual Account invested in
each Investment Fund (determined in accordance with (1), (2)
and (3) above) are added together.
4.04 MODIFICATION OF METHOD FOR VALUING INDIVIDUAL ACCOUNTS
If necessary or appropriate, the Plan Administrator may
establish different or additional procedures (which shall be
uniform and nondiscriminatory) for determining the fair market
value of the Individual Accounts.
4.05 SEGREGATION OF ASSETS
If a Participant elects a mode of distribution other than a
lump sum, the Plan Administrator may place that Participant's
account balance into a segregated Investment Fund for the
purpose of maintaining the necessary liquidity to provide
benefit installments on a periodic basis.
4.06 STATEMENT OF INDIVIDUAL ACCOUNTS
No later than 270 days after the close of each Plan Year, the
Plan Administrator shall furnish a statement to each
Participant indicating the Individual Account balances of such
Participant as of the last Valuation Date in such Plan Year.
SECTION FIVE TRUSTEE OR CUSTODIAN
5.01 CREATION OF FUND
By adopting this Plan, the Employer establishes the Fund which
shall consist of the assets of the Plan held by the Trustee
(or Custodian, if applicable) pursuant to this Section 5.
Assets within the Fund may be pooled on behalf of all
Participants, earmarked on behalf of each Participant or be a
combination of pooled and earmarked. To the extent that assets
are earmarked for a particular Participant, they will be held
in a Separate Fund for that Participant.
No part of the corpus or income of the Fund may be used for,
or diverted to, purposes other than for the exclusive benefit
of Participants or their Beneficiaries.
5.02 INVESTMENT AUTHORITY
Except as provided in Section 5.14 (relating to individual
direction of investments by Participants), the Employer, not
the Trustee (or Custodian, if applicable), shall have
exclusive management and control over the investment of the
Fund into any permitted investment. Notwithstanding the
preceding sentence, a Trustee may make an agreement with the
Employer whereby the Trustee will manage the investment of all
or a portion of the Fund. Any such agreement shall be in
writing and set forth such matters as the Trustee deems
necessary or desirable.
5.03 FINANCIAL ORGANIZATION CUSTODIAN OR TRUSTEE WITHOUT FULL TRUST POWERS
This Section 5.03 applies where a financial organization has
indicated in the Adoption Agreement that it will serve, with
respect to this Plan, as Custodian or as Trustee without full
trust powers (under applicable law). Hereinafter, a financial
organization Trustee without full trust powers (under
applicable law) shall be referred to as a Custodian. The
Custodian shall have no discretionary authority with respect
to the management of the Plan or the Fund but will act only as
directed by the entity who has such authority.
A. Permissible Investments - The assets of the Plan shall be
invested only in those investments which are available through
the Custodian in the ordinary course of business which the
Custodian may legally hold in a qualified plan and which the
Custodian chooses to make available to Employers for qualified
plan investments. Notwithstanding the preceding sentence, the
Prototype Sponsor may, as a condition of making the Plan
available to the Employer, limit the types of property in
which the assets of the Plan may be invested.
B. Responsibilities of the Custodian - The responsibilities of
the Custodian shall be limited to the following:
1. To receive Plan contributions and to hold, invest and
reinvest the Fund without distinction between principal and
interest; provided, however, that nothing in this Plan shall
require the Custodian to maintain physical custody of stock
certificates (or other indicia of ownership of any type of
asset) representing assets within the Fund;
2. To maintain accurate records of contributions, earnings,
withdrawals and other information the Custodian deems relevant
with respect to the Plan;
3. To make disbursements from the Fund to Participants or
Beneficiaries upon the proper authorization of the Plan
Administrator; and
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<PAGE>
4. To furnish to the Plan Administrator a statement which
reflects the value of the investments in the hands of the
Custodian as of the end of each Plan Year and as of any other
times as the Custodian and Plan Administrator may agree.
C. Powers of the Custodian - Except as otherwise provided in
this Plan, the Custodian shall have the power to take any
action with respect to the Fund which it deems necessary or
advisable to discharge its responsibilities under this Plan
including, but not limited to, the following powers:
1. To invest all or a portion of the Fund (including idle cash
balances) in time deposits, savings accounts, money market
accounts or similar investments bearing a reasonable rate of
interest in the Custodian's own savings department or the
savings department of another financial organization;
2. To vote upon any stocks, bonds, or other securities; to
give general or special proxies or powers of attorney with or
without power of substitution; to exercise any conversion
privileges or subscription rights and to make any payments
incidental thereto; to oppose, or to consent to, or otherwise
participate in, corporate reorganizations or other changes
affecting corporate securities, and to pay any assessment or
charges in connection therewith; and generally to exercise any
of the powers of an owner with respect to stocks, bonds,
securities or other property;
3. To hold securities or other property of the Fund in its own
name, in the name of its nominee or in bearer form; and
4. To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other
instruments that may be necessary or appropriate to carry out
the powers herein granted.
5.04 FINANCIAL ORGANIZATION TRUSTEE WITH FULL TRUST POWERS AND INDIVIDUAL TRUSTEE
This Section 5.04 applies where a financial organization has
indicated in the Adoption Agreement that it will serve as
Trustee with full trust powers. This Section also applies
where one or more individuals are named in the Adoption
Agreement to serve as Trustee(s).
A. Permissible Investments - The Trustee may invest the assets
of the Plan in property of any character, real or personal,
including, but not limited to the following: stocks, including
shares of open-end investment companies (mutual funds); bonds;
notes; debentures; options; limited partnership interests;
mortgages; real estate or any interests therein; unit
investment trusts; Treasury Bills, and other U.S. Government
obligations; common trust funds, combined investment trusts,
collective trust funds or commingled funds maintained by a
bank or similar financial organization (whether or not the
Trustee hereunder); savings accounts, time deposits or money
market accounts of a bank or similar financial organization
(whether or not the Trustee hereunder); annuity contracts;
life insurance policies; or in such other investments as is
deemed proper without regard to investments authorized by
statute or rule of law governing the investment of trust funds
but with regard to ERISA and this Plan.
Notwithstanding the preceding sentence, the Prototype Sponsor
may, as a condition of making the Plan available to the
Employer, limit the types of property in which the assets of
the Plan may be invested.
B. Responsibilities of the Trustee - The responsibilities of
the Trustee shall be limited to the following:
1. To receive Plan contributions and to hold, invest and
reinvest the Fund without distinction between principal and
interest; provided, however, that nothing in this Plan shall
require the Trustee to maintain physical custody of stock
certificates (or other indicia of ownership) representing
assets within the Fund;
2. To maintain accurate records of contributions, earnings,
withdrawals and other information the Trustee deems relevant
with respect to the Plan;
3. To make disbursements from the Fund to Participants or
Beneficiaries upon the proper authorization of the Plan
Administrator; and
4. To furnish to the Plan Administrator a statement which
reflects the value of the investments in the hands of the
Trustee as of the end of each Plan Year and as of any other
times as the Trustee and Plan Administrator may agree.
C. Powers of the Trustee - Except as otherwise provided in
this Plan, the Trustee shall have the power to take any action
with respect to the Fund which it deems necessary or advisable
to discharge its responsibilities under this Plan including,
but not limited to, the following powers:
1. To hold any securities or other property of the Fund in its
own name, in the name of its nominee or in bearer form;
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<PAGE>
2. To purchase or subscribe for securities issued, or real
property owned, by the Employer or any trade or business under
common control with the Employer but only if the prudent
investment and diversification requirements of ERISA are
satisfied;
3. To sell, exchange, convey, transfer or otherwise dispose of
any securities or other property held by the Trustee, by
private contract or at public auction. No person dealing with
the Trustee shall be bound to see to the application of the
purchase money or to inquire into the validity, expediency, or
propriety of any such sale or other disposition, with or
without advertisement;
4. To vote upon any stocks, bonds, or other securities; to
give general or special proxies or powers of attorney with or
without power of substitution; to exercise any conversion
privileges or subscription rights and to make any payments
incidental thereto; to oppose, or to consent to, or otherwise
participate in, corporate reorganizations or other changes
affecting corporate securities, and to delegate discretionary
powers, and to pay any assessments or charges in connection
therewith; and generally to exercise any of the powers of an
owner with respect to stocks, bonds, securities or other
property;
5. To invest any part or all of the Fund (including idle cash
balances) in certificates of deposit, demand or time deposits,
savings accounts, money market accounts or similar investments
of the Trustee (if the Trustee is a bank or similar financial
organization), the Prototype Sponsor or any affiliate of such
Trustee or Prototype Sponsor, which bear a reasonable rate of
interest;
6. To provide sweep services without the receipt by the
Trustee of additional compensation or other consideration
(other than reimbursement of direct expenses properly and
actually incurred in the performance of such services);
7. To hold in the form of cash for distribution or investment
such portion of the Fund as, at any time and from
time-to-time, the Trustee shall deem prudent and deposit such
cash in interest bearing or noninterest bearing accounts;
8. To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other
instruments that may be necessary or appropriate to carry out
the powers herein granted;
9. To settle, compromise, or submit to arbitration any claims,
debts, or damages due or owing to or from the Plan, to
commence or defend suits or legal or administrative
proceedings, and to represent the Plan in all suits and legal
and administrative proceedings;
10. To employ suitable agents and counsel, to contract with
agents to perform administrative and recordkeeping duties and
to pay their reasonable expenses, fees and compensation, and
such agent or counsel may or may not be agent or counsel for
the Employer;
11. To cause any part or all of the Fund, without limitation
as to amount, to be commingled with the funds of other trusts
(including trusts for qualified employee benefit plans) by
causing such money to be invested as a part of any pooled,
common, collective or commingled trust fund (including any
such fund described in the Adoption Agreement) heretofore or
hereafter created by any Trustee (if the Trustee is a bank),
by the Prototype Sponsor, by any affiliate bank of such a
Trustee or by such a Trustee or the Prototype Sponsor, or by
such an affiliate in participation with others; the instrument
or instruments establishing such trust fund or funds, as
amended, being made part of this Plan and trust so long as any
portion of the Fund shall be invested through the medium
thereof; and
12. Generally to do all such acts, execute all such
instruments, initiate such proceedings, and exercise all such
rights and privileges with relation to property constituting
the Fund as if the Trustee were the absolute owner thereof.
5.05 DIVISION OF FUND INTO INVESTMENT FUNDS
The Employer may direct the Trustee (or Custodian) from
time-to-time to divide and redivide the Fund into one or more
Investment Funds. Such Investment Funds may include, but not
be limited to, Investment Funds representing the assets under
the control of an investment manager pursuant to Section 5.12
and Investment Funds representing investment options available
for individual direction by Participants pursuant to Section
5.14. Upon each division or redivision, the Employer may
specify the part of the Fund to be allocated to each such
Investment Fund and the terms and conditions, if any, under
which the assets in such Investment Fund shall be invested.
5.06 COMPENSATION AND EXPENSES
The Trustee (or Custodian, if applicable) shall receive such
reasonable compensation as may be agreed upon by the Trustee
(or Custodian) and the Employer. The Trustee (or Custodian)
shall be entitled to reimbursement by the Employer for all
proper expenses incurred in carrying out his or her duties
under this Plan, including reasonable legal, accounting and
actuarial expenses. If not paid by the Employer, such
compensation and expenses may be charged against the Fund.
All taxes of any kind that may be levied or assessed under
existing or future laws upon, or in respect of, the Fund or
the income thereof shall be paid from the Fund.
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5.07 NOT OBLIGATED TO QUESTION DATA
The Employer shall furnish the Trustee (or Custodian, if
applicable) and Plan Administrator the information which each
party deems necessary for the administration of the Plan
including, but not limited to, changes in a Participant's
status, eligibility, mailing addresses and other such data as
may be required. The Trustee (or Custodian) and Plan
Administrator shall be entitled to act on such information as
is supplied them and shall have no duty or responsibility to
further verify or question such information.
5.08 LIABILITY FOR WITHHOLDING ON DISTRIBUTIONS
The Plan Administrator shall be responsible for withholding
federal income taxes from distributions from the Plan, unless
the Participant (or Beneficiary, where applicable) elects not
to have such taxes withheld. The Trustee (or Custodian) or
other payor may act as agent for the Plan Administrator to
withhold such taxes and to make the appropriate distribution
reports, if the Plan Administrator furnishes all the
information to the Trustee (or Custodian) or other payor it
may need to do withholding and reporting.
5.09 RESIGNATION OR REMOVAL OF TRUSTEE (OR CUSTODIAN)
The Trustee (or Custodian, if applicable) may resign at any
time by giving 30 days advance written notice to the Employer.
The resignation shall become effective 30 days after receipt
of such notice unless a shorter period is agreed upon.
The Employer may remove any Trustee (or Custodian) at any time
by giving written notice to such Trustee (or Custodian) and
such removal shall be effective 30 days after receipt of such
notice unless a shorter period is agreed upon. The Employer
shall have the power to appoint a successor Trustee (or
Custodian).
Upon such resignation or removal, if the resigning or removed
Trustee (or Custodian) is the sole Trustee (or Custodian), he
or she shall transfer all of the assets of the Fund then held
by such Trustee (or Custodian) as expeditiously as possible to
the successor Trustee (or Custodian) after paying or reserving
such reasonable amount as he or she shall deem necessary to
provide for the expense in the settlement of the accounts and
the amount of any compensation due him or her and any sums
chargeable against the Fund for which he or she may be liable.
If the Funds as reserved are not sufficient for such purpose,
then he or she shall be entitled to reimbursement from the
successor Trustee (or Custodian) out of the assets in the
successor Trustee's (or Custodian's) hands under this Plan. If
the amount reserved shall be in excess of the amount actually
needed, the former Trustee (or Custodian) shall return such
excess to the successor Trustee (or Custodian).
Upon receipt of the transferred assets, the successor Trustee
(or Custodian) shall thereupon succeed to all of the powers
and responsibilities given to the Trustee (or Custodian) by
this Plan.
The resigning or removed Trustee (or Custodian) shall render
an accounting to the Employer and unless objected to by the
Employer within 30 days of its receipt, the accounting shall
be deemed to have been approved and the resigning or removed
Trustee (or Custodian) shall be released and discharged as to
all matters set forth in the accounting. Where a financial
organization is serving as Trustee (or Custodian) and it is
merged with or bought by another organization (or comes under
the control of any federal or state agency), that organization
shall serve as the successor Trustee (or Custodian) of this
Plan, but only if it is the type of organization that can so
serve under applicable law.
Where the Trustee or Custodian is serving as a nonbank trustee
or custodian pursuant to Section 1.401-12(n) of the Income Tax
Regulations, the Employer will appoint a successor Trustee (or
Custodian) upon notification by the Commissioner of Internal
Revenue that such substitution is required because the Trustee
(or Custodian) has failed to comply with the requirements of
Section 1.401-12(n) or is not keeping such records or making
such returns or rendering such statements as are required by
forms or regulations.
5.10 DEGREE OF CARE - LIMITATIONS OF LIABILITY
The Trustee (or Custodian) shall not be liable for any losses
incurred by the Fund by any direction to invest communicated
by the Employer, Plan Administrator, investment manager
appointed pursuant to Section 5.12 or any Participant or
Beneficiary. The Trustee (or Custodian) shall be under no
liability for distributions made or other action taken or not
taken at the written direction of the Plan Administrator. It
is specifically understood that the Trustee (or Custodian)
shall have no duty or responsibility with respect to the
determination of matters pertaining to the eligibility of any
Employee to become a Participant or remain a Participant
hereunder, the amount of benefit to which a Participant or
Beneficiary shall be entitled to receive hereunder, whether a
distribution to Participant or Beneficiary is appropriate
under the terms of the Plan or the size and type of any policy
to be purchased from any insurer for any Participant hereunder
or similar matters; it being understood that all such
responsibilities under the Plan are vested in the Plan
Administrator.
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5.11 INDEMNIFICATION OF PROTOTYPE SPONSOR AND TRUSTEE (OR CUSTODIAN)
Notwithstanding any other provision herein, and except as may
be otherwise provided by ERISA, the Employer shall indemnify
and hold harmless the Trustee (or Custodian, if applicable)
and the Prototype Sponsor, their officers, directors,
employees, agents, their heirs, executors, successors and
assigns, from and against any and all liabilities, damages,
judgments, settlements, losses, costs, charges, or expenses
(including legal expenses) at any time arising out of or
incurred in connection with any action taken by such parties
in the performance of their duties with respect to this Plan,
unless there has been a final adjudication of gross negligence
or willful misconduct in the performance of such duties.
Further, except as may be otherwise provided by ERISA, the
Employer will indemnify the Trustee (or Custodian) and
Prototype Sponsor from any liability, claim or expense
(including legal expense) which the Trustee (or Custodian) and
Prototype Sponsor shall incur by reason of or which results,
in whole or in part, from the Trustee's (or Custodian's) or
Prototype Sponsor's reliance on the facts and other directions
and elections the Employer communicates or fails to
communicate.
