As filed with the Securities Exchange Registration No.
Commission on May 15, 1998
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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PLYMOUTH RUBBER COMPANY, INC.
(Exact Name of Registrant as Specified in Its Charter)
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Massachusetts 04-1733970
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
104 Revere Street, Canton, MA 02021
(781) 828-0220
(Address of registrant's Principal Executive Offices)
------------------------------------
Plymouth Rubber Company Retirement Savings & Profit Sharing Plan
(Full Title of the Plans)
------------------------------------
JOSEPH J. BERNS, VICE PRESIDENT - FINANCE
PLYMOUTH RUBBER COMPANY, INC.
104 Revere Street, Canton, MA 02021
(781) 828-0220
(Name, Address and Telephone number of Agent For Service)
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Copies to:
DEBORAH A. KREAM, ESQUIRE
PLYMOUTH RUBBER COMPANY, INC.
104 Revere Street, Canton, MA 02021
(781) 828-0220
=============================================================================
This Registration Statement on Form S-8 consists of 160 pages (including
exhibits). The index to exhibits is set forth on sequentially numbered
Page 7.
CALCULATION OF REGISTRATION FEE
______________________________________________________________________________
Proposed Proposed
Maximum Maximum
Title of Each Class Amount to be Offering Aggregate Amount
of Securities to be Registered Price Per Offering Registration
Registered (Shares)(1) Share (2) Price (2) fee
______________________________________________________________________________
Class B Common Stock 100,000 $7.00 $700,000 $205.50
$1.00 par value
_____________________________________________________________________________
(1) This Registration Statement also covers such indeterminable number of
additional shares of Common Stock as may become deliverable as a result
of stock splits, stock dividends or similar transactions in accordance
with the provisions of the Plans.
(2) Determined on the basis of the average of the high and low sales prices
of the Class B Common Stock reported in the American Stock Exchange,
Inc. quotations for the last known sale on May 11, 1998, solely for the
purposes of calculating the registration fee, in accordance with Rule
457 (c) under the Securities Act of 1933.
______________________________________________________________________________
This Registration Statement will become effective automatically upon
the date of filing, pursuant to the provisions of Section 8 of the Securities
Act of 1933 and Rule 462 enacted thereunder, or such other day as the
Commission acting pursuant to said Section 8 may determine.
______________________________________________________________________________
The approximate date of proposed sale to the public and cross reference
sheet called for by Items 501(a) and (b) of Regulation S-K are not applicable
and have been omitted.
EXPLANATORY NOTE
This Registration Statement on Form S-8 covers the registration of
100,000 shares of Class B Common Stock being made available for purchase on
the open market through the Plymouth Rubber Company Class B Common Stock Fund
(the "Company Stock Fund") as one of the Investment Funds in which a partici-
pant may direct the Plan Trustee to invest his/her Employer Elective
Contribution, Salary Reduction Contribution and Matching Contribution pursuant
to the Company's Retirement Savings & Profit Sharing Plan (the "Plan").
<PAGE>
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
PART I
Pursuant to the instructions in Part I of Form S-8, the information
required by Item 1, Plan Information, and Item 2, Registrant Information and
Employee Plan Annual Information, of Form S-8 has not been filed as part of
this Registration Statement.
PART II
Item 3. Incorporation of Documents by Reference.
The following documents filed by the Company with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934 (the
"Exchange Act") are incorporated by reference in this Registration Statement:
(a) The Company's Annual Report on Form 10-K for the year ended November
28, 1997;
(b) The Company's Quarterly Report on Form 10-Q for the quarterly period
ended February 27, 1998.
(c) The Company's Form 11-K for Annual Reports of Employee Stock
Purchase Savings and similar plans pursuant to Section 15(d) of the
Securities Exchange Act of 1934 for the period ended December 31, 1996.
(d) The description of the Company's Common Stock included in the
Company's registration thereof under Section 12 of the Exchange Act,
including all amendments and reports amending such description.
In addition, all documents filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this Registration Statement and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference in this Registration Statement and to be a part
hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Registration Statement to the extent that a statement
contained therein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute part of this Registration
Statement.
The financial statements of the Company included in the Company's
Annual Report on Form 10-K for the fiscal year ended November 28, 1997, have
been audited by Price Waterhouse LLP, independent auditors, as set forth in
their report included therein and incorporated herein by reference. Such
financial statements are, and audited financial statements to be included in
subsequently filed documents will be, incorporated herein by reference in
reliance upon the reports of Price Waterhouse LLP pertaining to such financial
statements (to the extent covered by consents filed with the Securities and
Exchange Commission.
1
<PAGE>
Item 4. Description of Securities.
See Item 3(c) herein.
Item 5. Interests of Named Experts and Counsel.
To the best knowledge of the Registrant, no expert or counsel named
herein or in the Information Statement delivered pursuant to the requirements
of Part I of the Registration Statement has any substantial interest, direct
or indirect, in any matter connected with this registration Statement and the
preparation an filing thereof.
Item 6. Indemnification of Officers and Directors.
Consistent with applicable provisions of the Massachusetts Business
Corporation Law, the Company's By-Laws provide that the Company's directors
and officers may be indemnified by the Company from and against any claims,
liabilities and expenses to which they may become subject by reason of being
an officer or director, except with respect to any matter as to which such
officer shall have been adjudicated by a court of competent jurisdiction not
to have acted in good faith in the reasonable belief that his or her action
was in the best interests of the Company. The Company has purchased and
maintains insurance coverage under a policy insuring directors and officers
of the Company, which may include coverage for liabilities arising under the
Securities Act of 1933.
Item 7. Exemption From Registration Claimed.
Not applicable.
Item 8. Exhibits.
Following is a list of all applicable exhibits filed with this
Registration Statement pursuant to the requirements of Item 601 of Regulation
S-K:
4.1 Restated Articles of Organization - incorporated by reference to Exhibit
3(i) to the Company's Annual Report on Form 10-K for the year ended
December 2, 1994.
4.2 Copy of the Company's By-Laws - incorporated by reference to Exhibit
3(ii) to the Company's Annual report on Form 10-K for the year ended
November 26, 1993.
4.3 Copy of the Registrant's Retirement Savings & Profit Sharing Plan,
including State Street Solutions Prototype Defined Contribution Plan,
including the Profit Sharing non- standardized adoption agreement and
supplement.
5. Opinion of Counsel, Deborah A. Kream.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Morris & Morris P.C.
24.1 Power of Attorney (included in signature page hereto).
24.2 Certificate of Vote authorizing signing by Power of Attorney.
2
<PAGE>
Item 9. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement.
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus (as defined in Part I of Form S-8)
any facts or events arising after the effective date of the
registration statement (or the most recent post-effective amend-
ment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
Provided, however, that clauses (1)(I) and (1)(ii) paragraph (1) do not
apply to this registration statement on Form S-8 because the information re-
quired to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to section 13
or section 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in this registration statement
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to section 13(a) or section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for indemni-
fication against such liabilities (other than the payment by the registrant or
expenses incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registration certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, there-
unto duly authorized, in the City of Boston, Commonwealth of Massachusetts,
on the 8th Day of May, 1998.
PLYMOUTH RUBBER COMPANY, INC.
By: /s/ Maurice J. Hamilburg
Maurice J. Hamilburg, President
Each of the undersigned officers and directors of Plymouth Rubber
Company, Inc. hereby constitutes and appoints Maurice J. Hamilburg, Deborah A.
Kream, Esq., and each of them singly, his or her true and lawful attorneys or
attorney-in-fact and agent, with full power of substitution and resubstitution,
for each of the undersigned and in each of their name, place and stead, in any
and all capacities, to sign any and all amendment thereto (including post-
effective amendments) to this Registration Statement and all documents relating
thereto and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission. Each of
said attorney-in-fact shall have full power and authority to do and perform
each and every act and thing necessary or advisable to be done in and about
the premises, as fully and to all intents and purposes as each of the under-
signed might or could do in person, hereby ratifying and confirming all that
each said attorney-in-fact and agent, or his substitutes, may lawfully do or
cause to be done by virtue hereof, and ratifying and confirming our signatures
as they may be signed by each attorney-in-fact and agent, or his substitutes,
to this Registration Statement and any and all amendments thereto.
4
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacity and on the
dates indicated.
Signature Title Date
/s/ Maurice J. Hamilburg President, Director and 05/08/98
Maurice J. Hamilburg Co-Chief Executive Officer
/s/ Joseph J. Berns Vice President - Finance & 05/08/98
Joseph J. Berns Treasurer, Chief Financial
Officer and Chief Accounting
Officer
/s/ Joseph D. Hamilburg Chairman, Director and 05/08/98
Joseph D. Hamilburg Co-Chief Executive Officer
/s/ Jane H. Guy Director 05/08/98
Jane H. Guy
/s/ Melvin L. Keating Director 05/08/98
Melvin L. Keating
/s/ James M. Oates Director 05/08/98
James M. Oates
/s/ C. Gerald Goldsmith Director 05/08/98
C. Gerald Goldsmith
/s/ Duane E. Wheeler Director 05/08/98
Duane E. Wheeler
5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, the 401(k)
Plan Committee of Plymouth Rubber Company, Inc. has duly caused this registra-
tion statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston, Commonwealth of Massachusetts, on May 8,
1998.
By: /s/ Maurice J. Hamilburg
Maurice J. Hamilburg, a member
of the 401(k) Plan Committee of
Plymouth Rubber Company, Inc.
6
<PAGE>
INDEX TO EXHIBITS
Exhibit If not filed herein,
No. Description of Document incorporated by reference to
4.1 Restated Articles of Organization Exhibit 3(i) to the Company's
Annual Report on Form 10-K for
the fiscal year ended December
2, 1994.
4.2 Company's By-Laws Exhibit 3(ii) to the Company's
Annual Report on Form 10-K for
the fiscal year ended November
26, 1993.
4.3 Registrant's Retirement Savings & Filed herewith
Profit Sharing Plan, including State
Street Solutions Prototype Defined
Contribution Plan, including the
Profit Sharing non-standardized
adoption agreement and supplement.
5. Opinion of Counsel, Filed herewith
Deborah A. Kream
23.1 Consent of Price Waterhouse LLP Filed herewith
23.2 Consent of Morris & Morris P.C. Filed herewith
24.1 Power of Attorney Filed herewith
(Included in signature page hereto).
24.2 Certificate of Vote Authorizing Filed herewith
Signing by Power of Attorney.
7
<PAGE>
Exhibit 4.3
10/1/96
STATE STREET SOLUTIONS
PROTOTYPE DEFINED CONTRIBUTION PLAN
(Basic Plan Document 01)
TABLE OF CONTENTS
PAGE
SECTION 1 1
Introduction 1
Purpose 1
Adoption of the Plan 1
Administration 1
Notices 2
SECTION 2 3
Definitions 3
Adoption Agreement 3
Code 3
Compensation 3
Disability 4
Earned Income 5
Effective Date 5
Employee 5
Employer 5
Entry Date 5
ERISA 5
Fiscal Year 6
Highly Compensated Employee 6
Hour of Service 7
Leased Employee 8
Leave of Absence 9
Limitation Year 9
Maternity or Paternity Absence 9
One-Year Break in Service 9
Participant 11
Plan 11
Plan Year 11
Predecessor Employer 11
Related Employer 11
Self-Employed Individual 11
Trust 12
Trust Fund 12
Trustee 12
Year of Service 12
SECTION 3 13
Eligibility and Participation 13
Eligibility 13
Notice of Participation 14
Leave of Absence 14
Employer Records 14
SECTION 4 15
Compensation Deferral Contributions 15
Compensation Deferral Contributions 15
Deduction of Compensation Deferral Contributions 15
Variation, Discontinuance and Resumption of
Compensation Deferral Contributions 15
Calendar Year Dollar Limitation on Compensation
Deferral Contributions 16
Limitation on Compensation Deferral Contributions 17
Limitation on Voluntary and Employer Matching
Contributions 20
Prohibition of Contributions by Highly Compensated
Employees 22
Two or More Plans 22
Distribution Restrictions 23
Other Requirements 24
SECTION 5 27
Participant Contributions 27
Voluntary Participant Contributions 27
Deduction or Payment of Voluntary Contributions 27
Variation, Discontinuance and Resumption of Voluntary
Contributions 27
No Deductible Employee Contributions 28
SECTION 6 29
Employer Contributions 29
Employer Contributions 29
Compensation Deferral Contributions 29
Employer Matching Contributions 30
Payment of Employer Contributions 30
Verification of Employer Contributions 30
No Responsibility for Collection or Verification 30
Limitations on Employer Contributions 30
SECTION 7 32
Period of Participation 32
Settlement Dates 32
Restricted Participation 32
SECTION 8 34
Accounting 34
Separate Accounts 34
Accounting Dates 35
Adjustment of Accounts 35
Valuation Date 35
Crediting of Compensation Deferral Contributions and
Voluntary Contributions 36
Allocation and Crediting of Employer Matching
Contributions 36
Allocation and Crediting of Employer Contributions 36
Allocation and Crediting of Forfeitures 39
Charging Withdrawals and Distributions 39
Rollovers 40
Statements 40
SECTION 9 41
Investments 41
Investment Option Selection 41
Investment Option Subaccounts 41
Elections to Change Investments 42
Accounting for Investments 42
Participant Directed Brokerage Accounts 43
Investment Restrictions 44
SECTION 10 46
Payment of Account Balances 46
Retirement or Death 46
Resignation or Dismissal 46
Manner of Distribution 46
Death Distribution Provisions 48
Commencement of Distributions 49
Distribution Requirements 50
Consent to Distribution 50
Beneficiary Designation 52
Missing Participants or Beneficiaries 53
Facility of Payment 54
Definitions 54
Distribution to Alternate Payees 56
SECTION 11 57
Joint and Survivor Annuity Requirements 57
Qualified Joint and Survivor Annuity 57
Qualified Preretirement Survivor Annuity 58
Definitions 59
Notice Requirements 61
Exceptions to Notice Requirements 62
Safe Harbor Rules 62
Transitional Rules 64
SECTION 12 66
Withdrawals and Distributions During Employment 66
Withdrawal of Voluntary Participant Contributions 66
Pre-Termination Distributions 66
Charging and Payment of Withdrawals 67
Loans to Participants 68
Hardship Withdrawals 71
SECTION 13 73
No Reversion in Employer 73
SECTION 14 74
Reemployment and Employment With Related Employers 74
Reemployment Before Break in Service 74
Reemployment After Break in Service 74
Restoration of Forfeitures 75
Employment With Related Employers 75
SECTION 15 77
General Provisions 77
Information Furnished by Participants 77
Information Furnished to Trustee 77
Inalienability of Benefits 77
Absence of Guaranty 77
Employment Rights 77
Gender and Number 78
Administrative Decisions Final 78
Evidence 78
Action by Employer 78
Uniform Rules 78
Controlling Law 78
Waiver of Notice 79
Successor to an Employer 79
Claims Procedure 79
Litigation by Participants 80
Amendments of Vesting Schedule 80
Qualification of Plan 81
Compliance with ERISA and Severability 81
Control of Trades or Businesses by Owner-Employee 82
Portability 82
SECTION 16 84
Amendment and Termination 84
Amendment by the Employer 84
Amendment by Sponsor 85
Termination 86
Notice of Amendment or Termination 87
Vesting and Distribution on Termination 87
Merger or Consolidation 87
SECTION 17 88
Benefit Limitations 88
Single Plan 88
Estimated Compensation 88
Actual Compensation 88
Excess Amount in Single Plan 88
Two or More Qualified Plans (Master or Prototype
Plans) 90
Estimated Compensation (Two or More Plans) 90
Actual Compensation (Two or More Plans) 91
Treatment of Excesses (Two or More Plans) 91
Coincident Allocations (Two or More Plans) 91
Two or More Qualified Plans (Other than Master or
Prototype Plans) 91
Combined Plan Limitation 92
Definitions Relative to Benefit Limitations 92
SECTION 18 98
Predecessor Plan 98
SECTION 19 99
Special Rules Applicable When Plan is Top-Heavy 99
Purpose and Effect 99
Top-Heavy Plan 99
Key Employee 100
Aggregation of Plans 101
Minimum Vesting 101
Minimum Employer Contribution 102
Coordination of Benefits 103
Adjustment of Combined Benefit Limitations 103
Benefit Accrual 103
SECTION 20 104
Direct Transfer of Eligible Rollover Distributions 104
Purpose 104
Definition of Eligible Rollover Distribution 104
Definition of Eligible Retirement Plan 104
Definition of Distributee 104
Definition of Direct Rollover 105
DEFINED TERMS
TERMS SECTION PAGE
Account 8.1 34
Accounting Date 8.2 35
Actual Deferral Percentage 4.5 18
Administrator 1.3 1
Adoption Agreement 2.1 3
Annual Addition 17.12 94
Code 2.2 3
Compensation 2.3 3
Compensation Deferral Contributions 4.1 15
Compensation Deferral Contribution Account 8.1 34
Disability 2.4 4
Earned Income 2.5 5
Effective Date 2.6 5
Employee 2.7 5
Employer 2.8 5
Employer Contributions 6.1 29
Employer Contribution Account 8.1 34
Employer Matching Contributions 6.3 30
Employer Matching Contribution Account 8.1 34
Entry Date 2.9 5
ERISA 2.10 5
Excess Aggregate Contributions 4.6 21
Fiscal Year 2.11 6
Forfeiture 8.8 39
Highly Compensated Employee 2.12 6
Hour of Service 2.13 7
Key Employee 19.3 103
Leased Employee 2.14 8
Leave of Absence 2.15 9
Limitation Year 2.16 9
Maternity or Paternity Absence 2.17 9
Normal Retirement Age 7.1 32
One-Year Break in Service 2.18 9
Owner-Employee 2.7 5
Participant 2.19 11
Participant Rollover Account 8.1 34
Plan 2.20 11
Plan Year 2.21 11
Predecessor Employer 2.22 11
Predecessor Plan 18 101
Qualified Matching Contributions 6.3 30
Qualified Nonelective Contributions 4.5 19
DEFINED TERMS
TERMS SECTION PAGE
Related Employer 2.23 11
Regular Accounting Date 8.2 35
Self-Employed Individual 2.24 11
Special Accounting Date 8.2 35
Sponsor 1.1 1
Super Top Heavy Plan 19.8 106
Top Heavy Plan 19.2 102
Trust 2.25 12
Trust Fund 2.26 12
Trustee 2.27 12
Valuation Date 8.4 35
Vested Percentage 10.2 46
Vesting Period 10.2 46
Voluntary Contributions 5.1 27
Voluntary Contributions Account 8.1 34
Year of Service 2.28 12
STATE STREET SOLUTIONS
PROTOTYPE DEFINED CONTRIBUTION PLAN
SECTION 1
Introduction
1.1. Purpose. This plan is a prototype defined con-
tribution plan sponsored by State Street Bank and Trust Company
(the "sponsor") which may be adopted as a money purchase pen-
sion plan or a profit sharing plan, including a salary reduc-
tion arrangement under Code Section 401(k). With the consent
of the sponsor, the employer (as defined in subsection 2.8) may
adopt the plan by executing the adoption agreement (as defined
in subsection 2.1) in the form attached hereto. The purpose of
the plan is to enable the eligible employees of the employer to
provide for their future security by accumulating funds and
sharing in the contributions of the employer.
1.2. Adoption of the Plan. With the sponsor's con-
sent, the employer may adopt the plan and become a party to the
trust which forms a part of the plan by completing and signing
the adoption agreement in the form attached hereto. The plan
may be adopted by the employer as a single-employer plan, a
plan of a controlled group of corporations, a plan of trades or
business under common control or a plan of an affiliated ser-
vice group, as the employer has specified in its adoption
agreement. The plan contains certain variable features which
the employer has specified in the adoption agreement. Only
those variable features specified by the employer in the adop-
tion agreement will be applicable to the employer.
1.3. Administration. The plan shall be administered
by a plan administrator (the "administrator") designated by the
employer in the adoption agreement and, for purposes of Section
3(16)(A) of the Employee Retirement Income Security Act of
1974, the administrator shall be considered the "plan adminis-
trator." The administrator has the discretionary authority to
construe and interpret the provisions of the plan and make
factual determinations thereunder, including the power to de-
termine the rights or eligibility of employees or participants
and any other persons, and the amounts of their benefits under
the plan, and to remedy ambiguities, inconsistencies or omis-
sions, and such determinations shall be binding on all parties.
The administrator from time to time may adopt such rules and
regulations as may be necessary or desirable for the proper and
efficient administration of the plan and as are consistent with
the terms of the plan. The administrator may designate other
persons to carry out fiduciary responsibilities (other than
those relating to the management or control of plan assets as
provided in the trust agreement). The employer shall certify
from time to time to the trustee any change in the identity of
the administrator.
1.4. Notices. Any notices, documents or forms re-
quired to be given to or filed with an employer may be deliv-
ered or mailed by certified mail, postage prepaid, to the em-
ployer at its principal place of business, as specified in the
adoption agreement.
SECTION 2
Definitions
2.1. "Adoption Agreement" shall mean the form
designed by the sponsor, executed by the employer and attached
hereto, which agreement shall constitute a part of the plan.
2.2. "Code" shall mean the Internal Revenue Code of
1986, as amended.
2.3. "Compensation" shall mean a participant's wages
within the meaning of Code Section 3401(a) and all other
payments of compensation to the participant by the employer (in
the course of the employer's trade or business) for which the
employer is required to furnish the participant a written
statement under Code Sections 6041(d), 6051(a)(3) and 6052.
Compensation shall be determined without regard to any rules
under Code Section 3401(a) that limit the remuneration included
in wages based on the nature or location of the employment or
the services performed. The employer may elect in the adoption
agreement to modify the foregoing definition of compensation to
include any amount which is not includible in the gross income
of the employee under Code Sections 125, 402(e)(3), 402(h),
457(b), 403(b) or 414(h)(2). The employer may also separately
elect in the adoption agreement to reduce a participant's
compensation for purposes of the plan by such items as the
employer may elect. Notwithstanding the foregoing, the
compensation of a self-employed individual (as defined in
subsection 2.24) shall mean his earned income (as defined in
subsection 2.5).
For plan years beginning on or after January 1, 1989 and before
January 1, 1994, the annual compensation of each participant
taken into account under the plan for any plan year shall not
exceed $200,000, as adjusted by the Secretary of Treasury at
the same time and in the same manner as under Section 415(d) of
the Code. For plan years beginning on or after January 1,
1994, the annual compensation of each participant taken into
account under the plan shall not exceed $150,000, as adjusted
for increases in the cost of living in accordance with Section
401(a)(17)(B) of the 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 annual compensa-
tion 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.
In determining the compensation of a participant for purposes
of this limitation, the rules of Section 414(q)(6) of the Code
shall apply, except in applying such rules, the term "family"
shall include only the spouse of the participant and any lineal
descendants of the participant who have not attained age 19
before the close of the year. If as a result of the applica-
tion of such rules, the adjusted annual compensation limitation
is exceeded, then (except for purposes of determining the por-
tion of compensation up to the integration level if this plan
provides for permitted disparity) the limitation shall be pro-
rated among the affected individuals in proportion to each such
individual's compensation, as determined under this subsection
prior to the application of the limitation.
If the compensation for any prior determination period is taken
into account in determining a participant's benefits accruing
in the current plan year, the compensation for that prior
determination period is subject to the applicable annual com-
pensation limit in effect for that prior determination period.
For this purpose, in determining allocations in plan years
beginning on or after January 1, 1989, the annual compensation
limit in effect for determination periods beginning before that
date is $200,000; and in determining allocations in plan years
beginning on or after January 1, 1994, the annual compensation
limit in effect for determination periods beginning before that
date is $150,000.
2.4. "Disability" shall mean an inability to perform
any of the duties assigned by an employer because of a medical-
ly determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be ex-
pected to last for a continuous period of at least twelve
months. The permanence and degree of such impairment shall be
determined by a qualified physician selected or approved by the
administrator. If a participant is eligible for and receives
Social Security disability benefits, the participant will be
deemed to be disabled for purposes of this subsection 2.4.
2.5. "Earned Income" shall mean the net earnings
from self-employment in the trade or business with respect to
which the plan is established, for which personal services of
the individual are a material income-producing factor. Net
earnings will be determined without regard to items not includ-
ed in gross income and the deductions allocable to such items.
Net earnings are reduced by contributions by the employer to a
qualified plan to the extent deductible under Code Section 404.
Net earnings shall be determined with regard to the deduction
allowed to the taxpayer by Section 164(f) of the Code.
2.6. "Effective Date" shall mean the date specified
by the employer in the adoption agreement as the effective date
of the plan.
2.7. "Employee" shall mean any person who is employ-
ed by an employer maintaining the plan in the conduct of the
business to which the plan relates, or by any other employer
required to be aggregated with such employer under Sections
414(b), (c), (m) or (o) of the Code. The term employee shall
also include any partner of an employer, a sole proprietor who
is an employer, and any leased employee deemed to be an employ-
ee of any employer described in the previous sentence as pro-
vided in Sections 414(n) or (o) of the Code. The term "owner-
employee" shall mean an individual who is a sole proprietor, or
who is a partner owning more than 10 percent of either the
capital or profits interest of the partnership.
2.8. "Employer" shall mean the employer and any
related employer which adopts the plan and becomes a party to
the trust with the consent of the employer (also referred to
herein collectively as the "employers" or singularly as the
"employer").
2.9. "Entry Date" shall mean the day or dates in
each plan year on which eligible employees become participants
in the plan, as specified by the employer in the adoption
agreement.
2.10. "ERISA" shall mean the Employee Retirement
Income Security Act of 1974.
2.11. "Fiscal Year" shall mean the taxable year of
the employer for federal income tax purposes.
2.12. "Highly Compensated Employee" shall mean high-
ly compensated active employees and highly compensated former
employees. A highly compensated active employee includes any
employee who performs service for the employer during the de-
termination year and who, during the look-back year: (i) re-
ceived compensation from the employer in excess of $75,000 (as
adjusted pursuant to Section 415(d) of the Code); (ii) received
compensation from the employer in excess of $50,000 (as adjust-
ed pursuant to Section 415(d) of the Code) and was a member of
the top-paid group for such year; or (iii) was an officer of
the employer and received compensation during such year that is
greater than 50 percent of the dollar limitation in effect
under Section 415(b)(1)(A) of the Code. The term highly com-
pensated employee also includes: (i) employees who are both
described in the preceding sentence if the term "determination
year" is substituted for the term "look-back year" and the
employee is one of the 100 employees who received the most
compensation from the employer during the determination year;
and (ii) employees who are 5-percent owners at any time during
the look-back year or the determination year.
