Registration No. 33-______
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
__________________
NORTHLAND CRANBERRIES, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 39-1583759
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
800 First Avenue South
P.O. Box 8020
Wisconsin Rapids, Wisconsin 54495-8020
(Address of principal executive offices) (Zip Code)
Northland Cranberries, Inc.
401(k) Retirement Plan and Trust
(Full title of the plans)
____________________
John A. Pazurek
Vice President-Finance
Northland Cranberries, Inc.
800 First Avenue South
P.O. Box 8020
Wisconsin Rapids, Wisconsin 54495-8020
(715) 424-4444
(Name, address and telephone number, including area code, of agent for
service)
__________________________
CALCULATION OF REGISTRATION FEE
Proposed
Title of Proposed Maximum
Securities Amount Maximum Aggregate Amount of
to be to be Offering Price Offering Registration
Registered Registered Per Share Price Fee
Class A Common 25,000 $20.25(1) $506,250.00(1) $174.57
Stock, $0.01 shares
par value
(1) Estimated pursuant to Rule 457(c) under the Securities Act of 1933
solely for the purpose of calculating the registration fee based on
the average of the high and low prices for Northland Cranberries,
Inc. Class A Common Stock on the Nasdaq National Market on
March 6, 1996.
_________________________________
In addition, pursuant to Rule 416(c) under the Securities Act of
1933, this Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the employee benefit plan
described herein.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
The document or documents containing the information specified
in Part I are not required to be filed with the Securities and Exchange
Commission (the "Commission") as part of this Form S-8 Registration
Statement.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed with the Commission by Northland
Cranberries, Inc. (the "Company") or the Northland Cranberries,
Inc. 401(k) Retirement Plan and Trust (the "Plan") are hereby incorporated
herein by reference:
1. The Company's Annual Report on Form 10-K for the year ended
March 31, 1995, which includes certified financial statements as of and
for the year ended March 31, 1995.
2. All other reports filed since March 31, 1995 by the Company
or the Plan pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934.
3. The description of the Company's Class A Common Stock
contained under the Section entitled "Description of Capital Stock" in the
Company's Form S-2 Registration Statement No. 33-60823, dated June 30,
1995, and any amendments or reports filed by the Company for the purpose
of updating such description.
All documents subsequently filed by the Company or the Plan
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, as amended, after the date of filing of this Registration
Statement and prior to such time as the Company files a post-effective
amendment to this Registration Statement 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.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Jeffrey J. Jones, a Director of the Company, is a partner at
Foley & Lardner, which serves as the Company's general counsel.
Item 6. Indemnification of Directors and Officers.
Pursuant to Sections 108.0850 to 180.0858 of the Wisconsin
Business Corporation Law, directors and officers of the Company are
entitled to mandatory indemnification from the Company against certain
liabilities and expenses (i) to the extent such officers or directors are
successful in the defense of a proceeding and (ii) in proceedings in which
the director or officer is not successful in the defense thereof, unless
(in the latter case only) it is determined that the director or officer
breached or failed to perform his duties to the Company and such breach or
failure constituted: (a) a willful failure to deal fairly with the
Company or its shareholders in connection with a matter in which the
director or officer had a material conflict of interest; (b) a violation
of the criminal law unless the director or officer had reasonable cause to
believe his or her conduct was lawful or had no reasonable cause to
believe his or her conduct was unlawful; (c) a transaction from which the
director or officer derived an improper personal profit; or (d) willful
misconduct. Section 180.0859 of the Wisconsin Business Corporation Law
specifically states that it is the public policy of Wisconsin to require
or permit indemnification in connection with a proceeding involving
securities regulation, as described therein, to the extent required or
permitted under Sections 180.0850 to 180.0858 as described above.
Additionally, under Section 180.0828 of the Wisconsin Business Corporation
Law, directors of the Company are not subject to personal liability to the
Company, its shareholders or any person asserting rights on behalf thereof
for certain breaches or failures to perform any duty resulting solely from
their status as such directors, except in circumstances paralleling those
in subparagraphs (a) through (d) outlined above. The Company's By-laws
require indemnification of the Company's directors and officers to the
fullest extent permitted by the Wisconsin Business Corporation Law. The
indemnification rights provided as set forth above are not exclusive of
any other rights to which a director or an officer of the Company may be
entitled.
The Company maintains an insurance policy which indemnifies its
officers and directors against certain liabilities.
Item 7. Exemption from Registration Claimed.
Not Applicable.
Item 8. Exhibits.
The following exhibits have been filed (except where otherwise
indicated) as part of this Registration Statement:
Exhibit No. Exhibit
(4) Northland Cranberries, Inc. 401(k) Retirement Plan
and Trust
(5) Opinion of Foley & Lardner
(23.1) Consent of Deloitte & Touche LLP
(23.2) Consent of Foley & Lardner (contained in Exhibit 5
hereto)
(24) Power of Attorney relating to subsequent amendments
(included on the signature page to this Registration
Statement)
The Registrant hereby undertakes to submit the Plan and any
amendment thereto to the Internal Revenue Service ("IRS") in a timely
manner and has made or will make all changes required by the IRS in order
to qualify the Plan under Section 401 of the Internal Revenue Code.
Item 9. Undertakings.
(a) 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 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.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, as amended, each such post-effective amendment
shall be deemed to be a new Registration Statement relating to the
securities offered herein, 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.
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, as
amended, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended,
that is incorporated by reference in this Registration Statement shall be
deemed to be a new Registration Statement relating to the securities
offered herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under
the Securities Act of 1933, as amended, 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 indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person of
the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities
Act of 1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and
has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Wisconsin
Rapids, State of Wisconsin, on January 15, 1996.
NORTHLAND CRANBERRIES, INC.
By: /s/ John Swendrowski
John Swendrowski
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in
the capacities indicated as of January 15, 1996. Each person whose
signature appears below constitutes and appoints John Swendrowski, John A.
Pazurek and each of them individually, his true and lawful
attorney-in-fact and agent, with full power of substitution and
revocation, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in
connection therewith, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, may lawfully do or cause
to be done by virtue hereof.
By: /s/ John Swendrowski By: /s/ John A. Pazurek
John Swendrowski John A. Pazurek
President, Chief Executive Vice President-Finance and
Officer and Director Treasurer (principal
(principal executive and accounting officer and
financial officer) controller)
By: /s/ Jeffrey J. Jones By: /s/ Patrick F. Brennan
Jeffrey J. Jones Patrick F. Brennan
Director Director
By: /s/ John C. Seramur By: /s/ LeRoy J. Miles
John C. Seramur LeRoy J. Miles
Director Director
By: /s/ Robert E. Hawk By: /s/ Jerold D. Kaminski
Robert E. Hawk Jerold D. Kaminski
Director Director
The Plan. Pursuant to the requirements of the Securities Act of
1933, the members of the Compensation and Stock Option Committee, who
administer the Plan, have duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Wisconsin Rapids, State of Wisconsin, on January 15, 1996.
By: /s/ John C. Seramur By: /s/ Jeffrey J. Jones
John C. Seramur Jeffrey J. Jones
By: /s/ Patrick F. Brennan By: /s/ Jerold D. Kaminski
Patrick F. Brennan Jerold D. Kaminski
Members of the Compensation and
Stock Option Committee
<PAGE>
EXHIBIT INDEX
Exhibit No. Exhibit
(4) Northland Cranberries, Inc. 401(k) Retirement Plan
and Trust
(5) Opinion of Foley & Lardner
(23.1) Consent of Deloitte & Touche LLP
(23.2) Consent of Foley & Lardner (contained in Exhibit 5
hereto)
(24) Power of Attorney relating to subsequent amendments
(included on the signature page to this
Registration Statement)
EXHIBIT 4
NORTH CENTRAL TRUST COMPANY
DEFINED CONTRIBUTION PLAN AND TRUST
Copyright 1990 North Central Trust Company
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION
2.1. TOP HEAVY PLAN REQUIREMENTS . . . . . . . . . . . . . . . . 15
2.2. DETERMINATION OF TOP HEAVY STATUS . . . . . . . . . . . . . 15
2.3. POWERS AND RESPONSIBILITIES OF THE EMPLOYER . . . . . . . . 18
2.4. DESIGNATION OF ADMINISTRATIVE AUTHORITY . . . . . . . . . . 19
2.5. ALLOCATION AND DELEGATION OF RESPONSIBILITIES . . . . . . . 19
2.6. POWERS AND DUTIES OF THE ADMINISTRATOR . . . . . . . . . . 20
2.7. RECORDS AND REPORTS . . . . . . . . . . . . . . . . . . . . 21
2.8. APPOINTMENT OF ADVISERS . . . . . . . . . . . . . . . . . . 21
2.9. INFORMATION FROM EMPLOYER . . . . . . . . . . . . . . . . . 21
2.10. PAYMENT OF EXPENSES . . . . . . . . . . . . . . . . . . . 21
2.11. MAJORITY ACTIONS . . . . . . . . . . . . . . . . . . . . . 22
2.12. CLAIMS PROCEDURE . . . . . . . . . . . . . . . . . . . . . 22
2.13. CLAIMS REVIEW PROCEDURE . . . . . . . . . . . . . . . . . 22
ARTICLE III
ELIGIBILITY
3.1. CONDITIONS OF ELIGIBILITY . . . . . . . . . . . . . . . . . 23
3.2. EFFECTIVE DATE OF PARTICIPATION . . . . . . . . . . . . . . 23
3.3. DETERMINATION OF ELIGIBILITY . . . . . . . . . . . . . . . 23
3.4. TERMINATION OF ELIGIBILITY . . . . . . . . . . . . . . . . 23
3.5. OMISSION OF ELIGIBLE EMPLOYEE . . . . . . . . . . . . . . . 23
3.6. INCLUSION OF INELIGIBLE EMPLOYEE . . . . . . . . . . . . . 24
3.7. ELECTION NOT TO PARTICIPATE . . . . . . . . . . . . . . . . 24
3.8. CONTROL OF ENTITIES BY OWNER-EMPLOYEE . . . . . . . . . . . 24
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1. FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION . . . . . . 25
4.2. TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION . . . . . . . . 26
4.3. ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS . . . 26
4.4. MAXIMUM ANNUAL ADDITIONS . . . . . . . . . . . . . . . . . 32
4.5. ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS . . . . . . . . . 40
4.6. TRANSFERS FROM QUALIFIED PLANS . . . . . . . . . . . . . . 40
4.7. VOLUNTARY CONTRIBUTIONS . . . . . . . . . . . . . . . . . . 41
4.8. DIRECTED INVESTMENT ACCOUNT . . . . . . . . . . . . . . . . 42
4.9. QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS . . . . . . . . 42
4.10. ACTUAL CONTRIBUTION PERCENTAGE TESTS . . . . . . . . . . . 43
4.11. INTEGRATION IN MORE THAN ONE PLAN . . . . . . . . . . . . 43
ARTICLE V
VALUATIONS
5.1. VALUATION OF THE TRUST FUND . . . . . . . . . . . . . . . . 43
5.2. METHOD OF VALUATION . . . . . . . . . . . . . . . . . . . . 44
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1. DETERMINATION OF BENEFITS UPON RETIREMENT . . . . . . . . . 44
6.2. DETERMINATION OF BENEFITS UPON DEATH . . . . . . . . . . . 44
6.3. DETERMINATION OF BENEFITS IN EVENT OF DISABILITY . . . . . 46
6.4. DETERMINATION OF BENEFITS UPON TERMINATION . . . . . . . . 46
6.5. DISTRIBUTION OF BENEFITS . . . . . . . . . . . . . . . . . 49
6.6. DISTRIBUTION OF BENEFITS UPON DEATH . . . . . . . . . . . . 54
6.7. TIME OF SEGREGATION OR DISTRIBUTION . . . . . . . . . . . . 58
6.8. DISTRIBUTION FOR MINOR BENEFICIARY . . . . . . . . . . . . 58
6.9. LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN . . . . . . 59
6.10. PRE-RETIREMENT DISTRIBUTION . . . . . . . . . . . . . . . 59
6.11. ADVANCE DISTRIBUTION FOR HARDSHIP . . . . . . . . . . . . 59
6.12. LIMITATIONS ON BENEFITS AND DISTRIBUTIONS . . . . . . . . 60
6.13. SPECIAL RULE FOR NON-ANNUITY PLANS . . . . . . . . . . . . 60
ARTICLE VII
TRUSTEE
7.1. BASIC RESPONSIBILITIES OF THE TRUSTEE . . . . . . . . . . . 61
7.2. INVESTMENT POWERS AND DUTIES OF THE TRUSTEE . . . . . . . . 61
7.3. OTHER POWERS OF THE TRUSTEE . . . . . . . . . . . . . . . . 63
7.4. LOANS TO PARTICIPANTS . . . . . . . . . . . . . . . . . . . 66
7.5. DUTIES OF THE TRUSTEE REGARDING PAYMENTS . . . . . . . . . 68
7.6. TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES . . . . . . . 68
7.7. ANNUAL REPORT OF THE TRUSTEE . . . . . . . . . . . . . . . 68
7.8. AUDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
7.9. RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE . . . . . . 69
7.10. TRANSFER OF INTEREST . . . . . . . . . . . . . . . . . . . 70
7.11. TRUSTEE INDEMNIFICATION . . . . . . . . . . . . . . . . . 71
7.12. EMPLOYER SECURITIES AND REAL PROPERTY . . . . . . . . . . 71
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1. AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . . 71
8.2. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . 72
8.3. MERGER OR CONSOLIDATION . . . . . . . . . . . . . . . . . . 72
ARTICLE IX
MISCELLANEOUS
9.1. EMPLOYER ADOPTIONS . . . . . . . . . . . . . . . . . . . . 73
9.2. PARTICIPANT'S RIGHTS . . . . . . . . . . . . . . . . . . . 73
9.3. ALIENATION . . . . . . . . . . . . . . . . . . . . . . . . 73
9.4. CONSTRUCTION OF PLAN . . . . . . . . . . . . . . . . . . . 74
9.5. GENDER AND NUMBER . . . . . . . . . . . . . . . . . . . . . 74
9.6. LEGAL ACTION . . . . . . . . . . . . . . . . . . . . . . . 74
9.7. PROHIBITION AGAINST DIVERSION OF FUNDS . . . . . . . . . . 74
9.8. BONDING . . . . . . . . . . . . . . . . . . . . . . . . . . 75
9.9. EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE . . . . . . . . 75
9.10. INSURER'S PROTECTIVE CLAUSE . . . . . . . . . . . . . . . 75
9.11. RECEIPT AND RELEASE FOR PAYMENTS . . . . . . . . . . . . . 75
9.12. ACTION BY THE EMPLOYER . . . . . . . . . . . . . . . . . . 76
9.13. NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY . . . . 76
9.14. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.15. APPROVAL BY INTERNAL REVENUE SERVICE . . . . . . . . . . . 76
9.16. UNIFORMITY . . . . . . . . . . . . . . . . . . . . . . . . 77
9.17. PAYMENT OF BENEFITS . . . . . . . . . . . . . . . . . . . 77
ARTICLE X
PARTICIPATING EMPLOYERS
10.1. ELECTION TO BECOME A PARTICIPATING EMPLOYER . . . . . 77
10.2. REQUIREMENTS OF PARTICIPATING EMPLOYERS . . . . . . . 77
10.3. DESIGNATION OF AGENT . . . . . . . . . . . . . . . . . 78
10.4. EMPLOYEE TRANSFERS . . . . . . . . . . . . . . . . . . 78
10.5. PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES 78
10.6. AMENDMENT . . . . . . . . . . . . . . . . . . . . . . 79
10.7. DISCONTINUANCE OF PARTICIPATION . . . . . . . . . . . 79
10.8. ADMINISTRATOR'S AUTHORITY . . . . . . . . . . . . . . 79
10.9. PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE . . 79
ARTICLE XI
CASH OR DEFERRED PROVISIONS
11.1. FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION . . . 80
11.2. PARTICIPANT'S SALARY REDUCTION ELECTION . . . . . . . 81
11.3. ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS . 85
11.4. ACTUAL DEFERRAL PERCENTAGE TESTS . . . . . . . . . . . 87
11.5. ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS . . . . 89
11.6. ACTUAL CONTRIBUTION PERCENTAGE TESTS . . . . . . . . . 92
11.7. ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS . . 94
11.8. ADVANCE DISTRIBUTION FOR HARDSHIP . . . . . . . . . . 97
<PAGE>
ARTICLE I
DEFINITIONS
As used in this Plan, the following words and phrases shall have
the meanings set forth herein unless a different meaning is clearly
required by the context:
1.1. "Act" means the Employee Retirement Income Security Act of
1974, as it may be amended from time to time.
1.2. "Administrator" means the person(s) or entity designated by
the Employer pursuant to Section 2.4 to administer the Plan on behalf of
the Employer.
1.3. "Adoption Agreement" means the separate Agreement which is
executed by the Employer and accepted by the Trustee which sets forth the
elective provisions of this Plan and Trust as specified by the Employer.
1.4. "Affiliated Employer" means the Employer and any
corporation which is a member of a controlled group of corporations (as
defined in Code Section 414(b)) which includes the Employer; any trade or
business (whether or not incorporated) which is under common control (as
defined in Code Section 414(c)) with the Employer; any organization
(whether or not incorporated) which is a member of an affiliated service
group (as defined in Code Section 414(m)) which includes the Employer; and
any other entity required to be aggregated with the Employer pursuant to
Regulations under Code Section 414(o).
1.5. "Aggregate Account" means with respect to each Participant,
the value of all accounts maintained on behalf of a Participant, whether
attributable to Employer or Employee contributions, subject to the
provisions of Section 2.2.
1.6. "Anniversary Date" means the anniversary date specified in
C3 of the Adoption Agreement.
1.7. "Beneficiary" means the person to whom a share of a
deceased Participant's interest in the Plan is payable, subject to the
restrictions of Sections 6.2 and 6.6.
1.8. "Code" means the Internal Revenue Code of 1986, as amended
or replaced from time to time.
1.9. "Compensation" with respect to any Participant means such
Participant's compensation as specified by the Employer in El of the
Adoption Agreement that is paid during the applicable Period.
Compensation for any Self-Employed Individual shall be equal to his Earned
Income.
In addition, if specified in the Adoption Agreement,
Compensation for all Plan purposes shall also include compensation which
is not currently includible in the Participant's gross income by reason of
the application of Code Sections 125, 402(a)(8), 402(h)(1)(B), or 403(b).
Compensation in excess of $200,000 shall be disregarded. Such
amount shall be adjusted at the same time and in such manner as permitted
under Code Section 415(d). In applying this limitation, the family group
of a Highly Compensated Participant who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such Participant is
either a "five percent owner" of the Employer or one of the ten (10)
Highly Compensated Employees paid the greatest "415 Compensation" during
the year, shall be treated as a single Participant, except that for this
purpose Family Members shall include only the affected Participant's
spouse and any lineal descendants who have not attained age nineteen (19)
before the close of the year. If, as a result of the application of such
rules, the adjusted $200,000 limitation is exceeded, then (except for
purposes of determining the portion of Compensation up to the integration
level if this plan is integrated), the limitation shall be prorated among
the affected individuals in proportion to each such individual's
Compensation as determined under this Section prior to the application of
this limitation.
For Plan Years beginning prior to January 1, 1989, the $200,000
limit (without regard to Family Member aggregation) shall apply only for
Top Heavy Plan Years and shall not be adjusted.
1.10. "Contract" or "Policy" means any life insurance
policy, retirement income policy, or annuity contract (group or
individual) issued by the Insurer. 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.
1.11. "Deferred Compensation" means, with respect to any
Participant, that portion of the Participant's total Compensation which
has been contributed to the Plan in accordance with the Participant's
deferral election pursuant to Section 11.2.
1.12. "Early Retirement Date" means the date specified in
the Adoption Agreement on which a Participant or Former Participant has
satisfied the age and service requirements specified in the Adoption
Agreement (Early Retirement Age). A Participant shall become fully Vested
upon satisfying this requirement if still employed at his Early Retirement
Age.
A Former Participant who terminates employment after satisfying
the service requirement for Early Retirement and who thereafter reaches
the age requirement contained herein shall be entitled to receive his
benefits under this Plan.
1.13. "Earned Income" means with respect to a Self-Employed
Individual, the net earnings from self-employment in the trade or business
with respect to which the Plan is established, for which the personal
services of the individual are a material income-producing factor. Net
earnings will be determined without regard to items not included in gross
income and the deductions allocable to such items. Net earnings are
reduced by contributions by the Employer to a qualified Plan to the extent
deductible under Code Section 404. In addition, for Plan Years beginning
after December 31, 1989, net earnings shall be determined with regard to
the deduction allowed to the Employer by Code Section 164(f).
1.14. "Elective Contribution" means the Employer's
contributions to the Plan that are made pursuant to the Participant's
deferral election pursuant to Section 11.2. In addition, if selected in
E3 of the Adoption Agreement, the Employer's matching contribution made
pursuant to Section 11.1(b) shall be considered an Elective Contribution
for purposes of the Plan. Elective Contributions shall be subject to the
requirements of Sections 11.2(b) and 11.2(c) and shall further be required
to satisfy the discrimination requirements of Regulation 1.401(k)-1(b)(3),
the provisions of which are specifically incorporated herein by reference.
1.15. "Eligible Employee" means any Employee specified in D1
of the Adoption Agreement.
1.16. "Employee" means any person who is employed by the
Employer, but excludes any person who is employed as an independent
contractor. The term Employee shall also include Leased Employees as
provided in Code Section 414(n) or (o).
Except as provided in the Non-Standardized Adoption Agreement,
all Employees of all entities which are an Affiliated Employer will be
treated as employed by a single employer.
1.17. "Employer" means the entity specified in the Adoption
Agreement, any Participating Employer (as defined in Section 10.1) which
shall adopt this Plan, any successor which shall maintain this Plan and
any predecessor which has maintained this Plan.
1.18. "Excess Compensation" means, with respect to a Plan
that is integrated with Social Security, a Participant's Compensation
which is in excess of the amount set forth in the Adoption Agreement.
1.19. "Excess Contributions" means, with respect to a Plan
Year, the excess of Elective Contributions and Qualified Non-Elective
Contributions made on behalf of Highly Compensated Participants for the
Plan Year over the maximum amount of such contributions permitted under
Section 11.4(a).
1.20. "Excess Deferred Compensation" means, with respect to
any taxable year of a Participant, the excess of the aggregate amount of
such Participant's Deferred Compensation and the elective deferrals
pursuant to Section 11.2(f) actually made on behalf of such Participant
for such taxable year, over the dollar limitation provided for in Code
Section 402(g), which is incorporated herein by reference.
1.21. "Fiduciary" means any person who (a) exercises any
discretionary authority or discretionary control respecting management of
the Plan or exercises any authority or control respecting management or
disposition of its assets, (b) renders investment advice for a fee or
other compensation, direct or indirect, with respect to any monies or
other property of the Plan or has any authority or responsibility to do
so, or (c) has any discretionary authority or discretionary responsibility
in the administration of the Plan, including, but not limited to, the
Trustee, the Employer and its representative body, and the Administrator.
1.22. "Fiscal Year" means the Employer's accounting year as
specified in the Adoption Agreement.
1.23. "Forfeiture" means that portion of a Participant's
Account that is not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a
Participant's Account, or
(b) the last day of the Plan Year in which the Participant
incurs five (5) consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case of
a Terminated Participant whose Vested benefit is zero, such Terminated
Participant shall be deemed to have received a distribution of his Vested
benefit upon his termination of employment. In addition, the term
Forfeiture shall also include amounts deemed to be Forfeitures pursuant to
any other provision of this Plan.
1.24. "Former Participant" means a person who has been a
Participant, but who has ceased to be a Participant for any reason.
1.25. "414(s) Compensation" with respect to any Employee
means his Compensation as defined in Section 1.9. However, for purposes
of this Section, Compensation shall be Compensation paid and shall be
determined by including, in the case of a non-standardized Adoption
Agreement, any items that are excluded from Compensation pursuant to the
Adoption Agreement. The amount of "414(s) Compensation" with respect to
any Employee shall include "414(s) Compensation" during the entire twelve
(12) month period ending on the last day of such Plan Year, except that
for Plan Years beginning prior to the later of January 1, 1992, or the
date that is sixty (60) days after the date final Regulations are issued,
"414(s) Compensation" shall only be recognized as of an Employee's
effective date of participation.
In addition, if specified in the Adoption Agreement, "414(s)
Compensation" shall also include compensation which is not currently
includible in the Participant's gross income by reason of the application
of Code Sections 125, 402(a)(8), 402(h)(1)(B), or 403(b).
1.26. "415 Compensation" means compensation as defined in
Section 4.4(f)(2).
1.27. "Highly Compensated Employee" means an Employee
described in Code Section 414(q) and the Regulations thereunder and
generally means an Employee who performed services for the Employer during
the "determination year" and is in one or more of the following groups:
(a) Employees who at any time during the "determination
year" or "look-back year" were "five percent owners" as defined in
Section 1.34(c).
(b) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $75,000.
(c) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $50,000 and were in
the Top Paid Group of Employees for the Plan Year.
(d) Employees who during the "look-back year" were
officers of the Employer (as that term is defined within the meaning
of the Regulations under Code Section 416) and received "415
Compensation" during the "look-back year" from the Employer greater
than 50 percent of the limit in effect under Code Section
415(b)(1)(A) for any such Plan Year. The number of officers shall be
limited to the lesser of (i) 50 employees; or (ii) the greater of 3
employees or 10 percent of all employees. If the Employer does not
have at least one officer whose annual "415 Compensation" is in
excess of 50 percent of the Code Section 415(b)(1)(A) limit, then the
highest paid officer of the Employer will be treated as a Highly
Compensated Employee.
(e) Employees who are in the group consisting of the 100
Employees paid the greatest "415 Compensation" during the
"determination year" and are also described in (b), (c) or (d) above
when these paragraphs are modified to substitute "determination year"
for "look-back year".
The "determination year" shall be the Plan Year for which
testing is being performed, and the "look-back year" shall be the
immediately preceding twelve-month period. However, if the Plan Year is a
calendar year, or if another Plan of the Employer so provides, then the
"look-back year" shall be the calendar year ending with or within the Plan
Year for which testing is being performed, and the "determination year"
(if applicable) shall be the period of time, if any, which extends beyond
the "look-back year" and ends on the last day of the Plan Year for which
testing is being performed (the "lag period"). With respect to this
election, it shall be applied on a uniform and consistent basis to all
plans, entities, and arrangements of the Employer.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts that would otherwise be
excluded from a Participant's gross income by reason of the application of
Code Sections 125, 402(a)(8), 402(h)(1)(B) and, in the case of Employer
contributions made pursuant to a salary reduction agreement, Code Section
403(b). Additionally, the dollar threshold amounts specified in (b) and
(c) above shall be adjusted at such time and in such manner as is provided
in Regulations. In the case of such an adjustment, the dollar limits
which shall be applied are those for the calendar year in which the
"determination year" or "look back year" begins.
In determining who is a Highly Compensated Employee, Employees
who are non-resident aliens and who received no earned income (within the
meaning of Code Section 911(d)) from the Employer constituting United
States source income within the meaning of Code Section 861(a)(3) shall
not be treated as Employees. Additionally, all Affiliated Employers shall
be taken into account as a single employer and Leased Employees within the
meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered
Employees unless such Leased Employees are covered by a plan described in
Code Section 414(n)(5) and are not covered in any qualified plan
maintained by the Employer. The exclusion of Leased Employees for this
purpose shall be applied on a uniform and consistent basis for all of the
Employer's retirement plans. In addition, Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without regard
to whether they performed services during the "determination year".
1.28. "Highly Compensated Former Employee" means a former
Employee who had a separation year prior to the "determination year" and
was a Highly Compensated Employee in the year of separation from service
or in any "determination year" after attaining age 55. Notwithstanding
the foregoing, an Employee who separated from service prior to 1987 will
be treated as a Highly Compensated Former Employee only if during the
separation year (or year preceding the separation year) or any year after
the Employee attains age 55 (or the last year ending before the Employee's
55th birthday), the Employee either received "415 Compensation" in excess
of $50,000 or was a "five percent owner". For purposes of this Section,
"determination year", "415 Compensation" and "five percent owner" shall be
determined in accordance with Section 1.27. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees. The method
set forth in this Section for determining who is a "Highly Compensated
Former Employee" shall be applied on a uniform and consistent basis for
all purposes for which the Code Section 414(q) definition is applicable.
1.29. "Highly Compensated Participant" means any Highly
Compensated Employee who is eligible to participate in the Plan.
1.30. "Hour of Service" means (l) each hour for which an
Employee is directly or indirectly compensated or entitled to compensation
by the Employer for the performance of duties during the applicable
computation period; (2) each hour for which an Employee is directly or
indirectly compensated or entitled to compensation by the Employer
(irrespective of whether the employment relationship has terminated) for
reasons other than performance of duties (such as vacation, holidays,
sickness, jury duty, disability, lay-off, military duty or leave of
absence) during the applicable computation period; (3) each hour for which
back pay is awarded or agreed to by the Employer without regard to
mitigation of damages. The same Hours of Service shall not be credited
both under (l) or (2), as the case may be, and under (3).
Notwithstanding the above, (i) no more than 501 Hours of Service
are required to be credited to an Employee on account of any single
continuous period during which the Employee performs no duties (whether or
not such period occurs in a single computation period); (ii) an hour for
which an Employee is directly or indirectly paid, or entitled to payment,
on account of a period during which no duties are performed is not
required to be credited to the Employee if such payment is made or due
under a plan maintained solely for the purpose of complying with
applicable worker's compensation, or unemployment compensation or
disability insurance laws; and (iii) Hours of Service are not required to
be credited for a payment which solely reimburses an Employee for medical
or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be
made by or due from the Employer regardless of whether such payment is
made by or due from the Employer directly, or indirectly through, among
others, a trust fund, or insurer, to which the Employer contributes or
pays premiums and regardless of whether contributions made or due to the
trust fund, insurer, or other entity are for the benefit of particular
Employees or are on behalf of a group of Employees in the aggregate.
An Hour of Service must be counted for the purpose of
determining a Year of Service, a year of participation for purposes of
accrued benefits, a 1-Year Break in Service, and employment commencement
date (or reemployment commencement date). The provisions of Department of
Labor regulations 2530.200b-2(b) and (c) are incorporated herein by
reference.
Hours of Service will be credited for employment with all
Affiliated Employers and for any individual considered to be a Leased
Employee pursuant to Code Sections 414(n) or 414(o) and the Regulations
thereunder.
Hours of Service will be determined on the basis of the method
selected in the Adoption Agreement.
1.31. "Insurer" means any legal reserve insurance company
which shall issue one or more policies under the Plan.
1.32. "Investment Manager" means an entity that (a) has the
power to manage, acquire, or dispose of Plan assets and (b) acknowledges
fiduciary responsibility to the Plan in writing. Such entity must be a
person, firm, or corporation registered as an investment adviser under the
Investment Advisers Act of 1940, a bank, or an insurance company.
1.33. "Joint and Survivor Annuity" means an annuity for the
life of a Participant with a survivor annuity for the life of the
Participant's spouse which is not less than 1/2, nor greater than the
amount of the annuity payable during the joint lives of the Participant
and the Participant's spouse. The Joint and Survivor Annuity will be the
amount of benefit which can be purchased with the Participant's Vested
interest in the Plan.
1.34. "Key Employee" means an Employee as defined in Code
Section 416(i) and the Regulations thereunder. Generally, any Employee or
former Employee (as well as each of his Beneficiaries) is considered a Key
Employee if he, at any time during the Plan Year that contains the
"Determination Date" or any of the preceding four (4) Plan Years, has been
included in one of the following categories:
(a) an officer of the Employer (as that term is defined
within the meaning of the Regulations under Code Section 416) having
annual "415 Compensation" greater than 50 percent of the amount in
effect under Code Section 415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415
Compensation" from the Employer for a Plan Year greater than the
dollar limitation in effect under Code Section 415(c)(l)(A) for the
calendar year in which such Plan Year ends and owning (or considered
as owning within the meaning of Code Section 318) both more than one-
half percent interest and the largest interests in the Employer.
(c) a "five percent owner" of the Employer. "Five percent
owner" means any person who owns (or is considered as owning within
the meaning of Code Section 318) more than five percent (5%) of the
outstanding stock of the Employer or stock possessing more than five
percent (5%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person
who owns more than five percent (5%) of the capital or profits
interest in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate
employers.
