----------------------------
MERRILL LYNCH
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SPECIAL/FLEXIBLE
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PROTOTYPE
DEFINED CONTRIBUTION PLAN AND TRUST
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Base Plan Document #03 used in conjunction with:
Standardized Profit Sharing Plan with CODA
Letter Serial Number: K273963a
National Office Letter Date: 6/4/2002
Standardized Money Purchase Pension Plan
Letter Serial Number: K273964a
National Office Letter Date: 6/4/2002
Standardized Profit Sharing Plan
Letter Serial Number: K273965a
National Office Letter Date: 6/4/2002
Non-standardized Profit Sharing Plan with CODA
Letter Serial Number: K373962a
National Office Letter Date: 6/4/2002
Non-standardized Money Purchase Pension Plan
Letter Serial Number: K373961a
National Office Letter Date: 6/4/2002
Non-standardized Profit Sharing Plan
Letter Serial Number: K373960a
National Office Letter Date: 6/4/2002
Non-standardized Target Benefit Plan
Letter Serial Number: K373959a
National Office Letter Date: 6/4/2002
This Prototype Plan and Adoption Agreement are important legal instruments
with legal and tax implications. Merrill Lynch, Pierce, Fenner and Smith,
Incorporated does not provide legal and tax advice to the Employer. The Employer
is urged to consult with its own attorney with regardto the adoption of this
Plan and its suitability to its circumstances.
TABLE OF CONTENTS
ARTICLE PAGE
ARTICLE I DEFINITIONS.........................................................1
1.1 Account:....................................................1
1.2 Account Balance:............................................1
1.3 ACP Test:...................................................1
1.4 Actual Contribution Percentage:.............................1
1.5 Actual Deferral Percentage:.................................1
1.6 Adjustment Factor:..........................................1
1.7 Adoption Agreement:.........................................1
1.8 ADP Test:...................................................1
1.9 Affiliate:..................................................2
1.10 Aggregate Limit:............................................2
1.11 Annuity Contract:...........................................2
1.12 Average Contribution Percentage or ACP:.....................2
1.13 Average Deferral Percentage or ADP:.........................2
1.14 Beneficiary:................................................2
1.15 Benefit Commencement Date:..................................2
1.16 Benefiting:.................................................3
1.17 Break in Service:...........................................3
1.18 CODA:.......................................................3
1.19 CODA Compensation:..........................................3
1.20 Code:.......................................................4
1.21 Compensation:...............................................4
1.22 Computation Period:.........................................4
1.23 Defined Benefit Plan:.......................................5
1.24 Defined Contribution Plan:..................................5
1.25 Disability:.................................................5
1.26 Distributee:................................................5
1.27 Early Retirement:...........................................5
1.28 Early Retirement Date:......................................5
1.29 Earned Income:..............................................5
1.30 Election Period:............................................6
1.31 Elective Contributions:.....................................6
1.32 Eligible Employees:.........................................6
1.33 Eligible Retirement Plan:...................................6
1.34 Eligible Rollover Distribution:.............................6
1.35 Employee:...................................................7
1.36 Employee After-Tax Contribution:............................7
1.37 Employee After-Tax Election:................................7
1.38 Employer:...................................................7
1.39 Employer Account:...........................................7
1.40 Employer Derived Account Balance:...........................7
1.41 Employment:.................................................8
1.42 Entry Date:.................................................8
1.43 ERISA:......................................................8
1.44 Excess Aggregate Contributions:.............................8
1.45 Excess Contributions:.......................................8
1.46 Excess Pre-Tax Contributions:...............................8
1.47 Fully Vested Separation:....................................8
1.48 Group Trust:................................................8
1.49 Highly Compensated Employee:................................8
1.50 Hour of Service:............................................9
1.51 Immediately Distributable:.................................10
1.52 Integration Level:.........................................10
1.53 Investment Committee:......................................10
1.54 Investment Manager:........................................10
1.55 IRS:.......................................................10
1.56 Key Employee:..............................................10
1.57 Leased Employee:...........................................11
1.58 Life Annuity:..............................................11
1.59 Limitation Compensation:...................................11
1.60 Limitation Year:...........................................11
1.61 Master or Prototype Plan:..................................11
1.62 Matching Contribution:.....................................12
1.63 Net Profits:...............................................12
1.64 Nonhighly Compensated Employee:............................12
1.65 Nonvested Separation:......................................12
1.66 Normal Retirement Age:.....................................12
1.67 Original Plan Effective Date:..............................12
1.68 Owner-Employee:............................................12
1.69 Paired Plans:..............................................12
1.70 Partially Vested Separation:...............................12
1.71 Participant:...............................................13
1.72 Participant-Directed Assets:...............................13
1.73 Period of Severance:.......................................13
1.74 Plan:......................................................13
1.75 Plan Administrator:........................................13
1.76 Plan Year:.................................................13
1.77 Predecessor Employer:......................................13
1.78 Predecessor Employer Service:..............................13
1.79 Pre-Tax Contributions:.....................................13
1.80 Pre-Tax Election:..........................................14
1.81 Prevailing Wage Contribution:..............................14
1.82 Primary Employer:..........................................14
1.83 Prototype Plan:............................................14
1.84 Qualified Joint and Survivor Annuity:......................14
1.85 Qualified Matching Contributions:..........................14
1.86 Qualified Nonelective Contributions:.......................14
1.87 Qualified Plan:............................................15
1.88 Qualifying Employer Securities:............................15
1.89 Qualified Voluntary Employee Contributions (QVECs):........15
1.90 Restatement Effective Date:................................15
1.91 Rollover Contribution:.....................................15
1.92 Secretary:.................................................15
1.93 Self-Employed Individual:..................................15
1.94 Social Security Retirement Age:............................15
1.95 Sponsor:...................................................15
1.96 Spouse:....................................................16
1.97 Surviving Spouse:..........................................16
1.98 Taxable Wage Base:.........................................16
1.99 Temporary Employee:........................................16
1.100 Trust:.....................................................16
1.101 Trust Fund:................................................16
1.102 Trustee:...................................................16
1.103 USERRA:....................................................17
1.104 Valuation Date:............................................17
1.105 Vesting Service:...........................................17
1.106 Years of Service:..........................................17
ARTICLE II PARTICIPATION.....................................................18
2.1 Admission as a Participant:................................18
2.1.1 General Rules:....................................18
2.1.2 Changes in Employment Status:.....................18
2.1.3 Pre-Tax and After-Tax Elections:..................18
2.1.4 Amendment to Age and Service Requirements:........19
2.1.5 Amendment to Entry Date:..........................19
2.2 Rollover Membership:.......................................19
2.3 Crediting of Service for Eligibility Purposes -
Breaks in Service:........................................19
2.3.1 Non-Vested Employees' Pre-Break Service:..........19
2.3.2 Vested Participants Retain Service:...............20
2.4 Termination of Participation:..............................20
2.5 Corrections with Regard to Participation:..................20
2.5.1 Omission of Participant:..........................20
2.5.2 Erroneous Inclusion in Plan:......................20
2.5.3 EPCRS Correction:.................................20
2.5.4 Employer and Plan Administrator Responsible
for Correction:...................................20
2.6 Provision of Information:..................................20
2.7 Waiver of Pre-Tax Participation:...........................21
2.8 Waiver of Matching Contributions and Employee
After-Tax Contributions:...................................21
2.9 Waiver of Other Contributions:.............................21
2.10 USERRA - Crediting Service:................................21
ARTICLE III CONTRIBUTIONS AND ACCOUNT ALLOCATIONS............................22
3.1 Employer Contributions and Allocations:....................22
3.1.1 Profit Sharing Contributions:.....................22
3.1.2 Money Purchase Contributions:.....................22
3.1.3 Target Benefit Contributions:.....................22
3.1.4 Contributions on Behalf of Disabled
Participants:.....................................22
3.1.5 Permitted Disparity:..............................22
3.1.6 Contributions Provided by Leasing
Organization:.....................................23
3.1.7 Short Plan Years:.................................23
3.1.8 Plan Year to Which Contributions are Deemed to
be Made:..........................................23
3.1.9 Collectively Bargained Employees..................23
3.2 Employee After-Tax Contributions:..........................23
3.3 Rollover Contributions:....................................24
3.4 Section 401(k) Contributions and Account Allocations:......24
3.4.1 Pre-Tax Contributions:............................24
3.4.2 Limitation on Pre-Tax Contributions:..............25
3.5 Matching Contributions:....................................29
3.6 Limitation on Contribution Percentage:.....................29
3.7 Treatment of Forfeitures:..................................33
3.8 Establishing of Accounts:..................................34
3.8.1 Pre-Tax Contributions Account:....................34
3.8.2 Profit Sharing, Money Purchase, or Target
Benefit Contributions Account:....................34
3.8.3 Employee After-Tax Contributions Account:.........34
3.8.4 Matching Contributions Account:...................34
3.8.5 Qualified Matching Contributions Account:.........34
3.8.6 Qualified Nonelective Contributions:..............34
3.8.7 Rollover Contributions Account:...................34
3.8.8 QVEC Account:.....................................34
3.8.9 Prevailing Wage Account:..........................34
3.8.10 Safe Harbor Matching Contributions Account:.......35
3.8.11 Safe Harbor Nonelective Contributions Account:....35
3.8.12 Miscellaneous Account:............................35
3.9 Limitation on Amount of Allocations:.......................35
3.9.1 Definitions:......................................35
3.9.2 Annual Additions Limit:...........................38
3.9.3 Participation in More Than One Plan:..............40
3.9.4 Participation in Non-Prototype Plans:.............41
3.9.5 Defined Benefit Plan Participation -
Pre-2000 Years:...................................41
3.9.6 Super Top-Heavy - Pre-2000 Years:.................41
3.10 Return of Employer Contributions Under Special
Circumstances:.............................................41
3.10.1 Contributions Are Conditional:....................41
3.10.2 Return of Contributions:..........................41
3.11 QVECs:.....................................................42
3.12 Qualified Nonelective Contributions:.......................42
3.13 Qualified Matching Contributions:..........................42
3.14 Contribution and Allocation of Qualified Nonelective
Contributions and Qualified Matching Contributions:........42
3.15 Prevailing Wage Contribution:..............................42
3.16 Safe Harbor Method CODA:...................................43
3.16.1 Rule of Application:..............................43
3.16.2 Governing Provisions:.............................43
3.16.3 Definitions:......................................43
3.16.4 ADP Test Safe Harbor:.............................43
3.16.5 ACP Test Safe Harbor:.............................44
3.16.6 Contributions Fully Vested:.......................45
3.17 USERRA:....................................................45
3.18 Electronic Media:..........................................46
ARTICLE IV VESTING...........................................................46
4.1 Determination of Vesting:..................................46
4.1.1 Vested Accounts:..................................46
4.1.2 Full Vesting Events:..............................46
4.1.3 Other Vesting Events:.............................46
4.1.4 Forfeitures:......................................47
4.2 Rules for Crediting Vesting Service:.......................47
4.2.1 General Rule:.....................................47
4.2.2 Breaks in Service:................................47
4.3 Employer Accounts Forfeitures:.............................47
4.3.1 Nonvested Separation..............................47
4.3.2 Partially Vested Separation:......................47
4.3.3 Vesting After Partial Distribution:...............47
4.3.4 Application of Forfeitures:.......................48
4.3.5 Withdrawal Does Not Cause Forfeiture:.............48
4.4 Top-Heavy Provisions:......................................48
4.4.1 Terms:............................................48
4.4.2 Top-Heavy Vesting Schedule:.......................50
4.4.3 Minimum Allocation:...............................50
4.4.4 Maximum Benefit - Pre-2000:.......................51
ARTICLE V AMOUNT AND DISTRIBUTION OF BENEFITS, WITHDRAWALS AND LOANS.........51
5.1 Distribution:..............................................51
5.1.1 Benefit Commencement Date:........................51
5.1.2 Pre-Tax, Qualified Nonelective,
Qualified Matching, Safe Harbor Nonelective
and Safe Harbor Matching Contributions:...........51
5.2 Amount of Benefits Upon a Fully Vested Separation:.........52
5.3 Amount of Benefits Upon a Partially Vested
Separation:................................................52
5.4 Amount of Benefits Upon a Nonvested Separation:............52
5.5 Amount of Benefits Upon a Separation Due to
Disability:................................................52
5.6 Distribution and Restoration:..............................53
5.6.1 Cash-Out of Small Amounts:........................53
5.6.2 Forfeiture of Nonvested Account Upon
Distribution:.....................................53
5.6.3 Restoration of Forfeited Amounts:.................53
5.6.4 Consent Requirements:.............................53
5.6.5 Timing of Notice and Consent:.....................54
5.7 Withdrawals During Employment:.............................54
5.7.1 Age 59-1/2 Withdrawal:............................54
5.7.2 Age 70-1/2 Withdrawal:............................55
5.7.3 Rollover Contribution and Employee After-Tax
Contribution Withdrawal:..........................55
5.7.4 Rules and Procedures:.............................55
5.7.5 Forfeitures:......................................55
5.7.6 Spousal Consent:..................................55
5.7.7 Transfers From Money Purchase Plan to
Profit Sharing Plan:..............................55
5.8 Loans:.....................................................55
5.8.1 Participant Loans:................................55
5.8.2 Conditions for Loans:.............................56
5.8.3 Account Adjustments:..............................56
5.8.4 General Rules:....................................57
5.8.5 Suspension of Loan Repayments:....................57
5.9 Hardship Distributions:....................................57
5.9.1 General Rules:....................................57
5.9.2 Conditions for Hardship Distribution:.............57
5.9.3 Immediate and Heavy Financial Need:...............58
5.9.4 Exception to General Rules:.......................58
5.10 Limitation on Commencement of Benefits:....................58
5.11 Distribution Requirements:.................................59
5.11.1 Participant Distributions:........................59
5.11.2 Code Section 401(a)(9) Compliance:................61
5.11.3 Limits on Distribution Periods:...................61
5.11.4 Determination of Amount to be
Distributed Each Year.............................61
5.11.5 Transitional Rule: Section 242 Election:.........62
5.12 Electronic Media:..........................................63
ARTICLE VI FORMS OF PAYMENT OF RETIREMENT BENEFITS...........................63
6.1 Methods of Distribution:...................................63
6.1.1 Plans Subject to Annuity Requirements -
Normal Form of Benefit:...........................63
6.1.2 Non-QJSA Profit Sharing Plans - Lump
Sum Normal Form of Benefit:.......................63
6.2 Election of Optional Forms:................................64
6.2.1 Post-Age 35 Waiver:...............................64
6.2.2 QJSA Explanation:.................................64
6.2.3 Election Revocation:..............................65
6.2.4 Spousal Consent to QJSA Waiver:...................65
6.2.5 Death Before Benefits Commence:...................66
6.3 Change in Form of Benefit Payments:........................66
6.4 Direct Rollovers:..........................................66
6.5 Electronic Media:..........................................66
ARTICLE VII DEATH BENEFITS...................................................66
7.1 Payment of Account Balances:...............................66
7.1.1 Payment to Beneficiary:...........................66
7.1.2 Form of Benefit:..................................66
7.1.3 Cash Out:.........................................67
7.2 Beneficiaries:.............................................67
7.2.1 Written Explanation of Benefit:...................67
7.2.2 Beneficiary Designation:..........................67
7.2.3 Manner of Designation:............................67
7.2.4 Beneficiary of Married Participants -
Designation of Non-Spouse Beneficiary:............68
7.2.5 Required Distributions:...........................68
7.3 Multiple Beneficiaries:....................................70
7.4 Qualified Disclaimers:.....................................70
7.5 Electronic Media:..........................................70
ARTICLE VIII FIDUCIARIES.....................................................71
8.1 Named Fiduciaries:.........................................71
8.1.1 Plan Administrator:...............................71
8.1.2 Named Fiduciaries:................................71
8.1.3 Investment Authority:.............................71
8.2 Employment of Advisers:....................................71
8.3 Multiple Fiduciary Capacities:.............................72
8.4 Indemnification:...........................................72
8.5 Payment of Expenses:.......................................72
8.5.1 Plan Expenses:....................................72
8.5.2 Transactional Costs:..............................72
8.5.3 Taxes:............................................72
8.5.4 Permitted Payments:...............................72
ARTICLE IX PLAN ADMINISTRATION...............................................73
9.1 The Plan Administrator:....................................73
9.1.1 Appointment of Plan Administration:...............73
9.1.2 Voting Authority:.................................73
9.1.3 Other Authority:..................................73
9.2 Powers and Duties of the Plan Administrator:...............73
9.2.1 Interpretation of Plan Document:..................73
9.2.2 Administrative Powers:............................73
9.2.3 Elections:........................................73
9.2.4 Miscellaneous:....................................74
9.3 Delegation of Responsibility:..............................74
9.4 Administrative Error:......................................74
ARTICLE X TRUSTEE AND INVESTMENT COMMITTEE...................................74
10.1 Appointment of Trustee and Investment Committee:...........74
10.1.1 Appointment:......................................74
10.1.2 Status of Trustee:................................74
10.1.3 Action of Trustee:................................74
10.2 The Trust Fund.............................................75
10.2.1 Contributions to Trust Fund:......................75
10.2.2 Assets of Trust Fund:.............................75
10.3 Relationship with Plan Administrator:......................75
10.3.1 Trustee Not Responsible for Payments
from the Trust Fund:..............................75
10.3.2 Communication of Plan Administrator Directions:...75
10.3.3 Disputes Concerning Payments:.....................76
10.4 Investment of Assets:......................................76
10.4.1 Permissible Investments:..........................76
10.4.2 Investment Limitations:...........................76
10.4.3 Investments in Qualifying Employer
Securities or Qualifying Employer Real
Property:.........................................76
10.4.4 Prototype Plan:...................................77
10.5 Investment Direction, Participant-Directed
Assets and Qualifying Employer Investments:................77
10.5.1 Management of Investments:........................77
10.5.2 Participant Directed Assets:......................77
10.5.3 Administration of Participant
Directed Assets:..................................77
10.5.4 Investment of Funds Pending Investment
Direction:........................................77
10.5.5 Communication of Investment Direction:............78
10.5.6 Voting and Other Rights Other than for
Qualifying Employer Securities:...................78
10.5.7 Voting Qualifying Employer Securities:............78
10.5.8 Tender or Exchange of Qualifying Employer
Securities:.......................................78
10.5.9 Failure to Vote or Tender With Respect to
Trust Fund Assets:................................78
10.5.10 Proxy Materials:..................................79
10.5.11 Common or Collective Trust Fund:..................79
10.6 Valuation of Accounts:.....................................79
10.6.1 Valuation Date:...................................79
10.6.2 Valuation Date of Distribution:...................79
10.6.3 Valuation of Assets:..............................79
10.6.4 Loans:............................................80
10.7 Insurance Contracts:.......................................80
10.7.1 Authority to Appoint Insurance Company:...........80
10.7.2 Payment of Insurance Premiums:....................80
10.7.3 Owner of Insurance Contract:......................80
10.7.4 Dividends Earned on Insurance:....................80
10.7.5 Reduced Death Benefit:............................81
10.7.6 Cash Surrender Value:.............................81
10.7.7 Maximum Premium Requirements:.....................81
10.7.8 Origination of Premium Payments:..................81
10.7.9 Distribution of Life Insurance
Contracts:........................................81
10.7.10 Conflict Between Plan and Insurance
Contract:.........................................82
10.8 The Investment Manager:....................................82
10.8.1 Appointment:......................................82
10.8.2 Qualifications of Investment Manager:.............82
10.8.3 Investment Manager as Fiduciary:..................82
10.8.4 Identification of Amounts for
Investment Manager:...............................82
10.8.5 Second Trust Fund:................................83
10.9 Powers of Trustee:.........................................83
10.9.1 Trustee's Power:..................................83
10.9.2 Additional Powers:................................84
10.9.3 Limitations on Trustee's Authority:...............84
10.10 Accounting and Records:....................................84
10.10.1 Maintenance of Records and Accounts:..............84
10.10.2 Written Accounting:...............................85
10.11 Judicial Settlement of Accounts:...........................85
10.12 Resignation and Removal of Trustee:........................85
10.12.1 Resignation of Trustee:...........................85
10.12.2 Removal of Trustee:...............................85
10.12.3 Successor Trustee:................................85
10.12.4 Settlement of Accounts:...........................85
10.12.5 Transfer of Assets:...............................86
10.12.6 Rights and Privileges:............................86
10.13 Group Trust:...............................................86
10.13.1 Trustee of Group Trust:...........................86
10.13.2 Maintenance of Accounting Records:................86
ARTICLE XI PLAN AMENDMENT OR TERMINATION.....................................86
11.1 Plan Amendment:............................................86
11.1.1 Authority to Amend:...............................86
11.1.2 Recognition as Prototype Plan:....................87
11.1.3 Limitations of Amendments:........................87
11.1.4 Vesting Schedule Amendment:.......................87
11.2 Right of the Employer to Terminate Plan:...................88
11.2.1 Authority to Terminate:...........................88
11.2.2 Additional Power to Terminate:....................88
11.2.3 Miscellaneous:....................................88
11.3 Effect of Partial or Complete Termination
or Complete Discontinuance of Contributions:...............88
11.3.1 Determination of Date of Complete
or Partial Termination:...........................88
11.3.2 Effect of Termination:............................88
11.3.3 Distribution of Accounts:.........................89
11.4 Bankruptcy:................................................89
ARTICLE XII MISCELLANEOUS PROVISIONS.........................................90
12.1 Exclusive Benefit of Participants:.........................90
12.2 Plan Not a Contract of Employment:.........................90
12.3 Action by Employer:........................................90
12.4 Source of Benefits:........................................90
12.5 Benefits Not Assignable:...................................90
12.6 Domestic Relations Orders:.................................90
12.7 Claims Procedure:..........................................91
12.8 Records and Documents:.....................................91
12.9 Errors:....................................................91
12.10 Benefits Payable to Minors, Incompetents
and Others:................................................91
12.11 Plan Merger or Transfer of Assets:.........................91
12.11.1 Continuation of Plan:.............................91
12.11.2 Benefit of Participants:..........................91
12.12 Employers:.................................................92
12.12.1 Adoption by Affiliates of Plan:...................92
12.12.2 Termination of Participation in
Plan:.............................................92
12.12.3 Employer Power:...................................92
12.13 Controlling Law:...........................................92
12.14 Singular and Plural and Article and
Section References:........................................92
12.15 USERRA:....................................................92
12.16 Unclaimed Benefit:.........................................92
12.17 Electronic Media:..........................................93
ARTICLE XIII SIMPLE 401(k) PROVISIONS........................................93
13.1 Rules of Application:......................................93
13.2 Definitions:...............................................93
13.2.1 Compensation:.....................................93
13.2.2 Eligible Employer:................................93
13.2.3 Eligible Employee:................................94
13.3 Contributions:.............................................94
13.3.1 Salary Reduction Contributions:...................94
13.3.2 Other Contributions:..............................94
13.3.3 Limitation on Contributions:......................94
13.3.4 Annual Addition Limitation on
Contributions:....................................94
13.4 Election and Notice Requirements:..........................95
13.4.1 Election Period:..................................95
13.4.2 Notice Requirements:..............................95
13.5 Vesting Requirements:......................................95
13.6 Top-Heavy Rules:...........................................95
13.7 Nondiscrimination Tests:...................................95
ARTICLE I
DEFINITIONS
As used in this Prototype Plan and in each Adoption Agreement, each of the
following terms shall have the meaning for that term set forth in this Article
I:
1.1 Account:
The Account maintained for a Participant. With respect to each Participant,
the following separate source accounts shall be maintained, as necessary: a
Pre-Tax Contributions Account, an Employee After-Tax Contributions Account, a
Profit Sharing Contributions (defined in Section 3.1.1) Account, a Money
Purchase Contributions (defined in Section 3.1.2) Account, a Target Benefit
Contributions (defined in Section 3.1.3) Account, a Matching Contributions
Account, a Qualified Matching Contributions Account, a Qualified Nonelective
Contributions Account, a Rollover Contributions Account, a Prevailing Wage
Contributions Account, a QVEC Account, a Safe Harbor Matching Contributions
Account, and a Safe Harbor Nonelective Contributions Account. The Plan
Administrator also may establish other Miscellaneous Account(s) as it deems
necessary to administer the Plan.
1.2 Account Balance
The value of an Account determined as of the applicable Valuation Date.
1.3 ACP Test:
The Average Contribution Percentage test set forth in Section 3.6(A) of the
Plan which is used to determine the maximum ACP Contribution Amounts (generally
Employee After-Tax and Matching Contributions) permitted for Highly Compensated
Employees.
1.4 Actual Contribution Percentage:
The ratio defined in Section 3.6(A)(i)(1) for purposes of the ACP Test.
1.5 Actual Deferral Percentage:
The ratio defined in Section 3.4.2(B)(i)(1) for purposes of the ADP Test.
1.6 Adjustment Factor:
The cost of living adjustment (COLA) factor prescribed by the Secretary of
the Treasury under Code Section 415(d) for Plan Years beginning after December
31, 1987, as applied to such items and in such manner as the Secretary shall
provide.
1.7 Adoption Agreement:
The document so designated with respect to this Prototype Plan that is
executed by the Employer, as amended from time to time.
1.8 ADP Test:
The Average Deferral Percentage test set forth in Section 3.4.2(B) of the
Plan which is used to determine the maximum amount of Highly Compensated
Employee deferrals (generally Pre-Tax Contributions) under the Plan.
1.9 Affiliate:
Any corporation or unincorporated trade or business that is:
(A) the Primary Employer
(B) a member of a "controlled group of corporations" (within the meaning of
Code Section 414(b)) that includes the Primary Employer;
(C) a member of any trade or business under "common control" (within the
meaning of Code Section 414(c)) with the Primary Employer;
(D) a member of an "affiliated service group" (as that term is defined in
Code Section 414(m)) which includes the Primary Employer; or
(E) any other entity to the extent required to be aggregated with the
Employer under Code Section 414(o).
The Plan Administrator will also determine "Affiliate" status in accordance
with Code Section 415(h).
1.10 Aggregate Limit:
The limit defined in Section 3.6(C)(iv) for purposes of the Multiple Use
Test.
1.11 Annuity Contract:
An individual or group annuity contract issued by an insurance company
providing periodic benefits, whether fixed, variable or both, the benefits or
value of which a Participant or Beneficiary cannot transfer, sell, assign,
discount, or pledge as collateral for a loan or as security for the performance
of an obligation, or for any other purpose, to any person other than the issuer
thereof. The terms of any annuity contract purchased and distributed by the Plan
to a Participant or Spouse shall comply with the requirements of this Plan.
1.12 Average Contribution Percentage or ACP:
For a specified group of eligible Participants for the Plan Year, the
average of the Participants' Actual Contribution Percentages determined as
provided in Section 3.6(A)(i)(3) for purposes of the ACP Test.
1.13 Average Deferral Percentage or ADP:
For a specified group of eligible Participants for the Plan Year, the
average of the Participants' Actual Deferral Percentages determined as provided
in Section 3.4.2(B)(i)(3) for purposes of the ADP Test.
1.14 Beneficiary:
A person, persons, trust or trusts entitled to receive any payment of
benefits under Article VII. For purposes of ERISA reporting and disclosure, a
Beneficiary becomes entitled to disclosure of relevant Plan documents only upon
the Participant's death, or if an individual becomes or is entitled to become an
alternate payee under a qualified domestic relations order within the meaning of
Code Section 414(p).
1.15 Benefit Commencement Date:
The first day, determined under Article V, for which a Participant or
Beneficiary receives or begins to receive payment in any form of distribution as
a result of death, Disability, termination of Employment, Early Retirement, Plan
termination or upon or after Normal Retirement Age or age 70-1/2.
1.16 Benefiting:
A Participant is treated as benefiting under the Plan for any Plan Year
during which the Participant receives or is deemed to receive an allocation of
contributions or forfeitures under the Plan. Whether a Participant is treated as
benefiting will be determined in accordance with Treas. Reg. Section
1.410(b)-3(a). Individuals who have not elected to make Pre-Tax Contributions,
but who are eligible to do so under the Plan, are treated as benefiting under
the Plan for purposes of the minimum coverage requirements of Code Section
410(b), the ADP Test and the ACP Test.
1.17 Break in Service:
(A) General Rule. For purposes of the hourly records method, a
12-consecutive month period (Computation Period) during which the Participant
does not complete more than 500 Hours of Service with the Employer. For purposes
of the elapsed time method, a Break in Service is a Period of Severance of at
least 12 consecutive months.
(B) Maternity or Paternity Absence Hourly Records Method. Solely for
purposes of determining whether a Break in Service for participation and vesting
purposes has occurred in a Computation Period, an individual who is absent from
work due to a Maternity or Paternity Absence shall receive credit for the Hours
of Service which would have otherwise been credited to the individual but for
that absence. In any case in which these hours cannot be determined, the
individual shall receive credit for 8 Hours of Service per day of that absence.
The Hours of Service credited under this paragraph shall be credited (1) in the
Computation Period in which the absence begins if crediting is necessary to
prevent a Break in Service in that period, or (2) in all other cases, the
following Computation Period. A "Maternity or Paternity Absence" is an
individual's absence from work (1) by 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 that
child by the individual; or (4) for purposes of caring for the child for a
period beginning immediately following the child's birth or placement.
(C) Maternity or Paternity Absence - Elapsed Time Method. For purposes of
the elapsed time method, a Period of Severance will not commence if an
individual is absent from work by reason of a Maternity or Paternity Absence.
Solely for purposes of determining when the individual's Period of Severance
begins, the individual will be credited with the 12-consecutive month period
beginning on the first anniversary of the first date of such absence. A
"Maternity or Paternity Absence" is an individual's absence from work (1) by
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 that child by the individual; or (4) for
purposes of caring for the child for a period beginning immediately following
the child's birth or placement.
(D) USERRA. No Break-in-Service shall occur due to an individual's
"qualified military service" (as defined in Code Section 414(u)) if the
individual is entitled to reemployment rights under USERRA.
1.18 CODA:
A cash or deferred arrangement under Code Section 401(k) which is part of a
profit sharing plan and under which a Participant may elect to make Pre-Tax
Contributions in accordance with Section 3.4.1.
1.19 CODA Compensation:
Solely for purposes of determining the Actual Deferral Percentage and the
Actual Contribution Percentage, CODA Compensation shall be Compensation either
excluding or including Elective Contributions as specified in the Adoption
Agreement. If elected by the Primary Employer in the Adoption Agreement, a
Participant's CODA Compensation shall, for the Plan Year that includes the
Participant's Entry Date, only include Compensation actually paid on and after
the Participant's Entry Date (i.e., during the Participant's period of
participation). The preceding sentence shall be effective as of the date
specified in the section of the Adoption Agreement setting forth the elections
with respect to CODA Compensation.
1.20 Code:
The Internal Revenue Code of 1986, as now in effect or as amended from time
to time. A reference to a specific provision of the Code shall include such
provision and any applicable regulation pertaining thereto.
1.21 Compensation:
Compensation means Compensation as that term is defined in Section 3.9.1(H)
of the Plan, subject to any exclusions or limitations elected in the Adoption
Agreement and Section 3.1.4 and subject to the further provisions of this
Section 1.21. Unless elected otherwise in the Adoption Agreement by the Primary
Employer, and except in the case of Self-Employed Individuals, Compensation
shall include only that Compensation which is actually paid to the Participant
during the Plan Year.
(A) Self-Employed Individuals. For a Self-Employed Individual, Compensation
means his or her Earned Income which is payable with respect to the Plan Year
(even if not actually paid during the Plan Year).
(B) Elective Contributions. Compensation shall include Elective
Contributions unless the Primary Employer elects in the Adoption Agreement not
to include Elective Contributions.
(C) Compensation Limit. For Plan Years beginning on or after January 1,
1994, the annual Compensation of each Participant taken into account for
determining all benefits provided under the Plan for any Plan Year shall not
exceed $150,000, as adjusted for increases in the cost-of-living in accordance
with Code Section 401(a)(17)(B). The cost-of-living adjustment in effect for a
calendar year applies to any determination period beginning in such calendar
year.
(D) Short Plan Year. If a determination period consists of fewer than 12
months, the annual Compensation limit (described in (C)) is an amount equal to
the otherwise applicable annual Compensation limit multiplied by a fraction, the
numerator of which is the number of months in the short determination period,
and the denominator of which is 12.
(E) Prior Determination Periods. If Compensation for any prior
determination period is taken into account in determining a Participant's
allocations for the current Plan Year, the Compensation for such prior
determination period is subject to the applicable annual Compensation limit in
effect for that prior period. 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, as adjusted. (F)
Severance Pay. Compensation for purposes of determining the amount of a
Participant's Pre-Tax Contributions shall not include severance pay.
1.22 Computation Period:
(A) Vesting Computation Period. The Plan Year.
(B) Eligibility Computation Period. For purposes of determining Years of
Service and Breaks in Service, the initial eligibility Computation Period is the
12-consecutive month period beginning on the date the Employee first performs an
Hour of Service for the Employer (referred to herein as the "date of hire").
The succeeding 12-consecutive month periods commence with either (i) or
(ii) below as selected by the Primary Employer in the Adoption Agreement:
(i) the first anniversary of the Employee's date of hire.
(ii) the first Plan Year which commences before the first anniversary of
the Employee's date of hire (regardless of whether the Employee is entitled to
be credited with 1,000 Hours of Service during the initial Eligibility
Computation Period). An Employee who is credited with 1,000 Hours of Service in
both the initial Eligibility Computation Period and the first Plan Year which
commences before the first anniversary of the Employee's initial Eligibility
Computation Period will be credited with two Years of Service for purposes of
eligibility to participate.
The same Eligibility Computation Period must be used for determining both
Years of Service and Breaks in Service.
(C) Computation Period Change. When a Plan amendment changes the Plan's
eligibility Computation Period, an Employee who completes at least 1,000 Hours
of Service in both the last pre-amendment Computation Period and the first
post-amendment Computation Period under the Plan will be credited with two Years
of Service. The last pre-amendment Computation Period will end during the first
post-amendment Computation Period under the Plan as amended.
1.23 Defined Benefit Plan:
A plan of the type defined in Code Section 414(j) maintained by the
Employer and any Affiliate, as applicable.
1.24 Defined Contribution Plan:
A plan of the type defined in Code Section 414(i) maintained by the
Employer and any Affiliate, as applicable.
1.25 Disability:
Unless elected otherwise by the Primary Employer in the Adoption Agreement,
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. In all events, the final determination
of whether an individual has incurred a Disability for purposes of this Plan
shall be made by the Plan Administrator in its discretion.
1.26 Distributee:
For purposes of distributing Eligible Rollover Distributions, a Distributee
includes an Employee or former Employee. In addition, the Employee's or former
Employee's Surviving Spouse and the Employee's or former Employee's Spouse or
former Spouse who is the alternate payee under a qualified domestic relations
order, as defined in Code Section 414(p), are Distributees with regard to the
interest of the Spouse or former Spouse.
1.27 Early Retirement:
An actively employed Participant's retirement upon satisfaction of the
requirements set forth in the Adoption Agreement for Early Retirement.
1.28 Early Retirement Date:
The Participant's Benefit Commencement Date following his or her Early
Retirement and before his or her attainment of Normal Retirement Age.
1.29 Earned Income:
The "net earnings from self-employment" in the trade or business with
respect to which the Plan is established, for which personal services of the
individual are a material income-producing factor. Net earnings will be
determined without regard to items not included in gross income and the
deductions allocable to such items. Net earnings are reduced by contributions by
the Employer to a Qualified Plan to the extent deductible under Code Section
404. Net earnings shall be determined with regard to the deduction allowed to
the taxpayer by Code Section 164(f) for taxable years beginning after
December 31, 1989.
1.30 Election Period:
If this Plan is subject to the qualified pre-retirement survivor annuity
requirements, the Election Period is the period that 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 before the
first day of the Plan Year in which he or she attains age 35, with respect to
the Account Balance as of the date of separation, the Election Period shall
begin on the date of separation.
1.31 Elective Contributions:
Any amount that is contributed by the Employer under a salary reduction
agreement with an Employee and that is not includible in the Employee's gross
income by reason of Code Sections 125 (cafeteria plan deductions), 402(e)(3)
(Pre-Tax Contributions), 402(h)(1)(B) (certain pre-tax deferrals to a simplified
employer pension plan) or 403(b) (certain Employee deferrals under a tax
deferred annuity). In addition, the term Elective Contributions shall include
elective amounts that are not includible in the gross income of the Employee by
reason of Code Section 132(f)(4) (qualified transportation fringe benefits),
effective for years after December 31, 1997, except as otherwise elected by the
Primary Employer in the Adoption Agreement.
1.32 Eligible Employees:
Those Employees specified in the Adoption Agreement. An individual, other
than a Leased Employee, shall only be treated as an Eligible Employee if he or
she is reported on the payroll records of an Employer or an Affiliate as a
common law employee. Unless otherwise elected by the Primary Employer in the
Adoption Agreement for a nonstandardized plan, the term "Eligible Employee" does
not include any other common law employee, any Leased Employee, or any
individual classified by his or her Employer as a Temporary Employee, as defined
in Section 1.99. It is expressly intended that individuals not treated as common
law employees by the Employer or an Affiliate on their payroll records are to be
excluded from Plan participation even if a court or administrative agency later
determines that such individuals are common law employees and not independent
contractors.
1.33 Eligible Retirement Plan:
For purposes of the Direct Rollover requirements of Section 6.4 and
Rollover Contributions to this Plan, the term Eligible Retirement Plan means an
individual retirement account described in Code Section 408(a), an individual
retirement annuity described in Code Section 408(b), an annuity plan described
in Code Section 403(a), or a qualified trust described in Code Section 401(a),
including this Plan, that accepts the Distributee's Eligible Rollover
Distribution. However, in the case of an Eligible Rollover Distribution to a
Surviving Spouse, an Eligible Retirement Plan is only an individual retirement
account or individual retirement annuity.
1.34 Eligible Rollover Distribution:
An Eligible Rollover Distribution is any distribution of all or any portion
of the balance to the credit of the Distributee from an Eligible Retirement
Plan, except that an Eligible Rollover Distribution does not include: any
distribution that is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life expectancy) of
the Distributee or the joint lives (or joint life expectancies) of the
Distributee and the Distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such distribution is
required under Code Section 401(a)(9) (minimum required distribution); any
hardship distribution of pre-tax elective contributions described in Section
401(k)(2)(B)(i)(iv) received after December 31, 1998 (or after a later date, not
later than December 31, 1999 as the Primary Employer selects in the Adoption
Agreement in accordance with IRS Notice 99-5); the portion of any distribution
that is not includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to Employer securities);
and any other distribution determined not to be an eligible rollover
distribution under the Code, IRS regulations, or other IRS guidance. For
purposes of determining whether distributions from this Plan are Eligible
Rollover Distributions, any distribution(s) that is(are) reasonably expected to
total less than $200 during a year shall not be treated as Eligible Rollover
Distributions. In all events, distributions of Excess Amounts (defined in
Section 3.9.1), Excess Aggregate Contributions, Excess Contributions, and Excess
Pre-Tax Contributions are not Eligible Rollover Distributions.
1.35 Employee:
A Self-Employed Individual, or any common law employee of the Employer
maintaining the Plan or of any Affiliate. The term "Employee" also shall include
any Leased Employee deemed to be an Employee of any Affiliate as provided in
Code Sections 414(n) or (o). If elected by the Primary Employer in the Adoption
Agreement, the term Employee may include individuals who would be Leased
Employees but for the fact that they have not performed services for an Employer
on a substantially full time basis for a period of a year. Notwithstanding the
preceding sentences, a Leased Employee shall not be considered an Employee of
the recipient Employer if: (A) such Employee is covered by a money purchase
pension plan (maintained by the "leasing organization" referred to in Section
1.57) providing (1) a nonintegrated Employer contribution rate of at least 10%
of compensation, as defined in Code Section 415(c)(3), (2) immediate
participation, and (3) full and immediate vesting and (B) such Leased Employees
do not constitute more than 20% of the Employer's and Affiliates' nonhighly
compensated recipient workforce. The term "Employee" does not include any
independent contractor. For purposes of applying the testing and
tax-qualification requirements of the Code, all Employees will be treated as
employed by a single Employer. An individual is not an Employee entitled to
additional Pre-Tax Contributions after the individual has ceased to provide
services as an Employee of an Employer (i.e. the individual is not expected to
resume providing services as an Employee of an Employer).
1.36 Employee After-Tax Contribution:
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.
1.37 Employee After-Tax Election:
The election by a Participant, including a negative election, to make
Employee After-Tax Contributions in accordance with Section 3.2.
1.38 Employer:
The sole proprietorship, partnership or corporation that adopts the Plan
with the consent of the Primary Employer and by executing the Adoption
Agreement. Only an Affiliate of the Primary Employer may be an Employer with
respect to a plan adopted by the Primary Employer.1 Upon and by adoption of this
Plan, each Employer shall delegate authority to amend the Plan to the Primary
Employer.
1.39 Employer Account:
The Participant's Matching Contributions Account, Profit Sharing
Contributions Account, Money Purchase Contributions Account, Target Benefit
Contributions Account, Safe Harbor Matching Contributions Account, Safe Harbor
Nonelective Contributions Account, Qualified Matching Contributions Account and
Qualified Nonelective Contributions Account, as the case may be.
1.40 Employer Derived Account Balance:
The portion of the Account Balance derived from Profit Sharing
Contributions, Target Benefit Contributions, Money Purchase Contributions,
Matching Contributions, Prevailing Wage Contributions, Safe Harbor Matching
Contributions Account, Safe Harbor Nonelective Contributions Account, Qualified
Matching Contributions, Qualified Nonelective Contributions, and Pre-Tax
Contributions.
1.41 Employment:
An Employee's employment or self-employment with the Employer, Affiliate or
a "leasing organization" referred to in Section 1.57 or, to the extent required
under Code Section 414(a)(2) or as otherwise specified by the Plan
Administrator, in its discretion (and not in violation of ERISA or the Code),
any predecessor of any of them. If any of them maintains a plan of a Predecessor
Employer, employment or self-employment with the Predecessor Employer will be
treated as Employment. Additionally, if the trade or business conducted by a
Self-Employed Individual becomes incorporated, all employment with that trade or
business or with any Affiliate shall be treated as Employment with the Employer.
1.42 Entry Date:
The date on which an Eligible Employee becomes a Participant as specified
in the Adoption Agreement.
1.43 ERISA:
The Employee Retirement Income Security Act of 1974, as amended from time
to time. Reference to a specific provision of ERISA shall include such provision
and any applicable regulation pertaining thereto.