If no officer has satisfied the compensation requirement of
(iii) above during either a determination year or look-back
year, the highest paid officer for such year shall be treated
as a highly compensated employee. For purposes of this subsec-
tion, the determination year shall be the plan year. The look-
back year shall be the twelve-month period immediately preced-
ing the determination year or, if the administrator so elects,
the calendar year ending with or within the determination year.
A highly compensated former employee includes any employee who
separated from service (or was deemed to have separated) prior
to the determination year, performs no service for the employer
during the determination year, and was a highly compensated
active employee for either the separation year or any determi-
nation year ending on or after the employee's 55th birthday.
If an employee is, during a determination year or look-back
year, a family member of either a 5-percent owner who is an
active or former employee or a highly compensated employee who
is one of the 10 most highly compensated employees ranked on
the basis of compensation paid by the employer during such
year, then such family member and the 5-percent owner or top-
ten highly compensated employee shall be aggregated. In such
case, the family member and 5-percent 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 5-percent owner or top-ten highly com-
pensated employee. For purposes of this subsection, family
member includes the spouse, lineal ascendants and descendants
of the employee or former employee and the spouses of such
lineal ascendants and descendants. The determination of who is
a highly compensated employee, including the determinations of
the number and identity of employees in the top-paid group, the
top 100 employees, the number of employees treated as officers
and the compensation that is considered, will be made in accor-
dance with Section 414(q) of the Code and the regulations
thereunder.
2.13. "Hour of Service" shall mean:
(a) Each hour for which an employee is paid or
entitled to payment by an employer for the
performance of duties. These hours shall
be credited to the employee for the period
or periods in which such duties are performed;
(b) Each hour for which an employee is paid or
entitled to payment by an employer for a
period during which no duties are performed
(irrespective of whether the employment
relationship has terminated) due to vaca-
tion, holiday, illness, incapacity (includ-
ing disability), layoff, jury duty, mili-
tary duty or leave of absence, provided
that no more than 501 hours will be credit-
ed for any single continuous period of
absence. Hours under this subparagraph
will be calculated and credited pursuant to
Section 2530.200b-2 of the Department of
Labor Regulations which are incorporated
herein by this reference;
(c) Each hour for which an employee has been
credited with back pay awarded or agreed to
by the employer, irrespective of mitigation
of damages. The same hours of service will
not be credited under both subparagraph (a)
or (b) above, as the case may be, and under
this subparagraph (c). These hours will be
credited to the employee for the period to
which the award or agreement relates rather
than the period in which the award, agree-
ment or payment is made; and
(d) Hours of service will be credited for em-
ployment with other members of an affil-
iated service group (under Code Section
414(m)), a controlled group of corporations
(under Code Section 414(b)), or a group of
trades or businesses under common control
(under Code Section 414(c)) of which an
adopting employer is a member, and any
other entity required to be aggregated with
such employer pursuant to Code Section
414(o) and the regulations thereunder.
Hours of service will also be credited for
any individual considered an employee for
purposes of this plan under Code Section
414(n) or Code Section 414(o) and the regu-
lations thereunder.
In computing hours of service for purposes of this subsection
2.13, each employee shall be credited with (i) his actual hours
of service, (ii) ten hours of service for each day in which the
employee completes at least one hour of service, (iii) 45 hours
of service for each week in which the employee completes at
least one hour of service, or (iv) 190 hours of service for
each month in which the employee completes at least one hour of
service, whichever the employer specifies in the adoption
agreement.
2.14. "Leased Employee" shall mean any person (other
than an employee of the recipient employer) who pursuant to an
agreement between the recipient employer and any other person
("leasing organization") has performed services for the recipi-
ent employer (or for the recipient and related persons deter-
mined in accordance with Section 414(n)(6) of the Code) on a
substantially full-time basis for a period of at least one
year, and such services are of a type historically performed by
employees in the business field of the recipient employer.
Contributions or benefits provided a leased employee by the
leasing organization which are attributable to services per-
formed for the recipient employer shall be treated as provided
by the recipient employer. A leased employee shall not be con-
sidered an employee of the recipient employer if: (i) such
employee is covered by a money purchase pension plan providing:
(1) a nonintegrated employer contribution rate of at least 10
percent of compensation, as defined in Section 415(c)(3) of the
Code, but including amounts contributed pursuant to a salary
reduction agreement which are excludable from the employee's
gross income under Section 125, Section 402(e)(3), Section
402(h)(1)(B) or Section 403(b) of the Code, (2) immediate par-
ticipation, and (3) full and immediate vesting; and (ii) leased
employees do not constitute more than 20 percent of the recipi-
ent employer's nonhighly compensated workforce.
2.15. "Leave of Absence" shall mean an absence from
work which is not treated by the employer as a termination of
the employee's employment or association with the employer or
an absence from work that is required by law to be treated as a
leave of absence. Leaves of absence will be granted under
rules of the employer applied uniformly to all employees simi-
larly situated.
2.16. "Limitation Year" shall mean the plan year.
2.17. "Maternity or Paternity Absence" shall mean an
employee's absence from work because of the pregnancy of the
employee or birth of a child of the employee, the placement of
a child with the employee in connection with the adoption of
such child by the employee, or for purposes of caring for the
child immediately following such birth or placement. The ad-
ministrator may require the employee to furnish such informa-
tion as the administrator considers necessary to establish that
the employee's absence was for one of the reasons specified
above.
2.18. "One-Year Break in Service" shall mean one of
the following, depending on the method of calculating years of
service selected by the employer in its adoption agreement:
(a) If the employer has specified that years of
service will be based upon hours of ser-
vice, then, for purposes of eligibility, a
one-year break in service shall occur at
the end of any twelve consecutive month
period ending on the anniversary of the
date the employee first completes one hour
of service (the employee's employment com-
mencement date) and during which such em-
ployee does not complete more than 500
hours of service; and for purposes of
determining a participant's vesting per-
centage, a one-year break in service shall
occur at the end of any plan year during
which a terminated participant or employee
does not complete more than 500 hours of
service. In the case of a maternity or
paternity absence, an employee shall be
credited, for the first plan year in which
such employee otherwise would have incurred
a one-year break in service (and solely for
purposes of determining whether such a
break in service has occurred), with the
hours of service which normally would have
been credited to him but for such absence
(or, if the administrator is unable to
determine the hours which would have been
so credited, eight hours for each work day
of such absence), but in no event more than
501 hours for any one absence.
(b) If the employer has specified the elapsed
time method of calculating years of service
in the adoption agreement pursuant to sub-
section 2.28, each twelve consecutive month
period commencing on the participant's em-
ployment termination date and each anni-
versary thereof, during which a participant
is not employed by the employer. An em-
ployee's employment termination date shall
be the date the employee retires, quits or
is discharged, or if earlier, the twelve-
month anniversary of the date on which the
employee was otherwise first absent from
service. If an employee is absent from
work by reason of a maternity or paternity
absence, the twelve consecutive month
period beginning on the first anniversary
of the first date of such absence shall not
constitute a break in service.
2.19. "Participant" shall mean an employee covered
under the plan in accordance with subsection 3.1.
2.20. "Plan" shall mean State Street Solutions
Prototype Defined Contribution Plan and the adoption agreement
forming a part thereof as adopted by the employer. A copy of
the plan (and the trust forming a part of the plan), as amended
from time to time, will be on file at the office of the employ-
er and may be examined by any participant.
2.21. "Plan Year" shall mean a calendar year, the
fiscal year of the employer or some other fiscal year, as spec-
ified by the employer in the adoption agreement.
2.22. "Predecessor Employer" shall mean any corpora-
tion or other entity, the stock, assets or business of which
was acquired by the employer, whether by merger, consolidation,
purchase of assets or otherwise, and any predecessor thereto.
If the employer has so designated in the adoption agreement, or
if the employer maintains a plan of a predecessor employer,
employment with the predecessor employer will be considered
employment with the employer for all purposes of the plan.
2.23. "Related Employer" shall mean (i) a member of
a controlled group of corporations within the meaning of Sec-
tion 414(b) of the Code of which an employer is also a member,
(ii) an incorporated or unincorporated trade or business under
common control with an employer within the meaning of Section
414(c) of the Code, or (iii) a member of an affiliated service
group within the meaning of Section 414(m) of the Code of which
an employer is also a member, and any other entity required to
be aggregated with the employer pursuant to regulations under
Section 414(o) of the Code.
2.24. "Self-Employed Individual" shall mean an indi-
vidual who has earned income for the taxable year from the
trade or business for which the plan is established, as well as
an individual who would have had earned income but for the fact
that the trade or business had no net profits for the taxable
year.
2.25. "Trust" shall mean the trust agreement which
forms a part of the plan pursuant to which funds contributed
under the plan are held, invested, managed, controlled and
distributed in accordance with the terms of such trust.
2.26. "Trust Fund" shall mean the total assets held
in trust as of any date under the trust forming a part of this
plan, including any participating interests in any common, col-
lective or commingled trust fund to which the trustee has made
a deposit.
2.27. "Trustee" shall mean State Street Bank and
Trust Company.
2.28. "Year of Service" shall mean the twelve con-
secutive month periods for eligibility and for vesting, as
specified by the employer in its adoption agreement:
(a) For purposes of eligibility, the twelve
consecutive month period beginning on the
date the employee first completes an hour
of service for the employer (such employee's
"employment commencement date") and
each anniversary of such employment com-
mencement date, during which the employee
completes at least 1,000 hours of service.
For purposes of vesting, a year of service
shall mean each plan year during which the
employee completes 1,000 hours of service.
(b) In lieu of the hours of service method
described in (a) above, for purposes of
eligibility or vesting, each twelve consec-
utive month period of employment with the
employer ending on an anniversary of the
employee's employment commencement date,
with any portion of a month being considered
a whole month for this purpose, including any
period of employment termination that does not
exceed twelve months.
SECTION 3
Eligibility and Participation
3.1. Eligibility. Each employee of an employer who
is a participant in a predecessor plan (as defined in Section
18) immediately preceding the effective date will continue as a
participant in the plan on and after that date, subject to the
conditions and limitations of the plan. Each other employee of
an employer will become eligible to participate in the plan on
the effective date (if he then satisfies the requirements be-
low) or on the first entry date coincident with or next follow-
ing the date such employee meets the applicable requirements
set forth below:
(a) The employee has attained the minimum age,
if any, specified by the employer for this
purpose in its adoption agreement;
(b) The employee has completed the number of
years of service specified by the employer
for this purpose in its adoption agreement;
and
(c) The employee is a member of a group or
class of employees to whom the plan has
been extended by the employer as specified
for this purpose in its adoption agreement.
For purposes of subparagraph (a) above, the minimum age that
the employer may specify in its adoption agreement shall not
exceed age 21 years. For purposes of subparagraph (b) above,
the number of years of service that the employer may specify in
its adoption agreement shall not exceed one year; except that,
if employer contributions under the plan are fully vested at
all times and the employer adopts this plan as a money purchase
pension plan or specifies in the adoption agreement that par-
ticipants cannot make compensation deferral contributions under
subsection 4.1 of the plan, the number of years of service that
may be specified in the adoption agreement shall not exceed two
years. An employee who would be eligible to participate on an
entry date except for subparagraph 3.1(c) above shall become a
participant on the date such employee satisfies the condition
for participation under subparagraph 3.1(c).
3.2. Notice of Participation. The employer will
notify its employees of the date on which they become eligible
to participate in the plan. Each such employee must complete
and file with the administrator one or more of the following
forms:
(a) An election, if any, to have his compen-
sation reduced and compensation deferral
contributions made to the plan on his
behalf by his employer.
(b) An election, if any, to make voluntary
contributions under the plan.
(c) Such other forms as the administrator may
determine.
3.3. Leave of Absence. Except as provided below, a
leave of absence will not interrupt years of service or partic-
ipation in the plan. If an employee or participant does not
return to work with his employer on or before termination of a
leave of absence, he will be considered to have terminated em-
ployment on the date his leave of absence expires, unless he
actually terminated employment before the expiration of his
leave of absence.
3.4. Employer Records. The records of an employer
as to an employee's or a participant's employment, years of
service, one-year breaks in service, termination of employment,
reemployment, hours of service, compensation and leaves of
absence will be conclusive on all persons unless demonstrated
to the administrator's satisfaction to be incorrect.
SECTION 4
Compensation Deferral Contributions
4.1. Compensation Deferral Contributions. No con-
tributions are required of participants. However, if the em-
ployer has so provided in its adoption agreement and subject to
the limitations of this Section, a participant may elect to
make compensation deferral contributions under the plan as of
the beginning of the first pay period coincident with or next
following the date he becomes eligible to participate under
subsection 3.1, in an amount equal to a percentage of his com-
pensation for the plan year which is within the range specified
by the employer in its adoption agreement for this purpose.
Each election by a participant under this subsection 4.1 shall
be made by filing the election form furnished by the adminis-
trator at least 30 days (or such shorter time period as may be
established by the administrator) prior to the beginning of the
pay period or date as of which such election is to be effec-
tive. A participant's compensation deferral contributions
shall be fully vested and nonforfeitable at all times. No
benefit under the plan except employer matching contributions
under subsection 6.3 shall be contingent upon the participant's
election to make (or not to make) compensation deferral contri-
butions.
4.2. Deduction of Compensation Deferral Contribu-
tions. Pursuant to the participant's compensation deferral
election, compensation deferral contributions shall be made by
a reduction of the participant's compensation for each pay
period by the elected percentage, and a contribution by the
employer to the trust fund pursuant to subsection 6.2, in the
amount of such reduction. The administrator may limit the
compensation deferral percentage elected by a participant who
is a highly compensated employee in order to satisfy the limi-
tations of this Section 4, and may limit the type of compensa-
tion from which compensation deferral contributions may be
made.
4.3. Variation, Discontinuance and Resumption of
Compensation Deferral Contributions. Except as provided below,
as of the dates specified for this purpose by the employer in
the adoption agreement, a participant may elect to change the
rate of his compensation deferral contributions (but not retro-
actively) within the limits specified by the employer in its
adoption agreement. A participant may elect to discontinue his
compensation deferral contributions (but not retroactively) as
of any pay period and resume making such contributions as of
any such date. Each election under this subsection 4.3 shall
be made by filing the election form furnished by the adminis-
trator at least 30 days (or such shorter time period as may be
established by the administrator) prior to the beginning of the
period or date as of which such election is to be effective.
Unless the plan specifies otherwise, compensation deferral con-
tributions elected under this Section 4 shall be treated as em-
ployer contributions under the plan.
4.4. Calendar Year Dollar Limitation on Compensation
Deferral Contributions. In no event may a participant make a
compensation deferral contribution election which would result
in his elective deferrals (as defined below) for any calendar
year exceeding $7,000 (or such greater amount as may be pre-
scribed by the Secretary of Treasury to take into account cost-
of-living increases pursuant to Code Section 402(g)(5)). For
purposes of this subsection 4.4, the term "elective deferral"
means, with respect to any calendar year, the sum of any con-
tributions made by the participant:
(a) pursuant to an election to defer under a
cash or deferred arrangement (as defined in
Code Section 401(k)), to the extent not
includible in the participant's gross in-
come for that calendar year pursuant to
Code Section 402(e)(3) (determined without
regard to Code Section 402(g));
(b) to an individual retirement plan pursuant
to a simplified employee pension, to the
extent not includible in the participant's
gross income for that calendar year under
Code Section 402(h)(1)(B) (determined with-
out regard to Code Section 402(g));
(c) to a plan described in Code Section
501(c)(18); and
(d) applied toward the purchase of an annuity
contract under Code Section 403(b) pursuant
to a salary reduction agreement (within the
meaning of Code Section 3121(a)(5)(D)).
If a participant's elective deferrals with respect to any cal-
endar year exceed the annual dollar limit prescribed above, the
participant may notify the administrator in writing on or be-
fore the March 1 next following the close of such calendar year
of his election to have all or a portion of such excess elec-
tive deferrals (and the income allocated to such deferrals)
assigned to this plan and distributed in accordance with the
following provisions. This assignment must be accompanied by
the participant's written statement that if such amounts are
not distributed, the participant's elective deferrals will
exceed the limit imposed by Code Section 402(g) for the taxable
year in which the deferral occurred. The participant is deemed
to notify the administrator of any excess elective deferrals
that arise by taking into account only those elective deferrals
made to this plan and any other plans of the employer. In
either event, the administrator, in its sole discretion and
without regard to any other provision of the plan, may direct
the trustee to distribute to the participant on or before the
April 15 following immediately thereafter the participant's
excess deferrals (and the income allocated to such deferrals)
so allocated under this plan. Excess elective deferrals shall
be adjusted for any income or loss up to the date of
distribution. The income or loss allocable to excess elective
deferrals is the sum of: (1) income or loss allocable to the
participant's compensation deferral account for the taxable
year multiplied by a fraction, the numerator of which is such
participant's excess elective deferral for the year, and the
denominator of which is the participant's account balance
attributable to elective deferrals without regard to any income
or loss occurring during such taxable year; and (2) ten percent
of the amount determined under (1) multiplied by the number of
whole calendar months between the end of the participant's
taxable year and the date of distribution, counting the month
of distribution if distribution occurs after the 15th of such
month. The amount of such excess elective deferrals
distributed to a highly compensated employee in accordance with
the preceding sentence shall continue to be treated as
compensation deferral contributions for purposes of the actual
deferral percentage test described in subsection 4.5 below.
4.5. Limitation on Compensation Deferral Contribu-
tions. In no event shall the actual deferral percentage (as
defined below) of the highly compensated employees for any plan
year exceed the greater of:
(a) The actual deferral percentage of all other
eligible employees for such plan year mul-
tiplied by 1.25; or
(b) The actual deferral percentage of all other
eligible employees for such plan year mul-
tiplied by 2.0; provided that the actual
deferral percentage of the highly compen-
sated employees does not exceed that of all
other eligible employees by more than two
percentage points.
The "actual deferral percentage" of a group of participants for
a plan year means the average of the ratios (determined sepa-
rately for each participant in such group) of A to B, where A
equals the sum of:
(c) The compensation deferral contributions
credited to each such participant's accounts
for such plan year,
(d) The qualified nonelective contributions, if
any, credited to each such participant's
accounts for such plan year, and
(e) The qualified matching contributions, if
any, credited to each such participant's
accounts for such plan year,
and B equals the participant's compensation (as defined in
subsection 2.3) for such plan year (whether or not the employee
was a participant for the entire plan year). If the employer
so elects, the administrator may limit the period of time for
which compensation is taken into account to that portion of the
plan year in which the employee was an eligible employee under
the plan; provided that, this limit shall be applied uniformly
to all eligible employees under the plan for the plan year.
From time to time, the administrator shall determine from the
compensation deferral elections then on file whether the fore-
going limitation will be satisfied and, to the extent necessary
to ensure compliance with such limitation, may reduce the ap-
plicable percentages of compensation withheld, or to be with-
held, for the class of highly compensated employees who have
elected to defer the greatest percentage of compensation; pro-
vided that such reduction shall apply to the entire class of
highly compensated employees at each percentage level.
The employer may elect in the adoption agreement to have all or
a part of employer contributions treated as qualified nonelec-
tive contributions. "Qualified nonelective contributions"
means employer contributions that are fully vested at all times
and subject to the restrictions on distribution applicable to
compensation deferral contributions under Code Section 401(k)
and subsection 4.9 of the plan (without regard to subparagraph
(e) thereof).
Each participant with respect to whom a reduction in amounts
previously withheld from his compensation must occur shall have
the excess deferral amounts (and income allocable thereto) dis-
tributed to him in cash. The excess amounts previously with-
held (and any income allocable thereto) shall be distributed
within 2-1/2 months after the close of the plan year for which
they are in excess, but in no event later than the close of the
next following plan year. In the event that excess deferral
amounts (and the income allocable thereto) are not distributed
to participants within 2-1/2 months after the close of the plan
year for which such deferrals are in excess, an excise tax,
payable by the employer, shall be imposed upon the plan in an
amount equal to ten percent of the excess deferral amount, pur-
suant to Section 4979 of the Code. Excess contributions shall
be adjusted for any income or loss up to the date of distribu-
tion. The income or loss allocable to excess deferral contri-
butions is the sum of: (1) income or loss allocable to the par-
ticipant's compensation deferral contribution account (and, if
applicable, the qualified nonelective contribution subaccount,
or the qualified matching contribution subaccount, as appli-
cable, of the employer contribution account) for the plan year
multiplied by a fraction, the numerator of which is such par-
ticipant's excess contributions for the year, and the denomina-
tor of which is the participant's account balance attributable
to compensation deferral contributions (and employer contribu-
tions, if any of such contributions are included in the actual
deferral percentage test) without regard to any income or loss
occurring during such plan year; and (2) ten percent of the
amount determined under (1) multiplied by the number of whole
calendar months between the end of the plan year and the date
of distribution, counting the month of distribution if distri-
bution occurs after the 15th of such month. Excess deferral
contributions shall be treated as annual additions under the
plan.
Amounts distributed under this subsection shall first be treat-
ed as distributions from the participant's compensation defer-
ral contribution account and shall be treated as distributed
from the participant's employer contribution account (if such
contributions are treated as qualified nonelective contribu-
tions or qualified matching contributions) only to the extent
such excess contributions exceed the balance in the partici-
pant's compensation deferral contribution account.
4.6. Limitation on Voluntary and Employer Matching
Contributions. In no event shall the contribution percentage
(as defined below) of the highly compensated employees for any
plan year exceed the greater of:
(a) The contribution percentage of all other
eligible employees for such plan year
multiplied by 1.25; or
(b) The contribution percentage of all other
eligible employees for such plan year mul-
tiplied by 2.0; provided that the contribu-
tion percentage of the highly compensated
employees does not exceed that of all other
eligible employees by more than two per-
centage points or such lesser amount as the
Secretary of the Treasury shall prescribe
to prevent the multiple use of this
alternative limitation with respect to any
highly compensated employee.
The "contribution percentage" of a group of participants for a
plan year means the average of the ratios (determined sepa-
rately for each participant in such group) of A to B, where A
equals the sum of:
(c) The voluntary contributions, if any, credited
to each such participant's account (as
described in subsections 8.3 and 8.5) for
such plan year; and
(d) The matching contributions, if any, credited to
each such participant's account (as
described in subsections 8.3 and 8.6) for
such plan year,
and B equals the participant's compensation (as defined in sub-
section 2.3) for such plan year. If the employer so elects,
the administrator may limit the period of time for which com-
pensation is taken into account to that portion of the plan
year in which the employee was an eligible employee under the
plan; provided that, this limit shall be applied uniformly to
all eligible employees under the plan for the plan year.
Qualified matching contributions and qualified nonelective
contributions used to satisfy the ADP test may not also be used
to satisfy this test. Qualified nonelective contributions may
be used to satisfy this test only if the requirements of Sec-
tion 1.401(m)-1(b)(5) of the Income Tax Regulations are met.
Matching contributions that are forfeited to correct excess
aggregate contributions shall be disregarded for purposes of
the ACP test.
From time to time, the administrator shall determine from the
voluntary contribution elections then on file whether the fore-
going limitation will be satisfied and, to the extent necessary
to ensure compliance with such limitation, may restrict such
contributions for the remainder of the year or reduce the
applicable contribution percentages for the class of highly
compensated employees who have elected to contribute the
greatest percentages of compensation by returning amounts of
their voluntary contributions; provided that such reduction
shall apply to the entire class of highly compensated employees
at each percentage level. The determination of excess
contribution percentage under this subsection 4.6 shall be made
after the determinations under subsections 4.4 and 4.5.
Each participant with respect to whom a reduction is required
under this subsection 4.6 shall have the amount of voluntary
participant or matching contributions involved in such
reduction (and any income or losses allocable thereto) distri-
buted to him in cash within 2-1/2 months after the close of the
plan year, but in no event later than the close of the next
following plan year. "Excess aggregate contributions" shall
mean, with respect to any plan year, the excess of the aggre-
gate contribution percentage amounts taken into account in
computing the numerator of the contribution percentage actually
made on behalf of highly compensated employees for such plan
year, over the maximum contribution percentage amounts per-
mitted by this test (determined by reducing contributions made
on behalf of highly compensated employees in order of their
contribution percentages beginning with the highest of such
percentages). Such determination shall be made after first
determining excess deferrals and excess contributions. In the
event that excess aggregate contributions (and the income
allocable thereto) are not distributed to participants within
2-1/2 months after the close of the plan year for which such
contributions are in excess, an excise tax, payable by the
employer, shall be imposed upon the plan in an amount equal to
ten percent of the excess aggregate contribution amount, pur-
suant to Section 4979 of the Code. Excess aggregate contribu-
tions shall be adjusted for any income or loss up to the date
of distribution. The income or loss allocable to excess aggre-
gate contributions is the sum of: (1) income or loss allocable
to the participant's voluntary or employer matching contribu-
tion account (and, if applicable, the qualified nonelective
contribution subaccount of the employer contribution account)
for the plan year multiplied by a fraction, the numerator of
which is such participant's excess aggregate contributions for
the year and the denominator of which is the participant's
account balance attributable to voluntary or employer matching
contributions, whichever is applicable (and qualified nonelec-
tive contributions, if any of such contributions are included
in the actual contribution percentage test) without regard to
any income or loss occurring during such plan year; and (2) ten
percent of the amount determined under (1) multiplied by the
number of whole calendar months between the end of the plan
year and the date of distribution, counting the month of dis-
tribution if distribution occurs after the 15th of such month.
Excess voluntary contributions shall be returned to the
participant. Excess matching contributions, if forfeitable,
shall be applied to reduce future employer matching
contributions. Nonforfeitable excess matching contributions
shall be distributed to participants to whose accounts such
contributions were allocated as provided in the first sentence
of this paragraph.
4.7. Prohibition of Contributions by Highly Compen-
sated Employees. Notwithstanding the provisions of Sections 4
and 5, the employer may designate in its adoption agreement
that if a participant is deemed to be a highly compensated
employee for the plan year, such participant shall not be per-
mitted to make compensation deferral contributions or voluntary
contributions for that plan year.