(d) a "one percent owner" of the Employer having an annual
"415 Compensation" from the Employer of more than $150,000. "One
percent owner" means any person who owns (or is considered as owning
within the meaning of Code Section 318) more than one percent (1%) of
the outstanding stock of the Employer or stock possessing more than
one percent (1%) of the total combined voting power of all stock of
the Employer or, in the case of an unincorporated business, any
person who owns more than one percent (1%) of the capital or profits
interest in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate
employers. However, in determining whether an individual has "415
Compensation" of more than $150,000, "415 Compensation" from each
employer required to be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be taken into account.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts that would otherwise be
excluded from a Participant's gross income by reason of the application of
Code Sections 125, 402(a)(8), 402(h)(1)(B) and, in the case of Employer
contributions made pursuant to a salary reduction agreement, Code Section
403(b).
1.35. "Late Retirement Date" means the date of, or the first
day of the month or the Anniversary Date coinciding with or next
following, whichever corresponds to the election made for the Normal
Retirement Date, a Participant's actual retirement after having reached
his Normal Retirement Date.
1.36. "Leased Employee" means any person (other than an
Employee of the recipient) who pursuant to an agreement between the
recipient and any other person ("leasing organization") has performed
services for the recipient (or for the recipient and related persons
determined in accordance with Code Section 414(n) (6)) on a substantially
full time basis for a period of at least one year, and such services are
of a type historically performed by employees in the business field of the
recipient employer. Contributions or benefits provided a leased employee
by the leasing organization which are attributable to services performed
for the recipient employer shall be treated as provided by the recipient
employer.
A leased employee shall not be considered an Employee of the
recipient if: (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 Code Section 415(c)(3),
but including amounts contributed pursuant to a salary reduction agreement
which are excludable from the employee's gross income under Code Sections
125, 402(a)(8), 402(h) or 403(b), (2) immediate participation, and (3)
full and immediate vesting; and (ii) leased employees do not constitute
more than 20 percent of the recipient's nonhighly compensated workforce.
1.37. "Net Profit" means with respect to any Fiscal Year the
Employer's net income or profit for such Fiscal Year determined upon the
basis of the Employer's books of account in accordance with generally
accepted accounting principles, without any reduction for taxes based upon
income, or for contributions made by the Employer to this Plan and any
other qualified plan.
1.38. "Non-Elective Contribution" means the Employer's
contributions to the Plan other than those made pursuant to the
Participant's deferral election made pursuant to Section 11.2 and any
Qualified Non-Elective Contribution. In addition, if selected in E3 of
the Adoption Agreement, the Employer's Matching Contribution made pursuant
to Section 4.3(b) shall be considered a Non-Elective Contribution for
purposes of the Plan.
1.39. "Non-Key Employee" means any Employee or former
Employee (and his Beneficiaries) who is not a Key Employee.
1.40. "Normal Retirement Age" means the age specified in the
Adoption Agreement at which time a Participant shall become fully Vested
in his Participant's Account.
1.41. "Normal Retirement Date" means the date specified in
the Adoption Agreement on which a Participant shall become eligible to
have his benefits distributed to him.
1.42. "1-Year Break in Service" means the applicable
computation period during which an Employee has not completed more than
500 Hours of Service with the Employer. Further, solely for the purpose
of determining whether a Participant has incurred a 1-Year Break in
Service, Hours of Service shall be recognized for "authorized leaves of
absence" and "maternity and paternity leaves of absence."
"Authorized leave of absence" means an unpaid, temporary
cessation from active employment with the Employer pursuant to an
established nondiscriminatory policy, whether occasioned by illness,
military service, or any other reason.
A "maternity or paternity leave of absence" means, for Plan
Years beginning after December 31, 1984, an absence from work for any
period by reason of the Employee's pregnancy, birth of the Employee's
child, placement of a child with the Employee in connection with the
adoption of such child, or any absence for the purpose of caring for such
child for a period immediately following such birth or placement. For
this purpose, Hours of Service shall be credited for the computation
period in which the absence from work begins, only if credit therefore is
necessary to prevent the Employee from incurring a 1-Year Break in
Service, or, in any other case, in the immediately following computation
period. The Hours of Service credited for a "maternity or paternity leave
of absence" shall be those which would normally have been credited but for
such absence, or, in any case in which the Administrator is unable to
determine such hours normally credited, eight (8) Hours of Service per
day. The total Hours of Service required to be credited for a "maternity
or paternity leave of absence" shall not exceed 501.
1.43. "Owner-Employee" means a sole proprietor who owns the
entire interest in the Employer or a partner who owns more than 10% of
either the capital interest or the profits interest in the Employer and
who receives income for personal services from the Employer.
1.44. "Participant" means any Eligible Employee who
participates in the Plan as provided in Section 3.2 and has not for any
reason become ineligible to participate further in the Plan.
1.45. "Participant's Account" means the account established
and maintained by the Administrator for each Participant with respect to
his total interest under the Plan resulting from (a) the Employer's
contributions in the case of a Profit Sharing Plan or Money Purchase Plan,
and (b) the Employer's Non-Elective Contributions in the case of a 401(k)
Profit Sharing Plan.
1.46. "Participant's Combined Account" means the account
established and maintained by the Administrator for each Participant with
respect to his total interest under the Plan resulting from the Employer's
contributions.
1.47. "Participant's Elective Account" means the account
established and maintained by the Administrator for each Participant with
respect to his total interest in the Plan and Trust resulting from the
Employer's Elective Contributions and Qualified Non-Elective
Contributions. A separate accounting shall be maintained with respect to
that portion of the Participant's Elective Account attributable to
Elective Contributions made pursuant to Section 11.2, Employer matching
contributions if they are deemed to be Elective Contributions, and any
Qualified Non-Elective Contributions.
1.48. "Participant's Rollover Account" means the account
established and maintained by the Administrator for each Participant with
respect to his total interest in the Plan resulting from amounts
transferred from another qualified plan or "conduit" Individual Retirement
Account in accordance with Section 4.6.
1.49. "Plan" means this instrument (hereinafter referred to
as North Central Trust Company Defined Contribution Plan and Trust Basic
Plan Document #01) including all amendments thereto, and the Adoption
Agreement as adopted by the Employer.
1.50. "Plan Year" means the Plan's accounting year as
specified in C2 of the Adoption Agreement.
1.51. "Pre-Retirement Survivor Annuity" means an immediate
annuity for the life of the Participant's spouse, the payments under which
must be equal to the actuarial equivalent of 50% of the Participant's
Vested interest in the Plan as of the date of death.
1.52. "Qualified Non-Elective Account" means the account
established hereunder to which Qualified Non-Elective Contributions are
allocated.
1.53. "Qualified Non-Elective Contribution" means the
Employer's contributions to the Plan that are made pursuant to E5 of the
Adoption Agreement and Section 11.1(d) which are used to satisfy the
"Actual Deferral Percentage" tests. Qualified Non-Elective Contributions
are nonforfeitable when made and are distributable only as specified in
Sections 11.2(c) and 11.8. In addition, the Employer's contributions to
the Plan that are made pursuant to Section 11.7(h) and which are used to
satisfy the "Actual Contribution Percentage" tests shall be considered
Qualified Non-Elective Contributions.
1.54. "Qualified Voluntary Employee Contribution Account"
means the account established and maintained by the Administrator for each
Participant with respect to his total interest under the Plan resulting
from the Participant's tax deductible qualified voluntary employee
contributions made pursuant to Section 4.9.
1.55. "Regulation" means the Income Tax Regulations as
promulgated by the Secretary of the Treasury or his delegate, and as
amended from time to time.
1.56. "Retired Participant" means a person who has been a
Participant, but who has become entitled to retirement benefits under the
Plan.
1.57. "Retirement Date" means the date as of which a
Participant retires for reasons other than Total and Permanent Disability,
whether such retirement occurs on a Participant's Normal Retirement Date,
Early or Late Retirement Date (see Section 6.1).
1.58. "Self-Employed Individual" means an individual who has
earned income for the taxable year from the trade or business for which
the Plan is established, and, also, an individual who would have had
earned income but for the fact that the trade or business had no net
profits for the taxable year. A Self-Employed Individual shall be treated
as an Employee.
1.59. "Shareholder-Employee" means a Participant who owns
more than five percent (5%) of the Employer's outstanding capital stock
during any year in which the Employer elected to be taxed as a Small
Business Corporation under the applicable Code Section.
1.60. "Short Plan Year" means, if specified in the Adoption
Agreement, that the Plan Year shall be less than a 12 month period. If
chosen, the following rules shall apply in the administration of this
Plan. In determining whether an Employee has completed a Year of Service
for benefit accrual purposes in the Short Plan Year, the number of the
Hours of Service required shall be proportionately reduced based on the
number of days in the Short Plan Year. The determination of whether an
Employee has completed a Year of Service for vesting and eligibility
purposes shall be made in accordance with Department of Labor Regulation
2530.203-2(c). In addition, if this Plan is integrated with Social
Security, the integration level shall also be proportionately reduced
based on the number of days in the Short Plan Year.
1.61. "Super Top Heavy Plan" means a plan described in
Section 2.2(b).
1.62. "Taxable Wage Base" means, with respect to any year,
the maximum amount of earnings which may be considered wages for such year
under Code Section 3121(a)(1).
1.63. "Terminated Participant" means a person who has been a
Participant, but whose employment has been terminated other than by death,
Total and Permanent Disability or retirement.
1.64. "Top Heavy Plan" means a plan described in Section
2.2(a).
1.65. "Top Heavy Plan Year" means a Plan Year commencing
after December 31, 1983 during which the Plan is a Top Heavy Plan.
1.66. "Top Paid Group" shall be determined pursuant to Code
Section 414(q) and the Regulations thereunder and generally means the top
20 percent of Employees who performed services for the Employer during the
applicable year, ranked according to the amount of "415 Compensation" (as
determined pursuant to Section 1.27) received from the Employer during
such year. All Affiliated Employers shall be taken into account as a
single employer, and Leased Employees shall be treated as Employees
pursuant to Code Section 414(n) or (o). Employees who are non-resident
aliens who received no earned income (within the meaning of Code Section
911(d)(2)) from the Employer constituting United States source income
within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, for the purpose of determining the number of
active Employees in any year, the following additional Employees shall
also be excluded, however, such Employees shall still be considered for
the purpose of identifying the particular Employees in the Top Paid Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2 hours per
week;
(c) Employees who normally work less than six (6) months
during a year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the
Employer are covered under agreements the Secretary of Labor finds to be
collective bargaining agreements between Employee representatives and the
Employer, and the Plan covers only Employees who are not covered under
such agreements, then Employees covered by such agreements shall be
excluded from both the total number of active Employees as well as from
the identification of particular Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be
applied on a uniform and consistent basis for all purposes for which the
Code Section 414(q) definition is applicable.
1.67. "Total and Permanent Disability" means the inability
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result
in death or which has lasted or can be expected to last for a continuous
period of not less than 12 months. The disability of a Participant shall
be determined by a licensed physician chosen by the Administrator.
However, if the condition constitutes total disability under the federal
Social Security Acts, the Administrator may rely upon such determination
that the Participant is Totally and Permanently Disabled for the purposes
of this Plan. The determination shall be applied uniformly to all
Participants.
1.68. "Trustee" means the person or entity named in B6 of
the Adoption Agreement and any successors.
1.69. "Trust Fund" means the assets of the Plan and Trust as
the same shall exist from time to time.
1.70. "Vested" means the nonforfeitable portion of any
account maintained on behalf of a Participant.
1.71. "Voluntary Contribution Account" means the account
established and maintained by the Administrator for each Participant with
respect to his total interest in the Plan resulting from the Participant's
nondeductible voluntary contributions made pursuant to Section 4.7.
1.72. "Year of Service" means the computation period of
twelve (12) consecutive months, herein set forth, and during which an
Employee has completed at least 1000 Hours of Service.
For purposes of eligibility for participation, the initial
computation period shall begin with the date on which the Employee first
performs an Hour of Service (employment commencement date). The
computation period beginning after a 1-Year Break in Service shall be
measured from the date on which an Employee again performs an Hour of
Service. The succeeding computation periods shall begin with the first
anniversary of the Employee's employment commencement date. However, if
one (1) Year of Service or less is required as a condition of eligibility,
then after the initial eligibility computation period, the eligibility
computation period shall shift to the current Plan Year which includes the
anniversary of the date on which the Employee first performed an Hour of
Service. An Employee who is credited with 1,000 Hours of Service in both
the initial eligibility computation period and the first Plan Year which
commences prior to the first anniversary of the Employee's initial
eligibility computation period will be credited with two Years of Service
for purposes of eligibility to participate.
For vesting purposes, and all other purposes not specifically
addressed in this Section, the computation period shall be the Plan Year,
including periods prior to the Effective Date of the Plan unless
specifically excluded pursuant to the Adoption Agreement.
Years of Service and breaks in service will be measured on the
same computation period.
Years of Service with any predecessor Employer which maintained
this Plan shall be recognized. Years of Service with any other
predecessor Employer shall be recognized as specified in the Adoption
Agreement.
Years of Service with any Affiliated Employer shall be
recognized.
ARTICLE II
TOP HEAVY PROVISIONS AND ADMINISTRATION
2.1. TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special
vesting requirements of Code Section 416(b) pursuant to Section 6.4 of the
Plan and the special minimum allocation requirements of Code Section
416(c) pursuant to Section 4.3(i) of the Plan.
2.2. DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year
beginning after December 31, 1983, in which, as of the Determination Date,
(1) the Present Value of Accrued Benefits of Key Employees and (2) the sum
of the Aggregate Accounts of Key Employees under this Plan and all plans
of an Aggregation Group, exceeds sixty percent (60%) of the Present Value
of Accrued Benefits and the Aggregate Accounts of all Key and Non-Key
Employees under this Plan and all plans of an Aggregation Group.
If any Participant is a Non-Key Employee for any Plan Year,
but such Participant was a Key Employee for any prior Plan Year, such
Participant's Present Value of Accrued Benefit and/or Aggregate Account
balance shall not be taken into account for purposes of determining
whether this Plan is a Top Heavy or Super Top Heavy Plan (or whether any
Aggregation Group which includes this Plan is a Top Heavy Group). In
addition, if a Participant or Former Participant has not performed any
services for any Employer maintaining the Plan at any time during the five
year period ending on the Determination Date, any accrued benefit for such
Participant or Former Participant shall not be taken into account for the
purposes of determining whether this Plan is a Top Heavy or Super Top
Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan
Year beginning after December 31, 1983, in which, as of the Determination
Date, (1) the Present Value of Accrued Benefits of Key Employees and (2)
the sum of the Aggregate Accounts of Key Employees under this Plan and all
plans of an Aggregation Group, exceeds ninety percent (90%) of the Present
Value of Accrued Benefits and the Aggregate Accounts of all Key and Non-
Key Employees under this Plan and all plans of an Aggregation Group.
(c) Aggregate Account: A Participant's Aggregate Account
as of the Determination Date is the sum of:
(1) his Participant's Combined Account balance as of
the most recent valuation occurring within a twelve (12) month period
ending on the Determination Date;
(2) for a Profit Sharing Plan, an adjustment for any
contributions due as of the Determination Date. Such adjustment shall
be the amount of any contributions actually made after the valuation
date but before the Determination Date, except for the first Plan
Year when such adjustment shall also reflect the amount of any
contributions made after the Determination Date that are allocated as
of a date in that first Plan Year;
(3) for a Money Purchase Plan, contributions that
would be allocated as of a date not later than the Determination
Date, even though those amounts are not yet made or required to be
made.
(4) any Plan distributions made within the Plan Year
that includes the Determination Date or within the four (4) preceding
Plan Years. However, in the case of distributions made after the
valuation date and prior to the Determination Date, such
distributions are not included as distributions for top heavy
purposes to the extent that such distributions are already included
in the Participant's Aggregate Account balance as of the valuation
date. In the case of a distribution of an annuity Contract, the
amount of such distribution is deemed to be the current actuarial
value of the Contract, determined on the date of the distribution.
Notwithstanding anything herein to the contrary, all distributions,
including distributions made prior to January l, 1984, and
distributions under a terminated plan which if it had not been
terminated would have been required to be included in an Aggregation
Group, will be counted. Further, distributions from the Plan
(including the cash value of life insurance policies) of a
Participant's account balance because of death shall be treated as a
distribution for the purpose of this paragraph.
(5) any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax deductible qualified
voluntary employee contributions shall not be considered to be a part
of the Participant's Aggregate Account balance.
(6) with respect to unrelated rollovers and plan-to-
plan transfers (ones which are both initiated by the Employee and
made from a plan maintained by one employer to a plan maintained by
another employer), if this Plan provides the rollovers or plan-to-
plan transfers, it shall always consider such rollovers or plan-to-
plan transfers as a distribution for the purposes of this Section.
If this Plan is the plan accepting such rollovers or plan-to-plan
transfers, it shall not consider such rollovers or plan-to-plan
transfers accepted after December 31, 1983 as part of the
Participant's Aggregate Account balance. However, rollovers or plan-
to-plan transfers accepted prior to January 1, 1984 shall be
considered as part of the Participant's Aggregate Account balance.
(7) with respect to related rollovers and plan-to-
plan transfers (ones either not initiated by the Employee or made to
a plan maintained by the same employer), if this Plan provides the
rollover or plan-to-plan transfer, it shall not be counted as a
distribution for purposes of this Section. If this Plan is the plan
accepting such rollover or plan-to-plan transfer, it shall consider
such rollover or plan-to-plan transfer as part of the Participant's
Aggregate Account balance, irrespective of the date on which such
rollover or plan-to-plan transfer is accepted.
(8) For the purposes of determining whether two
employers are to be treated as the same employer in 2.2(c)(6) and
2.2(c)(7) above, all employers aggregated under Code Section 414(b),
(c), (m) and (o) are treated as the same employer.
(d) "Aggregation Group" means either a Required
Aggregation Group or a Permissive Aggregation Group as hereinafter
determined.
(1) Required Aggregation Group: In determining a
Required Aggregation Group hereunder, each qualified plan of the
Employer, including any Simplified Employee Pension Plan, in which a
Key Employee is a participant in the Plan Year containing the
Determination Date or any of the four preceding Plan Years, and each
other qualified plan of the Employer which enables any qualified plan
in which a Key Employee participates to meet the requirements of Code
Sections 401(a)(4) or 410, will be required to be aggregated. Such
group shall be known as a Required Aggregation Group.
In the case of a Required Aggregation Group, each plan in the
group will be considered a Top Heavy Plan if the Required Aggregation
Group is a Top Heavy Group. No plan in the Required Aggregation
Group will be considered a Top Heavy Plan if the Required Aggregation
Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may
also include any other plan of the Employer, including any Simplified
Employee Pension Plan, not required to be included in the Required
Aggregation Group, provided the resulting group, taken as a whole,
would continue to satisfy the provisions of Code Sections 401(a) (4)
and 410. Such group shall be known as a Permissive Aggregation
Group.
In the case of a Permissive Aggregation Group, only a
plan that is part of the Required Aggregation Group will be
considered a Top Heavy Plan if the Permissive Aggregation Group is a
Top Heavy Group. No plan in the Permissive Aggregation Group will be
considered a Top Heavy Plan if the Permissive Aggregation Group is
not a Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar year shall be
aggregated in order to determine whether such plans are Top Heavy
Plans.
(4) An Aggregation Group shall include any terminated
plan of the Employer if it was maintained within the last five (5)
years ending on the Determination Date.
(e) "Determination Date" means (a) the last day of the
preceding Plan Year, or (b) in the case of the first Plan Year, the last
day of such Plan Year.
(f) Present Value of Accrued Benefit: In the case of a
defined benefit plan, the Present Value of Accrued Benefit for a
Participant other than a Key Employee shall be as determined using the
single accrual method used for all plans of the Employer and Affiliated
Employers, or if no such single method exists, using a method which
results in benefits accruing not more rapidly than the slowest accrual
rate permitted under Code Section 411(b)(1)(C). The determination of the
Present Value of Accrued Benefit shall be determined as of the most recent
valuation date that falls within or ends with the 12-month period ending
on the Determination Date, except as provided in Code Section 416 and the
Regulations thereunder for the first and second plan years of a defined
benefit plan.
However, any such determination must include present value
of accrued benefit attributable to any Plan distributions referred to in
Section 2.2(c)(4) above, any Employee contributions referred to in Section
2.2(c)(5) above or any related or unrelated rollovers referred to in
Sections 2.2(c)(6) and 2.2(c)(7) above.
(g) "Top Heavy Group" means an Aggregation Group in which,
as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key
Employees under all defined benefit plans included in the group, and
(2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum
determined for all Participants.
(h) The Administrator shall determine whether this Plan is
a Top Heavy Plan on the Anniversary Date specified in the Adoption
Agreement. Such determination of the top heavy ratio shall be in
accordance with Code Section 416 and the Regulations thereunder.
2.3. POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) The Employer shall be empowered to appoint and remove
the Trustee and the Administrator from time to time as it deems necessary
for the proper administration of the Plan to assure that the Plan is being
operated for the exclusive benefit of the Participants and their
Beneficiaries in accordance with the terms of the Plan, the Code, and the
Act.
(b) The Employer shall establish a "funding policy and
method", i.e., it shall determine whether the Plan has a short run need
for liquidity (e.g., to pay benefits) or whether liquidity is a long run
goal and investment growth (and stability of same) is a more current need,
or shall appoint a qualified person to do so. The Employer or its
delegate shall communicate such needs and goals to the Trustee, who shall
coordinate such Plan needs with its investment policy. The communication
of such a "funding policy and method" shall not, however, constitute a
directive to the Trustee as to investment of the Trust Funds. Such
"funding policy and method" shall be consistent with the objectives of
this Plan and with the requirements of Title I of the Act.
(c) The Employer may, in its discretion, appoint an
Investment Manager to manage all or a designated portion of the assets of
the Plan. In such event, the Trustee shall follow the directive of the
Investment Manager in investing the assets of the Plan managed by the
Investment Manager.
(d) The Employer shall periodically review the performance
of any Fiduciary or other person to whom duties have been delegated or
allocated by it under the provisions of this Plan or pursuant to
procedures established hereunder. This requirement may be satisfied by
formal periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day conduct and
evaluation, or through other appropriate ways.
2.4. DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall appoint one or more Administrators. Any
person, including, but not limited to, the Employees of the Employer,
shall be eligible to serve as an Administrator. Any person so appointed
shall signify his acceptance by filing written acceptance with the
Employer. An Administrator may resign by delivering his written
resignation to the Employer or be removed by the Employer by delivery of
written notice of removal, to take effect at a date specified therein, or
upon delivery to the Administrator if no date is specified.
The Employer, upon the resignation or removal of an
Administrator, shall promptly designate in writing a successor to this
position. If the Employer does not appoint an Administrator, the Employer
will function as the Administrator.
2.5. ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the Employer
and accepted in writing by each Administrator. In the event that no such
delegation is made by the Employer, the Administrators may allocate the
responsibilities among themselves, in which event the Administrators shall
notify the Employer and the Trustee in writing of such action and specify
the responsibilities of each Administrator. The Trustee thereafter shall
accept and rely upon any documents executed by the appropriate
Administrator until such time as the Employer or the Administrators file
with the Trustee a written revocation of such designation.
2.6. POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer
the Plan for the exclusive benefit of the Participants and their
Beneficiaries, subject to the specific terms of the Plan. The
Administrator shall administer the Plan in accordance with its terms and
shall have the power and discretion to construe the terms of the Plan and
determine all questions arising in connection with the administration,
interpretation, and application of the Plan. Any such determination by the
Administrator shall be conclusive and binding upon all persons. The
Administrator may establish procedures, correct any defect, supply any
information, or reconcile any inconsistency in such manner and to such
extent as shall be deemed necessary or advisable to carry out the purpose
of the Plan; provided, however, that any procedure, discretionary act,
interpretation or construction shall be done in a nondiscriminatory manner
based upon uniform principles consistently applied and shall be consistent
with the intent that the Plan shall continue to be deemed a qualified plan
under the terms of Code Section 401(a), and shall comply with the terms of
the Act and all regulations issued pursuant thereto. The Administrator
shall have all powers necessary or appropriate to accomplish his duties
under this Plan.
The Administrator shall be charged with the duties of the
general administration of the Plan, including, but not limited to, the
following:
(a) the discretion to determine all questions relating to
the eligibility of Employees to participate or remain a Participant
hereunder and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with
respect to the amount and the kind of benefits to which any
Participant shall be entitled hereunder;
(c) to authorize and direct the Trustee with respect to
all nondiscretionary or otherwise directed disbursements from the
Trust Fund;
(d) to maintain all necessary records for the
administration of the Plan;
(e) to interpret the provisions of the Plan and to make
and publish such rules for regulation of the Plan as are consistent
with the terms hereof;
(f) to determine the size and type of any Contract to be
purchased from any Insurer, and to designate the Insurer from which
such Contract shall be purchased;
(g) to compute and certify to the Employer and to the
Trustee from time to time the sums of money necessary or desirable to
be contributed to the Trust Fund;
(h) to consult with the Employer and the Trustee regarding
the short and long-term liquidity needs of the Plan in order that the
Trustee can exercise any investment discretion in a manner designed
to accomplish specific objectives;
(i) to prepare and distribute to Employees a procedure for
notifying Participants and Beneficiaries of their rights to elect
Joint and Survivor Annuities and Pre-Retirement Survivor Annuities if
required by the Code and Regulations thereunder;
(j) to assist any Participant regarding his rights,
benefits, or elections available under the Plan.
2.7. RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and
shall keep all other books of account, records, and other data that may be
necessary for proper administration of the Plan and shall be responsible
for supplying all information and reports to the Internal Revenue Service,
Department of Labor, Participants, Beneficiaries and others as required by
law.
2.8. APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, and other
persons as the Administrator or the Trustee deems necessary or desirable
in connection with the administration of this Plan.
2.9. INFORMATION FROM EMPLOYER
To enable the Administrator to perform his functions, the
Employer shall supply full and timely information to the Administrator on
all matters relating to the Compensation of all Participants, their Hours
of Service, their Years of Service, their retirement, death, disability,
or termination of employment, and such other pertinent facts as the
Administrator may require; and the Administrator shall advise the Trustee
of such of the foregoing facts as may be pertinent to the Trustee's duties
under the Plan. The Administrator may rely upon such information as is
supplied by the Employer and shall have no duty or responsibility to
verify such information.
2.10. PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund
unless paid by the Employer. Such expenses shall include any expenses
incident to the functioning of the Administrator, including, but not
limited to, fees of accountants, counsel, and other specialists and their
agents, and other costs of administering the Plan. Until paid, the
expenses shall constitute a liability of the Trust Fund. However, the
Employer may reimburse the Trust Fund for any administration expense
incurred. Any administration expense paid to the Trust Fund as a
reimbursement shall not be considered an Employer contribution.
2.11. MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 2.5, if there shall be more
than one Administrator, they shall act by a majority of their number, but
may authorize one or more of them to sign all papers on their behalf.
2.12. CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with
the Administrator. Written notice of the disposition of a claim shall be
furnished to the claimant within 90 days after the application is filed.
In the event the claim is denied, the reasons for the denial shall be
specifically set forth in the notice in language calculated to be
understood by the claimant, pertinent provisions of the Plan shall be
cited, and, where appropriate, an explanation as to how the claimant can
perfect the claim will be provided. In addition, the claimant shall be
furnished with an explanation of the Plan's claims review procedure.
2.13. CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has
been denied a benefit by a decision of the Administrator pursuant to
Section 2.12 shall be entitled to request the Administrator to give
further consideration to his claim by filing with the Administrator a
written request for a hearing. Such request, together with a written
statement of the reasons why the claimant believes his claim should be
allowed, shall be filed with the Administrator no later than 60 days after
receipt of the written notification provided for in Section 2.12. The
Administrator shall then conduct a hearing within the next 60 days, at
which the claimant may be represented by an attorney or any other
representative of his choosing and expense and at which the claimant shall
have an opportunity to submit written and oral evidence and arguments in
support of his claim. At the hearing (or prior thereto upon 5 business
days written notice to the Administrator) the claimant or his
representative shall have an opportunity to review all documents in the
possession of the Administrator which are pertinent to the claim at issue
and its disallowance. Either the claimant or the Administrator may cause
a court reporter to attend the hearing and record the proceedings. In such
event, a complete written transcript of the proceedings shall be furnished
to both parties by the court reporter. The full expense of any such court
reporter and such transcripts shall be borne by the party causing the
court reporter to attend the hearing. A final decision as to the
allowance of the claim shall be made by the Administrator within 60 days
of receipt of the appeal (unless there has been an extension of 60 days
due to special circumstances, provided the delay and the special
circumstances occasioning it are communicated to the claimant within the
60 day period). Such communication shall be written in a manner
calculated to be understood by the claimants and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1. CONDITIONS OF ELIGIBILITY
Any Eligible Employee shall be eligible to participate hereunder
on the date he has satisfied the requirements specified in the Adoption
Agreement.
3.2. EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee who has become eligible to be a
Participant shall become a Participant effective as of the day specified
in the Adoption Agreement.
In the event an Employee who has satisfied the Plan's
eligibility requirements and would otherwise have become a Participant
shall go from a classification of a noneligible Employee to an Eligible
Employee, such Employee shall become a Participant as of the date he
becomes an Eligible Employee.
In the event an Employee who has satisfied the Plan's
eligibility requirements and would otherwise become a Participant shall go
from a classification of an Eligible Employee to a noneligible Employee
and becomes ineligible to participate and has not incurred a 1-Year Break
in Service, such Employee shall participate in the Plan as of the date he
returns to an eligible class of Employees. If such Employee does incur a
1-Year Break in Service, eligibility will be determined under the Break in
Service rules of the Plan.
3.3. DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each
Employee for participation in the Plan based upon information furnished by
the Employer. Such determination shall be conclusive and binding upon all
persons, as long as the same is made pursuant to the Plan and the Act.
Such determination shall be subject to review per Section 2.13.
3.4. TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of an
Eligible Employee to an ineligible Employee, such Former Participant shall
continue to vest in his interest in the Plan for each Year of Service
completed while a noneligible Employee, until such time as his
Participant's Account shall be forfeited or distributed pursuant to the
terms of the Plan. Additionally, his interest in the Plan shall continue
to share in the earnings of the Trust Fund.
3.5. OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such
omission is not made until after a contribution by his Employer for the
year has been made, the Employer shall make a subsequent contribution, if
necessary after the application of Section 4.3(e), so that the omitted
Employee receives a total amount which the said Employee would have
received had he not been omitted. Such contribution shall be made
regardless of whether or not it is deductible in whole or in part in any
taxable year under applicable provisions of the Code.
3.6. INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been
included as a Participant in the Plan is erroneously included and
discovery of such incorrect inclusion is not made until after a
contribution for the year has been made, the Employer shall not be
entitled to recover the contribution made with respect to the ineligible
person regardless of whether or not a deduction is allowable with respect
to such contribution. In such event, the amount contributed with respect
to the ineligible person shall constitute a Forfeiture for the Plan Year
in which the discovery is made.
3.7. ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect
voluntarily not to participate in the Plan. The election not to
participate must be communicated to the Employer, in writing, at least
thirty (30) days before the beginning of a Plan Year. For Standardized
Plans, a Participant or an Eligible Employee may not elect not to
participate. Furthermore, the foregoing election not to participate shall
not be available with respect to partners in a partnership.
3.8. CONTROL OF ENTITIES BY OWNER-EMPLOYEE
(a) 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 entities, this Plan and the plan
established for other trades or businesses must, when looked at as a
single Plan, satisfy Code Sections 401(a) and (d) for the Employees of
this and all other entities.
(b) If the Plan provides contributions or benefits for one
or more Owner-Employees who control one or more other trades or
businesses, the employees of the other trades or businesses must be
included in a plan which satisfies Code Sections 401(a) and (d) and which
provides contributions and benefits not less favorable than provided for
Owner-Employees under this Plan.
(c) If an individual is covered as an Owner-Employee under
the plans of two or more trades or businesses which are not controlled and
the individual controls a trade or business, then the benefits or
contributions 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.
(d) For purposes of the preceding paragraphs, an Owner-
Employee, or two or more Owner-Employees, will be considered to control an
entity if the Owner-Employee, or two or more Owner-Employees together:
(1) own the entire interest in an unincorporated
entity, or
(2) in the case of a partnership, own more than 50
Percent of either the capital interest or the profits interest in the
partnership.
(e) For purposes of the preceding sentence, an Owner-
Employee, or two or more Owner-Employees shall be treated as owning any
interest in a partnership which is owned, directly or indirectly, by a
partnership which such Owner-Employee, or such two or more Owner-
Employees, are considered to control within the meaning of the preceding
sentence.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1. FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
(a) For a Money Purchase Plan -
(1) The Employer shall make contributions over such
period of years as the Employer may determine on the following basis.
