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Exhibit 4.7
[ICON] JOHN HANCOCK FUNDS
A GLOBAL INVESTMENT MANAGEMENT FIRM
UPI Prototype - Basic Plan
Document 04
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BASIC PLAN DOCUMENT 04
TABLE OF CONTENTS
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SECTION ONE DEFINITIONS.....................................................................................................1
1.01 ADOPTION AGREEMENT............................................................................................1
1.02 BASIC PLAN DOCUMENT...........................................................................................1
1.03 BENEFICIARY...................................................................................................1
1.04 BREAK IN ELIGIBILITY SERVICE..................................................................................1
1.05 BREAK IN VESTING SERVICE......................................................................................1
1.06 CODE..........................................................................................................1
1.07 COMPENSATION..................................................................................................1
1.08 CUSTODIAN.....................................................................................................3
1.09 DISABILITY....................................................................................................3
1.10 EARLY RETIREMENT AGE..........................................................................................3
1.11 EARNED INCOME.................................................................................................3
1.12 EFFECTIVE DATE................................................................................................3
1.13 ELIGIBILITY COMPUTATION PERIOD................................................................................3
1.14 EMPLOYEE......................................................................................................3
1.15 EMPLOYER......................................................................................................3
1.16 EMPLOYER CONTRIBUTION.........................................................................................3
1.17 EMPLOYMENT COMMENCEMENT DATE..................................................................................3
1.18 EMPLOYER PROFIT SHARING CONTRIBUTION..........................................................................3
1.19 ENTRY DATES...................................................................................................4
1.20 ERISA.........................................................................................................4
1.21 FORFEITURE....................................................................................................4
1.22 FUND..........................................................................................................4
1.23 HIGHLY COMPENSATED EMPLOYEE...................................................................................4
1.24 HOURS OF SERVICE - Means......................................................................................4
1.25 INDIVIDUAL ACCOUNT............................................................................................5
1.26 INVESTMENT FUND...............................................................................................5
1.27 KEY EMPLOYEE..................................................................................................5
1.28 LEASED EMPLOYEE...............................................................................................5
1.29 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS..........................................................................5
1.30 NORMAL RETIREMENT AGE.........................................................................................6
1.31 OWNER - EMPLOYEE..............................................................................................6
1.32 PARTICIPANT...................................................................................................6
1.33 PLAN..........................................................................................................6
1.34 PLAN ADMINISTRATOR............................................................................................6
1.35 PLAN YEAR.....................................................................................................6
1.36 PRIOR PLAN....................................................................................................6
1.37 PROTOTYPE SPONSOR.............................................................................................6
1.38 QUALIFYING PARTICIPANT........................................................................................6
1.39 RELATED EMPLOYER..............................................................................................6
1.40 RELATED EMPLOYER PARTICIPATION AGREEMENT......................................................................6
1.41 SELF-EMPLOYED INDIVIDUAL......................................................................................6
1.42 SEPARATE FUND.................................................................................................6
1.43 TAXABLE WAGE BASE.............................................................................................6
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1.44 TERMINATION OF EMPLOYMENT.....................................................................................6
1.45 TOP-HEAVY PLAN................................................................................................7
1.46 TRUSTEE.......................................................................................................7
1.47 VALUATION DATE................................................................................................7
1.48 VESTED........................................................................................................7
1.49 YEAR OF ELIGIBILITY SERVICE...................................................................................7
1.50 YEAR OF VESTING SERVICE.......................................................................................7
SECTION TWO ELIGIBILITY AND PARTICIPATION...................................................................................7
2.01 ELIGIBILITY TO PARTICIPATE....................................................................................7
2.02 PLAN ENTRY....................................................................................................7
2.03 TRANSFER TO OR FROM INELIGIBLE CLASS..........................................................................8
2.04 RETURN AS A PARTICIPANT AFTER BREAK IN ELIGIBILITY SERVICE...................................................8
2.05 DETERMINATIONS UNDER THIS SECTION.............................................................................8
2.06 SPECIAL RULES WHERE ELAPSED TIME METHOD IS BEING USED.........................................................8
2.08 ELECTION NOT TO PARTICIPATE...................................................................................9
SECTION THREE CONTRIBUTIONS.................................................................................................9
3.01 EMPLOYER CONTRIBUTIONS........................................................................................9
3.02 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS.........................................................................12
3.03 ROLLOVER CONTRIBUTIONS.......................................................................................12
3.04 TRANSFER CONTRIBUTIONS.......................................................................................12
3.05 LIMITATION ON ALLOCATIONS....................................................................................12
SECTION FOUR INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION.............................................................16
4.01 INDIVIDUAL ACCOUNTS..........................................................................................16
4.02 VALUATION OF FUND............................................................................................16
4.03 VALUATION OF INDIVIDUAL ACCOUNTS.............................................................................16
4.04 MODIFICATION OF METHOD FOR VALUING INDIVIDUAL ACCOUNTS.......................................................18
4.05 SEGREGATION OF ASSETS........................................................................................18
4.06 STATEMENT OF INDIVIDUAL ACCOUNTS.............................................................................18
SECTION FIVE TRUSTEE OR CUSTODIAN..........................................................................................18
5.01 CREATION OF FUND.............................................................................................18
5.02 INVESTMENT AUTHORITY.........................................................................................18
5.03 FINANCIAL ORGANIZATION CUSTODIAN OR TRUSTEE WITHOUT FULL TRUST POWERS........................................18
5.04 FINANCIAL ORGANIZATION TRUSTEE WITH FULL TRUST POWERS AND INDIVIDUAL TRUSTEE.................................19
5.05 DIVISION OF FUND INTO INVESTMENT FUNDS.......................................................................20
5.06 COMPENSATION AND EXPENSES...................................................................................20
5.07 NOT OBLIGATED TO QUESTION DATA...............................................................................21
5.08 LIABILITY FOR WITHHOLDING ON DISTRIBUTIONS...................................................................21
5.09 RESIGNATION OR REMOVAL OF TRUSTEE (OR CUSTODIAN).............................................................21
5.10 DEGREE OF CARE - LIMITATIONS ON LIABILITY....................................................................21
5.11 INDEMNIFICATION OF PROTOTYPE SPONSOR AND TRUSTEE (OR CUSTODIAN)..............................................22
5.12 INVESTMENT MANAGERS..........................................................................................22
5.13 MATTERS RELATING TO INSURANCE................................................................................22
5.14 DIRECTION OF INVESTMENTS BY PARTICIPANTS.....................................................................23
SECTION SIX VESTING AND DISTRIBUTION.......................................................................................23
6.01 DISTRIBUTION TO PARTICIPANT..................................................................................23
6.02 FORM OF DISTRIBUTION TO A PARTICIPANT........................................................................26
6.03 DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT................................................................27
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6.04 FORM OF DISTRIBUTION TO BENEFICIARY..........................................................................28
6.05 JOINT AND SURVIVOR ANNUITY REQUIREMENTS......................................................................28
6.06 DISTRIBUTION REQUIREMENTS....................................................................................31
6.07 ANNUITY CONTRACTS............................................................................................35
6.08 LOANS TO PARTICIPANTS........................................................................................35
6.09 DISTRIBUTION IN KIND.........................................................................................36
6.10 DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS..........................................................36
6.11 PROCEDURE FOR MISSING PARTICIPANTS OR BENEFICIARIES..........................................................36
SECTION SEVEN CLAIMS PROCEDURE.............................................................................................36
7.01 FILING A CLAIM FOR PLAN DISTRIBUTIONS........................................................................36
7.02 DENIAL OF CLAIM..............................................................................................37
7.03 REMEDIES AVAILABLE...........................................................................................37
SECTION EIGHT PLAN ADMINISTRATOR...........................................................................................37
8.01 EMPLOYER IS PLAN ADMINISTRATOR...............................................................................37
8.02 POWERS AND DUTIES OF THE PLAN ADMINISTRATOR..................................................................37
8.03 EXPENSES AND COMPENSATION....................................................................................38
8.04 INFORMATION FROM EMPLOYER....................................................................................38
SECTION NINE AMENDMENT AND TERMINATION.....................................................................................38
9.01 RIGHT OF PROTOTYPE SPONSOR TO AMEND THE PLAN.................................................................38
9.02 RIGHT OF EMPLOYER TO AMEND THE PLAN..........................................................................39
9.03 LIMITATION ON POWER TO AMEND.................................................................................39
9.04 AMENDMENT OF VESTING SCHEDULE................................................................................39
9.05 PERMANENCY...................................................................................................39
9.06 METHOD AND PROCEDURE FOR TERMINATION.........................................................................39
9.07 CONTINUANCE OF PLAN BY SUCCESSOR EMPLOYER....................................................................39
9.08 FAILURE OF PLAN QUALIFICATION................................................................................40
SECTION TEN MISCELLANEOUS..................................................................................................40
10.01 STATE COMMUNITY PROPERTY LAWS................................................................................40
10.02 HEADINGS.....................................................................................................40
10.03 GENDER AND NUMBER............................................................................................40
10.04 PLAN MERGER OR CONSOLIDATION.................................................................................40
10.05 STANDARD OF FIDUCIARY CONDUCT................................................................................40
10.06 GENERAL UNDERTAKING OF ALL PARTIES...........................................................................40
10.07 AGREEMENT BINDS HEIRS, ETC...................................................................................40
10.08 DETERMINATION OF TOP-HEAVY STATUS............................................................................40
10.09 SPECIAL LIMITATIONS FOR OWNER-EMPLOYEES......................................................................42
10.10 INALIENABILITY OF BENEFITS...................................................................................42
10.11 CANNOT ELIMINATE PROTECTED BENEFITS..........................................................................42
SECTION ELEVEN 401(K) PROVISIONS...........................................................................................43
11.100 DEFINITIONS..................................................................................................43
11.101 ACTUAL DEFERRAL PERCENTAGE (ADP).............................................................................43
11.102 AGGREGATE LIMIT..............................................................................................43
11.103 AVERAGE CONTRIBUTION PERCENTAGE (ACP)........................................................................43
11.104 CONTRIBUTING PARTICIPANT.....................................................................................43
11.105 CONTRIBUTION PERCENTAGE......................................................................................43
11.106 CONTRIBUTION PERCENTAGE AMOUNTS..............................................................................43
11.107 ELECTIVE DEFERRALS...........................................................................................43
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11.108 ELIGIBLE PARTICIPANT.........................................................................................44
11.109 EXCESS AGGREGATE CONTRIBUTIONS...............................................................................44
11.110 EXCESS CONTRIBUTIONS.........................................................................................44
11.111 EXCESS ELECTIVE DEFERRALS....................................................................................44
11.112 MATCHING CONTRIBUTION........................................................................................44
11.113 QUALIFIED NONELECTIVE CONTRIBUTIONS..........................................................................44
11.114 QUALIFIED MATCHING CONTRIBUTIONS.............................................................................44
11.115 QUALIFYING CONTRIBUTING PARTICIPANT..........................................................................45
11.200 CONTRIBUTING PARTICIPANT.....................................................................................45
11.201 REQUIREMENTS TO ENROLL AS A CONTRIBUTING PARTICIPANT.........................................................45
11.202 CHANGING ELECTIVE DEFERRAL AMOUNTS...........................................................................45
11.203 CEASING ELECTIVE DEFERRALS...................................................................................45
11.204 RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE DEFERRALS........................................45
11.205 CERTAIN ONE-TIME IRREVOCABLE ELECTIONS.......................................................................45
11.300 CONTRIBUTIONS................................................................................................45
11.301 CONTRIBUTIONS BY EMPLOYER....................................................................................45
11.302 MATCHING CONTRIBUTIONS.......................................................................................46
11.303 QUALIFIED NONELECTIVE CONTRIBUTIONS..........................................................................46
11.304 QUALIFIED MATCHING CONTRIBUTIONS.............................................................................46
11.305 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS.........................................................................46
11.400 NONDISCRIMINATION TESTING....................................................................................46
11.401 ACTUAL DEFERRAL PERCENTAGE TEST (ADP)........................................................................46
11.402 LIMITS ON NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS AND MATCHING CONTRIBUTIONS....................................47
11.500 DISTRIBUTION PROVISIONS......................................................................................48
11.501 GENERAL RULE.................................................................................................48
11.502 DISTRIBUTION REQUIREMENTS....................................................................................48
11.503 HARDSHIP DISTRIBUTION........................................................................................49
11.504 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS....................................................................49
11.505 DISTRIBUTION OF EXCESS CONTRIBUTIONS.........................................................................50
11.506 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS...............................................................50
11.507 RECHARACTERIZATION...........................................................................................51
11.508 DISTRIBUTION OF ELECTIVE DEFERRALS IF EXCESS ANNUAL ADDITIONS................................................51
11.600 VESTING......................................................................................................51
11.601 100% VESTING ON CERTAIN CONDITIONS...........................................................................51
11.602 FORFEITURES AND VESTING OF MATCHING CONTRIBUTIONS............................................................51
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QUALIFIED RETIREMENT PLAN AND TRUST
DEFINED CONTRIBUTION BASIC PLAN DOCUMENT
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SECTION ONE DEFINITIONS
The following words and phrases when used in the Plan with initial
capital letters shall, for the purpose of this Plan, have the
meanings set forth below unless the context indicates that other
meanings are intended:
1.01 ADOPTION AGREEMENT
Means the document executed by the Employer through which it
adopts the Plan and Trust and thereby agrees to be bound by all
terms and conditions of the Plan and Trust.
1.02 BASIC PLAN DOCUMENT
Means this prototype Plan and Trust document.
1.03 BENEFICIARY
Means the individual or individuals designated pursuant to Section
6.03(A) of the Plan.
1.04 BREAK IN ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides with an
Eligibility Computation Period during which an Employee fails to
complete more than 500 Hours of Service (or such lesser number of
Hours of Service specified in the Adoption Agreement for this
purpose).
1.05 BREAK IN VESTING SERVICE
Means a Plan Year (or other vesting computation period described
in Section 1.50) during which an Employee fails to complete more
than 500 Hours of Service (or such lesser number of Hours of
Service specified in the Adoption Agreement for this purpose).
1.06 CODE
Means the Internal Revenue Code of 1986 as amended from
time-to-time.
1.07 COMPENSATION
A. Basic Definition
For Plan Years beginning on or after January 1, 1989, the
following definition of Compensation shall apply:
As elected by the Employer in the Adoption Agreement (and
if no election is made, W-2 wages will be deemed to have
been selected), Compensation shall mean one of the
following:
1. W-2 wages. Compensation is defined as information
required to be reported under Sections 6041 and 6051
and 6052 of the Code (Wages, tips and other
compensation as reported on Form W-2). Compensation
is defined as wages within the meaning of Section
3401 (a) of the Code and all other payments of
compensation to an Employee by the Employer (in the
course of the Employer's trade or business) for
which the Employer is required to furnish the
Employee a written statement under Sections 6041 (d)
and 6051 (a)(3), and 6052 of the Code. Compensation
must be determined without regard to any rules under
Section 3401 (a) that limit the remuneration
included in wages based on the nature or location of
the employment or the services performed (such as
the exception for agricultural labor in Section 3401
(a)(2).
2. Section 3401 (a) wages. Compensation is defined as
wages within the meaning of Section 3401 (a) of the
Code, for the purposes of income tax withholding at
the source but determined without regard to any
rules that limit the remuneration included in wages
based on the nature or location of the employment or
the services performed (such as the exception for
agricultural labor in Section 3401 (a) (2).
3. 415 safe-harbor compensation. Compensation is
defined as wages, salaries, and fees for
professional services and other amounts received
(without regard to whether or not an amount is paid
in cash) for personal services actually rendered in
the course of employment with the Employer
maintaining the Plan to the extent that the amounts
are includible in gross income (including, but not
limited to, commissions paid salesmen, compensation
for services on the basis of a percentage of
profits, commissions on insurance premiums, tips,
bonuses, fringe benefits, and reimbursements or
other expense allowances under a nonaccountable plan
(as described in 1.62-2(c)), and excluding the
following:
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a. Employer contributions to a plan of deferred
compensation which are not includible in the
Employee's gross income for the taxable year
in which contributed, or employer
contributions under a simplified employee
pension plan to the extent such
contributions are deductible by the
Employee, or any distributions from a plan
of deferred compensation;
b. Amounts realized from the exercise of a
nonqualified stock option, or when
restricted stock (or property) held by the
Employee either becomes freely transferable
or is no longer subject to a substantial
risk of forfeiture;
c. Amounts realized from the sale, exchange or
other disposition of stock acquired under a
qualified stock option; and
d. Other amounts which received special tax
benefits, or contributions made by the
Employer (whether or not under a salary
reduction agreement) towards the purchase of
an annuity contract described in Section
403(b) of the Code (whether or not the
contributions are actually excludable from
the gross income of the Employee).
For any Self-Employed Individual covered under the
Plan, Compensation will mean Earned Income.
B. Determination Period And Other Rules
Compensation shall include only that Compensation which
is actually paid to the Participant during the
determination period. Except as provided elsewhere in
this Plan, the determination period shall be the Plan
Year unless the Employer has selected another period in
the Adoption Agreement. If the Employer makes no
election, the determination period shall be the Plan
Year.
Unless otherwise indicated in the Adoption Agreement,
Compensation shall include any amount which is
contributed by the Employer pursuant to a salary
reduction agreement which is not includible in the
gross income of the Employee under Section 125,
402(e)(3), 402(h)(1)(B) or 403(b) of the Code.
Where this Plan is being adopted as an amendment and
restatement to bring a Prior Plan into compliance with
the Tax Reform Act of 1986, such Prior Plan's
definition of Compensation shall apply for Plan Years
beginning before January 1, 1989.
C. Limits On Compensation
For years beginning after December 31, 1988 and before
January 1, 1994, the annual Compensation of each
Participant taken into account for determining all
benefits provided under the Plan for any determination
period shall not exceed $200,000. This limitation shall
be adjusted by the Secretary at the same time and in
the same manner as under Section 415(d) of the Code,
except that the dollar increase in effect on January 1
of any calendar year is effective for Plan Years
beginning in such calendar year and the first
adjustment to the $200,000 limitation is effective on
January 1, 1990.
For Plan Years beginning on or after January 1, 1994,
the annual Compensation of each participant taken into
account for determining all benefits provided under the
Plan for any Plan Year shall not exceed 150,000, as
adjusted for increases in the cost-of-living in
accordance with Section 401(a)(17)(B) of the Internal
Revenue Code. The cost-of-living adjustment in effect
for a calendar year applies to any determination period
beginning in such calendar year.
If the period for determining Compensation used in
calculating an Employee's allocation for a
determination period is a short Plan year (i.e.,
shorter than 12 months), the annual Compensation limit
is an amount equal to the otherwise applicable annual
Compensaion limit multiplied by a fraction, the
numerator or which is the number of months in the short
Plan Year, and the denominator of which is 12.
In determining the Compensation of a Participant for
purposes of this limitation, the rules of Section
414(q)(6) of the Code shall apply, except in applying
such rules, the term "family" shall include only the
spouse of the Participant and any lineal descendants of
the Participant who have not attained age 19 before the
close of the year. If, as a result of the application
of such rules the adjusted $200,000limitation is
exceeded, then (except for purposes of determining the
portion of Compensation up to the integration level, if
this Plan provides for permitted disparity), the
limitation shall be prorated among the affected
individuals in proportion to each such individual's
Compensation as determined under this Section prior to
the application of this limitation.
If Compensation for any prior determination period is
taken into account in determining an Employee's
allocations or benefits for the current determination
period, the Compensation for such prior determination
period is subject to the applicable annual Compensation
limit in effect for that prior period. For this
purpose, in determining allocations in Plan years
beginning on or after January 1, 1989, the annual
Compensation limit in effect for determination periods
beginning before that date is $200,000. In addition, in
determining allocations in Plan Years beginning on or
after January 1, 1994, the annual Compensation limit in
effect for determination periods beginning before that
date is $150,000.
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1.08 CUSTODIAN
Means an entity specified in the Adoption Agreement as
Custodian or any duly appointed successor as provided in
Section 5.09.
1.09 DISABILITY
Unless the Employer has elected a different definition in
the Adoption Agreement. Disability means the inability to
engage in any substantial, gainful activity by reason of any
medically determinable physical or mental impairment that
can be expected to result in death or which has lasted or
can be expected to last for a continuous period of not less
than 12 months. The permanence and degree of such impairment
shall be supported by medical evidence.
1.10 EARLY RETIREMENT AGE
Means the age specified in the Adoption Agreement. The Plan
will not have an Early Retirement Age if none is specified
in the Adoption Agreement.
1.11 EARNED INCOME
Means the net earnings from self-employment in the trade or
business with respect to which the Plan is established, for
which personal services of the individual are a material
income-producing factor. Net earnings will be determined
without regard to itmes not included in gross income and the
deductions allocable to such items. Net earnisn are reduced
by contributions by the Employer to a qualified plan to the
extend deductible under Section 404 of the Code.
1.12 EFFECTIVE DATE
Means the date the Plan becomes effective as indicated in
the Adoption Agreement. However, as indicated in the
Adoption Agreement, certain provisions may have specific
effective dates. Further, where a separate date is stated in
the Plan as of which a particular Plan provision becomes
effective, such date will control with respect to that
provision.
1.13 ELIGILITY COMPUTATION PERIOD
An Employee's initial Eligibility Computation Period shall
be the 12 consecutive month period commencing on the
Employee's Employment Commencement Date. The Employee's
subsequent Eligibility Computation Periods shall be the 12
consecutive month periods commencing on the anniversaries of
his or her Employment Commencement Date; provided, however,
if pursuant to the Adoption Agreement, an Employee is
required to complete one or less Years of Eligibility
Service to become a Participant, then his or her subsequent
Eligibility Computation Periods shall be the Plan years
commencing with the Plan Year beginning during his or her
initial Eligibility Computation Period. An Employee does not
complete a Year of Eligibility Service before the end of the
12 consecutive month period regardless of when during such
period the Employee completes the required number of Hours
of Service.
1.14 EMPLOYEE
Means any person employed by an Employer maintaining the
Plan or of any other employer required to be aggregated with
such Employer under Sections 414(b), (c), (m) or (o) of the
Code.
The term Employee shall also include any Leased Employee
deemed to be an Employee of any Employer described in the
previous paragraph as provided in Section 414(n) or (o) or
the Code.
1.15 EMPLOYER
Means any corporation, partnership, sole-proprietorship or
other entity named in the Adoption Agreement and any
successor who by merger, consolidation, purchase or
otherwise assumes the obligations of the Plan. A partnership
is considered to be the Employer of each of the partners and
a sole-proprietorship is considered to be the Employer of a
sole proprietor. Where this Plan is being maintained by a
union or other entity that represents its member Employees
in the negotiation of collective bargaining agreements, the
term Employer shall mean such union or other entity.
1.16 EMPLOYER CONTRIBUTION
Means the amount contributed by the Employer each year as
determined under this Plan.
1.17 EMPLOYMENT COMMENCEMENT DATE
AN EMPLOYEE'S EMPLOYMENT COMMENCEMENT DATE MEANS THE DATE
THE EMPLOYEE FIRST PERFORMS AN HOUR OF SERVICE FOR THE
EMPLOYER.
1.18 EMPLOYER PROFIT SHARING CONTRIBUTION
Means an Employer Contribution made pursuant to the Section
of the Adoption Agreement titled "Employer Profit Sharing
Contributions." The Employer may make Employer Profit
Sharing Contributions without regard to current or
accumulated earnings or profits.
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1.19 ENTRY DATES
Means the first day of the Plan Year and the first day of
the seventh month of the Plan year, unless the Employer has
specified different dates in the Adoption Agreement.
1.20 ERISA
Means the Employee Retirement Income Security Act of 1974 as
amended from time-to-time.
1.21 FORFEITURE
Means that portion of a Participant's Individual Account
derived from Employer Contributions which he or she is not
entitled to receive (i.e., the nonvested portion).
1.22 FUND
MEANS THE PLAN ASSETS HELD BY THE TRUSTEEFOR THE
PARTICIPANTS' EXCLUSIVE BENEFIT.
1.23 HIGHLY COMPENSATED EMPLOYEE
The term Highly Compensated Employeeincludes highly
compensated active employees and highly compensated
formeremployees.
A highly compensated active employee includes any Employee
who performs service for the Employer during the
determination year and who, during the look-back year: 9a)
received Compensation from the Employer in excess of $75,000
(as adjusted pursuant to Section 415(d) of the Code); (b)
received Compensation from the Employer in excess of $50,000
(as adjusted pursuant to Section 415(d) of the Code) and was
a member of the top-paid group for such year; or (c) was an
officer of the Employer and received Compensation during
such year that is greater than 50% of the dollar limitation
in effect under Section 415(b)(1)(A) of the Code. The term
Highly Compensated Employee also includes: (a) Employees who
are both described in the preceding sentence if the term
"determination year" is substituted for the term "look-back
year" and the Employee is one of the 100 Employees who
received the most Compensation from the Employer during the
determination year; and (b) Employees who are 5% owners at
any time during the look-back year or determination year.
If no officer has satisfied the Compensation requirement of
(c) above during either a determination year or look-back
year, the highest paid officer for such year shall be
treated as a Highly Compensated Employee.
For this purpose, the determination year shall be the Plan
Year. The look-back year shall be the 12 month period
immediately preceding the determination year.
A highly compensated former employee includes any Employee
who separated from service (or was deemed to have separated)
prior to the determination year, performs no service for the
Employer during the determination year, and was a highly
compensated active employee for either the separation year
or any determination year ending on or after the Employee's
55th birthday.
If an Employee is, during a determination year or look-back
year, a family member of either a 5% owner who is an active
or former Employee or a Highly Compensated Employee who is
one of the 10 most Highly Compensated Employees ranked on
the basis of Compensation paid by the Employer during such
year, then the family member and the 5% owner or top 10
Highly Compensated Employee shall be aggregated. In such
case, the family member and 5% owner or top 10 Highly
Compensated Employee shall be treated as a single Employee
receiving Compensation and Plan contributions or benefits
equal to the sum of such Compensation and contributions or
benefits of the family member and 5% owner or top 10 Highly
Compensated Employee. For purposes of this Section, family
member includes the spouse, lineal ascendants and
descendants of the Employee or former Employee and spouses
of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identify of
Employees in the top-paid group, the top 100 Employees, the
number of Employees treated as officers and the Compensation
that is considered, will be made in accordance with Section
414(q) of the Code and the regulations thereunder.
