Registration Nos. 2-91948
811-4061
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 X
Pre-Effective Amendment No.
Post-Effective Amendment No. 23 X
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY
ACT OF 1940 X
Amendment No. 22 X
SMITH BARNEY MANAGED GOVERNMENTS FUND INC.
(Exact name of Registrant as specified in Charter)
388 Greenwich Street, New York, New York 10013
(Address of principal executive offices) (Zip Code)
(212) 723-9218
(Registrant's telephone number, including Area Code)
Christina T. Sydor
Secretary
Smith Barney Managed Governments Fund Inc.
388 Greenwich Street
New York, New York 10013
(22nd Floor)
(Name and address of agent for service)
Approximate Date of Proposed Public Offering:
As soon as possible after this Post-Effective Amendment
becomes effective.
It is proposed that this filing will become effective:
X immediately upon filing pursuant to Rule 485(b)
on pursuant to Rule 485(b)
on pursuant to Rule 485(a)
The registrant has previously filed a declaration of
indefinite registration of its shares pursuant
to Rule 24f-2 under the Investment Company Act of 1940.
Registrant's Rule 24f-2 Notice for the fiscal year
ended July 31, 1996 was filed on September 27, 1996 as
Accession Number 0000748826-96-000002.
To Register Additional Securities under Reg. 270.24e-2
Calculation of
Registration Fee
________________________________________________
__
Title of Share Proposed Proposed
Securities Amount Maximum Maximum Amount
of
being being Offering Aggregate
Registration
Registered Registered Price per Offering* Fee
Share
________________________________________________________________________
___
SB Managed Govt 4,052,610 $12.65 $290,000 $100
The fee for the shares to be registered by this filing has been
computed
on the basis of the market value
per share in effect on December 3, 1996.
*Calculation of the proposed maximum offering price has been made
pursuant to Rule 24e-2.
During its fiscal year ended July 31, 1996, the Fund
redeemed 10,384,768
shares. During its current fiscal year, the Fund
used 6,377,918 shares
it redeemed during its fiscal year ended July 31, 1996,
for a reduction
pursuant to Rule 24f-2(c).
During its current fiscal year, the Fund filed no other
post-effective
amendments for the purpose of reduction pursuant to
Rule 24e-2 (a).
SMITH BARNEY MANAGED GOVERNMENTS FUND INC.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contrains the following pages and
documents
Front Cover
Contents Page
Cross-Reference Sheet
Part C - Other Information
Signature Page
Exhibit
SMITH BARNEY MANAGED GOVERNMENTS FUND INC.
FORM N-1A
CROSS REFERENCE SHEET
PURSUANT TO RULE 495(a)
Part A.
Item No. Prospectus Caption
1. Cover Page Cover Page
2. Synopsis Prospectus Summary
3. Condensed Financial Information Financial Highlights;
The Fund's Performance
4. General Description of Registrant Cover Page; Prospectus
Summary;
Purchase of Shares; Investment
Objective and
Management Policies; Additional
Information
5. Management of the Fund Management of the Fund;
Distributor;
Additional Information
6. Capital Stock and Other Securities Purchase of Shares;
Dividends, Distributions
and Taxes; Additional Information
7. Purchase of Securities Purchase of Shares;
Valuation of Shares;
Redemption of Shares; Exchange
Privilege;
Distributor; Additional Information
8. Redemption or Repurchase Purchase of Shares; Redemption
of Shares
9. Legal Proceedings Not Applicable
Part B Statement of
Item No. Additional Information Caption
10. Cover Cover Page
11. Table of Contents Table of Contents
12. General Information Additional
Information ; Distributor
13. Investment Objectives and Policies Investment Objective and
Management
Policies
14. Management of the Fund Management of the Fund;
Distributor
15. Control Persons and Principal Management of the Fund
Holders of Securities
16. Investment Advisory and Other Services Management of the Fund;
Distributor
17. Brokerage Allocation Investment Objective and
Management Policies
18. Capital Stock and Other Securities Purchase of Shares;
Redemption of Share;
Taxes
19. Purchase, Redemption and Pricing of Purchase of Shares;
Redemption of Shares;
Securities Being Offered Distributor; Valuation of
Shares; Exchange Privilege
20. Tax Status Taxes
21. Underwriters Distributor
22. Calculation of Performance Data Performance Data
23. Financial Statements Financial Statements
PART A
The Prospectus of Smith Barney Managed Governments Fund Inc. ("the
Fund") is incorporated by reference to Part A of Post-Effective
Amendment No. 22 to the Fund's Registration Statement filed on November
27, 1996, ("Post-Effective Amendment No. 22") (Accession No. 91155-96-
487).
PART B
The Statement of Additional Information to Smith Barney Managed
Governments Fund Inc. (the "Fund") is incorporated by reference to Part
B of Post Effective Amendment No. 22.
SMITH BARNEY NEW MANAGED GOVERNMENTS FUND INC.
PART C
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Included in Part A:
Financial Highlights
Included in Part B:
The Registrant's Annual Report for the year ended July 31, 1996
and the report of Independent Accountants dated September 23, 1996, are
incorporated by reference to the Definitive 30b-1 filed on October 1,
1996 as Accession # 0000091155-96-000396
Included in Part C:
Consent of Independent Accountants
(b) Exhibits
Exhibit No. Description of Exhibits
All references are to the Registrant's Registration
Statement on Form N-1A (the "Registration Statement") as
filed with the SEC on June 29, 1984 (File Nos. 2-91948 and
811-4061).
(1)(a) Registrant's Articles of Incorporation dated June 18,
1984 are incorporated by reference to the Registration
Statement.
(b) Form of Articles of Amendment to Articles of Incorporation
dated August 20, 1984, May 20, 1988, November 4, 1992,
November 19, 1992, July 30, 1993 and October 14, 1994 and
November 7, 1994, respectively, are incorporated by
reference to Post-Effective Amendment No. 20 to the
Registration Statement filed on November 7, 1994 ("Post-
Effective Amendment No. 20").
(2) Registrant's By-Laws are incorporated by reference to the
Registration Statement.
(3) Not Applicable.
(4)(a) Registrant's form of stock certificate for Class A
shares is incorporated by reference to Pre-Effective
Amendment No. 1 to the Registration Statement as filed with
the SEC on August 8, 1985 ("Pre-Effective Amendment No. 1").
(b) Registrant's form of stock certificate for Class B shares is
incorporated by reference to Post-Effective Amendment No. 13
to the Registration Statement as filed with the SEC on
October 23, 1992 ("Post-Effective Amendment No. 13").
(5) Investment Advisory Agreement dated July 30, 1993 between
the Registrant and Greenwich Street Advisors is incorporated
by reference to Post-Effective Amendment No. 16 to the
Registration Statement as filed with the SEC on September
30, 1993 ("Post-Effective Amendment No. 16")
(b) Form of Transfer of Investment Advisory Agreement dated as
of November 7, 1994, among Registrant, Mutual Management
Corp. and SBMFM is incorporated by reference to Post
Effective Amendment No. 21 dated November 30, 1995.
(6) Distribution Agreement dated July 30, 1993 between the
Registrant and Smith Barney Shearson Inc. is incorporated by
reference to Post-Effective Amendment No. 16.
(7) Not Applicable.
(8) Form of Custody Agreement between the Registrant and PNC
Bank, National Association dated as of July 12, 1995 is
incorporated by reference to Post Effective Amendment No. 21
dated November 30, 1995
(9)(a) Transfer Agency Agreement dated August 2, 1993 between
the Registrant and The Shareholder Services Group, Inc. is
incorporated by reference to Post-Effective Amendment No. 12
to the Registration Statement filed with the SEC on October
23, 1992.
(b) Administration Agreement dated April 20, 1994 between the
Registrant and Smith, Barney Advisers, Inc. ("SBA") is
incorporated by reference to Post-Effective Amendment No.
20.
(10) Not Applicable.
(11)(a) Consent of Independent Accountants is incorporated by
reference to Post-Effective Amendment No. 22 dated November
27, 1996.
(b) Consent of Morningstar Mutual Fund Values is incorporated by
reference to Post-Effective Amendment No. 13.
(12) Not Applicable.
(13) Not Applicable.
(14) Form of Smith Barney Defined Contributions Plan Document is
filed herein.
(15) Amended and Restated Services and Distribution Plan pursuant
to Rule 12b-1 between the Registrant and Smith Barney Inc.
("Smith Barney") is incorporated by reference to Post-
Effective Amendment No. 20.
(16) Performance Data is incorporated by reference to Post-
Effective Amendment No. 7 to the Registration Statement as
filed with the SEC on November 29, 1988.
(17) Financial Data Schedule is filed herewith.
(18) Form of Rule 18f-(3)d Multiple Class Plan A Registrant is
incorporated by reference to
Post Effective Amendment No. 21 dated November 30,
1995.
Item 25. Persons Controlled by or under Common Control with
Registrant
None
Item 26. Number of Holders of Securities
(1) (2)
Number of Record Holders
Title of Class by Class as of October
31, 1996
Common stock, par Class A 27,093
value $.001 per share Class B 7,011
Class C 74
Class Y 5
Item 27. Indemnification
Response to this item is incorporated by reference to Post-
Effective Amendment No. 13.
Item 28(a). Business and Other Connections of Investment Adviser
Investment Adviser and Administrator - - Smith Barney Mutual Funds
Management Inc., formerly
known as Smith, Barney Advisers, Inc. ("SBMFM")
SBMFM, was incorporated in December 1968 under the laws of the State of
Delaware. SBMFM is a wholly owned subsidiary of Smith Barney Holdings
Inc. (formerly known as Smith Barney Shearson Holdings Inc.), which in
turn is a wholly owned subsidiary of Travelers Group Inc. (formerly
known as Primerica Corporation) ("Travelers"). SBMFM is registered as
an investment adviser under the Investment Advisers Act of 1940 (the
"Advisers Act") and has, through its predecessors, been in the
investment counseling business since 1934
The list required by this Item 28 of the officer and directors of SBMFM
together with information as to any other business, profession, vocation
or employment of a substantial nature engaged in by such officer and
directors during the past two fiscal years, is incorporated by reference
to Schedules A and D of FORM ADV filed by SBMFM pursuant to the Advisers
Act (SEC File No. 801-8314).
Item 29. Principal Underwriter
Smith Barney Inc. ("Smith Barney") currently acts as distributor for
Smith Barney Managed Municipals Fund Inc., Smith Barney New York
Municipals Fund Inc., Smith Barney California Municipals Fund Inc.,
Smith Barney Massachusetts Municipals Fund, Smith Barney Global
Opportunities Fund, Smith Barney Aggressive Growth Fund Inc., Smith
Barney Appreciation Fund Inc., Smith Barney Principal Return Fund,
Smith Barney Income Funds, Smith Barney Equity Funds, Smith Barney
Investment Funds Inc., Smith Barney Precious Metals and Minerals Fund
Inc., Smith Barney Telecommunications Trust, Smith Barney Arizona
Municipals Fund Inc., Smith Barney New Jersey Municipals Fund Inc., The
USA High Yield Fund N.V., Garzarelli Sector Analysis Portfolio N.V.,
Smith Barney Fundamental Value Fund Inc., Smith Barney Series Fund,
Consulting Group Capital Markets Funds, Smith Barney Investment Trust,
Smith Barney Adjustable Rate Government Income Fund, Smith Barney
Florida Municipals Fund, Smith Barney Oregon Municipals Fund, Smith
Barney Funds, Inc., Smith Barney Muni Funds, Smith Barney World Funds,
Inc., Smith Barney Money Funds, Inc., Smith Barney Municipal Money
Market Fund., Inc., Smith Barney Variable Account Funds, Smith Barney
U.S. Dollar Reserve Fund (Cayman), Worldwide Special Fund, N.V.,
Worldwide Securities Limited, (Bermuda), Smith Barney International Fund
(Luxembourg) and various series of unit investment trusts.
Smith Barney is a wholly owned subsidiary of Holdings. On June 1,
1994, Smith Barney changed its name from Smith Barney-Shearson Inc. to
its current name. The information required by this Item 29 with respect
to each director, officer and partner of Smith Barney is incorporated by
reference to Schedule A of FORM BD filed by Smith Barney pursuant to the
Securities Exchange Act of 1934 (SEC File No. 812-8510).
Item 30. Location of Accounts and Records
(1) Smith Barney Managed Governments Fund Inc.
388 Greenwich Street
New York, New York, 10013
(2) Smith Barney Mutual Funds Management Inc.
388 Greenwich Street
New York, New York 10013
(3) PNC Bank, National Association
17th and Chestnut Streets
Philadelphia, Pennsylvania 19101
(4) First Data Investor Services Group, Inc.
One Boston Place
Boston, Massachusetts 02109
Item 31. Management Services
Not Applicable
Item 32. Undertakings
The Registrant hereby undertakes to furnish to each person
to whom a prospectus of the Registrant is delivered, a copy
of the Registrant's latest annual report, upon request and
without charge.
Rule 485(b) Certification
The Registrant hereby certifies that it meets all of the
requirements for effectiveness pursuant to Rule 485(b) under the
Securities Act of 1933, as amended.
The Registrant further represents pursuant to Rule
485(b)(2)(iv) that the resignations of Dr. Hardin and Mr. Frankel as
Directors of the Registrant was not due to any disagreement with the
Registrant on any matter relating to its operation, policies or
practices. Messrs. Hardin and Frankel resigned because of increased
board responsibilities for other investment companies and a desire to
reduce travel and minimize scheduling conflicts with other professional
obligations.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, and the Investment Company Act of 1940, as amended, the
Registrant, SMITH BARNEY MANAGED GOVERNMENTS FUND INC., has duly caused
this Amendment to the Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, all in the City of New
York, State of New York on the 6th day of December 1996.
SMITH BARNEY MANAGED GOVERNMENTS
FUND INC.
By: /s/ Heath B. McLendon
Heath B. McLendon,
Chairman of the Board
WITNESS our hands on the date set forth below.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Amendment to the Registration Statement has been signed
below by the following persons in the capacities and on the dates
indicated.
Signature Title Date
/s/ Heath B. McLendon Chairman of the Board
12/06/96
Heath B. McLendon (Chief Executive Officer)
/s/ Lewis E. Daidone Treasurer (Chief Financial 12/06/96
Lewis E. Daidone and Accounting Officer)
/s/ Herbert Barg* Director
12/06/96
Herbert Barg
/s/ Alfred Bianchetti* Director 12/06/96
Alfred Bianchetti
/s/ Martin Brody* Director
12/06/96
Martin Brody
/s/ Dwight Crane* Director
12/06/96
Dwight Crane
/s/ Burt N. Dorsett* Director 12/06/96
Burt N. Dorsett
/s/ Elliot S. Jaffe * Director 12/06/96
Elliot S. Jaffe
/s/ Stephen Kaufman* Director 12/06/96
Stephen Kaufman
/s/ Joseph McCann* Director 12/06/96
Joseph McCann
/s/ Cornelius C. Rose, Jr*. Director 12/06/96
Cornelius C. Rose, Jr.
______________________________________________________________
* Signed by Heath B. McLendon, their duly authorized attorney-in-fact,
pursuant
to power of attorney dated November 27, 1996.
/s/ Heath B. McLendon
Heath B. McLendon
SMITH BARNEY
DEFINED CONTRIBUTION PLAN DOCUMENT #05
PART I: PLAN DOCUMENT
SECTION 1. INTRODUCTION AND CONSTRUCTION
1.1 Introduction. This Smith Barney Prototype Defined Contribution
Plan is established and maintained as a prototype plan by the
Prototype Sponsor for its customers and the customers of its
subsidiaries and affiliates. This Plan shall be adopted as a prototype
plan only with the consent of the Prototype Sponsor or one of its
subsidiaries or affiliates as set forth in the related Adoption
Agreements and shall be maintained as a prototype plan only in
accordance with the terms and conditions set forth in this Plan.
1.2 Controlling Laws. To the extent such laws are not preempted by
federal law, this Plan and the related Adoption Agreement and Trust
Agreement shall be construed and interpreted under the laws of the
state specified in the Adoption Agreement; provided, if Smith Barney
Corporate Trust Company has been appointed as Trustee, the Trust
Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware.
1.3 Construction. The headings and subheadings in this Plan have been
inserted for convenience of reference only and are to be ignored in
the construction of its provisions. Wherever appropriate, the
masculine shall be read as the feminine, the plural as the singular,
and the singular as the plural. References in this Plan to a section
(s) shall be to a section in this Plan unless otherwise indicated.
References in this Plan to a section of the Code, ERISA or any other
federal law shall also refer to the regulations issued under such
section. Unless an alternative option is specified in the Adoption
Agreement, the option identified as the "Standard Option" will
control.
The Employer intends that this Plan and the related Trust Agreement
and Adoption Agreement which are part of this Plan satisfy the
requirements for tax exempt status under Code S401(a), Code S501(a)
and related Code sections and that the provisions of this Plan, the
Trust Agreement and the Adoption Agreement be construed and
interpreted in accordance with the requirements of the Code and the
regulations under the Code.
Further, except as expressly stated otherwise, no provision of this
Plan or the related Trust Agreement or Adoption Agreement is intended
to nor shall grant any rights to Participants or Beneficiaries or any
interest in the Fund in addition to those minimum rights or interests
required to be provided under ERISA and the Code and the regulations
under ERISA and the Code.
Nothing in this Plan or the related Trust Agreement or Adoption
Agreement shall be construed to prohibit the adoption or the
maintenance of this Plan or the Trust Agreement as an individually
designed plan or as a trust agreement which is part of an individually
designed plan, but in such event, the Employer may not rely on the
opinion letter issued to the Prototype Sponsor and the Prototype
Sponsor shall have absolutely no responsibility for such individually
designed plan.
Finally, in the event of any conflict between the terms of this Plan
and the terms of the Trust Agreement or the Adoption Agreement, the
terms of this Plan shall control.
1.4 TRA 86 Amendments. If this Plan is adopted as an amendment to a
Pre-Existing Plan in order to satisfy the requirements of TRA 86, the
retroactive effective date of any provision required under TRA 86 is
intended solely to comply with the Code and is not intended to grant
any substantive rights under ERISA to the extent that such provision
is different from the Pre-Existing Plan as in effect between the
applicable effective date of TRA 86 and the effective date in the
final regulations ("transition years").
SECTION 2. DEFINITIONS
The capitalized terms in this Plan and the related Adoption Agreement
and Trust Agreement shall have the meanings shown opposite those terms
in this S2 and in S3 for purposes of this Plan.
2.1 Account - means the bookkeeping account maintained under this
Plan to show as of any Valuation Date a Participant's interest in the
Fund attributable to the contributions made by or on behalf of such
Participant and the Fund Earnings on such contributions, and an
Account shall cease to exist when exhausted through forfeiture or
distributions made in accordance with this Plan.
2.2 Active Participant - means for purposes of eligibility to receive
an allocation of the Employer Contribution or Forfeitures for each
Plan Year, each Participant who is an Eligible Employee at any time
during the Plan Year and who satisfies the following conditions:
2.2(a) Standard Option.
2.2(a)(1) Standardized Plans. If this Plan is adopted as a
standardized Plan, such Participant (i) is employed as an Eligible
Employee (or on an authorized leave of absence as an Eligible
Employee) on the last day of such Plan Year, (ii) terminated
employment as an Eligible Employee during such Plan Year on or after
Normal Retirement Age or Early Retirement Age or by reason of death or
Disability, or (iii) such Participant is not employed on the last day
of such Plan Year but completed more than 500 Hours of Service during
such Plan Year (or the equivalent period described in S2.2(d) if the
"Elapsed Time" method is specified in the Adoption Agreement).
Notwithstanding the foregoing, if the "Hours of Service" method is
specified in the Adoption Agreement for a Plan Year beginning before
the Final Compliance Date, S2.2(a)(1)(iii) shall not apply and a
Participant who satisfies the requirements of S2.2(a)(1)(i) shall not
be eligible to receive an allocation of the Employer Contribution or
Forfeitures for such Plan Year unless such Participant also is
credited with at least 1,000 Hours of Service in such Plan Year.
2.2(a)(2) If this Plan is adopted as a nonstandardized Plan,
such Participant (i) is employed as an Eligible Employee (or on an
authorized leave of absence as an Eligible Employee) on the last day
of such Plan Year and, if the "Hours of Service" method is specified
in the Adoption Agreement, is credited with at least 1,000 Hours of
Service in such Plan Year, or (ii) terminated employment as an
Eligible Employee during such Plan Year on or after Normal Retirement
Age or Early Retirement Age or by reason of death or Disability.
2.2(b) Alternative. Such Participant satisfies the alternative
conditions specified in the Adoption Agreement.
2.2(c) If this Plan is adopted as a nonstandardized Plan and
fails to satisfy the minimum coverage and participation requirements
of Code S401(a)(26) and S410(b) for any Plan Year beginning on and
after the Final Compliance Date as a result of the application of the
minimum hours or last day employment requirements in this s2.2, such
minimum participation and coverage requirements shall be retroactively
amended by executing a new Adoption Agreement within the applicable
retroactive correction period in the regulations or, if no such
amendment is made, shall be satisfied as follows:
2.2(c)(1) If the Plan utilizes both the minimum hours and last
day employment requirements:
(i) Step 1 - Each Participant who completes at least 1,000 Hours
of Service without regard to whether such Participant is employed on
the last day of the Plan Year shall be deemed to be an Active
Participant for such Plan Year.
(ii) Step 2 - If the minimum participation and coverage
requirements are not satisfied after the application of Step 1, then
each Participant who completes more than 500 Hours of Service and who
is employed on the last day of the Plan Year shall be deemed to be an
Active Participant for such Plan Year.
(iii) Step 3 - If the minimum participation and coverage
requirements are not satisfied after the application of Step 1 and
Step 2, then each Participant who is not employed on the last day of
the Plan Year but who completed more than 500 Hours of Service in such
Plan Year also shall be deemed to be an Active Participant.
(iv) Step 4 - If the minimum participation and coverage
requirements are not satisfied after the application of Steps 1
through 3, then each Participant who satisfies the last day of
employment requirement also shall be deemed to be an Active
Participant without regard to the number of Hours of Service actually
completed by such Participant during such Plan Year.
2.2(c)(2) If the Plan utilizes only the last day employment
requirement, each Participant who is not employed on the last day of
the Plan Year but who completed more than 500 Hours of Service in such
Plan Year (or the equivalent period described in S2.2(d) if the
"Elapsed Time" method is specified in the Adoption Agreement) also
shall be deemed to be an Active Participant.
2.2(c)(3) If the Plan utilizes only the minimum hours
requirement:
(i) Step 1 - Each Participant who completes more than 500 Hours
of Service without regard to whether such Participant is employed on
the last day of the Plan Year shall be deemed to be an Active
Participant.
(ii) Step 2 - If the minimum participation and coverage
requirements are not satisfied after the application of Step 1, then
each Participant who is employed on the last day of the Plan Year
shall be deemed to be an Active Participant.
2.2(d) Special Elapsed Time Equivalency Rule. If the "Elapsed Time"
method is specified in the Adoption Agreement, a Participant shall be
treated as completing more than 500 Hours of Service during such Plan
Year for purposes of this S2.2 if, during such Plan year, the
Participant completes more than
(A) Standard Option - 91 consecutive calendar days of
employment, or
(B) Alternative - if so specified in the Adoption Agreement, 3
consecutive calendar months of employment.
2.3 Adoption Agreement- means the agreement by which the Employer
adopted this Plan.
2.4 Affiliate - means at any time (a) any parent, subsidiary or
sister corporation which at such time is a member of a controlled
group of corporations (as defined in Code S414(b)) with the Employer,
(b) any trade or business, whether or not incorporated, which at such
time is considered to be under common control (as defined in Code
S414(c)) with the Employer, (c) any person or organization which at
such time is a member of an affiliated service group (as defined in
Code S414(m)) with the Employer, and (d) any other organization which
at such time is required to be aggregated with the Employer under Code
S414(o).
2.5 Allocation Date - means for a 401(k) Plan the respective dates
specified in the Adoption Agreement as of which Matching
Contributions, Qualified Matching Contributions and Qualified
Nonelective Contributions, as applicable, are made.
2.6 Average Annual Compensation - means for a Target Benefit Plan the
average of an Employee's Compensation for the consecutive Plan Year
period specified in the Adoption Agreement during which such average
is the highest, or if such Employee's entire period of participation
in the Plan is less than the number of Plan Years so specified, the
Employee's Average Annual Compensation shall be determined by
averaging (on an annual basis) the Employee's Compensation for his or
her actual period of participation. For purposes of determining a
Participant's Average Annual Compensation for any Plan Year beginning
after the Final Compliance Date, the annual Compensation taken into
account for any prior Plan Year shall not exceed (a) for Plan Years
beginning before January 1, 1990, $200,000 and (b) for Plan Years
beginning on or after January 1, 1990, the annual Compensation limit
described in S2.10(e) in effect for such prior Plan Year.
2.7 Beneficiary - means for each Participant the person or persons so
designated in writing by the Participant on a properly completed
Election Form. However, if no such designation is made, if no person
so designated survives the Participant, or if after checking the last
known mailing address the whereabouts of the person so designated is
unknown and no death benefit claim is submitted to the Plan
Administrator by such person within one year after the Participant's
date of death, the Beneficiary shall be deemed to be (a) the
Participant's surviving Spouse, or if there is no surviving Spouse,
(b) the personal representative of such Participant in his or her
fiduciary capacity, if any has qualified within one year from the date
of the Participant's death, or if no personal representative has so
qualified or remains so qualified, (c) any person determined by a
court of competent jurisdiction to be the Participant's Beneficiary
for this purpose. If a Beneficiary is not identified and located
within 3 years of the Participant's date of death, S9.6, Missing
Person, shall control the distribution of the Participant's Account.
2.8 Board - means (a) for any Employer which is a corporation, the
Board of Directors of such Employer and (b) for any Employer which is
not a corporation, the person or persons duly authorized to act on
behalf of such Employer.
2.9 Code - means the Internal Revenue Code, as amended.
2.10 Compensation.
2.10(a) Common Law Employees. For an Employee who is not a Self-
Employed Individual or a Leased Employee, the term "Compensation"
means for any determination period
2.10(a)(1) Standard Option - the total compensation which is
actually paid (in cash or other benefits) by the Employer or any
Participating Affiliate to such Employee for such period and which is
reportable to the Internal Revenue Service on Form W-2 as wages within
the meaning of Code S3401(a) and all other payments of compensation to
such Employee from the Employer or Participating Affiliate (in the
course of its trade or business) for which a written statement is
required to be furnished to the Employee under Code S6041(d), Code
S6051(a)(3) and Code S6052. Such Compensation shall be determined
without regard to any rules under Code S3401(a) that limit the
remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for
agricultural labor in Code S3401(a)(2)), or
2.10(a)(2) Alternative - if so specified in the Adoption
Agreement, the total compensation which is actually paid (in cash or
other benefits) by the Employer or any Participating Affiliate to such
Employee for such period and which is
(i) considered as wages within the meaning of Code S3401(a) for
the purposes of federal income tax withholding at the source but
determined without regard to any rules under Code S3401(a) that limit
the remuneration included in wages based on the nature or location of
the employment or the services performed (such as the exception for
agricultural labor in Code S3401(a)(2)),
(ii) considered as compensation within the meaning of Code
S415(c)(3) as described in S7.2(a)(2)(ii)(B),
(iii) for a nonintegrated nonstandardized Plan (other than a
Target Benefit Pension Plan), compensation identified on the payroll
records of the Employer or Participating Affiliate as regular or base
salary or wages (whether hourly, weekly, monthly, annually or
otherwise) and, if so specified in the Adoption Agreement, overtime,
bonuses, commissions, and/or other specific compensation, or
(iv) compensation as described in S2.10(a)(1), S2.10(a)(2)(i) or
S2.10(a)(2)(ii), reduced by all of the following items (even if
includable in gross income): reimbursements or other expense
allowances, fringe benefits (cash and noncash), moving expenses,
deferred compensation and welfare benefits, or
2.10(b) Self-Employed. For an Employee who is a Self-Employed
Individual, the term "Compensation" means the Employee's Earned Income
for such period.
2.10(c) Leased Employees. All compensation paid by a leasing
organization to a Leased Employee for personal services rendered to
the Employer or a Participating Affiliate for such period shall be
treated as Compensation to the extent required under Code S414(n).
2.10(d) Determination Period. For purposes of this definition and
unless otherwise specified in this Plan or the Adoption Agreement, the
phrase "determination period" means
2.10(d)(1) Standard Option - the Plan Year or
2.10(d)(2) Alternative - the calendar year or other 12
consecutive month period ending with or within the Plan Year specified
in the Adoption Agreement.
2.10(e) Limitation. No more than $200,000 (as adjusted in
accordance with Code S401(a)(17)) shall be taken into account under
this Plan for any determination period beginning on or after January
1, 1989. The annual Compensation limit under this S2.10(e) for any
determination period shall be adjusted in accordance with Code
S401(a)(17) for the calendar year in which such determination period
begins.
If the determination period is less than 12 months as a result of a
short Plan Year, the annual Compensation limit under this S2.10(e)
shall equal the annual limit for such determination period multiplied
by a fraction, the numerator of which is the number of full months in
such period and the denominator of which is 12.
For purposes of this Compensation limit, the family aggregation
rules of Code S414(q)(6) shall be applied by aggregating only the
Participant's spouse and lineal descendants who have not reached age
19 before the end of such determination period. If the limit is
exceeded for any determination period as a result of the application
of the family aggregation rule, the limit shall be prorated among the
individuals affected by this limit in proportion to each such
individual's Compensation for such determination period as determined
under this S2.10 before the application of this S2.10(e). However, if
this Plan is adopted as an integrated plan, the preceding sentence
shall not apply for purposes of determining the portion of
Compensation which does not exceed the Integration Level.
2.10(f) Salary Reductions. Any amount which is contributed by the
Employer or any Participating Affiliate pursuant to a salary reduction
agreement which is not currently includable in an Employee's gross
income under Code S125, S402(e)(3), S402(h) or S403(b)
2.10(f)(1) Standard Option - shall be included in an Employee's
Compensation, or
2.10(f)(2) Alternative - if so specified in the Adoption
Agreement, shall not be included in an Employee's Compensation.
2.10(g) Special Rules.
2.10(g)(1) If so specified in the Adoption Agreement, an
Employee's Compensation shall not include Compensation which is paid
to the Employee for periods ending before the Entry Date on which the
Employee becomes a Participant.
2.10(g)(2) If this Plan is adopted as an amendment and
restatement of a Pre-Existing Plan, this definition shall be effective
for Plan Years beginning on or after January 1, 1989 unless a later
effective date is specified in the Adoption Agreement; provided, the
$200,000 limitation of S2.10(e) shall not be effective later than the
first day of the first Plan Year beginning on or after January 1, 1989
and any such later effective date specified in the Adoption Agreement
for the other provisions of this S2.10 shall not be later than the
Final Compliance Date.
2.10(g)(3) If so specified in the Adoption Agreement for a
nonstandardized Plan, a Participant's Compensation in excess of the
dollar amount or percentage specified in the Adoption Agreement shall
not be taken into account for purposes of determining the amount or
allocation of any contributions made by or on behalf of such
Participant under this Plan.
2.10(g)(4) If so specified in the Adoption Agreement for a
nonstandardized Plan, the Compensation of a Participant who is a
Highly Compensated Employee shall not include the specific types of
Compensation specified in the Adoption Agreement.
2.11 Covered Compensation - means for each Participant for each Plan
Year beginning on or after January 1, 1989, the average (without
indexing) of the Taxable Wage Bases in effect under the Social
Security Act for each calendar year during the 35-year period ending
with the last day of the calendar year in which the Participant
attains (or will attain) Social Security Retirement Age, determined by
assuming that the Taxable Wage Base for all future years shall be the
same as the Taxable Wage Base in effect as of the beginning of such
Plan Year.
A Participant's Covered Compensation for a Plan Year beginning before
the 35-year period ending with the last day of the calendar year in
which the Participant attains Social Security Retirement Age is the
Taxable Wage Base in effect as of the beginning of the Plan Year. A
Participant's Covered Compensation for a Plan Year beginning after
such 35-year period is the Participant's Covered Compensation for the
Plan Year during which the 35-year period ends.
However, a Participant's Covered Compensation shall automatically be
adjusted each Plan Year and any increase in a Participant's Covered
Compensation shall not result in a decrease in the Participant's
accrued benefit which would be impermissible under Code S411(b)(1)(G)
or S411(d)(6).
For purposes of this S2.11, Social Security Retirement Age means (a)
age 65 in the case of a Participant who was born before January 1,
1938, (b) age 66 for a Participant who was born after December 31,
1937, but before January 1, 1955, and (c) age 67 for a Participant who
was born after December 31, 1954.
2.12 Disability or Disabled - means an individual's inability to
engage in any substantially gainful activity at the individual's
customary level of compensation or competence and responsibility as an
Employee due to any medically determinable physical or mental
impairment or impairments which may be expected to result in death or
to last for a continuous period of at least 12 months as determined by
a qualified physician or other medical practitioner selected by the
Plan Administrator for this purpose in accordance with uniform and
nondiscriminatory standards.
2.13 Early Retirement Age - means
2.13(a) Standard Option - the Normal Retirement Age or
2.13(b) Alternative - the alternative Early Retirement Age
specified in the Adoption Agreement.
2.14 Earned Income - means for any Self-Employed Individual for any
period the net earnings from self-employment (as defined in Code
S1402(a)) for such period from the Employer or any Participating
Affiliate for which the personal services of such Employee are a
material income-producing factor, where such net earnings are (a)
determined without regard to items not included in gross income for
purposes of Chapter 1 of the Code and the deductions properly
attributable to such items, (b) determined with regard to the
deduction allowed to the Self-Employed Individual under Code S164(f)
for taxable years beginning after December 31, 1989, and (c) reduced
by the contributions made on behalf of such Employee to any qualified
plan (as described in Code S401(a)) maintained by the Employer or any
Participating Affiliate to the extent such contributions are
deductible under Code S404.
2.15 Effective Date - means the effective date of the Employer's
adoption or amendment of this Plan as specified in the Adoption
Agreement. However, if this Plan is adopted as an amendment and
restatement of a Pre-Existing Plan, certain provisions of this Plan
may be effective retroactive to Plan Years beginning before such
Effective Date or may be effective at a date later than such Effective
Date as specified in this Plan document or in the Adoption Agreement.
2.16 Election Form - means the form or forms provided by or
acceptable to the Plan Administrator for making the elections and
designations called for under this Plan and no such form shall become
effective unless properly completed and timely delivered to the Plan
Administrator in accordance with the terms of this Plan and such rules
as the Plan Administrator shall adopt from time to time.
2.17 Elective Deferral - means the nonforfeitable contribution made
to the Fund by the Employer or a Participating Affiliate on a
Participant's behalf under S5.3(f).
2.18 Elective Deferral Account - means the subaccount established as
part of a Participant's Account to record the Participant's Elective
Deferrals and the Fund Earnings attributable to such contributions.
2.19 Eligible Employee - means
2.19(a) Standard Option - each Employee of the Employer or a
Participating Affiliate other than
2.19(a)(1) an Employee who is included in a unit of employees
covered by a collective bargaining agreement between the Employer and
employee representatives which agreement does not provide for
participation in this Plan if retirement benefits under this Plan were
the subject of good faith bargaining; provided, however, that
(i) the term "employee representatives" shall not include an
organization more than half of whose members are employees who are
owners, officers or executives of the Employer, and
(ii) an Employee shall not be treated as covered under a
collective bargaining agreement if more than 2% of the Employees
covered under such agreement are "professionals" (as defined in
S1.410(b)-9(g) of the Federal Income Tax Regulations); and
2.19(a)(2) an Employee who is a nonresident alien (within the
meaning of Code S7701(b)(1)(B) and who receives no earned income
(within the meaning of Code S911(d)(2)) from the Employer or any
Participating Affiliate which constitutes income from sources within
the United States (within the meaning of Code S861(a)(3)).
2.19(b) Alternative - If this Plan is adopted as a
nonstandardized Plan, the Employer may specify in the Adoption
Agreement a category of Employees who shall not be treated as Eligible
Employees under this Plan. However, the Plan must satisfy on a
continuing basis the nondiscrimination rules under Code S401(a)(4),
the coverage rules under Code S410(b), and the minimum participation
rules under Code S401(a)(26).
2.20 Employee - means each person who is treated as an employee of
the Employer or an Affiliate which is required to be aggregated with
the Employer under Code S414(b), S414(c), S414(m) or S414(o) including
(a) a common-law employee (whether full-time, part-time, regular,
temporary or otherwise), (b) a Self-Employed Individual, (c) an Owner-
Employee, (d) a Leased Employee and (e) each person who is deemed to
be an employee under Code S414(o).
2.21 Employee Account - means the subaccount established as part of a
Participant's Account to record (1) the Participant's Employee
Contributions under this Plan, (2) the Participant's nondeductible
employee contributions, if any, under a Pre-Existing Plan or a plan
which is merged into this Plan under S14.5, and (3) the Fund Earnings
attributable to such contributions. If a separate account was not
maintained for contributions under other plans as described in clause
(2) above, the account balance attributable to such contributions
shall be the Participant's total account balance under such other
plans multiplied by a fraction, the numerator of which is the total
amount of the Participant's nondeductible employee contributions (less
withdrawals) and the denominator of which is the sum of the numerator
and the total contributions made by the Employer on behalf of the
Participant (less withdrawals). For purposes of calculating such
fraction, contributed amounts used to provide ancillary benefits shall
be treated as contributions and only amounts actually distributed to
the Participant (but not amounts which reflect the cost of any death
benefits) shall be treated as withdrawals.
2.22 Employee Contribution - means any contribution made by or on
behalf of a Participant to the Fund under S5.3(g) that is includable
in the Participant's gross income for the year in which made.
2.23 Employer - means the sole proprietorship, partnership or
corporation identified as the Employer in the Adoption Agreement and
any successor in interest to such organization.
2.24 Employer Account - means the subaccount established as part of a
Participant's Account to record the Participant's share of the
Employer Contributions and Forfeitures and the Fund Earnings
attributable to such amounts.
2.25 Employer Contribution - means the contributions made by the
Employer and by any Participating Affiliate to the Fund under S5.1,
S5.2, S5.3(e) or S5.4.
2.26 Entry Date - means
2.26(a) Standard Option - the first day of each Plan Year and the
first day of the 7th month in each Plan Year or
2.26(b) Alternative - the alternative Entry Date specified in the
Adoption Agreement.
2.27 ERISA - means the Employee Retirement Income Security Act of
1974, as amended.
2.28 Family Members - means for any year, with respect to a Highly
Compensated Employee who is a 5% owner or who is in the group
consisting of the 10 Highly Compensated Employees paid the greatest
Compensation during such year, (a) such individual's spouse, (b) such
individual's lineal ascendants and lineal descendants and (c) the
spouses of such lineal ascendants or descendants as determined under
Code S414(q)(6).
2.29 Final Compliance Date - means the first day of the first Plan
Year beginning after December 31, 1993 or such other applicable
effective date of the final nondiscrimination and other TRA 86
regulations.
2.30 Forfeiture - means the portion of an Account of a Participant
which is deducted from such Account in accordance with the terms of
this Plan.
2.31 401(k) Plan - means this Plan as adopted by entering into the
Standardized 401(k) Plan Adoption Agreement or the Nonstandardized
401(k) Plan Adoption Agreement.
2.32 Fund - means the trust fund created in accordance with this
Plan and the Trust Agreement which is a part of this Plan.
2.33 Fund Earnings - means for each period ending on a Valuation Date
the investment gains and losses (whether realized or unrealized),
income and expenses (other than expenses allocable directly to a
specific Account) of the Fund for such period as determined based on
the fair market value of the assets of the Fund on such Valuation
Date.
2.34 Highly Compensated Employee - means a highly compensated
employee within the meaning of Code S414(q) (as described in
S7.4(a)(5)).
2.35 Integration Level - means the amount of Compensation specified
in the Adoption Agreement at or below which the rate of contributions
or benefits (expressed as a percentage of such Compensation) provided
under the Plan is less than the rate of contributions or benefits
(expressed as a percentage of such Compensation) provided under the
Plan with respect to Compensation above such amount. The Integration
Level for any Plan Year shall not exceed the Taxable Wage Base in
effect at the beginning of such Plan Year.
2.36 Leased Employee - means for each Plan Year beginning on or after
January 1, 1987 each person who is not a common-law employee of the
Employer or an Affiliate, but who, pursuant to an agreement between
the Employer or an Affiliate ("recipient") and any other person
("leasing organization"), has performed services for the recipient or
the recipient and a related person (as determined in accordance with
Code S414(n)(6)) on a substantially full-time basis for a period of at
least one year, which services are of a type historically performed by
employees in the business field of the recipient or related person for
whom such services are being performed. However, subject to the rules
set forth in the regulations under Code S414(n), such person shall not
be treated as a Leased Employee if (a) the total number of such
persons does not constitute more than 20% of the total nonhighly
compensated work force of the recipient and (b) such person is covered
by a money purchase pension plan which is maintained by the leasing
organization and which provides for (1) a nonintegrated employer
contribution rate of at least 10% of compensation (as defined in Code
S415(c)(3) but including amounts contributed pursuant to a salary
reduction agreement which are excludable from the individual's gross
income under Code S125, S402(e)(3), S402(h) or S403(b)), (2) immediate
participation and (3) full and immediate vesting.
2.37 Matching Account - means the subaccount established as part of a
Participant's Account to record the Matching Contributions made on the
Participant's behalf under this Plan and the Fund Earnings
attributable to such contributions.
2.38 Matching Contribution - means the contribution made by the
Employer and by any Participating Affiliate to the Fund under S5.3(b)
by reason of a Participant's Elective Deferrals or Employee
Contributions.
2.39 Maximum Disparity Rate - means
2.39(a) Standard Option - if the Integration Level is equal to the
Taxable Wage Base, the greater of 5.7% or the portion of the tax rate
under Code S3111(a) which is attributable to old-age insurance as in
effect on the first day of such Plan Year, and
2.39(b) Alternative - if the Integration Level is less than the
Taxable Wage Base, the applicable percentage determined in accordance
with the following table, where
X = the greater of $10,000 or 20% of the Taxable Wage Base
TWB = the Taxable Wage Base
If the Integration Level
Is More ThanBut Not More Than Applicable Percentage
$0 X 5.7 %
X 80% of TWB 4.3 %
80% of TWB 100% of TWB 5.4 %
or, if the portion of the tax rate under Code S3111(a) which is
attributable to old-age insurance as in effect on the first day of
such Plan Year is greater than 5.7 %, the applicable percentage in the
table above shall be such portion of the tax rate, proportionately
reduced in the same manner as the 5.7% amount in the table above.
2.40 Money Purchase Pension Plan - means this Plan as adopted by
entering into the Standardized Money Purchase Pension Plan Adoption
Agreement or the Nonstandardized Money Purchase Pension Plan Adoption
Agreement.
2.41 Net Profits -
2.41(a) Standard Option. The term "Net Profits" means
2.41(a)(1) for an Employer or Participating Affiliate other than a
non-profit entity, the current or accumulated earnings for the taxable
year for which the Employer contribution is made as determined before
federal and state taxes and contributions to this Plan or any other
qualified plan, or
2.41(a)(2) for an Employer or Participating Affiliate which is a
non-profit entity, the current or accumulated excess of receipts over
disbursements for the fiscal year for which the Employer contribution
is made.
2.41(b) Alternative. The Employer may specify in an alternative
definition of Net Profits in the Adoption Agreement.
2.42 Nonhighly Compensated Employee - means each Employee who is
neither a Highly Compensated Employee nor a Family Member.
2.43 Normal Retirement Age -
2.43(a) General. The term "Normal Retirement Age" means
2.43(a)(1) Standard Option - age 65 or
2.43(a)(2) Alternative - the alternative Normal Retirement Age
specified in the Adoption Agreement.
2.43(b) Special Rules
2.43(b)(1) Mandatory Retirement Age. If, consistent with
applicable age discrimination law, the Employer enforces a mandatory
retirement age, the Normal Retirement Age shall be the earlier of (1)
the date the Participant reaches such mandatory retirement age or (2)
the date the Participant reaches age 65 or, if an alternative is
specified in the Adoption Agreement, the date the Participant reaches
Normal Retirement Age as specified in the Adoption Agreement.
2.43(b)(2) Transitional Rule. If
(i) the normal retirement age under the terms of the Pre-
Existing Plan as in effect for Plan Years beginning before January 1,
1988 was determined with reference to an anniversary of the date on
which a Participant commenced participation in such plan
("participation commencement date"),
(ii) such anniversary was later than the 5th anniversary of the
participation commencement date,
(iii) the Normal Retirement Age specified in the Adoption
Agreement is determined with reference to an anniversary of the
participation commencement date, and
(iv) this transitional rule is specified in the Adoption
Agreement,
then the anniversary for any Participant whose participation
commencement date occurred in a Plan Year beginning before January 1,
1988 shall be the earlier of (A) the anniversary under the terms of
the Pre-Existing Plan, or (B) the 5th anniversary of the first day of
the first Plan Year beginning after December 31, 1987.