1.44 Excess Aggregate Contributions:
The excess of a Highly Compensated Employee's aggregate ACP Contribution
Amounts (as defined in Section 3.6(A)(i)(2) of the Plan) over the amounts
permitted by the ACP Test, as determined under Section 3.6(A).
1.45 Excess Contributions:
The excess of a Highly Compensated Employee's aggregate ADP Contribution
Amounts (as defined in Section 3.4.2(B)(i)(2) of the Plan) over the amount
permitted by the ADP Test, as determined under Section 3.4.2(B).
1.46 Excess Pre-Tax Contributions:
Those Pre-Tax Contributions that are includible in a Participant's gross
income because and to the extent such Participant's Pre-Tax Contributions for a
calendar year exceed the dollar limitation on those contributions under Code
Section 402(g). Excess Pre-Tax Contributions shall be treated as Annual
Additions under the Plan, unless such amounts are distributed no later than the
first April 15th following the close of the calendar year in which the Excess
Pre-Tax Contributions were made and in accordance with the procedures set forth
in Section 3.4.2(A).
1.47 Fully Vested Separation:
Termination of Employment, as described in Section 4.1.2 or by a reason
other than death, when the Participant's vested percentage in his or her Account
is 100%.
1.48 Group Trust:
A Trust Fund consisting of assets of any Plan maintained and established by
the Employer or an Affiliate under Section 10.13.
1.49 Highly Compensated Employee:
The term Highly Compensated Employee includes highly compensated active
Employees and highly compensated former Employees.
(A) Highly Compensated Active Employee. Effective for years beginning after
December 31, 1996, the term Highly Compensated Employee means any Employee who:
(i) was a 5-percent owner at any time during the determination year or the
look-back year, or (ii) for the look-back year had Compensation from the
Employer in excess of $80,000 and, if elected by the Primary Employer in the
Adoption Agreement, was in the top-paid group for the look-back year. The
$80,000 amount is adjusted by the Adjustment Factor.
For this purpose the applicable year of the Plan for which a determination
is being made is called a determination year and the preceding 12-month period
is called a look-back year. If, as provided in the Adoption Agreement, the
Primary Employer makes a calendar year data election, the calendar year
beginning with or within the look-back year is treated as the Employer's
look-back year for purposes of determining whether an Employee is a Highly
Compensated Employee on account of the Employee's Compensation for a look-back
year under Section 414(q)(1)(B). A calendar year data election, once made,
applies for all subsequent determination years unless changed by the Employer. A
calendar year data election made does not apply in determining whether the
Employer's employees are Highly Compensated Employees under Code Section
414(q)(1)(A) on account of being 5-percent owners.
(B) Highly Compensated Former Employee. A highly compensated former
Employee includes any Employee who terminated Employment (or was deemed to have
terminated) prior to the Plan Year, performs no service for the Employer or
Affiliate during the Plan Year, and was a highly compensated active Employee for
either the separation year or any Plan Year ending on or after the Employee's
55th birthday. Whether a former Employee is a highly compensated former Employee
is based on the rules applicable to determining highly compensated Employee
status as in effect for that determination year, in accordance with Temp. Treas.
Reg. Section 1.414(q)-1T, A-4, Notice 97-45, and any additional guidance issued
by the IRS under Code Section 414(q).
(C) Rules of Construction. The determination of who is a Highly Compensated
Employee, including the determinations of the number and identity of Employees
in the top-paid group and the Compensation that is considered will be made in
accordance with the Adoption Agreement and all applicable guidance issued by the
IRS under Code Section 414(q). In determining whether an Employee is a Highly
Compensated Employee for years beginning in 1997, the amendments to Code Section
414(q) stated above are treated as having been in effect for years beginning in
1996.
1.50 Hour of Service:
(A) Hourly Records Method. If the Primary Employer elects the hourly
records method in the Adoption Agreement, an Hour of Service shall include:
(i) Hours for Performance of Duties. 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
(ii) Hours for Time During Which no Duties Performed. 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 will be calculated and credited
under Section 2530.200b-2 of the Department of Labor Regulations which is
incorporated herein by this reference; and
(iii) Hours for Back Pay. 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 subparagraph (i) or
subparagraph (ii), as the case may be, and under this subparagraph (iii). These
hours will be credited to the Employee for the Computation Period or periods to
which the award or agreement pertains rather than the Computation Period in
which the award, agreement or payment is made.
(B) Controlled Group Rules. Hours of Service will be credited for
Employment with the Employer and its Affiliates.
(C) Equivalencies. If elected by the Primary Employer in the Adoption
Agreement, the determination the number of Hours of Service earned in a
Computation Period may be based on the equivalencies specified in the Adoption
Agreement instead of counting the actual number of Hours of Service performed.
(D) Elapsed Time Method. If the Primary Employer elects the elapsed time
method in the Adoption Agreement, an Hour of Service is an hour for which an
Employee is paid, or entitled to payment, for the performance of duties for the
Employer or an Affiliate.
(E) Leased Employees. With respect to both the hourly records method and
the elapsed time method, in addition to service with an Affiliate, Hours of
Service will also be credited for any individual considered an Employee for
purposes of this Plan to the extent required under Code Section 414(n) (with
respect to Leased Employees).
1.51 Immediately Distributable:
For purposes of determining whether a Participant's consent is legally
required before a distribution may be made from the Plan, a Participant's
Account is "Immediately Distributable" during the period prior to the date the
Participant attains (or would have attained if not deceased) the later of Normal
Retirement Age or age 62. (The term "Immediately Distributable" only refers to
the period during which the law requires the Plan to obtain Participant consent
to a distribution. Nevertheless, distributions under this Plan will only be made
on request by a Participant or Beneficiary (if applicable) unless the Plan is
otherwise required to distribute the Participant's benefit by law.)
1.52 Integration Level:
The "Integration Level" described in the Adoption Agreement, is the dollar
amount at or below which the rate of contributions or benefits (expressed as a
percentage of Compensation) is less than the rate of contributions above that
dollar amount. The term "Integration Level" is only operative for Plan purposes
if the Plan is integrated with Social Security. If an integrated Employer profit
sharing, money purchase pension, or target benefit contribution is made for a
short Plan Year, the Integration Level used for purposes of determining and
allocating such contribution shall equal the otherwise applicable Integration
Level multiplied by a fraction, the numerator of which is the number of months
in the Plan Year and the denominator of which is 12.
1.53 Investment Committee:
The investment committee appointed by the Primary Employer in accordance
with Article X.
1.54 Investment Manager:
Any person appointed by the Trustee or, with respect to
Participant-Directed Assets, by the Participant or Beneficiary having the power
to direct the investment of such assets, to serve as such in accordance with
Section 10.8.
1.55 IRS:
The Internal Revenue Service.
1.56 Key Employee:
Any Employee or former Employee (and the Beneficiaries of such Employee)
who at any time during the "determination period" was:
(A) an officer of the Primary Employer or Affiliate, if such individual's
annual Compensation exceeds 50% of the dollar limitation under Code Section
415(b)(1)(A) (the Defined Benefit Plan dollar limitation);
(B) an owner (or considered an owner under Code Section 318) of one of the
ten largest interests in the Primary Employer or Affiliate if such individual's
Compensation exceeds 100% of the dollar limitation under Code
Section 415(c)(1)(A) (the Defined Contribution Plan dollar limitation);
(C) a "5% owner" (as defined in Code Section 416(i)) of the Employer or
Affiliate; or
(D) a "1% owner" (as defined in Code Section 416(i)) of the Employer or
Affiliate who has annual Compensation of more than $150,000 as adjusted.
Annual Compensation means Compensation as defined in the Adoption
Agreement, but including Elective Contributions. The "determination period" is
the Plan Year containing the "determination date" and the four preceding Plan
Years. The "determination date" for the first Plan Year is the last day of that
Plan Year, and for any subsequent Plan Year is the last day of the preceding
Plan Year. The determination of who is a Key Employee will be made in accordance
with Code Section 416(i) and is used in accordance with the provisions in
Article 4.4.
1.57 Leased Employee:
Effective for Plan Years beginning after December 31, 1996, any person
(other than an Employee of the recipient Employer or Affiliate) who, under an
agreement between the recipient Employer or Affiliate and any other person (the
"leasing organization") has performed services for the recipient Employer or
Affiliate (or for the Employer or Affiliate and "related persons" determined in
accordance with Code Section 414(n)(6)) on a substantially full time basis for a
period of at least one year. In addition, those services must be performed under
the primary direction or control of the recipient. Contributions or benefits
provided a Leased Employee by the leasing organization which are attributable to
services performed for the recipient Employer or Affiliate shall be treated as
provided by the recipient Employer. Solely for purposes of excluding Leased
Employees from the definition of Eligible Employee, individuals who would be
Leased Employees but for the fact that they have not performed services for an
Employer on a substantially full time basis for a period of at least one year
shall be treated as Leased Employees.
1.58 Life Annuity:
An annuity payable in equal installments for the life of the Participant
that terminates upon the Participant's death.
1.59 Limitation Compensation:
Limitation Compensation, as defined in Section 3.9.1(H), used for purposes
of the Annual Additions limitation of Code Section 415 and Plan Section 3.9.
1.60 Limitation Year:
A Plan Year, calendar year or the 12-consecutive month period elected by
the Primary Employer in the Adoption Agreement used for purposes of the Annual
Additions limitation of Code Section 415. All Qualified Plans maintained by the
Employer must use the same Limitation Year. If the Limitation Year is amended to
a different 12-consecutive month period, the new Limitation Year must begin on a
date within the Limitation Year in which the amendment is made.
1.61 Master or Prototype Plan:
A plan the form of which is the subject of a favorable opinion letter from
the IRS as a master or prototype plan.
1.62 Matching Contribution:
An Employer contribution made to this or any other Defined Contribution
Plan on behalf of a Participant, or on account of a Participant's Pre-Tax
Contributions and/or Employee After-Tax Contributions, as applicable, under a
plan maintained by the Employer.
1.63 Net Profits:
The current and accumulated profits of the Employer from the trade or
business of the Employer with respect to which the Plan is established, as
determined by the Employer before deductions for federal, state and local taxes
on income and before contributions under the Plan or any other Qualified Plan.
1.64 Nonhighly Compensated Employee:
An Employee of the Employer who is not a Highly Compensated Employee.
1.65 Nonvested Separation:
Termination of Employment of a Participant whose vested percentage in his
or her Employer Derived Account Balance is 0% and who has not had Pre-Tax
Contributions made to the Plan.
1.66 Normal Retirement Age:
The age selected by the Primary Employer in the Adoption Agreement. If the
Employer enforces a mandatory retirement age, the Normal Retirement Age is the
lesser of that mandatory age or the age specified in the Adoption Agreement.
1.67 Original Plan Effective Date:
In the case of a Plan that adopts the Profit Sharing Plan with CODA
Adoption Agreement, the Original Plan Effective Date is the first day of the
Plan Year in which occurs the earliest effective date for any Plan feature, as
specified in the Adoption Agreement, except as otherwise required by law. In the
case of a Plan that adopts any other permissible Adoption Agreement, the
Original Plan Effective Date is the first day of the Plan Year in which the Plan
is adopted. Separately, various provisions of the Plan may be effective on dates
other than the Original Plan Effective Date or the Restatement Effective Date,
as provided herein, in the Adoption Agreement, or as required by law.
1.68 Owner-Employee:
An individual who is a sole proprietor, or a partner owning more than 10%
of either the capital interest or the profits interest in the partnership.
1.69 Paired Plans:
Two Defined Contribution Plans or one or two Defined Contribution Plans and
one Defined Benefit Plan, provided that all such plans use the format of this
Prototype Plan or the Merrill Lynch Defined Benefit Plan and Trust.
1.70 Partially Vested Separation:
Termination of Employment of a Participant whose vested percentage in his
or her Employer Derived Account Balance is less than 100% but greater than 0%.
1.71 Participant:
An Employee who has commenced, but not terminated, participation in the
Plan as provided in Article II. An "Active Participant" is a Participant who is
an Eligible Employee. An "Inactive Participant" is a Participant who has
terminated employment or a Participant who is no longer an Eligible Employee but
still maintains a vested Account Balance.
1.72 Participant-Directed-Assets:
The assets of an Account which are invested, as described in Section 10.5,
according to the direction of the Participant or the Participant's Beneficiary,
as the case may be, in either individually selected investments, commingled
funds or in shares of regulated investment companies.
1.73 Period of Severance:
For purposes of the elapsed time method, a 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, is
discharged, or dies or, if earlier, the first 12-month anniversary of the date
on which the Employee was otherwise absent from service. No Period of Severance
shall occur due to an individual's "qualified military service" (as defined in
Code Section 414(u)) if the individual is entitled to reemployment rights under
USERRA.
1.74 Plan:
The plan established by the Primary Employer in the form of this Prototype
Plan and the applicable Adoption Agreement signed and dated by each Employer.
The Plan shall have the name specified in the Adoption Agreement.
1.75 Plan Administrator:
The Plan Administrator is the Primary Employer, unless otherwise specified
by duly authorized action by the Primary Employer, including through a
designation in the Adoption Agreement.
1.76 Plan Year:
Each 12-consecutive month period ending on the date specified in the
Adoption Agreement, during any part of which the Plan is in effect.
Notwithstanding the preceding sentence, the Plan Year in which the Plan is
terminated shall end on the effective date of such termination. In addition, if
the Primary Employer amends the Plan Year, the new Plan Year must begin on a
date within the Plan Year in which the amendment is made. Then, there shall be a
short Plan Year ending immediately before the beginning of the first day of the
subsequent new Plan Year. The new Plan Year shall then be each 12 consecutive
month period thereafter.
1.77 Predecessor Employer:
A "predecessor employer" within the meaning of Code Section 414(a)(1) which
requires Employees to be credited for service with prior employers under certain
circumstances.
1.78 Predecessor Employer Service:
Service with a Predecessor Employer, as described in Section 1.106(C).
1.79 Pre-Tax Contributions:
Any contributions made to the Plan at the election of the Participant, in
lieu of cash compensation, and including contributions made under a salary
reduction agreement or other deferral mechanism. With respect to any calendar
year, for purposes of Code Section 402(g), a Participant's Pre-Tax Contribution
is the sum of all contributions made on behalf of such Participant under an
election to defer under any qualified CODA described in Code Section 401(k), any
salary reduction simplified employee pension plan described in Code Section
408(k)(6), any SIMPLE IRA Plan described in Code Section 408(p), any eligible
deferred compensation plan under Code Section 457, any plan described under Code
Section 501(c)(18), and any contributions made on the behalf of a Participant
for the purchase of any annuity contract under Code Section 403(b) under a
salary reduction agreement. Pre-Tax Contributions shall not include any
deferrals properly distributed as Excess Amounts under Section 3.9.2 and are
limited by Code Section 402(g) (See Section 3.4.2).
1.80 Pre-Tax Election:
The election by a Participant, including through automatic enrollment (a
"negative election"), to make Pre-Tax Contributions in accordance with Section
3.4.1.
1.81 Prevailing Wage Contribution:
A prevailing wage contribution made in this Plan or any other Qualified
Plan under Section 3.15.
1.82 Primary Employer:
The Employer designated in the Adoption Agreement as the "Primary
Employer."
1.83 Prototype Plan:
The Merrill Lynch Special/Flexible Prototype Defined Contribution Plan and
Trust set forth in this document, as amended or restated from time to time.
1.84 Qualified Joint and Survivor Annuity:
The joint and survivor annuity required to be offered when benefits are to
be distributed under a Qualified Plan that is subject to the joint and survivor
annuity requirements of Code Section 417. In the case of a married Participant,
the qualified joint and survivor annuity is an immediate annuity for the life of
the Participant with a survivor annuity continuing after the Participant's death
to the Participant's Surviving Spouse. The annuity payable to the Surviving
Spouse for his or her life equals 50% of the amount of the annuity payable
during the joint lives of the Participant and such Surviving Spouse. The
qualified joint and survivor annuity must be the actuarial equivalent of a
single life annuity that could be provided for the Participant under an Annuity
Contract purchased with the aggregate vested Account Balances of the
Participant's Accounts at the Benefit Commencement Date. In the case of an
unmarried Participant, the qualified joint and survivor annuity shall be an
immediate annuity for the life of the Participant.
1.85 Qualified Matching Contributions:
Matching Contributions, which the Plan Administrator designates as
Qualified Matching Contributions, made by the Employer and allocated to
Participants' accounts that a Participant may not elect to receive in cash until
distributable from the Plan; that are nonforfeitable when made; and that are
distributable only in accordance with the distribution provisions that are
applicable to Pre-Tax Contributions (other than the hardship withdrawal
provisions). Qualified Matching Contributions may not be withdrawn on account of
a hardship.
1.86 Qualified Nonelective Contributions:
Contributions (other than Matching Contributions, Safe Harbor Matching
Contributions or Qualified Matching Contributions), which the Plan Administrator
designates as Qualified Nonelective Contributions, made by the Employer and
allocated to Participants' accounts that a Participant 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 provision that
are applicable to Pre-Tax Contributions (other than the hardship withdrawal
provisions). Qualified Nonelective Contributions may not be withdrawn on account
of a hardship.
1.87 Qualified Plan:
A Defined Benefit Plan or Defined Contribution Plan which has been
determined to meet the tax qualification requirements of Code Section 401(a).
1.88 Qualifying Employer Securities:
A security issued by an Employer which is (i) stock; (ii) a marketable
obligation within the meaning of ERISA Section 407(e), (iii) an interest in a
publicly traded partnership (as defined in Code Section 7704(b)) but only if
such partnership is an existing partnership as defined in Section 10211(c)(2)(A)
of the Revenue Act of 1987 (Public Law 100-203); and (iv) otherwise a
"qualifying employer security" as defined in ERISA Section 407(d).
1.89 Qualified Voluntary Employee Contributions (QVECs):
Qualified voluntary employee contributions made in accordance with former
Code Section 219 that constitute accumulated deductible employee contributions
within the meaning of Code Section 72(o)(5)(B).
1.90 Restatement Effective Date:
The effective date of the amendment and restatement of this Plan, if any,
as set forth in the Adoption Agreement.
1.91 Rollover Contribution:
A contribution under Section 3.3 that is a contribution of an Eligible
Rollover Distribution (defined in Section 1.34) to the Trustee by the
Participant on or before the 60th day after the Participant received the
Eligible Rollover Distribution or the contribution of the Eligible Rollover
Distribution by the Trustee of another Eligible Retirement Plan in the form of a
direct transfer under Code Section 401(a)(31).
1.92 Secretary:
The Secretary of the United States Treasury.
1.93 Self-Employed Individual:
An individual who has Earned Income for the taxable year from the trade or
business for which the Plan is established or 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.
1.94 Social Security Retirement Age:
Age 65 in the case of a Participant attaining age 62 before January 1, 2000
(i.e., born before January 1, 1938), age 66 for a Participant attaining age 62
after December 31, 1999, and before January 1, 2017 (i.e., born after
December 31, 1937, but before January 1, 1955), and age 67 for a Participant
attaining age 62 after December 31, 2016 (i.e., born after December 31, 1954) or
such other age as specified in the Social Security Act.
1.95 Sponsor:
Merrill Lynch, Pierce, Fenner and Smith, Incorporated and any successor
thereto.
1.96 Spouse:
The person legally married to a Participant (pursuant to local law where
the Participant resides, but not in violation of federal law).2 In addition, a
Participant's spouse or former spouse will be treated as the Participant's
Spouse to the extent provided under a "qualified domestic relations order" (or a
"domestic relations order" treated as such) as described in Code Section 414(p).
1.97 Surviving Spouse:
The Participant's Spouse on the earliest of:
(A) the date of the Participant's death;
(B) the Participant's Benefit Commencement Date; or
(C) the date on which an Annuity Contract is purchased for the Participant
providing benefits under the Plan.
A Participant's former Spouse will be treated as the Participant's
Surviving Spouse and a Participant's current Spouse will not be treated as the
Participant's Surviving Spouse to the extent provided under a "qualified
domestic relations order" (or a "domestic relations order" treated as such) as
described in Code Section 414(p).
1.98 Taxable Wage Base:
The contribution and benefit base under Section 230 of the Social Security
Act at the beginning of the Plan Year, as adjusted in accordance with the Social
Security Act.
1.99 Temporary Employee:
Any Employee employed on a temporary or periodic basis by an Employer where
such Employee from time to time accepts, at his discretion, job assignments
having a fixed and limited duration, such as (but not limited to) special
projects to cover unusual or cyclical employment needs at potentially varying
rates of compensation with each job assignment and who is classified in the
Employer's records as a "temporary employee."
1.100 Trust:
The trust established under the Plan to which Plan contributions are made
and in which Plan assets are held. Any reference in this Plan to the "Trust" or
"Trust Agreement" shall refer to the applicable trust provisions of this Plan.
1.101 Trust Fund:
The assets of the Trust held by or in the name of the Trustee.
1.102 Trustee:
The person(s) appointed as Trustee(s) under Article X and any successor
Trustees.
1.103 USERRA:
The Uniformed Services Employment and Reemployment Rights Act of 1994.
1.104 Valuation Date:
Each business day of the Plan Year, unless otherwise specified in the
Adoption Agreement by the Primary Employer, or determined under Section 10.6, if
applicable.
1.105 Vesting Service:
The Years of Service credited to a Participant under Article IV for
purposes of determining the Participant's vested percentage in his or her
Account established for the Participant.
1.106 Years of Service:
(A) Hourly Records Method. If the Primary Employer elects the hourly
records method in the Adoption Agreement, an Employee shall be credited with one
Year of Service for each Computation Period in which he or she has 1,000 Hours
of Service.
(B) Elapsed Time Method. If the Primary Employer elects the elapsed time
method in the Adoption Agreement, the Employee's Years of Service shall be a
span of service equal to the sum of:
(i) the period commencing on the date the Employee first performs an Hour
of Service and ending on the date he or she quits, retires, is discharged, dies,
or if earlier, the 12-month anniversary of the date on which the Employee was
otherwise first absent from service (with or without pay) for any other reason;
and
(ii) (1) if the Employee quits, retires, or is discharged, the period
commencing on the date the Employee terminated his or her Employment and ending
on the first date on which he or she again performs an Hour of Service, if such
date is within 12 months of the date on which he or she last performed an Hour
of Service; or
(2) if the Employee is absent from work for any other reason and, within 12
months of the first day of such absence, the Employee quits, retires, dies, or
is discharged, the period commencing on the first day of such absence and ending
on the first day he or she again performs an Hour of Service if such day is
within 12 months of the date his or her absence began.
(C) Predecessor Employer Service. With respect to both the elapsed time
method and the hourly records method, service with a Predecessor Employer,
determined in the manner in which the rules of this Plan would have credited
such service had the Participant earned such service under the terms of this
Plan, must be included in Years of Service, as required by Code Section
414(a)(1) and Code Section 414(a)(2) or as elected in the Adoption Agreement by
the Primary Employer. If the Employer maintains the plan of a Predecessor
Employer, service with such Employer will be treated as service for the
Employer.
(D) Hourly Record to Elapsed Time Transition. If the Plan's method of
determining service changes from the hourly records method to the elapsed time
method, the Employee shall receive credit for a period of service consisting of:
(i) a number of Years of Service equal to the number of Years of Service
credited to the Employee before the Computation Period during which the change
occurred; and (ii) the greater of (1) the period of service that would be
credited to the Employee under the elapsed time method for his service during
the entire Computation Period in which the change occurs or (2) the service
taken into account under the hourly records method as of the date of the change.
In addition, the Employee shall receive credit for service subsequent to the
change commencing on the day after the last day of the Computation Period in
which the change occurs.
(E) Elapsed Time to Hourly Records Transition. If the Plan's method of
determining service changes from the elapsed time method to the hourly records
method -- (i) the Employee shall receive credit as of the date of the change for
a number of Years of Service equal to the number of 1-year periods of service
credited to the Employee as of the date of the change; and (ii) the Employee
shall receive credit, in the Computation Period which includes the date of the
change, for a number of Hours of Service determined by applying the equivalency
method based on the Employees' payroll frequency. If the Employee is paid on
either a daily, weekly or bi-weekly basis, the Employee shall be credited with
45 Hours of Service for each week if under Section 1.50 of the Plan such
Employee would be credited with at least 1 Hour of Service during the week. If
the Employee is paid on a semi-monthly or monthly basis, the Employee shall be
credited with 180 Hours of Service for each month if under Section 1.50 of the
Plan such Employee would be credited with at least 1 Hour of Service during the
month.
ARTICLE II
PARTICIPATION
2.1 Admission as a Participant:
2.1.1 General Rules:
An Eligible Employee shall become a Participant on the Entry Date on or
next following the date on which he or she meets the participation requirements
specified in the Adoption Agreement; provided, however that:
(A) an Eligible Employee who meets the participation requirements when the
Plan is adopted shall become a Participant as of such date;
(B) an Eligible Employee who meets the participation requirements of a plan
that is restated and/or amended to become this Plan shall become a Participant
as of the date this Plan is amended and/or restated; and
(C) if a participation waiver is elected by the Primary Employer in the
Adoption Agreement, an Eligible Employee shall become a Participant on the date
specified in the Adoption Agreement, without regard to the otherwise applicable
participation requirements.
2.1.2 Changes in Employment Status:
(A) An Employee who did not become a Participant on the Entry Date
coincident with or next following the day on which he or she met the
participation requirements because he or she was not then an Eligible Employee
shall become eligible to be a Participant on the first day on which he or she
again becomes an Eligible Employee unless determined otherwise in accordance
with Section 2.3.1 of the Plan.
(B) If a Participant is no longer an Eligible Employee, he or she is no
longer eligible to share in contributions made by the Employer or participate in
any Pre-Tax or Employee After-Tax Contribution provisions of the Plan. If such
an ineligible Employee has not incurred a Break in Service, such Employee will
become a Participant immediately upon returning to an eligible class of
Employees. If such an individual incurs a Break in Service, eligibility will be
determined under Section 2.3. If an Employee who is not an Eligible Employee
becomes an Eligible Employee, such Employee will become eligible to be a
Participant immediately upon becoming an Eligible Employee if he or she has
satisfied the participation requirements of Section 2.1.1.
2.1.3 Pre-Tax and After-Tax Elections:
If the Plan includes a Pre-Tax or Employee After-Tax feature, in addition
to the participation requirements set forth in Section 2.1.1 and Section 2.1.2,
an Eligible Employee shall become a Participant upon filing his or her Pre-Tax
Election or Employee After-Tax Election with the Plan Administrator (or, if
elected by the Primary Employer in the Adoption Agreement, the date an Employee
is deemed to make such election (an automatic enrollment) and such automatic
enrollment shall be administered consistently with Internal Revenue Service
Revenue Ruling 2000-8 and any other such related guidance issued by the Internal
Revenue Service). An election shall not be required if the Employer has elected
to make contributions to a Pre-Tax Account or an After-Tax Account with respect
to all Participants under an automatic enrollment option.
2.1.4 Amendment to Age and Service Requirements:
If the Plan's age and/or service requirements for eligibility are amended,
an Employee who satisfied the pre-amendment age and service requirements before
the date of the amendment shall be deemed to satisfy the post-amendment age and
service requirements.
2.1.5 Amendment to Entry Date:
A change to the Plan's Entry Date (including a change caused by a change in
Plan Year) shall not cause any Participant to lose his or her Participant status
or postpone the participation of any Eligible Employee beyond the date required
under Code Section 410(a)(1). (Code Section 410(a)(1) generally requires that an
Eligible Employee who has satisfied the Plan's minimum age and service
requirements must be allowed to commence participation in the Plan no later than
the earlier of: (A) the first day of the first Plan Year beginning after the
date on which such Employee satisfied such requirements, or (B) the date six
months after the date on which the Employee satisfied such requirements.)
2.2 Rollover Membership:
An Eligible Employee who makes a Rollover Contribution (under Section 3.3)
shall become a Participant as of the date of such contribution or transfer even
if he or she had not previously become a Participant. However, such an Eligible
Employee will become a Participant only for the purposes of such Rollover
Contribution and shall not be eligible to share in contributions made by the
Employer or participate in any Pre-Tax or Employee After-Tax Contribution
provisions of the Plan until he or she has become a Participant in accordance
with the eligibility requirement of Section 2.1. An Eligible Employee who is a
Participant only for purposes of a Rollover Contribution is not taken into
account for purposes of the ADP Test or the ACP Test.
2.3 Crediting of Service for Eligibility Purposes - Breaks in Service:
2.3.1 Non-Vested Employees' Pre-Break Service:
(A) For purposes of eligibility to participate, an Eligible Employee who is
reemployed after a Nonvested Separation will not retain credit for his or her
Years of Service earned prior to a period of five consecutive one-year Breaks in
Service.
(B) If an Employee's Years of Service are disregarded under (A) above, such
Employee will be treated as a new Employee for eligibility purposes upon his or
her reemployment.
(C) If an Employee's Years of Service may not be disregarded under (A)
above, and if the Employee was not a Participant upon his or her prior Nonvested
Separation, and the Employee is an Eligible Employee upon his or her
reemployment, the Eligible Employee shall become a Participant in accordance
with the participation requirements of Section 2.1 taking into account his or
her pre-Break Service in Years of Service.
(D) If an Employee's Years of Service may not be disregarded under (A)
above, and the Employee was a Participant upon his or her prior Nonvested
Separation, such Participant shall continue to be eligible to participate in the
Plan immediately upon reemployment.
2.3.2 Vested Participants Retain Service:
For purposes of eligibility to participate, a Participant who is reemployed
after a Fully Vested Separation or Partially Vested Separation shall retain
credit for his or her Years of Service prior to such termination of Employment
without regard to the length of his or her absence from Employment. If such
Participant returns to Employment, he or she shall become eligible to
participate immediately upon reemployment.
2.4 Termination of Participation:
A Participant shall cease to be a Participant:
(A) upon his or her death;
(B) upon the payment to him or her of all nonforfeitable benefits due to
him or her under the Plan, whether directly or by the purchase of an Annuity
Contract; or
(C) upon his or her Nonvested Separation.
2.5 Corrections with Regard to Participation:
If an error is made with regard to any individual's participation in the
Plan, the error may be corrected as provided in this Section 2.5.
2.5.1 Omission of Participant:
If in any Plan Year an Eligible Employee who should have been included as a
Participant in the Plan is erroneously omitted or if an administrative error
results in a Participant's Account not being properly credited with any
contributions or earnings hereunder, the error may be corrected as provided in
this Section 2.5.1. Solely for purposes of restoring an affected Participant's
Account to the position that the Account would have been in if no error had been
made, the Employer may make additional contributions to such Participant's
Account or contributions may be reallocated among the Accounts of affected
Participants.
2.5.2 Erroneous Inclusion in Plan:
If in any Plan Year any person who should not have been included as a
Participant in the Plan is erroneously included and discovery of such incorrect
inclusion is not made until after a contribution for the year has been made, the
amount contributed on behalf of such ineligible person shall (together with any
earnings or losses) constitute a forfeiture for the Plan Year in which the
discovery is made, except for any Pre-Tax or Employee After-Tax Contributions,
which shall be distributed to such ineligible person.
2.5.3 EPCRS Correction:
An error described in this Section 2.5 shall be corrected using any
appropriate correction method permitted under the Employee Plans Compliance
Resolution System (or any successor procedure), as determined by the Plan
Administrator in its discretion.
2.5.4 Employer and Plan Administrator Responsible for Correction:
The Employer and Plan Administrator shall be responsible for taking any and
all actions as required by this Section 2.5.
2.6 Provision of Information:
Each Employee shall execute such forms as may reasonably be required by the
Plan Administrator in its discretion, and shall make available to the Plan
Administrator any information the Plan Administrator may reasonably request in
this regard. By virtue of his or her participation in this Plan, an Employee
agrees, on his or her own behalf and on behalf of all persons who may have or
claim any right by reason of the Employee's participation in the Plan, to be
bound by all provisions of the Plan.
2.7 Waiver of Pre-Tax Participation:
In the manner prescribed by the Plan Administrator, an Employee may make a
one-time irrevocable election upon the Employee's commencement of employment
with the Employer or upon the Employee's Entry Date not to be eligible to make a
cash or deferred election under the Plan or any other plans maintained by the
Employer. Such election shall be consistent with Treasury Regulation
1.401(k)-1(a)(3)(iv). An Employee who makes a one-time irrevocable election3
under this Section shall not be taken into account for purposes of the ADP Test.
2.8 Waiver of Matching Contributions and Employee After-Tax Contributions:
In the manner prescribed by the Plan Administrator, an Employee may make a
one-time irrevocable election upon the Employee's commencement of employment
with the Employer or upon the Employee's Entry Date not be to eligible to make
Employee After-Tax Contributions or to receive allocations of Matching
Contributions or Safe Harbor Matching Contributions under the Plan or any other
plans maintained by the Employer. An Employee who makes a one-time irrevocable
election4 under this Section shall not be taken into account for purposes of the
ACP Test.
2.9 Waiver of Other Contributions:
In the manner prescribed by the Plan Administrator, an Employee may make a
one-time irrevocable election upon the Employee's commencement of employment
with the Employer or upon the Employee's Entry Date not to be eligible to have
any Profit Sharing, Target Benefit, Money Purchase, Qualified Nonelective or
Safe Harbor Nonelective Contributions applicable, made on his or her behalf.
2.10 USERRA - Crediting Service:
For eligibility and vesting purposes, absence from employment on account of
a leave of absence for service in the United States uniformed armed services
will be counted as employment with an Employer if the Employee's reemployment
rights are protected under USERRA. In addition, if the Employee returns to
service with the Employer within the period during which his reemployment rights
are protected under USERRA, the period between the end of his or her active duty
period and his or her return to employment by the Employer will be considered
service with the Employer. If the Employee does not return to active employment
with the Employer, his Service will be deemed to have ceased on the earliest
date permitted under applicable law. This Section 2.10 is effective as of
December 12, 1994.
ARTICLE III
CONTRIBUTIONS AND ACCOUNT ALLOCATIONS
3.1 Employer Contributions and Allocations:
3.1.1 Profit Sharing Contributions:
If the Plan is a profit-sharing plan, the Employer will contribute cash
and/or Qualifying Employer Securities to the Trust Fund, in such amount, if any,
as specified in the Adoption Agreement and, with respect to Qualifying Employer
Securities, as is consistent with Sections 10.4.2 and 10.4.3. Profit sharing
contributions for a Plan Year will be allocated no later than as of the last day
of the Plan Year to the Accounts of Participants eligible for an allocation in
the manner specified in the Adoption Agreement.
3.1.2 Money Purchase Contributions:
If the Plan is a money purchase pension plan, the Employer will contribute
cash to the Trust Fund in such amount (equal to a percentage of the Compensation
of each Participant eligible for an allocation of money purchase contributions
for that Plan Year) as specified in the Adoption Agreement. Money purchase
contributions for the Plan Year will be allocated no later than as of the last
day of the Plan Year to the Accounts of Participants eligible for an allocation
in the manner specified in the Adoption Agreement.
3.1.3 Target Benefit Contributions:
If the Plan is a target benefit plan, the Employer will contribute cash to
the Trust Fund in such amount as specified in the Adoption Agreement. The amount
contributed with respect to the targeted benefit of each Participant eligible
for an allocation for that Plan Year will be allocated no later than as of the
last day of the Plan Year to the Accounts of Participants eligible for an
allocation in the manner specified in the Adoption Agreement.
3.1.4 Contributions on Behalf of Disabled Participants:
If the Primary Employer elects in the Adoption Agreement to make Profit
Sharing, Money Purchase or Target Benefit Contributions on behalf of a
Participant whose Employment terminated due to Disability, "Compensation" shall
mean, with respect to such Participant, the Compensation he or she would have
received for the entire Plan Year or calendar year in which the Disability
occurred if he or she had been paid for such year at the rate at which he or she
was being paid immediately prior to such Disability. Contributions made with
respect to such Compensation shall be nonforfeitable and continued for all
Participants whose Employment terminates due to Disability.
3.1.5 Permitted Disparity:
(A) Limited to One Plan:
If an Employer has adopted more than one Qualified Plan, only one such
Qualified Plan may be subject to the permitted disparity rules (integrated with
Social Security).
(B) Cumulative Permitted Disparity Limit:
Effective for Plan Years beginning on or after January 1, 1995, the
cumulative permitted disparity limit for a Participant is 35 total cumulative
permitted disparity years. Total cumulative permitted years means the number of
years credited to the Participant for allocation or accrual purposes under this
Plan, any other qualified plan or simplified employee pension plan (whether or
not terminated) ever maintained by the Employer. For purposes of determining the
Participant's cumulative permitted disparity limit, all years ending in the same
calendar year are treated as the same year. If the Participant has not benefited
under a defined benefit or target benefit plan for any year beginning on or
after January 1, 1994, the Participant has no cumulative disparity limit.
3.1.6 Contributions Provided by Leasing Organization:
For purposes of the Plan, contributions provided by the "leasing
organization" referred to in Section 1.57 of a Leased Employee which are
attributable to services performed for the recipient Employer shall be treated
as provided by the recipient Employer.
3.1.7 Short Plan Years:
If a Participant's allocation of any contribution, including Matching
Contributions, is conditioned on the completion of a specified number of Hours
of Service during a Plan Year, and if there is a Plan Year of fewer than 12
months, the specified number of Hours of Service required for such short Plan
Year shall equal the product of the number of Hours of Service otherwise
specified in the Adoption Agreement for contribution purposes multiplied by a
fraction, the numerator of which is the number of months in the short Plan Year
and the denominator of which is 12.
3.1.8 Plan Year to Which Contributions are Deemed to be Made:
A contribution shall be deemed to be made for the Plan Year the Employer
designates for the contribution; provided that for purposes of Code Sections
401(a)(4), 401(k), 401(m), 415, or 404 a contribution will not be treated as
having been made for a Plan Year if the contribution is actually made after a
deadline for such Plan Year as required by the applicable Code Section. For
example, for purposes of an Employer's deduction under Code Section 404, a
contribution for a Plan Year may be deemed to be made on the last day of that
Plan Year even if it is contributed to the Plan after the end of the Plan Year
as long as it is contributed before the due date for the Employer's federal
income tax or information return for the taxable year of the Employer ending
with or within the Plan Year (including extensions). For purposes of Section 3.9
(the Code Section 415 annual additions limitation), a contribution will not be
deemed to be credited to a Participant's Account for a Limitation Year unless
the contribution is actually made no later than 30 days after the due date for
the Employer's federal income tax or information return for the taxable year
that ends with or within the Limitation Year (including extensions) (or 30 days
after the end of the Limitation Year in the case of Employee After-Tax
Contributions), unless otherwise provided in the regulations under Code Section
415 or other IRS guidance. A contribution deemed to be made for a Plan Year but
actually contributed after the end of the Plan Year shall be deemed to be
allocated as of the last day of such Plan Year.
3.1.9 Collectively Bargained Employees
Notwithstanding any provision of the Plan to the contrary, if contributions
are made under the Plan on behalf of Employees covered by a collective
bargaining agreement where Plan benefits were the subject of good faith
bargaining, the provisions of the Plan as otherwise reflected in the Plan and
the Adoption Agreement shall apply to all such Employees, unless otherwise
specified in Appendix C to the Adoption Agreement.
3.2 Employee After-Tax Contributions:
(A) Employee After-Tax Contribution Election. If the Primary Employer
elects in the Adoption Agreement to provide for Employee After-Tax
Contributions, subject to the limitations contained in Section 3.6 (the ACP
Test) and Section 3.9 (the Code Section 415 limitation), the Employer will
contribute cash to the Trust Fund in an amount equal to:
(i) the specific dollar amount, or the specific percentage multiplied by
each Participant's Compensation, as specified on the Participant's Employee
After-Tax Election form; or
(ii) a bonus contribution made under Section 3.2(C)
(B) Election Procedure. The amount elected by a Participant in accordance
with an Employee After-Tax Election shall be determined within the limits
specified in the Adoption Agreement. The Employee After-Tax Election shall be
made on a form provided by the Plan Administrator or under an automatic
enrollment procedure (such as a negative election procedure) approved by the
Plan Administrator but no election shall be effective prior to approval by the
Plan Administrator. The Plan Administrator may reduce the amount of any Employee
After-Tax Contribution, or make such other modifications as necessary, so that
the Plan complies with the provisions of the Code. A Participant's Employee
After-Tax Election shall remain in effect until modified or terminated.
Modification or termination of an Employee After-Tax Election shall be made at
such time as specified in the Adoption Agreement.
(C) Contributions of Bonus Amounts. If elected by the Primary Employer in
the Adoption Agreement, a Participant may make an Employee After-Tax Election to
have an amount withheld up to the amount of any bonus payable for such Plan Year
and direct the Employer to contribute the amount so withheld to his or her
Employee After-Tax Contribution Account.
3.3 Rollover Contributions:
Any Eligible Employee or Participant may make a Rollover Contribution under
the Plan or direct the Plan Administrator to direct the Trustee to accept a
direct Rollover Contribution (in accordance with Code Section 401(a)(31)) from
another Eligible Retirement Plan. A Rollover Contribution shall be in cash or in
other property acceptable to the Trustee.
The Plan shall not accept a Rollover Contribution attributable to any
accumulated QVECs, any after tax contributions, or any other amounts that are
not Eligible Rollover Distributions. The Trustee may condition acceptance of a
Rollover Contribution upon receipt of such documents as it may require. The Plan
Administrator, in its discretion, may determine whether an amount constitutes a
valid Rollover Contribution.
If the Plan Administrator, in its discretion, determines at any time that
an amount that is to be contributed by an Employee does not meet the
requirements for a Rollover Contribution to this Plan, the Plan Administrator
may refuse to accept such amount as a Rollover Contribution. If an Employee
makes a contribution under this Section 3.3 intended to be a Rollover
Contribution and the Plan Administrator, in its discretion, determines that the
contribution did not qualify as a Rollover Contribution, the Trustee shall
distribute the entire balance in the Employee's Rollover Contributions Account
attributable to such invalid Rollover Contribution to the Employee as soon as
practicable after the Plan Administrator's determination.
This Section only applies in the context of Rollover Contributions and does
not apply in the context of business transactions such as corporate mergers and
acquisitions, or other trust-to-trust transfers under Code Section 414(l).
3.4 Section 401(k) Contributions and Account Allocations:
3.4.1 Pre-Tax Contributions:
(A) Pre-Tax Contribution Election. If the Primary Employer elects in the
Adoption Agreement to provide for Pre-Tax Contributions, subject to the
limitations contained in Section 3.4.2(B) (the ADP Test) and Section 3.9 (the
Code Section 415 limitation), the Employer will contribute cash to the Trust
Fund in an amount equal to:
(i) the specific dollar amount, or the specific deferral percentage
multiplied by each Participant's Compensation, as specified on the Participant's
Pre-Tax Election form; or
(ii) a bonus contribution made under Section 3.4.1(C).