1.24 HOURS OF SERVICE - MEANS
A. Each hour for which an Employee is paid, or entitled
to payment, for the performance of duties for the
Employer. These hours will be credited to the
Employee for the computation period in which the
duties are performed; and
B. Each hour for which an Employee is paid, or entitled
to payment, by the Employer on account of a period
of time during which no duties are performed
(irrespective of whether the employment relationship
has terminated) due to vacation, holiday, illness,
incapacity (including disability), layoff, jury
duty, military duty or leave of absence. No more
than 501 Hours of Service will be credited under
this paragraph for any single continuous period
(whether or not such period occurs in a single
computation period). Hours under this paragraph
shall be calculated and credited pursuant to Section
2530.200b-2 of the Department of Labor Regulations
which is incorporated herein by this reference; and
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C. Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed
to by the Employer. The same Hours of Service will
not be credited both under paragraph (A) or
paragraph (B), as the case may be, and under this
paragraph (C). These hours will be credited to the
Employee for the computation period of periods to
which the award or agreement pertains rather than
the computation period in which the award,
agreement, or payment is made.
D. Solely for purposes of determining whether a Break
in Eligibility Service or a Break in Vesting Service
has occurred in a computation period (the
computation period for purposes of determining
whether a Break in Vesting Service has occurred is
the Plan Year or other vesting computation period
described in Section 1.50), an individual who is
absent from work for maternity or paternity reasons
shall receive credit for the Hours of Service which
would otherwise have been credited to such
individual but for such absence, or in any case in
which such hours cannot be determined, 8 Hours of
Service per day of such absence. For purposes of
this paragraph, an absence form work for maternity
or paternity reasons means an absence (1) by reason
of the pregnancy of the individual, (2) by reason of
a birth of a child of the individual, (3) by reason
of the placement of a child with the individual in
connection with the adoption of such child by such
individual, or (4) for purposes of caring for such
child for a period beginning immediately following
such birth or placement. The Hours of Service
credited under this paragraph shall be credited (1)
in the Eligibility Computation Period or Plan year
or other vesting computation period described in
Section 1.50 in which the absence begins if the
crediting is necessary to prevent a Break in
Eligibility Service or a Break in Vesting Service in
the applicable period, or (2) in all other cases, in
the following Eligibility Computation Period or Plan
Year or other vesting computation period described
in Section 1.50.
E. Hours of Service will be credited for employment
with other members of an affiliated service group
(under Section 414(m) of the Code), a controlled
group of corporations (under Section 414(b) of the
Code), or a group of trades or businesses under
common control (under Section 414(c) of the Code) of
which the adopting Employer is a member, and any
other entity required to be aggregated with the
Employer pursuant to Section 414(o) of the Code and
the regulations thereunder.
F. Where the Employer maintains the plan of a
predecessor employer, service for such predecessor
employer shall be treated as service for the
Employer.
G. The above method for determining Hours of Service
may be altered as specified in the Adoption
Agreement.
1.25 INDIVIDUAL ACCOUNT
Means the account established and maintained under this Plan
for each Participant in accordance with Section 4.01.
1.26 INVESTMENT FUND
Means a subdivision of the Fund established pursuant to
Section 5.05.
1.27 KEY EMPLOYEE
Means any person who is determined to be a Key Employee
under Section 10.08.
1.28 LEASED EMPLOYEE
Means any person (other than an Employee of the recipient)
who pursuant to an agreement between the recipient and any
other person ("leasing organization") has performed services
for the recipient (or for the recipient and related persons
determined in accordance with Section 414(n)(6) of the Code)
on a substantially full time basis for a period of at least
one year, and such services are of a type historically
performed by Employees in the business field of the
recipient Employer. Contributions or benefits provided a
Leased Employee by the leasing organization which are
attributable to services performed for the recipient
Employer shall be treated as provided by the recipient
Employer.
A Leased Employee shall not be considered an Employee of the
recipient if: (1) such employee is covered by a money
purchase pension plan providing: (a) a nonintegrated
employer contribution rate of at least 10% of compensation,
as defined in Section 415(c)(3) of the Code, but including
amounts contributed pursuant to a salary reduction agreement
which are excludable from the employee's gross income under
Section 125, Section 402(e)(3), Section 402(h)(1)(B) or
Section 403(b) of the Code, (b) immediate participation, and
(c) full and immediate vesting; and (2) Leased Employees do
not constitute more than 20% of the recipient's nonhighly
compensated work force.
1.29 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Means any contribution made to the Plan by or on behalf of a
Participant that is included in the participant's gross
income in the year in which made and that is maintained
under a separate account to which earnings and losses are
allocated.
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<PAGE> 11
1.30 NORMAL RETIREMENT AGE
Means the age specified in the Adoption Agreement. However,
if the Employer enforces a mandatory retirement age which is
less than the Normal Retirement Age, such mandatory age is
deemed to be the Normal Retirement Age. If no age is
specified in the Adoption Agreement, the Normal Retirement
Age shall be age 65.
1.31 OWNER - EMPLOYEE
Means an individual who is a sole proprietor, or who is a
partner owning more than 10% of either the capital or
profits interest of the partnership.
1.32 PARTICIPANT
Means any Employee or former Employee of the Employer who
has met the Plan's eligibility requirements, has entered the
Plan and who is or may become eligible to receive a benefit
of any type from this Plan or whose Beneficiary may be
eligible to receive any such benefit.
1.33 PLAN
Means the prototype defined contribution plan adopted by the
Employer. The Plan consists of this Basic Plan Document plus
the corresponding Adoption Agreement as completed and signed
by the Employer.
1.34 PLAN ADMINISTRATOR
Means the person or persons determined to be the Plan
Administrator in accordance with Section 8.01.
1.35 PLAN YEAR
Means the 12 consecutive month period which coincides with
the Employer's fiscal year or such other 12 consecutive
month period as is designated in the Adoption Agreement.
1.36 PRIOR PLAN
Means a plan which was amended or replaced by adoption of
this Plan document as indicated in the Adoption Agreement.
1.37 PROTOTYPE SPONSOR
Means the entity specified in the Adoption Agreement that
makes this prototype plan available to employers for
adoption.
1.38 QUALIFYING PARTICPANT
Means a Participant who has satisfied the requirements
described in Section 3.01(B)(2) to be entitled to share in
any Employer Contribution (and Forfeitures, if applicable)
for a Plan year.
1.39 RELATED EMPLOYER
Means an employer that may be required to be aggregated with
the Employer adopting this Plan for certain qualification
requirements under Section 414(b), (c), (m) or (o) of the
Code (or any other employer that has ownership in common
with the Employer). A Related Employer may participate in
this Plan if so indicated in the Section of the Adoption
Agreement titled "Employer Information" or if such Related
Employer executes a Related Employer Participation
Agreement.
1.40 RELATED EMPLOYER PARTICIPATION AGREEMENT
Means the agreement under this prototype Plan that a Related
Employer may execute to participate in this Plan.
1.41 SELF-EMPLOYED INDIVIDUAL
Means an individual who has Earned Income for the taxable
year from the trade or business for which the Plan is
established; also, an individual who would have had Earned
Income but for the fact that the trade or business had no
net profits for the taxable year.
1.42 SEPARATE FUND
Means a subdivision of the Fund held in the name of a
particular Participant representing certain assets held for
that Participant. The assets which comprise a participant's
Separate Fund are those assets earmarked for him or her and
those assets subject to the Participant's individual
direction pursuant to Section 5.14.
1.43 TAXABLE WAGE BASE
Means, with respect to any taxable year, the contribution
and benefit base in effect under Section 230 of the Social
Security Act at the beginning of the Plan Year.
1.44 TERMINATION OF EMPLOYMENT
A Termination of Employment of an Employee of an Employer
shall occur whenever his or her status as an Employee of
such Employer ceases for any reason other than death. An
Employee who does not return to work for the Employer on or
before the expiration of an authorized leave of absence from
such Employer shall be deemed to have incurred a Termination
of Employment when such leave ends.
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<PAGE> 12
1.45 TOP-HEAVY PLAN
This Plan is a Top-Heavy Plan for any Plan Year if it is
determined to be such pursuant to Section 10.08.
1.46 TRUSTEE
Means an individual, individuals or corporation specified in
the Adoption Agreement as Trustee or any duly appointed
successor as provided in Section 5.09. Trustee shall mean
Custodian in the event the financial organization named as
Trustee does not have full trust powers.
1.47 VALUATION DATE
Means the date or dates as specified in the Adoption
Agreement. If no date is specified in the Adoption
Agreement, the Valuation Date shall be the last day of the
Plan Year and each other date designated by the Plan
Administrator which is selected in a uniform and
nondiscriminatory manner when the assets of the Fund are
valued at their then fair market value.
1.48 VESTED
Means nonforfeitable, that is, a claim which is
unconditional and legally enforceable against the Plan
obtained by a Participant or the Participant's beneficiary
to that part of an immediate or deferred benefit under the
Plan which arises from a Participant's Years of Vesting
Service.
1.49 YEAR OF ELIGIBILITY SERVICE
Means a 12 consecutive month period which coincides with an
Eligibility Computation Period during which an Employee
completes at least 1,000 Hours of Service (or lesser number
of Hours of Service specified in the Adoption Agreement for
this purpose). An Employee does not complete a Year of
Eligibility Service before the end of the 12 consecutive
month period regardless of when during such period the
Employee completes the required number of Hours of Service.
1.50 YEAR OF VESTING SERVICE
Means a Plan Year during which an Employee completes at
least 1,000 Hours of Service (or such lesser number of Hours
of Service specified in the Adoption Agreement for this
purpose). Notwithstanding the preceding sentence, where the
Employer so indicates in the Adoption Agreement, vesting
shall be computed by reference to the 12 consecutive month
period beginning with the Employee's Employment Commencement
Date and each successive 12 month period commencing on the
anniversaries thereof.
In the case of a Participant who has 5 or more consecutive
Breaks in Vesting Service, all Years of Vesting Service
after such Breaks in Vesting Service will be disregarded for
the purpose of determining the Vested portion of his or her
Individual Account derived from Employer Contributions that
accrued before such breaks. Such Participant's prebreak
service will count in vesting the postbreak Individual
Account derived from Employer Contributions only if either:
(A) such Participant had any Vested right to any portion of
his or her Individual Account derived from Employer
Contributions at the time of his or her Termination of
Employment; or
(B) upon returning to service, the number of consecutive
Breaks in Vesting Service is less that his or her
number of Years of Vesting Service before such breaks.
Separate subaccounts will be maintained for the
participant's prebreak portions of his or her Individual
Account derived from Employer Contributions Both subaccounts
will share in the gains and losses of the Fund.
Years of Vesting Service shall not include any period of
time excluded from Years of Vesting Service in the Adoption
Agreement.
In the event the Plan year is changed to a new 12-month
period, Employees shall receive credit for Years of Vesting
Service, in accordance with the preceding provisions of this
definition, for each of the Plan Years (the old and new Plan
years) which overlap as a result of such change.
SECTION TWO ELIGIBILITY AND PARTICIPATION
2.01 ELIGIBILITY TO PARTICIPATE
Each Employee of the Employer, except those Employees who
belong to a class of Employees which is excluded from
participation as indicated in the Adoption Agreement, shall
be eligible to participate in this Plan upon the
satisfaction of the age and Years of Eligibility Service
requirements specified in the Adoption Agreement.
2.02 PLAN ENTRY
A. If this Plan is a replacement of a Prior Plan by
amendment or restatement, each Employee of the Employer
who was a Participant in said Prior Plan before the
Effective Date shall continue to be a Participant in
this Plan.
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<PAGE> 13
B. An Employee will become a Participant in the Plan as of
the Effective Date if the Employee has met the
eligibility requirements of Section 2.01 as of such
date. After the Effective Date, each Employee shall
become a Participant on the first Entry Date following
the date the Employee satisfies the eligibility
requirements of Section 2.01 unless otherwise indicated
in the Adoption Agreement.
C. The Plan Administrator shall notify each Employee who
becomes eligible to be a Participant under this Plan
and shall furnish the Employee with the application
form, enrollment forms or other documents which are
required of Participants. The eligible Employee shall
execute such forms or documents and make available such
information as may be required in the administration of
the Plan.
2.03 TRANSFER TO OR FROM INELIGIBLE CLASS
If an Employee who had been a Participant becomes ineligible
to participate because he or she is no longer a member of an
eligible class of Employees, but has not incurred a Break in
Eligibility Service, such Employee shall participate
immediately upon his or her return to an eligible class of
Employees. If such Employee incurs a Break in Eligibility
Service, his or her eligibility to participate shall be
determined by Section 2.04.
An Employee who is not a member of the eligible class of
Employees will become a Participant immediately upon
becoming a member of the eligible class provided such
Employee has satisfied the age and Years of Eligibility
Service requirements. If such Employee has not satisfied the
age and years of Eligibility Service requirements as of the
date he or she becomes a member of the eligible class, such
Employee shall become a Participant on the first Entry Date
following the date he or she satisfies those requirements
unless otherwise indicated in the Adoption Agreement.
2.04 RETURN AS A PARTICIPANT AFTER BREAK IN ELIGIBILITY SERVICE
A. Employee Not Participant Before Break - If an Employee
incurs a Break in Eligibility Service before satisfying
the Plan's eligibility requirements, such Employee's
Years of Eligibility Service before such Break in
Eligibility Service will not be taken into account.
B. Nonvested Participants - In the case of a Participant
who does not have a Vested interest in his or her
Individual Account derived from Employer Contributions,
Years of Eligibility Service before a period of
consecutive Breaks in Eligibility Service will not be
taken into account for eligibility purposes if the
number of consecutive Breaks in Eligibility Service in
such period equals or exceeds the greater of 5 or the
aggregate number of Years of Eligibility Service before
such break. Such aggregate number of Years of
Eligibility Service will not include any Years of
Eligibility Service disregarded under the preceding
sentence by reason of prior breaks.
If a Participant's Years of Eligibility Service are
disregarded pursuant to the preceding paragraph, such
Participant will be treated as a new Employee for
eligibility purposes. If a Participant's Years of
Eligibility Service may not be disregarded pursuant to
the preceding paragraph, such Participant shall
continue to participate in the Plan, or, if terminated,
shall participate immediately upon reemployment.
C. Vested Participants - A Participant who has sustained a
Break in Eligibility Service and who had a Vested
interest in all or a portion of his or her Individual
Account derived from Employer Contributions shall
continue to participate in the Plan, or, if terminated,
shall participate immediately upon reemployment.
2.05 DETERMINATIONS UNDER THIS SECTION
The Plan Administrator shall determine the eligibility of
each Employee to be a Participant. This determination shall
be conclusive and binding upon all persons except as
otherwise provided herein or by law.
2.06 TERMS OF EMPLOYMENT
Neither the fact of the establishment of the Plan nor the
fact that a common law Employee has become a Participant
shall give to that common law Employee any right to
continued employment; nor shall either fact limit the right
of the Employer to discharge or to deal otherwise with a
common law Employee without regard to the effect such
treatment may have upon the Employee's rights under the
Plan.
2.07 SPECIAL RULES WHERE ELAPSED TIME METHOD IS BEING USED
This Section 2.07 shall apply where the Employer has
indicated in the Adoption Agreement that the elapsed time
method will be used. When this Section applies, the
definitions of year of service, break in service and hour of
service in this Section will replace the definitions of Year
of Eligibility Service, Year of Vesting Service, Break in
Eligibility Service, Break in Vesting Service and Hours of
Service found in the Definitions Section of the Plan
(Section One).
For purposes of determining an Employee's initial or
continued eligibility to participate in the Plan or the
Vested interest in the participant's Individual Account
balance derived from Employer Contributions, (except for
periods of service which may be disregarded on account of
the "rule of parity" described in Section 1.50 and 2.04) an
Employee will receive credit for the aggregate of all time
period(s) commencing with the Employee's first day of
employment or reemployment and ending on the date a break in
service begins. The first day of employment or reemployment
is the first day the
8
<PAGE> 14
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.
For purposes of this Section, hour of service will mean each
hour for which an Employee is paid or entitled to payment
for the performance of duties for the Employer. Break in
service is a period of severance of at least 12 consecutive
months. Period of severance is a continuous period of time
during which the Employee is not employed by the Employer.
Such period begins on the date the Employee retires, quits
or is discharged, or if earlier, the 12 month anniversary of
the date on which the Employee was otherwise first absent
from service.
In the case of an individual who is absent from work for
maternity or paternity reasons, the 12 month consecutive
month period beginning on the first anniversary of the first
date of such absence shall not constitute a break in
service. For purposes of this paragraph, an absence from
work for maternity or paternity reasons means an absence (1)
be reason of the pregnancy of the individual, (2) by reason
of the birth of a child of the individual, (3) by reason of
the placement of a child with the individual in connection
with the adoption of such child by such individual, or (4)
for purposes of caring for such child for a period beginning
immediately following such birth or placement.
Each Employee will share in Employer Contributions for the
period beginning on the date the Employee commences
participation under the Plan and ending on the date on which
such Employee severs employment with the Employer or is no
longer a member of an eligible class of Employees.
If the Employer is a member of an affiliated service group
(under Section 414(m) of the Code, a controlled group of
corporations (under Section 414(b) of the Code), a group of
trades or businesses under common control (under Section
414(c) of the Code), or any other entity required to be
aggregated with the Employer pursuant to Section 414(o) of
the Code, service will be credited for any employment for
any period of time for any other member of such group.
Service will also be credited for any individual required
under Section 414(n) or Section 414(o) to be considered an
Employee of any Employer aggregated under Section 414(b),
(c), or (m) of the Code.
2.08 ELECTION NOT TO PARTICIPATE
This Section 2.08 shall apply if this Plan is a
nonstandardized plan the Adoption Agreement so provides. If
this Section applies, then an Employee or a Participant may
elect not to participate in the Plan for one or more Plan
Years. The Employer may not contribute for an Employee or
Participant for any Plan Year during which such Employee's
or Participant's election not to participate is in effect.
Any election not to participate must be in writing and filed
with the Plan Administrator.
The Plan Administrator shall establish such uniform and
nondiscriminatory rules as it deems necessary or advisable
to carry out the terms of this Section, including, but not
limited to, rules prescribing the timing of the filing of
elections not to participate and the procedures for electing
to re-participate in the Plan.
An Employee or Participant continues to earn credit for
vesting and eligibility purposes for each Year of Vesting
Service or Year of Eligibility Service he or she completes
and his or her Individual Account (if any) will share in the
gains or losses of the fund during the periods he or she
elects not to participate.
SECTION THREE CONTRIBUTIONS
3.01 EMPLOYER CONTRIBUTIONS
A. Obligation to Contribute - The Employer shall make
contributions to the Plan in accordance with the
contribution formula specified in the Adoption
Agreement. If this Plan is a profit sharing plan, the
Employer shall, in its sole discretion, make
contributions without regard to current or accumulated
earnings or profits.
B. Allocation Formula and the Right to Share in the
Employer Contribution -
1. General - The Employer Contribution for any Plan
Year will be allocated or contributed to the
Individual Accounts of Qualifying Participants in
accordance with the allocation or contribution
formula specified in the Adoption Agreement. The
Employer Contribution for any Plan Year will be
allocated to each participant's Individual Account
as of the last day of that Plan Year.
Any Employer Contribution for a Plan year must
satisfy Section 401(a)(4) and the regulations
thereunder for such Plan Year.
2. Qualifying Participants - A Participant is a
Qualifying Participant and is entitled to share in
the Employer Contribution for any Plan Year if the
Participant was a Participant on at least one day
during the Plan Year and satisfies any additional
conditions specified in the Adoption Agreement. If
this Plan is a standardized plan, unless the
Employer specifies more favorable conditions in
the Adoption Agreement, a Participant will not be
a qualifying Participant for a Plan Year if he or
she incurs a Termination of Employment during such
Plan Year
9
<PAGE> 15
with not more than 500 Hours of Service if he or
she is not an Employee on the last day of the Plan
Year. The determination of whether a Participant
is entitled to share in the Employer Contribution
shall be made as of the last day of each Plan
year.
3. Special Rules for Integrated Plans - This Plan may
not allocate contributions based on an integrated
formula if the Employer maintains any other plan
that provides for allocation of contributions
based on an integrated formula that benefits any
of the same Participants. If the Employer has
selected the integrated contribution or allocation
formula in the Adoption Agreement, then the
maximum disparity rate shall be determined in
accordance with the following table.
<TABLE>
<CAPTION>
MAXIMUM DISPARITY RATE
Top-Heavy Nonstandardized and
Integration Level Money Purchase Profit Sharing Non-top-Heavy Profit Sharing
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Taxable Wage Base (TWB) 5.7% 2.7% 5.7%
More than $0 but not more
than 20% of TWB 5.7% 2.7% 5.7%
More than 20% of TWB but
not more than 80% of TWB 4.3% 1.3% 4.3%
More than 80% of TWB but
not more than TWB 5.4% 2.4% 5.4%
</TABLE>
C. Allocation of Forfeitures - Forfeitures for a Plan year
which arise as a result of the application of Section
6.01(D) shall be allocated as follows:
1. Profit Sharing Plan - If this is a profit sharing
plan, unless the Adoption Agreement indicates
otherwise, Forfeitures shall be allocated in the
manner provided in Section 3.01(B) (for Employer
Contributions) to the Individual Accounts of
Qualifying Participants who are entitled to share
in the Employer Contribution for such Plan year.
Forfeitures shall be allocated as of the last day
of the Plan Year during which the Forfeiture arose
(or any subsequent Plan year if indicated in the
Adoption Agreement).
2. Money Purchase Pension and Target Benefit Plan -
If this Plan is a money purchase plan or a target
benefit plan, unless the Adoption Agreement
indicates otherwise, Forfeitures shall be applied
towards the reduction of Employer Contributions to
the Plan. Forfeitures shall be allocated as of the
last day of the Plan Year during which the
Forfeiture arose (or any subsequent Plan year if
indicated in the Adoption Agreement).
D. Timing of Employer Contribution - The Employer
Contribution for each Plan year shall be delivered to
the Trustee (or Custodian, if applicable) not later
than the due date for filing the Employer's income tax
return for its fiscal year in which the Plan year ends,
including extensions thereof.
E. Minimum Allocation for Top-Heavy Plans - The
contribution and allocation provisions of this Section
3.01(E) shall apply for any Plan Year with respect to
which this Plan is a Top-Heavy Plan.
1. Except as otherwise provided in (3) and (4) below,
the Employer Contributions and Forfeitures
allocated on behalf of any Participant who is not
a Key Employee shall not be less than the lesser
of 3% of such participant's Compensation or (in
the case where the Employer has no defined benefit
plan which designates this Plan to satisfy Section
401 of the Code) the largest percentage of
Employer Contributions and Forfeitures, as a
percentage of the first $200,000 ($150,000 for the
Plan years beginning after December 31, 1993),
(increased by any cost of living adjustment made
by the Secretary of Treasury or the Secretary's
delegate) of the Key Employee's Compensation,
allocated on behalf of any Key Employee for that
year. The minimum allocation is determined without
regard to any Social Security contribution. The
Employer may, in the Adoption Agreement, limit the
Participants who are entitled to receive the
minimum allocation. This minimum allocation shall
be made even though under other Plan provisions,
the Participant would not otherwise be entitled to
receive an allocation, or would have received a
lesser allocation for the year because of (a) the
Participant's failure to complete 1,000 Hours of
Service (or any equivalent provided in the Plan),
or (b) the Participant's failure to make mandatory
Nondeductible Employee Contributions to the Plan,
or (c) Compensation less than a stated amount.
2. For purposes of computing the minimum allocation,
Compensation shall mean Compensation as defined in
Section 1.07 of the Plan and shall exclude any
amounts contributed by the Employer pursuant to a
salary
10
<PAGE> 16
reduction agreement and which is not includible in
the gross income of the Employee under Sections
125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code
even if the Employer has elected to include such
contributions in the definition of Compensation
used for other purposes under the Plan.
3. The provision in (1) above shall not apply to any
Participant who was not employed by the Employer
on the last day of the Plan Year.
4. The provision in (1) above shall not apply to any
Participant to the extent the Participant is
covered under any other plan or plans of the
Employer and the Employer has provided in the
adoption agreement that the minimum allocation or
benefit requirement applicable to Top-Heavy Plans
will be met in the other plan or plans.
5. The minimum allocation required under this Section
3.01(E) and Section 3.01(F)(1) (to the extent
required to be nonforfeitable under Code Section
416(b) may not be forfeited under Code Section
411(a)(3)(B) or 411(a)(3)(D).
F. Special Requirements for Paired Plans - The Employer
maintains paired plans if the Employer has adopted both
a standardized profit sharing plan and a standardized
money purchase pension plan using this Basic Plan
Document.
1. Minimum Allocation - When the paired plans are
top-heavy, the top-heavy requirements set forth in
Section 3.01(E)(1) of the Plan shall apply.
a. Same eligibility requirements. In satisfying
the top-heaving minimum allocation
requirements set forth in Section 3.01(E) of
the Plan, if the Employees benefiting under
each of the paired plans are identical, the
top-heaving minimum allocation shall be made
to the money purchase pension plan.
b. Different eligibility requirements. In
satisfying the top-heaving minimum
allocation requirements set forth in Section
3.01(E) of the Plan, if the Employees
benefiting under each of the paired plans
are not identical, the top-heaving minimum
allocations will be made to both of the
paired plans.
A Participant is treated as benefiting under the
Plan for any Plan year during which the
Participant received or is deemed to receive an
allocation in accordance with Section
1.410(b)-3(a).
2. Only One Plan Can Be Integrated - If the Employer
maintains paired plans, only one of the Plans may
provide for the disparity in contributions which
is permitted under Section 401(1) of the Code. In
the event that both Adoption Agreements provide
for such integration, only the money purchase
pension plan shall be deemed to be integrated.
G. Return of the Employer Contribution to the Employer
Under Special Circumstances - Any Contribution made by
the Employer because of a mistake of fact must be
returned to the Employer within one year of the
contribution.
In the event that the Commissioner of Internal Revenue
determines that the Plan is not initially qualified
under the Code, any contributions made incident to that
initial qualification by the Employer must be returned
to the Employer within one year after the date the
initial qualification is denied, but only if the
application for qualification is made by the time
prescribed by law for filing the Employer's return for
the taxable year in which the Plan is adopted, or such
later date as the Secretary of the Treasury may
prescribe.