On behalf of each Participant eligible to share in allocations, for
each year of his participation in this Plan, the Employer shall
contribute the amount specified in the Adoption Agreement. All
contributions by the Employer shall be made in cash or in such
property as is acceptable to the Trustee. The Employer shall be
required to obtain a waiver from the Internal Revenue Service for any
Plan Year in which it is unable to make the full required
contribution to the Plan. In the event a waiver is obtained, this
Plan shall be deemed to be an individually designed plan.
(2) For any Plan Year beginning prior to January 1,
1990, and if elected in the non-standardized Adoption Agreement for
any Plan Year beginning on or after January 1, 1990, the Employer
shall not contribute on behalf of a Participant who performs less
than a Year of Service during any Plan Year, unless there is a Short
Plan Year or a contribution is required pursuant to 4.3(h).
(3) Notwithstanding the foregoing, the Employer's
contribution for any Fiscal Year shall not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code
Section 404. However, to the extent necessary to provide the top
heavy minimum allocations, the Employer shall make a contribution
even if it exceeds the amount which is deductible under Code Section
404.
(b) For a Profit Sharing Plan -
(1) For each Plan Year, the Employer shall contribute
to the Plan such amount as specified by the Employer in the Adoption
Agreement. Notwithstanding the foregoing, however, the Employer's
contribution for any Fiscal Year shall not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code
Section 404. All contributions by the Employer shall be made in cash
or in such property as is acceptable to the Trustee.
(2) Except, however, to the extent necessary to
provide the top heavy minimum allocations, the Employer shall make a
contribution even if it exceeds current or accumulated Net Profit or
the amount which is deductible under Code Section 404.
4.2. TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
The Employer shall generally pay to the Trustee its contribution
to the Plan for each Plan Year within the time prescribed by law,
including extensions of time, for the filing of the Employer's federal
income tax return for the Fiscal Year.
4.3. ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an
account in the name of each Participant to which the Administrator shall
credit as of each Anniversary Date, or other valuation date, all amounts
allocated to each such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation of
the Employer's contributions for each Plan Year. Within a reasonable
period of time after the date of receipt by the Administrator of such
information, the Administrator shall allocate such contribution as
follows:
(1) For a Money Purchase Plan:
(i) The Employer's Contribution shall be
allocated to each Participant's Combined Account in the manner
set forth in Section 4.1 herein and as specified in Section E2
of the Adoption Agreement.
(2) For an Integrated Profit Sharing Plan:
(i) The Employer's contribution shall be
allocated to each Participant's Account, except as provided in
Section 4.3(f), in a dollar amount equal to 5.7% of the sum of
each Participant's total Compensation plus Excess Compensation.
If the Employer does not contribute such amount for all
Participants, each Participant will be allocated a share of the
contribution in the same proportion that his total Compensation
plus his total Excess Compensation for the Plan Year bears to
the total Compensation plus the total Excess Compensation of all
Participants for that year.
Regardless of the preceding, 4.3% shall be substituted
for 5.7% above if Excess Compensation is based on more than 20%
and less than or equal to 80% of the Taxable Wage Base. If
Excess Compensation is based on less than 100% and more than 80%
of the Taxable Wage Base, then 5.4% shall be substituted for
5.7% above.
(ii) The balance of the Employer's contribution
over the amount allocated above, if any, shall be allocated to
each Participant's Combined Account in the same proportion that
his total Compensation for the Year bears to the total
Compensation of all Participants for such year.
(iii) Except, however, for any Plan Year
beginning prior to January 1, 1990, and if elected in the non-
standardized Adoption Agreement for any Plan Year beginning on
or after January l, 1990, a Participant who performs less than a
Year of Service during any Plan Year shall not share in the
Employer's contribution for that year, unless there is a Short
Plan Year or a contribution is required pursuant to Section
4.3(h).
(3) For a Non-Integrated Profit Sharing Plan:
(i) The Employer's contribution shall be
allocated to each Participant's Account in the same proportion
that each such Participant's Compensation for the year bears to
the total Compensation of all Participants for such year.
(ii) Except, however, for any Plan Year beginning
prior to January 1, 1990, and if elected in the non-standardized
Adoption Agreement for any Plan Year beginning on or after
January 1, 1990, a Participant who performs less than a Year of
Service during any Plan Year shall not share in the Employer's
contribution for that year, unless there is a Short Plan Year or
a contribution is required pursuant to Section 4.3(h).
(c) As of each Anniversary Date or other valuation date,
before allocation of Employer contributions and Forfeitures, any earnings
or losses (net appreciation or net depreciation) of the Trust Fund shall
be allocated in the same proportion that each Participant's and Former
Participant's nonsegregated accounts bear to the total of all
Participants' and Former Participants' nonsegregated accounts as of such
date. If any nonsegregated account of a Participant has been distributed
prior to the Anniversary Date or other valuation date subsequent to a
Participant's termination of employment, no earnings or losses shall be
credited to such account.
Notwithstanding the above, with respect to contributions
made to a 401(k) Plan after the previous Anniversary Date or allocation
date, the method specified in the Adoption Agreement shall be used.
(d) Participants' Accounts shall be debited for any
insurance or annuity premiums paid, if any, and credited with any
dividends or interest received on insurance contracts.
(e) As of each Anniversary Date any amounts which became
Forfeitures since the last Anniversary Date shall first be made available
to reinstate previously forfeited account balances of Former Participants,
if any, in accordance with Section 6.4(g)(2) or be used to satisfy any
contribution that may be required pursuant to Section 3.5 and/or 6.9. The
remaining Forfeitures, if any, shall be treated in accordance with the
Adoption Agreement. Provided, however, that in the event the allocation
of Forfeitures provided herein shall cause the "annual addition" (as
defined in Section 4.4) to any Participant's Account to exceed the amount
allowable by the Code, the excess shall be reallocated in accordance with
Section 4.5. Except, however, for any Plan Year beginning prior to
January 1, 1990, and if elected in the non-standardized Adoption Agreement
for any Plan Year beginning on or after January 1, 1990, a Participant who
performs less than a Year of Service during any Plan Year shall not share
in the Plan Forfeitures for that year, unless there is a Short Plan Year
or a contribution required pursuant to Section 4.3(h).
(f) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum of the
Employer's contributions and Forfeitures allocated to the Participant's
Combined Account of each Non-Key Employee shall be equal to at least three
percent (3%) of such Non-Key Employee's "415 Compensation" (reduced by
contributions and forfeitures, if any, allocated to each Non-Key Employee
in any defined contribution plan included with this plan in a Required
Aggregation Group). However, if (i) the sum of the Employer's
contributions and Forfeitures allocated to the Participant's Combined
Account of each Key Employee for such Top Heavy Plan Year is less than
three percent (3%) of each Key Employee's "415 Compensation" and (ii) this
Plan is not required to be included in an Aggregation Group to enable a
defined benefit plan to meet the requirements of Code Section 401(a)(4) or
410, the sum of the Employer's contributions and Forfeitures allocated to
the Participant's Combined Account of each Non-Key Employee shall be equal
to the largest percentage allocated to the Participant's Combined Account
of any Key Employee.
However, for each Non-Key Employee who is a Participant in
a paired Profit Sharing Plan or 401(k) Profit Sharing Plan and a paired
Money Purchase Plan, the minimum 3% allocation specified above shall be
provided in the Money Purchase Plan.
If this is an integrated Plan, then for any Top Heavy Plan
Year the Employer's contribution shall be allocated as follows:
(1) An amount equal to 3% multiplied by each
Participant's Compensation for the Plan Year shall be allocated to
each Participant's Account. If the Employer does not contribute such
amount for all Participants, the amount shall be allocated to each
Participant's Account in the same proportion that his total
Compensation for the Plan Year bears to the total Compensation of all
Participants for such year.
(2) The balance of the Employer's contribution over
the amount allocated under subparagraph (l) hereof shall be allocated
to each Participant's Account in a dollar amount equal to 3%
multiplied by a Participant's Excess Compensation. If the Employer
does not contribute such amount for all Participants, each
Participant will be allocated a share of the contribution in the same
proportion that his Excess Compensation bears to the total Excess
Compensation of all Participants for that year.
(3) The balance of the Employer's contribution over
the amount allocated under subparagraph (2) hereof shall be allocated
to each Participant's Account in a dollar amount equal to 2.7%
multiplied by the sum of each Participant's total Compensation plus
Excess Compensation. If the Employer does not contribute such amount
for all Participants, each Participant will be allocated a share of
the contribution in the same proportion that his total Compensation
plus his total Excess Compensation for the Plan Year bears to the
total Compensation plus the total Excess Compensation of all
Participants for that year.
Regardless of the preceding, 1.3% shall be substituted
for 2.7% above if Excess Compensation is based on more than 20% and
less than or equal to 80% of the Taxable Wage Base. If Excess
Compensation is based on less than 100% and more than 80% of the
Taxable Wage Base, then 2.4% shall be substituted for 2.7% above.
(4) The balance of the Employer's contributions over
the amount allocated above, if any, shall be allocated to each
Participant's Account in the same proportion that his total
Compensation for the Plan Year bears to the total Compensation of all
Participants for such year.
For each Non-Key Employee who is a Participant in this
Plan and another non-paired defined contribution plan maintained by
the Employer, the minimum 3% allocation specified above shall be
provided as specified in F3 of the Adoption Agreement.
(g) For purposes of the minimum allocations set forth
above, the percentage allocated to the Participant's Combined Account of
any Key Employee shall be equal to the ratio of the sum of the Employer's
contributions and Forfeitures allocated on behalf of such Key Employee
divided by the "415 Compensation" for such Key Employee.
(h) For any Top Heavy Plan Year, the minimum allocations
set forth in this Section shall be allocated to the Participant's Combined
Account of all Non-Key Employees who are Participants and who are employed
by the Employer on the last day of the Plan Year, including Non-Key
Employees who have (l) failed to complete a Year of Service; or (2)
declined to make mandatory contributions (if required) or, in the case of
a cash or deferred arrangement, elective contributions to the Plan.
(i) Notwithstanding anything herein to the contrary, in
any Plan Year in which the Employer maintains both this Plan and a defined
benefit pension plan included in a Required Aggregation Group which is top
heavy, the Employer shall not be required to provide a Non-Key Employee
with both the full separate minimum defined benefit plan benefit and the
full separate defined contribution plan allocations. Therefore, if the
Employer maintains both a Defined Benefit and a Defined Contribution Plan
that are a Top Heavy Group, the top heavy minimum benefits shall be
provided as follows:
(1) Applies if F1b of the Adoption Agreement is
Selected -
(i) The requirements of Section 2.1 shall apply
except that each Non-Key Employee who is a Participant in the
Profit Sharing Plan or Money Purchase Plan and who is also a
Participant in the Defined Benefit Plan shall receive a minimum
allocation of five percent (5%) of such Participant's "415
Compensation" from the applicable Defined Contribution Plan(s).
(ii) For each Non-Key Employee who is a
Participant only in the Defined Benefit Plan the Employer will
provide a minimum non-integrated benefit equal to 2% of his
highest five consecutive year average "415 Compensation" for
each Year of Service while a Participant in the Plan, in which
the Plan is top heavy, not to exceed ten.
(iii) For each Non-Key Employee who is a
Participant only in this Defined Contribution Plan, the Employer
shall provide a contribution equal to 3% of his "415
Compensation".
(2) Applies if F1c of the Adoption Agreement is
Selected -
(i) The minimum allocation specified in Section
4.3(i)(1)(i) shall be 7 1/2% if the Employer elects in the
Adoption Agreement for years in which the Plan is Top Heavy, but
not Super Top Heavy.
(ii) The minimum benefit specified in Section
4.3(i)(1)(ii) shall be 3% if the Employer elects in the Adoption
Agreement for years in which the Plan is Top Heavy, but not
Super Top Heavy.
(iii) The minimum allocation specified in
Section 4.3(i)(1)(iii) shall be 4% if the Employer elects in the
Adoption Agreement for years in which the Plan is Top Heavy, but
not Super Top Heavy.
(j) For the purposes of this Section, "415 Compensation"
shall be limited to $200,000 (unless adjusted in such manner as permitted
under Code Section 415(d)). However, for Plan Years beginning prior to
January 1, 1989, the $200,000 limit shall apply only for Top Heavy Plan
Years and shall not be adjusted.
(k) Notwithstanding anything herein to the contrary, any
Participant who terminated employment during the Plan Year for reasons
other than death, Total and Permanent Disability, or retirement shall or
shall not share in the allocations of the Employer's Contributions and
Forfeitures as provided in the Adoption Agreement. Notwithstanding the
foregoing, for Plan Years beginning after 1989, if this is a standardized
Plan, any such terminated Participant shall share in the allocations as
provided in this Section provided such Participant completed more than 500
Hours of Service.
(l) Notwithstanding anything herein to the contrary,
Participants terminating for reasons of death, Total and Permanent
Disability, or retirement shall share in the allocations as provided in
this Section regardless of whether they completed a Year of Service during
the Plan Year.
(m) If a Former Participant is reemployed after five (5)
consecutive 1-Year Breaks in Service, then separate accounts shall be
maintained as follows:
(1) one account for nonforfeitable benefits
attributable to pre-break service; and
(2) one account representing his employer derived
account balance in the Plan attributable to post-break service.
(n) Notwithstanding any election in the Adoption Agreement
to the contrary, if this is a non-standardized Plan that would otherwise
fail to meet the requirements of Code Sections 401(a)(26), 410(b)(1), or
410(b)(2)(A)(i) and the Regulations thereunder because Employer
Contributions have not been allocated to a sufficient number or percentage
of Participants for a Plan Year, then the following rules shall apply:
(1) The group of Participants eligible to share in
the Employer's contribution and Forfeitures for the Plan Year shall
be expanded to include the minimum number of Participants who would
not otherwise be eligible as are necessary to satisfy the applicable
test specified above. The specific participants who shall become
eligible under the terms of this paragraph shall be those who are
actively employed on the last day of the Plan Year and, when compared
to similarly situated Participants, have completed the greatest
number of Hours of Service in the Plan Year.
(2) If after application of paragraph (l) above, the
applicable test is still not satisfied, then the group of
Participants eligible to share in the Employer's contribution and
Forfeitures for the Plan Year shall be further expanded to include
the minimum number of Participants who are not actively employed on
the last day of the Plan Year as are necessary to satisfy the
applicable test. The specific Participants who shall become eligible
to share shall be those Participants, when compared to similarly
situated Participants, who have completed the greatest number of
Hours of Service in the Plan Year before terminating employment.
Nothing in this Section shall permit the reduction of
a Participant's accrued benefit. Therefore any amounts that have
previously been allocated to Participants may not be reallocated to
satisfy these requirements. In such event, the Employer shall make
an additional contribution equal to the amount such affected
Participants would have received had they been included in the
allocations, even if it exceeds the amount which would be deductible
under Code Section 404. Any adjustment to the allocations pursuant
to this paragraph shall be considered a retroactive amendment adopted
by the last day of the Plan Year.
4.4. MAXIMUM ANNUAL ADDITIONS
(a) (1) If the Participant does not participate in, and
has never participated in another qualified plan maintained by the
Employer, or a welfare benefit fund (as defined in Code Section
419(e)), maintained by the Employer, or an individual medical account
(as defined in Code Section 415(1)(2)) maintained by the Employer,
which provides Annual Additions, the amount of Annual Additions which
may be credited to the Participant's accounts for any Limitation Year
shall not exceed the lesser of the Maximum Permissible Amount or any
other limitation contained in this Plan. If the Employer
contribution that would otherwise be contributed or allocated to the
Participant's accounts would cause the Annual Additions for the
Limitation Year to exceed the Maximum Permissible Amount, the amount
contributed or allocated will be reduced so that the Annual Additions
for the Limitation Year will equal the Maximum Permissible Amount.
(2) Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer may determine the
Maximum Permissible Amount for a Participant on the basis of a
reasonable estimation of the Participant's Compensation for the
Limitation Year, uniformly determined for all Participants similarly
situated.
(3) As soon as is administratively feasible after the
end of the Limitation Year, the Maximum Permissible Amount for such
Limitation Year shall be determined on the basis of the Participant's
actual compensation for such Limitation Year.
(4) If pursuant to Section 4.4(a)(2) or as a result
of the allocation of Forfeitures, there is an Excess Amount, the
excess will be disposed of as follows:
(i) Any nondeductible Voluntary Employee
Contributions, to the extent they would reduce the Excess
Amount, will be returned to the Participant;
(ii) If, after the application of subparagraph
(i), an Excess Amount still exists, and the Participant is
covered by the Plan at the end of the Limitation Year, the
Excess Amount in the Participant's account will be used to
reduce Employer contributions (including any allocation of
Forfeitures) for such Participant in the next Limitation Year,
and each succeeding Limitation Year if necessary;
(iii) If, after the application of
subparagraph (i), an Excess Amount still exists, and the
Participant is not covered by the Plan at the end of a
Limitation Year, the Excess Amount will be held unallocated in a
suspense account. The suspense account will be applied to reduce
future Employer contributions (including allocation of any
Forfeitures) for all remaining Participants in the next
Limitation Year, and each succeeding Limitation Year if
necessary;
(iv) If a suspense account is in existence at any
time during a Limitation Year pursuant to this Section, it will
not participate in the allocation of investment gains and
losses. If a suspense account is in existence at any time during
a particular limitation year, all amounts in the suspense
account must be allocated and reallocated to participants'
accounts before any employer contributions or any employee
contributions may be made to the plan for that limitation year.
Excess amounts may not be distributed to participants or former
participants.
(b) (1) This subsection applies if, in addition to this
Plan, the Participant is covered under another qualified Prototype
defined contribution plan maintained by the Employer, or a welfare
benefit fund (as defined in Code Section 419(e)) maintained by the
Employer, or an individual medical account (as defined in Code
Section 415(l)(2)) maintained by the Employer, which provides Annual
Additions, during any Limitation Year. The Annual Additions which
may be credited to a Participant's accounts under this Plan for any
such Limitation Year shall not exceed the Maximum Permissible Amount
reduced by the Annual Additions credited to a Participant's accounts
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
Permissible Amount and the Employer contribution that would otherwise
be contributed or allocated to the Participant's accounts under this
Plan would cause the Annual Additions for the Limitation Year to
exceed this limitation, the amount contributed or allocated will be
reduced so that the Annual Additions under all such plans and welfare
benefit funds for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with respect to the
Participant under such other defined contribution plans and welfare
benefit funds in the aggregate are equal to or greater than the
Maximum Permissible Amount, no amount will be contributed or
allocated to the Participant's account under this Plan for the
Limitation Year.
(2) Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer may determine the
Maximum Permissible Amount for a Participant in the manner described
in Section 4.4(a) (2).
(3) As soon as is administratively feasible after the
end of the Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the Participant's
actual Compensation for the Limitation Year.
(4) If, pursuant to Section 4.4(b)(2) or as a result
of the allocation of Forfeitures, a Participant's Annual Additions
under this Plan and such other plans would result in an Excess Amount
for a Limitation Year, the Excess Amount will be deemed to consist of
the Annual Additions last allocated, except that Annual Additions
attributable to a welfare benefit fund or individual medical account
will be deemed to have been allocated first regardless of the actual
allocation date.
(5) If an Excess Amount was allocated to a
Participant on an allocation date of this Plan which coincides with
an allocation date of another plan, the Excess Amount attributed to
this Plan will be the product of,
(i) the total Excess Amount allocated as of such
date, times
(ii) the ratio of (1) the Annual Additions
allocated to the Participant for the Limitation Year as of such
date under this Plan to (2) the total Annual Additions allocated
to the Participant for the Limitation Year as of such date under
this and all the other qualified defined contribution plans.
(6) Any Excess Amount attributed to this Plan will be
disposed in the manner described in Section 4.4(a)(4).
(c) If the Participant is covered under another qualified
defined contribution plan maintained by the Employer which is not a
Prototype Plan, Annual Additions which may be credited to the
Participant's account under this Plan for any Limitation Year will be
limited in accordance with Section 4.4(b), unless the Employer provides
other limitations in the Adoption Agreement.
(d) If the Employer maintains, or at any time maintained,
a qualified defined benefit plan covering any Participant in this Plan the
sum of the Participant's Defined Benefit Plan Fraction and Defined
Contribution Plan Fraction will not exceed 1.0 in any Limitation Year.
The Annual Additions which may be credited to the Participant's account
under this Plan for any Limitation Year will be limited in accordance with
the Limitation on Allocations Section of the Adoption Agreement.
Except, however, if the Plans are standardized paired
plans, the rate of accrual in the defined benefit plan will be reduced to
the extent necessary so that the sum of the Defined Contribution Fraction
and Defined Benefit Fraction will equal 1.0.
(e) For purposes of applying the limitations of Code
Section 415, the transfer of funds from one qualified plan to another is
not an "annual addition". In addition, the following are not Employee
contributions for the purposes of Section 4.4(f)(1)(2): (1) rollover
contributions (as defined in Code Sections 402(a)(5), 403(a)(4),
40.3(b)(8) and 408(d)(3)); (2) repayments of loans made to a Participant
from the Plan; (3) repayments of distributions received by an Employee
pursuant to Code Section 411(a)(7)(B) (cash-outs); (4) repayments of
distributions received by an Employee pursuant to Code Section
411(a)(3)(D) (mandatory contributions); and (5) Employee contributions to
a simplified employee pension excludable from gross income under Code
Section 408(k)(6).
(f) For purposes of this Section, the following terms
shall be defined as follows:
(1) Annual Additions means the sum credited to a
Participant's accounts for any Limitation Year of (1) Employer
contributions, (2) effective with respect to "limitation years"
beginning after December 31, 1986, Employee contributions, (3)
forfeitures, (4) amounts allocated, after March 31, 1984, to an
individual medical account, as defined in Code Section 415(1)(2),
which is part of a pension or annuity plan maintained by the Employer
and (5) amounts derived from contributions paid or accrued after
December 31, 1985, in taxable years ending after such date, which are
attributable to post-retirement medical benefits allocated to the
separate account of a key employee (as defined in Code Section
419A(d)(3)) under a welfare benefit fund (as defined in Code Section
419(e)) maintained by the Employer. Except, however, the "415
Compensation" percentage limitation referred to in paragraph (a) (2)
above shall not apply to: (l) any contribution for medical benefits
(within the meaning of Code Section 419A(f)(2)) after separation from
service which is otherwise treated as an "annual addition", or (2)
any amount otherwise treated as an "annual addition" under Code
Section 415(1)(1). Notwithstanding the foregoing, for "limitation
years" beginning prior to January 1, 1987, only that portion of
Employee contributions equal to the lesser of Employee contributions
in excess of six percent (6%) of "415 Compensation" or one-half of
Employee contributions shall be considered an "annual addition".
For this purpose, any Excess Amount applied under
Sections 4.4(a) (4) and 4.4(b) (6) in the Limitation Year to reduce
Employer contributions shall be considered Annual Additions for such
Limitation Year.
(2) Compensation means a Participant's earned income,
wages, salaries, fees for professional services and other amounts
received for personal services actually rendered in the course of
employment with the Employer maintaining the Plan (including, but not
limited to, commissions paid salesmen, compensation for services on
the basis of a percentage of profits, commissions on insurance
premiums, tips, and bonuses) 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 contributed, or Employer
contributions under a simplified employee pension plan to the
extent such contributions are excludable from the Employee's
gross income, or any distributions from a plan of deferred
compensation;
(ii) contributions made by the Employer to a plan
of deferred compensation to the extent that all or a portion of
such contributions are recharacterized as a voluntary Employee
contribution;
(iii) amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or
property) held by an Employee becomes freely transferable or is
no longer subject to a substantial risk of forfeiture;
(iv) amounts realized from the sale, exchange or
other disposition of stock acquired under a qualified stock
option; and
(v) other amounts which received special tax
benefits, or contributions made by an Employer (whether or not
under a salary reduction agreement) towards the purchase of an
annuity contract described in Code Section 403(b) (whether or
not the contributions are excludable from the gross income of
the Employee).
For purposes of applying the limitations of this
Section 4.4, Compensation for any Limitation Year is the Compensation
actually paid or includible in gross income during such year.
Notwithstanding the preceding sentence, Compensation for a
Participant in a profit-sharing plan who is permanently and totally
disabled (as defined in Code Section 22(e)(3)) is the Compensation
such Participant would have received for the Limitation Year if the
Participant had been paid at the rate of Compensation paid
immediately before becoming permanently and totally disabled; such
imputed Compensation for the disabled Participant may be taken into
account only if the Participant is not a Highly Compensated Employee
and contributions made on behalf of such Participant are
nonforfeitable when made.
(3) Defined Benefit Fraction means a fraction, the
numerator of which is the sum of the Participant's Projected Annual
Benefits under all the defined benefit plans (whether or not
terminated) maintained by the Employer, and the denominator of which
is the lesser of 125 percent of the dollar limitation determined for
the Limitation Year under Code Sections 415(b) and (d) or 140 percent
of his Highest Average Compensation including any adjustments under
Code Section 415(b).
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first Limitation Year
beginning after 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 close of the last
Limitation Year beginning before January 1, 1987, disregarding any
changes in the terms and conditions of the plan after May 5, 1986.
The preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Code
Section 415 for all Limitation Years beginning before January 1,
1987.
Notwithstanding the foregoing, for any Top Heavy Plan
Year, 100 shall be substituted for 125 unless the extra minimum
allocation is being made pursuant to the Employer's election in F1 of
the Adoption Agreement. However, for any Plan Year in which this Plan
is a Super Top Heavy Plan, 100 shall be substituted for 125 in any
event.
(4) Defined Contribution Dollar Limitation means
$30,000, or, if greater, one-fourth of the defined benefit dollar
limitation set forth in Code Section 415(b)(1) as in effect for the
Limitation Year.
(5) Defined Contribution Fraction means a fraction,
the numerator of which is the sum of the Annual Additions to the
Participant's account under all the defined contribution plans
(whether or not terminated) maintained by the Employer for the
current and all prior Limitation Years, (including the Annual
Additions attributable to the Participant's nondeductible voluntary
employee contributions to any defined benefit plans, whether or not
terminated, maintained by the Employer and the annual additions
attributable to all welfare benefit funds, as defined in Code Section
419(e), and individual medical accounts, as defined in Code Section
415(1)(2), maintained by the Employer), and the denominator of which
is the sum of the maximum aggregate amounts for the current and all
prior Limitation Years of Service with the Employer (regardless of
whether a defined contribution plan was maintained by the Employer).
The maximum aggregate amount in any Limitation Year is the lesser of
125 percent of the Defined Contribution Dollar Limitation or 35
percent of the Participant's Compensation for such year. For
Limitation Years beginning prior to January 1, 1987, the "annual
addition" shall not be recomputed to treat all Employee contributions
as an Annual Addition.
If the Employee was a Participant as of the end of the
first day of the first Limitation Year beginning after December 31,
1986, in one or more defined contribution plans maintained by the
Employer which were in existence on May 5, 1986, the numerator of
this fraction will be adjusted if the sum of this fraction and the
Defined Benefit Fraction would otherwise exceed 1.0 under the terms
of this Plan. Under the adjustment, an amount equal to the product
of (1) the excess of the sum of the fractions over 1.0 times (2) the
denominator of this fraction, will be permanently subtracted from the
numerator of this fraction. The adjustment is calculated using the
fractions as they would be computed as of the end of the last
Limitation Year beginning before January 1, 1987, and disregarding
any changes in the terms and conditions of the plan made after May 5,
1986, but using the Code Section 415 limitation applicable to the
first Limitation Year beginning on or after January 1, 1987.
Notwithstanding the foregoing, for any Top Heavy Plan
Year, 100 shall be substituted for 125 unless the extra minimum
allocation is being made pursuant to the Employer's election in F1 of
the Adoption Agreement. However, for any Plan Year in which this Plan
is a Super Top Heavy Plan, 100 shall be substituted for 125 in any
event.
(6) Employer means the Employer that adopts this Plan
and all Affiliated Employers, except that for purposes of this
Section, Affiliated Employers shall be determined pursuant to the
modification made by Code Section 415(h).
(7) Excess Amount means the excess of the
Participant's Annual Additions for the Limitation Year over the
Maximum Permissible Amount.
(8) Highest Average Compensation means the average
Compensation for the three consecutive Years of Service with the
Employer that produces the highest average. A Year of Service with
the Employer is the 12 consecutive month period defined in Section E1
of the Adoption Agreement which is used to determine Compensation
under the Plan.
(9) Limitation Year means the Compensation Year (a 12
consecutive month period) as elected by the Employer in the Adoption
Agreement. All qualified plans maintained by the Employer must use
the same Limitation Year. If the Limitation Year is amended to a
different 12 consecutive month period, the new Limitation Year must
begin on a date within the Limitation Year in which the amendment is
made.
(10) Master or Prototype Plan means a plan the form of
which is the subject of a favorable opinion letter from the Internal
Revenue Service.
(11) Maximum Permissible Amount means the maximum
Annual Addition that may be contributed or allocated to a
Participant's account under the plan for any Limitation Year, which
shall not exceed the lesser of:
(i) the Defined Contribution Dollar Limitation,
or
(ii) 25 percent of the Participant's Compensation
for the Limitation Year.
The Compensation Limitation referred to in (ii) shall
not apply to any contribution for medical benefits (within the
meaning of Code Sections 401(h) or 419A(f)(2)) which is otherwise
treated as an annual addition under Code Sections 415(1)(1) or
419A(d)(2).
If a short Limitation Year is created because of an
amendment changing the Limitation Year to a different 12 consecutive
month period, the Maximum Permissible Amount will not exceed the
Defined Contribution Dollar Contribution multiplied by the following
fraction:
number of months in the short Limitation Year
(12) Projected Annual Benefit means the annual
retirement benefit (adjusted to an actuarially equivalent straight
life annuity if such benefit is expressed in a form other than a
straight life annuity or qualified Joint and Survivor Annuity) to
which the Participant would be entitled under the terms of the plan
assuming:
(13) the Participant will continue employment until
Normal Retirement Age (or current age, if later), and
(14) the Participant's Compensation for the current
Limitation Year and all other relevant factors used to determine
benefits under the Plan will remain constant for all future
Limitation Years.
(g) Notwithstanding anything contained in this Section to
the contrary, the limitations, adjustments and other requirements
prescribed in this Section shall at all times comply with the provisions
of Code Section 415 and the Regulations thereunder, the terms of which are
specifically incorporated herein by reference.
4.5. ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If as a result of the allocation of Forfeitures, a
reasonable error in estimating a Participant's annual Compensation, or
other facts and circumstances to which Regulation 1.415-6(b)(6) shall be
applicable, the "annual additions" under this Plan would cause the maximum
provided in Section 4.4 to be exceeded, the Administrator shall treat the
excess in accordance with Section 4.4(a)(4).
4.6. TRANSFERS FROM QUALIFIED PLANS
(a) If specified in the Adoption Agreement and with the
consent of the Administrator, amounts may be transferred from other
qualified plans, provided that the trust from which such funds are
transferred permits the transfer to be made and the transfer will not
jeopardize the tax exempt status of the Plan or create adverse tax
consequences for the Employer. The amounts transferred shall be set up in
a separate account herein referred to as a "Participant's Rollover
Account". Such account shall be fully Vested at all times and shall not
be subject to forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be
held by the Trustee pursuant to the provisions of this Plan and may not be
withdrawn by, or distributed to the Participant, in whole or in part,
except as provided in Paragraphs (c) and (d) of this Section.
(c) Amounts attributable to elective contributions (as
defined in Regulation 1.401(k)-1(g)(4)), including amounts treated as
elective contributions, which are transferred from another qualified plan
in a plan-to-plan transfer shall be subject to the distribution
limitations provided for in Regulation 1.401(k)-1(d).
(d) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits, the
fair market value of the Participant's Rollover Account shall be used to
provide additional benefits to the Participant or his Beneficiary. Any
distributions of amounts held in a Participant's Rollover Account shall be
made in a manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 411(a) (11) and 417 and the Regulations
thereunder. Furthermore, such amounts shall be considered as part of a
Participant's benefit in determining whether an involuntary cash-out of
benefits without Participant consent may be made.
(e) The Administrator may direct that employee transfers
made after a valuation date be segregated into a separate account for each
Participant until such time as the allocations pursuant to this Plan have
been made, at which time they may remain segregated or be invested as part
of the general Trust Fund, to be determined by the Administrator.
