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ARTICLE I - DEFINITIONS
1.1 ACTUAL DEFERRAL PERCENTAGE
The ratio (expressed as a percentage and calculated separately for each
Participant) of:
(a) The amount of Employer contributions [as defined at (c) and
(d)] actually paid over to the Fund on behalf of such
Participant for the Plan Year to
(b) The Participant's Compensation for such Plan Year. (Unless
otherwise specified by the Employer in the Adoption
Agreement, Compensation will include all amounts earned from
the Employer and actually paid during the Plan Year).
Employer contributions on behalf of any Participant shall include:
(c) Any Elective Deferrals made pursuant to the Participant's
deferral election, including Excess Elective Deferrals, but
excluding Elective Deferrals that are either taken into
account in the Contribution Percentage test (provided the
ADP test is satisfied both with and without exclusion of
these Elective Deferrals) or are returned as excess Annual
Additions; and
(d) At the election of the Employer, Qualified Non-Elective
Contributions and Qualified Matching Contributions.
For purposes of computing Actual Deferral Percentages, an Employee who
would be a Participant but for the failure to make Elective Deferrals
shall be treated as a Participant on whose behalf no Elective Deferrals
are made.
1.2 ADOPTION AGREEMENT
The document attached to this Plan by which an employer elects to
establish a qualified retirement plan and trust under the terms of this
Prototype Plan and Trust.
1.3 AGGREGATE LIMIT THE SUM OF:
(a) 125 percent of the greater of the ADP of the Non-Highly
Compensated Employees for the Plan Year or the ACP of Non-
Highly Compensated Employees under the Plan subject to Code
Section 401(m) for the Plan Year beginning with or within
the Plan Year of the cash or deferred arrangement as
described in Code Section 401(k) or Code Section
402(h)(1)(B), and
(b) the lesser of 200% or 2% plus the lesser of such ADP or ACP.
Alternatively, the aggregate limit can be determined by substituting
"the lesser of 200% or 2% plus" for "125% of" in (a) above, and
substituting "125% of" for "the lesser of 200% or 2% plus" in (b) above.
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1.4 ANNUAL ADDITIONS
The sum of the following amounts credited to a Participant's account for
the Limitation Year:
(a) Employer Contributions;
(b) Employer Contributions (under Article IV);
(c) Forfeitures;
(d) 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 (these amounts are treated as Annual Additions to a
Defined Contribution Plan, though they arise under a Defined
Benefit Plan); and
(e) Amounts derived from contributions paid or accrued after
1985, in taxable years ending after 1985, which are either
attributable to post-retirement medical benefits allocated
to the account of a Key Employee, or to a Welfare Benefit
Fund maintained by the Employer, are also treated as Annual
Additions to a Defined Contribution Plan. For purposes of
this paragraph, an Employee is a Key Employee if he or she
meets the requirements of paragraph 1.43 at any time during
the Plan Year or any preceding Plan Year. Welfare Benefit
Fund is defined at paragraph 1.89.
(f) Allocations under a Simplified Employee Pension Plan.
Excess amounts applied in a Limitation Year to reduce Employer
contributions will be considered Annual Additions for such Limitation
Year, pursuant to the provisions of Article X.
1.5 ANNUITY STARTING DATE
The first day of the first period for which an amount is paid as an
annuity or in any other form.
1.6 APPLICABLE CALENDAR YEAR
The First Distribution Calendar Year, and in the event of the
recalculation of life expectancy, such succeeding calendar year. If
payments commence in accordance with paragraph 7.4(e) before the
Required Beginning Date, the Applicable Calendar Year is the year such
payments commence. If distribution is in the form of an immediate
annuity purchased after the Participant's death with the Participant's
remaining interest, the Applicable Calendar Year is the year of
purchase.
1.7 APPLICABLE LIFE EXPECTANCY
Used in determining the required minimum distribution. The life
expectancy (or joint and last survivor expectancy) calculated using the
attained age of the Participant (or Designated Beneficiary) as of the
Participant's (or Designated Beneficiary's) birthday in the Applicable
Calendar Year reduced by one for each calendar year which has elapsed
since the date life expectancy was first calculated. If life expectancy
is being recalculated, the Applicable Life
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Expectancy shall be the life expectancy as so recalculated. The life
expectancy of a non-Spouse Beneficiary may not be recalculated.
1.8 AVERAGE CONTRIBUTION PERCENTAGE (ACP)
The average of the Contribution Percentages for each Highly Compensated
Employee and for each Non-Highly Compensated Employee.
1.9 AVERAGE DEFERRAL PERCENTAGE (ADP)
The average of the Actual Deferral Percentages for each Highly
Compensated Employee and for each Non-Highly Compensated Employee.
1.10 BREAK IN SERVICE
If the Hour counting method has been chosen by the Employer in the
Adoption Agreement, a Break in Service is a 12-consecutive month period
during which an Employee fails to complete more than 500 Hours of
Service. If the Elapsed Time method has been chosen by the Employer in
the Adoption Agreement, a Break in Service is a period of severance of
at least 12 consecutive months.
1.11 CODE
The Internal Revenue Code of 1986, including any amendments.
1.12 COMPENSATION
Unless otherwise specified by the Employer in the Adoption Agreement,
Compensation shall include all amounts earned from the Employer and
actually paid during the Plan Year.
(a) Code Section 3401(a) Wages. Compensation is defined as wages
within the meaning of Code Section 3401(a) for the purposes
of Federal income tax withholding at the source but
determined without regard to any rules that limit the
remuneration included in wages based on the nature or
location of the employment or the services performed [such
as the exception for agricultural labor in Code Section
3401(a)(2)].
(b) Code Section 415 Compensation. For purposes of applying the
limitations of Article X and Top-Heavy minimums, the
definition of Compensation shall be Code Section 415
Compensation defined as follows: a Participant's Earned
Income, wages, salaries, and fees for professional services
and other amounts received (without regard to whether or not
an amount is paid in cash) for personal services actually
rendered in the course of employment with the Employer
maintaining the Plan to the extent that the amounts are
includible in gross income [including, but not limited to,
commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits and reimbursements
or other expense allowances under a nonaccountable plan [as
described in Regulation 1.62-2(c)], and excluding the
following:
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(1) 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 or any distributions
from a plan of deferred compensation,
(2) Amounts realized from the exercise of a non-qualified
Stock option, or when restricted Stock (or property)
held by the Employee either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture,
(3) Amounts realized from the sale, exchange or other
disposition of Stock acquired under a qualified Stock
option; and
(4) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not
under a Salary Reduction Agreement) towards the
purchase of an annuity described in Code Section
403(b) (whether or not the amounts are actually
excludible from the gross income of the Employee).
For purposes of applying the limitations of Article X, Compensation for
a Limitation Year is the Compensation actually paid or made available
during such Limitation Year. Notwithstanding the preceding sentence,
Compensation for a Participant in a Defined Contribution 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 [as defined in Code Section 414(q)] and contributions made on
behalf of such Participant are nonforfeitable when made.
If the Employer fails to pick the determination period in the Adoption
Agreement, the Plan Year shall be used. Unless otherwise specified by
the Employer in the Adoption Agreement, Compensation shall be determined
as provided in Code Section 3401(a) (as defined in this paragraph
1.12(a)). In nonstandardized Adoption Agreement 002, the Employer may
choose to eliminate or exclude categories of Compensation which do not
violate the provisions of Code Sections 401(a)(4), 414(s) the
regulations thereunder and Revenue Procedure 89-65.
Beginning with 1989 Plan Years, the annual Compensation of each
Participant which may be taken into account for determining all benefits
provided under the Plan (including benefits under Article XIV) for any
Plan Year shall not exceed $200,000, as adjusted under Code Section
415(d). For Plan Years beginning on or after January 1, 1994, the annual
Compensation of each Participant taken into account for determining all
benefits provided under the Plan for any Plan Year shall not exceed
$150,000, as adjusted for increases in the cost-of-living in accordance
with Code Section 401(a)(17). The cost-of-living adjustment in effect
for a calendar year applies to any determination period beginning in
such calendar year.
In determining the Compensation of a Participant for purposes of this
limitation, the rules of Code Section 414(q)(6) shall apply, except in
applying such rules, the term "family" shall include only the spouse of
the Participant and any lineal descendants of the Participant who have
not attained age 19 before the end of the Plan Year. If, as a result of
the application of such rules
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the adjusted annual Compensation limitation is exceeded, then (except
for purposes of determining the portion of Compensation up to the
integration level if this Plan provides for permitted disparity), the
limitation shall be prorated among the affected individuals in
proportion to each such individual's Compensation as determined under
this section prior to the application of this limitation.
If a Plan has a Plan Year that contains fewer than 12 Calendar Months,
then the annual compensation limit for that period is an amount equal to
the annual Compensation as adjusted for the calendar year in which the
compensation period begins, multiplied by a fraction the numerator of
which is the number of full months in the short determination period and
the denominator of which is 12. If compensation for any prior plan year
is taken into account in determining an employee's contributions or
benefits for the current year, the compensation for such prior year is
subject to the applicable annual compensation limit in effect for that
prior year. For this purpose, for years beginning before January 1,
1990, the applicable annual compensation limit is $200,000.
Compensation shall not include deferred compensation other than
contributions through a salary reduction agreement to a cash or deferred
plan under Code Section 401(k), a Simplified Employee Pension Plan under
Code Section 402(h)(1)(B), a cafeteria plan under Code Section 125 or a
tax-deferred annuity under Code Section 403(b). Unless elected otherwise
by the Employer in the Adoption Agreement, these deferred amounts will
be considered as Compensation for Plan purposes. These deferred amounts
are not counted as Compensation for purposes of Articles X and XIV
except for Code Sections 401(k) and 401(m) testing. When applicable to a
Self-Employed Individual, Compensation shall mean Earned Income.
1.13 CONTRIBUTION PERCENTAGE
The ratio (expressed as a percentage and calculated separately for each
Participant) of:
(a) the Participant's Contribution Percentage Amounts [as
defined at (c)-(f)] for the Plan Year, to
(b) the Participant's Compensation for such Plan Year. Unless
otherwise specified by the Employer in the Adoption
Agreement, Compensation will include all amounts earned from
the Employer and actually paid during the Plan Year.
Contribution Percentage Amounts on behalf of any Participant shall
include:
(c) the amount of Employee Voluntary Contributions, Matching
Contributions, and Qualified Matching Contributions (to the
extent not taken into account for purposes of the ADP test)
made under the Plan on behalf of the Participant for the
Plan Year,
(d) forfeitures of Excess Aggregate Contributions or Matching
Contributions allocated to the Participant's account which
shall be taken into account in the year in which such
forfeiture is allocated,
(e) at the election of the Employer, Qualified Non-Elective
Contributions, and
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(f) the Employer also may elect to use Elective Deferrals in the
Contribution Percentage Amounts so long as the ADP test is
met before the Elective Deferrals are used in the ACP test
and continues to be met following the exclusion of those
Elective Deferrals that are used to meet the ACP test.
Contribution Percentage Amounts shall not include Matching
Contributions, whether or not Qualified, that are forfeited either to
correct Excess Aggregate Contributions, or because the contributions to
which they relate are Excess Deferrals, Excess Contributions, or Excess
Aggregate Contributions.
1.14 DEFINED BENEFIT PLAN
A Plan under which a Participant's benefit is determined by a formula
contained in the Plan and no individual accounts are maintained for
Participants.
1.15 DEFINED BENEFIT (PLAN) FRACTION
A fraction, the numerator of which is the sum of the Participant's
Projected Annual Benefits under all the Defined Benefit Plans (whether
or not terminated) maintained by the Employer, and the denominator of
which is the lesser of 125 percent of the dollar limitation determined
for the Limitation Year under Code Sections 415(b) and (d) or 140
percent of the 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 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 close of the last Limitation
Year beginning before 1987, disregarding any changes in the terms and
conditions of the plan after May 5, 1986. The preceding sentence applies
only if the Defined Benefit Plans individually and in the aggregate
satisfied the requirements of Section 415 for all Limitation years
beginning before 1987.
1.16 DEFINED CONTRIBUTION DOLLAR LIMITATION
Thirty thousand dollars ($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.
1.17 DEFINED CONTRIBUTION PLAN
A Plan under which individual accounts are maintained for each
Participant to which all contributions, forfeitures, investment income
and gains or losses, and expenses are credited or deducted. A
Participant's benefit under such Plan is based solely on the fair market
value of his or her account balance.
1.18 DEFINED CONTRIBUTION (PLAN) FRACTION
A Fraction, the numerator of which is the sum of the Annual Additions to
the Participant's account under all the Defined Contribution Plans
(whether or not terminated) maintained by the
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Employer for the current and all prior Limitation Years (including the
Annual Additions attributable to the Participant's nondeductible
Employee contributions to all Defined Benefit Plans, whether or not
terminated, maintained by the Employer, and the Annual Additions
attributable to all Welfare Benefit Funds, as defined in paragraph 1.89
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 the Limitation Year is the lesser of 125 percent of the dollar
limitation determined under Code Sections 415(b) and (d) in effect under
Code Section 415(c)(1)(A) or 35 percent of the Participant's
Compensation for such year.
If the Employee was a Participant as of the end of the first day of the
first Limitation Year beginning after 1986, in one or more Defined
Contribution Plans maintained by the Employer which were in existence on
May 6, 1986, the numerator of this fraction will be adjusted if the sum
of this fraction and the Defined Benefit Fraction would otherwise exceed
1.0 under the terms of this Plan. Under the adjustment, an amount equal
to the product of (1) the excess of the sum of the fractions over 1.0
times (2) the denominator of this fraction will be permanently
subtracted from the numerator of this fraction. The adjustment is
calculated using the fractions as they would be computed as of the end
of the last Limitation Year beginning before 1987, and disregarding any
changes in the terms and conditions of the Plan made after May 6, 1986,
but using the Section 415 limitation applicable to the first Limitation
Year beginning on or after January 1, 1987. The Annual Addition for any
Limitation Year beginning before 1987 shall not be re-computed to treat
all Employee Contributions as Annual Additions.
1.19 DESIGNATED BENEFICIARY
The individual who is designated as the beneficiary under the Plan in
accordance with Code Section 401(a)(9) and the regulations thereunder.
1.20 DISABILITY
An illness or injury of a potentially permanent nature, expected to last
for a continuous period of not less than 12 months, certified by a
physician selected by or satisfactory to the Employer, which prevents
the Employee from engaging in any occupation for wage or profit for
which the Employee is reasonably fitted by training, education or
experience.
1.21 DISTRIBUTION CALENDAR YEAR
A calendar year for which a minimum distribution is required.
1.22 EARLY RETIREMENT AGE
The age set by the Employer in the Adoption Agreement (but not less than
55), which is the earliest age at which a Participant may retire and
receive his or her benefits under the Plan.
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1.23 EARNED INCOME
Net earnings from self-employment in the trade or business with respect
to which the Plan is established, determined without regard to items not
included in gross income and the deductions allocable to such items,
provided that personal services of the individual are a material income-
producing factor. Earned income shall be reduced by contributions made
by an Employer to a qualified plan to the extent deductible under Code
Section 404. For tax years beginning after 1989, net earnings shall be
determined, taking into account the deduction for one-ha1f of self-
employment taxes allowed to the Employer under Code Section 164(f) to
the extent deductible.
1.24 EFFECTIVE DATE
The date on which the Employer's retirement plan or amendment to such
plan becomes effective. Unless otherwise specified in the Adoption
Agreement, the effective date shall be the first day of the Plan Year
during which the Adoption Agreement is executed by the Employer. For
amendments reflecting statutory and regulatory changes post Tax Reform
Act of 1986, the Effective Date will be the date upon which such
amendment is first administratively applied.
1.25 ELECTION PERIOD
The period which begins on the first day of the Plan Year in which the
Participant attains age 35 and ends on the date of the Participant's
death. If a Participant separates from service prior to the first day of
the Plan Year in which age 35 is attained, the Election Period shall
begin on the date of separation, with respect to the account balance as
of the date of separation.
1.26 ELECTIVE DEFERRAL
Employer contributions made to the Plan at the election of the
Participant, in lieu of cash Compensation. Elective Deferrals shall also
include contributions made pursuant to a Salary Savings Agreement or
other deferral mechanism, such as a cash option contribution. With
respect to any taxable year, a Participant's Elective Deferral is the
sum of all Employer contributions made on behalf of such Participant
pursuant to an election to defer under any qualified cash or deferred
arrangement as described in Code Section 401(k), any simplified employee
pension cash or deferred arrangement as described in Code Section
402(h)(1)(B), any eligible deferred compensation plan under Code Section
457, any plan as described under Code Section 501(c)(18), and any
Employer contributions made on the behalf of a Participant for the
purchase of an annuity contract under Code Section 403(b) pursuant to a
Salary Savings Agreement. Elective Deferrals shall not include any
deferrals properly distributed as Excess Annual Additions.
1.27 ELIGIBLE PARTICIPANT
Any Employee who is eligible to make a Voluntary Contribution, or an
Elective Deferral (if the Employer takes such contributions into account
in the calculation of the Contribution Percentage), or to receive a
Matching Contribution (including forfeitures) or a Qualified Matching
Contribution. If a Voluntary Contribution or Elective Deferral is
required as a condition of participation in the Plan, any Employee who
would be a Participant in the Plan if such Employee made such a
contribution shall be treated as an Eligible Participant even though no
Voluntary Contributions or Elective Deferrals are made.
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1.28 EMPLOYEE
Any person employed by the Employer (including Self-Employed Individuals
and partners), all Employees of a member of an affiliated service group
[as defined in Code Section 414(m)], Employees of a controlled group of
corporations [as defined in Code Section 414(b)], all Employees of any
incorporated or unincorporated trade or business which is under common
control [as defined in Code Section 414(c)], leased Employees [as
defined in Code Section 414(n)] and any Employee required to be
aggregated by Code Section 414(o). All such Employees shall be treated
as employed by a single Employer.
1.29 EMPLOYER
The Se1f-Employed Individual, partnership, corporation or other
organization which adopts this Plan, including any firm that succeeds
the Employer and adopts this Plan. For purposes of Article X,
Limitations on Allocations, Employer shall mean the Employer that adopts
this Plan, and all members of a controlled group of corporations [as
defined in Code Section 414(b) as modified by Code Section 415(h)], all
commonly controlled trades or businesses [as defined in Code Section
414(c) as modified by Code Section 415(h)] or affiliated service groups
[as defined in Code Section 414(m)] of which the adopting Employer is a
part, and any other entity required to be aggregated with the Employer
pursuant to regulations under Code Section 414(o).
1.30 ENTRY DATE
The date on which an Employee commences participation in the Plan as
determined by the Employer in the Adoption Agreement. Unless the
Employer specifies otherwise in the Adoption Agreement, entry into the
Plan shall be on the first day of the Plan Year or the first day of the
seventh month of the Plan Year coinciding with or following the date on
which an Employee meets the eligibility requirements.
1.31 EXCESS AGGREGATE CONTRIBUTIONS
The excess, with respect to any Plan Year, of:
(a) the aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution Percentage
actually made on behalf of Highly Compensated Employees for such
Plan Year, over
(b) the maximum Contribution Percentage Amounts permitted by the
ACP test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of their Contribution
Percentages beginning with the highest of such percentages).
Such determination shall be made after first determining Excess Elective
Deferrals pursuant to paragraph 1.34 and then determining Excess
Contributions pursuant to paragraph 1.33.
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1.32 EXCESS AMOUNT
The excess of the Participant's Annual Additions for the Limitation Year
over the Maximum Permissible Amount.
1.33 EXCESS CONTRIBUTION
With respect to any Plan Year, the excess of:
(a) the aggregate amount of Employer contributions actually
taken into account in computing the ADP of Highly Compensated
Employees for such Plan Year, over
(b) the maximum amount of such contributions permitted by the
ADP test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of the ADPs, beginning with
the highest of such percentages).
1.34 EXCESS ELECTIVE DEFERRALS
Those Elective Deferrals that are includible in a Participant's gross
income under Code Section 402(g) to the extent such Participant's
Elective Deferrals for a taxable year exceed the dollar limitation under
such Code Section. Excess Elective Deferrals shall be treated as Annual
Additions under the Plan, unless such amounts are distributed no later
than the first April 15 following the close of the Participant's taxable
year.
1.35 FAMILY MEMBER
The Employee's Spouse, any lineal descendents and ascendants and the
Spouse of such lineal descendants and ascendants.
1.36 FIRST DISTRIBUTION CALENDAR YEAR
For distributions beginning before the Participant's death, the First
Distribution Calendar Year is the calendar year immediately preceding
the calendar year which contains the Participant's Required Beginning
Date. For distributions beginning after the Participant's death, the
First Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to paragraph 7.10.
1.37 FUND
All contributions received by the Trustee under this Plan and Trust,
investments thereof and earnings and appreciation thereon.
1.38 HARDSHIP
An immediate and heavy financial need of the Employee where such
Employee lacks other available resources.
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1.39 HIGHEST AVERAGE COMPENSATION
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 l2-consecutive month period defined in the Adoption
Agreement.
1.40 HIGHLY COMPENSATED EMPLOYEE
Any Employee who performs service for the Employer during the
determination year and who, during the immediate prior year:
(a) received Compensation from the Employer in excess of $75,000
[as adjusted pursuant to Code Section 415(d)]; or
(b) received Compensation from the Employer in excess of $50,000
[as adjusted pursuant to Code Section 415(d)] and was a member of
the Top-Paid Group for such year; or
(c) Was an officer of the Employer and received Compensation
during such year that is greater than 50 percent of the dollar
limitation in effect under Code Section 415(b)(1)(A).
Notwithstanding (a), (b) and (c), an Employee who was not Highly
Compensated during the preceding Plan Year shall not be treated as a
Highly Compensated Employee with respect to the current Plan Year,
unless such Employee is a member of the 100 Employees paid the greatest
Compensation during the year for which such determination is being made.
(d) Employees who are five percent (5%) Owners at any time
during the immediate prior year or determination year.
Highly Compensated Employee includes Highly Compensated active Employees
and Highly Compensated former Employees.
1.41 HOUR OF SERVICE
(a) Hour Counting Method:
(1) Each hour for which an Employee is paid, or entitled
to payment, for the performance of duties for the Employer.
These hours shall be credited to the Employee for the
computation period in which the duties are performed; and
(2) Each hour for which an Employee is paid, or entitled
to payment, by the Employer on account of a period of time
during which no duties are performed (irrespective of
whether the employment relationship has terminated) due to
vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of
absence. No more than 501 Hours of Service shall be
credited under this paragraph for any single continuous
period (whether or not such period occurs in a single
computation period). Hours under this paragraph shall be
calculated and credited pursuant to Section 2530.200b-2 of
the Department of Labor Regulations which are incorporated
herein by this reference; and
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(3) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by the
Employer. The same Hours of Service shall not be credited
both under paragraph (a) or paragraph (b), as the case may
be, and under this paragraph (c). These hours shall be
credited to the Employee for the computation period or
periods to which the award or agreement pertains rather than
the computation period in which the award, agreement or
payment is made.