2.44 Owner-Employee - means each Self-Employed Individual who is (a)
a sole proprietor of the Employer or a Participating Affiliate or (b)
a partner owning more than 10% of either the capital or profits
interest of the Employer or a Participating Affiliate.
2.45 Paired Plans - means (a) a combination of two or more
standardized defined contribution Plans under this Smith Barney
Prototype Defined Contribution Plan (Plan Document #05) or (b) a
combination of one or more such standardized defined contribution
Plans with a standardized defined benefit plan under the Smith Barney
Prototype Defined Benefit Plan (Plan Document #06). However, such
Plans shall be treated as Paired Plans only if (1) such Paired Plans
have the same Plan Year, and (2) no more than one such plan is
integrated with social security.
2.46 Participant - means (a) an Eligible Employee who has satisfied
the Participation Requirement specified in the Adoption Agreement and
has become a Participant in accordance with S4, and (b) any individual
for whom an Account continues to exist under the Plan.
2.47 Participating Affiliate - means (a) if this Plan is a
standardized Plan, each Affiliate of the Employer or (b) if this Plan
is a nonstandardized Plan, each Affiliate which participates in this
Plan, as set forth in S14.1(c) of the Plan; provided, an Affiliate
automatically shall cease to be a Participating Affiliate if, and at
the time, it ceases to be an Affiliate as set forth in S14.6(a).
2.48 Participation Requirement - means
2.48(a) Standard Option - attainment of age 21 and completion of a
waiting period equal to one Year of Service or
2.48(b) Alternative - the alternative minimum age and waiting
period requirement specified in the Adoption Agreement.
2.49 Plan - means this Smith Barney Prototype Defined Contribution
Plan, as adopted by the Employer in the form of a Profit Sharing Plan,
a 401(k) Plan, a Money Purchase Pension Plan or a Target Benefit
Pension Plan, and as amended from time to time in accordance with
S14.2.
2.50 Plan Administrator - means
2.50(a) Standard Option - the Employer or
2.50(b) Alternative - the person or persons designated in writing
by the Employer as the Plan Administrator for this Plan.
2.51 Plan Year - means the 12 consecutive month period or the 52/53
week period which ends on the date specified in the Adoption
Agreement; provided, however, if this Plan is adopted as a new Plan,
the first Plan Year shall be the period beginning on the Effective
Date and ending on the date specified in Adoption Agreement.
2.52 Pre-Existing Plan - means the Employer's prior defined
contribution plan and the related trust agreement or other funding
arrangement which is described in the Adoption Agreement and which is
amended and restated in the form of this Plan.
2.53 Profit Sharing Plan - means this Plan as adopted by entering
into the Standardized Profit Sharing Plan Adoption Agreement or the
Nonstandardized Profit Sharing Plan Adoption Agreement.
2.54 Prototype Sponsor - means Smith Barney Inc. and any successor to
such corporation.
2.55 Qualified Matching Contribution - means the contribution made by
the Employer and by any Participating Affiliate to the Fund under
S5.3(c) by reason of a Participant's Elective Deferrals or Employee
Contributions.
2.56 Qualified Matching Account - means the subaccount established as
part of a Participant's Account to record the Qualified Matching
Contributions made on the Participant's behalf under this Plan and the
Fund Earnings attributable to such contributions.
2.57 Qualified Nonelective Contribution - means the contribution
(other than Matching Contributions, Qualified Matching Contributions
and Employer Contributions) made by the Employer and by any
Participating Affiliate to the Fund under S5.3(d).
2.58 Qualified Nonelective Account - means the subaccount established
as part of a Participant's Account to record the Qualified Nonelective
Contributions made on the Participant's behalf under this Plan and the
Fund Earnings attributable to such contributions.
2.59 Rollover Account - means the subaccount established as part of a
Participant's Account to record the Participant's Rollover
Contributions and the Fund Earnings attributable to such
contributions.
2.60 Rollover Contribution - means (a) a contribution of an amount,
or more than one amount, which satisfies the applicable rollover
requirements under Code S402 or Code S408 made by a Participant to the
Fund under S5.5 and (b) effective January 1, 1993, an eligible
rollover distribution which is directly transferred to the Fund on or
after such date pursuant to a Participant's election under Code
S401(a)(31).
2.61 Self-Employed Individual - means an individual who is self-
employed and who receives Earned Income from the Employer or a
Participating Affiliate or who would have received such Earned Income
but for the fact that the Employer or the Participating Affiliate did
not have Net Profits.
2.62 Spouse - means the person who is lawfully married to the
Participant on the date the Participant's Account becomes payable
under this Plan or, if a Participant dies before such date, the person
who was lawfully married to such Participant on the Participant's date
of death. However, a former spouse shall be treated as the Spouse and
a current spouse shall not be treated as the Spouse to the extent
provided under a qualified domestic relations order as described in
Code S414(p).
2.63 Target Benefit Pension Plan - means this Plan as adopted by
entering into the Standardized Target Benefit Pension Plan Adoption
Agreement or the Nonstandardized Target Benefit Pension Plan Adoption
Agreement.
2.64 Taxable Wage Base - means for any Plan Year the contribution and
benefit base in effect under S230 of the Social Security Act at the
beginning of such Plan Year.
2.65 TRA 86 - means the Tax Reform Act of 1986 ("Act") and any other
legislation and related regulations, notices or other guidance for
which amendments are required to be made at the same time as
amendments for such Act.
2.66 Trust Agreement - means the trust agreement between the Employer
and the Trustee which is established as part of this Plan and which is
set forth in the attached Smith Barney Prototype Defined Contribution
Plan Trust Agreement or, if so specified in the Adoption Agreement for
a 401(k) Plan, the Smith Barney Prototype Defined Contribution Plan
Alternative Trust Agreement for 401(k) Plans.
2.67 Trustee - means the person or persons specified in the Adoption
Agreement who serve as the trustee for the Fund under the Trust
Agreement and any successor to such person or persons.
2.68 Valuation Date - means (a) the last day of each Plan Year and
(b) each other date, if any, agreed upon in advance by the Employer
and the Trustee, provided the selection of such other date does not
result in discrimination in favor of Highly Compensated Employees
which would be prohibited under Code S401(a).
SECTION 3. SERVICE DEFINITIONS AND RULES
The definitions and rules in this S3 shall apply for purposes of
measuring an Employee's service (a) for participation purposes - to
determine when the Employee has satisfied the Participation
Requirement and (b) for vesting purposes - to determine the
nonforfeitable interest in his or her Account.
3.1 Hour of Service Method (Standard Option). The definitions and
rules in this S3.1 shall apply unless the "Elapsed Time" method of
crediting service is specified in the Adoption Agreement.
3.1(a) Break in Service.
3.1(a)(1) General. The term "Break in Service" means each
Computation Period during which an Employee fails to complete more
than 500 Hours of Service.
3.1(a)(2) Maternity/Paternity Rule. Solely for purposes of
determining whether an Employee has a Break in Service, an Employee
who is absent from work for "maternity or paternity reasons" and who
timely furnishes proof of the reason for such absence (in accordance
with such nondiscriminatory rules as may be established by the Plan
Administrator and communicated to Employees) shall be credited with
each Hour of Service for which the Employee would otherwise have been
credited but for such absence, or if such Hours of Service cannot be
determined, with 8 Hours of Service for each day of such absence.
However, the total number of Hours of Service so credited to such
Employee shall not exceed 501 Hours of Service. The Hours of Service
so credited shall be credited to the Computation Period in which such
absence begins if such credit is necessary to prevent a Break in
Service in such Computation Period or, if such credit is unnecessary,
in the immediately following Computation Period. For purposes of this
special maternity/paternity rule, an absence for "maternity or
paternity reasons" means an absence (i) by reason of the pregnancy of
the Employee, (ii) by reason of the birth of a child of the Employee,
(iii) by reason of the placement of a child with the Employee in
connection with the adoption of such child by such Employee, or (iv)
for purposes of caring for such child for a period beginning
immediately following such birth or placement.
3.1(b) Computation Period.
3.1(b)(1) The term "Computation Period" for purposes of
determining Years of Service and Breaks in Service means the
applicable period described in this S3.1(b).
3.1(b)(2) Vesting. The relevant Computation Period for measuring
Years of Service and Breaks in Service for vesting purposes shall be
(i) Standard Option - the Plan Year or
(ii) Alternative - if so specified in the Adoption Agreement,
(A) the 12 consecutive month period which begins on the date the
Employee first performs an Hour of Service ("hire date") and ends on
the date immediately preceding the first anniversary of such hire date
and (B) each 12 consecutive month period thereafter beginning on each
anniversary of such hire date and ending on the date immediately
preceding the next anniversary of such date.
3.1(b)(3) Participation. The initial Computation Period for
measuring Years of Service and Breaks in Service for participation
purposes shall be the 12 consecutive month period which begins on the
first day an Employee first performs an Hour of Service as an Employee
("hire date") and ends on the date immediately preceding the first
anniversary of such date. Each subsequent Computation Period shall be
(i) Standard Option - each Plan Year, beginning with the Plan
Year which begins before the first anniversary of the Employee's hire
date (regardless of whether the Employee is credited with 1,000 Hours
of Service in the Employee's initial Computation Period). An Employee
shall be credited with two Years of Service for participation purposes
if the Employee completes 1,000 or more Hours of Service in both the
initial Computation Period and the first Plan Year which begins within
such initial Computation Period, or
(ii) Alternative - if so specified in the Adoption Agreement,
the 12 consecutive month period which begins on each anniversary of an
Employee's hire date and ends on the date immediately preceding the
next anniversary of the Employee's hire date.
For participation purposes, an Employee shall be credited with a
Year of Service
(A) Standard Option - on the last day of the Computation Period
in which the Employee is credited with at least 1,000 Hours of Service
(or such lesser number of hours specified in the Adoption Agreement)
or
(B) Alternative - on the first date on which the Employee is
credited with at least 1,000 Hours of Service (or such lesser number
of hours specified in the Adoption Agreement) provided the Employee
completes such specified number of Hours of Service in one Computation
Period.
Notwithstanding the foregoing, if the Participation Requirement
includes a partial Year of Service, no minimum number of Hours of
Service shall be required for such partial year and an Employee shall
be credited with such partial Year of Service on the date on which
such partial period of service is completed.
3.1(b)(4) Change in Computation Period. If an amendment results
in a change in the Computation Period, the first Computation Period
established under such amendment shall begin before the last day of
the preceding Computation Period and each Employee to whom both such
Computation Periods apply and who completes 1,000 or more Hours of
Service in both such Computation Periods shall be credited with one
Year of Service for each such Computation Period.
3.1(c) Hour of Service.
3.1(c)(1) General. The term "Hour of Service" means
(i) each hour for which an Employee is paid, or entitled to
payment, by the Employer or an Affiliate for the performance of duties
as an Employee, which hours shall be credited to the Employee for the
relevant Computation Period in which such duties are performed;
(ii) each hour for which an Employee is paid, or entitled to
payment, by the Employer or an Affiliate 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; provided (A) no more than 501 hours
shall be credited under this clause (ii) for any single continuous
period during which no duties are performed (whether or not such
period covers more than one relevant Computation Period) and (B) hours
under this clause (ii) shall be calculated and credited pursuant to
S2530.200b-2 of the Department of Labor Regulations which are
incorporated as part of this Plan by this reference; and
(iii) each hour for which back pay, irrespective of mitigation
of damages, is either awarded or agreed to by the Employer or an
Affiliate; provided (A) no credit shall be given for an hour described
in this clause (iii) if credit also is given for such hour under
clause (i) or clause (ii), and (B) an hour described in this clause
(iii) shall be credited to the Employee for the relevant Computation
Period or Computation Periods to which the award or agreement pertains
rather than to the Computation Period in which the award, agreement or
payment is made.
3.1(c)(2) Determination. The Employer shall determine an
Employee's Hours of Service
(i) Standard Option - by actually counting hours and
maintaining records which reflect the actual hours worked, or
(ii) Alternative - if so specified in the Adoption Agreement,
by crediting each such Employee with
(A) 10 Hours of Service for each day,
(B) 45 Hours of Service for each week,
(C) 95 Hours of Service for each semi-monthly payroll
period, or
(D) 190 Hours of Service for each month
during which the Employee otherwise would be credited with at
least one Hour of Service.
3.1(d) Year of Service. The term "Year of Service" means each
Computation Period during which an Employee completes at least
3.1(d)(1) Standard Option - 1,000 Hours of Service or
3.1(d)(2) Alternative - such lesser number of Hours of Service
specified in the Adoption Agreement.
Notwithstanding the foregoing, if the Participation Requirement
includes a partial Year of Service, no minimum number of Hours of
Service shall be required for such partial year.
3.1(e) Change in Service Calculation Method. If an amendment
changes the method of crediting service from the "Elapsed Time" method
to the "Hours of Service" method, each Employee who was credited with
service under the "Elapsed Time" method shall be credited with service
3.1(e)(1) for the Employee's employment before the Computation
Period in which such amendment is adopted, as determined on the basis
that one Year of Service credited to the Employee under the "Elapsed
Time" method for such employment shall equal one Year of Service under
this S3.1,
3.1(e)(2) for the Employee's employment during the Computation
Period in which such amendment is adopted, for a number of Hours of
Service determined by uniformly applying one of the equivalencies set
forth in S3.1(c)(2)(ii) to any fractional part of a year credited to
the Employee under the "Elapsed Time" method as of the effective date
of the amendment, and
3.1(e)(3) for the Employee's employment on and after the
effective date of the amendment, as determined under the rules in this
S3.1.
3.2 Elapsed Time Method (Alternative). If the "Elapsed Time" method
of crediting service is specified in the Adoption Agreement, the
definitions and rules in this S3.2 shall apply in lieu of the
definitions and rules in S3.1.
3.2(a) Break in Service.
3.2(a)(1) General. The term "Break in Service" means a Period of
Severance of at least 12 consecutive months.
3.2(a)(2) Maternity/Paternity Rule. If an Employee is absent from
service for "maternity or paternity reasons" and the Employee timely
furnishes proof of the reason for such absence (in accordance with
such nondiscriminatory rules as may be established by the Plan
Administrator and communicated to Employees), the 12 consecutive month
period beginning on the first anniversary of the first date of such
absence shall not constitute a Break in Service. Such 12 consecutive
month period shall be neither a Period of Severance nor a period of
Service. For purposes of this special maternity/paternity rule, an
absence for "maternity or paternity reasons" means an absence (i) by
reason of the pregnancy of the Employee, (ii) by reason of the birth
of a child of the Employee, (iii) by reason of the placement of a
child with the Employee in connection with the adoption of such child
by the Employee, or (iv) for purposes of caring for such child for a
period beginning immediately following such birth or placement.
3.2(b) Hour of Service. The term "Hour of Service" means each hour
for which an Employee is paid, or entitled to payment, by the Employer
or an Affiliate for the performance of duties as an Employee during
any period of employment.
3.2(c) Period of Severance. The term "Period of Severance" means a
continuous period of time during which an Employee is not employed by
the Employer or an Affiliate beginning 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.
3.2(d) Period of Service.
3.2(d)(1) General. For participation purposes and for vesting
purposes, the term "Period of Service" means an Employee's employment
completed as an Employee of the Employer and any Affiliate beginning
on such Employee's first day of employment or reemployment and ending
on the date a Break in Service begins. An Employee's first day of
employment or reemployment shall be the first day the Employee
performs an Hour of Service. A Period of Service also shall include
any Period of Severance of less than 12 consecutive months.
3.2(d)(2) Aggregation. An Employee's employment completed in all
Periods of Service shall be aggregated (to the extent that such
service is not disregarded under S3.7 or S3.8) and the number of days
in each Period of Service in excess of a whole year of employment (or,
if there is no whole year of employment in any such period, the number
of days in such period) shall be aggregated into additional whole
years of employment on the assumption that 365 days equals one whole
year of employment.
3.2(e) Year of Service. The term "Year of Service" means each 12
consecutive month period of employment completed in any Period of
Service beginning on the date an Employee first completes an Hour of
Service ("hire date") and ending on the date immediately preceding the
anniversary of such hire date. Subsequent Years of Service shall begin
on each anniversary of the Employee's hire date and end on the date
immediately preceding the next anniversary of such hire date.
3.2(f) Change in Service Calculation Method. If an amendment
changes the method of crediting service from the "Hour of Service"
method to the "Elapsed Time" method, each Employee who had any service
credit under the "Hour of Service" method shall be credited with
service
3.2(f)(1) for the Employee's employment before the Computation
Period in which such amendment is adopted, as determined on the basis
that one Year of Service credited to the Employee under the "Hour of
Service" method for such employment shall equal one Year of Service
under this S3.2,
3.2(f)(2) for the Employee's employment during the Computation
Period in which such amendment is adopted, as determined under the
rules in this S3.2 or, if greater, as determined for such period under
the "Hour of Service" method as converted to Years of Service under
the assumption that 365 days equals one Year of Service, and
3.2(f)(3) for the Employee's employment after the last day of the
Computation Period in which such amendment is adopted, as determined
under the rules in this S3.2.
3.3 Service Before Effective Date. For participation purposes all
periods of employment with the Employer or an Affiliate completed
before the Employer adopted this Plan or a predecessor plan ("pre-
effective date employment") shall be included (to the extent such
service is not disregarded under S3.7). For vesting purposes all
periods of pre-effective date employment shall be included unless such
service is disregarded under S3.7 or S3.8. Notwithstanding the
foregoing, service credit for vesting purposes automatically shall be
granted for pre-effective date employment to the extent required by
Code S411(a) for periods during which the Employer or an Affiliate
maintained a predecessor plan.
3.4 Service with Predecessor Employer. All periods of employment with
a predecessor employer or employers shall be included in calculating
an Employee's service to the extent required by Code S414(a) if the
Employer or an Affiliate maintains a plan of such predecessor
employer. However, if the Employer or an Affiliate does not maintain a
plan of such predecessor employer, periods of employment with such
predecessor employer shall be included in calculating an Employee's
service
3.4(a) Standard Option - only to the extent required under
regulations under Code S414(a) or
3.4(b) Alternative - only if so specified in the Adoption
Agreement.
3.5 Leased Employees. A Leased Employee shall be credited with
service as an Employee of the Employer or an Affiliate in accordance
with Code S414(n) or S414(o).
3.6 Service with Affiliates. An Employee shall be credited with all
service with any Affiliate and any other entity which is required to
be aggregated with the Employer under Code S414(o).
3.7 Special Break in Service Rules.
3.7(a) Standard Option. Except as provided in S3.7(c) and S8.2, an
Employee who has a Break in Service shall be credited after such Break
in Service for both participation and vesting purposes with all Years
of Service completed before such Break in Service.
3.7(b) Alternative. In addition to the exceptions in S3.7(c) and
S8.2, the Employer may specify in the Adoption Agreement that certain
service completed before a Break in Service may be disregarded under
one or more of the rules set forth in this S3.7(b).
3.7(b)(1) One Year Hold-Out Rule. If the "One Year Hold-Out Rule"
is specified in the Adoption Agreement for a nonstandardized Plan, an
Employee who has a Break in Service (two Breaks in Service if the
Alternative Maternity/Paternity Rule applies) shall not be credited
after such Break in Service for participation purposes or vesting
purposes with any Year of Service completed before such Break in
Service until the Employee completes a Year of Service after such
Break in Service.
In applying this rule for participation purposes, such Year of
Service shall be measured by the Computation Period which begins on an
Employee's "reemployment commencement date" and, if necessary,
subsequent Computation Periods beginning
(i) with the Plan Year which includes the first anniversary of
the "reemployment commencement date" if the standard Computation
Period in S3.1(b)(3)(i) is specified in the Adoption Agreement, or
(ii) on anniversaries of the "reemployment commencement date" if
the alternative Computation Period in S3.1(b)(3)(ii) is specified in
the Adoption Agreement.
The "reemployment commencement date" shall be the first day on
which the Employee is credited with an Hour of Service for the
performance of duties after the first Computation Period in which the
Employee incurs a Break in Service. If an Employee who was a
Participant before his or her Break in Service completes a Year of
Service in accordance with this provision, such Employee's
participation shall be reinstated as of his or her reemployment
commencement date.
3.7(b)(2) Pre-Participation Rule. If the "Pre-Participation Rule"
is specified in the Adoption Agreement, an Employee who has a Break in
Service (two Breaks in Service if the Alternative Maternity/Paternity
Rule applies) before the Employee satisfies the Participation
Requirement shall not be credited for participation purposes with any
Year of Service completed before such Break in Service. However, this
rule shall only apply if the Participation Requirement for the Plan
requires more than one Year of Service and the vesting schedule
specified in the Adoption Agreement provides for full and immediate
vesting.
3.7(b)(3) Rule of Parity. If the "Rule of Parity" is specified
in the Adoption Agreement, the following rules shall apply:
(i) General. If an Employee does not have any nonforfeitable
interest in the portion of the Employee's Account which is
attributable to Employer contributions, the Employee's Years of
Service before a period of consecutive Breaks in Service shall not be
taken into account in computing service for participation or vesting
purposes if the number of consecutive Breaks in Service in such period
equals or exceeds the greater of 5 (6 if the Alternative
Maternity/Paternity Rule applies) or the aggregate number of Years of
Service completed before such Breaks in Service ("pre-break service").
Such pre-break service shall not include any pre-break service
disregarded under the preceding sentence by reason of prior Breaks in
Service.
(ii) Participation. If an Employee's Years of Service are
disregarded under this rule of parity, the Employee shall be treated
as a new Employee for participation purposes. If the Employee's Years
of Service are not disregarded under this rule, the Employee shall
continue to participate in the Plan, or, if the Employee separated
from service, shall participate immediately upon the Employee's
reemployment.
(iii) Vesting. If a Participant's Years of Service are
disregarded under this rule of parity, the Participant's pre-break
Years of Service shall be disregarded for purposes of determining the
Participant's nonforfeitable interest in the Participant's post-break
Employer Account. If a Participant's pre-break Years of Service are
not disregarded under this rule of parity, the Participant's pre-break
Years of Service shall be counted for purposes of determining the
Participant's nonforfeitable interest in the Participant's post-break
Employer Account.
3.7(b)(4) Alternative Maternity/Paternity Rule. If the
"Alternative Maternity/Paternity Rule" is specified in the Adoption
Agreement, the special Maternity/Paternity rule set forth in
S3.1(a)(2) shall not apply and the minimum period of consecutive
Breaks in Service required to disregard any service or to deprive any
Employee of any right under this Plan shall be increased by one as
specified in the parentheticals in this S3.7 and in S8.2.
3.7(c) Vesting on Reemployment After Break in Service. If a
Participant has 5 or more consecutive Breaks in Service (6 or more
consecutive Breaks in Service if the Alternative Maternity/Paternity
Rule applies), all Years of Service completed after such Breaks in
Service shall be disregarded for purposes of determining the
Participant's nonforfeitable interest in the Participant's Employer
Account and Matching Account that accrued before such Breaks in
Service. Accordingly, as set forth in S8.2, the Employer shall not be
required to restore a Forfeiture upon such reemployment. Unless the
Adoption Agreement specifies the Rule of Parity, both the
Participant's pre-break service and post-break service shall count for
purposes of determining the nonforfeitable interest in the
Participant's post-break Employer Account and Matching Account. If the
Adoption Agreement specifies the Rule of Parity and the Participant's
pre-break Years of Service are disregarded under that rule, then the
Participant's pre-break Years of Service shall not count for purposes
of determining the nonforfeitable interest in the Participant's post-
break Employer Account and Matching Account. As provided in S8.2,
separate accounts shall be maintained for the Participant's pre-break
and post-break Employer Account and Matching Account and such accounts
shall share in Fund Earnings.
If a Participant does not have 5 consecutive Breaks in Service (6 or
more consecutive Breaks in Service if the Alternative
Maternity/Paternity Rule applies), both the Participant's pre-break
and post-break Years of Service shall count in determining the
nonforfeitable interest in both the pre-break and post-break Employer
Account and Matching Account balance. However, unless the Adoption
Agreement specifies the "Alternative to the Buy Back Rule" (as
described in S8.2(b)), a Participant's pre-break Employer Account and
Matching Account balance shall be zero unless the Participant repays
any distribution as provided in S8.2(a).
3.8 Service Exclusions for Vesting Purposes.
3.8(a) Standard Option - An Employee shall be credited with all
Years of Service for vesting purposes (to the extent such service is
not disregarded under S3.7 and S8.2).
3.8(b) Alternative - The Employer may specify in the Adoption
Agreement service which is expressly excluded for vesting purposes.
SECTION 4. PARTICIPATION
4.1 General Rule. Each Eligible Employee shall become a Participant
in this Plan on the Entry Date which coincides with or immediately
follows the date on which the Eligible Employee satisfies the
Participation Requirement (provided he or she is an Eligible Employee
on such Entry Date).
4.2 Special Rules.
4.2(a) Pre-Existing Plan. Any Employee who was a participant in the
Pre-Existing Plan on the date immediately preceding the Effective Date
or who would have become a participant in the Pre-Existing Plan on the
Effective Date shall become a Participant under this Plan on such
Effective Date. However, no contributions shall be made by or on
behalf of such Participant unless the Participant is otherwise
entitled to a contribution under S5.
4.2(b) Reemployment Before Satisfying Participation Requirement. If
an Employee separates from service prior to satisfying the
Participation Requirement and is thereafter reemployed, all employment
completed by such Employee prior to such separation shall be
aggregated with such Employee's employment completed after
reemployment for purposes of satisfying the Participation Requirement
unless such prior employment is excluded under the rules set forth in
S3.
4.2(c) Reemployment After Satisfying Participation Requirement. If
an Employee satisfies the Participation Requirement before he or she
separates from service and the Employee thereafter is reemployed, the
Employee shall become a Participant on the later of (1) the first day
he or she completes an Hour of Service as an Eligible Employee upon
reemployment or (2) the first Entry Date following the date on which
he or she satisfies the Participation Requirement. However, any such
Employee whose prior service is disregarded under S3 shall be treated
as a new Employee for participation purposes.
4.2(d) Status Change. If the status of an Eligible Employee for
whom no Account is maintained changes to that of an Employee (other
than an Eligible Employee) and such person's status thereafter changes
back to that of an Eligible Employee, such person shall become a
Participant on the later of (1) the date the status changes back to
that of an Eligible Employee or (2) the first Entry Date which
coincides with or immediately follows the date on which he or she
satisfies the Participation Requirement.
4.3 Participant Information. Each Participant shall file with the
Plan Administrator such personal information and data as the Plan
Administrator deems necessary for the orderly administration of this
Plan.
4.4 No Employment Rights. This Plan is not a contract of employment
and participation in this Plan shall not give any Employee or former
Employee the right to be retained in the employ of the Employer or any
Affiliate or, upon termination of such employment, to have any
interest or right in the Fund other than as expressly provided in this
Plan.
SECTION 5. CONTRIBUTIONS
5.1 Profit Sharing Plan. If this Plan is adopted as a Profit Sharing
Plan, the Employer Contribution made by the Employer and each
Participating Affiliate for each Plan Year shall equal such amount, if
any, as the Board determines in its discretion that the Employer and
each Participating Affiliate shall contribute for such year. Employer
Contributions under this S5.1 shall be made
5.1(a) Standard Option - from Net Profits or
5.1(b) Alternative - if so specified in the Adoption Agreement,
without regard to Net Profits. Notwithstanding any such election, the
Employer intends that this Plan shall be a "profit-sharing plan" for
purposes of the Code and ERISA.
5.2 Money Purchase Pension Plan. If this Plan is adopted as a Money
Purchase Pension Plan, the Employer Contribution made by the Employer
and each Participating Affiliate for each Plan Year shall be an amount
equal to the sum of the contribution for each Active Participant as
determined under the formula specified in the Adoption Agreement. The
Forfeitures for each Plan Year shall be
5.2(a) Standard Option - applied to reduce the Employer
Contribution for such Plan Year or
5.2(b) Alternative - if so specified in the Adoption Agreement,
allocated to the Employer Account of each Active Participant in
accordance with S6.3(b). Notwithstanding any such election, the
Employer intends that this Plan shall be a "money purchase pension
plan" for purposes of the Code and ERISA.
5.3 401(k) Plan.
5.3(a) General. If this Plan is adopted as a 401(k) Plan, the
contributions made by the Employer and each Participating Affiliate
shall be determined in accordance with the elections made by the
Employer in the Adoption Agreement and the rules set forth in this
S5.3. Contributions made under this S5.3 other than Elective Deferrals
and Employee Contributions shall be made
5.3(a)(1) Standard Option - from Net Profits or
5.3(a)(2) Alternative - if so specified in the Adoption Agreement,
without regard to Net Profits.
Elective Deferrals and Employee Contributions shall be made without
regard to Net Profits. Notwithstanding any such election, the Employer
intends that this Plan shall be a "profit-sharing plan" for purposes
of the Code and ERISA.
5.3(b) Matching Contributions. If the Employer specifies in the
Adoption Agreement that Matching Contributions shall be made to the
Plan, the Employer and each Participating Affiliate shall make a
Matching Contribution for each eligible Participant based on the
Employee Contributions and Elective Deferrals made by or on behalf of
such eligible Participant in such amount and as of each Allocation
Date as specified in the Adoption Agreement. Notwithstanding the
foregoing,
5.3(b)(1) for Plan Years beginning on or after the Final
Compliance Date, no Matching Contribution shall be made on account of
a Participant's Elective Deferrals or Employee Contributions which are
Excess Elective Deferrals under S7.3, Excess Contributions under S7.4
or Excess Aggregate Contributions under S7.5, and
5.3(b)(2) for Plan Years beginning before the Final Compliance
Date, no Matching Contribution shall be made on account of such excess
amounts unless specified in the formula for Matching Contributions set
forth in the Adoption Agreement.
5.3(c) Qualified Matching Contributions. If the Employer specifies
in the Adoption Agreement that Qualified Matching Contributions shall
be made to the Plan, the Employer and each Participating Affiliate
shall make a Qualified Matching Contribution for each eligible
Participant based on the Employee Contributions and Elective Deferrals
made by or on behalf of such eligible Participant in such amount and
as of each Allocation Date as specified in the Adoption Agreement.
Qualified Matching Contributions shall be subject to the following
special rules:
5.3(c)(1) the Participant may not elect to receive such
contributions in cash until distributed from the Plan;
5.3(c)(2) such contributions shall be completely nonforfeitable
when made;
5.3(c)(3) such contributions shall be subject to the same
distribution and withdrawal restrictions applicable to Elective
Deferrals set forth in S9.2(b);
5.3(c)(4), for Plan Years beginning on and after the Final
Compliance Date, no Qualified Matching Contribution shall be made on
account of a Participant's Elective Deferrals or Employee
Contributions which are Excess Elective Deferrals under S7.3, Excess
Contributions under S7.4 or Excess Aggregate Contributions under S7.5;
and
5.3(c)(5) for Plan Years beginning before the Final Compliance
Date, no Qualified Matching Contribution shall be made on account of
such excess amounts unless specified in the formula for Qualified
Matching Contributions set forth in the Adoption Agreement.
5.3(d) Qualified Nonelective Contribution. If the Employer
specifies in the Adoption Agreement that Qualified Nonelective
Contributions shall be made to the Plan, the Employer and each
Participating Affiliate shall make Qualified Nonelective Contributions
for each eligible Participant in such amount and as of each Allocation
Date specified in the Adoption Agreement.
In addition, in lieu of distributing Excess Contributions as
provided in S7.4(d) or Excess Aggregate Contributions as provided in
S7.5(d), the Employer and each Participating Affiliate may contribute
on behalf of each Participant who is a Nonhighly Compensated Employee
on the last day of each Plan Year such amount, if any, as the Employer
and each Participating Affiliate determine in their discretion to
contribute for such Plan Year to satisfy the ADP limit of S7.4(b) or
the ACP limit of S7.5(b), or both, pursuant to the regulations under
Code S401(k) and Code S401(m).
Qualified Nonelective Contributions shall be subject to the
following special rules:
5.3(d)(1) the Participant may not elect to receive such
contributions in cash until distributed from the Plan;
5.3(d)(2) such contributions shall be completely nonforfeitable
when made; and
5.3(d)(3) such contributions shall be subject to the same
distribution and withdrawal restrictions applicable to Elective
Deferrals set forth in S9.2(b).
5.3(e) Discretionary Employer Contribution. If the Employer
specifies in the Adoption Agreement that discretionary Employer
Contributions shall be made, the Employer Contribution made by the
Employer and each Participating Affiliate for each Plan Year shall
equal such amount, if any, as the Board determines in its discretion
that the Employer and each Participating Affiliate shall contribute
for such year.
5.3(f) Elective Deferrals. If the Employer specifies in the
Adoption Agreement that Elective Deferrals may be made, each
Participant who is an Eligible Employee may elect pursuant to a cash
or deferred election that the Employer and each Participating
Affiliate make Elective Deferrals to the Plan on the Participant's
behalf in lieu of cash compensation for each pay period ending on any
date on or after he or she becomes a Participant and on which he or
she is an Eligible Employee in such amounts as specified in the
Adoption Agreement. All Elective Deferrals shall be made exclusively
through payroll withholding and shall be transferred by the Employer
or Participating Affiliate to the Trustee as soon as practicable after
the date such Elective Deferrals are withheld.
5.3(g) Employee Contributions. If the Employer specifies in the
Adoption Agreement that Employee Contributions may be made, each
Participant who is an Eligible Employee may elect to make Employee
Contributions to the Plan for each pay period ending on any date on or
after he or she becomes a Participant and on which he or she is an
Eligible Employee in such amounts as specified in the Adoption
Agreement. All Employee Contributions shall be made exclusively
through payroll withholding and shall be transferred by the Employer
or Participating Affiliate to the Trustee as soon as practicable after
the date such Employee Contributions are withheld.
5.3(h) Election Rules and Limitations.
5.3(h)(1) General. The Plan Administrator from time to time shall
establish and shall communicate in writing to Participants who are
Eligible Employees such reasonable nondiscriminatory deadlines, rules
and procedures for making the elections described in this S5.3 as the
Plan Administrator deems appropriate under the circumstances for the
proper administration of this Plan. A Participant's election shall be
made on an Election Form and no election shall be effective unless
such Election Form is properly completed and timely filed in
accordance with such established deadlines, rules and procedures. The
Plan Administrator shall have the right at any time unilaterally to
reduce the amount or percentage of Elective Deferrals or Employee
Contributions elected under this S5.3 if the Plan Administrator
determines that such reduction is necessary to satisfy the limitations
under S7 of the Plan.
5.3(h)(2) Commencement of Election. A Participant's initial
election to make Elective Deferrals or Employee Contributions under
this S5.3 for any period of employment may be effective as early as
the Entry Date on which he or she becomes a Participant in the Plan.
If a Participant does not make a proper election to make Elective
Deferrals or Employee Contributions as of such Entry Date, the
Participant may thereafter make an election
(i) Standard Option - effective on any date or
(ii) Alternative - effective only as of the dates specified in
the Adoption Agreement.
A Participant's election shall remain in effect until revised or
terminated in accordance with this S5.3(h).
5.3(h)(3) Revision of Election. An election, once effective, can
thereafter be revised by a Participant
(i) Standard Option - effective on any date or
(ii) Alternative - effective only as of the dates specified in
the Adoption Agreement.
5.3(h)(4) Termination of Election. A Participant shall have the
right to completely terminate an election under this S5.3 at any time,
and any such termination shall become effective as of the first day of
the first pay period following the date he or she timely files a
properly completed Election Form terminating such election. Any
Participant whose status as an Eligible Employee terminates shall be
deemed to have completely terminated his or her election, if any,
under this S5.3 as of the date the Participant's status as such so
terminates.
5.3(h)(5) Resumption after Termination. A Participant whose
election terminates may thereafter elect to resume contributions under
this S5.3
(i) Standard Option - effective as of any date, or
(ii) Alternative - effective only as of the dates specified in
the Adoption Agreement.
5.3(h)(6) Effective Dates of Elections. A Participant's initial,
revised or resumed election shall be effective only if he or she is an
Eligible Employee on the effective date of such elections set forth in
this S5.3(h). Elective Deferrals and Employee Contributions made
pursuant to a Participant's elections shall be withheld from
Compensation which otherwise would be paid on or after the effective
date of such election and while he or she is an Eligible Employee.
Under no circumstances shall a Participant's Elective Deferral
election apply to defer Compensation which has been paid to the
Participant or which he or she is currently eligible to receive (in
cash or otherwise) at his or her discretion.
5.3(i) Application of Forfeitures. The Forfeitures attributable to
Matching Contributions and Employer Contributions shall be
5.3(i)(1) Standard Option - applied to reduce the Matching
Contributions, Qualified Matching Contributions and Qualified
Nonelective Contributions, if any, in accordance with
S6.3(c)(2)(ii)(A) or
5.3(i)(2) Alternative - if so specified in the Adoption Agreement,
(i) allocated to the Employer Account or Matching Account, as
applicable, of each Active Participant in accordance with
S6.3(c)(2)(ii)(B)(I), or
(ii) for a nonstandardized Plan, allocated in accordance with
the formula specified in the Adoption Agreement.
5.4 Target Benefit Pension Plan.
5.4(a) General. If this Plan is adopted as a Target Benefit Pension
Plan, the Employer Contribution made by the Employer and each
Participating Affiliate for each Plan Year shall be an amount equal to
the sum of the contributions required to fund each Active
Participant's "Target Benefit" specified in the Adoption Agreement.
The Forfeitures for each Plan Year shall be applied to reduce the
Employer Contribution for such Plan Year. Such contribution shall be
determined as of the last day of such Plan Year under the individual
level premium funding method, using the interest rate and mortality
table specified in the Adoption Agreement, the Participant's age on
his or her last birthday and the assumption of a constant rate of
future Compensation, in accordance with the following:
5.4(a)(1) Step 1. If the Participant has not reached the Plan's
Normal Retirement Age, calculate the present value of the "Target
Benefit" specified in the Adoption Agreement by multiplying the
"Target Benefit" by the product of (1) the applicable factor from
Table I(a) or (b), whichever is appropriate, in Exhibit A to the
Adoption Agreement and (2) the applicable factor from Table III(a) or
(b), whichever is appropriate, in Exhibit A to the Adoption Agreement.
If the Participant is at or beyond the Plan's Normal Retirement Age,
calculate the present value of the "Target Benefit" specified in the
Adoption Agreement by multiplying the "Target Benefit" by the
applicable factor from Table IV(a) or (b), whichever is appropriate,
in Exhibit A to the Adoption Agreement.
5.4(a)(2) Step 2. Calculate the excess, if any, of the amount
determined in Step 1 over the theoretical reserve.
5.4(a)(3) Step 3. Amortize the result in Step 2 by multiplying it
by the applicable factor from Table II in Exhibit A to the Adoption
Agreement. For the Plan Year in which the Participant attains Normal
Retirement Age and for subsequent Plan Years, the applicable factor is
1.0.
5.4(b) Theoretical Reserve. For purposes of this S5.4, the
theoretical reserve is determined as follows:
5.4(b)(1) A Participant's theoretical reserve as of the last day
of the first Plan Year in which the Participant participates in the
Plan, and as of the last day of the first Plan Year after any Plan
Year in which the Plan either did not satisfy the safe harbor in
S1.401(a)(4)-8(b)(3) of the Federal Income Tax Regulations or was not
a Prior Safe Harbor Plan, is zero. In all other cases, in the first
Plan Year in which this theoretical reserve provision is adopted or
made effective, if later, as specified in the Adoption Agreement
("year 1"), the initial theoretical reserve is determined as follows:
(i) Calculate as of the last day of the Plan Year immediately
preceding year 1 the present value of the "Target Benefit", using the
actuarial assumptions, the provisions of the Plan, and the
Participant's Average Annual Compensation as of such date; provided,
however, for a Participant who is beyond Normal Retirement Age in year
1, the straight life annuity factor used for such determination shall
be the factor applicable for such Normal Retirement Age.
(ii) Calculate as of the last day of the Plan Year immediately
preceding year 1 the present value of future Employer Contributions,
i.e., the contributions due each Plan Year using the actuarial
assumptions, the provisions of the Plan (disregarding those provisions
of the Plan providing for the limitations of Code S415 or the minimum
contributions under Code S416), and the Participant's Average Annual
Compensation as of such date, beginning with year 1 through the end of
the Plan Year in which the Participant attains Normal Retirement Age.
(iii) Subtract the amount determined in clause (ii) from the
amount determined in clause (i).
5.4(b)(2) Accumulate the initial theoretical reserve in
S5.4(b)(1) and the Employer Contribution (as limited by Code S415, but
without regard to any required minimum contributions under Code S416)
for each Plan Year beginning in year 1 up through the last day of the
current Plan Year (excluding contributions, if any, made for the
current Plan Year) using the Plan's interest assumption in effect for
each such year. In any Plan Year following the Plan Year in which the
Participant attains Normal Retirement Age, the accumulation is
calculated assuming an interest rate of 0%.
5.4(b)(3) The calculations in this S5.4(b) shall be made as of
the last day of each Plan Year, on the basis of the Participant's age
on his or her last birthday and the interest rate in effect on the
last day of the prior Plan Year.
5.4(c) Past Service Credits. If the Plan is adopted as a
standardized Plan, upon initial adoption of this Plan or upon a Plan
amendment which is effective on or after the Final Compliance Date, no
more than 5 years of credit shall be granted for service completed
before the effective date of such adoption or amendment, and any such
past service credit shall be granted on a uniform basis to all
Participants in the Plan on such effective date.
5.4(d) TRA 86 Amendment. A Participant's Account balance shall not
be reduced as a result of an amendment to this Plan or a Pre-Existing
Plan to satisfy the requirements of TRA 86. To the extent that
contributions actually made on a Participant's behalf for Plan Years
beginning after December 31, 1988 exceed the contributions that would
have been required under the formula as effective for such years as a
result of the amendment of this Plan or a Pre-Existing Plan to satisfy
TRA 86, such excess shall be applied to offset contributions required
to such Participant's Account for Plan Years beginning after the date
such TRA 86 amendment is adopted or, if later, the date such TRA 86
amendment is effective consistent with ERISA S204(h).
5.4(e) Special Definitions and Rules. The special definitions and
rules in this S5.4(e) shall apply for purposes of determining the
Employer Contributions under a Target Benefit Pension Plan.
5.4(e)(1) Cumulative Disparity Limit. For a Plan with a Unit
Benefit Formula, a Participant's Cumulative Disparity Limit is equal
to 35 minus (1) the number of the Participant's Years of Participation
under this Plan during which this Plan did not satisfy the safe harbor
for target benefit plans in S1.401(a)(4)-8(b)(3) of the Federal Income
Tax Regulations or was not a Prior Safe Harbor Plan, and (2) the
number of years during which the Participant participated in one or
more qualified plans or simplified employee pension plans ever
maintained by the Employer (other than years counted in clause (1) or
counted toward a Participant's total Years of Projected
Participation). The Cumulative Disparity Limit shall be determined
taking into account only those Years of Participation in this Plan
beginning after December 31, 1988 when this Plan had an integrated
benefit formula and those years of participation in such other
qualified plans and simplified employee pension plans beginning after
December 31, 1988 during which the Participant actually received an
allocation under an integrated defined contribution plan (other than a
target benefit pension plan), during which the Participant was
eligible to receive a benefit under an integrated defined benefit
pension plan or an integrated target benefit pension plan), or during
which the Participant received an allocation or accrued a benefit
under a plan which imputed permitted disparity pursuant to S1.401(a)-7
of the Federal Income Tax Regulations.
5.4(e)(2) Cumulative Disparity Reduction. For a Plan with a Fixed
Benefit Formula, the Excess Benefit Percentage will further be reduced
as set forth in this S5.4(e)(2) for a Participant with more than 35
"cumulative disparity years." A Participant's "cumulative disparity
years" consist of the sum of (1) the Participant's total Years of
Projected Participation, (2) the Participant's Years of Participation
during which this Plan did not satisfy the safe harbor for target
benefit plans in regulations S1.401(a)(4)-8(b)(3) of the Federal
Income Tax Regulations or was not a Prior Safe Harbor Plan, and (3)
the number of years during which the Participant participated in one
or more qualified plans or simplified employee pension plans ever
maintained by the Employer (other than years in clause (1) or (2)
above); provided that the cumulative disparity years shall be
determined taking into account only those Years of Participation in
this Plan beginning after December 31, 1988 when this Plan had an
integrated benefit formula and those years of participation in such
other qualified plans and simplified employee pension plans beginning
after December 31, 1988 during which the Participant actually received
an allocation under an integrated defined contribution plan (other
than a target benefit pension plan), during which the Participant was
eligible to receive a benefit under an integrated defined benefit
pension plan (or an integrated target benefit pension plan), or during
which the Participant received an allocation or accrued a benefit
under a plan which imputed permitted disparity pursuant to S1.401(a)-7
of the Federal Income Tax Regulations.
If this Cumulative Disparity Reduction applies, the Excess Benefit
Percentage will be reduced as follows:
(A) Subtract the Participant's Base Benefit Percentage from the
Participant's Excess Benefit Percentage (after modification as
required in the Adoption Agreement for less than 35 Years of Projected
Participation).