(B) Election Procedure. The amount elected by a Participant in accordance
with a Pre-Tax Election shall be determined within the limits specified in the
Adoption Agreement. The Pre-Tax Election shall be made on a form provided by the
Plan Administrator or under an automatic enrollment procedure (such as a
negative election procedure) approved by the Plan Administrator but no election
shall be effective prior to approval by the Plan Administrator. The Plan
Administrator may reduce the amount of any Pre-Tax Election, or make such other
modifications as necessary, so that the Plan complies with the provisions of the
Code. A Participant's Pre-Tax Election shall remain in effect until modified or
terminated. Modification or termination of a Pre-Tax Election shall be made at
such time as specified in the Adoption Agreement.
(C) Deferrals of Bonus Amounts. If elected by the Primary Employer in the
Adoption Agreement, an Eligible Employee may make a Pre-Tax Election to have an
amount withheld up to the amount of any bonus payable for such Plan Year and
direct the Employer to contribute the amount so withheld to his or her Pre-Tax
Contribution Account.
3.4.2 Limitation on Pre-Tax Contributions:
(A) Maximum Amount of Pre-Tax Contributions and Distribution of Excess
Pre-Tax Contributions.
(i) Code Section 402(g) Limit. No Participant shall be permitted to have
Pre-Tax Contributions made under this Plan, or any other Qualified Plan
maintained by the Employer, during any calendar year in excess of the dollar
limitation contained in Code Section 402(g) in effect at the beginning of the
such calendar year.
(ii) Claims. A Participant may assign to this Plan any Excess Pre-Tax
Contributions made during the calendar year by notifying the Plan Administrator
on or before March 15th of the amount of the Excess Pre-Tax Contributions to be
assigned to the Plan. A Participant is deemed to notify the Plan Administrator
of any Excess Pre-Tax Contributions that arise by taking into account only those
Pre-Tax Contributions made to this Plan and any other plans of the Employer or
of an Affiliate.
(iii) Distributions of Excess Pre-Tax Contributions. Notwithstanding any
other provision of the Plan, Excess Pre-Tax Contributions, plus any income and
minus any loss allocable thereto, will be distributed no later than the April
155 following the calendar year in which the Excess Pre-Tax Contributions were
made to any Participant to whose Account Excess Pre-Tax Contributions were
assigned for the preceding year and who claims Excess Pre-Tax Contributions for
such taxable year. Excess Pre-Tax Contributions shall be treated as Annual
Additions. Excess Pre-Tax Contributions of Non-Highly Compensated Participants
are not taken into account for purposes of the ADP Test.
(iv) Determination of Income or Loss. Excess Pre-Tax Contributions shall be
adjusted for income or loss up to the date of distribution. The income or loss
allocable to Excess Pre-Tax Contributions is the sum of:
(1) the income or loss allocable to the Participant's Pre-Tax Contributions
Account for the calendar year in which the Excess Pre-Tax Contribution occurred
multiplied by a fraction, the numerator of which is the Participant's Excess
Pre-Tax Contributions for that calendar year and the denominator of which is the
Participant's Account balance in the Pre-Tax Contributions Account as of the
first day of that calendar year without regard to any income or loss occurring
during that calendar year; and
(2) ten percent of the amount determined under (1) above multiplied by the
number of whole calendar months between the end of the calendar year in which
the Excess Pre-Tax Contribution occurred and the date of distribution, counting
the month of distribution if distribution occurs after the 15th of such month.
Anything in the preceding paragraph of this Section 3.4.2(A)(iv) to the
contrary notwithstanding, any reasonable method for computing the income or loss
allocable to Excess Pre-Tax Contributions may be used, provided that such method
is used consistently for all Participants and for all corrective distributions
under the Plan for the Plan Year, and is used by the Plan for allocating income
or loss to Participants' Accounts. Income or loss allocable to the period
between the end of the calendar year in which the Excess Pre-Tax Contribution
occurred and the date of distribution may be disregarded in determining income
or loss.
(B) ADP Test.
The ADP Test determines the maximum amount of Highly Compensated Employee
ADP Contribution Amounts (generally Pre-Tax Contributions) that can be made to
the Plan in accordance with the non-discrimination requirements of Code Section
401(k).
(i) Definitions.
(1) Actual Deferral Percentage. The ratio of (1) the ADP Contribution
Amounts actually paid over to the Trust for the Plan Year on behalf of any
Participant who was an Active Participant at any time during the Plan Year to
(2) such Participant's CODA Compensation for the Plan Year.
(2) ADP Contribution Amounts. ADP Contribution Amounts include (1) any
Pre-Tax Contributions made pursuant to the Participant's Pre-Tax Election
(including Excess Pre-Tax Contributions of Highly Compensated Employees), but
excluding (a) Excess Pre-Tax Contributions of Nonhighly Compensated Employees
that arise solely from Pre-Tax Contributions made under the Plan or plans of the
Employer or an Affiliate and (b) Pre-Tax Contributions that are taken into
account in the ACP Test (provided that ADP test is satisfied both with and
without exclusion of these Pre-Tax Contributions); and (2) Qualified Nonelective
Contributions and Qualified Matching Contributions that are designated by the
Plan Administrator (including through the Adoption Agreement) to be taken into
account in the ADP Test.
(3) Average Deferral Percentage or ADP. For a specified group of eligible
Participants for the Plan Year, the average of the Participants' Actual Deferral
Percentages. For purposes of computing the Average Deferral Percentages, except
as provided in Section 2.7, any otherwise eligible Participant who elects not to
defer or who is suspended from making deferrals due to a distribution shall be
treated as an eligible Participant on whose behalf no Pre-Tax Contributions are
made.
(ii) Prior Year Testing.
Except as provided in Section 3.16 (Safe Harbor Method CODA), the ADP for a
Plan Year for Participants who are Highly Compensated Employees for each Plan
Year and the prior Plan Year's ADP for Participants who were Nonhighly
Compensated Employees for the prior Plan Year must satisfy one of the following
tests:
(1) The ADP for a Plan Year for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the prior Plan Year's ADP for
Participants who were Nonhighly Compensated Employees for the prior Plan Year
multiplied by 1.25; or
(2) The ADP for a Plan Year for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the lesser of (i) the prior Plan
Year's ADP for Participants who were Nonhighly Compensated Employees for the
prior Plan Year multiplied by 2.0 and (ii) the ADP for Participants who were
Nonhighly Compensated Employees in the prior Plan Year plus two percentage
points.
For the first Plan Year that the Plan permits any Participant to make
Pre-Tax Contributions, and if this is not a successor plan, then for purposes of
the foregoing tests, the prior Plan Year's Nonhighly Compensated Employees' ADP
shall be 3 percent, unless the Primary Employer has elected in the Adoption
Agreement, before the end of the Plan Year, to use the Plan Year's ADP for these
Participants.
(iii) Current Year Testing.
(1) If elected by the Primary Employer in the Adoption Agreement, the ADP
Tests in subparagraph (B)(ii)(1) and (2), above, will be applied by comparing
the current Plan Year's ADP for Participants who are Highly Compensated
Employees with the current Plan Year's ADP for Participants who are Nonhighly
Compensated Employees.
(2) Once made, this current year testing election can only be changed by an
election in the Adoption Agreement and the requirements for changing to Prior
Year Testing set forth in Notice 98-1 (or superseding guidance) are satisfied.6
(C) Special Actual Deferral Percentage Rules.
(i) Participation in Two or More Plans. The Actual Deferral Percentage for
any Participant who is a Highly Compensated Employee for the Plan Year and who
is eligible to have ADP Contribution Amounts allocated to his or her accounts
under two or more CODAs that are maintained by the Employer shall be determined
as if all such ADP Contribution Amounts were made under a single arrangement. If
a Highly Compensated Employee participates in two or more CODAs 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 Code Section 401(k) and the regulations and other IRS
guidance issued thereunder.7
(ii) Aggregation. If this Plan satisfies the requirements of Code Sections
401(k), 401(a)(4) or 410(b) only if aggregated with one or more other plans, or
if one or more other plans satisfy the requirements of such sections of the Code
only if aggregated with this Plan, then this Section 3.4.2 shall be applied by
determining the Actual Deferral Percentages of Employees as if all such plans
were a single plan. Any adjustments to the Nonhighly Compensated Employee ADP
for the prior year will be made in accordance with Notice 98-1 and any
superseding guidance, unless the Primary Employer has elected in the Adoption
Agreement to use the current year testing method. Plans may be aggregated in
order to satisfy Code Section 401(k) only if they have the same plan year and
use the same ADP testing method.
(iii) Timing of Contributions. For purposes of the ADP Test, Pre-Tax
Contributions, Qualified Matching Contributions, and Qualified Nonelective
Contributions must be made before the end of the 12-month period immediately
following the Plan Year to which the contributions relate.
(iv) Records. The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP Test and the amount of Qualified Nonelective
Contributions or Qualified Matching Contribution, or both, used in such test.
(v) Other Requirements. The determination and treatment of the Pre-Tax
Contributions, Qualified Matching Contributions, and Qualified Nonelective
Contributions used in the ADP Test shall satisfy such other requirements as may
be prescribed by the Secretary.
(D) Distribution of Excess Contributions
(i) Excess Contributions. The term "Excess Contributions" means with
respect to any Plan Year, the excess of:
(1) The aggregate amount of ADP Contribution Amounts actually taken into
account in computing the ADP of Highly Compensated Employees for such Plan Year,
over
(2) The maximum amount of ADP Contribution Amounts permitted by the ADP
Test (determined by hypothetically reducing contributions made on behalf of
Highly Compensated Employees in order of the ADPs, beginning with the highest of
such percentages)
(ii) General Rules. Notwithstanding any other provision of the Plan except
Section 3.4.2(E), Excess Contributions, plus any income and minus any loss
allocable thereto, shall be distributed no later than the last day of each Plan
Year to Participants to whose Accounts such Excess Contributions were allocated
for the preceding Plan Year.8 Effective for Plan Years beginning after December
31, 1996, Excess Contributions are allocated to the Highly Compensated Employees
with the largest ADP Contribution Amounts taken into account in calculating the
ADP Test for the year in which the excess arose, beginning with the Highly
Compensated Employee with the largest amount of such ADP Contribution Amounts
and continuing in descending order until all the Excess Contributions have been
allocated. For purposes of the preceding sentence, the "largest amount" is
determined after distribution of any Excess Contributions. Excess Contributions
shall be treated as Annual Additions under the Plan. In making distributions,
the Plan Administrator shall distribute Excess Contributions in the following
order: first, Pre-Tax Contributions with respect to which no Matching
Contributions were made; and second, Pre-Tax Contributions with respect to which
Matching Contributions were made.
(iii) 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) the income or loss allocable to the Participant's Pre-Tax Contributions
Account (and, if applicable, the Qualified Nonelective Contributions Account or
the Qualified Matching Contributions Account or both) for the calendar year in
which the Excess Contributions occurred multiplied by a fraction, the numerator
of which is such Participant's Excess Contributions for the Plan Year and the
denominator is the Participant's Account balance attributable to ADP
Contribution Amounts as of the first day of the Plan Year without regard to any
income or loss occurring during such Plan Year; and
(2) ten percent of the amount determined under (1) above 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.
Anything in the preceding paragraph of this Section 3.4.2(D)(iii) to the
contrary notwithstanding, any reasonable method for computing the income or loss
allocable to Excess Contributions may be used, provided that such method is used
consistently for all Participants and for all corrective distributions under the
Plan for the Plan Year, and is used by the Plan for allocating income or loss to
Participant's Accounts. Income or loss allocable to the period between the end
of the Plan Year in which the Excess Contributions occurred and the date of
distribution may be disregarded in determining income or loss.
(E) Qualified Nonelective Contributions and Qualified Matching
Contributions. In lieu of (or in addition to) distributing Excess Contributions
under the preceding provisions of Section 3.4.2(D), and as provided in Sections
3.12 and 3.13, the Employer may make special Qualified Nonelective Contributions
and/or Qualified Matching Contributions on behalf of Nonhighly Compensated
Employees that are sufficient to satisfy the ADP Test. If the Employer elects to
use the prior Plan Year testing method in subparagraph (B)(ii) above, Qualified
Nonelective Contributions and/or Qualified Matching Contributions must be
allocated as of a date within the prior Plan Year and must actually be paid to
the Trust no later than the end of the 12-month period following the end of the
Plan Year to which the contribution relates.9
3.5 Matching Contributions:
(A) General Rule. If elected by the Primary Employer in the Adoption
Agreement, the Employer may make Matching Contributions to the Plan. Such
contributions shall be made at such time or times as the Primary Employer
selects in the Adoption Agreement. Matching Contributions shall, if forfeitable
in accordance with Article IV (vesting) and/or Code Section 411(a)(3)(G)10, be
forfeited to the extent that they are attributable to contributions distributed
under Section 3.4.2(D) ("Distribution of Excess Contributions").
(B) Change in Rate of Contribution. If the Primary Employer has elected in
the Adoption Agreement to have Matching Contributions made on other than a
payroll-by-payroll basis, no change in the Employer's Matching Contribution rate
made during a Plan Year shall reduce the Matching Contribution allocable for the
Plan Year of the change to any Participant who satisfied the Plan's conditions
for receiving a Matching Contribution for the Plan Year of the change.
3.6 Limitation on Contribution Percentage:
(A) ACP Test.
The ACP Test determines the maximum amount of Highly Compensated Employee
ACP Contribution Amounts (generally Employee After-Tax Contributions and
Matching Contributions) that can be made to the Plan in accordance with the
non-discrimination requirements of Code Section 401(m).
(i) Definitions.
(1) Actual Contribution Percentage. The ratio of (1) the ACP Contribution
Amounts actually paid over to the Trust on behalf of any Participant who was an
Active Participant at any time during the Plan Year to (2) such Participant's
CODA Compensation for the Plan Year.
(2) ACP Contribution Amounts. ACP Contribution Amounts include (1) the sum
of the Employee After-Tax Contributions, Matching Contributions, Safe Harbor
Matching Contributions, and Qualified Matching Contributions (to the extent not
taken into account for purposes of the ADP Test) made under the Plan on behalf
of the Participant for the Plan Year, but excluding Matching Contributions that
are forfeited either to correct Excess Aggregate Contributions or because the
contributions to which they relate are Excess Pre-Tax Contributions, or Excess
Aggregate Contributions; and (2) Qualified Nonelective Contributions designated
by the Plan Administrator to be taken into account in applying the ACP Test. The
Primary Employer also may elect to use Pre-Tax Contributions in the ACP
Contribution Amounts so long as the ADP Test is met before the Pre-Tax
Contributions are used in the ACP Test and continues to be met following the
exclusion of those Pre-Tax Contributions that are used to meet the ACP Test.
(3) Average Contribution Percentage or ACP. For a specified group of
eligible Participants for the Plan Year, the average of the Participants' Actual
Contribution Percentages. For purposes of computing the Average Contribution
Percentage, except as provided in Section 2.8, any otherwise eligible
Participant who elects not to make Employee After-Tax Contributions or to be
eligible to receive allocations of Matching Contributions, shall be treated as
an eligible Participant on whose behalf no Employee After-Tax or Matching
Contributions are made.
(ii) Prior Year Testing.
Except as provided in Section 3.16 (Safe Harbor Method CODA), the ACP for a
Plan Year for Participants who are Highly Compensated Employees for each Plan
Year and the prior Plan Year's ACP for Participants who were Nonhighly
Compensated Employees for the prior Plan Year must satisfy one of the following
tests:
(1) the ACP for a Plan Year for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the prior Plan Year's ACP for
Participants who were Nonhighly Compensated Employees for the prior Plan Year
multiplied by 1.25; or
(2) the ACP for a Plan Year for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the lesser of (i) the prior Plan
Year's ACP for Participants who are Nonhighly Compensated Employees for the
prior Plan Year multiplied by 2.0 and (ii) the ACP for Participants who were
Nonhighly Compensated Employees in the prior Plan Year plus two percentage
points.
For the first Plan Year that the Plan permits any Participant to make
Employee After-Tax Contributions, provides for Matching Contributions or both,
and if this is not a successor plan, then for purposes of the foregoing tests,
the prior Plan Year's Nonhighly Compensated Employees' ACP shall be 3 percent
unless the Primary Employer has elected in the Adoption Agreement, before the
end of the Plan Year, to use the Plan Year's ACP for these Participants.
(iii) Current Year Testing.
(1) If elected by the Primary Employer in the Adoption Agreement, the ACP
Tests in subparagraphs (A)(ii)(1) and (2), above, will be applied by comparing
the current Plan Year's ACP for Participants who are Highly Compensated
Employees for each Plan Year with the current Plan Year's ACP for Participants
who are Nonhighly Compensated Employees.
(2) Once made, this current year testing election can only be changed by an
election in the Adoption Agreement and the requirements for changing to prior
year testing set forth in Notice 98-1 (or superseding guidance) are satisfied.11
(B) Special Actual Contribution Percentage Rules.
(i) Participation in Two or More Plans. The Actual Contribution Percentage
for any Participant who is a Highly Compensated Employee for the Plan Year and
who is eligible to have ACP Contribution Amounts allocated to his or her account
under two or more such plans described in Code Section 401(a), or CODAs that are
maintained by the Employer, shall be determined as if all such ACP Contribution
Amounts were made under a single arrangement. If a Highly Compensated Employee
participates in two or more such plans described in Code Section 401(a) or CODAs
that have different Plan Years, all plans 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 Code Section 401(m) and the regulations and other IRS
guidance issued thereunder.12
(ii) Aggregation. If this Plan satisfies the requirements of Code Sections
401(m), 401(a)(4) or 410(b) only if aggregated with one or more other plans, or
if one or more other plans satisfy the requirements of such sections of the Code
only if aggregated with this Plan, then this Section 3.6 shall be applied by
determining the Actual Contribution Percentages of Employees as if all such
plans were a single plan. Any adjustments to the Nonhighly Compensated Employee
ACP for the prior year will be made in accordance with Notice 98-1 and any
superseding guidance, unless the Primary Employer has elected in the Adoption
Agreement to use the current year testing method. Plans may be aggregated in
order to satisfy Code Section 401(m) only if they have the same Plan Year and
use the same ACP testing method.
(iii) Timing of Contributions. For purposes of the ACP Test, Employee
After-Tax Contributions are considered to have been made in the Plan Year for
which contributed to the Trust. Matching Contributions, Qualified Matching
Contributions, Qualified Nonelective Contributions must be made before the end
of the 12-month period immediately following the Plan Year to which the
contributions relate.
(iv) Records. 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.
(v) Pre-Tax Contributions. At the discretion of the Employer, Pre-Tax
Contributions may be used to satisfy the ACP Test. If Pre-Tax Contributions are
used in the ACP Test, the ADP Test must be met before the Pre-Tax Contributions
are so used and the ADP Test must continue to be met following the exclusion of
those Pre-Tax Contributions that are used in the ACP Test.
(vi) Other Requirements. The determination and treatment of Matching
Contributions, Employee After-Tax Contributions, Qualified Matching
Contributions and Qualified Nonelective Contributions used in the ACP Test shall
satisfy such other requirements as may be prescribed by the Secretary.
(C) Multiple Use.
(i) The multiple use test described in this Section 3.6(C) applies to
determine the extent to which the alternative limitations in Section
3.4.2(B)(ii)(2) and Section 3.6(A)(ii)(2) are both utilized. In applying the
multiple use limitation, the ADP and ACP of the Highly Compensated Employees are
determined after any corrections required to meet the ADP Test and the ACP Test
and are deemed to be the maximum permitted under such tests for the Plan Year.
(ii) If one or more Highly Compensated Employees participate 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 (defined in subparagraph (C)(iii), below),
then the ACP of those Highly Compensated Employees who also participate in a
CODA will be reduced, so that the limit is not exceeded. The amount by which
each Highly Compensated Employee's ACP Contribution Amounts is reduced shall be
treated as an Excess Aggregate Contribution.
(iii) Multiple use does not occur if either the ADP of the Highly
Compensated Employees does not exceed 1.25 multiplied by the ADP of the
Nonhighly Compensated Employees or the ACP of the Highly Compensated Employees
does not exceed 1.25 multiplied by the ACP of the Nonhighly Compensated
Employees.
(iv) The "Aggregate Limit" is the greater of the sum of (1) and (2) below
or the sum of (3) and (4) below:
(1) 125 percent of the greater of (a) the ADP of the Nonhighly Compensated
Employees for the prior Plan Year or (b) the ACP of Nonhighly Compensated
Employees for the prior Plan Year, and
(2) 2 plus the "lesser" of (1)(a) or (1)(b) above (but in no event more
than 200% of the lesser of (1)(a) or (1)(b) above).
(3) 125 percent of the lesser of (a) the ADP of the Nonhighly Compensated
Employees for the prior Plan Year or (b) the ACP of Nonhighly Compensated
Employees for the prior Plan Year, and
(4) 2 plus the greater of (3)(a) or (3)(b) above (but in no event more than
200% of the greater of (3)(a) or (3)(b) above).
If the Primary Employer has elected in the Adoption Agreement to use the
current year testing method, then, in calculating the "Aggregate Limit" for a
particular Plan Year, the Nonhighly Compensated Employees' ADP and ACP for that
Plan Year, instead of for the prior Plan Year, is used.
(D) Forfeiture and/or Distribution of Excess Aggregate Contributions.
(i) Excess Aggregate Contributions. The term "Excess Aggregate
Contributions" means: With respect to any Plan Year, the excess of:
(1) The aggregate ACP Contribution Amounts actually taken into account in
computing the ACP of Highly Compensated Employees for such Plan Year, over
(2) The maximum amount of such ACP Contribution Amounts permitted by the
ACP Test (determined by hypothetically reducing contributions made on behalf of
Highly Compensated Employees in the order of their ACPs beginning with the
highest of such percentages). Such determination shall be made after first
determining Excess Pre-Tax Contributions under Section 3.4.2 and then
determining Excess Contributions under Section 3.4.2.
(ii) General Rules. Notwithstanding any other provision of the Plan, Excess
Aggregate Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited, if forfeitable13, 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. 14
Effective for Plan Years beginning after December 31, 1996, Excess Aggregate
Contributions are allocated to the Highly Compensated Employees with the largest
ACP Contribution Amounts taken into account in calculating the ACP Test for the
year in which the excess arose, beginning with the Highly Compensated Employee
with the largest amount of such ACP Contribution Amounts and continuing in
descending order until all the Excess Aggregate Contributions have been
allocated. For purposes of the preceding sentence, the "largest amount" is
determined after distribution of any Excess Aggregate Contributions. Excess
Aggregate Contributions shall be treated as Annual Additions under the Plan. In
making distributions, the Plan Administrator shall distribute and/or forfeit, if
forfeitable, Excess Aggregate Contributions in the following order: first,
After-Tax Contributions with respect to which no Matching Contributions were
made; second, After-Tax Contributions with respect to which Matching
Contributions were made and the Matching Contributions to which those After-Tax
Contributions relate on a pro rata basis; third, Matching Contributions and all
other amounts, if any, included in Excess Aggregate Contributions with respect
to affected Highly Compensated Employees.
(iii) 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 allocated to each Participant
is the sum of:
(1) income or loss allocable to the Participant's Employee After-Tax
Contribution Account, Matching Contribution Accounts, and, if applicable, the
Qualified Matching Contribution Account and Qualified Nonelective Contribution
Account for the Plan Year multiplied by a fraction, the numerator of which is
such Participant's Excess Aggregate Contributions for the Plan Year and the
denominator is the Participant's Account Balance(s) attributable to ACP
Contribution Amounts without regard to any income or loss occurring during such
Plan Year; and
(1) ten percent of the amount determined under (1) multiplied by the number
of whole calendar months between the end of the Plan Year and the date of
distribution, counting the month of distribution if distribution occurs after
the 15th of such month.
Anything in the preceding paragraph of this Section 3.6(D)(iii) to the
contrary notwithstanding, any reasonable method for computing the income or loss
allocable to Excess Aggregate Contributions may be used, provided that such
method is used consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year, and is used by the Plan for
allocating income or loss to Participants' Accounts. Income or loss allocable to
the period between the end of the Plan Year and the date of distribution may be
disregarded in determining income or loss.
(iv) Forfeitures of Excess Aggregate Contributions. Forfeitures of Excess
Aggregate Contributions shall be treated as provided in Section 3.7.
(E) Qualified Nonelective Contributions and Qualified Matching
Contributions. In lieu of (or in addition to) distributing Excess Aggregate
Contributions under the preceding provisions of Section 3.6, and as provided in
Sections 3.12 and 3.13, the Employer may make special Qualified Nonelective
Contributions and/or Qualified Matching Contributions on behalf of Nonhighly
Compensated Employees that are sufficient to satisfy the ACP Test. If the
Employer elects to use the prior Plan Year testing method in subparagraph
(A)(ii) above, Qualified Nonelective Contributions and/or Qualified Matching
Contributions must be allocated as of a date within the prior Plan Year and must
actually be paid to the Trust no later than the end of the 12-month period
following the end of the Plan Year to which the contribution relates.15
3.7 Treatment of Forfeitures:
Forfeitures for a Plan Year shall be applied as elected by the Primary
Employer in the Adoption Agreement.
3.8 Establishing of Accounts:
3.8.1 Pre-Tax Contributions Account:
A Pre-Tax Contributions Account shall be established for each Participant
who makes a Pre-Tax Election to which the Plan Administrator shall credit, or
cause to be credited, Pre-Tax Contributions allocable to each such Participant,
plus earnings or losses thereon.
3.8.2 Profit Sharing, Money Purchase, or Target Benefit Contributions
Account:
A Profit Sharing Contributions Account, Money Purchase Contributions
Account, or Target Benefit Contributions Account, shall be established for each
Participant to which the Plan Administrator shall credit or cause to be credited
contributions described in Section 3.1.1, 3.1.2 or 3.1.3 (as applicable) and
forfeitures attributable to such contributions, if any, plus earnings or losses
thereon.
3.8.3 Employee After-Tax Contributions Account:
An Employee After-Tax Contributions Account shall be established for each
Participant who makes Employee After-Tax Election, to which the Plan
Administrator shall credit, or cause to be credited, all amounts allocable to
each such Participant, plus earnings or losses thereon.
3.8.4 Matching Contributions Account:
A Matching Contributions Account shall be established for each Participant
for whom Matching Contributions are made, to which the Plan Administrator shall
credit, or cause to be credited, all such amounts allocable to each such
Participant, plus earnings or losses thereon.
3.8.5 Qualified Matching Contributions Account:
A Qualified Matching Contributions Account shall be established for each
Participant for whom Qualified Matching Contributions are made, to which the
Plan Administrator shall credit, or cause to be credited, all amounts allocable
to each such Participant, plus earnings or losses thereon.
3.8.6 Qualified Nonelective Contributions:
A Qualified Nonelective Contributions Account shall be established for each
Participant for whom Qualified Nonelective Contributions are made, to which the
Plan Administrator shall credit, or cause to be credited, all amounts allocable
to each such Participant, plus earnings or losses thereon.
3.8.7 Rollover Contributions Account:
A Rollover Contributions Account shall be established for each Participant
who contributes to the Plan under Section 3.3 to which the Plan Administrator
shall credit, or cause to be credited, Rollover Contributions made by the
Participant, plus earnings or losses thereon.
3.8.8 QVEC Account:
A QVEC Account shall be established for each Participant to contain amounts
attributable to QVECs, if any, plus earnings or losses thereon.
3.8.9 Prevailing Wage Account:
A Prevailing Wage Account shall be established for each Participant to
which Prevailing Wage Contributions made on behalf of the Participant, if any,
are credited, plus earnings or losses thereon.
3.8.10 Safe Harbor Matching Contributions Account:
A Safe Harbor Matching Contributions Account shall be established for each
Participant to which Matching Contributions made according to the Safe Harbor
CODA rules of Section 3.16, if any, are credited, plus earnings or losses
thereon.
3.8.11 Safe Harbor Nonelective Contributions Account:
A Safe Harbor Nonelective Contributions Account shall be established for
each Participant to which nonelective contributions made according to the Safe
Harbor CODA rules of Section 3.16, if any, are credited, plus earnings or losses
thereon.
3.8.12 Miscellaneous Account:
A Miscellaneous Account or Miscellaneous Accounts may be established by the
Plan Administrator as the Plan Administrator determines to be necessary for the
administration of the Plan, plus earnings or losses thereon.
3.9 Limitation on Amount of Allocations:
3.9.1 Definitions:
As used in this Section 3.9, each of the following terms shall have the
meaning for that term set forth in this Section 3.9.1:
(A) Annual Additions means, for each Participant, the sum of the following
amounts credited to the Participant's Accounts for the Limitation Year:
(i) Employer contributions within the meaning of Treas. Reg. Section
1.415-6(b) (including Pre-Tax Contributions);
(ii) Employee contributions within the meaning of Treas. Reg. Section
1.415-6(b);
(iii) forfeitures;
(iv) allocation under a simplified employee pension plan; and
(v) any Excess Amount (as defined in subsection (F), below) applied under a
Defined Contribution Plan in the Limitation Year to reduce Employer
contributions will also be considered as part of the Annual Additions for such
Limitation Year.
Amounts allocated after March 31, 1984, to an "individual medical benefit
account as defined in Code Section 415(1)(2) ("Individual Medical Benefit
Account") which is part of a pension or annuity plan maintained by the Employer
or Affiliate 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 that date, which are attributable to
post-retirement medical benefits allocated to the separate account of a "key
employee" as defined in Code Section 419A(d)(3) under a "welfare benefit fund"
as defined in Code Section 419(e) ("Welfare Benefit Fund") maintained by the
Employer or Affiliate, are treated as Annual Additions to a Defined Contribution
Plan.
For this purpose, any Excess Amount (as defined in subsection (F), below)
applied under Sections 3.9.2(D) or 3.9.3(F) in the Limitation Year to reduce any
Employer contributions will be considered Annual Additions for such Limitation
Year.
Notwithstanding any provision of the Plan to the contrary, if, in a
particular Limitation Year, an Employer contributes an amount to a Participant's
Account because of an erroneous forfeiture in a prior Limitation Year, or
because of an erroneous failure to allocate amounts in a prior Limitation Year,
or by operation of Section 2.5.1 or Section 12.9 (corrective allocations due to
administrative errors), the contribution will not be considered an Annual
Addition with respect to the Participant for that particular Limitation Year,
but will be considered an Annual Addition for the Limitation Year to which it
relates. If the amount so contributed in the particular Limitation Year takes
into account actual investment gains attributable to the period subsequent to
the year to which the contribution relates, the portion of the total
contribution which consists of such gains shall not be considered an Annual
Addition for any Limitation Year.
(B) Defined Benefit Dollar Limitation means $90,000 multiplied by the
Adjustment Factor or such other limitation set forth in Code Section 415(b)(1)
as in effect for the Limitation Year.
(C) Defined Benefit Fraction means a fraction, the numerator of which is
the sum of the Projected Annual Benefits of the Participant involved under all
Defined Benefit Plans (whether or not terminated) maintained by the Employer or
Affiliate, and the denominator of which is the lesser of 125% of the dollar
limitation determined for the Limitation Year under Code Sections 415(b) or (d)
or 140% of the Participant's Highest Average Limitation Compensation, including
any adjustments under Code Section 415(b). However, if the Participant was a
Participant as of the first day of the first Limitation Year beginning after
December 31, 1986, in one or more Defined Benefit Plans maintained by the
Employer or Affiliate which were in existence on May 5, 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 plans after May 5, 1986. The preceding sentence
applies only if the Defined Benefit Plans individually and in the aggregate
satisfied the requirements of Code Section 415 for all Limitation Years
beginning before January 1, 1987.
(D) Defined Contribution Dollar Limitation means $30,000, as adjusted under
Code Section 415(d).
(E) Defined Contribution Fraction means a fraction, the numerator of which
is the sum of the Annual Additions to the Participant's Account or Accounts
under all the Defined Contribution Plans (whether or not terminated) maintained
by the Employer or Affiliate for the current and all prior Limitation Years
(including the Annual Additions attributable to the Participant's nondeductible
contributions to all Defined Benefit Plans, whether or not terminated,
maintained by the Employer or Affiliate and the Annual Additions attributable to
all Welfare Benefit Funds, Individual Medical Benefit Accounts, and simplified
employee pensions maintained by the Employer or Affiliate), and the denominator
of which is the sum of the "maximum aggregate amounts" (as defined in the
following sentence) for the current and all prior Limitation Years of service
with the Employer or Affiliate (regardless of whether a Defined Contribution
Plan was maintained by the Employer or Affiliate). The "maximum aggregate
amount" in any Limitation Year is the lesser of (i) 125% of the dollar
limitation determined under Code Sections 415(b) and (d) in effect under Code
Section 415(c)(1)(A) or (ii) 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 or Affiliate in existence on May
5, 1986, the numerator of this fraction will be adjusted if the sum of this
fraction and the Defined Benefit Fraction would otherwise exceed 1.0 under the
terms of this Plan. Under the adjustment, an amount equal to the product of (A)
the excess of the sum of the fractions over 1.0 times (B) 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 later of the end of the last Limitation Year beginning before
January 1, 1987, and disregarding any changes in the terms and conditions of the
Plans made after May 6, 1986, but using the Code 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 Participant contributions as Annual
Additions.
(F) Excess Amounts means the excess of the Participant's Annual Additions
for the Limitation Year involved over the Maximum Permissible Amount (as defined
in subsection I, below) for that Limitation Year.
(G) Highest Average Limitation Compensation means the average Limitation
Compensation of the Participant involved for that period of three consecutive
Years of Service with the Employer or Affiliate (or if the Participant has less
than three such Years of Service, the actual number thereof) that produces the
highest average.
(H) Limitation Compensation means Compensation, as defined in either (i),
(ii) or (iii) below, as specified in the Adoption Agreement, and subject to (iv)
and (v) below. In addition, for Limitation Years beginning after December 31,
1997, for purposes of applying the limitations of this Section, Limitation
Compensation paid or made available during such Limitation Year shall include
any Elective Contributions.
(i) Form W-2 Compensation.
Information required to be reported under Sections 6041 and 6051. ("Wages,
Tips and Other Compensation" Box on Form W-2). Limitation Compensation is
defined as wages within the meaning of Code Section 3401(a) 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 Code Sections 6041(d), 6051(a)(3), and 6052.
Compensation must be determined without regard to any rules under Code Section
3401(a) that limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the exception for
agricultural labor in Code Section 3401(a)(2)).
(ii) Code Section 3401(a) wages.
Limitation Compensation is defined as wages within the meaning of Code
Section 3401(a) 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 Code Section
3401(a)(2)).
(iii) Code Section 415 Safe-Harbor Compensation.
For an Employee other than a Self-Employed Individual, the Employee's
earned income, wages, salaries, and fees for professional services and other
amounts received (without regard to whether or not an amount is paid in cash)
for personal services actually rendered in the course of Employment 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 Treas. Reg. Section 1.62-2(c)) and
excluding the following:
(1) Employer contributions to a plan of deferred compensation which are not
includible in the Employee's gross income for the taxable year in which
contributed, or contributions under a "simplified Employee pension" plan (within
the meaning of Code Section 408(k)) to the extent such contributions are
deductible by the Employee, or any distributions from a plan of deferred
compensation;
(2) amounts realized from the exercise of a non-qualified stock option, or
when restricted stock (or other property) held by the Employee either becomes
freely "transferable" or is no longer subject to a "substantial risk of
forfeiture" (both quoted terms within the meaning of Code Section 83(a));
(3) amounts realized from the sale, exchange or other disposition of stock
acquired under a qualified stock option;
(4) other amounts which received special tax benefits, or contributions
made by the Employer (whether or not under a salary reduction agreement) towards
the purchase of an annuity described in Code Section 403(b) (whether or not the
amounts are actually excludable from the gross income of the Employee); and
For purposes of this subsection (H)(iii), Limitation Compensation shall
include only that Compensation which is actually paid or made available in gross
income during the Limitation Year.
(iv) Self-Employed Individuals.
Without regard to the definition of Limitation Compensation elected by the
Primary Employer, for a Self-Employed Individual, Limitation Compensation means
his or her Earned Income, provided that if the Self-Employed Individual is not a
Participant for an entire Plan Year, his or her Limitation Compensation for that
Plan Year shall be his or her Earned Income for that Plan Year multiplied by a
fraction the numerator of which is the number of days he or she is a Participant
during the Plan Year and the denominator of which is the number of days in the
Plan Year.
(v) Disabled Participants.
Additionally, Limitation Compensation for a Participant in a Defined
Contribution Plan who is permanently and totally disabled (as defined in Code
Section 22(e)) 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 disabled. For Limitation Years beginning before
January 1, 1997 such imputed compensation may be taken into account only if the
Participant is not a Highly Compensated Employee and contributions made on
behalf of such Participant are nonforfeitable when made.
(I) Maximum Permissible Amount means the maximum Annual Addition (as
defined in subsection (A) above) that may be contributed or allocated to a
Participant's Account under the Plan for any Limitation Year. The maximum Annual
Addition shall not exceed the lesser of: (i) the Defined Contribution Dollar
Limitation, or (ii) 25% of the Participant's Limitation Compensation for the
Limitation Year. The Compensation limitation referred to in (ii) shall not apply
to any contribution for medical benefits (within the meaning of Code Sections
401(h) or 419A(f)(2)) which is otherwise treated as an Annual Addition under
Code Section 415(l)(1) or 419A(d)(2). If a short Limitation Year is created
because of an amendment changing the Limitation Year to a different
12-consecutive month period, the Maximum Permissible Amount will not exceed the
Defined Contribution Dollar Limitation multiplied by the following fraction:
Number of months in the short Limitation Year
(J) Projected Annual Benefit means the annual retirement benefit (adjusted
to an actuarially equivalent Straight Life Annuity if such benefit is expressed
in a form other than a Straight Life Annuity or Qualified Joint and Survivor
Annuity) to which the Participant would be entitled under the terms of a Defined
Benefit Plan assuming:
(K) the Participant continues in employment with the Employer or Affiliate
until the Participant's "normal retirement age" under the Plan within the
meaning of Code Section 411(a)(8) (or the Participant's current age, if later);
and
(L) the Participant's Limitation 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.
3.9.2 Annual Additions Limit:
The provisions of this subsection 3.9.2 apply with respect to a Participant
who does not participate in, and has never participated in, another Qualified
Plan, a welfare benefit fund as defined in Code Section 419(c) maintained by the
Employer or an Affiliate or an individual medical account as defined in Code
Section 415(l)(2) maintained by an Employer or Affiliate or a simplified
Employee pension, as defined in Code Section 408(k), maintained by the Employer
or an Affiliate, which provides an Annual Addition as defined in Section
3.9.1(A) of the Plan, other than this Plan.
(A) Limit. The amount of Annual Additions which may be credited to the
Participant's Account for any Limitation Year will not exceed the lesser of the
Maximum Permissible Amount or any other limitation contained in this Plan. If
the Employer contribution or forfeiture that would otherwise be contributed or
allocated to the Participant's Account would cause the Annual Additions on
behalf of the Participant for the Limitation Year to exceed the Maximum
Permissible Amount with respect to that Participant for the Limitation Year, the
amount contributed or allocated will be reduced so that the Annual Additions on
behalf of the Participant for the Limitation Year will equal such Maximum
Permissible Amount.
(B) Estimated Limitation Compensation. Prior to determining the
Participant's actual Limitation Compensation for a Limitation Year, the Employer
may determine the Maximum Permissible Amount for the Participant for the
Limitation Year on the basis of a reasonable estimation of the Participant's
Compensation for that Limitation Year. Such estimated Compensation shall be
uniformly determined for all Participants similarly situated.
(C) Actual Limitation Compensation. As soon as is administratively feasible
after the end of a Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the Participant's actual
Limitation Compensation for the Limitation Year.
(D) Disposition of Excess Amount. If under Section 3.9.2(C), as a result of
the allocation of forfeitures or as a result of an error in estimating
Compensation or in determining the amount of Pre-Tax Contributions, there is an
Excess Amount with respect to the Participant for a Limitation Year, the Excess
Amount shall be disposed of as follows:
(i) First, any contribution to the Participant's Employee After-Tax
Contributions Account (to the extent a Matching Contribution has not been made
with respect to such contribution), plus earnings or minus losses attributable
thereto will be distributed to the Participant to the extent that the return
thereof would reduce the Excess Amount in such Participant's Account.
(ii) If, after the application of Section 3.9.2(D)(i), an Excess Amount
still exists, any Pre-Tax Contributions (to the extent a Matching Contribution
has not been made with respect to such contributions) plus earnings or minus
losses attributable thereto, will be distributed to the Participant to the
extent that the return thereof would reduce the Excess Amount in such
Participant's Accounts.
(iii) If, after the application of Section 3.9.2(D)(i) and (ii) an Excess
Amount still exists, any Employee After-Tax Contributions (plus earning
attributable thereto) to which Matching Contributions are attributable shall be
distributed to the Participant to the extent that the return thereof would
reduce the Excess Amount in such Participant's Accounts. The pro rata portion of
the Matching Contribution (and earnings attributable thereto) attributable to
such returned Employee After-Tax Contributions shall be held in a suspense
account and used to reduce the Matching Contribution under this Plan for such
Participant in the next Limitation Year.
(iv) If after the application of Section 3.9.2(D)(i), (ii), and (iii) an
Excess Amount still exists, any Pre Tax Contributions (plus earnings
attributable thereto) to which Matching Contributions are attributable shall be
distributed to the Participant to the extent that the return thereof would
reduce the Excess Amount in such Participant's Accounts. The pro rata portion of
the Matching Contribution (and earnings attributable thereto) attributable to
such returned Pre Tax Contributions shall be held in a suspense account and used
to reduce the Matching Contribution under this Plan for such Participant in the
next Limitation Year.
(v) If after the application of Section 3.9.2(D)(i), (ii) (iii) and (iv) an
Excess Amount still exists, and the Participant is covered by the Plan at the
end of the Limitation Year, the remaining Excess Amount in the Participant's
Account will be held in a suspense account and used to reduce Employer
contributions (including allocation of any forfeitures) under this Plan to which
such Participant is otherwise entitled in the next Limitation Year, and in each
succeeding Limitation Year, if necessary.
(vi) If after the application of Section 3.9.2(D)(i), (ii), (iii), and (iv)
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 under this Plan for all remaining Participants in the next
Limitation Year, and in each succeeding Limitation Year, if necessary.