(4) Hours of Service shall be credited for employment with
the Employer and with other members of an affiliated service
group [as defined in Code Section 414(m)], a controlled
group of corporations [as defined in Code Section 414(h)] or
a group of trades or businesses under common control [as
defined in Code Section 414(c)] of which the adopting
Employer is a member, and any other entity required to be
aggregated with the Employer pursuant to Code Section 414(o)
and the regulations thereunder. Hours of Service shall a1so
be credited for any individual considered an Employee for
purposes of this Plan under Code Section 414(n) or Code
Section 414(o) and the regulations thereunder.
(5) Solely for purposes of determining whether a Break in
Service, as defined in paragraph 1.10, for participation and
vesting purposes has occurred in a computation period, an
individual who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of
Service which would otherwise have been credited to such
individual but for such absence, or in any case in which
such hours cannot be determined, 8 Hours of Service per day
of such absence. For purposes of this paragraph, an absence
from work for maternity or paternity reasons means an
absence by reason of the pregnancy of the individual, by
reason of a birth of a child of the individual, by reason of
the placement of a child with the individual in connection
with the adoption of such child by such individual, or for
purposes of caring for such child for a period beginning
immediately following such birth or placement. The Hours of
Service credited under this paragraph shall be credited in
the computation period in which the absence begins if the
crediting is necessary to prevent a Break in Service in that
period, or in all other cases, in the following computation
period. No more than 501 hours will be credited under this
paragraph.
(6) Unless specified otherwise in the Adoption Agreement,
the Hours of Service Method shall be used. Also, unless
specified otherwise in the Adoption Agreement, Hours of
Service shall be determined on the basis of actual hours for
which an Employee is paid or entitled to payment.
(b) Elapsed Time Method:
(1) For purposes of this section, Hour of Service shall
mean each hour for which an Employee is paid or entitled to
payment for the performance of duties for the Employer.
(2) Break In Service is a period of severance of at least
12 consecutive months.
(3) Period of Severance is a continuous period of time
during which the Employee is not employed by the Employer.
Such period begins on the date the Employee retires, quits
or
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is discharged, or if earlier, the 12-month anniversary of
the date on which the Employee was otherwise first absent
from service.
(4) In the case of an individual who is absent from work
for maternity or paternity reasons, the 12-consecutive-month
period beginning on the first anniversary of the first date
of such absence shall not constitute a Break In Service. For
purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (i) by
reason of the pregnancy of the individual, (ii) by reason of
the birth of a child of the individual, (iii) by reason of
the placement of a child with the individual in connection
with the adoption of such child by such individual, or (iv)
for purposes of caring for such child for a period beginning
immediately following such birth or placement.
(5) Each Employee will share in Employer contributions for
the period beginning on the date the Employee commences
participation under the plan and ending on the date on which
such Employee severs employment with the Employer or is no
longer a member of an eligible class of Employees.
(6) If the Employer is a member of an affiliated service
group (under section 414(m)), a controlled group of
corporations (under section 414(b)) a group of trades or
businesses under common control (under section 414(c)) or
any other entity required to be aggregated with the Employer
pursuant to section 414(o), service will be credited for any
employment for any period of time for any other member of
such group. Service will also be credited for any individual
required under section 414(n) or section 414(o) to be
considered an Employee of any Employer aggregated under
section 414(b), (c), or (m).
1.42 KEY EMPLOYEE
Any Employee or former Employee (and the beneficiaries of such employee)
who at any time during the determination period was an officer of the
Employer if such individual's annual compensation exceeds 50% of the
dollar limitation under Code Section 415(b)(1)(A) (the defined benefit
maximum annual benefit), an owner (or considered an owner under Code
Section 318) of one of the ten largest interests in the employer if such
individual's compensation exceeds 100% of the dollar limitation under
Code Section 415(c)(1)(A), a 5% owner of the Employer, or a 1% owner of
the Employer who has an annual compensation of more than $150,000. For
purposes of determining who is a Key Employee, annual compensation shall
mean Compensation as defined for Article X, but including amounts
deferred through a salary reduction agreement to a cash or deferred plan
under Code Section 401(k), a Simplified Employee Pension Plan under Code
Section 408(k), a cafeteria plan under Code Section 125 or a tax-
deferred annuity under Code Section 403(b). The determination period is
the Plan Year containing the Determination Date and the four preceding
Plan Years. The determination of who is a Key Employee will be made in
accordance with Code Section 416(i)(1) and the regulations thereunder.
1.43 LEASED EMPLOYEE
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
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substantially fu1l-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.
1.44 LIMITATION YEAR
The Plan Year as designated by the Employer in the Adoption Agreement
for purposes of determining the maximum Annual Addition to a
Participant's account. 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.
1.45 MASTER OR PROTOTYPE PLAN
A plan, the form of which is the subject of a favorable opinion letter
from the Internal Revenue Service.
1.46 MATCHING CONTRIBUTION
An Employer contribution made to this or any other defined contribution
plan on behalf of a Participant on account of an Employee Voluntary
Contribution made by such Participant, or on account of a Participant's
Elective Deferral, under a Plan maintained by the Employer.
1.47 MAXIMUM PERMISSIBLE AMOUNT
The maximum Annual Addition that may be contributed or allocated to a
Participant's account under the plan for any Limitation Year shall not
exceed the lesser of:
(a) the Defined Contribution Dollar Limitation, or
(b) 25% of the Participant's Compensation for the Limitation
Year.
The compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits [within the meaning of Code Section
401(h) or Code Section 419A(f)(2)] which is otherwise treated as an
Annual Addition under Code Section 415(l)(1) or 419(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
Limitation multiplied by the following fraction: Number of months in the
short Limitation Year divided by 12.
1.48 NET PROFIT
The current and accumulated operating earnings of the Employer before
Federal and State income taxes, excluding nonrecurring or unusual items
of income, and before contributions to this and any other qualified plan
of the Employer. Unless otherwise specified in the Adoption Agreement,
profits will not be required for Profit-Sharing contributions to the
Plan.
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1.49 NORMAL RETIREMENT AGE
The age, set by the Employer in the Adoption Agreement, at which a
Participant may retire and receive his or her benefits under the Plan.
Unless otherwise specified in the Adoption Agreement, the Normal
Retirement Age shall be 65.
1.50 OWNER-EMPLOYEE
A sole proprietor, or a partner owning more than 10% of either the
capital or profits interest of the partnership.
1.51 PAIRED PLANS
Two or more Plans maintained by the Sponsor designed so that a single or
any combination of Plans adopted by an Employer will meet the
antidiscrimination rules, the contribution and benefit limitations, and
the Top-Heavy provisions of the Code.
1.52 PARTICIPANT
Any Employee who has met the eligibility requirements and is
participating in the Plan.
1.53 PARTICIPANT'S BENEFIT
The account balance as of the last Valuation Date in the calendar year
immediately preceding the Distribution Calendar Year (valuation calendar
year) increased by the amount of any contributions or forfeitures
allocated to the account balance as of the dates in the valuation
calendar year after the Valuation Date and decreased by distributions
made in the valuation calendar year after the Valuation Date. A special
exception exists for the second distribution Calendar Year. For purposes
of this paragraph, if any portion of the minimum distribution for the
First Distribution Calendar Year is made in the second Distribution
Calendar Year on or before the Required Beginning Date, the amount of
the minimum distribution made in the second distribution calendar year
shall be treated as if it had been made in the immediately preceding
Distribution Calendar Year.
1.54 PERMISSIVE AGGREGATION GROUP
Used for Top-Heavy testing purposes, it is the Required Aggregation
Group of plans plus any other plan or plans of the Employer which, when
considered as a group with the Required Aggregation Group, would
continue to satisfy the requirements of Code Sections 401(a)(4) and 410.
1.55 PLAN
The Employer's retirement plan as embodied herein and in the Adoption
Agreement.
1.56 PLAN ADMINISTRATOR
The Employer.
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1.57 YEAR
The 12-consecutive month period designated by the Employer in the
Adoption Agreement. If no such period is designated, the Plan Year shall
be the Employer's taxable year.
1.58 PRESENT VALUE
Used for Top-Heavy test and determination purposes, when determining the
Present Value of accrued benefits, with respect to any Defined Benefit
Plan maintained by the Employer, interest and mortality rates shall be
determined in accordance with the provisions of the respective plan. If
applicable, interest and mortality assumptions will be specified in
Section 11 of the Adoption Agreement.
1.59 PROJECTED ANNUAL BENEFIT
Used to test the maximum benefit which may be obtained from a
combination of retirement plans, it is the annual retirement benefit
(adjusted to an actuarial 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 a Defined Benefit Plan or plans, assuming:
(a) the Participant will continue employment until Normal
Retirement Age under the plan (or current age, if later), and
(b) the Participant's Compensation for the current Limitation
Year and all other relevant factors used to determine benefits
under the plan will remain constant for all future Limitation
Years.
1.60 QUALIFIED DEFERRED COMPENSATION PLAN
Any pension, profit-sharing, stock bonus, or other plan which meets the
requirements of Code Section 401 and includes a trust exempt from tax
under Code Section 501(a) or any annuity plan described in Code Section
403(a).
An Eligible Retirement Plan is an individual retirement account (IRA) as
described in section 408(a) of the Code, an individual retirement
annuity (IRA) as described in section 408(b) of the Code, an annuity
plan as described in section 403(a) of the Code, or a qualified trust as
described in section 401(a) of the Code, which accepts Eligible Rollover
Distributions. However, in the case of an Eligible Rollover
Distribution to a surviving Spouse, an Eligible Retirement Plan is an
individual retirement account or individual retirement annuity.
1.61 QUALIFIED DOMESTIC RELATIONS ORDER (QDRO)
A QDRO is a signed Domestic Relations Order issued by a State Court
which creates, recognizes or assigns to an alternate payee(s) the right
to receive all or part of a Participant's Plan benefit and which meets
the requirements of Code Section 414(p). An alternate payee is a
Spouse, former Spouse, child, or other dependent who is treated as a
beneficiary under the Plan as a result of the QDRO.
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1.62 QUALIFIED EARLY RETIREMENT AGE
For purposes of paragraph 8.9, Qualified Early Retirement Age is the
latest of:
(a) the earliest date, under the Plan, on which the Participant
may elect to receive retirement benefits, or
(b) the first day of the 120th month beginning before the
Participant reaches Normal Retirement Age, or
(c) the date the Participant begins participation.
1.63 QUALIFIED JOINT AND SURVIVOR ANNUITY
An immediate annuity for the life of the Participant with a survivor
annuity for the life of the Participant's Spouse which is at least one-
half of but not more than the amount of the annuity payable during the
joint lives of the Participant and the Participant's Spouse. The exact
amount of the Survivor Annuity is to be specified by the Employer in the
Adoption Agreement. If not designated by the Employer, the Survivor
Annuity will be 1/2 of the amount paid to the Participant during his or
her lifetime. The Qualified Joint and Survivor Annuity will be the
amount of benefit which can be provided by the Participant's Vested
Account Balance.
1.64 QUALIFIED MATCHING CONTRIBUTION
Matching Contributions which when made are subject to the distribution
and nonforfeitability requirements under Code Section 401(k).
1.65 QUALIFIED NON-ELECTIVE CONTRIBUTIONS
Contributions (other than Matching Contributions or Qualified Matching
Contributions) made by the Employer and allocated to Participants'
accounts that the Participants may not elect to receive in cash until
distributed from the Plan; that are nonforfeitable when made; and that
are distributable only in accordance with the distribution provisions
that are applicable to Elective Deferrals and Qualified Matching
Contributions.
1.66 QUALIFIED NON-ELECTIVE CONTRIBUTIONS
A tax-deductible voluntary Employee contribution. These contributions
may no longer be made to the Plan.
1.67 REQUIRED AGGREGATION GROUP
Used for Top-Heavy testing purposes, it consists of:
(a) each qualified plan of the Employer in which at least one
Key Employee participates or participated at any time during the
determination period (regardless of whether the plan has
terminated), and
(b) any other qualified plan of the Employer which enables a
plan described in (a) to meet the requirements of Code Sections
401(a)(4) or 410.
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1.68 REQUIRED BEGINNING DATE
The date on which a Participant is required to take his or her first
minimum distribution under the Plan. The rules are set forth at
paragraph 7.5.
1.69 ROLLOVER CONTRIBUTION
A contribution made by a Participant of an amount distributed to such
Participant from another Qualified Deferred Compensation Plan in
accordance with Code Sections 402(a)(5), (6), and (7). An Eligible
Rollover Distribution is any distribution of all or any portion of the
balance to the credit of the Participant accept that an Eligible
Rollover Distribution does not include:
(a) any distribution that is one of a series of substantially
equal periodic payments (not less frequency than annually) made
for the life (or life expectancy) of the Participant or the joint
lives (or joint life expectancies) of the Participant and the
Participant's Designated Beneficiary, or for a specified period of
ten years or more;
(b) any distribution to the extent such distribution is required
under section 401(a)(9) of the Code; and
(c) the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
A Direct Rollover is a payment by the plan to the Eligible Retirement
Plan specified by the Participant.
1.70 SALARY SAVINGS AGREEMENT
An agreement between the Employer and a participating Employee where the
Employee authorizes the Employer to withhold a specified percentage of
his or her Compensation for deposit to the Plan on behalf of such
Employee.
1.71 SELF-EMPLOYED INDIVIDUAL
An individual who has Earned Income for the taxable year from the trade
or business for which the Plan is established including an individual
who would have had Earned Income but for the fact that the trade or
business had no Net Profit for the taxable year.
1.72 SERVICE
The period of current or prior employment with the Employer. If the
Employer maintains a plan of a predecessor employer, Service for such
predecessor shall be treated as Service for the Employer.
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1.73 SERVICE COMPANY
Prudential Mutual Fund Services, Inc., or its successor serving from
time to time.
1.74 SHAREHOLDER EMPLOYEE
An Employee or Officer who owns [or is considered as owning within the
meaning of Code Section 318(a)(1)], on any day during the taxable year
of an electing small business corporation (S Corporation), more than 5%
of such corporation's outstanding stock.
1.75 SIMPLIFIED EMPLOYEE PENSION PLAN
An individual retirement account which meets the requirements of Code
Section 408(k), and to which the Employer making contributions pursuant
to a written formula. These plans are considered for contribution
limitation and Top-Heavy testing purposes.
1.76 SPONSOR
Shall be Prudential Mutual Fund Management, Inc.
1.77 SPOUSE (SURVIVING SPOUSE)
The Spouse or Surviving Spouse of the Participant, provided that a
former Spouse will be treated as the Spouse or Surviving Spouse and a
current Spouse will not be treated as the Spouse or Surviving Spouse to
the extent provided under a Qualified Domestic Relations Order as
described in Code Section 414(p).
1.78 SUPER TOP-HEAVY PLAN
A Plan described at paragraph 1.81 under which the Top-Heavy Ratio [as
defined at paragraph 1.82] exceeds 90%.
1.79 TAXABLE WAGE BASE
For plans with an allocation formula which takes into account the
Employer's contribution under the Federal Insurance Contributions Act
(FICA), the contribution and benefit base in effect under Section 230,
of the Social Security Act, at the beginning of the Plan Year, or the
amount elected by the Employer in the Adoption Agreement.
1.80 TOP-HEAVY DETERMINATION DATE
For any Plan Year subsequent to the first Plan Year, the last day of the
preceding Plan Year. For the first Plan Year of the Plan, the last day
of that year.
1.81 TOP-HEAVY PLAN
For any Plan Year beginning after 1983, the Employer's Plan is Top-Heavy
if any of the following conditions exist:
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(a) If the Top-Heavy Ratio for the Employer's Plan exceeds 60%
and this Plan is not part of any required Aggregation Group or
Permissive Aggregation Group of Plans.
(b) If the Employer's plan is a part of a Required Aggregation
Group of plans but not part of a Permissive Aggregation Group and
the Top-Heavy Ratio for the group of plans exceeds 600/0.
(c) If the Employer's plan is a part of a Required Aggregation
Group and part of a Permissive Aggregation Group of plans and the
Top-Heavy Ratio for the Permissive Aggregation Group exceeds 60%.
1.82 TOP-HEAVY RATIO
(a) If the Employer maintains one or more Defined Contribution
plans (including any Simplified Employee Pension Plan) and the
Employer has not maintained any Defined Benefit Plan which during
the 5-year period ending on the Determination Date(s) has or has
had accrued benefits, the Top-Heavy Ratio for this Plan alone, or
for the Required or Permissive Aggregation Group as appropriate,
is a fraction,
(1) The numerator of which is the sum of the account
balances of all Key Employees as of the Determination
Date(s) [including any part of any account balance
distributed in the 5-year period ending on the Determination
Date(s)], and
(2) The denominator of which is the sum of all account
balances [including any part of any account balance
distributed in the 5-year period ending on the Determination
Dates(s)], both computed in accordance with Code Section 416
and the regulations thereunder.
Both the numerator and denominator of the Top-Heavy Ratio are increased
to reflect any contribution not actually made as of the Determination
Date, but which is required to be taken into account on that date under
Code Section 416 and the regulations thereunder.
(b) If the Employer maintains one or more Defined Contribution
Plans (including any Simplified Employee Pension Plan) and the
Employer maintains or has maintained one or more Defined Benefit
Plans which during the 5-year period ending on the Determination
Date(s) has or has had any accrued benefits, the Top-Heavy Ratio
for any Required or Permissive Aggregation Group as appropriate is
a fraction, the numerator of which is the sum of account balances
under the aggregated Defined Contribution Plan or Plans for all
Key Employees, determined in accordance with (a) above, and the
Present Value of accrued benefits under the aggregated Defined
Benefit Plan or Plans for all Key Employees as of the
Determination Date(s), and the denominator of which is the sum of
the account balances under the aggregated Defined Contribution
Plan or Plans for all Participants, determined in accordance with
(a) above, and the Present Value of accrued benefits under the
Defined Benefit Plan or Plans for all Participants as of the
Determination Date(s), all determined in accordance with Code
Section 416 and the regulations thereunder. The accrued benefits
under a Defined Benefit Plan in both the numerator and denominator
of the Top-Heavy Ratio are increased for any distribution of an
accrued benefit made in the 5-year period ending on the
Determination Date.
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(c) For purposes of (a) and (b) above, the value of account
balances and the Present Value of accrued benefits will be
determined as of the most recent Valuation Date that falls within
or ends with the 12-month period ending on the Determination Date,
except as provided in Code Section 416 and the regulations
thereunder for the first and second plan years of a Defined
Benefit Plan. The account balances and accrued benefits of a
participant (1) who is not a Key Employee but who was a Key
Employee in a prior year, or (2) who has not been credited with at
least one hour of service with any Employer maintaining the Plan
at any time during the 5-year period ending on the Determination
Date, will be disregarded. The calculation of the Top-Heavy Ratio,
and the extent to which distributions, rollovers, and transfers
are taken into account will be made in accordance with Code
Section 416 and the regulations thereunder. Qualified Voluntary
Employee Contributions will not be taken into account for purposes
of computing the Top-Heavy Ratio. When aggregating plans the value
of account balances and accrued benefits will be calculated with
reference to the Determination Dates that fall within the same
calendar year. The accrued benefit of a Participant other than a
Key Employee shall be determined under (1) the method, if any,
that uniformly applies for accrual purposes under all Defined
Benefit Plans maintained by the Employer, or (2) if there is no
such method, as if such benefit accrued not more rapidly than the
slowest accrual rate permitted under the fractional rule of Code
Section 411(b)(1)(C).
1.83 TOP-PAID GROUP
The group consisting of the top 20% of Employees when ranked on the
basis of Compensation paid during such year. For purposes of determining
the number of Employees in the group (but not who is in it), the
following Employees shall be excluded:
(a) Employees who have not completed 6 months of Service.
(b) Employees who normally work less than 17-1/2 hours per week.
(c) Employees who normally do not work more than 6 months during
any year.
(d) Employees who have not attained age 21.
(e) Employees included in a collective bargaining unit, covered
by an agreement between employee representatives and the Employer,
where retirement benefits were the subject of good faith
bargaining and provided that 90% or more of the Employer's
Employees are covered by the agreement.
(f) Employees who are nonresident aliens and who receive no
earned income which constitutes income from sources within the
United States.
1.84 TRANSFER CONTRIBUTION
A non-taxable transfer of a Participant's benefit directly from a
Qualified Deferred Compensation Plan to this Plan.
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1.85 TRUSTEE
The individual(s) or institution appointed by the Employer in the
Adoption Agreement.
1.86 VALUATION DATE
The last business day of each Plan Year or such other date consistent
with the operational cycle of the Service Company, as agreed to by the
Employer and the Service Company on which Participant accounts are
revalued in accordance with Article V hereof. For Top-Heavy purposes,
the date selected by the Employer as of which the Top-Heavy Ratio is
calculated.
The value of mutual funds and other marketable investments shall be
determined using the most recent price quoted on a national securities
exchange or over the counter market. The value of investments for which
there is no market shall be determined in the sole judgement of the
Employer or issuer and neither the Trustee nor Service Company shall
have responsibility with respect to the valuation of such assets.
1.87 VESTED ACCOUNT BALANCE
The aggregate value of the Participant's Vested Account Balances derived
from Employer and Employee contributions (including Rollovers), whether
vested before or upon death, including the proceeds of insurance
contracts, if any, on the Participant's life. The provisions of Article
VIII shall apply to a Participant who is vested in amounts attributable
to Employer contributions, Employee contributions (or both) at the time
of death or distribution.
1.88 VOLUNTARY CONTRIBUTION
An Employee contribution made to the Plan by or on behalf of a
Participant that is included in the Participant's gross income in the
year in which made and that is maintained under a separate account to
which earnings and losses are allocated.
1.89 WELFARE BENEFIT FUND
Any fund that is part of a plan of the Employer, or has the effect of a
plan, through which the Employer provides welfare benefits to Employees
or their beneficiaries. For these purposes, Welfare Benefits means any
benefit other than those with respect to which Code Section 83(h)
(relating to transfers of property in connection with the performance of
services), Code Section 404 (relating to deductions for contributions to
an Employee's trust or annuity and Compensation under a deferred payment
plan), Code Section 404A (relating to certain foreign deferred
compensation plans) apply. A "Fund" is any social club, voluntary
employee benefit association, supplemental unemployment benefit trust or
qualified group legal service organization described in Code Section
501(c)(7), (9), (17) or (20); any trust, corporation, or other
organization not exempt from income tax, or to the extent provided in
regulations, any account held for an Employer by any person.