(B) Multiply the results determined in (A) by a fraction (not
less than 0), the numerator of which is 35 minus the sum of the years
in clauses (2) and (3) of this S5.4(e)(2), and the denominator of
which is 35.
(C) The Participant's Excess Benefit Percentage is equal to the
sum of the result in (B) and the Participant's Base Benefit
Percentage, as otherwise modified in the Adoption Agreement.
5.4(e)(3) Current Stated Benefit. Each Participant's Current
Stated Benefit will be the product of (1) the amount derived from the
formula specified in the Adoption Agreement, and (2) a fraction, the
numerator of which is the Participant's number of Years of
Participation from the latest Fresh-Start Date (if any) through and
including the later of the year in which the Participant attains
Normal Retirement Age or the current Plan Year, and the denominator of
which is the Participant's total Years of Projected Participation. If
this Plan has not had a Fresh-Start Date, such fraction will equal 1.0
for all Participants. In any event, for those Participants who first
participated in the Plan after the latest Fresh-Start Date, such
fraction will equal 1.0. For purposes of determining the numerator of
the fraction described in clause (2), only those current and prior
years during which a Participant was eligible to receive a
contribution under the Plan will be taken into account.
5.4(e)(4) Fresh-Start Date. Fresh-Start Date means the last day
of a Plan Year preceding a Plan Year for which provisions that would
affect the amount of the Current Stated Benefit are amended. If
applicable, the latest Fresh-Start Date of the Plan shall be
designated in the Adoption Agreement.
5.4(e)(5) Frozen Accrued Stated Benefit. A Participant's Frozen
Accrued Stated Benefit is determined as of the Plan's latest Fresh-
Start Date as if the Participant terminated employment with the
Employer as of that date, without regard to any amendment made to the
Plan after that date except as permitted under regulations.
A Participant's Frozen Accrued Stated Benefit is equal to the
amount of the Current Stated Benefit in effect on the latest Fresh-
Start Date that a Participant has accrued as of that date, assuming
that such Current Stated Benefit accrues ratably from the year in
which the Participant first participated in this Plan (or, if later,
the immediately preceding Fresh-Start Date under this Plan) through
and including the Plan Year in which the Participant attains Normal
Retirement Age.
The amount of the Current Stated Benefit in effect on the latest
Fresh-Start Date that a Participant is assumed to have ratably accrued
is determined by multiplying the Plan's Current Stated Benefit in
effect on that date by a fraction, the numerator of which is the
number of Years of Participation from the later of the Participant's
first Year of Participation in this Plan or the immediately preceding
Fresh-Start Date (if any) through and including the year that contains
the latest Fresh-Start Date, and the denominator of which is the
number of Years of Participation from the later of the Participant's
first Year of Participation in this Plan or the immediately preceding
Fresh-Start Date (if any) through and including the later of the year
in which the Participant attains Normal Retirement Age or the current
Plan Year. For purposes of this paragraph, only those Years of
Participation during which a Participant was eligible to receive a
contribution under the Plan will be taken into account.
If this Plan has had a preceding Fresh-Start Date, each
Participant's Frozen Accrued Stated Benefit as of the latest Fresh-
Start Date will equal the sum of the amount of the Current Stated
Benefit in effect on the latest Fresh-Start Date that a Participant is
assumed to have ratably accrued as of that date under the preceding
paragraph, and the Frozen Accrued Stated Benefit determined as of the
preceding Fresh-Start Date(s).
If (1) the Current Stated Benefit formula in effect on the latest
Fresh-Start Date was not expressed as a straight life annuity for all
Participants, and/or (2) the Normal Retirement Age for any Participant
on the latest Fresh-Start Date was greater than the Normal Retirement
Age for that Participant under the Current Stated Benefit formula in
effect after the latest Fresh-Start Date, the Frozen Accrued Stated
Benefit will be converted to an actuarially equivalent straight life
annuity commencing at the Participant's Normal Retirement Age under
the Current Stated Benefit formula in effect after the latest Fresh-
Start Date, using the actuarial assumptions in effect under the
Current Stated Benefit formula in effect on the latest Fresh-Start
Date.
Notwithstanding the above, if in the immediately preceding Plan Year
this Plan did not satisfy the safe harbor for target benefit plans in
S1.401(a)(4)-8(b)(3) of the Federal Income Tax Regulations or was not
a Prior Safe Harbor Plan, the Frozen Accrued Stated Benefit for any
Participant in the Plan, determined for the next Plan Year during
which S1.401(a)(4)-8(b)(3) of the Federal Income Tax Regulations is
satisfied until the year following the next Fresh-Start Date, if any,
will be zero.
5.4(e)(6) Maximum Excess Allowance. The Maximum Excess Allowance
is equal to the lesser of the Base Benefit Percentage or
(1) for a Plan with a Unit Benefit Formula, the Applicable
Factor determined from Table A or Table B in Exhibit B to the Adoption
Agreement, and
(2) for a Plan with a Fixed Benefit Formula, 35 times the
Applicable Factor determined from Table A or Table B in Exhibit B to
the Adoption Agreement.
5.4(e)(7) Overall Permitted Disparity Limit. If for any Plan Year
this Plan benefits any Participant who also benefits under another
qualified plan or simplified employee pension plan maintained by the
Employer that provides for permitted disparity (or imputes permitted
disparity), the Current Stated Benefit for all Participants under this
Plan will be equal to the Excess Benefit Percentage set forth in the
Adoption Agreement multiplied times
(1) for a Plan with a Unit Benefit Formula, the Participant's
total Average Annual Compensation times the Participant's total Years
of Projected Participation under the Plan up to the maximum total
Years of Projected Participation specified in the Adoption Agreement,
and
(2) for a Plan with a Fixed Benefit Formula, the Participant's
total Average Annual Compensation (prorated for years less than 35).
If this paragraph is applicable, this Plan will have a Fresh-
Start Date on the last day of the Plan Year preceding the Plan Year in
which this paragraph is first applicable. In addition, if in any
subsequent Plan Year this Plan no longer benefits any Participant who
also benefits under another plan of the Employer, this Plan will have
a Fresh-Start Date on the last day of the Plan Year preceding the Plan
Year in which this paragraph is no longer applicable.
5.4(e)(8) Prior Safe Harbor Plan. Prior Safe Harbor Plan means a
Plan adopted and in effect on September 19, 1991, that satisfied the
applicable nondiscrimination requirements for target benefit plans on
that date and in all prior periods (taking into account no amendments
to the Plan after September 19, 1991, other than amendments necessary
to satisfy Code S401(1)).
5.4(e)(9) Year of Participation - means each Year of Service (as
determined in the same manner as a Year of Service for vesting
purposes) completed after the Participant first becomes a Participant
in this Plan or the Pre-Existing Plan.
5.4(e)(10) Years of Projected Participation. For purposes of
determining a Participant's Current Stated Benefit, a Participant's
total Years of Projected Participation under the Plan is the sum of
the Participant's total number of Years of Participation under this
Plan for the years this Plan consecutively satisfies the safe harbor
for target benefit plans in S1.401(a)(4)-8(b)(3) of the Federal Income
Tax Regulations or was a Prior Safe Harbor Plan, if applicable,
projected through the later of the end of the Plan Year in which the
Participant attains Normal Retirement Age or the end of the current
Plan Year. For purposes of determining a Participant's total Years of
Projected Participation, only those current and prior years during
which a Participant was eligible to receive a contribution under the
Plan will be taken into account.
5.5 Rollover Contributions.
5.5(a) Standard Option - An Eligible Employee may contribute on his
or her own behalf (or elect a direct transfer of) a Rollover
Contribution to the Fund, provided (1) such contribution shall be made
(or transferred) in cash or in a form which is acceptable to the
Trustee, (2) such contribution shall be made in accordance with such
rules as the Plan Administrator and the Trustee deem appropriate under
the circumstances, and (3) if so specified in the Adoption Agreement,
no Rollover Contribution may be made prior to the Entry Date on which
the Eligible Employee becomes a Participant in this Plan.
5.5(b) Alternative - The Employer may specify in the Adoption
Agreement that no Rollover Contributions may be made.
5.6 No Employee or Matching Contributions. Unless this Plan is
adopted as a 401(k) Plan which permits Employee Contributions, no
nondeductible employee contributions or matching contributions (as
defined in Code S401(m)) shall be made to this Plan after the Plan
Year in which this Plan is adopted by the Employer. Any nondeductible
employee contributions and matching contributions made under a Pre-
Existing Plan or under this Plan (in accordance with the preceding
sentence) for Plan Years beginning after December 31, 1986 shall be
subject to the nondiscrimination limitations under Code S401(m) as set
forth in S7.5.
5.7 No Deductible Voluntary Employee Contributions. No voluntary
deductible employee contributions shall be made to this Plan for a
taxable year beginning after December 31, 1986. Any voluntary
deductible employee contributions made under a Pre-Existing Plan prior
to such date shall be maintained in a separate account under this
Plan. Such account shall be nonforfeitable at all times and shall
share in the Fund Earnings in the same manner as described in S6.2. No
part of such account shall be used to purchase life insurance. Subject
to S10, Joint and Survivor Annuity Requirements (if applicable), a
Participant may withdraw any part of the Participant's voluntary
deductible employee contribution account by making a written
application to the Plan Administrator.
5.8 General Rules Applicable to All Contributions.
5.8(a) Limitations on Contributions. The contributions made under
this S5 and the allocation of those contributions under S6 shall be
subject to the limitations set forth in the Adoption Agreement, this
S5 and S7.
5.8(b) Code S415. The contributions for any Plan Year shall not
(based on the Employer's understanding of the facts at the time the
contribution is made) exceed the total amount allocable for such year
among the Accounts of all Participants in light of the restrictions in
Code S415 as set forth in S7.2. If a suspense account as described in
S7.2(b) is in existence at any time during a particular Limitation
Year (1) no Employer Contribution shall be made for such Limitation
Year if (based on the Employer's understanding of the facts at the
time the contribution is made) the allocation of the amount in such
suspense account would be precluded by Code S415 for such Limitation
Year and (2) if this Plan is adopted as a Money Purchase Pension Plan
or a Target Benefit Pension Plan, the Employer Contribution required
under this S5 shall be reduced by the amount in such suspense account.
5.8(c) Code S416. If this Plan is a Top-Heavy Plan (as defined in
'12) for any Plan Year, the minimum allocation required under Code
S416 shall be made in accordance with S12.
5.8(d) Leased Employees. Contributions or benefits which are
provided by a leasing organization on behalf of a Participant who is a
Leased Employee and which are attributable to services performed by
such Participant for the Employer or a Participating Affiliate shall
be credited against the contribution, if any, due to be allocated to
such Participant under this Plan in accordance with Code S414(n).
5.8(e) Owner-Employees.
5.8(e)(1) General. If this Plan provides contributions or
benefits for one or more Owner-Employees who control the Employer or a
Participating Affiliate, then
(i) if such Owner-Employee, or Owner-Employees, also control one
or more other trades or businesses,
(A) this Plan and the plans established for such other trades
or businesses shall, when viewed as a single plan, satisfy the
applicable requirements of Code S401(a) and Code S401(d) for the
employees of the Employer or the Participating Affiliate and such
other trades or businesses, and
(B) the employees of such other trades or businesses shall be
included in a plan which satisfies the applicable requirements of Code
S401(a) and Code S401(d) and which provides contributions and benefits
which are at least as favorable as those provided under this Plan for
such Owner-Employees, or
(ii) if such Owner-Employee is covered as an owner-employee
(within the meaning of Code S401(c)(3)) under the plans of two or more
other trades or businesses which such Owner-Employee does not control,
then the contributions or benefits provided under this Plan must be at
least as favorable as those provided for such Owner-Employee under the
most favorable plan of such other trade or business.
5.8(e)(2) Control. For purposes of this S5.8(e), an Owner-
Employee, or two or more such Owner-Employees, shall be considered to
control a trade or business if such Owner-Employee, or such Owner-
Employees together,
(i) own the entire interest in an unincorporated trade or
business, or
(ii) in the case of a partnership, own more than 50% of either
the capital interest or the profits interest in such partnership. Such
Owner-Employee, or such Owner-Employees, shall be treated as owning
any interest in a partnership which is owned, directly or indirectly,
by a partnership which is controlled by such Owner-Employee, or such
Owner-Employees, within the meaning of clause (ii).
SECTION 6. ALLOCATIONS TO ACCOUNTS
6.1 Establishment and Maintenance of Accounts. An Account shall be
established and maintained for each Participant under the Plan and the
Plan Administrator shall establish reasonable and nondiscretionary
procedures under which (a) any Forfeitures, insurance premium
payments, loans, withdrawals, distributions and other charges properly
allocable to such Account shall be debited from such Account and (b)
any insurance contract dividends, insurance contract surrender
proceeds, loan repayments and other amounts properly allocable to such
Account (other than amounts described in S6.2 and S6.3) shall be
credited to such Account.
6.2 Allocation of Fund Earnings.
6.2(a) General. As of each Valuation Date the fair market value of
the Fund and the Fund Earnings for the period which ends on such
Valuation Date shall be determined. Such Fund Earnings shall be
allocated (and posted) among all Accounts in the proportion that the
balance in each such Account (determined in accordance with S6.2(b))
bears to the total balance in all such Accounts in order that each
Account shall proportionately benefit from any earnings or
appreciation in the value of the Fund assets in which such Account is
invested or proportionately suffer any losses or depreciation in the
value of the Fund assets in which such Account is invested. Subject to
S13, each Participant shall have a ratable interest in all assets of
the Fund.
6.2(b) Allocation Procedures. The Plan Administrator shall
establish nondiscretionary allocation procedures for purposes of the
allocation of Fund Earnings under S6.2(a), which procedures shall be
set forth in writing with the records of this Plan. If so specified in
such procedures, the balance in each Account shall be determined after
adjusting for all or a portion of the contributions and other amounts
credited to or debited from such Account since the preceding Valuation
Date. Further, if so provided in such allocation procedures, Fund
Earnings shall not be allocated to any Forfeiture or to the balance in
any suspense account described in S7.2(b).
6.3 Allocation of Contributions and Forfeitures. Subject to the
limitations in S7, the Forfeitures (and any amount deemed to be a
Forfeiture under the terms of this Plan) and the contributions shall
be allocated (and posted) in accordance with the following rules:
6.3(a) Profit Sharing Plan.
6.3(a)(1) Nonintegrated. If this Plan is adopted as a Profit
Sharing Plan and the nonintegrated allocation formula is specified in
the Adoption Agreement, the Forfeitures and the Employer Contribution
for each Plan Year shall be allocated (and posted) as of the last day
of such Plan Year to the Employer Account of each Active Participant
in the same ratio that each Active Participant's Compensation for such
Plan Year bears to the total Compensation of all Active Participants
for such Plan Year.
6.3(a)(2) Integrated. If this Plan is adopted as an Profit
Sharing Plan and the integrated allocation formula is specified in the
Adoption Agreement, the Forfeitures and the Employer Contribution
shall be allocated (and posted) as of the last day of each Plan Year
to the Employer Account of each Active Participant in accordance with
the following:
(i) Step One - First, the lesser of (A) the sum of the Employer
Contribution and Forfeitures for such Plan Year or (B) the Integration
Amount for such Plan Year shall be allocated to the Employer Account
of each Active Participant in the same ratio that the sum of the total
Compensation and Excess Compensation of each Active Participant for
such Plan Year bears to the sum of the total Compensation and Excess
Compensation of all Active Participants for such Plan Year.
(ii) Step Two - Second, the remaining Employer Contribution and
the Forfeitures, if any, for such Plan Year shall be allocated to the
Employer Account of each Active Participant (whether or not he or she
had Excess Compensation) in the same ratio that each Active
Participant's total Compensation for such Plan Year bears to the total
Compensation of all Active Participants for such Plan Year.
(iii) Special Definitions - For purpose of this S6.3(a)(2),
(A) "Integration Amount" means the product of (1) the total
Compensation and the total Excess Compensation of all Active
Participants and (2) the Integration Percentage specified in the
Adoption Agreement, but in no event shall the Integration Percentage
exceed the Maximum Disparity Rate for any Plan Year beginning after
December 31, 1988.
(B) "Excess Compensation" means the amount, if any, of a
Participant's Compensation for such Plan Year which exceeds the
Integration Level for such Plan Year.
(iv) Top-Heavy. If this Plan is a Top-Heavy Plan for any Plan
Year, the allocation formula in S12.3(h)(1) shall apply in lieu of the
formula in this S6.3(a)(2) for such Plan Year.
6.3(b) Money Purchase Pension Plan. If this Plan is adopted as a
Money Purchase Pension Plan, the Forfeitures and the Employer
Contribution actually made under S5.2 (as adjusted, if applicable, in
accordance with S12.3(h)(2) for a Top-Heavy Plan) shall be allocated
(and posted) as of the last day of each Plan Year to the Employer
Account of each Active Participant in accordance with the formula
specified in the Adoption Agreement. If Forfeitures are applied to
reduce the Employer Contribution and the Forfeitures available under
S8.2(e) for any Plan Year exceed the contribution specified in the
Adoption Agreement for such Plan Year, such excess shall be held in a
separate account and shall be applied in full as a Forfeiture to
offset such contributions in the future until such account is
exhausted under this S6.3(b). If Forfeitures are to be allocated to
Active Participants, such Forfeitures shall be allocated (and posted)
to the Employer Account of each Active Participant in the same ratio
that such Active Participant's Compensation for such Plan Year bears
to the total Compensation of all such Active Participants for such
Plan Year.
6.3(c) 401(k) Plan. If this Plan is adopted as a 401(k) Plan,
Forfeitures and contributions made under S5.3 shall be allocated (and
posted) in accordance with the following:
6.3(c)(1) Elective Deferrals and Employee Contributions.
Elective Deferrals made on a Participant's behalf for the period
ending on each Valuation Date shall be credited to the
Participant's Elective Deferral Account as of such Valuation Date
and the Employee Contributions made by a Participant for such
period shall be credited to the Participant's Employee Account as
of such Valuation Date.
6.3(c)(2) Matching Contributions and Qualified Matching
Contributions.
(i) Allocation. Matching Contributions and Qualified Matching
Contributions made on a Participant's behalf shall be credited to the
Participant's Matching Account and Qualified Matching Account,
respectively,
(A) Standard Option - as of the last day of each Plan Year or
(B) Alternative - only as of each Allocation Date specified in
the Adoption Agreement.
(ii) Forfeitures. Forfeitures attributable to Matching Accounts
shall be allocated or applied in accordance with the following rules;
provided, no Forfeitures attributable to Excess Aggregate
Contributions under S7.5(d) shall be allocated to the Account of any
Highly Compensated Employee:
(A) Forfeitures to Reduce Matching Contribution (Standard
Option). Forfeitures attributable to Matching Accounts shall be
applied to reduce the Matching Contributions for the applicable
Allocation Date (as specified in S8.2 and the Adoption Agreement). If
the Forfeitures exceed the Matching Contribution specified in the
Adoption Agreement for any Allocation Date, such excess shall be held
in a separate account and shall be applied in full as a Forfeiture to
offset Matching Contributions as of the next Allocation Date (and
succeeding Valuation Dates) until such account is exhausted under this
S6.3(c)(2).
(B) Forfeitures to be Allocated (Alternative). If so specified
in the Adoption Agreement, Forfeitures attributable to Matching
Accounts shall be allocated (and posted)
(I) as of the last day of such Plan Year to the Matching
Account of each Active Participant in the same ratio that such Active
Participant's Compensation for such Plan Year bears to the total
Compensation of all such Active Participants for such Plan Year, or
(II) in accordance with the formula specified in the Adoption
Agreement for a nonstandardized Plan.
6.3(c)(3) Qualified Nonelective Contributions. Qualified
Nonelective Contributions made on behalf of a Participant shall be
credited to the Participant's Qualified Nonelective Account
(i) Standard Option - as of the last day of each Plan Year or
(ii) Alternative - only as of each Allocation Date specified in
the Adoption Agreement.
6.3(c)(4) Discretionary Employer Contribution.
(i) Allocation. As of the last day of each Plan Year, the
Employer Contribution, if any, for such Plan Year shall be allocated
(and posted) to the Employer Account of each Active Participant
(A) Standard Option - in the nonintegrated method described in
S6.3(a)(1).
(B) Alternative - if so specified in the Adoption Agreement,
in the integrated method described in S6.3(a)(2).
(ii) Forfeitures. Forfeitures attributable to Employer Accounts
shall be allocated or applied in accordance with the following:
(A) Standard Option. Forfeitures attributable to Employer
Accounts shall be allocated (and posted) as of the last day of each
Plan Year to the Employer Account of each Active Participant in the
same manner as the Employer Contribution under S6.3(c)(4)(i).
(B) Alternative. If so specified in the Adoption Agreement,
Forfeitures attributable to Employer Accounts shall be
(I) applied to reduce Matching Contributions, Qualified Matching
Contributions and Qualified Nonelective Contributions for the
applicable Allocation Date (as specified in S8.2 and the Adoption
Agreement) and succeeding Allocation Dates, if necessary, or
(II) allocated (and posted) in accordance with the formula
specified in the Adoption Agreement for a nonstandardized Plan.
6.3(d) Target Benefit Pension Plan. If this Plan is adopted as a
Target Benefit Pension Plan, the Forfeitures and the Employer
Contribution actually made under S5.4 for each Plan Year shall be
allocated (and posted) as of the last day of each Plan Year to the
Employer Account of each Active Participant as specified in the
Adoption Agreement. The Forfeitures for each Plan Year shall be
applied to reduce the Employer Contribution for such Plan Year. If
Forfeitures for any Plan Year exceed the Employer Contributions
determined under S5.4 for such Plan Year, such excess shall be held in
a separate account and shall be applied in full to offset Employer
Contributions in the future until such account is exhausted under this
S6.3(d).
6.3(e) Top Heavy Minimum Allocation. If this Plan is a Top-Heavy
Plan (as defined in S12), the minimum allocation required to be made
under this Plan under S12.3, if any, shall be allocated (and posted)
as of the last day of the Plan Year (1) to the Employer Account of
each Participant who is not an Active Participant but for whom a
minimum allocation is required under S12.3 and (2) to each Active
Participant for whom a minimum allocation is required to be made in
this Plan under S12.3 to the extent such minimum allocation is not
otherwise satisfied by the allocation under this S6.3. If this Plan is
adopted as a Profit Sharing Plan, the minimum allocation may be made
by reallocating the Employer Contribution and Forfeitures allocated
under S6.3(a) in a manner which satisfies this S6.3(e) or by
contributing an additional amount which will be allocated in
accordance with this S6.3(e). If this Plan is adopted as a Money
Purchase Pension Plan, a Target Benefit Pension Plan or a 401(k) Plan,
an additional Employer Contribution shall be made to satisfy this
S6.3(e).
6.3(f) Rollover Contributions. Rollover Contributions made by a
Participant during the period ending on each Valuation Date shall be
credited to the Participant's Rollover Contribution Account as of such
Valuation Date.
6.4 Allocation Report. The Plan Administrator shall maintain records
of the allocations and adjustments made to Accounts under this S6 and
shall at least annually prepare and forward to each such Participant
and Beneficiary a statement which shows the new balance in such
person's Account.
6.5 Allocation Corrections. If an error or omission is discovered in
any Account, then as of the first Valuation Date in the Plan Year in
which the error or omission is discovered, the Plan Administrator
shall make (and post) an adjustment to such Account as the Plan
Administrator deems necessary to remedy in an equitable manner such
error or omission.
SECTION 7. STATUTORY LIMITATIONS ON ALLOCATIONS
7.1 Effective Date. Except as otherwise expressly provided, this S7
shall be effective retroactive to Plan Years beginning on or after
January 1, 1987.
7.2 Limitations on Annual Additions Under Code S415.
7.2(a) Special Definitions. For purposes of this S7.2, the terms
defined in this S7.2(a) shall have the meanings shown opposite such
terms.
7.2(a)(1) Annual Additions - means for each Participant for any
Limitation Year
(i) the sum of the employer contributions, forfeitures, and
nondeductible employee contributions creditable (without regard to the
application of this S7.2) to the Participant's account under this Plan
or under any other defined contribution plan (including a Master or
Prototype Plan and any defined benefit plan which provides for
employee contributions) maintained by the Employer for such Limitation
Year; and for this purpose, any Excess Amount allocated under S7.2(b),
any Excess Elective Deferrals under S7.3 (unless such excess is
distributed by the deadline set forth in S7.3(d)), any Excess
Contributions under S7.4 and any Excess Aggregate Contributions under
S7.5 shall be considered Annual Additions for such Limitation Year;
(ii) amounts allocated on behalf of such Participant after March
31, 1984 to an individual medical account (as defined in Code
S415(1)(2)) which is part of a pension or annuity plan maintained by
the Employer; and
(iii) 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 Code S419A(d)(3))
under a welfare benefit fund (as described in Code S419(e)) maintained
by the Employer; and
(iv) allocations under a simplified employee pension (as defined
in Code S408(k).
7.2(a)(2) Compensation - means for a Self-Employed Individual,
such individual's Earned Income, and for each other Employee
(i) Standard Option - compensation reportable on Form W-2 as
defined in S2.10(a)(1), or
(ii) Alternative - if so specified in the Adoption Agreement,
(A) compensation subject to withholding as defined in
S2.10(a)(2)(i), or
(B) the Employee's wages, salaries, 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 includable in gross income during the
Limitation Year (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 S1.62-2(c) of the Federal Income
Tax Regulations). Compensation shall not include the following:
(I) Employer contributions to a plan of deferred
compensation which are not includable in the Participant's gross
income for the taxable year in which contributed, or Employer
contributions under any simplified employee pension plan, or any
distributions from a plan of deferred compensation;
(II) amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by the
Participant either becomes freely transferable or is no longer subject
to a substantial risk of forfeiture;
(III) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(IV) other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in Code S403(b) (whether or not the contributions are
actually excludable from the gross income of the Participant).
For purposes of applying the limitations of this S7.2, an
Employee's Compensation for Limitation Years beginning on and after
the Final Compliance Date shall not include any Compensation which is
accrued for such Limitation Year.
However, for purposes of applying the limitations of this S7.2 to
a Participant in a defined contribution plan who is permanently and
totally disabled (as defined in Code S22(e)(3)), the term
"Compensation" shall mean the compensation such Participant would have
received for the Limitation Year if the Participant had been paid at
the Participant's rate of Compensation (as defined in this S7.2(a)(2))
paid immediately before becoming permanently and totally disabled,
and, further, such imputed compensation for the disabled Participant
may be taken into account only if the Participant is not a Highly
Compensated Employee and contributions made on behalf of such
Participant are nonforfeitable when made.
7.2(a)(3) Defined Benefit Fraction - means a fraction, (i) the
numerator of which shall be the sum of the Participant's Projected
Annual Benefits under all defined benefit plans (whether or not
terminated) maintained by the Employer, and (ii) the denominator of
which shall be the lesser of (A) 125% of the dollar limitation
determined for the Limitation Year under Code S415(b) and S415(d) or
(B) 140% of the Participant's Highest Average Compensation, including
any adjustments under Code S415(b). However, if the Participant was a
participant as of the first day of the first Limitation Year beginning
after December 31, 1986 in one or more defined benefit plans
maintained by the Employer which were in existence on May 6, 1986 and
which individually and in the aggregate satisfied the requirements of
Code S415 for all Limitation Years beginning before January 1, 1987,
the denominator of such fraction shall be not less than 125% of the
sum of the annual benefits under such plans which the Participant had
accrued as of the end of the last Limitation Year beginning before
January 1, 1987 disregarding any changes in the terms and conditions
in the plan after May 5, 1986. Notwithstanding the foregoing, "100%"
shall be substituted for "125%" in any Limitation Year for which this
Plan is a Top-Heavy Plan (as defined in S12) unless otherwise
specified in the Adoption Agreement.
7.2(a)(4) Defined Contribution Dollar Limitation - means for each
Limitation Year the greater of (i) $30,000 or (ii) one-fourth of the
defined benefit dollar limitation under Code S415(b)(1) as in effect
for such Limitation Year.
7.2(a)(5) Defined Contribution Fraction - means a fraction, (i)
the numerator of which shall (subject to the adjustment rules set
forth below) be the sum of the Annual Additions credited to the
Participant's accounts under all 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
described in Code S419(e)) and all individual medical accounts (as
described in Code S415(l)(2)) maintained by the Employer and (ii) the
denominator of which shall be the sum of the Maximum Aggregate Amounts
for the current and all prior Limitation Years of service with the
Employer (without regard to whether a defined contribution plan was
maintained by the Employer). The numerator of such fraction shall be
adjusted if the Participant was a participant as of the first day of
the first Limitation Year beginning after December 31, 1986 in one or
more defined contribution plans maintained by the Employer which were
in existence on May 6, 1986 and the sum of this fraction and the
Defined Benefit Fraction would otherwise exceed 1.0 under the terms of
this Plan. The adjustment shall be made by taking an amount equal to
the product of (A) the excess of the sum of the fractions over 1.0,
times (B) the denominator of this fraction, and by permanently
subtracting such product from the numerator of this fraction. The
adjustment shall be 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 Code S415
limitation applicable to the first Limitation Year beginning on or
after January 1, 1987. The Annual Addition for any Limitation Year
beginning before January 1, 1987 shall not be recomputed to treat all
employee contributions as an Annual Addition.
7.2(a)(6) Employer - means the Employer that adopts this Plan and
all members of a controlled group of corporations (as defined in Code
S414(b) as modified by Code S415(h)), all commonly controlled trades
or businesses (as defined in Code S414(c) as modified by Code S415(h))
or affiliated service groups (as defined in Code S414(m)) of which the
adopting Employer is a part and any other entity required to be
aggregated with the Employer pursuant to the regulations under Code
S414(o).
7.2(a)(7) Excess Amount - means the excess of a Participant's
Annual Additions for the Limitation Year over the Maximum Permissible
Amount.
7.2(a)(8) Highest Average Compensation - means the Participant's
average Compensation for the three consecutive Plan Years of
employment with the Employer (without regard to whether such Plan
Years were before the Effective Date) that produces the highest
average.
7.2(a)(9) Limitation Year - means
(i) Standard Option - the Plan Year or
(ii)Alternative - the alternative 12 consecutive month period
specified 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.
7.2(a)(10) Master or Prototype Plan - means a plan the form of
which is the subject of a favorable opinion letter from the Internal
Revenue Service.
7.2(a)(11) Maximum Aggregate Amount - means for any Limitation
Year the lesser of (i) 125% of the dollar limitation determined under
Code S415(c)(1)(A) or (ii) 35% of the Participant's Compensation for
such year. Notwithstanding the foregoing, "100%" shall be substituted
for 125% in any Limitation year for which this Plan is a Top-Heavy
Plan (as defined in S12) unless otherwise specified in the Adoption
Agreement.
7.2(a)(12) Maximum Permissible Amount - means the lesser of (i)
the Defined Contribution Dollar Limitation or (ii) 25% of a
Participant's Compensation for the Limitation Year; provided,
(A) the compensation limitation referred to in clause (ii) shall
not apply to any contribution for medical benefits (within the meaning
of Code S401(h) or S419A(f)(2)) which is otherwise treated as an
Annual Addition under Code S415(l)(l) or S419(A)(d)(2); and
(B) 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 shall not exceed the
Defined Contribution Dollar Limitation multiplied by a fraction, the
numerator of which shall be the number of months in the short
Limitation Year and the denominator of which shall be 12.
7.2(a)(13) Projected Annual Benefit - means 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 a
Participant would be entitled under the terms of a defined benefit
plan assuming:
(i) the Participant will continue employment until normal
retirement age under the plan (or current age, if later), and
(ii) 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.
7.2(b) Limitation If No Other Plans. If a Participant does not
participate in, and has never participated in, another qualified plan
maintained by the Employer or a welfare benefit fund (as described in
Code S419(e)) or individual medical account (as described in Code
S415(l)(2)) maintained by the Employer which provides an Annual
Addition as defined in S7.2(a)(1) or a simplified employee pension (as
defined in Code S408(k)) maintained by the Employer, the amount of
Annual Additions which actually may be credited to the Account of any
Participant for any Limitation Year shall not exceed the lesser of the
Maximum Permissible Amount or any other limitation set forth in this
Plan. If the Employer Contribution that would otherwise be credited to
the Participant's Account would cause the Annual Additions for the
Limitation Year to exceed the Maximum Permissible Amount, such amount
shall be reduced so that the Annual Additions actually credited for
the Limitation Year shall equal the Maximum Permissible Amount. If
pursuant to S7.2(f) or as a result of the allocation of Forfeitures a
Participant's Annual Additions under this Plan would result in an
Excess Amount, such Excess Amount shall be disposed of as follows:
7.2(b)(1) Profit Sharing Plan. If this Plan is adopted as a
Profit Sharing Plan,
(i) such Excess Amount shall be deemed a Forfeiture which shall
be allocated and reallocated as provided in S6.3(a) subject to the
restrictions of this S7.2 among the Employer Accounts of the remaining
Active Participants until such amount has been allocated in its
entirety; and
(ii) if the restrictions in this S7.2 apply before such amount
has been reallocated in its entirety, as the final allocation step
such unallocable Excess Amount shall be transferred to a suspense
account.
7.2(b)(2) Money Purchase Pension Plan of Target Benefit Pension
Plan. If this Plan is adopted as a Money Purchase Pension Plan or
Target Benefit Pension Plan,
(i) Standard Option - such Excess Amount shall be held
unallocated in a suspense account which shall be applied to offset
future Employer Contributions for Active Participants in the next
Limitation Year (and in each succeeding Limitation Year if necessary).
(ii) Alternative - if so specified in the Adoption Agreement,
(A) for any Participant who is an Active Participant at the
end of the Limitation Year, such Excess Amount shall be held
unallocated in a suspense account which shall be applied to offset the
Employer Contribution for such Active Participant in the next
Limitation Year (and in each succeeding Limitation Year if necessary);
and
(B) for any Participant who is not an Active Participant at
the end of such Limitation Year, such Excess Amount shall be held
unallocated in a suspense account which shall be applied to offset
future Employer Contributions for all remaining Active Participants in
the next Limitation Year (and in each succeeding Limitation Year if
necessary).
7.2(b)(3) 401(k) Plan. If this Plan is adopted as a 401(k) Plan,
any Elective Deferrals and Employee Contributions made by the
Participant during the Limitation Year (and, to the extent required
under regulations, gains attributable to such Employee Contributions)
shall be refunded to the extent such refund would reduce the Excess
Amount and, if an Excess Amount still exists after such refund,
(i) any such Excess Amount which is attributable to
discretionary Employer Contributions shall be disposed of in the same
manner as an Excess Amount under a Profit Sharing Plan as described in
S7.2(b)(1), and
(ii) any such Excess Amount which is attributable to a Matching
Contribution, Qualified Nonelective Contribution or Qualified Matching
Contribution shall be held unallocated in a suspense account which
shall be used to offset future Matching Contributions, Qualified
Nonelective Contributions or Qualified Matching Contributions in the
next Limitation Year (and in each succeeding Limitation Year if
necessary).
7.2(b)(4) Suspense Account. A suspense account established
pursuant to this S7.2(b) shall not be subject to any allocation of
Fund Earnings under S6.2, and the balance of such account shall be
returned to the Employer in the event this Plan is terminated prior to
the date such account has been allocated in its entirety as a
Forfeiture. In no event shall Excess Amounts be distributed to
Participants or former Participants.
7.2(c) Limitation If Other Defined Contribution Master or Prototype
Plan. This S7.2(c) applies if, in addition to this Plan, a Participant
is covered under another defined contribution Master or Prototype Plan
maintained by the Employer or a welfare benefit fund (as described in
Code S419(e)) or an individual medical account (as described in Code
S415(l)(2)) maintained by the Employer which provides for an Annual
Addition as defined in S7.2(a)(1) or a simplified employee pension (as
defined in Code S408(k)) maintained by the Employer during any
Limitation Year. The Annual Additions which may be credited to a
Participant's Account under this Plan for any such Limitation Year
shall not exceed the Maximum Permissible Amount reduced by the Annual
Additions credited to a Participant's account under such other defined
contribution Master or Prototype Plan and welfare benefit funds for
the same Limitation Year.
7.2(c)(1) If for any Limitation Year (1) the Employer also
maintains another defined contribution Paired Plan, (2) the Employer
does not maintain any other defined contribution Master or Prototype
Plan (other than such Paired Plan) and (3) a Participant's Annual
Additions under such Paired Plans would result in an Excess Amount for
such Limitation Year, the allocation adjustment required to satisfy
the limitations of Code S415 shall be made under such Plans in the
following order:
(i) Standard Option - first, under the Profit Sharing Plan, if
any; second under the Money Purchase Pension Plan, if any; third under
the Target Benefit Pension Plan, if any; and finally, under the 401(k)
Plan, if any; or
(ii) Alternative - in the alternative order specified in the
Adoption Agreement.
7.2(c)(2) If the Annual Additions with respect to any Participant
under such other defined contribution Master or Prototype Plan (other
than a defined contribution Paired Plan) and welfare benefit funds
maintained by the Employer are less than the Maximum Permissible
Amount and the Employer Contribution that would otherwise be
contributed or allocated to the Participant's Account under this Plan
would cause the Annual Additions for the Limitation Year to exceed
this limitation, the amount contributed or allocated shall be reduced
so that the Annual Additions under all such plans and funds for the
Limitation Year shall equal the Maximum Permissible Amount.
7.2(c)(3) If the Annual Additions with respect to the Participant
under such other defined contribution Master and Prototype Plan (other
than a defined contribution Paired Plan) and welfare benefit funds in
the aggregate are equal to or greater than the Maximum Permissible
Amount, no amount shall be credited to the Participant's Account under
this Plan for the Limitation Year.
7.2(c)(4) If pursuant to S7.2(f) or as a result of the allocation
of Forfeitures a Participant's Annual Additions under this Plan and
such other defined contribution Master or Prototype Plan (other than a
Paired Plan) and welfare benefit funds would result in an Excess
Amount for any Limitation Year,
(i) the Excess Amount shall be deemed to consist of the Annual
Additions last allocated and the Annual Additions attributable to a
welfare benefit fund or an individual medical account shall be deemed
to have been allocated prior to all other Annual Additions, and
(ii) if an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an allocation date
of such other Master or Prototype Plan, then the Excess Amount
attributed to this Plan shall be the product of
(A) the total Excess Amount allocated as of such date, times
(B) a fraction, the numerator of which shall be the Annual
Additions allocated to the Participant for the Limitation Year as of
such date under this Plan and the denominator of which is the total
Annual Additions allocated to the Participant for the Limitation Year
as of such date under this and all such other defined contribution
Master or Prototype Plans.
7.2(c)(5) Any Excess Amount attributed to this Plan will be
disposed of in the manner described in S7.2(b).
7.2(d) Limitation If Other Defined Contribution Plan. If any
Participant is covered under another qualified defined contribution
plan maintained by the Employer which is not a Master or Prototype
Plan, the Annual Additions which may be credited to the Participant's
Account under this Plan for any Limitation Year shall be limited
7.2(d)(1) Standard Option - as specified in S7.2(c) as though the
other plan was a Master or Prototype Plan or
7.2(d)(2) Alternative - under the alternative method specified in
the Adoption Agreement for limiting the Annual Additions under this
Plan.
7.2(e) Limitation If Other Defined Benefit Plan. If the Employer
maintains, or at any time maintained, a qualified defined benefit plan
(other than a defined benefit Paired Plan) covering any Participant in
this Plan, the sum of the Participant's Defined Benefit Fraction and
Defined Contribution Fraction shall not exceed 1.0 in any Limitation
Year. The Annual Additions which may be credited to any Participant's
Account under this Plan for any Limitation Year shall be limited as
specified in the Adoption Agreement. If the Employer maintains a
defined benefit Paired Plan, any adjustments to satisfy the
requirements of Code S415(e) shall be made only under such defined
benefit Paired Plan.
7.2(f) Compensation for Determination of Maximum Permissible Amount.
Prior to determining a 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, and, if
applicable, a reasonable estimation of the amount of elective
deferrals (within the meaning of Code S402(g)(3)) that the Participant
may make for the Limitation Year, uniformly determined for all
similarly situated Participants. As soon as is administratively
feasible after the end of the Limitation Year, the Maximum Permissible
Amount for the Limitation Year shall be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
7.3 Individual Limitation on Elective Deferrals Under Code S402(g).
7.3(a) General. A Participant's Elective Deferrals under this Plan
and all other qualified plans, contracts and arrangements maintained
by the Employer or an Affiliate during any taxable year of the
Participant shall not exceed the dollar limitation under Code S402(g)
in effect at the beginning of such taxable year.
7.3(b) Elective Deferrals. For purposes of the dollar limitation
under Code S402(g) and this S7.3, the term "Elective Deferrals" shall
include all employer contributions made on behalf of a Participant
pursuant to an election to defer under any qualified cash or deferred
arrangement as described in Code S401(k), any simplified employee
pension cash or deferred arrangement as described in Code
S402(h)(1)(B), any plan described under Code S501(c)(18), and any
salary reduction agreement for the purchase of an annuity contract
under Code S403(b). However, the term shall not include Elective
Deferrals which are properly distributed to the Participant from this
Plan under S7.2 or such other plans or arrangements to correct for
excess annual additions.
7.3(c) Excess Elective Deferrals. For purposes of this S7.3, the
term "Excess Elective Deferrals" means for each Participant the
Elective Deferrals that are includable in gross income under Code
S402(g) to the extent the Participant's Elective Deferrals for a
taxable year exceed the dollar limitations under Code S402(g) for such
taxable year.
7.3(d) Distribution of Excess Elective Deferrals. Notwithstanding
any other provision of this Plan restricting the timing of
distributions, Excess Elective Deferrals, plus any income and minus
any loss allocable thereto, shall be distributed no later than April
15 of any calendar year to Participants (1) whose Excess Elective
Deferrals for the preceding taxable year were assigned to this Plan
and (2) who claim (or are deemed to have claimed) such allocable
Excess Elective Deferrals for such taxable year in accordance with the
claims procedure set forth in S7.3(f).
7.3(e) Determination of Income or Loss. A corrective distribution of
Excess Elective Deferrals under this S7.3 shall include the income or
loss allocable to such Excess Elective Deferrals for the Participant's
taxable year in which such excess occurred and, if so specified in the
Adoption Agreement, for the period between the end of such taxable
year and the date of distribution ("gap period"). The income or loss
for such taxable year and gap period, if applicable, shall be
determined in accordance with the regulations under Code S402(g). In
lieu of using the safe harbor method or the alternative method in the
regulations for allocating such income or loss, the Plan Administrator
may use any reasonable method for computing such income or loss,
provided that such method does not violate Code S401(a)(4), is used
consistently for all Participants and for all corrective distributions
under the Plan for the Plan Year, and is used by the Plan for
allocating income or loss to Participant's Accounts.
7.3(f) Claims Procedure.
7.3(f)(1) General. A Participant may assign to this Plan any
Excess Elective Deferral made during a taxable year by filing a claim
with the Plan Administrator on or before
(i) Standard Option - March 1 or
(ii) Alternative - the alternative date for filing such claims
specified in the Adoption Agreement.
Unless otherwise provided in administrative procedures established
by the Plan Administrator, such claim shall be in writing, shall
specify the dollar amount of the Participant's Excess Elective
Deferrals assigned to this Plan for such taxable year, and shall be
accompanied by the Participant's written statement that such amounts,
if not distributed to such Participant, will exceed the limit imposed
on the Participant by Code S402(g) for the taxable year in which the
deferral occurred.
7.3(f)(2) Deemed Claim. A Participant automatically shall be
deemed to have filed a claim under this S7.3(f) to the extent that
such Excess Elective Deferrals occurred solely as a result of Elective
Deferrals under this Plan and any other plans of the Employer and the
Affiliates, unless the Employer specifies in the Adoption Agreement
that such Excess Elective Deferrals shall be distributed from one or
more of such other plans.
7.4 Limitations on Elective Deferrals for Highly Compensated
Employees under Code S401(k).
7.4(a) Special Definitions. For purposes of this S7.4, the terms
defined in this S7.4(a) shall have the meanings shown opposite such
terms.
7.4(a)(1) Actual Deferral Percentage - means for each Plan Year
for each Participant who is an Eligible Employee at any time during
such Plan Year the ratio (expressed as a percentage and determined in
accordance with S7.4(c)) of Employer Contributions made on behalf of
such Participant for such Plan Year to such Participant's Compensation
for such Plan Year. The Actual Deferral Percentage of a Participant
who is an Eligible Employee, but does not make an Elective Deferral
and does not receive an allocation of a Qualified Nonelective
Contribution or a Qualified Matching Contribution, shall be zero.
7.4(a)(2) ADP (or Average Actual Deferral Percentage) - means
for each Plan Year separately for the group of Participants who
are Highly Compensated Employees during such Plan Year and for
the group of Participants who are Nonhighly Compensated Employees
during such Plan Year, the average (expressed as a percentage) of
the Actual Deferral Percentages of the Participants in each such
group who are Eligible Employees at any time during such Plan
Year.