(f) For purposes of this Section, the term "qualified
plan" shall mean any tax qualified plan under Code Section 401(a). The
term "amounts transferred from other qualified plans" shall mean: (i)
amounts transferred to this Plan directly from another qualified plan;
(ii) lump-sum distributions received by an Employee from another qualified
plan which are eligible for tax free rollover to a qualified plan and
which are transferred by the Employee to this Plan within sixty (60) days
following his receipt thereof; (iii) amounts transferred to this Plan from
a conduit individual retirement account provided that the conduit
individual retirement account has no assets other than assets which (A)
were previously distributed to the Employee by another qualified plan as a
lump-sum distribution (B) were eligible for tax-free rollover to a
qualified plan and (C) were deposited in such conduit individual
retirement account within sixty (60) days of receipt thereof and other
than earnings on said assets; and (iv) amounts distributed to the Employee
from a conduit individual retirement account meeting the requirements of
clause (iii) above, and transferred by the Employee to this Plan within
sixty (60) days of his receipt thereof from such conduit individual
retirement account.
(g) Prior to accepting any transfers to which this Section
applies, the Administrator may require the Employee to establish that the
amounts to be transferred to this Plan meet the requirements of this
Section and may also require the Employee to provide an opinion of counsel
satisfactory to the Employer that the amounts to be transferred meet the
requirements of this Section.
(h) Notwithstanding anything herein to the contrary, a
transfer directly to this Plan from another qualified plan (or a
transaction having the effect of such a transfer) shall only be permitted
if it will not result in the elimination or reduction of any "Section
411(d)(6) protected benefit" as described in Section 8.1.
4.7. VOLUNTARY CONTRIBUTIONS
(a) If this is an amendment to a Plan that had previously
allowed voluntary Employee contributions, then, except as provided in
below, this Plan will not accept voluntary Employee contributions for Plan
Years beginning after the Plan Year in which this Plan is adopted by the
Employer.
(b) The balance in each Participant's Voluntary
Contribution Account shall be fully Vested at all times and shall not be
subject to Forfeiture for any reason.
(c) A Participant may elect to withdraw his voluntary
contributions from his Voluntary Contribution Account and the actual
earnings thereon in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all notice and
consent requirements of Code Sections 411(a)(11) and 417 and the
Regulations thereunder. If the Administrator maintains sub-accounts with
respect to voluntary contributions (and earnings thereon) which were made
on or before a specified date, a Participant shall be permitted to
designate which sub-account shall be the source for his withdrawal. No
Forfeitures shall occur solely as a result of an Employee's withdrawal of
Employee contributions.
(d) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits, the
fair market value of the Voluntary Contribution Account shall be used to
provide additional benefits to the Participant or his Beneficiary.
4.8. DIRECTED INVESTMENT ACCOUNT
(a) If elected in the Adoption Agreement, all Participants
may direct the Trustee as to the investment of all or a portion of any one
or more of their individual account balances. Participants may direct the
Trustee in writing to invest their account in specific assets as permitted
by the Administrator provided such investments are in accordance with the
Department of Labor regulations and are permitted by the Plan. That
portion of the account of any Participant so directing will thereupon be
considered a Directed Investment Account.
(b) A separate Directed Investment Account shall be
established for each Participant who has directed an investment.
Transfers between the Participant's regular account and their Directed
Investment Account shall be charged and credited as the case may be to
each account. The Directed Investment Account shall not share in Trust
Fund Earnings, but it shall be charged or credited as appropriate with the
net earnings, gains, losses and expenses as well as any appreciation or
depreciation in market value during each Plan Year attributable to such
account.
(c) The Administrator shall establish a procedure, to be
applied in a uniform and nondiscriminatory manner, setting forth the
permissible investment options under this Section, how often changes
between investments may be made, and any other limitations that the
Administrator shall impose on a Participant's right to direct investments.
4.9. QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS
(a) If this is an amendment to a Plan that previously
permitted deductible voluntary contributions, then each Participant who
made a "Qualified Voluntary Employee Contribution" within the meaning of
Code Section 219(e)(2) as it existed prior to the enactment of the Tax
Reform Act of 1986, shall have his contribution held in a separate
Qualified Voluntary Employee Contribution Account which shall be fully
Vested at all times. Such contributions, however, shall not be permitted
if they are attributable to taxable years beginning after December 31,
1986.
(b) A Participant may, upon written request delivered to
the Administrator, make withdrawals from his Qualified Voluntary Employee
Contribution Account. Any distribution shall be made in a manner which is
consistent with and satisfies the provisions of Section 6.5, including,
but not limited to, all notice and consent requirements of Code Sections
411(a)(11) and 417 and the Regulations thereunder.
(c) At Normal Retirement Date, or such other date when the
Participant or his Beneficiary shall be entitled to receive benefits, the
fair market value of the Qualified Voluntary Employee Contribution Account
shall be used to provide additional benefits to the Participant or his
Beneficiary.
(d) Unless the Administrator directs Qualified Voluntary
Employee Contributions made pursuant to this Section be segregated into a
separate account for each Participant, they shall be invested as part of
the general Trust Fund and share in earnings and losses.
4.10. ACTUAL CONTRIBUTION PERCENTAGE TESTS
In the event this Plan previously provided for voluntary or
mandatory Employee contributions, then, with respect to Plan Years
beginning after December 31, 1986, such contributions must satisfy the
provisions of Code Section 401(m) and the Regulations thereunder.
4.11. INTEGRATION IN MORE THAN ONE PLAN
If the Employer and/or an Affiliated Employer maintain qualified
retirement plans integrated with Social Security such that any Participant
in this Plan is covered under more than one of such plans, then such plans
will be considered to be one plan and will be considered to be integrated
if the extent of the integration of all such plans does not exceed 100%.
For purposes of the preceding sentence, the extent of integration of a
plan is the ratio, expressed as a percentage, which the actual benefits,
benefit rate, offset rate, or employer contribution rate, whatever is
applicable, under the Plan bears to the limitation applicable to such
Plan. If the Employer maintains two or more standardized paired plans,
only one plan may be integrated with Social Security.
ARTICLE V
VALUATIONS
5.1. VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each
Anniversary Date, and at such other date or dates deemed necessary by the
Administrator, herein called "valuation date", to determine the net worth
of the assets comprising the Trust Fund as it exists on the "valuation
date". In determining such net worth, the Trustee shall value the assets
comprising the Trust Fund at their fair market value as of the "valuation
date" and shall deduct all expenses for which the Trustee has not yet
obtained reimbursement from the Employer or the Trust Fund.
5.2. METHOD OF VALUATION
In determining the fair market value of securities held in the
Trust Fund which are listed on a registered stock exchange, the
Administrator shall direct the Trustee to 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 at which they were last traded prior to the "valuation
date". Any unlisted security held in the Trust Fund shall be valued at
its bid price next preceding the close of business on the "valuation
date", which bid price shall be obtained from a registered broker or an
investment banker. 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.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1. DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer
and retire for the purposes hereof on or after his Normal Retirement Date
or Early Retirement Date. Upon such Normal Retirement Date or Early
Retirement Date, all amounts credited to such Participant's Combined
Account shall become distributable. However, a Participant may postpone
the termination of his employment with the Employer to a later date, in
which event the participation of such Participant in the Plan, including
the right to receive allocations pursuant to Section 4.3, shall continue
until his Late Retirement Date. Upon a Participant's Retirement Date, or
as soon thereafter as is practicable, the Administrator shall direct the
distribution of all amounts credited to such Participant's Combined
Account in accordance with Section 6.5.
6.2. DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement
Date or other termination of his employment, all amounts credited to such
Participant's Combined Account shall become fully Vested. The
Administrator shall direct, in accordance with the provisions of Sections
6.6 and 6.7, the distribution of the deceased Participant's accounts to
the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the
Administrator shall direct, in accordance with the provisions of Sections
6.6 and 6.7, the distribution of any remaining amounts credited to the
accounts of such deceased Former Participant to such Former Participant's
Beneficiary.
(c) The Administrator may require such proper proof of
death and such evidence of the right of any person to receive payment of
the value of the account of a deceased Participant or Former Participant
as the Administrator may deem desirable. The Administrator's
determination of death and of the right of any person to receive payment
shall be conclusive.
(d) Unless otherwise elected in the manner prescribed in
Section 6.6, the Beneficiary of the Pre-Retirement Survivor Annuity shall
be the Participant's spouse. Except, however, the Participant may
designate a Beneficiary other than his spouse for the Pre-Retirement
Survivor Annuity if:
(1) the Participant and his spouse have validly
waived the Pre-Retirement Survivor Annuity in the manner prescribed
in Section 6.6, and the spouse has waived his or her right to be the
Participant's Beneficiary, or
(2) the Participant is legally separated or has been
abandoned (within the meaning of local law) and the Participant has a
court order to such effect (and there is no "qualified domestic
relations order" as defined in Code Section 414(p) which provides
otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall
be made on a form satisfactory to the Administrator. A Participant may at
any time revoke his designation of a Beneficiary or change his Beneficiary
by filing written notice of such revocation or change with the
Administrator. However, the Participant's spouse must again consent in
writing to any change in Beneficiary unless the original consent
acknowledged that the spouse had the right to limit consent only to a
specific Beneficiary and that the spouse voluntarily elected to relinquish
such right. The Participant may, at any time, designate a Beneficiary for
death benefits payable under the Plan that are in excess of the Pre-
Retirement Survivor Annuity. in the event no valid designation of
Beneficiary exists at the time of the Participant's death, the death
benefit shall be payable to his estate.
(e) If the Plan provides an insured death benefit and a
Participant dies before any insurance coverage to which he is entitled
under the Plan is effected, his death benefit from such insurance coverage
shall be limited to the standard rated premium which was or should have
been used for such purpose.
(f) In the event of any conflict between the terms of this
Plan and the terms of any Contract issued hereunder, the Plan provisions
shall control.
6.3. DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability
prior to his Retirement Date or other termination of his employment, all
amounts credited to such Participant's Combined Account shall become fully
Vested. In the event of a Participant's Total and Permanent Disability,
the Administrator, in accordance with the provisions of Sections 6.5 and
6.7, shall direct the distribution to such Participant of all amounts
credited to such Participant's Combined Account as though he had retired.
6.4. DETERMINATION OF BENEFITS UPON TERMINATION
(a) On or before the Anniversary Date, or other valuation
date, coinciding with or subsequent to the termination of a Participant's
employment for any reason other than retirement, death, or Total and
Permanent Disability, the Administrator may direct that the amount of the
Vested portion of such Terminated Participant's Combined Account be
segregated and invested separately. In the event the Vested portion of a
Participant's Combined Account is not segregated, the amount shall remain
in a separate account for the Terminated Participant and share in
allocations pursuant to Section 4.3 until such time as a distribution is
made to the Terminated Participant. The amount of the portion of the
Participant's Combined Account which is not Vested may be credited to a
separate account (which will always share in gains and losses of the Trust
Fund) and at such time as the amount becomes a Forfeiture shall be treated
in accordance with the provisions of the Plan regarding Forfeitures.
Regardless of whether distributions in kind are permitted,
in the event that the amount of the Vested portion of the Terminated
Participant's Combined Account equals or exceeds the fair market value of
any insurance Contracts, the Trustee, when so directed by the
Administrator and agreed to by the Terminated Participant, shall assign,
transfer, and set over to such Terminated Participant all Contracts on his
life in such form or with such endorsements, so that the settlement
options and forms of payment are consistent with the provisions of Section
6.5. In the event that the Terminated Participant's Vested portion does
not at least equal the fair market value of the Contracts, if any, the
Terminated Participant may pay over to the Trustee the sum needed to make
the distribution equal to the value of the Contracts being assigned or
transferred, or the Trustee, pursuant to the Participant's election, may
borrow the cash value of the Contracts from the Insurer so that the value
of the Contracts is equal to the Vested portion of the Terminated
Participant's Combined Account and then assign the Contracts to the
Terminated Participant.
Distribution of the funds due to a Terminated Participant
shall be made on the occurrence of an event which would result in the
distribution had the Terminated Participant remained in the employ of the
Employer (upon the Participant's death, Total and Permanent Disability,
Early or Normal Retirement). However, at the election of the Participant,
the Administrator shall direct that the entire Vested portion of the
Terminated Participant's Combined Account to be payable to such Terminated
Participant provided the conditions, if any, set forth in the Adoption
Agreement have been satisfied. Any distribution under this paragraph
shall be made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including but not limited to, all notice and
consent requirements of Code Sections 411(a)(11) and 417 and the
Regulations thereunder.
Notwithstanding the above, if the value of a Terminated
Participant's Vested benefit derived from Employer and Employee
contributions does not exceed, and at the time of any prior distribution,
has never exceeded $3,500, the Administrator shall direct that the entire
Vested benefit be paid to such Participant in a single lump-sum without
regard to the consent of the Participant or the Participant's spouse. A
Participant's Vested benefit shall not include Qualified Voluntary
Employee Contributions within the meaning of Code Section 72(o)(5)(B) for
Plan Years beginning prior to January 1, 1989.
(b) The Vested portion of any Participant's Account shall
be a percentage of such Participant's Account determined on the basis of
the Participant's number of Years of Service according to the vesting
schedule specified in the Adoption Agreement.
(c) For any Top Heavy Plan Year, one of the minimum top
heavy vesting schedules as elected by the Employer in the Adoption
Agreement will automatically apply to the Plan. The minimum top heavy
vesting schedule applies to all benefits within the meaning of Code
Section 411(a)(7) except those attributable to Employee contributions,
including benefits accrued before the effective date of Code Section 416
and benefits accrued before the Plan became top heavy. Further, no
decrease in a Participant's Vested percentage may occur in the event the
Plan's status as top heavy changes for any Plan Year. However, this
Section does not apply to the account balances of any Employee who does
not have an Hour of Service after the Plan has initially become top heavy
and the Vested percentage of such Employee's Participant's Account shall
be determined without regard to this Section 6.4(c).
If in any subsequent Plan Year, the Plan ceases to be a Top
Heavy Plan, the Administrator shall continue to use the vesting schedule
in effect while the Plan was a Top Heavy Plan for each Employee who had an
Hour of Service during a Plan Year when the Plan was Top Heavy.
(d) Notwithstanding the vesting schedule above, upon the
complete discontinuance of the Employer's contributions to the Plan or
upon any full or partial termination of the Plan, all amounts credited to
the account of any affected Participant shall become 100% Vested and shall
not thereafter be subject to Forfeiture.
(e) If this is an amended or restated Plan, then
notwithstanding the vesting schedule specified in the Adoption Agreement,
the Vested percentage of a Participant's Account shall not be less than
the Vested percentage attained as of the later of the effective date or
adoption date of this amendment and restatement. The computation of a
Participant's nonforfeitable percentage of his interest in the Plan shall
not be reduced as the result of any direct or indirect amendment to this
Article, or due to changes in the Plan's status as a Top Heavy Plan.
(f) If the Plan's vesting schedule is amended, or if the
Plan is amended in any way that directly or indirectly affects the
computation of the Participant's nonforfeitable percentage or if the Plan
is deemed amended by an automatic change to a top heavy vesting schedule,
then each Participant with at least 3 Years of Service as of the
expiration date of the election period may elect to have his
nonforfeitable percentage computed under the Plan without regard to such
amendment or change. Notwithstanding the foregoing, for Plan Years
beginning before January 1, 1989, or with respect to Employees who fail to
complete at least one (1) Hour of Service in a Plan Year beginning after
December 31, 1988, five (5) shall be substituted for three (3) in the
preceding sentence. If a Participant fails to make such election, then
such Participant shall be subject to the new vesting schedule. The
Participant's election period shall commence on the adoption date of the
amendment and shall end 60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice
of the amendment from the Employer or Administrator.
(g) (1) If any Former Participant shall be reemployed by
the Employer before a 1-Year Break in Service occurs, he shall
continue to participate in the Plan in the same manner as if such
termination had not occurred.
(2) If any Former Participant shall be reemployed by
the Employer before five (5) consecutive 1-Year Breaks in Service,
and such Former Participant had received a distribution of his entire
Vested interest prior to his reemployment, his forfeited account
shall be reinstated only if he repays the full amount distributed to
him before the earlier of five (5) years after the first date on
which the Participant is subsequently reemployed by the Employer or
the close of the first period of 5 consecutive 1-Year Breaks in
Service commencing after the distribution. If a distribution occurs
for any reason other than a separation from service, the time for
repayment may not end earlier than five (5) years after the date of
separation. In the event the Former Participant does repay the full
amount distributed to him, the undistributed portion of the
Participant's Account must be restored in full, unadjusted by any
gains or losses occurring subsequent to the Anniversary Date or other
valuation date preceding his termination. If an employee receives a
distribution pursuant to this section and the employee resumes
employment covered under this plan, the employee's employer-derived
account balance will be restored to the amount on the date of
distribution if the employee repays to the plan the full amount of
the distribution attributable to employer contributions before the
earlier of 5 years after the first date on which the participant is
subsequently re-employed by the employer, or the date the participant
incurs 5 consecutive 1-year breaks in service following the date of
the distribution. If a non-Vested Former Participant was deemed to
have received a distribution and such Former Participant is
reemployed by the Employer before five (5) consecutive 1-Year Breaks
in Service, then such Participant will be deemed to have repaid the
deemed distribution as of the date of reemployment.
(3) If any Former Participant is reemployed after a
1-Year Break in Service has occurred, Years of Service shall include
Years of Service prior to his 1-Year Break in Service subject to the
following rules:
(i) Any Former Participant who under the Plan
does not have a nonforfeitable right to any interest in the Plan
resulting from Employer contributions shall lose credits if his
consecutive 1-Year Breaks in Service equal or exceed the greater
of (A) five (5) or (B) the aggregate number of his pre-break
Years of Service;
(ii) After five (5) consecutive 1-Year Breaks in
Service, a Former Participant's Vested Account balance
attributable to pre-break service shall not be increased as a
result of post-break service;
(iii) A Former Participant who is reemployed
and who has not had his Years of Service before a 1-Year Break
in Service disregarded pursuant to (i) above, shall participate
in the Plan as of his date of reemployment;
(iv) If a Former Participant completes a Year of
Service (a 1-Year Break in Service previously occurred, but
employment had not terminated), he shall participate in the Plan
retroactively from the first day of the Plan Year during which
he completes one (l) Year of Service.
(h) In determining Years of Service for purposes of
vesting under the Plan, Years of Service shall be excluded as specified in
the Adoption Agreement.
6.5. DISTRIBUTION OF BENEFITS
(a) (1) Unless otherwise elected as provided below, a
Participant who is married on the "annuity starting date" and who
does not die before the "annuity starting date" shall receive the
value of all of his benefits in the form of a Joint and Survivor
Annuity. The Joint and Survivor Annuity is an annuity that commences
immediately and shall be equal in value to a single life annuity.
Such joint and survivor benefits following the Participant's death
shall continue to the spouse during the spouse's lifetime at a rate
equal to 50% of the rate at which such benefits were payable to the
Participant. This Joint and Survivor Annuity shall be considered the
designated qualified Joint and Survivor Annuity and automatic form of
payment for the purposes of this Plan. However, the Participant may
elect to receive a smaller annuity benefit with continuation of
payments to the spouse at a rate of seventy-five percent (75%) or one
hundred percent (100%) of the rate payable to a Participant during
his lifetime which alternative Joint and Survivor Annuity shall be
equal in value to the automatic Joint and 50% Survivor Annuity. An
unmarried Participant shall receive the value of his benefit in the
form of a life annuity. Such unmarried Participant, however, may
elect in writing to waive the life annuity. The election must comply
with the provisions of this Section as if it were an election to
waive the Joint and Survivor Annuity by a married Participant, but
without the spousal consent requirement. The Participant may elect
to have any annuity provided for in this Section distributed upon the
attainment of the "earliest retirement age" under the Plan. The
"earliest retirement age" is the earliest date on which, under the
Plan, the Participant could elect to receive retirement benefits.
(2) Any election to waive the Joint and Survivor
Annuity must be made by the Participant in writing during the
election period and be consented to by the Participant's spouse. If
the spouse is legally incompetent to give consent, the spouse's legal
guardian, even if such guardian is the Participant, may give consent.
Such election shall designate a Beneficiary (or a form of benefits)
that may not be changed without spousal consent (unless the consent
of the spouse expressly permits designations by the Participant
without the requirement of further consent by the spouse). Such
spouse's consent shall be irrevocable and must acknowledge the effect
of such election and be witnessed by a Plan representative or a
notary public. Such consent shall not be required if it is
established to the satisfaction of the Administrator that the
required consent cannot be obtained because there is no spouse, the
spouse cannot be located, or other circumstances that may be
prescribed by Regulations. The election made by the Participant and
consented to by his spouse may be revoked by the Participant in
writing without the consent of the spouse at any time during the
election period. The number of revocations shall not be limited.
Any new election must comply with the requirements of this paragraph.
A former spouse's waiver shall not be binding on a new spouse.
(3) The election period to waive the Joint and
Survivor Annuity shall be the 90 day period ending on the "annuity
starting date."
(4) For purposes of this Section and Section 6.6, the
"annuity starting date" means the first day of the first period for
which an amount is paid as an annuity, or, in the case of a benefit
not payable in the form of an annuity, the first day on which all
events have occurred which entitles the Participant to such benefit.
(5) With regard to the election, the Administrator
shall provide to the Participant no less than 30 days and no more
than 90 days before the "annuity starting date" a written explanation
of:
(i) the terms and conditions of the Joint and
Survivor Annuity, and
(ii) the Participant's right to make and the
effect of an election to waive the Joint and Survivor Annuity,
and
(iii) the right of the Participant's spouse
to consent to any election to waive the Joint and Survivor
Annuity, and
(iv) the right of the Participant to revoke such
election, and the effect of such revocation.
(b) In the event a married Participant duly elects
pursuant to paragraph (a)(2) above not to receive his benefit in the form
of a Joint and Survivor Annuity, or if such Participant is not married, in
the form of a life annuity, the Administrator, pursuant to the election of
the Participant, shall direct the distribution to a Participant or his
Beneficiary any amount to which he is entitled under the Plan in one or
more of the following methods which are permitted pursuant to the Adoption
Agreement:
(1) One lump-sum payment in cash or in property;
(2) Payments over a period certain in monthly,
quarterly, semiannual, or annual cash installments. In order to
provide such installment payments, the Administrator may direct that
the Participant's interest in the Plan be segregated and invested
separately, and that the funds in the segregated account be used for
the payment of the installments. The period over which such payment
is to be made shall not extend beyond the Participant's life
expectancy (or the life expectancy of the Participant and his
designated Beneficiary);
(3) Purchase of or providing an annuity. However,
such annuity may not be in any form that will provide for payments
over a period extending beyond either the life of the Participant (or
the lives of the Participant and his designated Beneficiary) or the
life expectancy of the Participant (or the life expectancy of the
Participant and his designated Beneficiary).
(c) The present value of a Participant's Joint and
Survivor Annuity derived from Employer and Employee contributions may not
be paid without his written consent if the value exceeds, or has ever
exceeded at the time of any prior distribution, $3,500. Further, the
spouse of a Participant must consent in writing to any immediate
distribution. If the value of the Participant's benefit derived from
Employer and Employee contributions does not exceed $3,500 and has never
exceeded $3,500 at the time of any prior distribution, the Administrator
may immediately distribute such benefit without such Participant's
consent. No distribution may be made under the preceding sentence after
the "annuity starting date" unless the Participant and his spouse consent
in writing to such distribution. Any written consent required under this
paragraph must be obtained not more than 90 days before commencement of
the distribution and shall be made in a manner consistent with Section
6.5(a)(2).
(d) Any distribution to a Participant who has a benefit
which exceeds, or has ever exceeded at the time of any prior distribution,
$3,500 shall require such Participant's consent if such distribution
commences prior to the later of his Normal Retirement Age or age 62. With
regard to this required consent:
(1) No consent shall be valid unless the Participant
has received a general description of the material features and an
explanation of the relative values of the optional forms of benefit
available under the Plan that would satisfy the notice requirements
of Code Section 417.
(2) The Participant must be informed of his right to
defer receipt of the distribution. If a Participant fails to
consent, it shall be deemed an election to defer the commencement of
payment of any benefit. However, any election to defer the receipt
of benefits shall not apply with respect to distributions which are
required under Section 6.5(e).
(3) Notice of the rights specified under this
paragraph shall be provided no less than 30 days and no more than 90
days before the "annuity starting date".
(4) Written consent of the Participant to the
distribution must not be made before the Participant receives the
notice and must not be made more than 90 days before the "annuity
starting date".
(5) No consent shall be valid if a significant
detriment is imposed under the Plan on any Participant who does not
consent to the distribution.
(e) Notwithstanding any provision in the Plan to the
contrary, the distribution of a Participant's benefits, made on or after
January l, 1985, whether under the Plan or through the purchase of an
annuity Contract, shall be made in accordance with the following
requirements and shall otherwise comply with Code Section 401(a)(9) and
the Regulations thereunder (including Regulation Section 1.401(a)(9)-2),
the provisions of which are incorporated herein by reference:
(1) A Participant's benefits shall be distributed to
him not later than April 1st of the calendar year following the later
of (i) the calendar year in which the Participant attains age 70 1/2
or (ii) the calendar year in which the Participant retires, provided,
however, that this clause (ii) shall not apply in the case of a
Participant who is a "five (5) percent owner" at any time during the
five (5) Plan Year period ending in the calendar year in which he
attains age 70 1/2 or, in the case of a Participant who becomes a
"five (5) percent owner" during any subsequent Plan Year, clause (ii)
shall no longer apply and the required beginning date shall be the
April 1st of the calendar year following the calendar year in which
such subsequent Plan Year ends. Alternatively, distributions to a
Participant must begin no later than the applicable April 1st as
determined under the preceding sentence and must be made over the
life of the Participant (or the lives of the Participant and the
Participant's designated Beneficiary) or, if benefits are paid in the
form of a Joint and Survivor Annuity, the life expectancy of the
Participant (or the life expectancies of the Participant and his
designated Beneficiary) in accordance with Regulations. For Plan
Years beginning after December 31, 1988, clause (ii) above shall not
apply to any Participant unless the Participant had attained age 70
1/2 before January l, 1988 and was not a "five (5) percent owner" at
any time during the Plan Year ending with or within the calendar year
in which the Participant attained age 66 1/2 or any subsequent Plan
Year.
(2) Distributions to a Participant and his
Beneficiaries shall only be made in accordance with the incidental
death benefit requirements of Code Section 401(a)(9)(G) and the
Regulations thereunder.
Additionally, for calendar years beginning before 1989,
distributions may also be made under an alternative method which provides
that the then present value of the payments to be made over the period of
the Participant's life expectancy exceeds fifty percent (50%) of the then
present value of the total payments to be made to the Participant and his
Beneficiaries.
(f) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a life
annuity) shall be redetermined annually in accordance with Regulations if
permitted pursuant to the Adoption Agreement. If the Participant or the
Participant's spouse may elect whether recalculations will be made, then
the election, once made, shall be irrevocable. If no election is made by
the time distributions must commence, then the life expectancy of the
Participant and the Participant's spouse shall not be subject to
recalculation. Life expectancy and joint and last survivor expectancy
shall be computed using the return multiples in Tables V and VI of
Regulation 1.72-9.
(g) All annuity Contracts under this Plan shall be non-
transferable when distributed. Furthermore, the terms of any annuity
Contract purchased and distributed to a Participant or spouse shall comply
with all of the requirements of this Plan.
(h) Subject to the spouse's right of consent afforded
under the Plan, the restrictions imposed by this Section shall not apply
if a Participant has, prior to January 1, 1984, made a written designation
to have his retirement benefit paid in an alternative method acceptable
under Code Section 401(a) as in effect prior to the enactment of the Tax
Equity and Fiscal Responsibility Act of 1982.
(i) If a distribution is made at a time when a Participant
who has not terminated employment is not fully Vested in his Participant's
Account and the Participant may increase the Vested percentage in such
account:
(1) A separate account shall be established for the
Participant's interest in the Plan as of the time of the
distribution, and
(2) At any relevant time the Participant's Vested
portion of the separate account shall be equal to an amount ("x")
determined by the formula:
X equals P(AB plus (RxD)) - (R x D)
For purposes of applying the formula: P is the Vested
percentage at the relevant time, AB is the account balance at the
relevant time, D is the amount of distribution, and R is the ratio of
the account balance at the relevant time to the account balance after
distribution.
6.6. DISTRIBUTION OF BENEFITS UPON DEATH
(a) Unless otherwise elected as provided below, a Vested
Participant who dies before the annuity starting date and who has a
surviving spouse shall have the Pre-Retirement Survivor Annuity paid to
his surviving spouse. The Participant's spouse may direct that payment of
the Pre-Retirement Survivor Annuity commence within a reasonable period
after the Participant's death. If the spouse does not so direct, payment
of such benefit will commence at the time the Participant would have
attained the later of his Normal Retirement Age or age 62. However, the
spouse may elect a later commencement date. Any distribution to the
Participant's spouse shall be subject to the rules specified in Section
6.6(h).
(b) Any election to waive the Pre-Retirement Survivor
Annuity before the Participant's death must be made by the Participant in
writing during the election period and shall require the spouse's
irrevocable consent in the same manner provided for in Section 6.5(a)(2).
Further, the spouse's consent must acknowledge the specific nonspouse
Beneficiary. Notwithstanding the foregoing, the nonspouse Beneficiary
need not be acknowledged, provided the consent of the spouse acknowledges
that the spouse has the right to limit consent only to a specific
Beneficiary and that the spouse voluntarily elects to relinquish such
right.
(c) The election period to waive the Pre-Retirement
Survivor Annuity shall begin on the first day of the Plan Year in which
the Participant attains age 35 and end on the date of the Participant's
death. An earlier waiver (with spousal consent) may be made provided a
written explanation of the Pre-Retirement Survivor Annuity is given to the
Participant and such waiver becomes invalid at the beginning of the Plan
Year in which the Participant turns age 35. In the event a Vested
Participant separates from service prior to the beginning of the election
period, the election period shall begin on the date of such separation
from service.
(d) With regard to the election, the Administrator shall
provide each Participant within the applicable period, with respect to
such Participant (and consistent with Regulations), a written explanation
of the Pre-Retirement Survivor Annuity containing comparable information
to that required pursuant to Section 6.5(a)(5). For the purposes of this
paragraph, the term "applicable period" means, with respect to a
Participant, whichever of the following periods ends last:
(1) The period beginning with the first day of the
Plan Year in which the Participant attains age 32 and ending with the
close of the Plan Year preceding the Plan Year in which the
Participant attains age 35;
(2) A reasonable period after the individual becomes
a Participant. For this purpose, in the case of an individual who
becomes a Participant after age 32, the explanation must be provided
by the end of the three-year period beginning with the first day of
the first Plan Year for which the individual is a Participant;
(3) A reasonable period ending after the Plan no
longer fully subsidizes the cost of the Pre-Retirement Survivor
Annuity with respect to the Participant;
(4) A reasonable period ending after Code Section
401(a)(11) applies to the Participant; or
(5) A reasonable period after separation from service
in the case of a Participant who separates before attaining age 35.
For this purpose, the Administrator must provide the explanation
beginning one year before the separation from service and ending one
year after separation.
(e) The Pre-Retirement Survivor Annuity provided for in
this Section shall apply only to Participants who are credited with an
Hour of Service on or after August 23, 1984. Former Participants who are
not credited with an Hour of Service on or after August 23, 1984 shall be
provided with rights to the Pre-Retirement Survivor Annuity in accordance
with Section 303(e)(2) of the Retirement Equity Act of 1984.
(f) If the value of the Pre-Retirement Survivor Annuity
derived from Employer and Employee contributions does not exceed $3,500
and has never exceeded $3,500 at the time of any prior distribution, the
Administrator shall direct the immediate distribution of such amount to
the Participant's spouse. No distribution may be made under the preceding
sentence after the annuity starting date unless the spouse consents in
writing. If the value exceeds, or has ever exceeded at the time of any
prior distribution, $3,500, an immediate distribution of the entire amount
may be made to the surviving spouse, provided such surviving spouse
consents in writing to such distribution. Any written consent required
under this paragraph must be obtained not more than 90 days before
commencement of the distribution and shall be made in a manner consistent
with Section 6.5(a)(2).