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1.90 YEAR OF SERVICE
If the Hour counting method has been chosen by the Employer in the
Adoption Agreement, a Year of Service is a 12-consecutive month period
during which an Employee is credited with not less than 1,000 (or such
lesser number as specified by the Employer in the Adoption Agreement)
Hours of Service. If the Elapsed Time Method has been chosen by the
Employer in the Adoption Agreement, an Employee will receive credit for
the aggregate of all time period(s) commencing with the Employee's first
day of employment or reemployment and ending on the date a Break In
Service begins. The first day of employment or reemployment is the first
day the Employee performs an Hour of Service. An Employee will also
receive credit for any period of severance of less than 12 consecutive
months. Fractional periods of a year will be expressed in terms of days.
ARTICLE II - ELIGIBILITY REQUIREMENTS
2.11 PARTICIPATION
Unless otherwise specified in the Adoption Agreement, the Plan shall
cover all Employees having completed at least one Year of Service and
who have attained age 21. Employees who meet the eligibility
requirements in the Adoption Agreement on the Effective Date of the Plan
shall become Participants as of the Effective Date of the Plan. Unless
Stated to the contrary in the Adoption Agreement, all Employees employed
on the Effective Date of the Plan may participate, even if they have not
satisfied the Plan's specified eligibility requirements. Other Employees
shall become Participants on the Entry Date coinciding with or
immediately following the date on which they meet the eligibility
requirements. The Employee must satisfy the eligibility requirements
specified in the Adoption Agreement and be employed on the Entry Date to
become a Participant in the Plan. In the event an Employee who is not a
member of the eligible class of Employees becomes a member of the
eligible class, such Employee shall participate immediately if such
Employee has satisfied the minimum age and service requirements and
would have previously become a Participant had he or she been in the
eligible class. A former Participant shall again become a Participant
upon returning to the employ of the Employer. For this purpose,
Participant's Compensation and Service shall be considered from date of
rehire.
2.21 CHANGE IN CLASSIFICATION OF EMPLOYMENT
If a Participant is transferred to an ineligible class of Employees, or
is otherwise reclassified as an ineligible Employee, any contribution or
allocation of forfeitures which would otherwise be made for him
hereunder for the Plan Year of such transfer or reclassification shall
be made. No contribution or allocation of forfeitures for or by him
shall be made, however, for any subsequent Plan Year prior to the Plan
Year in which he again becomes a Participant.
2.31 COMPUTATION PERIOD
To determine Years of Service and Breaks in Service for purposes of
eligibility, the l2-consecutive month period shall commence on the date
on which an Employee first performs an Hour of Service for the Employer
and each anniversary thereof, such that the succeeding 12-consecutive
month period commences with the employee's first anniversary of
employment and so on. If, however, the period so specified is one year
or less, the succeeding l2-consecutive month period shall commence on
the first day of the Plan Year prior to the anniversary of the
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date they first performed an Hour of Service regardless of whether the
Employee is entitled to be credited with 1,000 (or such lesser number as
specified by the Employer in the Adoption Agreement) Hours of Service
during their first employment year.
2.41 EMPLOYMENT RIGHTS
Participation in the Plan shall not confer upon a Participant any
employment rights, nor shall it interfere with the Employer's right to
terminate the employment of any Employee at any time.
2.51 SERVICE WITH CONTROLLED GROUPS
All Years of Service with other members of a controlled group of
corporations [as defined in Code Section 414(b)], trades or businesses
under common control [as defined in Code Section 414(c)], or members of
an affiliated service group [as defined in Code Section 414(m)] shall be
credited for purposes of determining an Employee's eligibility to
participate.
2.61 OWNER-EMPLOYEES
If this Plan provides contributions or benefits for one or more Owner-
Employees who control both the business for which this Plan is
established and one or more other trades or businesses, this Plan and
the Plan established for other trades or businesses must, when looked at
as a single Plan, satisfy Code Sections 401(a) and (d) for the Employees
of this and all other trades or businesses.
If the Plan provides contributions or benefits for one or more Owner-
Employees who control one or more other trades or 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.
If an individual is covered as an Owner-Employee under the plans of two
or more trades or businesses which are not controlled, and the
individual controls a trade or business, then the contributions or
benefits of the Employees under the plan of the trades or businesses
which are controlled must be as favorable as those provided for him or
her under the most favorable plan of the trade or business which is not
controlled.
For purposes of the preceding sentences, an Owner-Employee, or two or
more Owner-Employees, will be considered to control a trade or business
if the Owner-Employee, or two or more Owner-Employees together:
(a) own the entire interest in an unincorporated trade or
business, or
(b) in the case of a partnership, own more than 50% of either
the capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or
more Owner-Employees shall be treated as owning any interest in a
partnership which is owned, directly or 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.
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2.71 LEASED EMPLOYEES
Any leased Employee shall be treated as an Employee of the recipient
Employer; however, contributions or benefits provided 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 such Employee is covered by a money purchase pension plan
providing:
(a) a non-integrated Employer contribution rate of at least 1%
of Compensation, [as defined in Code Section 415(c)(3) but
including amounts contributed by the Employer pursuant to a
salary reduction agreement, which are excludable from the
Employee's gross income under a cafeteria plan covered by Code
Section 125, a cash or deferred profit-sharing plan under
Section 401(k) of the Code, a Simplified Employee Pension Plan
under Code Section 402(h)(1)(B) and a tax-sheltered annuity
under Code Section 403(b)],
(b) immediate participation, and
(c) full and immediate vesting.
This exclusion is only available if Leased Employees do not constitute
more than twenty percent (20%) of the recipients non-highly compensated
work force.
2.81 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 for the year has been
made, the omitted Employee shall be included in the next valuation. The
Employer shall make any additional contribution with respect to the
omitted Employee that may be deemed necessary.
Such contribution shall be made regardless of whether it is deductible
in whole or in part in any taxable year under applicable provisions of
the Code. The Employee shall receive credit under the terms of the Plan
for any period during which he should have been included as a
Participant.
2.91 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 be removed from the ineligible Employee's
Account and treated as a forfeiture.
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ARTICLE III - EMPLOYER CONTRIBUTIONS
3.1 AMOUNT
The Employer intends to make periodic contributions to the Plan in
accordance with the formula or formulas selected in the Adoption
Agreement. However, the Employer's contribution for any Plan Year shall
be subject to the limitations on allocations contained in Article X.
3.2 EXPENSES AND FEES
The Employer shall also be authorized to reimburse the Fund for all
expenses and fees incurred in the administration of the Plan or Trust
and paid out of the assets of the Fund. Such expenses shall include, but
shall not be limited to, fees for professional services, printing and
postage. Commissions may not be reimbursed.
3.3 RESPONSIBILITY FOR CONTRIBUTIONS
The Trustee shall not be required to determine if the Employer has made
a contribution or if the amount contributed is in accordance with the
Adoption Agreement or the Code. The Employer shall have sole
responsibility in this regard. The Trustee shall be accountable solely
for contributions actually received by it, within the limits of Article
XI.
3.4 RETURN OF CONTRIBUTIONS
Contributions made to the Fund by the Employer shall be irrevocable
except as provided below:
(a) Any contribution forwarded to the Trustee because of a
mistake of fact, provided that the contribution is returned
to the Employer within one year of the contribution.
(b) In the event that the Commissioner of Internal Revenue
determines that the Plan is not initially qualified under
the Internal Revenue Code, any contribution made incident to
that initial qualification by the Employer must be returned
to the Employer within one year after the date the initial
qualification is denied, but only if the application for the
qualification is made by the time prescribed by law for
filing the Employer's return for the taxable year in which
the Plan is adopted, or such later date as the Secretary of
the Treasury may prescribe.
(c) Contributions forwarded to the Trustee are presumed to be
deductible and are conditioned on their deductibility.
Contributions which are determined to not be deductible will
be returned to the Employer.
3.5 FORM OF CONTRIBUTION
Except as contemplated in paragraphs 4.3 and 4.4, no contribution shall
be made in property other than United States currency or such other
property as is acceptable to the Service Company.
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ARTICLE IV - EMPLOYEE CONTRIBUTIONS
4.1 VOLUNTARY CONTRIBUTIONS
Unless otherwise specified in the Adoption Agreement, an Employee may
not make Voluntary Contributions to the Plan established hereunder. If
permitted, they will be made in a uniform and nondiscriminatory manner.
Such contributions are subject to the limitations on Annual Additions
and are subject to antidiscrimination testing.
4.2 QUALIFIED VOLUNTARY CONTRIBUTIONS
A Participant may no longer make Qualified Voluntary Contributions to
the Plan. Amounts already contributed may not remain in the Trust Fund.
The Participant must withdraw the Qualified Voluntary Contribution
amounts already contributed by making a written application to the Plan
Administrator.
4.3 ROLLOVER CONTRIBUTION
Unless provided otherwise in the Adoption Agreement, a Participant and
an Employee in an eligible class of Employees who has not met the
eligibility requirements for participation in the Plan may make a
Rollover Contribution to any Defined Contribution Plan established
hereunder of all or any part of an amount distributed or distributable
to him or her from a Qua1ified Deferred Compensation Plan provided:
(a) the amount distributed to the Participant is deposited in
the Plan no later than the sixtieth day after such
distribution was received by the Participant,
(b) the amount distributed is not one of a series of
substantially equal periodic payments made for the life (or
life expectancy) of the Participant or the joint lives (or
joint life expectancies) of the Participant and the
Participant's Designated Beneficiary, or for a specified
period of ten years or more;
(c) the amount distributed is not required under section
401(a)(9) of the Code;
(d) if the amount distributed included property such property is
rolled over, or if sold the proceeds of such property may be
rolled over,
(e) the amount distributed is not includible in gross income
(determined without regard to the exclusion for net
unrealized appreciation with respect to employer
securities).
In addition, if the Adoption Agreement allows Rollover Contributions,
the Plan will also accept any Eligible Rollover Distribution (as defined
at paragraph 1.69) directly to the Plan.
Rollover Contributions, which relate to distributions prior to January
1, 1993, must be made in accordance with paragraphs (a) through (e) and
additionally meet the requirements of paragraph (f):
(f) the distribution from the Qualified Deferred Compensation
Plan constituted the Participant's entire interest in such
Plan and was distributed within one taxable year to the
Participant:
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(1) on account of separation from Service, a Plan
termination, or in the case of a profit sharing or
stock bonus plan, a complete discontinuance of
contributions under such plan within the meaning of
Section 402(a)(6)(A) of the Code, or
(2) in one or more distributions which constitute a
qualified lump sum distribution within the meaning of
Code Section 402(e)(4)(A), determined without
reference to subparagraphs (B) and (H),
Such Rollover Contribution may also be made through an Individual
Retirement Account qualified under Code Section 408 where the IRA was
used as a conduit from the Qualified Deferred Compensation Plan, the
Rollover Contribution is made in accordance with the rules provided
under paragraph (a) through (e) and the Rollover Contribution does not
include any regular IRA contributions, or earnings thereon, which the
Participant may have made to the IRA. Rollover Contributions which
relate to distributions prior to January 1, 1993, may be made through an
IRA in accordance with paragraphs (a) through (f) and additional
requirements as provided in the previous sentence. The Trustee shall not
be held responsible for determining the tax-free Status of any Rollover
Contribution made under this Plan.
4.4 TRANSFER CONTRIBUTION
Unless provided otherwise in the Adoption Agreement, a Participant and
an Employee in an eligible class of Employees who has not met the
eligibility requirements for participation in the Plan, may, subject to
the provisions of paragraph 4.5, also arrange for the direct transfer of
his or her benefit from a Qualified Deferred Compensation Plan to this
Plan. For accounting and record keeping purposes, Transfer Contributions
shall be identical to Rollover Contributions.
In the event the Employer accepts a Transfer Contribution from a Plan in
which the Employee was directing the investments of his or her account,
the Employer may continue to permit the Employee to direct his or her
investments in accordance with paragraph 13.7 with respect only to such
Transfer Contribution. Notwithstanding the above, the Employer may
refuse to accept such Transfer Contributions.
Notwithstanding anything to the contrary, if a Participant changes
classification of employment between eligible and ineligible classes,
then the Employer may transfer said Participant's account balance
between the appropriate plans maintained by the Employer, so long as
such transfer will not result in an illegal cut back in benefits in
violation of Code Section 411(d)(6).
4.5 EMPLOYER APPROVAL OF TRANSFER CONTRIBUTIONS
The Employer maintaining a Safe-Harbor Profit Sharing Plan in accordance
with the provisions of paragraph 8.7, acting in a nondiscriminatory
manner, may in its sole discretion refuse to allow Transfer
Contributions to its profit-sharing plan, if such contributions are
directly or indirectly being transferred from a defined benefit plan, a
money purchase pension plan (including a target benefit plan), a stock
bonus plan, or another profit-sharing plan which would otherwise provide
for a life annuity form of payment to the Participant.
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4.6 ELECTIVE DEFERRALS
A Participant may enter into a Salary Savings Agreement with the
Employer authorizing the Employer to withhold a portion of such
Participant's Compensation not to exceed $7,000 per calendar year as
adjusted under Code Section 415(d) or, if lesser, the percentage of
Compensation specified in the Adoption Agreement and to deposit such
amount to the Plan. No Participant shall be permitted to have Elective
Deferrals made under this Plan or any other qualified plan maintained
by the Employer, during any taxable year, in excess of the dollar
limitation contained in Code Section 402(g) in effect at the beginning
of such taxable year. Thus, the $7,000 limit may be reduced if a
Participant contributes pre-tax contributions to qualified plans of this
or other Employers. Any such contribution shall be credited to the
Employee's Salary Savings Account. Unless otherwise specified in the
Adoption Agreement, a Participant may amend his or her Salary Savings
Agreement to increase, decrease or terminate the percentage upon 30
days written notice to the Employer. If a Participant terminates his
or her agreement, such Participant shall not be permitted to put a new
Salary Savings Agreement into effect until the first pay period in the
next Plan Year, unless otherwise stated in the Adoption Agreement. The
Employer may also amend or terminate said agreement on written notice
to the Participant. If a Participant has not authorized the Employer to
withhold at the maximum rate and desires to increase the total withheld
for a Plan Year, such Participant may authorize the Employer upon 30
days notice to withhold a supplemental amount up to 100% of his or her
Compensation for one or more pay periods. In no event may the sum of the
amounts withheld under the Salary Savings Agreement plus the supplemental
withholding exceed 25% of a Participant's Compensation for a Plan Year.
Elective Deferrals shall be deposited in the Trust no later than the date
described in Section 2510.3-102 of the Department of Labor Regulations.
4.7 DIRECT ROLLOVER OF BENEFITS
Notwithstanding any provision of the plan to the contrary that would
otherwise limit a Participant's election under this Paragraph, for
distributions made on or after January 1, 1993, a Participant may elect,
at the time and in the manner prescribed by the Plan Administrator, to
have any portion of an Eligible Rollover Distribution paid directly to
an Eligible Retirement Plan specified by the Participant in a Direct
Rollover. Any portion of a distribution which is not paid directly to an
Eligible Retirement Plan shall be distributed to the Participant. For
purposes of this Paragraph, a Surviving Spouse or a spouse or former
spouse who is an alternate payee under a Qualified Domestic Relations
Order as defined in section 414(p) of the Code, will be permitted to
elect to have any Eligible Rollover Distribution paid directly to an
individual retirement account (IRA), an individual retirement annuity
(IRA), or another qualified retirement Plan.
The plan provisions otherwise applicable to distributions continue to
apply to Rollover and Transfer Contributions.
ARTICLE V - PARTICIPANT ACCOUNTS
5.1 SEPARATE ACCOUNTS
The Employer shall establish a separate bookkeeping account for each
Participant showing the
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total value of his or her interest in the Fund. Each Participant's
account shall be separated for bookkeeping purposes into the following
sub-accounts:
(a) Employer contributions.
(1) Matching Contributions.
(2) Qualified Matching Contributions.
(3) Qualified Non-Elective Contributions.
(4) Discretionary Contributions.
(5) Elective Deferrals.
(b) Voluntary Contributions (and additional amounts include
required contributions and, if applicable, either repayments
of loans previously defaulted on and treated. As "deemed
distributions" on which a tax report has been issued, and
amounts paid out upon a separation from service which have
been included in income and which are repaid after being re-
hired by the Employer).
(c) Transfer Contributions.
(d) Rollover Contributions.
5.2 ADJUSTMENTS TO PARTICIPANT ACCOUNTS
As of each Valuation Date of the Plan, the Employer shall add to each
account:
(a) the Participant's share of the Employer's contribution and
forfeitures as determined in the Adoption Agreement,
(b) any Elective Deferrals, Voluntary, Rollover or Transfer
Contributions made by the Participant,
(c) any repayment of amounts previously paid out to a
Participant upon a separation from Service and repaid by the
Participant since the last Valuation Date, and
(d) the Participant's proportionate share of any investment
earnings and increase in the fair market value of the Fund
since the last Valuation Date, as determined at paragraph 5.4.
The Employer shall deduct from each account:
(e) any withdrawals or payments made from the Participant's
account since the last Valuation Date, and
(f) the Participant's proportionate share of any decrease in the
fair market value of the Fund since the last Valuation Date,
as determined at paragraph 5.4.
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5.3 ALLOCATING EMPLOYER CONTRIBUTIONS
The Employer's contribution shall be allocated to Participants in
accordance with the allocation formula selected by the Employer in the
Adoption Agreement, and the minimum contribution and allocation
requirements for Top-Heavy Plans. Unless otherwise specified in the
Adoption Agreement, the Plan will not be integrated with Social
Security. Beginning with the 1990 Plan Year and thereafter, for plans on
Standardized Adoption Agreement 001, Participants who are credited with
more than 500 Hours of Service or are employed on the last day of the
Plan Year must receive a full allocation of Employer contributions. In
Nonstandardized Adoption Agreement 002, Employer contributions shall be
allocated to the accounts of Participants employed by the Employer on
the last day of the Plan Year unless indicated otherwise in the Adoption
Agreement. In the case of a non-Top-Heavy, Nonstandardized Plan,
Participants must also have completed a Year of Service unless otherwise
specified in the Adoption Agreement. For Nonstandardized Adoption
Agreement 002, the Employer may only apply the last day of the Plan Year
and Year of Service requirements if the Plan satisfies the
requirements of Code Sections 401(a)(26) and 41O(b) and the
regulations thereunder including the exception for 401(k) plans. If,
when applying the last day and Year of Service requirements, the Plan
fails to Satisfy the aforementioned requirements, additional
Participants will be eligible to receive an allocation of Employer
Contributions until the requirements are satisfied. Participants who are
credited with a Year of Service, but not employed at Plan Year end, are
the first category of additional Participants eligible to receive an
allocation. If the requirements are still not satisfied, Participants
credited with more than 500 Hours of Service and employed at Plan
Year end are the next category of Participants eligible to receive an
allocation. Finally, if necessary to satisfy the said requirements, any
Participant credited with more than 500 Hours of Service will be
eligible for an allocation of Employer Contributions. The Service
requirement is not applicable with respect to any Plan Year during which
the Employer's Plan is Top-Heavy.
In the event the Employer selects an integrated allocation formula, the
Employer's contribution will be allocated in accordance with the
following method unless otherwise specified in the Adoption Agreement:
(a) First, to the extent contributions and forfeitures are
sufficient, all Participants will receive an allocation
equal to 3% of their Compensation.
(b) Next, any remaining Employer Contributions and forfeitures
will be allocated to Participants who have Compensation in
excess of the Taxable Wage Base (excess Compensation). Each
such Participant will receive an allocation in the ratio
that his or her excess compensation bears to the excess
Compensation of all Participants. Participants may only
receive an allocation of 3% of excess Compensation.
(c) Next, any remaining Employer contributions and forfeitures
will be allocated to all Participants in the ratio that
their Compensation plus Compensation bears to the total
Compensation plus excess Compensation of all Participants.
Participants may only receive an allocation of up to 2.7% of
their Compensation plus excess Compensation, under this
allocation method. If the Taxable Wage Base as defined in
Section 3 of the Adoption Agreement is less than the
maximum, but more than the greater of $10,000 or 20% of the
maximum, then the 2.7% must be reduced. If the amount
specified is
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greater than 80% but less than 100% of the maximum Taxable
Wage Base, the 2.7% must be reduced to 2.4%. If the amount
specified is greater than the greater of $10,000 or 20% of
the maximum Taxable Wage Base, but not more than 80%, 2.7%
must be reduced to 1.3%.
(d) Next, any remaining Employer contributions and forfeitures
will be allocated to all Participants (whether or not they
received an allocation under the preceding paragraphs) in
the ratio that each Participant's Compensation bears to all
Participants' Compensation.
If the Plan is not Top-Heavy, subparagraphs (a) and (b) above may be
disregarded and 5.7%, 5.4% or 4.3% may be substituted for 2.7%, 2.4% or
1.3% where it appears in (c) above.
5.4 ALLOCATING INVESTMENT EARNINGS AND LOSSES
A Participant's share of investment earnings and any increase or
decrease in the fair market value of the Fund shall be based on the
proportionate value of all active accounts (other than accounts with
segregated investments) as of the last Valuation Date less withdrawals
since the last Valuation Date. If applicable segregated accounts may be
allocated earnings, up through the date of segregation, under the above
method, at the Plan Administrators discretion. If Employer and/or
Employee contributions are made monthly, quarterly, or on some other
systematic basis, the adjusted value of such accounts for allocation of
investment income and gains or losses shall include one-half the
contributions for such period. If Employer and/ or Employee
contributions are not made on a systematic basis, it is assumed that
they are made at the end of the valuation period and therefore will not
receive an allocation of investment earnings and gains or losses for
such period. Notwithstanding the above, if contributions are made on a
nonsystematic basis, at the Plan Administrator's discretion, such
contributions will be credited with an allocation of the actual
investment earnings and gains and losses from the actual date of deposit
of each such contribution until the end of the period. In no event shall
this election of allocating gains and losses be used to disseminate.
Finally, the Plan Administrator may elect to disregard nonsystematic
contributions made during the year, altogether, and allocate earnings
exclusively on the basis of all active accounts (other than accounts
with segregated investments) as of the last Valuation Date less
withdrawals since the last Valuation Date, or, if applicable, take into
consideration any systematic contributions, as provided above. Accounts
with segregated investments shall receive only the income or loss on
such segregated investments.
5.5 PARTICIPANT STATEMENTS
The Employer shall periodically (not less often than annually), prepare
a Statement for each Participant showing the additions to and
subtractions from his or her account since the last such statement and
the fair market value of his or her account as of the date for which the
statement is prepared.