4.8. Two or More Plans. If two or more plans of the
employers to which employer matching contributions, voluntary
contributions or compensation deferral contributions are made,
are treated as one plan for purposes of Code Section 410(b),
such plans shall be treated as one plan for purposes of this
Section 4. If a highly compensated employee participates in
two or more plans of the employers to which employer matching,
voluntary or compensation deferral contributions are made, then
such contributions made under the various plans shall be aggre-
gated for purposes of this Section 4 to determine the actual
deferral percentage ("ADP") and actual contribution percentage
("ACP") of such highly compensated employee under subsections
4.5 and 4.6, respectively. In the event that this plan satis-
fies the requirements of Sections 401(k), 401(a)(4), or 410(b)
of the Code only if aggregated with one or more other plans, or
if one or more other plans satisfy the requirements of such
Sections of the Code only if aggregated with this plan, then
this Section shall be applied by determining the ADP and ACP of
employees as if all such plans were a single plan. Plans may
be aggregated in order to satisfy Sections 401(k) and 401(m) of
the Code only if they have the same plan year.
If a highly compensated employee participates in two or more
cash or deferred arrangements that have different plan years,
all cash or deferred arrangements ending with or within the
same calendar year shall be treated as a single arrangement.
4.9. Distribution Restrictions. Compensation defer-
ral contributions, qualified nonelective contributions, and
qualified matching contributions, and income allocable to each
are not distributable to a participant or his beneficiary or
beneficiaries earlier than upon separation from service, death,
or disability. Such amounts may also be distributed upon:
(a) Termination of the plan without the estab-
lishment of another defined contribution
plan.
(b) The disposition by a corporation to an
unrelated corporation of substantially all
of the assets (within the meaning of Section
409(d)(2) of the Code) used in a trade
or business of such corporation if such
corporation continues to maintain this plan
after the disposition, but only with
respect to employees who continue employ-
ment with the corporation acquiring such
assets.
(c) The disposition by a corporation to an
unrelated entity of such corporation's
interest in a subsidiary (within the meaning
of Section 409(d)(3) of the Code), if such
corporation continues to maintain this
plan, but only with respect to employees
who continue employment with such subsidiary.
(d) The attainment of age 59 1/2 in the case of
a profit-sharing plan.
(e) The hardship of the participant as described
in subsection 12.5.
4.10. Other Requirements.
(a) For purposes of determining the ADP and ACP
of a participant who is a 5-percent owner
or one of the ten most highly-paid highly
compensated employees, the elective deferrals,
voluntary contributions, employer matching
contributions (and employer contributions if
treated as elective deferrals or employer matching
contributions for purposes of the ADP or ACP test,
respectively) and compensation of such participant
shall include the elective deferrals, voluntary
contributions, employer matching contributions
(and, if applicable, employer contributions) and
compensation for the plan year of family members
(as defined in Section 414(q)(6) of the Code).
Family members with respect to such highly
compensated employees shall be disregarded as
separate employees in determining the ADP and ACP
both for participants who are non-highly
compensated employees and for participants
who are highly compensated employees. Excess
contributions or excess aggregate contributions,
as the case may be, shall be allocated to
participants who are subject to the family member
aggregation rules of Section 414(q)(6) of the Code
in proportion to the contributions of each family
member that are combined in accordance with the
foregoing rules.
(b) For purposes of determining the ADP and ACP
tests, elective deferrals, voluntary contributions,
qualified nonelective contributions and qualified
matching contributions must be made before the last
day of the twelve-month period immediately following
the plan year to which contributions relate.
(c) The employer shall maintain records sufficient to
demonstrate satisfaction of the ADP and ACP tests
and the amount of qualified nonelective contributions
or qualified matching contributions, or both, used in
such tests.
(d) The determination and treatment of the ADP and ACP
amounts of any participant shall satisfy such other
requirements as may be prescribed by the Secretary of
the Treasury.
(e) Multiple use: If one or more highly compensated
employees participate in both a Section 401(k) plan
and a plan subject to the ACP test maintained by the
employer and the sum of the ADP and ACP of those
highly compensated employees subject to either or
both tests exceeds the aggregate limit (as defined
below), then the ACP of those highly compensated
employees who also participate in a Section 401(k)
plan will be reduced (beginning with such highly
compensated employee whose ACP is the highest) so
that the limit is not exceeded. The amount by which
each highly compensated employee's contribution
percentage is reduced shall be treated as an excess
aggregate contribution (and distributed in accordance
with the rules of subsection 4.6). The ADP and ACP
of the highly compensated employees are determined
after any corrections required to meet the ADP and
ACP tests. Multiple use does not occur if both the
ADP and ACP of the highly compensated employees does
not exceed 1.25 multiplied by the ADP and ACP of the
nonhighly compensated employees. "Aggregate limit"
means the sum of (i) 125 percent of the greater of
the ADP of the non-highly compensated employees for
the plan year or the ACP of non-highly compensated
employees under the plan subject to Code Section
401(m) for the plan year beginning with or within the
plan year of the 401(k) plan and (ii) the lesser of
200% or two plus the lesser of such ADP or ACP.
The word "lesser" shall be substituted for the word
"greater" in (i)above, and the word "greater" shall
be substituted for the word "lesser" after the phrase
"two plus the" in (ii) above, if it would result in a
larger aggregate limit.
(f) Hardship withdrawal: If a participant receives a
hardship withdrawal from this plan in accordance
with subsection 12.5, such participant's compensation
deferral contributions and voluntary contributions
will be suspended for the twelve-month period following
such withdrawal.
SECTION 5
Participant Contributions
5.1. Voluntary Participant Contributions. If the employer
has so specified in the adoption agreement, a participant may elect to make
voluntary contributions under the plan as of the beginning of the first pay
period coincident with or next following the date he becomes eligible to
participate under subsection 3.1, in an amount equal to a percentage of his
compensation for the plan year which is within the range specified by the
employer in its adoption agreement for this purpose. Each election by a
participant under this subsection 5.1 shall be made by filing the election
form furnished by the administrator at least 30 days (or such shorter time
period as may be established by the administrator) prior to the beginning
of the pay period or date on which such election is to be effective. A
participant's voluntary contributions shall be fully vested and
nonforfeitable at all times.
5.2. Deduction or Payment of Voluntary Contributions. A
participant's voluntary contributions must be made by regular payroll
deductions (in multiples of one percent) or in one or more lump sum cash
payments. Voluntary participant contributions deducted by the employer will
be paid to the trustee as soon as practicable after the date the contributions
were made. The administrator may limit the voluntary contribution percentage
elected by a participant who is a highly compensated employee in order to
satisfy the limitations of Section 4, and may limit the type of compensation
from which voluntary contributions may be made.
5.3. Variation, Discontinuance and Resumption of Voluntary
Contributions. Except as provided below, as of the dates specified for this
purpose by the employer in the adoption agreement, a participant may elect
to change his voluntary contribution rate (but not retroactively) within
the limits specified by the employer in its adoption agreement. A participant
may elect to discontinue making voluntary contributions (but not retroactively)
as of any pay period and resume making such contributions as of any such date.
Each election under this subsection 5.3 shall be made by filing the election
form furnished by the administrator at least 30 days (or such shorter time
period as may be established by the administrator) prior to the beginning of
the period or date as of which such election is to be effective.
5.4. No Deductible Employee Contributions. The administrator
will not accept deductible employee contributions which are made for a taxable
year beginning after December 31, 1986. Contributions made prior to that date
will be maintained in a separate account which will be nonforfeitable at all
times. The account will share in the gains and losses of the trust in the
same manner as described in Section 8 of the plan. No part of the deductible
employee contribution account will be used to purchase life insurance.
Subject to the Section 11 joint and survivor annuity requirements (if
applicable), the participant may withdraw any part of the deductible employee
contribution account by making a written application to the administrator.
SECTION 6
Employer Contributions
6.1. Employer Contributions. Subject to the limitations of
this Section 6 and Section 17, for each plan year of an employer, beginning
with the first plan year in which the plan is in effect as to the employer,
the employer will contribute to the trustee an annual amount required by (a)
or (b) below, as has been selected by the employer in the adoption agreement:
(a) Pension Plan: an amount which is equal to the
percentage of participants' compensation for the
plan year specified in the adoption agreement.
(b) Profit Sharing Plan: such amount as the employer, in
its discretion, shall determine. The employer shall
designate the plan year on account of which the
contribution is made and shall specify the amount of
the contribution or a definite basis or formula by
which the contribution can be determined within a
reasonable time after the end of that plan year.
The employer may specify in the adoption agreement
that all or part of employer contributions shall be
treated as qualified nonelective contributions,
pursuant to subsection 4.5 or 4.6, as the case may be.
Employer contributions made under this subsection 6.1 shall be allocated in
accordance with subsection 8.7.
6.2. Compensation Deferral Contributions. Subject to the
limitations of this Section 6, Section 4 and Section 17, the employer will
contribute to the trustee on behalf of each participant the amount of such
participant's compensation deferral contributions elected under subsection 4.1.
Such compensation deferral contributions shall be paid by the employer to the
trustee as soon as practicable after being withheld, but not later than 30 days
(or such later date as is permitted by law or regulation) following the end of
the month in which such amounts are withheld.
6.3. Employer Matching Contributions. Subject to the
limitations of this Section 6, Section 4 and Section 17, if the employer has
so specified in its adoption agreement, in addition to the compensation
deferral contributions made under subsection 6.2, the employer shall contribute
the amount which is specified by the employer in the adoption agreement. Such
"employer matching contributions" shall be paid to the trustee as of the last
day of each plan year, unless the employer pays them to the trustee more
frequently. If the employer so elects in the adoption agreement, all or part
of employer matching contributions shall be qualified matching contributions.
"Qualified matching contributions" means employer matching contributions which
are nonforfeitable at all times and subject to the restrictions on distribution
applicable to compensation deferral contributions under Code Section 401(k)
and subsection 4.9 of the plan (without regard to subparagraph (e) thereof).
6.4. Payment of Employer Contributions. An employer's total
contribution under this Section 6 for a plan year shall be due on the last day
of the plan year and, if not paid by the end of that year, shall be payable to
the trustee as soon as practicable thereafter, without interest, but not later
than the time prescribed by law for filing the employer's federal income tax
return for the taxable year with or within with such plan year ends, including
extensions thereof.
6.5. Verification of Employer Contributions. If for any
reason the employer decides to verify the correctness of any amount or
calculation relating to an employer contribution for any plan year, the
certificate of an independent accountant selected by the employer shall be
conclusive as to all persons.
6.6. No Responsibility for Collection or Verification. The
trustee shall have no responsibility or obligation to collect any contributions
under the plan or to verify the correctness of the amount of any contributions
under the plan.
6.7. Limitations on Employer Contributions. An employer's
total contribution for any plan year under this Section 6 is conditioned on
its deductibility under Section 404 of the Code in that year, shall comply with
the contribution limitations set forth in Section 17, and shall not exceed an
amount equal to the maximum amount deductible on account thereof by the
employer for that year for purposes of federal taxes on income. Employer
contributions to the plan may be made without regard to profits.
SECTION 7
Period of Participation
7.1. Settlement Dates. A participant's "settlement date" will
be the date on which his employment with the employer is terminated because of
the first to occur of the following events:
(a) Normal or Late Retirement. The participant retires
on and after attaining the normal retirement age
specified by the employer in the adoption agreement.
A participant's right to his account balances shall
be nonforfeitable on and after his normal retirement
age.
(b) Early or Disability Retirement. The participant
retires at or after attaining the early retirement
age and service, if any, specified by the employer
in the adoption agreement, or at any age because
of disability.
(c) Death. The participant's death.
(d) Resignation or Dismissal. The participant resigns
or is dismissed from the employ of the employer
before his retirement under subparagraph (a) or
(b) of this subsection.
A participant who is transferred to employment with a related
employer which has not adopted the plan will not be deemed to
have terminated employment with the employer, but his partici-
pation in the plan will be restricted in accordance with the
provisions of subsection 7.2.
7.2. Restricted Participation. In the event payment of part or
all of a participant's account balances cannot be made at his settlement date or
in the event a participant is transferred to a related employer which is not
an employer under the plan or no longer meets the requirements designated by
the employer under subparagraph 3.1(c), the participant or his beneficiary will
be considered as a participant for all purposes of the plan, except as follows:
(a) No share of employer contributions or employer
matching contributions or forfeitures will be
credited to his account after his settlement
date (except as otherwise provided in Section 8),
the date he is transferred to employment with
such related employer or the date he no longer
meets the requirements of subparagraph 3.1(c).
(b) He will not be permitted to make compensation
deferral contributions or voluntary contributions
under the plan.
(c) The beneficiary of a deceased participant cannot
designate a beneficiary under subsection 10.8.
SECTION 8
Accounting
8.1. Separate Accounts. The administrator shall maintain the
following separate accounts in the name of each participant:
(a) A "compensation deferral contribution account" to
reflect the compensation deferral contributions
made by the employer pursuant to the participant's
election under subsection 4.1, and the income,
losses, appreciation and depreciation attributable
thereto.
(b) An "employer matching contribution account" to
reflect the participant's allocable share of
employer matching contributions, if any, made
pursuant to subsection 6.3, and the income,
losses, appreciation and depreciation attributable
thereto.
(c) An "employer contribution account" to reflect the
participant's allocable share of the employer
contributions, if any, made pursuant to subsection
6.1, and the income, losses, appreciation and
depreciation attributable thereto.
(d) A "voluntary contribution account" to reflect the
participant's voluntary contributions, if any,
made pursuant to subsection 5.1 of the plan, which
shall consist of two subaccounts: one to reflect
the participant's voluntary contributions made prior
to January 1, 1987 and the earnings and market
value adjustments thereon; and the other to reflect
his voluntary contributions made on and after that
date and the income, losses, appreciation and
depreciation attributable thereto.
(e) A "participant rollover account" to reflect each
transfer to the trust fund pursuant to subsection
8.10 of rollover amounts, rollover contributions
or benefits under any plan which meets the
requirements of Section 401(a) of the Code that
are attributable to the participant, and the income,
losses, appreciation and depreciation attributable
thereto.
If the employer has authorized the establishment of investment options in its
adoption agreement, each account maintained for a participant will consist of
separate subaccounts which will reflect the portion of each participant's
account invested in each of the investment options in accordance with subsection
9.2. The administrator or the trustee also may maintain such other accounts or
subaccounts in the names of participants or otherwise as it considers necessary
or advisable. Unless the context indicates otherwise, the term "account" shall
include all accounts (and subaccounts) maintained for a participant.
8.2. Accounting Dates. A "regular accounting date" is the
date specified for this purpose by the employer in the adoption agreement. A
"special accounting date" will be any accounting date specified as such by the
employer subject to the provisions of subsection 16.5. The term "accounting
date" shall include both a regular accounting date and a special accounting
date. If an accounting date is not a day on which the trustee is open for the
transaction of business, the next preceding business day or other date
designated by the trustee shall be the accounting date.
8.3. Adjustment of Accounts. The income, losses, appreciation
and depreciation of the trust fund and each investment option will be allocated
as they arise to the accounts of each participant with an interest therein, pro
rata, according to the portion of the participant's account balance invested in
the trust fund or that investment option.
8.4. Valuation Date. Adjustments under subsection 8.3 shall
be made as of each valuation date, based on the fair market value of the assets
of the trust fund and each investment option as of that date. A "valuation
date" means each business day of the sponsor. In determining the fair market
value of securities held in the trust fund which are listed on a registered
stock exchange, the trustee shall value the same at the prices they were last
traded on such exchange preceding the close of business on the valuation date.
If such securities were not traded on the valuation date, or if the exchange on
which they are traded was not open for business on the valuation date, then the
securities shall be valued at the prices they were last traded prior to the
valuation date. Any unlisted security held in the trust fund shall be valued
at it's bid price as of or next preceding the close of business on the valuation
date. In determining the fair market value of assets other than securities for
which trading or bid prices can be obtained, the trustee may appraise such
assets itself, or in its discretion, employ one or more appraisers for that
purpose and rely on the values established by such appraiser or
appraisers.
8.5. Crediting of Compensation Deferral Contributions and
Voluntary Contributions. Compensation deferral contributions made on behalf
of a participant shall be credited to his compensation deferral contribution
account. Each participant's voluntary contributions, if any, will be credited
to his voluntary contribution account.
8.6. Allocation and Crediting of Employer Matching
Contributions. The employer's matching contributions under subsection 6.3 of
the plan shall be allocated and credited to the employer matching contribution
accounts of such participants as the employer has specified in its adoption
agreement in the manner specified by the employer in the adoption agreement.
However, if the participant has elected any withdrawal from his compensation
deferral contribution account during the applicable period, then, for purposes
of determining the allocation of employer matching contributions for the period,
such withdrawal shall be deemed to have occurred first from any compensation
deferral contributions which the participant made during that period. In no
event, however, shall employer matching contributions be credited to a partici-
pant's employer matching contribution account which would exceed the limitations
specified in subsection 4.6 or Section 17 of the plan.
8.7. Allocation and Crediting of Employer Contributions. As of
the accounting date coincident with the last day of the plan year, the
employer's contribution for the plan year ending on that date shall be allo-
cated and credited to the employer contribution accounts of such participants
as the employer has specified in its adoption agreement, based upon such part-
icipants' compensation (calculated as specified by the employer in the adoption
agreement), according to (a) or (b) below, as specified by the employer in the
adoption agreement:
(a) Compensation Allocation. To the employer
contribution accounts of all participants,
pro rata, according to the compensation
paid to them by the employer during that
plan year.
(b) Permitted Disparity Allocation. To the
employer contribution accounts of all
participants as follows:
(i) First, pro rata, according to
the compensation paid to them
by the employer during that
plan year, but not in excess of
three percent of compensation.
(ii) Second, any employer contribu-
tions remaining after the allo-
cation in (i) above will be
allocated to each participant's
account, pro rata, according to
the compensation paid to them
by the employer during that
plan year in excess of the
integration level (as specified
by the employer in the adoption
agreement), but not in excess
of three percent of such excess
compensation.
(iii) Third, any employer contribu-
tions remaining after the allo-
cations in (i) and (ii) above
will be allocated to each par-
ticipant's account, pro rata,
according to the sum of the
total compensation and the
compensation in excess of the
integration level paid to them
by the employer while they were
participants during that plan
year, but not in excess of the
maximum disparity rate (as defined
below) multiplied by the sum of such
compensation and excess compensation.
(iv) Finally, any employer contributions
remaining after the allocations above
will be allocated to each participant's
account, pro rata, according to the
compensation paid to them by the
employer during that plan year.
If the employer has adopted this plan as a paired defined contribution plan,
only one of the plans may elect to allocate employer contributions in accordance
with subparagraph (b) above. The maximum disparity rate shall be:
(i) 2.7% if the integration level is either:
(A) the taxable wage base under
Section 3121(a) of the Code as
in effect at the beginning of
the plan year (the "TWB"); or
(B) not more than the greater of
$10,000 or 20% of the TWB;
(ii) 2.4% if the integration level is more
than 80% of the TWB but less than the
TWB; and
(iii) 1.3% if the integration level is:
(A) more than the greater of
$10,000 or 20% of the TWB; but
(B) not more than 80% of the TWB.
The integration level shall be equal to the taxable wage base or such lesser
amount elected by the employer in the adoption agreement. The taxable wage
base is the contribution and benefit base in effect under Section 230 of the
Social Security Act at the beginning of the plan year. This plan may not
provide for permitted disparity if the employer maintains any other plan that
provides for permitted disparity and benefits any of the same participants. A
participant is treated as benefitting under the plan for any plan year during
which the participant received or is deemed to receive an allocation in
accordance with Section 1.410(b)-3(a) of the Income Tax Regulations.
8.8. Allocation and Crediting of Forfeitures. As of the
accounting date coincident with the end of the plan year in which distribution
of the participant's benefits occurs (or in which the participant incurs five
consecutive one-year breaks in service, if earlier), the amount by which a
participant's accounts are reduced under subsection 10.2 (or subsection 19.5,
if applicable) on account of such participant's resignation or dismissal from
employment with the employer prior to becoming fully vested in his accounts
shall be a "forfeiture". Prior to that date, all of a participant's accounts
shall be subject to adjustment under subsection 8.3. Forfeitures shall be
applied in one of the following methods, as specified by the employer in the
adoption agreement:
(a) Forfeitures shall be allocated and credited to
the employer contribution accounts of participants
as though they were additional employer contri-
butions (but not in excess of the limitations of
Section 415 of the Code); or
(b) Forfeitures shall be applied first, to reduce the
amount of employer matching contributions, if any,
which are made pursuant to subsection 6.3 of the
plan, and then to reduce the employer contributions,
if any, which are made pursuant to subsection 6.1
of the plan.
In the event a participant is reemployed by an employer after distribution of
his benefits but before incurring five consecutive one-year breaks in service,
the provisions of subsection 14.3 shall apply.
8.9. Charging Withdrawals and Distributions. All withdrawals,
payments, loan disbursements and distributions made under the plan to or for the
benefit of a participant or his beneficiary shall be charged to the proper
accounts of such participant.
8.10. Rollovers. At the direction of the administrator, and
in accordance with such rules as the administrator may establish from time to
time, rollovers described in Section 402(c) of the Code, rollover contributions
described in Section 408(d)(3) of the Code and benefits under another plan which
meets the requirements of Section 401(a) of the Code that are attributable to
an employee covered under subsection 3.1(c) of the plan may be transferred to
the trust fund and received by the trustee. A rollover account will be
established in the name of each such employee in accordance with subparagraph
8.1(e) for rollovers or transfers made with respect to that employee. Except
to the extent otherwise provided in the plan or determined by the administrator,
such rollover accounts shall be subject to the same investment elections and
the same accounting, withdrawal, distribution and other provisions of this plan
as the other accounts of the employee, but no participant or employer contri-
butions made under this plan nor forfeitures that arise under this plan shall
be credited to such rollover accounts. Rollovers, rollover contributions and
benefits under other qualified plans that are transferred to the trust fund
pursuant to this subsection shall be credited to the appropriate participant
rollover accounts. If the administrator determines to accept a direct or
indirect transfer on behalf of an employee from any defined benefit plan, any
defined contribution plan subject to the funding standards of Section 412 of
the Code or any defined contribution plan that would require a joint and
survivor annuity or pre-retirement annuity under Sections 401(a)(11) and 417
of the Code with respect to that employee, the provisions of Section 11 shall
apply.
8.11. Statements. At least once each year, the administrator
will furnish to each participant a statement reflecting the condition of the
participant's accounts in the trust fund.
SECTION 9
Investments
9.1. Investment Option Selection. If the employer has speci-
fied in its adoption agreement that each participant may select the investment
options offered under the plan in which his account balances and the contribu-
tions to be made by him or on his behalf under the plan will be invested, the
provisions of this Section 9 shall be applicable. The employer shall designate
in the adoption agreement whether each participant in the plan may direct the
investment option selection for all accounts maintained on his behalf (and the
contributions made to such accounts) or only for those accounts specified by
the employer in the adoption agreement. Each participant, by writing filed
with the administrator at least 30 days (or such shorter time period as may be
established by the administrator) prior to the first day as of which this
Section is applicable, may specify the percentage (in whole multiples of such
percentages as the employer specifies in its adoption agreement for this purpose
and not exceeding 100 percent) of the future contributions to be made by him
or on his behalf to be invested in each of the investment options established
under the trust, as described in subsection 9.2. Each participant, by writing
filed with the administrator also may specify the percentage (in whole multiples
of such percentages as the employer specifies in its adoption agreement and not
exceeding 100 percent) of his current account balances to be invested in each
of the investment options. Unless the administrator (with the consent of the
trustee) specifies otherwise, a participant may execute separate investment
elections with respect to his current account balances under the plan and the
future contributions to be made to the plan by him or on his behalf.
9.2. Investment Option Subaccounts. The administrator will
maintain subaccounts reflecting the portion of each participant's compensation
deferral contribution account, voluntary contribution account, participant
rollover contribution account, employer matching contribution account and
employer contribution account invested in one or more of the investment options
established under the trust, as agreed to by the employer and the trustee. If
the employer so directs, an investment fund may be invested entirely in
"qualifying employer securities," as that term is defined in Section 407(d)(5)
of ERISA. The trustee shall invest such contributions and each participant's
account balances in an investment option or options in accordance with the
directions given the trustee by the administrator, but shall have no obligation
or duty to verify the correctness of any such directions.
9.3. Elections to Change Investments. As of each valuation
date (or such other date or dates as may be established by the administrator
with the consent of the trustee), a participant may elect by writing filed with
the administrator at least 30 days (or such shorter time period as may be estab-
lished by the administrator) prior to the date as of which such election is to
be effective, and within the limits specified in subsection 9.1:
(a) To select, based upon a percentage, totaling 100%,
the investment option or options in which the
aggregate credit balance of his subaccounts are
to be redistributed; and
(b) Except as provided in the last sentence of
subsection 9.1, to change his direction
with respect to the investment of any con-
tributions made by him or for his benefit
after such date.
Unless a participant elects to change his investment direction with respect to
his account balances and contributions made to him or on his behalf, such
contributions and account balances will be invested in accordance with the
investment directions last filed with the administrator. During any period in
which no direction as to the investment of contributions made by a participant
or for his benefit, or the participant's account balances, is in effect with
respect to the participant, such contributions and the participant's account
balances will be invested in such manner as the administrator may determine.
9.4. Accounting for Investments. In the event a participant
directs the transfer of his account balances from one investment option to
another investment option, the participant's subaccount invested in the invest-
ment option from which such transfer is made will be charged with the amount
transferred, and the subaccount invested in the investment option to which such
transfer is made shall be credited with the amount so transferred as of the
effective date of such transfer. Any forfeiture allocated to a participant's
employer matching or contribution account in accordance with subsection 8.8 will
be invested in the same manner as specified in the participant's current invest-
ment election as to future contributions.
9.5. Participant Directed Brokerage Accounts. If one of the
investment options established under the plan is a participant directed broker-
age account, the trustee shall make purchases or sales of property for a parti-
cipant directed brokerage account as the participant directs in writing.
However, pending investment of his account, the trustee may invest any portion
of the assets in a participant's account which is held in cash or cash equiva-
lents in short term fixed income investments. A participant shall be entitled
to give orders directly to a broker for the purchases and sale of securities.