5.12 INVESTMENT MANAGERS
A. Definition of Investment Manager - The Employer may appoint
one or more investment managers to make investment decisions
with respect to all or a portion of the Fund. The investment
manager shall be any firm or individual registered as an
investment adviser under the Investment Advisers Act of 1940,
a bank as defined in said Act or an insurance company
qualified under the laws of more than one state to perform
services consisting of the management, acquisition or
disposition of any assets of the Plan.
B. Investment Manager's Authority - A separate Investment Fund
shall be established representing the assets of the Fund
invested at the direction of the investment manager. The
investment manager so appointed shall direct the Trustee (or
Custodian, if applicable ) with respect to the investment of
such Investment Fund. The investments which may be acquired at
the direction of the investment manager are those described in
Section 5.03(A) (for Custodians) or Section 5.04(A) (for
Trustees).
C. Written Agreement - The appointment of any investment
manager shall be by written agreement between the Employer and
the investment manager and a copy of such agreement (and any
modification or termination thereof) must be given to the
Trustee (or Custodian).
The agreement shall set forth, among other matters, the
effective date of the investment manager's appointment and an
acknowledgment by the investment manager that it is a
fiduciary of the Plan under ERISA.
D. Concerning the Trustee (or Custodian) - Written notice of
each appointment of an investment manager shall be given to
the Trustee (or Custodian) in advance of the effective date of
such appointment. Such notice shall specify which portion of
the Fund will constitute the Investment Fund subject to the
investment manager's direction. The Trustee (or Custodian)
shall comply with the investment direction given to it by the
investment manager and will not be liable for any loss which
may result by reason of any action (or inaction) it takes at
the direction of the investment manager.
5.13 MATTERS RELATING TO INSURANCE
A. If a life insurance policy is to be purchased for a
Participant, the aggregate premium for certain life insurance
for each Participant must be less than a certain percentage of
the aggregate Employer Contributions and Forfeitures allocated
to a Participant's Individual Account at any particular time
as follows:
1. Ordinary Life Insurance - For purposes of these incidental
insurance provisions, ordinary life insurance contracts are
contracts with both nondecreasing death benefits and
nonincreasing premiums. If such contracts are purchased, less
than 50% of the aggregate Employer Contributions and
Forfeitures allocated to any Participant's Individual Account
will be used to pay the premiums attributable to them.
2. Term and Universal Life Insurance - No more than 25% of the
aggregate Employer Contributions and Forfeitures allocated to
any Participant's Individual Account will be used to pay the
premiums on term life insurance contracts, universal life
insurance contracts, and all other life insurance contracts
which are not ordinary life.
3. Combination - The sum of 50% of the ordinary life insurance
premiums and all other life insurance premiums will not exceed
25% of the aggregate Employer Contributions and Forfeitures
allocated to any Participant's Individual Account.
If this Plan is a profit sharing plan, the above incidental
benefits limits do not apply to life insurance contracts
purchased with Employer Contributions and Forfeitures that
have been in the Participant's Individual Account for at least
2 full Plan Years, measured from the date such contributions
were allocated.
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<PAGE>
B. Any dividends or credits earned on insurance contracts for
a Participant shall be allocated to such Participant's
Individual Account.
C. Subject to Section 6.05, the contracts on a Participant's
life will be converted to cash or an annuity or distributed to
the Participant upon commencement of benefits.
D. The Trustee (or Custodian, if applicable) shall apply for
and will be the owner of any insurance contract(s) purchased
under the terms of this Plan. The insurance contract(s) must
provide that proceeds will be payable to the Trustee (or
Custodian), however, the Trustee (or Custodian) shall be
required to pay over all proceeds of the contract(s) to the
Participant's designated Beneficiary in accordance with the
distribution provisions of this Plan. A Participant's spouse
will be the designated Beneficiary of the proceeds in all
circumstances unless a qualified election has been made in
accordance with Section 6.05. Under no circumstances shall the
Fund retain any part of the proceeds. In the event of any
conflict between the terms of this Plan and the terms of any
insurance contract purchased hereunder, the Plan provisions
shall control.
E. The Plan Administrator may direct the Trustee (or
Custodian) to sell and distribute insurance or annuity
contracts to a Participant (or other party as may be
permitted) in accordance with applicable law or regulations.
5.14 DIRECTION OF INVESTMENTS BY PARTICIPANT
If so indicated in the Adoption Agreement, each Participant
may individually direct the Trustee (or Custodian, if
applicable) regarding the investment of part or all of his or
her Individual Account. To the extent so directed, the
Employer, Plan Administrator, Trustee (or Custodian) and all
other fiduciaries are relieved of their fiduciary
responsibility under Section 404 of ERISA.
The Plan Administrator shall direct that a Separate Fund be
established in the name of each Participant who directs the
investment of part or all of his or her Individual Account.
Each Separate Fund shall be charged or credited (as
appropriate) with the earnings, gains, losses or expenses
attributable to such Separate Fund. No fiduciary shall be
liable for any loss which results from a Participant's
individual direction. The assets subject to individual
direction shall not be invested in collectibles as that term
is defined in Section 408(m) of the Code.
The Plan Administrator shall establish such uniform and
nondiscriminatory rules relating to individual direction as it
deems necessary or advisable including, but not limited to,
rules describing (1) which portions of Participant's
Individual Account can be individually directed; (2) the
frequency of investment changes; (3) the forms and procedures
for making investment changes; and (4) the effect of a
Participant's failure to make a valid direction.
The Plan Administrator may, in a uniform and nondiscriminatory
manner, limit the available investments for Participants'
individual direction to certain specified investment options
(including, but not limited to, certain mutual funds,
investment contracts, deposit accounts and group trusts). The
Plan Administrator may permit, in a uniform and
nondiscriminatory manner, a Beneficiary of a deceased
Participant or the alternate payee under a qualified domestic
relations order (as defined in Section 414(p) of the Code) to
individually direct in accordance with this Section.
SECTION SIX VESTING AND DISTRIBUTION
6.01 DISTRIBUTION TO PARTICIPANT
A. Distributable Events
1. Entitlement to Distribution - The Vested portion of a
Participant's Individual Account shall be distributable to the
Participant upon (1) the occurrence of any of the
distributable events specified in the Adoption Agreement; (2)
the Participant's Termination of Employment after attaining
Normal Retirement Age; (3) the termination of the Plan; and
(4) the Participant's Termination of Employment after
satisfying any Early Retirement Age conditions.
If a Participant separates from service before satisfying the
Early Retirement Age requirement, but has satisfied the
service requirement, the Participant will be entitled to elect
an early retirement benefit upon satisfaction of such age
requirement.
2. Written Request: When Distributed - A Participant entitled
to distribution who wishes to receive a distribution must
submit a written request to the Plan Administrator. Such
request shall be made upon a form provided by the Plan
Administrator. Upon a valid request, the Plan Administrator
shall direct the Trustee (or Custodian, if applicable) to
commence distribution no later than the time specified in the
Adoption Agreement for this purpose and, if not specified in
the Adoption Agreement, then no later than 90 days following
the later of:
a. the close of the Plan Year within which the event occurs
which entitles the Participant to distribution; or
b. the close of the Plan Year in which the request is received.
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3. Special Rules for Withdrawals During Service - If this is a
profit sharing plan and the Adoption Agreement so provides, a
Participant may elect to receive a distribution of all or part
of the Vested portion of his or her Individual Account,
subject to the requirements of Section 6.05 and further
subject to the following limits:
a. Participant for 5 or more years. An Employee who has been a
Participant in the Plan for 5 or more years may withdraw up to
the entire Vested portion of his or her Individual Account.
b. Participant for less than 5 years. An Employee who has been
a Participant in the Plan for less than 5 years may withdraw
only the amount which has been in his or her Individual
Account attributable to Employer Contributions for at least 2
full Plan Years, measured from the date such contributions
were allocated. However, if the distribution is on account of
hardship, the Participant may withdraw up to his or her entire
Vested portion of the Participant's Individual Account. For
this purpose, hardship shall have the meaning set forth in
Section 6.01(A)(4) of the Code.
4. Special Rules for Hardship Withdrawals - If this is a
profit sharing plan and the Adoption Agreement so provides, a
Participant may elect to receive a hardship distribution of
all or part of the Vested portion of his or her Individual
Account, subject to the requirements of Section 6.05 and
further subject to the following limits:
a. Participant for 5 or more years. An Employee who has been a
Participant in the Plan for 5 or more years may withdraw up to
the entire Vested portion of his or her Individual Account.
b. Participant for less than 5 years. An Employee who has been
a Participant in the Plan for less than 5 years may withdraw
only the amount which has been in his or her Individual
Account attributable to Employer Contributions for at least 2
full Plan Years, measured from the date such contributions
were allocated.
For purposes of this Section 6.01(A)(4) and Section 6.01(A)(3)
hardship is defined as an immediate and heavy financial need
of the Participant where such Participant lacks other
available resources. The following are the only financial
needs considered immediate and heavy: expenses incurred or
necessary for medical care, described in Section 213(d) of the
Code, of the Employee, the Employee's spouse or dependents;
the purchase (excluding mortgage payments) of a principal
residence for the Employee; payment of tuition and related
educational fees for the next 12 months of post-secondary
education for the Employee, the Employee's spouse, children or
dependents; or the need to prevent the eviction of the
Employee from, or a foreclosure on the mortgage of, the
Employee's principal residence.
A distribution will be considered as necessary to satisfy an
immediate and heavy financial need of the Employee only if:
1) The employee has obtained all distributions, other than
hardship distributions, and all nontaxable loans under all
plans maintained by the Employer;
2) The distribution is not in excess of the amount of an
immediate and heavy financial need (including amounts
necessary to pay any federal, state or local income taxes or
penalties reasonably anticipated to result from the
distribution).
5. One-Time In-Service Withdrawal Option - If this is a profit
sharing plan and the Employer has elected the one-time
in-service withdrawal option in the Adoption Agreement, then
Participants will be permitted only one in-service withdrawal
during the course of such Participants employment with the
Employer. The amount which the Participant can withdraw will
be limited to the lesser of the amount determined under the
limits set forth in Section 6.01(A)(3) or the percentage of
the Participant's Individual Account specified by the Employer
in the Adoption Agreement. Distributions under this Section
will be subject to the requirements of Section 6.05.
6. Commencement of Benefits - Notwithstanding any other
provision, unless the Participant elects otherwise,
distribution of benefits will begin no later than the 60th day
after the latest of the close of the Plan Year in which:
a. the Participant attains Normal Retirement Age;
b. occurs the 10th anniversary of the year in which the
Participant commenced participation in the Plan; or
c. the Participant incurs a Termination of Employment.
Notwithstanding the foregoing, the failure of a Participant
and spouse to consent to a distribution while a benefit is
immediately distributable, within the meaning of Section
6.02(B) of the Plan, shall be deemed to be an election to
defer commencement of payment of any benefit sufficient to
satisfy this Section.
B. Determining the Vested Portion - In determining the Vested
portion of a Participant's Individual Account, the following
rules apply:
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<PAGE>
1. Employer Contributions and Forfeitures - The Vested portion
of a Participant's Individual Account derived from Employer
Contributions and Forfeitures is determined by applying the
vesting schedule selected in the Adoption Agreement (or the
vesting schedule described in Section 6.01(C) if the Plan is a
Top-Heavy Plan).
2. Rollover and Transfer Contributions - A Participant is
fully Vested in his or her rollover contributions and transfer
contributions.
3. Fully Vested Under Certain Circumstances - A Participant is
fully Vested in his or her Individual Account if any of the
following occurs:
a. the Participant reaches Normal Retirement Age;
b. the Plan is terminated or partially terminated; or
c. there exists a complete discontinuance of contributions
under the Plan.
Further, unless otherwise indicated in the Adoption Agreement,
a Participant is fully Vested if the Participant dies, incurs
a Disability, or satisfies the conditions for Early Retirement
Age (if applicable).
4. Participants in a Prior Plan - If a Participant was a
participant in a Prior Plan on the Effective Date, his or her
Vested percentage shall not be less than it would have been
under such Prior Plan as computed on the Effective Date.
C. Minimum Vesting Schedule for Top-Heavy Plans - The
following vesting provisions apply for any Plan Year in which
this Plan is a Top-Heavy Plan.
Notwithstanding the other provisions of this Section 6.01 or
the vesting schedule selected in the Adoption Agreement
(unless those provisions or that schedule provide for more
rapid vesting), a Participant's Vested portion of his or her
Individual Account attributable to Employer Contributions and
Forfeitures shall be determined in accordance with the vesting
schedule elected by the Employer in the Adoption Agreement
(and if no election is made the 6 year graded schedule will be
deemed to have been elected) as described below:
6 YEAR GRADED 3 YEAR CLIFF
<S> <C> <C> <C>
Years of Years of
Vesting Service Vested Percentage Vesting Service Vested Percentage
--------------- ----------------- --------------- -----------------
1 0 1 0
2 20 2 0
3 40 3 100
4 60
5 80
6 100
This minimum vesting schedule applies to all benefits within
the meaning of Section 411(a)(7) of the Code, except those
attributable to Nondeductible Employee Contributions including
benefits accrued before the effective date of Section 416 of
the Code and benefits accrued before the Plan became a
Top-Heavy Plan. Further, no decrease in a Participant's Vested
percentage may occur in the event the Plan's status as a
Top-Heavy Plan changes for any Plan Year. However, this
Section 6.01(C) does not apply to the Individual Account of
any Employee who does not have an Hour of Service after the
Plan has initially become a Top-Heavy Plan and such Employee's
Individual Account attributable to Employer Contributions and
Forfeitures will be determined without regard to this Section.
If this Plan ceases to be a Top-Heavy Plan, then in accordance
with the above restrictions, the vesting schedule as selected
in the Adoption Agreement will govern. If the vesting schedule
under the Plan shifts in or out of top-heavy status, such
shift is an amendment to the vesting schedule and the election
in Section 9.04 applies.
D. Break in Vesting Service and Forfeitures - If a Participant
incurs a Termination of Employment, any portion of his or her
Individual Account which is not Vested shall be held in a
suspense account. Such suspense account shall share in any
increase or decrease in the fair market value of the assets of
the Fund in accordance with Section 4 of the Plan. The
disposition of such suspense account shall be as follows:
1. Breaks in Vesting Service - If a Participant neither
receives nor is deemed to receive a distribution pursuant to
Section 6.01(D)(3) or (4) and the Participant returns to the
service of the Employer before incurring 5 consecutive Breaks
in Vesting Service, there shall be no Forfeiture and the
amount in such suspense account shall be recredited to such
Participant's Individual Account.
2. Five Consecutive Breaks in Vesting Service - If a
Participant neither receives nor is deemed to receive a
distribution pursuant to Section 6.01(D)(3) or (4) and the
Participant does not return to the service of the Employer
before incurring 5 consecutive Breaks in Vesting Service, the
portion of the Participant's Individual Account which is not
Vested shall be treated as a Forfeiture and allocated in
accordance with Section 3.01(C).
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<PAGE>
3. Cash-out of Certain Participants - If the value of the
Vested portion of such Participant's Individual Account
derived from Nondeductible Employee Contributions and Employer
Contributions does not exceed $3,500, the Participant shall
receive a distribution of the entire Vested portion of such
Individual Account and the portion which is not Vested shall
be treated as a Forfeiture and allocated in accordance with
Section 3.01(C). For purposes of this Section, if the value of
the Vested portion of a Participant's Individual Account is
zero, the Participant shall be deemed to have received a
distribution of such Vested Individual Account. A
Participant's Vested Individual Account balance shall not
include accumulated deductible employee contributions within
the meaning of Section 72(o)(5)(B) of the Code for Plan Years
beginning prior to January 1, 1989.
4. Participants Who Elect to Receive Distributions - If such
Participant elects to receive a distribution, in accordance
with Section 6.02(B), of the value of the Vested portion of
his or her Individual Account derived from Nondeductible
Employee Contributions and Employer Contributions, the portion
which is not Vested shall be treated as a Forfeiture and
allocated in accordance with Section 3.01(C).
5. Re-employed Participants - If a Participant receives or is
deemed to receive a distribution pursuant to Section
6.01(D)(3) or (4) above and the Participant resumes employment
covered under this Plan, the Participant's Employer-derived
Individual Account balance will be restored to the amount on
the date of distribution if the Participant repays to the Plan
the full amount of the distribution attributable to Employer
Contributions before the earlier of 5 years after the first
date on which the Participant is subsequently re-employed by
the Employer, or the date the Participant incurs 5 consecutive
Breaks in Vesting Service following the date of the
distribution.
Any restoration of a Participant's Individual Account pursuant
to Section 6.01(D)(5) shall be made from other Forfeitures,
income or gain to the Fund or contributions made by the
Employer.