ARTICLE VI - RETIREMENT BENEFITS AND DISTRIBUTIONS
6.1 NORMAL RETIREMENT BENEFITS
A Participant shall be entitled to receive the balance held in his or
her account from Employer
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contributions upon attaining Normal Retirement Age or at such earlier
dates as the provisions of this Article VI may allow. If the Participant
elects to continue working past his or her Normal Retirement Age, he or
she will continue as an active Plan Participant and no distribution
shall be made to such Participant until his or her actual retirement
date unless the employer elects otherwise in the Adoption Agreement, or
a minimum distribution is required by law. Settlement shall be made in
the normal form, or if elected, in one of the optional forms of payment
provided below.
6.2 EARLY RETIREMENT BENEFITS
If the Employer so provides in the Adoption Agreement, an Early
Retirement Benefit will be available to individuals who meet the age and
Service requirements. An individual who meets the Early Retirement Age
requirements and separates from Service, will become fully vested,
regardless of any vesting schedule which otherwise might apply. If a
Participant separates from Service before satisfying the age
requirements, but after having satisfied the Service requirement, the
Participant will be entitled to elect an Early Retirement benefit upon
satisfaction of the age requirement.
6.3 BENEFITS ON TERMINATION OF EMPLOYMENT
(a) If a Participant terminates employment prior to Normal
Retirement Age, such Participant shall be entitled to
receive the vested balance held in his or her account
payable at Normal Retirement Age in the normal form, or if
elected, in one of the optional forms of payment provided
hereunder. If applicable, the Early Retirement Benefit
provisions may be elected. Notwithstanding the preceding
sentence, a former Participant may, if allowed in the
Adoption Agreement, make application to the Employer
requesting early payment of any deferred vested and
nonforfeitable benefit due.
(b) If a Participant terminates employment, and the value of
that Participant's vested account balance derived from
Employer and Employee contributions is not greater than
$3,500, the Participant may receive a lump sum distribution
of the value of the entire vested portion of such account
balance and the non-vested portion will be treated as a
forfeiture. The Employer shall continue to follow their
consistent policy, as may be established, regarding
immediate cash-outs of Vested Account Balances of $3,500 or
less. For purposes of this Article, if the value of a
Participant's Vested Account Balance is zero, the
Participant shall be deemed to have received a distribution
of such Vested Account Balance immediately following
termination. Likewise, if the Participant is re-employed
prior to incurring 5 consecutive 1-year Breaks In Service
they will be deemed to have immediately repaid such
distribution. For Plan Years beginning prior to 1989, a
Participant's Vested Account Balance shall not include
Qualified Voluntary Contributions. Notwithstanding the
above, if the Employer maintains or has maintained a policy
of not distributing any amounts until the Participant's
Normal Retirement Age, the Employer can continue to
uniformly apply such policy.
(c) If a Participant terminates employment with a Vested Account
Balance derived from
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Employer and Employee contributions in excess of $3,500, and
elects (with his or her Spouse's consent, if required) to
receive 100% of the Value of his or her Vested Account
Balance in a lump sum, the non-vested portion will be
treated as a forfeiture. The Participant (and his or her
Spouse, if required) must consent to any distribution, when
the Vested Account Balance described above exceeds S3,500 or
if at the time of any prior distribution it exceeded $3,500.
For purposes of this paragraph, for Plan Years beginning
prior to 1989, a Participants Vested Account Balance shall
not include Qualified Voluntary Contributions.
(d) Distribution of less than 100% of the Participant's Vested
Account Balance shall be permitted upon termination of
employment.
(e) If a Participant who is not 100 vested receives or is deemed
to receive a distribution pursuant to this paragraph and
resumes employment covered under this Plan, the Participant
shall have the right to repay to the Plan the full amount of
the distribution attributable to Employer contributions on
or before the earlier of the date that the Participant
incurs 5 consecutive 1-year Breaks in Service following the
date of distribution or five years after the first date on
which the Participant is subsequently re-employed. In such
event, the Participant's account shall be restored to the
value thereof at the time the distribution was made and may
further be increased by the Plan's income and investment
gains and/or losses on the undistributed amount from the
date of distribution to the date of repayment.
(f) A Participant shall also have the option, to postpone
payment of his or her Plan benefits until the first day of
April following the calendar year in which he or she attains
age 70-1/2. Any balance of a Participant's account resulting
from his or her Employee contributions not previously
withdrawn, if any, may be withdrawn by the Participant
immediately following separation from Service.
(g) If a Participant ceases to be an active Employee as a result
of a Disability as defined at paragraph 1.21, such
Participant shall be able to make an application for a
disability retirement benefit payment. The Participant's
account balance will be deemed immediately distributable as
set forth in paragraph 6.4, and will be fully vested
pursuant to paragraph 9.2.
6.4 RESTRICTIONS ON IMMEDIATE DISTRIBUTIONS
(a) An account balance is immediately distributable if any part
of the account balance could be distributed to the
Participant (or Surviving Spouse) before the Participant
attains (or would have attained if not deceased) the later
of the Normal Retirement Age or age 62.
(b) If the value of a Participant's vested account balance
derived from Employer and Employee Contributions exceeds (or
at the time of any prior distribution exceeded $3,500, and
the account balance is immediately distributable, the
Participant and his or her Spouse (or where either the
Participant or the Spouse has died, the survivor) must
consent to any distribution of such account balance. The
consent of the
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Participant and the Spouse shall be obtained in writing
within the 90-day period ending on the annuity starting
date, which is the first day of the first period for which
an amount is paid as an annuity or any other form. The Plan
Administrator shall notify the Participant and the
Participant's Spouse of the right to defer any distribution
until the Participant's account balance is no longer
immediately distributable. Such notification shall include a
general description of the material features, and an
explanation of the relative values of, the optional forms of
benefit available under the plan in a manner that would
satisfy the notice requirements of Code Section 417(a)(3),
and shall be provided no less than 30 days and no more than
90 days prior to the annuity starting date.
(c) Notwithstanding the foregoing, only the Participant
need consent to the commencement of a distribution in the
form of a qualified Joint and Survivor Annuity while the
account balance is immediately distributable. Furthermore,
if payment in the form of a Qualified Joint and Survivor
Annuity is not required with respect to the Participant
pursuant to paragraph 8.7 of the Plan, only the Participant
need consent to the distribution of an account balance that
is immediately distributable. Neither the consent of the
Participant nor the Participant's Spouse shall be required
to the extent that a distribution is required to satisfy
Code Section 401(a)(9) or Code Section 415. In addition,
upon termination of this Plan if the Plan does not offer an
annuity option (purchased from a commercial provider), the
Participant's account balance may, without the Participant's
consent, be distributed to the Participant or transferred
to another Defined Contribution Plan [other than an employee
stock ownership plan as defined in Code Section 4975(e)(7)]
within the same controlled group.
(d) For purposes of determining the applicability of the
foregoing consent requirements to distributions made before
the first day of the first Plan Year beginning after 1988,
the Participant's vested account balance shall not include
amounts attributable to Qualified Voluntary Contributions.
(e) If a distribution is one to which Code Section 401(a)(11)
and 417 do not apply, such distribution may commence less
than 30 days after the notice required under Section
1.411(a)-11(c) of the Income Tax Regulations is given,
provided that:
(1) the Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at
least 30 days after receiving the notice to consider
the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution
option), and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
6.5 NORMAL FORM OF PAYMENT
The normal form of payment for a profit-sharing plan satisfying the
requirements of paragraph 8.7 hereof shall be a lump sum with no option
for annuity payments. For all other plans, the normal form of payment
hereunder shall be a Qualified Joint and Survivor Annuity as provided
under Article VIII. A Participant whose vested account balance derived
from Employer and
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Employee contributions exceeds $3,500, or if at the time of any prior
distribution it exceeded $3,500, shall (with the consent of his or her
Spouse) have the right to receive his or her benefit in a lump sum or in
monthly, quarterly, semi-annual or annual payments from the Fund over
any period not extending beyond the life expectancy of the Participant
and his or her Beneficiary. For purposes of this paragraph, for Plan
Years prior to 1989, a Participant's Vested Account Balance shall not
include Qualified Voluntary Contributions. The normal form of payment
shall be automatic, unless the Participant files a written request with
the Employer prior to the date on which the benefit is automatically
payable, electing a lump sum or installment payment option. No
amendment to the Plan may eliminate one of the optional distribution
forms listed above.
6.6 COMMENCEMENT OF BENEFITS
(a) Unless the Participant elects otherwise, distribution of
benefits will begin no later than the 60th day after the
close of the Plan Year in which the latest of the following
events occurs:
(1) the Participant attains age 65 (or normal retirement
age if earlier),
(2) the 10th anniversary of the year in which the
Participant commenced participation in the Plan, or
(3) the Participant terminates Service with the Employer.
(b) Notwithstanding the foregoing, the failure of a Participant
and Spouse (If necessary) to consent to a distribution while
a benefit is immediately distributable, within the meaning
of paragraph 6.4 hereof, shall be deemed an election to
defer commencement of payment of any benefit sufficient to
satisfy this paragraph.
6.7 CLAIMS PROCEDURES
Upon retirement, death, or other severance of employment, the
Participant or his or her representative may make application to the
Employer requesting payment of benefits due and the manner of payment. If
no application for benefits is made, the Employer shall automatically
pay any vested benefit due hereunder in the normal form at the time
prescribed at paragraph 6.4. If an application for benefits is made, the
Employer shall accept, reject, or modify such request and shall notify
the Participant in writing setting forth the response of the Employer
and in the case of a denial or modification the Employer shall:
(a) state the specific reason or reasons for the denial,
(b) provide specific reference to pertinent Plan provisions on
which the denial is based,
(c) provide a description of any additional material or
information necessary for the Participant or his
representative to perfect the claim and an explanation of
why such material or information is necessary, and
(d) explain the Plan's claim review procedure as contained in
this Plan.
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In the event the request is rejected or modified, the Participant or his
or her representative may within 60 days following receipt by the
Participant or representative of such rejection or modification, submit
a written request for review by the Employer of its initial decision.
Within 60 days following such request for review, the Employer shall
render its final decision in writing to the Participant or
representative specific reasons for such decision. If the Participant or
representative is not satisfied with the Employers final decision, the
Participant or representative can institute an action in a federal court
of competent jurisdiction; for this purpose, process would be served on
the Employer.
6.8 IN-SERVICE WITHDRAWALS
An Employee may withdraw all or any part of the fair market value of his
or her Voluntary Contributions, Qualified Voluntary Contributions,
Rollover Contributions, upon written request to the Employer. Transfer
Contributions, which originate from a Plan meeting the safe-harbor
provisions of paragraph 8.7, may also be withdrawn, by an Employee, upon
written request to the Employer. Transfer Contributions not meeting the
safe-harbor provisions may only be withdrawn upon retirement, death,
disability, termination or termination of the Plan, and will be subject
to Spousal consent requirements consent in Code Sections 411(a)(11) and
417. No such withdrawals are permitted from a money purchase plan until
the participant reaches Normal Retirement Age. Such request shall
include the Employee's address, social security number, birthdate, and
amount of the withdrawal. If at the time a distribution of Qualified
Voluntary Contributions is received the Participant has not attained age
59-1/2 and is not disabled, as defined at Code Section 22(e)(3), the
Participant will be subject to a federal income tax penalty, unless the
distribution is rolled over to a qualified plan or individual retirement
plan within 60 days of the date of distribution. A Participant may
withdraw all or any part of the fair market value of his or her pre-1987
Voluntary Contributions with or without withdrawing the earnings
attributable thereto. Post-1986 Voluntary Contributions may only be
withdrawn along with a portion of the earnings thereon. The amount of
the earnings to be withdrawn is determined by using the formula: DA
[1-(V + V + E)], where DA is the distribution amount, V is the amount of
Voluntary Contributions and V + E is the amount of Voluntary
Contributions plus the earnings attributable thereto. A Participant
withdrawing his or her other contributions prior to attaining age
59-1/2, will be subject to a federal tax penalty to the extent that the
withdrawn amounts are includible in income. Any Participant in a profit-
sharing plan may, if permitted by the Employer in the Adoption
Agreement, withdraw all or any part of the fair market value of any of
such vested contributions, plus the investment earnings thereon, after
attaining age 59-1/2 without separating from Service. Such Employer
contributions may not have been used to satisfy the antidiscrimination
test of Code Section 401(k). Such distributions shall not be eligible
for redeposit to the Fund. A withdrawal under this paragraph shall not
prohibit such Participant from sharing in any future Employer
Contribution he or she would otherwise be eligible to share in. A
request to withdraw amounts pursuant to this paragraph must if
applicable, be consented to by the Participant's Spouse. The consent
shall comply with the requirements of paragraph 6.4 relating to
immediate distributions.
6.9 HARDSHIP WITHDRAWAL
Unless otherwise specified by the Employer in the Adoption Agreement, a
Participant may not request a hardship withdrawal prior to attaining age
59-1/2. If permitted and the Participant has
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not attained age 59-1/2, the Participant may be subject to a federal
income tax penalty. Such request shall be in writing to the Employer who
shall have sole authority to authorize a hardship withdrawal, pursuant
to the rules below. Hardship withdrawals may include Elective Deferrals
regardless of when contributed and any accrued and credited thereon as
of the last day of the Plan Year ending before July 1, 1989 and Employer
related contributions including but not limited to Employer Matching
Contributions, plus the investment earnings thereon to the extent
vested. Qualified Matching Contributions, Qualified Non-Elective
Contributions and Elective Deferrals reclassified as Voluntary
Contributions plus the investment earnings thereon are only available
for hardship withdrawal prior to age 59-1/2 to the extent that they were
credited to the Participant's Account as of the last day of the Plan
Year ending prior to July 1, 1989. The Plan Administrator may limit
withdrawals to Elective Deferrals and the earnings thereon as stipulated
above. Hardship withdrawals are subject to the Spousal consent
requirements contained in Code Sections 401(a)(11) and 17. Only the
following reasons are valid to obtain hardship withdrawal:
(a) medical expenses [within the meaning of Code Section
213(d)], incurred or necessary for the medical care of the
Participant, his or her Spouse, children and other
dependents,
(b) purchase (excluding mortgage payments) of the principal
residence for the Participant,
(c) payment of tuition and related educational expenses for the
next twelve (12) months of post-secondary education for the
Participant, his or her Spouse, children or other
dependents, or
(d) the need to prevent eviction of the Employee from or a
foreclosure on the mortgage of, the Employee's principal
residence.
Furthermore, the following conditions must be met in order for a
withdrawal to be authorized:
(e) the Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans under all
plans maintained by the Employer,
(f) all plans maintained by the Employer, other than flexible
benefit plans under Code Section 125 providing for current
benefits, provide that the Employee's Elective Deferrals and
Voluntary Contributions will be suspended for twelve months
after the receipt of the Hardship distribution,
(g) the distribution is not in excess of the amount of the
immediate and heavy financial need [(a) through (d) above]
including amounts necessary to pay any federal, state or
local income tax or penalties reasonably anticipated to
result from the distribution, and
(h) all plans maintained by the Employer provide that an
Employee may not make Elective Deferrals for the Employee's
taxable year immediately following the taxable year of the
hardship distribution in excess of the applicable limit
under Code Section 402(g) for such taxable year, less the
amount of such Employee's pre-tax: contributions for the
taxable year of the hardship distribution.
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If a distribution is made at a time when a Participant has a
nonforfeitable right to less than 100% of the account balance derived
from Employer contributions and the Participant may increase the
nonforfeitable percentage in the account:
(i) A separate account will be established for the Participant's
interest in the Plan as of the time of the distribution, and
(j) At any relevant time the Participant' s nonforfeitable
portion of the separate account will be equal to an amount
("X") determined by the formula: X = P [AB + (R*D)]-(R*D)
For purposes of applying the formula: P is the nonforfeitable percentage
at the relevant time, "AB" is the account balance at the relevant time,
"D" is the amount of the distribution and "R" is the ratio of the
account balance at the relevant time to the account balance after
distribution.
6.10 ORDER OF WITHDRAWA1S
Unless the Participant directs otherwise, withdrawals shall be made:
(a) First, from amounts attributable to Voluntary Contributions;
(b) Second, from amounts attributable to Rollover Contributions;
(c) Third, from amounts attributable to Transfer Contributions;
(d) Fourth, from amounts attributable to Elective Deferrals;
(e) Fifth, from amounts attributable to Qualified Non-Elective
Contributions;
(f) Sixth, from amounts attributable to Qualified Matching
Contributions;
(g) Seventh, from amounts attributable to vested matching
Contributions; and
(h) Eighth, from amounts attributable to vested Discretionary
Contributions.
ARTICLE VII - DISTRIBUTION REQUIREMENTS
7.1 JOINT AND SURVIVOR ANNUITY REQUIREMENTS
All distributions made under the terms of this Plan must comply with the
provisions of Article VIII including, if applicable, the safe harbor
provisions thereunder.
7.2 MINIMUM DISTRIBUTION REQUIREMENTS
All distributions required under this Article shall be determined and
made in accordance with the m1nimum distribution requirements of Code
Section 401(a)(9) and the regulations thereunder, including the minimum
distribution incidental benefit rules found at Regulations Section
1.401(a)(9)-2. The entire interest of a Participant must be distributed or
begin to be distributed no later than the Participant's Required
Beginning Date. Life expectancy and joint and last survivor
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life expectancy are computed by using the expected return multiples
found in Tables V and VI of Regulations Section 1.72-9.
In determining required distributions under the Plan, Participants and/
or their Spouse (Surviving Spouse) shall have the right to have their
life expectancy recalculated annually. Whether the Participant only or
both the Participant and Spouse's lives shall be recalculated shall be
determined by the Participant.
7.3 LIMITS ON DISTRIBUTION PERIODS
As of the First Distribution Calendar Year, distributions if not made in
a single-sum, may only be made over one of the following periods (or a
combination thereof):
(a) the life of the Participant,
(b) the life of the Participant and a Designated Beneficiary,
(c) a period certain not extending beyond the life expectancy of
the participant, or
(d) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated
beneficiary.
7.4 REQUIRED DISTRIBUTIONS ON OR AFTER THE REQUIRED BEGINNING DATE
(a) If a participant's benefit is to be distributed over (1) a
period not extending beyond the life expectancy of the
Participant or the joint life and last survivor expectancy
of the Participant and the Participant's Designated
Beneficiary or (2) a period not extending beyond the life
expectancy of the Designated Beneficiary, the amount
required to be distributed for each calendar year, beginning
with distributions for the First Distribution Calendar Year,
must at least equal the quotient obtained by dividing the
Participant's benefit by the Applicable Life Expectancy.
(b) For calendar years beginning before 1989, if the
Participant's Spouse is not the stated Beneficiary, the
method of distribution selected must have assured that at
least 50% of the Present Value of the amount available for
distribution was to be paid within the life expectancy of
the Participant.
(c) For calendar years beginning after 1988, the amount to be
distributed each year, beginning with distributions for the
First Distribution Calendar Year shall not be less than the
quotient obtained by dividing the Participant's benefit by
the lesser of (1) the Applicable Life Expectancy or (2) if
the Participant's Spouse is not the Designated Beneficiary,
the applicable divisor determined from the table set forth
in Q&A-4 of Regulations Section 1.401(a)(9)-2. Distributions
after the death of the Participant shall be distributed
using the Applicable Life Expectancy as the relevant divisor
without regard to Regulations Section 1.401(a)(9)-2.
(d) The minimum distribution required for the Participant's
First Distribution Calendar Year must be made on or before
the Participant's Required Beginning Date. The
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minimum distribution for other calendar years, including the
(minimum distribution for the Distribution Calendar Year in
which the Participant's Required Beginning Date occurs, must
be made on or before December 31 of that Distribution
Calendar Year.
(e) If the Participant's benefit is distributed in the form of
an annuity purchased from an insurance company,
distributions thereunder shall be made in accordance with
the requirements of Code Section 401 (a) (9) and the
Regulations thereunder.
(f) For purposes of determining the amount of the required
distribution for each Distribution Calendar Year, the
account balance to be used is the account balance determined
as of the last valuation preceding the Distribution Calendar
Year. This balance will be increased by the amount of any
contributions or forfeitures allocated to the account
balance after the valuation date in such preceding calendar
year. Such balance will also be decreased by distributions
made after the Valuation Date in such preceding Calendar
Year.
(g) For purposes of subparagraph 7.4(f), if any portion of the
minimum distribution for the First Distribution Calendar
Year is made in the second Distribution Calendar Year on or
before the Required Beginning Date, the amount of the
m1nimum distribution made in the second Distribution
Calendar Year shall be treated as if it had been made in the
immediately preceding Distribution Calendar Year.
7.5 REQUIRED BEGINNING DATE
(a) General Rule. The Required Beginning Date of a Participant
is the first day of April of the calendar year following the
calendar year in which the Participant attains age 70-1/2.
(b) Transitional Rules. The Required Beginning Date of a
Participant who attains age 70-1/2 before 1988, shall be
determined in accordance with (1) or (2) below:
(1) Non-5-percent owners. The Required Beginning Date of a
Participant who is not a 5-percent owner is the first
day of April of the calendar year following the
calendar year in which the later of retirement or
attainment of age 70-1/2 occurs. In the case of a
Participant who is not a 5-percent owner who attains
age 70-1/2 during 1988 and who has not retired as of
January 1,1989, the Required Beginning Date is Apri11,
1990.
(2) 5-percent owners. The Required Beginning Date of a
Participant who is a 5-percent owner during any year
beginning after 1979, is the first day of April
following the later of:
i) the calendar year in which the Participant
attains age 70-1/2, or
ii) the earlier of the calendar year with or within
which ends the plan year in which the
Participant becomes a 5-percent owner, or the
calendar year in which the Participant retires.
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(c) A Participant is treated as a 5-percent owner for purposes
of this Paragraph if such Participant is a 5-percent owner
as defined in Code Section 416(i) (determined in accordance
with Code Section 416 but without regard to whether the Plan
is Top-Heavy) at any time during the Plan Year "ending with
or within the calendar year in which such Owner attains age
66-1/2 or any subsequent Plan Year.
(d) Once distributions have begun to a 5-percent. owner under
this paragraph, they must continue to be distributed, even
if the Participant ceases to be a 5-percent owner in a
subsequent year.
7.6 TRANSITIONAL RULE
(a) Notwithstanding the other requirements of this Article and
subject to the requirements of Article VIII, Joint and
Survivor Annuity Requirements, distribution on behalf of any
Employee, including a 5-percent owner, may be made in
accordance with all of the following requirements
(regardless of when such distribution commences):
(1) The distribution by the Trust is one which would not
have disqualified such Trust under Code Section
401(a)(9) as in effect prior to amendment by the
Deficit Reduction Act of 1984.
(2) The distribution is in accordance with a method of
distribution designated by the Employee whose interest
in the Trust is being distributed or, if the Employee
is deceased, by a beneficiary of such Employee.
(3) Such designation was in writing, was signed by the
Employee or the beneficiary, and was made before 1984.
(4) The Employee had accrued a benefit under the Plan as
of December 31, 1983.