(g) (1) In the event there is an election to waive the
Pre-Retirement Survivor Annuity, and for death benefits in excess of
the Pre-Retirement Survivor Annuity, such death benefits shall be
paid to the Participant's Beneficiary by either of the following
methods, as elected by the Participant (or if no election has been
made prior to the Participant's death, by his Beneficiary) subject to
the rules specified in Section 6.6(h) and the selections made in the
Adoption Agreement:
(i) One lump-sum payment in cash or in property;
(ii) Payment in monthly, quarterly, semi-annual,
or annual cash installments over a period to be determined by
the Participant or his Beneficiary. After periodic installments
commence, the Beneficiary shall have the right to reduce the
period over which such periodic installments shall be made, and
the cash amount of such periodic installments shall be adjusted
accordingly.
(iii) If death benefits in excess of the Pre-
Retirement Survivor Annuity are to be paid to the surviving
spouse, such benefits may be paid pursuant to (i) or (ii) above,
or used to purchase an annuity so as to increase the payments
made pursuant to the Pre-Retirement Survivor Annuity;
(2) In the event the death benefit payable pursuant
to Section 6.2 is payable in installments, then, upon the death of
the Participant, the Administrator may direct that the death benefit
be segregated and invested separately, and that the funds accumulated
in the segregated account be used for the payment of the
installments.
(h) Notwithstanding any provision in the Plan to the
contrary, distributions upon the death of a Participant made on or after
January l, 1985, shall be made in accordance with the following
requirements and shall otherwise comply with Code Section 401(a)(9) and
the Regulations thereunder.
(1) If it is determined, pursuant to Regulations,
that the distribution of a Participant's interest has begun and the
Participant dies before his entire interest has been distributed to
him, the remaining portion of such interest shall be distributed at
least as rapidly as under the method of distribution selected
pursuant to Section 6.5 as of his date of death.
(2) If a Participant dies before he has begun to
receive any distributions of his interest in the Plan or before
distributions are deemed to have begun pursuant to Regulations, then
his death benefit shall be distributed to his Beneficiaries in
accordance with the following rules subject to the selections made in
the Adoption Agreement and Subsections 6.6(h)(3) and 6.6(i) below:
(i) The entire death benefit shall be
distributed to the Participant's Beneficiaries by December 31st
of the calendar year in which the fifth anniversary of the
Participant's death occurs;
(ii) The 5-year distribution requirement of (i)
above shall not apply to any portion of the deceased
Participant's interest which is payable to or for the benefit of
a designated Beneficiary. In such event, such portion shall be
distributed over the life of such designated Beneficiary (or
over a period not extending beyond the life expectancy of such
designated Beneficiary) provided such distribution begins not
later than December 31st of the calendar year immediately
following the calendar year in which the Participant died;
(iii) However, in the event the Participant's
spouse (determined as of the date of the Participant's death) is
his designated Beneficiary, the provisions of (ii) above shall
apply except that the requirement that distributions commence
within one year of the Participant's death shall not apply. In
lieu thereof, distributions must commence on or before the later
of: (1) December 31st of the calendar year immediately
following the calendar year in which the Participant died; or
(2) December 31st of the calendar year in which the Participant
would have attained age 70 1/2. If the surviving spouse dies
before distributions to such spouse begin, then the 5-year
distribution requirement of this Section shall apply as if the
spouse was the Participant.
(3) Notwithstanding subparagraph (2) above, or any
selections made in the Adoption Agreement, if a Participant's death
benefits are to be paid in the form of a Pre-Retirement Survivor
Annuity, then distributions to the Participant's surviving spouse
must commence on or before the later of: (1) December 31st of the
calendar year immediately following the calendar year in which the
Participant died; or (2) December 31st of the calendar year in which
the Participant would have attained age 70 1/2.
(i) For purposes of Section 6.6(h)(2), the election by a
designated Beneficiary to be excepted from the 5-year distribution
requirement (if permitted in the Adoption Agreement) must be made no later
than December 31st of the calendar year following the calendar year of the
Participant's death. Except, however, with respect to a designated
Beneficiary who is the Participant's surviving spouse, the election must
be made by the earlier of: (1) December 31st of the calendar year
immediately following the calendar year in which the Participant died or,
if later, the calendar year in which the Participant would have attained
age 70 1/2; or (2) December 31st of the calendar year which contains the
fifth anniversary of the date of the Participant's death. An election by
a designated Beneficiary must be in writing and shall be irrevocable as of
the last day of the election period stated herein. In the absence of an
election by the Participant or a designated Beneficiary, the 5-year
distribution requirement shall apply.
(j) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse (other than in the case of a life
annuity) shall or shall not be redetermined annually as provided in the
Adoption Agreement and in accordance with Regulations. If the Participant
or the Participant's spouse may elect, pursuant to the Adoption Agreement,
to have life expectancies recalculated, then the election, once made shall
be irrevocable. If no election is made by the time distributions must
commence, then the life expectancy of the Participant and the
Participant's spouse shall not be subject to recalculation. Life
expectancy and joint and last survivor expectancy shall be computed using
the return multiples in Tables V and VI of Regulation Section 1.72-9.
(k) In the event that less than 100% of a Participant's
interest in the Plan is distributed to such Participant's spouse, the
portion of the distribution attributable to the Participant's Voluntary
Contribution Account shall be in the same proportion that the
Participant's Voluntary Contribution Account bears to the Participant's
total interest in the Plan.
(l) Subject to the spouse's right of consent afforded
under the Plan, the restrictions imposed by this Section shall not apply
if a Participant has, prior to January 1, 1984, made a written designation
to have his death benefits paid in an alternative method acceptable under
Code Section 401(a) as in effect prior to the enactment of the Tax Equity
and Fiscal Responsibility Act of 1982.
6.7. TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever a
distribution is to be made, or a series of payments are to commence, on or
as of an Anniversary Date, the distribution or series of payments may be
made or begun on such date or as soon thereafter as is practicable, but in
no event later than 180 days after the Anniversary Date. However, unless
a Former Participant elects in writing to defer the receipt of benefits
(such election may not result in a death benefit that is more than
incidental), the payment of benefits shall begin not later than the 60th
day after the close of the Plan Year in which the latest of the following
events occurs: (a) the date on which the Participant attains the earlier
of age 65 or the Normal Retirement Age specified herein; (b) the 10th
anniversary of the year in which the Participant commenced participation
in the Plan; or (c) the date the Participant terminates his service with
the Employer.
Notwithstanding the foregoing, the failure of a Participant and,
if applicable, the Participant's spouse, to consent to a distribution
pursuant to Section 6.5(d), shall be deemed to be an election to defer the
commencement of payment of any benefit sufficient to satisfy this Section.
6.8. DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal
guardian, or if none, to a parent of such Beneficiary or a responsible
adult with whom the Beneficiary maintains his residence, or to the
custodian for such Beneficiary under the Uniform Gift to Minors Act or
Gift to Minors Act, if such is permitted by the laws of the state in which
said Beneficiary resides. Such a payment to the legal guardian, custodian
or parent of a minor Beneficiary shall fully discharge the Trustee,
Employer, and Plan from further liability on account thereof.
6.9. LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution
payable to a Participant or his Beneficiary hereunder shall, at the later
of the Participant's attainment of age 62 or his Normal Retirement Age,
remain unpaid solely by reason of the inability of the Administrator,
after sending a registered letter, return receipt requested, to the last
known address, and after further diligent effort, to ascertain the
whereabouts of such Participant or his Beneficiary, the amount so
distributable shall be treated as a Forfeiture pursuant to the Plan. In
the event a Participant or Beneficiary is located subsequent to his
benefit being reallocated, such benefit shall be restored, first from
Forfeitures, if any, and then from an additional Employer contribution if
necessary.
6.10. PRE-RETIREMENT DISTRIBUTION
For Profit Sharing Plans and 401(k) Profit Sharing Plans, if
elected in the Adoption Agreement, at such time as a Participant shall
have attained the age specified in the Adoption Agreement, the
Administrator, at the election of the Participant, shall direct the
distribution of up to the entire amount then credited to the accounts
maintained on behalf of the Participant. However, no such distribution
from the Participant's Account shall occur prior to 100% Vesting. In the
event that the Administrator makes such a distribution, the Participant
shall continue to be eligible to participate in the Plan on the same basis
as any other Employee. Any distribution made pursuant to this Section
shall be made in a manner consistent with Section 6.5, including, but not
limited to, all notice and consent requirements of Code Sections
411(a)(11) and 417 and the Regulations thereunder.
6.11. ADVANCE DISTRIBUTION FOR HARDSHIP
(a) For Profit Sharing Plans, if elected in the Adoption
Agreement, the Administrator, at the election of the Participant, shall
direct the distribution to any Participant in any one Plan Year up to the
lesser of 100% of his Participant's Combined Account valued as of the last
Anniversary Date or other valuation date or the amount necessary to
satisfy the immediate and heavy financial need of the Participant. Any
distribution made pursuant to this Section shall be deemed to be made as
of the first day of the Plan Year or, if later, the valuation date
immediately preceding the date of distribution, and the account from which
the distribution is made shall be reduced accordingly. Withdrawal under
this Section shall be authorized only if the distribution is on account
of:
(1) Medical expenses described in Code Section 213(d)
incurred by the Participant, his spouse, or any of his dependents (as
defined in Code Section 152);
(2) The purchase (excluding mortgage payments) of a
principal residence for the Participant;
(3) Funeral expenses for a member of the
Participant's family;
(4) Payment of tuition for the next semester or
quarter of post-secondary education for the Participant, his spouse,
children, or dependents; or
(5) The need to prevent the eviction of the
Participant from his principal residence or foreclosure on the
mortgage of the Participant's principal residence.
(b) No such distribution shall be made from the
Participant's Account until such Account has become fully Vested.
(c) Any distribution made pursuant to this Section shall
be made in a manner which is consistent with and satisfies the provisions
of Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 411(a)(11) and 417 and the Regulations
thereunder.
6.12. LIMITATIONS ON BENEFITS AND DISTRIBUTIONS
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order."
Furthermore, a distribution to an "alternate payee" shall be permitted if
such distribution is authorized by a "qualified domestic relations order,"
even if the affected Participant has not reached the "earliest retirement
age" under the Plan. For the purposes of this Section, "alternate payee,"
"qualified domestic relations order" and "earliest retirement age" shall
have the meaning set forth under Code Section 414(p).
6.13. SPECIAL RULE FOR NON-ANNUITY PLANS
If elected in the Adoption Agreement, the following shall apply
to a Participant in a Profit Sharing Plan or 401(k) 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
attributable solely to accumulated deductible employee contributions, as
defined in Code Section 72(o)(5)(B), and maintained on behalf of a
participant in a money purchase pension plan, (including a target benefit
plan):
(a) The Participant shall be prohibited from electing
benefits in the form of a life annuity;
(b) Upon the death of the Participant, the Participant's
entire Vested account balances will be paid to his or her surviving
spouse, or, if there is no surviving spouse or the surviving spouse
has already consented to waive his or her benefit, in accordance with
Section 6.6, to his designated Beneficiary; and
(c) Except to the extent otherwise provided in this
Section and Section 6.5(h), the other provisions of Sections 6.2, 6.5
and 6.6 regarding spousal consent and the forms of distributions
shall be inoperative with respect to this Plan.
This Section shall not apply to any Participant if it is
determined that this Plan is a direct or indirect transferee of a defined
benefit plan or money purchase plan, or a target benefit plan, stock bonus
or profit sharing plan which would otherwise provide for a life annuity
form of payment to the Participant.
ARTICLE VII
TRUSTEE
7.1. BASIC RESPONSIBILITIES OF THE TRUSTEE
The Trustee shall have the following categories of
responsibilities:
(a) Consistent with the "funding policy and method"
determined by the Employer to invest, manage, and control the Plan
assets subject, however, to the direction of an Investment Manager if
the Employer should appoint such manager as to all or a portion of
the assets of the Plan;
(b) At the direction of the Administrator, to pay benefits
required under the Plan to be paid to Participants, or, in the event
of their death, to their Beneficiaries;
(c) To maintain records of receipts and disbursements and
furnish to the Employer and/or Administrator for each Plan Year a
written annual report per Section 7.7; and
(d) If there shall be more than one Trustee, they shall
act by a majority of their number, but may authorize one or more of
them to sign papers on their behalf.
7.2. INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust Fund
to keep the Trust Fund invested without distinction between principal and
income and in such securities or property, real or personal, wherever
situated, as the Trustee shall deem advisable, including, but not limited
to, stocks, common or preferred, bonds and other evidences of indebtedness
or ownership, and real estate or any interest therein. The Trustee shall
at all times in making investments of the Trust Fund consider, among other
factors, the short and long-term financial needs of the Plan on the basis
of information furnished by the Employer. In making such investments, the
Trustee shall not be restricted to securities or other property of the
character expressly authorized by the applicable law for trust
investments; however, the Trustee shall give due regard to any limitations
imposed by the Code or the Act so that at all times this Plan may qualify
as a qualified Plan and Trust.
(b) The Trustee may employ a bank or trust company
pursuant to the terms of its usual and customary bank agency agreement,
under which the duties of such bank or trust company shall be of a
custodial, clerical and record-keeping nature.
(c) Notwithstanding Section 7.2(a), the Employer, in
writing to the Trustee, may delegate investment responsibility to the
Administrator. If the Administrator has been delegated such authority,
the Trustee shall invest trust assets in accordance with the
Administrator's direction, unless the Trustee determines, in the exercise
of its responsibility under ERISA as a co-fiduciary of the Plan, that such
investments are not permitted under the terms of the Plan, Trust, or the
Act. The Trustee shall not be liable or responsible for losses or
unfavorable results arising from the Trustee's compliance with directions
received from the Administrator.
(d) The Trustee may from time to time transfer to a
common, collective, or pooled trust fund maintained by any corporate
Trustee hereunder pursuant to Revenue Ruling 81-100, all or such part of
the Trust Fund as the Trustee may deem advisable, and such part or all of
the Trust Fund so transferred shall be subject to all the terms and
provisions of the common, collective, or pooled trust fund which
contemplate the commingling for investment purposes of such trust assets
with trust assets of other trusts. The Trustee may withdraw from such
common, collective, or pooled trust fund all or such part of the Trust
Fund as the Trustee may deem advisable.
(e) The Trustee, at the direction of the Administrator and
pursuant to instructions from the individual designated in the Adoption
Agreement for such purpose and subject to the conditions set forth in the
Adoption Agreement, shall ratably apply for, own, and pay all premiums on
Contracts on the lives of the Participants. Any initial or additional
Contract purchased on behalf of a Participant shall have a face amount of
not less than $1,000, the amount set forth in the Adoption Agreement, or
the limitation of the Insurer, whichever is greater. If a life insurance
Contract is to be purchased for a Participant, the aggregate premium for
ordinary life insurance for each Participant must be less than 50% of the
aggregate contributions and Forfeitures allocated to a Participant's
Combined Account. For purposes of this limitation, ordinary life
insurance Contracts are Contracts with both non-decreasing death benefits
and non-increasing premiums. If term insurance or universal life
insurance is purchased with such contributions, the aggregate premium must
be 25% or less of the aggregate contributions and Forfeitures allocated to
a Participant's Combined Account. If both term insurance and ordinary
life insurance are purchased with such contributions, the amount expended
for term insurance plus one-half of the premium for ordinary life
insurance may not in the aggregate exceed 25% of the aggregate Employer
contributions and Forfeitures allocated to a Participant's Combined
Account. The Trustee must distribute the Contracts to the Participant or
convert the entire value of the Contracts at or before retirement into
cash or provide for a periodic income so that no portion of such value may
be used to continue life insurance protection beyond retirement.
Notwithstanding the above, the limitations imposed herein with respect to
the purchase of life insurance shall not apply, in the case of a Profit
Sharing Plan, to the portion of a Participant's Account that has
accumulated for at least two (2) Plan Years.
Notwithstanding anything hereinabove to the contrary,
amounts credited to a Participant's Qualified Voluntary Employee
Contribution Account pursuant to Section 4.9, shall not be applied to the
purchase of life insurance contracts.
(f) The Trustee will be the owner of any life insurance
Contract purchased under the terms of this Plan. The Contract must
provide that the proceeds will be payable to the Trustee; however, the
Trustee shall be required to pay over all proceeds of the Contract to the
Participant's designated Beneficiary in accordance with the distribution
provisions of Article VI. A Participant's spouse will be the designated
Beneficiary pursuant to Section 6.2, unless a qualified election has been
made in accordance with Sections 6.5 and 6.6 of the Plan, if applicable.
Under no circumstances shall the Trust retain any part of the proceeds.
However, the Trustee shall not pay the proceeds in a method that would
violate the requirements of the Retirement Equity Act, as stated in
Article VI of the Plan, or Code Section 401(a)(9) and the Regulations
thereunder.
7.3. OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under
common law, statutory authority, including the Act, and other provisions
of this Plan, shall have the following powers and authorities to be
exercised in the Trustee's sole discretion:
(a) To purchase, or subscribe for, any securities or other
property and to retain the same. In conjunction with the purchase of
securities, margin accounts may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant options to
purchase, or otherwise dispose of any securities or other property
held by the Trustee, by private contract or at public auction. No
person dealing with the Trustee shall be bound to see to the
application of the purchase money or to inquire into the validity,
expediency, or propriety of any such sale or other disposition, with
or without advertisement;
(c) To vote upon any stocks, bonds, or other securities;
to give general or special proxies or powers of attorney with or
without power of substitution; to exercise any conversion privileges,
subscription rights or other options, and to make any payments
incidental thereto; to oppose, or to consent to, or otherwise
participate in, corporate reorganizations or other changes affecting
corporate securities, and to delegate discretionary powers, and to
pay any assessments or charges in connection therewith; and generally
to exercise any of the powers of an owner with respect to stocks,
bonds, securities, or other property. However, the Trustee shall not
vote proxies relating to securities for which it has not been
assigned full investment management responsibilities. In those cases
where another party has such investment authority or discretion, be
it the Administrator or an outside Investment Manager, the Trustee
will deliver all proxies to said party who will then have full
responsibility for voting those proxies;
(d) To cause any securities or other property to be
registered in the Trustee's own name or in the name of one or more of
the Trustee's nominees, and to hold any investments in bearer form,
but the books and records of the Trustee shall at all times show that
all such investments are part of the Trust Fund;
(e) To borrow or raise money for the purposes of the Plan
in such amount, and upon such terms and conditions, as the Trustee
shall deem advisable; and for any sum so borrowed, to issue a
promissory note as Trustee, and to secure the repayment thereof by
pledging all, or any part, of the Trust Fund; and no person lending
money to the Trustee shall be bound to see to the application of the
money lent or to inquire into the validity, expediency, or propriety
of any borrowing;
(f) To keep such portion of the Trust Fund in cash or cash
balances as the Trustee may, from time to time, deem to be in the
best interests of the Plan, without liability for interest thereon;
(g) To accept and retain for such time as it may deem
advisable any securities or other property received or acquired by it
as Trustee hereunder, whether or not such securities or other
property would normally be purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other
instruments that may be necessary or appropriate to carry out the
powers herein granted;
(i) To settle, compromise, or submit to arbitration any
claims, debts, or damages due or owing to or from the Plan, to
commence or defend suits or legal or administrative proceedings, and
to represent the Plan in all suits and legal and administrative
proceedings;
(j) To employ suitable agents and counsel and to pay their
reasonable expenses and compensation, and such agent or counsel may
or may not be agent or counsel for the Employer;
(k) To apply for and procure from the Insurer as an
investment of the Trust Fund such annuity, or other Contracts (on the
life of any Participant) as the Administrator shall deem proper; to
exercise, at any time or from time to time, whatever rights and
privileges may be granted under such annuity, or other Contracts; to
collect, receive, and settle for the proceeds of all such annuity, or
other Contracts as and when entitled to do so under the provisions
thereof;
(l) To invest funds of the Trust in time deposits or
savings accounts bearing a reasonable rate of interest in the
Trustee's bank;
(m) To invest in Treasury Bills and other forms of United
States government obligations;
(n) To sell, purchase and acquire put or call options if
the options are traded on and purchased through a national securities
exchange registered under the Securities Exchange Act of 1934, as
amended, or, if the options are not traded on a national securities
exchange, are guaranteed by a member firm of the New York Stock
Exchange;
(o) To deposit monies in federally insured savings
accounts or certificates of deposit in banks or savings and loan
associations;
(p) To pool all or any of the Trust Fund, from time to
time, with assets belonging to any other qualified employee pension
benefit trust created by the Employer or any Affiliated Employer, and
to commingle such assets and make joint or common investments and
carry joint accounts on behalf of this Plan and such other trust or
trusts, allocating undivided shares or interests in such investments
or accounts or any pooled assets of the two or more trusts in
accordance with their respective interests;
(q) To do all such acts and exercise all such rights and
privileges, although not specifically mentioned herein, as the
Trustee may deem necessary to carry out the purposes of the Plan;
(r) Directed Investment Account. The powers granted to
the Trustee shall be exercised in the sole fiduciary discretion of
the Trustee. However, if elected in the Adoption Agreement, each
Participant may direct the Trustee to separate and keep separate all
or a portion of his interest in the Plan; and further each
Participant is authorized and empowered, in his sole and absolute
discretion, to give directions to the Trustee in such form as the
Trustee may require concerning the investment of the Participant's
Directed Investment Account, which directions must be followed by the
Trustee subject, however, to restrictions on payment of life
insurance premiums. Neither the Trustee nor any other persons
including the Administrator or otherwise shall be under any duty to
question any such direction of the Participant or to review any
securities or other property, real or personal, or to make any
suggestions to the Participant in connection therewith, and the
Trustee shall comply as promptly as practicable with directions given
by the Participant hereunder. Any such direction may be of a
continuing nature or otherwise and may be revoked by the Participant
at any time in such form as the Trustee may require. The Trustee may
refuse to comply with any direction from the Participant in the event
the Trustee, in its sole and absolute discretion, deems such
directions improper by virtue of applicable law, and in such event,
the Trustee shall not be responsible or liable for any loss or
expense which may result. Any costs and expenses related to
compliance with the Participant's directions shall be borne by the
Participant's Directed Investment Account.
Notwithstanding anything hereinabove to the contrary, the
Trustee shall not, at any time after December 31, 1981, invest any portion
of a Directed Investment Account in "collectibles" within the meaning of
that term as employed in Code Section 408(m).
7.4. LOANS TO PARTICIPANTS
(a) If specified in the Adoption Agreement, the Trustee
(or, if loans are treated as Directed Investment pursuant to the Adoption
Agreement, the Administrator) may, in the Trustee's (or, if applicable,
the Administrator's) sole discretion, make loans to Participants or
Beneficiaries under the following circumstances: (1) loans shall be made
available to all Participants and Beneficiaries on a reasonably equivalent
basis; (2) loans shall not be made available to Highly Compensated
Employees in an amount greater than the amount made available to other
Participants; (3) loans shall bear a reasonable rate of interest; (4)
loans shall be adequately secured; and (5) shall provide for periodic
repayment over a reasonable period of time.
(b) Loans shall not be made to any Shareholder-Employee or
Owner-Employee unless an exemption for such loan is obtained pursuant to
Act Section 408 and further provided that such loan would not be subject
to tax pursuant to Code Section 4975.
(c) Loans shall not be granted to any Participant that
provide for a repayment period extending beyond such Participant's Normal
Retirement Date.
(d) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the
Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the
highest outstanding balance of loans from the Plan to the Participant
during the one year period ending on the day before the date on which
such loan is made, over the outstanding balance of loans from the
Plan to the Participant on the date on which such loan was made, or
(2) one-half (1/2) of the present value of the non-
forfeitable accrued benefit of the Employee under the Plan.
For purposes of this limit, all plans of the Employer shall
be considered one plan. Additionally, with respect to any loan made prior
to January 1, 1987, the $50,000 limit specified in (1) above shall be
unreduced.
(e) No Participant loan shall take into account the
present value of such Participant's Qualified Voluntary Employee
Contribution Account.
(f) Loans shall provide for level amortization with
payments to be made not less frequently than quarterly over a period not
to exceed five (5) years. However, loans used to acquire any dwelling
unit which, within a reasonable time, is to be used (determined at the
time the loan is made) as a principal residence of the Participant shall
provide for periodic repayment over a reasonable period of time that may
exceed five (5) years. Notwithstanding the foregoing, loans made prior to
January 1, 1987 which are used to acquire, construct, reconstruct or
substantially rehabilitate any dwelling unit which, within a reasonable
period of time is to be used (determined at the time the loan is made) as
a principal residence of the Participant or a member of his family (within
the meaning of Code Section 267(c)(4)) may provide for periodic repayment
over a reasonable period of time that may exceed five (5) years.
Additionally, loans made prior to January 1, 1987, may provide for
periodic payments which are made less frequently than quarterly and which
do not necessarily result in level amortization.
(g) An assignment or pledge of any portion of a
Participant's interest in the Plan and a loan, pledge, or assignment with
respect to any insurance Contract purchased under the Plan, shall be
treated as a loan under this Section.
(h) Any loan made pursuant to this Section after
August 18, 1985 where the Vested interest of the Participant is used to
secure such loan shall require the written consent of the Participant's
spouse in a manner consistent with Section 6.5(a) provided the spousal
consent requirements of such Section apply to the Plan. Such written
consent must be obtained within the 90-day period prior to the date the
loan is made. Any security interest held by the Plan by reason of an
outstanding loan to the Participant shall be taken into account in
determining the amount of the death benefit or Pre-Retirement Survivor
Annuity. However, no spousal consent shall be required under this
paragraph if the total accrued benefit subject to the security is not in
excess of $3,500.
(i) With regard to any loans granted or renewed on or
after the last day of the first Plan Year beginning after December 31,
1988, a Participant loan program shall be established which must include,
but need not be limited to, the following:
(1) the identity of the person or positions
authorized to administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or
denied;
(4) limitations, if any, on the types and amounts of
loans offered, including what constitutes a hardship or financial
need if selected in the Adoption Agreement;
(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a
Participant loan; and
(7) the events constituting default and the steps
that will be taken to preserve plan assets.
Such Participant loan program shall be contained in a
separate written document which, when properly executed, is hereby
incorporated by reference and made a part of this plan. Furthermore, such
Participant loan program may be modified or amended in writing from time
to time without the necessity of amending this Section of the Plan.
7.5. DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall, from
time to time, in accordance with the terms of the Plan, make payments out
of the Trust Fund. The Trustee shall not be responsible in any way for
the application of such payments.
7.6. TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as set
forth in the Trustee's fee schedule (if the Trustee has such a schedule)
or as agreed upon in writing by the Employer and the Trustee. An
individual serving as Trustee who already receives full-time pay from the
Employer shall not receive compensation from this Plan. In addition, the
Trustee shall be reimbursed for any reasonable expenses, including
reasonable counsel fees incurred by it as Trustee. Such compensation and
expenses shall be paid from the Trust Fund unless paid or advanced by the
Employer. All taxes of any kind and all kinds whatsoever that may be
levied or assessed under existing or future laws upon, or in respect of,
the Trust Fund or the income thereof, shall be paid from the Trust Fund.
7.7. ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the
Anniversary Date or receipt of the Employer's contribution for each Plan
Year, the Trustee, or its agent, shall furnish to the Employer and
Administrator a written statement of account with respect to the Plan Year
for which such contribution was made setting forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust Fund upon
sales or other disposition of the assets;
(c) the increase, or decrease, in the value of the Trust
Fund;
(d) all payments and distributions made from the Trust
Fund; and
(e) such further information as the Trustee and/or
Administrator deems appropriate. The Employer, forthwith upon its
receipt of each such statement of account, shall acknowledge receipt
thereof in writing and advise the Trustee and/or Administrator of its
approval or disapproval thereof. Failure by the Employer to
disapprove any such statement of account within thirty (30) days
after its receipt thereof shall be deemed an approval thereof. The
approval by the Employer of any statement of account shall be binding
as to all matters embraced therein as between the Employer and the
Trustee to the same extent as if the account of the Trustee had been
settled by judgment or decree in an action for a judicial settlement
of its account in a court of competent jurisdiction in which the
Trustee, the Employer and all persons having or claiming an interest
in the Plan were parties; provided, however, that nothing herein
contained shall deprive the Trustee of its right to have its accounts
judicially settled if the Trustee so desires.
7.8. AUDIT
(a) If an audit of the Plan's records shall be required by
the Act and the regulations thereunder for any Plan Year, the
Administrator shall direct the Trustee to engage on behalf of all
Participants an independent qualified public accountant for that purpose.
Such accountant shall, after an audit of the books and records of the Plan
in accordance with generally accepted auditing standards, within a
reasonable period after the close of the Plan Year, furnish to the
Administrator and the Trustee a report of his audit setting forth his
opinion as to whether any statements, schedules or lists, that are
required by Act Section 103 or the Secretary of Labor to be filed with the
Plan's annual report, are presented fairly in conformity with generally
accepted accounting principles applied consistently.
(b) All auditing and accounting fees shall be an expense
of and may, at the election of the Administrator, be paid from the Trust
Fund.
(c) If some or all of the information necessary to enable
the Administrator to comply with Act Section 103 is maintained by a bank,
insurance company, or similar institution, regulated and supervised and
subject to periodic examination by a state or federal agency, it shall
transmit and certify the accuracy of that information to the Administrator
as provided in Act Section 103(b) within one hundred twenty (120) days
after the end of the Plan Year or such other date as may be prescribed
under regulations of the Secretary of Labor.
7.9. RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering to
the Employer, at least thirty (30) days before its effective date, a
written notice of his resignation.
(b) The Employer may remove the Trustee by mailing by
registered or certified mail, addressed to such Trustee at his last known
address, at least thirty (30) days before its effective date, a written
notice of his removal.
(c) Upon the death, resignation, incapacity, or removal of
any Trustee, a successor may be appointed by the Employer; and such
successor, upon accepting such appointment in writing and delivering same
to the Employer, shall, without further act, become vested with all the
estate, rights, powers, discretions, and duties of his predecessor with
like respect as if he were originally named as a Trustee herein. Until
such a successor is appointed, the remaining Trustee or Trustees shall
have full authority to act under the terms of the Plan.
(d) The Employer may designate one or more successors
prior to the death, resignation, incapacity, or removal of a Trustee. In
the event a successor is so designated by the Employer and accepts such
designation, the successor shall, without further act, become vested with
all the estate, rights, powers, discretions, and duties of his predecessor
with the like effect as if he were originally named as Trustee herein
immediately upon the death, resignation, incapacity, or removal of his
predecessor.
(e) Whenever any Trustee hereunder ceases to serve as
such, he shall furnish to the Employer and Administrator a written
statement of account with respect to the portion of the Plan Year during
which he served as Trustee. This statement shall be either (i) included
as part of the annual statement of account for the Plan Year required
under Section 7.7 or (ii) set forth in a special statement. Any such
special statement of account should be rendered to the Employer no later
than the due date of the annual statement of account for the Plan Year.
The procedures set forth in Section 7.7 for the approval by the Employer
of annual statements of account shall apply to any special statement of
account rendered hereunder and approval by the Employer of any such
special statement in the manner provided in Section 7.7 shall have the
same effect upon the statement as the Employer's approval of an annual
statement of account. No successor to the Trustee shall have any duty or
responsibility to investigate the acts or transactions of any predecessor
who has rendered all statements of account required by Section 7.7 and
this subparagraph.
7.10. TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan, the
Trustee at the direction of the Administrator shall transfer the Vested
interest, if any, of such Participant in his account to another trust
forming part of a pension, profit sharing, or stock bonus plan maintained
by such Participant's new employer and represented by said employer in
writing as meeting the requirements of Code Section 401(a), provided that
the trust to which such transfers are made permits the transfer to be
made.
7.11. TRUSTEE INDEMNIFICATION
The Employer agrees to indemnify and save harmless the Trustee
against any and all claims, losses, damages, expenses and liabilities the
Trustee may incur in the exercise and performance of the Trustee's powers
and duties hereunder, unless the same are determined to be due to gross
negligence or willful misconduct.
7.12. EMPLOYER SECURITIES AND REAL PROPERTY
The Trustee shall be empowered to acquire and hold "qualifying
Employer securities" and "qualifying Employer real property," as those
terms are defined in the Act. However, no more than 100%, in the case of
a Profit Sharing Plan or 401(k) Plan or 10%, in the case of a Money
Purchase Plan of the fair market value of all the assets in the Trust Fund
may be invested in "qualifying Employer securities" and "qualifying
Employer real property".
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1. AMENDMENT
(a) The Employer shall have the right at any time to amend
this Plan subject to the limitations of this Section. However, any
amendment which affects the rights, duties or responsibilities of the
Trustee and Administrator may only be made with the Trustee's and
Administrator's written consent. Any such amendment shall become effective
as provided therein upon its execution. The Trustee shall not be required
to execute any such amendment unless the amendment affects the duties of
the Trustee hereunder.