7.4(a)(3) Employer Contributions - means for purposes of
determining a Participant's Actual Deferral Percentage for each Plan
Year, the sum of (i) the Elective Deferrals made pursuant to the
Participant's deferral election, including Excess Elective Deferrals
(as defined in S7.3(c)) of Highly Compensated Employees, but excluding
Excess Elective Deferrals of Nonhighly Compensated Employees that
arise solely from Elective Deferrals made under this Plan or any other
plans of the Employer and the Affiliates, and excluding Elective
Deferrals that are taken into account in the ACP test described in
S7.5(b) (provided the ADP test is satisfied both with and without
exclusion of such Elective Deferrals), and (ii) at the election of the
Employer, Qualified Nonelective Contributions and Qualified Matching
Contributions.
7.4(a)(4) Excess Contributions - means for each Plan Year for
each Highly Compensated Employee the excess of the aggregate amount of
Employer Contributions actually taken into account in computing the
Average Deferral Percentage of such Highly Compensated Employee for
such Plan Year over the maximum amount of such contributions permitted
for such Plan Year under the ADP limit as set forth in S7.4(b)
(determined by reducing Elective Deferrals, Qualified Nonelective
Contributions and Qualified Matching Contributions made on behalf of
Highly Compensated Employees in order of their Actual Deferral
Percentages, beginning with the highest of such percentages).
7.4(a)(5) Highly Compensated Employee - means any Employee who is
either a "highly compensated active employee" or a "highly compensated
former employee" as described below.
(i) A "highly compensated active employee" means any Employee
who performs services for the Employer or any Affiliate during the
"determination year" and who, during the "look-back year": (A)
received compensation from the Employer or any Affiliate in excess of
$75,000 (as adjusted pursuant to Code S415(d)); (B) received
compensation from the Employer or any Affiliate in excess of $50,000
(as adjusted pursuant to Code S415(d)) and was a member of the "top-
paid group" for such year; or (C) was an officer of the Employer or
any Affiliate and received compensation during such year that is
greater than 50% of the dollar limitation in effect under Code
S415(b)(1)(A). The term "highly compensated employee" shall also
include: (I) an Employee who is both described in the preceding
sentence if the term "determination year" is substituted for the term
"look-back year" and is one of the 100 Employees who received the most
compensation from the Employer or any Affiliate during the
determination year; and (II) an Employee who is a 5% owner at any time
during the look-back year or determination year. If no officer has
satisfied the compensation requirement of clause (C) above during
either a determination year or look-back year, the highest paid
officer for each such year shall be treated as a Highly Compensated
Employee.
(ii) A "highly compensated former employee" means any Employee
who separated (or was deemed to have separated) from service prior to
the determination year, performs no services for the Employer or any
Affiliate 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.
(iii) For purposes of this definition, the "determination year"
shall mean the Plan Year and the "look-back year" shall mean the 12-
month period immediately preceding the determination year.
(iv) 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 ("top-ten Highly Compensated
Employee"), then the Family Member and the 5% owner or top-ten Highly
Compensated Employee shall be treated as a single Employee receiving
compensation and Plan contributions or benefits equal to the sum of
such compensation and contributions or benefits of the Family Member
and the 5% owner or top-ten Highly Compensated Employee.
(v) The determination of who is a Highly Compensated Employee,
including the determination 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, shall be
made in accordance with Code S414(q) including any available
operational transition rules and any elections provided in the
regulations under Code S414(q) and specified in the Adoption
Agreement.
7.4(b) ADP Limit. The ADP for Highly Compensated Employees for
any Plan Year shall not exceed
7.4(b)(1) the ADP for Nonhighly Compensated Employees for such
Plan Year multiplied by 1.25, or
7.4(b)(2) the ADP for Nonhighly Compensated Employees for such
Plan Year multiplied by 2, provided that the ADP for Highly
Compensated Employees does not exceed the ADP for Nonhighly
Compensated Employees by more than 2 percentage points.
7.4(c) Special Rules.
7.4(c)(1) Other Plans. The Actual Deferral Percentage for any
Participant who is a Highly Compensated Employee for the Plan Year and
who is eligible to participate in more than one cash or deferred
arrangement maintained by the Employer or an Affiliate shall be
determined by treating all such arrangements as a single arrangement.
If a Highly Compensated Employee participates in two or more cash or
deferred arrangements that have different plan years, all such
arrangements ending with or within the same calendar year shall be
treated as a single arrangement. Notwithstanding the foregoing, plans
which are mandatorily disaggregated under regulations under Code
S401(k) shall be treated as separate.
7.4(c)(2) Aggregation. In the event that this Plan satisfies the
requirements of Code S410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such
Code section only if aggregated with this Plan, then this S7.4 shall
be applied by determining the Actual Deferral Percentages and ADP as
if all such plans were a single plan. For Plan Years beginning on and
after the Final Compliance Date, such plans may be aggregated only if
they have the same plan years and are not mandatorily disaggregated
under regulations under Code S401(k).
7.4(c)(3) Family Members. For purposes of determining the Actual
Deferral Percentage of a Participant who is a 5% owner or one of the
10 most highly paid Highly Compensated Employees and who is an
Eligible Employee at any time during the Plan Year, the Employer
Contributions and Compensation of such Participant shall include the
Employer Contributions and Compensation of his or her Family Members,
and such Family Members shall be disregarded as separate Participants
in determining the ADP both for Nonhighly Compensated Employees and
for Highly Compensated Employees.
7.4(c)(4) Timing. For purposes of determining the Actual Deferral
Percentages for any Plan Year, Elective Deferrals, Qualified
Nonelective Contributions and Qualified Matching Contributions shall
be considered made for such Plan Year only if such contributions are
allocated as of a date within such Plan Year and are actually paid to
the Fund by the last day of the 12 month period immediately following
such Plan Year.
7.4(c)(5) Records. The Plan Administrator shall maintain records
which are sufficient to demonstrate that the Plan complied with the
ADP limits, including the extent to which Qualified Nonelective
Contributions and Qualified Matching Contributions are taken into
account to satisfy such ADP limits.
7.4(c)(6) Other Requirements. The determination and treatment of
the Elective Deferrals and Actual Deferral Percentage of any
Participant shall satisfy such other requirements as may be prescribed
by the Secretary of the Treasury.
7.4(d) Distribution of Excess Contributions.
7.4(d)(1) General. Notwithstanding any other provision of this
Plan restricting the timing of distributions, Excess Contributions for
any Plan Year, plus any income and minus any loss allocable thereto,
shall be distributed no later than the last day of the immediately
following Plan Year to Participants on whose behalf such Excess
Contributions were made. If such Excess Contributions are distributed
more than 2_ months after the last day of the Plan Year in which such
excess occurred, a 10% excise tax shall be imposed under Code S4979 on
the Employer with respect to such excess. Such distributions shall be
made to such Participants on the basis of the respective portions of
the Excess Contributions attributable to each such Participant. Excess
Contributions shall be allocated to Participants who are subject to
the Family Member aggregation rules under Code S414(q)(6) in the
manner prescribed by the regulations under Code S401(k).
7.4(d)(2) Determination of Income or Loss. A corrective
distribution of Excess Contributions under this S7.4 shall include the
income or loss allocable to such Excess Contributions for the Plan
Year in which such excess occurred and, if so specified in the
Adoption Agreement, for the period between the end of such Plan Year
and the date of distribution ("gap period"). The income or loss for
such Plan Year and gap period, if applicable, shall be determined in
accordance with the regulations under Code S401(k). In lieu of using
the safe harbor method or the alternative method in the regulations
for allocating such income or loss, the Plan Administrator may use any
reasonable method for computing such income or loss, provided that
such method does not violate Code S401(a)(4), is used consistently for
all Participants and for all corrective distributions under the Plan
for the Plan Year, and is used by the Plan for allocating income or
loss to Participant's Accounts.
7.4(d)(3) Order for Determining Excess Contributions. Excess
Contributions shall be determined after first determining Excess
Elective Deferrals under S7.3. The Excess Contributions which
would otherwise be distributed to the Participant shall be
reduced, in accordance with regulations, by the Excess Elective
Deferrals distributed to the Participant under S7.3.
7.4(d)(4) Accounting for Excess Contributions. Excess
Contributions shall be distributed proportionately from the
Participant's Elective Deferral Account and Qualified Matching Account
in the same ratio that such Participant's Elective Deferrals and
Qualified Matching Contributions for the Plan Year in which such
Excess Contributions were made bears to the sum of the Participant's
Elective Deferrals and Qualified Matching Contributions for such Plan
Year. Excess Contributions shall be distributed from the Participant's
Qualified Nonelective Account only to the extent that such Excess
Contributions exceed the balance in the Participant's Elective
Deferral Account and Qualified Matching Account. Notwithstanding the
foregoing, Excess Contributions may be distributed from the applicable
subaccounts in accordance with procedures established by the Plan
Administrator provided such procedures do not result in discrimination
in favor of Highly Compensated Employees which would be prohibited
under Code S401(a)(4).
7.4(e) Recharacterization. If the Employer specifies in the
Adoption Agreement that Excess Contributions may be recharacterized, a
Participant may elect to treat Excess Contributions as an amount
distributed to the Participant and then contributed as an Employee
Contribution to the Plan. Any such Excess Contribution which is so
recharacterized as an Employee Contribution shall remain
nonforfeitable and shall thereafter be subject to the same
distribution restrictions applicable to Elective Deferrals under
S9.2(b). Excess Contributions shall not be recharacterized by a
Participant to the extent that such amounts, in combination with other
Employee Contributions, would exceed any limits on Employee
Contributions set forth in the Plan or in the Adoption Agreement.
Any such recharacterization must occur no later than 2_ months after
the end of the Plan Year in which such Excess Contribution occurred
and shall be deemed to occur no earlier than the date on which the
last Highly Compensated Employee is informed in writing of the amount
recharacterized and the consequences of such recharacterization. Any
Excess Contributions which are so recharacterized shall be taxable to
the Participant for the taxable year in which the Participant would
have received such amount in cash but for the deferral election.
7.5 Limitations on Employee Contributions and Matching Contributions
under Code S401(m).
7.5(a) Special Definitions. For purposes of this S7.5, the terms
defined in this S7.5(a) shall have the meanings shown opposite such
terms.
7.5(a)(1) Aggregate Limit - means the sum of
(i) 125% of the greater (or lesser, if it would result in a
larger Aggregate Limit) of
(A) the ADP for Nonhighly Compensated Employees under the plan
subject to Code S401(k) for the plan year or
(B) the ACP for Nonhighly Compensated Employees under the plan
subject to Code S401(m) for the plan year beginning with or within the
plan year of the plan which is subject to Code S401(k) and
(ii) the lesser of
(A) 200% of such ADP or ACP or
(B) two plus the lesser (or greater, if it would result in a
larger Aggregate Limit) of such ADP or ACP.
7.5(a)(2) ACP (or Average Contribution Percentage) - means for
each Plan Year separately for the group of Participants who are Highly
Compensated Employees during such Plan Year and for the group of
Participants who are Nonhighly Compensated Employees during such Plan
Year, the average (expressed as a percentage) of the Contribution
Percentages of the Participants in each such group who are Eligible
Employees at any time during such Plan Year.
7.5(a)(3) Contribution Percentage - means for each Plan Year for
each Participant who is an Eligible Employee at any time during such
Plan Year, the ratio (expressed as a percentage and determined in
accordance with S7.5(c)) of such Participant's Contribution Percentage
Amount for such Plan Year to such Participant's Compensation for such
Plan Year. The Contribution Percentage of a Participant who is
eligible to, but does not, make Employee Contributions or Elective
Deferrals and who, as a result of such failure to make such
contributions, does not receive an allocation of a Matching
Contribution or Qualified Matching Contribution shall be zero.
7.5(a)(4) Contribution Percentage Amount - means for each Plan
Year for each Participant who is an Eligible Employee at any time
during such Plan Year the sum of
(i) the Employee Contributions, Matching Contributions and
Qualified Matching Contributions (to the extent not taken into account
for purposes of the ADP test described in S7.4) made on behalf of such
Participant for such Plan Year, other than Matching Contributions
which are forfeited either to correct Excess Aggregate Contributions
or because the contributions to which they relate are Excess Elective
Deferrals, Excess Contributions or Excess Aggregate Contributions,
(ii) the Forfeitures allocated to such Participant's Account for
such Plan Year which are attributable to Matching Contributions and
Excess Aggregate Contributions,
(iii) at the election of the Employer, the Qualified Nonelective
Contributions made on behalf of such Participant for such Plan Year
(to the extent not taken into account for purposes of the ADP test
described in S7.4), and
(iv) at the election of the Employer, Elective Deferrals
(provided the ADP limit described in S7.4 is met both including and
excluding the Elective Deferrals that are used to meet the ACP limit).
7.5(a)(5) Employee Contribution - means for purposes of
determining a Participant's Contribution Percentage Amount any
contributions made by the Participant which are included in gross
income for the taxable year in which made and which are maintained in
a separate account to which earnings and losses are allocated.
7.5(a)(6) Excess Aggregate Contribution - means for each Plan Year
for each Highly Compensated Employee the excess of the aggregate
Contribution Percentage Amounts actually taken into account in
computing the ACP of such Highly Compensated Employee for such Plan
Year over the maximum Contribution Percentage Amounts permitted for
such Plan Year under the ACP limit as set forth in S7.5(b) (determined
by reducing contributions and Forfeitures on behalf of Highly
Compensated Employees in order of their Contribution Percentages,
beginning with the highest of such percentages).
7.5(a)(7) Matching Contribution - means for purposes of
determining a Participant's Contribution Percentage Amount any
Employer contribution made to this Plan or any other defined
contribution plan on account of an Employee Contribution or Elective
Deferral made by or on behalf of the Participant under a plan
maintained by the Employer.
7.5(b) ACP Limit.The ACP for Participants who are Highly Compensated
Employees for any Plan Year shall not exceed
7.5(b)(1) the ACP for Participants who are Nonhighly Compensated
Employees for such Plan Year multiplied by 1.25, or
7.5(b)(2) the ACP for Participants who are Nonhighly Compensated
Employees for such Plan Year multiplied by 2, provided that the ACP
for Participants who are Highly Compensated Employees does not exceed
the ACP for Participants who are Nonhighly Compensated Employees by
more than 2 percentage points.
7.5(c) Special Rules.
7.5(c)(1) Multiple Use. For Plan Years beginning after the Final
Compliance Date, if
(i) one or more Highly Compensated Employees participates both
in a plan with a qualified cash or deferred arrangement which is
subject to the ADP limitations under Code S401(k) as described in S7.4
and in a plan which is subject to the ACP limitations under Code
S401(m) as described in this S7.5,
(ii) the sum of the ADP of the eligible Highly Compensated
Employees in the plan subject to Code S401(k) and the ACP of the
eligible Highly Compensated Employees in the plan subject to Code
S401(m) exceeds the Aggregate Limit, and
(iii) both the ADP and the ACP of the eligible Highly
Compensated Employees in such plans exceed 125% of the ADP or ACP
respectively of the eligible Nonhighly Compensated Employees in such
plans,
then the Contribution Percentages of the Highly Compensated
Employees who participate in both such plans shall be reduced
(beginning with the highest of such percentages) so that the Aggregate
Limit for such plans is not exceeded. Any such reduction shall be
treated as an Excess Aggregate Contribution. The determination of the
limitations under this special rule shall be made after any
corrections required to meet the ADP limits and the ACP limits and in
accordance with the regulations under Code S401(m).
7.5(c)(2) Other Plans. The Contribution Percentage for any
Participant who is a Highly Compensated Employee for the Plan Year and
who is eligible to participate in more than one plan maintained by the
Employer or an Affiliate to which "employee contributions" (within the
meaning of Code S401(m)) or "matching contributions" (as described in
Code S401(m)(4)) are made shall be determined by treating all such
plans as one plan. If a Highly Compensated Employee participates in
two or more such plans that have different plan years, all such plans
ending with or within the same calendar year shall be treated as a
single plan. Notwithstanding the foregoing, plans which are
mandatorily disaggregated under regulations under Code S401(m) shall
be treated as separate.
7.5(c)(3) Aggregation. In the event that this Plan satisfies the
requirements of Code S410(b) only if aggregated with one or more other
plans, or if one or more other plans satisfy the requirements of such
Code sections only if aggregated with this Plan, then this S7.5 shall
be applied by determining the Contribution Percentages and ACP as if
all such plans were a single plan. For Plan Years beginning on and
after the Final Compliance Date, such plans may be aggregated only if
they have the same plan years and they are not mandatorily
disaggregated under regulations under Code S401(m).
7.5(c)(4) Family Members. 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 of his or her
Family Members, and such Family Members shall be disregarded as
separate Participants in determining the ACP both for Participants who
are Nonhighly Compensated Employees and for Participants who are
Highly Compensated Employees.
7.5(c)(5) Timing. For purposes of determining the ACP for any
Plan Year, Employee Contributions shall be considered made in the Plan
Year in which they are actually contributed to the Fund and Matching
Contributions (and, if applicable, Qualified Matching Contributions
and Qualified Nonelective Contributions) shall be considered made for
such Plan Year only if such contributions are allocated as of a date
within such Plan Year and are actually paid to the Fund by the last
day of the 12-month period immediately following such Plan Year.
7.5(c)(6) Records. The Plan Administrator shall maintain records
which are sufficient to demonstrate that the Plan complied with the
ACP limits, including the extent to which Elective Deferrals,
Qualified Nonelective Contributions and Qualified Matching
Contributions are taken into account to satisfy such ACP limits.
7.5(c)(7) Other Requirements. 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.
7.5(d) Distribution of Excess Aggregate Contributions.
7.5(d)(1) General. Notwithstanding any other provision of this
Plan restricting the timing of distributions, Excess Aggregate
Contributions for any Plan Year, plus any income and minus any loss
allocable thereto, shall be forfeited (if otherwise forfeitable under
the Plan) or distributed (if not forfeitable) from the Accounts of
Participants on whose behalf such Excess Aggregate Contributions were
made no later than the last day of the immediately following Plan
Year. If such Excess Aggregate Contributions are distributed more than
2 months after the last day of the Plan Year in which such excess
occurred, a 10% excise tax shall be imposed under Code S4979 on the
Employer with respect to such excess. Excess Aggregate Contributions
shall be allocated to Participants who are subject to the Family
Member aggregation rules under Code S414(q)(6) in the manner
prescribed by the regulations under Code S401(m).
7.5(d)(2) Determination of Income or Loss. A corrective
distribution of Excess Aggregate Contributions under this S7.5 shall
include the income or loss allocable to such Excess Aggregate
Contributions for the Plan Year in which such excess occurred and, if
so specified in the Adoption Agreement, for the period between the end
of such Plan Year and the date of distribution ("gap period"). The
income or loss for such Plan Year and gap period, if applicable, shall
be determined in accordance with the regulations under Code S401(m).
In lieu of using the safe harbor method or the alternative method in
the regulations for allocating such income or loss, the Plan
Administrator may use any reasonable method for computing such income
or loss, provided that such method does not violate Code S401(a)(4),
is used consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year, and is used by the
Plan for allocating income or loss to Participant's Accounts.
7.5(d)(3) Order for Determining Excess Aggregate Contributions.
Excess Aggregate Contributions shall be determined after first
determining Excess Elective Deferrals under S7.3 and then
determining Excess Contributions under S7.4.
7.5(d)(4) Accounting for Excess Aggregate Contributions. Excess
Aggregate Contributions shall be forfeited (if otherwise
forfeitable) or distributed (if not forfeitable) to the Highly
Compensated Employee from the Participant's Employee Account,
Matching Account, Qualified Matching Account, Qualified
Nonelective Account and Elective Deferral Account in the same
ratio that the contributions made on the Participant's behalf to
such account (to the extent such contributions are used in the
ACP test) for the Plan Year in which such Excess Aggregate
Contributions were made bears to the total of all such
contributions. Notwithstanding the foregoing, Excess Aggregate
Contributions may be distributed from the applicable subaccounts
in accordance with procedures established by the Plan
Administrator provided such procedures do not result in
discrimination in favor of Highly Compensated Employees which
would be prohibited under Code S401(a)(4).
7.5(d)(5) Allocation of Forfeitures. Amounts forfeited by Highly
Compensated Employees under this S7.5 shall be allocated or applied in
accordance with S6.3(c)(2); provided, no Forfeitures arising under
this S7.5 shall be allocated to the Account of any Highly Compensated
Employee.
SECTION 8. VESTING AND FORFEITURES
8.1 Determination of Nonforfeitable Percentage.
8.1(a) Fully Vested Accounts. Each Rollover Account, Employee
Account, Elective Deferral Account, Qualified Matching Account and
Qualified Nonelective Account shall be completely nonforfeitable at
all times.
8.1(b) Death, Disability and Retirement. The Employer Account and
Matching Account of each Participant who reaches Early Retirement Age
or Normal Retirement Age while an Employee shall become completely
nonforfeitable on such date. The Employer Account and Matching Account
of each Participant who dies while an Employee or who becomes Disabled
while an Employee
8.1(b)(1) Standard Option - shall become completely
nonforfeitable on such date.
8.1(b)(2) Alternative - if so specified in the Adoption Agreement,
shall be determined in accordance with the vesting schedule under
S8.1(c).
8.1(c) Other Separation From Service. Subject to S12.4, the
nonforfeitable percentage of the Employer Account and Matching Account
of a Participant other than a Participant described in S8.1(b) shall
be based on the Participant's Years of Service and on the following
vesting schedule:
8.1(c)(1) Standard Option - the full and immediate vesting
schedule.
8.1(c)(2) Alternative - the alternative vesting schedule
specified in the Adoption Agreement;
provided, however, if the Participation Requirement (or the
requirement to receive an allocation of Employer contributions under a
401(k) Plan) consists of a minimum period of service which exceeds one
year, the full and immediate vesting schedule shall automatically
apply notwithstanding any election to the contrary in the Adoption
Agreement.
8.1(d) Employee Contribution Withdrawals. No Forfeiture shall occur
solely as a result of a Participant's withdrawal of Employee
Contributions.
8.2 Forfeiture and Special Reemployment Rules.
8.2(a) Buy Back Rule (Standard Option).
8.2(a)(1) Forfeiture. The forfeitable portion, if any, of the
Employer Account and Matching Account of a Participant who separates
from service shall become a Forfeiture on the earlier of
(i) the date as of which the Participant receives (or is deemed
to receive under S8.2(c)) a distribution of the Participant's entire
nonforfeitable Account balance derived from Employer Contributions, or
(ii) the date he or she has 5 consecutive Breaks in Service
(6 consecutive Breaks in Service if the Alternative
Maternity/Paternity Rule applies).
If a Participant elects to have distributed less than the entire
nonforfeitable balance of the Participant's Employer Account and
Matching Account, the part of such accounts that shall be treated as a
Forfeiture is the total forfeitable portion of such Accounts
multiplied by a fraction, the numerator of which is the amount of the
distribution from the Participant's Employer Account or Matching
Account and the denominator of which shall be the total nonforfeitable
balance of the Participant's Employer Account or Matching Account at
the time of the distribution.
Any such Forfeiture shall be allocated or applied in accordance
with S6 on the Valuation Date specified in S8.2(e).
8.2(a)(2) Reemployment. If a Participant receives a distribution and
resumes employment covered under this Plan before the Participant has
5 consecutive Breaks in Service (6 consecutive Breaks in Service if
the Alternative Maternity/Paternity Rule applies), the Employer shall
restore to the Participant's Employer Account and Matching Account an
amount equal to the dollar amount of the Forfeitures from such
accounts if the Participant repays to the Plan an amount equal to the
dollar amount of the distributions from the Participant's Employer
Account and Matching Account in accordance with this S8.2(a). Such
repayment must be made before the earlier of (a) 5 years after the
first date on which the Participant is subsequently reemployed by the
Employer or a Participating Affiliate or (b) the date the Participant
incurs 5 consecutive Breaks in Service (6 consecutive Breaks in
Service if the Alternative Maternity/Paternity Rule applies) following
the date of the distribution.
If a Participant whose nonforfeitable Account balance is zero is
deemed to receive a distribution under S8.2(c) and he or she resumes
employment covered under this Plan before he or she has 5 consecutive
Breaks in Service (6 consecutive Breaks in Service if the Alternative
Maternity/Paternity Rule applies), the forfeitable portion of the
Participant's Employer Account and Matching Account shall
automatically be restored by the Employer upon the Participant's
reemployment.
Any amount restored by the Employer under this S8.2(a) shall be
restored upon repayment from the sources specified in S8.2(d). Such
restored or repaid amount shall not be treated as an Annual Addition
under S7.2 and shall be credited to the Participant's Employer Account
and Matching Account in the same proportion as the distribution was
made from such accounts.
8.2(b) Automatic Restoration (Alternative). This S8.2(b) shall apply
if the Employer specifies the use of the "Alternative to the Buy Back
Rule" in the Adoption Agreement.
8.2(b)(1) Forfeiture. The forfeitable portion, if any, of the
Employer Account and Matching Account of a Participant who separates
from service shall become a Forfeiture on the earlier of
(i) the date as of which payment of the nonforfeitable percentage
of the Participant's Account derived from Employer contributions
begins or is deemed to begin under S8.2(c) or
(ii) the date he or she has 5 consecutive Breaks in Service (6
consecutive Breaks in Service if the Alternative Maternity/Paternity
Rule applies)
and such Forfeiture shall be allocated or applied in accordance
with S6 on the allocation date specified in S8.2(e) unless he or she
is reemployed on or before such allocation date.
8.2(b)(2) Reemployment. If a Participant is reemployed before the
Participant incurs 5 consecutive Breaks in Service (6 consecutive
Breaks in Service if the Alternative Maternity/Paternity Rule applies)
but after the date of a Forfeiture under S8.2(b)(1), the Employer
shall restore to such Participant as of the last day of the Plan Year
in which he or she is reemployed an amount equal to the dollar amount
of such Forfeiture.
Any amount restored by the Employer under this SS8.2(b) shall be
restored from the sources specified in S8.2(d). Such restored amount
shall not be treated as an Annual Addition under S7.2 for such Plan
Year. The restored amount, together with any remaining balance of the
nonforfeitable portion of the Employer Account and Matching Account
attributable to the Participant's service prior to reemployment, shall
be maintained thereafter as separate special subaccounts of the
Participant's Employer Account and Matching Account (until such time
as it becomes completely nonforfeitable or again becomes a
Forfeiture), and the dollar amount of the Participant's nonforfeitable
percentage in each such special subaccount thereafter shall be
determined in accordance with Formula A unless Formula B is specified
in the Adoption Agreement:
(i) Formula A (Standard Option): X = P (AB + D) - D
(ii) Formula B (Alternative): X = P (AB + (R x D)) - (R x D)
For purposes of these formulas:
X = The current dollar amount, if any, of the nonforfeitable
percentage in the Participant's special subaccount;
P = The Participant's current nonforfeitable percentage as
determined under S8.1;
AB = Such dollar amount, if any, as evidenced by the last balance
posted to the Participant's special subaccount;
D = The dollar amount previously paid to the Participant under S9
from the Participant's original Employer Account or Matching Account,
as applicable; and
R = The ratio of AB to the dollar amount, if any, posted to the
Participant's Employer Account or Matching Account, as applicable,
immediately after the distribution.
8.2(c) Deemed Distribution. If the nonforfeitable portion of a
Participant's Account balance derived from Employer and Employee
contributions is zero, the Participant shall be deemed to have
received a distribution of the nonforfeitable portion of the
Participant's Account upon the Participant's separation from service.
A Participant's nonforfeitable Account balance derived from Employee
contributions shall not include accumulated deductible employee
contributions within the meaning of Code S72(o)(5)(B) for Plan Years
beginning prior to January 1, 1989.
8.2(d) Restoration Sources. Any amount restored under this S8.2
shall be restored from the following sources in the following order:
first, from Forfeitures occurring in the Plan Year in which such
amounts are restored, if any; second, from Employer Contributions for
such Plan Year, if any; third from Fund Earnings for such Plan Year;
and finally, from additional Employer Contributions. However, at the
election of the Employer, such amounts shall be restored entirely from
additional Employer Contributions.
8.2(e) Date Forfeitures Applied or Allocated. Any amounts which
become a Forfeiture under this S8.2 shall be allocated or applied as
of the allocation date specified in S6 which coincides with or
immediately follows the date such Forfeiture occurs, except that the
Employer may specify in the Adoption Agreement that Forfeitures which
are applied to reduce Employer Contributions, Matching Contributions,
Qualified Matching Contributions or Qualified Nonelective
Contributions shall be so applied as of the allocation date for such
contributions which immediately follows the last day of the Plan Year
in which such Forfeiture occurs.
8.2(f) In-service Distributions. The provisions of this S8.2(f)
shall apply if the Plan permits in-service distribution under S9.2.
If a distribution is made at a time when a Participant has a
nonforfeitable right to less than 100% of his or her Employer Account
or Matching Account and the Participant may increase the
nonforfeitable percentage in such Account:
8.2(f)(1) A separate special subaccount of the Participant's
Employer Account and Matching Account shall be established to record
the Participant's interest in such accounts as of the time of the
distribution; and
8.2(f)(2) At any relevant time the Participant's nonforfeitable
portion of each such special subaccount shall be determined in
accordance with the formula specified in S8.2(b).
SECTION 9. ACCOUNT DISTRIBUTION - GENERAL RULES
9.1 After Separation From Service. Subject to the rules in this S9,
S10, Benefit Payment Forms - Joint and Survivor Annuity Requirements,
and S11, Minimum Distribution Requirements, the nonforfeitable portion
of each Participant's Account (as determined in accordance with S8)
shall not be payable to such Participant before he or she separates
from service with the Employer and all Affiliates.
9.1(a) Timing. A Participant who has separated from service with the
Employer and all Affiliates
9.1(a)(1) Standard Option - may request a distribution of the
nonforfeitable portion of his or her Account as soon as practicable
after such separation from service.
9.1(a)(2) Alternative - if so specified in the Adoption
Agreement, may not request a distribution of the nonforfeitable
portion of his or her Account until Normal Retirement Age, Early
Retirement Age or Disability, whichever is earlier.
9.1(b) Reemployment. Except as required in S11, no payment shall be
made under this S9.1 if the Participant who separates from service is
reemployed as an Employee before payment is made. If a Participant is
reemployed as an Employee after payment of the nonforfeitable portion
of the Participant's Account has begun but before the entire balance
attributable to such nonforfeitable portion has been paid (or applied
to purchase an annuity), payments to the Participant from such balance
shall be terminated on the date he or she is so reemployed and no
further payments shall be made to the Participant until he or she is
subsequently entitled to such payments in accordance with the terms of
this Plan.
9.1(c) $3500 Cashout. The nonforfeitable portion of a Participant's
Account shall be distributed in a single sum to such Participant (or
to the Participant's Beneficiary in the event of the Participant's
death) as soon as administratively practicable following the
Participant's separation from service with the Employer and all
Affiliates for any reason if the nonforfeitable portion of such
Account is (and at the time of any prior distribution was) $3500 or
less. Any such distributions made on or after January 1, 1993 shall be
made in accordance with any applicable rules regarding the period for
providing notices under Code S402(f) and for making direct rollover
elections under Code S401(a)(31).
9.1(d) Claim. Except as provided in this S9 and S11, no payment
shall be made until a written claim for such payment is filed with the
Plan Administrator on an Election Form. The Plan Administrator shall
process each such claim in accordance with the claims procedure
described in the summary plan description for this Plan. If no such
claim is submitted and the Participant does not defer payment pursuant
to S9.1(e), payment may be made as soon as the benefit is not
immediately distributable (within the meaning of S9.3) and shall, in
any event, begin no later than 60 days following the end of the Plan
Year in which
9.1(d)(1) the Participant separates from service as an Employee,
9.1(d)(2) the Participant reaches age 65 or Normal Retirement
Age, if earlier, or
9.1(d)(3) occurs the 10th anniversary of the year in which the
Participant commenced participation in the Plan, whichever occurs
last.
9.1(e) Election to Defer Payment. If a Participant has separated
from service with the Employer and all Affiliates and the
nonforfeitable portion of the Participant's Account is (or at the time
of any prior distribution was) more than $3500, the Participant may
defer distribution of that nonforfeitable portion, but in no event
beyond
9.1(e)(1) Standard Option - the Participant's Required Beginning
Date (as defined in S11).
9.1(e)(2) Alternative - if so specified in the Adoption Agreement,
the later of the Participant's Normal Retirement Age or age 62.
The failure of a Participant and his or her Spouse, if applicable,
to consent to a distribution or make a written request to defer
payment while a benefit is immediately distributable (within the
meaning of S9.3) shall be deemed to be an election to defer
commencement of payment of any benefit under this S9 until the benefit
is no longer immediately distributable or, if S9.1(e)(1) applies,
until the Required Beginning Date.
Nothing in this S9.1(e) shall prevent the Plan Administrator from
paying in the normal form a benefit which is not immediately
distributable without regard to whether the Participant and his or her
Spouse consent to such distribution, unless the Participant has
requested a deferral pursuant to S9.1(e)(2).
9.1(f) Early Retirement Age. If the Early Retirement Age includes
both an age and service requirement, any Participant who separates
from service before satisfying such age requirement, but after the
Participant has satisfied the service requirement, may request a
distribution of the nonforfeitable portion of his or her Account upon
satisfaction of such age requirement.
9.1(g) Death. In the event of the Participant's death, the
nonforfeitable portion of the Participant's Account shall be payable
to the Participant's Beneficiary as soon as administratively
practicable after the Participant's death.
9.2 Before Separation From Service. Subject to the rules in this S9,
S10, Joint and Survivor Annuity Requirements, and S11, Minimum
Distribution Requirements, the nonforfeitable portion of a
Participant's Account may be paid to the Participant before he or she
separates from service with the Employer and all Affiliates if so
specified in the Adoption Agreement or by the Board in accordance with
S9.2(b)(2) or S9.2(e).
9.2(a) Money Purchase Pension Plan or Target Benefit Pension Plan.
If this Plan is adopted as a Money Purchase Pension Plan or a
Target Benefit Pension Plan,
9.2(a)(1) Standard Option - except as provided in S9.2(d) or (e),
no distributions shall be made before a Participant separates from
service with the Employer and all Affiliates, or
9.2(a)(2) Alternative - if so specified in the Adoption
Agreement, a Participant may request a distribution of all or a
portion of the nonforfeitable portion of the Participant's Account on
or after he or she reaches Normal Retirement Age without regard to
whether he or she has separated from service.
9.2(b) 401(k) Plan.
9.2(b)(1) Distribution Restrictions. If this Plan is adopted as a
401(k) Plan, then, except as provided in this S9.2(b), a Participant's
Elective Deferral Account, Qualified Nonelective Account and Qualified
Matching Account shall not be distributable to the Participant or the
Participant's Beneficiary earlier than upon the Participant's
separation from service with the Employer and all Affiliates, death,
or Disability.
9.2(b)(2) Termination of Plan or Disposition of Assets or
Subsidiary. Notwithstanding S9.2(b)(1) and subject to the Participant
and spousal consent rules in S9.3 and S10, the Employer may, by action
of its Board, make lump sum distributions (within the meaning of Code
S401(k)(10)(B)(ii)) of a Participant's Account, including the
Participant's Elective Deferral Account, Qualified Nonelective Account
and Qualified Matching Account in accordance with Code S401(k) by
reason of
(i) the termination of the Plan without the establishment of
another defined contribution plan (other than an employee stock
ownership plan as defined in Code S4975(e) or Code S409 or a
simplified employee pension as defined in Code S408(k));
(ii) the disposition by the Employer or a Participating
Affiliate to an unrelated entity of substantially all of the assets
(within the meaning of Code S409(d)(2)) used by the Employer or such
Participating Affiliate in a trade or business of the Employer or a
Participating Affiliate, if the transferor continues to maintain this
Plan after such disposition, but such distributions shall be made only
with respect to a Participant who continues employment with the entity
acquiring such assets; or
(iii) the disposition by the Employer or a Participating
Affiliate which is a corporation to an unrelated entity of interest in
a subsidiary (within the meaning of Code S409(d)(3)), if the
transferor continues to maintain this Plan after such disposition, but
such distributions shall be made only with respect to a Participant
who continues employment with such former subsidiary.
9.2(b)(3) Hardship Distribution.
(i) General. If the Employer specifies in the Adoption Agreement
that hardship distributions shall be permitted, a Participant may
request a hardship distribution before he or she separates from
service from the Participant's Elective Deferral Account (and, if
applicable, from the nonforfeitable portion of the other subaccounts
of such Account specified in the Adoption Agreement). The Plan
Administrator shall grant such request if, and to the extent that, the
Plan Administrator determines that such distribution is "necessary" to
satisfy an "immediate and heavy financial need" of the Participant as
determined in accordance with this S9.2(b)(3). Any such request shall
be made in writing, shall set forth in detail the nature of such
hardship and the amount of the distribution needed as a result of such
hardship, and shall include adequate documentation of the type of
financial need and the amount of the need. If the Plan Administrator
grants such request, such application shall be processed and such
distribution shall be made in a single sum as soon as administratively
practicable.
(ii) Safe Harbor Test for Financial Need. An "immediate and
heavy financial need" shall mean one or more of the following, as
specified in the Adoption Agreement,
(A) expenses for medical care described in Code S213(d)
incurred by the Participant or the Participant's spouse or dependents
(as defined in Code S152) and amounts necessary for such individuals
to obtain such care,
(B) the purchase of (but not the mortgage payments for) a
principal residence of the Participant,
(C) the payment of tuition and related educational fees for
the next 12 months of post-secondary education for the Participant or
the Participant's spouse, children or dependents (as defined in Code
S152),
(D) the prevention of the eviction of the Participant from the
Participant's principal residence or the foreclosure on the mortgage
of the Participant's principal residence, or
(E) such other events as the Internal Revenue Service deems to
constitute an "immediate and heavy financial need" under Code S401(k).
(iii) Safe Harbor Test for Distribution Necessary to Satisfy
Need. A distribution shall be deemed to be "necessary" to satisfy an
immediate and heavy financial need only if all of the following
requirements are satisfied:
(A) the distribution is not in excess of the amount of such
need, including any amounts necessary to pay any federal, state or
local income taxes or penalties reasonably anticipated to result from
such withdrawal;
(B) the Participant has obtained all distributions (other than
hardship distributions) and all nontaxable loans currently available
under this Plan and all other plans maintained by the Employer or an
Affiliate;
(C) the Participant's Elective Deferrals and Employee
Contributions under this Plan and elective deferrals and employee
contributions under all other plans maintained by the Employer or an
Affiliate shall be suspended for the 12-month period following the
date of receipt of such hardship distribution; and
(D) the Participant's Elective Deferrals under this Plan and
elective deferrals under all other plans maintained by the Employer or
an Affiliate for the Participant's taxable year immediately following
the taxable year in which such hardship distribution was made shall
not exceed the applicable dollar limitation under Code S402(g) for
such following taxable year less the amount of the Participant's
Elective Deferrals under this Plan and elective deferrals under all
such other plans for the taxable year in which such hardship
distribution was made.
(iv) Account Limitations. For Plan Years beginning after
December 31, 1988, no hardship distribution shall be made under this
S9.2(b)(3) to a Participant from
(A) the Participant's Qualified Nonelective Account,
(B) the Participant's Qualified Matching Account, or
(C) the Fund Earnings allocated to the Participant's Elective
Deferral Account
except to the extent of amounts credited to such Accounts as of
the end of the last Plan Year ending before July 1, 1989.
9.2(b)(4) Distributions on or after Age 59 If the Employer
specifies in the Adoption Agreement that distributions shall be
permitted on or after age 59, a Participant may request a
distribution of all or a portion of the nonforfeitable portion of the
subaccounts of the Participant's Account specified in the Adoption
Agreement at any time on or after he or she reaches age 59. Any such
request shall be made in writing on an Election Form and such
distribution shall be made in a single sum as soon as practicable in
accordance with such reasonable nondiscretionary procedures as the
Plan Administrator deems appropriate under the circumstances for the
proper administration of the Plan.
9.2(b)(5) Employer Account and Matching Account. If so specified
in the Adoption Agreement, a Participant may request in accordance
with reasonable and nondiscriminatory procedures a distribution of all
or a portion of the nonforfeitable portion of the Participant's
Employer Account and Matching Account after a fixed number of years,
the attainment of a stated age or upon the occurrence of some prior
event as specified in the Adoption Agreement.
9.2(c) Profit Sharing Plan. If this Plan is adopted as a Profit
Sharing Plan, then, if so specified in the Adoption Agreement, a
Participant may request in accordance with reasonable and
nondiscriminatory procedures a distribution of all or a portion of the
nonforfeitable portion of the Participant's Account after a fixed
number of years, the attainment of a stated age or upon the occurrence
of some prior event as specified in the Adoption Agreement.
9.2(d) Withdrawals from Employee Account.
9.2(d)(1) Standard Option. A Participant may request a withdrawal
of all or a portion of the Participant's Employee Account at any time.
Any such request shall be made in writing on an Election Form and such
withdrawal shall be made in a single sum as soon as administratively
practicable in accordance with such reasonable nondiscretionary
procedures as the Plan Administrator deems appropriate under the
circumstances for the proper administration of this Plan.
9.2(d)(2) Alternative. The Employer may specify in the Adoption
Agreement that withdrawals from Employee Accounts shall not be
permitted before the nonforfeitable portion of a Participant's Account
otherwise becomes distributable under this S9 or under S11 or may
specify other rules and conditions under which such withdrawals may be
made.
Notwithstanding the foregoing, any portion of a Participant's
Employee Account which is attributable to recharacterized Excess
Contributions under S7.4(e) may only be withdrawn in accordance with
the rules set forth in S9.2(b) applicable to an Elective Deferral
Account.
9.2(e) Plan Termination. If this Plan is terminated under S14.6 and
if the Board so specifies in its written action effecting such
termination, distribution of the nonforfeitable portion of each
Account shall be made as soon as administratively practical after the
Plan is terminated subject to the rules in S9.2(b) and to Code S411.
9.3 Consent.
9.3(a) General. If the nonforfeitable portion of a Participant's
Account exceeds (or at the time of any prior distribution exceeded)
$3500, and such Account is "immediately distributable", the
Participant and the Participant's Spouse, if any, (or where the
Participant has died, the surviving Spouse, if any) must consent to
any distribution from such 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 (as defined in S10.1).
The Plan Administrator shall notify the Participant and the
Participant's Spouse of the right to defer any distribution until the
Participant's 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 Code S417(a)(3) and shall be
provided no less than 30 days and no more than 90 days prior to the
Annuity Starting Date.
9.3(b) Exceptions. 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 Participant's
Account is immediately distributable. Furthermore, if payment in the
form of a Qualified Joint and Survivor Annuity is not required with
respect to the Participant pursuant to S10, only the Participant need
consent to the distribution from an Account that is immediately
distributable. The consent of the Participant and the Participant's
Spouse shall not be required to the extent that a distribution is
required to satisfy Code S401(a)(9), S401(k), S401(m), S402(g) or
S415. In addition, upon termination of this Plan if the Plan is not
required to offer an annuity option (purchased from a commercial
provider), the nonforfeitable portion of the Participant's Account
shall, without the Participant's consent, be distributed to the
Participant unless the Employer or an Affiliate maintains another
defined contribution plan (other than an employee stock ownership plan
as defined in Code S4975(e)(7)), in which event, the Account of a
Participant who does not consent to an immediate distribution shall be
transferred to such other plan.
9.3(c) Immediately Distributable. An Account is "immediately
distributable" if any part of the Account could be distributed to the
Participant (or the surviving Spouse) before the Participant reaches
(or would have reached if not deceased) the later of Normal Retirement
Age or age 62.
9.3(d) Accumulated Deductible Employee Contributions. For purposes
of determining the applicability of the consent requirements under
this S9.3 to distributions made before the first day of the first Plan
Year beginning after December 31, 1988, the nonforfeitable portion of
the Participant's Account shall not include amounts attributable to
accumulated deductible employee contributions within the meaning of
Code S72(o)(5)(B).
9.4 Form of Distribution. All distributions (including distributions
before separation from service under S9.2 but excluding corrective
distributions under S7) shall be made in the form specified in S10.
9.5 Minimum Distributions. The Plan shall satisfy the minimum
distribution requirements of Code S401(a)(9) as set forth in S11.
9.6 Missing Person. In the event that an Account becomes payable
under this Plan pursuant to S9.1(c), S9.1(d) or S9.1(e) and the Plan
Administrator is unable to locate the Participant or his or her
Beneficiary after sending written notice to the last known mailing
address and to the United States Social Security Administration, such
Participant or Beneficiary shall be presumed dead and such Account
shall become a Forfeiture on the third anniversary of the date such
Account first became payable under this Plan. However, the amount of
such Forfeiture shall be paid to such missing Participant or
Beneficiary in the event that such person files a claim for such
benefit while this Plan remains in effect and demonstrates to the
satisfaction of the Plan Administrator that such person in fact is
such missing Participant or Beneficiary.
9.7 No Estoppel of Plan. No person is entitled to any benefit under
this Plan except and to the extent expressly provided under this Plan.