(vii) If a suspense account is in existence at any time during a Limitation
Year under Section 3.9.2(D)(iv), the suspense account will not participate in
the allocation of the Trust Fund's investment gains or losses to or from any
other Account. 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 the applicable Participants' or Accounts before any
Employer or Participant contributions may be made to the Plan for the Limitation
Year. Excess Amounts, except as provided in Section 3.9.2(D)(i) and (ii), (iii),
and (iv) may not be distributed to Participants or former Participants.
(viii) Determination of Earnings. Earnings attributable to Excess Amounts
shall be determined in the manner described in Section 3.4.2(D)(iii).
3.9.3 Participation in More Than One Plan:
The provisions of this Section 3.9.3 apply with respect to a Participant
who, in addition to this Plan, is covered or has been covered under one or more
Defined Contribution Plans (which are either Master or Prototype Plans, or not
Master or Prototype Plans), welfare benefit funds, an individual medical account
or a simplified employee pension plan maintained by the Employer or an
Affiliate, which provides an Annual Addition as described in Section 3.9.1(A) of
the Plan during any Limitation Year.
(A) The Annual Additions which may be credited to a Participant's Accounts
under this Plan for any such Limitation Year will not exceed the Maximum
Permissible Amount reduced by the Annual Additions credited to the Participant's
Account or Accounts under the other qualified Master or Prototype Defined
Contribution Plans and welfare benefit fund, individual medical account or
simplified employee pension plan 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
account, and simplified employee pension plan maintained by the Employer are
less than the Maximum Permissible Amount and the Employer contribution that
would otherwise be contributed or allocated to a Participant's Account under
this Plan would cause the Annual Additions for the Limitation Year to exceed
this limitation, the amount contributed or allocated shall be reduced so that
the Annual Additions under all such other 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 and welfare benefit funds, individual medical
account, or simplified employee pension plan in the aggregate are equal to or
greater than the Maximum Permissible Amount, no amount will be contributed or
allocated to any of the Participant's Accounts under this Plan for the
Limitation Year.
(B) Before determining the Participant's actual Limitation Compensation for
a Limitation Year, the Maximum Permissible Amount for a Participant may be
determined in the manner described in Section 3.9.2(B).
(C) As soon as is administratively feasible after the end of a Limitation
Year, the Maximum Permissible Amount for the Limitation Year will be determined
on the basis of the Participant's actual Limitation Compensation for the
Limitation Year.
(D) If, under Section 3.9.3(A) above, or as a result of the allocation of
forfeitures, a Participant's Annual Additions under this Plan and the
Participant's Annual Additions under such other plans would result in an Excess
Amount for a Limitation Year, the Excess Amount will be deemed to consist of the
Annual Additions last allocated, except that Annual Additions attributable to a
simplified employee pension plan will be deemed to have been allocated first,
followed by Annual Additions to a welfare benefit fund or individual medical
benefit account regardless of the actual allocation date.
(E) If an Excess Amount was allocated to a Participant on an allocation
date of this Plan which coincides with an allocation date of another such plan,
the Excess Amount attributed to this Plan will be the product of:
(i) the total Excess Amount allocated as of such date, times
(ii) the ratio of (1) the Annual Additions allocated to the Participant for
the Limitation Year as of such date under this Plan to (2) the total Annual
Additions allocated to the Participant for the Limitation Year as of such date
under this Plan and all the other qualified Master or Prototype Defined
Contribution Plans.
(F) Any Excess Amount attributed to this Plan will be disposed in the
manner described in Section 3.9.2(D).
3.9.4 Participation in Non-Prototype Plans:
If a Participant is covered under one or more qualified Defined
Contribution Plans, other than this Plan, maintained by the Employer or an
Affiliate which are not Master or Prototype Plans, welfare benefit funds, or an
individual medical benefit account maintained or a simplified employee pension
plan by the Employer, Annual Additions which may be credited to the
Participant's Account under this Plan for any Limitation Year shall be limited
in accordance with the provisions of Sections 3.9.3(A) - (F) above as though
each such other plan was a Master or Prototype Plan, unless the Employer
provides other limitations in the qualified Defined Contribution Plan.
3.9.5 Defined Benefit Plan Participation - Pre-2000 Years:
If the Employer maintains, or at any time maintained, a Defined Benefit
Plan covering any Participant in this Plan, the sum of the Participant's Defined
Benefit Fraction and Defined Contribution Fraction will not exceed 1.0 in any
Limitation Year. The Annual Additions which may be credited to the Participant's
Account under this Plan for any Limitation Year will be limited in accordance
with the terms of the Defined Benefit Plan. This Section 3.9.5 does not apply
for Limitation Years beginning on or after January 1, 2000 with respect to
individuals who are actively employed Employees on or after January 1, 2000.
3.9.6 Super Top-Heavy - Pre-2000 Years:
If required under Section 4.4.4, "100%" shall be substituted for "125%"
wherever the latter percentage appears in this Section 3.9. This Section 3.9.6
does not apply for Limitation Years beginning on or after January 1, 2000 with
respect to individuals who are active Employees on or after January 1, 2000.
3.10 Return of Employer Contributions Under Special Circumstances:
3.10.1 Contributions Are Conditional:
All contributions by the Employers are conditioned on their being
deductible under Code Section 404 (to the extent the Employers are not otherwise
tax exempt) and upon the initial qualification of the Plan (as adopted by the
Employers) under Code Section 401(a).
3.10.2 Return of Contributions:
Notwithstanding any provision of this Plan to the contrary, upon timely
written demand by the Employer or the Plan Administrator to the Trustee:
(A) Any contribution by the Employer to the Plan under a mistake of fact
must be returned to the Employer by the Trustee within one year of the
contribution. Earnings attributable to such contribution shall not be returned
to the Employer, but losses attributable to the contribution shall reduce the
amount to be returned.
(B) Any contribution made by the Employer incident to the determination by
the Commissioner of Internal Revenue that the Plan is initially a Qualified Plan
shall be returned to the Employer by the Trustee within one year after
notification from the IRS that the Plan is not initially a Qualified Plan but
only if the application for the qualification is made by the time prescribed by
law for filing the Employer's return for the taxable year in which the Plan is
adopted, or such later date as the Secretary of the Treasury may prescribe.
(C) If the deduction of a contribution made by the Employer is disallowed
by the IRS under Code Section 404, such contribution (to the extent disallowed)
must be returned to the Employer within one year of the disallowance of the
deduction. Earnings attributable to such contribution shall not be returned to
the Employer, but losses attributable to the contribution shall reduce the
amount to be returned.
3.11 QVECs:
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, if any, will be maintained in a separate
QVEC Account with respect to each affected Participant which will be
nonforfeitable at all times. Each Participant's QVEC Account, if any, will share
in the gains and losses under the Plan in the same manner as any other Account
under the Plan. No part of the QVEC Account may be used to purchase life
insurance or is available for a loan under the Plan. Subject to the Article VI
Qualified Joint and Survivor Annuity requirements (if applicable), the
Participant may withdraw any part of his or her QVEC Account at any time by
making a written application to the Plan Administrator.
3.12 Qualified Nonelective Contributions:
The Employer may elect to make Qualified Nonelective Contributions under
the Plan on behalf of Nonhighly Compensated Employees. Such contributions for a
Plan Year shall be allocated among Participants who are Nonhighly Compensated
Employees in an amount necessary to satisfy the ADP Test or the ACP Test. Such
Qualified Nonelective Contributions may be made in lieu of or in addition to
distributing Excess Contributions as provided in Section 3.4.2 of the Plan, or
distributing or forfeiting Excess Aggregate Contributions as provided in Section
3.6 of the Plan.
3.13 Qualified Matching Contributions:
The Employer may elect to make Qualified Matching Contributions under the
Plan. Such Contributions for a Plan Year shall be allocated among Participants
who are Nonhighly Compensated Employees and who make Pre-Tax Contributions for
the Plan Year in an amount necessary to satisfy the ADP Test or the ACP Test.
Such Qualified Matching Contributions may be made in lieu of or in addition to
distributing Excess Contributions as provided in Section 3.4.2 of the Plan, or
distributing or forfeiting Excess Aggregate Contributions as provided in Section
3.6 of the Plan..
3.14 Contribution and Allocation of Qualified Nonelective Contributions and
Qualified Matching Contributions:
Qualified Nonelective Contributions and/or Qualified Matching Contributions
for a Plan Year shall be contributed and allocated to the Trust no later than
the last day of the 12-month period immediately following the Plan Year to which
such contributions relate.
3.15 Prevailing Wage Contribution:
If the Primary Employer elects in the Adoption Agreement, the Employer will
make Prevailing Wage Contributions on behalf of each Participant (or such
Participants identified in Appendix B of the Adoption Agreement) as provided in
the Adoption Agreement. Prevailing Wage Contributions may offset Employer
contributions to the extent provided in the Adoption Agreement. A Participant's
Prevailing Wage Account shall always be 100% vested.
3.16 Safe Harbor Method CODA:
This Section 3.16 is effective for Plan Years beginning after December 31,
1998.
3.16.1 Rule of Application:
(A) If the Primary Employer has elected the Safe Harbor CODA option in the
Adoption Agreement, the provisions of this Section 3.16 shall apply for the Plan
Year and any provisions relating to the ADP Test described in Code Section
401(k)(3) (and Plan Section 3.4.2(B)) or the ACP Test described in Code Section
401(m)(2) (and Plan Section 3.6) do not apply.
(B) Notwithstanding Section 3.16.1(A), if Matching Contributions that do
not satisfy the ACP Test Safe Harbor requirements of Section 3.16.5 or if
Employee After-Tax Contributions may be made to the Plan, the Plan must satisfy
the ACP Test using the current year testing method. Such test shall be applied
using only such contributions selected by the Primary Employer in the Adoption
Agreement and in accordance with IRS Notice 98-52 or subsequent guidance.
3.16.2 Governing Provisions:
To the extent that any other provision of the Plan is inconsistent with the
provisions of this Section 3.16, and this Section 3.16 has been elected by the
Primary Employer in the Adoption Agreement, the provisions of this Section 3.16
govern.
3.16.3 Definitions:
(A) ADP Test Safe Harbor is the method described in Section 3.16.4 for
satisfying the ADP Test of Code Section 401(k)(3).
(B) Safe Harbor Contributions are Matching Contributions and Safe Harbor
Nonelective Contributions described in Section 3.16.4.
(C) Compensation is defined in Section 1.21, except, for purposes of this
Section 3.16, no dollar limit, other than the limit imposed by Code Section
401(a)(17), applies to the compensation of a Nonhighly Compensated Employee.
However, solely for purposes of determining the compensation subject to a
Participant's deferral election, the Employer may use an alternative definition
to the one described in the preceding sentence, provided such alternative
definition is a reasonable definition within the meaning of Treas. Reg. Section
1.414(s)-1(d)(2) and permits each Participant to elect sufficient Pre-Tax
Contributions to receive the maximum amount of Matching Contributions
(determined using the definition of Compensation described in the preceding
sentence) available to the Participant under the Plan.
(D) Eligible Participant means an Active Participant eligible to make
Pre-Tax Contributions under the Plan for any part of the Plan Year or who would
be eligible to make Pre-Tax Contributions but for a suspension due to a hardship
distribution described in Section 5.9 or to statutory limitations, such as Code
Sections 402(g) and 415.
(E) Safe Harbor Matching Contributions are contributions made by the
Employer in the amount(s) specified as such in Section 3.16.4 in the Adoption
Agreement on account of an Eligible Participant's Pre-Tax Contributions and/or
Employee After-Tax Contributions.
(F) Safe Harbor Nonelective Contributions are nonelective contributions in
an amount specified as such in the Adoption Agreement made by the Employer on
behalf of Eligible Participants.
3.16.4 ADP Test Safe Harbor:
(A) Safe Harbor Contributions.
(i) Unless the Primary Employer elects in the Adoption Agreement to make
Enhanced Matching Contributions (as defined in the Adoption Agreement) or Safe
Harbor Nonelective Contributions, the Employer will contribute for the Plan Year
a Safe Harbor Matching Contribution to the Plan on behalf of each Eligible
Participant equal to (i) 100 percent of the amount of the Eligible Participant's
Pre-Tax Contributions that do not exceed 3 percent of the Eligible Participant's
Compensation for the Plan Year, plus (ii) 50 percent of the amount of the
Eligible Participant's Pre-Tax Contributions that exceed 3 percent of the
Eligible Participant's Compensation but that do not exceed 5 percent of the
Eligible Participant's Compensation ("Basic Matching Contributions").
(ii) Notwithstanding the requirement in (i) above that the Employer make
the Safe Harbor Contributions to this Plan, if the Employer so provides in the
Adoption Agreement, the Safe Harbor Contributions will be made to the Defined
Contribution Plan indicated in the Adoption Agreement. However, such
contributions will be made to this Plan unless (1) each Eligible Participant
eligible under this Plan is also eligible under the other plan and (2) the other
plan has the same Plan Year as this Plan. The option to make Safe Harbor
Contributions to another Defined Contribution Plan is permitted only if this
Plan is a nonstandardized plan or a plan that is paired with the other Defined
Contribution plan. Safe Harbor Contributions made to this Plan shall be
allocated to each Eligible Participant's Safe Harbor Matching Contributions
Account and/or Safe Harbor Nonelective Contributions Account, as appropriate.
(iii) The Participant's accrued benefit derived from Safe Harbor
Contributions may not be distributed earlier than the occurrence of an event
described in Section 5.1.2, other than Section 5.1.2(F) (financial hardship) or,
in the case of a profit-sharing plan, the attainment of age 59-1/2. In addition,
such contributions must satisfy the ADP Test Safe Harbor without regard to
permitted disparity under Code Section 401(1).
(B) Notice Requirement.
Generally, the Employer must provide each Eligible Participant with a
comprehensive notice of the Eligible Participant's rights and obligations under
the Plan, written in a manner calculated to be understood by the average
Employee. This notice must be provided to Eligible Participants within a
reasonable period before the beginning of the Plan Year (or, in the year an
Employee becomes an Eligible Participant, within a reasonable period before the
Employee becomes an Eligible Participant). Notice is deemed to have been
provided within such reasonable period if it is provided at least 30 days, but
not more than 90 days, before the beginning of the Plan Year. If an Employee
becomes an Eligible Participant after the 90th day before the beginning of the
Plan Year and does not receive the notice for that reason, the notice must be
provided no more than 90 days before the Employee becomes an Eligible
Participant but not later than the date the Employee becomes an Eligible
Participant. If an Employer adopts the Safe Harbor Method of this Section 3.16
for the first time with respect to the Plan for a Plan Year that begins on or
after January 1, 2000, and on or before June 1, 2000 the notice described in
this paragraph may be provided on or before May 1, 2000.
(C) Election Periods.
In addition to any other election periods provided under the Plan, each
Eligible Participant may make or modify a deferral election during the 30-day
period immediately following receipt of the notice described in Section
3.16.4(B) above.
3.16.5 ACP Test Safe Harbor:
The ACP Test Safe Harbor Requirements are met if
(A) Matching Contributions are not made with respect to Pre-Tax
Contributions or Employee After-Tax Contributions that in the aggregate exceed 6
percent of the Eligible Participant's Compensation,
(B) The rate of Matching Contributions does not increase as the rate of
Pre-Tax Contributions or Employee After-Tax Contributions increase, and
(C) At the rate of Pre-Tax Contributions or Employee After-Tax
Contributions, the rate of Matching Contributions that would apply with respect
to any Highly Compensated Employee who is an Eligible Participant is no greater
than the rate of Matching Contributions that would apply to a Nonhighly
Compensated Employee who is an Eligible Participant and who has the same rate of
Pre-Tax Contributions or Employee After-Tax Contributions.
3.16.6 Contributions Fully Vested:
All contributions made under this Section 3.16 shall be nonforfeitable.
3.17 USERRA:
This Section 3.17 is effective as of December 12, 1994.
(A) Make-Up Profit Sharing, Prevailing Wage, Safe Harbor Nonelective, Money
Purchase, and Target Benefit Contributions.
To the extent that USERRA requires the Employer to make contributions to
the Plan for any Participant, such contributions shall be made (without
adjustment for any investment gains or losses, earnings or expenses) when the
Participant returns to service as an Eligible Employee of the Employer or an
Affiliate. Any such make-up contribution shall be in an amount equal to the sum
of the contributions that the Employer would have made for allocation to the
Participant's Account (without adjustment to reflect investment gains or losses
or income or expenses that would have been attributable thereto) had the
Participant remained in the employ of the Employer as an Eligible Employee
throughout the period of his military service absence, with imputed Compensation
equal to the Compensation he would have earned at his rate of pay from the
Employer in effect immediately prior to inception of his absence for military
service.
(B) Make-Up Pre-Tax, Employee After-Tax, and Matching Contributions
(including Safe Harbor Matching Contributions).
If the Plan permits Pre-Tax Contributions and/or Employee After-Tax
Contributions, any Employee who is entitled to USERRA reemployment rights shall
be subject to the following provisions:
(i) If, at the time of the commencement of his absence for qualified
military service (as defined in Code Section 414(u)), the Eligible Employee was
not yet a Participant by reason of failure to satisfy the Plan's minimum service
requirements, such Eligible Employee shall be deemed to have become a
Participant as of the Entry Date on which he would otherwise have become a
Participant had his employment not been uninterrupted by qualified military
service.
(ii) Any Participant who resumes employment with the Employer within the
time during which his reemployment rights are protected by USERRA shall be
entitled to make up missed Pre-Tax Contributions and Employee After-Tax
Contributions at any time during the period commencing with his resumption of
employment with the Employer and ending on the earliest to occur of (1) the date
that occurs five years from the date on which such qualified military service
absence commenced, (2) the date on which his employment terminates after having
been resumed following qualified military service, or (3) the date that occurs
after a passage of time commencing on his resumption of employment following
qualified military service which is equal to three times the duration of his
absence for qualified military service. Any such make-up contributions shall be
by payroll withholding unless otherwise permitted by IRS regulations or rulings.
(iii) Solely for the purposes of determining all limitations applicable
thereto under the Plan and under the Code, any make-up contributions made by a
Participant exercising his rights under paragraph (ii) hereof shall be deemed to
have been made in the Plan Year in which originally missed. For the purpose of
applying these limitations, the Participant will be imputed with Compensation in
an amount equal to the amount that the Participant would have earned during his
period of absence in the Plan Year (or fraction thereof) had he been employed
through the entirety of such period of absence at his regular rate of wages or
salary in effect (including any contractual holiday, vacation or sick pay,
contractual bonuses and other contractual direct cash remuneration) immediately
prior to the commencement of such absence.
(iv) To the extent that the Participant makes contributions described in
paragraph (ii) hereof in a timely manner, the Employer shall contribute for
allocation directly to that Participant's Matching Contribution Account (or Safe
Harbor Matching Contributions Account) an amount equal to the Matching
Contributions (or Safe Harbor Matching Contributions) that would have been made
for the benefit of the Participant if the Participant's make-up Pre-Tax and/or
Employee After-Tax Contributions had been made at the time his imputed
Compensation would have been earned.
(C) Earnings on Make-Up Contributions.
There shall be no adjustment of either Employer contribution amounts or the
balance standing to the credit of the Participant in his Participant's Account
for other purposes (such as the payment of Plan administrative costs and trustee
or investment manager fees) that might or would have occurred had the make-up
Pre-Tax Contributions, Employee After-Tax Contributions, Profit Sharing
Contributions, Safe Harbor Nonelective Contributions, Money Purchase
Contributions, Target Benefit Contributions and Matching Contributions
(including any Safe Harbor Matching Contributions) been made on a current basis
during either the period of the Participant's absence or any period after his
return to employment and prior to the date on which such make-up contribution is
actually made.
3.18 Electronic Media:
Any notice, election, consent, waiver, or other communication under this
Article III may be made by means of such electronic, telephonic or other media
authorized by the Plan Administrator to the extent permitted and in the manner
required under applicable law.
ARTICLE IV
VESTING
4.1 Determination of Vesting:
4.1.1 Vested Accounts:
A Participant shall at all times have a vested percentage of 100% in the
Account Balance of each of his or her Pre-Tax Contributions Account, Qualified
Nonelective Contributions Account, Employee After-Tax Contributions Account,
Prevailing Wage Contributions Account, Qualified Matching Contributions Account,
Rollover Contributions Account, Safe Harbor Matching Contribution Account, Safe
Harbor Nonelective Account and QVEC Account.
4.1.2 Full Vesting Events:
In all events, a Participant shall have a vested percentage of 100% in his
or her entire Account upon: (i) the attainment of Normal Retirement Age; (ii)
termination of Employment due to the attainment of Early Retirement (if elected
by the Primary Employer in the Adoption Agreement); (iii) Disability; (iv)
death; (v) the complete discontinuance of contributions by the Employer; (vi)
the complete termination of the Plan; or (vii) solely in the case of affected
Participants, a partial termination of the Plan.
4.1.3 Other Vesting Events:
Except as otherwise provided in Section 4.1.1 and Section 4.1.2, each
Participant's Account shall become vested in accordance the vesting provisions
elected by the Primary Employer in the Adoption Agreement.
4.1.4 Forfeitures:
Forfeitures of Profit Sharing Contributions, Money Purchase Contributions,
Target Benefit Contributions and Matching Contributions other than Excess
Aggregate Contributions or Matching Contributions related to contributions that
are Excess Aggregate Contributions, Excess Pre-Tax Contributions, or Excess
Contributions, shall be made in accordance with Section 4.3.
4.2 Rules for Crediting Vesting Service:
4.2.1 General Rule:
Subject to Section 4.2.2, Years of Service shall be credited for purposes
of determining a Participant's Vesting Service as specified in the Adoption
Agreement. If the Employer maintains the plan of a Predecessor Employer, service
with such Predecessor Employer shall be treated as service with the Employer for
purposes of Vesting Service.
4.2.2 Breaks in Service:
(A) Fewer than Five Consecutive One-Year Breaks in Service. A Participant
who incurs fewer than five consecutive one-year Breaks in Service shall retain
credit for Vesting Service earned before such period of Breaks in Service.
(B) Five Consecutive One-Year Breaks in Service. A Participant who incurs
five or more consecutive one-year Breaks in Service shall not accrue additional
Vesting Service for Employment after such period of Breaks in Service with
respect to his or her Account accrued before the commencement of the Break in
Service period. Except as provided in (C) below, Years of Service both before
and after the Break in Service will count in determining the Participant's
Vesting Service with respect to all contributions made after the Participant's
reemployment.
(C) Five Consecutive One-Year Breaks in Service: Nonvested Termination. A
Participant who incurs a Nonvested Separation and is reemployed after having
incurred at least five consecutive one-year Breaks in Service shall be treated
as a new employee and his or her Years of Service earned before such period of
Breaks in Service shall be disregarded for crediting Vesting Service.
4.3 Employer Accounts Forfeitures:
4.3.1 Nonvested Separation
Subject to Section 5.6, upon the Nonvested Separation of a Participant, the
nonvested portion of each Account of such Participant will be forfeited as of
the date of termination of Employment.
4.3.2 Partially Vested Separation:
Upon the Partially Vested Separation of a Participant, the nonvested
portion of each Account of such Participant will be forfeited as of the date of
termination of Employment; provided, however, that such Participant receives a
distribution in accordance with Section 5.6. If a Participant does not receive a
distribution following his or her termination of Employment, the nonvested
portion of each Account of the Participant shall be forfeited following a period
of five consecutive one-year Breaks in Service.
4.3.3 Vesting After Partial Distribution:
If a distribution is made at a time when a Participant has a nonforfeitable
right to less than 100 percent of the Employer Derived Account Balance, and the
Participant may increase the nonforfeitable percentage in his or her Account,
the Participant's nonforfeitable portion of his or her Account will be equal to
an amount ("X") determined by the formula:
X = P(AB + D) - D
For purposes of applying the formula: P is the nonforfeitable percentage at
the relevant time, AB is the account balance at the relevant time, and D is the
amount of the distribution.
4.3.4 Application of Forfeitures:
Forfeitures shall be applied in accordance with Section 3.7.
4.3.5 Withdrawal Does Not Cause Forfeiture:
No forfeitures will occur solely as a result of an Employee's withdrawal of
Employee After-Tax Contributions, Rollover Contributions, and/or Pre-Tax
Contributions.
4.4 Top-Heavy Provisions:
If the Plan is or becomes Top-Heavy in any Plan Year, the provisions of
this Section 4.4 will supercede any conflicting provisions in the Plan or
Adoption Agreement.
4.4.1 Terms:
As used in this Section 4.4, each of the following terms shall have the
meanings for that term set forth in this Section 4.4.1:
(A) Determination Date means, 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, Determination Date means the last day of that year.
(B) Permissive Aggregation Group means the Required Aggregation Group of
plans plus any other plan or plans of the Employer or Affiliate which, when
considered as a group with the Required Aggregation Group, would continue to
satisfy the requirements of Code Sections 401(a)(4) and 410.
(C) Required Aggregation Group means (i) each Qualified Plan of the
Employer or Affiliate in which at least one Key Employee participates or
participated at any time during the five-year period ending on the Determination
Date, regardless of whether the Plan has terminated, and (ii) any other
Qualified Plan of the Employer or Affiliate which enables a plan described in
(i) to meet the requirements of Code Sections 401(a)(4) or 410.
(D) Super Top-Heavy Plan means, for any Plan Year, the Plan if any
Top-Heavy Ratio as determined under the definition of Top-Heavy Plan exceeds
90%. To the extent this definition is applicable for purposes of Section 4.4.4,
it shall not be effective with respect to individuals who are active Employees
on or after January 1, 2000.
(E) Top-Heavy Plan means, for any Plan Year, the Plan if any of the
following conditions exists:
(i) If the Top-Heavy Ratio for the Plan exceeds 60% and the Plan is not
part of any Required Aggregation Group or Permissive Aggregation Group of Plans.
(ii) If this Plan is a part of a Required Aggregation Group of plans but
not part of a Permissive Aggregation Group and the Top-Heavy Ratio for the group
of plans exceeds 60%.
(iii) If the 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%.
(F) Top-Heavy Ratio means
(i) If the Employer or Affiliate maintains one or more Defined Contribution
Plans (including any simplified employee pension plan) and the Employer or
Affiliate has never maintained any Defined Benefit Plan which during the 5-year
period ending on the Determination Dates 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 five-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 five-year period ending on the Determination Date(s)), both computed in
accordance with Code Section 416 and the regulations thereunder. Both the
numerator and denominator of the Top-Heavy Ratio are increased to reflect any
contribution not actually made as of the Determination Date, but which is
required to be taken into account on that date under Code Section 416 and the
regulations thereunder.
(ii) If the Employer or an Affiliate maintains one or more Defined
Contribution Plans (including any simplified employee pension plan) and the
Employer or an Affiliate maintains or has maintained one or more Defined Benefit
Plans which during the five-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
Plans for all Key Employees, determined in accordance with (i) above, and the
present value of accrued benefits under the aggregated Defined Benefit 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
Plans for all Participants, determined in accordance with (i) above, and the
present value of accrued benefits under the Defined Benefit Plans for all
Participants as of the Determination Dates, all determined in accordance with
Code Section 416 and the regulations thereunder. The accrued benefits under a
Defined Benefit Plan in both the numerator and denominator of the Top-Heavy
Ratio are increased for any distribution of an accrued benefit made in the
five-year period ending on the Determination Date.
(iii) For purposes of (i) and (ii) above, the value of Account Balances and
the present value of accrued benefits will be determined as of the most recent
Valuation Date that falls within or ends with the 12-month period ending on the
Determination Date, except as provided in Code Section 416 and the regulations
thereunder for the first and second Plan Years of a Defined Benefit Plan. The
Account Balances and accrued benefits of a Participant (1) who is not a Key
Employee but who was a Key Employee in a prior year, or (2) who has not been
credited with at least one Hour of Service with any Employer or an Affiliate
maintaining the Plan at any time during the five-year period ending on the
Determination Date, will be disregarded.
(iv) The calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers, and transfers are taken into account will be made in
accordance with Code Section 416 and the regulations thereunder.16 QVECs will
not be taken into account for purposes of computing the Top-Heavy Ratio. When
aggregating plans, the value of Account Balances and accrued benefits will be
calculated with reference to the determination dates that fall within the same
calendar year.
(v) The accrued benefit of a Participant who is not a Key Employee shall be
determined under (1) the method, if any, that uniformly applies for accrual
purposes under all Defined Benefit Plans maintained by the Employer or Affiliate
or (2) if there is no such method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional rule of Code
Section 411(b)(1)(C).
(G) Present Value. For purpose of this Section, present value shall be
based only on the interest and mortality rates specified in the Adoption
Agreement.
(H) Valuation Date. means the date the last business day of the Plan Year.
4.4.2 Top-Heavy Vesting Schedule:
If the Plan is determined to be a Top-Heavy Plan or a Super Top-Heavy Plan
as of any Determination Date, then the following vesting schedule shall apply
beginning with the first Plan Year commencing after such Determination Date,
unless the Plan's vesting schedule specified in the Adoption Agreement provides
for vesting that is at least as rapid as the following schedule, in which case
the vesting schedule specified in the Adoption Agreement shall apply:
Years of Service Nonforfeitable Percentage
2 20%
3 40%
4 60%
5 80%
6 or more 100%
If the vesting schedule of this Section applies, it applies to all benefits
within the meaning of Code Section 411(a)(7) except those attributable to
Employee After-Tax Contributions and Pre-Tax Contributions, including benefits
accrued before the effective date of Code Section 416 and benefits accrued
before the Plan became Top-Heavy. Further, once the Plan is determined to be a
Top-Heavy Plan or a Super Top-Heavy Plan, the minimum Top-Heavy vesting schedule
shall continue to apply to the Plan. No decrease in a Participant's
nonforfeitable percentage may occur regardless of whether the Plan's status as
Top-Heavy changes for any subsequent Plan Year. However, this Section does not
apply to the Account of any Employee who does not have an Hour of Service after
the Plan has initially become Top-Heavy and such Employee's Account Balance
attributable to Employer contributions and forfeitures will be determined
without regard to this Section. The minimum allocation pursuant to Section 4.4.3
(to the extent required to be nonforfeitable under Code Section 416(b)) may not
be forfeited under Code Section 411(a)(3)(B) or Code Section 411(a)(3)(D).
4.4.3 Minimum Allocation:
(A) Except as provided in Sections 4.4.3(C) and (D), for any Plan Year in
which the Plan is a Top-Heavy Plan, contributions and forfeitures allocated to
the Account of any Participant who is not a Key Employee in that Plan Year shall
not be less than the lesser of:
(i) 3% of such Participant's Limitation Compensation, or
(ii) in the case where the Employer has no Defined Benefit Plan which
designates this Plan to satisfy Code Section 416, the largest percentage of
contributions and forfeitures, as a percentage of the Key Employee's Limitation
Compensation, allocated to the Account of any Key Employee for that year. The
minimum allocation is determined without regard to any Social Security
contribution. 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 Plan Year because
of (1) the Participant's failure to complete a Year of Service, (2) the
Participant's failure to make mandatory Employee contributions to the Plan or
(3) compensation less than a stated amount.
(B) For purposes of computing the minimum allocation, a Participant's
Limitation Compensation will be applied.
(C) The provision in (A) above shall not apply to any Participant who was
not employed by the Employer or an Affiliate on the last day of the Plan Year.
(D) If the Employer or an Affiliate has executed Adoption Agreements
covering Participants under a Paired Plan or by a plan which is a profit-sharing
plan and by another plan which is a money purchase pension plan or a target
benefit plan, the minimum allocation specified in the preceding Section 4.4.3(A)
shall be provided by the money purchase pension plan or by the target benefit
plan, as the case may be. If a Participant is covered under a Paired Plan or
under this Plan and a Defined Benefit Plan maintained under Adoption Agreements
offered by the Sponsor, the minimum allocation specified in the preceding
Section 4.4.3(A) shall not be applicable and the Participant shall receive the
minimum benefit specified in the Defined Benefit Plan.
(E) With respect to any profit-sharing or money purchase pension plan which
becomes Top-Heavy and is integrated with Social Security, unless otherwise
provided for in the Adoption Agreement, there shall be an allocation of the
contribution to each Participant's Account in the ratio that each such
Participant's Limitation Compensation for the Plan Year bears to the Limitation
Compensation of all such Participants for the Plan Year, but not in excess of 3%
of such Limitation Compensation.
4.4.4 Maximum Benefit - Pre-2000:
If the Plan becomes a Top-Heavy Plan, then the maximum benefit which can be
provided under Section 3.9 shall continue to be determined by applying "125%"
wherever it appears in that Section and by substituting "4%" for "3%" wherever
that appears in Section 4.4.3. However, if the Plan becomes a Super Top-Heavy
Plan, the maximum benefit which can be provided under Section 3.9 shall be
determined by substituting "100%" for "125%" wherever the latter percentage
appears and the 3% minimum contribution provided for in Section 4.4.4 shall
remain unchanged. This Section 4.4.4 shall not be effective with respect to
individuals who are active Employees on or after January 1, 2000.
ARTICLE V
AMOUNT AND DISTRIBUTION OF BENEFITS,
WITHDRAWALS AND LOANS
5.1 Distribution:
5.1.1 Benefit Commencement Date:
Subject to Section 5.1.2, a Participant's Benefit Commencement Date shall
be as soon as administratively practicable following his or her Fully Vested
Separation, Partially Vested Separation or Nonvested Separation, if applicable,
and in accordance with Section 5.6. A Participant does not separate from service
for purposes of this Article V due to a transfer of employment to an Affiliate.
5.1.2 Pre-Tax, Qualified Nonelective, Qualified Matching, Safe Harbor
Nonelective and Safe Harbor Matching Contributions:
Pre-Tax Contributions, Qualified Nonelective Contributions, Qualified
Matching Contributions, Safe Harbor Nonelective and Safe Harbor Matching
Contributions, and income allocable to each are distributable to a Participant
or his or her Beneficiary or Beneficiaries no earlier than:
(A) upon separation from service, death, or Disability.
(B) termination of the Plan without the establishment of a successor
Defined Contribution Plan (as defined in Treas. Reg. Section 1.401(k)-1(d)(3))
or a SIMPLE IRA Plan (defined in Code Section 408(p)).
(C) the disposition by a corporation to an unrelated corporation of
substantially all of the assets (within the meaning of Code Section 409(d)(2))
used in a trade or business of such corporation if such corporation continues to
maintain the Plan after the disposition, but only with respect to Employees who
continue employment with the corporation acquiring such assets and only if the
distribution is made in connection with such disposition.
(D) the disposition by a corporation to an unrelated entity of such
corporation's interest in a subsidiary (within the meaning of Code Section
409(d)(3)) if such corporation continues to maintain the Plan but only with
respect to Employees who continue employment with such subsidiary and only if
the distribution is made in connection with such disposition.
(E) unless otherwise elected by the Primary Employer in the Adoption
Agreement, the attainment of age 59-1/2 in the case of a profit-sharing plan; and
(F) unless otherwise elected by the Primary Employer in the Adoption
Agreement, the hardship of the Participant as described in Section 5.9 (only if
this Plan is a profit sharing plan and only with respect to Pre-Tax
Contributions, not Qualified Nonelective Contributions, Qualified Matching
Contributions, Safe Harbor Nonelective Contributions or Safe Harbor Matching
Contributions).
All distributions that may be made under one or more of the foregoing
distributable events are subject to the consent requirements of Section 5.6.4.
In addition, distributions that are triggered by any of the events
described in subparagraphs 5.1.2 (B), (C), and (D) above must be made in a "lump
sum distribution" within the meaning of Code Section 402(d)(4), without regard
to subparagraphs (A)(i) through (iv), (B), and (F) of that Section.
For purposes of subparagraphs 5.1.2(C) and (D) a distribution is made "in
connection" with an event described in either Section only if the distribution
is made no later than the end of the second calendar year after the calendar
year in which the event occurred. Notwithstanding the preceding sentence, the
Plan Administrator may determine that unusual circumstances warrant treating a
distribution made after the end of the second calendar year after the calendar
year in which the event occurred as being in "connection with" such events.
5.2 Amount of Benefits Upon a Fully Vested Separation:
A Participant's benefits upon his or her Fully Vested Separation for any
reason other than Disability shall be the Account Balance of all of his or her
Accounts determined in accordance with Section 10.6.
5.3 Amount of Benefits Upon a Partially Vested Separation:
A Participant's benefits upon his or her Partially Vested Separation for
any reason other than Disability shall be: (A) the Account Balance of his or her
Accounts (other than Accounts listed in Section 4.1.1(Vested Accounts))
determined in accordance with Section 10.6.2 multiplied by his or her vested
percentage determined under Section 4.1.3, or, if applicable, Section 4.4.2
(Top-Heavy Vesting Schedule), plus (B) the Account Balance of his or her
Accounts listed in Section 4.1.1 (Vested Accounts) determined in accordance with
Section 10.6.
5.4 Amount of Benefits Upon a Nonvested Separation:
A Participant's benefits upon his or her termination of Employment prior to
satisfying the vesting requirement of Sections 4.1.2 and 4.1.3 shall be the
Account balance of his or her vested Accounts (under Section 4.1.1), if any,
determined in accordance with Section 10.6 plus a zero dollar cash-out
distribution of his or her Accounts other than those listed in Section 4.1.1.
5.5 Amount of Benefits Upon a Separation Due to Disability:
If a Participant terminates Employment due to a Disability, his or her
Account Balance will be 100% vested in accordance with Section 4.1.2, and his or
her benefit shall be the Account Balance of all of his or her Accounts
determined in accordance with Section 10.6. The Benefit Commencement Date of any
such Participant on whose behalf contributions are being made under Section
3.1.4 (regarding Disabled Participants) shall be as soon as practicable after
the date such contributions cease.
5.6 Distribution and Restoration:
5.6.1 Cash-Out of Small Amounts:
(A) If an Employee terminates service, and the value of the Employee's
vested Account Balance is not greater than $5,000, the Employee will receive a
distribution of the value of the entire vested portion of such Account Balance
and the nonvested portion of such Account balance will be treated as a
forfeiture.
(B) If an Employee would have received a distribution under the preceding
paragraph but for the fact that the Employee's vested Account Balance exceeded
$5,000 when the Employee terminated service and if at a later time such Account
Balance is reduced such that it is not greater than $5,000, the Employee will
receive a distribution of such Account Balance and the nonvested portion will be
treated as a forfeiture.
(C) For purposes of this Section, if a Participant incurs a Nonvested
Separation, the Employee shall be deemed to have received a distribution of zero
dollars reflecting the entire value of his or her Employer Derived Account
Balance.
(D) Effective for distributions made on or after March 22, 1999, whether a
Participant's vested Account Balance as described in this Section exceeds $5,000
shall be determined at the time of the current distribution without regard to
the value of such Account Balance at the time of any prior distribution.
5.6.2 Forfeiture of Nonvested Account Upon Distribution:
If an Employee terminates service, and elects, in accordance with the
requirements of Section 5.6.4 or 5.6.5 (as applicable) to receive the value of
the Employee's vested Account Balance, the nonvested portion will be treated as
a forfeiture.
5.6.3 Restoration of Forfeited Amounts:
If an Employee receives or is deemed to receive a distribution under this
Section and the Employee resumes employment covered under this Plan, the
Employee's Employer Derived Account Balance will be restored (from additional
Employer contributions and/or forfeitures, as provided in Section 3.7) to the
amount on the date of distribution if the Employee repays to the Plan the full
amount of the distribution attributable to Pre-Tax and Employer Contributions
before the earlier of five years after the first date on which the Participant
is subsequently re-employed by the Employer, or the date the Participant incurs
five consecutive one-year Breaks in Service following the date of the
distribution. If an Employee is deemed to receive a distribution under this
Section, and the Employee resumes employment covered under this Plan before the
date the Participant incurs five consecutive one-year Breaks in Service, upon
the reemployment of such Employee, the Employer Derived Account Balance of the
Employee will be restored to the amount on the date of such deemed distribution.
5.6.4 Consent Requirements:
(A) Account Exceeds $5,000. If the value of a Participant's vested Account
balance exceeds $5,000 and the Account balance is Immediately Distributable:
(i) the Participant must consent in order for a distribution to be made in
any form; and
(ii) the Participant's Spouse must consent in order for a distribution to
be made in a form other than a Qualified Joint and Survivor Annuity unless the
Plan is a "Non-QJSA Profit Sharing Plan" (as defined in Section 6.1.2).
(B) Consent Not Required Under Certain Circumstances. Neither 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), Section 402(g),
Section 415, Section 401(k), or Section 401(m) of the Code. In addition, upon
termination of this Plan, if the Plan does not offer an annuity option
(purchased from a commercial provider) and if the Employer or an Affiliate does
not maintain another Defined Contribution Plan (other than an employee stock
ownership plan as defined in Code Section 4975(e)(7)), the Participant's Account
Balance will, without the Participant's consent, be distributed to the
Participant. However, if the Employer or an Affiliate maintains another Defined
Contribution Plan (other than an employee stock ownership plan as defined in
Code Section 4975(e)(7)), then the Participant's Account balance will be
transferred, without the Participant's consent, to the other plan if the
Participant does not consent to an immediate distribution.
5.6.5 Timing of Notice and Consent:
(A) General Rules. The consent of the Participant and the Participant's
Spouse, if applicable, 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 if the Plan is subject to the Qualified Joint and Survivor Annuity
requirements) of the right to defer any distribution until the Participant's
Account Balance is no longer Immediately Distributable. Such notification shall
include a general description of the material features, and an explanation of
the relative values of the optional forms of benefit available under the Plan in
a manner that would satisfy the notice requirements of Code Sections 417(a)(3)
and 411(a)(11), and shall be provided no less than 30 days and no more than 90
days prior to the annuity starting date.
(B) Non-QJSA Profit Sharing Plans. Effective for distributions on or after
January 1, 1997, in the case of a "Non-QJSA Profit Sharing Plan" (as defined in
Section 6.1.2), distributions may commence less than 30 days after the notice
required under Code Section 411(a)(11) and paragraph (A) above is provided if
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 the Participant, after receiving the
notice, affirmatively elects a distribution.