E. Distribution Prior to Full Vesting - If a distribution is
made to a Participant who was not then fully Vested in his or
her Individual Account derived from Employer Contributions and
the Participant may increase his or her Vested percentage in
his or her Individual Account, then the following rules shall
apply:
1. a separate account will be established for the
Participant's interest in the Plan as of the time of the
distribution, and
2. at any relevant time the Participant's Vested portion of
the separate account will be equal to an amount ("X")
determined by the formula: X=P (AB + (R x D)) - (R x D) where
"P" is the Vested percentage at the relevant time, "AB" is the
separate account balance at the relevant time; "D" is the
amount of the distribution; and "R" is the ratio of the
separate account balance at the relevant time to the separate
account balance after distribution.
6.02 FORM OF DISTRIBUTION TO A PARTICIPANT
A. Value of Individual Account Does Not Exceed $3,500 - If the
value of the Vested portion of a Participant's Individual
Account derived from Nondeductible Employee Contributions and
Employer Contributions does not exceed $3,500, distribution
from the Plan shall be made to the Participant in a single
lump sum in lieu of all other forms of distribution from the
Plan as soon as administratively feasible.
B. Value of Individual Account Exceeds $3,500
1. If the value of the Vested portion of a Participant's
Individual Account derived from Nondeductible Employee
Contributions and Employer Contributions exceeds (or at the
time of any prior distribution exceeded) $3,500, and the
Individual Account is immediately distributable, the
Participant and the Participant's spouse (or where either the
Participant or the spouse died, the survivor) must consent to
any distribution of such Individual Account. The consent of
the Participant and the Participant's spouse shall be obtained
in writing within the 90-day period ending on the annuity
starting date. The annuity starting date is the first day of
the first period for which an amount is paid as an annuity or
any other form. The Plan Administrator shall notify the
Participant and the Participant's spouse of the right to defer
any distribution until the Participant's Individual Account is
no longer immediately distributable. Such notification shall
include a general description of the material features, and an
explanation of the relative values of, the optional forms of
benefit available under the Plan in a manner that would
satisfy the notice requirements of Section 417(a)(3) of the
Code, and shall be provided no less than 30 days and no more
than 90 days prior to the annuity starting date.
If a distribution is one to which Sections 401(a)(11) and 417
of the Internal Revenue Code do not apply, such distribution
may commence less than 30 days after the notice required under
Section 1.411(a)-11(c) of the Income Tax Regulations is given,
provided that:
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a. the Plan Administrator clearly informs the
Participant that the Participant has a right to a
period of at least 30 days after receiving the notice
to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular
distribution option), and
b. the Participant, after receiving the notice,
affirmatively elects a distribution.
Notwithstanding the foregoing, only the Participant
need consent to the commencement of a distribution in
the form of a qualified joint and survivor annuity
while the Individual Account is immediately
distributable. Neither the consent of the Participant
nor the Participant's spouse shall be required to the
extent that a distribution is required to satisfy
Section 401(a)(9) or Section 415 of the Code. In
addition, upon termination of this Plan if the Plan
does not offer an annuity option (purchased from a
commercial provider), the Participant's Individual
Account may, without the Participant's consent, be
distributed to the Participant or transferred to
another defined contribution plan (other than an
employee stock ownership plan as defined in Section
4975(e)(7) of the Code) within the same controlled
group.
An Individual Account is immediately distributable if
any part of the Individual Account could be
distributed to the Participant (or surviving spouse)
before the Participant attains or would have attained
(if not deceased) the later of Normal Retirement Age
or age 62.
2. For purposes of determining the applicability of
the foregoing consent requirements to distributions
made before the first day of the first Plan Year
beginning after December 31, 1988, the Vested portion
of a Participant's Individual Account shall not
include amounts attributable to accumulated
deductible employee contributions within the meaning
of Section 72(o)(5)(B) of the Code.
C. Other Forms of Distribution to Participant - If the value
of the Vested portion of a Participant's Individual Account
exceeds $3,500 and the Participant has properly waived the
joint and survivor annuity, as described in Section 6.05, the
Participant may request in writing that the Vested portion of
his or her Individual Account be paid to him or her in one or
more of the following forms of payment: (1) in a lump sum; (2)
in installment payments over a period not to exceed the life
expectancy of the Participant or the joint and last survivor
life expectancy of the Participant and his or her designated
Beneficiary; or (3) applied to the purchase of an annuity
contract.
Notwithstanding anything in this Section 6.02 to the contrary,
a Participant cannot elect payments in the form of an annuity
if the Retirement Equity Act safe harbor rules of Section
6.05(F) apply.
6.03 DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT
A. Designation of Beneficiary - Spousal Consent - Each
Participant may designate, upon a form provided by and
delivered to the Plan Administrator, one or more primary and
contingent Beneficiaries to receive all or a specified portion
of the Participant's Individual Account in the event of his or
her death. A Participant may change or revoke such Beneficiary
designation from time to time by completing and delivering the
proper form to the Plan Administrator.
In the event that a Participant wishes to designate a primary
Beneficiary who is not his or her spouse, his or her spouse
must consent in writing to such designation, and the spouse's
consent must acknowledge the effect of such designation and be
witnessed by a notary public or plan representative.
Notwithstanding this consent requirement, if the Participant
establishes to the satisfaction of the Plan Administrator that
such written consent may not be obtained because there is no
spouse or the spouse cannot be located, no consent shall be
required. Any change of Beneficiary will require a new spousal
consent.
B. Payment to Beneficiary - If a Participant dies before the
Participant's entire Individual Account has been paid to him
or her, such deceased Participant's Individual Account shall
be payable to any surviving Beneficiary designated by the
Participant, or, if no Beneficiary survives the Participant,
to the Participant's estate.
C. Written Request: When Distributed - A Beneficiary of a
deceased Participant entitled to a distribution who wishes to
receive a distribution must submit a written request to the
Plan Administrator. Such request shall be made upon a form
provided by the Plan Administrator. Upon a valid request, the
Plan Administrator shall direct the Trustee (or Custodian) to
commence distribution no later than the time specified in the
Adoption Agreement for this purpose and if not specified in
the Adoption Agreement, then no later than 90 days following
the later of:
1. the close of the Plan Year within which the Participant
dies; or
2. the close of the Plan Year in which the request is
received.
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6.04 FORM OF DISTRIBUTION TO BENEFICIARY
A. Value of Individual Account Does Not Exceed $3,500 - If the
value of the Participant's Individual Account derived from
Nondeductible Employee Contributions and Employer
Contributions does not exceed $3,500, the Plan Administrator
shall direct the Trustee (or Custodian, if applicable) to make
a distribution to the Beneficiary in a single lump sum in lieu
of all other forms of distribution from the Plan.
B. Value of Individual Account Exceeds $3,500 - If the value
of a Participant's Individual Account derived from
Nondeductible Employee Contributions and Employer
Contributions exceeds $3,500 the preretirement survivor
annuity requirements of Section 6.05 shall apply unless waived
in accordance with that Section or unless the Retirement
Equity Act safe harbor rules of Section 6.05(F) apply.
However, a surviving spouse Beneficiary may elect any form of
payment allowable under the Plan in lieu of the preretirement
survivor annuity. Any such payment to the surviving spouse
must meet the requirements of Section 6.06.
C. Other Forms of Distribution to Beneficiary - If the value
of a Participant's Individual Account exceeds $3,500 and the
Participant has properly waived the preretirement survivor
annuity, as described in Section 6.05 (if applicable) or if
the Beneficiary is the Participant's surviving spouse, the
Beneficiary may, subject to the requirements of Section 6.06,
request in writing that the Participant's Individual Account
be paid as follows: (1) in a lump sum; or (2) in installment
payments over a period not to exceed the life expectancy of
such Beneficiary.
6.05 JOINT AND SURVIVOR ANNUITY REQUIREMENTS
A. The provisions of this Section shall apply to any
Participant who is credited with at least one Hour of
Eligibility Service with the Employer on or after August 23,
1984, and such other Participants as provided in Section
6.05(G).
B. Qualified Joint and Survivor Annuity - Unless an optional
form of benefit is selected pursuant to a qualified election
within the 90-day period ending on the annuity starting date,
a married Participant's Vested account balance will be paid in
the form of a qualified joint and survivor annuity and an
unmarried Participant's Vested account balance will be paid in
the form of a life annuity. The Participant may elect to have
such annuity distributed upon attainment of the earliest
retirement age under the Plan.
C. Qualified Preretirement Survivor Annuity - Unless an
optional form of benefit has been selected within the election
period pursuant to a qualified election, if a Participant dies
before the annuity starting date then the Participant's Vested
account balance shall be applied toward the purchase of an
annuity for the life of the surviving spouse. The surviving
spouse may elect to have such annuity distributed within a
reasonable period after the Participant's death.
D. Definitions
1. Election Period - The period which begins on the first day
of the Plan Year in which the Participant attains age 35 and
ends on the date of the Participant's death. If a Participant
separates from service prior to the first day of the Plan Year
in which age 35 is attained, with respect to the account
balance as of the date of separation, the election period
shall begin on the date of separation.
Pre-age 35 waiver - A Participant who will not yet attain age
35 as of the end of any current Plan Year may make special
qualified election to waive the qualified preretirement
survivor annuity for the period beginning on the date of such
election and ending on the first day of the Plan Year in which
the Participant will attain age 35. Such election shall not be
valid unless the Participant receives a written explanation of
the qualified preretirement survivor annuity in such terms as
are comparable to the explanation required under Section
6.05(E)(1). Qualified preretirement survivor annuity coverage
will be automatically reinstated as of the first day of the
Plan Year in which the Participant attains age 35. Any new
waiver on or after such date shall be subject to the full
requirements of this Section 6.05.
2. Earliest Retirement Age - The earliest date on which, under
the Plan, the Participant could elect to receive retirement
benefits.
3. Qualified Election - A waiver of a qualified joint and
survivor annuity or a qualified preretirement survivor
annuity. Any waiver of a qualified joint and survivor annuity
or a qualified preretirement survivor annuity shall not be
effective unless: (a) the Participant's spouse consents in
writing to the election, (b) the election designates a
specific Beneficiary, including any class of beneficiaries or
any contingent beneficiaries, which may not be changed without
spousal consent (or the spouse expressly permits designations
by the Participant without any further spousal consent); (c)
the spouse's consent acknowledges the effect of the election;
and (d) the spouse's consent is witnessed by a plan
representative or notary public. Additionally, a Participant's
waiver of the qualified joint and survivor annuity shall not
be effective unless the election designates a form of benefit
payment which may not be changed without spousal consent (or
the spouse expressly permits designations by the Participant
without any further spousal consent). If it is established to
the satisfaction of a plan representative that there is no
spouse or that the spouse cannot be located, a waiver will be
deemed a qualified election.
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Any consent by a spouse obtained under this provision (or
establishment that the consent of a spouse may not be
obtained) shall be effective only with respect to such spouse.
A consent that permits designations by the Participant without
any requirement of further consent by such spouse must
acknowledge that the spouse has the right to limit consent to
a specific Beneficiary, and a specific form of benefit where
applicable, and that the spouse voluntarily elects to
relinquish either or both of such rights. A revocation of a
prior waiver may be made by a Participant without the consent
of the spouse at any time before the commencement of benefits.
The number of revocations shall not be limited. No consent
obtained under this provision shall be valid unless the
Participant has received notice as provided in Section 6.05(E)
below.
4. Qualified Joint and Survivor Annuity - An immediate annuity
for the life of the Participant with a survivor annuity for
the life of the spouse which is not less than 50% and not more
than 100% of the amount of the annuity which is payable during
the joint lives of the Participant and the spouse and which is
the amount of benefit which can be purchased with the
Participant's vested account balance. The percentage of the
survivor annuity under the Plan shall be 50% (unless a
different percentage is elected by the Employer in the
Adoption Agreement).
5. Spouse (surviving spouse) - The spouse or surviving spouse
of the Participant, provided that a former spouse will be
treated as the spouse or surviving spouse and a current spouse
will not be treated as the spouse or surviving spouse to the
extent provided under a qualified domestic relations order as
described in Section 414(p) of the Code.
6. Annuity Starting Date - The first day of the first period
for which an amount is paid as an annuity or any other form.
7. Vested Account Balance - The aggregate value of the
Participant's Vested account balances derived from Employer
and Nondeductible Employee Contributions (including
rollovers), whether Vested before or upon death, including the
proceeds of insurance contracts, if any, on the Participant's
life. The provisions of this Section 6.05 shall apply to a
Participant who is Vested in amounts attributable to Employer
Contributions, Nondeductible Employee Contributions (or both)
at the time of death or distribution.
E. Notice Requirements
1. In the case of a qualified joint and survivor annuity, the
Plan Administrator shall no less than 30 days and not more
than 90 days prior to the annuity starting date provide each
Participant a written explanation of: (a) the terms and
conditions of a qualified joint and survivor annuity; (b) the
Participant's right to make and the effect of an election to
waive the qualified joint and survivor annuity form of
benefit; (c) the rights of a Participant's spouse; and (d) the
right to make, and the effect of, a revocation of a previous
election to waive the qualified joint and survivor annuity.
2. In the case of a qualified preretirement annuity as
described in Section 6.05(C), the Plan Administrator shall
provide each Participant within the applicable period for such
Participant a written explanation of the qualified
preretirement survivor annuity in such terms and in such
manner as would be comparable to the explanation provided for
meeting the requirements of Section 6.05(E)(1) applicable to a
qualified joint and survivor annuity.
The applicable period for a Participant is whichever of the
following periods ends last: (a) the period beginning with the
first day of the Plan Year in which the Participant attains
age 32 and ending with the close of the Plan Year preceding
the Plan Year in which the Participant attains age 35; (b) a
reasonable period ending after the individual becomes a
Participant; (c) a reasonable period ending after Section
6.05(E)(3) ceases to apply to the Participant; and (d) a
reasonable period ending after this Section 6.05 first applies
to the Participant. Notwithstanding the foregoing, notice must
be provided within a reasonable period ending after separation
from service in the case of a Participant who separates from
service before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable
period ending after the enumerated events described in (b),
(c) and (d) is the end of the two-year period beginning one
year prior to the date the applicable event occurs, and ending
one year after that date. In the case of a Participant who
separates from service before the Plan Year in which age 35 is
attained, notice shall be provided within the two-year period
beginning one year prior to separation and ending one year
after separation. If such a Participant thereafter returns to
employment with the Employer, the applicable period for such
Participant shall be redetermined.
3. Notwithstanding the other requirements of this Section
6.05(E), the respective notices prescribed by this Section
6.05(E), need not be given to a Participant if (a) the Plan
"fully subsidizes" the costs of a qualified joint and survivor
annuity or qualified preretirement survivor annuity, and (b)
the Plan does not allow the Participant to waive the qualified
joint and survivor annuity or qualified preretirement survivor
annuity and does not allow a married Participant to designate
a nonspouse beneficiary. For purposes of this Section
6.05(E)(3), a plan fully subsidizes the costs of a benefit if
no increase in cost, or decrease in benefits to the
Participant may result from the Participant's failure to elect
another benefit.
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<PAGE>
F. Retirement Equity Act Safe Harbor Rules
1. If the Employer so indicates in the Adoption Agreement,
this Section 6.05(F) shall apply to a Participant in a profit
sharing plan, and shall always apply to any distribution, made
on or after the first day of the first Plan Year beginning
after December 31, 1988, from or under a separate account
attributable solely to accumulated deductible employee
contributions, as defined in Section 72(o)(5)(B) of the Code,
and maintained on behalf of a Participant in a money purchase
pension plan, (including a target benefit plan) if the
following conditions are satisfied:
a. the Participant does not or cannot elect payments in the
form of a life annuity; and
b. on the death of a Participant, the Participant's Vested
account balance will be paid to the Participant's surviving
spouse, but if there is no surviving spouse, or if the
surviving spouse has consented in a manner conforming to a
qualified election, then to the Participant's designated
Beneficiary. The surviving spouse may elect to have
distribution of the Vested account balance commence within the
90-day period following the date of the Participant's death.
The account balance shall be adjusted for gains or losses
occurring after the Participant's death in accordance with the
provisions of the Plan governing the adjustment of account
balances for other types of distributions. This Section
6.05(F) shall not be operative with respect to a Participant
in a profit sharing plan if the plan is a direct or indirect
transferee of a defined benefit plan, money purchase plan, a
target benefit plan, stock bonus, or profit sharing plan which
is subject to the survivor annuity requirements of Section
401(a)(11) and Section 417 of the code. If this Section
6.05(F) is operative, then the provisions of this Section 6.05
other than Section 6.05(G) shall be inoperative.
2. The Participant may waive the spousal death benefit
described in this Section 6.05(F) at any time provided that no
such waiver shall be effective unless it satisfies the
conditions of Section 6.05(D)(3) (other than the notification
requirement referred to therein) that would apply to the
Participant's waiver of the qualified preretirement survivor
annuity.
3. For purposes of this Section 6.05(F), Vested account
balance shall mean, in the case of a money purchase pension
plan or a target benefit plan, the Participant's separate
account balance attributable solely to accumulated deductible
employee contributions within the meaning of Section
72(o)(5)(B) of the Code. In the case of a profit sharing plan,
Vested account balance shall have the same meaning as provided
in Section 6.05(D)(7).