The fact that payments have been made from this Plan in connection
with any claim for benefits under this Plan does not (1) establish the
validity of the claim, (2) provide any right to have such benefits
continue for any period of time, or (3) prevent this Plan from
recovering the benefits paid to the extent that the Plan Administrator
determines that there was no right to payment of the benefits under
this Plan. Thus, if a benefit is paid under this Plan and it is
thereafter determined by the Plan Administrator that such benefit
should not have been paid (whether or not attributable to an error by
the Participant, the Plan Administrator, the Employer or any other
person), then the Plan Administrator may take such action as the Plan
Administrator deems necessary or appropriate to remedy such situation,
including without limitation by (1) deducting the amount of any
overpayment theretofore made to or on behalf of such Participant from
any succeeding payments to or on behalf of such Participant under this
Plan or from any amounts due or owing to such Participant by the
Employer or any Affiliate or under any other plan, program or
arrangement benefiting the employees or former employees of the
Employer or any Affiliate, or (2) otherwise recovering such
overpayment from whoever has benefited from it.
If the Plan Administrator determines that an underpayment of benefits
has been made, the Plan Administrator shall take such action as it
deems necessary or appropriate to remedy such situation. However, in
no event shall interest be paid on the amount of any underpayment
other than the investment gains (or losses) credited to the
Participant's Account pending payment.
9.8 Administration. All distributions shall be made in accordance with
such uniform and nondiscriminatory administrative and operational
procedures for Account distributions as the Plan Administrator deems
appropriate under the circumstances for the proper administration of
the Plan.
SECTION 10. BENEFIT PAYMENT FORMS - JOINT AND SURVIVOR ANNUITY
REQUIREMENTS
10.1 Application and Special Definitions. This S10 shall apply to a
Participant who is vested at the time of death or at the time of a
distribution from the Participant's Account in any portion of the
Participant's Account, whether such portion is attributable to
Employer contributions, Employee contributions, or both. For purposes
of this S10, the terms defined in this S10.1 shall have the meanings
shown opposite such terms.
10.1(a) Annuity Starting Date - means the first day of the first
period for which an amount is paid as an annuity or any other form.
10.1(b) Earliest Retirement Age - means
10.1(b)(1) if distributions are permitted only upon separation
from service, the earliest age at which the Participant could separate
from service and receive a distribution;
10.1(b)(2) if distributions are permitted before separation from
service, the earliest age at which such distribution could be made; or
10.1(b)(3) if clauses (1) and (2) do not apply, the Early
Retirement Age.
10.1(c) Election Period - means
10.1(c)(1) for a Qualified Preretirement Survivor Annuity, the
period which begins on the earlier of (i) the first day of the Plan
Year in which the Participant attains age 35 or (ii) the date such
Participant separates from service and ends on the date of the
Participant's death and
10.1(c)(2) for a Qualified Joint and Survivor Annuity or a Life
Annuity, the 90 day period ending on the Annuity Starting Date.
Notwithstanding the foregoing, a Participant who has not yet reached
age 35 (and who will not reach age 35 as of the end of the current
Plan Year) may make a special Qualified Election to waive the
Qualified Preretirement Survivor Annuity for the period beginning on
the date of such election and ending on the first day of the Plan Year
in which the Participant will reach 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 S10.4. Qualified
Preretirement Survivor Annuity coverage shall be automatically
reinstated as of the first day of the Plan Year in which the
Participant reaches age 35. Any new waiver on or after such date shall
be subject to the full requirements of this S10.
10.1(d) Life Annuity - means a nontransferable immediate annuity
payable for the life of the Participant, which is the amount of
benefit which can be purchased with such Participant's Vested Account
Balance as of the Annuity Starting Date.
10.1(e) Qualified Election - means a Participant's election to waive
the Qualified Joint and Survivor Annuity or the Qualified
Preretirement Survivor Annuity which election shall not be effective
unless (1) the election designates a specific Beneficiary (including
any class of Beneficiaries or any contingent Beneficiaries) and, for
an election to waive a Qualified Joint and Survivor Annuity, the
particular form of benefit payment, which designations cannot be
changed without the Spouse's consent (or the Spouse expressly permits
designations by the Participant without any further spousal consent);
(2) such Participant's Spouse consents in writing to such election on
an Election Form; (3) such consent acknowledges the effect of such
election; and (4) such consent is witnessed by a notary public;
provided,
(i) if the Participant establishes to the satisfaction of a Plan
representative that such written consent may not be obtained because
there is no Spouse or the Spouse cannot be located or because of such
other circumstances as may be described in the regulations under Code
S417, a Participant's election shall be deemed to be a Qualified
Election;
(ii) a Spouse's written consent under this S10.1(e) shall be
irrevocable as to such Spouse and shall be binding only as against
such Spouse;
(iii) no consent shall be valid unless the Participant received
notice as provided in S10.4;
(iv) a consent that permits designations by the Participant
without any further spousal consent must acknowledge that the Spouse
has the right to limit consent to a specific Beneficiary, and, if
applicable, a specific form of benefit payment, and that the Spouse
voluntarily elects to relinquish either or both of such rights; and
(v)a Participant may revoke (without the consent of his or her
Spouse) an election to waive the Qualified Joint and Survivor Annuity
or the Qualified Preretirement Survivor Annuity on an Election Form at
any time prior to the date as of which the Participant's Account
becomes payable under S9.
10.1(f) Qualified Joint and Survivor Annuity - means a
nontransferable immediate annuity payable for the life of the
Participant which is the amount of benefit which can be purchased with
the Participant's Vested Account Balance on the Annuity Starting Date
with a survivor annuity payable for the life of the Participant's
surviving Spouse which is
10.1(f)(1) Standard Option - 50% or
10.1(f)(2) Alternative - such greater percentage (not to exceed
100%) specified in the Adoption Agreement
of the amount of the annuity which is payable during the joint lives
of the Participant and such Spouse.
10.1(g) Qualified Preretirement Survivor Annuity - means a
nontransferable annuity payable for the life of the surviving Spouse,
which is the amount of benefit which can be purchased with
10.1(g)(1) Standard Option - 100% of the Participant's Vested
Account Balance as of the Annuity Starting Date or
10.1(g)(2) Alternative - such lesser percentage (not less than
50%) specified in the Adoption Agreement of such Participant's Vested
Account Balance (determined by allocating the portion of such balance
which is attributable to employee contributions proportionately to
such annuity and to the remainder of such balance).
10.1(h) Vested Account Balance - means the nonforfeitable portion
of a Participant's Account derived from Employer contributions and
Employee contributions (including Rollover Contributions), whether
vested before or upon death, including the proceeds of insurance
contracts, if any, on the Participant's life and reduced, if
applicable, for outstanding loans in accordance with S13.3(d)(1)(iv).
10.2 Distribution to Participant. Unless a Participant waives the
Qualified Joint and Survivor Annuity and elects an optional method of
distribution (as described in S10.6) on an Election Form pursuant to a
Qualified Election within the Election Period, any distribution of
such Participant's Vested Account Balance shall be paid in the form of
(a) a Qualified Joint and Survivor Annuity for each such married
Participant and his or her Spouse or (b) a Life Annuity for each such
unmarried Participant. A Participant may elect that such annuity be
distributed upon attainment of the Earliest Retirement Age.
10.3 Distribution to Surviving Spouse. Unless a Participant waives the
Qualified Preretirement Survivor Annuity and elects an optional method
of distribution (as described in S10.6) on an Election Form pursuant
to a Qualified Election within the Election Period, such Participant's
Vested Account Balance shall, in the event of the Participant's death
before the Participant's Annuity Starting Date, be applied to purchase
a Qualified Preretirement Survivor Annuity for the surviving Spouse.
If the Qualified Preretirement Survivor Annuity is less than 100%, the
remaining portion of the Participant's Vested Account Balance shall be
payable to the Participant's Beneficiary under S9. The surviving
Spouse may elect that such Qualified Preretirement Survivor Annuity be
distributed to such Spouse within a reasonable period following the
death of the Participant. Notwithstanding the foregoing, a surviving
Spouse entitled to a Qualified Preretirement Survivor Annuity may
elect in writing after the Participant's death to have the
Participant's Vested Account Balance distributed in an optional form
of benefit in accordance with S10.6.
10.4 Notice Requirements.
10.4(a) Qualified Joint and Survivor Annuity and Life Annuity. The
Plan Administrator shall no less than 30 days and no more than 90 days
before the Annuity Starting Date provide each Participant with a
written explanation of the Qualified Joint and Survivor Annuity and
the Life Annuity, which explanation shall describe
10.4(a)(1) the terms and conditions of such annuity;
10.4(a)(2) the Participant's right to make a Qualified Election
to waive such annuity and the effect of such election;
10.4(a)(3) the rights of the Participant's Spouse, if any;
10.4(a)(4) the right to revoke such election and the effect of
such a revocation; and
10.4(a)(5) the relative values of the various optional forms of
benefits under the Plan.
10.4(b) Qualified Preretirement Survivor Annuity. The Plan
Administrator shall provide to each Participant within the "applicable
period" for such Participant a written explanation of the Qualified
Preretirement Survivor Annuity which includes the type of information
described in S10.4(a). The "applicable period" for a Participant is
10.4(b)(1) the period beginning on the first day of the Plan Year
in which such Participant attains age 32 and ending with the close of
the Plan Year preceding the Plan Year in which the Participant attains
age 35,
10.4(b)(2) a reasonable period ending after he or she becomes a
Participant, or
10.4(b)(3) a reasonable period ending after this S10 applies to
such Participant,
whichever period ends last. However, if a Participant separates from
service before he or she reaches age 35, such notice shall be provided
within the two year period beginning one year before the Participant's
separation from service and ending one year after such separation and
if such Participant is subsequently reemployed, the applicable period
for such Participant shall be redetermined under S10.4(b)(1) through
S10.4(b)(3). For purposes of S10.4(b)(2) and S10.4(b)(3), a
"reasonable period" is the two year period which begins one year prior
to the occurrence of the event and ends one year after the occurrence
of the event.
10.5 Safe Harbor Rules.
10.5(a) Application. If so specified in the Adoption Agreement, the
provisions in this S10.5 shall apply in lieu of S10.1 through S10.4 to
(1) a Participant in a Profit Sharing Plan or a 401(k) Plan, and (2)
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 Code S72(o)(5)(B)) and maintained on
behalf of a Participant in a Money Purchase Pension Plan or Target
Benefit Pension Plan provided that the conditions specified in
S10.5(b) are satisfied.
10.5(b) Conditions. In order to fit within this safe harbor (1) the
Participant does not or cannot elect payments in the form of a Life
Annuity with respect to the Participant's Vested Account Balance; (2)
on the death of a Participant, the Participant's Vested Account
Balance shall be paid to the Participant's surviving Spouse, or if
there is no surviving Spouse or if the surviving Spouse has consented
in a manner conforming to a Qualified Election, to the Participant's
Beneficiary; and (3) with respect to a Participant in a Profit Sharing
Plan or a 401(k) Plan, the Plan is not a direct or indirect transferee
of a defined benefit plan, money purchase pension plan, target benefit
pension plan, stock bonus plan, or profit-sharing plan which is
subject to the survivor annuity requirements of Code S401(a)(11) and
Code S417 ("Transferee Plan"), or the Plan maintains separate
bookkeeping accounts for such Participant's Transferee Plan benefits
and all other benefits of the Participant under the Plan and gains,
losses, withdrawals, contributions, forfeitures, and other credits or
charges are allocated on a reasonable and consistent basis between the
Transferee Plan benefits (which are subject to the survivor annuity
requirements in S10.1 through S10.4) and the other Plan benefits
(which are subject to the safe harbor rule in this S10.5).
10.5(c) Surviving Spouse. 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 Vested
Account Balance shall be adjusted for Fund Earnings occurring after
the Participant's death in accordance with S6.2 in the same manner
that Accounts are adjusted for other types of distributions.
10.5(d) Waiver of Spousal Benefit. The Participant may waive the
spousal death benefit described in this S10.5 at any time; provided,
no such waiver shall be effective unless it satisfies the conditions
described in S10.1(e) (other than the notification requirement
referred to in such section) that would apply to the Participant's
Qualified Election to waive the Qualified Preretirement Survivor
Annuity.
10.5(e) Vested Account Balance. For purposes of this S10.5, Vested
Account Balance shall mean, (1) in the case of a Money Purchase
Pension Plan or Target Benefit Pension Plan, the Participant's
separate account balance attributable solely to accumulated deductible
employee contributions within the meaning of Code S72(o)(5)(B) and (2)
in the case of a Profit Sharing Plan or 401(k) Plan, the Participant's
Vested Account Balance as defined in S10.1(h), excluding the portion
of such Vested Account Balance which is attributable to Transferee
Plan benefits described in S10.5(b).
10.6 Optional Forms.
10.6(a)General. If a Participant properly and timely waives the
Qualified Joint and Survivor Annuity as described in S10.2 or to the
extent the safe harbor rules of S10.5 apply to a distribution, such
distribution shall be made in the form specified in this S10.6 as
selected by the Participant (or his or her Beneficiary in the event of
the Participant's death).
10.6(b) Before Separation From Service. Any distribution made
pursuant to S9.2 shall, subject to S10.2, be made in a single sum.
10.6(c) After Separation From Service.
10.6(c)(1) Standard Option. The optional benefit form available to
any Participant after separation from service with the Employer and
all Affiliates or to his or her Beneficiary in the event of the
Participant's death shall be a single sum.
10.6(c)(2) Alternative. If specified in the Adoption Agreement,
the following optional benefit forms shall be available to any
Participant (or to his or her Beneficiary in the event of the
Participant's death):
(i) Single Sum - by payment in a single sum.
(ii) Installments - by payment in annual installments (or more
frequent installments) over a specified period in accordance with the
minimum distribution rules in S11.
(iii) Annuity - in the form of an annuity contract under which
the amount of benefits shall be that which can be provided by applying
the nonforfeitable portion of such Participant's Account to the
applicable settlement option or annuity purchase rate under such
contract; or
(iv) Other Forms - under one of the optional forms of
distribution, if any, under the Pre-Existing Plan or a plan described
in S14.5 which are required to be preserved under Code S411(d)(6).
Such optional forms shall be described in the Adoption Agreement and,
unless otherwise specified in the Adoption Agreement, such other forms
shall apply to the Participant's entire Account balance.
Notwithstanding the foregoing, if the Plan Administrator separately
accounts for benefits under a Pre-Existing Plan or a plan described
under S14.5 or, if applicable, under S10.5, the optional forms may be
limited to such separate accounts.
10.6(d) No Method Selected. If the safe harbor rules of S10.5 apply
to a distribution, but the Participant or the Participant's Spouse or
Beneficiary fails to specify the method of distribution, then any
distribution made to such Participant, Spouse or Beneficiary shall be
made in a single sum.
10.6(e) Single Sum. A distribution made on account of a
Participant's death or separation from service with the Employer and
all Affiliates which is made in more than one payment shall be deemed
to be a single sum distribution for purposes of this Plan if the
additional payment or payments are necessary to reflect allocations
completed following the Participant's death or separation from
service.
10.6(f) In Kind Distributions. A distribution shall be made in kind
only to the extent provided in the Adoption Agreement and only to the
extent an "in kind" distribution is permissible under ERISA.
10.7 Annuity Contracts. Any annuity contract distributed by the Plan
to a Participant or a Beneficiary shall be nontransferable and the
terms of such contract shall comply with the applicable requirements
of this Plan and the Code.
10.8 Transitional Rules.
10.8(a) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed by the
previous sections of this S10 must be given the opportunity to elect
to have such sections apply (1) 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 (2) such
Participant had at least 10 years of vesting service when he or she
separated from service.
10.8(b) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one Hour of Service under this
Plan or a predecessor plan on or after September 2, 1974, and who is
not otherwise credited with any service in a Plan Year beginning on or
after January 1, 1976, must be given the opportunity to have his or
her benefits paid in accordance with S10.8(d).
10.8(c) The respective opportunities to elect (as described in
S10.8(a) and (b) above) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984, and
ending on the date benefits would otherwise commence to such
Participants.
10.8(d) Any Participant who has elected pursuant to S10.8(b) and
any Participant who does not elect under S10.8(a) or who meets the
requirements of S10.8(a) except that such Participant does not have at
least 10 years of vesting service when he or she separates from
service, shall have his or her benefits distributed in accordance with
all of the following requirements if benefits would have been payable
in the form of a life annuity:
10.8(d)(1) If benefits in the form of a life annuity become
payable to a married Participant who:
(i) begins to receive payments under the Plan on or after Normal
Retirement Age; or
(ii) dies on or after Normal Retirement Age while still working
for the Employer; or
(iii) begins to receive payments on or after the "qualified
early retirement age"; or
(iv) separates from service on or after attaining Normal
Retirement Age (or the "qualified early retirement age") and after
satisfying the eligibility requirements for the payment of benefits
under the Plan and thereafter dies before beginning to receive such
benefits;
then such benefits shall be received under this Plan in the form
of a Qualified Joint and Survivor Annuity, unless the Participant has
elected otherwise during the election period. The election period must
begin at least 6 months before the Participant attains "qualified
early retirement age" and end not more than 90 days before the
commencement of benefits. Any such election shall be in writing and
may be changed by the Participant at any time.
10.8(d)(2) A Participant who is employed after attaining the
qualified early retirement age shall be given the opportunity to
elect, during the election period, to have a survivor annuity payable
on death. The election period begins on the later of (i) the 90th day
before the Participant attains the "qualified early retirement age",
or (ii) the date on which participation begins, and ends on the date
the Participant separates from service. Any such election shall be in
writing and may be changed by the Participant at any time. 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 the Participant's death.
10.8(d)(3) For purposes of this S10.8(d), "qualified early
retirement age" means the latest of:
(i) the earliest date under the Plan on which the Participant
may elect to receive retirement benefits,
(ii) the first day of the 120th month beginning before the
Participant reaches Normal Retirement Age, or
(iii) the date the Participant begins participation.
10.9 Direct Rollovers.
10.9(a) General. This S10.9 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 S10, a Distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an
Eligible Rollover Distribution paid directly by the Plan to an
Eligible Retirement Plan specified by the Distributee in a direct
rollover in accordance with Code S401(a)(31).
10.9(b) Definitions.
10.9(b)(1) Eligible Rollover Distribution. An Eligible Rollover
Distribution is any distribution of all or any portion of the balance
to the credit of the Distributee, except that an Eligible Rollover
Distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
Distributee or the joint lives (or joint life expectancies) of the
Distributee and the Distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under Code S 401(a)(9); and the portion
of any distribution that is not includable in gross income (determined
without regard to the exclusion for net unrealized appreciation with
respect to employer securities).
10.9(b)(2) Eligible Retirement Plan. An Eligible Retirement Plan
is an individual retirement account described in Code S408(a), an
individual retirement annuity described in Code S408(b), an annuity
plan described in Code S403(a), or a qualified trust described in Code
S401(a), that accepts the Distributee's Eligible Rollover
Distribution. However, in the case of an Eligible Rollover
Distribution to the surviving spouse, an Eligible Retirement Plan is
an individual retirement account or individual retirement annuity.
10.9(b)(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 Code S414(p), are Distributees with
regard to the interest of the spouse or former spouse.
SECTION 11. MINIMUM DISTRIBUTION REQUIREMENTS
11.1 General. Subject to S10, Benefit Payment Forms - Joint and
Survivor Annuity Requirements, the requirements of this S11 shall
apply to any distribution of a Participant's Account and shall take
precedence over any inconsistent provisions of this Plan. Unless
otherwise specified, the provisions of this S11 shall apply to
calendar years beginning after December 31, 1984. All distributions
required under this S11 shall be determined and made in accordance
with the proposed regulations under Code S401(a)(9), including the
minimum distribution incidental benefit requirement of S1.401(a)(9)-2
of the proposed regulations.
11.2 Special Definitions.
11.2(a) Applicable Calendar Year - means the first Distribution
Calendar Year, and if life expectancy is being recalculated, each
succeeding calendar year.
11.2(b) Applicable Life Expectancy - means the life expectancy (or
joint and last survivor expectancy) calculated using the attained age
of the Participant (or Designated Beneficiary) as of the Participant's
(or Designated Beneficiary's) birthday in the Applicable Calendar Year
reduced by one for each calendar year which has elapsed since the date
life expectancy was first calculated. If life expectancy is being
recalculated, the Applicable Life Expectancy shall be the life
expectancy as so recalculated.
11.2(c) Designated Beneficiary - means the individual who is
designated as the Beneficiary under this Plan in accordance with Code
S401(a)(9) and the regulations under such Code section.
11.2(d) Distribution Calendar Year - means a calendar year for which
a minimum distribution is required. For distributions beginning before
the Participant's death, the first Distribution Calendar Year shall be
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 shall be the calendar year in which distributions are
required to begin pursuant to S11.6.
11.2(e) Life Expectancy - means the life expectancy (or joint and
last survivor expectancy) as computed by use of the expected return
multiples in Tables V and VI of S1.72-9 of the Federal Income Tax
Regulations. Unless otherwise elected by the Participant (or Spouse,
in the case of distributions described in S11.6(b)(2)) 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.
11.2(f) Participant's Benefit - means the nonforfeitable portion of
a Participant's Account determined as of the last Valuation Date in
the calendar year immediately preceding the Distribution Calendar Year
("valuation calendar year") increased by the amount of any
contributions or forfeitures allocated to the Account as of dates in
the valuation calendar year after such Valuation Date and decreased by
distributions made in the valuation calendar year after such Valuation
Date. 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.
11.2(g) Required Beginning Date.
11.2(g)(1) General Rule. The Required Beginning Date of a
Participant who reaches age 70 after December 31, 1987 is the first
day of April of the calendar year following the calendar year in which
the Participant reaches age 70.
11.2(g)(2) Age 70 Before 1988. The Required Beginning Date of a
Participant who reaches age 70 before January 1, 1988 shall be,
(i) for a Participant who is not a 5% owner, the first day of
April of the calendar year following the calendar year in which occurs
the later of retirement or reaching age 70 or
(ii) for a Participant who is a 5% owner during any year
beginning after December 31, 1979, the first day of April following
the later of:
(A) the calendar year in which the Participant reaches age
70, or
B) 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.
11.2(g)(3) Age 70 During 1988. The Required Beginning Date of a
Participant who is not a 5% owner, who reaches age 70 during 1988 and
who has not retired before January 1, 1989 shall be April 1, 1990. The
Required Beginning Date of a Participant who is a 5% owner or who
retired before January 1, 1989 and who reaches age 70 during 1988
shall be determined in accordance with S11.2(g)(1).
11.2(g)(4) 5% Owner. A Participant shall be treated as a 5% owner
for purposes of this S11.2(g) if such Participant is a 5% owner as
defined in Code S416(i) (determined in accordance with Code S416 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
individual attains age 66 or any subsequent Plan Year. Once
distributions have begun to a 5% owner under this S11, they must
continue to be distributed, even if the Participant ceases to be a 5%
owner in a subsequent year.
11.3 Required Beginning Date. The entire nonforfeitable interest of a
Participant must be distributed or begin to be distributed no later
than the Participant's Required Beginning Date. Such distribution
shall be made
11.3(a) in the form of a Qualified Joint and Survivor Annuity as
described in S10.2, or
11.3(b) if the Qualified Joint and Survivor Annuity is properly
waived or to the extent the safe harbor rules in S10.5 apply, in the
optional benefit form in S10.6 selected by the Participant.
Notwithstanding the foregoing, even if installment distributions are
not otherwise available as an optional benefit form, a Participant who
has not separated from service with the Employer and all Affiliates as
of the Required Beginning Date (or as of the end of any Distribution
Calendar Year thereafter) may elect to receive the minimum
distribution amount for each such Distribution Calendar Year as
described in S11.5.
11.4 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):
11.4(a) the life of the Participant,
11.4(b) the life of the Participant and a Designated Beneficiary,
11.4(c) a period certain not extending beyond the life expectancy
of the Participant, or
11.4(d) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a Designated Beneficiary.
11.5 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:
11.5(a) Individual Account.
11.5(a)
(1) General. If a Participant's Benefit is to be
distributed over (i) 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 (ii) 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.
11.5(a)(2) Incidental Death Benefit Rules.
(i) 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.
(ii) For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with distributions for
the first Distribution Calendar Year, shall not be less than the
quotient obtained by dividing the Participant's Benefit by the lesser
of (A) the Applicable Life Expectancy or (B) if the Participant's
Spouse is not the Designated Beneficiary, the applicable divisor
determined from the table set forth in Q&A-4 of S1.401(a)(9)-2 of the
proposed regulations. Distributions after the death of the Participant
shall be distributed using the Applicable Life Expectancy in
S11.5(a)(1) as the relevant divisor without regard to S1.401(a)(9)-2
of the proposed regulations.
11.5(a)(3) Timing. 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 subsequent Distribution Calendar Years, including the
minimum distribution for the Distribution Calendar Year in which the
Participant's Required Beginning Date occurs, must be made on or
before December 31 of that Distribution Calendar Year.
11.5(b) Annuity Contracts. If the Participant's Benefit is
distributed in the form of an annuity purchased from an insurance
company, distributions under such annuity shall be made in accordance
with the requirements of Code S401(a)(9).
11.6 Death Distribution Provisions.
11.6(a) Distribution Beginning Before Death. If the Participant dies
after distribution of his or her nonforfeitable interest has begun,
the remaining portion of such nonforfeitable interest shall continue
to be distributed at least as rapidly as under the method of
distribution being used prior to the Participant's death.
11.6(b) Distribution Beginning After Death. If the Participant dies
before distribution of his or her nonforfeitable interest begins,
distribution of the Participant's entire nonforfeitable interest shall
be completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death except to the extent that an
election is made to receive distributions in accordance with (1) or
(2) below:
11.6(b)(1) if any portion of the Participant's nonforfeitable
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 and shall commence on or
before December 31 of the calendar year immediately following the
calendar year in which the Participant died;
11.6(b)(2) if the Designated Beneficiary is the Participant's
surviving Spouse, distributions may be made over the period described
in clause (1) above but the required commencement date may be deferred
until the later of (i) December 31 of the calendar year immediately
following the calendar year in which the Participant died or (ii)
December 31 of the calendar year in which the Participant would have
reached age 70.
If the Participant has not made an election pursuant to this
S11.6(b) by the time of the Participant's death, the
Participant's Designated Beneficiary must elect
the method of distribution no later
than the earlier of (A) December 31 of the calendar year in which
distributions would be required to begin under this S11.6, or (B)
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.
11.6(c) Special Rules.
11.6(c)(1) For purposes of S11.6(b), if the surviving Spouse dies
after the Participant, but before payments to such Spouse begin, the
provisions of S11.6(b), with the exception of S11.6(b)(2), shall be
applied as if the surviving Spouse were the Participant.
11.6(c)(2) For purposes of this S11.6, any amount paid to a child
of the Participant shall 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.
11.6(c)(3) For the purposes of this S11.6, distribution of a
Participant's interest shall be considered to begin on the
Participant's Required Beginning Date (or, if S11.6(c)(1) above is
applicable, the date distribution is required to begin to the
surviving Spouse pursuant to S11.6(b)). 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
shall be the date distribution actually commences.
11.7 Special Pre-TEFRA Distribution Election.
11.7(a) General Rule. Subject to S10, Benefit Payment Forms - Joint
and Survivor Annuity Requirements, the nonforfeitable percentage of
the Account of any Participant (including a "5% owner" as described in
S11.2(g)(4)) who has in effect a Special Pre-TEFRA Distribution
Election (as described in S11.7(b)) shall be paid only to the
Participant, or in the case of the Participant's death, only to his or
her beneficiary in accordance with the method of distribution
specified in such election without regard to the distribution rules
set forth in S11.1 through S11.6.
11.7(b) Special Pre-TEFRA Distribution Election. For purposes of
this S11.7, a Special Pre-TEFRA Distribution Election means a
designation in writing, signed by the Participant or his or her
beneficiary, made before January 1, 1984 by a Participant in this Plan
or a Participant in a Pre-Existing Plan who had accrued a benefit
under such plan as of December 31, 1983 which designation specifies
11.7(b)(1) a distribution method which was permissible under Code
S401(a)(9) as in effect prior to amendment by the Deficit Reduction
Act of 1984,
11.7(b)(2) the time at which such distribution will commence,
11.7(b)(3) the period over which such distribution will be made,
and
11.7(b)(4) if such designation is to be effective for a
beneficiary, the beneficiaries of the Participant in order of
priority.
A distribution to be made upon the death of a Participant shall not
be covered under this S11.7(b) unless the information in the
designation with respect to such distribution satisfies the
requirements of this S11.7(b).
11.7(c) Current Distributions. Any distribution which began before
January 1, 1984 and continues after such date shall be deemed to be
made pursuant to a Special Pre-TEFRA Distribution Election if the
method of distribution was set forth in writing and such method
satisfies the requirements of S11.7(b)(1) through (4).
11.7(d) Revocation. A Participant who made a Special Pre-TEFRA
Distribution Election shall have the right to revoke such election by
completing and filing a distribution Election Form under S9.
Furthermore, any change (other than the mere substitution or addition
of a beneficiary not originally designated in such election which does
not directly or indirectly alter the period over which distributions
are to be made) to a Special Pre-TEFRA Distribution Election shall be
deemed to be a revocation of such election. Upon revocation, any
subsequent distribution shall be made in accordance with Code
S401(a)(9). 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 Code
S401(a)(9), but for the Special Pre-TEFRA Distribution Election. For
calendar years beginning after December 31, 1988, such distributions
must meet the minimum distribution incidental benefit requirements in
S1.401(a)(9)-2 of the proposed regulations. If an amount is
transferred or rolled over from one plan to another plan, the rules in
Q&A J-2 and Q&A J-3 of S1.401(a)(9)-1 of the proposed regulations
shall apply.
SECTION 12. TOP-HEAVY PLAN RULES
12.1 Application. The rules set forth in this S12 shall supersede any
provisions of this Plan or the Adoption Agreement which are
inconsistent with these rules as of the first day of the first Plan
Year beginning after December 31, 1983 during which the Plan is or
becomes a Top-Heavy Plan and such rules shall continue to supersede
such provisions for so long as the Plan is a Top-Heavy Plan unless the
Code permits such rules to cease earlier or requires them to remain in
effect for a longer period.
12.2 Special Definitions. For purposes of this S12, the terms defined
in this S12.2 shall have the meanings shown opposite such terms.
12.2(a) Determination Date - means
12.2(a)(1) for the first Plan Year of a Plan which is adopted as
a new Plan under the Adoption Agreement, the last day of such Plan
Year, and
12.2(a)(2) for any subsequent Plan Year, the last day of the
immediately preceding Plan Year, and
12.2(a)(3) for any plan year of each other qualified plan
maintained by the Employer or an Affiliate which is part of a
Permissive Aggregation Group or a Required Aggregation Group, the date
determined under this S12.2(a) as if the term "Plan Year" means the
plan year for each such qualified plan.
12.2(b)Key Employee - means any Employee or former Employee (and the
Beneficiaries of such Employee) (as determined in accordance with Code
S416(i)(1)) who at any time during the Plan Year or any of the 4
immediately preceding Plan Years was
12.2(b)(1) an officer of the Employer or an Affiliate whose
compensation for such Plan Year exceeds 50% of the dollar limitation
under Code S415(b)(1)(A),
12.2(b)(2) an owner (or considered to be an owner within the
meaning of Code S318) of one of the 10 largest interests in the
Employer or an Affiliate whose compensation for such Plan Year exceeds
the 100% of the dollar limitation under Code S415(c)(1)(A); provided
that the value of such Employee's ownership interest is more than one-
half of one percent,
12.2(b)(3) a 5% owner of the Employer or an Affiliate, or
12.2(b)(4) a 1% owner of the Employer or an Affiliate whose
compensation for such Plan Year exceeds $150,000.
For purposes of this S12.2(b), an Employee's compensation means
compensation within the meaning of Code S415(c)(3) (as defined in
S7.2(a)(2)) but including amounts contributed by the Employer or an
Affiliate pursuant to a salary reduction agreement which are excluded
from gross income under Code S125, S402(e)(3), S402(h) or S403(b).
12.2(c) Permissive Aggregation Group - means a Required Aggregation
Group and any other qualified plan or plans (as described in Code
S401(a)) maintained by the Employer or an Affiliate which, when
considered with the Required Aggregation Group, would continue to
satisfy the requirements of Code S401(a)(4) and Code S410.
12.2(d) Required Aggregation Group - means (1) each qualified plan
(as described in Code S401(a)) maintained by the Employer or an
Affiliate in which at least one Key Employee participates or
participated at any time during the 5 year period ending on the
Determination Date (without regard to whether such plan has
terminated) and (2) any other qualified plan maintained by the
Employer or an Affiliate which enables any such plan to satisfy the
requirements of Code S401(a)(4) or Code S410.
12.2(e) Top-Heavy Plan - means this Plan if, for any Plan Year
beginning after December 31, 1983, either
12.2(e)(1) this Plan is not part of a Required Aggregation Group
or a Permissive Aggregation Group and the Top-Heavy Ratio for this
Plan exceeds 60%;
12.2(e)(2) this Plan is part of a Required Aggregation Group but
not part of a Permissive Aggregation Group and the Top-Heavy Ratio for
the Required Aggregation Group exceeds 60%; or
12.2(e)(3) this Plan is part of a Required Aggregation Group and
part of a Permissive Aggregation Group and the Top-Heavy Ratio for the
Permissive Aggregation Group exceeds 60%.
12.2(f) Top-Heavy Ratio.
12.2(f)(1) If the Employer or an Affiliate maintains one or more
defined contribution plans (including any simplified employee pension
plan) and the Employer or an Affiliate has never maintained a defined
benefit plan under which benefits have been accrued for a Participant
in this Plan during the 5 year period ending on the Determination
Date, "Top-Heavy Ratio" means for this Plan alone or for the Required
Aggregation Group or Permissive Aggregation Group, as appropriate, a
fraction, the numerator of which shall be the sum of the account
balances of all Key Employees as of the Determination Date under this
and all other such defined contribution plans and the denominator of
which shall be the sum of the account balances of all employees as of
the Determination Date under this and all other such defined
contribution plans.
12.2(f)(2) If the Employer or an Affiliate maintains one or more
defined contribution plans (including any simplified employee pension
plan) and the Employer or an Affiliate maintains or has ever
maintained one or more defined benefit plans under which benefits have
been accrued for a Participant in this Plan during the 5 year period
ending on the Determination Date, "Top Heavy Ratio" means for the
Required Aggregation Group or the Permissive Aggregation Group, as
appropriate, a fraction, the numerator of which shall be the sum of
the account balances for all Key Employees as of the Determination
Date under this and all other such defined contribution plans and the
sum of the present value of the accrued benefits for all Key Employees
as of the Determination Date under all defined benefit plans
maintained by the Employer or an Affiliate and the denominator of
which shall be the sum of the account balances for all employees as of
the Determination Date under this and all other such defined
contribution plans and the sum of the present value of the accrued
benefits for all employees as of the Determination Date under all
defined benefit plans maintained by the Employer or an Affiliate.
12.2(f)(3) The following rules shall apply for purposes of
calculating the Top-Heavy Ratio:
(i) The value of any account balance and the present value of
any accrued benefit shall be determined as of the most recent Top-
Heavy Valuation Date that falls within, or ends with, the 12 month
period ending on the Determination Date (or, if plans are aggregated,
the Determination Dates that fall within the same calendar year),
except as provided under the regulations under Code S416 for the first
and second years of a defined benefit plan;
(ii) The value of any account balance and the present value of
any accrued benefit shall include the value of any distributions made
during the 5 year period ending on such Determination Date and any
contributions due but as yet unpaid as of the Determination Date which
are required to be taken into account on that date under Code S416;
(iii) The present value of an accrued benefit under a defined
benefit plan shall be determined in accordance with the interest rate
and mortality assumptions specified in the Adoption Agreement or, if
this Plan and such defined benefit plan are Paired Plans, as specified
in the Adoption Agreement for such defined benefit Paired Plan;
(iv) The account balance or accrued benefit of a Participant who
is not a Key Employee for the current Plan Year but who was a Key
Employee in a prior Plan Year or who has not performed an Hour of
Service for the Employer or any Affiliate at any time during the 5
year period ending on the Determination Date shall be disregarded;
(v) Deductible employee contributions shall be disregarded;
(vi) The calculation of the Top-Heavy Ratio and the extent to
which contributions, distributions, rollovers, and transfers are taken
into account shall be determined in accordance with Code S416; and
(vii) If the Employer maintains more than one defined benefit
plan, the accrued benefit of a Participant other than a Key Employee
shall be determined under the method, if any, that uniformly applies
for accrual purposes under all such defined benefit plans maintained
by the Employer or an Affiliate, or if there is no such method, as if
such benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional rule of Code S411(b)(1)(C).
12.2(g) Top-Heavy Valuation Date - means for this Plan, the last day
of each Plan Year and for each other qualified plan maintained by the
Employer or an Affiliate,
12.2(g)(1) Standard Option - the most recent valuation date for
such plan or
12.2(g)(2) Alternative - the valuation date specified in the
Adoption Agreement.
12.3 Minimum Allocation.
12.3(a) General. Except as otherwise provided in this S12.3, for any
Plan Year in which this Plan is a Top-Heavy Plan, the "minimum
allocation" for each Participant who is not a Key Employee means an
allocation of Employer Contributions and Forfeitures made in
accordance with S12.3(d) which shall not be less than the lesser of
12.3(a)(1) 3% of such Participant's Compensation for such Plan
Year or,
12.3(a)(2) if the Employer or an Affiliate has no defined benefit
plan which uses this Plan to satisfy the requirements of Code
S401(a)(4) or Code S410, the largest percentage of the Employer
Contributions and Forfeitures allocated on behalf of any Key Employee
(expressed as a percentage of the first $200,000 of Compensation) for
such Plan Year.
12.3(b) Defined Benefit Paired Plan. If this Plan is adopted in
combination with a defined benefit Paired Plan, the Employer and the
Participating Affiliates shall make a contribution under this Plan
(or, if this Plan is adopted in combination with another defined
contribution Paired Plan, under any combination of defined
contribution Paired Plans) for each Participant who is an Eligible
Employee
at any time during such Plan Year who is also a Participant
in the defined benefit Paired Plan equal to at least 5% (or such
greater percentage as is specified in the adoption agreement for the
defined benefit Paired Plan) of Compensation for such Plan Year unless
the Employer elects under such defined benefit Paired Plan to provide
the minimum benefit accrual under such defined benefit Paired Plan.
If this S12.3(b) applies and the Employer has not elected to provide
the minimum benefit accrual under the defined benefit Paired Plan, the
minimum allocation required under this S12.3(b) for Plan Years
beginning on and after the Final Compliance Date shall, subject to the
ordering rules in S12.3(c), be made under this Plan without regard to
whether the Participant also benefits under the defined benefit Paired
Plan. Further, if this Plan and the defined benefit Paired Plan do not
benefit the same participants for such Plan Year, the minimum
allocation described in S12.3(a) shall, subject to the ordering rules
in S12.3(c), be made under this Plan for each Participant described in
S12.3(d)(1) and the minimum benefit accrual shall be made for each
participant in the defined Benefit Paired Plan in accordance with the
terms of such Paired Plan.
12.3(c) Defined Contribution Paired Plan. If this Plan is adopted in
combination with one or more defined contribution Paired Plans, the
minimum allocation required under this S12.3, if any, shall be made
under such Paired Plans in the following order:
12.3(c)(1) Standard Option - First, under the Money Purchase
Pension Plan, if any; second, under the Target Benefit Pension Plan,
if any; third, under the Profit Sharing Plan, if any; and finally,
under the 401(k) Plan, if any.
12.3(c)(2) Alternative - in the order specified in the Adoption
Agreement.
12.3(d) Participants Entitled to Allocation. The minimum allocation
required for any Plan Year under this S12.3
12.3(d)(1) shall be made for each Participant who is not a Key
Employee and who is employed as an Eligible Employee (or on an
authorized leave of absence as an Eligible Employee) on the last day
of such Plan Year, without regard to the number of Hours of Service
actually completed by such Participant in such Plan Year; and
12.3(d)(2) shall not apply to any Participant (i) who is covered
under any other plan or plans maintained by the Employer or an
Affiliate and the Employer has specified in the Adoption Agreement
that the minimum allocation or the minimum benefit required under Code
S416 for any Plan Year for which this Plan is a Top-Heavy Plan shall
be made under such other plan or plans or (ii) to the extent such
Participant receives such minimum allocation or minimum benefit under
this Plan or any other plans maintained by the Employer or an
Affiliate.
Notwithstanding S12.3(d)(2), if this Plan is adopted as a
nonstandardized Plan that intends to satisfy the safe harbor in the
Code S401(a)(4) regulations, the minimum allocation required under
S12.3 for Plan Years beginning on and after the Final Compliance Date
must be made for each Participant described in S12.3(d)(1) without
regard to whether the Participant also benefits under another plan,
but only to the extent that such minimum allocation is not otherwise
received under this Plan.
12.3(e) Nonforfeitability. The minimum allocation required under
this S12.3 (to the extent required to be nonforfeitable under Code
S416(b)) shall not be forfeited under Code S411(a)(3)(B) or Code
S411(a)(3)(D).
12.3(f) Compensation. For purposes of computing the minimum
allocation under this S12.3, the term "Compensation" shall mean
Compensation within the meaning of Code S415(c)(3) as described in
S7.2(a)(2).
12.3(g) Multiple Plans. If the Employer or an Affiliate also
maintains another plan, the Employer shall specify in the Adoption
Agreement how the minimum allocation, if any, required under Code S416
will be satisfied and, if the Employer or an Affiliate maintains or
has maintained a defined benefit plan, the method of satisfying Code
S416(h).
12.3(h) Integrated Plans.
12.3(h)(1) Profit Sharing Plan. If this Plan is adopted as an
integrated Profit Sharing Plan, the following allocation formula shall
apply in lieu of the formula in S6.3(a)(2) for each Plan Year in which
such Plan is a Top-Heavy Plan.
The Forfeitures and the Employer Contribution shall be allocated
(and posted) as of the last day of such Plan Year to the Employer
Account of each Active Participant and each other Participant for whom
a minimum allocation is required to be made under this S12.3 in
accordance with the following:
Step One - First, the lesser of (A) the sum of the Employer
Contribution and Forfeitures for such Plan Year or (B) the product of
the Top-Heavy Percentage and the total Compensation of all such
Participants shall be allocated in the same ratio that each such
Participant's total Compensation for such Plan Year bears to the total
Compensation of all such Participants for such Plan Year.
Step Two - Second, the lesser of (A) the remaining Employer
Contribution and Forfeitures for such Plan Year or (B) the product of
the Top-Heavy Percentage (or the Maximum Disparity Rate, if less) and
the total Excess Compensation of all such Participants shall be
allocated in the same ratio that each such Participant's Excess
Compensation for such Plan Year bears to the total Excess Compensation
of all such Participants for such Plan Year.
Step Three - Third, the lesser of (A) the remaining Employer
Contribution and Forfeitures for such Plan Year or (B) the Integration
Amount shall be allocated in the same ratio that the sum of the total
Compensation and Excess Compensation of each such Participant for such
Plan Year bears to the sum of the total Compensation and Excess
Compensation of all such Participants for such Plan Year.
Step Four - Finally, the remaining Employer Contribution and
Forfeitures for such Plan Year shall be allocated in the same ratio
that each such Participant's total Compensation for such Plan Year
bears to the total Compensation of all such Participants for such Plan
Year.
12.3(h)(2)Money Purchase Pension Plan. If this Plan is adopted as
an integrated Money Purchase Pension Plan, (i) the "Base Contribution
Percentage" specified in the Adoption Agreement, if less than the Top-
Heavy Percentage, shall be increased to equal the Top-Heavy Percentage
and (ii) the Employer Contribution required under S5.2 (as adjusted in
(i) above) shall be made for each Active Participant and each other
Participant for whom an allocation is required to be made under this
S12.3.
12.3(h)(3) Special Definitions. For purposes of this S12.3(h),
(i) Excess Compensation" means the amount, if any, of a
Participant's Compensation for such Plan Year which exceeds the
Integration Level for such Plan Year.
(ii) Integration Amount" means the product of (1) the total
Compensation and the total Excess Compensation of all such
Participants and (2) the excess, if any, of the Integration Percentage
specified in the Adoption Agreement over the Top-Heavy Percentage.
(iii) Top-Heavy Percentage" means 3% or such greater percentage
required under this S12.3 or specified in the Adoption Agreement.
12.4 Vesting Schedule. For any Plan Year in which this Plan is a Top-
Heavy Plan, the Top-Heavy vesting schedule specified in the Adoption
Agreement automatically shall apply to all benefits under the Plan
within the meaning of Code S411(a)(7) (other than benefits which are
attributable to Employee Contributions or Rollover Contributions or
other contributions which are nonforfeitable when made), including
benefits accrued before the effective date of Code S416 and before
this Plan became a Top-Heavy Plan, unless the regular vesting schedule
is at least as favorable as such Top-Heavy vesting schedule. However,
the provisions of this S12.4 shall not apply to the Account balance of
any Participant who does not complete an Hour of Service after the
Plan first becomes a Top-Heavy Plan and such Participant's Account
balance attributable to Employer contributions and Forfeitures shall
be determined without regard to this S12.4. Further, no change in the
vesting schedule as a result of a change in this Plan's status to a
Top-Heavy Plan or to a plan which is not a Top-Heavy Plan shall
deprive a Participant of the nonforfeitable percentage of the
Participant's Account balance accrued to the date of the change, and
any such change to the vesting schedule shall be subject to the
provisions of S14.3(c).