(b) The Employer may (1) change the choice of options in
the Adoption Agreement, (2) add overriding language in the Adoption
Agreement when such language is necessary to satisfy Code Sections 415 or
416 because of the required aggregation of multiple plans, and (3) add
certain model amendments published by the Internal Revenue Service which
specifically provide that their adoption will not cause the Plan to be
treated as an individually designed plan. An Employer that amends the
Plan for any other reason, including a waiver of the minimum funding
requirement under Code Section 412(d), will no longer participate in this
Prototype Plan and will be considered to have an individually designed
plan.
(c) The Employer expressly delegates authority to the
sponsoring organization of this Plan, the right to amend this Plan by
submitting a copy of the amendment to each Employer who has adopted this
Plan after first having received a ruling or favorable determination from
the Internal Revenue Service that the Plan as amended qualifies under Code
Section 401(a) and the Act. For purposes of this Section, the mass
submitter shall be recognized as the agent of the sponsoring organization.
If the sponsoring organization does not adopt the amendments made by the
mass submitter, it will no longer be identical to or a minor modifier of
the mass submitter plan.
(d) No amendment to the Plan shall be effective if it
authorizes or permits any part of the Trust Fund (other than such part as
is required to pay taxes and administration expenses) to be used for or
diverted to any purpose other than for the exclusive benefit of the
Participants or their Beneficiaries or estates; or causes any reduction in
the amount credited to the account of any Participant; or causes or
permits any portion of the Trust Fund to revert to or become property of
the Employer.
(e) Except as permitted by Regulations (including
Regulation 1.411(d)-4), no Plan amendment or transaction having the effect
of a Plan amendment (such as a merger, plan transfer or similar
transaction) shall be effective if it eliminates or reduces any "Section
411(d)(6) protected benefit" or adds or modifies conditions relating to
"Section 411(d)(6) protected benefits" the result of which is a further
restriction on such benefit unless such protected benefits are preserved
with respect to benefits accrued as of the later of the adoption date or
effective date of the amendment. "Section 411(d)(6) protected benefits"
are benefits described in Code Section 411(d)(6)(A), early retirement
benefits and retirement-type subsidies, and optional forms of benefit.
8.2. TERMINATION
(a) The Employer shall have the right at any time to
terminate the Plan by delivering to the Trustee and Administrator written
notice of such termination. Upon any full or partial termination all
amounts credited to the affected Participants' Combined Accounts shall
become 100% Vested and shall not thereafter be subject to forfeiture, and
all unallocated amounts shall be allocated to the accounts of all
Participants in accordance with the provisions hereof.
(b) Upon the full termination of the Plan, the Employer
shall direct the distribution of the assets to Participants in a manner
which is consistent with and satisfies the provisions of Section 6.5.
Distributions to a Participant shall be made in cash (or in property if
permitted in the Adoption Agreement) or through the purchase of
irrevocable nontransferable deferred commitments from the Insurer. Except
as permitted by Regulations, the termination of the Plan shall not result
in the reduction of "Section 411(d)(6) protected benefits" as described in
Section 8.1.
8.3. MERGER OR CONSOLIDATION
This Plan may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other plan only if the
benefits which would be received by a Participant of this Plan, in the
event of a termination of the Plan immediately after such transfer, merger
or consolidation, are at least equal to the benefits the Participant would
have received if the Plan had terminated immediately before the transfer,
merger or consolidation and such merger or consolidation does not
otherwise result in the elimination or reduction of any "Section 411(d)(6)
protected benefits" as described in Section 8.1(e).
ARTICLE IX
MISCELLANEOUS
9.1. EMPLOYER ADOPTIONS
(a) Any organization may become the Employer hereunder by
executing the Adoption Agreement in form satisfactory to the Trustee, and
it shall provide such additional information as the Trustee may require.
The consent of the Trustee to act as such shall be signified by its
execution of the Adoption Agreement.
(b) Except as otherwise provided in this Plan, the
affiliation of the Employer and the participation of its Participants
shall be separate and apart from that of any other employer and its
participants hereunder.
9.2. PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between
the Employer and any Participant or to be a consideration or an inducement
for the employment of any Participant or Employee. Nothing contained in
this Plan shall be deemed to give any Participant or Employee the right to
be retained in the service of the Employer or to interfere with the right
of the Employer to discharge any Participant or Employee at any time
regardless of the effect which such discharge shall have upon him as a
Participant of this Plan.
9.3. ALIENATION
(a) Subject to the exceptions provided below, no benefit
which shall be payable to any person (including a Participant or his
Beneficiary) shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, or charge, and any
attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber,
or charge the same shall be void; and no such benefit shall in any manner
be liable for, or subject to, the debts, contracts, liabilities,
engagements, or torts of any such person, nor shall it be subject to
attachment or legal process for or against such person, and the same shall
not be recognized except to such extent as may be required by law.
(b) This provision shall not apply to the extent a
Participant or Beneficiary is indebted to the Plan, for any reason, under
any provision of this Plan. At the time a distribution is to be made to
or for a Participant's or Beneficiary's benefit, such proportion of the
amount to be distributed as shall equal such indebtedness shall be paid to
the Plan, to apply against or discharge such indebtedness. Prior to making
a payment, however, the Participant or Beneficiary must be given written
notice by the Administrator that such indebtedness is to be so paid in
whole or part from his Participant's Combined Account. If the Participant
or Beneficiary does not agree that the indebtedness is a valid claim
against his Vested Participant's Combined Account, he shall be entitled to
a review of the validity of the claim in accordance with procedures
provided in Sections 2.12 and 2.13.
(c) This provision shall not apply to a "qualified
domestic relations order" defined in Code Section 414(p), and those other
domestic relations orders permitted to be so treated by the Administrator
under the provisions of the Retirement Equity Act of 1984. The
Administrator shall establish a written procedure to determine the
qualified status of domestic relations orders and to administer
distributions under such qualified orders. Further, to the extent
provided under a "qualified domestic relations order", a former spouse of
a Participant shall be treated as the spouse or surviving spouse for all
purposes under the Plan.
9.4. CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according to
the Act and the laws of the State or Commonwealth in which the Employer's
principal office is located, other than its laws respecting choice of law,
to the extent not pre-empted by the Act.
9.5. GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or
neuter gender, they shall be construed as though they were also used in
another gender in all cases where they would so apply, and whenever any
words are used herein in the singular or plural form, they shall be
construed as though they were also used in the other form in all cases
where they would so apply.
9.6. LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding
the Trust and/or Plan established hereunder to which the Trustee or the
Administrator may be a party, and such claim, suit, or proceeding is
resolved in favor of the Trustee or Administrator, they shall be entitled
to be reimbursed from the Trust Fund for any and all costs, attorney's
fees, and other expenses pertaining thereto incurred by them for which
they shall have become liable.
9.7. PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically
permitted by law, it shall be impossible by operation of the Plan or of
the Trust, by termination of either, by power of revocation or amendment,
by the happening of any contingency, by collateral arrangement or by any
other means, for any part of the corpus or income of any Trust Fund
maintained pursuant to the Plan or any funds contributed thereto to be
used for, or diverted to, purposes other than the exclusive benefit of
Participants, Retired Participants, or their Beneficiaries.
(b) In the event the Employer shall make a contribution
under a mistake of fact pursuant to Section 403(c)(2)(A) of the Act, the
Employer may demand repayment of such contribution at any time within one
(l) year following the time of payment and the Trustees shall return such
amount to the Employer within the one (1) year period. Earnings of the
Plan attributable to the contributions may not be returned to the Employer
but any losses attributable thereto must reduce the amount so returned.
9.8. BONDING
Every Fiduciary, except a bank or an insurance company, unless
exempted by the Act and regulations thereunder, shall be bonded in an
amount not less than 10% of the amount of the funds such Fiduciary
handles; provided, however, that the minimum bond shall be $1,000 and the
maximum bond, $500,000. The amount of funds handled shall be determined
at the beginning of each Plan Year by the amount of funds handled by such
person, group, or class to be covered and their predecessors, if any,
during the preceding Plan Year, or if there is no preceding Plan Year,
then by the amount of the funds to be handled during the then current
year. The bond shall provide protection to the Plan against any loss by
reason of acts of fraud or dishonesty by the Fiduciary alone or in
connivance with others. The surety shall be a corporate surety company
(as such term is used in Act Section 412(a)(2)), and the bond shall be in
a form approved by the Secretary of Labor. Notwithstanding anything in the
Plan to the contrary, the cost of such bonds shall be an expense of and
may, at the election of the Administrator, be paid from the Trust Fund or
by the Employer.
9.9. EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer nor the Trustee, nor their successors,
shall be responsible for the validity of any Contract issued hereunder or
for the failure on the part of the Insurer to make payments provided by
any such Contract, or for the action of any person which may delay payment
or render a Contract null and void or unenforceable in whole or in part.
9.10. INSURER'S PROTECTIVE CLAUSE
The Insurer who shall issue Contracts hereunder shall not have
any responsibility for the validity of this Plan or for the tax or legal
aspects of this Plan. The Insurer shall be protected and held harmless in
acting in accordance with any written direction of the Trustee, and shall
have no duty to see to the application of any funds paid to the Trustee,
nor be required to question any actions directed by the Trustee.
Regardless of any provision of this Plan, the Insurer shall not be
required to take or permit any action or allow any benefit or privilege
contrary to the terms of any Contract which it issues hereunder, or the
rules of the Insurer.
9.11. RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative,
Beneficiary, or to any guardian or committee appointed for such
Participant or Beneficiary in accordance with the provisions of this Plan,
shall, to the extent thereof, be in full satisfaction of all claims
hereunder against the Trustee and the Employer.
9.12. ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted
or required to do or perform any act or matter or thing, it shall be done
and performed by a person duly authorized by its legally constituted
authority.
9.13. NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2)
the Administrator, (3) the Trustee, and (4) any Investment Manager
appointed hereunder. The named Fiduciaries shall have only those specific
powers, duties, responsibilities, and obligations as are specifically
given them under the Plan. In general, the Employer shall have the sole
responsibility for making the contributions provided for under Section
4.1; and shall have the sole authority to appoint and remove the Trustee
and the Administrator; to formulate the Plan's "funding policy and
method"; and to amend the elective provisions of the Adoption Agreement or
terminate, in whole or in part, the Plan. The Administrator shall have
the sole responsibility for the administration of the Plan, which
responsibility is specifically described in the Plan. The Trustee shall
have the sole responsibility of management of the assets held under the
Trust, except those assets, the management of which has been assigned to
an Investment Manager or Administrator, who shall be solely responsible
for the management of the assets assigned to it, all as specifically
provided in the Plan. Each named Fiduciary warrants that any directions
given, information furnished, or action taken by it shall be in accordance
with the provisions of the Plan, authorizing or providing for such
direction, information or action. Furthermore, each named Fiduciary may
rely upon any such direction, information or action of another named
Fiduciary as being proper under the Plan, and is not required under the
Plan to inquire into the propriety of any such direction, information or
action. It is intended under the Plan that each named Fiduciary shall be
responsible for the proper exercise of its own powers, duties,
responsibilities and obligations under the Plan. No named Fiduciary shall
guarantee the Trust Fund in any manner against investment loss or
depreciation in asset value. Any person or group may serve in more than
one Fiduciary capacity.
9.14. HEADINGS
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
9.15. APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary, if,
pursuant to a timely application filed by or in behalf of the Plan, the
Commissioner of Internal Revenue Service or his delegate should determine
that the Plan does not initially qualify as a tax-exempt plan under Code
Sections 401 and 501, and such determination is not contested, or if
contested, is finally upheld, then if the Plan is a new plan, it shall be
void ab initio and all amounts contributed to the Plan, by the Employer,
less expenses paid, shall be returned within one year and the Plan shall
terminate, and the Trustee shall be discharged from all further
obligations. If the disqualification relates to an amended plan, then the
Plan shall operate as if it had not been amended and restated.
(b) Except as specifically stated in the Plan, any
contribution by the Employer to the Trust Fund is conditioned upon the
deductibility of the contribution by the Employer under the Code and, to
the extent any such deduction is disallowed, the Employer may within one
(1) year following a final determination of the disallowance, whether by
agreement with the Internal Revenue Service or by final decision of a
court of competent jurisdiction, demand repayment of such disallowed
contribution and the Trustee shall return such contribution within one (1)
year following the disallowance. Earnings of the Plan attributable to the
excess contribution may not be returned to the Employer, but any losses
attributable thereto must reduce the amount so returned.
9.16. UNIFORMITY
All provisions of this Plan shall be interpreted and applied in
a uniform, nondiscriminatory manner.
9.17. PAYMENT OF BENEFITS
Benefits under this Plan shall be paid, subject to Section 6.10
and Section 6.11 only upon death, Total and Permanent Disability, normal
or early retirement, termination of employment, or upon Plan Termination.
ARTICLE X
PARTICIPATING EMPLOYERS
10.1. ELECTION TO BECOME A PARTICIPATING EMPLOYER
Notwithstanding anything herein to the contrary, with the
consent of the Employer and Trustee, any Affiliated Employer may adopt
this Plan and all of the provisions hereof, and participate herein and be
known as a Participating Employer, by a properly executed document
evidencing said intent and will of such Participating Employer.
10.2. REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each Participating Employer shall be required to
select the same Adoption Agreement provisions as those selected by the
Employer other than the Plan Year, the Fiscal Year, and such other items
that must, by necessity, vary among employers.
(b) Each such Participating Employer shall be required to
use the same Trustee as provided in this Plan.
(c) The Trustee may, but shall not be required to,
commingle, hold and invest as one Trust Fund all contributions made by
Participating Employers, as well as all increments thereof.
(d) The transfer of any Participant from or to an Employer
participating in this Plan, whether he be an Employee of the Employer or a
Participating Employer, shall not affect such Participant's rights under
the Plan, and all amounts credited to such Participant's Combined Account
as well as his accumulated service time with the transferor or
predecessor, and his length of participation in the Plan, shall continue
to his credit.
(e) Any expenses of the Plan which are to be paid by the
Employer or borne by the Trust Fund shall be paid by each Participating
Employer in the same proportion that the total amount standing to the
credit of all Participants employed by such Employer bears to the total
standing to the credit of all Participants.
10.3. DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a part of this
Plan; provided, however, that with respect to all of its relations with
the Trustee and Administrator for the purpose of this Plan, each
Participating Employer shall be deemed to have designated irrevocably the
Employer as its agent. Unless the context of the Plan clearly indicates
the contrary, the word "Employer" shall be deemed to include each
Participating Employer as related to its adoption of the Plan.
10.4. EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between
Participating Employers, and in the event of any such transfer, the
Employee involved shall carry with him his accumulated service and
eligibility. No such transfer shall effect a termination of employment
hereunder, and the Participating Employer to which the Employee is
transferred shall thereupon become obligated hereunder with respect to
such Employee in the same manner as was the Participating Employer from
whom the Employee was transferred.
10.5. PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES
Any contribution or Forfeiture subject to allocation during each
Plan Year shall be allocated among all Participants of all Participating
Employers in accordance with the provisions of this Plan. On the basis of
the information furnished by the Administrator, the Trustee shall keep
separate books and records concerning the affairs of each Participating
Employer hereunder and as to the accounts and credits of the Employees of
each Participating Employer. The Trustee may, but need not, register
Contracts so as to evidence that a particular Participating Employer is
the interested Employer hereunder, but in the event of an Employee
transfer from one Participating Employer to another, the employing
Employer shall immediately notify the Trustee thereof.
10.6. AMENDMENT
Amendment of this Plan by the Employer at any time when there
shall be a Participating Employer hereunder shall only be by the written
action of each and every Participating Employer and with the consent of
the Trustee where such consent is necessary in accordance with the terms
of this Plan.
10.7. DISCONTINUANCE OF PARTICIPATION
Except in the case of a Standardized Plan, any Participating
Employer shall be permitted to discontinue or revoke its participation in
the Plan at any time. At the time of any such discontinuance or
revocation, satisfactory evidence thereof and of any applicable conditions
imposed shall be delivered to the Trustee. The Trustee shall thereafter
transfer, deliver and assign Contracts and other Trust Fund assets
allocable to the Participants of such Participating Employer to such new
Trustee as shall have been designated by such Participating Employer, in
the event that it has established a separate pension plan for its
Employees provided, however, that no such transfer shall be made if the
result is the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 8.1(e). If no successor is
designated, the Trustee shall retain such assets for the Employees of said
Participating Employer pursuant to the provisions of Article VII hereof.
In no such event shall any part of the corpus or income of the Trust Fund
as it relates to such Participating Employer be used for or diverted for
purposes other than for the exclusive benefit of the Employees of such
Participating Employer.
10.8. ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all
necessary rules or regulations, binding upon all Participating Employers
and all Participants, to effectuate the purpose of this Article.
10.9. PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE
If any Participating Employer is prevented in whole or in part
from making a contribution which it would otherwise have made under the
Plan by reason of having no current or accumulated earnings or profits, or
because such earnings or profits are less than the contribution which it
would otherwise have made, then, pursuant to Code Section 404(a)(3)(B), so
much of the contribution which such Participating Employer was so
prevented from making may be made, for the benefit of the participating
employees of such Participating Employer, by other Participating Employers
who are members of the same affiliated group within the meaning of Code
Section 1504 to the extent of their current or accumulated earnings or
profits, except that such contribution by each such other Participating
Employer shall be limited to the proportion of its total current and
accumulated earnings or profits remaining after adjustment for its
contribution to the Plan made without regard to this paragraph which the
total prevented contribution bears to the total current and accumulated
earnings or profits of all the Participating Employers remaining after
adjustment for all contributions made to the Plan without regard to this
paragraph.
A Participating Employer on behalf of whose employees a
contribution is made under this paragraph shall not be required to
reimburse the contributing Participating Employers.
ARTICLE XI
CASH OR DEFERRED PROVISIONS
Notwithstanding any provisions in the Plan to the contrary, the
provisions of this Article shall apply with respect to any 401(k) Profit
Sharing Plan.
11.1. FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of
all Participants made pursuant to Section 11.2(a), which amount shall
be deemed an Employer's Elective Contribution, plus
(b) If specified in E3 of the Adoption Agreement, a
matching contribution equal to the percentage specified in the
Adoption Agreement of the Deferred Compensation of each Participant
eligible to share in the allocations of the matching contribution,
which amount shall be deemed an Employer's Non-Elective or Elective
Contribution as selected in the Adoption Agreement, plus
(c) If specified in E4 of the Adoption Agreement, a
discretionary amount, if any, which shall be deemed an Employer's
Non-Elective Contribution, plus
(d) If specified in E5 of the Adoption Agreement, a
Qualified Non-Elective Contribution.
(e) Notwithstanding the foregoing, however, the Employer's
contributions for any Fiscal Year shall not exceed the maximum amount
allowable as a deduction to the Employer under the provisions of Code
Section 404. All contributions by the Employer shall be made in cash
or in such property as is acceptable to the Trustee.
(f) Except, however, to the extent necessary to provide
the top heavy minimum allocations, the Employer shall make a
contribution even if it exceeds current or accumulated Net Profit or
the amount which is deductible under Code Section 404.
(g) Employer Elective Contributions accumulated through
payroll deductions shall be paid to the Trustee as of the earliest
date on which such contributions can reasonably be segregated from
the Employer's general assets, but in any event within ninety (90)
days from the date on which such amounts would otherwise have been
payable to the Participant in cash. The provisions of Department of
Labor regulations 2510.3-102 are incorporated herein by reference.
Furthermore, any additional Employer contributions which are
allocable to the Participant's Elective Account for a Plan Year shall
be paid to the Plan no later than the twelve-month period immediately
following the close of such Plan Year.
11.2. PARTICIPANT'S SALARY REDUCTION ELECTION
(a) If selected in the Adoption Agreement, each
Participant may elect to defer his Compensation which would have been
received in the Plan Year, but for the deferral election, subject to the
limitations of this Section and the Adoption Agreement. A deferral
election (or modification of an earlier election) may not be made with
respect to Compensation which is currently available on or before the date
the Participant executed such election, or if later, the latest of the
date the Employer adopts this cash or deferred arrangement, or the date
such arrangement first became effective. Any elections made pursuant to
this Section shall become effective as soon as is administratively
feasible.
Additionally, if elected in the Adoption Agreement, each
Participant may elect to defer and have allocated for a Plan Year all or a
portion of any cash bonus attributable to services performed by the
Participant for the Employer during such Plan Year and which would have
been received by the Participant on or before two and one-half months
following the end of the Plan Year but for the deferral. A deferral
election may not be made with respect to cash bonuses which are currently
available on or before the date the Participant executed such election.
Notwithstanding the foregoing, cash bonuses attributable to services
performed by the Participant during a Plan Year but which are to be paid
to the Participant later than two and one-half months after the close of
such Plan Year will be subjected to whatever deferral election is in
effect at the time such cash bonus would have otherwise been received.
The amount by which Compensation and/or cash bonuses are
reduced shall be that Participant's Deferred Compensation and be treated
as an Employer Elective Contribution and allocated to that Participant's
Elective Account.
Once made, a Participant's election to reduce Compensation
shall remain in effect until modified or terminated. Modifications may be
made as specified in the Adoption Agreement, and terminations may be made
at any time. Any modification or termination of an election will become
effective as soon as is administratively feasible.
(b) The balance in each Participant's Elective Account
shall be fully Vested at all times and shall not be subject to Forfeiture
for any reason.
(c) Amounts held in the Participant's Elective Account and
Qualified Non-Elective Account may be distributable as permitted under the
Plan, but in no event prior to the earlier of:
(1) a Participant's termination of employment, Total
and Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the proven financial hardship of a Participant,
subject to the limitations of Section 11.8;
(4) the termination of the Plan without the existence
at the time of Plan termination of another defined contribution plan
(other than an employee stock ownership plan as defined in Code
Section 4975(e)(7)) or the establishment of a successor defined
contribution plan (other than an employee stock ownership plan as
defined in Code Section 4975(e)(7)) by the Employer or an Affiliated
Employer within the period ending twelve months after distribution of
all assets from the Plan maintained by the Employer;
(5) the date of the sale by the Employer to an entity
that is not an Affiliated Employer of substantially all of the assets
(within the meaning of Code Section 409(d)(2)) with respect to a
Participant who continues employment with the corporation acquiring
such assets; or
(6) the date of the sale by the Employer or an
Affiliated Employer of its interest in a subsidiary (within the
meaning of Code Section 409(d)(3)) to an entity that is not an
Affiliated Employer with respect to a Participant who continues
employment with such subsidiary.
(d) In any Plan Year beginning after December 31, 1987, a
Participant's Deferred Compensation made under this Plan and all other
plans, contracts or arrangements of the Employer maintaining this Plan
shall not exceed the limitation imposed by Code Section 402(g), as in
effect for the calendar year in which such Plan Year began. This dollar
limitation shall be adjusted annually pursuant to the method provided in
Code Section 415(d) in accordance with Regulations.
(e) In the event a Participant has received a hardship
distribution pursuant to Regulation 1.401(k)-1(d)(2)(iii)(B) from any
other plan maintained by the Employer or from his Participant's Elective
Account pursuant to Section 11.8, then such Participant shall not be
permitted to elect to have Deferred Compensation contributed to the Plan
on his behalf for a period of twelve (12) months following the receipt of
the distribution. Furthermore, the dollar limitation under Code Section
402(g) shall be reduced, with respect to the Participant's taxable year
following the taxable year in which the hardship distribution was made, by
the amount of such Participant's Deferred Compensation, if any, made
pursuant to this Plan (and any other plan maintained by the Employer) for
the taxable year of the hardship distribution.
(f) If a Participant's Deferred Compensation under this
Plan together with any elective deferrals (as defined in Regulation
1.402(g)-1(b)) under another qualified cash or deferred arrangement (as
defined in Code Section 401(k)), a simplified employee pension (as defined
in Code Section 408(k)), a salary reduction arrangement (within the
meaning of Code Section 3121(a)(5)(D)), a deferred compensation plan under
Code Section 457, or a trust described in Code Section 501(c)(18)
cumulatively exceed the limitation imposed by Code Section 402(g) (as
adjusted annually in accordance with the method provided in Code Section
415(d) pursuant to Regulations) for such Participant's taxable year, the
Participant may, not later than March 1st following the close of his
taxable year, notify the Administrator in writing of such excess and
request that his Deferred Compensation under this Plan be reduced by an
amount specified by the Participant. In such event, the Administrator
shall direct the Trustee to distribute such excess amount (and any Income
allocable to such excess amount) to the Participant not later than the
first April 15th following the close of the Participant's taxable year.
Distributions in accordance with this paragraph may be made for any
taxable year of the Participant which begins after December 31, 1986. Any
distribution of less than the entire amount of Excess Deferred
Compensation and Income shall be treated as a pro rata distribution of
Excess Deferred Compensation and Income. The amount distributed shall not
exceed the Participant's Deferred Compensation under the Plan for the
taxable year. Any distribution on or before the last day of the
Participant's taxable year must satisfy each of the following conditions:
(1) the Participant shall designate the distribution
as Excess Deferred Compensation;
(2) the distribution must be made after the date on
which the Plan received the Excess Deferred Compensation; and
(3) the Plan must designate the distribution as a
distribution of Excess Deferred Compensation.
For the purpose of this Section, "Income" means the amount
of income or loss allocable to a Participant's Excess Deferred
Compensation and shall be equal to the sum of the allocable gain or loss
for the taxable year of the Participant and the allocable gain or loss for
the period between the end of the taxable year of the Participant and the
date of distribution ("gap period"). The income or loss allocable to each
such period is calculated separately and is determined by multiplying the
income or loss allocable to the Participant's Deferred Compensation for
the respective period by a fraction. The numerator of the fraction is the
Participant's Excess Deferred Compensation for the taxable year of the
Participant. The denominator is the balance, as of the last day of the
respective period, of the Participant's Elective Account that is
attributable to the Participant's Deferred Compensation reduced by the
gain allocable to such total amount for the respective period and
increased by the loss allocable to such total amount for the respective
period.
In lieu of the "fractional method" described above, a "safe
harbor method" may be used to calculate the allocable income or loss for
the "gap period". Under such "safe harbor method", allocable income or
loss for the "gap period" shall be deemed to equal ten percent (10%) of
the income or loss allocable to a Participant's Excess Deferred
Compensation for the taxable year of the Participant multiplied by the
number of calendar months in the "gap period". For purposes of
determining the number of calendar months in the "gap period", a
distribution occurring on or before the fifteenth day of the month shall
be treated as having been made on the last day of the preceding month and
a distribution occurring after such fifteenth day shall be treated as
having been made on the first day of the next subsequent month.
Income or loss allocable to any distribution of Excess
Deferred Compensation on or before the last day of the taxable year of the
Participant shall be calculated from the first day of the taxable year of
the Participant to the date on which the distribution is made pursuant to
either the "fractional method" or the "safe harbor method".
Notwithstanding the above, for the 1987 calendar year,
Income during the "gap period" shall not be taken into account.
(g) Notwithstanding the above, a Participant's Excess
Deferred Compensation shall be reduced, but not below zero, by any
distribution of Excess Contributions pursuant to Section 11.5(a) for the
Plan Year beginning with or within the taxable year of the Participant.
(h) At Normal Retirement Date, or such other date when the
Participant shall be entitled to receive benefits, the fair market value
of the Participant's Elective Account shall be used to provide benefits to
the Participant or his Beneficiary.
(i) Employer Elective Contributions made pursuant to this
Section may be segregated into a separate account for each Participant in
a federally insured savings account, certificate of deposit in a bank or
savings and loan association, money market certificate, or other short-
term debt security acceptable to the Trustee until such time as the
allocations pursuant to Section 11.3 have been made.
(j) The Employer and the Administrator shall adopt a
procedure necessary to implement the salary reduction elections provided
for herein.
11.3. ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an
account in the name of each Participant to which the Administrator shall
credit as of each Anniversary Date, or other valuation date, all amounts
allocated to each such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation of
the Employer's contributions for each Plan Year. Within a reasonable
period of time after the date of receipt by the Administrator of such
information, the Administrator shall allocate such contribution as
follows:
(1) With respect to the Employer's Elective
Contribution made pursuant to Section 11.1(a), to each Participant's
Elective Account in an amount equal to each such Participant's
Deferred Compensation for the year.
(2) With respect to the Employer's Matching
Contribution made pursuant to Section 11.1(b), to each Participant's
Account, or Participant's Elective Account as selected in E3 of the
Adoption Agreement, in accordance with Section 11.1(b).
Except, however, a Participant who is not credited
with a Year of Service during any Plan Year shall or shall not share
in the Employer's Matching Contribution for that year as provided in
E3 of the Adoption Agreement. However, for Plan Years beginning
after 1989, if this is a standardized Plan, a Participant shall share
in the Employer's Matching Contribution regardless of Hours of
Service.
(3) With respect to the Employer's Non-Elective
Contribution made pursuant to Section 11.1(c), to each Participant's
Account in accordance with the provisions of Sections 4.3(b)(2) or
4.3(b)(3), whichever is applicable, 4.3(k) and 4.3(1).
(4) With respect to the Employer's Qualified Non-
Elective Contribution made pursuant to Section 11.1(d), to each
Participant's Qualified Non-Elective Contribution Account in the same
proportion that each such Participant's Compensation for the year
bears to the total Compensation of all Participants for such year.
However, for any Plan Year beginning prior to January 1, 1990, and if
elected in the non-standardized Adoption Agreement for any Plan Year
beginning on or after January 1, 1990, a Participant who is not
credited with a Year of Service during any Plan Year shall not share
in the Employer's' Qualified Non-Elective Contribution for that year,
unless required pursuant to Section 4.3(h). In addition, the
provisions of Sections 4.3(k) and 4.3(l) shall apply with respect to
the allocation of the Employer's Qualified Non-Elective contribution.
(c) Notwithstanding anything in the Plan to the contrary,
for Plan Years beginning after December 31, 1988, in determining whether a
Non-Key Employee has received the required minimum allocation pursuant to
Section 4.3(f) such Non-Key Employee's Deferred Compensation and matching
contributions used to satisfy the "Actual Deferral Percentage" test
pursuant to Section 11.4(a) or the "Actual Contribution Percentage" test
of Section 11.6(a) shall not be taken into account.
(d) Notwithstanding anything herein to the contrary,
participants who terminated employment during the Plan Year shall share in
the salary reduction contributions made by the Employer for the year of
termination without regard to the Hours of Service credited.
(e) Notwithstanding anything herein to the contrary (other
than Sections 11.3(d) and 11.3(g)), any Participant who terminated
employment during the Plan Year for reasons other than death, Total and
Permanent Disability, or retirement shall or shall not share in the
allocations of the Employer's Matching Contribution made pursuant to
Section 11.1(b), the Employer's Non-Elective Contributions made pursuant
to Section 11.1(c), the Employer's Qualified Non-Elective Contribution
made pursuant to Section 11.1(d), and Forfeitures as provided in the
Adoption Agreement. Notwithstanding the foregoing, for Plan Years
beginning after 1989, if this is a standardized Plan, any such terminated
Participant shall share in such allocations provided the terminated
Participant completed more than 500 Hours of Service.
(f) Notwithstanding anything herein to the contrary,
Participants terminating for reasons of death, Total and Permanent
Disability, or retirement shall share in the allocation of the Employer's
Matching Contribution made pursuant to Section 11.1(b), the Employer's
Non-Elective Contributions made pursuant to Section 11.1(c), the
Employer's Qualified Non-Elective Contribution made pursuant to Section
11.1(d), and Forfeitures as provided in this Section regardless of whether
they completed a Year of Service during the Plan Year.
(g) Notwithstanding any election in the Adoption Agreement
to the contrary, if this is a non-standardized Plan that would otherwise
fail to meet the requirements of Code Sections 401(a)(26), 410(b)(l), or
410(b)(2)(A)(i) and the Regulations thereunder because Employer matching
Contributions made pursuant to Section 11.1(b), Employer Non-Elective
Contributions made pursuant to Section 11.1(c) or Employer Qualified Non-
Elective Contributions made pursuant to Section 11.1(d) have not been
allocated to a sufficient number or percentage of Participants for a Plan
Year, then the following rules shall apply:
(1) The group of Participants eligible to share in
the respective contributions for the Plan Year shall be expanded to
include the minimum number of Participants who would not otherwise be
eligible as are necessary to satisfy the applicable test specified
above. The specific participants who shall be come eligible under
the terms of this paragraph shall be those who are actively employed
on the last day of the Plan Year and, when compared to similarly
situated Participants, have completed the greatest number of Hours of
Service in the Plan Year.