In the event that a contribution made by the Employer
under this Plan is conditioned on deductibility and is
not deductible under Code Section 404, the
contribution, to the extent of the amount disallowed,
must be returned to the Employer within one year after
the deduction is disallowed.
H. Omission of Participant
1. If the Plan is a money purchase plan or a target
benefit plan and, if in any Plan Year, any
Employee who should be included as a Participant
is erroneously omitted and discovery of such
omission is not made until after a contribution by
the Employer for the year has been made and
allocated, the Employer shall make a subsequent
contribution to include earnings thereon, with
respect to the omitted Employee in the amount
which the Employer would have contributed with
respect to that Employee had he or she not been
omitted.
2. If the Plan is a profit sharing plan, and if in
any Plan Year, any Employee who should be included
as a Participant is erroneously omitted and
discovery of such omission is not made until after
the Employer Contribution has been made and
allocated, then the Plan Administrator must re-do
the allocation (if a correction can be made) and
inform the Employee. Alternatively, the Employer
may choose to contribute for the omitted Employee
the amount to include earnings thereon, which the
Employer would have contributed for the Employee.
11
<PAGE> 17
3.02 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
This Plan will not accept Nondeductible Employee
Contributions and matching contributions for Plan Years
beginning after the Plan Year in which this Plan is adopted
by the Employer. Nondeductible Employee Contributions for
Plan Years beginning after December 31, 1986, together with
any matching contributions as defined in Section 410(m) of
the Code, will be limited so as to meet the
nondiscrimination test of Section 401(m) of the Code.
A separate account will be maintained by the Plan
Administrator for the Nondeductible Employee Contributions
of each Participant.
A Participant may, upon a written request submitted to the
Plan Administrator withdraw the lesser of the portion of his
or her Individual Account attributable to his or her
Nondeductible Employee Contributions or the amount he or she
contributed as Nondeductible Employee Contributions.
Nondeductible Employee Contributions and earnings thereon
will be nonforfeitable at all times. No Forfeiture will
occur solely as a result of an Employee's withdrawal of
Nondeductible Employee Contributions.
The Plan Administrator will not accept deductible employee
contributions which are made for a taxable year beginning
after December 31, 1986. Contributions made prior to that
date will be maintained in a separate account which will be
nonforfeitable at all times. The account will share in the
gains and losses of the Fund in the same manner as described
in Section 4.03 of the Plan. No part of the deductible
employee contribution account will be used to purchase life
insurance. Subject to Section 6.05, joint and survivor
annuity requirements (if applicable), the Participant may
withdraw any part of the deductible employee contribution
account by making a written application to the Plan
Administrator.
3.03 ROLLOVER CONTRIBUTIONS
If so indicated in the Adoption Agreement, an Employee may
contribute a rollover contribution to the Plan. The Plan
Administrator may require the Employee to submit a written
certification that the contribution qualifies as a rollover
contribution under the applicable provisions of the Code. If
it is later determined that all or part of a rollover
contribution was ineligible to be rolled into the Plan, the
Plan Administrator shall direct that any ineligible amounts,
plus earnings attributable thereto, be distributed from the
Plan to the Employee as soon as administratively feasible.
A separate account shall be maintained by the Plan
Administrator for each Employee's rollover contributions
which will be nonforfeitable at all times. Such account will
share in the income and gains and losses of the Fund in the
manner described in Section 4.03 and shall be subject to the
Plan's provisions governing distributions.
The Employer may, in a uniform and nondiscriminatory manner,
only allow Employees who have become participants in the
Plan to make rollover contributions.
3.04 TRANSFER CONTRIBUTIONS
If so indicated in the Adoption Agreement, the Trustee (or
Custodian, if applicable) may receive any amounts
transferred to it from the trustee or custodian of another
plan qualified under Code Section 401(a). If it is later
determined that all or part of a transfer contribution was
ineligible to be transferred into the Plan, the Plan
Administrator shall direct that any ineligible amounts, plus
earnings attributable thereto, be distributed from the Plan
to the Employee as soon as administratively feasible.
A separate account shall be maintained by the Plan
Administrator for each Employee's transfer contributions
which will be nonforfeitable at all times. Such account will
share in the income and gains and losses of the Fund in the
manner described in Section 4.03 and shall be subject to the
Plan's provisions governing distributions. Notwithstanding
any provisions of this Plan to the contrary, to the extent
that any optional form of benefit under this Plan permits a
distribution prior to the Employee's retirement, death,
Disability, or severance from employment, and prior to Plan
termination, the optional form of benefit is not available
with respect to benefits attributable to assets (including
the post-transfer earnings thereon) and liabilities that are
transferred, within the meaning of Section 414(l) of the
Internal Revenue Code, to this Plan from a money purchase
pension plan qualified under Section 401(a) of the Internal
Revenue Code (other than any portion of those assets and
liabilities attributable to voluntary employee
contributions).
The Employer may, in a uniform and nondiscriminatory manner,
only allow Employees who have become Participants in the
Plan to make transfer contributions.
3.05 LIMITATION ON ALLOCATIONS
A. If the Participant does not participate in, and has
never participated in another qualified plan maintained
by the Employer or a welfare benefit fund, as defined
in Section 419(e) of the Code maintained by the
Employer, or an individual medical account, as defined
in Section 415(1)(2) of the Code, or a simplified
employee pension plan, as defined in Section 408(k) of
the Code, maintained by the Employer, which provides an
annual addition as defined in Section 3.08(E)(1), the
following rules shall apply:
1. The amount of annual additions which may be
credited to the Participant's Individual Account
for any limitation year will not exceed the lesser
of the maximum permissible amount or any other
limitation contained
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<PAGE> 18
in this Plan. If the Employer Contribution what
would otherwise be contributed or allocated to the
Participant's Individual Account would cause the
annual additions for the limitation year to exceed
the maximum permissible amount, the amount
contributed or allocated will be reduced so that
the annual additions for the limitation year will
equal the maximum permissible amount.
2. Prior to determining the Participant's actual
Compensation for the limitation year, the Employer
may determine the maximum permissible amount for a
Participant on the basis of a reasonable
estimation of the Participant's Compensation for
the limitation year, uniformly determined for all
Participants similarly situated.
3. As soon as administratively feasible after the end
of the limitation year, the maximum permissible
amount for the limitation year will be determined
on the basis of the Participant's actual
Compensation for the limitation year.
4. If pursuant to Section 3.05(A)(3) or as a result
of the allocation of Forfeitures there is an
excess amount, the excess will be disposed of as
follows:
a. Any Nondeductible Employee Contributions, to
the extent they would reduce the excess
amount, will be returned to the Participant;
b. If after the application of paragraph (a) an
excess amount still exists, and the
Participant is covered by the Plan at the
end of the limitation year, the excess
amount in the Participant's Individual
Account will be used to reduce Employer
Contributions (including any allocation of
Forfeitures) for such participant in the
next limitation year, and each succeeding
limitation year if necessary;
c. If after the application of paragraph (b) an
excess amount still exists, and the
Participant is not covered by the Plan at
the end of 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;
d. If a suspense account is in existence at any
time during a limitation year pursuant to
this Section, it will not participate in the
allocation of the Fund's investment gains
and losses. If a suspense account is in
existence at any time during a particular
limitation year, all amounts in the suspense
account must be allocated and reallocated to
Participants' Individual Accounts before any
Employer Contributions or any Nondeductible
Employee Contributions may be made to the
Plan for that limitation year. Excess
amounts may not be distributed to
Participants or former Participants.
B. If, in addition to this Plan, the Participant is
covered under another qualified master or prototype
defined contribution plan maintained by the Employer, a
welfare benefit fund maintained by the Employer, an
individual medical account maintained by the Employer,
or a simplified employee pension maintained by the
Employer that provides an annual addition as defined in
Section 3.05(E) (1), during any limitation year, the
following rules apply:
1. The annual additions which may be credited to a
Participant's Individual Account under this Plan
for any such limitation year will not exceed the
maximum permissible amount reduced by the annual
additions credited to a Participant's Individual
Account under the other qualified master or
prototype plans, welfare benefit funds, individual
medical accounts and simplified employee pensions
for the same limitation year. If the annual
additions with respect to the Participant under
other qualified master or prototype defined
contribution plans, welfare benefit funds,
individual medical accounts and simplified
employee pensions maintained by the Employer are
less that the maximum permissible amount and the
Employer Contribution that would otherwise be
contributed or allocated to the Participant's
Individual Account under this Plan would cause the
annual additions for the limitation year to exceed
this limitation, the amount contributed or
allocated will be reduced so that the annual
additions under all such plans and funds for the
limitation year will equal the maximum permissible
amount. If the annual additions with respect to
the Participant under such other qualified master
or prototype defined contribution plans, welfare
benefit funds, individual medical accounts and
simplified employee pensions in the aggregate are
equal to or greater than the maximum permissible
amount, no amount will be contributed or allocated
to the Participant's Individual Account under this
Plan for the limitation year.
2. Prior to determining the Participant's actual
Compensation for the limitation year, the Employer
may determine the maximum permissible amount for a
Participant in the manner described in Section
3.05(A)(2).
3. As soon as is administratively feasible after the
end of the limitation year, the maximum
permissible amount for the limitation year will be
determined on the basis of the Participant's
actual Compensation for the limitation year.
4. If, pursuant to Section 3.05(B)(3) or as a result
of the allocation of Forfeitures a Participant's
annual additions under this Plan and such other
plans would result in an excess amount for a
limitation year, the excess amount
13
<PAGE> 19
will be deemed to consist of the annual additions
last allocated, except that annual additions
attributable to a simplified employee pension will
be deemed to have been allocated first, followed
by annual additions to a welfare benefit fund or
individual medical account, regardless of the
actual allocation date.
5. If an excess amount was allocated to a Participant
on an allocation date of this Plan which coincides
with an allocation date of another plan, the
excess amount attributed to this Plan will be the
product of,
a. the total excess amount allocated as of such
date, times
b. the ratio of (I) the annual additions
allocated to the Participant for the
limitation year as of such date under this
Plan to (ii) the total annual additions
allocated to the Participant for the
limitation year as of such date under this
and all the other qualified prototype
defined contribution plans.
6. Any excess amount attributed to this Plan will be
disposed in the manner described in Section
3.05(A)(4).
C. If the Participant is covered under another qualified
defined contribution plan maintained by the Employer
which is not a master or prototype plan, annual
additions which may be credited to the Participant's
Individual Account under this Plan for any limitation
year will be limited in accordance with Sections
3.05(B)(1) through 3.05(B)(6) as though the other plan
were a master or prototype plan unless the Employer
provides other limitations in the Section of the
Adoption Agreement titled "Limitation on Allocation -
More Than One Plan."
D. If the Employer maintains, or at any time maintained, a
qualified defined benefit plan covering any Participant
in this Plan, the sum of the Participant's defined
benefit plan fraction and defined contribution plan
fraction will not exceed 1.0 in any limitation year.
The annual additions which may be credited to the
Participant's Individual Account under this Plan for
any limitation year will be limited in accordance with
the Section of the Adoption Agreement titled
"Limitation on Allocation - More Than One Plan."
E. The following terms shall have the following meanings
when used in this Section 3.05:
1. Annual additions: The sum of the following amounts
credited to a Participant's Individual Account for
the limitation year:
a. Employer Contributions,
b. Nondeductible Employee Contributions,
c. Forfeitures,
d. amounts allocated, after March 31, 1984, to
an individual medical account, as defined in
Section 415(1)(2) of the Code, which is part
of a pension or annuity plan maintained by
the Employer are treated as annual additions
to a defined contribution plan. Also amounts
derived from contributions paid or accrued
after December 31, 1985, in taxable years
ending after such date, which are
attributable to post-retirement medical
benefits, allocated to the separate account
of a key employee, as defined in Section
419A(d)(3) of the Code, under a welfare
benefit fund, as defined in Section 419(e)
of the Code, maintained by the Employer are
treated as annual additions to a defined
contribution plan, and
e. allocations under a simplified employee
pension.
For this purpose, any excess amount applied under
Section 3.06(A)(4) or 3.05(B)(6) in the limitation
year to reduce Employer Contributions will be
considered annual additions for such limitation
year.
2. Compensation: Means Compensation as defined in
Section 1.07 of the Plan except that Compensation
for purposes of this Section 3.05 shall not
include any amounts contributed by the Employer
pursuant to a salary reduction agreement and which
is not includible in the gross income of the
Employee under Sections 125, 402(s)(3),
402(h)(1)(B) or 403(b) of the Code even if the
Employer has elected to include such contributions
in the definition of Compensation used for other
purposes under the Plan. Further, any other
exclusion the Employer has elected (such as the
exclusion of certain types of pay or pay earned
before the Employee enters the Plan) will be apply
for purposes of this Section.
Notwithstanding the preceding sentence,
Compensation for a Participant in a defined
contribution plan who is permanently and totally
disabled (as defined in Section 22(e)(3) of the
Code) is the Compensation such Participant would
have received for the limitation year if the
Participant had been paid at the rate of
Compensation paid immediately before becoming
permanently and totally disabled; such imputed
Compensation for the disabled Participant may be
taken into account only if the Participant is not
a Highly Compensated Employee (as defined in
Section 414(q) of the Code) and contributions made
on behalf of such Participant are nonforfeitable
when made.
14
<PAGE> 20
3. Defined benefit fraction: A Fraction, the
numerator of which is the sum of the Participant's
projected annual benefits under all the defined
benefit plans (whether or not terminated)
maintained by the Employer, and the denominator of
which is the lesser of 125% of the dollar
limitation determined for the limitation year
under Section 415(b) and (d) of the Code or 140%
of the highest average compensation, including any
adjustments under Section 415(b) of the Code.
Notwithstanding the above, if the Participant was
a Participant as of the first day of the first
limitation year beginning after December 31, 1986,
in one or more defined benefit plans maintained by
the Employer which were in existence on May 6,
1986, the denominator of this fraction will not be
less than 125% of the sum of the annual benefits
under such plans which the Participant had accrued
as of the close of the last limitation year
beginning before January 1, 1987, disregarding any
changes in the terms and conditions of the plan
after May 5, 1986. The preceding sentence applies
only if the defined benefit plans individually and
in the aggregate satisfied the requirements of
Section 415 of the Code for all limitation years
beginning before January 1, 1987.
4. Defined contribution dollar limitation: $30,000 or
if greater, one-fourth of the defined benefit
dollar limitation set forth in Section 415(b)(1)
of the Code as in effect for the limitation year.
5. Defined contribution fraction: A fraction, the
numerator of which is the sum of the annual
additions to the Participant's account under all
the defined contribution plans (whether or not
terminated) maintained by the Employer for the
current and all prior limitation years (including
the annual additions attributable to the
participant's nondeductible employee contributions
to all defined benefit plans, whether or not
terminated, maintained by the Employer, and the
annual additions attributable to all welfare
benefit funds, as defined in Section 419(e) of the
Code, individual medical accounts, and simplified
employee pensions, maintained by the Employer),
and the denominator of which is the sum of the
maximum aggregate amounts for the current and all
prior limitation years of service with the
Employer (regardless of whether a defined
contribution plan was maintained by the Employer).
The maximum aggregate amount in any limitation
year is the lesser of 125% of the dollar
limitation determined under Section 415(b) and (d)
of the Code in effect under Section 415(c)(1)(A)
of the Code or 35% of the Participant's
Compensation for such year.
If the Employee was a Participant as of the end of
the first day of the first limitation year
beginning after December 31, 1986, in one or more
defined contribution plans maintained by the
Employer which were in existence on May 6, 1986,
the numerator of this fraction will be adjusted if
the sum of this fraction and the defined benefit
fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an
amount equal to the product of (1) the excess of
the sum of the fractions over 1.0 times (2) the
denominator of this fraction, will be permanently
subtracted from the numerator of this fraction.
The adjustment is calculated using the fractions
as they would be computed as of the end of the
last limitation year beginning before January 1,
1987, and disregarding any changes in the terms
and conditions of the Plan made after May 5, 1986,
but using the Section 415 limitation applicable to
the first limitation year beginning on or after
January 1, 1987.
The annual addition for any limitation year
beginning before January 1, 1987, shall not be
recomputed to treat all Nondeductible Employee
Contributions as annual additions.
6. Employer: For purposes of this Section 3.05,
Employer shall mean the Employer that adopts this
Plan, and all members of a controlled group of
corporations (as defined in Section 414(b) of the
Code as modified by Section 415(h), all commonly
controlled trades or businesses (as defined in
Section 414(c) as modified by Section 415(h) or
affiliated service groups (as defined in Section
414(m) of which the adopting Employer is a part,
and any other entity required to be aggregated
with the Employer pursuant to regulations under
Section 414(o) of the Code.
7. Excess amount: The excess of the Participant's
annual additions for the limitation year over the
maximum permissible amount.
8. Highest average compensation: The average
compensation for the three consecutive years of
service with the Employer that produces the
highest average.
9. Limitation year: A calendar year, or the
12-consecutive month period elected by the
Employer in the Adoption Agreement. All qualified
plans maintained by the Employer must use the same
limitation year. If the limitation year is amended
to a different 12-consecutive month period, the
new limitation year must begin on a date within
the limitation year in which the amendment is
made.
10. Master or prototype plan: A plan the form of which
is the subject of a favorable opinion letter from
the Internal Revenue Service.
11. Maximum permissible amount: The maximum annual
addition that may be contributed or allocated to a
Participant's Individual Account under the Plan
for any limitation year shall not exceed the
lesser of:
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<PAGE> 21
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 Section 401(h) or
Section 419A(f)(2) of the Code) which is otherwise
treated as an annual addition under Section
415(1)(1) or 419A(d)(2) of the Code.
If a short limitation year is created because of
an amendment changing the limitation year to a
different 12-consecutive month period, the maximum
permissible amount will not exceed the defined
contribution dollar limitation multiplied by the
following fraction:
Number of months in the short limitation year
---------------------------------------------
12
12. Projected annual benefit: The annual retirement
benefit (adjusted to an actuarially equivalent
straight life annuity if such benefit is expressed
in a form other than a straight life annuity or
qualified joint and survivor annuity) to which the
Participant would be entitled under the terms of
the Plan assuming:
a. the Participant will continue employment
until Normal Retirement Age under the Plan
(or current age, if later), and
b. the Participant's Compensation for the
current limitation year and all other
relevant factors used to determine benefits
under the Plan will remain constant for all
future limitation years.
Straight life annuity means an annuity payable in
equal installments for the life of the participant
that terminates upon the Participant's death.
SECTION FOUR INDIVIDUAL ACCOUNTS OF PARTICIPANTS AND VALUATION
4.01 INDIVIDUAL ACCOUNTS
A. The Plan Administrator shall establish and maintain an
Individual Account in the name of each Participant to
reflect the total value of his or her interest in the
Fund. Each Individual Account established hereunder
shall consist of such subaccounts as may be needed for
each Participant including:
1. a subaccount to reflect Employer Contributions and
Forfeitures allocated on behalf of a Participant;
2. a subaccount to reflect a Participant's rollover
contributions;
3. a subaccount to reflect a Participant's transfer
contributions;
4. a subaccount to reflect a Participant's
Nondeductible Employee Contributions; and
5. a subaccount to reflect a Participant's deductible
employee contributions.
B. The Plan Administrator may establish additional
accounts as it may deem necessary for the proper
adminstration of the Plan, including, but not limited
to, a suspense account for Forfeitures as required
pursuant to Section 6.01(D).
4.02 VALUATION OF FUND
The Fund will be valued each Valuation Date at fair market
value.
4.03 VALUATION OF INDIVIDUAL ACCOUNTS
A. Where all or a portion of the assets of a Participant's
Individual Account are invested in a Separate Fund for
the Participant, then the value of that portion of such
Participant's Individual Account at any relevant time
equals the sum of the fair market values of the assets
in such Separate Fund, less any applicable charges or
penalties.
B. The fair market value of the remainder of each
Individual Account is determined in the following
manner:
1. First, the portion of the Individual Account
invested in each Investment Fund as of the
previous Valuation Date is determined. Each such
portion is reduced by any withdrawal made from the
applicable Investment Fund to or for the benefit
of a Participant or the Participant's Beneficiary,
further reduced by any amounts forfeited by the
Participant pursuant to Section 6.01(D) and
further reduced by any transfer to another
Investment Fund since the previous Valuation Date
and is increased by any amount transferred from
another Investment Fund since the previous
Valuation Date. The resulting amounts are the net
Individual Account portions invested in the
Investment Funds.
2. Secondly, the net Individual Account portions
invested in each Investment Fund are adjusted
upwards or downwards, pro rata (i.e., ratio of
each net Individual Account portion of the sum of
all net Individual Account
16
<PAGE> 22
portions) so that the sum of all the net
Individual Account portions invested in an
Investment Fund will equal the then fair market
value of the Investment Fund. Notwithstanding the
previous sentence, for the first Plan Year only,
the net Individual Account portions shall be the
sum of all contributions made to each
Participant's Individual Account during the first
Plan year.
17
<PAGE> 23
3. Thirdly, any contributions to the Plan and
Forfeitures are allocated in accordance with the
appropriate allocation provisions of Section 3.
For purposes of Section 4, contributions made by
the Employer for any Plan year but after that Plan
Year will be considered to have been made on the
last day of that Plan year regardless of when paid
to the Trustee (or Custodian, if applicable).
Amounts contributed between Valuation Dates will
not be credited with investment gains or losses
until the next following Valuation Date.
4. Finally, the portions of the Individual Account
invested in each investment Fund (determined in
accordance with (1), (2) and (3) are added
together.
4.04 MODIFICATION OF METHOD FOR VALUING INDIVIDUAL ACCOUNTS
If necessary or appropriate, the Plan Administrator may
establish different or additional procedures (which shall be
uniform and nondiscriminatory) for determining the fair
market value of the Individual Accounts.
4.05 SEGREGATION OF ASSETS
If a Participant elects a mode of distribution other than a
lump sum, the Plan Administrator may place that
Participant's account balance into a segregated Investment
Fund for the purpose of maintaining the necessary liquidity
to provide benefit installments on a periodic basis.
4.06 STATEMENT OF INDIVIDUAL ACCOUNTS
No later than 270 days after the close of each Plan Year,
the Plan Administrator shall furnish a statement to each
Participant indicating the Individual Account balances of
such Participant as of the last Valuation Date in such Plan
year.
SECTION FIVE TRUSTEE OR CUSTODIAN
5.01 CREATION OF FUND
By adopting this Plan, the Employer establishes the Fund
which shall consist of the assets of the Plan held by the
Trustee (or Custodian, if applicable) pursuant to this
Section 5. Assets within the Fund may be pooled on behalf of
all Participants, earmarked on behalf of each Participant or
be a combination of pooled and earmarked. To the extent that
assets are earmarked for a particular Participant, they will
be held in a Separate Fund for that Participant.
No part of the corpus or income of the Fund may be used for,
or diverted to, purposes other than for the exclusive
benefit of Participants or their Beneficiaries.
5.02 INVESTMENT AUTHORITY
Except as provided in Section 5.14 (relating to individual
direction of investments by Participants), the Employer, not
the Trustee (or Custodian, if applicable) shall have
exclusive management and control over the investment of the
Fund into any permitted investment. Notwithstanding the
preceding sentence, a Trustee may make an agreement with the
Employer whereby the Trustee will manage the investment of
all or a portion of the Fund. Any such agreement shall be in
writing and set forth such matters as the Trustee deems
necessary or desirable.
5.03 FINANCIAL ORGANIZATION CUSTODIAN OR TRUSTEE WITHOUT FULL
TRUST POWERS
This Section 5.03 applies where a financial organization has
indicated in the Adoption Agreement that it will serve, with
respect to this Plan, as Custodian or as Trustee without
full trust powers (under applicable law). Hereinafter, a
financial organization Trustee without full trust powers
(under applicable law) shall be referred to as a Custodian.
The Custodian shall have no discretionary authority with
respect to the management of the Plan or the Fund but will
act only as directed by the entity who has such authority.
A. Permissible Investments - The assets of the Plan shall
be invested only in those investments which are
available through the Custodian in the ordinary course
of business which the Custodian may legally hold in a
qualified plan and which the Custodian chooses to make
available to Employers for qualified plan investments.
Notwithstanding the preceding sentence, the Prototype
Sponsor may, as a condition of making the Plan
available to the Employer, limit the types of property
in which the assets of the Plan may be invested.
B. Responsibilities of the Custodian - The
responsibilities of the Custodian shall be limited to
the following:
1. To receive Plan contributions and to hold, invest
and reinvest the Fund without distinction between
principal and interest; provided, however, that
nothing in this Plan shall require the Custodian
to maintain physical custody of stock certificates
(or other indicia of ownership of any type of
asset) representing assets within the Fund;
2. To maintain accurate records of contributions,
earnings, withdrawals and other information the
Custodian deems relevant with respect to the Plan;
18
<PAGE> 24
3. To make disbursements from the Fund to
Participants or Beneficiaries upon the proper
authorization of the Plan Administrator; and
4. To furnish to the Plan Administrator a statement
which reflects the value of the investments in the
hands of the Custodian as of the end of each Plan
Year and as of any other times as the Custodian
and Plan Administrator may agree.
C. Powers of the Custodian - Except as otherwise provided
in this Plan, the Custodian shall have the power to
take any action with respect to the Fund which it deems
necessary or advisable to discharge its
responsibilities under this Plan including, but not
limited to, the following powers:
1. To invest all or a portion of the Fund (including
idle cash balances) in time deposits, savings
accounts, money market accounts or similar
investments bearing a reasonable rate of interest
in the Custodian's own savings department or the
savings department of another financial
organization;
2. To vote upon any stocks, bonds, or other
securities; to give general or special proxies or
powers of attorney with or without power of
substitution; to exercise any conversion
privileges or subscription rights and to make any
payments incidental thereto; to oppose, or to
consent to, or otherwise participate in ,
corporate reorganizations or other changes
affecting corporate securities, and to pay any
assessment or charges in connection therewith; and
generally to exercise any of the powers of an
owner with respect to stocks, bonds, securities or
other property;
3. To hold securities or other property of the Fund
in its own name, in the name of its nominee or in
bearer form; and
4. To make, execute, acknowledge, and deliver any and
all documents of transfer and conveyance and any
and all other instruments that may be necessary or
appropriate to carry out the powers herein
granted.