(C) Plans Other Than Non-QJSA Profit Sharing Plans. Effective for
distributions on or after January 1, 1997, if this Plan is subject to the
Qualified Joint and Survivor Annuity requirements, the notice described in (A)
above shall include a written explanation of: (i) the terms and conditions of
the Qualified Joint and Survivor Annuity; (ii) the Participant's right to make,
and the effect of, an election to waive a Qualified Joint and Survivor Annuity;
(iii) the rights of the Participant's Spouse; and (iv) the right to make and the
effect of, a revocation of a previous election to waive a Qualified Joint and
Survivor Annuity. The annuity starting date for a distribution in a form other
than a Qualified Joint and Survivor Annuity may be less than 30 days after
receipt of the written explanation described above if: (i) the Participant has
been provided with information that clearly indicates the Participant has at
least 30 days to consider whether to waive the Qualified Joint and Survivor
Annuity and elect (with spousal consent) a form of distribution other than a
Qualified Joint and Survivor Annuity; (ii) the Participant is permitted to
revoke any affirmative distribution election at least until the annuity starting
date or, if later, at any time prior to the expiration of the 7 day period
beginning the day after the explanation of the Qualified Joint and Survivor
Annuity is provided to the Participant; and (iii) the annuity starting date is a
date after the date that the written explanation of the Qualified Joint and
Survivor Annuity was provided to the Participant.
5.7 Withdrawals During Employment:
5.7.1 Age 59-1/2 Withdrawal:
If the Plan is a profit-sharing plan, unless elected otherwise by the
Primary Employer in the Adoption Agreement, each Participant upon attainment of
age 59-1/2 may elect to withdraw, as of the Valuation Date next following the
receipt of an election by the Plan Administrator, and upon such notice as the
Plan Administrator may require, all or any part of the vested Account balance of
all of his or her Accounts, as of such Valuation Date.
5.7.2 Age 70-1/2 Withdrawal:
If the Primary Employer has elected in the Adoption Agreement to permit age
70-1/2 withdrawals during Employment, each Participant upon the January 1 of the
calendar year in which the Participant attains age 70-1/2 may elect to withdraw,
as of the Valuation Date next following the receipt of an election by the Plan
Administrator, and upon such notice as the Plan Administrator may require, all
or any part of the vested Account Balance of all or his or her Accounts, as of
such Valuation Date.
5.7.3 Rollover Contribution and Employee After-Tax Contribution Withdrawal:
Notwithstanding Section 5.7.1, prior to termination of Employment, each
Participant with a Rollover Contributions Account and/or an Employee After-Tax
Contributions Account may elect to withdraw, as of the Valuation Date next
following the receipt of an election by the Plan Administrator, and upon such
notice as the Plan Administrator may require, all or any of such Account, as of
such Valuation Date.
5.7.4 Rules and Procedures:
The Plan Administrator may establish from time to time rules and procedures
with respect to any withdrawals including the order of Accounts from which such
withdrawals shall be made.
5.7.5 Forfeitures:
No forfeitures shall occur as a result of a withdrawal under this Section
5.7.
5.7.6 Spousal Consent:
If a Participant is married at the time of such election, the Participant's
Spouse must consent to such a withdrawal in the same manner as provided in
Section 6.2.4 (waiver of Qualified Joint and Survivor Annuity); provided,
however, that if the Plan is a profit-sharing plan and Section 6.1.2 applies,
the consent of the Participant's Spouse will not be required.
5.7.7 Transfers From Money Purchase Plan to Profit Sharing Plan:
This Section 5.7.7 is effective if this Plan is a profit sharing plan that
has accepted a transfer of assets and liabilities from a money purchase pension
plan and only to the extent it does not result in a violation of Code Section
411(d)(6) (subject to Treas. Reg. 1.411(d)-4, Q and A 2(b) and Revenue Ruling
94-76).
Effective as of the first day of the Plan Year, or, if later, 90 days after
December 12, 1994 and notwithstanding any provision 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 an event described in 5.1.3(B), (C), or
(D), 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 Code Section 414(l), to
this Plan from a money purchase pension plan qualified under Code Section 401(a)
(other than any portion of those assets and liabilities attributable to
voluntary employee contributions).
5.8 Loans:
5.8.1 Participant Loans:
Unless otherwise elected by the Primary Employer in the Adoption Agreement,
loans shall be made available to all Participants and Beneficiaries (who are
"parties in interest" under ERISA Section 3(14)17) on a reasonably equivalent
basis. A Participant may submit an application to the Plan Administrator to
borrow from any Account maintained for the Participant (on such terms and
conditions as the Plan Administrator shall prescribe) an amount which when added
to the outstanding balance of all other loans to the Participant (including
loans made to the Participant from other Qualified Plans of the Employer) would
not 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 vested portion of his or her
Account (determined without regard to accumulated QVECs) as of the Valuation
Date immediately preceding the receipt of his or her loan application by the
Plan Administrator. The loan application must be made before the expiration of
such notice period as the Plan Administrator may require. For this purpose, all
loans from Qualified Plans of the Employer or an Affiliate shall be aggregated,
and 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 Section 5.8.1.
The Plan Administrator shall administer such procedures as are necessary or
desirable to administer Plan loans in accordance with this Section 5.8.
5.8.2 Conditions for Loans:
If approved, each such loan shall comply with the following conditions:
(A) it shall be evidenced by a negotiable promissory note;
(B) it shall be adequately secured and bear a reasonable rate of interest,
as determined by the Plan Administrator;
(C) the Participant must obtain the consent of his or her Spouse, if any,
to the use of the Account balance 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. If the Plan is a
profit-sharing plan that meets the requirements in Section 6.1.2 of the Plan (a
"Non-QJSA Profit Sharing Plan"), however the consent of the Participant's Spouse
will not be required. Any required spousal 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. A new consent
also is required if an Account is used for any increase in the amount of
security. The consent described in this paragraph is a consent to the reduction
of the Account Balance payable at time of death or distribution by the amount of
the security interest necessary to repay the loan;
(D) the loan, by its terms, must require repayment (principal and interest)
be amortized in level payments, not less frequently than quarterly, over a
period not extending beyond five years from the date of the loan; provided,
however, that if the proceeds of the loan are 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, the repayment schedule may
be for a term in excess of five years; and
(E) the loan shall be adequately secured and may be secured by no more than
50% of the Participant's vested interest in his or her Accounts.
5.8.3 Account Adjustments:
If a Participant or Beneficiary requests and is granted a loan, principal
and interest payments with respect to the loan shall be credited solely to the
Account of the borrowing Participant from which the loan was made. In addition,
all repayments of principal and interest shall be reinvested in the Plan in the
same manner and in the same proportion as all other Participant contributions
would otherwise be made, based on the Participant's current investment election.
Any loss caused by nonpayment or other default on a Participant's loan
obligations shall be charged solely to that Account. Any other loan shall be
treated as an investment of the Trust Fund and interest and principal payments
on account thereof shall be credited to the Trust Fund.
The Plan Administrator shall determine the order of Accounts from which a
loan may be made.
5.8.4 General Rules:
In all events:
(A) in the event of a default, foreclosure on the promissory note will not
occur until a distributable event occurs under this Article V;
(B) no loan will be made to any Owner-Employee or to any
"shareholder-Employee" of an Employer. For this purpose, a
"shareholder-Employee" means an Employee or officer of an electing small
business, i.e., an "S corporation" as defined in Code Section 1361, who owns (or
is considered as owning within the meaning of Code Section 318(a)(1)) on any day
during the taxable year of such corporation, more than 5% of the outstanding
stock of the corporation; and
(C) loans shall not be made available to Highly Compensated Employees in an
amount greater than the amount made available to other Employees.
5.8.5 Suspension of Loan Repayments:
(A) Suspension for Periods of Qualified Military Service. An Employee's
obligation to repay principal and/or interest under a loan made under this
Section 5.8 shall be suspended for any part of any period during which such
Employee is performing service in the uniformed military service to the extent
permitted under Code Section 414(u)(4).
(B) Suspension for Other Leaves of Absence. In accordance with procedures
implemented by the Plan Administrator, an Employee's obligation to repay
principal and/or interest under a loan made under this Section 5.8 may be
suspended for a period of up to one year on account of a leave of absence,
either without pay from the Employer or at a rate of pay (after income and
employment tax withholding) that is less than the amount of the installment
payments required under the terms of the loan.
5.9 Hardship Distributions:
5.9.1 General Rules:
To the extent available and elected by the Primary Employer in the Adoption
Agreement, an Active Participant may request a distribution due to hardship
from, unless elected otherwise by the Primary Employer in the Adoption
Agreement, the vested portion of his or her Accounts other than from his or her
Qualified Nonelective Contributions Account, Qualified Matching Contributions
Account, earnings accrued after December 31, 1988 on the Participant's Pre-Tax
Contributions, or any Safe Harbor contributions made under Section 3.16, only if
the distribution is made both due to an immediate and heavy financial need of
the Participant and is necessary to satisfy such financial need. Hardship
distributions are subject to the spousal consent requirements contained in Code
Sections 401(a)(11) and 417 unless the Plan is a "Non-QJSA Profit Sharing Plan"
as defined in Section 6.1.2.
5.9.2 Conditions for Hardship Distribution:
A hardship distribution shall be permitted only if the distribution is due
to:
(A) expenses incurred or necessary for medical care described in Code
Section 213(d) to be incurred by the Participant, the Participant's Spouse, or
any dependents of the Participant (as defined in Code Section 152);
(B) expenses related to the purchase (excluding mortgage payments) of a
principal residence for the Participant;
(C) payment of tuition and related educational fees and room and board
expenses for the next 12 months of post-secondary education for the Participant,
his or her Spouse, children or dependents;
(D) the need to prevent the eviction of the Participant from his or her
principal residence or foreclosure on the mortgage of the Participant's
principal residence; or
(E) any other condition or event which the Commissioner of the IRS
determines is a deemed immediate and financial need.
5.9.3 Immediate and Heavy Financial Need:
A distribution will be considered necessary to satisfy an immediate and
heavy financial need of a Participant if all of the following requirements are
satisfied:
(A) the distribution will not be in excess of the amount of the immediate
and heavy financial need of the Participant (including amounts necessary to pay
any Federal, state or local income taxes or penalties reasonably anticipated to
result from the distribution);
(B) the Participant obtains all distributions, other than hardship
distributions, and all nontaxable loans currently available under all plans
maintained by the Employer or an Affiliate (except to the extent that taking a
loan will not alleviate the hardship or repaying the loan would create a
financial hardship);
(C) the Participant's Pre-Tax Contributions and Employee After-Tax
Contributions will be suspended for at least 12 months after receipt of the
hardship distribution in this Plan and in all other plans maintained by the
Employer or an Affiliate (including all qualified and nonqualified plans of
deferred compensation, stock option plans, stock purchase plans, or a CODA that
is part of a Code Section 125 plan, but excluding any mandatory employee
contribution portion of a defined benefit plan); and
(D) the Participant may not make Pre-Tax Contributions for the
Participant's taxable year immediately following the taxable year of the
hardship distribution in excess of the applicable limit under Code
Section 402(g) for such next taxable year less the amount of such Participant's
Pre-Tax Contributions for the taxable year of the distribution in this Plan and
in all other plans maintained by the Employer or an Affiliate.
5.9.4 Exception to General Rules:
If the distribution is made from any Account other than a Pre-Tax
Contributions Account, a distribution due to hardship may be made without
application of Section 5.9.3(B), 5.9.3(C), or 5.9.3(D).
5.10 Limitation on Commencement of Benefits:
Unless the Participant elects otherwise, distribution of benefits will
commence no later than the 60th day after the latest of the close of the Plan
Year in which:
(A) the Participant attains age 65 (or Normal Retirement Age if earlier);
(B) occurs the tenth anniversary of the year in which the Participant
commenced participation in the Plan; or
(C) the Participant terminates Employment with the Employer.
Notwithstanding the foregoing, the failure of a Participant and Spouse to
consent to a distribution while a benefit is Immediately Distributable shall be
deemed to be an affirmative election to defer commencement of payment of any
benefit sufficient to satisfy this Section.
5.11 Distribution Requirements:
5.11.1 Participant Distributions:
Subject to the Joint and Survivor Annuity rules set forth in Article VI,
the requirements of this Article shall apply to any distribution of a
Participant's interest and will take precedence over any inconsistent provisions
of this Plan. As used in this Section 5.11, each of the following terms shall
have the meaning for that term set forth in this Section 5.11.1:
(A) Applicable Life Expectancy. The term "Applicable Life Expectancy" means
the life expectancy (or joint and last survivor expectancy) calculated using the
attained age of the Participant (or designated Beneficiary) as of the
Participant's (or designated Beneficiary's) birthday in the applicable calendar
year reduced by one for each calendar year which has elapsed since the date Life
Expectancy was first calculated. Unless the Participant elects otherwise (or, in
the case of distributions described in Section 7.2, the Participant's Spouse
elects otherwise) by the time distributions are required to begin, Life
Expectancies shall not be recalculated. Any election for recalculation shall be
irrevocable as to the Participant or Spouse and shall apply to all subsequent
years. The Life Expectancy of a non-Spouse Beneficiary may not be recalculated.
If Life Expectancy recalculation is elected by the Participant (or Spouse),
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.
(B) Designated Beneficiary. The term "Designated Beneficiary" means the
individual who is designated as the Beneficiary under the Plan in accordance
with Section 7.2.2 and Code Section 401(a)(9). If a Participant names a trust to
be a Designated Beneficiary, the designation shall provide that, as of the later
of the date on which the trust is named as a Beneficiary or the Participant's
Required Beginning Date, and as of all subsequent periods during which the trust
is named as a Beneficiary, the following requirements will be met:
(i) the trust is a valid trust under state law, or would be but for the
fact that there is no corpus;
(ii) the trust is irrevocable or will, by its terms, become irrevocable
upon the Participant's death;
(iii) the Beneficiaries of the trust who are Beneficiaries with respect to
the trust's interest in the Participant's benefits are identifiable from the
trust instrument within the meaning of Code Section 401(a)(9); and
(iv) the Participant either: (1) provides the Plan Administrator a copy of
the trust instrument and agrees that if the trust instrument is amended, the
Participant will, within a reasonable time, provide the Plan Administrator a
copy of each such amendment, or (2) provides the Plan Administrator a list of
all of the Beneficiaries of the trust (including contingent and remainderman
Beneficiaries with a description of the conditions on their entitlement),
certifies that, to the best of the Participant's knowledge, the list is correct
and complete and that requirements (i), (ii), and (iii) of this paragraph are
satisfied, and agrees to provide the Plan Administrator a copy of the trust
instrument on demand.
If a Participant names a trust as his or her Beneficiary, but the
requirements of this paragraph are not satisfied, the Participant shall be
deemed to not have a Designated Beneficiary.
(C) Distribution Calendar Year. The term "Distribution Calendar Year" means
a calendar year for which a minimum distribution is required. For distributions
beginning before the Participant's death, the first Distribution Calendar Year
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 under Section 7.2.
(D) 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
Treas. Reg. Section 1.72-9.
(E) Participant's Benefit.
(i) General Rule. The Participant's Benefit is the Account Balance as of
the last Valuation Date in the calendar year immediately preceding the
Distribution Calendar Year (valuation calendar year), increased by the amount of
any contributions or forfeitures allocated to the Account Balance as of dates in
the Valuation calendar year after the Valuation Date and decreased by
distributions made in the Valuation calendar year after the Valuation Date.
(ii) Exception for Second Distribution Calendar Year. For purposes of
paragraph (i) 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.
(F) Required Beginning Date.
(i) General Rule. Effective for Plan Years beginning on or after January 1,
1997, the Required Beginning Date of a Participant is the later of the April 1
of the calendar year following the calendar year in which the Participant
attains age 70-1/2 or retires except that the Required Beginning Date for a
5-percent is the April 1 of the calendar year following the calendar year in
which the Participant attains age 70-1/2.
(ii) 5% owner. A Participant is treated as a 5% owner for purposes of this
Section 5.11 if such Participant is a 5% owner as defined in Code Section 416(i)
(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 70-1/2 or any subsequent Plan
Year. Once distributions have begun to a 5% owner under this Section 5.11, they
must continue to be distributed, even if the Participant ceases to be a 5% owner
in a subsequent year.
(iii) Transition Rules.
(1) Deferral of Benefit Commencement. If elected by the Primary Employer in
the Adoption Agreement, any actively employed Participant (other than a 5%
owner) attaining age 70-1/2 in years after 1995 may elect, by April 1 of the
calendar year following the year in which the Participant attained age 70-1/2,
(or by December 31, 1997 in the case of a Participant attaining age 70-1/2 in
1996) to defer distributions until the calendar year following the calendar year
in which the Participant retires. If no such Participant election is made, then
unless otherwise provided in the Adoption Agreement, the Participant will begin
receiving distributions by the April 1 of the calendar year following the year
in which the Participant attained age 70-1/2 (or by December 31, 1997 in the
case of a Participant attaining age 70-1/2 in 1996).
(2) Cessation of Minimum Distribution Payments. If elected by the Primary
Employer in the Adoption Agreement, any actively employed Participant (other
than a 5% owner) attaining age 70-1/2 in years prior to 1997 may elect to stop
receiving minimum distributions and recommence distributions by the April 1 of
the calendar year following the year in which the Participant retires. If such
distributions are ceased, unless otherwise elected in the Adoption Agreement,
there shall be a new annuity starting date for distribution purposes upon a
later recommencement of distributions.
(3) Elimination of Pre-Retirement Age-70-1/2 Distribution Option. If
elected by the Primary Employer in the Adoption Agreement, the preretirement age
70-1/2 distribution option is only eliminated with respect to Employees who
reach age 70-1/2 in or after a calendar year that begins after the later of
December 31, 1998, or the date of the amendment set forth in the Adoption
Agreement, but no later than the date permitted by the IRS to eliminate such
option consistently with the requirements of Code Section 411(d)(6) and the
regulations and other guidance issued thereunder. The preretirement age 70-1/2
distribution option is an optional form of benefit under which benefits payable
in a particular distribution form (including any modifications that may be
elected after benefit commencement) commence at a time during the period that
begins on or after January 1 of the calendar year in which an Employee attains
age 70-1/2 and ends April 1 of the immediately following calendar year.
5.11.2 Code Section 401(a)(9) Compliance:
All distributions required under this Section 5.11 shall be determined and
made in accordance with the regulations and other guidance issued under Code
Section 401(a)(9), including the minimum distribution incidental benefit
requirement of Prop. Treas. Reg. Section 1.401(a)(9)-2. The entire interest of a
Participant must be distributed or begin to be distributed no later than the
Participant's Required Beginning Date.
5.11.3 Limits on Distribution Periods:
As of the first Distribution Calendar Year, distributions, if not made in a
lump sum, may only be made over one of the following periods (or a combination
thereof):
(A) the life of the Participant;
(B) the life of the Participant and a Designated Beneficiary;
(C) a period certain not extending beyond the Life Expectancy of the
Participant; or
(D) a period certain not extending beyond the joint and last survivor
expectancy of the Participant and a Designated Beneficiary.
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.
5.11.4 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:
(A) Individual Account.
(i) 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 Account
Balance by the applicable Life Expectancy.
(ii) 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.
(iii) 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 Account Balance 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 and
A-4 of Prop. Treas. Reg. Section 1.401(a)(9)-2. Distributions after the death of
the Participant shall be distributed using the applicable Life Expectancy in
Section 5.11.1(A) above as the relevant divisor without regard to Prop. Treas.
Reg. Section 1.401(a)(9)-2.
(iv) 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.
(B) 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 Code Section 401(a)(9) and the
proposed regulations thereunder.
5.11.5 Transitional Rule: Section 242 Election:
Notwithstanding the other requirements of this Article and subject to the
Joint and Survivor Annuity rules set forth in Article VI, 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 Plan is one which would not have disqualified
such Plan under Code Section 401(a)(9) 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 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; and
(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.
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.
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 Sections 5.11.5(A) and (E).
If a designation subject to this Section 5.11.5 (a "Section 242(b)(2)
Election") is revoked, any subsequent distribution must satisfy the requirements
of Code Section 401(a)(9), as otherwise provided in this Section 5.11. If
Section 242(b)(2) Election is revoked after the date distributions are required
to begin, the Plan must distribute the total amount not yet distributed to the
Participant and that would have been required to have been distributed to the
Participant to satisfy Code Section 401(a)(9) and the proposed regulations
thereunder but for the Section 242(b)(2) Election. That distribution must be
made by the end of the calendar year following the calendar year in which the
revocation occurs. Also, for calendar years beginning after December 31, 1988,
such distributions must meet the minimum distribution incidental benefit
requirements in Prop. Treas. Reg. Section 1.401(a)(9)-2.
Any changes in a Section 242(b)(2) Election will be considered to be a
revocation of the election. However, the mere substitution or addition of
another Beneficiary (one not named in the election) under the Section 242(b)(2)
Election will not be considered to be a revocation of the election, as long as
that substitution or addition does not alter the period over which distributions
are to be made under the election, 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 and A
J-2 and Q and A J-3 of Prop. Treas. Reg. Section 1.401(a)(9)-1 shall apply.
5.12 Electronic Media:
Any notice, election, consent to a distribution, waiver, loan request,
request for withdrawal, or other communication under this Article V may be made
by means of such electronic, telephonic or other media authorized by the Plan
Administrator to the extent permitted and in the manner required under
applicable law.
ARTICLE VI
FORMS OF PAYMENT OF RETIREMENT BENEFITS
6.1 Methods of Distribution:
6.1.1 Plans Subject to Annuity Requirements - Normal Form of Benefit:
If the Plan is a money purchase pension plan, a target benefit plan, or a
profit-sharing plan other than a Non-QJSA Profit-Sharing Plan (as defined in
Section 6.1.2), a Participant's benefit shall be payable in the normal form of a
Qualified Joint and Survivor Annuity if the Participant is married on his or her
Benefit Commencement Date and in the normal form of an immediate annuity for the
life of the Participant if the Participant is not married on that date. A
Participant who terminated Employment on or after satisfying the requirements
for Early Retirement may elect to have his or her Qualified Joint and Survivor
Annuity distributed upon or after his or her termination of Employment. A
Participant in a money purchase pension plan, a target benefit plan, or a
profit-sharing plan that is not a Non-QJSA Profit Sharing Plan, may at any time
after attaining age 35 and prior to his or her Benefit Commencement Date elect,
in accordance with Section 6.2, any of the following optional forms of payment
instead of the normal form:
(A) An Annuity Contract payable as:
(i) a Straight Life Annuity;
(ii) a joint and 50% survivor annuity with a contingent annuitant;
(iii) a joint and 100% survivor annuity with a contingent annuitant;
(iv) an annuity for the life of the Participant with 120 monthly payments
certain (any Annuity Contract distributed must be nontransferable).
(B) A lump-sum distribution in cash or in kind, or part in cash and part in
kind; or
(C) In installments payable in cash or in kind, or part in cash and part in
kind over a period not in excess of that required to comply with Section 5.11.4.
Anything in this Section 6.1.1 to the contrary notwithstanding, if the
value of a Participant's vested Account as of the applicable Valuation Date is
$5,000 or less, his or her benefit shall be paid in the form of a lump-sum
distribution and no optional form of benefit payment shall be available.
6.1.2 Non-QJSA Profit Sharing Plans - Lump Sum Normal Form of Benefit:
(A) Conditions for Non-QJSA Profit Sharing Plan Status. If the following
conditions are satisfied with respect to Participants in a profit sharing plan,
then the Plan shall be treated as a "Non-QJSA Profit Sharing Plan" with respect
to such Participants: (i) the Participant does not or cannot elect payments in
the form of a life annuity; and (ii) on the death a Participant, the
Participant's vested Account Balance will be paid to the Participant's Surviving
Spouse; provided, however, that if there is no Surviving Spouse, or if the
Surviving Spouse has consented to the naming of a different Beneficiary in
accordance with Section 7.2.2, then the vested Account Balance may be paid to
the Participant's designated Beneficiary upon the Participant's death.
(B) Transfers from Plan Subject to QJSA Rules. This Section 6.1.2 shall not
be operative with respect to a Participant in a profit sharing plan to the
extent 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 Code Sections
401(a)(11) and 417, unless the survivor annuity requirements are permissibly
eliminated in accordance with Code Section 411(d)(6) and the regulation
thereunder.
(C) Distribution Forms. If this Section 6.1.2 is operative, then
(i) the normal form of benefit shall be a lump sum distribution;
(ii) a Participant may also elect to receive his or her benefit in the form
of installments in accordance with 6.1.1(C) of the Plan; and
(iii) Sections 6.2.1, 6.2.2 and 6.2.4 shall not apply except as provided in
this Section 6.1.2.
6.2 Election of Optional Forms:
6.2.1 Post-Age 35 Waiver:
This Section 6.2.1 shall not be applicable if Section 6.1.2 applies to a
Participant. By notice to the Plan Administrator at any time prior to a
Participant's date of death and beginning on the first day of the Plan Year in
which the Participant attains age 35, the Participant may elect, in writing, not
to receive the normal form of benefit payment otherwise applicable and to
receive instead an optional form of benefit payment provided for in Section
6.1.1. If the Participant separates from Employment prior to the first day of
the Plan Year in which the Participant attains age 35, the Participant may make
such election beginning on the date he or she separates from Employment.
6.2.2 QJSA Explanation:
Unless Section 6.1.2 applies, within a reasonable period, but in any event
no less than 30 and no more than 90 days prior to each Participant's Benefit
Commencement Date, the Plan Administrator shall provide to each Participant a
written explanation of the terms and conditions of a Qualified Joint and
Survivor Annuity. Such written explanation shall consist of:
(A) the terms and conditions of the 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;
(C) the rights of the Participant's Spouse under Section 6.2.4;
(D) the right to make, and the effect of, a revocation of a previous
election to waive the Qualified Joint and Survivor Annuity; and
(E) the relative values of the various optional forms of benefit under the
Plan.
The Benefit Commencement Date for a distribution in a form other than a
Qualified Joint and Survivor Annuity may be less than 30 days after receipt of
the written explanation described in the preceding paragraph provided: (i) the
Participant has been provided with information that clearly indicates that the
Participant has at least 30 days to consider whether to waive the Qualified
Joint and Survivor Annuity and elect (with spousal consent) to a form of
distribution other than a Qualified Joint and Survivor Annuity; (ii) the
Participant is permitted to revoke any affirmative distribution election at
least until the Benefit Commencement Date or, if later, at any time prior to the
expiration of the seven-day period that begins the day after the explanation of
the Qualified Joint and Survivor Annuity is provided to the Participant; and
(iii) the Benefit Commencement Date is a date after the date that the written
explanation was provided to the Participant.
The Plan Administrator may provide for such other notices, information or
election periods or take such other action as the Plan Administrator considers
necessary or appropriate to implement the provisions of this Section 6.2.2.
6.2.3 Election Revocation:
A Participant may revoke his or her election to take an optional form of
benefit, and elect a different form of benefit, at any time prior to the
Participant's Benefit Commencement Date.
6.2.4 Spousal Consent to QJSA Waiver:
(A) Spousal Consent Required for QJSA Waiver. The election of an optional
benefit by a Participant must also be a waiver of a Qualified Joint and Survivor
Annuity by the Participant. Any waiver of a Qualified Joint and Survivor Annuity
shall not be effective unless:
(i) the Participant's Spouse consents in writing;
(ii) the election designates a specific alternate Beneficiary for an
optional form of benefit that provides for distributions after the death of a
Participant to a beneficiary other than the Spouse, 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);
(iii) the Spouse's consent to the waiver is witnessed by a Plan
representative or notary public; and
(iv) the Spouse's consent acknowledges the effect of the election.
Additionally, a Participant's waiver of the Qualified Joint and Survivor
Annuity will 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 without any further spousal consent).
(B) Circumstances Under Which Spousal Consent Not Required. Spousal consent
to any election or designation by a Participant under this Plan shall not be
required if the Participant establishes to the satisfaction of the Plan
Administrator that such written consent may not be obtained because there is no
Spouse, the Spouse cannot be located, the Participant is legally separated or
the Participant has been abandoned (within the meaning of local law) and the
Participant has a court order to that effect (unless a qualified domestic
relations order, within the meaning of Code Section 414(p), provides otherwise),
or because of such other circumstances as the Secretary may prescribe by
regulation, notice or otherwise. In addition, a Spouse's consent shall not be
required where the Spouse is legally incompetent to provide such consent. In
such a case, the Spouse's legal guardian may provide the required consent, even
if that legal guardian is the Participant.
(C) Other Rules for Spousal Consent. Any consent necessary under this
provision (or establishment that the consent of a Spouse may not be obtained
under paragraph (B)) 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. Additionally, a revocation of a prior waiver may be made by a
Participant without the consent of the Spouse at any time before his or her
Benefit Commencement Date. The number of revocations shall not be limited. Any
new waiver will require a new consent by the electing Participant's Spouse. No
consent obtained under this provision shall be valid unless the Participant has
received notice as provided in this Section.
6.2.5 Death Before Benefits Commence:
The election of an optional form of benefit which contemplates the payment
of an annuity shall not be given effect if any person who would receive benefits
under the annuity dies before the Benefit Commencement Date.
6.3 Change in Form of Benefit Payments:
Any former Employee whose payments are being deferred or who is receiving
installment payments may request acceleration, including a lump sum payment of
his or her vested Account balance, or other modification of the form of benefit
distribution, subject to Code Section 401(a)(9) and Section 5.11, provided that
any necessary consent to such change required under Section 6.2.4 (to the extent
applicable) is obtained from the Employee's Spouse.
6.4 Direct Rollovers:
Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a Distributee's election under this Section 6.4, a Distributee
may elect, at the time and in the manner prescribed by the Plan Administrator,
to have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Distributee in a Direct Rollover. A
Direct Rollover is a payment by the Plan to the Eligible Retirement Plan
specified by the Distributee.
6.5 Electronic Media:
Any notice, election, consent to a distribution, waiver, or other
communication under this Article VI may be made by means of such electronic,
telephonic or other media authorized by the Plan Administrator to the extent
permitted and in the manner required under applicable law.
ARTICLE VII
DEATH BENEFITS
7.1 Payment of Account Balances:
7.1.1 Payment to Beneficiary:
In the case of an Active Participant who dies or an Inactive Participant
who dies before benefit commencement, the benefits payable to the Participant's
Beneficiary shall be the value of the vested Account Balance of all of the
Participant's Accounts. Except as otherwise provided in this Article VII, a
Beneficiary may request that he or she be paid his or her benefits as soon as
practicable after the Participant's death. Until all amounts are distributed
hereunder to the Participant's Beneficiary, the Participant's 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.
7.1.2 Form of Benefit:
Benefits payable under this Article shall be paid to the Participant's
Beneficiary in the form and at the time elected by the Beneficiary and as
permitted under this Plan pursuant to Article VI, subject to Section 7.2.5. If
benefits have commenced as of the Participant's death in a form of benefit that
provides for continued payments after the Participant's death to a designated
Beneficiary, such amounts shall be paid to the Participant's designated
Beneficiary in accordance with the terms of such optional form of benefit;
provided, however, that a Beneficiary may elect to accelerate the distribution
of a benefit that is being paid in installments and have the remaining amounts
paid to the Beneficiary in the form of a single lump sum payment.
7.1.3 Cash Out:
If the value of a Participant's vested Account Balance determined as of the
Valuation Date immediately following the Participant's death is $5,000 or less,
distribution of such benefit shall be made to the Participant's Beneficiary in a
single lump-sum cash payment as soon as practicable following the Participant's
death.
7.2 Beneficiaries:
7.2.1 Written Explanation of Benefit:
Unless this Plan is a Non-QJSA Profit Sharing Plan, as described in Section
6.1.2, the Plan Administrator shall provide each Participant, within the period
described in Section 7.2.1(A) for such Participant, a written explanation of the
death benefit under Section 7.2.5 in such terms and in such a manner as would be
comparable to the explanation provided for meeting the requirements applicable
to a Qualified Joint and Survivor Annuity under Code Sections 401(a)(11) and
417.
(A) The period for providing a written explanation of the death benefit for
a Participant ends on the latest of the following:
(i) the period beginning with the first day of the Plan Year in which the
Participant attains age 32 and ending with the close of the Plan Year preceding
the Plan Year in which the Participant attains age 35;
(ii) a reasonable period ending after the Employee becomes a Participant;
or
(iii) a reasonable period ending after Code Section 417 first applies to
the Participant.
In case of a Participant who terminates Employment before attaining age 35
and who has a vested interest in his or her Account, notice must be provided
within a reasonable period ending after termination of Employment.
(B) For purposes of the preceding paragraph, a reasonable period ending
after the enumerated events described in (ii) and (iii) is the end of the
two-year period that begins one year before the date described in (ii) and (iii)
the applicable event occurs and ending one year after that date. A Participant
who has a vested interest in his or her Account and who terminates Employment
before the Plan Year in which age 35 is attained, shall be provided such notice
within the two-year period beginning one year before and ending one year after
the Participant's date of termination. If such a Participant returns to
Employment, the applicable period for such Participant shall be redetermined.
7.2.2 Beneficiary Designation:
A Participant shall designate one or more Beneficiaries to whom amounts due
after his or her death, other than under the Qualified Joint and Survivor
Annuity, shall be paid. If a Participant fails to make a proper designation or
if no designated Beneficiary survives the Participant, the Participant's
Beneficiary shall be the Participant's Surviving Spouse, or if the Participant
has no Surviving Spouse, the Participant's estate. A Participant's Beneficiary
shall not have any right to benefits under the Plan unless he or she shall
survive the Participant.
7.2.3 Manner of Designation:
Any designation of a Beneficiary incorporated into an Annuity Contract or
insurance contract shall be governed by the terms of such Annuity Contract or
insurance contract. Any other designation of a Beneficiary must be filed with
the Plan Administrator, in a time and manner designated by such Plan
Administrator, in order to be effective. Any such designation of a Beneficiary
may be revoked by filing a later designation or an instrument of revocation with
the Plan Administrator, in a time and manner designated by the Plan
Administrator.
7.2.4 Beneficiary of Married Participants - Designation of Non-Spouse
Beneficiary:
(A) General Rules. The Beneficiary of a Participant who is married on his
or her date of death shall be the Participant's Surviving Spouse, unless the
Participant has elected a different Beneficiary in accordance with the terms of
the Plan and the Plan Administrator's procedures. A married Participant's
designation of a Beneficiary other than his or her Spouse, including a
Beneficiary referred to in the first sentence of Section 7.2.3, or the change of
any such Beneficiary to a new Beneficiary other than the Participant's Spouse,
shall not be valid unless made in writing and consented to by the Participant's
Spouse.
(B) Effect of Divorce on Spousal Designation. Except to the extent
otherwise provided in a qualified domestic relations order (as defined in Code
Section 414(p)):
(i) Any actual designation of a Spouse as a Participant's Beneficiary on a
form accepted by the Plan Administrator hereunder shall continue to be valid and
will not be revoked notwithstanding a later divorce of the Spouse from the
Participant, until and unless the Participant changes his or her designated
Beneficiary in accordance with the procedures established by the Plan
Administrator.
(ii) If the Participant's Spouse is deemed to be the Participant's
Beneficiary at any time on account of an absence of any other valid Beneficiary
designation and the Participant and Spouse divorce, the Participant's former
spouse shall not be treated as a Beneficiary hereunder until and unless the
Participant specifically designates such person as his or her Beneficiary in
accordance with the procedures established by the Plan Administrator.
(iii) If a Participant remarries after a divorce, the new Spouse will
automatically be treated as the sole designated Beneficiary hereunder until and
unless a waiver and designation of an alternate Beneficiary are thereafter
delivered in accordance with the procedures established by the Plan
Administrator.
(C) Requirements for Spousal Consent to Non-Spouse Beneficiary. The
Spouse's consent to such designation will be effective only if:
(i) the Spouse consents in writing;
(ii) the designation designates a specific alternate 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);
(iii) the Spouse's consent is witnessed by a Plan representative or a
notary public; and
(iv) the Spouse's consent acknowledges the effect of the designation.
(D) Circumstances Under Which Spousal Consent Not Required. Spousal consent
to any Beneficiary designation by a Participant under this Plan shall not be
required if the Participant establishes to the satisfaction of the Plan
Administrator that such written consent may not be obtained because there is no
Spouse, the Spouse cannot be located, the Participant is legally separated or
the Participant has been abandoned (within the meaning of local law) and the
Participant has a court order to that effect (unless a qualified domestic
relations order, within the meaning of Code Section 414(p), provides otherwise),
or because of such other circumstances as the Secretary may prescribe by
regulation, notice or otherwise. In addition, a Spouse's consent shall not be
required where the Spouse is legally incompetent to provide such consent. In
such a case, the Spouse's legal guardian may provide the required consent, even
if that legal guardian is the Participant.
7.2.5 Required Distributions:
(A) Death After Benefit Commencement Date. If the Participant dies after
his or her Benefit Commencement Date, but before distribution of his or her
benefit has been completed, the remaining portion of such benefit may continue
in the form and over the period in which the distributions were being made, or
may be distributed in an immediate lump sum, but in any event must continue to
be made at least as rapidly as under the method of distribution being used prior
to the Participant's death.
(B) Death Before Benefit Commencement Date.
(i) Surviving Spouse Benefit. Except as provided in paragraph (ii) below,
unless an optional form of benefit has been selected within the Election Period
in accordance with an election made under Section 6.2.4, if a married
Participant dies before the Benefit Commencement 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.
The preceding sentence shall not apply if the Surviving Spouse elects, by
written notice to the Plan Administrator, any other form of benefit payment
available under Article VI or the Participant's Surviving Spouse has already
consented to the designation of an alternate Beneficiary under Section 7.2.4.
(ii) Non-QJSA Profit Sharing Plan. In all events, if the Plan is a
profit-sharing plan which meets the requirements of Section 6.1.2. (Non-QJSA
Profit Sharing Plan), the Surviving Spouse shall receive his or her distribution
in the form of a single lump sum payment unless she or he elects any other form
of benefit payment available under Article VI or the Participant's Surviving
Spouse has already consented to the designation of an alternate Beneficiary
under Section 7.2.4.
(iii) Cash-Out of Small Benefit. If the value of the Participant's Account
as of the Valuation Date immediately following his or hear death is $5,000 or
less, distribution of such Account shall be made in the form of a single lump
sum payment of the entire vested Account Balance.
(C) Death Before Benefit Commencement Date - Minimum Required Distribution
Rules. If the Participant dies before his or her Benefit Commencement Date, the
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 by the designated
Beneficiary involved to receive distributions in accordance with (i) or (ii) of
this subsection (C) below:
(i) If any portion of the Participant's interest is payable to a designated
Beneficiary who is an individual, distributions may be made in substantially
equal installments over any period up to the life or Life Expectancy, as defined
in Section 5.11.1(D), of the designated Beneficiary commencing on or before
December 31 of the calendar year immediately following the calendar year of the
Participant's death;
(ii) If the designated Beneficiary is the Participant's Surviving Spouse,
the date distributions are required to begin in accordance with (i) of this
subsection (C) shall not be earlier than the later of December 31 of the
calendar year in which the Participant died and December 31 of the calendar year
in which the Participant would have attained age 70-1/2; and
(iii) If the Surviving Spouse dies after the Participant but before
payments begin, subsequent distributions shall be made as if the Surviving
Spouse had been the Participant.
(D) Additional Rules for Minimum Required Distributions.
(i) For purposes of this Section 7.2.5, distribution of a Participant's
interest is considered to begin on the Participant's Required Beginning Date, as
defined in Section 5.11.1(F). If distribution in the form of an annuity
irrevocably commences to the Participant before such Required Beginning Date,
the date distribution is considered to begin is the date distribution actually
commences.
(ii) For purposes of this Section 7.2.5, any amount paid to a child of the
Participant will be treated as if it had been paid to the Participant's
Surviving Spouse if the amount becomes payable to such Surviving Spouse when the
child reaches the age of majority.
(iii) If the Participant has not made an election under this Section 7.2.5
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 (i) December 31 of
the calendar year in which distributions would be required to begin under this
Section or (ii) 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.
7.3 Multiple Beneficiaries:
(A) General Rule. No contingent Beneficiary shall receive any benefit under
the Plan if the Participant is survived by at least one primary Beneficiary. If
one, but fewer than all of the primary Beneficiaries designated by the
Participant survive the Participant, the percentage interest that otherwise
would have been payable to the primary Beneficiary or Beneficiaries who
predeceased the participant shall be divided among the primary Beneficiaries who
survive the Participant in the ratio determined by comparing the percentages
specified by the Participant for those beneficiaries and adjusting the
percentages accordingly. For example, suppose the Participant indicated
percentages of 20% for Beneficiary A, 30% for Beneficiary B and 50% for
Beneficiary C. If Beneficiary C predeceased the Participant, Beneficiaries A and
B would share Beneficiary C's 50% interest in a 2:3 ratio. Beneficiary A's
interest would increase to 40% and Beneficiary B's interest would increase to
60%.
(B) Exception. Notwithstanding Section 7.3(A), the interest of a primary
Beneficiary who predeceases the Participant shall be paid to such contingent
Beneficiary or Beneficiaries who the Participant designates to receive the
primary Beneficiary's interest, to the exclusion of all other primary
Beneficiaries. The ratio principle described in Section 7.3(A) shall be used to
determine each such surviving contingent Beneficiary's interest if one or more
of such contingent Beneficiaries predeceases the Participant. If no such
contingent Beneficiaries survive the Participant, the interest of the contingent
Beneficiaries shall be divided among the primary Beneficiaries under the ratio
principle described in Section 7.3(A).
7.4 Qualified Disclaimers:
A Beneficiary who is entitled to receive any benefits under the Plan may
disclaim all or any portion of such benefits by filing a written disclaimer with
the Plan Administrator after the death of the Participant. Any such disclaimer
shall be irrevocable, must be notarized or witnessed to the Plan Administrator's
satisfaction, and must comply with the requirements of the Code for qualified
disclaimers in order to be effective. If such a disclaimer is received by the
Plan Administrator before the payment of all remaining benefits under the Plan
otherwise owed to such disclaiming Beneficiary, then, notwithstanding any other
provision of the Plan, any disclaimed benefits otherwise payable to the person
filing such disclaimer shall be paid to the person designated by the Participant
to receive such benefits in the event of such a disclaimer, or if the
Participant has made no such designation, then to the person who would be the
Participant's Beneficiary determined in accordance with this Article VII as if
the disclaiming person had predeceased the Participant.
7.5 Electronic Media:
Any notice, election, consent to a distribution, or other communication
under this Article VII may be made by means of such electronic, telephonic or
other media authorized by the Plan Administrator to the extent permitted and in
the manner required under applicable law.
ARTICLE VIII
FIDUCIARIES
8.1 Named Fiduciaries:
8.1.1 Plan Administrator:
The Plan Administrator shall be the named administrative fiduciary of the
Plan and a "named fiduciary" of the Plan, as that term is defined in ERISA
Section 402(a)(2), with authority to control and manage the operation and
administration of the Plan, other than authority to manage and control Plan
assets. The Plan Administrator shall also be the "Plan Administrator" with
respect to the Plan, as those terms are defined in ERISA Section 3(16)(A) and in
Code Section 414(g), respectively. (See Article IX "Plan Administration").