12.5 401(k) Plan. Notwithstanding any contrary provision, the
following rules shall apply if this Plan adopted as a 401(k) Plan:
12.5(a) Qualified Nonelective Contributions shall be treated as
Employer contributions for purposes of satisfying the minimum
allocation under S12.3.
12.5(b) Matching Contributions allocated to the Account of a Key
Employee shall be treated as Employer contributions for purposes of
determining the amount of the minimum allocation required under
S12.3. The Plan may use Matching Contributions allocated on behalf
of a non-Key Employee to satisfy the minimum allocation under
S12.3; provided, however, that for Plan Years beginning on and
after the Final Compliance Date, such contributions shall not be
treated as Matching Contributions for purposes of satisfying the
limitations of S7.4 and S7.5 but shall instead be subject to the
general nondiscrimination rules of Code S401(a)(4).
12.5(c) Elective Deferrals allocated to the Account of a Key
Employee shall be treated as Employer contributions for purposes of
determining the amount of the minimum allocation required under
S12.3. However, for Plan Years beginning on and after the Final
Compliance Date, Elective Deferrals allocated on behalf of non-Key
Employees shall not be treated as Employer contributions for
purposes of satisfying the minimum allocation required under S12.3.
SECTION 13. INSURANCE, INDIVIDUALLY DIRECTED INVESTMENTS AND
PARTICIPANT LOANS
13.1 Insurance Contracts.
13.1(a) Elections and Existing Life Insurance Contracts.
13.1(a)(1) Standard Option. No Participant shall have the right to
elect to have the Trustee purchase an insurance contract on his or her
life for his or her Account under this Plan; however, any life
insurance contract purchased under the terms of a Pre-Existing Plan,
which is acceptable to the Trustee, shall continue to be held by the
Trustee for the benefit of the Participant subject to the conditions
of this S13.1.
13.1(a)(2) Alternative. If so specified in the Adoption Agreement
each Participant who is an Eligible Employee may elect (subject to
this S13.1) to have the Trustee purchase an insurance contract on his
or her life for his or her Account under the Plan by completing and
filing an Election Form with the Plan Administrator.
13.1(b) Premiums. The aggregate annual premiums on any life
insurance contracts held for a Participant's Account under this
Plan shall be subject to the following limitations:
13.1(b)(1) Ordinary Life. If the life insurance contracts are
ordinary whole life insurance contracts which are contracts with both
nondecreasing death benefits and nonincreasing premiums, such premiums
shall be less than one-half of the aggregate Employer Contributions
plus Forfeitures credited to the Participant's Employer Account and
Matching Account.
13.1(b)(2) Term and Universal Life. If the life insurance
contracts are term life insurance contracts, universal life insurance
contracts and any other life insurance contracts (other than whole
life), then such premiums shall not exceed one-fourth of the aggregate
Employer Contributions plus Forfeitures credited to the Participant's
Employer Account and Matching Account.
13.1(b)(3) Combination. If the life insurance contracts either
combine features of ordinary whole life and other life insurance or
consist of ordinary whole life and other life insurance contracts, the
sum of one-half of the ordinary whole life premiums plus all other
life insurance premiums shall not exceed one-fourth of the aggregate
Employer Contributions plus Forfeitures credited to the Participant's
Employer Account and Matching Account.
13.1(c) Owner and Beneficiary. The Trustee shall apply for and be
the owner of each life insurance contract held under this Plan and
also shall be named as the beneficiary of each such life insurance
contract. In the event of the Participant's death prior to the date
as of which the Participant's Account becomes payable under the
Plan, the Trustee, as beneficiary, shall pay the entire proceeds of
such life insurance contracts to the Participant's Account which
shall then be distributed to the surviving Spouse or, if
applicable, to the Participant's Beneficiary in accordance with
S10. Under no circumstances shall the Fund retain any part of the
proceeds of any life insurance contracts. In the event of a
conflict between the terms of the Plan and the terms of any life
insurance contracts held under this Plan, the Plan provisions shall
control.
13.1(d) Allocations. Any dividends or credits earned on a life
insurance contract held under this Plan shall be allocated to the
Account of the Participant for whom the contract was purchased and
may be applied to pay the annual premium on such life insurance
contract. The amount of the annual premium on each such insurance
contract shall be charged against the Account of the insured
Participant. The value of any such insurance contract shall be
deemed to be zero for the purposes of allocating the Employer
Contribution, Forfeitures or the Fund Earnings for any Plan Year as
provided in S6.
13.1(e) Distribution to Participant. Subject to S10, Joint and
Survivor Annuity Requirements, the life insurance contracts held as
part of a Participant's Account shall be distributed in kind to the
Participant upon retirement or other termination of employment as
an Employee for reasons other than death (1) if such Account is
completely nonforfeitable or (2) if the cash surrender value of
such contracts is equal to or less than the nonforfeitable portion
of the Participant's Account. If neither one of these conditions is
satisfied and the Participant does not elect to purchase the life
insurance contracts under S13.1(f), the Trustee shall surrender
such contracts, add the proceeds to the Participant's Account and
distribute the nonforfeitable percentage of the Participant's
Account in accordance with S10.
13.1(f) Termination of Insurance Election. A Participant may
direct the Trustee to stop making premium payments on a life
insurance contract held as part of the Participant's Account and to
surrender such contract or to sell such contract to the Participant
by completing and filing an Election Form with the Plan
Administrator. If the Participant purchases the contract, he or she
shall prepare and deliver to the Trustee all papers needed to
properly effect that purchase and shall pay to the Trustee an
amount equal to the cash surrender value of the contract at the
time of the purchase. The amount paid either by the Participant for
the purchase or by the insurance company in connection with the
surrender of a contract shall be credited to the Participant's
Account as of the date payment is made to the Trustee. A
Participant automatically shall be deemed to have directed the
Trustee to stop premium payments and to surrender a life insurance
contract immediately before a premium due date if the premium due
on that date would exceed the premium payment limits in S13.1(b).
13.2 Individually Directed Investments.
13.2(a) General.
13.2(a)(1) Standard Option. No Participant or a Beneficiary may
direct the investment of such individual's Account.
13.2(a)(2) Alternative. If so specified in the Adoption
Agreement, a Participant or a Beneficiary may elect how such
individual's Account shall be invested between the investment
alternatives available under the Plan from time to time. The Plan
Administrator shall furnish to each Participant and Beneficiary
sufficient information to make informed decisions with regard to
investment alternatives and, if this Plan is intended to satisfy ERISA
S404(c), information which satisfies the requirements of the
regulations under ERISA S404(c). An individual's investment direction
shall apply
(i) Standard Option - to the individual's entire Account or
(ii) Alternative - only to the portion of the individual's
Account specified in the Adoption Agreement.
13.2(b) Election Rules. The Plan Administrator from time to time
shall establish and shall communicate in writing to such
individuals such reasonable restrictions and procedures for making
individual investment elections as the Plan Administrator deems
appropriate under the circumstances for the proper administration
of this Plan. Such restrictions and procedures shall be applied on
a uniform and nondiscriminatory basis to all similarly situated
individuals and, if this Plan is intended to satisfy ERISA S404(c),
shall be in accordance with the regulations under ERISA S404(c).
13.2(c) No Election. The Account of an individual for whom no
investment election is in effect under this S13.2, either because
such individual failed to make a proper election or terminated an
election under this S13.2, shall be invested as designated by the
Plan Administrator.
13.3 Participant Loans. This S13.3 shall apply only if the Employer
specifies in the Adoption Agreement that loans shall be permitted.
However, if loans are not permitted in the Adoption Agreement, any
outstanding loans made under the terms of the Pre-Existing Plan shall
be subject to this S13.3.
13.3(a) Administration and Procedures. The Plan Administrator
shall establish objective nondiscriminatory written procedures for
the administration of the loan program under this S13.3 (which
written procedures, together with any written amendments to such
procedures, hereby are expressly incorporated by reference as a
part of this Plan), including, but not limited to,
13.3(a)(1) the class of Participants and Beneficiaries who are
eligible for a loan;
13.3(a)(2) the identity of the person or position authorized to
administer the loan program;
13.3(a)(3) the procedures for applying for a loan;
13.3(a)(4) the basis on which loans will be approved or denied;
13.3(a)(5) the limitations, if any, on the types and amounts of
loans offered;
13.3(a)(6) the procedures for determining a reasonable rate of
interest;
13.3(a)(7) the types of collateral which may be used as security
for a loan; and
13.3(a)(8) the events constituting default and the steps that
will be taken to preserve Plan assets in the event of such default.
13.3(b) No Loans to Certain Owners and Family Members. No loan
shall be made under this Plan to a Participant or Beneficiary who
is
13.3(b)(1) an Owner-Employee,
13.3(b)(2) an employee or officer of an Employer or an Affiliate
which is an electing small business corporation within the meaning of
Code S1361 ("S Corporation") who owns (or is considered to own within
the meaning of Code S318(a)(1)) on any day during any taxable year of
such corporation for which it is an S Corporation more than 5% of the
outstanding stock of such corporation, or
13.3(b)(3) a member of the family (as defined in Code S267(c)(4))
of a Participant or Beneficiary described in clause (1) or (2).
13.3(c) General Conditions. If loans are made available after
October 18, 1989 to any Participant or Beneficiary who is a "party
in interest" (as defined in ERISA S3(14)) with respect to the Plan,
then loans shall be made available to all Participants and
Beneficiaries who are parties in interest with respect to the Plan.
All loans which are made under this Plan shall comply with the
following requirements under Code S4975(d)(1) and ERISA S408(b)(1):
13.3(c)(1) such loans shall be made available to Participants and
Beneficiaries who are eligible for a loan on a reasonably equivalent
basis;
13.3(c)(2) such loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount made
available to other Employees;
13.3(c)(3) such loans shall be made in accordance with specific
provisions regarding such loans set forth in the Plan and the written
procedures described in S13.3(a);
13.3(c)(4) such loans shall bear a reasonable rate of interest;
and
13.3(c)(5) such loans shall be adequately secured.
13.3(d) Other Conditions. All loans made under this Plan shall be
subject to the following conditions:
13.3(d)(1) If the loan is secured by any portion of the
Participant's Account and S10.5 does not apply to any portion of the
Participant's Account, the Participant's Spouse, if any, must consent
in writing to the granting of such security interest or to any
increase in the amount of security no earlier than the beginning of
the 90 day period before such loan is made; provided
(i) such consent must be in writing before a notary public and
must acknowledge the effect of such loan;
(ii) such consent shall be irrevocable and shall be binding
against the person, if any, identified as the Participant's
Spouse at the time of such consent and any individual who may
subsequently become the Participant's Spouse;
(iii) a new consent shall be required in the event of any
renegotiation, extension, renewal, or other revision of such a
loan; and
(iv) if a valid spousal consent has been obtained, then,
notwithstanding any other provision of this Plan, the portion
of the Participant's vested Account balance used as a security
interest held by the Plan by reason of a loan outstanding to
the Participant shall be taken into account for purposes of
determining (and may reduce) the amount of the Account balance
payable at the time of death or distribution, but only if the
reduction is used as repayment of the loan. If less than 100%
of the Participant's vested Account balance (determined without
regard to the preceding sentence) is payable to the surviving
Spouse, then the vested Account balance shall be adjusted by
first reducing the vested Account balance by the amount of the
security used as repayment of the loan, and then determining
the benefit payable to the surviving Spouse.
13.3(d)(2) The loan shall provide for the repayment of principal
and interest in substantially level installments with payments not
less frequently than quarterly over a period of 5 years or less unless
such loan is classified as a "home loan" (as described in Code
S72(p));
13.3(d)(3) If the loan is secured by any portion of the
Participant's Account, such Account balance shall not be reduced as a
result of a default until a distributable event occurs under the Plan;
and
13.3(d)(4) The Participant or Beneficiary shall agree to such
other terms and conditions as are required under the written
procedures described in S13.3(a).
13.3(e) Crediting of Loan Payments.
13.3(e)(1) Account Asset (Standard Option). The loan to a
Participant whose loan request is granted under this S13.3 shall be
made from, and shall be an asset of, the Participant's Account and all
principal and interest payments on such loan shall be credited
exclusively to the Participant's Account.
13.3(e)(2) Fund Asset (Alternative). If the Employer specifies in
the Adoption Agreement that loans shall be treated as an asset of the
Fund or, if any loan which was made under a Pre-Existing Plan was
treated as an asset of the Fund, such loans shall be treated under
this Plan as a general Fund investment and an asset of the Fund, and
all principal and interest payments on such loan shall be credited
exclusively to the Fund as a general Fund investment.
13.3(f) Limitations on Amounts. The principal amount of any loan
(when added to the outstanding principal balance of any outstanding
loans made under this Plan or under any other plan which is tax
exempt under Code S401 and which is maintained by the Employer or
an Affiliate) to the Participant shall not exceed the lesser of (1)
and (2) below:
13.3(f)(1) Dollar Limit - $50,000 reduced by the excess, if any,
of
(i) the highest outstanding principal balance of previous loans
to the Participant from the Plan (and any other plan maintained
by the Employer or an Affiliate) during the one year period
ending immediately before the date such current loan is made,
over
(ii) the current outstanding principal balance of such previous
loans on the date such current loan is made, or
13.3(f)(2) Account Limit -
(i) Standard Option - 50% of the nonforfeitable interest in the
Participant's Account at the time the loan is made or
(ii) Alternative - if so specified in the Adoption Agreement,
the greater of $10,000 or the amount specified in
S13.3(f)(2)(i), but in no event more than the nonforfeitable
interest in the Participant's Account.
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 shall be treated
as a loan for purposes of the limitations in this S13.3(f).
13.3(g) Failure to Repay. If (1) the terms of the loan provide that
it shall become due and payable in full if the Participant's or
Beneficiary's obligation to repay the loan has been discharged
through a bankruptcy or any other legal process or action which did
not actually result in payment in full and (2) such loan is not
actually repaid in full, such loan shall be cancelled on the Fund's
books and records and the amount otherwise distributable to such
Participant or Beneficiary under this Plan shall be reduced by the
principal amount of the loan plus accrued but unpaid interest due
as determined without regard to whether the loan had been
discharged through a bankruptcy or any other legal process or
action which did not actually result in payment in full. The Plan
Administrator shall have the power to direct the Trustee to take
such action as the Plan Administrator deems necessary or
appropriate to stop the payment of an Account to or on behalf of a
Participant who fails to repay a loan (without regard to whether
the obligation to repay such loan had been discharged through a
bankruptcy or any other legal process or action) until the
Participant's Account has been reduced by the principal plus
accrued but unpaid interest due (without regard to such discharge)
on such loan or to distribute the note which evidences such loan in
full satisfaction of that portion of such Account which is
represented by the value of such note. Notwithstanding the
foregoing, in the event of default, foreclosure on the note and
execution of the Plan's security interest in the Account shall not
occur until a distributable event occurs under this Plan and
interest shall continue to accrue only to the extent permissible
under applicable law.
13.3(h) Distributions. In the event the Participant's Account
becomes distributable before the loan is repaid in full, then the
vested Account balance shall be adjusted by first reducing the
vested Account balance by the amount of the security interest in
the Account and then determining the benefit payable. Nothing shall
preclude the Trustee from cancelling the Plan's security interest
in the Account and distributing the note in lieu of any other Plan
assets in full satisfaction of that portion of the Participant's
Account represented by the value of the outstanding balance of the
loan or the amount which would have been outstanding but for a
discharge in bankruptcy or through any other legal process.
SECTION 14. ADOPTION, AMENDMENT, WITHDRAWAL AND CONVERSION, MERGER,
ASSET TRANSFERS AND TERMINATION
14.1 Adoption.
14.1(a) General. Subject to the terms and conditions of this Plan,
the Trust Agreement and the Adoption Agreement, any sole
proprietorship, partnership or corporation may adopt this Plan by
completing and executing the Adoption Agreement. The Plan as
adopted by the Employer shall be effective for all purposes (other
than as a "prototype plan") as of the Effective Date. However, the
status of the Plan as a "prototype plan" shall be conditioned upon
acceptance of the Adoption Agreement by the Prototype Sponsor and,
upon such acceptance, such status as a "prototype plan" shall be
effective retroactive to the Effective Date except as provided in
S14.4.
14.1(b) Pre-Existing Plan. If this Plan is adopted as an amendment
and restatement of a Pre-Existing Plan, (1) the Trust Agreement
shall be substituted for the trust or other funding arrangement
under the Pre-Existing Plan, (2) the assets held under such trust
or other funding arrangement shall become assets of the Fund, (3)
an Account shall be established for each person who is a
participant or beneficiary in the Pre-Existing Plan, and (4) the
dollar value assigned to such participant's or beneficiary's Pre-
Existing Plan account or accounts shall be credited to such
person's Account under this Plan (or to one or more subaccounts
under such Account). All optional forms of benefit available under
the Pre-Existing Plan which must be preserved under Code S411(d)(6)
shall be available to the Participant under this Plan. Further,
such optional forms shall be described in the Adoption Agreement
and shall apply to the Participant's entire Account balance.
Notwithstanding the foregoing, if the Employer so specifies in the
Adoption Agreement and separately accounts for the benefits
attributable to the Pre-Existing Plan as described in S14.5(c) or,
if applicable, S10.5, the optional forms which must be preserved
may be limited to such separate accounts.
14.1(c) Participating Affiliates. If this Plan is adopted as a
standardized Plan, each Affiliate shall automatically become a
Participating Affiliate effective as of the later of the Effective
Date or the date such entity first becomes an Affiliate. If this
Plan is adopted as a nonstandardized Plan, an Affiliate of the
Employer may adopt the Employer's Plan effective as of any date on
or after the Effective Date. An Affiliate's execution of the
Adoption Agreement (or a separate signature page to the Adoption
Agreement) shall evidence the Participating Affiliate's adoption of
the Plan and the effective date of such adoption. In adopting this
Plan, each Participating Affiliate is deemed to have authorized the
Employer to effect all actions under this Plan on its behalf,
including but not limited to the powers reserved to the Employer
under this S14 and the power to enter into such agreements with the
Trustee or others as may be necessary or appropriate under the
Plan.
14.2 Amendment.
14.2(a) Prototype Sponsor. Subject to the restrictions of S14.3,
the Prototype Sponsor shall have the right at any time and from
time to time to amend this Plan in any respect whatsoever in
writing. To the extent required under the procedures and rules in
effect for master and prototype plans at the time of any such
amendment, notice of such amendment shall be given to the Employer
by the Prototype Sponsor as soon as practicable under the
circumstances.
14.2(b) Employer. Subject to the restrictions of S14.3, the
Employer shall have no right to amend this Plan except (1) by
entering into a new Adoption Agreement with the Prototype Sponsor,
(2) by adding such language to the Adoption Agreement as is
necessary to allow the Plan to continue to satisfy the requirements
of Code S415 or Code S416 because of the required aggregation of
multiple plans, (3) by adopting certain model amendments published
by the Internal Revenue Service which specifically provide that
such adoption would not cause the Plan to be treated as an
individually designed plan, or (4) by withdrawing this Plan as a
prototype and converting it into an individually designed plan as
provided in S14.4.
14.3 Certain Amendment Restrictions.
14.3(a) General. No amendment to the Plan shall be made which
would (1) deprive a Participant of the nonforfeitable percentage of
his or her Account balance accrued to the later of the effective
date of the amendment or the date the amendment is adopted, or (2)
decrease a Participant's Account balance or eliminate an optional
form of benefit except to the extent permissible under Code
S412(c)(8), S401(a)(4) and S411(d)(6) and the regulations under
those sections.
14.3(b) Change in Service Calculation Method. If an amendment
changes the method of calculating service, each Employee who had
any service credit under such prior method shall be credited with
any service for any computation period during which such amendment
was effective in accordance with the rules in S3.
14.3(c) Change in Vesting Schedule. If an amendment directly or
indirectly affects the computation of a Participant's
nonforfeitable percentage of his or her Account or if the Plan's
vesting schedule changes as a result of a change in the Plan's
status as a Top-Heavy Plan (as described in S12.4), each
Participant with at least 3 years of service with the Employer or
an Affiliate may elect, within a reasonable period after the
adoption of the amendment, to have the nonforfeitable percentage of
his or her Account computed under this Plan without regard to such
amendment. In the case of a Participant who does not have at least
one Hour of Service in any Plan Year beginning after December 31,
1988, the preceding sentence shall be applied by substituting 5
years of service for 3 years of service. The period during which
the election may be made shall commence with the date the amendment
is adopted and shall end on the later of
14.3(c)(1) 60 days after the amendment is adopted;
14.3(c)(2) 60 days after the amendment becomes effective; or
14.3(c)(3) 60 days after the Participant is issued written notice
of the amendment by the Plan Administrator.
Furthermore, if an amendment changes the Plan's vesting schedule,
the nonforfeitable percentage (determined as of the later of the
date the amendment is adopted or the date it becomes effective) of
the employer-derived Account balance of each Employee who is a
Participant as of such date shall not be less than the percentage
computed under the Plan without regard to such amendment.
14.4 Withdrawal as a Prototype and Conversion to Individually
Designed Plan.
14.4(a) Voluntary Conversion. The Employer may voluntarily
withdraw this Plan as a "prototype plan" and convert it to an
individually designed plan by written notice filed with the Trustee
and the Prototype Sponsor. For purposes of this S14.4, such
withdrawal shall be effective with respect to the Employer's plan
and the Trustee as of the effective date of such withdrawal, but
such withdrawal shall not relieve the Employer of any
responsibilities or liabilities to the Prototype Sponsor until 60
days after the date the Prototype Sponsor receives written notice
of such withdrawal unless the Prototype Sponsor agrees in writing
to an earlier effective date for such withdrawal.
14.4(b) Involuntary Conversion.The Employer shall be deemed to have
withdrawn this Plan as a "prototype plan" and converted it to an
individually designed plan effective as of the earlier of the date
14.4(b)(1) the Internal Revenue Service or a court determines
that this Plan fails to meet the requirements of Code S401;
14.4(b)(2) the Trustee ceases to maintain a brokerage account for
the Plan with the Prototype Sponsor or with an approved subsidiary of
the Prototype Sponsor;
14.4(b)(3) the Prototype Sponsor notifies the Employer in writing
that the Prototype Sponsor for reasons sufficient to the Prototype
Sponsor has terminated its sponsorship of its prototype plan program
or of this Plan for the Employer; or
14.4(b)(4) the Employer amends any provision of this Plan or the
Adoption Agreement (other than in accordance with S14.2(b)(1) through
(3)) including an amendment because of a waiver of the minimum funding
requirement under Code S412(d).
14.4(c) Effect of Withdrawal and Conversion. If this Plan is
withdrawn as a prototype and converted to an individually designed
Plan under this S14.4, the Employer as of the effective date of such
withdrawal shall assume the right and responsibility to amend the Plan
under S14.2(a) and thereafter only the Employer shall make amendments
to this Plan; provided, (1) no such amendment shall affect the
Trustee's rights or duties under this Plan without the Trustee's prior
written consent and (2) any such amendment shall be subject to the
restrictions of S14.3.
14.5 Merger, Consolidation or Asset Transfers.
14.5(a) General. In the case of any Plan merger or consolidation
with, or transfer of assets or liabilities to or from, any other
employee benefit plan, each person for whom an Account then is
maintained shall be entitled to receive a benefit from such plan,
if it is then terminated, which is equal to or greater than the
benefit such person would have been entitled to receive immediately
before such merger, consolidation or transfer, if this Plan then
had been terminated.
14.5(b) Authorization. The Plan Administrator may authorize the
Trustee to accept a transfer of assets from or transfer Fund assets
to the trustee, custodian or insurance company of any other plan
which satisfies the requirements of Code S401(a) in connection with
a merger or consolidation with, or other transfer of assets and
liabilities to or from any such plan, provided that the transfer
will not affect the qualification of this Plan under Code S401(a)
and the assets to be transferred are acceptable to the Trustee.
14.5(c) Separate Account. The Plan Administrator may establish
separate bookkeeping accounts for any assets transferred to the
Trustee under this S14.5 and shall establish such separate
bookkeeping accounts if required under this Plan. If separate
accounts are maintained with respect to transferred assets, no
contributions or Forfeitures under this Plan shall be credited to
such separate accounts, but such accounts shall share in the Fund
Earnings on the same basis as each other Account under S6.2. Any
individual for whom an Account is established under this S14.5
shall become a Participant in this Plan as of the effective date of
the merger, consolidation or asset transfer; however, no
contributions shall be made by or on behalf of such individual
under this Plan unless such individual is otherwise entitled to
such contributions under the terms of this Plan.
14.5(d) Code S411(d)(6) Protected Benefits. All optional forms of
benefit available under the transferor plan which must be preserved
under Code S411(d)(6) shall be available to the Participant under
this Plan unless such transfer meets the requirements of Code
S414(l) and the Participant has made an elective transfer which
satisfies the requirements set forth in Q&A-3(b) of S1.411(d)-4 of
the Federal Income Tax Regulations. Further, such optional forms
shall be described in the Adoption Agreement and, generally, shall
apply to the Participant's entire Account balance. Notwithstanding
the foregoing, if the Employer so specifies in the Adoption
Agreement and separately accounts for such transferred assets, the
optional forms which must be preserved may be limited to such
separate account.
14.6 Termination.
14.6(a) Right to Terminate. The Employer may terminate or
partially terminate this Plan or discontinue contributions to this
Plan at any time by written action of the Board filed with the
Trustee and the Prototype Sponsor. The Employer reserves the right
to terminate the participation in this Plan by any Participating
Affiliate at any time by written action. Furthermore, a
Participating Affiliate's participation in this Plan automatically
shall terminate if (and at such time as) its status as an Affiliate
terminates for any reason whatsoever (other than through a merger
or consolidation into another Participating Affiliate). However, a
Participating Affiliate's termination of participation in this Plan
shall not be deemed to be a termination or partial termination of
the Plan except to the extent required under the Code. Upon
complete termination of this Plan, any unallocated amounts (other
than amounts in a Code S415 suspense account described in S7.2(b))
shall be allocated in accordance with the Plan terms but, if the
Plan terms do not address the allocation of such amounts, they
shall be allocated in a nondiscriminatory manner prior to
distribution of Plan assets.
14.6(b) Full Vesting Upon Termination. If this Plan is terminated
or partially terminated under this S14.6 or if there is a complete
discontinuance of contributions under this Plan, the Account of
each affected Employee of the Employer or an Affiliate shall become
nonforfeitable on the effective date of such termination or partial
termination or complete discontinuance of contributions, as the
case may be. In the event of a complete termination of this Plan or
a complete discontinuance of contributions, each other Account
(except to the extent otherwise nonforfeitable under the terms of
this Plan) shall become a Forfeiture and shall be allocated as such
under S6.3 as of the effective date of such complete termination or
complete discontinuance as if such date was the last day of a Plan
Year.
SECTION 15. ADMINISTRATION
15.1 Named Fiduciaries. The Plan Administrator and the Employer (if
the Plan Administrator is not the Employer) shall be the Named
Fiduciaries responsible to the extent of their powers and
responsibilities assigned in the Plan for the control, management and
administration of the Plan. The Plan Administrator, the Employer and
the Trustee (other than Smith Barney Trust Company) shall be the
Named Fiduciaries responsible to the extent of their respective powers
and responsibilities assigned to them in the Trust Agreement for the
safekeeping, control, management, investment and administration of the
assets of the Fund. Any power or responsibility for the control,
management or administration of the Plan or the Fund which is not
expressly assigned to a Named Fiduciary under the Plan or the Trust
Agreement, or with respect to which the proper assignment is in doubt,
shall be deemed to have been assigned to the Employer as a Named
Fiduciary. One Named Fiduciary shall have no responsibility to inquire
into the acts and omissions of another Named Fiduciary in the exercise
of powers or the discharge of responsibilities assigned to such other
Named Fiduciary under the Plan or the Trust Agreement. Any person may
serve in more than one fiduciary capacity under the Plan or the Trust
Agreement and a fiduciary may be a Participant provided such
individual otherwise satisfies the requirements of S4.
A Named Fiduciary, by written instrument filed by the Plan
Administrator with the records of the Plan, may designate a person who
is not a Named Fiduciary to carry out any of its responsibilities
under the Plan or Trust Agreement, other than the responsibilities of
the Trustee for the safekeeping, control, management, investment and
administration of the assets of the Fund, except to the extent the
Trustee's responsibility for investment decisions is delegated to the
Employer, the Plan Administrator, or an investment manager.
15.2 Administrative Powers and Duties. Except to the extent expressly
reserved under the Plan or the Trust Agreement to the Employer, the
Board, or the Trustee, the Plan Administrator shall have the exclusive
responsibility and complete discretionary authority to control the
operation, management and administration of the Plan, with all powers
necessary to enable it properly to carry out such responsibilities,
including (but not limited to) the power to construe the Plan, the
related Adoption Agreement, and the Trust Agreement, to determine
eligibility for benefits and to resolve all interpretative, equitable
or other questions that arise under the Plan or the Trust Agreement.
The decisions of the Plan Administrator on all matters within the
scope of its authority shall be final and binding. To the extent a
discretionary power or responsibility under the Plan or Trust
Agreement is expressly assigned to a person other than the Plan
Administrator, such person shall have complete discretionary authority
to carry out such power or responsibility and such person's decisions
on all matters within the scope of such person's authority shall be
final and binding.
15.3 Agent for Service of Process. The agent for service of process
for this Plan shall be the person who is identified as the agent for
service of process in the summary plan description for this Plan.
Neither the Prototype Sponsor nor any of its affiliates shall be the
agent for service of process for the Plan.
15.4 Reporting and Disclosure. All records regarding the operation,
management and administration of this Plan shall be maintained by the
Plan Administrator. The Plan Administrator shall satisfy any federal
or state requirement to report and disclose any information regarding
this Plan to any federal or state department or agency, or to any
Participant or Beneficiary.
SECTION 16. MISCELLANEOUS
16.1 Spendthrift Clause and Qualified Domestic Relations Orders.
Except to the extent permitted by law, no Account, benefit, payment or
distribution under this Plan or Trust Agreement shall be subject to
attachment, garnishment, levy, execution or any claim or legal process
of any creditor of a Participant or Beneficiary, and no Participant or
Beneficiary shall have any right to alienate, commute, anticipate, or
assign all or any part of such individual's Account, benefit, payment
or distribution under this Plan or Trust Agreement. The preceding
sentence also shall apply to the creation, alienation, 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 ("QDRO")
within the meaning of Code S414(p) and such order is entered on or
after January 1, 1985. The Plan Administrator shall establish uniform
and nondiscriminatory procedures regarding the determination of
whether a domestic relations order constitutes a QDRO, the timing of
distributions made pursuant to a QDRO and the treatment of any
separate account established under this Plan pursuant to a QDRO.
Unless otherwise expressly specified in such procedures, (1) the Plan
Administrator shall treat a domestic relations order entered before
January 1, 1985 as a QDRO in accordance with Code S414(p) and (2) a
distribution may be made to an alternate payee pursuant to a QDRO
prior to the earliest date that a distribution could be made to a
Participant under the terms of this Plan and prior to a Participant's
"earliest retirement age" under Code S414(p). The determinations and
the distributions made by, or at the direction of, the Plan
Administrator under this S16.1 shall be final and binding on the
Participant and on all other persons interested in such order.
16.2 Benefits Supported Only by Trust Fund. Any person having any
claim for any benefit under this Plan shall look solely to the assets
of the Fund for the satisfaction of that claim. In no event shall the
Prototype Sponsor, the Trustee, the Plan Administrator, the Employer
or a Participating Affiliate or any of their employees, officers,
directors or their agents be liable in their individual capacities to
any person whomsoever for the payment of any benefits under this Plan.
16.3 Discrimination. The Plan Administrator shall administer the Plan
in a manner which it deems equitable under the circumstances for all
similarly situated Employees, Participants, Spouses and Beneficiaries;
provided, the Plan Administrator shall not permit discrimination in
favor of Highly Compensated Employees of the Employer or any
Participating Affiliate which would be prohibited under Code S401(a).
16.4 Claims. Any payment to a Participant or Beneficiary or to the
legal representative or heirs-at-law of any such person made in
accordance with the provisions of this Plan shall to the extent of
such payment be in full satisfaction of all claims under this Plan
against the Trustee, Plan Administrator, a Named Fiduciary, the
Employer and any Participating Affiliate, any of whom may require such
person, such person's legal representative or heirs-at-law, as a
condition precedent to such payment, to execute a receipt and release
in such form as shall be determined by the Trustee, Plan
Administrator, a Named Fiduciary, the Employer or a Participating
Affiliate, as the case may be.
16.5 Nonreversion. Except as provided in S7.2(b) and in this S16.5,
neither the Employer nor any Participating Affiliate shall have any
present or prospective right, claim, or interest in the Fund or in any
Employer contribution made to the Trustee.
To the extent permitted by the Code and ERISA, the Employer
contributions described in this S16.5, less any losses on such
contributions, shall be returned by the Trustee to the Employer or to
any Participating Affiliate upon the written direction of the Plan
Administrator in the event that:
16.5(a) an Employer contribution is made by a mistake of fact,
provided such return is effected within one year after the payment
of such contribution;
16.5(b) a final judicial or Internal Revenue Service determination
is made that this Plan fails to satisfy the requirements of Code
S401 with respect to its initial qualification (provided, if the
Employer is not entitled to rely on the Prototype Sponsor's opinion
letter, the application for the initial qualification of the Plan
is made on or before the date 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 which event all Employer contributions made before
such judicial or administrative determination (whichever last
occurs) plus any earnings and minus any losses shall be returned
within one year after such determination, all such contributions
being hereby conditioned upon this Plan satisfying all applicable
requirements under Code S401 from and after its adoption; or
16.5(c) a deduction for an Employer contribution is disallowed
under Code S404, in which event such contribution shall be returned
within one year after such disallowance, all such contributions
being hereby conditioned upon being deductible under Code S404.
16.6 Exclusive Benefit. The corpus or income of the Fund shall not
be diverted to or used for any purpose other than the exclusive
benefit of Participants or Beneficiaries.
16.7 Expenses. Any expenses of the Fund which are properly allocable
to an individual's Account (including, but not limited to, expenses
related to an individual's investment directions, annuity contract
purchases and other transactional fees for processing distributions)
may be charged directly against such individual's Account if so
provided in the administrative procedures established by the Plan
Administrator.
16.8 Section 16 of Securities Exchange Act of 1934. If this Plan is
invested in employer securities and this Plan permits employees of the
Employer who are subject to the reporting requirements of S16 of the
Securities Act of 1934, as amended ("Act") to receive awards, then
notwithstanding any other provision of this Plan, the provisions of
this Plan that set forth the formula or formulas that determine the
amount, price or timing of awards to such persons and any other
provisions of this Plan of the type referred to in S16b-3(c)(2)(ii) of
the Act shall not be amended more than once every six months, other
than to comport with changes in the Code, ERISA, or the rules
thereunder. Further, to the extent required, the employees described
in the preceding sentence shall be subject to such withdrawal,
investment and other restrictions necessary to satisfy Rule 16b-3
under the Act. This S16.8 is intended to comply with Rule 16b-3 under
the Act and shall be effective only to the extent required by such
rule and shall be interpreted and administered in accordance with such
rule.
16.9 Arbitration. Any claims or controversies with the Prototype
Sponsor related to this Plan are subject to arbitration in accordance
with the arbitration provisions of the Smith Barney Qualified
Retirement Plan and IRA Client Agreement or any successor to such
agreement, which provisions hereby are expressly incorporated herein
by reference.
APPENDIX ONE TO THE SMITH BARNEY
PROTOTYPE DEFINED CONTRIBUTION PLAN
OBRA '93 ANNUAL COMPENSATION LIMIT
The Plan is amended by adding the following to the end of S 2.10:
2.10 (h) OBRA '93 Annual Compensation Limit. In addition to other
applicable limitations set forth in the Plan, and notwithstanding any
other provision of the Plan to the contrary, for Plan Years beginning
on or after January 1, 1994, the annual Compensation of each Employee
taken into account under the Plan shall not exceed the OBRA '93 annual
compensation limit. The OBRA '93 annual compensation limit is
$150,000, as adjusted by the Commissioner for increases in the cost of
living in accordance with Section 401(a)(17)(B) of the Internal
Revenue Code. The cost-of-living adjustment in effect for a calendar
year applies to any period, not exceeding 12 months, over which
Compensation is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Section 401(a)(17) of the Code shall
mean the OBRA '93 annual compensation limit set forth in this
provision.
If Compensation for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current
Plan Year, the Compensation for that prior determination period is
subject to the OBRA '93 annual compensation limit in effect for that
prior determination period. For this purpose, for determination
periods beginning before the first day of the first Plan Year
beginning on or after January 1, 1994, the OBRA '93 annual
compensation limit is $150,000.
Waiver of 30-Day Notice Period
[Note to Employer: The following amendment will apply only to
distributions from a Profit Sharing Plan or 401(k) Plan that are not
subject to the qualified joint and survivor annuity rules of Code S
401(a)(11) and Code S 417. In order for this amendment to apply to a
Plan, the Employer must have selected Option IX.D3 in the Adoption
Agreement and the distribution must satisfy the Safe Harbor Rules in
S10.5.]
The Plan is amended by adding the following to the end of S 9.3:
9.3 (e) Waiver of 30-Day Notice Period. 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 1.41 1(a)-1 1(c) of the Income
Tax Regulations is given, provided that:
9.3 (e) (1) the Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option), and
9.3 (e) (2) the Participant, after receiving the notice,
affirmatively elects a distribution.
PART II:
SMITH BARNEY DEFINED CONTRIBUTION PLAN TRUST AGREEMENT DOCUMENT #05
SECTION 1. INTRODUCTION AND CONSTRUCTION
1.1 Introduction. This Trust Agreement is a part of the Smith Barney
Prototype Defined Contribution Plan and is entered into between the
Employer and the Trustee effective as of the date the Adoption
Agreement is executed by the Employer and the Trustee. If the Plan is
adopted as an amendment and restatement of a Pre-Existing Plan, this
Trust Agreement shall amend and restate the trust agreement or other
funding arrangement for the Pre-Existing Plan.
1.2 Definitions. The terms in this Trust Agreement which begin with a
capital letter shall have the meanings set forth in S2 of the Plan.
For purposes of this Trust Agreement, "SBCTC" shall mean Smith Barney
Corporate Trust Company and any successor in interest to Smith Barney
Corporate Trust Company.
1.3 Controlling Laws. To the extent such laws are not preempted by
federal law, this Trust Agreement shall be construed and interpreted
under the laws of the state specified in the Adoption Agreement;
provided, if SBCTC has been appointed as Trustee, this Trust Agreement
shall be governed by and construed in accordance with the laws of the
State of Delaware.
1.4 Construction. The headings and subheadings in this Trust
Agreement have been inserted for convenience of reference only and are
to be ignored in the construction of its provisions. Wherever
appropriate, the masculine shall be read as the feminine, the plural
as the singular, and the singular as the plural. References in this
Trust Agreement to a section (S) shall be to a section in this Trust
Agreement unless otherwise indicated. References in this Trust
Agreement to a section of the Code, ERISA or any other federal law
shall also refer to the regulations issued under such section.
The Employer intends that the Plan and this Trust Agreement and the
related Adoption Agreement which are part of the Plan satisfy the
requirements for tax exempt status under Code S401(a), Code S501(a)
and related Code sections and that the provisions of this Trust
Agreement, the Plan and the related Adoption Agreement be construed
and interpreted in accordance with the requirements of the Code and
the regulations under the Code.
Further, except as expressly stated otherwise, no provision of the
Plan or this Trust Agreement or the related Adoption Agreement is
intended to nor shall grant any rights to Participants or
Beneficiaries or any interest in the Fund in addition to those minimum
rights or interests required to be provided under ERISA and the Code
and the regulations under ERISA and the Code.
Nothing in the Plan or this Trust Agreement or the related Adoption
Agreement shall be construed to prohibit the adoption or the
maintenance of the Plan and Trust Agreement as an individually
designed plan and trust agreement or the adoption of this Trust
Agreement in connection with an individually designed plan, but in
such event, the Employer may not rely on the opinion letter issued to
the Prototype Sponsor and the Prototype Sponsor shall have absolutely
no responsibility for such individually designed plan and trust
agreement.
Finally, in the event of any conflict between the terms of the Plan
and the terms of this Trust Agreement or the Adoption Agreement, the
terms of the Plan shall control.
SECTION 2. GENERAL
All the Trustee's rights, power, authorities, duties and
responsibilities of any kind or description whatsoever respecting the
Fund shall be solely and exclusively as expressly stated in the Plan
and in this Trust Agreement. Except to the extent the Employer or Plan
Administrator also is the Trustee for the Plan, the Trustee shall have
no responsibility whatsoever with respect to the maintenance,
operation and administration of the Plan. No right, power, authority,
duty or responsibility of any kind or description whatsoever
respecting the Fund or the maintenance, operation or administration of
the Plan shall be attributed to the Trustee on account of any
ambiguity or inference which might be interpreted by any person to
exist in the terms of the Plan or this Trust Agreement. Finally, if
SBCTC is Trustee, any discretionary powers, duties or responsibilities
assigned to the Trustee in this Trust Agreement shall be exercised or
performed by SBCTC only upon the direction of the Plan Administrator,
the Employer or an Investment Manager, and SBCTC shall exercise no
discretion with respect to the investment or management of the Fund
except to the extent that Fund assets are invested in a common or
collective group trust maintained by SBCTC or an affiliate of SBCTC.
SECTION 3. CONTRIBUTIONS AND TRUST FUND
The Employer and the Trustee shall establish reasonable procedures for
making and accepting contributions to the Fund and any asset transfers
pursuant to S9 of this Trust Agreement. The Trustee shall accept any
contributions the Trustee reasonably believes are paid to it in
accordance with such procedures, except that the Trustee may refuse to
accept any non-cash contributions or assets which either are not
acceptable to the Trustee or the acceptance of which the Trustee
reasonably believes would constitute a prohibited transaction under
ERISA or the Code. If this Trust Agreement is an amendment and
restatement of a trust agreement or other funding arrangement for a
Pre-Existing Plan, the assets held under such pre-existing trust
agreement or other funding arrangement shall (to the extent acceptable
to the Trustee and permissible under the prohibited transaction rules
of ERISA and the Code) be transferred to the Trustee pursuant to
reasonable transfer procedures established by the Trustee, the
Employer and any predecessor trustee, custodian or insurance carrier
and shall become assets of the Fund. The Trustee shall have no
responsibility with respect to such transferred assets except to
receive such assets and to hold and administer the same thereafter in
accordance with this Trust Agreement. The Trustee shall not be
responsible for any act or omission of a predecessor trustee or any
other person with respect to assets that are transferred to the
Trustee when the Fund is a continuation of a trust fund or other
funding arrangement under a Pre-Existing Plan and shall not be
required to make any claim or demand against any of such persons
unless the Employer requests in writing that the Trustee make such
claim or demand. The Fund shall consist of all such contributions and
assets together with the income or gains on such contributions and
assets, less any payments, distributions, transfers, assessments and
losses from or on such contributions and assets. The Fund shall be
managed and controlled by the Trustee pursuant to the terms of this
Trust Agreement without distinction between principal and income and
without liability for the payment of any interest on such assets. The
Trustee shall not be responsible for the amount or the collection of
any contributions to the Fund or for the determination of the amount
or frequency of any contribution required by the Plan, ERISA or the
Code and such responsibilities shall be borne solely by the Employer
and the Participating Affiliates. Further, the Trustee, for investment
purposes, may combine into one fund the Funds created under each Plan
maintained by the Employer and Participating Affiliates and (unless
otherwise specified) all references to the Fund in this Trust
Agreement shall be references to the combined Funds; provided that (a)
the Trustee shall maintain separate books and records of the assets,
contributions, distributions and income or losses allocable to each
such Fund and (b) no part of one Fund shall be used to pay the
expenses, benefits or liabilities attributable to any other Fund.
SECTION 4. MANAGEMENT OF TRUST FUND
4.1 Plan Administrator. With respect to the Fund, the Plan
Administrator shall have those duties and responsibilities specified
in this Trust Agreement and, additionally, shall have the duty to
advise the Trustee and any other person of such facts and issue such
directions as may be required to enable the Trustee and such other
person to execute their duties and responsibilities under this
Agreement.
4.2 Trustee. The Trustee shall have the sole and exclusive power
(except as otherwise provided in this Trust Agreement) in the
management and control of the Fund to do all things and execute such
instruments as may be deemed necessary or proper, including the powers
described in this section, all of which may be exercised without order
of or report to any court. To the extent the exercise of any such
power would require the exercise of discretion by SBCTC as the Trustee
(other than the management and control of any assets invested in any
common or collective trust maintained by SBCTC or its affiliates),
SBCTC as Trustee shall exercise such power only in accordance with the
specific direction of the Plan Administrator, the Employer or an
Investment Manager.