(5) The method of distribution designated by the Employee
or the beneficiary specifies the time at which
distribution will commence, the period over which
distributions will be made, and in the case of any
distribution upon the Employee's death, the
beneficiaries of the Employee listed in order of
priority.
(b) A distribution upon death will not be covered by this
transitional rule unless the information in the designation
contains the required information described above with
respect to the distributions to be made upon the death of
the Employee.
(c) For any distribution which commences before 1984, but
continues after 1983, the Employee or the beneficiary, to
whom such distribution is being made, will be presumed to
have designated the method of distribution under which the
distribution is being made if the method of distribution was
specified in writing and the distribution satisfies the
requirements in subparagraphs (a)(1) and (5) above.
(d) If a designation is revoked any subsequent distribution must
satisfy the requirements of Code Section 401(a)(9) and the
regulations thereunder. If a designation is revoked
subsequent to the date distributions are required to begin,
the Trust must distribute by
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the end of the calendar year following the calendar year in
which the revocation occurs the total amount not yet
distributed which would have been required to have been
distributed to satisfy Code Section 401(a)(9) and the
regulations thereunder, but for the section 242(b)(2)
election of the Tax Equity and Fiscal Responsibility Act of
1982. For calendar years beginning after 1988, such
distributions must meet the min1mwn distribution incidental
benefit requirements in section 1.401(a)(9)-2 of the Income
Tax Regulations. Any changes in the designation will be
considered to be a revocation of the designation. However,
the mere substitution or addition of another beneficiary
(one not named in the designation) under the designation
will not be considered to be a revocation of the
designation, so long as such substitution or addition does
not alter the period over which distributions are to be made
under the designation, directly or indirectly (for example,
by altering the relevant measuring life). In the case in
which an amount is transferred or rolled over from one plan
to another plan, the rules in Q&.A J-2 and Q&.A J-3 of the
regulations shall apply.
7.7 DESIGNATION OF BENEFICIARY FOR DEATH BENEFIT
Each Participant shall file a written designation of beneficiary with
the Employer upon qualifying for participation in this Plan. Such
designation shall remain in force until revoked by the Participant by
filing a new beneficiary form with the Employer. The Participant may
elect to have a portion of his or her account balance invested in an
insurance contract. If an insurance contract is purchased under the
Plan, the Trustee must be named as Beneficiary under the terms of the
contract. However, the Participant shall designate a Beneficiary to
receive the proceeds of the contract after settlement is received by the
Trustee. Under a profit-sharing plan satisfying the requirements of
paragraph 8.7, the Designated Beneficiary shall be the Participant's
Surviving Spouse, if any, unless such Spouse properly consents
otherwise.
7.8 NONEXISTENCE OF BENEFICIARY
Any portion of the amount payable hereunder which is not disposed of
because of the Participant's. or former Participant's failure to
designate a beneficiary, or because all of the Designated Beneficiaries
predeceased the Participant, shall be paid to his or her Spouse. If the
Participant had no Spouse at the time of death, payment shall be made to
the personal representative of his or her estate in a lump sum.
7.9 DISTRIBUTION BEGINNING BEFORE DEATH
If the Participant dies after distribution of his or her interest has
begun, the remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of distribution
being used prior to the Participant's death.
7.10 DISTRIBUTION BEGINNING AFTER DEATH
If the Participant dies before distribution of his or her interest
begins, distribution of the Participant's entire interest shall be
completed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death except to the extent that an
election is made to receive distributions in accordance with (a) or (b)
below:
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(a) If any portion of the Participant's interest is payable to a
Designated Beneficiary, distributions may be made over the
life or over a period certain not greater than the life
expectancy of the Designated Beneficiary commencing on or
before December 31 of the calendar year immediately
following the calendar year in which the Participant died;
(b) If the Designated Beneficiary is the Participant's surviving
Spouse, the date distributions are required to begin in
accordance with (a) above shall not be earlier than the
later of (1) December 31 of the calendar year immediately
following the calendar year in which the Participant died or
(2) December 31 of the calendar year in which the
Participant would have attained age 70-1/2.
If the Participant has not made an election pursuant to this paragraph
7.10 by the time of his or her death, the Participant's Designated
Beneficiary must elect the method of distribution no later than the
earlier of (1) December 31 of the calendar year in which distributions
would be required to begin under this section, or (2) December 31 of the
calendar year which contains the fifth anniversary of the date of death
of the participant. If the Participant has no Designated Beneficiary, or
if the Designated Beneficiary does not elect a method of distribution,
then distribution of the Participant's entire interest must be completed
by December 31 of the calendar year containing the fifth anniversary of
the Participant's death.
For purposes of this paragraph if the Surviving Spouse dies after the
Participant, but before payments to such Spouse begin, the provisions of
this paragraph with the exception of paragraph (b) therein, shall be
applied as if the Surviving Spouse were the Participant. For the
purposes of this paragraph and paragraph 7.9, distribution of a
Participant's interest is considered to begin on the Participant's
Req11iI1ed Beginning Date (or, if the preceding sentence is applicable,
the date distribution is required to begin to the Surviving Spouse). If
distribution in the form of an annuity described in paragraph 7.4(e)
irrevocably commences to the Participant before the Required Beginning
Date, the date distribution is considered to begin is the date
distribution actually commences.
For purposes of paragraph 7.9 and this paragraph, if an amount is
payable to either a minor or an individual who has been declared
incompetent, the benefits shall be paid to the legally appointed
guardian for the benefit of said minor or incompetent individual, unless
the court which appointed the guardian has ordered otherwise.
7.11 DISTRIBUTION OF EXCESS ELECTIVE REFERRALS
(a) Notwithstanding any other provision of the Plan, Excess
Elective Deferrals plus any income and minus any loss
allocable thereto, shall be distributed no later than
April 15, 1988, and each Apri1 15 thereafter, to Participants
to whose accounts Excess Elective Deferrals were allocated
for the preceding taxable year, and who claim Excess
Elective Deferrals for such taxable year. Excess Elective
Deferrals shall be treated as Annual Additions under the
plan, unless such amounts are distributed no later than the
first Apri115th following the close of the Participant's
taxable year. A Participant is deemed to notify the Plan
Administrator of any Excess Elective Deferrals that arise by
taking into account only those Elective Deferrals made to this
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Plan and any other plans of this Employer.
(b) Furthermore, a Participant who participates in another plan
allowing Elective Deferrals may assign to this Plan any
Excess Elective Deferrals made during a taxable year of the
Participant, by notifying the Plan Administrator of the
amount of the Excess Elective Deferrals to be assigned. The
Participant's claim shall be in writing; shall be submitted
to the Plan Administrator not later than March 1 of each
year; shall specify the amount of the Participant' s Excess
Elective Deferrals for the preceding taxable year; and shall
be accompanied by the Participant's written statement that
if such amounts are not distributed, such Excess Elective
Deferrals, when added to amounts deferred under other plans
or arrangements described in Code Sections 401(k), 408(k)
[Simplified Employee Pensions], or 403(b) [annuity programs
for public schools and charitable organizations] will exceed
the $7,000 limit as adjusted under Code Section 415(d)
imposed on the Participant by Code Section 402(g) for the
year in which the deferral occurred.
(c) Excess Elective Deferrals shall be adjusted for any income
or loss up to the end of the taxable year, during which such
excess was deferred. Income or loss will be calculated under
the method used to calculate investment earnings and losses
elsewhere in the Plan or any other reasonable method.
Whichever method is selected shall be used for all
Participants and for all corrective distributions made from
the Plan for the Plan Year.
(d) If the Participant receives a return of his or her Elective
Deferrals, the amount of such contributions which are
returned must be brought into the Employee's taxable income.
7.12 DISTRIBUTIONS OF EXCESS CONTRIBUTIONS
(a) Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of
each Plan Year to Participants to whose accounts such Excess
Contributions were allocated for the preceding Plan Year. If
such excess amounts are distributed more than 2-1/2 months
after the last day of the Plan Year in which such excess
amounts arose, a ten (10) percent excise tax will be imposed
on the Employer maintaining the Plan with respect to such
amounts. Such distributions shall be made to Highly
Compensated Employees on the basis of the respective
portions of the Excess Contributions attributable to each of
such Employees. Excess Contributions of Participants who
are subject to the Family Member aggregation rules of Code
Section 414(q)(6) shall be allocated among the Family
Members in proportion to the Elective Deferrals (and amounts
treated as Elective Deferrals) of each Family Member that is
combined to determine the Average Deferral Percentage.
(b) Excess Contributions shall be adjusted for any income or
loss up to the end of the Plan Year. Income or loss will be
calculated under the method used to calculate investment
earnings and losses elsewhere in the Plan.
(c) Excess Contributions shall be distributed from the Participant's
Elective Deferral
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account and Qualified Matching Contribution account (if
applicable) in proportion to the Participant's Elective
Deferrals and Qualified Marching Contributions (to the
extent used in the ADP test) for the Plan Year. Excess
Contributions shall be distributed from the Participant's
Qualified Non-Elective Contribution account only to the
extent that such Excess Contributions exceed the balance in
the Participant's Elective Deferral account and Qualified
Matching Contribution account.
7.13 DISTRIBUTIONS OF EXCESS AGGREGATE CONTRIBUTIONS
(a) Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss
allocable thereto, shall be forfeited, if forfeitable, or if
not forfeitable, distributed no later than the last day of
each Plan Year to Participants whose accounts such Excess
Aggregate Contributions were allocated for the preceding
Plan Year. Excess Aggregate Contributions shall be
allocated to Participants who are subject to the Family
Member aggregation rules of Code Section 414(q)(6) in the
manner prescribed by the regulations.
If such Excess Aggregate Contributions are distributed more
than 2-1/2 months after the last day of the Plan Year in
which such excess amounts arose, a ten (10) percent excise
tax will be imposed on the Employer maintaining the Plan
with respect to those amounts. Excess Aggregate
Contributions shall be treated as Annual Additions under the
plan.
(b) Excess Aggregate Contributions shall be adjusted for any
income or loss up to the end of the Plan Year. The income
or loss allocable Excess Aggregate Contributions is the sum
of income or loss for the Plan Year allocable to the
Participant's Voluntary Contribution account, Matching
Contribution account (if any, and if all amounts therein are
not used in the ADP test) and, if applicable, Qualified Non-
Elective Contribution account and Elective Deferral account.
Income or loss will be calculated under the method used to
calculate investment earnings and losses elsewhere in the
Plan.
(c) Forfeitures of Excess Aggregate Contributions may either be
reallocated to the accounts of non-Highly Compensated
Employees or applied to reduce Employer contributions, as
elected by the employer in the Adoption Agreement.
(d) Excess Aggregate Contributions shall be forfeited if such
amount is not vested. If vested, such excess shall be
distributed in the following order:
(i) First, from the Participant's Voluntary Contribution
account;
(ii) Second, from the Participant's Matching Contribution
account; and
(iii) Third, from the Participant's Qualified Matching
Contribution account (if applicable).
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ARTICLE VIII - JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 APPLICABILITY OF PROVISIONS
The provisions of this Article shall apply to any Participant who is
credited with a least one Hour of Service with the Employer on or after
August 23, 1984 and such other Participants as provided in paragraph 8.8.
8.2 PAYMENT OF QUALIFIED JOINT AND SURVIVOR ANNUITY
Unless an optional form of benefit is selected pursuant to a Qualified
Election within the 90-day period ending on the Annuity Starting Date, a
married Participant' s Vested Account Balance will be paid in the form
of a Qualified Joint and Survivor Annuity and an unmarried Participant'
s Vested Account Balance will be paid in the form of a life annuity.
The Participant may elect to have such annuity distributed upon
attainment of the Early Retirement Age under the Plan.
8.3 PAYMENT OF QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY
Unless an optional form of benefit has been selected within the Election
Period pursuant to a Qualified Election, if a Participant dies before
benefits have commenced then the Participant's vested account balance
shall be paid in the form of an annuity for the life of the Surviving
Spouse. The Surviving Spouse may elect to have such annuity distributed
within a reasonable period after the Participant's death.
A Participant who does not meet the age 35 requirement set forth in the
Election Period as of the end of any current Plan Year may make a
special qualified election to waive the qualified Pre-retirement
Survivor Annuity for the period beginning on the date of such election
and ending on the first day of the Plan Year in which the Participant
will attain age 35. Such election shall not be valid unless the
Participant receives a written explanation of the Qualified Pre-
retirement Survivor Annuity in such terms as are comparable to the
explanation required under paragraph 8.5. Qualified Pre-retirement
Survivor Annuity coverage will be automatically reinstated as of the
first day of the Plan Year in which the Participant attains age 35. Any
new waiver on or after such date shall be subject to the full
requirements of this Article.
8.4 QUALIFIED ELECTION
A Qualified Election is an election to either waive a Qualified Joint
and Survivor Annuity or a qualified pre-retirement survivor annuity. Any
such election shall not be effective unless:
(a) the Participant's Spouse consents in writing to the
election;
(b) the election designates a specific beneficiary, including
any class of beneficiaries or any contingent beneficiaries,
which may not be changed without spousal consent (or the
Spouse expressly permits designations by the Participant
without any further spousal consent);
(c) the Spouse's consent acknowledges the effect of the
election; and
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(d) the Spouse's consent is witnessed by a Plan representative
or notary public.
Additionally, a Participant' s waiver of the Qualified Joint and
Survivor Annuity shall not be effective unless the election designates a
form of benefit payment which may not be changed without spousal consent
(or the Spouse expressly permits designations by the Participant without
any further spousal consent). If it is established to the satisfaction
of the Plan Administrator that there is no Spouse or that the Spouse
cannot be located, a waiver will be deemed a Qualified Election. Any
consent by a Spouse obtained under this provision (or establishment that
the consent of a Spouse may not be obtained) shall be effective only
with respect to such Spouse. A consent that permits designations by the
Participant without any requirement of further consent by such Spouse
must acknowledge that the Spouse has the right to limit consent to a
specific beneficiary, and a specific form of benefit where applicable,
and that the Spouse voluntarily elects to relinquish either or both of
such rights. A revocation of a prior waiver may be made by a
Participant without the consent of the Spouse at any time before the
commencement of benefits. The number of revocations shall not be
limited. No consent obtained under this provision shall be valid unless
the Participant has received notice as provided in paragraphs 8.5 and
8.6 below.
8.5 NOTICE REQUIREMENTS FOR QUALIFIED JOINT AND SURVIVOR ANNUITY
In the case of a Qualified Joint and Survivor Annuity, the Plan
Administrator shall, no less than 30 days and no more than 90 days prior
to the Annuity Starting date, provide each Participant a written
explanation of:
(a) the terms and conditions of a Qualified Joint and Survivor
Annuity;
(b) the Participant's right to make and the effect of an
election to waive the Qualified Joint and Survivor Annuity
form of benefit;
(c) the rights of a Participant's Spouse; and
(d) the right to make, and the effect of, a revocation of a
previous election to waive the Qualified Joint and Survivor
Annuity.
8.6 NOTICE REQUIREMENTS FOR QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY
In the case of a qualified pre-retirement survivor annuity as described
in paragraph 8.3, the Plan Administrator shall provide each Participant
within the applicable period for such Participant a written explanation
of the qualified pre-retirement survivor annuity in such terms and in
such manner as would be comparable to the explanation provided for
meeting the requirements of paragraph 8.5 applicable to a Qualified
Joint and Survivor Annuity. The applicable period for a Participant is
whichever of the following periods ends last:
(a) the period beginning with the first day of the Plan Year in
which the Participant attains age 32 and ending with the
close of the Plan Year preceding the Plan Year in which the
Participant attains age 35;
(b) a reasonable period ending after the individual becomes a
Participant;
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(c) a reasonable period ending after this Article first applies
to the Participant. Notwithstanding the foregoing, notice
must be provided within a reasonable period ending after
separation from Service in the case of a Participant who
separates from Service before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable period
ending after the events described in (b) and (c) is the end of the two-
year period beginning one-year prior to the date the applicable event
occurs, and ending one-year after that date. In the case of a
Participant who separates from Service before the Plan Year in which age
35 is attained, notice shall be provided within the two-year period
beginning one year prior to separation and ending one year after
separation. If such a Participant subsequently returns to employment
with the Employer, the applicable period for such Participant shall be
re-determined.
8.7 SPECIAL SAFE-HARBOR EXCEPTION FOR CERTAIN PROFIT-SHARING PLANS
(a) This paragraph shall apply to a Participant in a profit-
sharing plan, and to any distribution, made on or after the
first day of the first plan year beginning after 1988, from
or under a separate account attributable solely to Qualified
Voluntary contributions, as maintained on behalf of a
Participant in a money purchase pension plan, (including a
target benefit plan) if the following conditions are
satisfied:
(1) the Participant does not or cannot elect payments in
the form of a life annuity; and
(2) on the death of a Participant, the Participant's
Vested Account Balance will be paid to the
Participant's Surviving Spouse, but if there is no
Surviving Spouse, or if the Surviving Spouse has
consented in a manner conforming to a Qualified
Election, then to the Participant's Designated
Beneficiary.
The Surviving Spouse may elect to have distribution of
the Vested Account Balance commence within the 9O-day
period following the date of the Participant's death.
The account balance shall be adjusted for gains or
losses occurring after the Participant's death in
accordance with the provisions of the Plan governing
the adjustment of account balances for other types of
distributions. These safe-harbor rules shall not be
operative with respect to a Participant in a profit-
sharing plan if that plan is a direct or indirect
transferee of a Defined Benefit Plan, money purchase
plan, a target benefit plan, stock bonus plan, or
profit sharing plan which is subject to the survivor
annuity requirements of Code Section 401(a)(11) and
Code Section 417, and would therefore have a Qualified
Joint and Survivor Annuity as its normal form of
benefit.
(b) The Participant may waive the spousal death benefit
described in this paragraph at any time provided that no
such waiver shall be effective unless it satisfies the
conditions (described in paragraph 8.4) that would apply to
the Participant's waiver of the Qualified Pre-Retirement
Survivor Annuity.
(c) If this paragraph 8.7 is operative, then all other
provisions of this Article other than paragraph 8.8 are
inoperative.
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8.8 TRANSITIONA1 JOINT AND SURVIVOR ANNUITY RULES
Special transition roles apply to Participants who were not receiving
benefits on August 23, 1984.
(a) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits
prescribed by the previous paragraphs of this Article, must
be given the opportunity to elect to have the prior
paragraphs of this Article apply if such Participant is
credited with at least one Hour of Service under this Plan
or a predecessor Plan in a Plan Year beginning on or after
January 1, 1976 and such Participant had at least 10 Years
of Service for vesting purposes when he or she separated
from Service.
(b) Any living Participant not receiving benefits on August 23,
1914, who was credited with at least one Hour of Service
under this Plan or a predecessor Plan on or after September
2, 1974, and who is not otherwise credited with any Service
in a Plan year beginning on or after January 1, 1976, must
be given the opportunity to have his or her benefits paid in
accordance with paragraph 8.9.
(c) The respective opportunities to elect [as described in (a)
and (b) above] must be afforded to the appropriate
Participants during the period commencing on August 23, 1984
and ending on the date benefits would otherwise commence to
said Participants.
8.9 AUTOMATIC JOINT AND SURVIVOR ANNUITY AND EARLY SURVIVOR ANNUITY
Any Participant who has elected pursuant to paragraph 8.8(b) and any
Participant who does not elect under paragraph 8.8(a) or who meets the
requirements of paragraph 8.8(a), except that such Participant does not
have at least 10 years of vesting Service when he or she separates from
Service, shall have his or her benefits distributed in accordance with
all of the following requirements if benefits would have been payable in
the form of a life annuity.
(a) Automatic Joint and Survivor Annuity. If benefits in the
form of a life annuity become payable to a married
Participant who:
(1) begins to receive payments under the Plan on or after
Normal Retirement Age, or
(2) dies on or after Normal Retirement Age while Still
working for the Employer, or
(3) begins to receive payments on or after the Qualified
Early Retirement Age, or
(4) separates from Service on or after attaining Normal
Retirement (or the Qualified Early Retirement Age) and
after satisfying the eligibility requirements for the
payment of benefits under the Plan and thereafter dies
before beginning to receive such benefits, then such
benefits will be received under this Plan in the form
of a Qualified Joint and Survivor Annuity, unless the
Participant has elected otherwise m1ring the Election
Period. The Election Period must begin at least 6 months
before the Participant attains Qualified Early Retirement
Age and end not more than 90 days before the commencement
of benefits. Any election will be in writing and may be
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changed by the Participant at any time.
(b) Election of Early Survivor Annuity. A Participant who
is employed after attaining the Qualified Early Retirement
Age will be given the opportunity to elect, during the
Election Period, to have a survivor annuity payable on
death. If the Participant elects the survivor annuity,
payments under such annuity must not be less than the
payments which would have been made to the Spouse under the
Qualified Joint and Survivor Annuity if the Participant had
retired on the day before his or her death. Any election
under this provision will be in writing and may be changed
by the Participant at any time. The Election Period begins
on the later of:
(1) the 90th day before the Participant attains the
Qualified Early Retirement Age, or
(2) the date on which participation begins, and ends on
the date the Participant terminates employment.
8.10 ANNUITY CONTRACTS
Any annuity contract distributed under this plan must be
nontransferable. The terms of any annuity contract purchased and
distributed by the Plan to a Participant or Spouse, shall comply with
the requirements of this Plan.
ARTICLE IX - VESTING
9.1 EMPLOYEE CONTRIBUTIONS
A Participant shall always have a 100% vested and nonforfeitable
interest in his or her Elective Deferrals, Voluntary Contributions,
Qualified Voluntary Contributions, Rollover Contributions, and Transfer
Contributions plus the earnings thereon. No forfeiture of Employer
related contributions (including any minimum contributions made under
paragraph 14.2) will occur solely as a result of an Employee's
withdrawal of any Employee contributions.
9.2 EMPLOYER CONTRIBUTIONS
A Participant shall acquire a vested and nonforfeitable interest in his
or her account attributable to Employer contributions in accordance with
the table selected in the Adoption Agreement, provided that if a
Participant is not already fully vested, he or she shall become so upon
attaining Normal Retirement Age, Early Retirement Age, on death prior to
normal retirement, on retirement due to Disability, or on termination of
the Plan. If no table is selected in the Adoption Agreement, an
Employee shall acquire a vested and nonforfeitable interest in his or
her account attributable to Employer contributions in accordance with
the following percentages: 20% after 2 Years Of Service, 20% additional
for each of the following Years Of Service, reaching 100% after 6 Years
Of Service with the Employer.
9.3 COMPUTATION PERIOD
The computation period for purposes of determining Years of Service and
Breaks in Service for purposes of computing a Participant's
nonforfeitable right to his or her account balance derived
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from Employer contributions shall be the Plan Year. In the event a
former Participant with no vested interest in his or her Employer
contribution account requalifies for participation in the Plan after
incurring a Break in Service, such Participant shall be credited for
vesting with all pre-break and post-break Service.