5.04 FINANCIAL ORGANIZATION TRUSTEE WITH FULL TRUST POWERS AND
INDIVIDUAL TRUSTEE
This Section 5.04 applies where a financial organization has
indicated in the Adoption Agreement that it will serve as
Trustee with full trust powers. This Section also applies
where one or more individuals are named in the Adoption
Agreement to serve as Trustee(s).
A. Permissible Investments - The Trustee may invest the
assets of the Plan in property of any character, real
or personal, including, but not limited to the
following: stocks, including share of open-end
investment companies (mutual funds); bonds; notes;
debentures; options; limited partnership interests;
mortgages; real estate or any interests therein; unit
investment trusts; Treasury Bills, and other U.S.
Government obligations; common trust funds, combined
investment trusts, collective trust funds or commingled
funds maintained by a bank or similar financial
organization (whether or not the Trustee hereunder);
savings accounts, time deposits or money market
accounts of a bank or similar financial organization
(whether or not the Trustee hereunder); annuity
contracts; life insurance policies; or in such other
investments as is deemed proper without regard to
investments authorized by statute or rule of law
governing the investment of trust funds but with regard
to ERISA and this Plan.
Notwithstanding the preceding sentence, the Prototype
Sponsor may, as a condition of making the Plan
available to the Employer, limit the types of property
in which the assets of the Plan may be invested.
B. Responsibilities of the Trustee - The responsibilities
of the Trustee shall be limited to the following:
1. To receive Plan contributions and to hold, invest
and reinvest the Fund without distinction between
principal and interest; provided, however, that
nothing in this Plan shall require the Trustee to
maintain physical custody of stock certificates
(or other indicia of ownership) representing
assets within the Fund;
2. To maintain accurate records of contributions,
earnings, withdrawals and other information the
Trustee deems relevant with respect to the Plan;
3. To make disbursements from the Fund to
Participants or Beneficiaries upon the proper
authorization of the Plan Administrator; and
4. To furnish to the Plan Administrator a statement
which reflects the value of the investments in the
hands of the Trustee as of the end of each Plan
Year and as of any other times as the Trustee and
Plan Administrator may agree.
C. Powers of the Trustee - Except as otherwise provided in
this Plan, the Trustee shall have the power to take any
action with respect to the Fund which it deems
necessary or advisable to discharge its
responsibilities under this Plan, including, but not
limited to, the following powers:
19
<PAGE> 25
1. To hold any securities or other property of the
Fund in its own name, in the name of its nominee
or in bearer form:
2. To purchase or subscribe for securities issued, or
real property owned, by the Employer or any trade
or business under common control with the Employer
but only if the prudent investment and
diversification requirements of ERISA are
satisfied;
3. To sell, exchange, convey, transfer or otherwise
dispose of any securities or other property held
by the Trustee, by private contract or at public
auction. No person dealing with the Trustee shall
be bound to see to the application of the purchase
money or to inquire into the validity, expediency,
or propriety of any such sale or other
disposition, with or without advertisement;
4. To vote upon any stocks, bonds, or other
securities; to give general or special proxies or
powers of attorney with or without power of
substitution; to exercise any conversion
privileges or subscription rights and to make any
payments incidental thereto; to oppose, or to
consent to, or otherwise participate in, corporate
reorganizations or other changes affecting
corporate securities, and to delegate
discretionary powers, and to pay any assessment or
charges in connection therewith; and generally to
exercise any of the powers of an owner with
respect to stocks, bonds, securities or other
property;
5. To invest any part or all of the Fund (including
idle cash balances) in certificates of deposit,
demand or time deposits, savings accounts, money
market accounts or similar investments of the
Trustee (if the Trustee is a bank or similar
financial organization), the Prototype Sponsor or
any affiliate of such Trustee or Prototype
Sponsor, which bear a reasonable rate of interest;
6. To provide sweep services without the Receipt by
the Trustee of additional compensation or other
consideration (other than reimbursement of direct
expenses properly and actually incurred in the
performance of such services);
7. To hold in the form of cash for distribution or
investment such portion of the Fund as, at any
time and from time-to-time, the Trustee shall deem
prudent and deposit such cash in interest bearing
or noninterest bearing accounts:
8. To make, execute, acknowledge, and deliver any and
all documents of transfer and conveyance and any
and all other instruments that may be necessary or
appropriate to carry out the powers herein
granted;
9. To settle, compromise, or submit to arbitration
any claims, debts, or damages due or owing to or
from the Plan, to commence or defend suits or
legal or administrative proceedings, and to
represent the Plan in all suits and legal and
administrative proceedings;
10. To employ suitable agents and counsel, to contract
with agents to perform administrative and
recordkeeping duties and to pay their reasonable
expenses, fees and compensation, and such agent or
counsel may or may not be agent or counsel for the
Employer;
11. To cause any or all of the Fund, without
limitation as to amount, to be commingled with the
funds of other trusts (including trusts for
qualified employee benefit plans) by causing such
money to be invested as a part of any pooled,
common, collective or commingled trust fund
(including any such fund described in the Adoption
Agreement) heretofore or hereafter created by any
Trustee (if the Trustee is a bank), by the
Prototype Sponsor, by any affiliate bank of such a
Trustee or by such a Trustee or the Prototype
Sponsor, or by such an affiliate in participation
with others; the instrument or instruments
establishing such trust fund or funds, as amended,
being made part of this Plan and trust so long as
any portion of the Fund shall be invested through
the medium thereof; and
12. Generally to do all such acts, execute all such
instruments, initiate such proceedings, and
exercise all such rights and privileges with
relation to property constituting the Fund as if
the Trustee were the absolute owner thereof.
5.05 DIVISION OF FUND INTO INVESTMENT FUNDS
The Employer may direct the Trustee or Custodian) from
time-to-time to divide and redivide the Fund into one or
more Investment Funds. Such Investment Funds may include,
but not be limited to, Investment Funds representing the
assets under the control of an investment manager pursuant
to Section 5.12 and Investment Funds representing investment
options available for individual direction by Participants
pursuant to Section 5.14. Upon each division or redivision,
the Employer may specify the part of the Fund to be
allocated to each such Investment Fund and the terms and
conditions, if any, under which the assets in such
Investment Fund shall be invested.
5.06 COMPENSATION AND EXPENSES
The Trustee (or Custodian, if applicable) shall receive such
reasonable compensation as may be agreed upon by the Trustee
(or Custodian) and the Employer. The Trustee (or Custodian)
shall be entitled to reimbursement by the Employer
20
<PAGE> 26
for all proper expenses incurred in carrying out is or her
duties under this Plan, including reasonable legal,
accounting and acturial expenses. If not paid by the
Employer, such compensation and expenses may be charged
against the Fund.
All taxes of any kind that may be levied or assessed under
existing or future laws upon, or in respect of, the Fund or
the income thereof shall be paid from the Fund.
5.07 NOT OBLIGATED TO QUESTION DATA
The Employer shall furnish the Trustee (or Custodian, if
applicable) and Plan Administrator the information which
each party deems necessary for the administration of the
Plan including, but not limited to, changes in a
Participant's status, eligibility, mailing addresses and
other such data as may be required. The Trustee (or
Custodian) and Plan Administrator shall be entitled to act
on such information as is supplied them and shall have no
duty or responsibility to further verify or question such
information.
5.08 LIABILITY FOR WITHHOLDING ON DISTRIBUTIONS
The Plan Administrator shall be responsible for withholding
federal income taxes from distributions from the Plan,
unless the Participant (or Beneficiary, where applicable)
elects not to have such taxes withheld. The Trustee (or
Custodian) or other payor may act as agent for the Plan
Administrator to withhold such taxes and to make the
appropriate distribution reports, if the Plan Administrator
furnishes all the information to the Trustee (or Custodian)
or other payor it may need to do withholding and reporting.
5.09 RESIGNATION OR REMOVAL OF TRUSTEE (OR CUSTODIAN)
The Trustee (or Custodian, if applicable) may resign at any
time by giving 30 days advance written notice to the
Employer. The resignation shall become effective 30 days
after receipt of such notice unless a shorter period is
agreed upon.
The Employer may remove any Trustee (or Custodian) at any
time by giving written notice to such Trustee (or Custodian)
and such removal shall be effective 30 days after receipt of
such notice unless a shorter period is agreed upon. The
Employer shall have the power to appoint a successor Trustee
(or Custodian).
Upon such resignation or removal, if the resigning or
removed Trustee (or Custodian) is the sole Trustee (or
Custodian), he or she shall transfer all of the assets of
the Fund then held by such Trustee (or Custodian) as
expeditiously as possible to the successor Trustee (or
Custodian) after paying or reserving such reasonable amount
as he or she shall deem necessary to provide for the expense
in the settlement of the accounts and the amount of any
compensation due him or her and any sumschargeable against
the Fund for which he or she may be liable. If the Funds as
reserved are not sufficient for such purpose, then he or she
shall be entitled to reimbursement from the successor
Trustee (or Custodian) out of the assets in the successor
Trustee's (or Custodian's) hands under this Plan. If the
amount reserved shall be in excess of the amount actually
needed, the former Trustee (or Custodian) shall return such
excess to the successor Trustee (or Custodian).
Upon receipt of the transferred assets, the successor
Trustee (or Custodian) shall thereupon succeed to all of the
powers and responsibilities given to the Trustee (or
Custodian) by this Plan.
The resigning or removed Trustee (or Custodian) shall render
an accounting to the Employer and unless objected to by the
Employer within 30 days of its receipt, the accounting shall
be deemed to have been approved and the resigning or removed
Trustee (or Custodian) shall be released and discharged as
to all matters set forth in the accounting. Where a
financial organization is serving as Trustee (or Custodian)
and it is merged with or bought by another organization (or
comes under the control of any federal or state agency),
that organization shall serve as the successor Trustee (or
Custodian) of this Plan, but only if it is the type of
organization that can so serve under applicable law.
Where the Trustee or Custodian is serving as a nonbank
trustee or custodian pursuant to Section 1.401-12(n) of the
Income Tax Regulations, the Employer will appoint a
successor Trustee (or Custodian) upon notification by the
Commissioner of Internal Revenue that such substitution is
required because the Trustee (or Custodian) has failed to
comply with the requirements of Section 1.401-12(n) or is
not keeping such records or making such returns or rendering
such statements as are required by forms or regulations.
5.10 DEGREE OF CARE - LIMITATIONS OF LIABILITY
The Trustee (or Custodian) shall not be liable for any
losses incurred by the Fund by any direction to invest
communicated by the Employer, Plan Administrator, investment
manager appointed pursuant to Section 5.12 or any
Participant or Beneficiary. The Trustee (or Custodian) shall
be under no liability for distributions made or other action
taken or not taken at the written direction of the Plan
Administrator. It is specifically understood that the
Trustee (or Custodian) shall have no duty or responsibility
with respect tot he determination of matters pertaining to
the eligibility of any Employee to become a Participant or
remain a Participant hereunder, the amount of benefit to
which a Participant or Beneficiary shall be entitled to
receive hereunder, whether a distribution to Participant or
Beneficiary is appropriate under the terms of the Plan or
the size and type of any policy to be purchased from any
insurer for any Participant hereunder or similar matters; it
being understood that all such responsibilities under the
Plan are vested in the Plan Administrator.
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<PAGE> 27
5.11 INDEMNIFICATION OF PROTOTYPE SPONSOR AND TRUSTEE (OR
CUSTODIAN)
Notwithstanding any other provision herein, and except as
may be otherwise provided by ERISA, the Employer shall
indemnify and hold harmless the Trustee (or Custodian, of
applicable) and the Prototype Sponsor, their officers,
directors, employees, agents, their heirs, executors,
successors and assigns, from and against any and all
liabilities, damages, judgments, settlements, losses, costs,
charges, or expenses (including legal expenses) at any time
arising out of or incurred in connection with any action
taken by such parties in the performance of their duties
with respect to this Plan, unless there has been a final
adjudication of gross negligence or willful misconduct in
the performance of such duties.
Further, except as may be otherwise provided by ERISA, the
Employer will indemnify the Trustee (or Custodian) and
Prototype Sponsor from any liability, claim or expense
(including legal expense) which the Trustee (or Custodian)
and Prototype Sponsor shall incur by reason of or which
results, in whole or in part, from the Trustee's (or
Custodian's) or Prototype Sponsor's reliance on the facts
and other directions and elections the Employer communicates
or fails to communicate.
5.12 INVESTMENT MANAGERS
A. Definition of Investment Manager - The Employer may
appoint one or more investment managers to make
investment decisions with respect to all or a portion
of the Fund. The investment manager shall be any firm
or individual registered as an investment adviser under
the Investment Advisers Act of 1940, a bank as defined
in said Act or an insurance company qualified under the
laws of more than one state to perform services
consisting of the management, acquisition or
disposition of any assets of the Plan.
B. Investment Manager's Authority - A separate Investment
Fund shall be established representing the assets of
the Fund invested at the direction of the investment
manager. The investment manager so appointed shall
direct the Trustee (or Custodian, if applicable) with
respect to the investment of such Investment Fund. The
investments which may be acquired at the direction of
the investment manager are those described in Section
5.03(A) (for Custodians) or Section 5.04(A) (for
Trustees).
C. Written Agreement - The Appointment of any investment
manager shall be by written agreement between the
Employer and the investment manager and a copy of such
agreement (and any modification or termination thereof)
must be given to the Trustee (or Custodian).
The agreement shall set forth, among other matters, the
effective date of the investment manager's appointment
and an acknowledgment by the investment manager that it
is a fiduciary of the Plan under ERISA.
D. Concerning the Trustee (or Custodian) - Written notice
of each appointment of an investment manager shall be
given to the Trustee (or Custodian) in advance of the
effective date of such appointment. Such notice shall
specify which portion of the Fund will constitute the
Investment Fund subject to the investment manager's
direction. The Trustee (or Custodian) shall comply with
the investment direction given to it by the investment
manager and will not be liable for any loss which may
result by reason of any action (or inaction) it takes
at the direction of the investment manager.
5.13 MATTERS RELATING TO INSURANCE
A. If a life insurance policy is to be purchased for a
Participant, the aggregate premium for certain life
insurance for each Participant must be less than a
certain percentage of the aggregate Employer
Contributions and Forfeitures allocated to a
Participant's Individual Account at any particular time
as follows:
1. Ordinary Life Insurance - For purposes of these
incidental insurance provisions, ordinary life
insurance contracts are contracts with both
nondecreasing death benefits and nonincreasing
premiums. If such contracts are purchased, less
than 50% of the aggregate Employer Contributions
and Forfeitures allocated to any Participant's
Individual Account will be used to pay the
premiums attributable to them.
2. Term and Universal Life Insurance - No more than
25% of the aggregate Employer Contributions and
Forfeitures allocated to any Participant's
Individual Account will be used to pay the
premiums on term life insurance contracts,
universal life insurance contracts, and all other
life insurance contracts which are not ordinary
life.
3. Combination - The sum of 50% of the ordinary life
insurance premiums and all other life insurance
premiums will not exceed 25% of the aggregate
Employer Contributions and Forfeitures allocated
to any Participant's Individual Account.
If this Plan is a profit sharing plan, the above
incidental benefits limits do not apply to life
insurance contracts purchased with Employer
Contributions and Forfeitures that have been in the
Participant's Individual Account for at least 2 full
Plan Years, measured from the date such contributions
were allocated.
22
<PAGE> 28
B. Any dividends or credits earned on insurance contracts
for a Participant shall be allocated to such
Participant's Individual Account.
C. Subject to Section 6.05, the contracts on a
Participant's life will be converted to cash or an
annuity or distributed to the participant upon
commencement of benefits.
D. The Trustee (or Custodian, if applicable) shall apply
for and will be the owner of any insurance contract(s)
purchased under the terms of this Plan. The insurance
contract(s) must provide that proceeds will be payable
to the Trustee (or Custodian), however, the Trustee (or
Custodian) shall be required to pay over all proceeds
of the contract(s) to the Participant's designated
Beneficiary in accordance with the distribution
provisions of this Plan. A Participant's spouse will be
the designated Beneficiary of the proceeds in all
circumstances unless a qualified election has been made
in accordance with Section 6.05. Under no circumstances
shall the Fund retain any part of the proceeds. In the
event of any conflict between the terms of this Plan
and the terms of any insurance contract purchased
hereunder, the Plan provisions shall control.
E. The Plan Administrator may direct the Trustee (or
Custodian) to sell and distribute insurance or annuity
contracts to a Participant (or other party as may be
permitted) in accordance with applicable law or
regulations.
5.14 DIRECTION OF INVESTMENTS BY PARTICIPANT
If so indicated in the Adoption Agreement, each Participant
may individually direct the Trustee (or Custodian, if
applicable) regarding the investment of part or all of his
or her Individual Account. To the extent so directed, the
Employer, Plan Administrator, Trustee (or Custodian) and all
other fiduciaries are relieved of their fiduciary
responsibility under Section 404 of ERISA.
The Plan Administrator shall direct that a Separate Fund be
established in the name of each Participant who directs the
investment of part or all of his or her Individual Account.
Each Separate Fund shall be charged or credited (as
appropriate) with the earnings, gains, losses or expenses
attributable to such Separate Fund. No fiduciary shall be
liable for any loss which results from a Participant's
individual direction. The assets subject to individual
direction shall not be invested in collectibles as that term
is defined in Section 408(m) of the Code.
The Plan Administrator shall establish such uniform and
nondiscriminatory rules relating to individual direction as
it deems necessary or advisable including, but not limited
to, rules describing (1) which portions of Participant's
Individual Account can be individually directed; (2) the
frequency of investment changes; (3) the forms and
procedures for making investment changes; and (4) the effect
of a participant's failure to make a valid direction.
The Plan Administrator may, in a uniform and
nondiscriminatory manner, limit the available investments
for Participants' individual direction to certain specified
investment options (including, but not limited to, certain
mutual funds, investment contracts, deposit accounts and
group trusts). The Plan Administrator may permit, in a
uniform and nondiscriminatory manner, a Beneficiary of a
deceased Participant or the alternate payee under a
qualified domestic relations order (as defined in Section
414(p) of the Code) to individually direct in accordance
with this Section.
SECTION SIX VESTING AND DISTRIBUTION
6.01 DISTRIBUTION TO PARTICIPANT
A. Distributable Events
1. Entitlement to Distribution - The Vested portion
of a Participant's Individual Account shall be
distributable to the Participant upon (1) the
occurrence of any of the distributable events
specified in the Adoption Agreement: (2) the
Participant's Termination of Employment after
attaining Normal Retirement Age; (3) the
termination of the Plan; and (4) the Participant's
Termination of Employment after satisfying any
Early Retirement Age conditions.
If a Participant separates from service before
satisfying the Early Retirement Age requirement,
but has satisfied the service requirement, the
Participant will be entitled to elect an early
retirement benefit upon satisfaction of such age
requirement.
2. Written Request: When Distributed - A Participant
entitled to distribution who wishes to receive a
distribution must submit a written request to the
Plan Administrator. Such request shall be made
upon a form provided by the Plan Administrator.
Upon a valid request, the Plan Administrator shall
direct the Trustee (or Custodian, if applicable)
to commence distribution no later than the time
specified in the Adoption Agreement for this
purpose and, if not specified in the Adoption
Agreement, then no later than 90 days following
the later of:
a. the close of the Plan Year within which the
event occurs which entitles the Participant
to distribution; or
b. the close of the Plan year in which the
request is received.
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<PAGE> 29
3. Special Rules for Withdrawals During Service - If
this is a profit sharing plan and the Adoption
Agreement so provides, a Participant may elect to
receive a distribution of all or part of the
Vested portion of his or her Individual Account,
subject to the requirements of Section 6.05 and
further subject to the following limits:
a. Participant for 5 or more years. An Employee
who has been a Participant in the Plan for 5
or more years may withdraw up to the entire
Vested portion of his or her Individual
Account.
b. Participant for less than 5 years. An
Employee who has been a Participant in the
Plan for less than 5 years may withdraw only
the amount which has been in his or her
Individual Account attributable to Employer
Contributions for at least 2 full Plan
Years, measured from the date such
contributions were allocated. However, if
the distribution is on account of hardship,
the Participant may withdraw up to his or
her entire Vested portion of the
Participant's Individual Account. For this
purpose, hardship shall have the meaning set
forth in Section 6.01(A)(4) of the Code.
4. Special Rules for Hardship Withdrawals - If this
is a profit sharing plan and the Adoption
Agreement so provides, a Participant may elect to
receive a hardship distribution of all or part of
the Vested portion of his or her Individual
Account, subject to the requirements of Section
6.05 and further subject to the following limits:
a. Participant for 5 or more years. An Employee
who has been a Participant in the Plan for 5
or more years may withdraw up to the entire
Vested portion of his or her Individual
Account.
b. Participant for less than 5 years. An
Employee who has been a Participant in the
Plan for less than 5 years may withdraw only
the amount which has been in his or her
Individual Account attributable to Employer
Contributions for at least 2 full Plan
years, measured from the date such
contributions were allocated.
For purposes of this Section 6.01(A)(4) and
Section 6.01(A)(3) hardship is defined as an
immediate and heavy financial need of the
Participant where such Participant lacks
other available resources. The following are
the only financial needs considered
immediate and heavy: expenses incurred or
necessary for medical care, described in
Section 213(d) of the Code, of the Employee,
the Employee's spouse or dependents; the
purchase (excluding mortgage payments) or a
principal residence for the Employee;
payment of tuition and related educational
fees for the next 12 months of
post-secondary education for the Employee,
the Employee's spouse, children or
dependents; or the need to prevent the
eviction of the Employee from, or a
foreclosure on the mortgage of, the
Employee's principal residence.
A distribution will be considered as
necessary to satisfy an immediate and heavy
financial need of the Employee only if:
1) The employee has obtained all
distributions, other than hardship
distributions, and all nontaxable loans
under all plans maintained by the
Employer;
2) The distribution is not in excess of the
amount of an immediate and heavy
financial need (including amounts
necessary to pay any federal, state or
local income taxes or penalties
reasonably anticipated to result from
the distribution).
5. One-Time In-Service Withdrawal Option - If this
is a profit sharing plan and the Employer has
elected the one-time in-service withdrawal option
in the Adoption Agreement, then Participants will
be permitted only one in-service withdrawal during
the course of such Participant's employment with
the Employer. The amount which the Participant can
withdraw will be limited to the lesser of the
amount determined under the limits set forth in
Section 6.01(A)(3) or the percentage of the
Participant's Individual Account specified by the
Employer in the Adoption Agreement. Distributions
under this Section will be subject to the
requirements of Section 6.05.
6. commencement of Benefits - Notwithstanding any
other provision, unless the Participant elects
otherwise, distribution of benefits will begin no
later than the 60th day after the latest of the
close of the Plan Year in which:
a. the Participant attains Normal Retirement
Age;
b. occurs the 10th anniversary of the year in
which the Participant commenced
participation in the Plan; or
c. the Participant incurs a Termination of
Employment.
Notwithstanding the foregoing, the failure of a
Participant and spouse to consent to a distribution
while a benefit is immediately distributable, within
the meaning of Section 6.02(B) of the Plan, shall be
deemed to be an election to defer commencement of
payment of any benefit sufficient to satisfy this
Section.
B. Determining the Vested Portion - in determining the
Vested portion of a Participant's Individual Account,
the following rules shall apply:
24
<PAGE> 30
1. Employer Contributions and Forfeitures - The
Vested portion of a Participant's Individual
Account derived from Employer Contributions and
Forfeitures is determined by applying the vesting
schedule selected in the Adoption Agreement (or
the vesting schedule described in Section 6.01(C)
if the Plan is a Top-Heavy Plan).
2. Rollover and Transfer Contributions - A
Participant is fully Vested in his or her rollover
contributions and transfer contributions.
3. Fully Vested Under Certain Circumstances - A
Participant is fully Vested in his or her
Individual Account if any of the following occurs:
a. the participant reaches Normal Retirement
Age;
b. the Plan is terminated or partially
terminated; or
c. there exists a complete discontinuance of
contributions under the Plan.
Further, unless otherwise indicated in the
Adoption Agreement, a Participant is fully Vested
if the Participant dies, incurs a Disability, or
satisfies the conditions for Early Retirement Age
(if applicable).
4. Participants in a Prior Plan - If a Participant
was a participant in a Prior Plan on the Effective
Date, his or her Vested Percentage shall not be
less than it would have been under such Prior Plan
as computed on the Effective Date.
C. Minimum Vesting Schedule for Top-Heavy Plans - The
following vesting provisions apply for any Plan Year in
which this Plan is a Top-Heavy Plan.
Notwithstanding the other provisions of this Section
6.01 or the vesting schedule selected in the Adoption
Agreement (unless those provisions or that schedule
provide for more rapid vesting) a Participant's Vested
portion of his or her Individual Account attributable
to Employer Contributions and Forfeitures shall be
determined in accordance with the vesting schedule
elected by the Employer in the Adoption Agreement (and
if no election is made the 6 year graded schedule will
be deemed to have been elected) as described below:
<TABLE>
<CAPTION>
6 YEAR GRADED 3 YEAR CLIFF
Years of Years of
Vesting Service Vested Percentage Vesting Service Vested Percentage
--------------- ----------------- --------------- -----------------
<S> <C> <C> <C>
1 0 1 0
2 20 2 0
3 40 3 100
4 60
5 80
6 100
</TABLE>
This minimum vesting schedule applies to all benefits
within the meaning of Section 411(a)(7) of the Code,
except those attributable to Nondeductible Employee
Contributions including benefits accrued before the
effective date of Section 416 of the Code and benefits
accrued before the Plan became a Top-Heavy Plan.
Further, no decrease in a Participant's Vested
percentage may occur in the event the Plan's status as
a Top-Heavy Plan changes for any Plan Year. However,
this Section 6.01(C) does not apply to the Individual
Account of any Employee who does not have an Hour of
Service after the Plan has initially become a Top-Heavy
Plan and such Employee's Individual Account
attributable to Employer Contributions and Forfeitures
will be determined without regard to this Section.
If this Plan ceases to be a Top-Heavy Plan, then in
accordance with the above restrictions, the vesting
schedule as selected in the Adoption Agreement will
govern. If the vesting schedule under the Plan shifts
in or out of top-heavy status, such shift is an
amendment to the vesting schedule and the election in
Section 9.04 applies.