(2) If after application of paragraph (1) above, the
applicable test is still not satisfied, then the group of
Participants eligible to share for the Plan Year shall be further
expanded to include the minimum number of Participants who are not
actively employed on the last day of the Plan Year as are necessary
to satisfy the applicable test. The specific Participants who shall
become eligible to share shall be those Participants, when compared
to similarly situated Participants, who have completed the greatest
number of Hours of Service in the Plan Year before terminating
employment.
11.4. ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year
beginning after December 31, 1986, the annual allocation derived from
Employer Elective Contributions and Qualified Non-Elective Contributions
to a Participant's Elective Account and Qualified Non-Elective Account
shall satisfy one of the following tests:
(1) The "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not be more than the "Actual
Deferral Percentage" of the Non-Highly Compensated Participant group
multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage"
for the Highly Compensated Participant group over the "Actual
Deferral Percentage" for the Non-Highly Compensated Participant group
shall not be more than two percentage points. Additionally, the
"Actual Deferral Percentage" for the Highly Compensated Participant
group shall not exceed the "Actual Deferral Percentage" for the Non-
Highly Compensated Participant group multiplied by 2. The provisions
of Code Section 401(k)(3) and Regulation 1.401(k)-1(b) are
incorporated herein by reference.
However, for Plan Years beginning after December 31, 1988,
to prevent the multiple use of the alternative method described in
(2) above and Code Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make elective deferrals pursuant to Section
11.2 and to make Employee contributions or to receive matching
contributions under this Plan or under any other plan maintained by
the Employer or an Affiliated Employer shall have his actual
contribution ratio reduced pursuant to Regulation 1.401(m)-2, the
provisions of which are incorporated herein by reference.
(b) For the purposes of this Section "Actual Deferral
Percentage" means, with respect to the Highly Compensated Participant
group and Non-Highly Compensated Participant group for a Plan Year, the
average of the ratios, calculated separately for each Participant in such
group, of the amount of Employer Elective Contributions and Qualified Non-
Elective Contributions allocated to each Participant's Elective Account
and Qualified Non-Elective Account for such Plan Year, to such
Participant's "414(s) Compensation" for such Plan Year. The actual
deferral ratio for each Participant and the "Actual Deferral Percentage"
for each group, for Plan Years beginning after December 31, 1988, shall be
calculated to the nearest one-hundredth of one percent of the
Participant's "414(s) Compensation". Employer Elective Contributions
allocated to each Non-Highly Compensated Participant's Elective Account
shall be reduced by Excess Deferred Compensation to the extent such excess
amounts are made under this Plan or any other plan maintained by the
Employer.
(c) For the purpose of determining the actual deferral
ratio of a Highly Compensated Participant who is subject to the Family
Member aggregation rules of Code Section 414(q)(6) because such
Participant is either a "five percent owner" of the Employer or one of the
ten (10) Highly Compensated Employees paid the greatest "415 Compensation"
during the year, the following shall apply:
(1) The combined actual deferral ratio for the family
group (which shall be treated as one Highly Compensated Participant)
shall be the greater of: (i) the ratio determined by aggregating
Employer Elective Contributions and "414(s) Compensation" of all
eligible Family Members who are Highly Compensated Participants
without regard to family aggregation; and (ii) the ratio determined
by aggregating Employer Elective Contributions and "414(s)
Compensation" of all eligible Family Members (including Highly
Compensated Participants). However, in applying the $200,000 limit
to "414(s) Compensation" for Plan Years beginning after December 31,
1988, Family Members shall include only the affected Employee's
spouse and any lineal descendants who have not attained age 19 before
the close of the Plan Year.
(2) The Employer Elective Contributions and "414(s)
Compensation" of all Family Members shall be disregarded for purposes
of determining the "Actual Deferral Percentage" of the Non-Highly
Compensated Participant group except to the extent taken into account
in paragraph (1) above.
(3) If a Participant is required to be aggregated as
a member of more than one family group in a plan, all Participants
who are members of those family groups that include the Participant
are aggregated as one family group in accordance with paragraphs (1)
and (2) above.
(d) For the purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(k), if two or more plans which include cash or
deferred arrangements are considered one plan for the purposes of Code
Section 401(a)(4) or 410(b) (other than Code Section 401(b)(2)(A)(ii) as
in effect for Plan Years beginning after December 31, 1988), the cash or
deferred arrangements included in such plans shall be treated as one
arrangement. In addition, two or more cash or deferred arrangements may
be considered as a single arrangement for purposes of determining whether
or not such arrangements satisfy Code Sections 401(a)(4), 410(b) and
401(k). In such a case, the cash or deferred arrangements included in
such plans and the plans including such arrangements shall be treated as
one arrangement and as one plan for purposes of this Section and Code
Sections 401(a)(4), 410(b) and 401(k). For plan years beginning after
December 31, 1989, plans may be aggregated under this paragraph (e) only
if they have the same plan year.
Notwithstanding the above, for Plan Years beginning after
December 31, 1988, an employee stock ownership plan described in Code
Section 4975(e)(7) may not be combined with this Plan for purposes of
determining whether the employee stock ownership plan or this Plan
satisfies this Section and Code Sections 401(a)(4), 410(b) and 401(k).
(e) For the purposes of this Section, if a Highly
Compensated Participant is a Participant under two (2) or more cash or
deferred arrangements (other than a cash or deferred arrangement which is
part of an employee stock ownership plan as defined in Code Section
4975(e) (7) for Plan Years beginning after December 31, 1988) of the
Employer or an Affiliated Employer, all such cash or deferred arrangements
shall be treated as one cash or deferred arrangement for the purpose of
determining the actual deferral ratio with respect to such Highly
Compensated Participant. However, for Plan Years beginning after
December 31, 1988, if the cash or deferred arrangements have different
Plan Years, this paragraph shall be applied by treating all cash or
deferred arrangements ending with or within the same calendar year as a
single arrangement.
11.5. ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event that the initial allocations of the Employer's
Elective Contributions and Qualified Non-Elective Contributions do not
satisfy one of the tests set forth in Section 11.4, for Plan Years
beginning after December 31, 1986, the Administrator shall adjust Excess
Contributions pursuant to the options set forth below:
(a) On or before the fifteenth day of the third month
following the end of each Plan Year, the Highly Compensated
Participant having the highest actual deferral ratio shall have his
portion of Excess Contributions distributed to him until one of the
tests set forth in Section 11.4 is satisfied, or until his actual
deferral ratio equals the actual deferral ratio of the Highly
Compensated Participant having the second highest actual deferral
ratio. This process shall continue until one of the tests set forth
in Section 11.4 is satisfied. For each Highly Compensated
Participant, the amount of Excess Contributions is equal to the
Elective Contributions and Qualified Non-Elective Contributions made
on behalf of such Highly Compensated Participant (determined prior to
the application of this paragraph) minus the amount determined by
multiplying the Highly Compensated Participant's actual deferral
ratio (determined after application of this paragraph) by his "414(s)
Compensation". However, in determining the amount of Excess
Contributions to be distributed with respect to an affected Highly
Compensated Participant as determined herein, such amount shall be
reduced by any Excess Deferred Compensation previously distributed to
such affected Highly Compensated Participant for his taxable year
ending with or within such Plan Year. Any distribution of Excess
Contributions shall be made in accordance with the following:
(1) With respect to the distribution of Excess
Contributions pursuant to (a) above, such distribution:
(i) may be postponed but not later than the
close of the Plan Year following the Plan Year to which
they are allocable;
(ii) shall be made first from unmatched Deferred
Compensation and, thereafter, simultaneously from Deferred
Compensation which is matched and matching contributions
which relate to such Deferred Compensation. However, any
such matching contributions which are not Vested shall be
forfeited in lieu of being distributed;
(iii) shall be made from Qualified Non-
Elective Contributions only to the extent that Excess
Contributions exceed the balance in the Participant's
Elective Account attributable to Deferred Compensation and
Employer matching contributions.
(iv) shall be adjusted for Income; and
(v) shall be designated by the Employer as a
distribution of Excess Contributions (and Income).
(2) Any distribution of less than the entire amount
of Excess Contributions shall be treated as a pro rata
distribution of Excess Contributions and Income.
(3) The determination and correction of Excess
Contributions of a Highly Compensated Participant whose actual
deferral ratio is determined under the family aggregation rules
shall be accomplished as follows:
(i) If the actual deferral ratio for the Highly
Compensated Participant is determined in accordance with
Section 11.4(c)(1)(ii), then the actual deferral ratio
shall be reduced as required herein and the Excess
Contributions for the family unit shall be allocated among
the Family Members in proportion to the Elective
Contributions of each Family Member that were combined to
determine the group actual deferral ratio.
(ii) If the actual deferral ratio for the Highly
Compensated Participant is determined under Section
11.4(c)(l)(i), then the actual deferral ratio shall first
be reduced as required herein, but not below the actual
deferral ratio of the group of Family Members who are not
Highly Compensated Participants without regard to family
aggregation. The Excess Contributions resulting from this
initial reduction shall be allocated (in proportion to
Elective Contributions) among the Highly Compensated
Participants whose Elective Contributions were combined to
determine the actual deferral ratio. If further reduction
is still required, then Excess Contributions resulting from
this further reduction shall be determined by taking into
account the contributions of all Family Members and shall
be allocated among them in proportion to their respective
Elective Contributions.
(b) Within twelve (12) months after the end of the Plan
Year, the Employer shall make a special Qualified Non-Elective
Contribution on behalf of Non-Highly Compensated Participants in an
amount sufficient to satisfy one of the tests set forth in Section
11.4(a). Such contribution shall be allocated to the Participant's
Qualified Non-Elective Account of each Non-Highly Compensated
Participant in the same proportion that each Non-Highly Compensated
Participant's Compensation for the year bears to the total
Compensation of all Non-Highly Compensated Participants.
(c) For purposes of this Section, "Income" means the
income or loss allocable to Excess Contributions which shall equal
the sum of the allocable gain or loss for the Plan Year and the
allocable gain or loss for the period between the end of the Plan
Year and the date of distribution ("gap period"). The income or loss
allocable to Excess Contributions for the Plan Year and the "gap
period" is calculated separately and is determined by multiplying the
income or loss for the Plan Year or the "gap period" by a fraction.
The numerator of the fraction is the Excess Contributions for the
Plan Year. The denominator of the fraction is the total of the
Participant's Elective Account attributable to Elective Contributions
and the Participant's Qualified Non-Elective Account as of the end of
the Plan Year or the "gap period", reduced by the gain allocable to
such total amount for the Plan Year or the "gap period" and increased
by the loss allocable to such total amount for the Plan Year or the
"gap period".
In lieu of the "fractional method" described above, a "safe
harbor method" may be used to calculate the allocable Income for the
"gap period". Under such "safe harbor method", allocable Income for
the "gap period" shall be deemed to equal ten percent (10%) of the
Income allocable to Excess Contributions for the Plan Year of the
Participant multiplied by the number of calendar months in the "gap
period". For purposes of determining the number of calendar months
in the "gap period", a distribution occurring on or before the
fifteenth day of the month shall be treated as having been made on
the last day of the preceding month and a distribution occurring
after such fifteenth day shall be treated as having been made on the
first day of the next subsequent month.
Notwithstanding the above, for Plan Years which began in
1987, Income during the "gap period" shall not be taken into account.
(d) Any amounts not distributed within 2 1/2 months after
the end of the Plan Year shall be subject to the 10% Employer excise
tax imposed by Code Section 4979.
11.6. ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage", for Plan Years
beginning after the later of the Effective Date of this Plan or
December 31, 1986, for the Highly Compensated Participant group shall not
exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly
Compensated Participant group; or
(2) the lesser of 200 percent of such percentage for
the Non-Highly Compensated Participant group, or such percentage for
the Non-Highly Compensated Participant group plus 2 percentage
points. However, for Plan Years beginning after December 31, 1988,
to prevent the multiple use of the alternative method described in
this paragraph and Code Section 401(m)(9)(A), any Highly Compensated
Participant eligible to make elective deferrals pursuant to Section
11.2 or any other cash or deferred arrangement maintained by the
Employer or an Affiliated Employer and to make Employee contributions
or to receive matching contributions under any plan maintained by the
Employer or an Affiliated Employer shall have his actual contribution
ratio reduced pursuant to Regulation 1.401(m)-2. The provisions of
Code Section 401(m) and Regulations 1.401(m)-1(b) and 1.401(m)-2 are
incorporated herein by reference.
(b) For the purposes of this Section and Section 11.7,
"Actual Contribution Percentage" for a Plan Year means, with respect to
the Highly Compensated Participant group and Non-Highly Compensated
Participant group, the average of the ratios (calculated separately for
each Participant in each group) of:
(1) the sum of Employer matching contributions made
pursuant to Section 11.1(b) (to the extent such matching
contributions are not used to satisfy the tests set forth in Section
11.4 on behalf of each such Participant for such Plan Year; to
(2) the Participant's "414(s) Compensation" for such
Plan Year.
(c) For purposes of determining the "Actual Contribution
Percentage" and the amount of Excess Aggregate Contributions pursuant to
Section 11.7(d), only Employer matching contributions contributed to the
Plan prior to the end of the succeeding Plan Year shall be considered. In
addition, the Administrator may elect to take into account, with respect
to Employees eligible to have Employer matching contributions made
pursuant to Section 11.1(b) allocated to their accounts, elective
deferrals (as defined in Regulation 1.402(g)-l(b)) and qualified non-
elective contributions (as defined in Code Section 401(m)(4)(C))
contributed to any plan maintained by the Employer. Such elective
deferrals and qualified non-elective contributions shall be treated as
Employer matching contributions subject to Regulation 1.401(m)-1(b)(2)
which is incorporated herein by reference. However, for Plan Years
beginning after December 31, 1988, the Plan Year must be the same as the
plan year of the plan to which the elective deferrals and the qualified
non-elective contributions are made.
(d) For the purpose of determining the actual contribution
ratio of a Highly Compensated Employee who is subject to the Family Member
aggregation rules of Code Section 414(q)(6) because such Employee is
either a "five percent owner" of the Employer or one of the ten (10)
Highly Compensated Employees paid the greatest "415 Compensation" during
the year, the following shall apply:
(1) The combined actual contribution ratio for the
family group (which shall be treated as one Highly Compensated
Participant) shall be the greater of: (i) the ratio determined by
aggregating Employer matching contributions made pursuant to Section
11.1(b) (to the extent such matching contributions are not used to
satisfy the tests set forth in Section 11.4 and "414(s) Compensation"
of all eligible Family Members who are Highly Compensated
Participants without regard to family aggregation; and (ii) the ratio
determined by aggregating Employer matching contributions made
pursuant to Section 11.1(b) (to the extent such matching
contributions are not used to satisfy the tests set forth in Section
11.4 and "414(s) Compensation" of all eligible Family Members
(including Highly Compensated Participants). However, in applying the
$200,000 limit to "414(s) Compensation" for Plan Years beginning
after December 31, 1988, Family Members shall include only the
affected Employee's spouse and any lineal descendants who have not
attained age 19 before the close of the Plan Year.
(2) The Employer matching contributions made pursuant
to Section 11.1(b) (to the extent such matching contributions are not
used to satisfy the tests set forth in Section 11.4 and "414(s)
Compensation" of all Family Members shall be disregarded for purposes
of determining the "Actual Contribution Percentage" of the Non-Highly
Compensated Participant group except to the extent taken into account
in paragraph (1) above.
(3) If a Participant is required to be aggregated as
a member of more than one family group in a plan, all Participants
who are members of those family groups that include the Participant
are aggregated as one family group in accordance with paragraphs (1)
and (2) above.
(e) For purposes of this Section and Code Sections
401(a)(4), 410(b) and 401(m), if two or more plans of the Employer to
which matching contributions, Employee contributions, or both, are made
are treated as one plan for purposes of Code Sections 401(a)(4) or 410(b)
(other than the average benefits test under Code Section 410(b)(2)(A)(ii)
as in effect for Plan Years beginning after December 31, 1988), such plans
shall be treated as one plan. In addition, two or more plans of the
Employer to which matching contributions, Employee contributions, or both,
are made may be considered as a single plan for purposes of determining
whether or not such plans satisfy Code Sections 401(a)(4), 410(b) and
401(m). In such a case, the aggregated plans must satisfy this Section
and Code Sections 401(a)(4), 410(b) and 401(m) as though such aggregated
plans were a single plan. For plan years beginning after December 31,
1989, plans may be aggregated under this paragraph only if they have the
same plan year.
Notwithstanding the above, for Plan Years beginning after
December 31, 1988, an employee stock ownership plan described in Code
Section 4975(e)(7) may not be aggregated with this Plan for purposes of
determining whether the employee stock ownership plan or this Plan
satisfies this Section and Code Sections 401(a)(4), 410(b) and 401(m).
(f) If a Highly Compensated Participant is a Participant
under two or more plans (other than an employee stock ownership plan as
defined in Code Section 4975(e)(7) for Plan Years beginning after
December 31, 1988) which are maintained by the Employer or an Affiliated
Employer to which matching contributions, Employee contributions, or both,
are made, all such contributions on behalf of such Highly Compensated
Participant shall be aggregated for purposes of determining such Highly
Compensated Participant's actual contribution ratio. However, for Plan
Years beginning after December 31, 1988, if the plans have different plan
years, this paragraph shall be applied by treating all plans ending with
or within the same calendar year as a single plan.
(g) For purposes of Section 11.6(a) and 11.7, a Highly
Compensated Participant and a Non-Highly Compensated Participant shall
include any Employee eligible to have matching contributions made pursuant
to Section 11.1(b) (whether or not a deferred election was made or
suspended pursuant to Section 11.2(e)) allocated to his account for the
Plan Year or to make salary deferrals pursuant to Section 11.2 (if the
Employer uses salary deferrals to satisfy the provisions of this Section)
allocated to his account for the Plan Year.
(h) For purposes of this Section, "Matching Contribution"
shall mean an Employer contribution made to the Plan, or to a contract
described in Code Section 403(b), on behalf of a Participant on account of
an Employee contribution made by such Participant, or on account of a
participant's deferred compensation, under a plan maintained by the
Employer.
11.7. ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event that for Plan Years beginning after
December 31, 1986, the "Actual Contribution Percentage" for the Highly
Compensated Participant group exceeds the "Actual Contribution Percentage"
for the Non-Highly Compensated Participant group pursuant to Section
11.6(a), the Administrator (on or before the fifteenth day of the third
month following the end of the Plan Year, but in no event later than the
close of the following Plan Year) shall direct the Trustee to distribute
to the Highly Compensated Participant having the highest actual
contribution ratio, his portion of Excess Aggregate Contributions (and
Income allocable to such contributions) or, if forfeitable, forfeit such
non-Vested Excess Aggregate Contributions attributable to Employer
matching contributions (and Income allocable to such Forfeitures) until
either one of the tests set forth in Section 11.6(a) is satisfied, or
until his actual contribution ratio equals the actual contribution ratio
of the Highly Compensated Participant having the second highest actual
contribution ratio. This process shall continue until one of the tests
set forth in Section 11.6(a) is satisfied. The distribution and/or
Forfeiture of Excess Aggregate Contributions shall be made in the
following order:
(1) Employer matching contributions distributed
and/or forfeited pursuant to Section 11.5(a)(1);
(2) Remaining Employer matching contributions.
(b) Any distribution or Forfeiture of less than the entire
amount of Excess Aggregate Contributions (and Income) shall be treated as
a pro rata distribution of Excess Aggregate Contributions and Income.
Distribution of Excess Aggregate Contributions shall be designated by the
Employer as a distribution of Excess Aggregate Contributions (and Income).
Forfeitures of Excess Aggregate Contributions shall be treated in
accordance with Section 4.3. However, no such Forfeiture may be allocated
to a Highly Compensated Participant whose contributions are reduced
pursuant to this Section.
(c) Excess Aggregate Contributions including forfeited
matching contributions, shall be treated as Employer contributions for
purposes of Code Sections 404 and 415 even if distributed from the Plan.
(d) For the purposes of this Section and Section 11.6,
"Excess Aggregate Contributions" means, with respect to any Plan Year, the
excess of:
(1) the aggregate amount of Employer matching
contributions made pursuant to Section 11.1(a) (to the extent such
contributions are taken into account pursuant to Section 11.6(a)),
and any Qualified Non-Elective Contributions or elective deferrals
taken into account pursuant to Section 11.6(c) actually made on
behalf of the Highly Compensated Participant group for such Plan
Year, over
(2) the maximum amount of such contributions
permitted under the limitations of Section 11.6(a).
(e) For each Highly Compensated Participant, the amount of
Excess Aggregate Contributions is equal to the total Employer matching
contributions made pursuant to Section 11.1(b) (to the extent taken into
account pursuant to Section 11.6(a) and any Qualified Non-Elective
Contributions or elective deferrals taken into account pursuant to Section
11.6(c) on behalf of the Highly Compensated Participant (determined prior
to the application of this paragraph) minus the amount determined by
multiplying the Highly Compensated Participant's actual contribution ratio
(determined after application of this paragraph) by his "414(s)
Compensation". The actual contribution ratio must be rounded to the
nearest one-hundredth of one percent for Plan Years beginning after
December 31, 1988. In no case shall the amount of Excess Aggregate
Contribution with respect to any Highly Compensated Participant exceed the
amount of Employer matching contributions made pursuant to Section 11.1(b)
(to the extent taken into account pursuant to Section 11.6(a) and any
Qualified Non-Elective Contributions or elective deferrals taken into
account pursuant to Section 11.6(c) on behalf of such Highly Compensated
Participant for such Plan Year.
(f) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after first
determining the Excess Contributions, if any, to be treated as voluntary
Employee contributions due to recharacterization for the plan year of any
other qualified cash or deferred arrangement (as defined in Code Section
401(k)) maintained by the Employer that ends with or within the Plan Year.
(g) The determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual
contribution ratio is determined under the family aggregation rules shall
be accomplished as follows:
(1) If the actual contribution ratio for the Highly
Compensated Participant is determined in accordance with Section
11.6(d)(1), then the actual contribution ratio shall be reduced and
the Excess Aggregate Contributions for the family unit shall be
allocated among the Family Members in proportion to the sum of
Employer matching contributions made pursuant to Section 11.1(b) (to
the extent taken into account pursuant to Section 11.6(a) and any
Qualified Non-Elective Contributions or elective deferrals taken into
account pursuant to Section 11.6(c) of each Family Member that were
combined to determine the group actual contribution ratio.
(2) If the actual contribution ratio for the Highly
Compensated Participant is determined under Section 11.6(d)(2), then
the actual contribution ratio shall first be reduced, as required
herein, but not below the actual contribution ratio of the group of
Family Members who are not Highly Compensated Participants without
regard to family aggregation. The Excess Aggregate Contributions
resulting from this initial reduction shall be allocated among the
Highly Compensated Participants whose Employer matching contributions
made pursuant to Section 11.1(b) (to the extent taken into account
pursuant to Section 11.6(a) and any Qualified Non-Elective
Contributions or elective deferrals taken into account pursuant to
Section 11.6(c) were combined to determine the actual contribution
ratio. If further reduction is still required, then Excess Aggregate
Contributions resulting from this further reduction shall be
determined by taking into account the contributions of all Family
Members and shall be allocated among them in proportion to their
respective Employer matching contributions made pursuant to Section
11.1(b) (to the extent taken into account pursuant to Section 11.6(a)
and any Qualified Non-Elective Contributions or elective deferrals
taken into account pursuant to Section 11.6(c).
(h) Notwithstanding the above, within twelve (12) months
after the end of the Plan Year, the Employer may make a special Qualified
Non-Elective Contribution on behalf of Non-Highly Compensated Participants
in an amount sufficient to satisfy one of the tests set forth in Section
11.6. Such contribution shall be allocated to the Participant's Qualified
Non-Elective Account of each Non-Highly Compensated Participant in the
same proportion that each Non-Highly Compensated Participant's
Compensation for the year bears to the total Compensation of all Non-
Highly Compensated Participants. A separate accounting shall be
maintained for the purpose of excluding such contributions from the
"Actual Deferral Percentage" tests pursuant to Section 11.4.
(i) For purposes of this Section, "Income" means the
income or loss allocable to Excess Aggregate Contributions which shall
equal the sum of the allocable gain or loss for the Plan Year and the
allocable gain or loss for the period between the end of the Plan Year and
the date of distribution ("gap period"). The income or loss allocable to
Excess Aggregate Contributions for the Plan Year and the "gap period" is
calculated separately and is determined by multiplying the income or loss
for the Plan Year or the "gap period" by a fraction. The numerator of the
fraction is the Excess Aggregate Contributions for the Plan Year. The
denominator of the fraction is the total Participant's Account
attributable to Employer matching contributions subject to Section 11.6
and any Qualified Non-Elective Contributions and elective deferrals taken
into account pursuant to Section 11.6(c) as of the end of the Plan Year or
the "gap period", reduced by the gain allocable to such total amount for
the Plan Year or the "gap period" and increased by the loss allocable to
such total amount for the Plan Year or the "gap period".
In lieu of the "fractional method" described above, a "safe
harbor method" may be used to calculate the allocable Income for the "gap
period". Under such "safe harbor method", allocable Income for the "gap
period" shall be deemed to equal ten percent (10%) of the Income allocable
to Excess Aggregate Contributions for the Plan Year of the Participant
multiplied by the number of calendar months in the "gap period". For
purposes of determining the number of calendar months in the "gap period",
a distribution occurring on or before the fifteenth day of the month shall
be treated as having been made on the last day of the preceding month and
a distribution occurring after such fifteenth day shall be treated as
having been made on the first day of the next subsequent month.
The Income allocable to Excess Aggregate Contributions
resulting from recharacterization of Elective Contributions shall be
determined and distributed as if such recharacterized Elective
Contributions had been distributed as Excess Contributions.
Notwithstanding the above, for Plan Years which began in
1987, Income during the "gap period" shall not be taken into account.
11.8. ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the Participant,
shall direct the Trustee to distribute to any Participant in any one Plan
Year up to the lesser of (1) 100% of his accounts as specified in the
Adoption Agreement valued as of the last Anniversary Date or other
valuation date or (2) the amount necessary to satisfy the immediate and
heavy financial need of the Participant. Any distribution made pursuant
to this Section shall be deemed to be made as of the first day of the Plan
Year or, if later, the valuation date immediately preceding the date of
distribution, and the account from which the distribution is made shall be
reduced accordingly. Withdrawal under this Section shall be authorized
only if the distribution is on account of one of the following or any
other items permitted by the Internal Revenue Service:
(1) Medical expenses described in Code Section 213(d)
incurred by the Participant, his spouse, or any of his dependents (as
defined in Code Section 152);
(2) The purchase (excluding mortgage payments) of a
principal residence for the Participant;
(3) Payment of tuition for the next semester or
quarter of post-secondary education for the Participant, his spouse,
children, or dependents; or
(4) The need to prevent the eviction of the
Participant from his principal residence or foreclosure on the
mortgage of the Participant's principal residence.
(b) No such distribution shall be made from the
Participant's Account until such Account has become fully Vested.
(c) No distribution shall be made pursuant to this Section
unless the Administrator, based upon the Participant's representation and
such other facts as are known to the Administrator, determines that all of
the following conditions are satisfied:
(1) The distribution is not in excess of the amount
of the immediate and heavy financial need of the Participant;
(2) The Participant has obtained all distributions,
other than hardship distributions, and all nontaxable loans currently
available under all plans maintained by the Employer;
(3) The Plan, and all other plans maintained by the
Employer, provide that the Participant's elective deferrals and
voluntary Employee contributions will be Suspended for at least
twelve (12) months after receipt of the hardship distribution; and
(4) The Plan, and all other 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 distribution in excess of the
applicable limit under Code Section 402(g) for such next taxable year
less the amount of such Participant's elective deferrals for the
taxable year of the hardship distribution.
(d) Notwithstanding the above, distributions from the
Participant's Elective Account and Qualified Non-Elective Account pursuant
to this Section shall be limited solely to the Participant's Deferred
Compensation and any income attributable thereto credited to the
Participant's Elective Account as of December 31, 1988.
(e) Any distribution made pursuant to this Section shall
be made in a manner which is consistent with and satisfies the provisions
of Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 411(a)(11) and 417 and the Regulations
thereunder.
<PAGE>
ADOPTION AGREEMENT FOR
NORTH CENTRAL TRUST COMPANY
NON-STANDARDIZED 401(K) PROFIT SHARING
PLAN AND TRUST
The undersigned Employer adopts the North Central Trust Company Non-
Standardized 401(k) Profit Sharing Plan for those Employees who shall
qualify as Participants hereunder, to be known as the
A1 NORTHLAND CRANBERRIES, INC. 401(k) RETIREMENT PLAN
It shall be effective as of the date specified below. The Employer
hereby selects the following Plan specifications:
CAUTION: The failure to properly fill out this Adoption Agreement
may result in disqualification of the Plan.
EMPLOYER INFORMATION
B1 Name of Employer: Northland Cranberries, Inc.
B2 Address: 800 First Avenue South
Wisconsin Rapids, WI 54495-8020
City State Zip Code
Telephone: (715) 424-4444
B3 Employer Identification Number: 39 - 1583759
B4 Date Business Commenced: May 8, 1987
Copyright 1990-N North Central Trust Company
B5 TYPE OF ENTITY
a. ( ) S Corporation
b. ( ) Professional Service Corporation
c. (X) Corporation
d. ( ) Sole Proprietorship
e. ( ) Partnership
f. ( ) Other
AND, is the Employer a member of...
g. a controlled group? ( ) Yes (X) No
h. an affiliated service group? ( ) Yes (X) No
B6 NAME(S) OF TRUSTEE(S) a. North Central Trust Company
b.
c.
B7 TRUSTEES' ADDRESS a. ( ) Use Employer Address
b. (X) 311 Main Street
Street
La Crosse , WI 54601
City State Zip Code
B8 LOCATION OF EMPLOYER'S PRINCIPAL OFFICE:
a. (X) state b. ( ) commonwealth of c. Wisconsin
and this Plan and Trust shall be governed under the same.
B9 EMPLOYER FISCAL YEAR means the 12 consecutive month period:
Commencing on a. September 1st (e.g. January 1st) and
month day
ending on b. August 31st .
month day
PLAN INFORMATION
C1 EFFECTIVE DATE
This Adoption Agreement of the North Central Trust Company Non-
Standardized 401(k) Profit Sharing Plan and Trust shall:
a. (X) establish a new Plan and Trust effective as of January 1,
1996 hereinafter called "Effective Date").
b. ( ) constitute an amendment and restatement in its entirety of
a previously established qualified Plan and Trust of the
Employer which was effective _____________________
(hereinafter called the "Effective Date"). Except as
specifically provided in the Plan, the effective date of
this amendment and restatement is __________________
(For TRA '86 amendments, enter the first day of the first
Plan Year beginning in 1989).
C2 PLAN YEAR means the 12 consecutive month period:
Commencing on a. January 1st (e.g., January 1st)
and ending on b. December 31st .
IS THERE A SHORT PLAN YEAR?
c. (X) No
d. ( ) Yes, beginning ____ and ending _______.
C3 ANNIVERSARY DATE of Plan (Annual Valuation Date)
a. December 31st
month day
C4 PLAN NUMBER assigned by the Employer (select one)
a. (X) 001 b. ( ) 002 c. ( ) 003 d. ( ) Other ______.
C5 NAME OF PLAN ADMINISTRATOR (Document provides for the Employer to
appoint an Administrator. If none is named, the Employer will become
the Administrator.)
a. (X) Employer (Use Employer Address)
b. ( ) Name:_______________________
Address: __________________________
_____________ ______________ _______
City State Zip
Telephone: ___________________________
Administrator's I.D. Number ______-___________
C6 PLAN'S AGENT FOR SERVICE OF LEGAL PROCESS
a. (X) Employer (Use Employer Address)
b. ( ) Name ___________________________________________
Address _________________________________________________
____________ __________ ______
City State Zip
ELIGIBILITY, VESTING AND RETIREMENT AGE
D1 ELIGIBLE EMPLOYEES (Plan Section 1.15) shall mean:
a. (X) all Employees who have satisfied the eligibility
requirements.
b. ( ) all Employees who have satisfied the eligibility
requirements except those checked below:
1. ( ) Employees paid by commissions only.
2. ( ) Employees hourly paid.
3. ( ) Employees paid by salary.
4. ( ) Employees whose employment is governed by a collective
bargaining agreement between the Employer and
"employee representatives" under which retirement
benefits were the subject of good faith bargaining.
For this purpose, the term "employee representatives"
does not include any organization more than half of
whose members are employees who are owners, officers,
or executives of the Employer.