A participant may not require the trustee to:
(a) enter into a general partnership or a joint
venture;
(b) engage in a transaction with respect to
commodities;
(c) acquire any property that will be subject
to acquisition or other indebtedness;
(d) acquire any securities other than those
listed on a recognized national exchange or
quoted by the National Association of Secu-
rities Dealers automatic quotation system;
(e) write or acquire any option with respect to
property of any kind;
(f) acquire any real property in violation of
local laws on the holding of such property
or acquire any non-commercial real
property;
(g) acquire any franchise or similar right or
property; or
(h) engage in any transaction that the trustee
in good faith believes to be a transaction
prohibited by ERISA.
Each participant shall indemnify and hold the employer, the administrator and
the trustee harmless from and against any and all claims, obligations, liabili-
ties, costs and expenses (including reasonable attorneys' fees) arising from
any investment direction given by the participant in accordance with this sub-
section 9.5. Notwithstanding the provisions of the trust, all expenses incurred
in connection with the sale, investment and reinvestment of assets in accordance
with this subsection 9.5 (including, but not limited to custodial, maintenance,
investment management, brokerage, postage, express and insurance charges, and
transfer taxes) shall be charged to the appropriate accounts of participants
who elect to direct investment of their accounts. By writing filed with the
trustee, a participant may direct the trustee to liquidate all the assets held
subject to his individual direction at fair market value (as determined by the
trustee after consulting with the participant). The amount realized by the
trustee shall be credited to the participant's accounts under the plan and
shall thereafter be invested and reinvested by the trustee in accordance with
the applicable provisions of the trust agreement.
9.6. Investment Restrictions. No assets of the trust may be
invested in "collectibles" as that term is defined in Section 408(m) of the
Code. If the sponsor consents, life insurance contracts may be held for a
participant, subject to the following provisions of this subsection 9.6. For
purposes of this subsection, ordinary life insurance contracts are contracts
with both nondecreasing death benefits and nonincreasing premiums. If such
contracts are held, less than 1/2 of the aggregate employer contributions allo-
cated to any participant will be used to pay the premiums attributable to them.
No more than of the aggregate employer contributions allocated to any partici-
pant will be used to pay the premiums on term life insurance contracts,
universal life insurance contracts, and all other life insurance contracts which
are not ordinary life. The sum of 1/2 of the ordinary life insurance premiums
and all other life insurance premiums will not exceed of the aggregate employer
contributions allocated to any participant. Subject to the survivor annuity
requirements of Section 11, the contracts on a participant's life will be
converted to cash or an annuity or distributed to the participant upon commence-
ment of benefits. The trustee shall apply for and will be the owner of any
insurance contract held under the terms of this plan. The insurance contract(s)
must provide that proceeds will be payable to the trustee; however, the trustee
shall be required to pay over all proceeds of the contract(s) to the partici-
pant's designated beneficiary in accordance with the distribution provisions
of this plan. A participant's spouse will be the designated beneficiary of the
proceeds in all circumstances unless a qualified election has been made in
accordance with Section 11, if applicable. Under no circumstances shall the
trust retain any part of the proceeds. In the event of any conflict between
the terms of this plan and the terms of any insurance contract purchased
hereunder, the plan provisions shall control. Any dividends or credits earned
on insurance contracts will be allocated to the participant's account derived
from employer contributions for whose benefit the contract is held.
SECTION 10
Payment of Account Balances
10.1. Retirement or Death. If a participant's settlement date
occurs under subparagraph 7.1(a), (b) or (c) on account of his retirement,
disability or death, his entire account balance will be fully vested and nonfor-
feitable and will be payable under subsection 10.3 or 10.4.
10.2. Resignation or Dismissal. If a participant's
settlement date occurs under subparagraph 7.1(d) on account of
his resignation or dismissal, his account balances, reduced in
certain cases as required below, will be payable under subsec-
tion 10.3 (or 10.4 if the participant dies before the commence-
ment of his benefits). If at the date the participant's em-
ployment terminates the participant has not been a participant
in the plan for his applicable "vesting period" (as defined
below), the participant's employer matching contribution ac-
count balance and employer contribution account balance as of
his settlement date (after any adjustments then required) will
be reduced to an amount equal to the "vested percentage" (as
defined below) of such balances, except as otherwise provided
in the next sentence. A participant's applicable "vesting
period" is the applicable vesting period as specified by the
employer in the adoption agreement, based on his years of ser-
vice with his employer. Except as may be required under sub-
section 19.5, of the plan, the "vested percentage" of a partic-
ipant in his employer contribution and employer matching con-
tribution account balances will be the percentage specified by
the employer in the adoption agreement for this purpose. A
participant's interests in his compensation deferral contribu-
tion account, voluntary contribution account and participant
rollover account (and employer contribution account, to the
extent employer contributions are utilized to satisfy the ADP
test under subsection 4.5 or the ACP test under subsection 4.6)
shall be fully vested and nonforfeitable at all times. If the
employer has specified under subsection 3.1 that two years of
service are required for eligibility purposes, the vested per-
centage of all participant accounts shall be one hundred per-
cent.
10.3. Manner of Distribution. Subject to the provi-
sions of this Section 10 and Section 11, after each partici-
pant's settlement date, distribution of the net credit balances
in the participant's accounts, after all required adjustments
have been completed, will be made to the participant by payment
in a lump sum, unless the employer has specified in the adop-
tion agreement that a participant may elect to receive payment
in a series of substantially equal annual, semi-annual, quar-
terly or monthly installments, or unless the joint and survivor
provisions of Section 11 apply because the employer has adopted
this plan as a money purchase pension plan or because the em-
ployer has adopted this plan as a profit sharing plan and has
elected in the adoption agreement to provide a joint and sur-
vivor annuity form of payment. If the participant may elect
the form of payment, then his account balances will be paid to
him (or, in the event of his death, to his spouse or designated
beneficiary) in accordance with such election. If the partici-
pant has not filed the appropriate election with the adminis-
trator (or if such election is not permitted), his account bal-
ance will be paid in a lump sum, subject to the provisions of
Section 11, if applicable. If the participant's interest is to
be distributed in other than single sum, the following minimum
distribution rules shall apply on or after the required begin-
ning date to determine the amount to be distributed each year:
(a) If a participant's benefit is to be dis-
tributed over (i) a period not extending
beyond the life expectancy of the partici-
pant or the joint life and last survivor
expectancy of the participant and the par-
ticipant'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 distri-
butions for the first distribution calendar
year, must at least equal the quotient
obtained by dividing the participant's
benefit by the applicable life expectancy.
(b) 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
(i) the applicable life expectancy, or (ii)
if the participant's spouse is not the
designated beneficiary, the applicable
divisor determined from the table set forth
in Q&A-4 of Section 1.401(a)(9)-2 of the
Income Tax Regulations. Distributions
after the death of the participant shall be
distributed using the applicable life ex-
pectancy in (a) above as the relevant divi-
sor without regard to Regulations Section
1.401(a)(9)-2.
(c) The minimum distribution required for the
participant's first distribution calendar
year must be made on or before the partici-
pant's required beginning date. The mini-
mum distribution for other calendar years,
including the minimum distribution for the
distribution calendar year in which the
participant's required beginning date
occurs, must be made on or before December
31 of that distribution calendar year.
10.4. Death Distribution Provisions. If the partic-
ipant dies after distribution of the participant's interest has
begun, the remaining portion of such interest will continue to
be distributed at least as rapidly as under the method of dis-
tribution being used prior to the participant's death. If a
participant dies prior to the commencement of his benefit pay-
ments under the plan, his account balances will be distributed
in a lump sum, unless the employer has specified in the adop-
tion agreement that distributions may be made by installment
payments and the participant has elected payment in that form
to his spouse or other beneficiary, as provided in subsection
10.8, or unless the provisions of Section 11 apply. If the
participant dies before distribution of his or her interest
begins, 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, except that, if
installment payments may be elected, as specified by the em-
ployer in the adoption agreement, an election may be made to
receive distributions in accordance with (a) or (b) below:
(a) if any portion of the participant's inter-
est is payable to a designated beneficiary,
distributions may be made over the life of,
or over a period certain not greater than
the life expectancy of, the designated ben-
eficiary, commencing on or before December
31 of the calendar year immediately
following the calendar year in which the
participant died;
(b) if the designated beneficiary is the par-
ticipant's surviving spouse, the date dis-
tributions are required to begin in accor-
dance with (a) above shall not be earlier
than the later of (1) December 31 of the
calendar year immediately following the
calendar year in which the participant died
and (2) December 31 of the calendar year in
which the participant would have attained
age 70-1/2.
If elections are permitted, but the participant has not made an
election pursuant to this subsection by the time of his death,
the participant's designated beneficiary must elect the method
of distribution no later than the earlier of (1) December 31 of
the calendar year in which distributions would be required to
begin under this subsection, or (2) December 31 of the calendar
year which contains the fifth anniversary of the date of death
of the participant. If the participant has no designated bene-
ficiary, or if the designated beneficiary does not elect a
method of distribution (or the adoption agreement does not per-
mit elections), distribution of the participant's entire inter-
est must be completed by December 31 of the calendar year con-
taining the fifth anniversary of the participant's death. If
the surviving spouse dies after the participant, but before
payments to such spouse begin, the provisions of (a) above
shall be applied as if the surviving spouse were the partici-
pant. For purposes of this subsection, any amount paid to a
child of the participant will be treated as if it had been paid
to the surviving spouse if the amount becomes payable to the
surviving spouse when the child reaches the age of majority.
For purposes of this subsection, distribution of a partici-
pant's interest is considered to begin on the participant's
required beginning date (or the date distribution is required
to begin to the surviving spouse pursuant to (b) above).
10.5. Commencement of Distributions. Except as
provided below in this subsection, payment of a participant's
benefits will be made (or installment payments will commence)
within a reasonable time after his settlement date, but not
later than 60 days after the latest of (a) the end of the plan
year in which a participant attains normal retirement age, (b)
the end of the plan year in which the participant terminates
his employment with the employer, or (c) such later date on
which the amount of the payment can be ascertained by the
administrator. Distribution of a participant's benefits shall
be made (or installment payments shall commence) no later than
the participant's required beginning date as defined in sub-
paragraph 10.11(d). Notwithstanding the foregoing, if a par-
ticipant has elected, by filing a written designation with the
administrator prior to January 1, 1984, to have distribution of
his benefits commence in accordance with the terms of a pre-
decessor plan as in effect immediately preceding January 1,
1984, then distribution of such participant's benefits will be
made in accordance with that designation, unless revoked by the
participant, except that, for calendar years beginning after
December 31, 1988, such distributions must meet the minimum
distribution incidental benefit requirements in Section
1.401(a)(9)-2 of the Income Tax Regulations.
10.6. Distribution Requirements. All distributions
required under this Section shall be determined and made in
accordance with the Income Tax Regulations under Section
401(a)(9), including the minimum distribution incidental bene-
fit requirement of Section 1.401(a)(9)-2 of the regulations.
The entire interest of a participant must be distributed or
begin to be distributed no later than the participant's requir-
ed beginning date. As of the first distribution calendar year,
distributions, if not made in a single-sum, may only be made
over one of the following periods (or a combination thereof):
(a) the life of the participant,
(b) the life of the participant and a desig-
nated beneficiary,
(c) a period certain not extending beyond the
life expectancy of the participant, or
(d) a period certain not extending beyond the
joint and last survivor expectancy of the
participant and a designated beneficiary.
10.7. Consent to Distribution. If a participant's
settlement date occurs and the value of the participant's vest-
ed account balance derived from employer and employee contribu-
tions is not greater than $3,500, the participant will receive
a distribution of the value of the entire vested portion of
such account balance and the nonvested portion will be treated
as a forfeiture. For purposes of this subsection, if the value
of a participant's vested account balance is zero, the partici-
pant shall be deemed to have received a distribution of such
vested account balance. If a participant's settlement date
occurs and the participant elects, in accordance with the re-
quirements below, to receive the value of his vested account
balance, the nonvested portion will be treated as a forfeiture.
If a participant receives or is deemed to receive a distribu-
tion pursuant to this subsection and the participant resumes
employment covered under this plan, the participant's employer-
derived account balance may be restored pursuant to subsection
14.3.
If the value of participant's vested account balance derived
from employer and employee contributions exceeds (or at the
time of any prior distribution exceeded) $3,500, and the ac-
count balance is immediately distributable, the participant
must consent to any distribution of such account balance. The
consent of the participant shall be obtained in writing within
the 90-day period ending on the date proposed for distribution.
An account balance is immediately distributable if any part of
the account balance could be distributed to the participant
before the participant attains age 65. The administrator shall
notify the participant of the right to defer any distribution
until the participant's account balance is no longer immedi-
ately 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 re-
quirements of Code Section 417(a)(3), and shall be provided no
less than 30 days and no more than 90 days prior to the date
proposed for distribution.
The consent of the participant shall not be required to the
extent that a distribution is required to satisfy Section
401(a)(9) or Section 415 of the Code. In addition, upon termi-
nation of this plan, the participant's account balance may,
without the participant's consent, be distributed to the par-
ticipant or transferred to another defined contribution plan
(other than an employee stock ownership plan as defined in
Section 4975(e)(7) of the Code) within the same controlled
group. Notwithstanding the foregoing, the failure of a partic-
ipant to consent to a distribution while a benefit is immedi-
ately distributable, within the meaning of this subsection,
shall be deemed to be an election to defer commencement of
payment of any benefit sufficient to satisfy this subsection.
If a distribution is one to which Sections 401(a)(11) and 417
of the Code do not apply, such distribution may commence less
than 30 days after the notice required under Section
1.411(a)-11(c) of the Income Tax Regulations is given, provided
that:
(a) The administrator clearly informs the par-
ticipant that the participant has a right
to a period of at least 30 days after re-
ceiving the notice to consider whether or
not to elect a distribution (and, if appli-
cable, a particular distribution option),
and
(b) the participant, after receiving the no-
tice, affirmatively elects a distribution.
10.8. Beneficiary Designation. Each participant
from time to time, by signing a form furnished by the adminis-
trator, may designate any person or persons (who may be desig-
nated contingently or successively) to whom his account balanc-
es under the plan are to be paid if he dies before he receives
all of such account balances. Each beneficiary designation
form signed by a participant will be effective only when filed
with the administrator and when so filed will cancel all such
beneficiary designation forms signed earlier. Notwithstanding
the foregoing, if a deceased participant is survived by his
spouse, such spouse automatically shall be his sole primary
beneficiary unless the participant has designated another per-
son or persons as his primary, sole or co-beneficiary and the
surviving spouse has consented thereto. Such consent by a sur-
viving spouse shall be in writing filed with the administrator,
shall acknowledge the effect of such designation and shall be
witnessed by the administrator or a notary public. If a par-
ticipant dies without leaving a surviving spouse or having
failed to designate a beneficiary as provided above or if his
spouse or designated beneficiary dies before him or before com-
plete distribution of his account balances, the administrator
in its discretion may direct the trustee to pay the partici-
pant's account balances to either:
(a) one or more of the participant's relatives
by blood or marriage and in such propor-
tions as the administrator determines; or
(b) the legal representative or representatives
of the estate of the last to die of the
participant and his designated beneficiary.
The phrase "designated beneficiary" means the person or persons
designated by a participant as his beneficiary in the last
effective beneficiary designation form filed with the adminis-
trator under this subsection and to whom a deceased partici-
pant's account balances are payable under the plan. The term
"beneficiary" means the natural or legal person or persons to
whom a deceased participant's account balances are payable
under this subsection. No beneficiary may designate another
beneficiary.
10.9. Missing Participants or Beneficiaries. Each
participant must file with the administrator from time to time
in writing his and his designated beneficiary's post office
address and each change of any such address. If a participant
dies before he receives all of his benefits under the plan, his
beneficiary must file any change in his post office address
with the administrator. A communication, statement or notice
addressed to a participant or beneficiary at his last post
office address filed with the administrator or shown on his
employer's records, will be binding on the participant and his
beneficiary for all purposes of the plan. If the administrator
notifies the participant or his beneficiary that he is entitled
to a payment and also notifies him of this subsection, and the
participant or beneficiary fails to claim his benefits or make
his whereabouts known to the administrator within three years
after the notification, the account of the participant or bene-
ficiary will be disposed of as follows:
(a) If the whereabouts of the participant's
designated beneficiary then is known to the
administrator, payment or distribution will
be made to the designated beneficiary; or
(b) If the whereabouts of the participant's
designated beneficiary then is unknown to
the administrator, payment or distribution
will be made to the participant's heirs, as
determined under the laws of the
Commonwealth of Massachusetts as if the
participant had died on the date of such
distribution.
10.10. Facility of Payment. When, in the opinion of
the administrator, a participant or beneficiary is under a
legal disability or is incapacitated in any way so as to be
unable to manage his financial affairs, the administrator may
direct the trustee to make payments to the participant or his
beneficiary or his legal representative.
10.11. Definitions. For purposes of this Section
10, the following terms shall have the following meanings:
(a) Applicable life expectancy. The life ex-
pectancy (or joint and last survivor expec-
tancy) calculated using the attained age of
the participant (or designated beneficiary)
as of the participant's (or designated ben-
eficiary's) birthday in the applicable cal-
endar year reduced by one for each calendar
year which has elapsed since the date life
expectancy was first calculated. The
applicable calendar year shall be the first
distribution calendar year. If payments
commence before the required beginning
date, the applicable calendar year is the
year such payments commence.
(b) Life expectancy. Life expectancy and joint
and last survivor expectancy are computed
by use of the expected return multiples in
Tables V and VI of Section 1.72-9 of the
Income Tax Regulations. Unless otherwise
elected by the participant (or spouse, in
the case of distributions described in sub-
section 10.4 above) by the time distribu-
tions are required to begin, life expec-
tancies shall not be recalculated annually.
Such election shall be irrevocable and
shall apply to all subsequent years. The
life expectancy of a nonspouse beneficiary
may not be recalculated.
(c) Distribution calendar year. A calendar
year for which a minimum distribution is
required. For distributions beginning
before the participant's death, the first
distribution calendar year is the calendar
year immediately preceding the calendar
year which contains the participant's re-
quired beginning date. For distributions
beginning after the participant's death,
the first distribution calendar year is the
calendar year in which distributions are
required to begin pursuant to subsec-
tion 10.5.
(d) Required beginning date. The required
beginning date of a participant is the
first day of April of the calendar year
following the calendar year in which the
participant attains age 70-1/2. The re-
quired beginning date of a participant who
attains age 70-1/2 before January 1988,
shall be determined in accordance with (1)
or (2) below:
(i) Non-5-percent-owners. The
required beginning date of a
participant who is not a 5-per-
cent owner is the first day of
April of the calendar year fol-
lowing the calendar year in
which the later of retirement
or attainment of age 70-1/2
occurs.
(ii) 5-percent owners. The required
beginning date of a participant
who is a 5-percent owner during
any year beginning after Decem-
ber 31, 1979 is the first day
of April following the later
of: (A) the calendar year in
which the participant attains
age 70-1/2, or (B) the earlier
of the calendar year with or
within which ends the plan year
in which the participant be-
comes a 5-percent owner, or the
calendar year in which the par-
ticipant retires.
The required beginning date of a partici-
pant who is not a 5-percent owner who
attains age 70-1/2 during 1988 and who has
not retired as of January 1, 1989 is April
1, 1990. A participant is treated as a
5-percent owner for purposes of this sub-
section if such participant is a 5-percent
owner as defined in Section 416(i) of the
Code (determined in accordance with Section
416 but without regard to whether the plan
is top-heavy) at any time during the plan
year ending with or within the calendar
year in which such owner attains age 66-1/2
or any subsequent plan year. Once distri-
butions have begun to a 5-percent owner
under this subsection, they must continue
to be distributed, even if the participant
ceases to be a 5-percent owner in a subse-
quent year.
(e) Participant's benefit. The account balance
as of the last valuation date in the calen-
dar year immediately preceding the distri-
bution calendar year (valuation calendar
year) increased by the amount of any con-
tributions or forfeitures allocated to the
account balance as of dates in the valua-
tion calendar year after the valuation date
and decreased by distributions made in the
valuation calendar year after the valuation
date. However, if any portion of the mini-
mum distribution for the first distribution
calendar year is made in the second distri-
bution calendar year on or before the re-
quired 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.
10.12. Distribution to Alternate Payees. The admin-
istrator may direct the trustee to distribute benefits to an
alternate payee on the earliest date specified in a qualified
domestic relations order, without regard to whether such dis-
tribution is made or commences prior to the participant's ear-
liest retirement age (as defined in Section 414(p)(4)(B) of the
Code) or the earliest date that the participant could commence
receiving benefits under the plan.
SECTION 11
Joint and Survivor Annuity Requirements
11.1. Qualified Joint and Survivor Annuity. The
provisions of this Section shall apply to any participant who
is credited with at least one hour of service with the employer
on or after August 23, 1984, and such other participants as
provided in subsection 11.7. Unless the participant selects an
optional form of benefit pursuant to a qualified election
within the 90-day period ending on the annuity starting date, a
married participant's vested account balance will be paid in
the form of a qualified joint and survivor annuity and an
unmarried participant's vested account balance will be paid in
the form of a life annuity. The participant may elect to have
such annuity distributed upon attainment of the earliest re-
tirement age under the plan. A "qualified joint and survivor
annuity" is an immediate annuity for the life of the partici-
pant with a survivor annuity for the life of the spouse which
is not less than 50 percent and not more than 100 percent of
the amount of the annuity which is payable during the joint
lives of the participant and the spouse and which is the amount
of benefit which can be purchased with the participant's vested
account balance. The percentage of the survivor annuity under
the plan shall be 50%. A "life annuity" is an immediate annu-
ity payable in equal installments for the life of the partici-
pant that terminates upon the participant's death. Any annuity
contract distributed from the plan must be nontransferable.
The terms of any annuity contract purchased and distributed by
the plan to a participant or spouse shall comply with the
requirements of the plan.
11.2. Qualified Preretirement Survivor Annuity.
Unless the participant selects an optional form of benefit
within the election period pursuant to a qualified election, if
a participant dies before the annuity starting date, the par-
ticipant's vested account balance shall be applied toward the
purchase of an annuity for the life of the surviving spouse.
The surviving spouse may elect to have such annuity distributed
within a reasonable period after the participant's death.
11.3. Definitions.
(a) Election period: The period which begins
on the first day of the plan year in which
the participant attains age 35 and ends on
the date of the participant's death. If a
participant separates from service prior to
the first day of the plan year in which age
35 is attained, with respect to the account
balance as of the date of separation, the
election period shall begin on the date of
separation.
(b) Pre-age 35 waiver: A participant who will
not yet attain age 35 as of the end of any
current plan year may make a special quali-
fied election to waive the qualified prere-
tirement survivor annuity for the period
beginning on the date of such election and
ending on the first day of the plan year in
which the participant will attain age 35.
Such election shall not be valid unless the
participant receives a written explanation
of the qualified preretirement survivor
annuity in such terms as are comparable to
the explanation required under subsection
11.4. Qualified preretirement survivor
annuity coverage will be automatically
reinstated as of the first day of the plan
year in which the participant attains age
35. Any new waiver on or after such date
shall be subject to the full requirements
of this Section.
(c) Qualified election: A waiver of a quali-
fied joint and survivor annuity or a quali-
fied preretirement survivor annuity. Any
waiver of a qualified joint and survivor
annuity or a qualified preretirement survi-
vor annuity shall not be effective unless:
(i) the participant's spouse consents in
writing to the election; (ii) the election
designates a specific beneficiary, includ-
ing any class of beneficiaries or any con-
tingent beneficiaries, which may not be
changed without spousal consent (or the
spouse expressly permits designations by
the participant without any further spousal
consent); (iii) the spouse's consent
acknowledges the effect of the election;
and (iv) the spouse's consent is witnessed
by a plan representative or notary public.
Additionally, a participant's waiver of
the qualified joint and survivor annuity
shall not be effective unless the election
designates a form of benefit payment which
may not be changed without spousal consent
(or the spouse expressly permits
designations by the participant without any
further spousal consent). If it is
established to the satisfaction of a plan
representative that there is no spouse or
that the spouse cannot be located, a waiver
will be deemed a qualified election.
Any consent by a spouse obtained under this
provision (or establishment that the con-
sent of a spouse may not be obtained) shall
be effective only with respect to such
spouse. A consent that permits designa-
tions by the participant without any re-
quirement of further consent by such spouse
must acknowledge that the spouse has the
right to limit consent to a specific bene-
ficiary, and a specific form of benefit
where applicable, and that the spouse vol-
untarily elects to relinquish either or
both of such rights. A revocation of a
prior waiver may be made by a participant
without the consent of the spouse at any
time before the commencement of benefits.
The number of revocations shall not be
limited. No consent obtained under this
provision shall be valid unless the partic-
ipant has received notice as provided in
subsection 11.4 below.
(d) Spouse (surviving spouse): The spouse or
surviving spouse of the participant, pro-
vided that a former spouse will be treated
as the spouse or surviving spouse and a
current spouse will not be treated as the
spouse or surviving spouse to the extent
provided under a qualified domestic rela-
tions order as described in Section 414(p)
of the Code.
(e) Annuity starting date: The first day of
the first period for which an amount is
paid as an annuity or in any other form.
(f) Vested account balance: The aggregate
value of the participant's vested account
balances derived from employer and employee
contributions (including rollovers), wheth-
er vested before or upon death, including
the proceeds of insurance contracts, if
any, on the participant's life. The provi-
sions of this Section shall apply to a par-
ticipant who is vested in amounts attrib-
utable to employer contributions, employee
contributions (or both) at the time of
death or distribution.
11.4. Notice Requirements. In the case of a quali-
fied joint and survivor annuity, the administrator shall pro-
vide each participant, no less than 30 days and no more than 90
days prior to the annuity starting date, a written explanation
of: (i) the terms and conditions of a qualified joint and sur-
vivor annuity; (ii) the participant's right to make and the
effect of an election to waive the qualified joint and survivor
annuity form of benefit; (iii) the rights of a participant's
spouse; and (iv) the right to make, and the effect of, a revo-
cation of a previous election to waive the qualified joint and
survivor annuity.