D. Break in Vesting Service and Forfeitures - If a
Participant incurs a Termination of Employment, any
portion of his or her Individual Account which is not
Vested shall be held in a suspense account. Such
suspense account shall share in any increase or
decrease in the fair market value of the assets of the
Fund in accordance with Section 4 of the Plan. The
disposition of such suspense account shall be as
follows:
1. Breaks in Vesting Service - If a Participant
neither receives nor is deemed to receive a
distribution pursuant to Section 6.01(D)(3) or (4)
and the Participant returns to the service of the
Employer before incurring 5 consecutive Breaks in
Vesting Service, there shall be no Forfeiture and
the amount in such suspense account shall be
recredited to such Participant's Individual
Account.
25
<PAGE> 31
2. Five Consecutive Breaks in Vesting Service - If a
Participant neither receives or is deemed to
receive a distribution pursuant to Section
6.01(D)(3) or (4) and the Participant does not
return to the service of the Employer before
incurring 5 consecutive Breaks in Vesting Service,
the portion of the Participant's Individual
Account which is not Vested shall be treated as a
Forfeiture and allocated in accordance with
Section 3.01(C).
3. Cash-out of Certain Participants - If the value of
the Vested portion of such Participant's
Individual Account derived from Nondeductible
Employee Contributions and Employer Contributions
does not exceed $3,500, the Participant shall
receive a distribution of the entire Vested
portion of such Individual Account and the portion
which is not Vested shall be treated as a
Forfeiture and allocated in accordance with
Section 3.01(C). For purposes of this Section, if
the value of the Vested portion of a Participant's
Individual Account is zero, the Participant shall
be deemed to have received a distribution of such
Vested Individual Account. A Participant's Vested
Individual Account balance shall not include
accumulated deductible employee contributions
within the meaning of Section 72(o)(5)(B) of the
Code for Plan years beginning prior to January 1,
1989.
4. Participants Who Elect to Receive Distributions -
If such Participant elects to receive a
distribution, in accordance with Section 6.02(B),
of the value of the Vested portion of his or her
Individual Account derived from Nondeductible
Employee Contributions and Employer Contributions,
the portion which is not Vested shall be treated
as a Forfeiture and allocated in accordance with
Section 3.01(C).
5. Re-employed Participants - If a Participant
receives or is deemed to receive a distribution
pursuant to Section 6.01(D)(3) or (4) above and
the Participant resumes employment covered under
this Plan, the Participant's Employer-derived
Individual Account balance will be restored to the
amount on the date of distribution if the
Participant repays to the Plan the full amount of
the distribution attributable to Employer
Contributions before the earlier of 5 years after
the first date on which the Participant is
subsequently re-employed by the Employer, or the
date the participant incurs 5 consecutive Breaks
in Vesting Service following the date of the
distribution.
Any restoration of a Participant's Individual
Account pursuant to Section 6.01(D)(5) shall be
made from other Forfeitures, income or gain to the
Fund or contributions made by the Employer.
E. Distribution Prior to Full Vesting - If a distribution
is made to a Participant who was not then fully Vested
in his or her Individual Account derived from Employer
Contributions and the Participant may increase his or
her Vested percentage in his or her Individual Account,
then the following rules shall apply:
1. a separate account will be established for the
Participant's interest in the Plan as of the time
of the distribution, and
2. at any relevant time the Participant's Vested
portion of the separate account will be equal to
an amount ("X") determined by the formula: X = P
(AB + (R xD)) - (R x D) where "P" is the Vested
percentage at the relevant time, "AB" is the
separate account balance at the relevant time; "D"
is the amount of the distribution; and "R" is the
ratio of the separate account balance at the
relevant time to the separate account balance
after distribution.
6.02 FORM OF DISTRIBUTION TO A PARTICIPANT
A. Value of Individual Account Does Not Exceed $3,500 - If
the value of the Vested portion of a Participant's
Individual Account derived from Nondeductible Employee
Contributions and Employer Contributions does not
exceed $3,500, distribution from the Plan shall be made
to the Participant in a single lump sum in lieu of all
other forms of distribution from the Plan as soon as
administratively feasible.
B. Value of Individual Account Exceeds $3,500
1. If the value of the Vested portion of a
Participant's Individual Account derived from
Nondeductible Employee Contributions and Employer
Contributions exceeds (or at the time of any prior
distribution exceeded) $3,500, and the Individual
Account is immediately distributable, the
Participant and the Participant's spouse (or where
either the Participant or the spouse died, the
survivor) must consent to any distribution of such
Individual Account. The consent of the Participant
and the Participant's spouse shall be obtained in
writing within the 90-day period ending on the
annuity starting date. The annuity starting date
is the first day of the first period for which an
amount is paid as an annuity or any other form.
The Plan Administrator shall notify the
Participant and the Participant's spouse of the
right to defer any distribution until the
Participant's Individual Account is no longer
immediately distributable. Such notification shall
include a general description of the material
features, and an explanation of the relative
values of, the optional forms of benefit available
under the Plan in a manner that would satisfy the
notice requirements of Section 417(a)(3) of the
Code, and shall be provided no less than 30 days
and no more than 90 days prior to the annuity
starting date.
If a distribution is one to which Section
401(a)(11) and 417 of the Internal Revenue Code do
not apply, such distribution may commence less
than 30 days after the notice required under
Section 1.411(a)-11(c) of the Income Tax
Regulations is given, provided that:
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<PAGE> 32
a. the Plan Administrator clearly informs the
Participant that the Participant has a right
to a period of at least 30 days after
receiving the notice to consider the
decision of whether or not to elect a
distribution (and, if applicable, a
particular distribution option), and
b. the Participant, after receiving the notice,
affirmatively elects a distribution.
Notwithstanding the foregoing, only the
Participant need consent to the commencement of a
distribution in the form of a qualified joint and
survivor annuity while the Individual Account is
immediately distributable. Nether the consent of
the Participant nor the Participant's spouse shall
be required to the extent that a distribution is
required to satisfy Section 401(a)(9) or Section
415 of the Code. In addition, upon termination of
this Plan if the Plan does not offer an annuity
option (purchased from a commercial provider), the
Participant's Individual Account may, without the
Participant's consent, be distributed to the
Participant or transferred to another defined
contribution plan (other than an employee stock
ownership plan as defined in Section 4975(e)(7) of
the Code) within the same controlled group.
An Individual Account is immediately distributable
if any part of the Individual Account could be
distributed to the Participant (or surviving
spouse) before the Participant attains or would
have attained (if not deceased) the later of
Normal Retirement Age or age 62.
2. For purposes of determining the applicability of
the foregoing consent requirements to
distributions made before the first day of the
first Plan year beginning after December 31, 1988,
the Vested portion of a participant's Individual
Account shall not include amounts attributable to
accumulated deductible employee contributions with
the meaning of Section 72(o)(5)(B) of the Code.
C. Other Forms of Distribution to Participant - If the
value of the Vested portion of a Participant's
Individual Account exceeds $3,500 and the Participant
has properly waived the join and survivor annuity, as
described in Section 6.05, the Participant may request
in writing that the Vested portion of his or her
Individual Account be paid to him or her in one or more
of the following forms of payment: (1) in a lump sum;
(2) in installment payments over a period not to exceed
the life expectancy of the Participant or the joint and
last survivor life expectancy of the Participant and
his or her designated Beneficiary; or (3) applied to
the purchase of an annuity contract.
Notwithstanding anything in this Section 6.02 to the
contrary, a Participant cannot elect payments in the
form of an annuity if the Retirement Equity Act safe
harbor rules of Section 6.05(F) apply.
6.03 DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT
A. Designation of Beneficiary - Spousal Consent - Each
Participant may designate, upon a form provided by and
delivered to the Plan Administrator, one or more
primary and contingent Beneficiaries to receive all or
a specified portion of the Participant's Individual
Account in the event of his or her death. A Participant
may change or revoke such Beneficiary designation from
time to time by completing and delivering the proper
form to the Plan Administrator.
In the event that a Participant wishes to designate a
primary Beneficiary who is not his or her spouse, his
or her spouse must consent in writing to such
designation, and the spouse's consent must acknowledge
the effect of such designation and be witnessed by a
notary public or plan representative. Notwithstanding
this consent requirement, if the Participant
establishes to the satisfaction of the Plan
Administrator that such written consent may not be
obtained because there is no spouse or the spouse
cannot be located, no consent shall be required. Any
change of Beneficiary will require a new spousal
consent.
B. Payment to Beneficiary - If a Participant dies before
the Participant's entire Individual Account has been
paid to him or her, such deceased Participant's
Individual Account shall be payable to any surviving
Beneficiary designated by the Participant, or, if no
Beneficiary survives the Participant, to the
Participant's estate.
C. Written Request: When Distributed - A Beneficiary of a
deceased Participant entitled to a distribution who
wishes to receive a distribution must submit a written
request to the Plan Administrator. Such request shall
be made upon a from provided by the Plan Administrator.
Upon a valid request, the Plan Administrator shall
direct the Trustee (or Custodian) to commence
distribution no later than the time specified in the
Adoption Agreement for this purpose and if not
specified in the Adoption Agreement, then no later than
90 days following the later of:
1. the close of the Plan year within which the
Participant dies; or
2. the close of the Plan Year in which the request
is received.
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<PAGE> 33
6.04 FORM OF DISTRIBUTION TO BENEFICIARY
A. Value of Individual Account Does Not Exceed $3,500 - If
the value of the Participant's Individual Account
derived from Nondeductible Employee Contributions and
Employer Contributions does not exceed $3,500, the Plan
Administrator shall direct the Trustee (or Custodian,
if applicable) to make a distribution to the
Beneficiary in a single lump sum in lieu of all other
forms of Distribution from the Plan.
B. Value of Individual Account Exceeds $3,500 - If the
value of a Participant's Individual Account derived
from Nondeductible Employee Contributions and Employer
Contributions exceeds $3,500, the preretirement
survivor annuity requirements of Section 6.05 shall
apply unless waived in accordance with that Section or
unless the Retirement Equity Act safe harbor rules of
Section 6.05(F) apply. However, a surviving spouse
Beneficiary may elect any form of payment allowable
under the Plan in lieu of the preretirement survivor
annuity. Any such payment to the surviving spouse must
meet the requirements of Section 6.06.
C. Other Forms of Distribution to Beneficiary - If the
value of a Participant's Individual Account exceeds
$3,500 and the Participant has properly waived the
preretirement survivor annuity, as described in Section
6.05 (if applicable) or if the Beneficiary is the
Participant's surviving spouse, the Beneficiary may,
subject to the requirements of Section 6.06, request in
writing that the Participant's Individual Account be
paid as follows: (1) in a lump sum; or (2) in
installment payments over a period not to exceed the
life expectancy of such Beneficiary.
6.05 JOINT AND SURVIVOR ANNUITY REQUIREMENTS
A. The provisions of this Section shall apply to any
Participant who is credited with at least one Hour of
Eligibility Service with the Employer on or after
August 23, 1984, and such other Participants as
provided in Section 6.05(G).
B. Qualified Joint and Survivor Annuity - Unless an
optional form of benefit is selected pursuant to a
qualified election within the 90-day period ending on
the annuity starting date, a married Participant's
Vested account balance will be paid in the form of a
qualified joint and survivor annuity and an unmarried
Participant's Vested account balance will be paid in
the form of a life annuity. The Participant may elect
to have such annuity distributed upon attainment of the
earliest retirement age under the Plan.
C. Qualified Preretirement Survivor Annuity - Unless an
optional form of benefit has been selected within the
election period pursuant to a qualified election, if a
Participant dies before the annuity starting date then
the Participant's Vested account balance shall be
applied toward the purchase of an annuity for the life
of the surviving spouse. The surviving spouse may elect
to have such annuity distributed within a reasonable
period after the Participant's death.
D. Definitions
1. Election Period - The period which begins on the
first day of the Plan Year in which the
Participant attains age 35 and ends on the date of
the Participant's death. If a Participant
separates from service prior to the first day of
the Plan year in which age 35 is attained, with
respect to the account balance as of the date of
separation, the election period shall begin on the
date of separation.
Pre-age 35 waiver - A Participant who will not yet
attain age 35 as of the end of any current Plan
year may make special qualified election to waive
the qualified preretirement survivor annuity for
the period beginning on the date of such election
and ending on the first day of the Plan Year in
which the Participant will attain age 35. Such
election shall not be valid unless the Participant
receives a written explanation of the qualified
preretirement survivor annuity in such terms as
are comparable to the explanation required under
Section 6.05(E)(1). Qualified preretirement
survivor annuity coverage will be automatically
reinstated as of the first day of the Plan Year in
which the Participant attains age 35. Any new
waiver on or after such date shall be subject to
the full requirements of this Section 6.05.
2. Earliest Retirement Age - The earliest date on
which, under the Plan, the Participant could elect
to receive retirement benefits.
3. Qualified Election - A waiver of a qualified joint
and survivor annuity or a qualified preretirement
survivor annuity. Any waiver of a qualified joint
and survivor annuity or a qualified preretirement
survivor annuity shall not be effective unless:
(a) the Participant's spouse consents in writing
to the election, (b) the election designates a
specific Beneficiary, including any class of
beneficiaries or any contingent beneficiaries,
which may not be changed without spousal consent
(or the spouse expressly permits designations by
the Participant without any further spousal
consent); (c) the spouse's consent acknowledges
the effect of the election; and (d) the spouse's
consent is witnessed by a plan representative or
notary public. Additionally, a Participant's
waiver of the qualified joint and survivor annuity
shall not be effective unless the election
designates a form of benefit payment which may not
be changed without spousal consent (or the spouse
expressly permits designations by the Participant
without any further spousal consent). If it is
established to the satisfaction of a plan
28
<PAGE> 34
representative that there is no spouse or that the
spouse cannot be located, a waiver will be deemed
a qualified election.
Any consent by a spouse obtained under this
provision (or establishment that the consent of a
spouse may not be obtained) shall be effective
only with respect to such spouse. A consent that
permits designations by the Participant without
any requirement of further consent by such spouse
must acknowledge that the spouse has the right to
limit consent to a specific Beneficiary, and a
specific form of benefit where applicable and that
the spouse voluntarily elects to relinquish either
or both of such rights. A revocation of a prior
waiver may be made by a Participant without the
consent of the spouse at any time before the
commencement of benefits. The number of
revocations shall not be limited. No consent
obtained under this provision shall be valid
unless the Participant has received notice as
provided in Section 6.05(E) below.
4. Qualified Joint and Survivor Annuity - An
immediate annuity for the life of the Participant
with a survivor annuity for the life of the spouse
which is not less than 50% and not more than 100%
of the amount of the annuity which is payable
during the joint lives of the Participant and the
spouse and which is the amount of benefit which
can be purchased with the Participant's vested
account balance. The percentage of the survivor
annuity under the Plan shall be 50% (unless a
different percentage is elected by the Employer in
the Adoption Agreement).
5. Spouse (surviving spouse) - The spouse or
surviving spouse of the Participant, provided that
a former spouse will be treated as the spouse or
surviving spouse and a current spouse will not be
treated as the spouse or surviving spouse to the
extent provided under a qualified domestic
relations order as described in Section 414(p) of
the Code.
6. Annuity Starting Date - The first day of the first
period for which an amount is paid as an annuity
or any other form.
7. Vested Account Balance - The aggregate value of
the Participant's Vested account balances derived
from Employer and Nondeductible Employee
Contributions (including rollovers), whether
Vested before or upon death, including the
proceeds of insurance contracts, if any on the
Participant's life. The provisions of this Section
6.05 shall apply to a Participant who is Vested in
amounts attributable to Employer Contributions,
Nondeductible Employee Contributions (or both) at
the time of death or distribution.
E. Notice Requirements
1. In the case of a qualified joint and survivor
annuity, the Plan Administrator shall no less than
30 days and not more than 90 days prior to the
annuity starting date provide each Participant a
written explanation of: (a) the terms and
conditions of a qualified joint and survivor
annuity; (b) the Participant's right to make and
the effect of an election to waive the qualified
joint and survivor annuity form of benefit; (c)
the rights of a Participant's spouse; and (d) the
right to make, and the effect of, a revocation of
a previous election to waive the qualified joint
and survivor annuity.
2. In the case of a qualified preretirement annuity
as described in Section 6.05 (C), the Plan
Administrator shall provide each participant
within the applicable period for such participant
a written explanation of the qualified
preretirement survivor annuity in such terms and
in such manner as would be comparable to the
explanation provided for meeting the requirements
of Section 6.05(E)(1) applicable to a qualified
joint and survivor annuity.
The applicable period for a Participant is
whichever of the following periods ends last: (a)
the period beginning with the first day of the
Plan year in which the Participant attains age 32
and ending with the close of the Plan year
preceding the Plan Year in which the Participant
attains age 35; (b) a reasonable period ending
after the individual becomes a Participant; (c) a
reasonable period ending after Section 6.05 first
applies to the Participant. Notwithstanding the
foregoing, notice must be provided within a
reasonable period ending after separation from
service in the case of a Participant who separates
from service before attaining age 35.
For purposes of applying the preceding paragraph,
a reasonable period ending after the enumerated
events described in (b), (c) and (d) is the end of
the two-year period beginning one year prior to
the date the applicable event occurs, and ending
one year after that date. In the case of a
Participant who separates from service before the
Plan year in which age 35 is attained, notice
shall be provided within the two-year period
beginning one year prior to separation and ending
one year after separation. If such a Participant
thereafter returns to employment with the
Employer, the applicable period for such
Participant shall be redetermined.
3. Notwithstanding the other requirements of this
Section 6.05(E), the respective notices prescribed
by this Section 6.05(E), need not be given to a
Participant if (a) the Plan "fully subsidizes" the
costs of a qualified joint and survivor annuity or
qualified preretirement survivor annuity, and (b)
the Plan does not allow the
29
<PAGE> 35
Participant to waive the qualified joint and
survivor annuity or qualified preretirement
survivor annuity and does not allow a married
Participant to designate a nonspouse beneficiary.
For purposes of this Section 6.05(E)(3), a plan
fully subsidizes the costs of a benefit if no
increase in cost, or decrease in benefits to the
Participant may result from the Participant's
failure to elect another benefit.
F. Retirement Equity Act Safe Harbor Rules
1. If the Employer so indicates in the Adoption
Agreement, this Section 6.05(F) shall apply to a
Participant in a profit sharing plan, and shall
always apply to any distribution, made on or after
the first day of the first Plan Year beginning
after December 31, 1988, from or under a separate
account attributable solely to accumulated
deductible employee contributions, as defined in
Section 72(o)(5)(B) of the Code, and maintained on
behalf of a Participant in a money purchase
pension plan, (including a target benefit plan) if
the following conditions are satisfied:
a. the Participant does not or cannot elect
payments in the form of a life annuity; and
b. on the death of a Participant, the
Participant's Vested account balance will be
paid to the participant's surviving spouse,
but if there is no surviving spouse, or if
the surviving spouse has consented in a
manner conforming to a qualified election,
then to the Participant's designated
Beneficiary. The surviving spouse may elect
to have distribution of the Vested account
balance commence within the 90-day period
following the date of the Participant's
death. The account balance shall be adjusted
for gains or losses occurring after the
Participant's death in accordance with the
provisions of the Plan governing the
adjustment of account balances for other
types of distributions. This Section 6.05(F)
shall not be operative with respect to a
Participant in a profit sharing plan if the
plan is a direct or indirect transferee of a
defined benefit plan, money purchase plan, a
target benefit plan, stock bonus, or profit
sharing plan which is subject to the
survivor annuity requirements of Section
401(a)(11) and Section 417 of the Code. If
this Section 6.05(F) is operative, then the
provisions of this Section 6.05 other than
Section 6.05(G) shall be inoperative.
2. The Participant may waive the spousal death
benefit described in this Section 6.05(F) at any
time provided that no such waiver shall be
effective unless it satisfies the conditions of
Section 6.05(D)(3) (other than the notification
requirement referred to therein) that would apply
to the Participant's waiver of the qualified
preretirement survivor annuity.
3. For purposes of this Section 6.05(F), Vested
account shall mean, in the case of a money
purchase pension plan or a target benefit plan,
the Participant's separate account balance
attributable solely to accumulated deductible
employee contributions within the meaning of
Section 72(o)(5)(B) of the Code. In the case of a
profit sharing plan, Vested account balance shall
have the same meaning as provided in Section
6.05(D)(7).
G. Transitional Rules
1. Any living Participant not receiving benefits on
August 23, 1984, who would otherwise not receive
the benefits prescribed by the previous
subsections of this Section 6.05 must be given the
opportunity to elect to have the prior subsections
of this Section apply if such Participant is
credited with at least one Hour of Service under
this Plan or a predecessor plan in a Plan year
beginning on or after January 1, 1976, and such
Participant had at least 10 Years of Vesting
Service when he or she separated from service.
2. Any living Participant not receiving benefits on
August 23, 1984, who was credited with at least
one Hour of Service under this Plan or a
predecessor plan on or after September 2, 1974,
and who is not otherwise credited with any service
in a Plan year beginning on or after January 1,
1976, must be given the opportunity to have his or
her benefits paid in accordance with Section
6.05(G)(4).
3. The respective opportunities to elect (as
described in Section 6.05(G)(1) and (2) above)
must be afforded to the appropriate Participants
during the period commencing on August 23, 1984,
and ending on the date benefits would otherwise
commence to said Participants.
4. Any Participant who has elected pursuant to
Section 6.05(G)(2) and any Participant who does
not elect under Section 6.05(G)(1) or who meets
the requirements of Section 6.05(G)(1) except that
such Participant does not have at least 10 Year 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:
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<PAGE> 36
3. For purposes of Section 6.06(E)(2) above, if the
surviving spouse dies after the Participant, but
before payments to such spouse begin, the
provisions of Section 6.06(E)(2), with the
exception of paragraph (b) therein, shall be
applied as if the surviving spouse were the
Participant.
(1) beings 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 Age (or
the qualified early retirement age)
and after satisfying the eligibility
requirements for the payment of
benefits under the Plan and thereafter
dies before beginning to receive such
benefits;
then such benefits will be received
under this Plan in the form of a
qualified joint and survivor annuity,
unless the Participant has elected
otherwise during the election period.
The election period must begin at
least 6 months before the Participant
attains qualified early retirement age
and end not more than 90 days before
the commencement of benefits. Any
election hereunder will be in writing
and may be changed by the Participant
at any time.
b. Election of Early Survivor Annuity - A
Participant who is employed after attaining
the qualified early retirement age will be
given the opportunity to elect, during the
election period, to have a survivor annuity
payable on death. If the Participant elects
the survivor annuity, payments under such
annuity must not be less than the payments
which would have been made to the spouse
under the qualified joint and survivor
annuity if the Participant had retired on
the day before his or her death. Any
election under this provision will be in
writing and may be changed by the
Participant at any time. The election period
begins on the later of (1) the 90th day
before the Participant attains the qualified
early retirement age, or (2) the date on
which participation begins, and ends on the
date the Participant terminates employment.
c. For purposes of Section 6.05(G)(4):
1. Qualified early retirement age is the
latest of:
a. the earliest date, under the
Plan, on which the Participant
may elect to receive retirement
benefits,
b. the first day of the 120th month
beginning before the Participant
reaches Normal Retirement Age,
or
c. the date the Participant begins
participation.
2. Qualified joint and survivor annuity
is an annuity for the life of the
Participant with a survivor annuity
for the life of the spouse as
described in Section 6.05(D)(4) of
this Plan.
6.06 DISTRIBUTION REQUIREMENTS
A. General Rules
1. Subject to Section 6.05 Joint and Survivor Annuity
Requirements, the requirements of this Section
shall apply to any distribution of a Participant's
interest and will take precedence over any
inconsistent provisions of this Plan. Unless
otherwise specified, the provisions of this
Section 6.06 apply to calendar years beginning
after December 31, 1984.
2. All distributions required under this Section 6.06
shall be determined and made in accordance with
the Income Tax Regulations under Section
401(a)(9), including the minimum distribution
incidental benefit requirement of Section
1.40(a)(9)-2 of the proposed regulations.
B. Required Beginning Date - The entire interest of a
Participant must be distributed or begin to be
distributed no later than the Participant's required
beginning date.
C. Limits on Distribution Periods - As of the first
distribution calendar year, distributions, if not made
in a single sum, may only be made over one of the
following periods (or a combination thereof):
1. the life of the Participant,
2. the life of the Participant and a designated
Beneficiary,
3. a period certain not extending beyond the life
expectancy of the Participant, or
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<PAGE> 37
4. a period certain not extending beyond the joint
and last survivor expectancy of the participant
and a designated Beneficiary.
D. Determination of Amount to be Distributed Each year -
If the Participant's interest is to be distributed in
other than a single sum, the following minimum
distribution rules shall apply on or after the required
beginning date:
1. Individual Account
a. If a Participant's benefit is to be
distributed over (1) a period not extending
beyond the life expectancy of the
Participant or the joint life and last
survivor expectancy of the Participant and
the Participant's designated Beneficiary or
(2) a period not extending beyond the life
expectancy of the designated Beneficiary,
the amount required to be distributed for
each calendar year, beginning with
distributions for the first distribution
calendar year, must at least equal the
quotient obtained by dividing the
Participant's benefit by the applicable life
expectancy.
b. For calendar years beginning before January
1, 1989, if the Participant's spouse is not
the designated Beneficiary, the method of
distribution selected must assure that at
least 50% of the present value of the amount
available for distribution is paid within
the life expectancy of the Participant.
c. For calendar years beginning after December
31, 1988, the amount to be distributed each
year, beginning with distributions for the
first distribution calendar year shall not
be less than the quotient obtained by
dividing the Participant's benefit by the
lesser of (1) the applicable life expectancy
or (2) if the Participant's spouse is not
the designated Beneficiary, the applicable
divisor determined from the table set forth
in Q&A-4 of Section 1.401(a)(9)-2 of the
Proposed Income Tax Regulations.
Distributions after the death of the
Participant shall be distributed using the
applicable life expectancy in Section
6.05(D)(1)(a) above as the relevant divisor
without regard to proposed regulations
1.401(a)(9)-2.
d. the minimum distribution required for the
Participant's first distribution calendar
year must be made on or before the
Participant's required beginning date. The
minimum distribution for other calendar
years, including the minimum distribution
for the distribution calendar year in which
the Employee's required beginning date
occurs, must be made on or before December
31 of that distribution calendar year.
2. Other Forms - If the Participant's benefit is
distributed in the form of an annuity purchased
from an insurance company, distributions
thereunder shall be made in accordance with the
requirements of Section 401(a)(9) of the Code and
the regulations thereunder.