8.1.2 Named Fiduciaries:
(A) The Trustee, or the Investment Committee, shall be a "named fiduciary"
of the Plan, as that term is defined in ERISA Section 402(a)(2), with authority
to manage and control all Trust Fund assets and to select an Investment Manager
or Investment Managers.
(B) If Merrill Lynch Trust, Co., FSB is the Trustee, it shall be a
nondiscretionary trustee; (and all investment authority shall be delegated to a
named investment fiduciary or to Participants) an Investment Committee shall be
appointed by the Primary Employer, who may also remove such Investment
Committee; and the Investment Committee shall be the "named investment
fiduciary" with respect to Trust Fund assets.
(C) With respect to Participant-Directed Assets, the Participant or
Beneficiary having the power to direct the investment of such assets shall be
the "named fiduciary."
8.1.3 Investment Authority:
Unless otherwise delegated to the Investment Committee, the Trustee (other
than Merrill Lynch Trust Co., FSB if it is the Trustee) shall have in addition
to the other rights, powers, duties and obligations granted or imposed upon it
elsewhere in the Plan, the power to make and deal with any investment of the
Trust Fund permitted in Section 10.4, except Participant-Directed Assets or
assets for which an Investment Manager has such power, in any manner which it
deems advisable and shall also:
(A) establish and carry out a funding policy and method consistent with the
objectives of the Plan and the requirements of ERISA;
(B) have the power to select Annuity Contracts, if applicable;
(C) have the power to determine, if applicable, what investments specified
in Section 10.4 are available as Participant-Directed Assets, including, without
limitation, Qualified Employer Securities and regulated investment company
shares.
(D) If Merrill Lynch Trust Co., FSB is the Trustee, the foregoing authority
and responsibilities are delegated by the Primary Employer to the named
investment fiduciary of the Plan (which shall be the Primary Employer unless the
Primary Employer delegates that function to another named investment fiduciary).
8.2 Employment of Advisers:
A "named fiduciary," with respect to the Plan (as defined in ERISA
Section 402(a)(2)) and any "fiduciary" (as defined in ERISA Section 3(4))
appointed by such a "named fiduciary," may employ one or more persons to render
advice with regard to any responsibility of such "named fiduciary" or
"fiduciary" under the Plan.
8.3 Multiple Fiduciary Capacities:
Any "named fiduciary" with respect to the Plan (as defined in ERISA
Section 402(a)(2)) and any other "fiduciary" (as defined in ERISA Section 3(4))
with respect to the Plan may serve in more than one fiduciary capacity. A named
fiduciary shall be treated as a fiduciary only with respect to such
responsibilities and authority delegated to it by the Plan or by the Primary
Employer. In the absence of any delegation of fiduciary authority to any other
individual by the Primary Employer, the Primary Employer is the named fiduciary
for all administrative and investment purposes of the Plan.
8.4 Indemnification:
To the extent not prohibited by state or federal law, the Employer agrees
to, and shall indemnify and hold harmless, as the case may be, each Plan
Administrator (if a person other than the Employer), Trustee, Investment
Committee and/or any Employee, officer or director of the Employer, or an
Affiliate, from all claims for liability, loss, damage or expense (including
payment of reasonable expenses in connection with the defense against any such
claim) which result from any exercise or failure to exercise any of the
indemnified person's responsibilities with respect to the Plan, other than by
reason of gross negligence.
8.5 Payment of Expenses:
8.5.1 Plan Expenses:
All Plan expenses, including without limitation, expenses and fees
(including fees for legal services rendered and fees to the Trustee) of the
Sponsor, Plan Administrator, Investment Manager, Trustee, and any insurance
company, shall be charged against and withdrawn from the Trust Fund; provided,
however, the Employer may pay any of such expenses or reimburse the Trust Fund
for any payment. In addition, forfeitures may be applied toward the payment of
Plan expenses as provided in Section 3.7.
8.5.2 Transactional Costs:
All transactional costs or charges imposed or incurred (if any) for
Participant-Directed Assets shall be charged to the Account of the directing
Participant or Beneficiary. Transactional costs and charges shall include, but
shall not be limited to, charges for the acquisition or sale or exchange of
Participant-Directed Assets, brokerage commissions, service charges and
professional fees.
8.5.3 Taxes:
Any taxes which may be imposed upon the Trust Fund or the income therefrom
shall be deducted from and charged against the Trust Fund.
8.5.4 Permitted Payments:
To the extent permitted by law, the Employer authorizes the Trustee and/or
its affiliates to receive payments from certain mutual funds (and/or collective
trusts) for which no affiliate of the Trustee acts as investment manager or
advisor (or from the principal distributors and/or advisors of those funds or
trusts), in connection with the performance of reasonable and necessary services
(including recordkeeping, subaccounting, account maintenance, administrative and
other shareholder services). The Employer understands that different mutual
funds (or collective trusts) may be subject to different fee arrangements. Upon
written request, the Trustee shall provide further details on any specific fee
arrangements that may be applicable to investments under the Plan.
ARTICLE IX
PLAN ADMINISTRATION
9.1 The Plan Administrator:
9.1.1 Appointment of Plan Administration:
The Employer may appoint one or more persons as Plan Administrator, who may
also be removed by the Employer. If any individual is appointed as Plan
Administrator, and the individual is an Employee, the individual will be
considered to have resigned as Plan Administrator if he or she terminates
Employment and at least one other person continues to serve as Plan
Administrator. Employees shall receive no compensation for their services
rendered to or as Plan Administrator.
9.1.2 Voting Authority:
If more than one person is designated as Plan Administrator, the Plan
Administrator shall act by a majority of its members at the time in office and
such action may be taken either by a vote at a meeting or in writing without a
meeting. However, if less than three members are appointed, the Plan
Administrators shall act only upon the unanimous consent of its members. An
individual who is a Plan Administrator and who is also a Participant shall not
vote or act upon any matter relating to himself or herself, unless such person
is the sole Plan Administrator.
9.1.3 Other Authority:
The Plan Administrator may authorize in writing any person to execute any
document or documents on the Plan Administrator's behalf, and any interested
person, upon receipt of notice of such authorization directed to it, may
thereafter accept and rely upon any document executed by such authorized person
until the Plan Administrator shall deliver to such interested person a written
revocation of such authorization.
9.2 Powers and Duties of the Plan Administrator:
9.2.1 Interpretation of Plan Document:
The Plan Administrator shall have full discretionary authority necessary to
administer the Plan and carry out its provisions. The Plan Administrator's
authority shall include discretionary authority to interpret all Plan
provisions, including provisions relating to eligibility, benefit amounts, and
all other questions arising in the administration, interpretation, and operation
of the Plan. No Participant or Beneficiary shall be entitled to any distribution
of benefits hereunder (including any Plan loans) unless the Plan Administrator,
in its discretion, determines that the requirements otherwise specified in the
Plan have been met with respect to such distributions. Any determination by the
Plan Administrator shall be conclusively binding upon all persons interested in
the Plan. It is intended that any exercise of the Plan Administrator's
discretionary authority not be reversed by a court of law unless such exercise
of authority is determined to be arbitrary and capricious or made in bad faith.
9.2.2 Administrative Powers:
The Plan Administrator shall have the power and discretion to promulgate
such rules and procedures, to maintain or cause to be maintained such records
and to issue such forms as it shall deem necessary and proper for the
administration of the Plan.
9.2.3 Elections:
Subject to the terms of the Plan, the Plan Administrator shall determine
the time and manner in which all elections authorized by the Plan shall be made
or revoked.
9.2.4 Miscellaneous:
The Plan Administrator shall have all the rights, powers, duties,
discretionary authority, and obligations granted to or imposed upon it elsewhere
in the Plan.
9.3 Delegation of Responsibility:
The Plan Administrator may designate persons, including persons other than
"named fiduciaries" (as defined in ERISA Section 402(a)(2)) to carry out the
specified responsibilities of the Plan Administrator and shall not be liable for
any act or omission of a person so designated.
9.4 Administrative Error:
The Plan Administrator shall take such actions as it deems, in its
discretion, to be necessary to correct any inequity resulting from incorrect
information received or communicated in good faith, or due to administrative or
operational error. Such actions may include, but are not limited to, utilizing
the IRS Employee Plans Compliance Resolution System, the Department of Labor
Voluntary Fiduciary Correction Program, or any other similar program of the IRS,
or Department of Labor, or other agency; reallocating plan assets; adjusting
future payments to Participants and Beneficiaries; and pursuing actions to
recover erroneous benefit payments made in error or on the basis of incorrect or
incomplete information.
ARTICLE X
TRUSTEE AND INVESTMENT COMMITTEE
10.1 Appointment of Trustee and Investment Committee:
10.1.1 Appointment:
The Employer shall appoint one or more persons as a Trustee who shall serve
as such for all or a portion of the Trust Fund. By executing the Adoption
Agreement: (i) the Employer represents that all necessary action has been taken
for the appointment of the Trustee; (ii) the Trustee acknowledges that it
accepts such appointment; and (iii) both the Employer and the Trustee agree to
act in accordance with the Trust provisions contained in this Article X.
10.1.2 Status of Trustee:
An Employee appointed as Trustee or to the Investment Committee shall
receive no compensation for services rendered in such capacity and will be
considered to have resigned if he or she terminates Employment and at least one
other person continues to act as Trustee or as the Investment Committee, as the
case may be. If Merrill Lynch Trust Co., FSB is the Trustee, the Employer shall
appoint an Investment Committee and Merrill Lynch Trust Co., FSB shall be a
nondiscretionary trustee.
10.1.3 Action of Trustee:
If more than one person is acting as the Trustee, or as an Investment
Committee, such Trustee, or Investment Committee, shall act by a majority of the
persons at the time so acting and such action may be taken either by a vote at a
meeting or in writing without a meeting. If less than three members are serving,
the Trustee, or Investment Committee, shall act only upon the unanimous consent
of those serving. The Trustee, or Investment Committee, may authorize in writing
any person to execute any document or documents on its behalf, and any
interested person, upon receipt of notice of such authorization directed to it,
may thereafter accept and rely upon any document executed by such authorized
person until the Trustee, or Investment Committee, shall deliver to such
interested person a written revocation of such authorization.
10.2 The Trust Fund
The Trustee shall receive such sums of money or other property acceptable
to the Trustee which shall from time to time be paid or delivered to the Trustee
under the Plan. The Trustee shall hold in the Trust Fund all such assets,
without distinction between principal and income, together with all property
purchased therewith and the proceeds thereof and the earnings and income
thereon. The Trustee shall not be responsible for, or have any duty to enforce,
the collection of any contributions or assets to be paid or transferred to it,
or for verifying whether contributions or transfers to it are allowable under
the Plan, nor shall the Trustee be responsible for the adequacy of the Trust
Fund to meet or discharge liabilities under the Plan.
10.2.1 Contributions to Trust Fund:
The Trustee shall receive in cash or other assets acceptable to the
Trustee, so long as such assets received do not constitute a prohibited
transaction, all contributions paid or delivered to it which are allocable under
the Plan and to the Trust Fund and all transfers paid or delivered under the
Plan to the Trust Fund from a predecessor trustee or another trust (including a
trust forming part of another plan qualified under Code Section 401(a);
provided, however, that the Trustee shall not be obligated to receive any such
contribution or transfer unless prior thereto or coincident therewith, as the
Trustee may specify, the Trustee has received such reconciliation, allocation,
investment or other information concerning, or such direction, contribution or
representation with respect to, the contribution or transfer or the source
thereof as the Trustee may require. The Trustee shall have no duty or authority
to (a) require any contributions or transfers to be made under the Plan or to
the Trustee, (b) compute any amount to be contributed or transferred under the
Plan to the Trustee, or (c) determine whether amounts received by the Trustee
comply with the Plan.
10.2.2 Assets of Trust Fund:
The Trust Fund shall consist of all money and other property received by
the Trustee under Section 10.2, increased by any income or gains on or increment
in such assets and decreased by any investment loss or expense, benefit or
disbursement paid under the Plan.
10.3 Relationship with Plan Administrator:
10.3.1 Trustee Not Responsible for Payments from the Trust Fund:
Neither the Trustee, nor the Investment Committee, if any, shall be
responsible in any respect for the administration of the Plan. Payments of money
or property from the Trust Fund shall be made by the Trustee upon direction from
the Plan Administrator or its designee. Payments by the Trustee shall be
transmitted to the Plan Administrator or its designee for delivery to the proper
payees or to payee addresses supplied by the Plan Administrator or its designee,
and the Trustee's obligation to make such payments shall be satisfied upon such
transmittal. The Trustee shall have no obligation to determine the identity of
persons entitled to payments under the Plan or their addresses.
10.3.2 Communication of Plan Administrator Directions:
Directions from or on behalf of the Plan Administrator or its designee
shall be communicated to the Trustee or the Trustee's designee for that purpose
only in a manner and in accordance with procedures acceptable to the Trustee.
The Trustee's designee shall not, however, be empowered to implement any such
directions except in accordance with procedures acceptable to the Trustee. The
Trustee shall have no liability for following any such directions or failing to
act in the absence of any such directions. The Trustee shall have no liability
for the acts or omissions of any person making or failing to make any direction
under the Plan or the provisions of this Article X nor any duty or obligation to
review any such direction, act or omission.
10.3.3 Disputes Concerning Payments:
If a dispute arises over the propriety of the Trustee making any payment
from the Trust Fund, the Trustee may withhold the payment until the dispute has
been resolved by a court of competent jurisdiction or settled by the parties to
the dispute. The Trustee may consult legal counsel and shall be fully protected
in acting upon the advice of counsel.
10.4 Investment of Assets:
10.4.1 Permissible Investments:
Except as provided in Section 10.4.2, investments of the Trust Fund shall
be made in the following manner, but only if compatible with the Sponsor's
administrative and operational requirement and framework:
(A) shares of any regulated investment company managed in whole or in part
by the Sponsor or any affiliate of the Sponsor;
(B) any property purchased through the Sponsor or any affiliate of the
Sponsor, whether or not productive of income or consisting of wasting assets,
including, without limitation by specification, governmental, corporate or
personal obligations, trust and participation certificates, leaseholds, fee
titles, mortgages and other interests in realty, preferred and common stocks,
convertible stocks and securities, shares of regulated investment companies,
certificates of deposit, put and call options and other option contracts of any
type, foreign or domestic, whether or not traded on any exchange, futures
contracts and options on futures contracts traded on or subject to the rules of
an exchange which has been designated as a contract market by the Commodity
Futures Trading Commission, an independent U.S. government agency, contracts
relating to the lending of property, evidences of indebtedness or ownership in
foreign corporations or other enterprises, or indebtedness of foreign
governments, group trust participations, limited or general partnership
interests, insurance contracts, annuity contracts, any other evidences of
indebtedness or ownership including oil, mineral or gas properties, royalty
interests or rights (including equipment pertaining thereto); and
(C) Qualifying Employer Securities or "qualifying employer real properties"
(as that term is defined in ERISA Section 407(d) to the extent permitted in
Section 10.4.3).
10.4.2 Investment Limitations:
(A) Up to 25% or with the written consent of the Sponsor or its
representative, an additional percentage of each Plan Year's contributions may
be invested in property as specified in Section 10.4.1(B) acquired through a
person other than the Sponsor or an affiliate of the Sponsor.
(B) Except as permitted by Section 10.4.2(A) and except as may result from
a Rollover Contribution without the written consent of the Sponsor or its
representative, property may not be acquired through a person other than the
Sponsor or an affiliate of the Sponsor if following such acquisitions the value
of the property so acquired would exceed 25% of the value of the Trust Fund.
10.4.3 Investments in Qualifying Employer Securities or Qualifying Employer
Real Property:
In its sole discretion, the Investment Committee, or Trustee if there is no
Investment Committee:
(A) may permit the investment of up to 10% of the Trust Fund in Qualifying
Employer Securities or "qualifying employer real property" (as that term is
defined in ERISA Section 407(d)), to the extent such investment is compatible
with the Sponsor's administrative and operational requirements and framework;
and
(B) may determine, subject to Section 10.4.2, that a percentage of assets
in excess of 10% of the Trust Fund may be invested in Qualifying Employer
Securities or "qualifying employer real property" by a profit-sharing plan.
10.4.4 Prototype Plan:
This Plan will be recognized as a Prototype Plan by the Sponsor only by
complying with the provisions of this Section 10.4.
10.5 Investment Direction, Participant-Directed Assets and Qualifying
Employer Investments:
10.5.1 Management of Investments:
The Trustee, or Investment Committee if appointed, shall manage the
investment of the Trust Fund except insofar as (A) an Investment Manager has
authority to manage Trust assets, or (B) Participant-Directed Assets are
permitted as specified in the Adoption Agreement. Except as required by ERISA,
if an Investment Committee is acting, the Trustee shall invest the Trust Fund as
directed by the Investment Committee, an Investment Manager or a Participant or
Beneficiary, as the case may be, and the Trustee shall have no discretionary
control over, nor any other discretion regarding, the investment or reinvestment
of any asset of the Trust. Participant-Directed Assets shall be invested in
accordance with the direction of the Participant or, in the event of the
Participant's death before an Account is fully paid out, the Participant's
Beneficiary with respect to the assets involved; provided, however, that
Participant-Directed Assets may not be invested in "collectibles" (as defined in
Code Section 408(m)(2)). If there are Participant-Directed Assets, the
investment of these assets shall be made in accordance with such rules and
procedures established by the Plan Administrator which must be consistent with
the rules and procedures of the Sponsor or its affiliate, as the case may be.
10.5.2 Participant Directed Assets:
With respect to Participant-Directed Assets, neither the Plan
Administrator, the Investment Committee nor the Trustee shall:
(A) make any investments or dispose of any investments without the
direction of the Participant or Beneficiary for whom the Participant-Directed
Assets are maintained, except as provided in Section 8.5 so as to pay fees or
expenses of the Plan;
(B) be responsible for reviewing any investment direction with respect to
Participant-Directed Assets or for making recommendations on acquiring,
retaining or disposing of any assets or otherwise regarding any assets;
(C) have any duty to determine whether any investment is an authorized or
proper one; or
(D) be liable for following any investment direction or for any losses,
taxes or other consequences incurred as a consequence of investments selected by
any Participant or Beneficiary or for holding assets uninvested until it
receives proper instructions.
10.5.3 Administration of Participant Directed Assets:
If Participant-Directed Assets are permitted, a list of the Participants
and Beneficiaries and such information concerning them as the Trustee may
specify shall be provided by the Employer or the Plan Administrator to the
Trustee and/or such person as are necessary for the implementation of the
directions in accordance with the procedure acceptable to the Trustee.
10.5.4 Investment of Funds Pending Investment Direction:
It is understood that the Trustee may, from time to time, have on hand
funds which are received as contributions or transfers to the Trust Fund which
are awaiting investment or funds from the sale of Trust Fund assets which are
awaiting reinvestment. Absent receipt by the Trustee of a direction from the
proper person for the investment or reinvestment of such funds or otherwise
prior to the application of funds in implementation of such a direction, the
Trustee shall cause such funds to be invested in shares of such money market
fund or other short term investment vehicle as the Trustee, or Investment
Committee if appointed, may specify for this purpose from time to time. Any such
investment fund may be sponsored, managed, or distributed by the Sponsor or an
affiliate of the Sponsor.
10.5.5 Communication of Investment Direction:
Directions for the investment or reinvestment of Trust assets of a type
referred to in Section 10.4 from the Investment Committee, an Investment Manager
or a Participant or Beneficiary, as the case may be, shall, in a manner and in
accordance with procedures acceptable to the Trustee, be communicated to and
implemented by, as the case may be, the Trustee, the Trustee's designee or, with
the Trustee's consent and if an Investment Committee is operating, a
broker/dealer designated for the purpose by the Investment Committee.
Communication of any such direction to such a designee or broker/dealer shall
conclusively be deemed an authorization to the designee or broker/dealer to
implement the direction even though coming from a person other than the Trustee.
The Trustee shall have no liability for its or any other person's following such
directions or failing to act in the absence of any such directions. The Trustee
shall have no liability for the acts or omissions of any person directing the
investment or reinvestment of Trust Fund assets or making or failing to make any
direction referred to in Section 10.5.6.
10.5.6 Voting and Other Rights Other than for Qualifying Employer
Securities:
The voting and other rights in securities or other assets held in the Trust
shall be exercised by the Trustee provided, however, that if an Investment
Committee is appointed, the Trustee shall act as directed by such person who at
the time has the right to direct the investment or reinvestment of the security
or other asset involved.
10.5.7 Voting Qualifying Employer Securities:
With respect to any Qualifying Employer Securities allocated to an Account,
each Participant shall be entitled to direct the Trustee in writing as to the
manner in which Qualifying Employer Securities are to be voted.
10.5.8 Tender or Exchange of Qualifying Employer Securities:
With respect to any Qualifying Employer Securities allocated to an Account,
each Participant shall be entitled to direct the Trustee in writing as to the
manner in which to respond to a tender or exchange offer or other decisions with
respect to the Qualifying Employer Securities. The Plan Administrator shall
utilize its best efforts to timely distribute or cause to be distributed to each
Participant such information received from the Trustee as will be distributed to
shareholders of the Employer in connection with any such tender or exchange
offer or other similar matter or any vote referred to in Section 10.5.7.
10.5.9 Failure to Vote or Tender With Respect to Trust Fund Assets:
If an Investment Committee is appointed, notwithstanding any provision
hereof to the contrary, in the event the person with the right to direct a
voting or other decision with respect to any security, Qualifying Employer
Securities, or other asset held in the Trust does not communicate any decision
on the matter to the Trustee or the Trustee's designee by the time prescribed by
the Trustee or the Trustee's designee for that purpose or if the Trustee
notifies the Investment Committee, if applicable, either that it does not have
precise information as to the securities, Qualifying Employer Securities, or
other assets involved allocated on the applicable record date to the accounts of
all Participants and Beneficiaries or that time constraints make it unlikely
that Participant, Beneficiary or Investment Manager direction, as the case may
be, can be received on a timely basis, the decision shall be the responsibility
of the Investment Committee and shall be communicated to the Trustee on a timely
basis. In the event an Investment Committee with any right under the Plan to
direct a voting or other decision with respect to any security, Qualifying
Employer Securities, or other asset held in the Trust, does not communicate any
decision on the matter to the Trustee or the Trustee's designee by the time
prescribed by the Trustee for that purpose, the Trustee may, at the cost of the
Employer, obtain advice from a bank, insurance company, investment adviser or
other investment professional (including an affiliate of the Trustee) or retain
an Investment Manager or other independent fiduciary with full discretion to
make the decision. Except as required by ERISA, the Trustee shall (a) follow all
directions above referred to in this Section and (b) shall have no duty to
exercise voting or other rights relating to any such security, Qualifying
Employer Security or other asset.
10.5.10 Proxy Materials:
The Plan Administrator shall establish, or cause to be established, a
procedure acceptable to the Trustee for the timely dissemination to each person
entitled to direct the Trustee or its designee as to a voting or other decision
called for thereby or referred to therein of all proxy and other materials
bearing on the decision.
10.5.11 Common or Collective Trust Fund:
Any person authorized to direct the investment of Trust assets may, if the
Trustee and the Investment Committee, if applicable, so permit, direct the
Trustee to invest such assets in a common or collective trust maintained by the
Trustee for the investment of assets of qualified trusts under Code Section
401(a), individual retirement accounts under Code Section 408(a) and plans or
governmental units described in Code Section 818(a)(6). The documents governing
any such common or collective trust fund maintained by the Trustee, and in which
Trust assets have been invested, are hereby incorporated into this Article X by
reference.
10.6 Valuation of Accounts:
10.6.1 Valuation Date:
A Participant's Accounts shall be valued at fair market value on each
Valuation Date. Subject to Section 10.6.2(A), as of each Valuation Date, the
earnings and losses and expenses of the Trust Fund shall be allocated to each
Participant Account in the ratio that such Account Balance in that category of
Accounts bears to all Account Balances in that category. With respect to
Participant-Directed Assets, the earnings and losses and expenses (including
transactional expenses under Section 8.5.2) of such Participant-Directed Assets
shall be allocated to the Account of the Participant or Beneficiary having
authority to direct the investment of the assets in his or her Account.
10.6.2 Valuation Date of Distribution:
The Valuation Date with respect to any distributions (including, without
limitation, loan distributions and purchase of annuities) from any Account upon
the occurrence of a Benefit Commencement Date or otherwise, shall be:
(A) with respect to Participant-Directed Asset, the date as of which the
Account distribution is made; and
(B) with respect to other assets, the Valuation Date immediately preceding
the Benefit Commencement Date, if applicable, or immediately preceding the
proposed date of any other distribution from an Account.
With respect to any contribution allocable to an Account which has not been
made as of a Valuation Date determined under this Section 10.6.2, the principal
amount of such contribution distributable because of the occurrence of a Benefit
Commencement Date shall be distributed as soon as practicable after the date
paid to the Trust Fund.
10.6.3 Valuation of Assets:
The assets of the Trust shall be valued at fair market value as determined
by the Trustee based upon such sources of information as it may deem reliable,
including, but not limited to, stock market quotations, statistical evaluation
services, newspapers of general circulation, financial publications, advice from
investment counselors or brokerage firms, or any combination of sources. The
reasonable costs incurred in establishing values of the Trust Fund shall be a
charge against the Trust Fund, unless paid by the Employer.
When the Trustee is unable to arrive at a value based upon information from
independent sources, it may rely upon information from the Employer, Plan
Administrator, Investment Committee, appraisers or other sources, and shall not
incur any liability for inaccurate valuation based in good faith upon such
information.
10.6.4 Loans:
In the event that Participant loans are available under the Plan, the
Trustee shall reflect one aggregate balance for participant loans under the Plan
and shall reflect changes thereto only as directed by the Employer or Plan
Administrator.
10.7 Insurance Contracts:
10.7.1 Authority to Appoint Insurance Company:
The Trustee, if an Investment Committee is not appointed, Investment
Committee, or Participant or Beneficiary with respect to Participant-Directed
Assets, may appoint one or more insurance companies to hold assets of the Plan,
and may direct, subject to Section 10.7, the purchase of insurance contracts or
policies from one or more insurance companies with assets of the Plan. Neither
the Investment Committee, Trustee nor the Plan Administrator shall be liable for
the validity of any such contract or policy, the failure of any insurance
company to make any payments or for any act or omission of an insurance company
with respect to any duties delegated to any insurance company.
10.7.2 Payment of Insurance Premiums:
With the consent of the Plan Administrator and upon such notice as the Plan
Administrator may require, a Participant may direct that a portion of his or her
Account be used to pay premiums on life insurance on the Participant's life;
provided, however, that (a) the aggregate premiums paid on ordinary life
insurance must be less than 50% of the aggregate contributions allocated to the
Participant's Employer Account, (b) the aggregate premiums paid on term life
insurance contracts, universal life insurance contracts and all other life
insurance contracts which are not ordinary life insurance may not exceed 25% of
the aggregate contributions allocated to the Participant's Employer Account, and
(c) the sum of one-half of the premiums paid on ordinary life insurance and the
total of all other life insurance premiums may not exceed 25% of the aggregate
contributions allocated to the Employer Account of the Participant. For purposes
of these limitations, ordinary life insurance contracts are contracts with both
non-decreasing death benefits and non-increasing premiums.
10.7.3 Owner of Insurance Contract:
A Trustee other than Merrill Lynch Trust Co., FSB18 shall be the owner of
each life insurance contract purchased under this Section 10.7 and the proceeds
of each such contract shall be payable to the Trustee, provided that all
benefits, rights and privileges under each contract on the life of a Participant
which are available while the Participant is living shall be exercised by the
Trustee only upon and in accordance with the written instructions of the
Participant. The proceeds of all such insurance on the life of a Participant
shall be paid over by the Trustee to the Participant's Beneficiary in accordance
with Article VII. Under no circumstances shall the Trustee retain any part of
the proceeds.
10.7.4 Dividends Earned on Insurance:
Any dividends or credits earned on a life insurance contract shall be
applied when received in reduction of any premiums thereon, or, if no premiums
are due, applied to increase the proceeds of the insurance contract.
10.7.5 Reduced Death Benefit:
If a Participant is found by the Plan Administrator to be insurable only at
a substandard premium rate, the policy shall provide a reduced death benefit
using the same premium as would be required if the Participant were a standard
risk, the amount of the death benefit being determined in accordance with the
amount of the rating.
10.7.6 Cash Surrender Value:
The cash surrender value of an insurance contract to the extent deriving
from Employer or Participant contributions, if any, shall be included,
respectively, in the Account Balance of the Account from which the premiums were
paid. Any death benefits under an insurance contract payable before the
Participant's termination of Employment will be paid to the Trustee for addition
to the relevant Account of the Participant for distribution in accordance with
Section 7.1.
10.7.7 Maximum Premium Requirements:
Any other provisions herein to the contrary notwithstanding, the purchase
of life insurance for any Participant shall be subject to such minimum premium
requirements as the Trustee may determine from time to time.
10.7.8 Origination of Premium Payments:
Premiums on life insurance contracts on a Participant's life shall be paid
by the Trustee, unless directed otherwise by the Participant, first from cash in
the Participant's Employer Accounts to the extent thereof, and then from cash in
the Participant's Employee After-Tax Contributions Account, if any, to the
extent thereof. If there is insufficient cash in either Account to pay premiums
due, the Trustee shall notify the Participant of this fact. If the Participant
does not thereafter instruct the Trustee to sell sufficient assets in an Account
of the Participant to pay premiums due on a timely basis, the Trustee shall not
be obligated to take any further action with respect to any life insurance
contract on the Participant's life, whether as regards continuing insurance on a
paid-up basis, effecting a reduction of the insurance in force, or otherwise,
except at the direction of the Participant.
10.7.9 Distribution of Life Insurance Contracts:
Prior to such time as a Participant becomes entitled to receive a
distribution of any benefits under this Plan for any reason other than the
Participant's death, the Trustee shall, in accordance with the written direction
of the Participant delivered to the Plan Administrator within such period of
time as is acceptable to the Plan Administrator, either convert all life
insurance contracts on the Participant's life into cash or an annuity to provide
current or future retirement income to the Participant or distribute the
contracts to the Participant as a part of a benefit distribution; provided,
however, that:
(A) the contracts shall not be distributed unless, if the Participant is
married at the time the distribution of the contracts is to be made, and the
Plan is a money purchase pension plan, a target benefit plan or a profit-sharing
plan to which Section 6.1.2 does not apply, the Participant's Spouse at that
time consents to a distribution in the manner prescribed by Section 6.2.4; and
(B) if the cash value of any contracts at the time they become
distributable to a Participant exceeds a Participant's vested interest in his or
her Employer Accounts at that time, the Participant shall be entitled to receive
a distribution of such contracts only if the Participant promptly pays such
excess in cash to the Trust Fund.
Life insurance contracts on a Participant's life shall not continue to be
maintained under the Plan following the Participant's termination of Employment
or after Employer contributions have ceased.
If a Participant on whose life an insurance contract is held does not make
a timely and proper direction regarding the contract under this Section 10.7.9,
the Participant shall be deemed to have directed that the contract be converted
into cash to be distributed in the manner in which the Participant's benefit is
to be distributed.
10.7.10 Conflict Between Plan and Insurance Contract:
Anything contained herein to the contrary notwithstanding, if there is any
conflict between the terms of the Plan and the terms of any insurance contract
purchased under this Section 10.7, the provisions of the Plan shall control.
10.8 The Investment Manager:
10.8.1 Appointment:
The Trustee, if an Investment Committee is not appointed, Investment
Committee, or the Participant or Beneficiary with respect to
Participant-Directed Assets, may, by an instrument in writing, appoint one or
more Investment Managers, who may be an affiliate of the Merrill Lynch Trust
Co., FSB, to direct the Trustee in the investment of all or a specified portion
of the assets of the Trust in property specified in Section 10.4. Any such
Investment Manager shall be directed by the Trustee, if an Investment Committee
is not appointed, Investment Committee, Participant or Beneficiary, as the case
may be, to act in accordance with the procedures referred to in Section 10.5.5.
If appointed, the Investment Committee shall notify the Trustee in writing
before the effectiveness of the appointment or removal of any Investment
Manager. If there is more than one Investment Manager whose appointment is
effective under the Plan at any one time, the Trustee shall, upon written
instructions from the Investment Committee, Participant or Beneficiary,
establish separate funds for control by each such Investment Manager. The funds
shall consist of those Trust Fund assets designated by the Investment Committee,
Participant or Beneficiary.
10.8.2 Qualifications of Investment Manager:
Each person appointed as an Investment Manager shall be:
(A) an investment adviser registered under the Investment Advisers Act of
1940,
(B) a bank as defined in that Act, or
(C) an insurance company qualified to manage, acquire or dispose of any
asset of the Plan under the laws of more than one state.
10.8.3 Investment Manager as Fiduciary:
Each Investment Manager shall acknowledge in writing that it is a
"fiduciary" (as defined in ERISA Section 3(21)) with respect to the Plan. The
Trustee, or the Investment Committee if appointed, shall enter into an agreement
with each Investment Manager specifying the duties and compensation of such
Investment Manager and the other terms and conditions under which such
Investment Manager shall be retained. Neither the Trustee nor the Investment
Committee, if appointed, shall be liable for any act or omission of any
Investment Manager and shall not be liable for following the advice of any
Investment Manager with respect to any duties delegated to any Investment
Manager.
10.8.4 Identification of Amounts for Investment Manager:
The Trustee, or Investment Committee if appointed, or the Participant or
Beneficiary, if applicable with respect to Participant-Directed Assets, shall
have the power to determine the amount of Trust Fund assets to be invested in
accordance with the direction of a designated Investment Manager and to set
investment objectives and guidelines for the Investment Manager.
10.8.5 Second Trust Fund:
The Employer may appoint a second trustee under the Plan with respect to
assets which the Employer desires to contribute or have transferred to the Trust
Fund, but which the other Trustee does not choose to accept: provided, however,
that if Merrill Lynch Trust Co., FSB is a Trustee, its consent (which consent
may be evidenced by its acceptance of its appointment as Trustee) shall be
required. In the event and upon the effectiveness of the acceptance of the
second Trustee's appointment, the Employer shall be deemed to have created two
trust funds under the Plan, each with its own Trustee, each governed separately
by this Article X. Each Trustee under such an arrangement shall, however,
discharge its duties and responsibilities solely with respect to those assets of
the Trust delivered into its possession and except under ERISA, shall have no
duties, responsibilities or obligations with respect to property of the other
Trust nor any liability for the acts or omissions of the other Trustee. As a
condition to its consent to the appointment of a second trustee, Merrill Lynch
Trust Co., FSB shall assure that recordkeeping, distribution and reporting
procedures are established on a coordinated basis between it and the second
trustee as considered necessary or appropriate with respect to the Trusts.
10.9 Powers of Trustee:
10.9.1 Trustee's Power:
At the direction of the person authorized to direct such action as referred
to in Section 10.5.1, but limited to those assets or categories of assets
acceptable to the Trustee as referred to in Section 10.4, or at its own
discretion if no such person is so authorized, the Trustee, or the Trustee's
designee or a broker/dealer as referred to in Section 10.5.5, is authorized and
empowered:
(A) To invest and reinvest the Trust Fund, together with the income
therefrom, in assets specified in Section 10.4;
(B) To deposit or invest all or any part of the assets of the Trust in
savings accounts or certificates of deposit or other deposits in a bank or
savings and loan association or other depository institution, including the
Trustee or any of its affiliates, provided with respect to such deposits with
the Trustee or an affiliate the deposits bear a reasonable interest rate;
(C) To hold, manage, improve, repair and control all property, real or
personal, forming part of the Trust Fund; to sell, convey, transfer, exchange,
partition, lease for any term, even extending beyond the duration of this Trust,
and otherwise dispose of the same from time to time;
(D) To have, respecting securities, all the rights, powers and privileges
of an owner, including the power to give proxies, pay assessments and other sums
deemed by the Trustee necessary for the protection of the Trust Fund; to vote
any corporate stock either in person or by proxy, with or without power of
substitution, for any purpose; to participate in voting trusts, pooling
agreements, foreclosures, reorganizations, consolidations, mergers and
liquidations, and in connection therewith to deposit securities with or transfer
title to any protective or other committee; to exercise or sell stock
subscriptions or conversion rights; and, regardless of any limitation elsewhere
in this instrument relative to investments by the Trustee, to accept and retain
as an investment any securities or other property received through the exercise
of any of the foregoing powers;
(E) Subject to Section 10.5.4 hereof, to hold in cash, without liability
for interest, such portion of the Trust Fund which it is directed to so hold
pending investments, or payment of expenses, or the distribution of benefits;
(F) To take such actions as may be necessary or desirable to protect the
Trust from loss due to the default on mortgages held in the Trust including the
appointment of agents or trustees in such other jurisdictions as may seem
desirable, to transfer property to such agents or trustees, to grant to such
agents such powers as are necessary or desirable to protect the Trust Fund, to
direct such agent or trustee, or to delegate such power to direct, and to remove
such agent or trustee;
(G) To settle, compromise or abandon all claims and demands in favor of or
against the Trust Fund;
(H) To invest in any common or collective trust fund of the type referred
to in Section 10.5.11 hereof maintained by the Trustee;
(I) To exercise all of the further rights, powers, options and privileges
granted, provided for, or vested in trustees generally under ERISA and other
pertinent federal law, and to the extent that federal law is inapplicable, under
the laws of the State of New Jersey if Merrill Lynch Trust Co., FSB is the
Trustee or the state where the Trustee is located if Merrill Lynch Trust Co.,
FSB is not the Trustee, so that the powers conferred upon the Trustee herein
shall not be in limitation of any authority conferred by law, but shall be in
addition thereto;
(J) To borrow money from any source and to execute promissory notes,
mortgages or other obligations and to pledge or mortgage any trust assets as
security, subject to applicable requirements of the Code and ERISA; and
(K) To maintain accounts at, execute transactions through, and lend on an
adequately secured basis stocks, bonds or other securities to, any brokerage or
other firm, including any firm which is an affiliate of the Trustee.
10.9.2 Additional Powers:
To the extent necessary or which it deems appropriate to implement its
powers under Section 10.9.1 or otherwise to fulfill any of its duties and
responsibilities as Trustee of the Trust Fund, the Trustee shall have the
following additional powers and authority:
(A) to register securities, or any other property, in its name or in the
name of any nominee, including the name of any affiliate or the nominee name
designated by any affiliate, with or without indication of the capacity in which
property shall be held, or to hold securities in bearer form and to deposit any
securities or other property in a depository or clearing corporation;
(B) to designate and engage the services of, and to delegate powers and
responsibilities to, such agents, representatives, advisers, counsel and
accountants as the Trustee considers necessary or appropriate, any of whom may
be an affiliate of the Trustee or a person who renders services to such an
affiliate, and, as a part of its expenses under this Trust Agreement, to pay
their reasonable expenses and compensation;
(C) to make, execute and deliver, as Trustee, any and all deeds, leases,
mortgages, conveyances, waivers, releases or other instruments in writing
necessary or appropriate for the accomplishment of any of the powers listed in
this Trust Agreement; and
(D) generally to do all other acts which the Trustee deems necessary or
appropriate for the protection of the Trust Fund.
10.9.3 Limitations on Trustee's Authority:
The Trustee shall have no duties or responsibilities other than those
specified in the Plan.
10.10 Accounting and Records:
10.10.1 Maintenance of Records and Accounts:
The Trustee shall maintain or cause to be maintained accurate records and
accounts of all Trust transactions and assets. The records and accounts shall be
available at reasonable times during normal business hours for inspection or
audit by the Plan Administrator, Investment Committee, if appointed, or any
person designated for the purpose by either of them.
10.10.2 Written Accounting:
Within 90 days following the close of each fiscal year of the Plan or the
effective date of the removal or resignation of the Trustee, the Trustee shall
file with the Plan Administrator a written accounting setting forth all
transactions since the end of the period covered by the last previous
accounting. The accounting shall include a listing of the assets of the Trust
showing the value of such assets at the close of the period covered by the
accounting. On direction of the Plan Administrator, and if previously agreed to
by the Trustee, the Trustee shall submit to the Plan Administrator interim
valuations, reports or other information pertaining to the Trust.
The Plan Administrator may approve the accounting by written approval
delivered to the Trustee or by failure to deliver written objections to the
Trustee within 60 days after receipt of the accounting. Any such approval shall
be binding on the Employer, the Plan Administrator, the Investment Committee
and, to the extent permitted by ERISA, all other persons.
10.11 Judicial Settlement of Accounts:
The Trustee can apply to a court of competent jurisdiction at any time for
judicial settlement of any matter involving the Plan including judicial
settlement of the Group Trustee's account. If it does so, the Trustee must give
the Plan Administrator the opportunity to participate in the court proceedings,
but the Trustee can also involve other persons. Any expenses the Trustee incurs
in legal proceedings involving the Plan, including attorney's fees, are
chargeable to the Trust Fund as an administrative expense. Any judgment or
decree which may be entered in such a proceeding, shall, subject to the
provision of ERISA, be conclusive upon all persons having or claiming to have
any interest in the Trust Fund or under any Plan.
10.12 Resignation and Removal of Trustee:
10.12.1 Resignation of Trustee:
The Trustee may resign at any time upon at least 30 days' written notice to
the Employer.
10.12.2 Removal of Trustee:
The Employer may remove the Trustee upon at least 30 days' written notice
to the Trustee.
10.12.3 Successor Trustee:
Upon resignation or removal of the Trustee, the Employer shall appoint a
successor trustee. Upon failure of the Employer to appoint, or the failure of
the effectiveness of the appointment by the Employer of, a successor trustee by
the effective date of the resignation or removal, the Trustee may apply to any
court of competent jurisdiction for the appointment of a successor.
Promptly after receipt by the Trustee of notice of the effectiveness of the
appointment of the successor trustee: (a) the Trustee shall deliver to the
successor trustee such records as may be reasonably requested to enable the
successor trustee to properly administer the Trust Fund and all property of the
Trust after deducting therefrom such amounts as the Trustee deems necessary to
provide for expenses, taxes, compensation or other amounts due to or by the
Trustee not paid by the Employer prior to the delivery; and (b) except if the
second Trustee is removed or resigns, the Plan will no longer be considered a
prototype plan.
10.12.4 Settlement of Accounts:
Upon resignation or removal of the Trustee, the Trustee shall have the
right to a settlement of its account, which settlement shall be made, at the
Trustee's option, either by an agreement of settlement between the Trustee and
the Employer or by a judicial settlement in an action instituted by the Trustee.