5. ( ) Highly Compensated Employees.
6. ( ) Employees who are non-resident aliens who received no
earned income (within the meaning of Code Section
911(d)(2)) from the Employer which constitutes income
from sources within the United States (within the
meaning of Code Section 861(a)(3)).
7. ( ) Other __________________________
NOTE: For purposes of this section, the term Employee shall
include all Employees of this Employer and any leased
employees deemed to be Employees under Code Section
414(n) or 414(o).
D2 EMPLOYEES OF AFFILIATED EMPLOYERS (Plan Section 1.16)
Employees of Affiliated Employers:
a. ( ) will not or N/A
b. (X) will
be treated as Employees of the Employer adopting the Plan.
NOTE: If D2b is elected each Affiliated Employer should execute
this Adoption Agreement as a Participating Employer.
D3 HOURS OF SERVICE (Plan Section 1.30) will be determined on the basis
of the method selected below. Only one method may be selected. The
method selected will be applied to all Employees covered under the
Plan.
a. (X) On the basis of actual hours for which an Employee is paid
or entitled to payment.
b. ( ) On the basis of days worked. An Employee will be credited
with ten (10) Hours of Service if under the Plan such
Employee would be credited with at least one (1) Hour of
Service during the day.
c. ( ) On the basis of weeks worked. An Employee will be credited
forty-five (45) Hours of Service if under the Plan such
Employee would be credited with at least one (1) Hour of
Service during the week.
d. ( ) On the basis of semi-monthly payroll periods. An Employee
will be credited with ninety-five (95) Hours of Service if
under the Plan such Employee would be credited with at
least one (1) Hour of Service during the semi-monthly
payroll period.
e. ( ) On the basis of months worked. An Employee will be
credited with one hundred ninety (190) Hours of Service if
under the Plan such Employee would be credited with at
least one (1) Hour of Service during the month.
D4 CONDITIONS OF ELIGIBILITY (Plan Section 3.1)
(Check either a OR b and c, and if applicable, d)
Any Eligible Employee will be eligible to participate in the Plan if
such Eligible Employee has satisfied the service and age
requirements, if any, specified below:
a. ( ) NO AGE OR SERVICE REQUIRED.
b. (X) SERVICE REQUIREMENT. (may not exceed 1 year.)
1. ( ) None
2. ( ) 1/2 Year of Service
3. (X) 1 Year of Service
4. ( ) Other:
NOTE: If the Year(s) of Service selected is or includes a
fractional year, an Employee will not be required to
complete any specified number of Hours of Service to
receive credit for such fractional year. If expressed in
Months of Service, an Employee will not be required to
complete any specified number of Hours of Service in a
particular month.
c. (X) AGE REQUIREMENT (may not exceed 21)
1. ( ) N/A - No Age Requirement.
2. ( ) 20 1/2
3. ( ) 21
4. (X) Other: 18
d. (X) FOR NEW PLANS ONLY - Regardless of any of the above age or
service requirements, any Eligible Employee who was
employed on the Effective Date of the Plan shall be
eligible to participate hereunder and shall enter the Plan
as of such date.
D5 EFFECTIVE DATE OF PARTICIPATION (Plan Section 3.2)
An Eligible Employee shall become a Participant as of:
a. ( ) the first day of the Plan Year in which he met the
requirements.
b. ( ) the first day of the Plan Year in which he met the
requirements, if he met the requirements in the first 6
months of the Plan Year, or as of the first day of the next
succeeding Plan Year if he met the requirements in the last
6 months of the Plan Year.
c. (X) the earlier of the first day of the seventh month or the
first day of the Plan Year coinciding with or next
following the date on which he met the requirements.
d. ( ) the first day of the Plan Year next following the date on
which he met the requirements. (Eligibility must be 1/2
Year of Service or less and age 20 1/2 or less.)
e. ( ) the first day of the month coinciding with or next
following the date on which he met the requirements.
f. ( ) Other: ____________________________________,
provided that an Employee who has satisfied the
maximum age and service requirements that are
permissible in Section D4 above and who is otherwise
entitled to participate, shall commence participation
no later than the earlier of (a) 6 months after such
requirements are satisfied, or (b) the first day of
the first Plan Year after such requirements are
satisfied, unless the Employee separates from service
before such participation date.
D6 VESTING OF PARTICIPANT'S INTEREST (Plan Section 6.4(b))
The vesting schedule, based on number of Years of Service, shall be
as follows:
a. ( ) 100% upon entering Plan. (Required if eligibility
requirement is greater than one (1) Year of Service.)
b. ( ) 0-2 years 0% c. ( ) 0-4 years 0%
3 years 100% 5 years 100%
d. ( ) 0-1 years 0% e. ( ) 1 year 25%
2 years 20% 2 years 50%
3 years 40% 3 years 75%
4 years 60% 4 years 100%
5 years 80%
6 years 100%
f. (X) 1 year 20% g. ( ) 0-2 years 0%
2 years 40% 3 years 20%
3 years 60% 4 years 40%
4 years 80% 5 years 60%
5 years 100% 6 years 80%
7 years 100%
h. ( ) Other - Must be at least as liberal as either c or g
above.
Years of Service Percentage
_______________ __________
_______________ __________
_______________ __________
_______________ __________
D7 FOR AMENDED PLANS (Plan Section 6.4(f)) If the vesting schedule has
been amended to a less favorable schedule, enter the pre-amended
schedule below:
a. ( ) Vesting schedule has not been amended or amended schedule
is more favorable in all years.
b. ( ) Years of Service Percentage
_______________ __________
_______________ __________
_______________ __________
_______________ __________
D8 TOP HEAVY VESTING (Plan Section 6.4(c)) If this Plan becomes a Top
Heavy Plan, the following vesting schedule, based on number of Years
of Service, for such Plan Year and each succeeding Plan Year,
whether or not the Plan is a Top Heavy Plan, shall apply and shall
be treated as a Plan amendment pursuant to this Plan. Once
effective, this schedule shall also apply to any contributions made
prior to the effective date of Code Section 416 and/or before the
Plan became a Top Heavy Plan.
a. (X) N/A (D6a, b, d, e or f was selected)
b. ( ) 0-1 year 0% c. ( ) 0-2 years 0%
2 years 20% 3 years 100%
3 years 40%
4 years 60%
5 years 80%
6 years 100%
NOTE: This section does not apply to the Account balances of any
Participant who does not have an Hour of Service after the
Plan has initially become top heavy. Such Participant's
Account balance attributable to Employer contributions and
Forfeitures will be determined without regard to this
section.
D9 VESTING (Plan Section 6.4(h)) In determining Years of Service for
vesting purposes, Years of Service attributable to the following
shall be EXCLUDED:
a. (X) Service prior to the Effective Date of the Plan or a
predecessor plan.
b. ( ) N/A
c. (X) Service prior to the time an Employee attained age 18.
d. ( ) N/A
D10 PLAN SHALL RECOGNIZE SERVICE WITH PREDECESSOR EMPLOYER
a. (X) No.
b. ( ) Yes: Years of Service with
shall be recognized for the purpose of this Plan.
NOTE: If the predecessor Employer maintained this qualified
Plan, then Years of Service with such predecessor Employer
shall be recognized pursuant to Section 1.72 and b. must
be marked.
D11 NORMAL RETIREMENT AGE ("NRA") (Plan Section 1.40) means:
a. (X) the date a Participant attains his 65th birthday. (not to
exceed 65th)
b. ( ) the later of the date a Participant attains his ______
birthday (not to exceed 65th) or the c. _________ (not
to exceed 5th) anniversary of the first day of the Plan
Year in which participation in the Plan commenced.
D12 NORMAL RETIREMENT DATE (Plan Section 1.41) shall commence:
a. (X) as of the Participant's "NRA".
OR (must select b. or c. AND 1. or 2.)
b. ( ) as of the first day of the month...
c. ( ) as of the Anniversary Date...
1. ( ) coinciding with or next following the Participant's
"NRA".
2. ( ) nearest the Participant's "NRA".
D13 EARLY RETIREMENT DATE (Plan Section 1.12) means the:
a. (X) No Early Retirement provision provided.
b. ( ) date on which a Participant...
c. ( ) first day of the month coinciding with or next following
the date on which a Participant...
d. ( ) Anniversary Date coinciding with or next following the
date on which a Participant...
AND, if b, c or d was selected...
1. ( ) attains his _________ birthday and has
2. ( ) completed at least _______ Years of Service.
CONTRIBUTIONS, ALLOCATIONS AND DISTRIBUTIONS
E1 a. COMPENSATION (Plan Section 1.9) with respect to any
Participant means:
1. (X) "415 Compensation."
2. ( ) Compensation reportable as wages on Form W-2.
b. COMPENSATION shall be
1. (X) actually paid (must be selected if Plan is
integrated)
2. ( ) accrued
c. HOWEVER, for non-integrated plan, Compensation shall exclude
(select all that apply):
1. (X) N/A. No exclusions
2. ( ) overtime
3. ( ) bonuses
4. ( ) commissions
5. ( ) other
d. FOR PURPOSES OF THIS SECTION E1, Compensation shall be based on:
1. (X) the Plan Year.
2. ( ) the Fiscal Year coinciding with or ending within
the Plan Year.
3. ( ) the Calendar Year coinciding with or ending
within the Plan Year.
NOTE: The Limitation Year shall be the same as the year on
which Compensation is based.
e. HOWEVER, for an Employee's first year of participation,
Compensation shall be recognized as of:
1. ( ) the first day of the Plan Year.
2. (X) the date the Participant entered the Plan.
f. IN ADDITION, COMPENSATION and "414(s) Compensation" 1. (X)
shall 2. ( ) shall not include compensation which is not
currently includible in the Participant's gross income by reason
of the application of Code Sections 125, 402(a)(8),
402(h)(1)(B), or 403(b).
E2 SALARY REDUCTION ARRANGEMENT - ELECTIVE CONTRIBUTION (Plan Section
11.2) Each Employee may elect to have his Compensation reduced by:
a. ( ) __________%
b. ( ) up to _____________%
c. ( ) from ___________% to ____________%
d. (X) up to the maximum percentage allowable not to exceed the
limits of Code Sections 401(k), 404 and 415.
AND...
e. (X) A Participant may elect to commence salary reductions as
of 01/01, 04/01, 07/01, 10/01 (ENTER AT LEAST ONE DATE OR
PERIOD). A Participant may modify the amount of salary
reductions as of the 01/01, 04/01, 07/01, 10/01 (ENTER
AT LEAST ONE DATE OR PERIOD).
AND...
Shall cash bonuses paid within 2 1/2 months after the end of the
Plan Year be subject to the salary reduction election?
f. (X) Yes
g. ( ) No
E3 FORMULA FOR DETERMINING EMPLOYER'S MATCHING CONTRIBUTION (Plan
Section 11.1(b))
a. ( ) N/A. There shall be no matching contributions.
b. ( ) The Employer shall make matching contributions equal to
________% (e.g. 50%) of the Participant's salary
reductions.
c. (X) The Employer may make matching contributions equal to a
discretionary percentage, to be determined by the
Employer, of the Participant's salary reductions.
d. ( ) The Employer shall make matching contributions equal to
the sum of _____% of the portion of the Participant's
salary reduction which does not exceed ______ %
of the Participant's Compensation plus _____% of the
portion of the Participant's salary reduction which
exceeds _____% of the Participant's Compensation, but
does not exceed ______ % of the Participant's
Compensation.
e. ( ) The Employer shall make matching contributions equal to
the percentage determined under the following schedule:
Participant's Total Matching Percentage
Years of Service
_______________ __________
_______________ __________
_______________ __________
_______________ __________
FOR PLANS WITH MATCHING CONTRIBUTIONS
f. (X) Matching contributions g. ( ) shall h. (X) shall
not be used in satisfying the deferral percentage tests.
(If used, full vesting and restrictions on withdrawals
will apply and the match will be deemed to be an Elective
Contribution).
i. (X) Shall a Year of Service be required in order to share in
the matching contributions?
With respect to Plan Years beginning after 1989...
1. (X) Yes (Could cause Plan to violate minimum
participation and coverage requirements under Code
Sections 401(a)(26) and 410)
2. ( ) No
With respect to Plan Years beginning before 1990...
1. (X) N/A New Plan or same as years beginning after 1989.
2. ( ) Yes
3. ( ) No
j. (X) In determining matching contributions, only salary
reductions up to 10 % of a Participant's Compensation
will be matched. k. ( ) N/A
l. ( ) The matching contribution made on behalf of a Participant
for any Plan Year shall not exceed $____________.
m. (X) N/A
n. (X) Matching contributions shall be made on behalf of
1. (X) all Participants.
2. ( ) only Non-Highly Compensated Employees.
E4 WILL A DISCRETIONARY EMPLOYER CONTRIBUTION BE PROVIDED (OTHER THAN A
DISCRETIONARY MATCHING OR QUALIFIED NON-ELECTIVE CONTRIBUTION) (Plan
Section 11.1(c))?
a. ( ) No.
b. ( ) Yes, the Employer may make a discretionary contribution
out of its current or accumulated Net Profit.
c. (X) Yes, the Employer may make a discretionary contribution
which is not limited to its current or accumulated Net
Profit.
IF YES (b. or c. is selected above), the Employer's
discretionary contribution shall be allocated as follows:
d. (X) FOR A NON-INTEGRATED PLAN
The Employer discretionary contribution for the Plan Year shall
be allocated in the same ratio as each Participant's
Compensation bears to the total of such Compensation of all
Participants.
e. ( ) FOR AN INTEGRATED PLAN
The Employer discretionary contribution for the Plan Year shall
be allocated in accordance with Plan Section 4.3(b)(2) based on
a Participant's Compensation in excess of:
f. ( ) The Taxable Wage Base.
g. ( ) The greater of $10,000 or 20% of the Taxable Wage
Base.
h. ( ) ___________% of the Taxable Wage Base. (See
Note below)
i. ( ) $___________. (see Note below)
NOTE: The integration percentage of 5.7% shall be reduced
to:
1. 4.3% if h. or i. above is more than 20% and less than
or equal to 80% of the Taxable Wage Base.
2. 5.4% if h. or i. above is less than 100% and more
than 80% of the Taxable Wage Base.
E5 QUALIFIED NON-ELECTIVE CONTRIBUTIONS (Plan Section 11.1(d))
a. (X) N/A. There shall be no Qualified Non-Elective
Contributions except as provided in Section 11.5(b) and
11.7(h).
b. ( ) The Employer shall make a Qualified Non-Elective
Contribution equal to _________% of the total
Compensation of all Participants eligible to share in the
allocations.
c. ( ) The Employer may make a Qualified Non-Elective
Contribution in the amount to be determined by the
Employer.
E6 FORFEITURES (Plan Section 4.3(e))
a. Forfeitures of contributions other than matching contributions
shall be...
1. ( ) added to the Employer's contribution under the Plan.
2. (X) allocated to all Participants eligible to share in
the allocations in the same proportion that each
Participant's Compensation for the year bears to the
Compensation of all Participants for such year.
b. Forfeitures of matching contributions shall be...
1. ( ) N/A. No matching contributions or match is fully
vested.
2. ( ) used to reduce the Employer's matching contribution.
3. (X) allocated to all Participant's eligible to share in
the allocations in proportion to each such
Participant's Compensation for the year.
4. ( ) allocated to all Non-Highly Compensated Employee's
eligible to share in the allocations in proportion to
each such Participant's Compensation for the year.
E7 ALLOCATIONS TO ACTIVE PARTICIPANTS (Plan Section 4.3) With respect
to Plan Years beginning after 1989, a Participant...
a. (X) shall (Plan may become discriminatory)
b. ( ) shall not be required to complete a Year of Service in
order to share in any Non-Elective Contributions (other
than matching contributions) or Qualified Non-Elective
Contributions. For Plan Years beginning before 1990, the
Plan provides that a Participant must complete a Year of
Service to share in the allocations.
E8 ALLOCATIONS TO TERMINATED PARTICIPANTS (Plan Section 4.3(k))
Any Participant who terminated employment during the Plan Year (i.e.
not actively employed on the last day of the Plan Year) for reasons
other than death, Total and Permanent Disability or retirement:
a. With respect to Employer Non-Elective Contributions (other than
matching), Qualified Non-Elective Contributions, and
Forfeitures:
1. For Plan Years beginning after 1989,
i. ( ) N/A, Plan does not provide for such
contributions.
ii. ( ) shall share in the allocations provided such
Participant completed more than 500 Hours of
Service.
iii.( ) shall share in such allocations provided such
Participant completed a Year of Service.
iv. (X) shall not share in such allocations, regardless
of Hours of Service.
2. For Plan Years beginning before 1990,
i. (X) N/A, new Plan, or same as for Plan Years
beginning after 1989.
ii. ( ) shall share in such allocations provided such
Participant completed a Year of Service.
iii.( ) shall not share in such allocations, regardless
of Hours of Service.
NOTE: If a.1.iii or iv is selected, the Plan could violate
minimum participation and coverage requirements under
Code Sections 401(a)(26) and 410.
b. With respect to the allocation of Employer Matching
Contributions, a Participant:
1. For Plan Years beginning after 1989,
i. ( ) N/A, Plan does not provide for matching
contributions.
ii. ( ) shall share in the allocations, regardless of
Hours of Service.
iii.( ) shall share in the allocations provided such
Participant completed more than 500 Hours of
Service.
iv. ( ) shall share in such allocations provided such
Participant completed a Year of Service.
v. (X) shall not share in such allocations, regardless
of Hours of Service.
2. For Plan Years beginning before 1990,
i. (X) N/A, new Plan, or same as years beginning after
1989.
ii. ( ) shall share in the allocations, regardless of
Hours of Service.
iii.( ) shall share in such allocations provided such
Participant completed a Year of Service.
iv. ( ) shall not share in such allocations, regardless
of Hours of Service.
NOTE: If b.1.iv or v is selected, the Plan could violate
minimum participation and coverage requirements under
Code Section 401(a)(26) and 410.
E9 ALLOCATIONS OF EARNINGS (Plan Section 4.3(c))
Allocations of earnings with respect to amounts contributed to the
Plan after the previous Anniversary Date or other valuation date
shall be determined...
a. ( ) by using a weighted average.
b. ( ) by treating one-half of all such contributions as being a
part of the Participant's nonsegregated account balance as
of the previous Anniversary Date or valuation date.
c. ( ) by using the method specified in Section 4.3(c).
d. (X) Other Daily Valuation.
E10 LIMITATIONS ON ALLOCATIONS (Plan Section 4.4)
a. If any Participant is or was covered under another qualified
defined contribution plan maintained by the Employer, other than
a Master or Prototype Plan, or if the Employer maintains a
welfare benefit fund, as defined in Code Section 419(e), or an
individual medical account, as defined in Code Section
415(1)(2), under which amounts are treated as Annual Additions
with respect to any Participant in this Plan:
1. (X) N/A.
2. ( ) The provisions of Section 4.4(b) of the Plan will
apply as if the other plan were a Master or Prototype
Plan.
3. ( ) 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.
b. If any Participant is or ever has been a Participant in a
defined benefit plan maintained by the Employer:
1. (X) N/A.
2. ( ) In any Limitation Year, the Annual Additions credited
to the Participant under this Plan may not cause the
sum of the Defined Benefit Plan Fraction and Defined
Contribution Fraction to exceed 1.0. If the
Employer's contribution that would otherwise be made
on the Participant's behalf during the limitation
year would cause the 1.0 limitation to be exceeded,
the rate of contribution under this Plan will be
reduced so that the sum of the fractions equals 1.0.
If the 1.0 limitation is exceeded because of an
Excess Amount, such Excess Amount will be reduced in
accordance with Section 4.4(a)(4) of the Plan.
3. ( ) Provide the method under which the Plans involved
will satisfy the 1.0 limitation in a manner that
precludes Employer discretion.
E11 DISTRIBUTIONS UPON DEATH (Plan Section 6.6(h))
Distributions upon the death of a Participant prior to receiving any
benefits shall...
a. (X) be made pursuant to the election of the Participant or
beneficiary.
b. ( ) begin within 1 year of death for a designated beneficiary
and be payable over the life (or over a period not
exceeding the life expectancy) of such beneficiary, except
that if the beneficiary is the Participant's spouse, begin
within the time the Participant would have attained age
70 1/2.
c. ( ) be made within 5 years of death for all beneficiaries.
d. ( ) other:
E12 LIFE EXPECTANCIES (Plan Section 6.5(f)) for minimum distributions
required pursuant to Code Section 401(a)(9) shall...
a. ( ) be recalculated at the Participant's election.
b. (X) be recalculated.
c. ( ) not be recalculated.
E13 CONDITIONS FOR DISTRIBUTIONS UPON TERMINATION
Distributions upon termination of employment pursuant to Section
6.4(a) of the Plan shall not be made unless the following conditions
have been satisfied:
a. (X) N/A. Immediate distributions may be made at Participant's
election.
b. ( ) The Participant has incurred _____ 1-Year Break(s) in
Service.
c. ( ) The Participant has reached his or her Early or Normal
Retirement Age.
d. ( ) Distributions may be made at the Participant's election on
or after the Anniversary Date following termination of
employment.
e. ( ) Other:____________________
E14 FORM OF DISTRIBUTIONS (Plan Sections 6.5 and 6.6) Distributions
under the Plan may be made...
a. 1. ( ) in lump sums.
2. (X) in lump sums or installments.
b. AND, pursuant to Plan Section 6.13,
1. (X) no annuities are allowed (avoids Joint and Survivor
rules).
2. ( ) annuities are allowed (Plan Section 6.13 shall not
apply).
NOTE: b.1. above may not be elected if this is an amendment
to a plan which permitted annuities as a form of
distribution or if this Plan has accepted a plan to
plan transfer of assets from a plan which permitted
annuities as a form of distribution.
c. AND may be made in...
1. (X) cash only (except for insurance or annuity
contracts).
2. ( ) cash or property.
TOP HEAVY REQUIREMENTS
F1 TOP HEAVY DUPLICATIONS (Plan Section 4.3(i)): When a Non-Key
Employee is a Participant in this Plan and a Defined Benefit Plan
maintained by the Employer, indicated which method shall be utilized
to avoid duplication of top heavy minimum benefits.
a. (X) The Employer does not maintain a Defined Benefit Plan.
b. ( ) A minimum, non-integrated contribution of 5% of each Non-
Key Employee's total Compensation shall be provided in
this Plan, as specified in Section 4.3(i). (The Defined
Benefit and Defined Contribution Fractions will be
computed using 100% if this choice is selected.)
c. ( ) A minimum, non-integrated contribution of 7 1/2% of each
Non-Key Employee's total Compensation shall be provided
in this Plan, as specified in Section 4.3(i). (If this
choice is selected, the Defined Benefit and Defined
Contribution Fractions will be computed using 125% for all
Plan Years in which the Plan is Top Heavy, but not Super
Top Heavy.)
d. ( ) Specify the method under which the Plans will provide top
heavy minimum benefits for Non-Key Employees that will
preclude Employer discretion and avoid inadvertent
omissions, including any adjustments required under Code
Section 415(e).
____________________________________________________
____________________________________________________
____________________________________________________
____________________________________________________
F2 PRESENT VALUE OF ACCRUED BENEFIT (Plan Section 2.2) for Top Heavy
purposes where the Employer maintains a Defined Benefit Plan in
addition to the Plan, shall be based on...
a. (X) N/A. The Employer does not maintain a defined benefit
plan.
b. ( ) Interest Rate: _____________________________
Mortality Table: _______________________________
F3 TOP HEAVY DUPLICATIONS: Employer maintaining two (2) or more
Defined Contribution Plans.
a. (X) N/A.
b. ( ) A minimum, non-integrated contribution of 3% of each Non-
Key Employee's total Compensation shall be provided in the
Money Purchase Plan (or other plan subject to Code
Section 412), where the Employer maintains two (2) or more
non-paired Defined Contribution Plans.
c. ( ) Specify the method under which the Plans will provide top
heavy minimum benefits for Non-Key Employees that will
preclude Employer discretion and avoid inadvertent
omissions, including any adjustments required under Code
Section 415(e).
____________________________________________________
____________________________________________________
MISCELLANEOUS
G1 LOANS TO PARTICIPANTS (Plan Section 7.4)
a. ( ) Yes, loans may be made up to $50,000 or 1/2 Vested
interest.
b. (X) No, loans may not be made.
IF YES, (check all that apply)...
c. ( ) loans shall be treated as a Directed Investment.
d. ( ) loans shall only be made for hardship or financial
necessity.
e. ( ) the minimum loan shall be $1,000.
f. ( ) $10,000 de minimis loans may be made regardless of Vested
interest. (If selected, plan may need security in
addition to Vested interest).
NOTE: Department of Labor Regulations require the adoption of a
separate written loan program setting forth the
requirements outlined in Plan Section 7.4.
G2 DIRECTED INVESTMENT ACCOUNTS (Plan Section 4.8) are permitted for
the interest in any one or more accounts.
a. (X) Yes, regardless of the Participant's Vested interest in
the Plan.
b. ( ) Yes, but only with respect to the Participant's Vested
interest in the Plan.
c. ( ) Yes, but only with respect to those accounts which are
100% Vested.
d. ( ) No directed investments are permitted.
G3 TRANSFERS FROM QUALIFIED PLANS (Plan Section 4.6)
a. (X) Yes, transfers from qualified plans (and rollovers) will
be allowed.
b. ( ) No, transfers from qualified plans (and rollovers) will
not be allowed.
AND, transfers shall be permitted...
c. ( ) from any Employee, even if not a Participant.
d. (X) from Participants only.
G4 HARDSHIP DISTRIBUTIONS (Plan Section 6.11 and 11.8)
a. (X) Yes, from any accounts which are 100% Vested.
b. ( ) Yes, from Participant's Elective Account only.
c. ( ) Yes, but limited to the Participant's Account only.
d. ( ) No.
NOTE: Distributions from a Participant's Elective Account are
limited to a portion of such account attributable to such
Participant's Deferred Compensation and earnings
attributable thereto up to December 31, 1988. Also
hardship distributions are not permitted from a
Participant's Qualified Non-Elective Account.
G5 PRE-RETIREMENT DISTRIBUTION (Plan Section 6.10)
a. (X) If a Participant has reached the age of 59-1/2 ,
distributions may be made, at the Participant's election,
from any accounts which are 100% Vested without requiring
the Participant to terminate employment.
b. ( ) No pre-retirement distribution may be made.
NOTE: Distributions from a Participant's Elective Account and
Qualified Non-Elective Account are not permitted prior to
age 59 1/2.
G6 LIFE INSURANCE (Plan Section 7.2(e)) may be purchased with Plan
contributions.
a. (X) No life insurance may be purchased.
b. ( ) Yes, at the option of the Administrator.
c. ( ) Yes, at the option of the Participant.
AND, the purchase of initial or additional life insurance shall be
subject to the following limitations: (select all that apply)
d. (X) N/A, no limitations.
e. ( ) each initial Contract shall have a minimum face amount of
$_________.
f. ( ) each additional Contract shall have a minimum face amount
of $_________.
g. ( ) the Participant has completed ______ Years of
Service.
h. ( ) the Participant has completed _______ Years of
Service while a Participant in the Plan.
i. ( ) the Participant is under age ___________ on the
Contract issue date.
j. ( ) the maximum amount of all Contracts on behalf of a
Participant shall not exceed $__________.
k. ( ) the maximum face amount of life insurance shall be
$___________.
The adopting Employer may not rely on an opinion letter issued by
the National Office of the Internal Revenue Service as evidence that
the plan is qualified under Code Section 401. In order to obtain
reliance with respect to plan qualification, the Employer must apply
to the appropriate Key District Office for a determination letter.
This Adoption Agreement may be used only in conjunction with basic
Plan document #01. This Adoption Agreement and the basic Plan
document shall together be known as North Central Trust Company Non-
Standardized 401(k) Profit Sharing Plan #01-005.
The adoption of this Plan, its qualification by the IRS, and the
related tax consequences are the responsibility of the Employer and
its independent tax and legal advisors.
North Central Trust Company will notify the Employer of any
amendments made to the Plan or of the discontinuance or abandonment
of the Plan provided this Plan has been acknowledged by North
Central Trust Company or its authorized representative. Furthermore,
in order to be eligible to receive such notification, we agree to
notify North Central Trust Company of any change in address.
IN WITNESS WHEREOF, the Employer and Trustee hereby cause this Plan to be
executed on this 11th day of January , 1996. Furthermore, this Plan may
not be used unless acknowledged by North Central Trust Company or its
authorized representative.
EMPLOYER: NORTH CENTRAL TRUST COMPANY
Northland Cranberries, Inc. /s/ John P. McCann
(enter name) John P. McCann
TRUSTEE
By: /s/________________________ ___________________________
TRUSTEE
PARTICIPATING EMPLOYER: ___________________________
TRUSTEE
Wildhawk, Inc.
(enter name)
By: /s/________________________
This Plan may not be used, and shall not be deemed to be a Prototype Plan,
unless an authorized representative of North Central Trust Company has
acknowledged the use of the Plan. Such acknowledgment is for
administerial purposes only. It acknowledges that the Employer is using
the Plan but does not represent that this Plan, including the choices
selected on the Adoption Agreement, has been reviewed by a representative
of the sponsor or constitutes a qualified retirement plan.
North Central Trust Company
By: /s/ John P. McCann
John P. McCann, Vice President
With regard to any questions regarding the provisions of the Plan,
adoption of the Plan, or the effect of an opinion letter from the IRS,
call or write (this information must be completed by the sponsor of this
Plan or its designated representative):
Name: North Central Trust Company
Address: 311 Main Street, La Crosse, WI 54601
Telephone: (608 782-1148
EXHIBIT 5
FOLEY & LARDNER
A T T O R N E Y S A T L A W
FIRSTAR CENTER
777 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202-5367
A MEMBER OF GLOBALEX
WITH MEMBER OFFICES IN
MADISON BERLIN
CHICAGO TELEPHONE (414) 271-2400 BRUSSELS
WASHINGTON, D.C. DRESDEN
JACKSONVILLE TELEX 26-819 FRANKFURT
ORLANDO LONDON
TALLAHASSEE (FOLEY LARD MIL) PARIS
TAMPA SINGAPORE
WEST PALM BEACH FACSIMILE (414) 297-4900 STUTTGART
TAIPEI
WRITER'S DIRECT LINE
March 7, 1996
Northland Cranberries, Inc.
800 First Avenue South
P.O. Box 8020
Wisconsin Rapids, Wisconsin 54495-8020
Ladies and Gentlemen:
We have acted as counsel for Northland Cranberries, Inc., a
Wisconsin corporation (the "Company"), in connection with the preparation
of a Form S-8 Registration Statement (the "Registration Statement") to be
filed by the Company with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Securities Act"), relating to
25,000 shares of the Company's Class A Common Stock, $.01 par value per
share (the "Class A Common Stock"), and interests in the Northland
Cranberries, Inc. 401(k) Retirement Plan and Trust (the "Plan") which may
be issued or acquired pursuant to the Plan.
In this regard, we have examined: (a) the Plan; (b) signed
copies of the Registration Statement; (c) the Company's Articles of
Incorporation and Bylaws, as amended to date; (d) resolutions of the
Company's Board of Directors relating to the Plan; and (e) such other
documents and records as we have deemed necessary to enable us to render
this opinion.
Based upon the foregoing, we are of the opinion that:
1. The Company is a corporation validly existing under the
laws of the State of Wisconsin.
2. It is presently contemplated that the shares of Class A
Common Stock to be acquired by the Plan will be purchased either in the
open market or directly from the Company or other private sources. To the
extent that the shares of Class A Common Stock acquired by the Plan shall
constitute shares issued by and purchased from the Company, such shares of
Class A Common Stock, when issued pursuant to the terms and conditions of
the Plan, and as contemplated in the Registration Statement, will be
validly issued, fully paid and nonassessable, except as otherwise provided
by Section 180.0622(2)(b) of the Wisconsin Statutes.
Jeffrey J. Jones, a partner in the law firm of Foley & Lardner,
is a director of the Company.
We consent to the use of this opinion as an exhibit to the
Registration Statement. In giving this consent, we do not admit that we
are "experts" within the meaning of Section 11 of the Securities Act or
within the category of persons whose consent is required by Section 7 of
said Act.
Very truly yours,
FOLEY & LARDNER
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement relating to 25,000 shares of Class A Common Stock of
Northland Cranberries, Inc. on Form S-8 of our report dated June 6,
1995, incorporated by reference in the Annual Report on Form
10-K of Northland Cranberries, Inc. for the year ended March 31,
1995.
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
March 6, 1996