In the case of a qualified preretirement survivor annuity as
described in subsection 11.2, the administrator shall provide
each participant, within the applicable period for such partic-
ipant, a written explanation of the qualified preretirement
survivor annuity in such terms and in such manner as would be
comparable to the explanation provided for meeting the require-
ments of the preceding paragraph applicable to a qualified
joint and survivor annuity. The applicable period for a par-
ticipant is whichever of the following periods ends last: (i)
the period beginning with the first day of the plan year in
which the participant attains age 32 and ending with the close
of the plan year preceding the plan year in which the partici-
pant attains age 35; (ii) a reasonable period ending after the
individual becomes a participant; (iii) a reasonable period
ending after subsection 11.5 ceases to apply to the partici-
pant; or (iv) a reasonable period ending after this subsection
first applies to the participant. Notwithstanding the forego-
ing, notice must be provided within a reasonable period ending
after separation from service in the case of a participant who
separates from service before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable
period ending after the enumerated events described in (ii),
(iii) and (iv) is the end of the two-year period beginning one
year prior to the date the applicable event occurs, and ending
one year after that date. In the case of a participant who
separates from service before the plan year in which he attains
age 35, notice shall be provided within the two-year period
beginning one year prior to separation and ending one year
after separation. If such a participant thereafter returns to
employment with the employer, the applicable period for such
participant shall be redetermined.
11.5. Exceptions to Notice Requirements. Notwith-
standing the provisions of subsection 11.4, the respective
notices prescribed by that subsection need not be given to a
participant if the plan (1) "fully subsidizes" the costs of a
qualified joint and survivor annuity or qualified preretirement
survivor annuity, (2) does not allow the participant to waive
the qualified joint and survivor annuity or qualified prere-
tirement survivor annuity, and (3) does not allow a married
participant to designate a nonspouse beneficiary. For purposes
of this subsection 11.5, a plan fully subsidizes the costs of a
benefit if no increase in cost, or decrease in benefits to the
participant may result from the participant's failure to elect
another benefit.
11.6. Safe Harbor Rules. This subsection 11.6,
which provides an exception to the joint and survivor annuity
requirement for certain profit sharing plans, shall apply to a
participant in a profit sharing plan, and to any distribution,
made on or after the first day of the first plan year beginning
after December 31, 1988, from or under a separate account at-
tributable solely to accumulated deductible employee contribu-
tions, as defined in Section 72(o)(5)(B) of the Code, and main-
tained on behalf of a participant in a money purchase pension
plan, (including a target benefit plan) if the following condi-
tions are satisfied: (i) the participant does not or cannot
elect payments in the form of a life annuity; and (ii) on the
death of a participant, the participant's vested account bal-
ance will be paid to the participant's surviving spouse, but if
there is no surviving spouse, or if the surviving spouse has
consented in a manner conforming to a qualified election, then
to the participant's designated beneficiary. The surviving
spouse may elect to have distribution of the vested account
balance commence within the 90-day period following the date of
the participant's death. The account balance shall be adjusted
for gains or losses occurring after the participant's death in
accordance with the provisions of Section 8 of the plan. This
subsection 11.6 shall not be operative with respect to a par-
ticipant in a profit sharing plan if the plan is a direct or
indirect transferee of a defined benefit plan, money purchase
plan, a target benefit plan, stock bonus, or profit sharing
plan which is subject to the survivor annuity requirements of
Section 401(a)(11) and Section 417 of the Code, or if the em-
ployer has specified in the adoption agreement that the joint
and survivor annuity shall be the normal form of payment under
the plan. If this subsection 11.6 is operative, then the pro-
visions of this Section 11, other than this subsection 11.6,
shall be inoperative. Notwithstanding the foregoing:
(a) The participant may waive the spousal death
benefit described in this subsection at any
time provided that no such waiver shall be
effective unless it satisfies the condi-
tions of subsection 11.3 (other than the
notification requirement referred to there-
in) that would apply to the participant's
waiver of the qualified preretirement sur-
vivor annuity.
(b) For purposes of this subsection 11.6, vested
account balances shall mean, in the case
of a money purchase pension plan or a tar-
get benefit plan, the participant's sepa-
rate account balance attributable solely to
accumulated deductible employee contribu-
tions within the meaning of Section
72(o)(5)(B) of the Code. In the case of a
profit sharing plan, vested account balance
shall have the same meaning as provided in
subsection 11.3.
11.7. Transitional Rules.
(a) Any living participant not receiving
benefits on August 23, 1984 who would
otherwise not receive the benefits
prescribed by the foregoing provisions of
this Section must be given the opportunity
to elect to have the foregoing provisions
of this Section apply if such participant
is credited with at least one hour of
service under this plan or a predecessor
plan in a plan year beginning on or after
January 1, 1976, and such participant had
at least 10 years of vesting service when
he or she separated from service.
(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
subparagraph (d) below.
(c) The respective opportunities to elect (as
described in subparagraphs (a) and (b)
above) must be afforded to the appropriate
participants during the period commencing
on August 23, 1984 and ending on the date
benefits would otherwise commence to said
participants.
(d) Any participant who has elected pursuant to
subparagraph (b) above, and any participant
who does not elect under subparagraph (a)
above or who meets the requirements of
subparagraph (a) above 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:
(i) Automatic joint and survivor
annuity. If benefits in the form of
a life annuity become payable to a
married participant who:
(A) begins to receive payments
under the plan on or after
normal retirement age; or
(B) dies on or after normal
retirement age while still
working for the employer; or
(C) begins to receive payments on
or after the qualified early
retirement age; or
(D) separates from service on or
after attaining normal
retirement age (or the
qualified early retirement age)
and after satisfying the
eligibility requirement for the
payment of benefits under the
plan and thereafter dies before
beginning to receive such
benefits;
then such benefits will be received
under this plan in the form of a
qualified joint and survivor
annuity, unless the participant has
elected otherwise during the
election period. The election
period must begin at least 6 months
before the participant attains the
qualified early retirement age and
not more than 90 days before the
commencement of benefits. Any
election hereunder will be in
writing and may be changed by the
participant at any time.
(ii) Election of early survivor annuity.
A participant who is employed after
attaining the qualified early
retirement age will be given the
opportunity to elect, during the
election period, to have a survivor
annuity payable on death. If the
participant elects the survivor
annuity, payments under such annuity
must not be less than the payments
which would have been made to the
spouse under the qualified joint and
survivor annuity if the participant
had retired on the day before his or
her death. Any election under this
provision will be in writing and may
be changed by the participant at any
time. The election period begins on
the later of (A) the 90th day before
the participant attains the
qualified early retirement age, or
(B) the date on which participation
begins, and ends on the date the
participant terminates employment.
(iii) For purposes of this subparagraph (d),
(A) Qualified early retirement age
is 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.
(B) Qualified joint and survivor
annuity is an annuity for the
life of the participant with a
survivor annuity for the life
of the spouse as described in
subsection 11.1.
SECTION 12
Withdrawals and Distributions During Employment
12.1. Withdrawal of Voluntary Participant Contribu-
tions. A participant may elect to withdraw all or any portion
of the net credit balance in his voluntary contribution ac-
count. Each election by a participant under this subsection
12.1 shall be made by filing the election form furnished by the
administrator at least 30 days (or such shorter time period as
may be established by the administrator) prior to the date as
of which such withdrawal is to be effective. If the provisions
of Section 11 are applicable to a participant, then such par-
ticipant's election to withdraw his voluntary contributions
shall not be effective unless the participant's spouse consents
to the withdrawal in writing in the manner described in subsec-
tion 11.3. Such consent shall acknowledge the form of payment,
the effect of the withdrawal and be witnessed by a plan repre-
sentative or a notary public.
12.2. Pre-Termination Distributions. If the employ-
er has adopted this plan as a profit sharing plan and specified
in its adoption agreement that pre-termination distributions
may be made from the plan, this subsection shall be applicable.
Subject to the provisions of Section 11, as of any accounting
date, a participant who has attained age 59-1/2 (or has met
such other requirements as are specified by the employer in the
adoption agreement) and is fully vested in all of his account
balances may irrevocably elect to withdraw all or any portion
of such account balances (after any adjustments required under
the plan have been made), except that, a participant who has
not attained age 59 1/2 may not withdraw amounts from his compen-
sation deferral contribution accounts nor any employer contri-
butions (and earnings thereon) that are treated as qualified
matching contributions or qualified nonelective contributions
under the plan. Each election under this subsection 12.2 shall
be made by filing the election form furnished by the adminis-
trator at least 30 days (or such shorter time period as may be
established by the administrator) before the date as of which
such withdrawal is to be effective. All pre-termination dis-
tributions under this subsection shall be distributed in a
single payment (including amounts, if any, which are withdrawn
from an investment fund investing in employer securities), and
if the participant's accounts are invested in various invest-
ment options pursuant to Section 9, withdrawal shall be made
pro rata, from all investment option subaccounts.
12.3. Charging and Payment of Withdrawals. All
withdrawals by a participant under this Section 12 shall be
charged to the appropriate account of the participant, and to
his interest in the investment options designated by the par-
ticipant if the participant is allowed to select investment
options, in accordance with such rules as the administrator may
establish. In the absence of investment option designations by
a participant, withdrawals shall be charged in accordance with
such rules as shall be established by the administrator. In
determining the amount any participant may withdraw under this
Section 12, any unpaid loan or loans theretofore made to the
participant under subsection 12.4 shall be taken into account.
Withdrawals under this Section 12 shall be paid to the
participant as soon as practicable after all plan accounting
required on or before such withdrawal is completed.
Withdrawals from a participant's accounts must occur in the
following order:
(a) First, the participant's voluntary contri-
butions made prior to January 1, 1987 from
the subaccount under the participant's
voluntary contribution account which is
attributable to such contributions;
(b) Next, the participant's voluntary contribu-
tions made on and after January 1, 1987 and
the interest, earnings and appreciation
thereon, from the subaccount under the par-
ticipant's voluntary contribution account
which is attributable to such contribu-
tions;
(c) Next, the interest, earnings and apprecia-
tion on the participant's voluntary contri-
butions made prior to January 1, 1987 from
the remainder of the subaccount attribut-
able to such contributions; and
(d) Finally, the participant's remaining ac-
counts under the plan, subject to the limi-
tations of subsections 12.2 and 12.5.
No forfeitures will occur solely as a result of a participant's
withdrawal of compensation deferral or voluntary contributions.
12.4. Loans to Participants. While it is the pri-
mary purpose of the plan to accumulate funds for participants
when they retire, it is recognized that under some circum-
stances it is in the best interests of participants to permit
loans to be made to them while they continue in the active ser-
vice of the employer. Accordingly, if the employer has so
specified in its adoption agreement, the administrator, pursu-
ant to such rules and procedures as it may from time to time
establish, and upon written application by a participant sup-
ported by such evidence as the administrator requests, may
direct the trustee to make a loan to a participant from his
accounts in the trust fund. Loans shall be made available to
all participants on a reasonably equivalent basis and shall be
subject to the following rules:
(a) Subject to the limitations below, the prin-
cipal amount of any loan made to a partici-
pant, when added to the outstanding balance
of all other loans made to the participant
from all qualified plans maintained by the
employer or a related employer, shall not
exceed the lesser of:
(i) $50,000, reduced by the excess
(if any) of the highest out-
standing balance during the
one-year period ending
immediately preceding the date
of the loan, over the outstand-
ing balance on the date of the
loan, of all such loans from
all such plans; or
(ii) 50 percent of the participant's
vested account balances under
the plan.
(b) Each loan must be evidenced by a written
note in a form approved by the administra-
tor, and shall bear interest at a reason-
able rate. If the administrator does not
specify a procedure for determining a rea-
sonable rate of interest, the applicable
rate will be the reference rate in effect
at the sponsor on the date the loan is made.
(c) Each loan shall specify a repayment period
determined by the administrator in a uni-
form and nondiscriminatory manner, but not
in excess of five years. However, the five
year limit shall not apply to any loan used
to acquire any dwelling unit which within a
reasonable time is to be used (determined
at the time the loan is made) as the prin-
cipal residence of the participant.
(d) In the event of default, foreclosure on the
note and attachment of security will not
occur until a distributable event occurs
under the plan.
(e) No loans will be made to a shareholder-
employee, or to an owner-employee (as
defined in subsection 2.7). For purposes
of this requirement, a "shareholder-
employee" means an employee or officer of
an electing small business (Subchapter S)
corporation who owns (or is considered as
owning within the meaning of Section
318(a)(1)) of the Code), on any day during
the taxable year of such corporation, more
than five percent of the outstanding stock
of the corporation.
(f) Principal and interest on each loan shall
be repaid on a substantially level basis
(no less frequently than quarterly) by
payroll withholding or in a single lump sum
prepayment, and shall be credited to the
accounts and investment option subaccounts
of the participant in accordance with his
current investment election as to future
contributions. Except as provided in the
preceding sentence, partial repayments will
not be permitted.
(g) Loans shall not be made available to highly
compensated employees (as defined in sub-
section 2.12) in an amount greater than the
amount made available to other employees.
Loans will be approved or denied based on
the credit worthiness of the
participant/applicant and the liquidity of
the trust fund.
(h) The employer or administrator shall adopt
and publish a procedure governing the
application for and processing of partic-
ipant loans.
(i) If the provisions of Section 11 are appli-
cable to any participant in this plan, then
the consent of such participant's spouse
must be obtained as to any loan, in the
manner described in subsection 11.3.
Spousal consent shall be obtained no ear-
lier than the beginning of the 90-day
period ending on the date of the loan, must
be in writing, must acknowledge the effect
of the loan, and must be witnessed by a
plan representative or notary public. Such
consent shall thereafter be binding with
respect to the consenting spouse or any
subsequent spouse with respect to that
loan; but a new consent shall be required
if the account balances are used for rene-
gotiation, extension, renewal or other
revisions of the loan.
The employer or administrator shall specify the accounts from
which a loan to a participant can be made; and also shall spec-
ify whether any such loan shall be drawn, pro rata, from the
vested portion of each of the participant's specified accounts
(and subaccounts, if any) or the hierarchy of accounts from
which such loans will be drawn. No loan shall exceed the pres-
ent value of a participant's nonforfeitable account balances.
Any loan made under the plan or a predecessor plan on or before
December 31, 1986 shall be governed by the terms of the plan or
the predecessor plan in effect on or before that date. Any
loan made under the plan or a predecessor plan after December
31, 1986 (including any renegotiation, extension, revision or
renewal after that date of a loan made on or before that date)
shall be subject to the foregoing limitations of this subsec-
tion 12.4. If on a participant's settlement date (including
for this purpose the date a distribution is to be made to a
participant under subsection 12.2), any loan or portion of a
loan made to him under the plan, together with the accrued
interest thereon, remains unpaid, an amount equal to such loan
or any part thereof, together with the accrued interest there-
on, shall be charged to the participant's accounts after all
other adjustments required under the plan, but before any dis-
tribution pursuant to subsections 10.3, 10.4, and 12.2 and such
amount shall be deemed distributed to the participant at that
time, subject to applicable law. In the event of a default by
the participant prior to the participant's settlement date
(e.g., a failure to make timely repayments), the amount of the
loan, together with any accrued interest thereon, may be deemed
distributed. In no event shall a loan to a participant be
secured by an interest in the participant's residence.
12.5. Hardship Withdrawals. If the employer has so
provided in the adoption agreement, a participant, in accor-
dance with such rules and procedures as the administrator may
from time to time establish, may elect to withdraw all or any
portion of the sum of (a) the lesser of the compensation defer-
ral contributions in his compensation deferral contribution
account (including investment earnings credited to such account
before 1989), or his total compensation deferral contribution
account balance (determined as of the preceding accounting
date), plus (b) the compensation deferral contributions with-
held by the employer but not yet credited to the participant's
compensation deferral contribution account. A participant may
not withdraw any portion of the investment earnings on his com-
pensation deferral contribution account that are credited to
such account after 1988. Such a withdrawal must be necessary
because of a hardship causing immediate and heavy financial
needs on the participant, and the participant previously must
have withdrawn the entire net credit balance, if any, in his
voluntary contribution account. Such a withdrawal shall not
exceed the amount required to meet such immediate financial
need and not reasonably available from other resources of the
participant, and shall not exceed the balance of such account
as of the valuation date coincident with or next preceding the
date of withdrawal (reduced by the remaining principal and
interest of any outstanding loan made to the participant under
subsection 12.4 above). Each election under this subsection
12.5 shall be made by filing the election form furnished by the
administrator at such time and in such manner as the adminis-
trator shall determine, and shall be effective in accordance
with such rules as may be required by Internal Revenue Service
regulations and as the administrator may establish from time to
time. The following are the only financial needs considered
immediate and heavy: expenses incurred or necessary for medi-
cal care (within the meaning of Section 213(d) of the Code) of
the participant, the participant's spouse, or dependents; the
purchase (excluding mortgage payments) of a principal residence
for the participant; payment of tuition and related educational
fees for the next twelve months of post-secondary education for
the participant, the participant's spouse, children, or depen-
dents; or the need to prevent the eviction of the participant
from, or a foreclosure on the mortgage of, the participant's
principal residence; and amounts reasonably determined by the
administrator to be necessary to pay any federal, state, or
local income taxes or penalties resulting from any such hard-
ship withdrawal. A distribution will be considered as neces-
sary to satisfy an immediate and heavy financial need of the
participant only if: (a) the participant has obtained all dis-
tributions, other than hardship distributions, and all nontax-
able loans under all plans maintained by the employer; (b) all
plans maintained by the employer provide that the participant's
elective deferrals (and participant contributions) will be sus-
pended for twelve months after the receipt of the hardship dis-
tribution; (c) the distribution is not in excess of the amount
of an immediate and heavy financial need; and (d) all plans
maintained by the employer provide that the participant may not
make elective deferrals for the participant's taxable year
immediately following the taxable year of the hardship distri-
bution in excess of the applicable limit under Section 402(g)
of the Code for such taxable year less the amount of such par-
ticipant's elective deferrals for the taxable year of the
hardship distribution.
If the provisions of Section 11 are applicable to any partici-
pant in this plan, then the consent of such participant's
spouse must be obtained as to any hardship withdrawal, in the
manner described in subsection 11.3. Spousal consent shall be
obtained no earlier than the beginning of the 90-day period
ending on the date of the hardship withdrawal, must be in writ-
ing, must acknowledge the effect of the hardship withdrawal,
and must be witnessed by a plan representative or notary public.
SECTION 13
No Reversion in Employer
The employer shall have no right, title or interest
in the trust fund, and no part of the trust fund shall revert
or be repaid to the employer, directly or indirectly, unless:
(a) the Internal Revenue Service initially
determines that the plan does not meet the
requirements of Section 401(a) of the Code,
in which event the contributions made to
the plan by the employer shall be returned
to it within one year after such adverse
determination;
(b) a contribution is made by the employer by
mistake of fact and such contribution is
returned to the employer within one year
after payment to the trustee; or
(c) a contribution conditioned on the deduct-
ibility thereof is disallowed as an expense
for federal income tax purposes and such
contribution (to the extent disallowed) is
returned to the employer within one year
after the disallowance of the deduction.
Contributions may be returned to the employer pursuant to sub-
paragraph (a) above only if they are conditioned upon initial
qualification of the plan, and an application for determination
was made by the time prescribed by law for filing the employ-
er's Federal income tax return for the taxable year in which
the plan was adopted (or such later date as the Secretary of
the Treasury may prescribe). The amount of any contribution
that may be returned to the employer pursuant to subparagraph
(b) or (c) above must be reduced by any portion thereof previ-
ously distributed from the trust fund and by any losses of the
trust fund allocable thereto, and in no event may the return of
such contribution cause any participant's account balances to
be less than the amount of such balances had the contribution
not been made under the plan.
SECTION 14
Reemployment and Employment With Related Employers
14.1. Reemployment Before Break in Service. If an
employee's employment with his employer terminates and he is
reemployed before he incurs a one-year break in service, his
years of service will not be deemed to have been interrupted
during such year and, if he was a participant in the plan, he
will continue as such upon his reemployment if he then meets
the requirements of subparagraph 3.1(c); provided that, such
participant must refile the forms required under subsection 3.2
with the administrator and he may resume making compensation
deferral contributions and voluntary contributions as of the
beginning of the first pay period coincident with or next fol-
lowing the date of his reemployment.
14.2. Reemployment After Break in Service. If a
former participant who incurs a one-year break in service is
reemployed, he will again become a participant in the plan as
of his date of reemployment if he then meets the requirements
of subparagraph 3.1(c). If an employee who is not partici-
pating in the plan should terminate employment and then subse-
quently be reemployed by an employer, his eligibility for par-
ticipation shall be determined in accordance with subsection
3.1, and he shall become a participant on the date of his reem-
ployment if he then meets the requirements of subparagraph
3.1(c) and he had met the requirements of subparagraphs 3.1(a)
and (b) prior to his termination. The years of service accrued
prior to termination by a non-vested participant or by an em-
ployee who was not a participant shall be disregarded for pur-
poses of subsection 10.2 only if his number of consecutive one-
year breaks in service occurring after his termination equal or
exceed the greater of (i) five, or (ii) his years of service
prior to his termination. Each such reemployed employee or
participant must file (or refile) the forms required by subsec-
tion 3.2 with the administrator, and compensation deferral
contributions and voluntary contributions by a reemployed par-
ticipant will not resume under the plan until the beginning of
the first pay period coincident with or next following the date
of his reemployment. A "non-vested participant" is a partici-
pant who, at his prior termination of employment, had no non-
forfeitable right under subsection 10.2 to any part of his em-
ployer matching or employer contribution accounts. In the case
of a participant who has 5 consecutive 1-year breaks in ser-
vice, all years of service after such breaks in service will be
disregarded for the purpose of vesting the employer-derived
account balance that accrued before such breaks, but both pre-
break and post-break service will count for the purposes of
vesting the employer-derived account balance that accrues after
such breaks. Both accounts will share in the earnings and
losses of the fund. In the case of a participant who does not
have 5 consecutive 1-year breaks in service, both the pre-break
and post-break service will count in vesting both the pre-break
and post-break employer-derived account balance.
14.3. Restoration of Forfeitures. If a participant
whose employment with the employer terminated because of resig-
nation or dismissal before he was 100 percent vested in his em-
ployer matching or contribution accounts is reemployed by the
employer or a related employer after distribution of his em-
ployer contribution or employer matching contribution accounts
has commenced (or was deemed to commence under subsection 10.7)
but before he incurs five consecutive one-year breaks in ser-
vice, he may repay to the trustee the total amount distributed
to him from such accounts as a result of his earlier termina-
tion of employment. Such repayment must be made before the
earlier of five years after the first date on which the partic-
ipant is subsequently reemployed by an employer, or the date
the participant incurs five consecutive one-year breaks in ser-
vice commencing after the distribution. If a participant makes
such a repayment to the trustee, both the amount of the repay-
ment and the forfeiture which resulted from his earlier termi-
nation of employment (without interest) shall be credited to
his employer matching and contribution accounts, as appropri-
ate, as of the regular accounting date coincident with or next
following the date of repayment (after all other adjustments
required under the plan as of that date have been made), but
the amount of the repayment shall be separately accounted for
by the administrator or trustee, inasmuch as such amount was
previously the subject of a taxable distribution. Forfeitures
which are restored to participants' accounts as of a regular
accounting date under this subsection 14.3 shall reduce:
first, forfeitures to be allocated as of that date under sub-
section 8.8; and then, to the extent that the forfeitures to be
allocated as of that date are insufficient to fully restore a
reemployed participant's accounts, the employer will make a
special contribution in the amount necessary to restore such
forfeitures.
14.4. Employment With Related Employers. Employment
of an employee or a participant with a related employer will be
considered as employment with the employer for purposes of
determining the employee's or participant's years of service,
hours of service, leaves of absence, breaks in service and dis-
tribution date. Termination of an employee's or participant's
employment with his employer will not be considered a termina-
tion of employment for purposes of the plan if, concurrently
with or immediately following such termination of employment,
such employee or participant is employed by a related employer.
No contribution to be made by an employer under the plan on
behalf of a participant, however, will be based on any earnings
paid to such employee or participant by such related employer,
and no employee of a related employer may become a participant
in the plan solely as a result of such employment.
SECTION 15
General Provisions
15.1. Information Furnished by Participants. Par-
ticipants and their beneficiaries must furnish to the adminis-
trator and the trustee such evidence, data or information as
the administrator and the trustee consider desirable to carry
out the plan. No participant, except one authorized by the
administrator, shall have the right to inspect plan records.
15.2. Information Furnished to Trustee. Each em-
ployer and the administrator shall furnish the trustee such
data and information as it may require to perform its functions
under the plan and trust.
15.3. Inalienability of Benefits. The interests of
participants and their beneficiaries under the plan are not
subject to the claims of their creditors and, except as may be
required by a domestic relations order which the administrator
determines to be a qualified domestic relations order under
Section 414(p) of the Code, may not be voluntarily or involun-
tarily assigned or alienated. A domestic relations order
entered before January 1, 1985 will be treated as a qualified
domestic relations order if payment of benefits pursuant to the
order had commenced as of such date, and may be treated as a
qualified domestic relations order if payment of benefits has
not commenced as of such date, even though the order does not
satisfy the requirements of Code Section 414(p).
15.4. Absence of Guaranty. Neither the administra-
tor, the trustee nor the employers in any way guarantee the
trust fund from loss or depreciation. The liability of the
trustee and the administrator to make any payment under the
plan will be limited to the assets held by the trustee which
are available for that purpose.
15.5. Employment Rights. The plan does not consti-
tute a contract of employment. The plan shall not be construed
as giving a participant a right to be retained in the employ of
the employers or a right or claim to any benefit under the plan
unless the right or claim has specifically accrued under the
plan.
15.6. Gender and Number. Words in the masculine
include the feminine and neuter genders, words in the neuter
include the masculine and feminine genders, the singular in-
cludes the plural and the plural includes the singular, unless
qualified by the context.
15.7. Administrative Decisions Final. Any interpre-
tation of the plan and any decision on a matter within the
administrator's discretion made in good faith shall be binding
on all persons, and shall not be overturned unless held to be
arbitrary and capricious. A misstatement or other mistake of
fact shall be corrected when it becomes known, and the adminis-
trator shall make such adjustment on account thereof as it
considers equitable and practicable.