E. Death Distribution Provisions
1. Distribution Beginning Before Death - If the
Participant dies after distribution of his or her
interest has begun, the remaining portion of such
interest will continue to be distributed at least
as rapidly as under the method of distribution
being used prior to the Participant's death.
2. Distribution Beginning After Death - If the
Participant dies before distribution of his or her
interest begins, distribution of the Participant's
entire interest shall be completed by December 31
of the calendar year containing the fifth
anniversary of the Participant's death except to
the extent that an election is made to receive
distributions in accordance with (a) or (b) below:
a. if any portion of the Participant's interest
is payable to a designated Beneficiary,
distributions may be made over the life or
over a period certain not greater than the
life expectancy of the designated
Beneficiary commencing on or before December
31 of the calendar year immediately
following the calendar year in which the
Participant died;
b. if the designated Beneficiary is the
Participant's surviving spouse, the date
distributions are required to begin in
accordance with (a) above shall not be
earlier than the later of (1) December 31 of
the calendar year immediately following the
calendar year in which the Participant dies
or (2) December 31 of the calendar year in
which the Participant would have attained
age 70 1/2.
If the Participant has not made an election
pursuant to this Section 6.05(E)(2) by the
time of his or her death, the Participant's
designated Beneficiary must elect the method
of distribution no later than the earlier of
(1) December 31 of the calendar year in
which distributions would be required to
begin under this Section 6.05(E)(2), or (2)
December 31 of the calendar year which
contains the fifth anniversary of the date
of death of the Participant. If the
Participant has no designated Beneficiary,
or if the designated Beneficiary does not
elect a method of distribution, distribution
of the Participant's entire interest must be
completed by December 31 of the calendar
year containing the fifth anniversary of the
Participant's death.
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3. For purposes of Section 6.06(E)(2) above, if the
surviving spouse dies after the Participant, but
before payments to such spouse begin, the
provisions of Section 6.06(E)(2), with the
exception of paragraph (b) therein, shall be
applied as if the surviving spouse were the
Participant.
4. For purposes of this Section 6.06(E), any amount
paid to a child of the Participant will be treated
as if it had been paid to the surviving spouse if
the amount becomes payable to the surviving spouse
when the child reaches the age of majority.
5. For purposes of this Section 6.06(E), distribution
of a Participant's interest is considered to begin
on the Participant's required beginning date (or,
if Section 6.06(E)(3) above is applicable, the
date distribution is required to begin to the
surviving spouse pursuant to Section 6.06(E)(2)
above). If distribution in the form of an annuity
irrevocably commences to the Participant before
the required beginning date, the date distribution
is considered to begin is the date distribution
actually commences.
F. Definitions
1. Applicable Life Expectancy - The life expectancy
(or joint and last survivor expectancy) calculated
using the attained age of the Participant (or
designated Beneficiary) as of the Participant's
(or designated Beneficiary's) birthday in the
applicable calendar year reduced by one for each
calendar year which has elapsed since the date
life expectancy was first calculated. If life
expectancy is being recalculated, the applicable
life expectancy shall be the life expectancy as so
recalculated. The applicable calendar year shall
be the first distribution calendar year, and if
life expectancy is being recalculated such
succeeding calendar year.
2. Designated Beneficiary - The individual who is
designated as the Beneficiary under the Plan in
accordance with Section 401(a)(9) of the Code and
the regulations thereunder.
3. Distribution Calendar Year - A calendar year for
which a minimum distribution is required. For
distributions beginning before the Participant's
death, the first distribution calendar year is the
calendar year immediately preceding the calendar
year which contains the Participant's required
beginning date. For distributions beginning after
the Participant's death, the first distribution
calendar year is the calendar year in which
distributions are required to begin pursuant to
Section 6.05(E) above.
4. Life Expectancy - Life expectancy and joint and
last survivor expectancy are computed by use of
the expected return multiples in Tables V and VI
of Section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or
spouse, in the case of distributions described in
Section 6.05(E)2)(b) above) by the time
distributions are required to begin, life
expectancies shall be recalculated annually. Such
election shall be irrevocable as to the
Participant (or spouse) and shall apply to all
subsequent years. The life expectancy of a
nonspouse Beneficiary may not be recalculated.
5. Participant's Benefit
a. The account balance as of the last valuation
date in the valuation calendar year (the
calendar year immediately preceding the
distribution calendar year) increased by the
amount of any Contributions or Forfeitures
allocated to the account balance as of dates
in the valuation calendar year after the
valuation date and decreased by
distributions made in the valuation calendar
year after the valuation date.
b. Exception for second distribution calendar
year. For purposes of paragraph (a) above,
if any portion of the minimum distribution
for the first distribution calendar year is
made in the second distribution calendar
year on or before the required beginning
date, the amount of the minimum distribution
made in the second distribution calendar
year shall be treated as if it had been made
in the immediately preceding distribution
calendar year.
6. Required Beginning Date
a. General Rule - The required beginning date
of a Participant is the first day of April
of the calendar year following the calendar
year in which the Participant attains age 70
1/2.
b. Transitional Rules - The required beginning
date of a Participant who attains age 70 1/2
before January 1, 1988, shall be determined
in accordance with (1) or (2) below:
(1) Non 5% Owners - The required beginning
date of a Participant who is not a 5%
owner is the first day of April of the
calendar year following the calendar
year in which the later of retirement
or attainment of age 70 1/2 occurs.
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<PAGE> 39
(2) 5$ Owners - The required beginning date
of a Participant who is a 5% owner
during any year beginning after
December 31, 1979, is the first day of
April following the later of:
(a) the calendar year in which the
Participant attains age 70 1/2, or
(b) the earlier of the calendar year
with or within which ends the Plan
Year in which the Participant
becomes a 5% owner, or the calendar
year in which the Participant
retires.
The required beginning date of a
Participant who is not a 5% owner who
attains age 70 1/2 during 1988 and who
has not retired as of January 1, 1989,
is April 1, 1990.
c. 5% Owner - A Participant is treated as a 5%
owner for purposes of this Section
6.06(F)(6) if such Participant is a 5% owner
as defined in Section 416(I) of the Code
(determined in accordance with Section 416
but without regard to whether the Plan is
top-heavy) at any time during the Plan Year
ending with or within the calendar year in
which such owner attains age 66 1/2 or any
subsequent Plan Year.
d. Once distributions have begun to a 5% owner
under this Section 6.06(F)(6) they must
continue to be distributed, even if the
Participant ceases to be a 5% owner in a
subsequent year.
G. Transitional Rule
1. Notwithstanding the other requirements of this
Section 6.06 and subject to the requirements of
Section 6.05, Joint and Survivor Annuity
Requirements, distribution on behalf of any
Employee, including a 5% owner, may be made in
accordance with all of the following requirements
(regardless of when such distribution commences):
a. The distribution by the Fund is one which
would not have qualified such Fund under
Section 401(a)(9) of the Code as in effect
prior to amendment by the Deficit Reduction
Act of 1984.
b. The distribution is in accordance with a
method of distribution designated by the
Employee whose interest in the Fund is being
distributed or, if the Employee is deceased,
by a Beneficiary of such Employee.
c. Such designation was in writing, was signed
by the Employee or the Beneficiary, and was
made before January 1, 1984.
d. The Employee had accrued a benefit under the
Plan as of December 31, 1983.
e. The method of distribution designated by the
Employee or the Beneficiary specifies the
time at which distribution will commence,
the period over which distributions will be
made, and in the case of any distribution
upon the Employee's death, the Beneficiaries
of the Employee listed in order of priority.
2. A distribution upon death will not be covered by
this transitional rule unless the information in
the designation contains the required information
described above with respect to the distributions
to be made upon the death of the Employee.
3. For any distribution which commences before
January 1, 1984, but continues after December 31,
1983, the Employee, or the Beneficiary, to whom
such distribution is being made, will be presumed
to have designated the method of distribution
under which the distribution is being made if the
method of distribution was specified in writing
and the distribution satisfies the requirements in
Section 6.06(G)(1)(a) and (e).
4. If a designation is revoked, any subsequent
distribution must satisfy the requirements of
Section 401(a)(9) of the Code and the regulations
thereunder. If a designation is revoked subsequent
to the date distributions are required to begin,
the Plan must distribute by the end of the
calendar year following the calendar year in which
the revocation occurs the total amount not yet
distributed which would have been required to have
been distributed to satisfy Section 401(a)(9) of
the Code and the regulations thereunder, but for
the Section 242(b)(2) election. For calendar years
beginning after December 31, 1988, such
distributions must meet the minimum distribution
incidental benefit requirements in Section
1.40(a)(9)-2 of the Proposed Income Tax
Regulations. Any changes in the designation will
be considered to be a revocation of the
designation. However, the mere substitution or
addition of another Beneficiary (one not named in
the designation) under the designation will not be
considered to be a revocation of the designation,
so long as such substitution or addition does not
alter the period over which distributions are to
be made under the designation, directly or
indirectly (for example, by altering the relevant
measuring life). In the case in which an amount is
transferred or rolled over from one plan to
another plan, the rules in Q&A J-2 and Q&A J-3
shall apply.
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6.07 ANNUITY CONTRACTS
Any annuity contract distributed under the Plan (if
permitted or required by this Section 6) must be
nontransferable. The terms of any annuity contract purchased
and distributed by the Plan to a Participant or spouse shall
comply with the requirements of the Plan.
6.08 LOANS TO PARTICIPANTS
If the Adoption Agreement so indicates, a Participant may
receive a loan from the Fund, subject to the following
rules:
A. Loans shall be made available to all Participants on a
reasonably equivalent basis.
B. Loans shall not be made available to Highly Compensated
Employees (as defined in Section 414(q) of the Code) in
an amount greater than the amount made available to
other Employees.
C. Loans must be adequately secured and bear a reasonable
interest rate.
D. No Participant loan shall exceed the present value of
the Vested portion of a Participant's Individual
Account.
E. A Participant must obtain the consent of his or her
spouse, if any, to the use of the Individual Account as
security for the loan. Spousal consent shall be
obtained no earlier than the beginning of the 90 day
period that ends on the date on which the loan is to be
so secured. The consent must be in writing, must
acknowledge the effect of the loan, and must be
witnessed by a plan representative or notary public.
Such consent shall thereafter be binding with respect
to the consenting spouse or any subsequent spouse with
respect to that loan. A new consent shall be required
if the account balance is used for renegotiation,
extension, renewal, or other revision of the loan.
Notwithstanding the foregoing, no spousal consent if
necessary if, at the time the loan is secured, no
consent would be required for a distribution under
Section 417(a)(2)(B). In addition, spousal consent is
not required if the Plan of the Participant is not
subject to Section 401(a)(11) at the time the
Individual Account is used as security, or if the total
Individual Account subject to the security is less than
or equal to $3,500.
F. In the event of default, foreclosure on the note and
attachment of security will not occur until a
distributable event occurs in the Plan. Notwithstanding
the preceding sentence, a Participant's default on a
loan will be treated as a distributable event and as
soon as administratively feasible after the default,
the Participant's Vested Individual Account will be
reduced by the lesser of the amount in default (plus
accrued interest) or the amount secured. If this Plan
is a 401(k) plan, then to the extent the loan is
attributable to a Participant's Elective Deferrals,
Qualified Nonelective Contributions or Qualified
Matching Contributions, the Participant's Individual
Account will not be reduced unless the Participant has
attained age 59 1/2 or has another distributable event.
A Participant will be deemed to have consented to the
provision at the time the loan is made to the
Participant.
G. No loans will be made to any shareholder-employee or
Owner-Employee. For purposes of this requirement, a
shareholder-employee means an employee or officer of an
electing small business (Subchapter S) corporation who
owns (or is considered as owning within the meaning of
Section 318(a)(1) of the Code), on any day during the
taxable year of such corporation, more than 5% of the
outstanding stock of the operation.
If a valid spousal consent has been obtained in accordance
with 6.08(E), then, notwithstanding any other provisions of
this Plan, the portion of the Participant's Vested
Individual Account used as a security interest held by the
Plan by reason of a loan outstanding to the Participant
shall be taken into account for purposes of determining the
amount of the account balance payable at the time of death
or distribution, but only if the reduction is used as
repayment of the loan. If less than 100% of the
Participant's Vested Individual Account (determined without
regard to the preceding sentence) is payable to the
surviving spouse, then the account balance shall be adjusted
by first reducing the Vested Individual Account by the
amount of the security used as repayment of the loan, and
then determining the benefit payable to the surviving
spouse.
To avoid taxation to the Participant, no loan to any
Participant can be made to the extent that such loan when
added to the outstanding balance of all other loans to the
Participant would exceed the lesser of (a) $50,000 reduced
by the excess (if any) of the highest outstanding balance of
loans during the one year period ending on the day before
the loan is made, over the outstanding balance of loans from
the Plan on the date the loan is made, or (b) 50% of the
present value of the nonforfeitable Individual Account of
the Participant or, if greater, the total Individual Account
up to $10,000. For the purpose of the above limitation, all
loans from all plans of the Employer and other members of a
group of employers described in Sections 414(b), 414(c), and
414(m) of the Code are aggregated. Furthermore, any loan
shall by its terms require that repayment (principal and
interest) be amortized in level payments, not less
frequently than quarterly, over a period not extending
beyond 5 years from the date of the loan, unless such loan
is used to acquire a dwelling unit which within a reasonable
time (determined at the time the loan is made) will be used
as the principal residence of the Participant. An assignment
or pledge of any portion of the Participant's interest in
the Plan and a loan, pledge, or assignment with respect to
any insurance contract purchased under the Plan, will be
treated as a loan under this paragraph.
The Plan Administrator shall administer the loan program in
accordance with a written document. Such written document
shall include, at a minimum, the following: (I) the identity
of the person or positions authorized to administer the
Participant loan program; (ii) the procedure for applying
for loans; (iii) the basis on which loans will be approved
or
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<PAGE> 41
denied; (iv) limitations (if any) on the types and amounts
of loans offered; (v) the procedure under the program for
determining a reasonable rate of interest; (vi) the types of
collateral which may secure a Participant loan; and (vii)
the events constituting default and steps that will be taken
to preserve Plan assets in the event of such default.
6.09 DISTRIBUTION IN KIND
The Plan Administrator may cause any distribution under this
Plan to be made either in a form actually held in the Fund,
or in cash by converting assets other than cash into cash,
or in any combination of the two foregoing ways.
6.10 DIRECT ROLLOVERS OF ELIGIBLE ROLLOVER DISTRIBUTIONS
A. Direct Rollover Option
This Section applies to distributions made on or after
January 1, 1993. Notwithstanding any provision of the
Plan to the contrary that would otherwise limit a
distributee's election under this Section, a
distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any
portion of an eligible rollover distribution that is
equal to at least $500 paid directly to an eligible
retirement plan specified by the distributee in direct
rollover.
B. Definitions
1. Eligible rollover distribution - An eligible
rollover distribution is any distribution of all
or any portion of the balance to the credit of the
distributee, except that an eligible rollover
distribution does not include:
a. any distribution that is one of a series of
substantially equal periodic payments (not
less frequently than annually) made for the
life (or life expectancy) of the distributee
or the joint lives (or joint life
expectancies) of the distributee and the
distributee's designated Beneficiary, or for
a specified period of ten years or more;
b. any distribution to the extent such
distribution is required under Section
401(a)(9) of the Code:
c. the portion of any other distribution that
is not includible in gross income
(determined without regard to the exclusion
for net unrealized appreciation with respect
to employer securities); and
d. any other distributions(s) that is
reasonably expected to total less than $200
during a year.
2. Eligible retirement plan - An eligible retirement
plan is an individual retirement account described
in Section 408(a) of the Code, an individual
retirement annuity described in Section 408(b) of
the Code, an annuity plan described in Section
403(a) of the Code, or a qualified trust described
in Section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution.
However, in the case of an eligible rollover
distribution to the surviving spouse, an eligible
retirement plan is an individual retirement
account or individual retirement annuity.
3. Distributee - A distributee includes an Employee
or former Employee. In addition, the Employee's or
former Employee's surviving spouse and the
Employee's or former Employee's spouse or former
spouse who is the alternate payee under a
qualified domestic relations order, as defined in
Section 414(p) of the Code, are distributees with
regard to the interest of the spouse or former
spouse.
4. Direct rollover - A direct rollover is a payment
by the Plan to the eligible retirement plan
specified by the distributee.
6.11 PROCEDURE FOR MISSING PARTICIPANTS OR BENEFICIARIES
The Plan Administrator must use all reasonable measures to
locate Participants or Beneficiaries who are entitled to
distributions from the Plan. In the event that the Plan
Adminstrator cannot locate a Participant or Beneficiary who
is entitled to a distribution from the Plan after using all
reasonable measures to locate him or her, the Plan
Administrator may, consistent with applicable laws,
regulations and other pronouncements under ERISA, use any
reasonable procedure to dispose of distributable plan
assets, including any of the following: (1) establish a bank
account for and in the name of the Participant or
Beneficiary and transfer the assets to such bank account,
(2) purchase an annuity contract with the assets in the name
of the Participant or Beneficiary, or (3) after the
expiration of 5 years after the benefit becomes payable,
treat the amount distributable as a Forfeiture and allocate
it in accordance with the terms of the Plan and if the
Participant or Beneficiary is later located, restore such
benefit to the Plan.
SECTION SEVEN CLAIMS PROCEDURE
7.01 FILING A CLAIM FOR PLAN DISTRIBUTIONS
A Participant or Beneficiary who desires to make a claim for
the Vested portion of the Participant's Individual Account
shall file a written request with the Plan Administrator on
a form to be furnished to him or her by the Plan
Administrator for such purpose. The request shall set forth
the basis of the claim. The Plan Administrator is authorized
to conduct such
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<PAGE> 42
examinations as may be necessary to facilitate the payment
of any benefits to which the Participant or Beneficiary may
be entitled under the terms of the Plan.
7.02 DENIAL OF CLAIM
Whenever a claim for a Plan distribution by any Participant
or Beneficiary has been wholly or partially denied, the Plan
Administrator must furnish such Participant or Beneficiary
written notice of the denial within 60 days of the date the
original claim was filed. This notice shall set forth the
specific reasons for the denial, specific reference to
pertinent Plan provisions on which the denial is based, a
description of any additional information or material needed
to perfect the claim, an explanation of why such additional
information or material is necessary and an explanation of
the procedures for appeal.
7.03 REMEDIES AVAILABLE
The Participant or Beneficiary shall have 60 days from
receipt of the denial notice in which to make written
application for review by the Plan Administrator. The
Participant or Beneficiary may request that the review be in
the nature of a hearing. The Participant or Beneficiary
shall have the right to representation, to review pertinent
documents and to submit comments in writing. The Plan
Administrator shall issue a decision on such review within
60 days after receipt of an application for review as
provided for in Section 7.02. Upon a decision unfavorable to
the Participant or Beneficiary, such Participant or
Beneficiary shall be entitled to bring such actions in law
or equity as may be necessary or appropriate to protect or
clarify his or her right to benefits under this Plan.
SECTION EIGHT PLAN ADMINISTRATOR
8.01 EMPLOYER IS PLAN ADMINISTRATOR
A. The Employer shall be the Plan Administrator unless the
managing body of the Employer designates a person or
persons other than the Employer as the Plan
Administrator and so notifies the Trustee (or
Custodian, if applicable). The Employer shall also be
the Plan Administrator if the person or persons so
designated cease to be the Plan Administrator. The
Employer may establish an administrative committee that
will carry out the Plan Administrator's duties. Members
of the administrative committee may allocate the Plan
Administrator's duties among themselves.
B. If the managing body of the Employer designates a
person or persons other than the Employer as Plan
Administrator, such person or persons shall serve at
the pleasure of the Employer and shall serve pursuant
to such procedures as such managing body may provide.
Each such person shall be bonded as may be required by
law.
8.02 POWERS AND DUTIES OF THE PLAN ADMINISTRATOR
A. The Plan Administrator may, by appointment, allocate
the duties of the Plan Administrator among several
individuals or entities. Such appointments shall not be
effective until the party designated accepts such
appointment in writing.
B. The Plan Administrator shall have the authority to
control and manage the operation and administration of
the Plan. The Plan Administrator shall administer the
Plan for the exclusive benefit of the Participants and
their Beneficiaries in accordance with the specific
terms of the Plan.
C. The Plan Administrator shall be charged with the duties
of the general administration of the Plan, including,
but not limited to, the following:
1. To determine all questions of interpretation or
policy in a manner consistent with the Plan's
documents and the Plan Administrator's
construction or determination in good faith shall
be conclusive and binding on all persons except as
otherwise provided herein or by law. Any
interpretation or construction shall be done in a
nondiscriminatory manner and shall be consistent
with the intent that the Plan shall continue to be
deemed a qualified plan under the terms of Section
401(a) of the Code, as amended from time-to-time,
and shall comply with the terms of ERISA, as
amended from time-to-time;
2. To determine all questions relating to the
eligibility of Employees to become or remain
Participants hereunder;
3. To compute the amounts necessary or desirable to
be contributed to the Plan;
4. To compute the amount and kind of benefits to
which a Participant or Beneficiary shall be
entitled under the Plan and to direct the Trustee
(or Custodian, if applicable0 with respect to all
disbursements under the Plan, and, when requested
by the Trustee (or Custodian), to furnish the
Trustee (or Custodian) with instructions, in
writing, on matters pertaining to the Plan and the
Trustee (or Custodian) may relay and act thereon;
5. To maintain all records necessary for the
administration of the Plan;
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<PAGE> 43
6. To be responsible for preparing and filing such
disclosure and tax forms as may be required from
time-to-time by the Secretary of Labor or the
Secretary of the Treasury; and
7. To furnish each Employee, Participant or
Beneficiary such notices, information and reports
under such circumstances as may be required by
law.
D. The Plan Administrator shall have all of the powers
necessary or appropriate to accomplish his or her
duties under the Plan, including, but not limited to,
the following:
1. To appoint and retain such persons as may be
necessary to carry out the functions on the Plan
Administrator;
2. To appoint and retain counsel, specialists or
other persons as the Plan Administrator deems
necessary or advisable in the administration of
the Plan;
3. To resolve all questions of administration of the
Plan;
4. To establish such uniform and nondiscriminatory
rules which it deems necessary to carry out the
terms of the Plan;
5. To make any adjustments in a uniform and
nondiscriminatory manner which it deems necessary
to correct any arithmetical or accounting errors
which may have been made for any Plan Year; and
6. To correct any defect, supply any omission or
reconcile any inconsistency in such manner and to
such extent as shall be deemed necessary or
advisable to carry out the purpose of the Plan.
8.03 EXPENSES AND COMPENSATION
All reasonable expenses of administration including, but not
limited to, those involved in retaining necessary
professional assistance may be paid from the assets of the
Fund. Alternatively, the Employer may, in its discretion,
pay any or all such expenses. Pursuant to uniform and
nondiscriminatory rules that the Plan Administrator may
establish from time-to-time, administrative expenses and
expenses unique to a particular Participant may be charged
to a Participant's Individual Account or the Plan
Administrator may allow Participants to pay such fees
outside the Plan. The Employer shall furnish the Plan
Administrator with such clerical and other assistance as the
Plan Administrator may need in the performance of his or her
duties.
8.04 INFORMATION FROM EMPLOYER
To enable the Plan Administrator to perform his or her
duties, the Employer shall supply full and timely
information to the Plan Administrator (or his or her
designated agents) on all matters relating to the
Compensation of all Participants, their regular employment,
retirement, death, Disability or Termination of Employment,
and such other pertinent facts as the Plan Administrator (or
his or her agents) may require. The Plan Administrator shall
advise the Trustee (or Custodian, if applicable) of such or
the foregoing facts as may be pertinent to the Trustee's (or
Custodian's) duties under the Plan. The Plan Administrator
(or his or her agents) is entitled to rely on such
information as is supplied by the Employer and shall have no
duty or responsibility to verify such information.
SECTION NINE AMENDMENT AND TERMINATION
9.01 RIGHT OF PROTOTYPE SPONSOR TO AMEND THE PLAN
A. The Employer, by adopting the Plan, expressly delegates
to the Prototype Sponsor the power, but not the duty,
to amend the Plan without any further action or consent
of the Employer as the Prototype Sponsor deems
necessary for the purpose of adjusting the Plan to
comply with all laws and regulations governing pension
or profit sharing plans. Specifically, it is understood
that the amendments may be made unilaterally by the
Prototype Sponsor. However, it shall be understood that
the Prototype Sponsor shall be under no obligation to
amend the Plan documents and the Employer expressly
waives any rights or claims against the Prototype
Sponsor for not exercising this power to amend. For
purposes of Prototype Sponsor amendments, the mass
submitter shall be recognized as the agent of the
Prototype Sponsor. If the Prototype Sponsor does not
adopt the amendments made by the mass submitter, it
will no longer be identical to or a minor modifier of
the mass submitter plan.
B. An amendment by the Prototype Sponsor shall be
accomplished by giving written notice to the Employer
of the amendment to be made. The notice shall set forth
the text of such amendment and the date such amendment
is to be effective. Such amendment shall take effect
unless within the 30 day period after such notice is
provided, or within such shorter period as the notice
may specify, the Employer gives the Prototype Sponsor
written notice of refusal to consent to the amendment.
Such written notice of refusal shall have the effect of
withdrawing the Plan as a prototype plan and shall
cause the Plan to be considered an individually
designed plan. The right of the Prototype Sponsor to
cause the Plan to be amended shall terminate should the
Plan cease to conform as a prototype plan as provided
in this or any other section.
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<PAGE> 44
9.02 RIGHT OF EMPLOYER TO AMEND THE PLAN
The Employer may (1) change the choice of options in the
Adoption Agreement; (2) add overriding language in the
Adoption Agreement when such language is necessary to
satisfy Section 415 or Section 416 of the Code because of
the required aggregation of multiple plans; and (3) add
certain model amendments published by the Internal Revenue
Service which specifically provide that their adoption will
not cause the Plan to be treated as individually designed.
An Employer that amends the Plan for any other reason,
including a waiver of the minimum funding requirement under
Section 412(d) of the Code, will no longer participate in
this prototype plan and will be considered to have an
individually designed plan.
An Employer who wishes to amend the Plan to change the
options it has chosen in the Adoption Agreement must
complete and deliver a new Adoption Agreement to the
Prototype Sponsor and Trustee (or Custodian, if applicable).
Such amendment shall become effective upon execution by the
Employer and Trustee (or Custodian).