The Employer shall bear the cost of any such judicial settlement, including
reasonable attorneys fees.
10.12.5 Transfer of Assets:
The Trustee shall not be obligated to transfer Trust assets until the
Trustee is provided assurance by the Employer satisfactory to the Trustee that
all fees and expenses reasonably anticipated will be paid.
10.12.6 Rights and Privileges:
Upon settlement of the account and transfer of the Trust Fund to the
successor trustee, all rights and privileges under the Trust Agreement shall
vest in the successor trustee and all responsibility and liability of the
Trustee with respect to the Trust and assets thereof shall, except as otherwise
required by ERISA, terminate subject only to the requirement that the Trustee
execute all necessary documents to transfer the Trust assets to the successor
trustee.
10.13 Group Trust:
10.13.1 Trustee of Group Trust:
If elected by the Primary Employer in the Adoption Agreement, the Trustee
shall be the Trustee for this Plan and for each other Qualified Plan specified
in the Adoption Agreement; provided, however, that such other Qualified Plan is
in effect in accordance with an Adoption Agreement under this Prototype Plan.
Any reference to Trustee and to the Trust Fund in this Plan shall mean the
Trustee as the trustee of a Group Trust consisting of the assets of each such
plan. The Plan and each other Qualified Plan specified in the Adoption Agreement
shall be deemed to join in and adopt the Trust as the Trust for each such plan.
By executing the Adoption Agreement, the Trustee accepts designation as Trustee
of this Group Trust.
10.13.2 Maintenance of Accounting Records:
The Trustee shall establish and maintain such accounting records for each
of the Plans as shall be necessary to reflect the interest in the Group Trust
applicable at any time or from time to time to each Plan. No part of the corpus
or income of the Group Trust allocable to an individual Plan may be used for or
diverted to any purposes other than for the exclusive benefit of Participants
and their Beneficiaries entitled to benefits under that Plan. The allocable
interest of a Plan in the Group Trust may not be assigned.
ARTICLE XI
PLAN AMENDMENT OR TERMINATION
11.1 Plan Amendment:
11.1.1 Authority to Amend:
The Sponsor may amend any part of the Plan. The Primary Employer shall have
the right at any time, by an instrument in writing, effective retroactively or
otherwise, to (A) change the choice of options in the Adoption Agreement, in
whole or in part; (B) add overriding language in the Adoption Agreement when
such language is needed to satisfy Code Section 415 or Code Section 416 because
of the required aggregation of multiple plans; and (C) add certain model
amendments published by the IRS which specifically provide that their adoption
will not cause the Plan to be treated as individually designed. No such
amendment, however, shall have any of the effects specified in Section 11.1.3.
If the Primary Employer (or any other Employer) amends the Plan or nonelective
portions of the Adoption Agreement except as previously provided (including a
waiver of the minimum funding requirement under Code Section 412(d)), it will no
longer participate in the Prototype Plan, but will be considered to have an
individually designed plan for purposes of qualification under Code
Section 401(a). If an Employer is amending its plan from an
individually-designed plan or from one prototype plan to another, a list of the
"Section 411(d)(6) protected benefits" that must be preserved may be attached,
and such a list would not be considered an amendment to the Plan.
11.1.2 Recognition as Prototype Plan:
This Plan will be recognized as a Prototype Plan by the Sponsor only by
complying with the registration requirements as specified in the Adoption
Agreement.
11.1.3 Limitations of Amendments:
No amendment to the Plan shall be effective to the extent that it:
(A) authorizes any part of the Trust Fund to be used for, or diverted to,
purposes other than for the exclusive benefit of Participants or their
Beneficiaries;
(B) has the effect of decreasing a Participant's accrued benefit.
Notwithstanding the preceding sentence, a Participant's Account Balance may be
reduced to the extent permitted under Code Section 412(c)(8). For purposes of
this paragraph, an amendment which has the effect of (1) decreasing a
Participant's Account Balance or (2) eliminating or reducing an Early Retirement
benefit or a retirement-type subsidy, with respect to benefits attributable to
service before the amendment shall be treated as reducing accrued benefits,
except as permitted under Treas. Reg. Section 1.411(d)-4 or any other guidance
issued under Code Section 411(d)(6). In the case of a retirement-type subsidy,
the preceding sentence shall apply only with respect to a Participant who
satisfies (either before or after the amendment) the preamendment conditions for
the subsidy. In general, a retirement-type subsidy is a subsidy that continues
after retirement, but does not include a qualified disability benefit, a medical
benefit, a social security supplement, a death benefit (including life
insurance), or a plant shutdown benefit (that does not continue after retirement
age).
(C) reduces the vested percentage of any Participant determined without
regard to such amendment as of the later of the date such amendment is adopted
or the date it becomes effective.
(D) eliminates or restricts an optional form of benefit. For purposes of
this paragraph the preceding shall not apply to a Plan amendment that eliminates
or restricts the ability of a Participant to receive payment of his or her
Account Balance under a particular optional form of benefit if the amendment
satisfies the conditions in (i) or (ii) below:
(i) The amendment provides a single-sum distribution form that is otherwise
identical to the optional form of benefit eliminated or restricted. For purposes
of this condition (i), a single-sum distribution form is otherwise identical
only if it is identical in all respects to the eliminated or restricted optional
form of benefit (or would be identical except that it provides greater rights to
the Participant) except with respect to the timing of payments after
commencement.
(ii) The amendment is not effective unless the amendment provides that the
amendment shall not apply to any distribution with an annuity starting date
earlier than the earlier of: the 90th day after the date the Participant
receiving the distribution has been furnished a summary that reflects the
amendment and that satisfies the ERISA requirements at 29 C.F.R. Section
2530.104b-3 relating to a summary of material modifications or (ii) the first
day of the second Plan Year following the Plan Year in which the amendment is
adopted.
11.1.4 Vesting Schedule Amendment:
(A) 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
nonforfeitable percentage, (i) each Participant with at least 3 years of Vesting
Service with the Employer may elect, within a reasonable period after the
adoption of the amendment or change, to have the nonforfeitable percentage
computed under the Plan without regard to such amendment or change, and (ii) 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 nonforfeitable
percentage (determined as of such date) of such Employee's Employer-derived
accrued benefit will not be less than the percentage computed under the plan
without regard to such amendment.
The period during which the election may be made shall commence with the
date the amendment is adopted or deemed to be made and shall end on the latest
of:
(B) 60 days after the amendment is adopted;
(C) 60 days after the amendment becomes effective; or
(D) 60 days after the Participant is issued written notice of the amendment
by the Employer or Plan Administrator.
11.2 Right of the Employer to Terminate Plan:
11.2.1 Authority to Terminate:
The Employer intends and expects that from year to year it will be able to
and will deem it advisable to continue this Plan in effect and to make
contributions as herein provided. The Employer reserves the right, however, to
terminate the Plan with respect to its Employees at any time by an instrument in
writing delivered to the Plan Administrator and the Trustee, or to completely
discontinue its contributions thereto at any time.
11.2.2 Additional Power to Terminate:
The Plan will also terminate: (A) if the Employer is a sole proprietorship,
upon the death of the sole proprietor; (B) if the Employer is a partnership,
upon termination of the partnership; (C) if the Employer is judicially declared
bankrupt or insolvent (as provided in Section 11.4); (D) upon the sale or other
disposition of all or substantially all of the assets of the business; or (E)
upon any other termination of the business. Any successor to or purchaser of the
Employer's trade or business, after any event specified in the prior sentence,
may continue the Plan, in which case the successor or purchaser will thereafter
be considered the Employer for purposes of the Plan. Such a successor or
purchaser shall execute an appropriate Adoption Agreement if and when requested
by the Plan Administrator.
11.2.3 Miscellaneous:
Anything contained herein to the contrary notwithstanding, if the Employer
fails to attain or retain qualification of the Plan under Code Section 401(a),
the Plan will not participate in this Prototype Plan and will, instead, be
considered an individually designed plan for purposes of such qualification.
11.3 Effect of Partial or Complete Termination or Complete Discontinuance
of Contributions:
11.3.1 Determination of Date of Complete or Partial Termination:
The date of complete or partial termination shall be established by the
Plan Administrator in accordance with the directions of the Primary Employer (if
then in existence) in accordance with applicable law.
11.3.2 Effect of Termination:
(A) As of the date of a partial termination of the Plan:
(i) the accrued benefit of each affected Participant, to the extent funded,
shall become nonforfeitable (as provided in Section 4.1.2);
(ii) no affected Participant shall be granted credit based on Hours of
Service after such date;
(iii) Compensation paid to affected Participants after such date shall not
be taken into account; and
(iv) no contributions by affected Participants shall be required or
permitted.
For purposes of this Section, an "affected Participant" is a Participant
who is affected by the event causing the partial termination of the Plan.
(B) As of the date of the complete termination of the Plan or of a complete
discontinuance of contributions:
(i) the accrued benefit of each Participant to the extent funded, shall
become nonforfeitable (as provided in Section 4.1.2);
(ii) no Participant shall be granted credit based on Hours of Service after
such date;
(iii) Compensation paid after such date shall not be taken into account;
(iv) no contributions by Participants shall be required or permitted;
(v) no Eligible Employee shall become a Participant after such date; and
(vi) except as may otherwise be required by applicable law, all obligations
of the Employer and Employers to fund the Plan shall terminate.
(C) All other provisions of the Plan shall remain in effect unless
otherwise amended.
11.3.3 Distribution of Accounts:
Upon the complete discontinuance of contributions under the Plan, at the
Employer's election, either the Trust Fund shall continue to be held and
distributed as if the Plan had not been terminated (in which case such Plan
shall continue to be subject to all requirements under Title I of ERISA, and
qualification requirements under the Code) or any and all assets remaining in
the Trust Fund as of the date of such termination or discontinuance, together
with any earnings subsequently accruing thereon, shall be distributed by the
Trustee to all Participants at the Plan Administrator's direction.
Upon the complete termination of the Plan, the Trust Fund shall be
distributed to all Participants within one year after the date of termination.
If the Plan does not offer an annuity option (purchased from a commercial
provider) and if the Employer or any Affiliate does not maintain another Defined
Contribution Plan (other than an employee stock ownership plan as defined in
Code Section 4975(e)(7)), the Participant's benefit may, without the
Participant's consent, be distributed to the Participant. However, if any
Affiliate maintains another Defined Contribution Plan (other than an employee
stock ownership plan as defined in Code Section 4975(e)(7)), then the
Participant's Account(s) will be transferred, without the Participant's consent,
to the other plan if the Participant does not consent to an immediate
distribution. Distributions shall be made in compliance with the applicable
provisions, including restrictions, of Articles VI and VII. The Trust Fund shall
continue in effect until all distributions therefrom are complete. Upon the
completion of such distributions, the Trustee shall be relieved from all further
liability with respect to all amounts so paid or distributed.
11.4 Bankruptcy:
In the event that the Employer shall at any time be judicially declared
bankrupt or insolvent without any provisions being made for the continuation of
this Plan, the Plan shall be completely and automatically terminated in
accordance with this Article XI.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Exclusive Benefit of Participants:
Notwithstanding anything in the Plan to the contrary, the Trust Fund shall
be held for the benefit of all persons who shall be entitled to receive payments
under the Plan. Subject to Section 3.10, the corpus or income of the Trust Fund
may not (other than such part as is required to pay expenses) be diverted to or
used for other than the exclusive benefit of Participants or their
Beneficiaries.
12.2 Plan Not a Contract of Employment:
The Plan is not a contract of employment, and the terms of employment of
any Employee shall not be affected in any way by the Plan or related instruments
except as specifically provided therein.
12.3 Action by Employer:
Any action by an Employer which is a corporation shall be taken by the
board of directors of the corporation or any person or persons duly empowered to
exercise the powers of the corporation with respect to the Plan. In the case of
an Employer which is a partnership, action shall be taken by any general partner
of the partnership, and in the case of an Employer which is a sole
proprietorship, action shall be taken by the sole proprietor.
12.4 Source of Benefits:
Benefits under the Plan shall be paid or provided for solely from the Trust
Fund, and neither the Employer, any Employer, the Trustee, the Plan
Administrator, nor any Investment Manager or insurance company shall assume any
liability under the Plan therefor.
12.5 Benefits Not Assignable:
Benefits provided under the Plan may not be assigned or alienated, either
voluntarily or involuntarily. In the event that a Participant or Beneficiary
becomes individually liable with respect to any expenses listed in Section 8.5,
the provision of Code Section 401(a)(13) shall be applicable with respect to any
claim the Plan may have against the Participant or Beneficiary individually with
respect to such expenses. The preceding sentence shall also apply to the
creation, assignment or recognition of a right to any benefit payable with
respect to a Participant under a "domestic relations order" (as defined in Code
Section 414(p)) unless such order is determined by the Plan Administrator to be
a "qualified domestic relations order" (as defined in Code Section 414(p)) or,
in the case of a "domestic relations order" entered before January 1, 1985, if
either payment of benefits under the order has commenced as of that date or the
Plan Administrator decides to treat such order as a "qualified domestic
relations order" within the meaning of Code Section 414(p) even if it does not
otherwise qualify as such.
12.6 Domestic Relations Orders:
Any other provision of the Plan to the contrary notwithstanding, the Plan
Administrator shall have all powers necessary with respect to the Plan for the
proper operation of Code Section 414(p) with respect to "qualified domestic
relations orders" (or "domestic relations orders" treated as such) referred to
in Section 12.5, including, but not limited to, the power to establish all
necessary or appropriate procedures, to authorize the establishment of new
accounts with such assets and subject to such investment control by the Plan
Administrator as the Plan Administrator may deem appropriate, and the Plan
Administrator may decide upon and direct appropriate distributions therefrom.
12.7 Claims Procedure:
In the event that a claim by a Participant, Beneficiary, or other person
for benefits under the Plan is denied, the Plan Administrator will so notify the
claimant, giving the reasons for the denial. This notice will also refer to the
specific provisions of the Plan on which the denial was based, will specify
whether any additional information is needed from the Participant or Beneficiary
and will explain the review procedure.
Within 60 days after receiving the denial, the claimant may submit,
directly or through a duly authorized representative, a written request for
reconsideration of the application to the Plan Administrator. Documents or
records relied on by the claimant should be filed with the request. The person
making the request may review relevant documents and submit issues and
additional comments in writing.
The Plan Administrator will review the claim within 60 days (or 120 days if
a hearing is held because special circumstances exist) and provide a written
response to the appeal. The response will explain the reasons for the decision
and will refer to the Plan provisions on which the decision is based. The
decision of the Plan Administrator is the final one under this claims procedure.
12.8 Records and Documents:
Participants and Beneficiaries must supply the Plan Administrator with such
personal history data as may be required by the Plan Administrator in the
operation of the Plan. Proof of age, when required, must be established by
evidence satisfactory to the Plan Administrator, and the records of the
Employers concerning length of service and compensation may be accepted by the
Plan Administrator as conclusive for the purposes of the Plan.
12.9 Errors:
The Plan Administrator may take whatever action it determines in its
discretion to be necessary and appropriate to correct any error in the
administration of the Plan, to the extent consistent with applicable law,
including, but not limited to making corrections under the Employee Plans
Compliance Resolution System (or successor procedure).
12.10 Benefits Payable to Minors, Incompetents and Others:
In the event any benefit is payable to a minor or to a Participant or
Beneficiary declared incompetent by a court having jurisdiction over such
matters and a guardian, committee, conservator or other legal representative of
the estate of such a person is appointed, benefits to which he or she is
entitled shall be paid to the legally appointed person for the benefit of the
minor or incompetent. The receipt by any such person to whom any such payment on
behalf of any Participant or Beneficiary is made shall be a sufficient discharge
therefor.
12.11 Plan Merger or Transfer of Assets:
12.11.1 Continuation of Plan:
The merger or consolidation of the Employer with any other person, or the
transfer of the assets of the Employer to any other person, or the merger of the
Plan with any other plan shall not constitute a termination of the Plan if
provision is made for the continuation of the Plan.
12.11.2 Benefit of Participants:
The Plan may not merge or consolidate with, or transfer any assets or
liabilities to, any other plan, unless each Participant would (if the Plan had
then terminated) receive a benefit immediately after the merger, consolidation
or transfer which is equal to or greater than the benefit he or she would have
been entitled to receive immediately before the merger, consolidation or
transfer (if the Plan had then terminated). Any merger or consolidation shall
not constitute a termination of a Plan or require the acceleration of vesting of
Participants' Account Balances.
12.12 Employers:
12.12.1 Adoption by Affiliates of Plan:
With the consent of the Primary Employer and by duly authorized action, any
Affiliate may adopt the Plan. If this Plan is a "non-standardized plan" (as
defined in Rev. Proc. 2000-20 or other similar guidance issued by the IRS), such
Affiliate shall determine the classes of its Employees who shall be Eligible
Employees and the amount of its contribution to the Plan on behalf of such
Employees.
12.12.2 Termination of Participation in Plan:
If this Plan is a "non-standardized plan" (as defined in Rev. Proc. 2000-20
or other similar guidance issued by the IRS), with the consent of the Primary
Employer and by duly authorized action, an Affiliate may terminate its
participation in the Plan or withdraw from the Plan. Any such withdrawal shall
be deemed an adoption by such Affiliate of a plan and trust identical to the
Plan and the Trust, except that all references to the Employer shall be deemed
to refer to such Affiliate. At such time and in such manner as the Primary
Employer directs, the assets of the Trust allocable to Employees of such
Affiliate shall be transferred to the trust deemed adopted by such Affiliate.
12.12.3 Employer Power:
An Employer shall have no power with respect to the Plan except as
specifically provided herein.
12.13 Controlling Law:
The Plan is intended to qualify under Code Section 401(a) and to comply
with ERISA, and its terms shall be interpreted accordingly. Otherwise, to the
extent not preempted by ERISA, the laws of the State of New York shall control
the interpretation and performance of the terms of the Plan, other than the
provisions of the Trust Agreement.
12.14 Singular and Plural and Article and Section References:
As used in the Plan, the singular includes the plural, and the plural
includes the singular, unless qualified by the context. Titles of Articles and
sections of the Plan are for convenience of reference only and are to be
disregarded in applying the provisions of the Plan. Any reference in this
Prototype Plan to an Article or Section is to the Article or Section so
specified of the Prototype Plan, unless otherwise indicated.
12.15 USERRA:
Notwithstanding any provision of this Plan to the contrary, contributions,
benefits and service credit with respect to qualified military service will be
provided in accordance with Code Section 414(u).
12.16 Unclaimed Benefit:
If Employer is unable to locate a Participant to whom a benefit under the
Plan is payable within a reasonable period of time after the date such benefit
became payable and after having exhausted reasonable means to locate such
individual, the amount of such benefit shall be treated as a forfeiture and
shall be applied according to Section 3.7. If a benefit is forfeited because an
individual cannot be found, such benefit will be reinstated if a claim is later
made by the individual. Any such unclaimed benefits not forfeited at the time
the Plan terminates shall escheat to the appropriate state or government entity.
12.17 Electronic Media:
Any notice, election, or other Plan communication may be made by means of
such electronic media authorized by the Plan Administrator to the extent
permitted and in the manner required under applicable law.
ARTICLE XIII
SIMPLE 401(k) PROVISIONS
13.1 Rules of Application:
(A) This Article XIII shall only apply to an Employer who elected SIMPLE
401(k) provisions in an Adoption Agreement prior to January 1, 1999. If such
Employer elected in the Adoption Agreement to have the SIMPLE 401(k) provisions
apply, then the provisions of this Article shall apply for a calendar year only
if (a) the Employer is an Eligible Employer and (b) no contributions are made,
or benefits accrued for services during the calendar year, on behalf of any
Eligible Employee under any other plan, contract, pension, or trust described in
Code Section 219(g)(5)(A) or (B), maintained by an Employer.
(B) To the extent that any other provision of the Plan is inconsistent with
the provisions of this Article, the provisions of this Article govern.
(C) Unless otherwise provided in this Article, or as otherwise modified in
this Article, capitalized terms have the meaning set forth in Article I.
13.2 Definitions:
The following terms have the meanings set forth below for purposes of this
Article:
13.2.1 Compensation:
"Compensation" means, for purposes of Sections 13.2.2, 13.3.1 and 13.3.2 of
this Article, the sum of the wages, tips, and other compensation from the
Employer subject to federal income tax withholding (as described in Code Section
6051(a)(3)) and the Employee's salary reduction contributions made under this or
any other Code Section 401(k) plan, and, if applicable, elective deferrals under
a Code Section 408(p) SIMPLE IRA Plan, a SARSEP, or a Code Section 403(b)
annuity contract and compensation deferred under a Code Section 457 plan,
required to be reported by the Employer on Form W-2 (as described in Code
Section 6051(a)(8)). For self-employed individuals, compensation means net
earnings from self-employment determined under Code Section 1402(a) prior to
subtracting any contributions made under this plan on behalf of the individual.
The provisions of the plan implementing the limit on compensation under Code
Section 401(a)(17) apply to the Compensation under Section 13.3 of this Article.
13.2.2 Eligible Employer:
An "Eligible Employer" means, with respect to any calendar year, an
Employer that had no more than 100 Employees who received at least $5,000 of
Compensation from the Employer for the preceding calendar year. In applying the
preceding sentence, all Employees of Affiliates and Leased Employees required to
be treated as the Employer's Employees under Code Section 414(n), are taken into
account. An Eligible Employer that elects to have the SIMPLE 401(k) provisions
apply to the Plan and that fails to be an Eligible Employer for any subsequent
calendar year, is treated as an Eligible Employer for the 2 calendar years
following the last calendar year the Employer was an Eligible Employer. If the
failure is due to any acquisition, disposition, or similar transaction involving
an Eligible Employer, the preceding sentence applies only if the provisions of
Code Section 410(b)(6)(C)(i) are satisfied.
13.2.3 Eligible Employee:
"Eligible Employee" means, for purposes of the SIMPLE 401(k) provisions,
any Employee who is entitled to make Pre-Tax Contributions under the terms of
the Plan.
13.3 Contributions:
13.3.1 Salary Reduction Contributions:
(A) Each Eligible Employee may make a salary reduction election to have his
or her Compensation reduced for the calendar year in any amount selected by the
Employee subject to the limitation in Section 13.3.1(B) of this Article. The
Employer will make a salary reduction contribution to the Plan, as Pre-Tax
Contribution, in the amount by which the Employee's Compensation has been
reduced.
(B) The total salary reduction contribution for the calendar year cannot
exceed the amount determined under Code Section 408(p)(2)(A)(ii) for any
Employee. To the extent permitted by law, this amount will be adjusted to
reflect any annual cost-of-living increases announced by the IRS.
13.3.2 Other Contributions:
(A) Matching Contributions - Each calendar year, the Employer will
contribute a Matching Contribution to the Plan on behalf of each Employee who
makes a salary reduction election under Section 13.3.1. The amount of the
Matching Contribution will be equal to the employee's salary reduction
contribution up to a limit of 3 percent of the Employee's Compensation for the
full calendar year.
(B) Nonelective Contribution - For any calendar year, instead of a Matching
Contribution, the Employer may elect to contribute a nonelective contribution of
2 percent of Compensation for the full calendar year for each Eligible Employee
who received at least $5,000 of Compensation for the calendar year.
13.3.3 Limitation on Contributions:
(A) No employer or employee contributions may be made to this plan for the
Year other than salary reduction contributions described in Section 3.1,
Matching or nonelective contributions described in Section 3.2 and rollover
contributions described in IRS regulations section 1.402(c)-2, Q and A-1(a) or
other similar guidance issued under the Code.
(B) 1997 Transition Rule - If the Employer has maintained this Plan during
1997 prior to adopting this Article, then contributions made prior to the
adoption of this Article are treated as made under Sections 13.3.1 and 13.3.2
provided that: (i) the Employer has adopted the SIMPLE 401(k) provisions by July
l, 1997, effective as of January l, 1997; (ii) the salary reduction
contributions for the calendar year made prior to adoption of this Article do
not total more than $6,000 for any Employee; (iii) the other contributions set
forth in Section 13.3.2 are of inherently equal or greater value than the
contributions required under the Plan prior to the adoption of this Article; and
(iv) for 1997, the 60-day election period requirement described in Sections
13.4.1(A) and (B) is deemed satisfied if the Employee may make or modify a
salary reduction election during a 60-day election period that begins no later
than 30 days after this Article is adopted but in no event later than July 1,
1997.
13.3.4 Annual Addition Limitation on Contributions:
The provisions of Section 3.9 of the Plan (implementing the limitations of
Code Section 415) apply to contributions made pursuant to Sections 13.3.1 and
13.3.2.
13.4 Election and Notice Requirements:
13.4.1 Election Period:
(A) In addition to any other election periods provided under the Plan, each
Eligible Employee may make or modify a salary reduction election made under this
Article XIII during the 60-day period immediately preceding each January 1.
(B) For the calendar year that an Employee becomes eligible to make salary
reduction contributions under the SIMPLE 401(k) provisions of this Article XIII,
the 60-day election period requirement of Section 13.4.1(A) is deemed satisfied
if the Employee may make or modify a salary reduction election during a 60-day
period that includes either the date the Employee becomes eligible or the day
before.
(C) Each Employee may terminate a salary reduction election made under this
Article XIII at any time during the calendar year.
13.4.2 Notice Requirements:
(A) The Employer will notify each Eligible Employee prior to the 60-day
election period described in Section 13.4.1 that he or she can make a salary
reduction election or modify a prior election during that period.
(B) The notification described in Section 13.4.2(A) will indicate whether
the Employer will provide a 3-percent Matching Contribution described in Section
13.3.2(A) or a 2-percent nonelective contribution described in Section
13.3.2(B).
13.5 Vesting Requirements:
All benefits attributable to contributions described in Section 13.3.1 and
13.3.2 are nonforfeitable at all times, and all previous contributions made
under the Plan are nonforfeitable as of the beginning of the calendar year the
SIMPLE 401(k) provisions apply.
13.6 Top-Heavy Rules:
The Plan is not treated as a Top-Heavy Plan under Code Section 416 for any
calendar year for which this Article applies.
13.7 Nondiscrimination Tests:
The ADP Test and ACP Test described in Sections 3.4.2(B) and 3.6(A) of the
Plan are treated as satisfied for any calendar year for which this Article
applies.
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1 This Plan may not be both a multiple employer Plan and a Master or
Prototype Plan.
2 For example, under the "Defense of Marriage Act" (P.L. 104-199) for
purposes of federal law, "the word 'marriage' means only a legal union between
one man and one woman as husband and wife, and the word 'spouse' refers only to
a person of the opposite sex who is a husband or a wife."
3 For purposes of the ADP Test, an election will not be treated as a
one-time irrevocable election for purposes of Section 2.7 if the election is
made by an Employee who previously became eligible under another plan (whether
or not the plan has terminated) of the Employer.
4 For purposes of the ACP Test, an election will not be treated as a
one-time irrevocable election for purposes of Section 2.8 if the election is
made by an Employee who previously became eligible under another plan (whether
or not terminated) of the Employer.
5 Excess Pre-Tax Contributions that are not distributed by such date may
not be distributed until the date that Pre-Tax Contributions may otherwise be
distributed. In that event, the Excess Pre-Tax Contributions are includible in
the Participant's gross income both in the year contributed and in the year
distributed.
6 Generally, the Plan may change from using the current year testing method
to the Prior Year Testing method if the current year testing method was used
under the Plan for each of the five Plan Years preceding the Plan Year of the
change (or if lesser, the number of Plan Years the Plan has been in existence,
including years in which the Plan was a portion of another plan). A change may
also be permitted in the context of certain business acquisitions. Notification
to or filing with the IRS of a change from the current year to the Prior Year
Testing method is not required for the change to be valid.
7 Generally, an arrangement must be treated as a separate plan for purposes
of Code Section 401(k)(3) to the extent it covers employees covered by a
collective bargaining agreement, is an employee stock ownership plan, or covers
employees of a qualified separate line of business under Code Section 414(r).
8 Distribution of Excess Contributions on or before the last day of the
Plan Year after the Plan Year in which such excess amounts arose is required
under Code Section 401(k)(8) if the Plan is to maintain its tax-qualified
status. However, if such excess amounts, plus any income and minus any loss
allocable thereto, are distributed more than 2-1/2 months after the last day of
the Plan Year in which such excess amounts arose, then Code Section 4979 imposes
a 10% excise tax on the Employer maintaining the plan with respect to such
amounts.
9 Any such contributions must be made by the date described in Treasury
Regulations 1.415-6(b)(7)(ii) in order to be treated as Annual Additions for the
prior Limitation Year. Generally, this period ends 30 days after the time
prescribed by law for filing the tax return for the taxable year of the Employer
with or within which the prior Limitation Year ends (including extensions
thereof).
10 Under Code Section 411(a)(3)(G), a matching contribution is not treated
as being impermissibly forfeitable if it is forfeitable because the contribution
to which it relates is an Excess Aggregate Contribution, an Excess Pre-Tax
Contribution, or an Excess Contribution.
11 Generally, the Plan may change from using the current year testing
method to the Prior Year Testing method if the current year testing method was
used under the Plan for each of the five Plan Years preceding the Plan Year of
the change (or if lesser, the number of Plan Years the Plan has been in
existence, including years in which the Plan was a portion of another plan). A
change may also be permitted in the context of certain business acquisitions.
Notification to or filing with the IRS of a change from the current year to the
Prior Year testing method is not required for the change to be valid.
12 Generally, an arrangement must be treated as a separate plan for
purposes of Code Section 401(m) to the extent it covers employees covered by a
collective bargaining agreement, is an employee stock ownership plan, or covers
employees of a qualified separate line of business under Code Section 414(r).
13 Under Code Section 411(a)(3)(G) a matching contribution is not treated
as being impermissibly forfeitable if it is forfeitable because the contribution
to which it relates is an Excess Contribution, Excess Pre-Tax Contribution, or
Excess Aggregate Contribution.
14 Distribution or forfeiture of Excess Aggregate Contributions on or
before the last day of the Plan Year after the Plan Year in which such excess
amounts arose is required under Code Section 401(m)(6) if the Plan is to
maintain its tax-qualified status. However, if such excess amounts, plus any
income and minus any loss allocable thereto, are distributed more than 2-1/2
months after the last day of the Plan Year in which such excess amounts arose,
then Code Section 4979 imposes a 10% excise tax on the Employer maintaining the
plan with respect to such amounts.
15 Any such contributions must be made by the date described in Treasury
Regulations 1.415-6(b)(7)(ii) in order to be treated as Annual Additions for the
prior Limitation Year. Generally, this period ends 30 days after the time
prescribed by law for filing the tax return for the taxable year of the Employer
with or within which the prior Limitation Year ends (including extensions
thereof).
16 Specifically, in the case of "unrelated rollovers and transfers" (both
initiated by the Employee and made from a plan maintained by an employer to a
plan maintained by another unrelated employer) the distributing plan takes the
distribution into account and the plan accepting the rollover or transfer does
not take the distribution into account. In the case of "related rollovers and
transfers" (one either not initiated by the Employee or made to a plan
maintained by the same employer), the distributing plan does not take the
distribution into account and the plan accepting the rollover or transfer takes
the distribution into account.
17 The term "party in interest" generally includes active Employees, Plan
fiduciaries, Plan service providers, certain owners, and relatives of such
individuals.
18 Merrill Lynch Trust Co., FSB will not be the Trustee with respect to
life insurance policies.
Appendix G
Minimum Distribution Requirements to the
Merrill Lynch Special/Flexible Prototype
Defined Contribution Plan and Trust
This Amendment to the Merrill Lynch Special/Flexible Prototype Defined
Contribution Plan and Trust (Base Plan Document # 03) ("the Plan") is made on
behalf of all Employers that adopt the Plan and is adopted to reflect certain
provisions of the Final and Temporary Treasury Regulations relating to Section
401(a)(9) of the Internal Revenue Code. This Amendment supercedes the provisions
of the Plan to the extent those provisions are inconsistent with the provisions
of this Amendment.
ARTICLE XIV
MINIMUM DISTRIBUTION REQUIREMENTS
14.1 Effective Date:
The provisions of this Article will apply for purposes of determining
required minimum distributions for calendar years beginning with the 2003
calendar year.
14.2 Precedence:
The requirements of this Article will take precedence over any inconsistent
provisions of the Plan or any prior elections made by an Employer in an Adoption
Agreement.
14.3 Requirements of Treasury Regulations Incorporated:
All distributions required under this Article will be determined and made
in accordance with the Treasury Regulations under Code Section 401(a)(9).
14.4 TEFRA Section 242(b)(2) Elections:
Notwithstanding the other provisions of this Article, distributions may be
made under a designation made before January 1, 1984, in accordance with Section
242(b)(2) of the Tax Equity and Fiscal Responsibility Act ("TEFRA") and Plan
Section 5.11.5.
14.5 Time and Manner of Distribution:
14.5.1 Required Beginning Date:
The Participant's entire interest will be distributed, or begin to be
distributed, to the Participant no later than the Participant's Required
Beginning Date.
14.5.2 Death of Participant Before Distributions Begin:
If the Participant dies before distributions begin, the Participant's
entire interest will be distributed, or begin to be distributed, no later than
as provided in (A) through (D) below, unless an irrevocable election is made
under (E) below.
(A) If the Participant's Surviving Spouse is the Participant's sole
designated Beneficiary, then distributions to the Surviving Spouse will begin by
December 31 of the calendar year immediately following the calendar year in
which the Participant died, or by December 31 of the calendar year in which the
Participant would have attained age 70%, if later.
(B) If the Participant's Surviving Spouse is not the Participant's sole
designated Beneficiary, then distributions to the designated Beneficiary will
begin by December 31 of the calendar year immediately following the calendar
year in which the Participant died.
(C) If there is no designated Beneficiary as of September 30 of the year
following the year of the Participant's death, the Participant's entire interest
will be distributed by December 31 of the calendar year containing the fifth
anniversary of the Participant's death.
(D) If the Participant's Surviving Spouse is the Participant's sole
designated Beneficiary and the Surviving Spouse dies after the Participant but
before distributions to the Surviving Spouse begin, this Section 14.5.2, other
than Section 14.5.2(A), will apply as if the Surviving Spouse were the
Participant.
(E) Participants or Beneficiaries may elect on an individual basis whether
the 5-year rule under Code Section 401(a)(9)(B)(ii) (under which distribution of
the Participant's entire interest will be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant's death) or
the life expectancy rule in Sections 14.5.2(B) or 14.7.2(A) applies to
distributions after the death of a Participant who has a designated Beneficiary.
The election must be made no later than the earlier of September 30 of the
calendar year in which distributions would be required to begin under Section
14.5.2(A), (B), or (D) or by September 30 of the calendar year which contains
the fifth anniversary of the Participant's (or if applicable, Surviving
Spouse's) death. If neither the Participant nor the Beneficiary makes an
election under this Section 14.5.2(E), distributions will be made in accordance
with Sections 14.5.2(A) through (D) and 14.7.2.
For purposes of this Section and Section 14.7, unless Section 14.5.2(D)
applies, distributions are considered to begin on the Participant's Required
Beginning Date. If Section 14.5.2(D) applies, distributions are considered to
begin on the date distributions are required to begin to the Surviving Spouse
under Section 14.5.2(A). If distributions under an annuity purchased from an
insurance company irrevocably commence to the Participant before the
Participant's Required Beginning Date (or to the Participant's Surviving Spouse
before the date distributions are required to begin to the Surviving Spouse
under Section 14.5.2(A)), the date distributions are considered to begin is the
date distributions actually commence.
14.5.3 Forms Of Distributions:
Unless the Participant's interest is distributed in the form of an annuity
purchased from an insurance company or in a single sum on or before the Required
Beginning Date, as of the First Distribution Calendar Year distributions will be
made in accordance with Sections 14.6 and 14.7 of this Article. If the
Participant's interest is distributed in the form of an annuity purchased from
an insurance company, distributions thereunder will be made in accordance with
the requirements of Code Section 401(a)(9) of the Treasury Regulations.
14.6 Payment of Required Minimum Distributions During Participant's
Lifetime:
14.6.1 Amount of Required Minimum Distribution For Each Distribution
Calendar Year:
During the Participant's lifetime, the minimum amount that will be
distributed for each Distribution Calendar Year is the lesser of:
(A) the quotient obtained by dividing the Participant's Account Balance by
the distribution period in the Uniform Lifetime Table set forth in Section
1.401(a)(9)-9 of the Treasury Regulations, using the Participant's age as of the
Participant's birthday in the Distribution Calendar Year; or
(B) if the Participant's sole designated Beneficiary for the Distribution
Calendar Year is the Participant's Spouse, the quotient obtained by dividing the
Participant's Account Balance by the number in the Joint and Last Survivor Table
set forth in Section 1.401(a)(9)-9 of the Treasury Regulations, using the
Participant's and Spouse's attained ages as of the Participant's and Spouse's
birthdays in the Distribution Calendar Year.
14.6.2 Lifetime Required Minimum Distributions Continue Through Year of
Participant's Death:
Required minimum distributions will be determined under this Section 14.6
beginning with the first Distribution Calendar Year and up to and including the
Distribution Calendar Year that includes the Participant's date of death.
14.7 Required Minimum Distributions After Participant's Death:
14.7.1 Death On or After Distributions Begin:
(A) Participant Survived By Designated Beneficiary. If the Participant dies
on or after the date distributions begin and there is a designated Beneficiary,
the minimum amount that will be distributed for each Distribution Calendar Year
after the year of the Participant's death is the quotient obtained by dividing
the Participant's Account Balance by the longer of the remaining life expectancy
of the Participant or the remaining life expectancy of the Participant's
designated Beneficiary, determined as follows:
(1) Participant's Remaining Life Expectancy. The Participant's remaining
life expectancy is calculated using the age of the Participant in the year of
death, reduced by one for each subsequent year.
(2) Surviving Spouse's Remaining Life Expectancy. If the Participant's
Surviving Spouse is the Participant's sole designated Beneficiary, the remaining
life expectancy of the Surviving Spouse is calculated for each Distribution
Calendar Year after the year of the Participant's death using the Surviving
Spouse's age as of the Surviving Spouse's birthday in that year. For
Distribution Calendar Years after the year of the Surviving Spouse's death, the
remaining life expectancy of the Surviving Spouse is calculated using the age of
the Surviving Spouse as of the Spouse's birthday in the calendar year of the
Spouse's death, reduced by one for each subsequent calendar year.
(3) Non-Surviving Spouse Remaining Life Expectancy. If the Participant's
Surviving Spouse is not the Participant's sole designated Beneficiary, the
designated Beneficiary's remaining life expectancy is calculated using the age
of the Beneficiary in the year following the year of the Participant's death,
reduced by one for each subsequent year.
(B) No Designated Beneficiary: If the Participant dies on or after the date
distributions begin and there is no designated Beneficiary as of September 30 of
the year after the year of the Participant's death, the minimum amount that will
be distributed for each Distribution Calendar Year after the year of the
Participant's death is the quotient obtained by dividing the Participant's
Account Balance by the Participant's remaining life expectancy calculated using
the age of the Participant in the year of death, reduced by one for each
subsequent year.
14.7.2 Death Before Date Distributions Begin:
(A) Participant Survived By Designated Beneficiary: Unless the 5-year rule
is elected as provided under Section 14.5.2(E) (in which case distribution of
the Participant's entire interest will be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant's death), if
the Participant dies before the date distributions begin and there is a
designated Beneficiary, the minimum amount that will be distributed for each
Distribution Calendar Year after the year of the Participant's death is the
quotient obtained by dividing the Participant's Account Balance by the remaining
life expectancy of the Participant's designated Beneficiary, determined as
provided in Section 14.8.1.
(B) No Designated Beneficiary: If the Participant dies before the date
distributions begin and there is no designated Beneficiary as of September 30 of
the year following the year of the Participant's death, distribution of the
Participant's entire interest will be completed by December 31 of the calendar
year containing the fifth anniversary of the Participant's death.
(C) Death Of Surviving Spouse Before Distributions To Surviving Spouse Are
Required To Begin: If the Participant dies before the date distributions begin,
the Participant's Surviving Spouse is the Participant's sole designated
Beneficiary, and the Surviving Spouse dies before distributions are required to
begin to the Surviving Spouse under Section 14.5.2(A), this Section 14.7 will
apply as if the Surviving Spouse were the Participant.
14.8 Definitions:
As used in this Article XIV, each of the following terms shall have the
meaning for that term set forth in this Section 14.8.
14.8.1 Designated Beneficiary:
The individual who is designated as the Beneficiary under Article VII of
the Plan and is the designated Beneficiary under Code Section 401(a)(9) and
Section 1.401(a)(9)-1, Q and A-4, of the Treasury Regulations.
14.8.2 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 under Section 14.5.2.
The required minimum distribution for the Participant's First Distribution
Calendar Year will be made on or before the Participant's Required Beginning
Date. The required minimum distribution for other Distribution Calendar Years,
including the required minimum distribution for the Distribution Calendar Year
in which the Participant's Required Beginning Date occurs, will be made on or
before December 31 of that Distribution Calendar Year.
14.8.3 Life Expectancy:
Life expectancy as computed by use of the Single Life Table in Section
1.401(a)(9)-9 of the Treasury Regulations.
14.8.4 Participant's Account Balance:
The Account Balance as of the last Valuation Date in the calendar year
immediately preceding the Distribution Calendar Year (Valuation Calendar Year)
increased by the amount of any contributions made and allocated 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. The Account Balance for the Valuation
Calendar year includes any amounts rolled over or transferred to the Plan either
in the Valuation Calendar Year or in the Distribution Calendar Year if
distributed or transferred in the Valuation Calendar Year.
14.8.5 Required Beginning Date:
The date specified in Section 5.11.1(F) of the Plan.
_____________________________________________________
MERRILL LYNCH
------------------
SPECIAL/FLEXIBLE
-----------------
NON STANDARDIZED
PROTOTYPE DEFINED
CONTRIBUTION PLAN
ADOPTION AGREEMENT
____________________________________________________________
PROFIT SHARING PLAN
PROFIT SHARING PLAN WITH CODA
Letter Serial Number: K373962a
National Office Letter Date: 6/4/2002
This Prototype Plan and Adoption Agreement are important legal instruments
with legal and tax implications. Merrill Lynch, Pierce Fenner and Smith
Incorporated does not provide legal and tax advice to the Employer. The Employer
is urged to consult with its own attorney with regard to the adoption of this
Plan and its suitability to its circumstances.