G. Transitional Rules
1. Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed
by the previous subsections of this Section 6.05 must be given
the opportunity to elect to have the prior subsections of this
Section apply if such Participant is credited with at least
one Hour of Service under this Plan or a predecessor plan in a
Plan Year beginning on or after January 1, 1976, and such
Participant had at least 10 Years of Vesting Service when he
or she separated from service.
2. Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one Hour of Service under
this Plan or a predecessor plan on or after September 2, 1974,
and who is not otherwise credited with any service in a Plan
Year beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance
with Section 6.05(G)(4).
3. The respective opportunities to elect (as described in
Section 6.05(G)(1) and (2) above) must be afforded to the
appropriate Participants during the period commencing on
August 23, 1984, and ending on the date benefits would
otherwise commence to said Participants.
4. Any Participant who has elected pursuant to Section
6.05(G)(2) and any Participant who does not elect under
Section 6.05(G)(1) or who meets the requirements of Section
6.05(G)(1) except that such Participant does not have at least
10 Years of Vesting Service when he or she separates from
service, shall have his or her benefits distributed in
accordance with all of the following requirements if benefits
would have been payable in the form of a life annuity:
a. Automatic Joint and Survivor Annuity - If benefits in the
form of a life annuity become payable to a married Participant
who:
(1) begins to receive payments under the Plan on or after
Normal Retirement Age; or
(2) dies on or after Normal Retirement Age while still working
for the Employer; or
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<PAGE>
(3) begins to receive payments on or after the qualified early
retirement age; or
(4) separates from service on or after attaining Normal
Retirement Age (or the qualified early retirement age) and
after satisfying the eligibility requirements for the payment
of benefits under the Plan and thereafter dies before
beginning to receive such benefits;
then such benefits will be received under this Plan in the
form of a qualified joint and survivor annuity, unless the
Participant has elected otherwise during the election period.
The election period must begin at least 6 months before the
Participant attains qualified early retirement age and ends
not more than 90 days before the commencement of benefits. Any
election hereunder will be in writing and may be changed by
the Participant at any time.
b. Election of Early Survivor Annuity - A Participant who is
employed after attaining the qualified early retirement age
will be given the opportunity to elect, during the election
period, to have a survivor annuity payable on death. If the
Participant elects the survivor annuity, payments under such
annuity must not be less than the payments which would have
been made to the spouse under the qualified joint and survivor
annuity if the Participant had retired on the day before his
or her death. Any election under this provision will be in
writing and may be changed by the Participant at any time. The
election period begins on the later of (1) the 90th day before
the Participant attains the qualified early retirement age, or
(2) the date on which participation begins, and ends on the
date the Participant terminates employment.
c. For purposes of Section 6.05(G)(4):
1. Qualified early retirement age is the latest of:
a. the earliest date, under the Plan, on which the Participant
may elect to receive retirement benefits,
b. the first day of the 120th month beginning before the
Participant reaches Normal Retirement Age, or
c. the date the Participant begins participation.
2. Qualified joint and survivor annuity is an annuity for the
life of the Participant with a survivor annuity for the life
of the spouse as described in Section 6.05(D)(4) of this Plan.
6.06 DISTRIBUTION REQUIREMENTS
A. General Rules
1. Subject to Section 6.05 Joint and Survivor Annuity
Requirements, the requirements of this Section shall apply to
any distribution of a Participant's interest and will take
precedence over any inconsistent provisions of this Plan.
Unless otherwise specified, the provisions of this Section
6.06 apply to calendar years beginning after December 31,
1984.
2. All distributions required under this Section 6.06 shall be
determined and made in accordance with the Income Tax
Regulations under Section 401(a)(9), including the minimum
distribution incidental benefit requirement of Section
1.401(a)(9)-2 of the proposed regulations.
B. Required Beginning Date - The entire interest of a
Participant must be distributed or begin to be distributed no
later than the Participant's required beginning date.
C. Limits on Distribution Periods - As of the first
distribution calendar year, distributions, if not made in a
single sum, may only be made over one of the following periods
(or a combination thereof):
1. the life of the Participant,
2. the life of the Participant and a designated Beneficiary,
3. a period certain not extending beyond the life expectancy
of the Participant, or
4. a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated
Beneficiary.
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<PAGE>
D. Determination of Amount to be Distributed Each Year - If
the Participant's interest is to be distributed in other than
a single sum, the following minimum distribution rules shall
apply on or after the required beginning date:
1. Individual Account
a. If a Participant's benefit is to be distributed over (1) a
period not extending beyond the life expectancy of the
Participant or the joint life and last survivor expectancy of
the Participant and the Participant's designated Beneficiary
or (2) a period not extending beyond the life expectancy of
the designated Beneficiary, the amount required to be
distributed for each calendar year, beginning with
distributions for the first distribution calendar year, must
at least equal the quotient obtained by dividing the
Participant's benefit by the applicable life expectancy.
b. For calendar years beginning before January 1, 1989, if the
Participant's spouse is not the designated Beneficiary, the
method of distribution selected must assure that at least 50%
of the present value of the amount available for distribution
is paid within the life expectancy of the Participant.
c. For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with
distributions for the first distribution calendar year shall
not be less than the quotient obtained by dividing the
Participant's benefit by the lesser of (1) the applicable life
expectancy or (2) if the Participant's spouse is not the
designated Beneficiary, the applicable divisor determined from
the table set forth in Q&A-4 of Section 1.401(a)(9)-2 of the
Proposed Income Tax Regulations. Distributions after the death
of the Participant shall be distributed using the applicable
life expectancy in Section 6.05(D)(1)(a) above as the relevant
divisor without regard to proposed regulations 1.401(a)(9)-2.
d. The minimum distribution required for the Participant's
first distribution calendar year must be made on or before the
Participant's required beginning date. The minimum
distribution for other calendar years, including the minimum
distribution for the distribution calendar year in which the
Employee's required beginning date occurs, must be made on or
before December 31 of that distribution calendar year.
2. Other Forms - If the Participant's benefit is distributed
in the form of an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with the
requirements of Section 401(a)(9) of the Code and the
regulations thereunder.
E. Death Distribution Provisions
1. Distribution Beginning Before Death - If the Participant
dies after distribution of his or her interest has begun, the
remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death.
2. Distribution Beginning After Death - If the Participant
dies before distribution of his or her interest begins,
distribution of the Participant's entire interest shall be
completed by December 31 of the calendar year containing the
fifth anniversary of the Participant's death except to the
extent that an election is made to receive distributions in
accordance with (a) or (b) below:
a. if any portion of the Participant's interest is payable to
a designated Beneficiary, distributions may be made over the
life or over a period certain not greater than the life
expectancy of the designated Beneficiary commencing on or
before December 31 of the calendar year immediately following
the calendar year in which the Participant died;
b. if the designated Beneficiary is the Participant's
surviving spouse, the date distributions are required to begin
in accordance with (a) above shall not be earlier than the
later of (1) December 31 of the calendar year immediately
following the calendar year in which the Participant dies or
(2) December 31 of the calendar year in which the Participant
would have attained age 70 1/2.
If the Participant has not made an election pursuant to this
Section 6.05(E)(2) by the time of his or her death, the
Participant's designated Beneficiary must elect the method of
distribution no later than the earlier of (1) December 31 of
the calendar year in which distributions would be required to
begin under this Section 6.05(E)(2), or (2) December 31 of the
calendar year which contains the fifth anniversary of the date
of death of the Participant. If the Participant has no
designated Beneficiary, or if the designated Beneficiary does
not elect a method of distribution, distribution of the
Participant's entire interest must be completed by December 31
of the calendar year containing the fifth anniversary of the
Participant's death.
3. For purposes of Section 6.06(E)(2) above, if the surviving
spouse dies after the Participant, but before payments to such
spouse begin, the provisions of Section 6.06(E)(2), with the
exception of paragraph (b) therein, shall be applied as if the
surviving spouse were the Participant.
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<PAGE>
4. For purposes of this Section 6.06(E), any amount paid to a
child of the Participant will be treated as if it had been
paid to the surviving spouse if the amount becomes payable to
the surviving spouse when the child reaches the age of
majority.
5. For purposes of this Section 6.06(E), distribution of a
Participant's interest is considered to begin on the
Participant's required beginning date (or, if Section
6.06(E)(3) above is applicable, the date distribution is
required to begin to the surviving spouse pursuant to Section
6.06(E)(2) above). If distribution in the form of an annuity
irrevocably commences to the Participant before the required
beginning date, the date distribution is considered to begin
is the date distribution actually commences.
F. Definitions
1. Applicable Life Expectancy - The life expectancy (or joint
and last survivor expectancy) calculated using the attained
age of the Participant (or designated Beneficiary) as of the
Participant's (or designated Beneficiary's) birthday in the
applicable calendar year reduced by one for each calendar year
which has elapsed since the date life expectancy was first
calculated. If life expectancy is being recalculated, the
applicable life expectancy shall be the life expectancy as so
recalculated. The applicable calendar year shall be the first
distribution calendar year, and if life expectancy is being
recalculated such succeeding calendar year.
2. Designated Beneficiary - The individual who is designated
as the Beneficiary under the Plan in accordance with Section
401(a)(9) of the Code and the regulations thereunder.
3. Distribution Calendar Year - A calendar year for which a
minimum distribution is required. For distributions beginning
before the Participant's death, the first distribution
calendar year is the calendar year immediately preceding the
calendar year which contains the Participant's required
beginning date. For distributions beginning after the
Participant's death, the first distribution calendar year is
the calendar year in which distributions are required to begin
pursuant to Section 6.05(E) above.
4. Life Expectancy - Life expectancy and joint and last
survivor expectancy are computed by use of the expected return
multiples in Tables V and VI of Section 1.72-9 of the Income
Tax Regulations.
Unless otherwise elected by the Participant (or spouse, in the
case of distributions described in Section 6.05(E)(2)(b)
above) by the time distributions are required to begin, life
expectancies shall be recalculated annually. Such election
shall be irrevocable as to the Participant (or spouse) and
shall apply to all subsequent years. The life expectancy of a
nonspouse Beneficiary may not be recalculated.
5. Participant's Benefit
a. The account balance as of the last valuation date in the
valuation calendar year (the calendar year immediately
preceding the distribution calendar year) increased by the
amount of any Contributions or Forfeitures allocated to the
account balance as of dates in the valuation calendar year
after the valuation date and decreased by distributions made
in the valuation calendar year after the valuation date.
b. Exception for second distribution calendar year. For
purposes of paragraph (a) above, if any portion of the minimum
distribution for the first distribution calendar year is made
in the second distribution calendar year on or before the
required beginning date, the amount of the minimum
distribution made in the second distribution calendar year
shall be treated as if it had been made in the immediately
preceding distribution calendar year.
6. Required Beginning Date
a. General Rule - The required beginning date of a Participant
is the first day of April of the calendar year following the
calendar year in which the Participant attains age 70 1/2.
b. Transitional Rules - The required beginning date of a
Participant who attains age 70 1/2 before January 1, 1988,
shall be determined in accordance with (1) or (2) below:
(1) Non 5% Owners - The required beginning date of a
Participant who is not a 5% owner is the first day of April of
the calendar year following the calendar year in which the
later of retirement or attainment of age 70 1/2 occurs.
(2) 5% Owners - The required beginning date of a Participant
who is a 5% owner during any year beginning after December 31,
1979, is the first day of April following the later of:
(a) the calendar year in which the Participant attains age 70
1/2, or
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(b) the earlier of the calendar year with or within which ends
the Plan Year in which the Participant becomes a 5% owner, or
the calendar year in which the Participant retires.
The required beginning date of a Participant who is not a 5%
owner who attains age 70 1/2 during 1988 and who has not
retired as of January 1, 1989, is April 1, 1990.
c. 5% Owner - A Participant is treated as a 5% owner for
purposes of this Section 6.06(F)(6) if such Participant is a
5% owner as defined in Section 416(i) of the Code (determined
in accordance with Section 416 but without regard to whether
the Plan is top-heavy) at any time during the Plan Year ending
with or within the calendar year in which such owner attains
age 66 1/2 or any subsequent Plan Year.
d. Once distributions have begun to a 5% owner under this
Section 6.06(F)(6) they must continue to be distributed, even
if the Participant ceases to be a 5% owner in a subsequent
year.
G. Transitional Rule
1. Notwithstanding the other requirements of this Section 6.06
and subject to the requirements of Section 6.05, Joint and
Survivor Annuity Requirements, distribution on behalf of any
Employee, including a 5% owner, may be made in accordance with
all of the following requirements (regardless of when such
distribution commences):
a. The distribution by the Fund is one which would not have
qualified such Fund under Section 401(a)(9) of the Code as in
effect prior to amendment by the Deficit Reduction Act of 1984.
b. The distribution is in accordance with a method of
distribution designated by the Employee whose interest in the
Fund is being distributed or, if the Employee is deceased, by
a Beneficiary of such Employee.
c. Such designation was in writing, was signed by the Employee
or the Beneficiary, and was made before January 1, 1984.
d. The Employee had accrued a benefit under the Plan as of
December 31, 1983.
e. The method of distribution designated by the Employee or
the Beneficiary specifies the time at which distribution will
commence, the period over which distributions will be made,
and in the case of any distribution upon the Employee's death,
the Beneficiaries of the Employee listed in order of priority.
2. A distribution upon death will not be covered by this
transitional rule unless the information in the designation
contains the required information described above with respect
to the distributions to be made upon the death of the
Employee.
3. For any distribution which commences before January 1,
1984, but continues after December 31, 1983, the Employee, or
the Beneficiary, to whom such distribution is being made, will
be presumed to have designated the method of distribution
under which the distribution is being made if the method of
distribution was specified in writing and the distribution
satisfies the requirements in Sections 6.06(G)(1)(a) and (e).
4. If a designation is revoked, any subsequent distribution
must satisfy the requirements of Section 401(a)(9) of the Code
and the regulations thereunder. If a designation is revoked
subsequent to the date distributions are required to begin,
the Plan must distribute by the end of the calendar year
following the calendar year in which the revocation occurs the
total amount not yet distributed which would have been
required to have been distributed to satisfy Section 401(a)(9)
of the Code and the regulations thereunder, but for the
Section 242(b)(2) election. For calendar years beginning after
December 31, 1988, such distributions must meet the minimum
distribution incidental benefit requirements in Section
1.401(a)(9)-2 of the Proposed Income Tax Regulations. Any
changes in the designation will be considered to be a
revocation of the designation. However, the mere substitution
or addition of another Beneficiary (one not named in the
designation) under the designation will not be considered to
be a revocation of the designation, so long as such
substitution or addition does not alter the period over which
distributions are to be made under the designation, directly
or indirectly (for example, by altering the relevant measuring
life). In the case in which an amount is transferred or rolled
over from one plan to another plan, the rules in Q&A J-2 and
Q&A J-3 shall apply.
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6.07 ANNUITY CONTRACTS
Any annuity contract distributed under the Plan (if permitted
or required by this Section 6) must be nontransferable. The
terms of any annuity contract purchased and distributed by the
Plan to a Participant or spouse shall comply with the
requirements of the Plan.
6.08 LOANS TO PARTICIPANTS
If the Adoption Agreement so indicates, a Participant may
receive a loan from the Fund, subject to the following rules:
A. Loans shall be made available to all Participants on a
reasonably equivalent basis.
B. Loans shall not be made available to Highly Compensated
Employees (as defined in Section 414(q) of the Code) in an
amount greater than the amount made available to other
Employees.
C. Loans must be adequately secured and bear a reasonable
interest rate.
D. No Participant loan shall exceed the present value of the
Vested portion of a Participant's Individual Account.
E. A Participant must obtain the consent of his or her spouse,
if any, to the use of the Individual Account as security for
the loan. Spousal consent shall be obtained no earlier than
the beginning of the 90 day period that ends on the date on
which the loan is to be so secured. The consent must be in
writing, must acknowledge the effect of the loan, and must be
witnessed by a plan representative or notary public. Such
consent shall thereafter be binding with respect to the
consenting spouse or any subsequent spouse with respect to
that loan. A new consent shall be required if the account
balance is used for renegotiation, extension, renewal, or
other revision of the loan. Notwithstanding the foregoing, no
spousal consent is necessary if, at the time the loan is
secured, no consent would be required for a distribution under
Section 417(a)(2)(B). In addition, spousal consent is not
required if the Plan or the Participant is not subject to
Section 401(a)(11) at the time the Individual Account is used
as security, or if the total Individual Account subject to the
security is less than or equal to $3,500.
F. In the event of default, foreclosure on the note and
attachment of security will not occur until a distributable
event occurs in the Plan. Notwithstanding the preceding
sentence, a Participant's default on a loan will be treated as
a distributable event and as soon as administratively feasible
after the default, the Participant's Vested Individual Account
will be reduced by the lesser of the amount in default (plus
accrued interest) or the amount secured. If this Plan is a
401(k) plan, then to the extent the loan is attributable to a
Participant's Elective Deferrals, Qualified Nonelective
Contributions or Qualified Matching Contributions, the
Participant's Individual Account will not be reduced unless
the Participant has attained age 59 1/2 or has another
distributable event. A Participant will be deemed to have
consented to the provision at the time the loan is made to the
Participant.