9.4 REQUALIFICATION PRIOR TO FIVE CONSECUTIVE ONE-YEAR BREAKS IN
SERVICE
The account balance of such Participant shall consist of any
undistributed amount in his or her account as of the date of re-
employment plus any future contributions added to such account plus the
investment earnings on the account. The vested account balance of such
Participant shall be determined by multiplying the Participant's account
balance (adjusted to include any distribution or redeposit made under
paragraph 6.3) by such Participant's vested percentage. All Service of
the Participant, both prior to and following the break, shall be counted
when computing the Participant's vested percentage.
9.5 REQUALIFICATION AFTER FIVE CONSECUTIVE ONE-YEAR BREAKS IN SERVICE
If such Participant is not fully vested upon re-employment, a new
account shall be established for such Participant to separate his or her
deferred vested and nonforfeitable account, if any, from the account to
which new allocations will be made. The Participant's deferred account
to the extent remaining shall be fully vested and shall continue to
share in earnings and losses of the Fund. When computing the
Participant's vested portion of the new account, all pre-break and post-
break Service shall be counted. However, notwithstanding this
provision, no such former Participant who has had five consecutive one-
year Breaks in Service shall acquire a larger vested and nonforfeitable
interest in his or her prior account balance as a result of
requalification hereunder.
9.6 CALCULATING VESTED INTEREST
A Participant's vested and nonforfeitable interest shall be calculated
by multiplying the fair market value of his or her account attributable
to Employer contributions on the Valuation Date preceding distribution
by the decimal equivalent of the vested percentage as of his or her
termination date. The amount attributable to Employer contributions for
purposes of the calculation includes amounts previously paid out
pursuant to paragraph 6.3 and not repaid if the non-vested portion has
not been forfeited. The Participant's vested and nonforfeitable
interest, once calculated above, shall be reduced to reflect those
amounts previously paid out to the Participant and not repaid by the
Participant. The Participant's vested and nonforfeitable interest so
determined shall continue to share in the investment earnings and any
increase or decrease in the fair market value of the Fund up to the
Valuation Date preceding or coinciding with payment.
9.7 FORFEITURES
Any balance in the account of a Participant who has separated from
Service to which he or she is not entitled under the foregoing
provisions, shall be forfeited and applied as provided in the Adoption
Agreement. A forfeiture may only occur if the Participant has received a
distribution from the Plan or if the Participant has incurred five
consecutive one year Breaks in Service. Furthermore, a Highly
Compensated Employee's Matching Contributions may be forfeited, even
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if vested, if the contributions to which they relate are Excess
Deferrals, Excess Contributions or Excess Aggregate Contributions.
9.8 AMENDMENT OF VESTING SCHEDULE
No amendment to the Plan shall have the effect of decreasing a
Participant's vested interest determined without regard to such
amendment as of the later of the date such amendment is adopted or the
date it becomes effective. Further, if the vesting schedule of the Plan
is amended, or the Plan is amended in any way that directly or
indirectly affects the computation of any Participant's nonforfeitable
percentage or if the Plan is deemed amended by an automatic change to or
from a Top-Heavy vesting schedule, each Participant with at least three
Years of Service with the Employer may elect, within a reasonab1e period
after the adoption of the amendment, to have his or her nonforfeitable
percentage computed under the Plan without regard to such Amendment.
For Participants who do not have at least one Hour of Service in any
Plan Year beginning after 1988, the preceding sentence shall be applied
by substituting "Five Years of Service" for "Three Years of Service"
where such language appears. The period during which the election may be
made shall commence with the date the amendment is adopted and shall end
on the later of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after the Participant is issued written notice of
the amendment by the Employer or the Trustee. If the
Trustee is asked to so notify, the Fund will be charged for
the costs thereof.
No amendment to the Plan shall be effective to the extent that it has
the effect of decreasing a Participant's accrued benefit.
Notwithstanding the preceding sentence, a Participant's account balance
may be reduced to the extent permitted under section 412(c)(8) of the
Code (relating to financial hardships). For purposes of this paragraph,
a Plan amendment which has the effect of decreasing a Participant's
account balance or eliminating an optional form of benefit, with respect
to benefits attributable to service before the amendment, shall be
treated as reducing an accrued benefit.
9.9 SERVICE WITH CONTROLLED GROUPS
All Years of Service with other members of a controlled group of
corporations [as defined in Code Section 414(b)] trades or businesses
under common control [as defined in Code Section 414(c)] or members of
an affiliated service group [as defined in Code Section 414(m)] shall be
considered for purposes of determining a Participant's nonforfeitable
percentage.
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ARTICLE X - LIMITATIONS ON ALLOCATIONS AND ANTIDISCRIMINATION TESTING
10.1 PARTICIPATION IN THIS PLAN ONLY
If the Participant does not participate in and has never participated in
another qualified plan, a Welfare Benefit Fund (as defined in paragraph
1.89) or an individual medical account, as defined in Code Section
415(1)(2), or a Simplified Employee Pension Plan, as defined in Code
Section 408(k), maintained by the adopting Employer, which provides an
Annual Addition as defined in paragraph 1.4, the amount of Annual
Additions which may be credited to the Participant's account for any
Limitation Year will not exceed the lesser of the Maximum Permissible
Amount or any other limitation contained in this Plan. If the Employer
contribution that would otherwise be contributed or allocated to the
Participant's account would cause the Annual Additions for the
Limitation Year to exceed the Maximum Permissible Amount, the amount
contributed or allocated will be reduced so that the Annual Additions
for the Limitation Year will equal the Maximum Permissible Amount.
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 estimate of the
Participant's Compensation for the Limitation Year, uniformly determined
for all Participants similarly situated. 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.
10.2 DISPOSITION OF EXCESS ANNUAL ADDITIONS
If, pursuant to paragraph 10.1 or as a result of the allocation of
forfeitures, there is an Excess Amount, the excess will be disposed of
under one of the following methods as determined in the Adoption
Agreement. If no election is made in the Adoption Agreement then method
"(a)" below shall apply.
(a) Suspense Account Method
(1) Any Elective Deferrals and nondeductible Employee
Voluntary Contributions, to the extent they would
reduce the Excess Amount, will be returned to the
Participant;
(2) If after the application of paragraph (1) 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;
(3) If after the application of paragraph (1) an Excess
Amount still exists, and the Participant is not
covered by the Plan at the end of the 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;
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(4) If a suspense account is in existence at any time
during the Limitation Year pursuant to this paragraph,
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) Spillover Method
(1) Any Elective Deferrals and nondeductible Employee
Voluntary Contributions, to the extent they would
reduce the Excess Amount, will be returned to the
Participant.
(2) Any Excess Amount which would be allocated to the
account of an individual Participant under the Plan's
allocation formula will be reallocated to other
Participants in the same manner as other Employer
contributions. No such reallocation shall be made to
the extent that it will result in an Excess Amount
being created in such Participant's own account.
(3) To the extent that amounts cannot be reallocated under
(1) above, the suspense account provisions of (a)
above will apply.
10.3 PARTICIPATION IN THIS PLAN AND ANOTHER QUALIFIED MASTER AND
PROTOTYPE DEFINED CONTRIBUTION PLAN, WELFARE BENEFIT FUND,
INDIVIDUAL MEDICAL ACCOUNT OR SIMPLIFIED EMPLOYEE PENSION PLAN
MAINTAINED BY THE EMPLOYER
The Annual Additions which may be credited to a Participant's account
under this Plan for any Limitation Year will not exceed the Maximum
Permissible Amount reduced by the Annual Additions credited to a
Participant's account under the other qualified Master or Prototype
Defined Contribution Plans, Welfare Benefit Funds, and individual
medical accounts as defined in Code Section 415(l)(2), or Simplified
Employee Pension Plan, maintained by the Employer, which provide an
Annual Addition as defined in paragraph 1.4 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 account under this Plan would cause the Annual
Additions for the Limitation Year to exceed this limitation, the amount
contributed or allocated will be reduced so that the Annual Additions
under all such plans and funds for the Limitation Year will equal the
Maximum Permissible Amount. If the Annual Additions with respect to the
Participant under such other 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. Prior to
determining the Participant's annual Compensation for the Limitation
Year, the Employer may determine the Maximum Permissible Amount for a
Participant in the manner described in paragraph 10.1. As soon as
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.
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10.4 DISPOSITION OF EXCESS ANNUAL ADDITIONS UNDER TWO PLANS
If, pursuant to paragraph 10.3 or as a result of forfeitures, a
Participant's Annual Additions Under this Plan and such other plans
would result in an Excess Amount for a Limitation Year, the Excess
Amount will be deemed to consist of the Annual Additions last allocated
except that Annual Additions attributable to a Simplified Employee
Pension Plan will be deemed to have been allocated first, followed by
Annual Additions attributable to a Welfare Benefit Fund or Individual
Medical Account as defined in Code Section 415(1)(2) regardless of the
actual allocation date. If an Amount was allocated to a Participant on
an allocation date of this Plan which coincides with an allocation date
of another plan, the Excess Amount attributed to this Plan will be the
product of:
(a) the total Excess Amount allocated as of such date, times
(b) the ratio of:
(1) the Annual Additions allocated to the Participant for
the Limitation Year as of such date under the 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 Master or
Prototype Defined Contribution Plans.
Any Excess Amount attributed to this Plan will be disposed of in the
manner described in paragraph 10.2.
10.5 PARTICIPATION IN THIS PLAN AND ANOTHER DEFINED CONTRIBUTION PLAN
WHICH IS NOT A QUALIFIED MASTER OR PROTOTYPE PLAN
If the Participant is covered under another qualified Defined
Contribution Plan maintained by the Employer which is not a qualified
Master or 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 paragraphs 10.3 and 10.4 as though the other
plan were a Master or Prototype Plan, unless the Employer provides other
limitations in the Adoption Agreement.
10.6 PARTICIPATION IN THIS PLAN AND A DEFINED BENEFIT PLAN
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. For any Plan
Year during which the Plan is Top-Heavy, the Defined Benefit and Defined
Contribution Plan Fractions shall be calculated in accordance with Code
Section 416(h). 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 provisions set forth in the Adoption
Agreement.
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10.7 AVERAGE DEFERRAL PERCENTAGE (ADP) TEST.
With respect to any Plan Year, the Average Deferral Percentage for
Participants who are Highly Compensated Employees and the Average
Deferral Percentage for Participants who are non-Highly Compensated
Employees must satisfy one of the following tests:
(a) Basic Test - The Average Deferral Percentage for
Participants who are Highly Compensated Employees for the
Plan Year is not more than 1.25 times the Average Deferral
Percentage for Participants who are non-High1y Compensated
Employees for the same Plan Year, or
(b) Alternative Test - The Average Deferral Percentage for
Participants who are Highly Compensated Employees for the
Plan Year does not exceed the Average Deferral Percentage
for Participants who are non-High1y Compensated Employees
for the same Plan Year by more than 2 percentage points
provided that the Average Deferral Percentage for
Participants who are Highly Compensated Employees is not
more than 2.0 times the Average Deferral Percentage for
Participants who are non-Highly Compensated Employees.
10.8 SPECIAL RULES RELATING TO APPLICATION OF ADP TEST
(a) The Actual Deferral Percentage for any Participant who is a
Highly Compensated Employee for the Plan Year and who is
eligible to have Elective Deferrals (and Qualified Non-
Elective Contributions or Qualified Matching Contributions,
or both, if treated as Elective Deferrals for purposes of
the ADP test) allocated to his or her accounts under two or
more arrangements described in Code Section 401(k), that are
maintained by the Employer, shall be determined as if such
Elective Deferrals (and, if applicable, such Qualified Non-
Elective Contributions or Qualified Matching Contributions,
or both) were made under a single arrangement. If a Highly
Compensated Employee participates in two or more cash or
deferred arrangements that have different Plan Years, all
cash or deferred arrangements ending with or within the same
calendar year shall be treated as a single arrangement.
(b) In the event that this Plan satisfies the requirements of
Code Sections 401(k), 401(a)(4), or 410(b), only if
aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of such Code Sections
only if aggregated with this Plan, then this Section shall
be applied by determining the Actual Deferral Percentage of
Employees as if all such plans were a single plan. For Plan
Years beginning after 1989, plans may be aggregated in order
to satisfy Code Section 401(k) only if they have the same
Plan Year.
(c) For purposes of determining the Actual Deferral Percentage
of a Participant who is a 5 percent owner or one of the ten
most highly-paid Highly Compensated Employees, the Elective
Deferrals (and Qualified Non-Elective Contributions or
Qualified Matching Contributions, or both, if treated as
Elective Deferrals for purposes of the ADP test) and
Compensation of such Participant shall include the Elective
Deferrals (and, if applicable, Qualified Non-Elective
Contributions and Qualified Matching Contributions, or both)
for
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the Plan Year of Family Members as defined in paragraph 1.36
of this Plan. Family Members, with respect to such Highly
Compensated Employees, shall be disregarded as separate
Employees in determining the ADP both for Participants who
are non-Highly Compensated Employees and for Participants
who are Highly Compensated Employees. In the event of repeal
of the family aggregation rules under Code Section
414(q)(6), all applications of such rules under this Plan
will cease as of the effective date of such repeal.
(d) For Purposes of determining the ADP test, Elective
Deferrals, Qualified Non-Elective Contributions and
Qualified Matching Contributions must be made before the
last day of the twelve-month period immediately following
the Plan Year to which contributions relate.
(e) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the amount of
Qualified Non-Elective Contributions or Qualified Matching
Contributions, or both, used in such test.
(f) The determination and treatment of the Actual Deferral
Percentage amounts of any Participant shall satisfy such
other requirements as may be prescribed by the Secretary of
the Treasury.
10.9 AVERAGE CONTRIBUTION PERCENTAGE (ACP) TEST
If the Employer makes Matching Contributions or if the Plan allows
Employees to make Voluntary Contributions the Plan must meet additional
nondiscrimination requirements provided under Code Section 401(m). If
Employee Contributions (including any Elective Deferrals recharacterized
as Voluntary Contributions) are made pursuant to this Plan, then in
addition to the ADP test referenced in paragraph 10.7, the Average
Contribution Percentage test is also applicable. The Average
Contribution Percentage for Participants who are Highly Compensated
Employees for each Plan Year and the Average Contribution Percentage for
Participants who are Non-Highly Compensated Employees for the same Plan
Year must satisfy one of the following tests:
(a) Basic Test - The Average Contribution Percentage for
Participants who are Highly Compensated Employees for the
Plan Year shall not exceed the Average Contribution
Percentage for Participants who are non-Highly Compensated
Employees for the same Plan Year multiplied by 1.25; or
(b) Alternative Test - The ACP for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
Average Contribution Percentage for Participants who are
non-Highly Compensated Employees for the same Plan Year
multiplied by two (2), provided that the Average
Contribution Percentage for Participants who are Highly
Compensated Employees does not exceed the Average
Contribution Percentage for Participants who are non-Highly
Compensated Employees by more than two (2) percentage
points.
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10.10 SPECIAL RULES RELATING TO APPLICATION OF ACP TEST
(a) If one or more Highly Compensated Employees participate in
both a cash or deferred arrangement and a plan subject to
the ACP test maintained by the Employer and the sum of the
ADP and ACP of those Highly Compensated Employees subject to
either or both tests exceeds the Aggregate Limit, then the
ADP or ACP of those Highly Compensated Employees who also
participate in a cash or deferred arrangement will be
reduced (beginning with such Highly Compensated Employee
whose ADP or ACP is the highest) as set forth in the
Adoption Agreement so that the limit is not exceeded. The
amount by which each Highly Compensated Employee's
Contribution Percentage Amount is reduced shall be treated
as an Excess Aggregate Contribution. The ADP and ACP of the
Highly Compensated Employees are determined after any
corrections required to meet the ADP and ACP tests.
Multiple use does not occur if both the ADP and ACP of the
Highly Compensated Employees does not exceed 1.25 multiplied
by the ADP and ACP of the non-Highly Compensated Employees.
(b) For purposes of this Article, the Contribution Percentage
for any Participant who is a Highly Compensated Employee and
who is eligible to have Contribution Percentage Amounts
allocated to his or her account under two or more plans
described in Code Section 401(a), or arrangements described
in Code Section 401(k) that are maintained by the Employer,
shall be determined as if the total of such Contribution
Percentage Amounts was made under each Plan. If a Highly
Compensated Employee participates in two or more cash or
deferred arrangements that have different plan years, all
cash or deferred arrangements ending with or within the same
calendar year shall be treated as a single arrangement.
(c) In the event that this Plan satisfies the requirements of
Code Sections 401(a)(4), 401(m), or 410(b) only if
aggregated with one or more other plans, or if one or more
other plans satisfy the requirements of such Code Sections
only if aggregated with this Plan, then this Section shall
be applied by determining the Contribution Percentage of
Employees as if all such plans were a single plan. For plan
years beginning after 1989, plans may be aggregated in order
to satisfy Code Section 401(m) only if the aggregated plans
have the same Plan Year.
(d) For purposes of determining the Contribution percentage of a
Participant who is a five-percent owner or one of the ten
most highly-paid, Highly Compensated Employees, the
Contribution Percentage Amounts and Compensation of such
Participant shall include the Contribution Percentage
Amounts and Compensation for the Plan Year of Family Members
as defined in Paragraph 1.36 of this Plan. Family Members,
with respect to Highly Compensated Employees, shall be
disregarded as separate Employees in determining the
Contribution Percentage both for Participants who are non-
Highly Compensated Employees and for Participants who are
Highly Compensated Employees. In the event of repeal of the
family aggregation rules under Code Section 414(q)(6), all
applications of such rules under this Plan will cease as of
the effective date of such repeal.
(e) For purposes of determining the Contribution Percentage
test, Employee Contributions are considered to have been
made in the Plan Year in which contributed to the trust.
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Matching Contributions and Qualified Non-Elective
Contributions will be considered made for a Plan Year if
made no later than the end of the twelve-month period
beginning on the day after the close of the Plan Year.
(f) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the amount of
Qualified Non-Elective Contributions or Qualified Matching
Contributions, or both, used in such test.
(g) The determination and treatment of the Contribution
Percentage of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
(h) Qualified Matching Contributions and Qualified Non-Elective
Contributions used to satisfy the ADP test may not be used
to satisfy the ACP test.
ARTICLE XI - ADMINISTRATLON
11.1 PLAN ADMINISTRATOR
The Employer shall be the named fiduciary and Plan Administrator. These
duties shall include:
(a) appointing the Plan's attorney, accountant, actuary, or any
other party needed to administer the Plan,
(b) directing the Trustee with respect to payments from the
Fund,
(c) communicating with Employees regarding their participation
and benefits under the Plan, including the administration of
all claims procedures,
(d) filing any returns and reports with the Internal Revenue
Service, Department of Labor, or any other governmental
agency,
(e) reviewing and approving any financial reports, investment
reviews, or other reports prepared by any party appointed by
the Employer under paragraph (a),
(f) purposes of the Plan and the Employee Retirement Income
Security Act of 1974, and
(g) construing and resolving any question of Plan
interpretation. The Plan Administrators interpretation of
Plan provisions including e1igibility and benefits under the
Plan is final, and unless it can be shown to be arbitrary
and capricious will not be subject to "de novo" review.
11.2 TRUSTEE
The Trustee shall only be responsible for maintaining the trust
account(s) in accordance with applicable laws on behalf of the Employer.
The Trustee's duties shall include:
(a) receiving contributions under the terms of the Plan, but not
determining the amount or enforcing the payment thereof,
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(b) making distributions from the Fund in accordance with
written instructions received from an authorized
representative of the Employer, and
(c) keeping accurate and detailed records of all contributions,
receipts, investments, distributions, disbursements and all
other transactions with respect to each account [In the case
of Employee Investment Direction) or the Fund [In the case
of Employer Investment Direction). Periodically (not less
than annually), the Trustee shall provide a transcript of
all activity in the account or in the Fund (which may
consist of regularly issued Statements from the Service
Company). In the case of Employee Investment Direction, each
such transcript will be provided to the Participant. In the
case of Employer Investment Direction, each such transcript
will be provided to the Employer. Each such transcript shall
be the sole accounting required of the Trustee. Unless the
Participant or Employer files a written objection to the
transcript within 60 days following the date it is
furnished, he shall be deemed to have consented to the
accounting, and the Trustee and Service Company shall be
forever released and discharged from all liability and
accountability to anyone with respect to its acts,
transactions, duties, obligations or responsibilities as
shown in or reflected by the transcript.
(d) employing such agents, attorneys or other professionals as
the Trustee may deem necessary or advisable in the
performance of its duties.
The Trustee's duties shall be limited to those described above. The
Employer shall be responsible for any other Administrative duties
required under the Plan or by applicable law.
11.3 ADMINISTRATIVE FEES AND EXPENSES
All reasonable costs, charges and expenses incurred by the Trustee and
Service Company in connection with the administration of the Fund and
all reasonable costs, charges and expenses incurred by the Plan
Administrator in connection with the Administration of the Plan
[including fees for legal services rendered to the Trustee and Service
Company or Plan Administrator) may be paid by the Employer, but if not
paid by the Employer when due, shall be paid from the Fund. Such
reasonable compensation to the Trustee and Service Company as may be
agreed upon from time to time between the Employer and the Trustee and
Service Company and such reasonable compensation to the Plan
Administrator as may be agreed upon from time to time between the
Employer and Plan Administrator and the compensation of the Service
Company in accordance with its fee schedule as in effect at the
applicable time, may be paid by the Employer, but if not paid by the
Employer when due shall be paid by the Fund. The Trustee and Service
Company shall have the right to liquidate trust assets to cover its
fees. Notwithstanding the foregoing, no compensation other than
reimbursement for expenses shall be paid to a Plan Administrator who is
the Employer or a full-time Employee of the Employer. In the event any
part of the Trust becomes subject to tax, all taxes incurred will be
paid from the Fund unless the Plan Administrator advises the Trustee not
to pay such tax.
11.4 DUTIES AND INDEMNIFICATION
(a) The Trustee shall have the authority and discretion to
manage and govern the Fund to the extent provided in this
instrument, but does not guarantee the Fund in any manner
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against investment loss or depreciation in asset value, or
guarantee the adequacy of the Fund to meet and discharge all
or any liabilities of the Plan.
ARTICLE XI - ADMINISTRATION
11.1 PLAN ADMINISTRATOR
The Employer shall be the named fiduciary and Plan Administrator. These
duties shall include:
(a) appointing the Plan's attorney, accountant, actuary, or any
other party needed to administer the Plan,
(b) directing the Trustee with respect to payments from the
Fund,
(c) communicating with Employees regarding their participation
and benefits under the Plan, including the administration of
all claims procedures,
(d) filing any returns and reports with the Internal Revenue
Service, Department of Labor, or any other governmental
agency,
(e) reviewing and approving any financial reports, investment
reviews, or other reports prepared by any party appointed by
the Employer under paragraph (a),
(f) establishing a funding policy and investment objectives
consistent with the purposes of the Plan and the Employee
Retirement Income Security Act of 1974, and
(g) construing and resolving any question of Plan
interpretation. The Plan Administrators interpretation of
Plan provisions including eligibility and benefits under the
Plan is final, and unless it can be shown to be arbitrary
and capricious will not be subject to "de novo" review.