The Employer further reserves the right to replace the Plan
in its entirety by adopting another retirement plan which
the Employer designates as a replacement plan.
9.03 LIMITATION ON POWER TO AMEND
No amendment to the Plan shall be effective to the extent
that it has the effect of decreasing a Participant's accrued
benefit. Notwithstanding the preceding sentence, a
Participant's Individual Account may be reduced to the
extent permitted under Section 412(c)(8) of the Code. For
purposes of this paragraph, a plan amendment which has the
effect of decreasing a Participant's Individual Account or
eliminating an optional form of benefit with respect to
benefits attributable to service before the amendment shall
be treated as reducing an accrued benefit. Furthermore, if
the vesting schedule of a Plan is amended, in the case of an
Employee who is a Participant as of the later of the date
such amendment is adopted or the date it becomes effective,
the Vested percentage (determined as of such date) of such
Employee's Individual Account derived from Employer
Contributions will not be less than the percentage computed
under the Plan without regard to such amendment.
9.04 AMENDMENT OF VESTING SCHEDULE
If the Plan's vesting schedule is amended, or the Plan is
amended in any way that directly or indirectly affects the
computation of the Participant's Vested percentage, or if
the Plan is deemed amended by an automatic change to or from
a top-heavy vesting scheduled, each Participant with at
least 3 Years of Vesting Service with the Employer may
elect, within the time set forth below, to have the Vested
percentage computed under the Plan without regard to such
amendment.
For Participants who do not have at least 1 Hour of Service
in any Plan Year beginning after December 31, 1988, the
preceding sentence shall be applied by substituting "5 Years
of Vesting Service" for "3 Years of Vesting Service" where
such language appears.
The Period during which the election may be made shall
commence with the date the amendment is adopted or eemed to
be made and shall end the later of:
A. 60 days after the amendment is adopted;
B. 60 days after the amendment becomes effective; or
C. 60 days after the Participant is issued written notice
of the amendment by the Employer or Plan Administrator.
9.05 PERMANENCY
The Employer expects to continue this Plan and make the
necessary contributions thereto indefinitely, but such
continuance and payment is not assumed as a contractual
obligation. Neither the Adoption Agreement nor the Plan or
any amendment or modification thereof nor the making of
contributions hereunder shall be construed as giving any
Participant or any person whomsoever any legal or equitable
right against the Employer, the Trustee (or Custodian, if
applicable) the Plan Administrator or the Prototype Sponsor
except as specifically provided herein, or as provided by
the law.
9.06 METHOD AND PROCEDURE FOR TERMINATION
The Plan may be terminated by the Employer at any time by
appropriate action of its managing body. Such termination
shall be effective on the date specified by the Employer.
The Plan shall terminate if the Employer shall be dissolved,
terminated, or declared bankrupt. Written notice of the
termination and effective date thereof shall be given to the
Trustee (or Custodian), Plan Administrator, Prototype
Sponsor, Participants and Beneficiaries of deceased
Participants, and the required filings (such as the Form
5500 series and others) must be made with the Internal
Revenue Service and any other regulatory body as required by
current laws and regulations. Until all of the assets have
been distributed from the Fund, the Employer must keep the
Plan in compliance with current laws and regulations by (a)
making appropriate amendments to the Plan and (b) taking
such other measures as may be required.
9.07 CONTINUANCE OF PLAN BY SUCCESSOR EMPLOYER
Notwithstanding the preceding Section 9.06, a successor of
the Employer may continue the Plan and be substituted in the
place of the present Employer. The successor and the present
Employer (or, if deceased, the executor of the estate
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of a deceased Self-Employed Individual who was the Employer)
must execute a written instrument authorizing such
substitution and the successor must complete and sign a new
plan document.
9.08 FAILURE OF PLAN QUALIFICATION
If the Plan fails to retain its qualified status, the Plan
will no longer be considered to be part of a prototype plan,
and such Employer can no longer participate under this
prototype. In such event, the Plan will be considered an
individually designed plan.
SECTION TEN MISCELLANEOUS
10.01 STATE COMMUNITY PROPERTY LAWS
The terms and conditions of this Plan shall be applicable
without regard to the community property laws of any state.
10.02 HEADINGS
The headings of the Plan have been inserted for convenience
of reference only and are to be ignored in any construction
of the provisions hereof.
10.03 GENDER AND NUMBER
Whenever any words are used herein in the masculine gender
they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and
whenever any words are used herein in the singular form they
shall be construed as though they were also used in the
plural form in all cases where they would so apply.
10.04 PLAN MERGER OR CONSOLIDATION
In the case of any merger or consolidation of the Plan with,
or transfer of assets or liabilities of such Plan to, any
other plan, each Participant shall be entitled to receive
benefits immediately after the merger, consolidation, or
transfer (if the Plan had then terminated) which are equal
to or greater than the benefits he or she would have been
entitled to receive immediately before the merger,
consolidation, or transfer (if the Plan had then
terminated). The Trustee (or Custodian) has the authority to
enter into merger agreements or agreements to directly
transfer the assets of the Plan but only if such agreements
are made with trustees or custodians of other retirement
plans described in Section 401(a) of the Code.
10.05 STANDARD OF FIDUCIARY CONDUCT
The Employer, Plan Administrator, Trustee and any other
fiduciary under this Plan shall discharge their duties with
respect to this Plan solely in the interests of Participants
and their Beneficiaries and with the care, skill, prudence
and diligence under the circumstances then prevailing that a
prudent man acting in like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims. No fiduciary shall cause the
Plan to engage in any transaction known as a "prohibited
transaction" under ERISA.
10.06 GENERAL UNDERTAKING OF ALL PARTIES
All parties to this Plan and all persons claiming any
interest whatsoever hereunder agree to perform any and all
acts and execute any and all documents and papers which may
be necessary or desirable for the carrying out of this Plan
and any of its provisions.
10.07 AGREEMENT BINDS HEIRS, ETC.
This Plan shall be binding upon the heirs, executors,
administrators, successors and assigns, as those terms shall
apply to any and all parties hereto, present and future.
10.08 DETERMINATION OF TOP-HEAVY STATUS
A. For any Plan Year beginning after December 31, 1983,
this Plan is a Top-Heavy Plan if any of the following
conditions exist:
1. If the top-heavy ratio for this Plan exceeds 60%
and this Plan is not part of any required
aggregation group or permissive aggregation group
of plans.
2. If this Plan is part of a required aggregation
group of plans but not part of a permissive
aggregation group and the top-heavy ratio for the
group of plans exceeds 60%.
3. If this Plan is a part of a required aggregation
group and part of a permissive aggregation group
of plans and the top-heavy ratio for the
permissive aggregation group exceeds 60%.
For purposes of Section 10.08, the following terms
shall have the meanings indicated below:
B. Key Employee - Any Employee or former Employee (and the
Beneficiaries of such Employee) who at any time during
the determination period was an officer of the Employer
if such individual's annual compensation exceeds 50% of
the dollar limitation under Section 415(b)(1)(A) of the
Code, an owner (or considered an owner under
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Section 318 of the Code) of one of the 10 largest
interests in the Employer if such individual's
compensation exceeds 100% of the dollar limitation
under Section 415(c)(1)(A) of the Code, a 5% owner of
the Employer, or a 1% owner of the Employer who has an
annual compensation of more than $150,000. Annual
compensation means compensation as defined in Section
415(c)(3) of the Code, but including amounts
contributed by the Employer pursuant to a salary
reduction agreement which are excludable from the
Employee's gross income under Section 125, Section
402(e)(3), Section 420(h)(1)(B) or Section 403(b) of
the Code. The determination period is the Plan Year
containing the determination date and the 4 preceding
Plan Years.
The determination of who is a Key Employee will be made
in accordance with Section 416(i)(1) of the Code and
the regulations thereunder.
C. Top-heavy ratio
1. If the Employer maintains one or more defined
contribution plans (including any simplified
employee pension plan) and the Employer has not
maintained any defined benefit plan which during
the 5-year period ending on the determination
date(s) has or has had accrued benefits, the
top-heavy ratio for this Plan alone or for the
required or permissive aggregation group as
appropriate is a fraction, the numerator of which
is the sum of the account balances of all Key
Employees as of the determination date(s)
(including any part of any account balance
distributed in the 5-year period ending on the
determination date(s)), and the denominator of
which is the sum of all account balances
(including any part of any account balance
distributed in the 5-year period ending on the
determination date(s)), both computed in
accordance with Section 416 of the Code and the
regulation thereunder. Both the numerator and the
denominator of the top-heavy ration are increased
to reflect any contribution not actually made as
of the determination date, but which is required
to be taken into account on that date under
Section 416 of the Code and the regulations
thereunder.
2. If the Employer maintains one or more defined
contribution plans (including any simplified
employee pension plan) and the Employer maintains
or has maintained one or more defined plans which
during the 5-year period ending on the
determination date(s) has or has had any accrued
benefits, the top-heavy ratio for any required or
permissive aggregation group as appropriate is a
fraction, the numerator of which is the sum of
account balances under the aggregated defined
contribution plan or plans for all Key Employees,
determined in accordance with (1) above, and the
present value of accrued benefits under the
aggregated defined benefit plan or plans for all
Key Employees as of the determination date(s), and
the denominator of which is the sum of the account
balances under the aggregated defined contribution
plan or plans for all Participants, determined in
accordance with (1) above, and the present value
of accrued benefits under the defined benefit plan
or plans for all Participants as of the
determination date(s), all determined in
accordance with Section 416 of the Code and the
regulations thereunder. The accrued benefits under
a defined benefit plan in both the numerator and
denominator of the top-heavy ratio are increased
for any distribution of an accrued benefit made I
the 5-year period ending on the determination
date.
3. For purposes of (1) and (2) above, the value of
account balances and the present value of accrued
benefits will be determined as of the most recent
valuation date that falls within or ends with the
12-month period ending on the determination date,
except as provided in Section 416 of the Code and
the regulations thereunder for the first and
second plan years of a defined benefit plan. The
account balances and accrued benefits of a
Participant (a) who is not a Key Employee but who
was a Key Employee in a Prior Year, or (b) who has
not been credited with at least one Hour of
Service with any employer maintaining the plan at
any time during the 5-year period ending on the
determination date will be disregarded. The
calculation of the top-heavy ratio, and the extent
to which distributions, rollovers, and transfers
are taken into account will be made in accordance
with Section 416 of the Code and the regulations
thereunder. Deductible employee contributions will
not be taken into account for purposes of
computing the top-heavy ration. When aggregating
plans the value of account balances and accrued
benefits will be calculated with reference to the
determination dates that fall within the same
calendar year.
The accrued benefit of a Participant other than a
Key Employee shall be determined under (a) the
method, if any, that uniformly applies for accrual
purposes under all defined benefit plans
maintained by the Employer, or (b) if there is not
such method, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted
under the fractional rule of Section 411(b)(1)(C)
of the Code.
4. Permissive aggregation group: The required
aggregation group of plans plus any other plan or
plans of the Employer which, when considered as a
group with the required aggregation group, would
continue to satisfy the requirements of Sections
401(a)(4) and 410 of the Code.
5. Required aggregation group: (a) Each qualified
plan of the Employer in which at least one Key
Employee participates or participated at any time
during the determination period (regardless of
whether the Plan has terminated), and (b) any
other qualified plan of the Employer which enables
a plan described in (a) to meet the requirements
of Sections 401(a)(4) or 410 of the Code.
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6. Determination date: For any Plan Year subsequent
to the first Plan Year, the last day of the
preceding Plan Year. For the first Plan year of
the Plan, the last day of that year.
7. Valuation date: For purposes of calculating the
top-heavy ratio, the valuation date shall be the
last day of each Plan year.
8. Present value: For purposes of establishing the
"present value" of benefits under a defined
benefit plan to compute the top-heavy ratio, any
benefit shall be discounted only for mortality and
interest based on the interest rate and mortality
table specified for this purpose in the defined
benefit plan, unless otherwise indicated in the
Adoption Agreement.
10.09 SPECIAL LIMITATIONS FOR OWNER-EMPLOYEES
If this Plan provides contributions or benefits for one or
more Owner-Employees who control both the business for which
this Plan is established and one or more other trades or
businesses, this Plan and the plan established for other
trades or businesses must, when looked at as a single plan,
satisfy Section 401(a) and (d) of the Code for the employees
of those trades or businesses.
If the Plan provides contributions or benefits for one or
more Owner-Employees who control one or more other trades or
businesses, the employees of the other trades or businesses
must be included in a plan which satisfies Section 401(a_
and (d) of the Code and which provides contributions and
benefits not less favorable than provided for
,Owner-Employees under this Plan.
If an individual is covered as an Owner-Employee under the
plans of two or more trades or businesses which are not
controlled and the individual controls a trade or business,
then the contributions or benefits of the employees under
the plan of the trade or business which is controlled must
be as favorable as those provided for him or her under the
most favorable plan of the trade or business which is not
controlled.
For purposes of the preceding paragraphs, an Owner-Employee,
or two or more Owner-Employees, will be considered to
control a trade or business if the Owner-Employee, or two or
more Owner-Employees, together:
A. own the entire interest in an unincorporated trade or
business, or
B. in the case of a partnership, own more than 50% of
either the capital interest or the profit interest in
the partnership.
For purposes of the preceding sentence, an Owner-Employee,
or two or more Owner-Employees, shall be treated as owning
any interest in a partnership which is owned, directly or
indirectly, by a partnership which such Owner-Employee, or
such two or more Owner-Employees, are considered to control
with the meaning of the preceding sentence.
10.10 INAIENABILITY OF BENEFITS
No benefit or interest available hereunder will be subject
to assignment or alienation, either voluntarily or
involuntarily. The preceding sentence shall also apply to
the creation, assignment, or recognition of a right to any
benefit payable with respect to a Participant pursuant to a
domestic relations order, unless such order is determined to
be a qualified domestic relations order, as defined in
Section 414(p) of the Code.
Generally, a domestic relations order cannot be a qualified
domestic relations order until January 1, 1985. However, in
the case of a domestic relations order entered before such
date, the Plan Administrator:
(1) shall treat such order as a qualified domestic
relations order if such Plan Administrator is paying
benefits pursuant to such order on such date, and
(2) may treat any other such order entered before such date
as a qualified domestic relations order even if such
order does not meet the requirements of Section 414(p)
of the Code.
Notwithstanding any provision of the Plan to the contrary, a
distribution to an alternate payee under a qualified
domestic relations order shall be permitted even if the
Participant affected by such order is not otherwise entitled
to a distribution and even if such Participant has not
attained earliest retirement age as defined in Section
414(p) of the Code.
10.11 CANNOT ELIMINATE PROTECTED BENEFITS
Pursuant to Section 411(d)(6) of the Code, and the
regulations thereunder, the Employer cannot reduce,
eliminate or make subject to Employer discretion any Section
411(d)(6) protected benefit. Where this Plan document is
being adopted to amend another plan that contains a
protected benefit not provided for in this document, the
Employer may attach a supplement to the Adoption Agreement
that describes such protected benefit which shall become
part of the Plan.
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SECTION ELEVEN 401(k) PROVISIONS
In addition to Sections 1 through 10, the provisions of this
Section 11 shall apply if the Employer has established a
401(k) cash or deferred arrangement (CODA) by completing and
signing the appropriate Adoption Agreement.
11.100 DEFINITIONS
The following words and phrases when used in the Plan with
initial capital letters shall, for the purposes of this
Plan, have the meanings set forth below unless the context
indicates that other meanings are intended.
11.101 ACTUAL DEFERALL PERCENTAGE (ADP)
Means, for a specified group of Participants for a Plan
Year, the average of the ratios (calculated separately for
each Participant in such group) of (1) the amount of
Employer Contributions actually paid over to the Fund on
behalf of such Participant for the Plan year to (2) the
Participant's Compensation for such Plan Year (taking into
account only that Compensation paid to the Employee during
the portion of the Plan year he or she was an eligible
Participant, unless otherwise indicated in the Adoption
Agreement). For purposes of calculating the ADP, Employer
Contributions on behalf of any Participant shall include:
(1) any Elective Deferrals made pursuant to the
Participant's deferral election, (including Excess Elective
Deferrals of Highly Compensated Employees), but excluding
(a) Excess Elective Deferrals of Non-highly Compensated
Employees that arise solely from Elective Deferrals made
under the Plan or plans of this Employer and (b) Elective
Deferrals that are taken into account in the Contribution
Percentage test (provided the ADP test is satisfied both
with and without exclusion of these Elective Deferrals); and
(2) at the election of the Employer, Qualified Nonelective
Contributions and Qualified Matching Contributions. For
purposes of computing Actual Deferral Percentages, an
Employee who would be a Participant but for the failure to
make Elective Deferrals shall be treated as a Participant on
whose behalf no Elective Deferrals are made.
11.102 AGGREGATE LIMIT
Means the sum (1) 125% of the greater of the ADP of the
Participants who are not Highly Compensated Employees for
the Plan Year or the ACP of the Participants who are not
Highly Compensated Employees under the Plan subject to Code
Section 401(m) for the Plan Year beginning with or within
the Plan Year of the CODA; and (2) the lesser of 200% or two
plus the lesser of such ADP or ACP. "Lesser" is substituted
for "greater" in "(1)" above, and "greater" is substituted
for "lesser" after "two plus" in "(2)" if it would result in
a larger Aggregate Limit.
11.103 AVERAGE CONTRIBUTION PERCENTAGE (ACP)
Means the average of the Contribution Percentages of the
Eligible Participants in a group.
11.104 CONTRIBUTING PARTICIPANT
Means a Participant who has enrolled as a Contributing
Participant pursuant to Section 11.201 and on whose behalf
the Employer is contributing Elective Deferrals to the Plan
(or is making Nondeductible Employee Contributions).
11.105 CONTRIBUTION PERCENTAGE
Means the ratio (expressed as a percentage) of the
Participant's Contribution Percentage Amounts to the
Participant's Compensation for the Plan Year (taking into
account only the Compensation paid to the Employee during
the portion of the Plan Year he or she was an eligible
Participant, unless otherwise indicated in the Adoption
Agreement).
11.106 CONTRIBUTION PERCENTAGE AMOUNTS
Means the sum of the Nondeductible Employee Contributions,
Matching Contributions, and Qualified Matching Contributions
made under the Plan on behalf of the Participant for the
Plan Year. Such Contribution Percentage Amounts shall not
include Matching Contributions that are forfeited either to
correct Excess Aggregate Contributions or because the
contributions to which they relate are Excess Deferrals,
Excess Contributions, Excess Aggregate Contributions or
excess annual additions which are distributed pursuant to
Section 11.508. If so elected in the Adoption Agreement, the
Employer may include Qualified Nonelective Contributions in
the Contribution Percentage Amount. The Employer also may
elect to use Elective Deferrals in the Contribution
Percentage Amounts so long as the ADP test is met before the
Elective Deferrals are used in the ACP test and continues to
be met following the exclusion of those Elective Deferrals
that are used to meet the ACP test.
11.107 ELECTIVE DEFERRALS
Means any Employer Contributions made to the Plan at the
election of the Participant, in lieu of cash compensation,
and shall include contributions made pursuant to a salary
reduction agreement or other deferral mechanism. With
respect to any taxable year, a Participant's Elective
Deferral is the sum of all Employer contributions made on
behalf of such Participant pursuant to an election to defer
under any qualified CODA as described in Section 401(k) of
the Code, any simplified employee pension cash or deferred
arrangement as described in Section 402(h)(1)(B), any
eligible deferred compensation plan under Section 457, any
plan as described under Section 501(c)(18), and any Employer
contributions made on behalf of a Participant for the
purchase of an annuity contract under Section 403(b)
pursuant to a salary reduction agreement. Elective Deferrals
shall not include any deferrals properly distributed as
excess annual additions.
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No Participant shall be permitted to have Elective Deferrals
made under this Plan, or any other qualified plan maintained
by the Employer, during any taxable year, in excess of the
dollar limitation contained in Section 402(g) of the Code in
effect at the beginning of such taxable year.
Elective Deferrals may not be taken into account for
purposes of satisfying the minimum allocation requirement
applicable to Top-Heavy Plans described in Section 3.01(E).
11.108 ELIGIBLE PARTICIPANT
Means any Employee who is eligible to make a Nondeductible
Employee Contribution or an Elective Deferral (if the
Employer takes such contributions into account in the
calculation of the Contribution Percentage), or to receive a
Matching Contribution (including Forfeitures thereof) or a
Qualified Matching Contribution.
If a Nondeductible Employee Contribution is required as a
condition of participation in the Plan, any Employee who
would be a Participant in the Plan if such Employee made
such a contribution shall be treated as an Eligible
Participant on behalf of whom no Nondeductible Employee
Contributions are made.
11.109 EXCESS AGGREGATE CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of:
A. The aggregate Contribution Percentage Amounts taken
into account in computing the numerator of the
Contribution Percentage actually made on behalf of
Highly Compensated Employees for such Plan year, over
B. The maximum Contribution Percentage Amounts permitted
by the ACP test (determined by reducing contributions
made on behalf of Highly Compensated Employees in order
of their Contribution Percentages beginning with the
highest of such percentages).
Such determination shall be made after first
determining Excess Elective Deferrals pursuant to
Section 11.111 and then determining Excess
Contributions pursuant to Section 11.110.
11.110 EXCESS CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of:
A. The aggregate amount of Employer Contributions actually
taken into account in computing the ADP of Highly
Compensated Employees for such Plan year, over
B. The maximum amount of such contributions permitted by
the ADP test (determined by reducing contributions made
on behalf of Highly Compensated Employees in order of
the ADPs, beginning with the highest of such
percentages).
11.111 EXCESS ELECTIVE DEFERRALS
Means those Elective Deferrals that are includible in a
Participant's gross income under Section 402(g) of the Code
to the Extent such Participant's Elective Deferrals for a
taxable year exceed the dollar limitation under such Code
section. Excess Elective Deferrals shall be treated as
annual additions under the Plan, unless such amounts are
distributed no later than the first April 15 following the
close of the Participant's taxable year.
11.112 MATCHING CONTRIBUTION
Means an Employer Contribution made to this or any other
defined contribution plan on behalf of a Participant on
account of an Elective Deferral or a Nondeductible Employee
Contribution made by such Participant under a plan
maintained by the Employer.
Matching Contributions may not be taken into account for
purposes of satisfying the minimum allocation requirement
applicable to Top-Heavy Plans described in Section 3.01(E).
11.113 QUALIFIED NONELECTIVE CONTRIBUTIONS
Means contributions (other than Matching Contributions or
Qualified Matching Contributions) made by the Employer and
allocated to Participants' Individual Accounts that the
Participants may not elect to receive in cash until
distributed from the Plan; that are nonforfeitable when
made; and that are distributable only in accordance with the
distribution provisions that are applicable to Elective
Deferrals and Qualified Matching Contributions.
Qualified Nonelective Contributions may be taken into
account for purposes of satisfying the minimum allocation
requirement applicable to Top-Heavy Plans described in
Section 3.01(E).
11.114 QUALIFIED MATCHING CONTRIBUTIONS
Means Matching Contributions which are subject to the
distribution and nonforfeitability requirements under
Section 401(k) of the Code when made.
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11.115 QUALIFYING CONTRIBUTING PARTICIPANT
Means a Contributing Participant who satisfies the
requirements described in Section 11.302 to be entitled to
receive a matching Contribution (and Forfeitures, if
applicable) for a Plan year.
11.200 CONTRIBUTING PARTICIPANT
11.201 REQUIREMENTS TO ENROLL AS A CONTRIBUTING PARTICIPANT
A. Each Employee who satisfies the eligibility
requirements specified in the Adoption Agreement may
enroll as a Contributing Participant as of any
subsequent Entry Date (or earlier if required by
Section 2.03) specified in the Adoption Agreement for
this purpose. A Participant who wishes to enroll as a
Contributing Participant must complete, sign and file a
salary reduction agreement (or agreement to make
Nondeductible Employee Contributions) with the Plan
Administrator.
B. Notwithstanding the times set forth in Section
11.201(A) as of which a Participant may enroll as a
Contributing Participant, the Plan Administrator shall
have the authority to designate, in a nondiscriminatory
manner, additional enrollment times during the 12 month
period beginning on the Effective Date (or the date
that Elective Deferrals may commence, if later) in
order that an orderly first enrollment might be
completed. In addition, if the Employer has indicated
in the Adoption Agreement that Elective Deferrals may
be based on bonuses, then Participants shall be
afforded a reasonable period of time prior to the
issuance of such bonuses to elect to defer them into
the Plan.
11.202 CHANGING ELECTIVE DEFERRAL AMOUNTS
A Contributing Participant may modify his or her salary
reduction agreement (or agreement to make Nondeductible
Employee Contributions) to increase or decrease (within the
limits placed on Elective Deferrals (or Nondeductible
Employee Contributions) in the Adoption Agreement) the
amount of his or her Compensation deferred into the Plan.
Such modification may only be made as of the dates specified
in the Adoption Agreement for this purpose, or as of any
other more frequent date(s) if the Plan Administrator
permits in a uniform and nondiscriminatory manner. A
Contributing Participant who desires to make such a
modification shall complete, sign and file a new salary
reduction agreement (or agreement to make Nondeductible
Employee Contribution) with the Plan Administrator. The Plan
Administrator may prescribe such uniform and
nondiscriminatory rules it deems appropriate to carry out
the terms of this Section.
11.203 CEASING ELECTIVE DEFERRALS
A Participant may cease Elective Deferrals (or Nondeductible
Employee Contributions) and thus withdraw as a Contributing
Participant as of the dates specified in the Adoption
Agreement for this purpose (or as of any other date if the
Plan Administrator so permits in a uniform and
nondiscriminatory manner) by revoking the authorization to
the Employer to make Elective Deferrals (or Nondeductible
Employee Contributions) on his or her behalf. A Participant
who desires to withdraw as a Contributing Participant shall
give written notice of withdrawal to the Plan Administrator
at least thirty days (or such lesser period of days as the
Plan Administrator shall permit in a uniform and
nondiscriminatory manner) before the effective date of
withdrawal. A Participant shall cease to be a Contributing
Participant upon his or her Termination of Employment, or an
account of termination of the Plan.
11.204 RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE
DEFERRALS
A Participant who has withdrawn as a Contributing
Participant under Section 11.203 (or because the Participant
has taken a hardship withdrawal pursuant to Section 11.503)
may not again become a Contributing Participant until the
dates set forth in the Adoption Agreement for this purpose,
unless the Plan Administrator, in a uniform and
nondiscriminatory manner, permits withdrawing Participants
to resume their status as Contributing Participants sooner.