G. No loans will be made to any shareholder-employee or
Owner-Employee. For purposes of this requirement, a
shareholder-employee means an employee or officer of an
electing small business (Subchapter S) corporation who owns
(or is considered as owning within the meaning of Section
318(a)(1) of the Code), on any day during the taxable year of
such corporation, more than 5% of the outstanding stock of the
corporation.
If a valid spousal consent has been obtained in accordance
with 6.08(E), then, notwithstanding any other provisions of
this Plan, the portion of the Participant's Vested Individual
Account used as a security interest held by the Plan by reason
of a loan outstanding to the Participant shall be taken into
account for purposes of determining the amount of the account
balance payable at the time of death or distribution, but only
if the reduction is used as repayment of the loan. If less
than 100% of the Participant's Vested Individual Account
(determined without regard to the preceding sentence) is
payable to the surviving spouse, then the account balance
shall be adjusted by first reducing the Vested Individual
Account by the amount of the security used as repayment of the
loan, and then determining the benefit payable to the
surviving spouse.
To avoid taxation to the Participant, no loan to any
Participant can be made to the extent that such loan when
added to the outstanding balance of all other loans to the
Participant would exceed the lesser of (a) $50,000 reduced by
the excess (if any) of the highest outstanding balance of
loans during the one year period ending on the day before the
loan is made, over the outstanding balance of loans from the
Plan on the date the loan is made, or (b) 50% of the present
value of the nonforfeitable Individual Account of the
Participant or, if greater, the total Individual Account up to
$10,000. For the purpose of the above limitation, all loans
from all plans of the Employer and other members of a group of
employers described in Sections 414(b), 414(c), and 414(m) of
the Code are aggregated. Furthermore, any loan shall by its
terms require that repayment (principal and interest) be
amortized in level payments, not less frequently than
quarterly, over a period not extending beyond 5 years from the
date of the loan, unless such loan is used to acquire a
dwelling unit which within a reasonable time (determined at
the time the loan is made) will be used as the principal
residence of the Participant. An assignment or pledge of any
portion of the Participant's interest in the Plan and a loan,
pledge, or assignment with respect to any insurance contract
purchased under the Plan, will be treated as a loan under this
paragraph.
The Plan Administrator shall administer the loan program in
accordance with a written document. Such written document
shall include, at a minimum, the following: (i) the identity
of the person or positions authorized to administer the
Participant loan program; (ii) the procedure for applying for
loans; (iii) the basis on which loans will be approved or
denied; (iv) limitations (if any) on the types and amounts of
loans offered; (v) the procedure under the program for
determining a reasonable rate of interest; (vi) the types of
collateral which may secure a Participant loan; and (vii) the
events constituting default and the steps that will be taken
to preserve Plan assets in the event of such default.
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6.09 DISTRIBUTION IN KIND
The Plan Administrator may cause any distribution under this
Plan to be made either in a form actually held in the Fund, or
in cash by converting assets other than cash into cash, or in
any combination of the two foregoing ways.
6.10 DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS
A. Direct Rollover Option This Section 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
Section, 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 that is equal to
at least $500 paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.
B. Definitions
1. Eligible rollover distribution - An eligible rollover
distribution is any distribution of all or any portion of the
balance to the credit of the distributee, except that an
eligible rollover distribution does not include:
a. any distribution that is one of a series of substantially
equal periodic payments (not less frequently than annually)
made for the life (or life expectancy) of the 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;
b. any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code;
c. the portion of any other distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities); and
d. any other distribution(s) that is reasonably expected to total
less than $200 during a year.
2. Eligible retirement plan - An eligible retirement plan is
an individual retirement account described in Section 408(a)
of the Code, an individual retirement annuity described in
Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, or a qualified trust described in
Section 401(a) of the Code, that accepts the distributee's
eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account
or individual retirement annuity.
3. Distributee - A distributee includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under a
qualified domestic relations order, as defined in Section
414(p) of the Code, are distributees with regard to the
interest of the spouse or former spouse.
4. Direct rollover - A direct rollover is a payment by the
Plan to the eligible retirement plan specified by the
distributee.
6.11 PROCEDURE FOR MISSING PARTICIPANTS OR BENEFICIARIES
The Plan Administrator must use all reasonable measures to
locate Participants or Beneficiaries who are entitled to
distributions from the Plan. In the event that the Plan
Administrator cannot locate a Participant or Beneficiary who
is entitled to a distribution from the Plan after using all
reasonable measures to locate him or her, the Plan
Administrator may, consistent with applicable laws,
regulations and other pronouncements under ERISA, use any
reasonable procedure to dispose of distributable plan assets,
including any of the following: (1) establish a bank account
for and in the name of the Participant or Beneficiary and
transfer the assets to such bank account, (2) purchase an
annuity contract with the assets in the name of the
Participant or Beneficiary, or (3) after the expiration of 5
years after the benefit becomes payable, treat the amount
distributable as a Forfeiture and allocate it in accordance
with the terms of the Plan and if the Participant or
Beneficiary is later located, restore such benefit to the
Plan.
SECTION SEVEN CLAIMS PROCEDURE
7.01 FILING A CLAIM FOR PLAN DISTRIBUTIONS
A Participant or Beneficiary who desires to make a claim for
the Vested portion of the Participant's Individual Account
shall file a written request with the Plan Administrator on a
form to be furnished to him or her by the Plan Administrator
for such purpose. The request shall set forth the basis of the
claim. The Plan Administrator is authorized to conduct such
examinations as may be necessary to facilitate the payment of
any benefits to which the Participant or Beneficiary may be
entitled under the terms of the Plan.
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7.02 DENIAL OF CLAIM
Whenever a claim for a Plan distribution by any Participant or
Beneficiary has been wholly or partially denied, the Plan
Administrator must furnish such Participant or Beneficiary
written notice of the denial within 60 days of the date the
original claim was filed. This notice shall set forth the
specific reasons for the denial, specific reference to
pertinent Plan provisions on which the denial is based, a
description of any additional information or material needed
to perfect the claim, an explanation of why such additional
information or material is necessary and an explanation of the
procedures for appeal.
7.03 REMEDIES AVAILABLE
The Participant or Beneficiary shall have 60 days from receipt
of the denial notice in which to make written application for
review by the Plan Administrator. The Participant or
Beneficiary may request that the review be in the nature of a
hearing. The Participant or Beneficiary shall have the right
to representation, to review pertinent documents and to submit
comments in writing. The Plan Administrator shall issue a
decision on such review within 60 days after receipt of an
application for review as provided for in Section 7.02. Upon a
decision unfavorable to the Participant or Beneficiary, such
Participant or Beneficiary shall be entitled to bring such
actions in law or equity as may be necessary or appropriate to
protect or clarify his or her right to benefits under this
Plan.
SECTION EIGHT PLAN ADMINISTRATOR
8.01 EMPLOYER IS PLAN ADMINISTRATOR
A. The Employer shall be the Plan Administrator unless the
managing body of the Employer designates a person or persons
other than the Employer as the Plan Administrator and so
notifies the Trustee (or Custodian, if applicable). The
Employer shall also be the Plan Administrator if the person or
persons so designated cease to be the Plan Administrator. The
Employer may establish an administrative committee that will
carry out the Plan Administrator's duties. Members of the
administrative committee may allocate the Plan Administrator's
duties among themselves.
B. If the managing body of the Employer designates a person or
persons other than the Employer as Plan Administrator, such
person or persons shall serve at the pleasure of the Employer
and shall serve pursuant to such procedures as such managing
body may provide. Each such person shall be bonded as may be
required by law.
8.02 POWERS AND DUTIES OF THE PLAN ADMINISTRATOR
A. The Plan Administrator may, by appointment, allocate the
duties of the Plan Administrator among several individuals or
entities. Such appointments shall not be effective until the
party designated accepts such appointment in writing.
B. The Plan Administrator shall have the authority to control
and manage the operation and administration of the Plan. The
Plan Administrator shall administer the Plan for the exclusive
benefit of the Participants and their Beneficiaries in
accordance with the specific terms of the Plan.
C. The Plan Administrator shall be charged with the duties of
the general administration of the Plan, including, but not
limited to, the following:
1. To determine all questions of interpretation or policy in a
manner consistent with the Plan's documents and the Plan
Administrator's construction or determination in good faith
shall be conclusive and binding on all persons except as
otherwise provided herein or by law. Any interpretation or
construction shall be done in a nondiscriminatory manner and
shall be consistent with the intent that the Plan shall
continue to be deemed a qualified plan under the terms of
Section 401(a) of the Code, as amended from time-to-time, and
shall comply with the terms of ERISA, as amended from
time-to-time;
2. To determine all questions relating to the eligibility of
Employees to become or remain Participants hereunder;
3. To compute the amounts necessary or desirable to be
contributed to the Plan;
4. To compute the amount and kind of benefits to which a
Participant or Beneficiary shall be entitled under the Plan
and to direct the Trustee (or Custodian, if applicable) with
respect to all disbursements under the Plan, and, when
requested by the Trustee (or Custodian), to furnish the
Trustee (or Custodian) with instructions, in writing, on
matters pertaining to the Plan and the Trustee (or Custodian)
may rely and act thereon;
5. To maintain all records necessary for the administration of
the Plan;
6. To be responsible for preparing and filing such disclosure
and tax forms as may be required from time-to-time by the
Secretary of Labor or the Secretary of the Treasury; and
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7. To furnish each Employee, Participant or Beneficiary such
notices, information and reports under such circumstances as
may be required by law.
D. The Plan Administrator shall have all of the powers
necessary or appropriate to accomplish his or her duties under
the Plan, including, but not limited to, the following:
1. To appoint and retain such persons as may be necessary to
carry out the functions of the Plan Administrator;
2. To appoint and retain counsel, specialists or other persons
as the Plan Administrator deems necessary or advisable in the
administration of the Plan;
3. To resolve all questions of administration of the Plan;
4. To establish such uniform and nondiscriminatory rules which
it deems necessary to carry out the terms of the Plan;
5. To make any adjustments in a uniform and nondiscriminatory
manner which it deems necessary to correct any arithmetical or
accounting errors which may have been made for any Plan Year;
and
6. To correct any defect, supply any omission or reconcile any
inconsistency in such manner and to such extent as shall be
deemed necessary or advisable to carry out the purpose of the
Plan.
8.03 EXPENSES AND COMPENSATION
All reasonable expenses of administration including, but not
limited to, those involved in retaining necessary professional
assistance may be paid from the assets of the Fund.
Alternatively, the Employer may, in its discretion, pay any or
all such expenses. Pursuant to uniform and nondiscriminatory
rules that the Plan Administrator may establish from
time-to-time, administrative expenses and expenses unique to a
particular Participant may be charged to a Participant's
Individual Account or the Plan Administrator may allow
Participants to pay such fees outside of the Plan. The
Employer shall furnish the Plan Administrator with such
clerical and other assistance as the Plan Administrator may
need in the performance of his or her duties.
8.04 INFORMATION FROM EMPLOYER
To enable the Plan Administrator to perform his or her duties,
the Employer shall supply full and timely information to the
Plan Administrator (or his or her designated agents) on all
matters relating to the Compensation of all Participants,
their regular employment, retirement, death, Disability or
Termination of Employment, and such other pertinent facts as
the Plan Administrator (or his or her agents) may require. The
Plan Administrator shall advise the Trustee (or Custodian, if
applicable) of such of the foregoing facts as may be pertinent
to the Trustee's (or Custodian's) duties under the Plan. The
Plan Administrator (or his or her agents) is entitled to rely
on such information as is supplied by the Employer and shall
have no duty or responsibility to verify such information.
SECTION NINE AMENDMENT AND TERMINATION
9.01 RIGHT OF PROTOTYPE SPONSOR TO AMEND THE PLAN
A. The Employer, by adopting the Plan, expressly delegates to
the Prototype Sponsor the power, but not the duty, to amend
the Plan without any further action or consent of the Employer
as the Prototype Sponsor deems necessary for the purpose of
adjusting the Plan to comply with all laws and regulations
governing pension or profit sharing plans. Specifically, it is
understood that the amendments may be made unilaterally by the
Prototype Sponsor. However, it shall be understood that the
Prototype Sponsor shall be under no obligation to amend the
Plan documents and the Employer expressly waives any rights or
claims against the Prototype Sponsor for not exercising this
power to amend. For purposes of Prototype Sponsor amendments,
the mass submitter shall be recognized as the agent of the
Prototype Sponsor. If the Prototype Sponsor does not adopt the
amendments made by the mass submitter, it will no longer be
identical to or a minor modifier of the mass submitter plan.
B. An amendment by the Prototype Sponsor shall be accomplished
by giving written notice to the Employer of the amendment to
be made. The notice shall set forth the text of such amendment
and the date such amendment is to be effective. Such amendment
shall take effect unless within the 30 day period after such
notice is provided, or within such shorter period as the
notice may specify, the Employer gives the Prototype Sponsor
written notice of refusal to consent to the amendment. Such
written notice of refusal shall have the effect of withdrawing
the Plan as a prototype plan and shall cause the Plan to be
considered an individually designed plan. The right of the
Prototype Sponsor to cause the Plan to be amended shall
terminate should the Plan cease to conform as a prototype plan
as provided in this or any other section.
9.02 RIGHT OF EMPLOYER TO AMEND THE PLAN
The Employer may (1) change the choice of options in the
Adoption Agreement; (2) add overriding language in the
Adoption Agreement when such language is necessary to satisfy
Section 415 or Section 416 of the Code because of the required
aggregation of multiple plans; and (3) add certain model
amendments published by the Internal Revenue Service which
specifically provide that their adoption will not cause the
Plan to be treated as individually designed. An Employer that
amends the Plan for any other reason, including a waiver of
the minimum funding requirement under Section 412(d) of the
Code, will no longer participate in this prototype plan and
will be considered to have an individually designed plan.
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An Employer who wishes to amend the Plan to change the options
it has chosen in the Adoption Agreement must complete and
deliver a new Adoption Agreement to the Prototype Sponsor and
Trustee (or Custodian, if applicable). Such amendment shall
become effective upon execution by the Employer and Trustee
(or Custodian).
The Employer further reserves the right to replace the Plan in
its entirety by adopting another retirement plan which the
Employer designates as a replacement plan.
9.03 LIMITATION ON POWER TO AMEND
No amendment to the Plan shall be effective to the extent that
it has the effect of decreasing a Participant's accrued
benefit. Notwithstanding the preceding sentence, a
Participant's Individual Account may be reduced to the extent
permitted under Section 412(c)(8) of the Code. For purposes of
this paragraph, a plan amendment which has the effect of
decreasing a Participant's Individual Account or eliminating
an optional form of benefit with respect to benefits
attributable to service before the amendment shall be treated
as reducing an accrued benefit. Furthermore, if the vesting
schedule of a Plan is amended, in the case of an Employee who
is a Participant as of the later of the date such amendment is
adopted or the date it becomes effective, the Vested
percentage (determined as of such date) of such Employee's
Individual Account derived from Employer Contributions will
not be less than the percentage computed under the Plan
without regard to such amendment.
9.04 AMENDMENT OF VESTING SCHEDULE
If the Plan's vesting schedule is amended, or the Plan is
amended in any way that directly or indirectly affects the
computation of the Participant's Vested percentage, or if the
Plan is deemed amended by an automatic change to or from a
top-heavy vesting schedule, each Participant with at least 3
Years of Vesting Service with the Employer may elect, within
the time set forth below, to have the Vested percentage
computed under the Plan without regard to such amendment.
For Participants who do not have at least 1 Hour of Service in
any Plan Year beginning after December 31, 1988, the preceding
sentence shall be applied by substituting "5 Years of Vesting
Service" for "3 Years of Vesting Service" where such language
appears. The Period during which the election may be made
shall commence with the date the amendment is adopted or
deemed to be made and shall end the later of:
A. 60 days after the amendment is adopted;
B. 60 days after the amendment becomes effective; or
C. 60 days after the Participant is issued written notice of
the amendment by the Employer or Plan Administrator.
9.05 PERMANENCY
The Employer expects to continue this Plan and make the
necessary contributions thereto indefinitely, but such
continuance and payment is not assumed as a contractual
obligation. Neither the Adoption Agreement nor the Plan nor
any amendment or modification thereof nor the making of
contributions hereunder shall be construed as giving any
Participant or any person whomsoever any legal or equitable
right against the Employer, the Trustee (or Custodian, if
applicable) the Plan Administrator or the Prototype Sponsor
except as specifically provided herein, or as provided by law.