11.2 TRUSTEE
The Trustee shall only be responsible for maintaining the trust
account(s) in accordance with applicable laws on behalf of the Employer.
The Trustee's duties shall include:
(a) receiving contributions under the terms of the Plan, but not
determining the amount or enforcing the payment thereof,
(b) making distributions from the Fund in accordance with
written instructions received from an authorized
representative of the Employer, and
(c) keeping accurate and detailed records of all contributions,
receipts, investments, distributions, disbursements and all
other transactions with respect to each account (In the case
of Employee Investment Direction) or the Fund (In the case
of Employer Investment Direction). Periodically (not less
than annually), the Trustee shall provide a transcript of
all activity in the account or in the Fund (which may
consist of
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regularly issued Statements from the Service Company). In
the case of Employee Investment Direction, each such
transcript will be provided to the Participant. In the case
of Employer Investment Direction, each such transcript will
be provided to the Employer. Each such transcript shall be
the sole accounting required of the Trustee. Unless the
Participant or Employer files a written objection to the
transcript within 60 days following the date it is
furnished, he shall be deemed to have consented to the
accounting, and the Trustee and Service Company shall be
forever released and discharged from all liability and
accountability to anyone with respect to its acts,
transactions, duties, obligations or responsibilities as
shown in or reflected by the transcript.
(d) employing such agents, attorneys or other professionals as
the Trustee may deem necessary or advisable in the
performance of its duties.
The Trustee's duties shall be limited to those described above. The
Employer shall be responsible for any other Administrative duties
required under the Plan or by applicable law.
11.3 ADMINISTRATIVE FEES AND EXPENSES
All reasonable costs, charges and expenses incurred by the Trustee and
Service Company in connection with the administration of the Fund and
all reasonable costs, charges and expenses incurred by the Plan
Administrator in connection with the Administration of the Plan
[including fees for legal services rendered to the Trustee and Service
Company or Plan Administrator) may be paid by the Employer, but if not
paid by the Employer when due, shall be paid from the Fund. Such
reasonable compensation to the Trustee and Service Company as may be
agreed upon from time to time between the Employer and the Trustee and
Service Company and such reasonable compensation to the Plan
Administrator as may be agreed upon from time to time between the
Employer and Plan Administrator and the compensation of the Service
Company in accordance with its fee schedule as in effect at the
applicable time, may be paid by the Employer, but if not paid by the
Employer when due shall be paid by the Fund. The Trustee and Service
Company shall have the right to liquidate trust assets to cover its
fees. Notwithstanding the foregoing, no compensation other than
reimbursement for expenses shall be paid to a Plan Administrator who is
the Employer or a full-time Employee of the Employer. In the event any
part of the Trust becomes subject to tax, all taxes incurred will be
paid from the Fund unless the Plan Administrator advises the Trustee not
to pay such tax.
11.4 DUTIES AND INDEMNIFICATION
(a) The Trustee shall have the authority and discretion to
manage and govern the Fund to the extent provided in this
instrument, but does not guarantee the Fund in any manner
against investment loss or depreciation in asset value, or
guarantee the adequacy of the Fund to meet and discharge all
or any liabilities of the Plan.
(b) The Trustee shall not be liable for the making, retention or
sale of any investment of reinvestment made by it, as herein
provided, or for any loss to, or diminution of the Fund, or
for any other loss or damage which may result from the
discharge of its duties hereunder except to the extent it is
judicially determined that the Trustee has
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failed to exercise the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent
person acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character with like aims.
(c) The Trustee shall not be liable for the making, retention or
sale of any investment or Reinvestment made by it, as herein
provided, or for any loss to, or diminution of the Fund, or
for any Other loss or damage which may result from the
discharge of its duties hereunder except to the extent it is
judicially determined that the Trustee has failed to
exercise the care, skill, prudence and diligence under the
circumstances then prevailing that a prudent person acting
in a like capacity and familiar with such matters would use
in the conduct of an enterprise of a like character with
like aims.
(d) The Employer warrants that all directions issued to the
Trustee by it or the Plan Administrator or will be in
accordance with the terms of the Plan and not contrary to
the provisions of the Employee Retirement Income Security
Act of 1974 and regulations issued thereunder.
(e) The Trustee shall not be answerable for any action taken
pursuant to any direction, consent, certificate, or other
paper or document on the belief that the same is genuine and
signed by the proper person. All directions by the Employer,
Participant or the Plan Administrator shall be given in a
manner and form prescribed by the Trustee and approved by
the Service Company. The Employer shall deliver to the
Trustee certificates evidencing the individual or
individuals authorized to act as set forth in the Adoption
Agreement or as the Employer may subsequently inform the
Trustee in writing and shall deliver to the Trustee
specimens of their Signatures.
(f) The duties and obligations of the Trustee shall be limited
to those expressly imposed upon it by this instrument or
subsequently agreed upon by the parties. Responsibility for
administrative duties required under the Plan or applicable
law not expressly imposed upon or agreed to by the Trustee
shall rest solely with the Employer.
(g) The Trustee shall be indemnified and saved harmless by the
Employer from and against any and all liability to which the
Trustee may be subjected, including all expenses reasonably
incurred in its defense, for any action or failure to act
resulting from compliance with the instructions of the
Employer, the employees or agents of the Employer, the Plan
Administrator, or any other fiduciary to the Plan, and for
any liability arising from the actions or non-actions of any
predecessor Trustee or fiduciary or other fiduciaries of the
Plan.
(h) The Trustee shall not be responsible in any way for the
application of any payments it is directed to make or for
the adequacy of the Fund to meet and discharge any and all
liabilities under the Plan.
(i) With respect to non-mutual fund investments, the Trustee in
Administering the Trust Fund is authorized and empowered to
exercise generally, any of the powers which a trustee might
customarily exercise in connection with investments held by
the Trust Fund and to do all other acts that the Trustee may
deem necessary or proper to carry
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out any of the powers and duties set forth in this Article XI.
11.5 SPECIAL PROVISIONS CONCERNING THE SERVICE COMPANY
(a) To the full extent permitted under ERISA, the Code, any
other applicable federal or State law, the regulations,
rules and interpretations thereunder, and subject to any
written instrument executed by the Trustee and the Service
Company allocating responsibilities between them, all
ministerial functions assigned to the Trustee under the Plan
shall be delegated to the Service Company. All instructions
required to be given to the Trustee under the Plan will be
effective if given to the Service Company in the manner
prescribed by the Service Company. To the extent the
Service Company is performing a function assigned to the
Trustee under the Plan, the Service Company shall have the
benefit of all of the limitations of the scope of the
Trustee's duties and liabilities, all rights of
indemnification granted to the Trustee and all other
protections of any nature afforded the Trustee under the
Plan.
(b) It is understood and agreed that while the Service Company
will perform certain ministerial duties (such as custodial,
reporting, recording, and bookkeeping functions) with
respect to Plan assets, such duties do not involve the
exercise of any discretionary authority or other authority
to manage or control Plan assets.
(c) With respect to any transaction which the Service Company is
directed to engage in, the Employer, the Trustee, the Named
investment Fiduciary and the person directing the
transaction shall be responsible for making sure that the
transaction does not violate any applicable provision of law
or disqualify the Plan under the Code, and the Service
Company shall have no responsibility therefor.
(d) The Employer and, where the Service Company is following the
directions or instructions of a Participant, the Trustee,
Plan Administrator or the Named Investment Fiduciary, such
Participant, the Trustee, Plan Administrator or the Named
Investment Fiduciary (as the case may be) shall at all times
fully indemnify and save harmless the Service Company from
any liability which may arise in connection with this Plan,
except liability arising from the gross negligence or
willful misconduct of the Service Company. For purposes of
this Section 11.5, "1iability" shall include, without
limitation, taxes, expenses; claims, damages, actions,
suits, attorneys' fees, expenses of litigation or
preparation for threatened litigation, and any other
charges. The Service Company shall be liable for its own
gross negligence or willful misconduct in the performance of
the duties expressly assumed by it under the Plan.
ARTICLE XII - TRUST FUND
12.1 THE FUND
The Fund shall consist of all contributions made under Article III and
Article IV of the Plan and the investment thereof and earnings thereon.
All contributions and the earnings thereon less payments made under the
terms of the Plan, shall constitute the Fund. The Fund shall be
administered as provided in this document.
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12.2 CONTROL OF PLAN ASSETS
The assets of the Fund or evidence of ownership shall be held by the
Trustee under the terms of the Plan and Trust. If the assets represent
amounts transferred from another trustee under a former plan, the
Trustee named hereunder shall not be responsible for the proprietary of
any investment under the former plan.
12.3 EXCLUSIVE BENEFIT RULES
No part of the Fund shall be used for, or diverted to, purposes other
than for the exclusive benefit of Participants, former Participants with
a Vested interest, and the beneficiary or beneficiaries of deceased
Participants having a vested interest in the Fund at death.
12.4 ASSIGNMENT AND ALIENATION OF BENEFITS
No right or claim to, or interest in, any part of the Fund, or any
payment from the Fund, shall be assignable, transferable, or subject to
sale, mortgage, pledge, hypothecation, commutation, anticipation,
garnishment, attachment, execution, or levy of any kind. The Trustee
shall not recognize any attempt to assign, transfer, sell, mortgage,
pledge, hypothecate, commute, or anticipate the same, except to the
extent required by law. The preceding sentences shall also apply to the
creation, assignment, or recognition of a right to any benefit payable
with respect to a Participant pursuant to a domestic relations order,
unless such order is determined to be a qualified domestic relations
order, as defined in Code Section 414(p), or any domestic relations
order entered before January 1, 1985 which the Plan attorney and Plan
Administrator deem to be qualified.
12.5 DETERMINATION OF QUALIFIED DOMESTIC RELATIONS ORDER (QDRO)
A Domestic Relations Order shall specifically state all of the following
in order to be deemed a Qualified Domestic Relations Order ("QDRO"):
(a) The name and last known mailing address (if any) of the
Participant and of each alternate payee covered by the QDRO.
However, if the QDRO does not specify the current mailing
address of the alternate payee, but the Plan Administrator
has independent knowledge of that address, the QDRO will
still be valid.
(b) The dollar amount or percentage of the Participant's benefit
to be paid by the Plan to each alternate payee, or the
manner in which the amount or percentage will be determined.
(c) The number of payments or period for which the order
applies.
(d) The specific plan (by name) to which the Domestic Relations
Order applies.
(e) The Domestic Relations Order shall not be deemed a QDRO if
it requires the Plan to provide:
(f) any type or form of benefit, or any option not already
provided for in the Plan;
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(g) increased benefits, or benefits in excess of the
Participant's vested rights;
(h) payment of a benefit earlier than allowed by the Plan's
earliest retirement provisions or in the case of a profit-
sharing plan, prior to the allowability of in-service
withdrawals, or
(i) Payment of benefits to an alternate payee which are required
to be paid to another alternate payee under another QDRO.
Promptly, upon receipt of a Domestic Relations Order ("Order") which may
or may not be "Qualified", the Plan Administrator shall notify the
Participant and any alternate payee(s) named in the Order of such
receipt, and include a copy of this paragraph 12.5. The Plan
Administrator shall then forward the Order to the Plan's legal counsel
for an opinion as to whether or not the Order is in fact "Qualified" as
defined in Code Section 414(p). Within a reasonable time after receipt
of the Order, not to exceed 60 days, the Plan's legal counsel shall make
a determination as to its "Qualified" Status and the Participant and any
alternate payee(s) shall be promptly notified in writing of the
determination.
If the "Qualified" status of the Order is in question, there will be a
delay in any payout to any payee including the Participant, until the
status is resolved. In such event, the Plan Administrator shall
segregate the amount that would have been payable to the alternate
payee(s) if the Order had been deemed a QDRO. If the Order is not
Qua1ified, or the Status is not resolved (for example, it has been sent
back to the Court for clarification or modification) within 18 months
beginning with the date the first payment would have to be made under
the Order, the Plan Administrator shall pay the segregated amounts plus
interest to the person(s) who would have been entitled to the benefits
had there been no Order. If a determination as to the Qualified Status
of the Order is made after the 18-month period described above, then the
Order shall only be applied on a prospective basis. If the Order is
determined to be a QDRO, the Participant and alternate payee(s) shall
again be notified promptly after such determination. Once an Order is
deemed a QDRO, the Plan Administrator shall pay to the alternate
payee(s) all the amounts due under the QDRO, including segregated
amounts plus interest which may have accrued during a dispute as to the
Order's qualification.
Unless specified otherwise in the Adoption, Agreement, the earliest
retirement age with regard to the Participant against whom the order is
entered shall be the date the order is determined to be qualified. This
will only allow payouts to alternate payee(s) and not the Participant
ARTICLE XIII - INVESTMENTS
13.1 FIDUCIARY STANDARDS
The Trustee shall invest and reinvest income in the same Fund in
accordance with the investment objectives established by the Employer,
provided that:
(a) such investments are prudent under the Employee Retirement
Income Security Act of 1974 and the regulations promulgated
thereunder,
(b) such investments are sufficiently diversified or otherwise
insured or guaranteed to
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minimize the risk of large losses, and
(c) such investments are similar to those which would be
purchased by another professional money manager for a like
plan with similar investment objectives.
13.2 NO INVESTMENT DISCRETION
The Plan Sponsor and the Trustee shall have no discretion to direct any
investments of the Trust and are authorized solely to make and hold
investments only as directed pursuant to Section 13.3.
13.3 INVESTMENT DIRECTIONS
(a) Responsibility for directing the Trustee with respect to the
investment of the Trust Fund shall be allocated to the
Employer, or a named fiduciary appointed by the Employer for
that purpose (the Named Investment Fiduciary), the
Participants, or any investment manager (an "Investment
Manager"), who meets the requirements of Section 3(38) of
the Employee Retirement Income Security Act of 1974 (ERISA)
appointed by the Named Investment Fiduciary, all as provided
in the Plan (including the Adoption Agreement). To the
extent investment responsibility is allocated to the
Participant, the Designated Beneficiary of a deceased
Participant shall discharge the responsibility subsequent to
the Participant's death and any reference to the Participant
in any provision of the Plan pertaining to investment
directions shall in such event be construed as a reference
to the Designated Beneficiary.
(b) Investment directions shall be given in a manner and form
prescribed by the Trustee and shall be subject to such
limitations, including limitations as to the frequency with
which any standing investment instructions may be changed
and funds may be moved among investment choices, as the
Employer or other Named Investment Fiduciary shall
prescribe. If Investment responsibility is allocated to
Participants, to the extent permitted by the Trustee,
investment directions may be given directly to the Service
Company in a manner and form prescribed by the Service
Company.
(c) Cash for which no investments are directed shall be
automatically invested in such investment or investments as
the Employer or other Named Investment Fiduciary shall
select from the investments the Service Company makes
available for that purpose unless and until the person
responsible for giving directions directs otherwise. Such
automatic investment shall be made at regular intervals and
pursuant to procedures provided by the Service Company
(which procedures may, without limitation, provide for more
frequent intervals only if reinvested balances exceed a
Stated amount). Absent a contrary direction in accordance
with the preceding provisions of Section 13.2 the Service
Company is hereby directed to make such automatic
investments.
Notwithstanding other provisions of the Plan to the contrary, if another
qualified plan is amended and restated in the form of this Plan, the
Employer or the named investment fiduciary shall have the power to
prescribe rules regarding the investment of the assets held under the
other qualified plan until such time as any resulting reconciliation of
Participant Accounts is completed and the
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assets may be reinvested in investments permitted under Section 13.4 of
the Plan.
13.4 PERMITTED INVESTMENTS
Except as Section 13.9 may apply, all amounts held in the Trust Fund
under the Plan shall be invested in mutual fund shares and annuities
which are offered through the Service Company, and such other
investments as shall be accepted in writing by the Service Company for
availability under the Plan. All dividends, including capital gain
dividends, paid by any mutual fund shall be reinvested in full and
fractional shares of the mutual fund paying the dividend in the manner
specified in the prospectus of the mutual fund, and such dividends shall
be credited to the Trust Fund.
Each of the mutual funds in which the Plan may invest carries its own
fees and expenses, which may include management fees, Rule 12b-l fees
and/or other fees and expenses which are described in detail in each
fund's prospectus. Participants who invest in these mutual funds will,
as shareholders of those funds, bear their prorata portion of each
fund's fees and expenses. Employer acknowledges that Prudential Mutual
Fund Distributors (PMFD) and Prudential Securities Incorporated (PSI)
may act as distributor of each fund's shares and that PSI, PMFD and
Pruco Securities Corporation (Prusec) are subsidiaries of The Prudential
Insurance Company of America (Prudential) (through which the Guaranteed
Interest Account is offered) and are each affiliated with the Funds as
described in each fund's prospectus. Employer acknowledges that
Prudential, PMFD, PSI and Prusec are not fiduciaries to the Plan, have
no obligation to the Plan or the Participants and are acting solely in
their own interest. Employer further acknowledges that Prudential, PMFD,
PSI and Prusec may be deemed to benefit from advisory and other fees
paid to it or its affiliates in connection with the management and
operation of the mutual funds in which the Participants may invest, from
sales charges and contingent deferred sales charges imposed as described
in the prospectus and from fees paid to The Prudential Insurance Company
of America in connection with the Guaranteed Interest Account.
13.5 SHAREHOLDER RIGHTS
The Trustee shall exercise any rights of a shareholder (including voting
rights) with respect to any securities held, but only in accordance with
the instructions of the Participant or the Designated Beneficiary of a
deceased Participant subject to and except as permitted by any
applicable rules of the Securities and Exchange Commission and any
national securities exchange.
13.6 LIQUIDATION OF ASSETS
If the trustee must liquidate assets in order to make distributions,
transfer assets, or pay fees, expenses or taxes assessed against all or
a part of the Fund, and the Trustee is not instructed as to the
liquidation of such assets, assets will be liquidated in accordance with
the rules and procedures customarily followed by the Service Company,
which rules shall be formulated in a manner to eliminate the potential
for exercise of discretion by the Service Company in the liquidation of
assets and shall be applied consistently with respect to all similarly
situated plans in the form of the prototype Plan; provided that if a
contribution is being made to an affected subaccount as of the date the
Trustee would otherwise be liquidating assets pursuant to this
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section, the Trustee may withdraw the necessary amount of cash and
invest the remainder of the contribution in investments in the same
proportion as would have resulted had the withdrawal not been made. The
Trustee is expressly authorized to liquidate assets in order to satisfy
the trust Fund's obligation to pay the Trustee's compensation if such
compensation is not paid on a timely basis.
13.7 ARBITRATION
(a) This Plan requires that certain controversies be arbitrated
as provided below. In this regard it is to be noted that:
(b) Arbitration is final and binding on the parties.
(c) The parties are waiving their right to seek remedies in
court including the right to jury trial.
(d) Pre-arbitration discovery is generally more limited than and
different from court proceedings.
(e) The arbitrator's award is not required to include factual
findings or legal reasoning and any party's right to appeal
or to seek modification of rulings by the arbitrators is
strictly limited.
(f) The panel of arbitrators will typically include a minority
of arbitrators who were or are affiliated with the
securities industry.
Unless the following procedure for the resolution of controversies is
not enforceable under ERISA, any controversy arising out of or relating
to the Plan, or with respect to transactions of any kind executed by,
through or with the Service Company or otherwise pertaining to the Plan
shall be settled by arbitration. The arbitration may be before either
the National Association of Securities Dealers, Inc. (NASD) or the New
York Stock Exchange Inc., as Employer/Employee, as the case may be, may
elect and shall-be governed by the laws of the State of New York. If
Employer/Employee does not make the above election by registered mail
addressed to PSI at its main office within 5 business days after demand
by PSI that Employer/Employee make such election, then PSI shall have
the right to elect the arbitration tribunal of its choice. Notice
preliminary to, in conjunction with or incident to arbitration, may be
sent to Employer/Employee by mail and personal service is hereby waived.
Judgment upon any award rendered by the arbitrators may be entered in
any court having jurisdiction thereof, without notice to
Employer/Employee.
No person shall bring a putative or certified class action to
arbitration, nor seek to enforce any pre-dispute arbitration agreement
against any person who has initiated in court a putative class action;
or who is a member of a putative class who has not opted out of the
class with respect to any claims encompassed by the putative class
action until: (i) the class Certification is denied; or (ii) the class
is decertified; or (iii) the customer is excluded from the class by the
court. Such forbearance to enforce an agreement to arbitrate shall not
constitute a waiver of any rights under this agreement except to the
extent Stated herein.
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13.8 PARTICIPANT LOANS
Unless otherwise specified in the Adoption Agreement, Participant Loans
will not be permitted. If permitted by the Adoption Agreement, a
Participant may make application to the Employer requesting a loan from
the Fund. Loans shall be made available to all Participants on a
reasonably equivalent basis and shall not be made available to highly
compensated employees who are Participants in amounts greater than made
available to all other Participants. The Employer will administer all
Participant Loans unless the Trustee otherwise agrees in writing to
accept these duties. Loan administration duties shall include, but are
not limited to: approving or disapproving loan applications from
Participants, loan origination and closing, providing proper disclosures
to Participant borrowers under applicable federal and state lending
laws, notifying Participant borrowers of default, and collecting current
and past due payments on such loans. The Employer will notify the
Trustee of any loan to be made from the Fund. The Trustee will reflect
the amount of each such loan and its repayments on records of the Fund.
Any loan granted hereunder shall be made subject to the following rules:
(a) No loan when aggregated with any outstanding Participant
loan(s), shall exceed the lesser of (i) $50,000 reduced by
the excess, if any, of the highest outstanding balance of
loans during the one year period ending on the day before
the loan is made, over the outstanding balance of loans from
the Plan on the date the loan is made or (ii) one-half of
the fair market value of a Participant's Vested account
balance built up from Employer Contributions, Voluntary
Contributions, and Rollover Contributions. For the purpose
of the above limitation, all loans from all plans of the
Employer and other members of a group of employers described
in Code Sections 414(b), 414(c), and 414(m) are aggregated.
An assignment or pledge of any portion of the Participants
interest in the Plan and a loan, pledge, or assignment with
respect to any insurance contract purchased under the Plan,
will be treated as a loan under this paragraph.
(b) All applications must be made on forms provided by the
Employer and must be signed by the Participant.