15.8. Evidence. Evidence required of anyone under
the plan may be by certificate, affidavit, document, or other
information which the person acting on it considers pertinent
and reliable and signed, made or presented by the proper party
or parties.
15.9. Action by Employer. Any action required or
permitted to be taken by an employer under the plan shall be by
resolution of its Board of Directors, by resolution of a duly
authorized committee of its Board of Directors, or by a person
or persons authorized by resolution of its Board of Directors
or such committee, if the employer is a corporation; by written
instrument signed by its managing partner or partners, or by a
person or persons authorized by such managing partner or part-
ners, if the employer is a partnership; and by written instru-
ment signed by the employer, if the employer is a sole propri-
etor.
15.10. Uniform Rules. In managing the plan, the
administrator will apply uniform rules to all participants
similarly situated.
15.11. Controlling Law. Except to the extent super-
seded by the laws of the United States, the laws of the state
of the employer's principal place of business shall govern,
control and determine all questions arising with respect to the
plan and the trust agreement and the validity of their provi-
sions.
15.12. Waiver of Notice. Any notice required under
the plan or the trust agreement may be waived by the person
entitled thereto.
15.13. Successor to an Employer. The term "employ-
er" also includes any entity that is a successor to an employer
or a purchaser of all or substantially all of the assets of an
employer and which agrees to continue the plan as provided in
subparagraph 16.3(d).
15.14. Claims Procedure. A participant or bene-
ficiary who believes that he is entitled to a benefit under the
plan may file a written claim for such benefit with the admin-
istrator. The administrator shall notify in writing any par-
ticipant or beneficiary whose claim for benefits under the plan
has been denied in whole or part within 90 days after receipt
of the claim for benefits by the administrator, or within 180
days of receipt of such claim if the participant is notified in
writing by the administrator that an extension of time is re-
quired for processing the claim. If a claim is neither granted
nor denied within 90 days or 180 days, as the case may be, the
claim will be considered denied and the claimant may pursue the
review procedure set forth below. Each notice of denial of a
claim shall be in writing and shall contain the following
information:
(a) The specific reason or reasons for the
denial;
(b) Specific reference to pertinent plan provi-
sions upon which the denial is based;
(c) A description of any additional material or
information necessary for the applicant to
perfect the claim and an explanation of why
such material or information is necessary;
and
(d) An explanation of the plan's review proce-
dure (as described below).
In the event a claim for benefits is denied in whole or in
part, the claimant or the claimant's duly authorized represen-
tative may request a review of such denial by the administra-
tor. Each such request for review must be in writing signed by
the claimant or the claimant's duly authorized representative,
must specify that it is a request for review of a denied claim
and must be filed with the administrator no later than 60 days
after receipt by the claimant of the denial of the claim. The
decision of the administrator upon a claimant's request for
review shall be made within 60 days after the request for re-
view is received by the administrator unless special circum-
stances require an extension of time for processing such re-
view, in which event the claimant shall be notified in writing
prior to the expiration of such 60 days, and the decision of
the administrator shall be rendered within 120 days of the
receipt of the request for review. In connection with a
request for review, the claimant or the claimant's duly autho-
rized representative may submit issues and comments in writing
to the administrator. All communications between the adminis-
trator and the claimant or the claimant's duly authorized rep-
resentative shall be in writing unless the claimant or the
claimant's duly authorized representative requests otherwise
and the administrator consents thereto. Each decision of the
administrator on a request for review shall be in writing,
shall include the specific reason or reasons for the decision
and shall contain specific reference to the plan provisions
upon which the decision is based.
15.15. Litigation by Participants. If a legal action
begun against the trustee, the employer or the administrator by
or on behalf of any person results adversely to that person, or
if a legal action arises because of conflicting claims to a
participant's or beneficiary's benefits, the cost to the trust-
ee, the employer or the administrator of defending the action
will be charged to the extent legally permitted under ERISA
against the sums, if any, involved in the action or payable to
the participant or beneficiary concerned.
15.16. Amendments of Vesting Schedule. If the em-
ployer amends the vesting schedule contained in the adoption
agreement: for every employee who is a participant on the
later of the amendment adoption date or the amendment effective
date, the vested percentage of such participant shall not be
less than the vested percentage of such participant without
regard to the amendment; and each participant with three or
more years of service may elect, within a reasonable period of
time after the adoption of such amendment, to have his vested
percentage determined under the plan without regard to such
amendment. For participants who do not have at least one hour
of service in any plan year beginning after December 31, 1988,
the preceding sentence shall be applied by substituting "five"
for "three" years of service where such language appears. The
period during which such election may be made will end on the
latest of (i) 60 days after the amendment is adopted; (ii) 60
days after the effective date of the amendment, and (iii) 60
days after the participant is issued written notice of the
amendment by the administrator. For purposes of this subsec-
tion, an amendment of the vesting schedule is any plan amend-
ment which directly or indirectly affects the computation of
the vested percentage of participants' rights to their employer
matching and contribution account balances.
15.17. Qualification of Plan. Adoption of the plan
and trust by the employer is conditioned, unless the plan is
adopted as a standardized plan, upon the employer's securing a
determination letter from the Internal Revenue Service to the
effect that the plan, as adopted by the employer, meets the
applicable requirements of Section 401(a) of the Code. In the
event the employer fails to secure such determination letter
or, after having secured such determination letter, is notified
that the plan no longer meets the applicable requirements of
Section 401(a), any assets of the plan held in the trust will
be considered as held by a nonqualified plan and treated ac-
cordingly. If the employer's plan fails to attain or retain
qualification, such plan will no longer participate in this
prototype plan and will be considered an individually designed
plan. As a condition to adopting this plan, the employer
agrees to notify the trustee and provide the trustee with a
copy of the determination letter issued by the Internal Revenue
Service in connection with the plan within a reasonable period
of time after such letter is received.
15.18. Compliance with ERISA and Severability. The
plan is intended to comply with the applicable requirements of
ERISA. The provisions of the plan shall be interpreted to con-
form to ERISA and any regulations and rules promulgated or
issued under ERISA. If any provision of the plan is found to
be illegal or invalid, such illegality or invalidity shall not
affect the remaining provisions of the plan and the plan shall
be construed and enforced as if such illegal or invalid provi-
sion had never been incorporated herein.
15.19. Control of Trades or Businesses by Owner-
Employee. If this plan provides contributions or benefits for
one or more owner-employees who control both the business for
which this plan is established and one or more other trades or
businesses, this plan and the plan established for such other
trades or businesses must, when looked at as a single plan,
satisfy Code Sections 401(a) and (d) for the employees of this
and all other trades or businesses.
If the plan provides contributions or benefits for one or more
owner-employees who control one or more other trades or busi-
nesses, the employees of the other trades or businesses must be
included in a plan which satisfies Sections 401(a) and (d) and
which provides contributions and benefits not less favorable
than provided for owner-employees under this plan.
If an individual is covered as an owner-employee under the
plans of two or more trades or businesses which are not con-
trolled and the individual controls a trade or business, then
the contributions or benefits of the employees under the plan
of the trades or businesses which are controlled must be as
favorable as those provided for him under the most favorable
plan of the trade or business which is not controlled.
For purposes of the preceding paragraphs, an owner-employee, or
two or more owner-employees, will be considered to control a
trade or business if the owner-employee, or two or more owner-
employees together:
(a) own the entire interest in an unincorpo-
rated trade or business, or
(b) in the case of a partnership, own more than
50 percent of either the capital interest
or the profits interest in the partnership.
For purposes of the preceding sentence, an owner-employee, or
two or more owner-employees, shall be treated as owning any
interest in a partnership which is owned, directly or indi-
rectly, by a partnership which such owner-employee, or such two
or more owner-employees, are considered to control within the
meaning of the preceding sentence.
15.20. Portability. Except as provided below, an
employer may direct the trustee, with the consent of the trust-
ee, to receive and hold for the benefit of a participant under
this plan any assets (i) held for the benefit of such partici-
pant under any other plan or trust qualified under Section
401(a) of the Code or (ii) held in a trust or custodial account
qualified under Section 408 of the Code and attributable to
such participant's prior participation in a plan or trust qual-
ified under Section 401(a) of the Code. Any such assets trans-
ferred to this plan shall be held in a separate, nonforfeitable
account established for the benefit of such participant, which
shall be adjusted as any other participant account under the
plan until distributed in accordance with Section 10.
SECTION 16
Amendment and Termination
16.1. Amendment by the Employer. While the employer
expects and intends to continue the plan, the employer reserves
the right, subject to Section 13, to amend the plan (in accor-
dance with the procedures set forth in subsection 15.9) from
time to time, subject to the following:
(a) No amendment to the plan shall be effective
to the extent that it has the effect of
decreasing a participant's accrued benefit.
Notwithstanding the preceding sentence, a
participant's accrued benefit may be
reduced to the extent permitted under
Section 412(c)(8) of the Code. For pur-
poses of this subparagraph, a plan amend-
ment which has the effect of decreasing a
participant's account balance or elimi-
nating an optional form of benefit, with
respect to benefits attributable to service
before the amendment shall be treated as
reducing an accrued benefit. Furthermore,
no amendment to the plan shall have the
effect of decreasing a participant's vested
interest determined without regard to such
amendment as of the later of the date such
amendment is adopted or the date it becomes
effective.
(b) The employer, by filing an amended adoption
agreement with the sponsor, may amend the
plan to specify which of the plan's vari-
able features will be included in the plan
after the effective date of the amended
adoption agreement and to specify, to the
extent permitted under the plan, how these
variable features will be applied.
(c) The employer, by continuing the plan in the
form of a newly-established and individ-
ually designed plan and trust, may amend
the plan in any manner it considers desir-
able, provided that the accounts of par-
ticipants will not be transferred to such
newly-established trust until it has been
determined that the plan, as amended and
continued in the form of such newly-estab-
lished plan and trust, continues to meet
the requirements of a qualified plan under
the Code. If the employer amends the plan
in this fashion (not including an amendment
under (b) above) it shall no longer be con-
sidered to have adopted this plan, and the
plan, as adopted by the employer, will no
longer be considered to be a prototype
plan. Participants' accounts will be
transferred to such newly-established trust
as soon as practicable after the accounting
date coincident with or next following the
date of a favorable Internal Revenue Ser-
vice determination as to the plan's quali-
fication. If the employer amends the plan
because of a waiver of the minimum funding
requirements of Code Section 412, the plan
will be considered an individually designed
plan and no longer part of the prototype plan.
(d) The employer may amend the plan by adding
overriding plan language to the adoption
agreement where such language is necessary
to satisfy Sections 415 and 416 of the Code
because of the required aggregation of
multiple plans under Sections 415 and 416.
(e) The employer may add certain model amend-
ments published by the Internal Revenue
Service which specifically provide that
their adoption will not cause the plan to
be treated as individually designed.
16.2. Amendment by Sponsor. Each employer, by fil-
ing its adoption agreement with the sponsor and thus adopting
the plan, authorizes and empowers the sponsor to amend the plan
from time to time subject to Section 13 and the following:
(a) Except as provided in subparagraphs (b) and
(c) next below, no such amendment shall
become effective until at least 30 days'
prior written notice thereof has been given
to the employer, nor shall any such amend-
ment reduce participants' benefits to less
than the benefits to which they would have
been entitled to receive if they had re-
signed from the employ of their respective
employers on the day of the amendment or
eliminate any optional form of distribution
under the plan.
(b) An amendment of the plan made under this
subsection which the sponsor deems neces-
sary or appropriate to enable the plan to
meet the requirements of Section 401(a) of
the Code, or any future legislation amend-
ing, supplementing or superseding said
section, may be made effective as of the
date the plan was established by the spon-
sor or as of any subsequent date.
(c) An amendment of the plan made under this
subsection to conform the plan to any
change in the law of the United States, the
state of the employer's principal place of
business or any political subdivision
thereof, or to any rule or regulation
thereunder, may take effect as of the date
such amendment is required to be effective
under such law, rule or regulation.
16.3. Termination. The plan will terminate as to an
individual employer on the first to occur of the following:
(a) The date the plan is terminated by the em-
ployer (in accordance with the procedures
set forth in subsection 15.9) if thirty
days' advance written notice of the termi-
nation is given to the administrator, the
trustee and other employers, if any.
(b) The date the employer is judicially dis-
charged in bankruptcy or is insolvent.
(c) The date the employer permanently discon-
tinues making contributions under the plan.
(d) The dissolution, merger, consolidation or
reorganization of the employer, or the sale
by the employer of all or substantially all
of its assets except that: (i) in such
event arrangements may be made with the
consent of the employer whereby the plan
will be continued by a successor to, or
purchaser of all or substantially all of
the employer's assets, in which case the
successor or purchaser will be substituted
for the employer under the plan; and (ii)
if an employer is merged, dissolved or in
any way reorganized into, or consolidated
with, any other employer, the plan, as
applied to the former employer automat-
ically will continue in effect without a
termination thereof. If the employer is a
partnership, the withdrawal of partners and
the admission of new partners will not in
itself be considered as affecting the
identity of the employer.
16.4. Notice of Amendment or Termination. The
administrator shall notify participants of an amendment or ter-
mination of the plan within a reasonable time.
16.5. Vesting and Distribution on Termination. On
termination or partial termination of the plan [including com-
plete discontinuance of contributions under subparagraph
16.3(c)], the date of termination shall be a special accounting
date and after all adjustments then required have been made,
the account balances of each participant will be fully vested
and nonforfeitable and will be distributable in accordance with
subsections 10.3 or 10.4. Until the entire trust fund has been
distributed, all appropriate accounting provisions of the plan
shall continue to apply, the trust shall continue in effect,
and the trustee shall have all the powers, rights, discretions,
duties and liabilities provided for in the trust and the plan.
16.6. Merger or Consolidation. In the event of a
merger or consolidation of this plan with, or transfer of
assets or liabilities of the plan to, any other plan, each par-
ticipant's or beneficiary's benefits under such other plan
immediately after such merger, consolidation or transfer (if
the plan terminated immediately after such merger, consolida-
tion or transfer) at least shall equal the benefit he would
have received under this plan immediately before the merger,
consolidation or transfer (if this plan had terminated).
SECTION 17
Benefit Limitations
17.1. Single Plan. If the participant does not par-
ticipate in, and has never participated in, another qualified
plan, a welfare benefit fund (as defined in Section 419(e) of
the Code), an individual medical account (as defined in Section
415(l)(2) of the Code), or a simplified employee pension (as
defined in Section 408(k) of the Code), maintained by the
employer, which provides an annual addition as defined in sub-
section 17.12, the amount of annual addition which may be allo-
cated under this plan to the participant's accounts for any
limitation year shall not exceed the lesser of the maximum per-
missible amount or any other limitation contained in this plan.
If the employer contribution that would otherwise be contri-
buted or allocated to the participant's employer contribution
account would cause the annual additions for that limitation
year to exceed the maximum permissible amount, the amount con-
tributed or allocated will be reduced so that the annual addi-
tions for the limitation year will equal the maximum permis-
sible amount.
17.2. Estimated Compensation. Prior to the deter-
mination of the participant's actual compensation for a limi-
tation year, the maximum permissible amount may be determined
on the basis of the participant's estimated annual compensation
for such limitation year. Such estimated annual compensation
shall be determined on a reasonable basis and shall be uni-
formly determined for all participants similarly situated.
17.3. Actual Compensation. As soon as is adminis-
tratively feasible after the end of the limitation year, the
maximum permissible amount for such limitation year shall be
determined on the basis of the actual compensation for such
participant for such limitation year.
17.4. Excess Amount in Single Plan. If, pursuant to
subsection 17.3 or as a result of the allocation of forfei-
tures, there is an excess amount with respect to a participant
for a limitation year, such excess amount shall be disposed of
as follows:
(a) Any voluntary contributions, to the extent
they would reduce the excess amount, will
be returned to the participant.
(b) If after the application of subparagraph
(a) an excess amount still exists, and the
participant is covered by the plan at the
end of the limitation year, then such
excess amount shall not be distributed to
the participant, but shall be reapplied to
reduce future employer contributions or
matching contributions under the plan for
the next limitation year (and for each suc-
ceeding limitation year, if necessary) for
such participant, so that in each such
year, the sum of actual employer contri-
butions and matching employer contributions
plus the reapplied amount shall equal the
amount of employer matching or contribu-
tions which would otherwise be allocated to
such participant's employer contribution
and employer matching contribution accounts.
(c) If after the application of subparagraph
(a) an excess amount still exists, and the
participant is not covered by the plan at
the end of the limitation year, or in the
event that the participant is not entitled
to have an employer contribution allocated
to his account for the next limitation
year, then such excess amount shall not be
distributed to the participant, but shall
be held unallocated in a suspense account.
The suspense account will be applied to
reduce future employer contributions or
employer matching contributions for all
remaining participants in the next limita-
tion year, and each succeeding limitation
year if necessary.
(d) If a suspense account is in existence at
any time during the limitation year pursu-
ant to this subsection, it will not partic-
ipate in the allocation of the trust's
investment gains and losses. If a suspense
account is in existence at any time during
a particular limitation year, all amounts
in the suspense account must be allocated
and reallocated to participants' accounts
before any employer or employee contribu-
tions may be made to the plan for that
limitation year. Excess amounts may not be
distributed to participants or former par-
ticipants.
17.5. Two or More Qualified Plans (Master or Proto-
type Plans). If, in addition to this plan, the participant is
covered under another qualified master or prototype defined
contribution plan maintained by the employer, a welfare benefit
fund maintained by the employer, an individual medical account
maintained by the employer, or a simplified employee pension
maintained by the employer, which provides an annual addition
as defined in subsection 17.12 during any limitation year, the
amount of annual additions which may be allocated under this
plan on a participant's behalf for a limitation year shall not
exceed the maximum permissible amount reduced by the annual
additions credited to a participant's account under the other
plans and welfare benefit funds for the same limitation year.
If the annual additions with respect to the participant under
other defined contribution plans and welfare benefit funds
maintained by the employer are less than the maximum permissi-
ble amount and the employer contribution that otherwise would
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 allo-
cated will be reduced so that the annual additions under all
such plans and funds for the limitation year will equal the
maximum permissible amount. If a participant's annual addi-
tions under such other plans result in an excess amount for a
limitation year, no participant or employer contributions will
be contributed or allocated to the participant's accounts under
this plan for the limitation year.
17.6. Estimated Compensation (Two or More Plans).
Prior to the determination of the participant's actual compen-
sation for a limitation year, the amounts referred to in sub-
section 17.5 above may be determined on the basis of the par-
ticipant's estimated annual compensation for such limitation
year. Such estimated annual compensation shall be determined
on a reasonable basis and shall be uniformly determined for all
participants similarly situated.
17.7. Actual Compensation (Two or More Plans). As
soon as is administratively feasible after the end of the limi-
tation year, the amounts referred to in subsection 17.6 shall
be determined on the basis of the actual compensation paid to
such participant for such limitation year.
17.8. Treatment of Excesses (Two or More Plans). If
pursuant to subsection 17.7 or as a result of the allocation of
forfeitures, a participant's annual additions under this plan
and all such other plans result in an excess amount for a limi-
tation year, such excess amount shall be deemed to consist of
the amounts last allocated under the plans, except that annual
additions attributable to a simplified employee pension will be
deemed to have been allocated first, followed by annual addi-
tions to a welfare benefit fund or individual medical account,
regardless of the actual allocation date. Any excess amounts
attributable to this plan shall be disposed of as provided in
subsection 17.4.
17.9. Coincident Allocations (Two or More Plans).
If an excess amount was allocated to a participant's accounts
on an allocation date of this plan which coincides with an
allocation date of another plan, the excess amount attributable
to this plan will be the product of:
(a) the total excess amount allocated as of
such date, and
(b) the ratio of (i) the annual additions allo-
cated to the participant for the limitation
year as of such date under this plan, to
(ii) the total annual additions allocated
to the participant for the limitation year
as of such date under all qualified master
or prototype defined contribution plans.
17.10. Two or More Qualified Plans (Other than Mas-
ter or Prototype Plans). If the employer also maintains anoth-
er plan which is a qualified defined contribution plan other
than a master or prototype plan and a participant is covered
under such other plan, annual additions allocated to accounts
under this plan on behalf of any participant shall be limited
in accordance with the provisions of subsections 17.5 through
17.10, as though the other plan were a master or prototype
plan, unless the employer provides other limitations in the
adoption agreement.
17.11. Combined Plan Limitation. If the employer
maintains or at any time maintained a qualified defined benefit
plan covering any of its employees who are participants in this
plan, the sum of the participant's defined benefit plan frac-
tion and defined contribution plan fraction will not exceed 1.0
in any limitation year. The benefits provided for the partici-
pant under the defined benefit plan will be adjusted to the
extent necessary so that the sum of such fractions determined
with respect to the participant does not exceed 1.0, unless the
employer has specified otherwise in the adoption agreement.
17.12. Definitions Relative to Benefit Limitations.
For purposes of this Section 17, the following terms shall
have the following meanings:
(a) "Annual addition" means the sum of the
following amounts allocated or credited to
a participant's account for a limitation
year:
(i) all employer contributions made
on his behalf;
(ii) all forfeitures; and
(iii) all of the participant's volun-
tary contributions.
In addition, amounts allocated, after
March 31, 1984, to an individual medical
account, as defined in Section 415(l)(2) of
the Code, which is part of a pension or
annuity plan maintained by the employer are
treated as annual additions to a defined
contribution plan. Also, amounts derived
from contributions paid or accrued after
December 31, 1985, in taxable years ending
after such date, which are attributable to
post-retirement medical benefits allocated
to the separate account of a key employee,
as defined in Section 419A(d)(3) of the
Code under a welfare benefit fund, as de-
fined in Section 419(e) of the Code, main-
tained by the employer, are treated as
annual additions to a defined contribution
plan. Finally, allocations under a
simplified employee pension are treated as
annual additions to a defined contribution
plan.
(b) "Maximum permissible amount" means, with
respect to any participant for a limitation
year, the lesser of (i) $30,000 (or if
greater, 1/4 of the dollar amount in effect
under Section 415(b)(1) of the Code for
that limitation year), or (ii) 25 percent
of the participant's actual compensation
for the limitation year. The limitation in
(ii) above shall not apply to any contribu-
tion for medical benefits (within the mean-
ing of Section 401(h) or Section 419A(f)(2)
of the Code) which is otherwise treated as
an annual addition, or any amount otherwise
treated as an annual addition under Section
415(l)(1) or 419A(d)(2) of the Code. If a
short limitation year is created because of
an amendment changing the plan year to a
different 12-consecutive month period, the
maximum permissible amount will not exceed
the defined contribution dollar limitation
in (i) above multiplied by the following
fraction:
Number of Months in the short limitation year
12
(c) "Excess amount" means the excess of a par-
ticipant's annual addition for a limitation
year over the participant's maximum permis-
sible amount.
(d) "Defined benefit fraction" means a frac-
tion, the numerator of which is the sum of
the participant's projected annual benefits
under all the defined benefit plans (wheth-
er or not terminated) maintained by the
employer, and the denominator of which is
the lesser of 125 percent of the dollar
limitation determined for the limitation
year under Sections 415(b) and (d) of the
Code or 140 percent of the highest average
compensation, including any adjustments
under Section 415(b) of the Code. Notwith-
standing the above, if the participant was
a participant as of the first day of the
first limitation year beginning after
December 31, 1986, in one or more defined
benefit plans maintained by the employer
which were in existence on May 6, 1986, the
denominator of this fraction will not be
less than 125 percent 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 of the plan
after May 5, 1986. The preceding sentence
applies only if the defined benefit plans
individually and in the aggregate satisfied
the requirements of Section 415 for all
limitation years beginning before January
1, 1987.
(e) "Defined contribution fraction" means a
fraction, the numerator of which is the sum
of the annual additions to the partici-
pant's accounts under all the defined con-
tribution plans (whether or not terminated)
maintained by the employer for the current
and all the prior limitation years (includ-
ing the annual additions attributable to
the participant's voluntary contributions
to all defined benefit plans, whether or
not terminated, maintained by the employer,
and the annual additions attributable to
all welfare benefit funds, individual medi-
cal accounts, and simplified employee pen-
sions, maintained by the employer) and the
denominator of which is the sum of the
maximum aggregate amount for the current
and all prior limitation years of service
with the employer (regardless of whether a
defined contribution plan was maintained by
the employer). The "maximum aggregate
amount" in any limitation year is the
lesser of 125 percent of the dollar limita-
tion in effect under Section 415(c)(1)(A)
of the Code or 35 percent of the partici-
pant's compensation for such year. If the
employee was a participant as of the end of
the first day of the first limitation year
beginning after December 31, 1986, in one
or more defined contribution plans main-
tained by the employer which were in exis-
tence on May 6, 1986, the numerator of this
fraction will be adjusted if the sum of
this fraction and the defined benefit frac-
tion would otherwise exceed 1.0 under the
terms of this plan. Under the adjustment,
an amount equal to the product of (1) the
excess of the sum of the fractions over 1.0
times (2) the denominator of this fraction,
will be permanently subtracted from the
numerator of this fraction. The adjustment
is calculated using the fractions as they
would be computed as of the end of the last
limitation year beginning before January 1,
1987 and disregarding any changes in the
terms and conditions of the plan made after
May 5, 1986, but using the Section 415
limitation applicable to the first limita-
tion year beginning on or after January 1,
1987. The annual addition for any limita-
tion year beginning before January 1, 1987
shall not be recomputed to treat all em-
ployee contributions as annual additions.
(f) "Projected annual benefit" means the annual
benefit (adjusted to an actuarially equiva-
lent straight life annuity if such benefit
is expressed in a form other than a
straight life annuity or qualified joint
and survivor annuity) to which the partici-
pant would be entitled under the terms of
the plan assuming:
(i) the participant will continue
employment until normal retire-
ment 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 con-
stant for all future limitation
years.