9.06 METHOD AND PROCEDURE FOR TERMINATION
The Plan may be terminated by the Employer at any time by
appropriate action of its managing body. Such termination
shall be effective on the date specified by the Employer. The
Plan shall terminate if the Employer shall be dissolved,
terminated, or declared bankrupt. Written notice of the
termination and effective date thereof shall be given to the
Trustee (or Custodian), Plan Administrator, Prototype Sponsor,
Participants and Beneficiaries of deceased Participants, and
the required filings (such as the Form 5500 series and others)
must be made with the Internal Revenue Service and any other
regulatory body as required by current laws and regulations.
Until all of the assets have been distributed from the Fund,
the Employer must keep the Plan in compliance with current
laws and regulations by (a) making appropriate amendments to
the Plan and (b) taking such other measures as may be
required.
9.07 CONTINUANCE OF PLAN BY SUCCESSOR EMPLOYER
Notwithstanding the preceding Section 9.06, a successor of the
Employer may continue the Plan and be substituted in the place
of the present Employer. The successor and the present
Employer (or, if deceased, the executor of the estate of a
deceased Self-Employed Individual who was the Employer) must
execute a written instrument authorizing such substitution and
the successor must complete and sign a new plan document.
9.08 FAILURE OF PLAN QUALIFICATION
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If the Plan fails to retain its qualified status, the Plan
will no longer be considered to be part of a prototype plan,
and such Employer can no longer participate under this
prototype. In such event, the Plan will be considered an
individually designed plan.
SECTION TEN MISCELLANEOUS
10.01 STATE COMMUNITY PROPERTY LAWS
The terms and conditions of this Plan shall be applicable
without regard to the community property laws of any state.
10.02 HEADINGS
The headings of the Plan have been inserted for convenience of
reference only and are to be ignored in any construction of
the provisions hereof.
10.03 GENDER AND NUMBER
Whenever any words are used herein in the masculine gender
they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and
whenever any words are used herein in the singular form they
shall be construed as though they were also used in the plural
form in all cases where they would so apply.
10.04 PLAN MERGER OR CONSOLIDATION
In the case of any merger or consolidation of the Plan with,
or transfer of assets or liabilities of such Plan to, any
other plan, each Participant shall be entitled to receive
benefits immediately after the merger, consolidation, or
transfer (if the Plan had then terminated) which are equal to
or greater than the benefits he or she would have been
entitled to receive immediately before the merger,
consolidation, or transfer (if the Plan had then terminated).
The Trustee (or Custodian) has the authority to enter into
merger agreements or agreements to directly transfer the
assets of this Plan but only if such agreements are made with
trustees or custodians of other retirement plans described in
Section 401(a) of the Code.
10.05 STANDARD OF FIDUCIARY CONDUCT
The Employer, Plan Administrator, Trustee and any other
fiduciary under this Plan shall discharge their duties with
respect to this Plan solely in the interests of Participants
and their Beneficiaries and with the care, skill, prudence and
diligence under the circumstances then prevailing that a
prudent man acting in like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims. No fiduciary shall cause the
Plan to engage in any transaction known as a "prohibited
transaction" under ERISA.
10.06 GENERAL UNDERTAKING OF ALL PARTIES
All parties to this Plan and all persons claiming any interest
whatsoever hereunder agree to perform any and all acts and
execute any and all documents and papers which may be
necessary or desirable for the carrying out of this Plan and
any of its provisions.
10.07 AGREEMENT BINDS HEIRS, ETC.
This Plan shall be binding upon the heirs, executors,
administrators, successors and assigns, as those terms shall
apply to any and all parties hereto, present and future.
10.08 DETERMINATION OF TOP-HEAVY STATUS
A. For any Plan Year beginning after December 31, 1983, this
Plan is a Top-Heavy Plan if any of the following conditions
exist:
1. If the top-heavy ratio for this Plan exceeds 60% and this
Plan is not part of any required aggregation group or
permissive aggregation group of plans.
2. If this Plan is part of a required aggregation group of
plans but not part of a permissive aggregation group and the
top-heavy ratio for the group of plans exceeds 60%.
3. If this Plan is a part of a required aggregation group and
part of a permissive aggregation group of plans and the
top-heavy ratio for the permissive aggregation group exceeds 60%.
For purposes of this Section 10.08, the following terms shall
have the meanings indicated below:
B. Key Employee - Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during the
determination period was an officer of the Employer if such
individual's annual compensation exceeds 50% of the dollar
limitation under Section 415(b)(1)(A) of the Code, an owner
(or considered an owner under Section 318 of the Code) of one
of the 10 largest interests in the Employer if such
individual's compensation exceeds 100% of the dollar
limitation under Section 415(c)(1)(A) of the Code, a 5% owner
of the Employer, or a 1% owner of the Employer who has an
annual compensation of more than $150,000. Annual compensation
means compensation as defined in Section 415(c)(3) of the
Code, but including amounts contributed by the Employer
pursuant to a salary reduction agreement which are excludable
from the Employee's gross income under Section 125, Section
402(e)(3), Section 402(h)(1)(B) or Section 403(b) of the Code.
The determination period is the Plan Year containing the
determination date and the 4 preceding Plan Years.
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The determination of who is a Key Employee will be made in
accordance with Section 416(i)(1) of the Code and the
regulations thereunder.
C. Top-heavy ratio
1. If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and the
Employer has not maintained any defined benefit plan which
during the 5-year period ending on the determination date(s)
has or has had accrued benefits, the top-heavy ratio for this
Plan alone or for the required or permissive aggregation group
as appropriate is a fraction, the numerator of which is the
sum of the account balances of all Key Employees as of the
determination date(s) (including any part of any account
balance distributed in the 5-year period ending on the
determination date(s)), and the denominator of which is the
sum of all account balances (including any part of any account
balance distributed in the 5-year period ending on the
determination date(s)), both computed in accordance with
Section 416 of the Code and the regulations thereunder. Both
the numerator and the denominator of the top-heavy ratio are
increased to reflect any contribution not actually made as of
the determination date, but which is required to be taken into
account on that date under Section 416 of the Code and the
regulations thereunder.
2. If the Employer maintains one or more defined contribution
plans (including any simplified employee pension plan) and the
Employer maintains or has maintained one or more defined
benefit plans which during the 5-year period ending on the
determination date(s) has or has had any accrued benefits, the
top-heavy ratio for any required or permissive aggregation
group as appropriate is a fraction, the numerator of which is
the sum of account balances under the aggregated defined
contribution plan or plans for all Key Employees, determined
in accordance with (1) above, and the present value of accrued
benefits under the aggregated defined benefit plan or plans
for all Key Employees as of the determination date(s), and the
denominator of which is the sum of the account balances under
the aggregated defined contribution plan or plans for all
Participants, determined in accordance with (1) above, and the
present value of accrued benefits under the defined benefit
plan or plans for all Participants as of the determination
date(s), all determined in accordance with Section 416 of the
Code and the regulations thereunder. The accrued benefits
under a defined benefit plan in both the numerator and
denominator of the top-heavy ratio are increased for any
distribution of an accrued benefit made in the 5-year period
ending on the determination date.
3. For purposes of (1) and (2) above, the value of account
balances and the present value of accrued benefits will be
determined as of the most recent valuation date that falls
within or ends with the 12-month period ending on the
determination date, except as provided in Section 416 of the
Code and the regulations thereunder for the first and second
plan years of a defined benefit plan. The account balances and
accrued benefits of a Participant (a) who is not a Key
Employee but who was a Key Employee in a Prior Year, or (b)
who has not been credited with at least one Hour of Service
with any employer maintaining the plan at any time during the
5-year period ending on the determination date will be
disregarded. The calculation of the top-heavy ratio, and the
extent to which distributions, rollovers, and transfers are
taken into account will be made in accordance with Section 416
of the Code and the regulations thereunder. Deductible
employee contributions will not be taken into account for
purposes of computing the top-heavy ratio. When aggregating
plans the value of account balances and accrued benefits will
be calculated with reference to the determination dates that
fall within the same calendar year.
The accrued benefit of a Participant other than a Key Employee
shall be determined under (a) the method, if any, that
uniformly applies for accrual purposes under all defined
benefit plans maintained by the Employer, or (b) if there is
no such method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional
rule of Section 411(b)(1)(C) of the Code.
4. Permissive aggregation group: The required aggregation
group of plans plus any other plan or plans of the Employer
which, when considered as a group with the required
aggregation group, would continue to satisfy the requirements
of Sections 401(a)(4) and 410 of the Code.
5. Required aggregation group: (a) Each qualified plan of the
Employer in which at least one Key Employee participates or
participated at any time during the determination period
(regardless of whether the Plan has terminated), and (b) any
other qualified plan of the Employer which enables a plan
described in (a) to meet the requirements of Sections
401(a)(4) or 410 of the Code.
6. Determination date: For any Plan Year subsequent to the
first Plan Year, the last day of the preceding Plan Year. For
the first Plan Year of the Plan, the last day of that year.
7. Valuation date: For purposes of calculating the top-heavy
ratio, the valuation date shall be the last day of each Plan
Year.
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8. Present value: For purposes of establishing the "present
value" of benefits under a defined benefit plan to compute the
top-heavy ratio, any benefit shall be discounted only for
mortality and interest based on the interest rate and
mortality table specified for this purpose in the defined
benefit plan, unless otherwise indicated in the Adoption
Agreement.
10.09 SPECIAL LIMITATIONS FOR OWNER-EMPLOYEES
If this Plan provides contributions or benefits for one or
more Owner-Employees who control both the business for which
this Plan is established and one or more other trades or
businesses, this Plan and the plan established for other
trades or businesses must, when looked at as a single plan,
satisfy Sections 401(a) and (d) of the Code for the employees
of those trades or businesses.
If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or
businesses, the employees of the other trades or businesses
must be included in a plan which satisfies Sections 401(a) and
(d) of the Code and which provides contributions and benefits
not less favorable than provided for Owner-Employees under
this Plan.
If an individual is covered as an Owner-Employee under the
plans of two or more trades or businesses which are not
controlled and the individual controls a trade or business,
then the contributions or benefits of the employees under the
plan of the trade or business which is controlled must be as
favorable as those provided for him or her under the most
favorable plan of the trade or business which is not
controlled.
For purposes of the preceding paragraphs, an Owner-Employee,
or two or more Owner-Employees, will be considered to control
a trade or business if the Owner-Employee, or two or more
Owner-Employees, together:
A. own the entire interest in a unincorporated trade or
business, or
B. in the case of a partnership, own more than 50% of either
the capital interest or the profit interest in the
partnership.
For purposes of the preceding sentence, an Owner-Employee, or
two or more Owner-Employees, shall be treated as owning any
interest in a partnership which is owned, directly or
indirectly, by a partnership which such Owner-Employee, or
such two or more Owner-Employees, are considered to control
within the meaning of the preceding sentence.
10.10 INALIENABILITY OF BENEFITS
No benefit or interest available hereunder will be subject to
assignment or alienation, either voluntarily or involuntarily.
The preceding sentence shall also apply to the creation,
assignment, or recognition of a right to any benefit payable
with respect to a Participant pursuant to a domestic relations
order, unless such order is determined to be a qualified
domestic relations order, as defined in Section 414(p) of the
Code.
Generally, a domestic relations order cannot be a qualified
domestic relations order until January 1, 1985. However, in
the case of a domestic relations order entered before such
date, the Plan Administrator:
(1) shall treat such order as a qualified domestic relations
order if such Plan Administrator is paying benefits pursuant
to such order on such date, and
(2) may treat any other such order entered before such date as
a qualified domestic relations order even if such order does
not meet the requirements of Section 414(p) of the Code.
Notwithstanding any provision of the Plan to the contrary, a
distribution to an alternate payee under a qualified domestic
relations order shall be permitted even if the Participant
affected by such order is not otherwise entitled to a
distribution and even if such Participant has not attained
earliest retirement age as defined in Section 414(p) of the
Code.
10.11 CANNOT ELIMINATE PROTECTED BENEFITS
Pursuant to Section 411(d)(6) of the Code, and the regulations
thereunder, the Employer cannot reduce, eliminate or make
subject to Employer discretion any Section 411(d)(6) protected
benefit. Where this Plan document is being adopted to amend
another plan that contains a protected benefit not provided
for in this document, the Employer may attach a supplement to
the Adoption Agreement that describes such protected benefit
which shall become part of the Plan.
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SECTION ELEVEN 401(k) PROVISIONS
In addition to Sections 1 through 10, the provisions of this
Section 11 shall apply if the Employer has established a
401(k) cash or deferred arrangement (CODA) by completing and
signing the appropriate Adoption Agreement.
11.100 DEFINITIONS
The following words and phrases when used in the Plan with
initial capital letters shall, for the purposes of this Plan,
have the meanings set forth below unless the context indicates
that other meanings are intended.
11.101 ACTUAL DEFERRAL PERCENTAGE (ADP)
Means, for a specified group of Participants for a Plan Year,
the average of the ratios (calculated separately for each
Participant in such group) of (1) the amount of Employer
Contributions actually paid over to the Fund on behalf of such
Participant for the Plan Year to (2) the Participant's
Compensation for such Plan Year (taking into account only that
Compensation paid to the Employee during the portion of the
Plan Year he or she was an eligible Participant, unless
otherwise indicated in the Adoption Agreement). For purposes
of calculating the ADP, Employer Contributions on behalf of
any Participant shall include: (1) any Elective Deferrals made
pursuant to the Participant's deferral election, (including
Excess Elective Deferrals of Highly Compensated Employees),
but excluding (a) Excess Elective Deferrals of Non-highly
Compensated Employees that arise solely from Elective
Deferrals made under the Plan or plans of this Employer and
(b) Elective Deferrals that are taken into account in the
Contribution Percentage test (provided the ADP test is
satisfied both with and without exclusion of these Elective
Deferrals); and (2) at the election of the Employer, Qualified
Nonelective Contributions and Qualified Matching
Contributions. For purposes of computing Actual Deferral
Percentages, an Employee who would be a Participant but for
the failure to make Elective Deferrals shall be treated as a
Participant on whose behalf no Elective Deferrals are made.
11.102 AGGREGATE LIMIT
Means the sum of (1) 125% of the greater of the ADP of the
Participants who are not Highly Compensated Employees for the
Plan Year or the ACP of the Participants who are not Highly
Compensated Employees under the Plan subject to Code Section
401(m) for the Plan Year beginning with or within the Plan
Year of the CODA; and (2) the lesser of 200% or two plus the
lesser of such ADP or ACP. "Lesser" is substituted for
"greater" in "(1)" above, and "greater" is substituted for
"lesser" after "two plus the" in "(2)" if it would result in a
larger Aggregate Limit.
11.103 AVERAGE CONTRIBUTION PERCENTAGE (ACP)
Means the average of the Contribution Percentages of the
Eligible Participants in a group.
11.104 CONTRIBUTING PARTICIPANT
Means a Participant who has enrolled as a Contributing
Participant pursuant to Section 11.201 and on whose behalf the
Employer is contributing Elective Deferrals to the Plan (or is
making Nondeductible Employee Contributions).
11.105 CONTRIBUTION PERCENTAGE
Means the ratio (expressed as a percentage) of the
Participant's Contribution Percentage Amounts to the
Participant's Compensation for the Plan Year (taking into
account only the Compensation paid to the Employee during the
portion of the Plan Year he or she was an eligible
Participant, unless otherwise indicated in the Adoption
Agreement).
11.106 CONTRIBUTION PERCENTAGE AMOUNTS
Means the sum of the Nondeductible Employee Contributions,
Matching Contributions, and Qualified Matching Contributions
made under the Plan on behalf of the Participant for the Plan
Year. Such Contribution Percentage Amounts shall not include
Matching Contributions that are forfeited either to correct
Excess Aggregate Contributions or because the contributions to
which they relate are Excess Deferrals, Excess Contributions,
Excess Aggregate Contributions or excess annual additions
which are distributed pursuant to Section 11.508. If so
elected in the Adoption Agreement, the Employer may include
Qualified Nonelective Contributions in the Contribution
Percentage Amount. The Employer also may elect to use Elective
Deferrals in the Contribution Percentage Amounts so long as
the ADP test is met before the Elective Deferrals are used in
the ACP test and continues to be met following the exclusion
of those Elective Deferrals that are used to meet the ACP
test.
11.107 ELECTIVE DEFERRALS
Means any Employer Contributions made to the Plan at the
election of the Participant, in lieu of cash compensation, and
shall include contributions made pursuant to a salary
reduction agreement or other deferral mechanism. With respect
to any taxable year, a Participant's Elective Deferral is the
sum of all Employer contributions made on behalf of such
Participant pursuant to an election to defer under any
qualified CODA as described in Section 401(k) of the Code, any
simplified employee pension cash or deferred arrangement as
described in Section 402(h)(1)(B), any eligible deferred
compensation plan under Section 457, any plan as described
under Section 501(c)(18), and any Employer contributions made
on the behalf of a Participant for the purchase of an annuity
contract under Section 403(b) pursuant to a salary reduction
agreement. Elective Deferrals shall not include any deferrals
properly distributed as excess annual additions.