11.205 CERTAIN ONE-TIME IRREVOCABLE ELECTIONS
This Section 11.205 applies where the Employer has indicated
in the Adoption Agreement that an Employee may make a
one-time irrevocable election to have the Employer make
contributions to the Plan on such Employee's behalf. In such
event, an Employee may elect, upon the Employee's first
becoming eligible to participate in the Plan, to have
contributions equal to a specified amount or percentage of
the Employee's Compensation (including no amount of
Compensation) made by the Employer on the Employee's behalf
to the Plan (and to any other plan of the Employer) for the
duration of the Employee's employment with the Employer. Any
contributions made pursuant to a one-time irrevocable
election described in this Section are not treated as made
pursuant to a cash or deferred election, are not Elective
Deferrals and are not includible in an Employee's gross
income.
The Plan Administrator shall establish such uniform and
nondiscriminatory procedures as it deems necessary or
advisable to administer this provision.
11.300 CONTRIBUTIONS
11.301 CONTRIBUTIONS BY EMPLOYER
The Employer shall make contributions to the Plan in
accordance with the contribution formula specified in the
Adoption Agreement.
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11.302 MATCHING CONTRIBUTIONS
The Employer may elect to make Matching Contributions under
the Plan on behalf of Qualifying Contributing Participants
as provided in the Adoption Agreement. To be a Qualifying
Contributing Participant for a Plan Year, the Participant
must make Elective Deferrals (or Nondeductible Employee
Contributions, if the Employer has agreed to match such
contributions) for the Plan Year, satisfy any age and Years
of Eligibility Service requirements that are specified for
Matching Contributions in the Adoption Agreement and also
satisfy any additional conditions set forth in the Adoption
Agreement for this purpose. In a uniform and
nondiscriminatory manner, the Employer may make Matching
Contributions at the same time as it contributes Elective
Deferrals or at any other time as permitted by laws and
regulations.
11.303 QUALIFYING NONELECTIVE CONTRIBUTIONS
The Employer may elect to make Qualified Nonelective
Contributions under the Plan on behalf of Participants as
provided in the Adoption Agreement.
In addition, in lieu of distributing Excess Contributions as
provided in Section 11.505 of the Plan, or Excess Aggregate
Contributions as provided in Section 11.506 of the Plan, and
to the extent elected by the Employer in the Adoption
Agreement, the Employer may make Qualified Nonelective
Contributions on behalf of Participants who are not Highly
Compensated Employees that are sufficient to satisfy either
the Actual Deferral Percentage test or the Average
Contribution Percentage test, or both, pursuant to
regulations under the Code.
11.304 QUALIFIED MATCHING CONTRIBUTIONS
The Employer may elect to make Qualified Matching
Contributions under the Plan on behalf of Participants as
provided in the Adoption Agreement.
11.305 NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Notwithstanding Section 3.02, if the Employer so allows in
the Adoption Agreement, a Participant may contribute
Nondeductible Employee Contributions to the Plan.
If the Employer has indicated in the Adoption Agreement that
Nondeductible Employee Contributions will be mandatory, then
the Employer shall establish uniform and nondiscriminatory
rules and procedures for Nondeductible Employee
Contributions as it deems necessary and advisable including,
but not limited to, rules describing in amounts or
percentages of Compensation Participants may or must
contribute to the Plan.
A separate account will be maintained by the Plan
Administrator for the Nondeductible Employee Contributions
for each Participant.
A Participant may, upon a written request submitted to the
Plan Administrator, withdraw the lesser of the portion of
his or her Individual Account attributable to his or her
Nondeductible Employee Contributions or the amount he or she
contributed as Nondeductible Employee Contributions.
Nondeductible Employee Contributions and earnings thereon
will be nonforfeitable at all times. No Forfeitures will
occur solely as a result of an Employee's withdrawal of
Nondeductible Employee Contributions.
11.400 NONDISCRIMINATION TESTING
11.401 ACTUAL DEFERRAL PERCENTAGE TEST (ADP)
A. LIMITS ON HIGHLY COMPENSATED EMPLOYEES - The Actual
Deferral Percentage (hereinafter "ADP" for Participants
who are Highly Compensated Employees for each Plan Year
and the ADP for Participants who are not Highly
Compensated Employees for the same Plan Year must
satisfy one of the following tests:
1. The ADP for Participants who are Highly
Compensated Employees for the Plan Year shall not
exceed the ADP for Participants who are not Highly
Compensated Employees for the same Plan Year
multiplied by 1.25; or
2. The ADP for Participants who are Highly
Compensated Employees for the Plan Year shall not
exceed the ADP for Participants who are not Highly
Compensated Employees for the same Plan Year
multiplied by 2.0 provided that the ADP for
Participants who are Highly Compensated Employees
does not exceed the ADP for Participants who are
not Highly Compensated Employees by more than 2
percentage points.
B. SPECIAL RULES
1. The ADP for any Participant who is a Highly
Compensated Employee for the Plan Year and who is
eligible to have Elective Deferrals (and Qualified
Nonelective Contributions or Qualified Matching
Contributions, or both, if treated as Elective
Deferrals for purposes of the ADP test) allocated
to his or her Individual Accounts under two or
more arrangements described in Section 401(k) of
the Code, that are maintained by the Employer,
shall be determined as if such Elective Deferrals
(and, if applicable, such Qualified Nonelective
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Contributions or Qualified Matching Contributions,
or both) were made under a single arrangement. If
a Highly Compensated Employee participates in two
or more cash or deferred arrangements that have
different Plan Years, all cash or deferred
arrangements ending with or within the same
calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing,
certain plans shall be treated as separate if
mandatorily disaggregated under regulations under
Section 401(k) of the Code.
2. In the event that this Plan satisfies the
requirements of Sections 401(k), 401(a)(4), or
410(b) of the Code only if aggregated with one or
more other plans, or if one or more other plans
satisfy the requirements of such sections of the
Code only if aggregated with this Plan, then this
Section 11.401 shall be applied by determining the
ADP of Employees as if all such plans were a
single plan. For Plan Years beginning after
December 31, 1989, plans may be aggregated in
order to satisfy Section 401(k) of the Code only
if they have the same Plan Year.
3. For purposes of determining the ADP of a
Participant who is a 5% owner or one of the 10
most highly paid Highly Compensated Employees, the
Elective Deferrals (and Qualified Nonelective
Contributions or Qualified Matching Contributions,
or both, if treated as Elective Deferrals for
purposes of the ADP test) and Compensation of such
Participant shall include the Elective Deferrals
(and, if applicable, Qualified Nonelective
Contributions and Qualified Matching
Contributions, or both) and Compensation for the
Plan Year of family members (as defined in Section
414(q)(6) of the Code). Family members, with
respect to such Highly Compensated Employees,
shall be disregarded as separate Employees in
determining the ADP both for Participants who are
not Highly Compensated Employees and for
Participants who are Highly Compensated Employees.
4. For purposes of determining the ADP test, Elective
Deferrals, Qualified Nonelective Contributions and
Qualified Matching Contributions must be made
before the last day of the 12 month period
immediately following the Plan Year to which
contributions relate.
5. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the
amount of Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, used in
such test.
6. The determination and treatment of the ADP amounts
of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary
of the Treasury.
7. If the Employer elects to take Qualified Matching
Contributions into account as Elective Deferrals
for purposes of the ADP test, then (subject to
such other requirements as may be prescribed by
the Secretary of the Treasury) unless otherwise
indicated in the Adoption Agreement, only the
amount of such Qualified Matching Contributions
that are needed to meet the ADP test shall be
taken into account.
8. In the event that the Plan Administrator
determines that it is not likely that the ADP test
will be satisfied for a particular Plan Year
unless certain steps are taken prior to the end of
such Plan Year, the Plan Administrator may require
Contributing Participants who are Highly
Compensated Employees to reduce their Elective
Deferrals for such Plan Year in order to satisfy
that requirement. Said reduction shall also be
required by the Plan Administrator in the event
that the Plan Administrator anticipates that the
Employer will not be able to deduct all Employer
Contributions from its income for Federal income
tax purposes.
11.400 LIMITS ON NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS AND MATCHING
CONTRIBUTIONS
A. LIMITS ON HIGHLY COMPENSATED EMPLOYEES - The Average
Contribution Percentage (hereinafter "ACP") for
Participants who are Highly Compensated Employees for
each Plan year and the ACP for Participants who are not
Highly Compensated Employees for the same Plan Year
must satisfy one of the following tests:
1. The ACP for Participants who are Highly
Compensated Employees for the Plan Year shall not
exceed the ACP for Participants who are not Highly
Compensated Employees for the same Plan Year
multiplied by 1.25; or
2. The ACP for Participants who are Highly
Compensated Employees for the Plan Year shall not
exceed the ACP for Participants who are not Highly
Compensated Employees for the same Plan year
multiplied by 2, provided that the ACP for the
Participants who are Highly Compensated Employees
does not exceed the ACP for Participants who are
not Highly Compensated Employees by more than 2
percentage points.
B. SPECIAL RULES
1. Multiple Use - If one or more Highly Compensated
Employees participates in both a CODA and a plan
subject to the ACP test maintained by the Employer
and the sum of the ADP and ACP of those Highly
Compensated Employees subject to either or both
tests exceeds the Aggregate Limit, then, as
elected in the Adoption Agreement, the ACP or the
ADP of those Highly Compensated Employees who also
participate in a CODA will be reduced (beginning
with such Highly Compensated Employee whose ACP
(or ADP, if elected( is the
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highest) so that the limit is not exceeded. The
amount by which each Highly Compensated Employee's
Contribution Percentage Amounts (or ADP, if
elected) is reduced shall be treated as an Excess
Aggregate Contribution (or Excess Contribution, if
elected). The ADP and ACP of the Highly
Compensated Employees are determined after any
corrections required to meet the ADP and ACP
tests. Multiple use does not occur if the ADP and
ACP of the Highly Compensated Employees does not
exceed 1.25 multiplied by the ADP and ACP of the
Participants who are not Highly Compensated
Employees.
2. For purposes of this Section 11.402, the
Contribution Percentage for any Participant who is
a Highly Compensated Employee and who is eligible
to have Contribution Percentage Amounts allocated
to his or her Individual Account under two or more
plans described in Section 401(a) of the Code, or
arrangements described in Section 401(k) of the
Code that are maintained by the Employer, shall be
determined as if the total of such Contribution
Percentage Amounts was made under each plan. If a
Highly Compensated Employee participates in two or
more cash or deferred arrangements that have
different plan years, all cash or deferred
arrangements ending with or within the same
calendar year shall be treated as a single
arrangement. Notwithstanding the foregoing,
certain plans shall be treated as separate if
mandatorily disaggregated under regulations under
Section 401(m) of the Code.
3. In the event that this Plan satisfies the
requirements of Sections 401(m), 401(a)(4) or
410(b) of the Code only if aggregated with one or
more other plans, or if one or more other plans
satisfy the requirements of such Sections of the
Code only if aggregated with this Plan, then this
Section shall be applied by determining the
Contribution Percentage of Employees as if all
such plans were a single plan. For Plan Years
beginning after December 31, 1989, plans may be
aggregated in order to satisfy Section 401(m) of
the Code only if they have the same Plan Year.
4. For purposes of determining the Contribution
Percentage of a Participant who is a 5% owner or
one of the 10 most highly paid Highly Compensated
Employees, the Contribution Percentage Amounts and
Compensation of such Participant shall include the
Contribution Percentage Amounts and Compensation
for the Plan Year of family members, (as defined
in Section 414(q)(6) of the Code). Family members,
with respect to Highly Compensated Employees,
shall be disregarded as separate Employees in
determining the Contribution Percentage both for
Participants who are not Highly Compensated
Employees and for Participants who are Highly
Compensated Employees.
5. For purposes of determining the Contribution
Percentage test, Nondeductible Employee
Contributions are considered to have been made in
the Plan Year in which contributed to the Fund.
Matching Contributions and Qualified Nonelective
Contributions will be considered made for a Plan
Year if made no later than the end of the 12 month
period beginning on the day after the close of the
Plan Year.
6. The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the
amount of Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, used in
such test.
7. The determination and treatment of the
Contribution Percentage of any Participant shall
satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
8. If the Employer elects to take Qualified
Nonelective Contributions into account as
Contribution Percentage Amounts for purposes of
the ACP test, then (subject to such other
requirements as may be prescribed by the Secretary
of the Treasury) unless otherwise indicated in the
Adoption Agreement, only the amount of such
Qualified Nonelective Contributions that are
needed to meet the ACP test shall be taken into
account.
9. If the Employer elects to take Elective Deferrals
into account as Contribution Percentage Amounts
for purposes of the ACP test, the (subject to such
other requirements as may be prescribed by the
Secretary of the Treasury) unless otherwise
indicated in the Adoption Agreement, only the
amount of such Elective Deferrals that are needed
to meet the ACP test shall be taken into account.
11.500 DISTRIBUTION PROVISIONS
11.501 GENERAL RULE
Distributions from the Plan are subject to the provisions of
Section 6 and the provisions of this Section 11. In the
event of a conflict between the provisions of Section 6 and
Section 11, the provisions of Section 11 shall control.
11.502 DISTRIBUTION REQUIREMENTS
Elective Deferrals, Qualified Nonelective Contributions, and
Qualified Matching Contributions, and income allocable to
each are not distributable to a Participant or his or her
Beneficiary or Beneficiaries, in accordance with such
Participant's or Beneficiary or Beneficiaries' election,
earlier than upon separation from service, death or
disability.
Such amounts may also be distributed upon:
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A. Termination of the Plan without the establishment of
another defined contribution plan, other than an
employee stock ownership plan (as defined in Section
4975(e) or Section 409 of the Code) or a simplified
employee pension plan as defined in Section 408(k).
B. the disposition by a corporation to an unrelated
corporation of substantially all of the assets (within
the meaning of Section 409(d)(2) of the Code used in a
trade or business of such corporation if such
corporation continues to maintain this Plan after the
disposition, but only with respect to Employees who
continue employment with the corporation acquiring such
assets.
C. The disposition by a corporation to an unrelated entity
of such corporation's interest in a subsidiary (within
the meaning of Section 409(d)(3) of the Code) if such
corporation continues to maintain this Plan, but only
with respect to Employees who continue employment with
such subsidiary.
D. The attainment of age 59 1/2 in the case of a profit
sharing plan.
E. If the Employer has so elected in the Adoption
Agreement, the hardship of the Participant as
described in Section 11.503.
All distributions that may be made pursuant to one or
more of the foregoing distributable events are subject
to the spousal and Participant consent requirements (if
applicable) contained in Section 401(a)(11) and 417 of
the Code. In addition, distributions after March 31,
1988, that are triggered by any of the first three
events enumerated above must be made in a lump sum.
11.503 HARDSHIP DISTRIBUTION
A. GENERAL - If the Employer has so elected in the
Adoption Agreement, distribution of Elective Deferrals
(and any earnings credited to a Participant's account
as of the end of the last Plan year, ending before July
1, 1989) may be made to a Participant in the event of a
hardship. For the purposes of this Section, hardship is
defined as an immediate and heavy financial need of the
Employee where such Employee lacks other available
resources. Hardship distributions are subject to the
spousal consent requirements contained in Sections
401(a)(11) and 417 of the Code.
B. SPECIAL RULES
1. The following are the only financial needs
considered immediate and heavy: expenses incurred
or necessary for medical care, described in
Section 213(d) of the Code, of the Employee, the
Employee's spouse or dependents; the purchase
(excluding mortgage payments) of a principal
residence for the Employee; payment of tuition and
related education fees for the next 12 months of
post-secondary education for the Employee, the
Employee's spouse, children or dependents; or the
need to prevent the eviction of the Employee from,
or a foreclosure on the mortgage of, the
Employee's principal residence.
2. A distribution will be considered as necessary to
satisfy an immediate and heavy financial need of
the Employee only if:
a. The Employee has obtained all distributions,
other than hardship distributions, and all
nontaxable loans under all plans maintained
by the Employer;
b. All plans maintained by the Employer provide
that the Employee's Elective Deferrals (and
Nondeductible Employee Contributions) will
be suspended for 12 months after the receipt
of the hardship distribution;
c. The distribution is not in excess of the
amount of an immediate and heavy financial
need (including amounts necessary to pay any
Federal, state or local income taxes or
penalties reasonably anticipated to result
from the distribution); and
d. All plans maintained by the Employer provide
that the Employee may not make Elective
Deferrals for the Employee's taxable year
immediately following the taxable year of
the hardship distribution in excess of the
applicable limit under Section 402(g) of the
Code for such taxable year less the amount
of such Employee's Elective Deferrals for
the taxable year of the hardship
distribution.
11.504 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
A. GENERAL RULE - A Participant may assign to this Plan
any Excess Elective Deferrals made during a taxable
year of the Participant by notifying the Plan
Administrator on or before the date specified in the
Adoption Agreement of the amount of the Excess Elective
Deferrals to be assigned to the Plan. A Participant is
deemed to notify the Plan Administrator of any Excess
Elective Deferrals that arise by taking into account
only those Elective Deferrals made to this Plan and any
other plans of the Employer.
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Notwithstanding any other provision of the Plan, Excess
Elective Deferrals, plus any income and minus any loss
allocable thereto, shall be distributed no later than
April 15 to any Participant to whose Individual Account
Excess Elective Deferrals were assigned for the
preceding year and who claims Excess Elective Deferrals
for such taxable year.
B. DETERMINATION OF INCOME OR LOSS - Excess Elective
Deferrals shall be adjusted for any income or loss up
to the date of distribution. The income of loss
allocable to Excess Elective Deferrals is the sum of:
(1) income or loss allocable to the Participant's
Elective Deferral account for the taxable year
multiplied by a fraction, the numerator of which is
such Participant's Elective Deferrals for the year and
the denominator is the Participant's Individual Account
balance attributable to Elective Deferrals without
regard to any income or loss occurring during such
taxable year; and (2) 10% of the amount determined
under (1) multiplied by the number of calendar months
between the end of the Participant's taxable year and
the date of distribution, counting the month of
distribution if distribution occurs after the 15th of
such month. Notwithstanding the preceding sentence, the
Plan Administrator may compute the income or loss
allocable to Excess Elective Deferrals in the manner
described in Section 4 (i.e., the usual manner used by
the Plan for allocating income or loss to Participants'
Individual Accounts), provided such method is used
consistently for all Participants and for all
corrective distributions under the Plan for the Plan
Year.
11.505 DISTRIBUTION OF EXCESS CONTRIBUTIONS
A. GENERAL RULE - Notwithstanding any other provision of
this Plan, Excess Contributions, plus any income and
minus any loss allocable thereto, shall be distributed
no later than the last day of each Plan Year to
Participants to whose Individual Accounts such Excess
Contributions were allocated for the preceding Plan
Year. If such excess amounts are distributed more than
2 1/2 months after the last day of the Plan Year in
which such excess amounts arose, a 10% excise tax will
be imposed on the Employer maintaining the Plan with
respect to such amounts. Such distributions shall be
made to Highly Compensated Employees on the basis of
the respective portions of the Excess Contributions
attributable to each of such Employees. Excess
Contributions of Participants who are subject to the
family member aggregation rules shall be allocated
among the family members in proportion to the Elective
Deferrals (and amounts treated as Elective Deferrals)
of each family member that is combined to determine the
combined ADP.
Excess Contributions (including the amounts
recharacterized) shall be treated as annual additions
under the Plan.
B. DETERMINATION OF INCOME OR LOSS - Excess Contributions
shall be adjusted for any income or loss up to the date
of distribution. The income or loss allocable to Excess
Contributions is the sum of: (1) income or loss
allocable to Participant's Elective Deferral Account
(and, if applicable, the Qualified Nonelective
Contribution account or the Qualified Matching
Contributions account or both) for the Plan Year
multiplied by a fraction, the numerator of which is
such Participant's Excess Contributions for the year
and the denominator is the Participant's Individual
Account balance attributable to Elective Deferrals (and
Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if any of such
contributions are included in the ADP test) without
regard to any income or loss occurring during such Plan
Year; and (2) 10% of the amount determined under (1)
multiplied by the number of whole calendar months
between the end of the Plan Year and the date of
distribution, counting the month of distribution if
distribution occurs after the 15th of such month.
Notwithstanding the preceding sentence, the Plan
Administrator may compute the income or loss allocable
to Excess Contributions in the manner described in
Section 4 (i.e., the usual manner used by the Plan for
allocating income or loss to Participants' Individual
Accounts), provided such method is used consistently
for all Participants and for all corrective
distributions under the Plan for the Plan Year.
C. ACCOUNTING FOR EXCESS CONTRIBUTIONS - Excess
Contributions shall be distributed from the
Participant's Elective Deferral account and Qualified
Matching Contributions account (if applicable) in
proportion to the Participant's Elective Deferrals and
Qualified Matching Contributions (to the extent used in
the ADP test) for the Plan Year. Excess Contributions
shall be distributed from the Participant's Qualified
Nonelective Contribution account only to the extent
that such Excess Contributions exceed the balance in
the Participant's Elective Deferral Account and
Qualified Matching Contribution account.
11.506 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
A. GENERAL RULE - Notwithstanding any other provision of
this Plan, Excess Aggregate Contributions, plus any
income and minus any loss allocable thereto, shall be
forfeited, if forfeitable, or if not forfeitable,
distributed no later than the last day of each Plan
year to Participants to whose accounts such Excess
Aggregate Contributions were allocated for the
preceding Plan Year. Excess Aggregate Contributions of
Participants who are subject to the family member
aggregation rules shall be allocated among the family
members in proportion to the Employee and Matching
Contributions (or amounts treated as Matching
Contributions) of each family member that is combined
to determine the combined ACP. If such Excess Aggregate
Contributions are distributed more than 2 1/2 months
after the last day of the Plan year in which such
excess amounts arose, a 10% excise tax will be imposed
on the Employer maintaining the Plan with respect to
those amounts.
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Excess Aggregate Contributions shall be treated as
annual additions under the Plan.
B. DETERMINATION OF INCOME OR LOSS - Excess Aggregate
Contributions shall be adjusted for any income or loss
up to the date of distribution. The income or loss
allocable to Excess Aggregate Contributions is the sum
of: (1) income or loss allocable to the Participant's
Nondeductible Employee Contribution account, Matching
Contribution account (if any, and if all amounts
therein are not used in the ADP test) and, if
applicable, Qualified Nonelective Contribution account
and Elective Deferral account for the Plan Year
multiplied by a fraction, the numerator of which is
such Participant's Excess Aggregate Contributions for
the year and the denominator is the Participant's
Individual Account balance(s) attributable to
Contribution Percentage Amounts without regard to any
income or loss occurring during such Plan Year; and (2)
10% of the amount determined under (1) multiplied by
the number of whole calendar months between the end of
the Plan Year and the date of distribution, counting
the month of distribution if distribution occurs after
the 15th of such month. Notwithstanding the preceding
sentence, the Plan Administrator may compute the income
or loss allocable to Excess Aggregate Contributions in
the manner described in Section 4 (i.e., the usual
manner used by the Plan for allocating income or loss
to Participants' Individual Accounts), provided such
method is used consistently for all Participants and
for all corrective distributions under the Plan for the
Plan Year.
C. FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS -
Forfeitures of Excess Aggregate Contributions may
either be reallocated to the accounts of Contributing
Participants who are not Highly Compensated Employees
or applied to reduce Employer Contributions, as elected
by the Employer in the Adoption Agreement.
D. Accounting for Excess Aggregate Contributions - Excess
Aggregate Contributions shall be forfeited, if
forfeitable or distributed on a pro rata basis from the
Participant's Nondeductible Employee Contribution
account, Matching Contribution account, and Qualified
Matching Contribution account (and, if applicable, the
Participant's Qualified Nonelective Contribution
account or Elective Deferral account, or both).
11.507 RECHARACTERIZATION
A Participant may treat his or her Excess Contributions as
an amount distributed to the Participant and then
contributed by the Participant to the Plan. Recharacterized
amounts will remain nonforfeitable and subject to the same
distribution requirements as Elective Deferrals. Amounts may
not be recharacterized by a Highly Compensated Employee to
the extent that such amount in combination with other
Nondeductible Employee Contributions made by that Employee
would exceed any stated limit under the Plan on
Nondeductible Employee Contributions.
Recharacterization must occur no later than two and one-half
months after the last day of the Plan Year in which such
Excess Contributions arose and is deemed to occur no earlier
than the date the last Highly Compensated Employee is
informed in writing of the amount recharacterized and the
consequences thereof. Recharacterized amounts will be
taxable to the Participant for the Participant's tax year in
which the Participant would have received them in cash.
11.508 DISTRIBUTION OF ELECTIVE DEFERRALS IF EXCESS ANNUAL
ADDITIONS
Notwithstanding any other provision of the Plan, a
Participant's Elective Deferrals shall be distributed to him
or her to the extent that the distribution will reduce an
excess annual addition (as that term is described in Section
3.05 of the Plan).
11.600 VESTING
11.601 100% VESTING ON CERTAIN CONTRIBUTIONS
The Participant's accrued benefit derived from Elective
Deferrals, Qualified Nonelective Contributions,
Nondeductible Employee Contributions, and Qualified Matching
Contributions is nonforfeitable. Separate accounts for
Elective Deferrals, Qualified Nonelective Contributions,
Nondeductible Employee Contributions, Matching
Contributions, and Qualified Matching Contributions will be
maintained for each Participant. Each account will be
credited with the applicable contributions and earnings
thereon.
11.602 FORFEITURES AND VESTING OF MATCHING CONTRIBUTIONS
Matching Contributions shall be Vested in accordance with
the vesting schedule for Matching Contributions in the
Adoption Agreement. In any event, Matching Contributions
shall be fully Vested at Normal Retirement Age, upon the
complete or partial termination of the profit sharing plan,
or upon the complete discontinuance of Employer
Contributions. Notwithstanding any other provisions of the
Plan, Matching Contributions or Qualified Matching
Contributions must be forfeited if the contributions to
which they relate are Excess Elective Deferrals, Excess
Contributions, Excess Aggregate Contributions or excess
annual additions which are distributed pursuant to Section
11.508. Such Forfeitures shall be allocated in accordance
with Section 3.01(C).
When a Participant incurs a Termination of Employment,
whether a Forfeiture arises with respect to Matching
Contributions shall be determined in accordance with Section
6.01(D).
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