(g) "Compensation". For purposes of this Sec-
tion 17 only, the term "compensation" means
a participant's earned income, wages, sala-
ries, fees for professional service and
other amounts received (without regard to
whether or not an amount is paid in cash)
for personal services actually rendered in
the course of employment with the employer
maintaining the plan to the extent that the
amounts are includible in the participant's
gross income (including, but not limited
to, commissions paid salesmen, compensation
for services on the basis of a percentage
of profits, commissions on insurance premi-
ums, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances
under a nonaccountable plan (as described
in Section 1.62-2(c) of the Income Tax
Regulations) and excluding the following:
(i) employer contributions to a
plan of deferred compensation
which are not includible in the
employee's gross income for the
taxable year in which contrib-
uted, or employer contributions
under a simplified employee
pension plan to the extent such
contributions are deductible by
the employee, or any distribu-
tions from a plan of deferred
compensation;
(ii) amounts realized from the exer-
cise of a non-qualified stock
option, or when restricted
stock (or property) held by the
employee either becomes freely
transferable or is no longer
subject to a substantial risk
of forfeiture;
(iii) amounts realized from the sale,
exchange or other disposition
of stock acquired under a qual-
ified stock option; and
(iv) other amounts which received
special tax benefits, or con-
tributions made by the employer
(whether or not under a salary
reduction agreement) towards
the purchase of an annuity
described in Section 403(b) of
the Code (whether or not the
amounts are actually excludable
from the gross income of the
employee).
Notwithstanding the foregoing, compensation
for a participant in a defined contribution
plan who is permanently and totally dis-
abled (as defined in Section 22(e)(3) of
the Code) is the compensation such partici-
pant would have received for the limitation
year if the participant was paid at the
rate of compensation paid immediately be-
fore becoming permanently and totally dis-
abled; such imputed compensation for the
disabled participant may be taken into
account only if the participant is not a
highly compensated employee (as defined in
Section 414(q) of the Code), and contribu-
tions made on behalf of such participant
are nonforfeitable when made.
(h) "Master or Prototype Plan" means a plan the
form of which is the subject of a favorable
opinion letter from the Internal Revenue
Service.
(i) "Highest Average Compensation" means the
average compensation for the three consecu-
tive years of service with the employer
that produces the highest average. A year
of service with the employer is the 12-con-
secutive month period defined in subsection
2.28 and the adoption agreement.
SECTION 18
Predecessor Plan
If the employer so indicates in the adoption agree-
ment, this plan (and the trust which forms a part of the plan)
shall constitute an amendment, continuation and entire restate-
ment of a plan (the "predecessor plan") previously adopted and
maintained by the employer which also was a plan intended to
meet the requirements of Section 401(a) of the Code. If this
plan constitutes a continuation of a predecessor plan, each
employee of the employers who was a participant in the prede-
cessor plan immediately prior to the applicable effective date
of this plan will continue as a participant in this plan, sub-
ject to its terms and conditions. Furthermore, in the case of
a participant in the predecessor plan immediately prior to the
effective date of this plan, the vested or nonforfeitable per-
centage of such participant's benefits under this plan in no
event shall be less than the vested or nonforfeitable percent-
age which he was entitled to receive under such predecessor
plan.
SECTION 19
Special Rules Applicable When Plan is Top-Heavy
19.1. Purpose and Effect. The purpose of this Sec-
tion 19 is to comply with the requirements of Section 416 of
the Code. The provisions of this Section 19 shall be effective
for each plan year in which the plan is a "top-heavy plan"
within the meaning of Section 416(g) of the Code and shall
supersede any conflicting provisions in the plan or the adop-
tion agreement. The administrator shall have sole responsibil-
ity for determining whether the plan is a top-heavy plan.
19.2. Top-Heavy Plan. In general, the plan will be
a top-heavy plan for any plan year if, (i) as of the last day
of the preceding plan year and (ii) in the case of the first
plan year of a new plan, the last day of such plan year (the
"determination date"), the top-heavy ratio for this plan (and
any other plan which is aggregated in accordance with subsec-
tion 19.4 below including any Simplified Employee Pension Plan)
exceeds 60 percent. The "top-heavy ratio" for this plan (and
such other plans) is equal to the ratio of the sum of the
amounts in (a), (b) and (c) below for key employees (as defined
below and in Section 416(i)(1) of the Code) to the sum of such
amounts for all employees who are covered by a defined contri-
bution plan or defined benefit plan which is aggregated in
accordance with subsection 19.4 below:
(a) The aggregate account balances of partici-
pants under this plan.
(b) The aggregate account balances of partici-
pants under any other defined contribution
plan included in subsection 19.4 below.
(c) The present value (based on the assumptions
specified in the adoption agreement) of the
cumulative accrued benefits of participants
calculated under any defined benefit plan
included in subsection 19.4 below.
The accounting date coincident with the last day of the plan
year shall be the "valuation date" for purposes of determining
the value of account balances and the present value of accrued
benefits. In making the foregoing determination: (A) a par-
ticipant's account balances or cumulative accrued benefits
shall be increased by the aggregate distributions, if any, made
with respect to the participant during the 5-year period ending
on the determination date, including distributions under a ter-
minated plan which, if it had not been terminated, would have
been required to be included in the aggregation group, (B) the
account balances or cumulative accrued benefits of a partici-
pant who was previously a key employee, but who is no longer a
key employee, shall be disregarded, (C) the account balances or
cumulative accrued benefits of a beneficiary of a participant
shall be considered accounts of the participant, (D) the ac-
count balances or cumulative accrued benefits of a participant
who has not been credited with at least one hour of service
with an employer or related employer at any time during the
five-year period ending on the determination date shall be
disregarded, (E) any rollover contribution (or similar trans-
fer) from a plan maintained by an unrelated employer to this
plan initiated by a participant shall not be taken into account
as part of the participant's aggregate account balances under
this plan and (F) any contribution not actually made as of a
determination date, but which is required to be taken into
account under Section 416 and the regulations thereunder, shall
be taken into account. The accrued benefit of a participant
other than a key employee shall be determined under: (i) the
method, if any, that uniformly applies for accrual purposes
under all defined benefit plans maintained by the employer; or
(ii) if there is no such method, as if such benefit accrued not
more rapidly than the slowest accrual rate permitted under the
fractional rule of Section 411(b)(1)(C) of the Code.
19.3. Key Employee. In general, a "key employee" is
an employee or former employee (and the beneficiaries of such
employee) who, at any time during the 5-year period ending on
the determination date, is:
(a) an officer of an employer or related em-
ployer receiving annual earnings from the
employer and related employers in excess of
50% of the limitation in effect under Sec-
tion 415(b)(1)(A) of the Code for that
year); provided that, for purposes of this
subparagraph (a), no more than 50 employees
of the employer and related employers (or,
if lesser, the greater of 3 employees or 10
percent of the employees) shall be treated
as officers;
(b) one of the ten employees receiving annual
earnings from an employer and related em-
ployers in excess of the dollar limitation
in effect under Section 415(c)(1)(A) of the
Code for that year and owning (or consid-
ered as owning under Section 318 of the
Code) both the largest interests in the
employer or in a related employer and more
than a one-half percent interest; or
(c) a 5-percent owner of an employer or a re-
lated employer; or
(d) a 1-percent owner of an employer or related
employer receiving annual earnings from the
employer and related employers of more than
$150,000.
The determination of who is a key employee will be made in
accordance with Section 416(i)(l) of the Code and the regula-
tions thereunder. A "non-key employee" is each employee who is
not a key employee, as defined above. Annual earnings means
compensation as defined in Section 415(c)(3) of the Code, but
including amounts contributed by the employer pursuant to a
salary reduction agreement which are excludable from the em-
ployee's gross income under Section 125, Section 402(c)(3),
Section 402(h) or Section 403(b) of the Code.
19.4. Aggregation of Plans. Each other defined con-
tribution plan and defined benefit plan maintained by the em-
ployer or related employers which covers a "key employee" as a
participant at any time during the determination period (re-
gardless of whether the plan has terminated), or which is main-
tained by the employer or related employers in order for a plan
covering a key employee to qualify under Section 401(a)(4) and
410 of the Code, shall be aggregated with this plan in deter-
mining whether this plan is top-heavy ("required aggregation").
In addition, any other defined contribution or defined benefit
plan of the employer or related employers may be included if
all such plans which are included when aggregated will continue
to qualify under Section 401(a)(4) and 410 of the Code ("per-
missive aggregation").
19.5. Minimum Vesting. Once the plan has become a
top-heavy plan for any plan year, a participant's vested per-
centage in his employer matching and contribution accounts for
that year and all subsequent years shall not be less than the
vesting percentage specified by the employer in the adoption
agreement or the percentage determined under the following
table (whichever results in a more rapid vesting schedule):
Years of Service Vested Percentage
Less than 2 0%
2 years 20%
3 years 40%
4 years 60%
5 years 80%
6 or more years 100%
19.6. Minimum Employer Contribution. Subject to the
following sentence and subsection 19.8 below, for any plan year
in which the plan is a top-heavy plan, employer contributions
and forfeitures, if any, credited to each participant who is
not a key employee (including participants who were employed on
the last day of the plan year but did not complete 1,000 hours
of service) shall not be less than 3 percent of such partici-
pant's compensation for that year. In no event, however, shall
the employer contributions and forfeitures, if any, credited in
any year to any such participant (expressed as a percentage of
such participant's compensation) exceed the maximum employer
contributions and forfeitures, if any, credited in that year to
a key employee (expressed as a percentage of such key employ-
ee's compensation). The preceding sentence shall not apply if
this plan is required to be included in an aggregation group
for a defined benefit plan in order for such group to meet the
requirements of 401(a)(4) or 410 of the Code. The employer may
specify in the adoption agreement that the minimum employer
contribution provided above will be 4 percent of each partici-
pant's compensation for that year if it desires to preserve the
defined contribution and benefit fractions provided under sub-
paragraph 17.12(d) and (e) and the plan is not super top-heavy
(as defined below). If the employer has adopted this plan as a
paired defined contribution plan, for each plan year in which
the paired plans are top-heavy, the employer will provide a
minimum contribution equal to 3 percent of compensation for
each non-key employee who is entitled to a minimum contribution
under both paired defined contribution plan number 003 and
paired defined contribution plan number 001. Compensation for
purposes of this Section 19 means a participant's earnings paid
to him by the employers for the plan year as reported on the
participant's Federal Income Tax Withholding Statement (Form
W-2).
19.7. Coordination of Benefits. If a participant is
covered by another plan maintained by the employer or a related
employer, the minimum contribution otherwise required under
subsection 19.6 above may be reduced to prevent inappropriate
duplication of required minimum contributions or benefits.
Accordingly, the provisions of subsection 19.6 shall not apply
to any participant to the extent the participant is covered by
another plan or plans of the employer and the employer has
provided in the adoption agreement that the minimum contribu-
tion or benefit requirements will be met in the other plan or
plans.
19.8. Adjustment of Combined Benefit Limitations.
For any plan year in which the plan is a top-heavy plan, the
determination of the defined contribution plan fraction and
defined benefit plan fraction under subparagraphs 17.12(d) and
(e) of the plan shall be adjusted in accordance with the provi-
sions of Section 416(h) of the Code (by substituting "1.0" for
"1.25" in the determination of such fractions), unless the min-
imum employer contribution specified in subsection 19.6 above
is not less than four rather than three percent and the plan is
not a "super top-heavy plan" (as described below and in Section
416(h) of the Code) for that year. The plan will be a super
top-heavy plan for any plan year if the plan would still be a
top-heavy plan under subsection 19.2 above if the figure "90
percent" was substituted for the figure "60 percent" in that
subsection.
19.9. Benefit Accrual. Solely for the purpose of
determining if the plan, or any other plan included in a re-
quired aggregation group of which this plan is a part, is top-
heavy (within the meaning of Section 416(g) of the Code), the
accrued benefit of an employee other than a key employee (with-
in the meaning of Section 416(i)(1) of the Code) shall be de-
termined under (a) the method, if any, that uniformly applies
for accrual purposes under all plans maintained by the employ-
ers, or (b) if there is no such method, as if such benefit
accrued not more rapidly than the slowest accrual rate permit-
ted under the fractional accrual rule of Section 411(b)(1)(C)
of the Code.
SECTION 20
Direct Transfer of Eligible Rollover Distributions
20.1. Purpose. This Section 20 applies to distribu-
tions made on or after January 1, 1993. Notwithstanding any
provision of the plan to the contrary that would otherwise
limit a distributee's election under this Section 20, a dis-
tributee may elect, at the time and in the manner prescribed by
the administrator, to have any portion of an eligible rollover
distribution paid directly to an eligible retirement plan spec-
ified by the distributee in a direct rollover.
20.2. Definition of 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 Section 401(a)(9) of
the Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
20.3. Definition of Eligible Retirement Plan. An
eligible retirement plan is an individual retirement account
described in Section 408(a) of the Code, an individual retire-
ment annuity described in Section 408(b) of the Code, an annu-
ity plan described in Section 403(a) of the Code, or a quali-
fied trust described in Section 401(a) of the Code, that
accepts the distributee's eligible rollover distribution. How-
ever, 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.
20.4. Definition of Distributee. A distributee in-
cludes an employee or former employee. In addition, the em-
ployee's or former employee's surviving spouse and the employ-
ee's or former employee's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as
defined in Section 414(p) of the Code, are distributees with
regard to the interest of the spouse or former spouse.
20.5. Definition of Direct Rollover. A direct roll-
over is a payment by the plan to the eligible retirement plan
specified by the distributee.
\30790\201\20PLNKXK.003
\30790\201\20PLNKXK.R03
PAGE
9/30/96
ADOPTION AGREEMENT FOR
STATE STREET SOLUTIONS
PROTOTYPE DEFINED CONTRIBUTION PLAN
(Profit Sharing - Nonstandardized)
(001)
ADOPTION AGREEMENT FOR
STATE STREET SOLUTIONS
PROTOTYPE DEFINED CONTRIBUTION PLAN
(Profit Sharing - Nonstandardized)
ADOPTION OF PLAN
[ ] Adoption - With the consent of State Street Bank and Trust
Company (the "sponsor"), the undersigned
(the "employer") hereby
adopts as a profit sharing plan for its employees the form of
plan known as State Street Solutions Prototype Defined Contribu-
tion Plan, and hereby agrees to become a party to the Trust
Agreement under State Street Solutions Prototype Defined Contri-
bution Trust (the "trust"), which forms a part of the plan.
[ ] Amendment of State Street Solutions Prototype Defined
Contribution Plan -
(the "employer") previously has adopted a profit sharing plan in
the form of State Street Solutions Prototype Defined Contribution
Plan and the execution of this adoption agreement constitutes an
amendment of that plan.
[x] Restatement of Other Profit Sharing Plan - With the consent
of State Street Bank and Trust Company (the "sponsor"), the
undersigned Plymouth Rubber Co., Inc (the
"employer") hereby adopts as a profit sharing plan for its
employees the form of plan known as State Street Solutions
Prototype Defined Contribution Plan, and hereby agrees to become
a party to the Trust Agreement under State Street Solutions
Prototype Defined Contribution Trust (the "trust"), which forms a
part of the plan.
Name of Plan. The name of this plan as adopted by the employer
is the Plymouth Rubber Co., Inc Retirement Savings & Profit
Sharing Plan (the "plan").
With respect to the variable features contained in the plan, the
employer hereby makes the following selections granted under the
provisions of the plan:
GENERAL INFORMATION (Sections 1 and 2 of the plan)
1. Adopting Entity. The employer adopts the plan as: (subsection 1.2)
[ ] (a) a single employer plan.
[x] (b) a plan of a controlled group of corporations or
trades or businesses under common control.
[ ] (c) a plan of an affiliated service group.
Item (a) should be selected if the plan is being adopted by
the employer only. If the plan is adopted by one or more related employers
in addition to the employer, item (b) or (c) should be selected and the
related employers adopting the plan should be specified below:
Brite-Line Technologies Inc.
The adopting employers and the employer are referred to
herein collectively as the "employer."
2. Employer's Address. The employer's principal business
address is:
Plymouth Rubber Co., Inc
104 Revere St
Canton MA 02021
(subsection 1.4)
3. Employer's Name and ID Number. The employer's name and employer identifica-
tion number that will be used for filing annual return/reports is:
Plymouth Rubber Co., Inc 04-1733970 .
4. Effective Date. The "effective date" of the initial adoption of this plan
or this plan amendment is January 1, 1998 (subsection 2.6). If this is an
amendment and restatement of a prior profit sharing plan, the initial effec-
tive date of the prior plan was December 1, 1955.
5. Employer's Fiscal Year. The last month and day of the employer's fiscal
year is Ends the Friday Closest to Nov 30th (subsection 2.11).
6. Plan Year. The "plan year" of the plan shall be (subsection 2.21):
[x] (a) A calendar year.
[ ] (b) The fiscal year of the employer.
[ ] (c) The fiscal year ending [specify
month and day].
[ ] (d) A short plan year beginning , 19
and ending , 19 ; and thereafter
the plan year shall be as indicated in (a), (b) or (c) above.
7. Plan Administrator. The plan administrator (subsection 1.3)
of the plan is The Retirement Committee
(fill in the name(s)
of the individuals or entity that is responsible for administration of the
plan) and such other persons or entity as the employer shall appoint from
time to time. The employer will notify the trustee of any change in the
administrator.
COMPENSATION
8. Exclusions from Compensation. For purposes of subsection 2.3 of the plan,
the definition of compensation:
(a) [x] shall include
[ ] shall not include
all employer contributions made pursuant to a compensation
deferral (or reduction) election which are not includible in
the gross income of the employee under Sections 125, 402(e)(3),
402(h), 457(b), 403(b) or 414(h)(2) of the Code; and
(b) [ ] shall
[ ] shall not
exclude the following items from the compensation of an
employee:
[If you exclude items from compensation under (b) above, the plan will
be required to demonstrate that the resulting definition of compensation
is non-discriminatory.]
ELIGIBILITY TO PARTICIPATE
9. Entry Date. The entry date (subsection 2.9) is: [Select
one]
[ ] (a) The first day of each month.
[x] (b) The first day of each plan year quarter.
[ ] (c) The first day of each plan year and the first day
of the seventh month of each plan year.
[ ] (d) The last day of the sixth month of each plan year
and the last day of each plan year.
[ ] (e) The first day of each plan year, provided the
plan year begins on the first day of a month.
[If you select this option, the age requirement
in item 10(a) may not exceed 20-1/2 years and the
service requirement in item 10(b) may not exceed
1/2 year.]
[ ] (f) The date that the employee satisfies the plan's
eligibility requirements.
10. Eligibility Requirements. Subject to the provisions of subsection 3.1 of
the plan, each employee of the employer will be eligible to participate in the
plan if the employee satisfies all of the following eligibility requirements:
(a) Minimum Age. The employee has attained at least age
21 years (specify 21 or less - or specify that "no"
age requirement shall apply). (subparagraph 3.1(a))
(b) Minimum Service. The employee has completed at least
.50 year(s) of service (specify 2 or less). If you
permit compensation deferral contributions, the
employee will be eligible to participate in the
compensation deferral (and matching contribution, if
any) arrangement under this plan if the employee com-
pletes at least .50 year of service (specify 1 or
less). (subparagraph 3.1(b))
(c) Eligible Classes. The employee belongs to at least
one of the groups or classes of employees specified
below (subparagraph 3.1(c)):
[ ] All employees.
[ ] All employees who are not included in a unit
of employees covered by be a collective
bargaining agreement between employee
representatives and one or more employers,
if retirement benefits were the subject of
good faith bargaining between the employer
and such employee representatives, if two
percent or less of the employees who are
covered pursuant to that agreement are
professionals as defined in Section
1.410(b)-9 of the Income Tax Regulations,
and if participation in the plan has not
been extended to such unit of employees.
[ ] Salary based employees
[ ] Hourly based employees
[ ] Commissioned salesmen
[x] Other (specify) See Supplement to the plan, Item 2.
[If you select any of the last four choices in item (c) above, the
plan must satisfy on a continuing basis the non-discrimination test of Section
401(a)(4), the participation test of Section 401(a)(26) and the coverage test
of Section 410(b) of the Internal Revenue Code. These participation and
coverage tests will automatically be satisfied if you select only the first
or second choice in (c) above.]
YEAR OF SERVICE
11. Eligibility Service. A "year of service" (subsection 2.28)
for purposes of determining eligibility to participate in
the plan shall be computed in accordance with: [Select one]
[ ] (a) Hours of service completed in a year, in accor-
dance with subparagraph 2.28(a) of the plan.
[x] (b) Elapsed time, in accordance with subparagraph
2.28(b) of the plan.
12. Vesting Service. A "year of service" (subsection 2.28) for
purposes of determining vesting under the plan shall be
computed in accordance with: [Select one]
[x] (a) Hours of service completed in a plan year, in
accordance with subparagraph 2.28(a) of the plan.
[ ] (b) Elapsed time, in accordance with subparagraph
2.28(b) of the plan.
This item must be completed even though the number "0" has
been specified in item 10(b).
13. Hours of Service. [Do not complete item 13 if you selected
both 11(b) and 12(b) above]. If item 11(a) or 12(a) has
been specified, an employee shall be credited with hours of
service (subsection 2.13), as follows: [Select one]
[x] (a) Actual hours of service for which an employee is
paid or entitled to payment.
[ ] (b) 10 hours of service for each day or portion of a
day.
[ ] (c) 45 hours of service for each week or portion of a
week.
[ ] (d) 190 hours of service for each month or portion of
a month.
COMPENSATION DEFERRAL CONTRIBUTIONS
14. Compensation Deferral Contributions Permitted. Compensation
deferral contributions by participants under subsection 4.1
of the plan are permitted.
[x] (a) Yes. A participant's compensation deferral
contribution election: [Select one]
[x] (i) shall
[ ] (ii) shall not
apply to cash bonuses.
[ ] (b) No.
15. Compensation Deferral Contribution Limits. Between 1% and
15% of a participant's compensation (specify minimum and
maximum whole percentages) may be deferred by a participant
and contributed to the plan as compensation deferral
contributions in accordance with subsections 4.1 and 6.2 of
the plan. Compensation deferral contributions withheld from
participants' compensation are deemed to be made by the em-
ployer. Compensation deferral contributions may not exceed
the dollar limit in effect under Section 402(g) of the
Internal Revenue Code for any taxable year, and excess
deferrals under Section 402(g) must be remedied as a matter
of plan qualification.
The plan contains limitations on the percentage of compen-
sation that "highly compensated employees" may elect to
defer as compared to all other participants (subsection
4.5). The plan also contains a limitation ($10,000 for
1998, and indexed to the cost-of-living) on the compensation
deferral contributions made by any participant for any cal-
endar year (subsection 4.4). You may wish to take these
limitations into consideration when selecting the maximum
and minimum percentages above. Under no circumstances may a
salary reduction agreement or other deferral mechanism be
adopted retroactively.See Supplement to Plan, Item 9.
16. Compensation Deferral Contribution Changes. A participant
may elect to change the rate of his compensation deferral
contributions under subsection 4.3 of the plan as of the
first payroll period beginning on or after: [Select one]
[ ] (a) The first day of any plan year.
[ ] (b) The first day of any plan year and the first
day of the seventh month of any plan year.
[x] (c) The first day of any plan year quarter.
[ ] (d) The first day of any month.
VOLUNTARY PARTICIPANT CONTRIBUTIONS
17. Voluntary Contributions Permitted. If the employer has
specified that participants may make compensation deferral
contributions under the plan, participants also may elect to
make voluntary contributions under subsection 5.1 of the
plan. Note: If you maintain another qualified retirement
plan that permits voluntary participant contributions, you
must check "No".
[ ] (a) Yes. A participant's voluntary contribution
election: [Select one]
[ ] (i) shall
[ ] (ii) shall not
apply to cash bonuses.
[x] (b) No.
18. Voluntary Contribution Limits. If the employer has speci-
fied in item 17 above that participants may elect to make
voluntary contributions, such contributions may be between
one and percent of their compensation (specify a whole
number, up to 10 percent).
The plan contains limitations on the percentage of compen-
sation that "highly compensated employees" may elect to
contribute (when added together with any employer matching
contributions allocated to such participants), as compared
to all participants (subsection 4.6). You may wish to take
these limitations into account when setting the maximum per-
centage in this item 18, unless you have prohibited highly
compensated employees from making contributions by item 29
below.
19. Voluntary Contribution Changes. If the employer has speci-
fied in item 17 above that participants may elect to make
voluntary contributions, a participant may elect to change
the rate of his voluntary contributions under subsection 5.3
of the plan as of the first payroll period beginning on or
after: [select one]
[ ] (a) The first day of any plan year.
[ ] (b) The first day of any plan year and the first day
of the seventh month of any plan year.
[ ] (c) The first day of any plan year quarter.
[ ] (d) The first day of any month.
MATCHING CONTRIBUTIONS
20. Employer Matching Contributions Permitted. In addition to
the compensation deferral contributions under subsection 6.2
of the plan, the employer will make a matching contribution
on behalf of each participant under subsection 6.3 of the
plan.
[x] Yes.
[ ] No.
21. Amount of Matching Contribution. If the employer has speci-
fied that it will make employer matching contributions on
behalf of participants, such matching contributions will be
in an amount determined as follows: [Select one]
[ ] (a) % of the compensation deferral contributions
made by each participant.
[x] (b) At a percentage of the compensation deferral con-
tributions to be determined solely in the dis-
cretion of the employer in a nondiscriminatory
manner.
[If (a) or (b) above is selected, the employer will not
match compensation deferral contributions in excess of
$___________ or 15% of each participant's compensation --
specify either a dollar amount or a whole percentage which
is between 1% and the highest percentage specified in item 15.]
[ ] (c) $________ for each participant who made compensa-
tion deferral contributions of at least ____% of
compensation.
[ ] (d) ____% of the compensation of each participant who
made compensation deferral contributions of at
least ___% of compensation.
[ ] (e) In an amount to be determined solely in the dis-
cretion of the employer in a nondiscriminatory
manner, to be allocated to those participants who
made compensation deferral contributions of at
least ____% of compensation, pro rata, according
to the compensation paid to them by the employer.
[ ] (f) ____% of that portion of the compensation defer-
ral contributions made by each participant which
does not exceed ____% of the participant's com-
pensation; plus ____% of that portion, if any, of
the compensation deferral contributions made by
each participant which exceeds ____% of the par-
ticipant's compensation but does not exceed ____%
of the participant's compensation; plus ____% of
that portion, if any, of the compensation defer-
ral contributions made by each participant which
exceeds ____% of the participant's compensation
but does not exceed ____% of the participant's
compensation.
Subsection 4.6 of the plan contains limitations on the per-
centage of compensation which a highly compensated partici-
pant can have credited to his account through employer
matching contributions; and Section 17 of the plan contains
limitations on the total amount which may be credited to a
participant's account for any year.