4.2(a) To sell, exchange, or otherwise dispose of any property at
any time held or acquired by the Fund, at public or private sale,
for cash or on terms, without advertisement, including the right to
lease for any term notwithstanding the period of the Trust
Agreement;
4.2(b) To vote in person or by proxy any corporate stock or other
security and to agree to or take, or refrain from taking, any other
action necessary or appropriate for a shareholder or owner in
regard to any reorganization, merger, consolidation, liquidation,
bankruptcy or other procedure or proceeding affecting any stock,
bond, note or other property;
4.2(c) To compromise, settle or adjust any claim or demand by or
against the Fund and to agree to any rescission or modification of
any contract or agreement affecting the Fund;
4.2(d) To borrow money, and to secure the same by mortgaging,
pledging, or conveying the property of the Fund;
4.2(e) To deposit any stock, bond or other security in any
depository or other similar institution and to register any stock,
bond or other security in the name of a nominee or in street name
provided such securities are held on behalf of the Fund by a bank
or trust company, subject to supervision by the United States or a
State, a broker or dealer registered under the Securities Exchange
Act of 1934 ("Act") or a "clearing agency" as defined in the Act,
or their nominees, without the addition of words indicating that
such security is held in a fiduciary capacity, but accurate records
shall be maintained showing that such security is a Fund asset and
the Trustee shall be responsible for the acts of such nominee;
4.2(f) To hold cash in such amounts as may be in its opinion
reasonable for the proper operation of the Fund;
4.2(g) To invest any and all monies in such stocks, bonds,
securities, investment company or trust shares or mutual funds,
including mutual funds which invest in commodities, mortgages,
notes, choses in action, real estate, improvements thereon, and
other property as the Trustee may deem appropriate, including
"employer securities" (whether or not such securities are
"qualifying employer securities") or "employer real property"
(whether or not such property is "qualifying employer real
property"), as such terms are defined for purposes of ERISA S407,
except to the extent prohibited under ERISA or the Code;
4.2(h) To grant, sell, purchase, or exercise any option of any kind
or description whatsoever to purchase or sell any security or other
property which is a permissible investment under this S4(b),
provided the Trustee in no event shall grant or sell any option
under which any person can require the Fund to sell any security or
other property which the Fund at the time of such grant or sale
does not hold in an amount sufficient to cover such option and any
other outstanding option granted or sold by the Trustee, and the
Trustee in no event shall dispose of any such security or other
property covering any such option until such option is exercised or
otherwise expires;
4.2(i) To invest all, or any part, of the assets of the Fund in any
common, collective or group trust fund maintained under Code S584
or Revenue Ruling 81-100, 1981-1 C.B. 326 exclusively for the
investment of the assets of tax exempt pension and profit sharing
plans, the provisions of which upon such investment shall
automatically be adopted and made a part of this Trust Agreement
for the period such investment is made in such common, collective
or group trust fund; provided, if SBCTC is the Trustee,
4.2(i)(1) the Trustee shall, upon receipt of written investment
directions, invest some or all of the Fund in one or more collective
trust funds (including, without limitation, any collective trust fund
maintained by the Trustee or by any affiliate of the Trustee) that are
exempt from taxation under Code S501(a);
4.2(i)(2) any such investment shall be subject to all the
provisions of the declaration of trust creating such collective trust
fund which is adopted in its entirety as an integral part of the Plan
and of this Trust Agreement;
4.2(i)(3) the Employer, Plan Administrator or Investment Manager
shall not have any right to vote or otherwise in any manner control
the operation and management of any such collective trust fund, the
operation of any party to any such collective trust fund, or any
beneficiary of any such collective trust fund;
4.2(i)(4) the Trustee (or its affiliate) is authorized to utilize
investment advice received from investment advisers for any collective
trust fund maintained by the Trustee (or its affiliate) including,
without limitation, such advice received from [SB Capital Management
and SB Asset Management, each of which is a division of] an affiliate
of the Trustee, and to utilize the brokerage services of the Prototype
Sponsor, an affiliate of the Trustee; and
4.2(i)(5) the Employer, Plan Administrator or Investment Manager,
as applicable, shall determine, prior to any direction by either of
them to invest the Fund in any such collective trust fund, that the
services provided to the Plan through the collective trust fund
including, without limitation, any investment advisory services
provided to the Trustee (or its affiliate) by [SB Capital Management
or SB Asset Management] and brokerage services provided by the
Prototype Sponsor are (A) necessary to the operation of the Plan, (B)
furnished under a declaration of trust which is reasonable and (C)
furnished for reasonable compensation;
4.2(j) To purchase, hold, sell, surrender or distribute any
investment contract, life insurance contract or annuity contract as
directed by a Participant or the Plan Administrator in accordance
with the Plan;
4.2(k) To make a participant loan as directed by the Plan
Administrator; and
4.2(l) To make such other investments as the Trustee in its
discretion shall deem best or if SBCTC is the Trustee or if the
Trustee is subject to the direction of another person, as directed
by someone other than the Trustee, without regard to any law now or
hereafter in force (other than ERISA) limiting the investments of
trustees or other fiduciaries.
The Trustee shall not be required to make any inventory or appraisal
or report to any court, nor to secure any order of court for the
exercise of any power contained in this Trust Agreement, and shall not
be required to give bond (except as required by ERISA).
Notwithstanding the foregoing, if SBCTC is the Trustee, SBCTC shall
invest all assets of the Fund which are to be invested on an interim
basis pending reinvestment, distribution or other disbursement either
(1) in depository accounts bearing a reasonable rate of interest which
are maintained by SBCTC or by any affiliate of SBCTC or (2) in
commingled short-term investment funds which are maintained by SBCTC
or by any affiliate of SBCTC, in which event the provisions of
S4(b)(9) of this Trust Agreement shall apply.
Except as agreed to in writing by the Trustee and the Employer, the
Trustee shall not be liable and shall be indemnified and held harmless
by the Employer for any liability, loss, damage, expense, assessment
or other cost of any kind or description whatsoever, which the Trustee
incurs as a result of or arising out of (1) any action taken at the
direction of the Employer, the Plan Administrator or an Investment
Manager, (2) any failure to act if, under the terms of this Trust
Agreement, action can be taken only after receipt from the Employer,
the Plan Administrator or an Investment Manager of specific
directions, (3) any action or failure to act based on advice of legal
counsel to the Employer or the Plan Administrator, or (4) any failure
to act pending the receipt of direction from the Employer, the Plan
Administrator or an Investment Manager, when the Trustee has made a
written request for such direction, provided such action or failure to
act is not attributable to fraud, misconduct, negligence or error by
the Trustee. Further, if SBCTC is the Trustee, SBCTC may from time to
time request the advice of counsel on any legal matter, including the
interpretation of the Plan and this Trust Agreement, and shall be
indemnified and held harmless for any and all liability, loss, damage,
expense, assessment or other cost of any kind or description resulting
from or on account of its services as Trustee under the Plan,
including, but not limited to, any co-fiduciary liability under ERISA
S405 and any liability, damage, expense, assessment or other cost
arising out of its actions in accordance with advice of counsel.
Except as agreed to in writing by the Trustee and the Employer, the
provisions of this paragraph shall survive the term of this Trust
Agreement and may not be amended by any person or entity other than
the Prototype Sponsor or terminated except with the consent of the
Trustee.
4.3 Investment Manager. The Plan Administrator as a Named Fiduciary
at any time may appoint in writing a person, or more than one person,
including, subject to S4(i) of this Trust Agreement, the Prototype
Sponsor or any of its affiliates, who either (1) is registered as an
investment adviser under the Investment Advisers Act of 1940 ("Act"),
(2) is a bank, as defined in the Act, or (3) is an insurance company
which, within the meaning of ERISA S3(38), is qualified to manage,
acquire and dispose of the assets of an employee benefit plan under
the laws of more than one state, as an investment manager pursuant to
ERISA S3(38) ("Investment Manager") for all of the Fund or for a
specified portion of the Fund allocated by the Plan Administrator to
such Investment Manager's management account ("Management Account").
The Plan Administrator shall notify the Trustee of such appointment
and of the date such appointment becomes effective, and such
Investment Manager shall have the sole responsibility and duty and the
sole power, without prior consultation with the Board, the Employer,
the Plan Administrator, the Trustee, or any other person, to manage
and direct or effect the acquisition and disposition of the assets of
the Fund allocated to such Management Account from the date the
appointment as Investment Manager becomes effective. The Plan
Administrator as a Named Fiduciary also may terminate the appointment
of any person as an Investment Manager and may cause assets of the
Fund to be added to or deleted from any Management Account.
The Investment Manager may exercise his or her power through
procedures as agreed upon with the Trustee which satisfy the
requirements of the securities laws and the rules of the New York
Stock Exchange (and any other exchange on which securities are traded
for such manager's Management Account), and the Trustee shall not be
liable in any respect to any person, and shall be indemnified and held
harmless by the Employer, for acting in accordance with such
procedures. Pending receipt of directions from the Investment Manager,
any cash received by the Trustee from time to time for such manager's
Management Account may be retained in the Fund in cash. If an
Investment Manager ceases to have investment responsibility for the
Management Account, the Plan Administrator or the Employer, as
authorized in accordance with S4(d) of this Trust Agreement, shall
manage such assets in accordance with S4(d) or shall appoint another
Investment Manager to manage such assets.
4.4 Plan Administrator or Employer Investment Directions. The Board
at any time may authorize in writing the Plan Administrator or the
Employer as a Named Fiduciary to manage and direct the investment of
all or any specified portion of the assets of the Fund as determined
by the Board, and the Board at any time may modify or terminate such
authorization in writing. If SBCTC is appointed as Trustee, the
Employer shall automatically be deemed to be so authorized to manage
and direct the investment of the entire Fund; provided, the Employer
may specify in the Adoption Agreement that such direction shall be
made by the Plan Administrator. In the event the Plan Administrator or
the Employer is authorized to manage and direct the investment of Fund
assets under this S4(d), the provisions of S4(c) of this Trust
Agreement shall apply in all respects as if the Plan Administrator or
the Employer, as applicable, was an Investment Manager and the portion
of the assets subject to such management and direction was a
Management Account.
4.5 Participant Investment Directions. If the Plan permits a
Participant or a Beneficiary to direct the investment of such
individual's Account, the Plan Administrator shall direct the Trustee
to establish the investment alternatives designated by the Plan
Administrator and to accept directions to invest all or any specified
portion of the Participant's Account among such alternatives. The Plan
Administrator in consultation with the Trustee shall establish such
reasonable rules for effecting the investment elections as the Plan
Administrator deems necessary or appropriate and such rules shall be
applied on a uniform and nondiscriminatory basis to all similarly
situated individuals. Except as required under ERISA, neither the Plan
Administrator, the Employer nor the Trustee shall be responsible for
any investment decisions made by a Participant or a Beneficiary. If a
Participant or Beneficiary fails to direct the investment of the
Account, then the Employer or Plan Administrator (as authorized in
accordance with S4(d) of this Trust Agreement) shall assume the
investment responsibility for such Account.
4.6 Custodian. The Trustee (including SBCTC) at any time and from
time to time may appoint one, or more than one, person, including,
subject to S4(i) of this Trust Agreement, the Prototype Sponsor or any
of its affiliates, to perform such custodial safekeeping, record
keeping, securities execution and other nondiscretionary functions of
the Trustee as the Trustee deems appropriate, and any person who is
appointed to perform a custodial safekeeping function may (in
connection with the performance of that function) hold Fund securities
in a street name, provided that the Trustee shall remain the
beneficial owner of all assets held by such person and such person in
no event shall be granted any discretionary authority in the capacity
as a custodian to manage and direct the acquisition and disposition of
Fund assets.
4.7 Multiple Trustees. More than one person can serve at the same
time as the Trustee, including any combination of individuals and
banks or similar institutions, and in the event that more than one
person does serve at the same time as Trustee under the Plan and this
Trust Agreement, the references to "Trustee" in the Plan and this
Trust Agreement wherever applicable shall be deemed to be to
"Trustees" and such Trustees may allocate among themselves by
unanimous written consent (signed by all Trustees) such specific
Trustee duties, responsibilities and functions in the management of
the Fund and otherwise under the Plan and this Trust Agreement as the
Trustees deem appropriate under the circumstances. The Trustees in all
unallocated duties, responsibilities and functions shall act by
majority vote at a meeting at which a majority of the Trustees are
present or by unanimous written consent (signed by all Trustees) in
lieu of a meeting. Any person shall be entitled to rely conclusively
upon any written action signed by all Trustees or by any one or more
Trustees to whom the power to take such action has been allocated by
unanimous written consent signed by all Trustees. Finally, the
provisions of S8 of this Trust Agreement shall apply to the
resignation or removal of any one of the Trustees, provided that (1)
all notices required in such S8 also shall be given to any remaining
Trustees, (2) the Employer only shall be required to appoint successor
Trustees upon the resignation or removal of all Trustees then serving,
and (3) the Employer or the remaining Trustees may demand and receive
an accounting upon the resignation or removal of one or more of the
Trustees. Notwithstanding the foregoing, if SBCTC is not the sole
Trustee under the Plan, SBCTC shall serve in a nondiscretionary,
custodial capacity only subject to the directions of the Employer or
the Plan Administrator and SBCTC shall have no duties with respect to
assets held by any other person including, without limitation, any
other Trustee for the Fund. Further, the Employer hereby agrees that
SBCTC shall not serve as, and shall not be deemed to be, a co-trustee
under any circumstances.
4.8 Communications. The Employer, the Plan Administrator and each
Investment Manager shall establish with the Trustee such oral, written
or electronic communication procedures (or any combination of such
communication procedures) or such other procedures as such persons and
the Trustee deem reasonable and prudent under the circumstances for
the orderly administration of the Fund. The Trustee and each other
person shall be entitled to rely conclusively upon any and all
communication from the Employer, the Plan Administrator and each
Investment Manager reasonably believed to be communicated in
accordance with such established procedures.
If the Trustee receives a direction which in the Trustee's
determination is incomplete, was not communicated in accordance with
established procedures or otherwise cannot reasonably be executed, the
Trustee shall promptly inform the person responsible for such
direction and shall take no further action pending receipt of proper
directions from such person.
4.9 Prototype Sponsor. Nothing in the Plan or this Trust Agreement
shall prevent the Prototype Sponsor or any of its affiliates from
engaging in any transaction with the Plan or the Fund, provided that
such transaction does not (in the opinion of the Prototype Sponsor)
constitute a "prohibited transaction" under ERISA S406 or Code S4975,
and the Employer shall provide such written documentation as the
Prototype Sponsor deems necessary or appropriate to determine that any
such transaction would not be a "prohibited transaction."
To the extent that ERISA or a prohibited transaction exemption
requires action by an individual independent of the Plan Sponsor and
its affiliates or their employers, officers and directors, then the
Employer, the Plan Administrator, an Investment Manager, a Participant
or a Beneficiary shall have full power and authority to take action on
behalf of the Fund as necessary to satisfy ERISA or such exemption
provided such person otherwise is authorized to act under this Trust
Agreement.
4.10 Voting of Proxies. Except as provided in this S4(j), the person
with the responsibility to manage and invest all or a portion of the
Fund shall have the exclusive authority and responsibility for voting
proxies with respect to investments held for such portion of the Fund
and the Trustee shall be obligated to vote such proxies only in
accordance with the directions of such person and shall be precluded
from voting such proxies except in accordance with such directions.
However, the Plan Administrator, as a Named Fiduciary, may reserve to
itself the right to vote proxies with respect to any investments which
are otherwise subject to the management and control of an Investment
Manager and, in such event, the Investment Manager shall be precluded
from voting such proxies.
SECTION 5. BENEFIT PAYMENTS
No disbursement from the Fund shall be made by the Trustee for
purposes of the payment of any Plan benefit except on the written
direction of the Plan Administrator, and the Trustee shall have no
duty or obligation whatsoever to inquire as to the accuracy of such
direction or its propriety in light of the provisions of the Plan,
ERISA or the Code. Upon written direction (which may be a continuing
direction) from the Plan Administrator as to the name of any person to
whom payment is to be made from the Fund and when such payment is to
be made and the amount and manner of such payment, and consistent with
the income tax withholding requirements, the Trustee shall draw
checks, purchase annuity contracts or distribute other assets from the
Fund in the name of the person designated by the Employer and deliver
such checks, contracts or other assets in such manner and in such
amounts and at such times as the Plan Administrator shall direct or,
if appropriate, the Trustee shall make an electronic transfer to the
account of such person designated by the Plan Administrator in such
amounts and at such times as the Plan Administrator shall direct.
If SBCTC is the Trustee, all payments to be paid by means of a check
from the Trustee shall be paid from a non-interest bearing checking
account to be maintained with an affiliate of the Trustee. Prior to
executing this Trust Agreement, the Employer shall determine that such
checking account services are (1) necessary to the operation of the
Plan, (2) furnished under an arrangement which is reasonable and (3)
furnished for reasonable compensation.
In the event the Trustee shall deem it necessary to withhold any
distribution pending compliance with legal requirements with respect
to probate of wills, appointment of personal representatives, payment
or provision for estate or inheritance taxes, or for death duties or
otherwise, the Trustee shall notify the Plan Administrator and shall
thereafter take no action pending receipt of the Plan Administrator's
instructions to distribute and an agreement from the Plan
Administrator, in form satisfactory to the Trustee, protecting it from
any liability arising out of noncompliance with such requirements.
The Plan Administrator may in its discretion direct, and the Trustee
shall make payment on such direction, that Plan payments be made (1)
directly to an incompetent or disabled person, whether because of
minority or mental or physical disability, (2) to the guardian or to
the person having custody of such person if a court of competent
jurisdiction has appointed such guardian or custodian, or (3) to any
person designated or authorized under any state statute to receive
such payments on behalf of such incompetent or disabled person without
further liability either on the part of the Employer, the Plan
Administrator or the Trustee for the amount of such payment to the
person on whose account such payment is made.
In the case of a termination, partial termination, a complete
discontinuance of contributions or the termination of participation by
a Participating Affiliate as described in S14.5 of the Plan, the Plan
Administrator shall direct the Trustee precisely as to what action to
take and the Trustee (subject to the terms of this Trust Agreement and
the Plan and to such terms and conditions, if any, as agreed upon
between the Plan Administrator and the Trustee) shall follow such
directions.
The Plan Administrator shall determine anticipated liquidity
requirements to meet projected benefit payments for each Plan Year
and, if any adjustment from the practices and policies agreed upon
between the Plan Administrator and the Trustee at the adoption of this
Trust Agreement is deemed appropriate, notice of such adjustment shall
be communicated by the Plan Administrator in writing as soon as
practicable to the Trustee. The Trustee shall be under no duty to make
any such adjustment prior to receiving such notice.
SECTION 6. VALUATION AND ACCOUNTING BY TRUSTEE
The Trustee as of each Valuation Date shall determine the fair market
value of the assets of the Fund (or, if more than one Fund is combined
for investment purposes, of each such Fund) based upon such reasonable
accounting principles, practices and procedures as the Trustee shall
adopt and consistently apply for this purpose, which determination
shall be final and binding. At such times as agreed upon between the
Trustee and the Plan Administrator, the Trustee shall file with the
Plan Administrator a written report setting forth such fair market
value and all investments, receipts and disbursements and other
transactions of the Fund since the date of the last such report.
Upon the expiration of 90 days from the filing of the Trustee's report
and except as provided under ERISA, the Trustee shall be forever
relieved and discharged from any liability or accountability to anyone
with respect to the propriety of its actions or the transactions shown
by such report except with respect to those acts or transactions to
which the Plan Administrator or the Employer shall, within such 90 day
period, have filed with the Trustee its written disapproval, and
neither the Plan Administrator nor the Employer nor any other person
shall have the right to demand or be entitled to any further or
different accounting by the Trustee.
SECTION 7. EXPENSES
All reasonable and proper expenses of the Plan and the Fund (within
the meaning of ERISA S403(c)(1) and S404(a)(1)(A)), including any
taxes which may be levied or assessed against the Trustee on account
of the Fund and the Trustee's compensation as agreed upon from time to
time by the Employer and the Trustee, shall be paid from the Fund
unless (a) the payment of such expense would constitute a "prohibited
transaction" within the meaning of ERISA S406 or Code S4975 or (b) the
Employer pays such expenses. Any such expenses of the Fund which are
properly allocable to an individual's Account (including, but not
limited to, expenses related to an individual's investment directions,
annuity contract purchases and other transactional fees for processing
distributions) may be charged directly against such individual's
Account if so provided in administrative procedures established by the
Plan Administrator. No payments shall be made to a Trustee who also
receives full-time pay from the Employer or from a Participating
Affiliate except for his or her benefits, if any, from the Plan and
the reimbursement of his or her reasonable and proper expenses as a
Trustee which are not reimbursed by any other person.
SECTION 8. RESIGNATION OR REMOVAL OF TRUSTEE
The Trustee may resign at any time by delivering its written
resignation to the Employer. The Employer shall within 60 days after
receipt of such resignation appoint a successor trustee in writing
(acceptable for this purpose to the Employer and the successor
trustee) delivered to the Trustee and to such successor trustee. The
Employer may remove the Trustee at any time and appoint a successor
trustee or trustees upon 60 days written notice to the Trustee unless
the Trustee agrees to a shorter notice period. In either event, on the
appointment of such successor, the Trustee shall promptly turn over to
such successor all assets held by the Trustee and shall make a final
accounting to the Plan Administrator and the Employer. The successor
trustee shall have no responsibility except to receive such money and
property from the Trustee and to hold and administer the same
thereafter in accordance with this Trust Agreement and shall not be
responsible for any act or omission of the Trustee, and shall not be
required to make any claim or demand against the Trustee unless the
Plan Administrator or the Employer shall in writing request the
successor trustee to make a claim or demand against the Trustee. Any
such successor trustee shall have and may exercise all the rights,
powers, and duties of the Trustee as fully and to the same extent as
if it had originally been named Trustee herein.
SECTION 9. MERGERS, CONSOLIDATIONS AND ASSET TRANSFERS
The Trustee upon written direction of the Plan Administrator shall
transfer and deliver Fund assets to or accept the transfer to the Fund
of assets acceptable to it from any trustee, custodian or insurance
carrier maintaining any investment medium of a pension or profit
sharing plan which is tax exempt under Code S401(a) into which the
Plan (or any portion thereof) shall be merged or consolidated.
In the case of any Plan merger or consolidation with, or transfer of
assets or liabilities to or from, any other employee benefit plan,
each person for whom an Account then is maintained shall be entitled
to receive a benefit from such plan, if it is then terminated, which
is equal to or greater than the benefit such person would have been
entitled to receive immediately before such merger, consolidation or
transfer, if the Plan then had been terminated. The Trustee in
connection with either of the above described transfers shall have no
liability or responsibility (1) to determine whether such transfer
shall be in conformity with the provisions of the Plan, any other
plan, ERISA or the Code or (2) to determine the effect of such
transfer upon any Accounts. Any direction of the Plan Administrator
respecting any of the foregoing shall constitute a certification that
the transfer so directed is in conformity with the provisions of the
Plan or any other plan, this Trust Agreement, ERISA and the Code, and
the Trustee shall act in accordance with such direction.
SECTION 10. SINGLE TRUST - SEPARATE FUNDS
The assets of the Fund (or, if more than one Fund is combined for
investment purposes, of each such Fund) shall be held, administered,
invested and managed by the Trustee (except to the extent investment
responsibility is allocated to another person under the terms of this
Trust Agreement) consistent with the terms of this Trust Agreement in
all respects as a single trust even though portions of such assets may
be attributable to different employers or may be allocable to the
payment of benefits for different employee groups. The Plan
Administrator shall be responsible to maintain and determine the
appropriate portion of the Fund held in respect of any such group of
employees in the event that such maintenance or determination shall
become necessary. The determination by the Plan Administrator of the
portion of the Fund held in respect of any such employee group shall
be final and conclusive upon all persons.
SECTION 11. NAMED FIDUCIARIES AND ADMINISTRATION
The Plan Administrator and the Employer (if the Plan Administrator is
not the Employer) shall be the Named Fiduciaries responsible to the
extent of their powers and responsibilities assigned in the Plan for
the control, management and administration of the Plan. The Plan
Administrator, the Employer and the Trustee (other than SBCTC) shall
be the Named Fiduciaries responsible to the extent of their respective
powers and responsibilities assigned to them in the Trust Agreement
for the safekeeping, control, management, investment and
administration of the assets of the Fund. Any power or responsibility
for the control, management or administration of the Plan or the Fund
which is not expressly assigned to a Named Fiduciary under the Plan or
the Trust Agreement, or with respect to which the proper assignment is
in doubt, shall be deemed to have been assigned to the Employer as a
Named Fiduciary. One Named Fiduciary shall have no responsibility to
inquire into the acts and omissions of another Named Fiduciary in the
exercise of powers or the discharge of responsibilities assigned to
such other Named Fiduciary under the Plan or the Trust Agreement. Any
person may serve in more than one fiduciary capacity under the Plan or
the Trust Agreement and a fiduciary may be a Participant provided such
individual otherwise satisfies the requirements of S4.
A Named Fiduciary, by written instrument filed by the Plan
Administrator with the records of the Plan, may designate a person who
is not a Named Fiduciary to carry out any of its responsibilities
under the Plan or Trust Agreement, other than the responsibilities of
the Trustee for the safekeeping, control, management, investment and
administration of the assets of the Fund, except to the extent the
Trustee's responsibility for investment decisions is delegated to the
Employer, the Plan Administrator, or an Investment Manager.
Except to the extent expressly reserved under the Plan or the Trust
Agreement to the Employer, the Board, or the Trustee, the Plan
Administrator shall have the exclusive responsibility and complete
discretionary authority to control the operation, management and
administration of the Plan, with all powers necessary to enable it
properly to carry out such responsibilities, including (but not
limited to) the power to construe the Plan, the related Adoption
Agreement, and the Trust Agreement, to determine eligibility for
benefits and to resolve all interpretative, equitable or other
questions that arise under the Plan or the Trust Agreement. The
decisions of the Plan Administrator on all matters within the scope of
its authority shall be final and binding. To the extent a
discretionary power or responsibility under the Plan or Trust
Agreement is expressly assigned to a person other than the Plan
Administrator, such person shall have complete discretionary authority
to carry out such power or responsibility and such person's decisions
on all matters within the scope of such person's authority shall be
final and binding.
SECTION 12. MISCELLANEOUS
12.1 Spendthrift Clause and Qualified Domestic Relations Orders.
Except to the extent permitted by law, no Account, benefit, payment or
distribution under the Plan or this Trust Agreement shall be subject
to attachment, garnishment, levy, execution, or any claim or legal
process of any creditor of a Participant or Beneficiary, and no
Participant or Beneficiary shall have any right to alienate, commute,
anticipate, or assign all or any part of such individual's Account,
benefit, payment or distribution under the Plan or this Trust
Agreement. The preceding sentence also shall apply to the creation,
alienation, 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 ("QDRO") within the meaning of Code S414(p) and such
order is entered on or after January 1, 1985. Notwithstanding the
foregoing, the Plan Administrator may treat a domestic relations order
entered before January 1, 1985 as a QDRO in accordance with Code
S414(p) and S16.1 of the Plan.
12.2 Benefits Supported Only by Trust Fund. Any person having any
claim for any benefit under the Plan shall look solely to the assets
of the Fund for the satisfaction of that claim. In no event will the
Prototype Sponsor, the Trustee, the Plan Administrator, the Employer
or a Participating Affiliate or any of their employees, officers,
directors or their agents be liable in their individual capacities to
any person whomsoever for the payment of any benefits under the Plan.
12.3 Claims. Any payment to a Participant or Beneficiary, or to the
legal representative or heirs-at-law of any such person made in
accordance with the provisions of the Plan shall to the extent of such
payment be in full satisfaction of all claims under the Plan against
the Trustee, Plan Administrator, a Named Fiduciary, the Employer and
any Participating Affiliate, any of whom may require such person, such
person's legal representative or heirs-at-law, as a condition
precedent to such payment, to execute a receipt and release in such
form as shall be determined by the Trustee, Plan Administrator, a
Named Fiduciary, the Employer or a Participating Affiliate, as the
case may be.
12.4 Nonreversion. Except as provided in S7.2(b) of the Plan and in
this S12(d), neither the Employer nor any Participating Affiliate
shall have any present or prospective right, claim, or interest in the
Fund or in any Employer contribution made to the Trustee.
To the extent permitted by the Code and ERISA, the Employer
contributions described in this S12(d), less any losses on such
contributions, shall be returned by the Trustee to the Employer or to
any Participating Affiliate upon the written direction of the Plan
Administrator in the event that:
12.4(a) an Employer contribution is made by a mistake of fact,
provided such return is effected within one year after the payment
of such contribution;
12.4(b) a final judicial or Internal Revenue Service determination
is made that the Plan fails to satisfy the requirements of Code
S401 with respect to its initial qualification (provided, if the
Employer is not entitled to rely on the Prototype Sponsor's opinion
letter, the application for the initial qualification of the Plan
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
which event all Employer contributions made before such judicial or
administrative determination (whichever last occurs) plus any
earnings and minus any losses shall be returned within one year
after such determination, all such contributions being hereby
conditioned upon the Plan satisfying all applicable requirements
under Code S401 from and after its adoption; or
12.4(c) a deduction for an Employer contribution is disallowed
under Code S404, in which event such contribution shall be returned
within one year after such disallowance, all such contributions
being hereby conditioned upon being deductible under Code S404.
The Trustee shall have no obligation or responsibility whatsoever to
determine whether the return of any such Employer contributions is
permitted by the Code or ERISA and shall (to the extent permissible
under law) be indemnified and held harmless by the Employer for acting
in accordance with written directions given by the Plan Administrator
pursuant to this S12(d).
12.5 Exclusive Benefit. The corpus or income of the Fund shall not be
diverted to or used for any purpose other than the exclusive benefit
of Participants or Beneficiaries.
FEE SCHEDULE
Employers who use a Smith Barney Prototype Defined Contribution Plan
will be charged a $100 annual fee. In the event that the plan
terminates or all plan assets are transferred from Smith Barney, an
additional $100 fee will be charged. In accordance with the Employee
Representations Section of the Adoption Agreement (see Signature
Section), such fees will be charged against the brokerage account
maintained for the plan.
These fees are subject to change and you will be notified prior to the
time the change becomes effective.
Smith Barney Prototype
Standardized 401(k) Plan
Adoption Agreement #003
Adoption of a qualified plan has important legal and tax
implications. Failure to properly fill out the Adoption Agreement may
result in disqualification of the Plan. Employers should consult with
their counsel concerning the adoption of this Plan. To obtain further
information about the Plan, contact Smith Barney through your
Financial Consultant.
NOTE: Under the terms of the Plan, options marked "Standard"
automatically will apply unless another option is selected. If
additional space is needed to provide information requested in this
Adoption Agreement, the information may be provided in an addendum
attached to this Adoption Agreement which contains a reference to the
appropriate Part(s) of the Adoption Agreement.
Adoption Agreement #003 may only be used in conjunction with the
SMITH BARNEY PROTOTYPE DEFINED CONTRIBUTION PLAN - Plan Document #05.
Capitalized terms refer to defined terms in Plan Document #05. "S"
refers to sections of Plan Document #05; "Part" refers to provisions
in this Adoption Agreement. The instructions and descriptions in this
Adoption Agreement generally summarize the Plan Document provisions,
but the Plan Document terms will be controlling in the event of any
conflict.
TO BE COMPLETED BY SMITH BARNEY
FINANCIAL CONSULTANT: ________________ Telephone Number: _______
Address: ________________________________________________________
_________________________________________________________________
Smith Barney Inc. Account # for Plan:____________________________
I. EMPLOYER INFORMATION.
Name: ___________________________________________________________
Address: ________________________________________________________
_________________________________________________________________
Taxable Year: _______________ EIN: ___________________
II. PLAN INFORMATION.
A. Plan Name: _____________________________________________
B. Plan Year: the period which ends on ____________________
C. Construction. Except as provided in S1.2, the Plan and the
Trust Agreement will be subject to the laws of the State of
________________________________________
D. Plan Adoption. The Plan is hereby adopted as [Check one. See
S14.1.]
1. a new profit sharing plan (with cash or deferred
arrangement).
2. an amendment and restatement of the
___________________________________ ("Pre-Existing Plan") which was
originally effective _______________________________, 19____.
E. Effective Date of this Adoption Agreement:
____________________________________, 19_______.
III. ELIGIBILITY AND PARTICIPATION. [If the Employer maintains
another defined contribution Paired Plan, the eligibility and
participation requirements specified in this Part III for Plan Years
beginning on and after the Final Compliance Date must be the same as
those specified in the Adoption Agreement for such other Paired Plan.]
A. Eligible Employees. All Employees of the Employer and all
Employees of all Affiliates who satisfy the Participation Requirement
generally are eligible to participate in the Plan except certain
nonresident aliens. However, notwithstanding any contrary language,
participation in this Plan by Employees who are covered by a
collective bargaining agreement and the extent of such participation,
if any, will be determined by collective bargaining. [See S2.19.]
B. Participation Requirement. In order to participate in this
Plan, an Eligible Employee must [Check one. See S2.46, S4 and Part
V.B.1. Enter "N/A" if there will be no minimum age or no waiting
period, as applicable.]
1. Standard: reach minimum age of 21 and complete a waiting
period of 1 Year of Service.
2. no minimum age or waiting period.
3. reach minimum age of _____ [not to exceed 21] and complete a
waiting period of ______ Year of Service [not to exceed 1].
4. reach minimum age of ____ [not to exceed 21] and complete
a waiting period of ____ Year of Service [not to exceed 1] ; however,
each Employee who is an Eligible Employee on the Effective Date will
be deemed to satisfy the Participation Requirement on the Effective
Date regardless of such Employee's actual age or service.
C. Entry Date: [Check one. See S2.26 and S4.]
1. Standard: the first day of each Plan Year and the first day
of the seventh month of each Plan Year.
2. the date on which the Participant satisfies the
Participation Requirement.
3. other:_____________________________ [Specify date(s). If a
single Entry Date is entered, the minimum age in Part III.B cannot
exceed 20 and the maximum waiting period in Part III.B
cannot exceed
= year.]
IV. VESTING.
A. Death, Disability or Retirement. [See S8.1(b).]
1. Standard: A Participant's Employer Account and Matching
Account will be 100% vested if, while an Employee, that Participant
dies, becomes Disabled, or reaches Normal Retirement Age or, if
applicable, Early Retirement Age.
2. A Participant's Employer Account and Matching Account will
be 100% vested if, while an Employee, that Participant reaches Normal
Retirement Age or if the Participant satisfies the following
condition: [Check one or more only if desired.]
a. dies while an Employee.
b. becomes Disabled while an Employee.
c. reaches Early Retirement Age while an Employee.
B. General Vesting Schedule. [See S8.1 and S14.3(c). Generally,
the vesting schedule under this Plan must be at least as favorable at
the completion of each year as the vesting schedule under the Pre-
Existing Plan. The Top-Heavy Vesting Schedule selected in Part XI.A
will apply for all Plan Years in which the Plan is a Top-Heavy Plan.
See S12.4.]
1. Matching Account. [Check one. "Full and Immediate Vesting" must
be selected if the 2-year requirement for Matching Contributions is
selected in Part VII.A.2.b.3.]
a. Standard: Full and Immediate Vesting. 100% at all times.
b. Cliff Vesting. 100% after completion of ____ Years of
Service [not to exceed 5].
c. Graded Vesting.
Years of Service Nonforfeitable Percentage
Less than 1 ___%
1 ___%
2 ___%
3 ___% [at least 20%]
4 ___% [at least 40%]
5 ___% [at least 60%]
6 ___% [at least 80%]
7 or more 100%
d. Top-Heavy. The Top-Heavy Vesting Schedule in Part XI.A will
apply for all Plan Years.
2. Employer Account. [Check one. "Full and Immediate Vesting" must
be selected if the 2-year requirement for Employer Contributions is
selected in Part VII.D.2.b.2]
a. Standard: Full and Immediate Vesting. 100% at all times.
b. Cliff Vesting. 100% after completion of ____ Years of
Service [not to exceed 5].
c. Graded Vesting.
Years of Service Nonforfeitable Percentage
Less than 1 ___%
1 ___%
2 ___%
3 ___% [at least 20%]
4 ___% [at least 40%]
5 ___% [at least 60%]
6 ___% [at least 80%]
7 or more 100%
d. Top-Heavy. The Top-Heavy Vesting Schedule in Part XI.A will
apply for all Plan Years.
C. Normal Retirement Age: [Check one. See S2.43 and Part XIII.B.]
1. Standard: age 65.
2. age ____ [not to exceed 65].
3. the later of age ____ [not to exceed 65] or the ___ [not to
exceed 5th] anniversary of the date on which the Participant commenced
participation in the Plan.
D. Early Retirement Age: [The designation of an Early Retirement
Age may accelerate vesting and distribution. Early Retirement Age
cannot exceed Normal Retirement Age. Check one. See S2.13 and S9.1.]
1. Standard: No Early Retirement Age.
2. age ____
3. the later of age ____ or the completion of ___ Years of
Service (for vesting purposes).
V. SERVICE FOR PARTICIPATION AND VESTING.
A. Method for Crediting Service. [Check one. See S3.]
1. Standard: "Hour of Service" method. [See S3.1.]
a. Crediting Hours. Hours will be credited during each Computation
Period [Check one. See S3.1(c).]
(1) Standard: by maintaining records of the actual hours worked.
[See S3.1(c)(2)(i).]
(2) by using the following equivalency [Check one. See
S3.1(c)(2)(ii).]
10 Hours of Service for each day.
45 Hours of Service for each week.
95 Hours of Service for each semi-monthly payroll period.
190 Hours of Service for each month.
b. Vesting Computation Period. The Computation Period for vesting
purposes will be [Check one. See S3.1(b)(2).]
(1) Standard: the Plan Year.
(2) the 12 month period beginning on the Participant's hire date
and each anniversary of that hire date.
c. Participation Computation Period. The initial Computation
Period for participation purposes will be the 12 month period
beginning on the Participant's hire date. Each subsequent Computation
Period after the initial 12 months of employment will be [Check one.
See S3.1(b)(3).]
(1) Standard: Plan Years beginning after the Participant's hire
date.
(2) subsequent 12 month periods beginning on the anniversaries
of the Participant's hire date.
d. Year of Service for Vesting. For vesting purposes, an Employee
will be credited with a Year of Service if, during a Computation
Period, the Employee completes at least [Check one. See S3.1(d).]
(1) Standard: 1,000 Hours of Service.
(2) ______ [not more than 1,000] Hours of Service.
e. Year of Service for Participation. For participation purposes,
an Employee will be credited with a Year of Service [Check one. See
S3.1(b)(3) and S3.1(d).]
(1) Standard: at the end of the Computation Period in which the
Employee completes at least 1,000 Hours of Service.
(2) on the date on which the Employee completes at least ______
[not more than 1,000] Hours of Service.
(3) at the end of the Computation Period on which the Employee
completes at least ______ [not more than 1,000] Hours of Service.
Notwithstanding the foregoing, if a partial Year of Service is
selected in Part III.B, no minimum number of Hours of Service will be
required.
2. "Elapsed Time" method. [See S3.2.]
For purposes of determining whether a Participant is entitled
to an allocation of contributions or forfeitures, the Participant will
be deemed to have completed more than 500 Hours of Service in a Plan
Year if the Participant completes the following period of employment
in the Plan Year: [Check one. See S2.2(d) and Part VII.]
a. Standard: more than 91 consecutive calendar days.
b. more than 3 consecutive months.
B. Special Rules.
1. Vesting Service Exclusions. [See S3.8.] In addition to any
service that is disregarded under the Break in Service rules described
below and in S3.7(c), the following service will be excluded for
vesting purposes:
a. Standard: No other exclusions.
b. Years of Service before age 18.
c. Years of Service before the Employer or an Affiliate
maintained this Plan or a predecessor plan.
d. Years of Service during a period for which the Employee made
no mandatory contributions under a Pre-Existing Plan.
2. Predecessor Employer Service (Vesting and Participation).
Generally, unless the Employer maintains the plan of a predecessor
employer (for example, an acquired company), service for a predecessor
employer will not be credited as service under this Plan. [Check and
attach appropriate addendum only if desired. See S3.4.]
Service credit will be given under this Plan for certain
predecessor employers for participation and/or vesting purposes to the
extent provided in Addendum V.B.2.
3. Break in Service Rules. [See S3.7 and S8.2.] Generally, all
service completed before a Break in Service will be credited upon
reemployment. Certain service may be excluded under the following
rules:
a. Standard: No exclusions. [See S3.7(a).]
b. "Rule of Parity." [See S3.7(b)(3).] This rule, generally,
disregards vesting and participation service completed before 5
uninterrupted Breaks in Service.
c. "Alternative Maternity/Paternity Rule." [Not applicable if
"Elapsed Time" is selected. See S3.7(b)(4).] This rule, generally,
increases the number of Breaks in Service from 5 to 6 for all
Employees in lieu of crediting service for maternity/paternity leave.
d. Alternative to "Buy Back Rule." [See S8.2(b).] This rule,
generally, does not require former participants (less than 100%
vested) to pay back previous distributions upon reemployment (vesting
only). A rehired Participant's vested interest in restored amounts
will be determined under: [Check one. See S8.2(a), S8.2(b) and
S8.2(c).]
(1) Standard: Formula A
(2) Formula B
VI. EMPLOYEE CONTRIBUTIONS.
A. Elective Deferrals. Elective Deferrals [See S5.3(f). Check
one.]
1. Standard: will be allowed. [Complete formula below; enter
"N/A" if not applicable.]
a. Minimum Amount. Not less than _____% of a Participant's
Compensation or $_____.
b. Maximum Amount. For Plan Years ending on and before
____________, not more than _____% of a Participant's Compensation or
$_____, and for each Plan Year thereafter, not more than _____% of a
Participant's Compensation or $ _____.
2. will not be allowed.
B. Employee Contributions. Employee Contributions [See S5.3(g).
Check one.]
1. Standard: will not be allowed.
2. will be allowed. [Complete formula below; enter "N/A" if not
applicable.]
a. Minimum Amount. Not less than _____% of a Participant's
Compensation or $_____.
b. Maximum Amount. For Plan Years ending on and before
____________, not more than _____% of a Participant's Compensation or
$_____, and for each Plan Year thereafter, not more than _____% of a
Participant's Compensation or $ _____.
C. Election Rules. [Check one. See S5.3(h).]
1. Standard: If a Participant does not elect to begin Elective
Deferrals or Employee Contributions on the Participant's Entry Date,
the Participant may elect to begin such contributions as of any
following pay date. A Participant's election can be revised
(prospectively only) as of any pay date. A Participant who terminates
contributions may elect to resume contributions prospectively as of
any pay date.
2. Alternatives to Standard: A Participant's elections may be
made as follows: [Must include at least one day in each calendar
year.]
a. Commencement. [See S5.3(h)(2).] effective only as of any
________________________________ following the Participant's Entry
Date.
b. Revision. [See S5.3(h)(3).] effective only as of any
following _______________________________.
c. Resumption. [See S5.3(h)(5).] effective only as of any
following ___________________________.
D. Rollover Contributions. Rollover Contributions [Check one. See
S5.4.]
1. Standard: will be allowed and may be made by [Check one.]
a. Standard: any Eligible Employee.
b. any Eligible Employee who is a Participant.
2. will not be allowed.
E. Limitations on Elective Deferrals.
1. Claims. Claims for a refund of Excess Elective Deferrals must
be made no later than [See S7.3(f). Check one.]
a. Standard: March 1.
b. _____________ [no earlier than March 1 and no later than
April 15.]
2. Deemed Claims. Corrections of Excess Elective Deferrals will be
made [See S7.3(f)(2). Check one.]
a. Standard: from this Plan.
b. from the following plan(s): _______________.
3. "Gap Period" Income. The income or loss allocable to the "gap
period" [Check one. See S7.3(e), S7.4(d)(2) and S7.5(d)(2).]
a. Standard: shall not be distributed.
b. shall be distributed.
4. Highly Compensated Employees. The following special rules in
the temporary Code S414(q) regulations and in Code S414(q)(12) will
apply: [Check one. See S7.4(a)(5)(v).]
a. Standard: no special rules.
b. The special rules set forth in Addendum V.E.3.
5. Recharacterization. Recharacterization of Excess Contributions
as Employee Contributions [See S7.4(e). Check one.]
a. Standard: will not be allowed.
b. [Do not check this option 2 if Employee Contributions are
not allowed in Part VI.B.] will be allowed.
VII. EMPLOYER CONTRIBUTIONS.
A. Matching Contributions. [See S5.3(b) and Part VII.F.]
1. Formula. [Check one.]
a. Standard: No Matching Contributions will be made.
b. Matching Contributions will be made on account of: [Check
one or both.]