No Participant shall be permitted to have Elective Deferrals
made under this Plan, or any other qualified plan maintained
by the Employer, during any taxable year, in excess of the
dollar limitation contained in Section 402(g) of the Code in
effect at the beginning of such taxable year.
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Elective Deferrals may not be taken into account for purposes
of satisfying the minimum allocation requirement applicable to
Top-Heavy Plans described in Section 3.01(E).
11.108 ELIGIBLE PARTICIPANT
Means any Employee who is eligible to make a Nondeductible
Employee Contribution or an Elective Deferral (if the Employer
takes such contributions into account in the calculation of
the Contribution Percentage), or to receive a Matching
Contribution (including Forfeitures thereof) or a Qualified
Matching Contribution.
If a Nondeductible Employee Contribution is required as a
condition of participation in the Plan, any Employee who would
be a Participant in the Plan if such Employee made such a
contribution shall be treated as an Eligible Participant on
behalf of whom no Nondeductible Employee Contributions are
made.
11.109 EXCESS AGGREGATE CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of:
A. The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution
Percentage actually made on behalf of Highly Compensated
Employees for such Plan Year, over
B. The maximum Contribution Percentage Amounts permitted by
the ACP test (determined by reducing contributions made on
behalf of Highly Compensated Employees in order of their
Contribution Percentages beginning with the highest of such
percentages).
Such determination shall be made after first determining
Excess Elective Deferrals pursuant to Section 11.111 and then
determining Excess Contributions pursuant to Section 11.110.
11.110 EXCESS CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of:
A. The aggregate amount of Employer Contributions actually
taken into account in computing the ADP of Highly Compensated
Employees for such Plan Year, over
B. The maximum amount of such contributions permitted by the
ADP test (determined by reducing contributions made on behalf
of Highly Compensated Employees in order of the ADPs,
beginning with the highest of such percentages).
11.111 EXCESS ELECTIVE DEFERRALS
Means those Elective Deferrals that are includible in a
Participant's gross income under Section 402(g) of the Code to
the extent such Participant's Elective Deferrals for a taxable
year exceed the dollar limitation under such Code section.
Excess Elective Deferrals shall be treated as annual additions
under the Plan, unless such amounts are distributed no later
than the first April 15 following the close of the
Participant's taxable year.
11.112 MATCHING CONTRIBUTION
Means an Employer Contribution made to this or any other
defined contribution plan on behalf of a Participant on
account of an Elective Deferral or a Nondeductible Employee
Contribution made by such Participant under a plan maintained
by the Employer.
Matching Contributions may not be taken into account for
purposes of satisfying the minimum allocation requirement
applicable to Top-Heavy Plans described in Section 3.01(E).
11.113 QUALIFIED NONELECTIVE CONTRIBUTIONS
Means contributions (other than Matching Contributions or
Qualified Matching Contributions) made by the Employer and
allocated to Participants' Individual Accounts that the
Participants may not elect to receive in cash until
distributed from the Plan; that are nonforfeitable when made;
and that are distributable only in accordance with the
distribution provisions that are applicable to Elective
Deferrals and Qualified Matching Contributions.
Qualified Nonelective Contribution may be taken into account
for purposes of satisfying the minimum allocation requirement
applicable to Top-Heavy Plans described in Section 3.01(E).
11.114 QUALIFIED MATCHING CONTRIBUTIONS
Means Matching Contributions which are subject to the
distribution and nonforfeitability requirements under Section
401(k) of the Code when made.
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11.115 QUALIFYING CONTRIBUTING PARTICIPANT
Means a Contributing Participant who satisfies the
requirements described in Section 11.302 to be entitled to
receive a Matching Contribution (and Forfeitures, if
applicable) for a Plan Year.
11.200 CONTRIBUTING PARTICIPANT
11.201 REQUIREMENTS TO ENROLL AS A CONTRIBUTING PARTICIPANT
A. Each Employee who satisfies the eligibility requirements
specified in the Adoption Agreement may enroll as a
Contributing Participant as of any subsequent Entry Date (or
earlier if required by Section 2.03) specified in the Adoption
Agreement for this purpose. A Participant who wishes to enroll
as a Contributing Participant must complete, sign and file a
salary reduction agreement (or agreement to make Nondeductible
Employee Contributions) with the Plan Administrator.
B. Notwithstanding the times set forth in Section 11.201(A) as
of which a Participant may enroll as a Contributing
Participant, the Plan Administrator shall have the authority
to designate, in a nondiscriminatory manner, additional
enrollment times during the 12 month period beginning on the
Effective Date (or the date that Elective Deferrals may
commence, if later) in order that an orderly first enrollment
might be completed. In addition, if the Employer has indicated
in the Adoption Agreement that Elective Deferrals may be based
on bonuses, then Participants shall be afforded a reasonable
period of time prior to the issuance of such bonuses to elect
to defer them into the Plan.
11.202 CHANGING ELECTIVE DEFERRAL AMOUNTS
A Contributing Participant may modify his or her salary
reduction agreement (or agreement to make Nondeductible
Employee Contributions) to increase or decrease (within the
limits placed on Elective Deferrals (or Nondeductible Employee
Contributions) in the Adoption Agreement) the amount of his or
her Compensation deferred into the Plan. Such modification may
only be made as of the dates specified in the Adoption
Agreement for this purpose, or as of any other more frequent
date(s) if the Plan Administrator permits in a uniform and
nondiscriminatory manner. A Contributing Participant who
desires to make such a modification shall complete, sign and
file a new salary reduction agreement (or agreement to make
Nondeductible Employee Contribution) with the Plan
Administrator. The Plan Administrator may prescribe such
uniform and nondiscriminatory rules it deems appropriate to
carry out the terms of this Section.
11.203 CEASING ELECTIVE DEFERRALS
A Participant may cease Elective Deferrals (or Nondeductible
Employee Contributions) and thus withdraw as a Contributing
Participant as of the dates specified in the Adoption
Agreement for this purpose (or as of any other date if the
Plan Administrator so permits in a uniform and
nondiscriminatory manner) by revoking the authorization to the
Employer to make Elective Deferrals (or Nondeductible Employee
Contributions) on his or her behalf. A Participant who desires
to withdraw as a Contributing Participant shall give written
notice of withdrawal to the Plan Administrator at least thirty
days (or such lesser period of days as the Plan Administrator
shall permit in a uniform and nondiscriminatory manner) before
the effective date of withdrawal. A Participant shall cease to
be a Contributing Participant upon his or her Termination of
Employment, or an account of termination of the Plan.
11.204 RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE DEFERRALS
A Participant who has withdrawn as a Contributing Participant
under Section 11.203 (or because the Participant has taken a
hardship withdrawal pursuant to Section 11.503) may not again
become a Contributing Participant until the dates set forth in
the Adoption Agreement for this purpose, unless the Plan
Administrator, in a uniform and nondiscriminatory manner,
permits withdrawing Participants to resume their status as
Contributing Participants sooner.
11.205 CERTAIN ONE-TIME IRREVOCABLE ELECTIONS
This Section 11.205 applies where the Employer has indicated
in the Adoption Agreement that an Employee may make a one-time
irrevocable election to have the Employer make contributions
to the Plan on such Employee's behalf. In such event, an
Employee may elect, upon the Employee's first becoming
eligible to participate in the Plan, to have contributions
equal to a specified amount or percentage of the Employee's
Compensation (including no amount of Compensation) made by the
Employer on the Employee's behalf to the Plan (and to any
other plan of the Employer) for the duration of the Employee's
employment with the Employer. Any contributions made pursuant
to a one-time irrevocable election described in this Section
are not treated as made pursuant to a cash or deferred
election, are not Elective Deferrals and are not includible in
an Employee's gross income.
The Plan Administrator shall establish such uniform and
nondiscriminatory procedures as it deems necessary or
advisable to administer this provision.
11.300 CONTRIBUTIONS
11.301 CONTRIBUTIONS BY EMPLOYER
The Employer shall make contributions to the Plan in
accordance with the contribution formulas specified in the
Adoption Agreement.
11.302 MATCHING CONTRIBUTIONS
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The Employer may elect to make Matching Contributions under
the Plan on behalf of Qualifying Contributing Participants as
provided in the Adoption Agreement. To be a Qualifying
Contributing Participant for a Plan Year, the Participant must
make Elective Deferrals (or Nondeductible Employee
Contributions, if the Employer has agreed to match such
contributions) for the Plan Year, satisfy any age and Years of
Eligibility Service requirements that are specified for
Matching Contributions in the Adoption Agreement and also
satisfy any additional conditions set forth in the Adoption
Agreement for this purpose. In a uniform and nondiscriminatory
manner, the Employer may make Matching Contributions at the
same time as it contributes Elective Deferrals or at any other
time as permitted by laws and regulations.
11.303 QUALIFIED NONELECTIVE CONTRIBUTIONS
The Employer may elect to make Qualified Nonelective
Contributions under the Plan on behalf of Participants as
provided in the Adoption Agreement.
In addition, in lieu of distributing Excess Contributions as
provided in Section 11.505 of the Plan, or Excess Aggregate
Contributions as provided in Section 11.506 of the Plan, and
to the extent elected by the Employer in the Adoption
Agreement, the Employer may make Qualified Nonelective
Contributions on behalf of Participants who are not Highly
Compensated Employees that are sufficient to satisfy either
the Actual Deferral Percentage test or the Average
Contribution Percentage test, or both, pursuant to regulations
under the Code.
11.304 QUALIFIED MATCHING CONTRIBUTIONS
The Employer may elect to make Qualified Matching
Contributions under the Plan on behalf of Participants as
provided in the Adoption Agreement.
11.305 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Notwithstanding Section 3.02, if the Employer so allows in the
Adoption Agreement, a Participant may contribute Nondeductible
Employee Contributions to the Plan.
If the Employer has indicated in the Adoption Agreement that
Nondeductible Employee Contributions will be mandatory, then
the Employer shall establish uniform and nondiscriminatory
rules and procedures for Nondeductible Employee Contributions
as it deems necessary and advisable including, but not limited
to, rules describing in amounts or percentages of Compensation
Participants may or must contribute to the Plan.
A separate account will be maintained by the Plan
Administrator for the Nondeductible Employee Contributions for
each Participant.
A Participant may, upon a written request submitted to the
Plan Administrator, withdraw the lesser of the portion of his
or her Individual Account attributable to his or her
Nondeductible Employee Contributions or the amount he or she
contributed as Nondeductible Employee Contributions.
Nondeductible Employee Contributions and earnings thereon will
be nonforfeitable at all times. No Forfeiture will occur
solely as a result of an Employee's withdrawal of
Nondeductible Employee Contributions.
11.400 NONDISCRIMINATION TESTING
11.401 ACTUAL DEFERRAL PERCENTAGE TEST (ADP)
A. Limits on Highly Compensated Employees - The Actual
Deferral Percentage (hereinafter "ADP") for Participants who
are Highly Compensated Employees for each Plan Year and the
ADP for Participants who are not Highly Compensated Employees
for the same Plan Year must satisfy one of the following
tests:
1. The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for
Participants who are not Highly Compensated Employees for the
same Plan Year multiplied by 1.25; or
2. The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for
Participants who are not Highly Compensated Employees for the
same Plan Year multiplied by 2.0 provided that the ADP for
Participants who are Highly Compensated Employees does not
exceed the ADP for Participants who are not Highly Compensated
Employees by more than 2 percentage points.
B. Special Rules
1. The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have
Elective Deferrals (and Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, if treated as
Elective Deferrals for purposes of the ADP test) allocated to
his or her Individual Accounts under two or more arrangements
described in Section 401(k) of the Code, that are maintained
by the Employer, shall be determined as if such Elective
Deferrals (and, if applicable, such Qualified Nonelective
Contributions or Qualified Matching Contributions, or both)
were made under a single arrangement. If a Highly Compensated
Employee participates in two or more cash or deferred
arrangements that have different Plan Years, all cash or
deferred arrangements ending with or within the same calendar
year shall be treated as a single arrangement. Notwithstanding
the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under regulations under Section
401(k) of the Code.
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2. In the event that this Plan satisfies the requirements of
Sections 401(k), 401(a)(4), or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of such sections of the
Code only if aggregated with this Plan, then this Section
11.401 shall be applied by determining the ADP of Employees as
if all such plans were a single plan. For Plan Years beginning
after December 31, 1989, plans may be aggregated in order to
satisfy Section 401(k) of the Code only if they have the same
Plan Year.
3. For purposes of determining the ADP of a Participant who is
a 5% owner or one of the 10 most highly paid Highly
Compensated Employees, the Elective Deferrals (and Qualified
Nonelective Contributions or Qualified Matching Contributions,
or both, if treated as Elective Deferrals for purposes of the
ADP test) and Compensation of such Participant shall include
the Elective Deferrals (and, if applicable, Qualified
Nonelective Contributions and Qualified Matching
Contributions, or both) and Compensation for the Plan Year of
family members (as defined in Section 414(q)(6) of the Code).
Family members, with respect to such Highly Compensated
Employees, shall be disregarded as separate Employees in
determining the ADP both for Participants who are not Highly
Compensated Employees and for Participants who are Highly
Compensated Employees.
4. For purposes of determining the ADP test, Elective
Deferrals, Qualified Nonelective Contributions and Qualified
Matching Contributions must be made before the last day of the
12 month period immediately following the Plan Year to which
contributions relate.
5. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the amount of
Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, used in such test.
6. The determination and treatment of the ADP amounts of any
Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
7. If the Employer elects to take Qualified Matching
Contributions into account as Elective Deferrals for purposes
of the ADP test, then (subject to such other requirements as
may be prescribed by the Secretary of the Treasury) unless
otherwise indicated in the Adoption Agreement, only the amount
of such Qualified Matching Contributions that are needed to
meet the ADP test shall be taken into account.
8. In the event that the Plan Administrator determines that it
is not likely that the ADP test will be satisfied for a
particular Plan Year unless certain steps are taken prior to
the end of such Plan Year, the Plan Administrator may require
Contributing Participants who are Highly Compensated Employees
to reduce their Elective Deferrals for such Plan Year in order
to satisfy that requirement. Said reduction shall also be
required by the Plan Administrator in the event that the Plan
Administrator anticipates that the Employer will not be able
to deduct all Employer Contributions from its income for
Federal income tax purposes.
11.402 LIMITS ON NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS AND MATCHING CONTRIBUTIONS
A. Limits on Highly Compensated Employees - The Average
Contribution Percentage (hereinafter "ACP") for Participants
who are Highly Compensated Employees for each Plan Year and
the ACP for Participants who are not Highly Compensated
Employees for the same Plan Year must satisfy one of the
following tests:
1. The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for
Participants who are not Highly Compensated Employees for the
same Plan Year multiplied by 1.25; or
2. The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for
Participants who are not Highly Compensated Employees for the
same Plan Year multiplied by 2, provided that the ACP for the
Participants who are Highly Compensated Employees does not
exceed the ACP for Participants who are not Highly Compensated
Employees by more than 2 percentage points.
B. Special Rules
1. Multiple Use - If one or more Highly Compensated Employees
participate in both a CODA and a plan subject to the ACP test
maintained by the Employer and the sum of the ADP and ACP of
those Highly Compensated Employees subject to either or both
tests exceeds the Aggregate Limit, then, as elected in the
Adoption Agreement, the ACP or the ADP of those Highly
Compensated Employees who also participate in a CODA will be
reduced (beginning with such Highly Compensated Employee whose
ACP (or ADP, if elected) is the highest) so that the limit is
not exceeded. The amount by which each Highly Compensated
Employee's Contribution Percentage Amounts (or ADP, if
elected) is reduced shall be treated as an Excess Aggregate
Contribution (or Excess Contribution, if elected). The ADP and
ACP of the Highly Compensated Employees are determined after
any corrections required to meet the ADP and ACP tests.
Multiple use does not occur if the ADP and ACP of the Highly
Compensated Employees does not exceed 1.25 multiplied by the
ADP and ACP of the Participants who are not Highly Compensated
Employees.
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2. For purposes of this Section 11.402, the Contribution
Percentage for any Participant who is a Highly Compensated
Employee and who is eligible to have Contribution Percentage
Amounts allocated to his or her Individual Account under two
or more plans described in Section 401(a) of the Code, or
arrangements described in Section 401(k) of the Code that are
maintained by the Employer, shall be determined as if the
total of such Contribution Percentage Amounts was made under
each plan. If a Highly Compensated Employee participates in
two or more cash or deferred arrangements that have different
plan years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing, certain plans
shall be treated as separate if mandatorily disaggregated
under regulations under Section 401(m) of the Code.
3. In the event that this Plan satisfies the requirements of
Sections 401(m), 401(a)(4) or 410(b) of the Code only if
aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of such Sections of the
Code only if aggregated with this Plan, then this Section
shall be applied by determining the Contribution Percentage of
Employees as if all such plans were a single plan. For Plan
Years beginning after December 31, 1989, plans may be
aggregated in order to satisfy Section 401(m) of the Code only
if they have the same Plan Year.