22. Compensation in Initial Year of Participation. A partici-
pant's compensation which is used in the allocation of em-
ployer matching contributions under item 21(d) or (e) shall:
[Select one]
[ ] (a) exclude compensation before becoming a partici-
pant.
[x] (b) exclude compensation before meeting the plan's
eligibility requirements.
[ ] (c) include compensation in the first plan year of
participation.
23. Employees Eligible to Receive Matching Contribution. Em-
ployer matching contributions made for each plan year shall
be allocated and credited to the employer matching contri-
bution accounts of the following participants: [Select one]
[ ] (a) Participants who were employed by the employer
during that plan year, other than participants
who resigned or were dismissed prior to complet-
ing ____ (not more than 1,000) hours of service
during that plan year.
[ ] (b) Participants who were employed by the employer
during that plan year.
[x] (c) Participants who were employed by the employer on
the last day of that plan year.See Supplement to
Plan, Item 3.
[ ] (d) Participants who both were employed by the em-
ployer on the last day of that plan year and had
completed at least ____ (not more than 1,000)
hours of service during that plan year.
[Selection of more than 501 hours in item 23(a) or selection
of item 23(c) or 23(d) could result in discrimination in
operation and plan disqualification.]
24. Qualified Matching Contributions. Employer matching
contributions made under item 21 may constitute "qualified
matching contributions" or the employer may make additional
matching contributions which constitute "qualified matching
contributions" that are fully vested and subject to distri-
bution restrictions.
[x] (a) Yes. The portion of the employer matching con-
tributions which constitutes qualified matching
contributions shall be:
[ ] (i) All matching contributions.
[x] (ii) Only the portion of the matching contri-
butions required to satisfy the ADP test
under subsection 4.5 of the plan.
Qualified matching contributions shall be allo-
cated to:
[ ] (iii) All participants.
[x] (iv) All participants who are not highly com-
pensated employees.
[ ] (b) No.
EMPLOYER CONTRIBUTIONS
25. Allocation Formula. Employer contributions shall be allo-
cated to participants' accounts as follows:
[ ] (a) Compensation Formula: According to participants'
compensation as provided in subparagraph 8.7(a)
of the plan.
[ ] (b) Permitted Disparity Formula: According to a
formula which emphasizes compensation in excess
of the taxable wage base, as provided in subpara-
graph 8.7(b) of the plan. The integration level
shall be:
[ ] (i) $ (a dollar amount less
than the taxable wage base).
[ ] (ii) % (up to 100%) of the taxable wage base
in effect for the calendar year in which the
plan year begins.
If the employer has adopted this plan as a paired plan with
State Street Solutions Prototype Defined Contribution Plan
(Money Purchase - Nonstandardized), only one of the plans
may provide for permitted disparity under item (b) above.
[x] (c) See Supplement to the Plan, Item 4.
26. Compensation in Initial Year of Participation. A partici-
pant's compensation which is used in the allocation of em-
ployer contributions shall: [Select one]
[ ] (a) exclude compensation before becoming a partici-
pant.
[x] (b) exclude compensation before meeting the plan's
eligibility requirements.
[ ] (c) include all compensation in the first plan year
of participation.
27. Employees Eligible to Receive Employer Contribution. Employer
contributions made for each plan year (and forfeitures, if applicable)
shall be allocated and credited to the employer contribution accounts
of the following participants: [Select one]
[ ] (a) Participants who were employed by the employer
during that plan year, other than participants
who resigned or were dismissed prior to complet-
ing (not more than 1,000) hours of ser-
vice during that plan year.
[ ] (b) Participants who were employed by the employer
during that plan year.
[x] (c) Participants who were employed by the employer on
the last day of that plan year. See Supplement to
Plan, Item 5.
[ ] (d) Participants who both were employed by the em-
ployer on the last day of that plan year and had
completed at least ____ (not more than 1,000)
hours of service during that plan year.
[Selection of more than 501 hours in item 27(a) or selection
of item 27(c) or 27(d) could result in discrimination in
operation and plan disqualification.]
28. Qualified Nonelective Contributions.Employer contributions
made under subparagraph 6.1(b) of the plan may constitute
"qualified nonelective contributions" or the employer may
make additional contributions which constitute "qualified
nonelective contributions" that are fully vested and
subject to distribution restrictions.
[ ] (a) Yes. The portion of the employer contributions
which constitutes qualified nonelective contri-
butions shall be:
[ ] (i) All employer contributions.
[x] (ii) Only the portion of the employer contri-
butions required to satisfy the ADP test
under subsection 4.5 of the plan and the
ACP test under subsection 4.6 of the plan.
Qualified nonelective contributions shall be
allocated to:
[ ] (iii) All participants.
[x] (iv) All participants who are not highly com-
pensated employees.
[ ] (b) No.
HIGHLY COMPENSATED EMPLOYEES
29. Contributions by Highly Compensated Employees Prohibited
[ ] (a) Compensation Deferral Contributions. Partici-
pants who are deemed to be "highly compensated
employees" under subsection 2.12 of the plan
(including certain family members) shall not be
permitted to make compensation deferral contri-
butions under the plan (subsection 4.7).
[ ] (b) Voluntary Contributions. Participants who are
deemed to be "highly compensated employees" under
subsection 2.12 of the plan (including certain
family members) shall not be permitted to make
voluntary contributions under the plan (subsec-
tion 4.7).
ACCOUNTING
30. Regular Accounting Date. A "regular accounting date" (under
subsection 8.2) for purposes of the plan shall mean:
[Select one]
[x] (a) The last day of each plan year quarter.
[ ] (b) The last day of the six month of each plan year
and the last day of each plan year.
[ ] (c) The last day of each plan year.
31. Application of Forfeitures. Forfeitures arising during a
plan year (except forfeitures arising under subsection 4.6)
under subsection 10.2 of the plan shall be applied as
follows:
[ ] (a) Forfeitures shall be allocated to participants,
in accordance with subparagraph 8.8(a), or
[x] (b) Forfeitures shall be applied to reduce employer
matching contributions, if any, and then employer
contributions required under the plan, in accor-
dance with subparagraph 8.8(b) of the plan.
PLAN INVESTMENTS
32. Investment Options.
[ ] (a) Investment options shall not be offered.
[x] (b) Investment Options - All Accounts. Participants
shall direct the investment of their account bal-
ances under the plan among the various investment
options established by agreement between the em-
ployer and the trustee.See supplement to Plan,
Item 6.
[ ] (c) Investment Options - Specified Accounts Only.
Participants shall direct the investment of the
following accounts under the plan among the vari-
ous investment options established by agreement
between the employer and the trustee (select one
or more):
[ ] (i) Compensation deferral contribution
account.
[ ] (ii) Voluntary contribution account.
[ ] (iii) Rollover account.
[ ] (iv) Matching contribution account.
[ ] (v) Employer contribution account.
The administrator shall direct the investment among
the investment options of the remaining accounts under
the plan.
33. Investment Increments. If the employer has specified that
participants may direct the investment of their accounts
under item 32(b) or (c) above, such directions must be in
increments of: [Select one]
[ ] (a) 10% and multiples thereof.
[x] (b) 1 % (specify a whole number).
VESTING AND DISTRIBUTION OF BENEFITS
34. Vesting of Employer Contributions. A participant's vested
percentage (subsection 10.2) in employer contributions will
be determined under the vesting period selected below:
[Select one]
[ ] (a) 100% vested at all times (this box must be
checked if a number greater than "1" has been
specified in item 10(b) or if you elected to
treat all employer contributions as "qualified
nonelective contributions" in item 28(a)(i) above
for purposes of the anti-discrimination tests
described in subsections 4.5 and 4.6 of the
plan).
[ ] (b) Years of Service Vested Percentage
Less than 1 year ___%
1 year but less than 2 ___%
2 years but less than 3 ___%
3 years but less than 4 ___% (20% or more)
4 years but less than 5 ___% (40% or more)
5 years but less than 6 ___% (60% or more)
6 years but less than 7 ___% (80% or more)
7 or more years 100%
[x] (c) Years of Service Vested Percentage
Less than 1 year _ 0%
1 year but less than 2 __0%
2 years but less than 3 __0%
3 years but less than 4 _10%
4 years but less than 5 _20%
5 or more years 100%
If the plan becomes top-heavy (as defined in subsection 19.2
of the plan), the vesting period must meet the requirements
of subsection 19.5 of the plan.
35. Vesting of Matching Contributions. If employer matching
contributions may be made under item 20, a participant's
vested percentage in employer matching contributions will be
determined under the vesting period selected below: [Select
one if applicable]
[ ] (a) 100% vested at all times (this box must be
checked if a number greater than "1" has been
specified in item 10(b) or if you elected to
treat all employer matching contributions as
"qualified matching contributions" in item
24(a)(i) above for purposes of the anti-
discrimination test described in subsection 4.5
of the plan).
[ ] (b) Years of Service Vested Percentage
Less than 1 year ___%
1 year but less than 2 ___%
2 years but less than 3 ___%
3 years but less than 4 ___% (20% or more)
4 years but less than 5 ___% (40% or more)
5 years but less than 6 ___% (60% or more)
6 years but less than 7 ___% (80% or more)
7 or more years 100%
[x] (c) Years of Service Vested Percentage
Less than 1 year _0_%
1 year but less than 2 _0_%
2 years but less than 3 _0_%
3 years but less than 4 _10%
4 years but less than 5 _20%
5 or more years 100%
36. Service Before Plan's Establishment Excluded. Years of
service earned prior to establishment of the plan shall be
disregarded for purposes of determining vesting under the
plan:
[ ] Yes.
[x] No.
37. Service Before Age 18 Excluded. Years of service earned
prior to attaining age 18 years shall be disregarded for
purposes of determining vesting under the plan:
[ ] Yes.
[x] No.
38. Normal Retirement Age. For each participant, normal retire-
ment age is:
[x] (a) Age 62 (not to exceed 65)
[ ] (b) The later of:
(i) age ____ (not to exceed 65)
(ii) the ____ (not to exceed 5th) anniversary of the
participation commencement date.
39. Early Retirement. The plan provides for early retirement at
or after age __55__ years and after completing _10_ years of
service.
[x] Yes. (If you select this option, you must fill in the
early retirement age and service requirement
above.)
[ ] No.
40. Joint and Survivor Annuity. Benefits under the plan are
subject to the joint and survivor annuity requirements.
(Once you respond to this statement and select the optional
form(s) of benefit, you cannot later amend the plan or
adoption agreement to change your response or remove the
option as to existing accounts.)
[x] (a) No. Lump sum is normal form of benefit. Optional
form(s) of benefit, if any:
[x] Installment payment.
[ ] Joint and survivor annuity. (If you select this
option, the joint and survivor annuity require-
ments of Section 11 of the plan will apply to
this form of benefit).
[ ] (b) Yes. Joint and survivor annuity is normal form
of benefit. Optional form(s) of benefit:
[ ] (i) Lump sum payment.
[ ] (ii) Installment payment.
41. Installments for Beneficiaries. Participants may select an
installment method of payment for their beneficiaries.
[x] Yes.
[ ] No.
42. Protected Benefits.
[ ] Benefits under the plan are payable under another dis-
tribution option that is a "protected benefit" under
Section 411(d)(6) of the Internal Revenue Code.
[Check this box if the plan is a restatement,
continuation, transferee, etc. of another plan under
which benefits were payable in a form not selected in
items 40 and 41. Attach a separate page identifying
the protected distribution option(s).]
LOANS AND WITHDRAWALS
43. Loans. Loans to participants under subsection 12.4 of the
plan are permitted.
[x] Yes.
[ ] No.
44. Hardship Withdrawals. Hardship withdrawals of participants'
compensation deferral contributions shall be permitted (sub-
section 12.5).
[x] Yes.
[ ] No.
45. Pre-Termination Distributions. In addition to withdrawals
described in item 44 and subsection 12.1 of the plan, if any,
pre-termination distributions of account balances that are
100% vested (subsection 12.2) are permitted. [Select one]
[ ] (a) No.
[x] (b) Yes, after attaining age 59-1/2.
[ ] (c) Yes [except for compensation deferral contribu-
tion accounts and employer contributions treated
as qualified matching contributions or qualified
nonelective employer contributions (and earnings
thereon), if any] after both attaining age ____
and completing ____ years of participation in the
plan (specify 5 or more).
LIMITATION ON ALLOCATIONS (Section 17 of the plan)
46. Other Qualified Plans Maintained. If the employer maintains
or ever maintained another qualified plan in which any par-
ticipant in this plan is (or was) a participant or could
become a participant, the employer must complete this item
if it desires to apply the Code Section 415 limits in a man-
ner other than as provided in Section 17 of the plan. The
employer must also complete this item if it maintains a wel-
fare benefit fund, as defined in Section 419(e) of the Code,
or an individual medical account, as defined in Section
415(l)(2) of the Code, under which amounts are treated as
annual additions with respect to any participant.
[ ] (a) Other Defined Contribution Plan(s) Maintained.
If the employer maintains other qualified defined
contribution plans other than a master or proto-
type plan, any excess amount shall be considered
attributable to amounts last allocated to such
other plans and shall be handled in the manner
provided for in such plans as follows:
[Provide the method under which the plans will limit total
annual additions to the maximum permissible amount, and will
properly reduce any excess amounts in a manner that precludes
employer discretion.]
[x] (b) Defined Benefit Plan(s) Maintained. If the em-
ployer maintains, or at any time maintained, one
or more qualified defined benefit plans and the
sum of the defined contribution fraction and the
defined benefit fraction with respect to any par-
ticipant for a limitation year exceeds 1.0, the
1.0 limitation under subsection 17.11 will be met
by limiting the annual addition to this plan as
provided for in subsection 17.4 for the limita-
tion years so that the sum of the defined contri-
bution fraction and the defined benefit fraction
do not exceed 1.0. If in any limitation year the
1.0 limitation would be exceeded, the limitation
will be satisfied as follows: See Supplement to
Plan, Item 7.
[Provide the method under which the 1.0 limitation will be
satisfied, in a manner that precludes employer discretion.]
PREDECESSOR EMPLOYER
47. Employment with Predecessor Employer.
[ ] Employment with the following "predecessor employers"
(as described in subsection 2.22) shall be considered
employment with the employer for the periods and
purposes of the plan set forth below:
MINIMUM CONTRIBUTION (TOP-HEAVY) (Section 19 of the plan)
48. Defined Benefit Plan Maintained - 4% Minimum. The minimum
employer contribution figure specified under subsections
19.6 and 19.8 of the plan will be 4 percent in order to
preserve the method of calculating the defined benefit and
defined contribution fractions under subsection 17.12 of the
plan.
[x] Yes.
[ ] No.
49. Minimum Benefit Under Other Employer Plan. The minimum em-
ployer contribution or benefits required under Section 19 of
the plan will be provided to participants under another plan
or plans maintained by the employer.
[ ] Yes.
[ ] No.
The plan provides that, in the event the plan becomes top
heavy, a minimum contribution will be made by the employer,
unless you specify that such contributions (or a minimum
benefit) will be provided for all participants under another
plan maintained by the employer.
50. Defined Benefit Plan - Actuarial Assumptions. If the em-
ployer maintains any defined benefit plan, the actuarial
assumptions utilized under such plan are as follows (sub-
paragraph 19.2(c) of the plan):See Supplement to Plan, Item
8.
[Provide the interest rate and mortality factors used to
determine the present value of accrued benefits. If the
employer does not maintain a defined benefit plan, specify
"N/A".]
The failure to properly complete the elections in this Adoption
Agreement could result in disqualification of the plan.
Only those elections that are completed shall be considered as
provisions applicable to and forming a part of the plan.
This Adoption Agreement may only be used in conjunction with
basic plan document 01.
Terms used in this Adoption Agreement which are defined in State
Street Solutions Prototype Defined Contribution Plan shall have
the meaning given them therein.
The employer hereby acknowledges that it is adopting this profit
sharing plan as part of State Street Solutions Prototype Defined
Contribution Plan Program (the "program"). To the extent that
federal legislation or other changes in the law relating to
employee benefit plans requires that the plan be amended, the
sponsor will amend the plan and furnish amended copies to the
employer for adoption as long as the employer is part of the
program. The sponsor will inform the employer of any amendment
made to the plan or of the discontinuance or abandonment of the
plan by the sponsor. If the employer declines to adopt an
amendment furnished by the sponsor to comply with legal changes,
the employer will no longer be considered part of the program.
The employer may amend the plan or trust by giving notice to the
sponsor in writing, but such amendment will remove the employer
from the program. The preceding sentence shall not apply to the
employer's addition of overriding plan language to this adoption
agreement, where such language is necessary to satisfy Sections
415 or 416 of the Internal Revenue Code because of the required
aggregation of multiple plans; provided that the employer must
obtain a determination letter in order to continue reliance on
the plan's qualified status. The sponsor reserves the right to
discontinue the Prototype Plan at any time by giving the employer
60 days' prior written notice.
The sponsor's address and telephone number are State Street Bank
and Trust Company, Two International Place, Boston, Massachusetts
02110, (617) 654-6008.
The employer may not rely on the notification letter issued to
the sponsor by the Internal Revenue Service with respect to the
qualification of the plan and should apply to the appropriate Key
District Director of the Internal Revenue Service for a determi-
nation as to the qualification of the plan as adopted by the
employer.
* * *
The undersigned duly authorized owner, partner, or
officer of the employer hereby executes the plan and trust on
behalf of the employer.
Dated this day of , 199 .
Employer
By
Its
The undersigned hereby consents to the adoption of the
plan by the employer.
Dated this day of , 199 .
STATE STREET BANK AND TRUST COMPANY
By
Title
\30790\201\20AGTKXK.003
-26-
SUPPLEMENT TO THE PLYMOUTH RUBBER COMPANY
RETIREMENT SAVINGS AND PROFIT SHARING PLAN AND TRUST
The Adoption Agreement for State Street Solutions Prototype Defined Contribution
Plan (the "Adoption Agreement") and the State Street Solutions Prototype Defined
Contribution Plan (the "Basic Plan Document") for the Plymouth Rubber Company
Retirement Savings and Profit Sharing Plan and Trust (the "Plan"), as amended
and restated effective January 1, 1998, are supplemented as follows:
1. Subsection (b) of section 10 of the Adoption Agreement is revised by
deleting the said subsection in its entirety and substituting the following
therefore:
"(b) Minimum Service. The employee has completed at least .5 years of
service. If you permit compensation deferral contributions, the
employee will be eligible to participate in the compensation deferral
arrangement under this plan if the employee completes .5 years of
service. If the employer makes matching contributions under this
plan, the employee will be eligible to receive an allocation of such
matching contributions, if any, if the employee completes one year of
service."
2. Subsection (c) of section 10 of the Adoption Agreement is revised by
deleting the description of "Other" and substituting the following descrip-
tion therefore:
"[x] Other: All employees except non-resident aliens, temporary employees,
cooperative students, and leased employees. For this purpose, a
temporary employee is a person who is classified by the employer as
employed on a temporary basis, regardless of how long the person works
for the employer."
3. Subsection (c) of section 23 of the Adoption Agreement is revised by
adding the following subsection (d) at the end thereof:
"(d) Participants who were employed by the employer on the last day of the
plan year, or retired, died or became disabled during such plan year."
4. Section 25 of the Adoption Agreement is revised by adding the following
subsection (c) at the end thereof:
"[x] (c) Age-Weighted Formula: For the plan years ending December 31, 1998
and 1999, the employer may make an age-weighted contribution in
accordance with the following formula to the account of each
participant who (i) was a participant in the Plan on January 1,
1997 and who was a participant in the employer's defined benefit
plan and (ii) is employed on the last day of the plan year for
which the contribution is made. The amount of any age-weighted
contribution allocated to the account of an eligible participant
shall be based on the age of such participant on December 31 of
the plan year for which such contribution is made as follows:
Amount of
Age Age -Weighted Contribution
At least 21 but less than 30 $50
At least 30 but less than 40 $100
At least 40 but less than 50 $250
At least 50 but less than 55 $450
At least 55 but less than 60 $700
60 or more $1,000"
5. Section 27 of the Adoption Agreement is revised by adding the following
subsection (e) at the end thereof:
"(e) Participants who were employed by the employer on the last day of the
plan year, or retired, died or became disabled during such plan year."
6. Section 32 of the Adoption Agreement is revised by adding the following sub-
subsection (i) immediately after subsection (b):
"(i) Restrictions on Investments in the Company Stock Fund. A maximum of
50% of a participant's total account balance may be invested in the
Company Stock Fund (the "Aggregate Limit"). So long as the investment
of a participant's total account balance does not equal or exceed the
Aggregate Limit and so long as the effect of an election is not to
cause the investment of a participant's total account balance to exceed
the Aggregate Limit, a participant may (i) elect to invest up to 20% of
his current compensation deferral contributions in the Company Stock
Fund and (ii) effective January 1, 1998, elect to transfer up to 20%
of his total account balance to the Company Stock Fund."
7. Section 46(b) of the Adoption Agreement is supplemented by adding the
following sentence at the end thereof:
"Any reduction will be made in the defined benefit plan."
8. Section 50 of the Adoption Agreement is supplemented by adding the following
sentence at the end thereof:
"UP84 Mortality Table. 9% interest rate."
9. Section 10.7 of the Basic Plan Document is hereby amended by deleting the
reference to "$7,000" and substituting in lieu thereof "$10,000."
10. Section 8.6 of the Basic Plan Document is hereby amended by adding the
following at the beginning of said Section:
"As of the accounting date coincident with the last day of the plan year,
the employer's contribution for the plan year ending on that date shall be
allocated and credited first to the employer contribution accounts of such
participants as the employer has specified in section 25 of its adoption
agreement, second according to subsection (a) of Section 8.7 of Basic Plan
Document, and third according to this Section 8.6.
11. Section 8.7 of the Basic Plan Document is hereby amended by deleting the
first paragraph of said section and substituting the following in lieu
thereof:
"As of the accounting date coincident with the last day of the plan year,
the employer's contribution for the plan year ending on that date shall
be allocated and credited first to the employer contribution accounts of
such participants as the employer has specified in section 25 of its
adoption agreement and then according to subsection (a) below:"
12. Section 10.7 of the Basic Plan Document is hereby amended by deleting each
reference to "$3,500" and substituting in lieu thereof "$5,000."
DOCSB\526527.1
Exhibit 5
May 15, 1998
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sir or Madam:
I have acted as counsel for Plymouth Rubber Company, Inc., (the "Company") in
connection with the Registration Statement on Form S-8 (the "Registration
Statement"), to be filed by the Company with the Securities and Exchange
Commission under the Securities Act of 1933, with respect to the Company's
State Street Solutions Prototype Defined Contribution Plan, including the
Profit Sharing - Nonstandardized Adoption Agreement and Supplement, (the
"Plan") and 100,000 shares of the Company's Class B Common Stock, $1.00 par
value ("Class B Common Stock"), making available to purchase on the open
market through the Plymouth Rubber Company Class B Common Stock Fund (the
"Company Stock Fund") as one of the Investment funds in which a Participant
may direct the Plan Trustee to invest his/her Employer Elective Contribution,
Salary Reduction Contribution and Matching Contribution under the Plan. In
this capacity and in connection with the opinion hereinafter expressed, I have
reviewed the Company's Restated Articles of Organization, its By-Laws, as
amended, and other pertinent documents, corporate records and proceedings;
and I am familiar with the additional proceedings in connection with the
preparation and filing of the Registration Statement.
Based on the foregoing and subject to the proposed additional proceedings being
taken as now contemplated by me as counsel for the Company, I am of the opinion
that:
1. The Company is a corporation duly organized and existing under the laws
of the Commonwealth of Massachusetts and in good standing under the corporate
laws thereof.
2. The shares covered by the Registration Statement and to be offered and
sold pursuant to the Prospectus (as defined in Part I of Form S-8) constitute
duly authorized capital stock of the Company and when purchased under the Plan,
will be legally and validly issued, fully paid and nonassessable shares of
Class B Common Stock of the Company.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and I further consent to the use of my name in the
Information Statement which constitutes a part of the Prospectus related to
the Registration Statement.
Very truly yours,
/s/Deborah A. Kream
Deborah A. Kream
General Counsel
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 30 1998, which appears on
page 16 of Plymouth Rubber Company's, Annual Report on Form 10-K for the fiscal
year ended November 28, 1997.
/s/Price Waterhouse LLP
Price Waterhouse LLP
Boston, Massachusetts
May 15, 1995
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated May 21, 1997 appearing on
page 2 of the Annual Report on Form 11-K of the Plymouth Rubber Company
Retirement Savings and Profit Sharing Plan and Trust for the fiscal year
ended December 31, 1996. We also consent to the reference to us under the
heading "Experts".
/s/Morris & Morris, P.C.
Morris & Morris, P.C.
Needham Heights, Massachusetts
May 15, 1998
Exhibit 24.2
CERTIFICATE OF VOTE
I, Deborah A. Kream, Assistant Clerk of Plymouth Rubber Company, Inc., hereby
certify that, pursuant to the unanimous consent of all of the members of the
Company's Board of Directors, the following vote was unanimously adopted, to
wit:
VOTED: That Maurice J. Hamilburg and Joseph J. Berns, each acting
individually and without the other be and hereby are authorized, for and on
behalf of, and as attorney for, the Company and/or the Company's controller
and principal accounting officer and/or any other officer of the Company,
including, without limitation, the President and/or each Vice President and/or
the Treasurer and/or the Assistant Clerk or Assistant Secretary of the Company,
to sign the Registration Statement on Form S-8 (including all post-effective
amendments thereto) which the Company proposes to file with the Securities
and Exchange Commission under the Securities Act of 1933 with respect to the
Company's State Street Solutions Prototype Defined Contribution Plan,
including the Profit Sharing - Nonstandardized Adoption Agreement and
Supplement, (the Plan) and 100,000 shares of the Company's Class B
Common Stock, $1.00 par value, to be purchased on the open market through
the Plymouth Rubber Company Class B Common Stock Fund as one of the
Investment Funds under the Plan.
I further certify that the foregoing vote is still in full force and effect
and has not been altered, amended, rescinded or repealed.
IN WITNESS WHEREOF, I hereunto set my hand and seal of the Company this 15th
day of May 1998.
/s/Deborah A. Kream
Assistant Clerk