83
Elective Deferrals
Employee Contributions
under the following formula: [Check and complete one. Enter "N/A" if
not applicable. The formula selected and completed must not provide a
higher rate of Matching Contributions for Participants who make a
higher amount of contributions.]
____ % of the Participant's contributions which do not
exceed $_____ or ____% of the Participant's Compensation plus ____ %
of the Participant's contributions which exceed $_____ or ____ %, but
contributions in excess of $ __________ or ____% of the Participant's
Compensation will not be matched.
such percentage of the Participant's contributions as
determined by the Employer in its discretion for each Plan Year.
in an amount equal to
_________________
_____________________________________________
2. Eligible Participant. The Matching Contribution for any
Allocation Date will be made only for each Participant who makes
Elective Deferrals or Employee Contributions, as applicable, during
the period ending on the Allocation Date and who satisfies all of the
following requirements: [Check one.]
a. Standard: no additional requirements.
b. Alternative: [Check one or more.]
(1) the Participant is employed (or on an authorized leave of
absence) on the last day of the Plan Year or (b) is not employed as of
the last day of the Plan Year but is credited with more than 500 Hours
of Service in such Plan Year. [Do not check if Allocation Date is not
Standard Option. Special Hour of Service equivalencies apply if
"Elapsed Time" is selected. See Part V.A.2.] However, a Participant
who died, retired or became disabled during the Plan Year will be
eligible: [Check one.]
without regard to the number of Hours of Service.
only if the Participant completes the Hours of Service
specified above.
(2) the Participant is a Nonhighly Compensated Employee.
(3) the Participant is credited with at least 2 Years of Service
(for participation purposes) on such Allocation Date.
(4) for Plan Years beginning before the __________ [Not later
than Final Compliance Date], the Participant [Check one or more only
if Allocation Date is Standard Option.]
is employed (or on an authorized leave of absence) on the
last day of the Plan Year;
is not employed on the last day of the Plan Year
because the Participant died, retired or became disabled
during such Plan Year;
if the "Hours of Service" method is selected, is
credited with more than 1,000 Hours of Service during such
Plan Year.
3. Allocation Date. Matching Contributions will be made and
allocated as of [Check one.]
a. Standard: the last day of each Plan Year.
b. each ____________________.
4. Forfeitures. Forfeitures attributable to Matching Accounts
[Check one. See S6.3(c)(2)(ii).]
a. Standard: will be applied to reduce Matching Contributions
as of the Allocation Date: [Check one. See S8.2(e).]
(1) Standard: which immediately follows the date the Forfeiture
occurs.
(2) which immediately follows the last day of the Plan Year in
which the Forfeiture occurs.
b. will be reallocated to Active Participants as of the last
day of each Plan Year. [Complete Part VII.D.2 to specify who is an
Active Participant for this purpose.]
B. Qualified Matching Contributions. [See S5.3(c) and Part VII.F.]
1. Formula. [Check one.]
a. Standard: No Qualified Matching Contributions will be made.
b. Qualified Matching Contributions will be made on account of:
[Check one or both.]
Elective Deferrals
Employee Contributions
under the following formula: [Check and complete one. Enter "N/A"
if not applicable. The formula selected and completed must not provide
a higher rate of Qualified Matching Contributions for Participants who
make a higher amount of contributions.]
____ % of the Participant's contributions which do not
exceed $_____ or ____% of the Participant's Compensation plus ____ %
of the Participant's contributions which exceed $_____ or ____ %, but
contributions in excess of $ __________ or ____% of the Participant's
Compensation will not be matched.
such percentage of the Participant's contributions as
determined by the Employer in its discretion for each Plan Year.
in an amount equal to
__________________
2. Eligible Participant. The Qualified Matching Contribution for
any Allocation Date will be made only for each Participant who makes
Elective Deferrals or Employee Contributions, as applicable, during
the period ending on the Allocation Date and who satisfies all of the
following requirements: [Check one.]
a. Standard: no additional requirements.
b. Alternative: [Check one or more.]
(1) the Participant is employed (or on an authorized leave of
absence) on the last day of the Plan Year or (b) is not employed as of
the last day of the Plan Year but is credited with more than 500 Hours
of Service in such Plan Year. [Do not check if Allocation Date is not
Standard Option. Special Hour of Service equivalencies apply if
"Elapsed Time" is selected. See Part V.A.2.] However, a Participant
who died, retired or became disabled during the Plan Year will be
eligible: [Check one.]
without regard to the number of Hours of Service.
only if the Participant completes the Hours of Service
specified above.
(2) the Participant is a Nonhighly Compensated Employee.
(3) the Participant is credited with at least 2 Years of Service
(for participation purposes) on such Allocation Date.
(4) for Plan Years beginning before the __________ [Not later
than Final Compliance Date], the Participant [Check one or more only
if Allocation Date is Standard Option.]
is employed (or on an authorized leave of absence) on the
last day of the Plan Year;
is not employed on the last day of the Plan Year
because the Participant died, retired or became disabled
during such Plan Year;
if the "Hours of Service" method is selected, is
credited with more than 1,000 Hours of Service during such
Plan Year.
3. Allocation Date. Qualified Matching Contributions will be made
and allocated as of [Check one.]
a. Standard: the last day of each Plan Year.
b. each ____________________.
C. Qualified Nonelective Contributions. [See S5.3(d) and Part
VII.F.]
1. Formula. In addition to the Qualified Nonelective Contributions
which may be made for Nonhighly Compensated Employees to satisfy the
ADP or ACP limits, [Check one.]
a. Standard: no additional Qualified Nonelective Contributions
will be made.
b. additional Qualified Nonelective Contributions will be made
in an amount equal to: [Specify nondiscriminatory formula that
satisfies Code S401(a)(4) safe harbors.]
_________________________________________________________________
_________________________________________________________________
2. Eligible Participant. The Additional Qualified Nonelective
Contribution described in this Part VII.C for any Allocation Date will
be made only for each Participant who is an Eligible Employee at any
time during the period ending on the Allocation Date and who satisfies
all of the following requirements: [Check one.]
a. Standard: no additional requirements.
b. Alternative: [Check one or more.]
(1) the Participant is employed (or on an authorized leave of
absence) on the last day of the Plan Year or (b) is not employed as of
the last day of the Plan Year but is credited with more than 500 Hours
of Service in such Plan Year. [Do not check if Allocation Date is not
Standard option. Special hour of service equivalencies apply if
"elapsed time" is selected. See part V.A.2.] However, a participant
who died, retired or became disabled during the plan year will be
eligible: [Check one.]
without regard to the number of Hours of Service.
only if the Participant completes the Hours of Service
specified above.
(2) the Participant is a Nonhighly Compensated Employee.
(3) the Participant is credited with at least 2 Years of Service
(for participation purposes) on such Allocation Date.
(4) for Plan Years beginning before the __________ [Not later
than Final Compliance Date], the Participant [Check one or more only
if Allocation Date is Standard option.]
is employed (or on an authorized leave of absence) on the
last day of the Plan year;
is not employed on the last day of the plan year
because the participant died, retired or became disabled
during such plan year;
if the "hours of service" method is selected, is
credited with more than 1,000 hours of service during such
plan year.
3. Allocation date. The qualified nonelective contributions
described in this part vii.C will be made and allocated as of [check
one.]
a. Standard: the last day of each Plan Year.
b. each ____________________.
D. Discretionary Employer Contributions.
1. Allocation Formula. The discretionary Employer Contributions
will be allocated among Active Participants as follows: [Check one.
See S5.3(e), S6.3(a), S6.3(c)(4) and Part VII.F. Do not select an
integrated formula for Plan Years beginning on and after the Final
Compliance Date if the Employer also maintains another integrated plan
for such Plan Year.]
a. Standard: Nonintegrated. [See S6.3(a)(1) and S6.3(c)(4)(i)(A).]
b. Integrated. [See S6.3(a)(2), S6.3(c)(4)(i)(B) and S12.3(h).]
(1) Integration Percentage. [Check one. If the Integration Level is
less than the Taxable Wage Base, the Maximum Disparity Rate must be
reduced. See S2.39.]
Standard: the Maximum Disparity Rate.
____% [not to exceed the Maximum Disparity Rate.]
(2) Integration Level. [Check one. See S2.35.]
Standard: the Taxable Wage Base.
$________ or ____ % of the Taxable Wage Base [not to exceed
the Taxable Wage Base.]
2. Active Participant.
a. General. The discretionary Employer Contri-butions and
Forfeitures, if applicable, will only be allocated to: [If the
Employer maintains another defined contribution Paired Plan, the
allocation requirements specified in this Part VII.D.2 for Plan Years
beginning on and after the Final Compliance Date must be the same as
those specified in the Adoption Agreement for such other Paired Plan.
Check one. See S2.2, S5.3(e) and Part VII.F.]
(1) Standard: each Participant who is an Eligible Employee at
any time during the Plan Year and who (1) is employed (or on an
authorized leave of absence) on the last day of the Plan Year, (2)
terminated employment during the Plan Year due to death, disability or
retirement, or (3) was not employed on the last day of the Plan Year
but was credited with more than 500 Hours of Service during the Plan
Year. [Special Hour of Service equivalencies apply if "Elapsed Time"
is selected.]
(2) Alternatives to Standard: [Check one or more.]
The Participant must also be credited with at least 2
Years of Service by the last day of the Plan Year.
The last day employment requirement will not apply.
The 500 hours requirement will not apply.
The exceptions for death, disability and retirement will not
apply.
b. Years Before Final Compliance Date. For Plan Years beginning
before __________ [Not later than the Final Compliance Date], the
discretionary Employer Contributions and Forfeitures will only be
allocated to: [Complete only if desired. See S2.2. Check one.]
(1) Standard: each Participant who is an Eligible Employee at
any time during the Plan Year and (1) who is employed (or on an
authorized leave of absence) on the last day of the Plan Year and (if
the "Hours of Service" method is selected) who is credited with 1,000
Hours of Service during the Plan Year or (2) who died, retired or
became disabled during the Plan Year.
(2) Alternatives to Standard: [Check one or more.]
The last day employment requirement will not apply.
The 1,000 hours requirement will not apply. [Not applicable
if "Elapsed Time" is selected.]
The Participant must also be credited with at least 2 Years
of Service by the last day of the Plan Year.
The exceptions for death, disability and retirement will not
apply.
3. Forfeitures. Forfeitures attributable to Employer Accounts
[Check one. See S5.3(i) and S6.3(c)(4)(ii).]
a. Standard: will be reallocated to Active Participants as of
the last day of each Plan Year in the same manner as Employer
Contributions.
b. will be applied to reduce Matching Contributions, Qualified
Matching Contributions and/or Qualified Nonelective Contributions.
E. Net Profits.
1. General. [Check one. See S5.3(a).]
a. Standard: All Employer contributions other than Elective
Deferrals will be made out of Net Profits.
b. Alternatives to Standard: In addition to Elective Deferrals,
the following contributions will be made without regard to Net
Profits: [Check one or more.]
(1) Matching Contributions
(2) Qualified Matching Contributions
(3) Qualified Nonelective Contributions
(4) Discretionary Employer Contributions
(5) Definition. For this purpose, Net Profits will be as defined
[Check one. See S2.41.]
c. Standard: in S2.41(a).
d. in the attached Addendum VII.E.2.
F. Minimum Allocations. Each Active Participant (determined
without regard to the Participant's completed
Hours of Service) who is not a Key Employee, generally, will receive
the minimum top-heavy allocation if the Plan is top-heavy. [See
S6.3(e) and S12.]
VIII. COMPENSATION. Compensation for any Plan Year generally
means total compensation (not to exceed $200,000 indexed for inflation
after 1989) actually paid to a Participant during such Plan Year
(unless another determination period is selected). [See S2.10.]
A. Basic Definition: Total compensation means: [Check one. See
S2.10(a).]
1. Standard: wages, tips and other compensation reportable on
Form W-2. [See S2.10(a)(1).]
2. wages subject to federal income tax withholding. [See
S2.10(a)(2)(i).]
3. general Code S415 compensation. [See S2.10(a)(2)(ii) and
S7.2(a)(2)(ii)(B).]
Reimbursements or other expense allowances, fringe benefits
(cash and noncash), moving expenses, deferred compensation and welfare
benefits (even if includible in gross income): [Check one. See
S2.10(a)(2)(iv).]
Standard: will
will not
be included in Compensation as determined in accordance with the
definition selected above.
B. Determination Period: [Check one. See S2.10(d).]
1. Standard: the Plan Year.
2. the calendar year ending in the Plan Year.
3. a period beginning each ______________ [Enter the day and
month the period begins. The determination period must end with or
within the Plan Year, must be at least 12 consecutive months in
duration and must apply uniformly to all Employees in the Plan.]
C. Salary Reductions. Participant salary reduction contributions
(for example, S401(k) or benefit plan contributions) [Check one. See
S2.10(f).]
1. Standard: will
2. will not
be included in total compensation.
D. Special Rules. [Complete only if desired. See S2.10(g).]
1. Compensation for periods ending before the Entry Date on
which an Eligible Employee becomes a Participant will be excluded.
[See S2.10(g)(1).]
2. If this is an amendment to a Pre-Existing Plan, the
definition of Compensation will be effective as of _______________ [No
later than the first day of the first Plan Year after this Plan is
adopted. See S2.10(g)(2). The definition in the Pre-Existing Plan will
continue to apply until that date.]
IX. DISTRIBUTIONS.
A. Timing. Vested Plan benefits, generally, will be distributed as
follows: [Check one. See S9.1(a).]
1. Standard: as soon as practical after the Participant
separates from service subject to the Participant's consent, if
required.
2. no earlier than the Participant's Normal Retirement Age,
Early Retirement Age or Disability, whichever is earlier.
B. Elections to Defer. A Participant whose Account is more than
$3500 may elect that distribution of vested Plan benefits be deferred
until: [Check one. See S9.1(e).]
1. Standard: the Participant's Required Beginning Date
(generally age 70).
2. the later of the Participant's Normal Retirement Age or age
62.
C. In-Service Distributions. [See S9.2(b).]
1. Elective Deferral Accounts. In-service distributions from
Elective Deferral Accounts will be allowed as follows: [Check
applicable box(es).]
a. Standard: no distributions before separation from service.
b. on or after age 59. [See S9.2(b)(4).]
c. for the following financial hardship(s): [See S9.2(b)(3).
Check one or more.]
(1) medical expenses [See S9.2(b)(3)(ii)(A).]
(2) purchase of principal residence [See S9.2(b)(3)(ii)(B).]
(3) tuition [See S9.2(b)(3)(ii)(C).]
(4) foreclosure or eviction [See S9.2(b)(3)(ii)(D).]
(5) other IRS "deemed" financial hardship [See
S9.2(b)(3)(ii)(E).]
2. Matching Accounts. In-service distributions from Matching
Accounts will be allowed as follows: [Check applicable box(es).]
a. Standard: no distributions before separation from service.
b. on or after age _____.
c. after the ________ anniversary of Plan participation.
d. for a financial hardship under the safe harbor tests. [See
S9.2(b)(3).]
e. in accordance with the rules set forth in Addendum IX.C.2.
[See S9.2(b)(5). The addendum should describe nondiscriminatory
objective standards for an in-service distribution after a fixed
number of years or upon the prior occurrence of some event such as
layoff, illness or hardship.]
3. Employer Accounts. In-service distributions from Employer
Accounts will be allowed as follows: [Check applicable box(es).]
a. Standard: no distributions before separation from service.
b. on or after age _____.
c. after the ________ anniversary of Plan participation.
d. for a financial hardship under the safe harbor tests. [See
S9.2(b)(3).]
e. in accordance with the rules set forth in Addendum IX.C.3.
[See S9.2(b)(5). The addendum should describe nondiscriminatory
objective standards for an in-service distribution after a fixed
number of years or upon the prior occurrence of some event such as
layoff, illness or hardship.]
4. Qualified Nonelective and Qualified Matching Accounts. In-
service distributions from Qualified Nonelective and Qualified
Matching Accounts will be allowed as follows: [Check applicable
box(es).]
a. Standard: no distributions before separation from service.
b. on or after age 59.
c. for financial hardship (pre-89 amounts only). [See
S9.2(b)(3).]
5. Employee Accounts. Withdrawals from Employee Accounts [See
S9.2(d). Check one.]
a. Standard: will be allowed.
b. will not be allowed.
D. Joint and Survivor Annuity Rules. [Check one. See S10.]
1. Standard: The entire vested balance will be paid (a) to
married Participants as a 50% joint and survivor annuity, (b) to
single Participants as a 100% life annuity and (c) to the surviving
Spouse of a married Participant who dies before retirement as a 100%
preretirement survivor annuity.
2. The entire vested balance will be paid under the standard
joint and survivor annuity rules except the percentages will be:
[Percentages must be not less than 50% nor more than 100%.]
a. Qualified Joint and Survivor Annuity: _____% [See S10.1(f).]
b. Qualified Preretirement Survivor Annuity: ___% [See S10.1(g).]
3. The standard joint and survivor annuity rules will not
apply. [Check only if the safe harbor rule described in S10.5 will be
satisfied. This option generally is not available if this Plan or a
Pre-Existing Plan provides annuities and separate accounts are not
maintained for such Pre-Existing Plan balances. Under this option, the
entire vested balance eligible for the safe harbor will be paid to the
surviving Spouse of a married Participant who dies before retirement.
See S10.5.]
E. Optional Distribution Forms. [See S10.6(c).] In addition to
single sum distributions in cash, Participants may also request:
1. Installments [See S10.6(c)(2)(ii).]
2. Annuity contracts [See S10.6(c)(2)(iii).]
3. The optional forms or in kind distribution offered under a
Pre-Existing Plan as described in Addendum XIII.A.
4. Single sum distributions in kind [See S10.6(e).]
X. INVESTMENT PROVISIONS.
A. Individually Directed Investments. An individual's direction of
the investment of that individual's Account [Check one. See S13.2.]
1. Standard: will not be allowed
2. will be allowed and will apply: [Check one.]
a. Standard: to the entire Account
b. only to the following: _____________________
B. Participant Loans. Participant loans [Check one. See S13.3.]
1. Standard: will not be allowed.
2. will be allowed.
a. Accounting. Loans will be treated as an asset of [See S13.3(e).
Check one.]
(1) Standard: the Participant's Account.
(2) the Fund.
b. Amounts. The $10,000 exception for loans in excess of 50% of
Account value [Check one. See S13.3(f)(2).]
(1) Standard: shall not apply.
(2) shall apply. [Note: Loans under this exception must be
secured by collateral in addition to the Participant's vested
Account.]
C. Insurance. A Participant's direction to purchase insurance
contracts [Check one. See S13.1.]
1. Standard: will not be allowed.
2. will be allowed.
XI. TOP-HEAVY RULES. [SEE S12.]
A. Top-Heavy Vesting Schedule. The vesting schedule for any Plan
Year in which this Plan is a Top-Heavy Plan will be: [Check one. See
S2.4.]
1. Standard: Full and Immediate. 100% of all times.
2. Cliff. 100% after completion of ____ Years of Service [not
to exceed 3].
3. Graded.
Years of Service Nonforfeitable Percentage
Less than 1 ____%
1 ____%
2 ____% [at least 20%]
3 ____% [at least 40%]
4 ____% [at least 60%]
5 ____% [at least 80%]
6 or more 100%
B. Other Paired Plan. [Complete only if the Employer maintains
another Smith Barney defined contribution Paired Plan. See S2.45 and
S12.3(c).] The minimum top-heavy contributions or benefit, if any,
will be made under the following Paired Plans in the following order:
[Check one.]
1. Standard: Money Purchase Pension Plan, Target Benefit
Pension Plan, Profit Sharing Plan, 401(k) Plan.
2. Other: ______________________________.
C. Other Plans. [Complete only if the Employer maintains or has
ever maintained another plan that is not a Paired Plan.]
1. Minimum Allocation. The minimum top-heavy contributions or
benefit, if any, will be made under [Check one. See S12.3(d) and (g).]
a. Standard: this Plan.
b. the following plan(s): __________________.
2. Present Value. [See S12.2(f)(3)(iii). Complete only if Employer
maintains a defined benefit plan.] "Present value" will be determined
using an interest rate of ___% and the following mortality table:
_____________________________________________.
3. Valuation Date. The Top-Heavy Valuation Date for each other
plan will be: [See S12.2(g). Check one.]
a. Standard: the most recent valuation date.
b. Other: _______________________________
XII. LIMITATIONS ON ALLOCATIONS (CODE S415). [See S7.2.]
A. Compensation. For Code S415 purposes, Compensation means:
[Check one. See S7.2(a)(2).]
1. Standard: wages, tips and other compensation reportable on
Form W-2. [See S7.2(a)(2)(i).]
2. wages subject to federal income tax withholding. [See
S7.2(a)(2)(ii)(A) and S2.10(a)(2)(i).]
3. general Code S415 compensation. [See S7.2(a)(2)(ii)(B).]
B. Limitation Year. The Limitation Year will be: [Check one. See
S7.2(a)(9).]
1. Standard: the Plan Year.
2. the 12 consecutive month period which ends on each
__________________.
C. Other Paired Plan. [Complete only if the Employer maintains
another Smith Barney defined contribution Paired Plan. See S2.45 and
S7.2(c)(1).] The allocation adjustment will be made under the
following plans in the following order: [Check one.]
1. Standard: Profit Sharing Plan, Money Purchase Pension Plan,
Target Benefit Pension Plan, 401(k) Plan.
2. Other: _______________________________.
D. Other Plans. [Complete only if the Employer maintains or has
ever maintained another plan that is not a Paired Plan.]
1. Other Defined Contribution Plan. The Annual Additions
attributable to this Plan will be determined: [Check one. See
S7.2(d).]
a. Standard: by treating the other plan as a Master or
Prototype Plan.
b. by using the method described in Addendum XII.D.1.b.
2. Defined Benefit Plan. [Check and attach appropriate addendum
only if applicable. See S7.2(a)(3), 7.2(a)(11), S7.2(e) and S12.3(g).]
The Annual Additions attributable to this Plan will be
limited by using the method described in Addendum XII.D.2.
XIII. SPECIAL PROVISIONS FOR AMENDMENT AND RESTATEMENT OF PRE-
EXISTING PLAN, MERGERS OR TRANSFERS.
A. Vesting or Distribution Rules. [Check and attach appropriate
description only if applicable. See S10.6, S14.1(b) and S14.5.]
The special vesting or distribution rules which must be
preserved under Code S411 are described in Addendum XIII.A.
B. Normal Retirement Age. [Check only if the normal retirement age
under the Pre-Existing Plan was determined with reference to the
participation commencement date and the special transitional rule in
S2.43 is desired. See S2.43.]
The Normal Retirement Age of a Participant who commenced
participation in the Pre-Existing Plan in a Plan Year beginning before
1988 will be determined under the transitional rule described in
S2.43.
C. Effective Dates. [Check and attach appropriate addendum only if
any of the selections made in this Adoption Agreement will become
effective as of a date other than the Effective Date set forth in Part
II.E. However, the addendum shall in no event delay the effective date
of any Plan provisions beyond the latest effective date required for
such provision under TRA 86 or other applicable law or regulations.]
Certain elections in this Adoption Agreement shall be
effective as of the date(s) specified in Addendum XIII.C.
XIV. TRUSTEE APPOINTMENT AND TRUST AGREEMENT. [Check one. See S2.66
and S2.68.]
A. Standard Trust Agreement. The standard Trust Agreement will
apply and the Trustee will be the following individual(s), bank(s) or
other person(s) who can serve as a fiduciary and trustee under the
laws of the State shown in Part II.C.
___________________________________________
___________________________________________
[If Smith Barney Corporate Trust Company ("SBCTC") is the
Trustee, SBCTC will charge a fee and may require the Employer to
complete other documents prior to accepting its appointment as
Trustee. Further, SBCTC will act only as a nondiscretionary Trustee
and the investment of the Fund will be made as directed by the Plan
Administrator or the Employer. See S15 and the Trust Agreement.]
B. Alternate Trust Agreement. The alternate Trust Agreement for
401(k) Plans will apply and the Trustee will be
_______________________, which is a bank or trust company organized
under the laws of the State of _____________ and which is authorized
to serve as a fiduciary and trustee under the laws of such State.
[The Trustee will charge a fee and will require the Employer to
complete other documents, including execution of the alternate Trust
Agreement, prior to accepting its appointment as Trustee. Except as
described in the Trust Agreement, the Trustee will act only as a
nondiscretionary Trustee and will be subject to the directions of the
Plan Administrator as a named fiduciary under the Plan in the control
and management of the assets of the Fund. Such directions will be
communicated to the Trustee by the Recordkeeper as described in the
Trust Agreement.]
XV. IRS APPROVAL.
This Plan is designed to operate as a "standardized" plan and an
adopting Employer may rely on the opinion letter issued to the
Prototype Sponsor and may not have to apply for a favorable
determination letter on this Plan if the only plans ever maintained
(or later adopted) by the Employer are Paired Plans which satisfy
S2.45.
Any Employer who has ever maintained or who later adopts any plan
(including, after December 31, 1985, a welfare benefit fund, as
defined in Code S419(e), which provides post-retirement medical
benefits allocated to separate accounts for key employees, as defined
in Code S419A(d)(3), or an individual medical account as defined in
Code S415(l)(2)) in addition to this Plan (other than a Paired Plan
which satisfies S2.45) may not rely on the opinion letter issued to
the Prototype Sponsor by the National Office of the Internal Revenue
Service as evidence that this Plan is qualified under Code S401.
Any Employer who adopts or maintains multiple plans (other than
Paired Plans) must apply to the appropriate Key District Office for a
favorable determination letter on this Plan to obtain reliance that
this Plan as adopted by the Employer is qualified.
An Employer may not rely on the opinion letter issued by the
National Office of the Internal Revenue Service as evidence that this
Plan is qualified under Code S401 unless the terms of the Plan, as
herein adopted or amended, that pertain to the requirements of Code
S401(a)(4), S401(a)(17), S401(l), S401(a)(5), S410(b) and S414(s), as
amended by the Tax Reform Act of 1986, or later laws, (a) are made
effective retroactively to the first day of the first Plan Year
beginning after December 31, 1988 (or such later date on which these
requirements first become effective with respect to this Plan) or (b)
are made effective no later than the first day on which the Employer
is no longer entitled, under regulations, to rely on a reasonable,
good faith interpretation of these requirements, and the prior
provisions of the plan constitute such an interpretation.
Smith Barney will notify each adopting Employer of any amendments
that have been made to the Plan by Smith Barney as Prototype Sponsor
or of any intention to discontinue or abandon its sponsorship of the
Plan as a prototype plan.
SIGNATURES
IMPORTANT:
In order to have a valid plan and trust, this Adoption Agreement
must be signed by individuals authorized to sign for the Employer and,
if applicable, the Trustee and each Participating Affiliate. If the
alternate Trust Agreement is specified in Part XIV.B., the Trust
Agreement must be signed by the Employer, the Trustee and, if
applicable, each Participating Affiliate.
This Adoption Agreement will not become effective as a prototype
plan unless and until it is accepted by Smith Barney as the Prototype
Sponsor but, upon such acceptance, will be effective as a prototype
plan retroactive to the Effective Date.
Each Affiliate (i.e., each member of a controlled group of
corporations, commonly controlled group of trades or businesses, or an
affiliated service group within the meaning of Code S414) must adopt
this Plan as a Participating Affiliate.
EMPLOYER REPRESENTATIONS. The undersigned hereby certifies that
the adoption of the Plan and the Trust Agreement is authorized by
(1) a Board of Directors' resolution for an Employer which is a
corporation, or (2) a written authorization by the person or persons
duly authorized to act on behalf of an Employer which is not a
corporation. If this Adoption Agreement amends and restates a Pre-
Existing Plan, the undersigned hereby certifies that such amendment is
duly authorized by the Employer. The undersigned hereby acknowledges
that the Prototype Sponsor (1) is not responsible for the elections
made in this Adoption Agreement, (2) shall have no responsibility
whatsoever with respect to the Fund or the operation and
administration of this Plan, and (3) has advised the Employer to
consult with legal counsel for the Employer regarding the adoption and
operation of this Plan. The undersigned further acknowledges that the
Employer is solely responsible for the elections made in this Adoption
Agreement and for the operation and administration of this Plan.
Finally, the undersigned acknowledges that the Prototype Sponsor will
charge an annual prototype maintenance fee and hereby authorizes the
Prototype Sponsor to charge such fees against any brokerage account
maintained for the Plan.
EMPLOYER EXECUTION. Subject to the terms and conditions of the
Plan, the Trust Agreement and this Adoption Agreement, the undersigned
hereby has executed this Adoption Agreement to evidence its adoption
(or, if applicable, amendment) of the Plan and the Trust Agreement.
Signature: __________________________________
Title: _______________________ Date: __________
TRUSTEE EXECUTION. Subject to the terms and conditions of the
Plan, the Trust Agreement and this Adoption Agreement, the undersigned
hereby accepts its appointment as Trustee and has executed this
Adoption Agreement to evidence its adoption of the Trust Agreement.
[Attach additional signature pages if there are more than three
Trustees. If the alternate Trust Agreement is specified in Part
XIV.B., the Trustee should execute the alternate Trust Agreement in
lieu of executing the Adoption Agreement in this section.]
Signature: ________________________ Date: ________
Signature: ________________________ Date: ________
Signature: ________________________ Date: ________
PARTICIPATING AFFILIATES EXECUTION. [Attach additional signature
pages if there are more than three Participating Affiliates. An
organization which becomes an Affiliate after this Adoption Agreement
is executed should evidence its adoption of this Plan by executing and
attaching to this Adoption Agreement a signature page which includes
the information set forth below.]
Subject to the terms and conditions of the Plan, the Trust Agreement
and this Adoption Agreement, the undersigned hereby has executed this
Adoption Agreement to evidence its adoption (or, if applicable,
amendment) of the Plan and the Trust Agreement.
AFFILIATE NAME: _______________________________
Signature: ________________________ Date: _________
Effective Date of Adoption of Plan by Affiliate (if different from
the Effective Date in Part II.E.): _________________
AFFILIATE NAME: _______________________________
Signature: ________________________ Date: _________
Effective Date of Adoption of Plan by Affiliate (if different from
the Effective Date in Part II.E.):_________________
AFFILIATE NAME: ______________________________
Signature: ________________________ Date: _________
Effective Date of Adoption of Plan by Affiliate (if different from
the Effective Date in Part II.E.): _________________
PROTOTYPE SPONSOR ACCEPTANCE. Subject to the terms and conditions
of the Plan, the Trust Agreement and this Adoption Agreement, this
Adoption Agreement is accepted by the Prototype Sponsor.
Authorized Signature: _____________________________
Date: __________________________________________
Smith Barney Prototype
Standardized 401(k) Plan
Adoption Agreement #003
Adoption of a qualified plan has important legal and tax
implications. Failure to properly fill out the Adoption Agreement may
result in disqualification of the Plan. Employers should consult with
their counsel concerning the adoption of this Plan. To obtain further
information about the Plan, contact Smith Barney through your
Financial Consultant.
NOTE: Under the terms of the Plan, options marked "Standard"
automatically will apply unless another option is selected. If
additional space is needed to provide information requested in this
Adoption Agreement, the information may be provided in an addendum
attached to this Adoption Agreement which contains a reference to the
appropriate Part(s) of the Adoption Agreement.
Adoption Agreement #003 may only be used in conjunction with the
SMITH BARNEY PROTOTYPE DEFINED CONTRIBUTION PLAN - Plan Document #05.
Capitalized terms refer to defined terms in Plan Document #05. "S"
refers to sections of Plan Document #05; "Part" refers to provisions
in this Adoption Agreement. The instructions and descriptions in this
Adoption Agreement generally summarize the Plan Document provisions,
but the Plan Document terms will be controlling in the event of any
conflict.
TO BE COMPLETED BY SMITH BARNEY
FINANCIAL CONSULTANT: ________________ Telephone Number: _______
Address: ________________________________________________________
_________________________________________________________________
Smith Barney Inc. Account # for Plan:____________________________
I. EMPLOYER INFORMATION.
Name: ___________________________________________________________
Address: ________________________________________________________
_________________________________________________________________
Taxable Year: _______________ EIN: ___________________
II. PLAN INFORMATION.
A. Plan Name: _____________________________________________
B. Plan Year: the period which ends on ____________________
C. Construction. Except as provided in S1.2, the Plan and the
Trust Agreement will be subject to the laws of the State of
________________________________________
D. Plan Adoption. The Plan is hereby adopted as [Check one. See
S14.1.]
1. a new profit sharing plan (with cash or deferred
arrangement).
2. an amendment and restatement of the
___________________________________ ("Pre-Existing Plan") which was
originally effective _______________________________, 19____.
E. Effective Date of this Adoption Agreement:
____________________________________, 19_______.
III. ELIGIBILITY AND PARTICIPATION. [If the Employer maintains
another defined contribution Paired Plan, the eligibility and
participation requirements specified in this Part III for Plan Years
beginning on and after the Final Compliance Date must be the same as
those specified in the Adoption Agreement for such other Paired Plan.]
A. Eligible Employees. All Employees of the Employer and all
Employees of all Affiliates who satisfy the Participation Requirement
generally are eligible to participate in the Plan except certain
nonresident aliens. However, notwithstanding any contrary language,
participation in this Plan by Employees who are covered by a
collective bargaining agreement and the extent of such participation,
if any, will be determined by collective bargaining. [See S2.19.]
B. Participation Requirement. In order to participate in this
Plan, an Eligible Employee must [Check one. See S2.46, S4 and Part
V.B.1. Enter "N/A" if there will be no minimum age or no waiting
period, as applicable.]
1. Standard: reach minimum age of 21 and complete a waiting
period of 1 Year of Service.
2. no minimum age or waiting period.
3. reach minimum age of _____ [not to exceed 21] and complete a
waiting period of ______ Year of Service [not to exceed 1].
4. reach minimum age of ____ [not to exceed 21] and complete
a waiting period of ____ Year of Service [not to exceed 1] ; however,
each Employee who is an Eligible Employee on the Effective Date will
be deemed to satisfy the Participation Requirement on the Effective
Date regardless of such Employee's actual age or service.
C. Entry Date: [Check one. See S2.26 and S4.]
1. Standard: the first day of each Plan Year and the first day
of the seventh month of each Plan Year.
2. the date on which the Participant satisfies the
Participation Requirement.
3. other:_____________________________ [Specify date(s). If a
single Entry Date is entered, the minimum age in Part III.B cannot
exceed 20 and the maximum waiting period in Part III.B cannot exceed
= year.]
IV. VESTING.
A. Death, Disability or Retirement. [See S8.1(b).]
1. Standard: A Participant's Employer Account and Matching
Account will be 100% vested if, while an Employee, that Participant
dies, becomes Disabled, or reaches Normal Retirement Age or, if
applicable, Early Retirement Age.
2. A Participant's Employer Account and Matching Account will
be 100% vested if, while an Employee, that Participant reaches Normal
Retirement Age or if the Participant satisfies the following
condition: [Check one or more only if desired.]
a. dies while an Employee.
b. becomes Disabled while an Employee.
c. reaches Early Retirement Age while an Employee.
B. General Vesting Schedule. [See S8.1 and S14.3(c). Generally,
the vesting schedule under this Plan must be at least as favorable at
the completion of each year as the vesting schedule under the Pre-
Existing Plan. The Top-Heavy Vesting Schedule selected in Part XI.A
will apply for all Plan Years in which the Plan is a Top-Heavy Plan.
See S12.4.]
1. Matching Account. [Check one. "Full and Immediate Vesting" must
be selected if the 2-year requirement for Matching Contributions is
selected in Part VII.A.2.b.3.]
a. Standard: Full and Immediate Vesting. 100% at all times.
b. Cliff Vesting. 100% after completion of ____ Years of
Service [not to exceed 5].
c. Graded Vesting.
Years of Service Nonforfeitable Percentage
Less than 1 ___%
1 ___%
2 ___%
3 ___% [at least 20%]
4 ___% [at least 40%]
5 ___% [at least 60%]
6 ___% [at least 80%]
7 or more 100%
d. Top-Heavy. The Top-Heavy Vesting Schedule in Part XI.A will
apply for all Plan Years.
2. Employer Account. [Check one. "Full and Immediate Vesting" must
be selected if the 2-year requirement for Employer Contributions is
selected in Part VII.D.2.b.2]
a. Standard: Full and Immediate Vesting. 100% at all times.
b. Cliff Vesting. 100% after completion of ____ Years of
Service [not to exceed 5].
c. Graded Vesting.
Years of Service Nonforfeitable Percentage
Less than 1 ___%
1 ___%
2 ___%
3 ___% [at least 20%]
4 ___% [at least 40%]
5 ___% [at least 60%]
6 ___% [at least 80%]
7 or more 100%
d. Top-Heavy. The Top-Heavy Vesting Schedule in Part XI.A will
apply for all Plan Years.
C. Normal Retirement Age: [Check one. See S2.43 and Part XIII.B.]
1. Standard: age 65.
2. age ____ [not to exceed 65].
3. the later of age ____ [not to exceed 65] or the ___ [not to
exceed 5th] anniversary of the date on which the Participant commenced
participation in the Plan.
D. Early Retirement Age: [The designation of an Early Retirement
Age may accelerate vesting and distribution. Early Retirement Age
cannot exceed Normal Retirement Age. Check one. See S2.13 and S9.1.]
1. Standard: No Early Retirement Age.
2. age ____
3. the later of age ____ or the completion of ___ Years of
Service (for vesting purposes).
V. SERVICE FOR PARTICIPATION AND VESTING.
A. Method for Crediting Service. [Check one. See S3.]
1. Standard: "Hour of Service" method. [See S3.1.]
a. Crediting Hours. Hours will be credited during each Computation
Period [Check one. See S3.1(c).]
(1) Standard: by maintaining records of the actual hours worked.
[See S3.1(c)(2)(i).]
(2) by using the following equivalency [Check one. See
S3.1(c)(2)(ii).]
10 Hours of Service for each day.
45 Hours of Service for each week.
95 Hours of Service for each semi-monthly payroll period.
190 Hours of Service for each month.
b. Vesting Computation Period. The Computation Period for vesting
purposes will be [Check one. See S3.1(b)(2).]
(1) Standard: the Plan Year.
(2) the 12 month period beginning on the Participant's hire date
and each anniversary of that hire date.
c. Participation Computation Period. The initial Computation
Period for participation purposes will be the 12 month period
beginning on the Participant's hire date. Each subsequent Computation
Period after the initial 12 months of employment will be [Check one.
See S3.1(b)(3).]
(1) Standard: Plan Years beginning after the Participant's hire
date.
(2) subsequent 12 month periods beginning on the anniversaries
of the Participant's hire date.
d. Year of Service for Vesting. For vesting purposes, an Employee
will be credited with a Year of Service if, during a Computation
Period, the Employee completes at least [Check one. See S3.1(d).]
(1) Standard: 1,000 Hours of Service.
(2) ______ [not more than 1,000] Hours of Service.
e. Year of Service for Participation. For participation purposes,
an Employee will be credited with a Year of Service [Check one. See
S3.1(b)(3) and S3.1(d).]
(1) Standard: at the end of the Computation Period in which the
Employee completes at least 1,000 Hours of Service.
(2) on the date on which the Employee completes at least ______
[not more than 1,000] Hours of Service.
(3) at the end of the Computation Period on which the Employee
completes at least ______ [not more than 1,000] Hours of Service.
Notwithstanding the foregoing, if a partial Year of Service is
selected in Part III.B, no minimum number of Hours of Service will be
required.
2. "Elapsed Time" method. [See S3.2.]
For purposes of determining whether a Participant is entitled
to an allocation of contributions or forfeitures, the Participant will
be deemed to have completed more than 500 Hours of Service in a Plan
Year if the Participant completes the following period of employment
in the Plan Year: [Check one. See S2.2(d) and Part VII.]
a. Standard: more than 91 consecutive calendar days.
b. more than 3 consecutive months.
B. Special Rules.
1. Vesting Service Exclusions. [See S3.8.] In addition to any
service that is disregarded under the Break in Service rules described
below and in S3.7(c), the following service will be excluded for
vesting purposes:
a. Standard: No other exclusions.
b. Years of Service before age 18.
c. Years of Service before the Employer or an Affiliate
maintained this Plan or a predecessor plan.
d. Years of Service during a period for which the Employee made
no mandatory contributions under a Pre-Existing Plan.
2. Predecessor Employer Service (Vesting and Participation).
Generally, unless the Employer maintains the plan of a predecessor
employer (for example, an acquired company), service for a predecessor
employer will not be credited as service under this Plan. [Check and
attach appropriate addendum only if desired. See S3.4.]
Service credit will be given under this Plan for certain
predecessor employers for participation and/or vesting purposes to the
extent provided in Addendum V.B.2.
3. Break in Service Rules. [See S3.7 and S8.2.] Generally, all
service completed before a Break in Service will be credited upon
reemployment. Certain service may be excluded under the following
rules:
a. Standard: No exclusions. [See S3.7(a).]
b. "Rule of Parity." [See S3.7(b)(3).] This rule, generally,
disregards vesting and participation service completed before 5
uninterrupted Breaks in Service.
c. "Alternative Maternity/Paternity Rule." [Not applicable if
"Elapsed Time" is selected. See S3.7(b)(4).] This rule, generally,
increases the number of Breaks in Service from 5 to 6 for all
Employees in lieu of crediting service for maternity/paternity leave.
d. Alternative to "Buy Back Rule." [See S8.2(b).] This rule,
generally, does not require former participants (less than 100%
vested) to pay back previous distributions upon reemployment (vesting
only). A rehired Participant's vested interest in restored amounts
will be determined under: [Check one. See S8.2(a), S8.2(b) and
S8.2(c).]
(1) Standard: Formula A
(2) Formula B
VI. EMPLOYEE CONTRIBUTIONS.
A. Elective Deferrals. Elective Deferrals [See S5.3(f). Check
one.]
1. Standard: will be allowed. [Complete formula below; enter
"N/A" if not applicable.]
a. Minimum Amount. Not less than _____% of a Participant's
Compensation or $_____.
b. Maximum Amount. For Plan Years ending on and before
____________, not more than _____% of a Participant's Compensation or
$_____, and for each Plan Year thereafter, not more than _____% of a
Participant's Compensation or $ _____.
2. will not be allowed.
B. Employee Contributions. Employee Contributions [See S5.3(g).
Check one.]
1. Standard: will not be allowed.
2. will be allowed. [Complete formula below; enter "N/A" if not
applicable.]
a. Minimum Amount. Not less than _____% of a Participant's
Compensation or $_____.
b. Maximum Amount. For Plan Years ending on and before
____________, not more than _____% of a Participant's Compensation or
$_____, and for each Plan Year thereafter, not more than _____% of a
Participant's Compensation or $ _____.
C. Election Rules. [Check one. See S5.3(h).]
1. Standard: If a Participant does not elect to begin Elective
Deferrals or Employee Contributions on the Participant's Entry Date,
the Participant may elect to begin such contributions as of any
following pay date. A Participant's election can be revised
(prospectively only) as of any pay date. A Participant who terminates
contributions may elect to resume contributions prospectively as of
any pay date.
2. Alternatives to Standard: A Participant's elections may be
made as follows: [Must include at least one day in each calendar
year.]
a. Commencement. [See S5.3(h)(2).] effective only as of any
________________________________ following the Participant's Entry
Date.
b. Revision. [See S5.3(h)(3).] effective only as of any
following _______________________________.
c. Resumption. [See S5.3(h)(5).] effective only as of any
following ___________________________.
D. Rollover Contributions. Rollover Contributions [Check one. See
S5.4.]
1. Standard: will be allowed and may be made by [Check one.]
a. Standard: any Eligible Employee.
b. any Eligible Employee who is a Participant.
2. will not be allowed.
E. Limitations on Elective Deferrals.
1. Claims. Claims for a refund of Excess Elective Deferrals must
be made no later than [See S7.3(f). Check one.]
a. Standard: March 1.
b. _____________ [no earlier than March 1 and no later than
April 15.]
2. Deemed Claims. Corrections of Excess Elective Deferrals will be
made [See S7.3(f)(2). Check one.]
a. Standard: from this Plan.
b. from the following plan(s): _______________.
3. "Gap Period" Income. The income or loss allocable to the "gap
period" [Check one. See S7.3(e), S7.4(d)(2) and S7.5(d)(2).]
a. Standard: shall not be distributed.
b. shall be distributed.
4. Highly Compensated Employees. The following special rules in
the temporary Code S414(q) regulations and in Code S414(q)(12) will
apply: [Check one. See S7.4(a)(5)(v).]
a. Standard: no special rules.
b. The special rules set forth in Addendum V.E.3.
5. Recharacterization. Recharacterization of Excess Contributions
as Employee Contributions [See S7.4(e). Check one.]
a. Standard: will not be allowed.
b. [Do not check this option 2 if Employee Contributions are
not allowed in Part VI.B.] will be allowed.
VII. EMPLOYER CONTRIBUTIONS.
A. Matching Contributions. [See S5.3(b) and Part VII.F.]
1. Formula. [Check one.]
a. Standard: No Matching Contributions will be made.
b. Matching Contributions will be made on account of: [Check
one or both.]