4. For purposes of determining the Contribution Percentage of
a Participant who is a 5% owner or one of the 10 most highly
paid Highly Compensated Employees, the Contribution Percentage
Amounts and Compensation of such Participant shall include the
Contribution Percentage Amounts and Compensation for the Plan
Year of family members, (as defined in Section 414(q)(6) of
the Code). Family members, with respect to Highly Compensated
Employees, shall be disregarded as separate Employees in
determining the Contribution Percentage both for Participants
who are not Highly Compensated Employees and for Participants
who are Highly Compensated Employees.
5. For purposes of determining the Contribution Percentage
test, Nondeductible Employee Contributions are considered to
have been made in the Plan Year in which contributed to the
Fund. Matching Contributions and Qualified Nonelective
Contributions will be considered made for a Plan Year if made
no later than the end of the 12 month period beginning on the
day after the close of the Plan Year.
6. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the amount of
Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, used in such test.
7. The determination and treatment of the Contribution
Percentage of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
8. If the Employer elects to take Qualified Nonelective
Contributions into account as Contribution Percentage Amounts
for purposes of the ACP test, then (subject to such other
requirements as may be prescribed by the Secretary of the
Treasury) unless otherwise indicated in the Adoption
Agreement, only the amount of such Qualified Nonelective
Contributions that are needed to meet the ACP test shall be
taken into account.
9. If the Employer elects to take Elective Deferrals into
account as Contribution Percentage Amounts for purposes of the
ACP test, then (subject to such other requirements as may be
prescribed by the Secretary of the Treasury) unless otherwise
indicated in the Adoption Agreement, only the amount of such
Elective Deferrals that are needed to meet the ACP test shall
be taken into account.
11.500 DISTRIBUTION PROVISIONS
11.501 GENERAL RULE
Distributions from the Plan are subject to the provisions of
Section 6 and the provisions of this Section 11. In the event
of a conflict between the provisions of Section 6 and Section
11, the provisions of Section 11 shall control.
11.502 DISTRIBUTION REQUIREMENTS
Elective Deferrals, Qualified Nonelective Contributions, and
Qualified Matching Contributions, and income allocable to each
are not distributable to a Participant or his or her
Beneficiary or Beneficiaries, in accordance with such
Participant's or Beneficiary or Beneficiaries' election,
earlier than upon separation from service, death or
disability.
Such amounts may also be distributed upon:
A. Termination of the Plan without the establishment of
another defined contribution plan, other than an employee
stock ownership plan (as defined in Section 4975(e) or Section
409 of the Code) or a simplified employee pension plan as
defined in Section 408(k).
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B. The disposition by a corporation to an unrelated
corporation of substantially all of the assets (within the
meaning of Section 409(d)(2) of the Code used in a trade or
business of such corporation if such corporation continues to
maintain this Plan after the disposition, but only with
respect to Employees who continue employment with the
corporation acquiring such assets.
C. The disposition by a corporation to an unrelated entity of
such corporation's interest in a subsidiary (within the
meaning of Section 409(d)(3) of the Code) if such corporation
continues to maintain this Plan, but only with respect to
Employees who continue employment with such subsidiary.
D. The attainment of age 59 1/2 in the case of a profit
sharing plan.
E. If the Employer has so elected in the Adoption Agreement,
the hardship of the Participant as described in Section 11.503.
All distributions that may be made pursuant to one or more of
the foregoing distributable events are subject to the spousal
and Participant consent requirements (if applicable) contained
in Section 401(a)(11) and 417 of the Code. In addition,
distributions after March 31, 1988, that are triggered by any
of the first three events enumerated above must be made in a
lump sum.
11.503 HARDSHIP DISTRIBUTION
A. General - If the Employer has so elected in the Adoption
Agreement, distribution of Elective Deferrals (and any
earnings credited to a Participant's account as of the end of
the last Plan Year, ending before July 1, 1989) may be made to
a Participant in the event of hardship. For the purposes of
this Section, hardship is defined as an immediate and heavy
financial need of the Employee where such Employee lacks other
available resources. Hardship distributions are subject to the
spousal consent requirements contained in Sections 401(a)(11)
and 417 of the Code.
B. Special Rules
1. The following are the only financial needs considered
immediate and heavy: expenses incurred or necessary for
medical care, described in Section 213(d) of the Code, of the
Employee, the Employee's spouse or dependents; the purchase
(excluding mortgage payments) of a principal residence for the
Employee; payment of tuition and related educational fees for
the next 12 months of post-secondary education for the
Employee, the Employee's spouse, children or dependents; or
the need to prevent the eviction of the Employee from, or a
foreclosure on the mortgage of, the Employee's principal
residence.
2. A distribution will be considered as necessary to satisfy
an immediate and heavy financial need of the Employee only if:
a. The Employee has obtained all distributions, other than
hardship distributions, and all nontaxable loans under all
plans maintained by the Employer;
b. All plans maintained by the Employer provide that the
Employee's Elective Deferrals (and Nondeductible Employee
Contributions) will be suspended for 12 months after the
receipt of the hardship distribution;
c. The distribution is not in excess of the amount of an
immediate and heavy financial need (including amounts
necessary to pay any Federal, state or local income taxes or
penalties reasonably anticipated to result from the
distribution); and
d. All plans maintained by the Employer provide that the
Employee may not make Elective Deferrals for the Employee's
taxable year immediately following the taxable year of the
hardship distribution in excess of the applicable limit under
Section 402(g) of the Code for such taxable year less the
amount of such Employee's Elective Deferrals for the taxable
year of the hardship distribution.
11.504 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
A. General Rule - A Participant may assign to this Plan any
Excess Elective Deferrals made during a taxable year of the
Participant by notifying the Plan Administrator on or before
the date specified in the Adoption Agreement of the amount of
the Excess Elective Deferrals to be assigned to the Plan. A
Participant is deemed to notify the Plan Administrator of any
Excess Elective Deferrals that arise by taking into account
only those Elective Deferrals made to this Plan and any other
plans of the Employer.
Notwithstanding any other provision of the Plan, Excess
Elective Deferrals, plus any income and minus any loss
allocable thereto, shall be distributed no later than April 15
to any Participant to whose Individual Account Excess Elective
Deferrals were assigned for the preceding year and who claims
Excess Elective Deferrals for such taxable year.
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B. Determination of Income or Loss - Excess Elective Deferrals
shall be adjusted for any income or loss up to the date of
distribution. The income of loss allocable to Excess Elective
Deferrals is the sum of : (1) income or loss allocable to the
Participant's Elective Deferral account for the taxable year
multiplied by a fraction, the numerator of which is such
Participant's Elective Deferrals for the year and the
denominator is the Participant's Individual Account balance
attributable to Elective Deferrals without regard to any
income or loss occurring during such taxable year; and (2) 10%
of the amount determined under (1) multiplied by the number of
whole calendar months between the end of the Participant's
taxable year and the date of distribution, counting the month
of distribution if distribution occurs after the 15th of such
month. Notwithstanding the preceding sentence, the Plan
Administrator may compute the income or loss allocable to
Excess Elective Deferrals in the manner described in Section 4
(i.e., the usual manner used by the Plan for allocating income
or loss to Participants' Individual Accounts), provided such
method is used consistently for all Participants and for all
corrective distributions under the Plan for the Plan Year.
11.505 DISTRIBUTION OF EXCESS CONTRIBUTIONS
A. General Rule - Notwithstanding any other provision of this
Plan, Excess Contributions, plus any income and minus any loss
allocable thereto, shall be distributed no later than the last
day of each Plan Year to Participants to whose Individual
Accounts such Excess Contributions were allocated for the
preceding Plan Year. If such excess amounts are distributed
more than 2 1/2 months after the last day of the Plan Year in
which such excess amounts arose, a 10% excise tax will be
imposed on the Employer maintaining the Plan with respect to
such amounts. Such distributions shall be made to Highly
Compensated Employees on the basis of the respective portions
of the Excess Contributions attributable to each of such
Employees. Excess Contributions of Participants who are
subject to the family member aggregation rules shall be
allocated among the family members in proportion to the
Elective Deferrals (and amounts treated as Elective Deferrals)
of each family member that is combined to determine the
combined ADP.
Excess Contributions (including the amounts recharacterized)
shall be treated as annual additions under the Plan.
B. Determination of Income or Loss - Excess Contributions
shall be adjusted for any income or loss up to the date of
distribution. The income or loss allocable to Excess
Contributions is the sum of: (1) income or loss allocable to
Participant's Elective Deferral account (and, if applicable,
the Qualified Nonelective Contribution account or the
Qualified Matching Contributions account or both) for the Plan
Year multiplied by a fraction, the numerator of which is such
Participant's Excess Contributions for the year and the
denominator is the Participant's Individual Account balance
attributable to Elective Deferrals (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if
any of such contributions are included in the ADP test)
without regard to any income or loss occurring during such
Plan Year; and (2) 10% of the amount determined under (1)
multiplied by the number of whole calendar months between the
end of the Plan Year and the date of distribution, counting
the month of distribution if distribution occurs after the
15th of such month. Notwithstanding the preceding sentence,
the Plan Administrator may compute the income or loss
allocable to Excess Contributions in the manner described in
Section 4 (i.e., the usual manner used by the Plan for
allocating income or loss to Participants' Individual
Accounts), provided such method is used consistently for all
Participants and for all corrective distributions under the
Plan for the Plan Year.
C. Accounting for Excess Contributions - Excess Contributions
shall be distributed from the Participant's Elective Deferral
account and Qualified Matching Contribution account (if
applicable) in proportion to the Participant's Elective
Deferrals and Qualified Matching Contributions (to the extent
used in the ADP test) for the Plan Year. Excess Contributions
shall be distributed from the Participant's Qualified
Nonelective Contribution account only to the extent that such
Excess Contributions exceed the balance in the Participant's
Elective Deferral account and Qualified Matching Contribution
account.
11.506 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
A. General Rule - Notwithstanding any other provision of this
Plan, Excess Aggregate Contributions, plus any income and
minus any loss allocable thereto, shall be forfeited, if
forfeitable, or if not forfeitable, distributed no later than
the last day of each Plan Year to Participants to whose
accounts such Excess Aggregate Contributions were allocated
for the preceding Plan Year. Excess Aggregate Contributions of
Participants who are subject to the family member aggregation
rules shall be allocated among the family members in
proportion to the Employee and Matching Contributions (or
amounts treated as Matching Contributions) of each family
member that is combined to determine the combined ACP. If such
Excess Aggregate Contributions are distributed more than 2 1/2
months after the last day of the Plan Year in which such
excess amounts arose, a 10% excise tax will be imposed on the
Employer maintaining the Plan with respect to those amounts.
Excess Aggregate Contributions shall be treated as annual
additions under the Plan.
B. Determination of Income or Loss - Excess Aggregate
Contributions shall be adjusted for any income or loss up to
the date of distribution. The income or loss allocable to
Excess Aggregate Contributions is the sum of: (1) income or
loss allocable to the Participant's Nondeductible Employee
Contribution account, Matching Contribution account (if any,
and if all amounts therein are not used in the ADP test) and,
if applicable, Qualified Nonelective Contribution account and
Elective Deferral account for the Plan Year multiplied by a
fraction, the numerator of which is such Participant's Excess
Aggregate Contributions for the year and the denominator is
the Participant's Individual Account balance(s) attributable
to Contribution Percentage Amounts without regard to any
income or loss occurring during such Plan Year; and (2) 10% of
the amount determined under (1) multiplied by the number of
whole calendar months between the end of the Plan Year and the
50
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date of distribution, counting the month of distribution if
distribution occurs after the 15th of such month.
Notwithstanding the preceding sentence, the Plan Administrator
may compute the income or loss allocable to Excess Aggregate
Contributions in the manner described in Section 4 (i.e., the
usual manner used by the Plan for allocating income or loss to
Participants' Individual Accounts), provided such method is
used consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year.
C. Forfeitures of Excess Aggregate Contributions - Forfeitures
of Excess Aggregate Contributions may either be reallocated to
the accounts of Contributing Participants who are not Highly
Compensated Employees or applied to reduce Employer
Contributions, as elected by the Employer in the Adoption
Agreement.
D. Accounting for Excess Aggregate Contributions - Excess
Aggregate Contributions shall be forfeited, if forfeitable or
distributed on a pro rata basis from the Participant's
Nondeductible Employee Contribution account, Matching
Contribution account, and Qualified Matching Contribution
account (and, if applicable, the Participant's Qualified
Nonelective Contribution account or Elective Deferral account,
or both).
11.507 RECHARACTERIZATION
A Participant may treat his or her Excess Contributions as an
amount distributed to the Participant and then contributed by
the Participant to the Plan. Recharacterized amounts will
remain nonforfeitable and subject to the same distribution
requirements as Elective Deferrals. Amounts may not be
recharacterized by a Highly Compensated Employee to the extent
that such amount in combination with other Nondeductible
Employee Contributions made by that Employee would exceed any
stated limit under the Plan on Nondeductible Employee
Contributions.
Recharacterization must occur no later than two and one-half
months after the last day of the Plan Year in which such
Excess Contributions arose and is deemed to occur no earlier
than the date the last Highly Compensated Employee is informed
in writing of the amount recharacterized and the consequences
thereof. Recharacterized amounts will be taxable to the
Participant for the Participant's tax year in which the
Participant would have received them in cash.
11.508 DISTRIBUTION OF ELECTIVE DEFERRALS IF EXCESS ANNUAL ADDITIONS
Notwithstanding any other provision of the Plan, a
Participant's Elective Deferrals shall be distributed to him
or her to the extent that the distribution will reduce an
excess annual addition (as that term is described in Section
3.05 of the Plan).
11.600 VESTING
11.601 100% VESTING ON CERTAIN CONTRIBUTIONS
The Participant's accrued benefit derived from Elective
Deferrals, Qualified Nonelective Contributions, Nondeductible
Employee Contributions, and Qualified Matching Contributions
is nonforfeitable. Separate accounts for Elective Deferrals,
Qualified Nonelective Contributions, Nondeductible Employee
Contributions, Matching Contributions, and Qualified Matching
Contributions will be maintained for each Participant. Each
account will be credited with the applicable contributions and
earnings thereon.
11.602 FORFEITURES AND VESTING OF MATCHING CONTRIBUTIONS
Matching Contributions shall be Vested in accordance with the
vesting schedule for Matching Contributions in the Adoption
Agreement. In any event, Matching Contributions shall be fully
Vested at Normal Retirement Age, upon the complete or partial
termination of the profit sharing plan, or upon the complete
discontinuance of Employer Contributions. Notwithstanding any
other provisions of the Plan, Matching Contributions or
Qualified Matching Contributions must be forfeited if the
contributions to which they relate are Excess Elective
Deferrals, Excess Contributions, Excess Aggregate
Contributions or excess annual additions which are distributed
pursuant to Section 11.508. Such Forfeitures shall be
allocated in accordance with Section 3.01(C).
When a Participant incurs a Termination of Employment, whether
a Forfeiture arises with respect to Matching Contributions
shall be determined in accordance with Section 6.01(D).
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Internal Revenue Service Department of the Treasury
Plan Description: Prototype Non-standardized Safe Harbor Profit Sharing Plan COMPREHENSIVE
with CODA
FFN: 50339222705-006 Case: 9700133 EIN: 04-3111116 Washington, DC 20224
BPD: 05 Plan: 006 Letter Serial No: D366033a
Person to Contact: Ms. Arrington
JOHN HANCOCK FUNDS, INC.
Telephone Number: (202) 622-8173
101 HUNTINGTON AVENUE
Refer Reply to: CP:E:EPQ:ICU
BOSTON, MA 02199
Date: 03/04/97
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Coe. It is not an opinion of the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to each Key District Director of
Internal Revenue Service in whose juriadiction there are adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). Therefore, an employer adopting the form of the plan should apply for a
determination letter by filing an application with the Key District Director of
Internal Revenue Service on Form 5307, Short Form Application for Determination
for Employee Benefit Plan.
The form of the plan is a nonstandardized safe harbor plan that meets all the
requirements of section 3 of Rev. Proc. 93-10, 1993-5 I.R.B. 13.
Because you submitted this plan for approval after March 31, 1991, the
continued, interim and extended reliance provisions of section 13 and 17.03 of
Rev. Proc. 89-9, 1989-1 C.B. 780, are not applicable.
Because you submitted this plan after the letter of December 31, 1994, or the
date that was 90 days after the date on which a favorable opinion letter was
issued for your mass submitter's plan, it does not meet the requirements for the
extension of the remedial amendment period provided by Rev. Proc. 95-12, 1995-3
I.R.B. 24.
This letter may not be relied upon with respect to whether the plan satisfies
the qualification requirements as amended by Uruguay Round Agreements Act, Pub.
L. 103-465
If you, the sponsoring organization, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsoring organization. Individual participants and/or
adopting employers with questions concerning the plan should contact the
sponsoring organization. The plan's adoption agreement must include the
sponsoring organization's address and telephone number for inquiries by adopting
employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial Number
and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ John Swieca
----------------------------------
Chief, Employee Plans Technical Branch 1
</TABLE>