(c) Any loan granted hereunder shall bear interest at a rate
reasonable at the time of application, considering the
purpose of the loan and the rate being charged by
representative commercial banks in the local area for a
similar loan unless the Employer sets forth a different
method for determining loan interest rates in its loan
procedures. The loan agreement shall also provide that the
payment of principal and interest be amortized in level
payments not less frequently than quarterly.
(d) The term of such loan shall not exceed five years except in
the case of a loan for the purpose of acquiring any house,
apartment, condominium, or mobile home (not used on a
transient basis) which is used or is to be used within a
reasonable time as the principal residence of the
Participant. The term of such loan shall be determined by
the Employer considering the maturity dates quoted by
representative commercial banks in the local area for a
similar loan.
(e) The principal and interest paid by a Participant on his or
her loan shall be credited to
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the Fund in the same manner as for any other Plan
investment. Loans will be treated as segregated investments
of the individual Participants.
(f) If a Participant's loan application is approved by the
Employer, such Participant shall be required to sign a note,
loan agreement, and assignment of one-half of his or her
interest in the Fund as collateral for the loan. The
Participant, except in the case of a profit-sharing plan
satisfying the requirements of paragraph 8.7, must obtain
the consent of his or her Spouse, if any, within the 90 day
period before the time his or her account balance is used as
security for the loan. A new consent is required if the
account balance is used for any renegotiation, extension,
renewal or other revision of the loan, including an increase
in the amount thereof. The consent must be written. Must
acknowledge the effect of the loan, and must be witnessed by
a plan representative or notary public. Such consent shall
thereafter be binding with respect to the consenting Spouse
or any subsequent Spouse.
(g) If a valid Spousal consent has been obtained. Then,
notwithstanding any other provision of this Plan, the
portion of the Participant's vested account balance used as
a security interest held by the Plan by reason of a loan
outstanding to the Participant shall be taken into account
for purposes of determining the amount of the account
balance payable at the time of death or distribution, but
only if the reduction is used as repayment of the loan. If
less than 100% of the Participant's Vested account balance
(determined without regard to the preceding sentence) is
payable to the surviving Spouse, then the account balance
shall be adjusted by first reducing the vested account
balance by the amount of the security used as repayment of
the loan, and then determining the benefit payable to the
Surviving Spouse.
(h) The Employer may also require additional collateral in order
to adequately secure the loan.
(i) A Participant's loan shall immediately become due and
payable if such Participant terminates employment for any
reason or fails to make a principal and/or interest payment
as provided in the loan agreement. If such Participant
terminates employment, the Employer shall immediately
request payment of principal and interest on the loan. If
the Participant refuses payment following Termination, the
Employer shall reduce the Participant's vested account
balance by the remaining principal and interest on his or
her loan. If the Participant's vested account balance is
less than the amount due, the Employer shall take whatever
steps are necessary to collect the balance due directly from
the Participant. However, no foreclosure on the
Participant's note or attachment of the Participant's
account balance will occur until a distributable event
occurs in the Plan.
(j) No loans will be made to Owner-Employees (as defined in
paragraph 1.50) or Shareholder-Employees (as defined in
paragraph 1.74), unless an exemption from the prohibited
transactions rules is first obtained from the Department of
Labor.
(k) If a Participant requests a loan, the funds to be loaned
will be taken from the subaccount or subaccounts specified
by the Participant or, in the absence of such a
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specification, from the subaccounts in the order specified
in Section 6.10 pertaining to withdrawals. If specific
assets of the trust Fund are allocable to individual
Participants' Accounts, such assets equal in value to the
amount of the loan shall be sold at the direction of the
Participant to provide the funds to be loaned.
13.9 INSURANCE POLICIES
Unless otherwise specified in the Adoption Agreement, the insurance
provisions of this Section 13.9 shall not be applicable. If agreed upon
by the Trustee and approved by the Employer in the Adoption Agreement,
Employees may elect the purchase of life insurance policies under the
Plan. If elected, the maximum annual premium for a whole life policy
shall not exceed 50% of the aggregate cumulative Employer contributions
allocated to the account of a Participant. Whole life policies are
policies with both nondecreasing death benefits and nonincreasing
premiums. The maximum annual premium for term contracts or universal
life policies and all other policies which are not whole life shall not
exceed 25% of aggregate Employer contributions allocated to the account
of a Participant. The minimum annual premiums for a Participant with
both a whole life and a term contract or universal life policies shall
be limited to one-half of the whole life premiums plus the term premium
but shall not exceed 25% of the aggregate Employer contributions
allocated to the account of a Participant. It may also be elected to
have policies purchased on behalf of a Participant's spouse, their
dependents, or any individual in whom the Participant has an insurable
interest. If any policy is maintained on the joint lives of a
Participant and another individual, it may not be maintained under the
Plan should the other individual predecease the Participant. Any
policies purchased under this Plan shall be held subject to the
following rules:
(a) The Trustee shall be applicant and owner of any policies
issued.
(b) All policies or contracts purchased shall be endorsed as
nontransferable, and must provide that proceeds will be
payable to the Trustee; however, the Trustee shall be
required to pay over all proceeds of the contracts to the
Participant's Designated Beneficiary in accordance with the
distribution provisions of this Plan. Under no circumstances
shall the Trust retain any part of the proceeds.
(c) Each Participant shall be entitled to designate a
beneficiary under the terms of any contract issued; however,
such designation will be given to the Trustee which must be
the named beneficiary on any policy. Such designation shall
remain in force, until revoked by the Participant, by filing
a new beneficiary form with the Trustee. A Participant's
Spouse will be the Designated Beneficiary of the proceeds in
all circumstances unless a Qualified Election has been made
in accordance with paragraph 8.4. The beneficiary of a
deceased Participant shall receive, in addition to the
proceeds of the Participant's policy or policies, the amount
credited to such Participant's investment account.
(d) A Participant who is uninsurable or insurable at substandard
rates, may elect to receive a reduced amount of insurance,
if available, or may waive the purchase of any insurance.
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(e) At the discretion of the Participant, any dividends or
credits earned on a life insurance contract shall, either be
allocated to the Participant's account in the Fund, applied
in reduction of any premiums thereon, or, if no premiums are
due, applied to increase the proceeds of the life insurance
contract.
(f) Employer contributions are in-adequate to pay all premiums
on all insurance policies, the Trustee may, at the option of
the Employer, utilize other amounts remaining in each
Participant's account to pay the premiums on his or her
respective policy or policies, allow the policies to lapse,
reduce the policies to a level at which they may be
maintained, or borrow against the policies on a prorated
basis, provided that the borrowing does not discriminate in
favor of the policies on the lives of Officers,
Shareholders, and highly compensated Employees.
(g) On retirement or termination of employment of a Participant,
the Employer shall direct the Trustee to cash surrender the
Participant's policy and credit the proceeds to his or her
account for distribution under the terms of the Plan.
However, before so doing, the Trustee shall first offer to
distribute the policy to the Participant as a part of the
benefit distribution. If a Participant on whose life an
insurance policy is held under the Plan does not make a
timely direction regarding the policy under this Section
(g), the Participant shall be deemed to have directed that
the policy be converted into cash to be distributed in the
manner in which the balance of the Participant's Account is
to be distributed. All distributions resulting from the
application of this paragraph shall be subject to the Joint
and Survivor Annuity Rules of Article VIII, if applicable.
(h) The Employer shall be solely responsible to see that these
insurance provisions are administered properly and that if
there is any conflict between the provisions of this Plan
and any insurance contracts issued that the terms of this
Plan will control.
ARTICLE XIV - TOP-HEAVY PROVISIONS
14.1 APPLICABILITY OF RULES
If the Plan is or becomes Top-Heavy in any Plan Year beginning after
1983, the provisions of this Article will supersede any conflicting
provisions in the Plan or Adoption Agreement.
14.2 MINIMUM CONTRIBUTION
Notwithstanding any other provision in the Employer's Plan, for any Plan
Year in which the Plan is Top-Heavy or Super Top-Heavy, the aggregate
Employer contributions and forfeitures allocated on behalf of any
Participant (without regard to any Social security contribution) under
this Plan and any other Defined Contribution Plan of the Employer shall
be lesser of 3% of such Participant's Compensation or the largest
percentage of Employer Contributions and forfeitures, as a percentage of
the Key Employee's annual Compensation allocated on behalf of any Key
Employee for that year.
Each Participant who is employed by the Employer on the last day of the
Plan Year shall be entitled to receive an allocation of the Employer's
minimum contribution for such Plan Year. The
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minimum allocation applies even though under other Plan provisions the
Participant would not otherwise be entitled to receive an allocation, or
would have received a lesser allocation for the year because the
Participant fails to make Mandatory Contributions to the Plan, the
Participant's Compensation is less than a stated amount, or the
Participant fails to complete 1,000 Hours of Service (or such lesser
number designated by the Employer in the Adoption Agreement) during the
Plan Year. A Paired profit-sharing plan designated to provide the
minimum Top-Heavy contribution must do so regardless of profits. An
Employer may make the minimum Top-Heavy contribution available to all
Participants or just non-key Employees.
For purposes of computing the minimum allocation, Compensation shall
mean Compensation as The Top-Heavy minimum contribution does not apply
to any Participant to the extent the Participant is covered under any
other plan(s) of the Employer and the Employer has provided in Section
11 of the Adoption Agreement that the minimum allocation or benefit
requirements applicable to Top-Heavy Plans will be met in the other
plan(s).
If a Key Employee makes an Elective Deferral or has an allocation of
Matching Contributions made to his or her account, a Top-Heavy minimum
will be required for non-Key Employees who are Participants, however,
neither Elective Deferrals by nor Matching Contributions to non-Key
Employees may be taken into account for purposes of satisfying the top-
heavy Minimum Contribution requirement.
14.3 MINIMUM VESTING
For any Plan Year in which this Plan is Top-Heavy, the minimum vesting
schedule elected by the Employer in the Adoption Agreement will
automatically apply to the Plan. If the vesting schedule selected by the
Employer in the Adoption Agreement is less liberal than the allowable
schedule, the schedule will automatically be modified. If the vesting
schedule under the Employer's Plan shifts in or out of the Top-Heavy
schedule for any Plan Year, such shift is an amendment t to the vesting
schedule and the election in paragraph 9.8 of the Plan applies. The
minimum vesting schedule applies to all accrued 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 reduction in vested benefits may occur in the event the
Plan's Status as Top-Heavy changes for any Plan Year. However, this
paragraph does not apply to the account balances of any Employee who
does not have an Hour of Service after the Plan initially becomes Top-
Heavy and such Employee's account balance attributable to Employer
contributions and forfeitures will be determined without regard to this
paragraph.
14.4 LIMITATIONS ON ALLOCATIONS
In any Plan Year in which the Top-Heavy Ratio exceeds 90% (i.e., the
Plan becomes Super Top-Heavy), the denominators of the Defined Benefit
Fraction (as defined in paragraph 1.15) and Defined Contribution
Fraction (as defined in paragraph 1.18) shall be computed using 100% of
the dollar limitation instead of 125%.
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ARTICLE XV - AMENDMENT AND TERMINATION
15.1 AMENDMENT BY SPONSOR
The Sponsor may amend any or all provisions of this Plan and Trust at
any time without obtaining the approval or consent of any Employer which
has adopted this Plan and Trust provided that no amendment shall
authorize or permit any pan of the corpus or income of the Fund to be
used for or diverted to purposes other than for the exclusive benefit of
Participants and their beneficiaries, or eliminate an optional form of
distribution. In the case of a mass-submitted plan, the mass-submitter
shall amend the Plan on behalf of the Sponsor.
15.2 AMENDMENT BY EMPLOYER
The Employer may amend any option in the Adoption Agreement, and may
include language as permitted in the Adoption Agreement,
(a) to satisfy Code Section 415, or
(b) to avoid duplication of minimums under Code Section 416,
because of the required aggregation of multiple plans.
The Employer may 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 for which
the Employer must obtain a separate determination letter.
If the Employer amends the Plan and Trust other than as provided above,
the Employer's Plan shall no longer participate in this Prototype Plan
and will be considered an individually designed plan.
15.3 TERMINATION
Employers shall have the right to terminate their Plans upon 60 days
notice in writing to the Trustee. If the Plan is terminated, partially
terminated, or if there is a complete discontinuance of contributions
under a profit-sharing plan maintained by the Employer, all amounts
credited to the accounts of Participants shall vest and become
nonforfeitable. In the event of a partial termination, only those who
are affected by such partial termination shall be fully vested. In the
event of termination, the Employer shall direct the Trustee with respect
to the Distribution of accounts to or for the exclusive benefit of
participants or their beneficiaries. The Trustee shall dispose of the
Fund in accordance with the written directions of the Plan Administrator,
provided that no liquidation of assets and payment of benefits, (or
provision therefor), shall actually be made by the Trustee until after
it is established by the Employer in a manner Satisfactory to the
Trustee, that the applicable requirements, if any, of ERISA and the
Internal Revenue Code governing the termination of employee benefit
plans, have been or are being, complied with, or that appropriate
authorizations, waivers, exemptions, or variances have been, or are
being obtained.
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15.4 QUALIFICATION OF EMPLOYER'S PLAN
If the adopting Employer fails to attain or retain Internal Revenue
Service qualification, such Employer's Plan shall no longer participate
in this Prototype Plan and will be considered an individually designed
plan.
15.5 MERGERS AND CONSOLIDATIONS
(a) In the case of any merger or consolidation of the Employer's
Plan with, or transfer of assets or liabilities of the
Employer's Plan to, any other plan, Participants in the
Employer's Plan shall be entitled to receive benefits
immediately after the merger, consolidation, or transfer
which are equal to or greater than the benefits they would
have been entitled to receive immediately before the merger,
consolidation, or transfer if the Plan had then terminated.
(b) Any corporation into which the Trustee or any successor
trustee may be merged or with which it may be consolidated,
or any corporation resulting from any merger or
consolidation to which the Trustee or any successor trustee
may be a party, or any corporation to which all or
substantially all the trust business of the Trustee or any
successor trustee may be transferred, shall be the successor
of such Trustee without the filing of any instrument or
performance of any further act, before any court.
15.6 RESIGNATION AND REMOVAL
The Trustee may resign by written notice to the Employer which shall be
effective 60 days after de1ivery. The Employer may discontinue its
participation in this Prototype Plan and trust effective upon 60 days
written notice to the Sponsor. In such event the Employer shall, prior
to the effective date thereof, amend the Plan to eliminate any reference
to this Prototype Plan and Trust and appoint a successor trustee or
arrange for another funding agent. The Trustee shall deliver the Fund to
its successor on the effective date of the resignation or removal, or as
soon thereafter as practicable, provided that this shall not waive any
lien the Trustee may have upon the Fund for its compensation or
expenses. If the Employer fails to amend the Plan and appoint a
successor trustee, or other funding agent within the said 60 days, or
such longer period as the Trustee may specify in writing, the Plan shall
be deemed individually designed and the Employer shall be deemed the
successor trustee. The Employer must then obtain its own determination
letter.
15.7 QUALIFICATION OF PROTOTYPE
The Sponsor intends that this Prototype Plan will meet the requirements
of the Code as a qualified Prototype Retirement Plan and Trust. Should
the Commissioner of Internal Revenue or any delegate of the Commissioner
at any time determine that the Plan and Trust fails to meet the
requirements of the Code, the Sponsor will amend the Plan and trust to
maintain its qualified Status.
ARTICLE XVI - GOVERNING LAW
Construction, validity and administration of the prototype Plan and
Trust, and any Employer
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Plan and Trust as embodied in the Prototype document and accompanying
Adoption Agreement, shall be governed by Federal law to the extent
applicable and to the extent not applicable by the laws of the State
Commonwealth in which the principal office of the Sponsor is located.
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INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
PLAN DESCRIPTION: PROTOTYPE STANDARDIZED
PROFIT SHARING PLAN WITH CODA WASHINGTON, DC 20224
FFN: 50296321903-001 Case: 9400380
EIN: 13-3408212
BPD: 03 Plan: 001 Letter Serial No: D256803b Person to Contact: Mr. Dua
PRUDENTIAL MUTUAL FUND MANAGEMENT INC. Telephone Number: (202) 622-8380
1 SEAPORT PLAZA Refer Reply to: CP:E:EP:Q:3
NEW YORK, NY 10292 Date: 3/11/94
Dear Applicant
In our opinion, the amendment to the form of the plan identified above
does not in and of itself adversely affect The plan's acceptability
under Section 401 of the Internal Revenue Code. This opinion relates
only to the amendment to the form of the plan. It is not an opinion as
to the adaptability of any other amendment or of the form of the plan as
a whole, or as to the effect of other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this
plan. You are also required to send a copy of the approved form of the
plan, any approved amendments and related documents to each Key District
Director of Internal Revenue Service in whose jurisdiction there are
adopting employers.
Our opinion on the acceptability of the form of the plan is not a ruling
or determination as to whether an employer's plan qualifies under code
section 401(a). An employer who adopts this plan win be considered to
have a plan qualified under Code section 401(a) provided all the terms
of the plan are followed, and the eligibility requirements and
contribution or benefit provisions are not more favorable for highly
compensated employees than for other employees. Except as stated below,
the Key District Director will not issue a determination letter with
regard to this plan.
Our opinion does not apply to the form of the plan for purposes of Code
section 401(a)(16) if (1) an employer ever maintained another qualified
plan for one or more employees who are covered by this plan, other than
a specified paired within the meaning of Section 7 of Rev. Proc. 89-9,
1989-1 C.B. 780: or (2) after December 31, 1985, the employer maintains
a welfare benefit fund defined in Code Section 419(e), which provides
post retirement medical benefits allocated to separate accounts for key
employees as defined in Code section 419A(d)(3).
An employer that has adopted a standardized plan may not rely on this
opinion letter with respect to: (1) whether any amendment or series of
amendments to the plan satisfies the nondiscrimination requirements of
section 1.401(a)(4)-5(a) of the regulations, except with respect to the
plan amendments granting past service that meet the safe harbor
described in section 1.401 (a)(4)-5(a)(5) and are not part of a pattern
of amendments that significantly discriminates in favor of highly
compensated employees; or (2) whether the plan satisfies the effective
availability requirement of section 1.401 (a)(4)-4(c) of the regulations
with respect to any benefits, right or feature.
An employer that has adopted a standardized plan as an amendment to a
plan other than a standardized plan may not rely on this opinion letter
with respect to whether a benefit, right or other feature that is
prospectively eliminated satisfies the current availability requirements
of section 1.401 (a)-4 of the regulations.
The employer may request a determination (1) as to whether the plan,
considered with all related qualified plans and, if appropriate, welfare
benefit funds, satisfies the requirements of Code section 401(a)(16) as
to limitations on benefits and contributions in Code section 415; (2)
regarding the nondiscriminatory effect of grants of past service; and
(3) with respect to whether a prospectively eliminated benefit, right or
feature satisfies the current availability requirements.
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Prudential Mutual Fund Management Inc
FFN:50296321903-001
Page 2
Our opinion does not apply to the form of the plan for purposes of
section 401(a) of the code unless the terms of the plan, as adopted or
amended, that pertain to the requirements of sections 401(a)(4),
401(a)(5), 401(a)(17), 401(1), 401(b) and 401(s) of the Code, as amended
by The Tax Reform Act of 1986 or subsequent legislation, (a) are made
effective retroactively to the first day of the first plan year
beginning after December 31, 1988 (or such other date on which these
requirements first became effective with respect to this plan); or (b)
are made effective no later than the first day on which the employer is
no longer entitled, under regulations, to rely on a reasonable, good
faith interpretation of these Requirements, and the prior provisions of
the plan constitute such an interpretation.
This letter with respect to the amendment to the form of the plan does
no affect the applicability of the plan of the continued, interim and
extended reliance provisions of section 13 and 17.03 of Rev. Proc. 89-9,
1989-1 C.B. 780. The applicability of such provisions may be determined
by reference to the initial opinion letter issued with respect to the
plan.
If you, the sponsoring organization, have any questions concerning the
IRS processing of this case, please call the above telephone number.
This number is only for use of the sponsoring organization. Individual
participants and/or adopting employers with questions concerning the
plan should contact the sponsoring organization. The plan's adoption
agreement must include the sponsoring organization's address and
telephone number for inquiries by adopting employers.
If you write to the IRS regarding this plan, please provide your
telephone number and the most convenient time for us to call in case we
need more information. Whether you call or write, please refer to the
letter Serial Number and file Folder Number shown in the heading of this
letter.
You should keep this letter as a permanent record. Please notify us if
you modify or discontinue sponsorship of this plan.
Sincerely yours,
Chief Employee Plans Qualifications Branch
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INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
PLAN DESCRIPTION: PROTOTYPE STANDARDIZED
PROFIT SHARING PLAN WITH CODA WASHINGTON, DC 20224
FFN: 50296321903-002 Case: 9400381
EIN: 13-3408212
BPD: 03 Plan: 001 Letter Serial No: D356804b Person to Contact: Mr. Dua
PRUDENTIAL MUTUAL FUND MANAGEMENT INC. Telephone Number: (202) 622-8380
1 SEAPORT PLAZA Refer Reply to: CP:E:EP:Q:3
NEW YORK, NY 10292 Date: 3/11/94
Dear Applicant
In our opinion, the amendment to the form of the plan identified above
does not in and of itself adversely affect the plan's acceptability
under Section 401 of the Internal Revenue Code. This opinion relates
only to the amendment to the form of the plan. It is not an opinion as
to the acceptability of any other amendment of the form of the plan as a
whole, or as to the effect of other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this
plan. You are also required to send a copy of the approved form of the
plan, any approved amendments and related documents to each Key District
Director of Internal Revenue Service in whose jurisdiction there are
adopting employers.
An employer who adopts the amended form of the plan after the date of
the amendment should apply for a determination letter by filing an
application with the Key District Director of The Internal Revenue on
Form 5307, Short Form Application for Determination for Employee Benefit
Plan.
This letter with respect to 118 amendment to the form of the plan does
not affect the applicability to the plan of the continued, interim and
extended reliance provisions of sections 13 and 17.03 of Rev. Proc. 89-
9, 1989-1 C.B. 780. The applicability of such provisions may be
determined by reference to the initial opinion letter issued with
respect to the plan.
If you, the sponsoring organization, have any questions concerning the
IRS processing of this case, please call the above telephone number.
This number is only for use of the sponsoring organization. Individual
participants and/or adopting employers with questions concerning the
plan should contact the sponsoring organization. The plan's adoption
agreement must include the sponsoring organization's address and
telephone number for inquiries by adopting employers.
If you write to the IRS regarding this plan, please provide your
telephone number and the most convenient time for us to call in case we
need more information. Whether you call or write, please refer to the
Letter Serial Number and File Folder Number shown in the heading of this
letter.
You should keep this letter as a permanent record. Please notify us if
you modify or discontinue sponsorship of this plan.
Sincerely yours,
Chief Employee Plans Qualifications Branch
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