NOTE: In order to be recognized as a Prototype Plan maintained by the
Sponsor, Merrill Lynch, Pierce Fenner and Smith Incorporated, the Employer must
contribute and maintain at least 75% of Plan Year contributions and Trust Fund
value with the Sponsor.
Addendum to the
Meridian Bioscience, Inc. Savings and Investment Plan
pursuant to Article 11.1.3 of the Plan
411(d)(6) Protected Benefits Attachment to the
Meridian Bioscience, Inc. Savings and Investment Plan
Prior to October 1, 2003, a joint and survivor annuity for the Participant
and his Surviving Spouse under which the survivor annuity is more than one-half
of, but not greater than, the annuity payable during the joint lives of the
Participant and such spouse, and subject to 6.1.2(B) of the Plan.
Adoption of Plan
The Employer named below hereby establishes or restates a Profit Sharing
plan that includes a [[X]] Pre-Tax, [[X]] Profit Sharing, and/or [ ] Employee
After-Tax plan feature (the "Plan") by adopting the Merrill Lynch
Special/Flexible Prototype Defined Contribution Plan and Trust as modified by
the terms and provisions of this Adoption Agreement.
Employer and Plan Information
Primary Employer Name: Meridian Bioscience, Inc.
The Employer is (i) [[X]] a member of a Code Section 414(b) controlled
group; (ii) [ ] a member of a Code Section 414(c) group of trades or businesses
under common control; and/or (iii) [ ] a member of a Code Section 414(m)
affiliated service group, or (iv) [ ] none of the above.1
Business Address: 3471 River Hills Drive
Cincinnati, OH 4522
Telephone Number: (513) 272-5239
Employer Taxpayer ID Number: 31-0888197
Employer Taxable Year ends on: 09/30
Plan Name: Meridian Bioscience, Inc. Savings and Investment Plan
Plan Number: 001
Restatement Effective Date (if applicable): 02/01/2004
Employee
Pre-Tax Profit Sharing After-Tax
Effective Date of Plan 01/01/1983 01/01/1983
Feature:2
- ---------------
1 Only entities treated as a single employer under Section 414 of the
Internal Revenue Code may adopt this Plan. Generally, entities are treated as a
single employer under Code Section 414 if they share 80%common ownership or if
their operations are otherwise closely affiliated. The related employer rules
are complex and legal advice should be sought before any entity other than the
Primary Employer is permitted to adopt this Plan.
2 The original effective date of this Plan's adoption is the first day of
the Plan Year in which occurs the earliest effective date for any Plan feature,
as specified above. See Plan Section 1.67. The effective date for Pre-Tax or
Employee After-Tax Contributions cannot be earlier than the date that deferrals
or contributions will begin to be deducted from Employees' Compensation.
Moreover, even if the effective date of the Plan's Pre-Tax or Employee After-Tax
feature occurs in the middle of a Plan Year, a Participant's Compensation may be
based on Compensation paid for the entire Plan Year if so elected in Article
IA(5) of this Adoption Agreement.
Proper Names of Participating Employers:
Meridian Bioscience, Inc.
Meridian Bioscience Corporation
Viral Antigens, Inc.
BIODESIGN International Incorporated
Plan Administrator Name: Meridian Bioscience, Inc.
Business Address: 3471 River Hills Drive
Cincinnati, OH 45244
Telephone Number: (513) 271-3700
Note: If this Plan is a continuation or an amendment of a prior plan,
optional forms of benefits provided in the prior plan must be provided under
this Plan, and should be listed on an Addendum attached to this Adoption
Agreement, unless permissibly eliminated or restricted under the terms of the
Plan and IRS regulations or other guidance. Article I.
ARTICLE I. Definitions
A. "Compensation"
(1) With respect to each Participant, except as provided below,
Compensation shall mean the (select (a), (b) or (c) for each applicable column;
a Plan which is integrated with Social Security may not elect (d) in the Profit
Sharing Contributions column):
Non-Profit Profit
Sharing Sharing
Contributions* Contributions
[ ] [ ] (a) amount reported in the "Wages Tips and
Other Compensation" Box on Form W-2 (as
defined in Section 3.9.1(H)(i) of the Plan)
and paid during the Plan Year.
[[X]] [[X]] (b) amount reported pursuant to Code Section
3401(a) (as defined in Section 3.9.1(H)(ii)
of the Plan) and paid during the Plan Year.
[ ] [ ] (c) compensation for Code Section 415 safe-
harbor purposes (as defined in Section
3.9.1(H)(iii) of the Plan) paid during the
Plan Year.
[[X]] [[X]] (d) all amounts received (under either option
(a) (b) or (c) above)for personal services
rendered to the Employer and paid during the
Plan Year but excluding (select all
applicable):
[ ] overtime.
[ ] bonuses.
[ ] commissions.
[ ] amounts in excess of $______________
[[X]] other (specify)
Allowances, reimbursements and fringe benefits.
Notwithstanding the foregoing, if necessary to satisfy the
nondiscrimination testing requirements applicable to the Plan under the Code,
the exclusions indicated above will be included as Compensation solely for
purposes of such testing.
*These amounts include ADP Test and ACP Test Safe Harbor Contributions.
Note: For Self-Employed Individuals, Compensation means "Earned Income"
regardless of which of the above options is elected. (See Plan Section 1.21(A).)
Earned Income generally means net earnings from self-employment with certain
adjustments, as described in Section 1.29 of the Plan document.
(2) Treatment of Elective Contributions
Note: The term Elective Contributions under Plan Section 1.31 automatically
includes elective amounts that are not included in the Employee's gross income
by reason of Code Section 132(f)(4) (Qualified Transportation Fringe Benefits)
for years after December 31, 1997, unless indicated otherwise (b) below. For
purposes of determining the amount of Pre-Tax, Employee After-Tax, and Matching
Contributions (including Safe Harbor Matching Contributions, and Enhanced
Matching Contributions (under Article VIII of this Adoption Agreement)),
Compensation shall include Elective Contributions. For all other contributions,
(select either (a) or (b) if applicable):
[[X]] (a) For purposes of determining the amount of Profit Sharing,
Prevailing Wage, and any Safe Harbor Nonelective Contributions, Compensation
shall include Elective Contributions. Qualified Transportation Fringe Benefits:
[[X]] (i) are included as Elective Contributions effective for years after
December 31, 1997 in accordance with Plan Section 1.31.
[ ] (ii) are included as Elective Contributions effective
____________(enter the applicable Plan Year for which such amounts are included,
which should not be earlier than the first Plan Year beginning after December
31, 1998).
[ ] (iii) are not included as Elective Contributions.
[[X]] (b) For purposes of determining the amount of Profit Sharing,
Prevailing Wage, and any Safe Harbor Nonelective Contributions, Compensation
shall not include Elective Contributions.
(3) CODA Compensation
(a) Inclusion or Exclusion of Elective Contributions (select one):
[[X]] (i) For purposes of the ADP and ACP Tests, Compensation shall include
Elective Contributions.
Note: The term Elective Contributions under Plan Section 1.31 automatically
includes elective amounts that are not included in the Employee's gross income
by reason of Code Section 132(f)(4) (Qualified Transportation Fringe Benefits)
for years after December 31, 1997, unless one of the following is selected.
[ ] (A) Elective Contributions for purposes of ADP and ACP Tests shall
include Qualified Transportation Fringe Benefits effective _________________
(enter the applicable Plan Year for which such amounts are included, which
should not be earlier than the first Plan Year beginning after December 31,
1998).
[ ] (B) Elective Contributions for purposes of ADP and ACP Tests shall not
include Qualified Transportation Fringe Benefits.
[ ] (ii) For purposes of the ADP and ACP Tests, Compensation shall not
include Elective Contributions.
(b) Plan Year or Eligibility Compensation for ADP and ACP Tests (select
one):
[ ] (i) CODA Compensation shall be determined with respect to each Plan
Year without regard to a Participant's Entry Date.
[[X]] (ii) Effective for Plan Years beginning on and after 01/01/2004, CODA
Compensation shall only include Compensation actually paid on and after the
Participant's Entry Date.
(4) With respect to Profit Sharing Contributions and Safe Harbor
Nonelective Contributions, Compensation shall include all Compensation (select
one if applicable):
[ ] (a) during the Plan Year in which the Participant enters the Plan.
[[X]] (b) after the Participant's Entry Date.
(5) With respect to Pre-Tax and Employee After-Tax Contributions,
Compensation shall include all Compensation (select one):
[ ] (a) during the Plan Year in which the Participant enters the Plan.
[[X]] (b) after the Participant's Entry Date.
Note: If A(4)(b) or A(5)(b) above are elected and the Plan benefits
Self-Employed Individuals, then the Compensation taken into account for the
portion of the Plan Year after the Participant's Entry Date for a Self-Employed
Individual shall be his or her Earned Income payable with respect to that Plan
Year modified by a fraction, the numerator of which is the number of days he or
she is a Participant during the Plan Year after the Entry Date and the
denominator of which is the number of days in the Plan Year.
B. "Computation Period"
For purposes of Breaks in Service and Years of Service for purposes of
eligibility, "Computation Periods" occurring after the initial Computation
Period described in Section 1.22 of the Plan shall be the succeeding 12-month
periods commencing with (select one):
[ ] (1) the first anniversary of the Employee's employment commencement
date.
[[X]] (2) the first Plan Year which commences prior to the first
anniversary of the Employee's employment commencement date.
[ ] (3) not applicable, Plan uses elapsed time method to determine all
eligibility service.
C. "Disability"
(1) Definition
Disability shall mean a condition which results in the Participant's
(select one):
[[X]] (a) 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 indefinite period of not less than 12 months.
Note: This option C(1)(a) must be selected if contributions due to
Disability are to be made under option C(2) below. In addition, the exception
from the early distribution tax of Code Section 72(t) may not apply to a
distribution made on account of a "Disability" unless the definition used is
that as defined in this option C(1)(a).
[ ] (b) total and permanent inability to meet the requirements of the
Participant's customary employment which can be expected to last for a
continuous period of not less than 12 months.
[ ] (c) qualification for Social Security disability benefits.
[ ] (d) qualification for benefits under the Employer's long-term
disability plan.
(2) Contributions During Disability (select one):
[[X]] (a) No contributions to a Participant's Account will be made on
behalf of a Participant whose Employment has terminated on account of Disability
with respect to periods on and after his or her termination of Employment due to
Disability.
[ ] (b) Contributions otherwise to be made to a Participant's Account will
continue to be made on behalf of a Participant whose Employment has terminated
on account of Disability with respect to the remainder of the Plan Year in which
occurs his or her termination of Employment due to Disability, provided that
option C(1)(a) above is elected as the definition of "Disability." For purposes
of determining the amount of such an individual's contributions, "Compensation"
shall mean the compensation such Participant would have received for the Plan
Year if the Participant had been paid at the rate of Compensation paid
immediately before his or her Disability.
[ ] (c) Contributions otherwise to be made to a Participant's Account will
continue to be made on behalf of a Participant whose Employment has terminated
on account of Disability with respect to periods on and after his or her
termination of Employment due to Disability and during such period that the
Participant remains so disabled, provided that option C(1)(a) above is elected
as the definition of "Disability." For purposes of determining the amount of
such an individual's contributions, "Compensation" shall mean the compensation
such Participant would have received for the Plan Year if the Participant had
been paid at the rate of Compensation paid immediately before his or her
Disability.
D. "Early Retirement Age"
(1) Early Retirement Age (select one):
[[X]] (a) shall be permitted.
[ ] (b) shall not be permitted.
(2) If D(1)(a) above is elected, Early Retirement Age shall mean (select
one):
[ ] (a) attained age ________.
[[X]] (b) attained age 50 and completed 15 Years of Service.
[ ] (c) attained age ___ and completed __ Years of Service
as a Participant.
E. "Eligible Employees"
(1) General Rule (select one):
It is expressly intended that, regardless of any elections below,
individuals not treated as common law employees by the Employer or an Affiliate
on their payroll records are to be excluded from Plan participation even if a
court or administrative agency later determines that such individuals are common
law employees and not independent contractors.
[ ] (a) All Employees of the Primary Employer and participating Employers
are eligible to participate in the Plan.
[[X]] (b) All Employees are eligible to participate in the Plan except for
the following Employees (select all those applicable):
[ ] (i) Employees included in a unit of Employees covered by a collective
bargaining agreement between the Employer and the Employee representatives (not
including any organization more than half of whose members are Employees who are
owners, officers, or executives of the Employer) in the negotiation of which
retirement benefits were the subject of good faith bargaining, unless the
bargaining agreement provides for participation in the Plan.
[ ] (ii) Non-resident aliens (within the meaning of Code Section
7701(b)(1)(B)) and who received no earned income (within the meaning of Code
Section 911(d)(2)) from the Employer which constitutes income from sources
within the United States (within the meaning of Code Section 861(a)(3)).
[ ] (iii) Employees of an Affiliate that is not a participating Employer.
[[X]] (iv) Leased Employees, as defined in Section 1.57 of the Plan.
[[X]] (v) Any Employee classified by his or her Employer as a Temporary
Employee, as defined in Section 1.99 of the Plan.
[ ] (vi) Employees employed in or by the following specified division,
plant, location, job category or other identifiable individual or group of
Employees (This exclusion for specified job classifications may not impose
conditions relating to age or Service that must be satisfied by Plan
Participants. For example, part-time employees may not be excluded as a
classification or job category of employees):
(2) Newly-Hired Leased Employees
Individuals who would be Leased Employees but for the fact that they have
not performed services for an Employer on a substantially full-time basis for a
period of one year:
[ ] (a) shall be treated as Employees.
[[X]] (b) shall not be treated as Employees.
Note: The Plan's definition of "Eligible Employee" merely identifies the
Employees who may participate under the Plan and has no bearing on the
identification of Employees who must be taken into account for coverage testing
under Code Section 410(b) and the regulations thereunder. F. "Entry Date"
(1) Entry Date shall mean (select one):
Pre-Tax and/or Matching Profit
Employee Contributions Sharing
After-Tax Contributions
Contributions
[ ] [ ] [ ] (a) each business day of the Plan Year.
[ ] [ ] [ ] (b) the first day of the Plan Year following
the date the Employee meets the
participation requirements of Section 2.1
of the Plan. If the Employer elects this
option (b) establishing only one Entry
Date, the participation "age and service"
requirements elected in Article II must be
no more than age 20-1/2 and 6 months of
service.
[ ] [ ] [ ] (c) the first day of the month following the
date the Employee meets the participation
requirements of Section 2.1 of the Plan.
[ ] [ ] [ ] (d) the first day of the Plan Year and the
first day of the seventh month of the Plan
Year following the date the Employee meets
the participation requirements of Section
2.1 of the Plan.
[ ] [[X]] [[X]] (e) the first day of the Plan Year, the first
day of the fourth month of the Plan Year,
the first day of the seventh month of the
Plan Year, and the first day of the tenth
month of the Plan Year following the date
the Employee meets the participation
requirements of Section 2.1 of the Plan.
[[X]] [ ] [ ] (f) other: Any date within 30 days after hire,
otherwise the first day of each calendar
quarter.
provided that the Entry Date or Dates selected
are no later than any of the options above.
(2) Restatement Effective Date:
The Restatement Effective Date (select one):
[ ] (a) shall be an Entry Date.
[ ] (b) shall not be an Entry Date.
[[X]] (c) shall not be applicable. (Either this is an initial adoption as
provided in the Employer and Plan Information Section or the Restatement
Effective Date is already an Entry Date as described in (1) above.)
G. "Highly Compensated Employees"
(1) Top-Paid Group Election
In determining who is a Highly Compensated Employee (select one):
[ ] (a) A top-paid group election is made. The effect of this election is
that an Employee (who is not a 5% owner at any time during the determination
year or the look-back year) with Compensation in excess of $80,000 (as adjusted)
for the look-back year (as defined in Section 1.49 of the Plan) is a Highly
Compensated Employee only if the Employee was in the top-paid group for the
look-back year. An Employee is in the "top-paid group" for any year, if such
Employee is in the group of Employees consisting of the top 20% of the
includable Employees when ranked on the basis of Compensation paid during such
year.3
[[X]] (b) A top-paid group election is not made.
(2) Calendar Year Data Election
In determining who is a Highly Compensated Employee (other than a 5% owner)
(select one):
[ ] (a) A calendar year data election is made. The effect of this election
is that the look-back year is the calendar year beginning with or within the
look-back year.
[ ] (b) A calendar year data election is not made.
[[X]] (c) Not applicable, Plan Year is the calendar year.
Note: If both G(1)(a) and G(2)(a) are selected, the look-back year in
determining the top-paid group shall be the calendar year beginning with or
within the look-back year. Generally, a top-paid group election must apply
consistently to the determination years of all plans of the Employer that begin
with or within the same calendar year. A calendar year data election also must
apply consistently to the determination years of all of the Employer's plans
that begin within the same calendar year.
H. "Hours of Service"
Hours of Service shall be determined on the basis of the method specified below:
(1) Eligibility Service
For purposes of determining whether an Employee has satisfied the
participation requirements of Section 2.1 of the Plan, the following method
shall be used (select one for each column as applicable):
Pre-Tax and/or Employee Matching Profit Sharing
After-Tax Contributions Contributions Contributions
[[X]] [ ] [ ] (a) elapsed time method.
[ ] [[X]] [[X]] (b) hourly records method.
(2) Vesting Service
All Pre-Tax Contributions, Employee After-Tax Contributions, Qualified
Matching Contributions, Qualified Nonelective Contributions, ACP Test Safe
Harbor Matching Contributions, and ADP Test Safe Harbor Contributions are always
100% vested. Unless Profit Sharing and/or Matching Contributions are fully
vested when made (in accordance with Article IX of this Adoption Agreement), a
Participant's nonforfeitable interest in Profit Sharing Contributions and/or
Matching Contributions (as applicable) made on his or her behalf shall be
determined on the basis of the method specified below (select one as
applicable):
[ ] (a) elapsed time method.
[[X]] (b) hourly records method.
(3) Hourly Records
For the purpose of determining Hours of Service under the hourly records
method (choose one box for eligibility and one box for vesting as applicable):
Eligibility Vesting
[[X]] [[X]] (a) only actual hours for which an Employee is paid or
entitled to payment shall be counted.
[ ] [ ] (b) an Employee shall be credited with 45 Hours of
Service if under Section 1.50 of the Plan such
Employee would be credited with at least 1 Hour
of Service during the week.
I. "Limitation Compensation "
For purposes of Code Section 415, Limitation Compensation shall be
Compensation as determined for purposes of (select one):
[ ] (1) the "Wages, Tips and Other Compensation" Box on Form W-2 as defined
in Plan Section 3.9.1(H)(i).
[[X]] (2) Code Section 3401(a) Federal Income Tax Withholding as defined in
Plan Section 3.9.1(H)(ii).
[ ] (3) Code Section 415 safe-harbor as defined in Plan Section
3.9.1(H)(iii).
J. "Limitation Year"
For purposes of Code Section 415, the Limitation Year shall be (select one):
[[X]] (1) the Plan Year.
[ ] (2) the calendar year.
[ ] (3) the 12 consecutive month period ending on the ____________ day of
the month of ____________________.
K. "Normal Retirement Age"
Normal Retirement Age shall be (select one):
[[X]] (1) attainment of age 65 (not more than 65) by the Participant.
[ ] (2) attainment of age________ (not more than 65) by the Participant or
the ________ anniversary (not more than the 5th) of the first day of the Plan
Year in which the Eligible Employee became a Participant, whichever is later.
[ ] (3) attainment of age ________ (not more than 65) by the Participant or
the ________ anniversary (not more than the 5th) of the first day on which the
Eligible Employee performed an Hour of Service, whichever is later.
L. "Participant Directed Assets"
Participant directed assets are:
Non-Profit Profit Sharing
Sharing Contributions
Contributions
[[X]] [[X]] (1) permitted
[ ] [ ] (2) not permitted
M. "Plan Year"
The Plan Year shall be the 12 consecutive month period ending on the 31st day of
December.
N. "Predecessor Employer Service"
Predecessor Employer Service will be credited (select one):
[ ] (1) only as required by the Plan.
[[X]] (2) to include, in addition to the Plan requirements and subject to
the limitations set forth below, service with the following Predecessor
Employer(s) determined as if such predecessors were the Employer: Gull
Laboratories, BIODESIGN International Incorporated and Viral Antigens, Inc.
Service with such Predecessor Employer listed in this item (2) applies
[select either (a), (b) or (a) and (b); (c) is only available in addition to (a)
and/or (b)]:
[[X]] (a) for purposes of eligibility to participate;
[[X]] (b) for purposes of vesting;
[ ] (c) except for the following service:
O. "Top-Heavy Ratio"
If the adopting Employer maintains or has ever maintained a qualified
defined benefit plan, for purposes of establishing present value to compute the
top-heavy ratio, any benefit shall be discounted only for mortality and interest
based on the following:
Interest Rate: 8%
Mortality Table: UP'84
P. "Valuation Date"
Valuation Date shall mean (select one for each column, as applicable):
Non-Profit Profit
Sharing Sharing
Contributions Contributions
[[X]] [[X]] (1) each business day.
[ ] [ ] (2) the last business day of each month.
[ ] [ ] (3) the last business day of each quarter within
the Plan Year.
[ ] [ ] (4) the last business day of each semi-annual
period within the Plan Year.
[ ] [ ] (5) the last business day of the Plan Year.
[ ] [ ] other:
Article II. Participation
General Participation Requirements An Eligible Employee must meet the
following requirements to become a Participant (select one or more for each
column, as applicable):
Pre-Tax
and/or
Employee
After-Tax Matching Profit Sharing
Contributions Contributions Contributions
[ ] [ ] [ ] (1) Performance of one Hour of Service.
[ ] [ ] [ ] (2) Attainment of age ____ (maximum 20-1/2) and
completion of ____ (not more than 1/2) Year(s)
of Service. If this item is selected, no Hours
of Service shall be counted.
[X] (3) Attainment of age N/A (maximum 21) and
completion of N/A Year(s) of Service (not to
exceed 2 years). If more than 1 Year of
Service is selected, the immediate 100%
vesting schedule must be selected in Article
IX of this Adoption Agreement.
[X]
(4) Attainment of age N/A (maximum 21) and
completion of N/A Years of Service (not to
exceed 2 years). If more than 1 Year of
Service is selected, the immediate l00%
vesting schedule must be selected in Article
IX of this Adoption Agreement.
[X] (5) Attainment of age N/A (maximum 21) and
completion of 1 Years of Service (not to
exceed 2 years). If more than 1 Year of
Service is selected, the immediate l00%
vesting schedule must be selected in Article
IX of this Adoption Agreement.
[ ] [ ] [ ] (6) Each Employee who is an Eligible Employee will
be deemed to have satisfied the participation
requirements as of ________ without regard to
such Eligible Employee's actual age and/or
service.
Note: A maximum of 1 Year of Service can be required for Pre-Tax and/or
Employee After-Tax Contributions.
Article III. Pre-Tax Contributions and Employee After-Tax Contributions
A. Pre-Tax Contributions (select all applicable):
[[X]] (1) Pre-Tax Contributions are permitted under the Plan and may be
made by a Participant in an amount equal to a dollar amount or a percentage of
the Participant's Compensation, as specified by the Participant in his or her
Pre-Tax Election, which may not exceed 100% of his or her Compensation.
[ ] (2) Pre-Tax Contributions Election Limit for Highly Compensated
Employees. If elected, a Highly Compensated Employee may make a Pre-Tax Election
which may not exceed ____% of his or her Compensation.
Note: If item A(2) is selected, the election limit percentage for Highly
Compensated Employees in A(2) must be less than the Employee Pre-Tax
Contribution limit selected in A(1) above.
[ ] (3) Separate Bonus Election - With respect to bonuses, such dollar
amount or percentage as specified by the Participant in his or her Pre-Tax
Election with respect to such bonus.
[ ] (4) Pre-Tax Contributions are not permitted under the Plan.
B. Employee After-Tax Contributions (select all applicable):
[ ] (1) Employee After-Tax Contributions are permitted under the Plan and
may be made by a Participant in an amount equal to a dollar amount or a
percentage of the Participant's Compensation, as specified by the Participant in
his or her Employee After-Tax Contribution Election, which may not exceed ____%
of his or her Compensation.
[ ] (2) After-Tax Contributions Election Limit for Highly Compensated
Employees. If elected, a Highly Compensated Employee may make an After-Tax
Election which may not exceed _____% of his or her Compensation.
Note: If item B(2) is selected, the election limit percentage for Highly
Compensated Employees in B(2) must be less than the Employee After-Tax
Contribution limit selected in B(1) above.
[ ] (3) Separate Bonus Election - With respect to bonuses, such dollar
amount or percentage as specified by the Participant in his or her Employee
After-Tax Contribution Election with respect to such bonus.
[[X]] (4) Employee After-Tax Contributions are not permitted under the
Plan.
Note: Department of Labor regulations require Pre-Tax Contributions and
Employee After-Tax Contributions to be contributed to the Trust as soon as
possible and no later than the 15th business day of the month following the
month in which (i) the Participant's contribution amounts are received by the
Employer (in the case of amounts that a Participant or Beneficiary pays to an
Employer) or (ii) such amounts would otherwise have been payable to the
Participant in cash (in the case of amounts withheld by an Employer from a
Participant's wages).
C. Automatic Enrollment4 (select all applicable):
[ ] (1) In the absence of an election made by a Participant to the contrary
within such time period as established by the Plan Administrator, a Participant
shall be deemed to have elected (select one or both):
[ ] (a) a Pre-Tax Contribution of _____% of his or her Compensation.
[ ] (b) an Employee After-Tax Contribution of ______% of his or her
Compensation.
[[X]] (2) Notwithstanding any provision of the Plan to the contrary, the
following contribution(s) may only be made pursuant to an affirmative election
made by the Participant in writing (or in such electronic or telephonic form as
specified by the Plan Administrator) (select one or both):
[[X]] (a) Pre-Tax Contributions.
[ ] (b) Employee After-Tax Contributions.
D. Making and Modifying an Election
An Eligible Employee shall be entitled to increase, decrease or resume his
or her Pre-Tax Contributions and/or Employee After-Tax Contributions with the
following frequency during the Plan Year (select one):
[ ] (1) annually.
[ ] (2) semi-annually.
[[X]] (3) quarterly.
[ ] (4) monthly.
[ ] (5) other (specify):_______________________________________.
Any such increase, decrease or resumption shall be effective as of the
first payroll period coincident with or next following the first day of each
period set forth above. A Participant may completely discontinue making Pre-Tax
Contributions and/or Employee After-Tax Contributions at any time effective for
the payroll period after written notice is provided to the Administrator.
Article IV. Matching Contributions
This Article IV is effective only if Pre-Tax Contributions and/or Employee
After-Tax Contributions are permitted under the Plan.
A. Contribution and Allocation Formula
If selected below, the Employer may make Matching Contributions (select all
that apply):
[[X]] (1) Discretionary Formula:
Discretionary Matching Contribution equal to such a dollar amount or
percentage of Pre-Tax Contributions and/or Employee After-Tax Contributions, as
determined by the Employer, which shall be allocated (select all that apply):
[ ] (a) based on the ratio of each Participant's Pre-Tax Contributions
and/or Employee After-Tax Contributions for the Plan Year to the total Pre-Tax
Contributions and/or Employee After-Tax Contributions of all Participants for
the Plan Year. If selected, Matching Contributions shall be subject to a maximum
amount of (select one):
[ ] (i) $_________ for each Participant.
[ ] (ii) ____ % of each Participant's Compensation.
[[X]] (b) in an amount up to 100% or $________ of each Participant's first
3 % or $________ of Compensation contributed as Pre-Tax Contributions and/or
Employee After-Tax Contributions. If any Matching Contribution remains, it is
allocated to each such Participant in an amount up to _____% or $_________ of
the next ____% or $______ of each Participant's Compensation contributed as
Pre-Tax Contributions and/or Employee After- Tax Contributions. If any Matching
Contribution remains after the application of the preceding sentence, it is
allocated to each such Participant in an amount up to ___% or $_______ of the
next _____% or $________ of each Participant's Compensation contributed as
Pre-Tax Contributions and/or Employee After-Tax Contributions.
Any remaining Matching Contribution shall be allocated to each such
Participant in the ratio that such Participant's Pre-Tax Contributions and/or
Employee After-Tax Contributions bear to the total Pre-Tax Contributions and/or
Employee After-Tax Contributions of all such Participants.
If selected, Matching Contributions shall be subject to a maximum amount of
(select one):
[ ] (i) $___________ for each Participant.
[ ] (ii) ____% of each Participant's Compensation.
[ ] (2) Nondiscretionary Formula:
A nondiscretionary Matching Contribution equal to (select all that apply):
[ ] (a) ____% of each Participant's Compensation contributed as Pre-Tax
Contributions and/or Employee After-Tax Contributions. If selected, Matching
Contributions shall be subject to a maximum amount of (select one):
[ ] (i) $_________ for each Participant.
[ ] (ii) ____% of each Participant's Compensation.
[ ] (b) _____% or $_________ of the first % or $_______ of the
Participant's Compensation contributed as Pre-Tax Contributions and/or Employee
After-Tax Contributions, % or $_________ of the next % or $________ of the
Participant's Compensation contributed as Pre-Tax Contributions and/or Employee
After-Tax Contributions, and _____% or $______ of the next ____% or $ ______ of
the Participant's Compensation contributed as Pre-Tax Contributions and/or
Employee After-Tax Contributions.
If selected, Matching Contributions shall be subject to a maximum amount of
(select one):
[ ] (i) $_________ for each Participant.
[ ] (ii) ____% of each Participant's Compensation.
[[X]] (3) Matching Contribution "True-up" (select one):
[ ] (a) Annualized Matching Contributions: Matching Contributions, if made
on a periodic basis, will be recalculated based on Compensation for the Plan
Year, and "true-up" contributions will be made to Participants as necessary.
[[X]] (b) Non-annualized Matching Contributions: The "true-up" Matching
Contributions will not be made.
[[X]] (4) Matched Contributions. Pre-Tax and/or Employee After-Tax
Contributions indicated above shall be eligible for Matching Contributions as
indicated below (select all that apply):
Discretionary Nondiscretionary
Matching Contribution Matching Contribution
Formula Formula
[[X]] [ ] (a) Pre-Tax Contributions.
[ ] [ ] (b) After-Tax Contributions.
(c) If (a) and (b) selected above, the Pre-Tax and Employee After-Tax
Matching Contributions formula will be applied (select one, if applicable):
[ ] (i) concurrently as a separate formula for each feature.
[ ] (ii) cumulatively as a single formula for both features.
B. Participants Eligible for Matching Contribution Allocation
The following Participants shall be eligible for an allocation to their Matching Contributions
Account (select one):
[[X]] (1) Payroll Basis Matching Contributions - Any Participant who makes
Pre-Tax Contributions and/or Employee After-Tax Contributions.
[ ] (2) Periodic Matching Contributions - Solely with respect to a Plan in
which Matching Contributions are made on a periodic basis, any Participant whose
Pre-Tax Election or Employee After-Tax Election is in effect during such period.
(select the applicable period):
[ ] (a) monthly.
[ ] (b) quarterly.
[ ] (c) semi-annually.
[ ] (d) other (specify):________________________________.
[ ] (3) Annual Plan Year-end Matching Contribution - Any Participant who
makes Pre-Tax Contributions and/or Employee After-Tax Contributions during the
Plan Year and who satisfies the following requirements (select all those
applicable):
[ ] (a) is employed during the Plan Year.
[ ] (b) was credited with _____ (no more than 1,000) Hours of
Service during the Plan Year.
[ ] (c) was employed on the last day of the Plan Year.
[ ] (d) was on a leave of absence on the last day of the Plan
Year.
[ ] (e) during the Plan Year died or became disabled while an
Employee or terminated employment after attaining Normal
Retirement Age.
[ ] (f) was credited with at least 501 Hours of Service whether
or not employed on the last day of the Plan Year.
[ ] (g) was credited with at least 1,000 Hours of Service and was
employed on the last day of the Plan Year.
Article V. Profit Sharing Contributions and Account Allocation
A. A. Profit Sharing Contributions:
Contributions to Profit Sharing Contribution Accounts shall be (select one):
[[X]] (1) such an aggregate amount, if any, as determined by the Employer,
for each Participant eligible to share in the allocation for a Plan Year.
[ ] (2) of the Compensation of each Participant eligible to share in the
allocation for a Plan Year.
B. Allocation of Contributions to Profit Sharing Contribution Accounts
(select all applicable):
[[X]] (1) Non-Integrated Allocation
[[X]] (a) The Profit Sharing Contributions Account of each Participant
eligible to share in the allocation for a Plan Year shall be credited with a
portion of the contribution, plus any forfeitures if forfeitures are reallocated
to Participants, equal to the ratio that the Participant's Compensation for the
Plan Year bears to the Compensation for that Plan Year of all Participants
entitled to share in the contribution.
[ ] (a) $_______ per each Participant eligible to share in the allocation
for a Plan Year, on a ____________ (specify period, such as weekly, monthly,
quarterly, etc.) basis.
[ ] (2) Step-First Dollar Integrated Allocation
For each Participant eligible to share in the allocation for a Plan Year,
contributions to Profit Sharing Contributions Accounts with respect to a Plan
Year, plus any forfeitures if forfeitures are reallocated to Participants, shall
be allocated to the Profit Sharing Contributions Account of each eligible
Participant as follows:
(i) First, in the ratio that the sum of each eligible Participant's
Compensation for the Plan Year and Compensation for the Plan Year in excess of
the Integration Level bears to the sum of all such Participants' Compensation
and Compensation in excess of the Integration Level, but for each eligible
Participant, not in excess of the Maximum Profit Sharing Disparity Rate (defined
below).
(ii) Second, any remaining contributions or forfeitures will be allocated
in the ratio that each Participant's Compensation for that Plan Year bears to
all Participants' Compensation for that Plan Year.
[ ] (3) Top-Heavy Integrated Allocation
Note: Under this allocation formula, each eligible Participant will be
allocated a contribution equal to a Top-Heavy minimum contribution up to 3% of
Compensation even in Plan Years that the Plan is not otherwise Top-Heavy.
For each Participant eligible to share in the allocation for a Plan Year,
contributions to Profit Sharing Contributions Accounts with respect to a Plan
Year shall be allocated to the Profit Sharing Contributions Account of each
eligible Participant in the ratio that each such eligible Participant's
Compensation for the Plan Year bears to the Compensation for that Plan Year of
all eligible Participants but not in excess of 3% of each Participant's
Compensation.
The amount of this Top-Heavy allocation will be offset against the Profit
Sharing allocation made under (1) or (2) above.
The Maximum Profit Sharing Disparity Rate is equal to the applicable
percentage determined in accordance with the following table:
If the Integration Level is (as a % of the Taxable
Wage Base ("TWB")). The applicable percentage is:
20% (or $10,000 if greater) or less of the TWB 5.7%
More than 20% (but not less than $10,001) but not 4.3%
more than 80% of the TWB
More than 80% but less than 100% of the TWB 5.4%
100% of the TWB 5.7%
[ ] (4) Integration Level
The "Integration Level" shall be (select one):
[ ] (a) the Taxable Wage Base.
[ ] (b) $_______ (a dollar amount less than the Taxable Wage Base).
[ ] (c) _______% of the Taxable Wage Base (not to exceed 100%).
[ ] (d) the greater of $10,000 or 20% of the Taxable Wage Base.
C. Participants Eligible for Profit Sharing Contribution Allocation
The following Participants shall be eligible for an allocation to their
Profit Sharing Contributions Accounts (select all those applicable):
[ ] (1) Any Participant who was employed during the Plan Year.
Note: Item C(1) must be selected if Profit Sharing Contributions are
allocated on a periodic basis during the Plan Year.
[ ] (2) Any Participant who was credited with 01/01/2004 (no more than
1,000) Hours of Service during the Plan Year.
[ ] (3) Any Participant who was employed on the last day of the Plan Year.
[ ] (4) Any Participant who was on a leave of absence on the last day of
the Plan Year.
[ ] (5) Any Participant who during the Plan Year died or became disabled
while an Employee or terminated employment after attaining Normal Retirement
Age.
[ ] (6) Any Participant who was credited with at least 501 Hours of Service
whether or not employed on the last day of the Plan Year.
[ ] (7) Any Participant who was credited with at least 1,000 Hours of
Service and was employed on the last day of the Plan Year.
Article VI. Prevailing Wage Contributions
A. Prevailing Wage Contributions, as described in Section 3.15 of the Plan
(select one):
[ ] (1) shall be made as provided in Appendix B and shall:
[ ] (a) (a) be considered a QNEC.
[ ] (b) (b) not be considered a QNEC.
[[X]] (2) shall not be made.
B. Prevailing Wage Offset
The Prevailing Wage Contribution made on behalf of a Participant for the
Plan Year will (select one if A(1) is selected above):
[ ] (1) Offset the amount allocated or contributed on behalf of such
Participant under Article V for the Plan Year.
[ ] (2) Not offset the amount allocated or contributed on behalf of such
Participant under Article V for the Plan Year.
Article VII. ADP Test and ACP Test
A. Actual Deferral Percentage Test and Actual Contribution Percentage Test
Election
Effective for Plan Years beginning on and after ___________, the ADP Test
of Section 3.4 of the Plan and the ACP Test under Section 3.6 of the Plan shall
be applied using the ADP and ACP of Nonhighly Compensated Employees for the
(select one):
[[X]] (1) current Plan Year.
[[X]] (2) immediately preceding Plan Year.
Note: An election to use the current Plan Year data may not be changed
unless (1) the Plan has been using the current year testing method for the
preceding 5 Plan Years, or if less, the number of Plan Years the Plan has been
in existence; or (2) the Plan otherwise meets one of the requirements of IRS
Notice 98-1 (or superceding guidance) for changing from the current year testing
method. Legal counsel should be obtained prior to changing a current year data
election under this Article.
B. First Plan Year Elections
For purposes of /Sections 3.4.2(B) and 3.6(A), the ADP and the ACP for
Nonhighly Compensated Employees for the first Plan Year the Plan permits any
Participant to make Pre-Tax Contributions and/or Employee After-Tax
Contributions, provides for Matching Contributions, or both (if this Plan is not
a successor plan) (select one):
[ ] (1) shall be the Plan Year ADP and ACP.
[ ] (2) shall be 3%.
[[X]] (3) is not applicable, existing plan.
C. Coordination with Safe Harbor CODA
As provided under Section 3.16.1(B), and as consistent with IRS Notice
98-52 (or subsequent guidance) indicate below which of the following shall be
disregarded for purposes of satisfying the ACP Test (select one):
[ ] (1) All Matching Contributions for all Eligible Participants (if the
requirements of the ACP Test Safe Harbor are satisfied).
[ ] (2) Matching Contributions that do not exceed 4% of each Eligible
Participant's Compensation, if permitted under IRS Notice 98-52 (or subsequent
guidance).
[[X]] (3) Not applicable, not a Safe Harbor plan.
Article VIII. Safe Harbor CODA
A. Safe Harbor CODA Provisions
The Safe Harbor Method CODA provisions of Section 3.16 of the Plan:
[ ] (3) apply.
[[X]] (2) do not apply.
B. ADP/ACP Test Safe Harbor Contributions
Section 3.16.4(A) provides for a Basic Matching Contribution to the Plan on
behalf of each Eligible Participant equal to (i) 100% of the amount of the
Eligible Participant's Pre-Tax Contributions that do not exceed 3% of the
Eligible Participant's Compensation for the Plan Year, plus (ii) 50% of the
amount of the Eligible Participant's Pre-Tax Contributions that exceed 3% of the
Eligible Participant's Compensation but that do not exceed 5% of the Eligible
Participant's Compensation.
In lieu of the Safe Harbor Matching Contributions described in Section
3.16.4(A), the Employer will make the following contributions for the Plan Year
(select one):
[ ] (1) Enhanced Matching Contributions
The Employer will make Matching Contributions to the Account of each
Eligible Participant in an amount equal to:
% of the first % of the Eligible Participant's Compensation contributed as
Pre-Tax Contributions, % of the next % of the Eligible Participant's
Compensation contributed as Pre-Tax Contributions, and % of the next % of the
Eligible Participant's Compensation contributed as Pre-Tax Contributions.
Note: The blanks above must be completed so that, at any rate of Pre-Tax
Contributions, the Matching Contribution is at least equal to the contribution
that would otherwise be made under Section 3.16.4(A) (the Basic Safe Harbor
Matching Contribution). Additionally, the rate of match cannot increase as
Pre-Tax Contributions increase. Finally, if Matching Contributions are made with
respect to Pre-Tax Contributions that exceed 6% of Eligible Participants'
Compensation, the Plan will not meet the requirements for the ACP Test Safe
Harbor provisions and an ACP Test would have to be performed. [ ] (2) Safe
Harbor Nonelective Contributions
The Employer will make a Safe Harbor Nonelective Contribution to the
Account of each Eligible Participant in an amount equal to ______% (at least 3%)
of the Employee's Compensation for the Plan Year.
Note: The Safe Harbor Nonelective Contribution cannot be allocated on an
integrated basis.
C. [ ] If checked, the ADP Test Safe Harbor Contributions will be made to
the following Defined Contribution Plan of the Employer:
Article IX. Vesting
A. Employer Contribution Accounts
(1) A Participant shall have a vested percentage in his or her Profit
Sharing Contributions and Matching Contributions Account(s), if applicable, in
accordance with the following schedule (select one for each column as
applicable):
Matching Profit Sharing
Contributions Contributions
[ ] [ ] (a) 100% vesting immediately upon participation.
[ ] [ ] (b) 100% after years of Vesting Service.
[[X]] [[X]] (c) Graded vesting schedule:
0% 0% immediately upon participation;
20% 20% after 1 year of Vesting Service;
40% 40% after 2 years of Vesting Service;
60% 60% after 3 years of Vesting Service;
80% 80% after 4 years of Vesting Service;
100% 100% after 5 years of Vesting Service;
100% 100% after 6 years of Vesting Service;
100% after 7 years of Vesting Service.
(2) Early Retirement
Upon attainment of Early Retirement Age (if selected in I.D(2)), a
Participant (select one):
[[X]] (a) shall
[ ] (b) shall not
become 100% vested solely due to attainment of Early Retirement Age.
(3) Prior Vesting Schedule(s) If the Plan's vesting schedule has been
amended, the following prior vesting schedule shall apply to Participants who
were eligible to and did elect to have their vested percentages determined under
the vesting schedule in effect prior to the vesting schedule amendment:
Matching Contributions Profit Sharing
vesting schedule Contributions
effective on and before vesting schedule
_____________ effective on and before
_____________
[ ] [ ] (a) 100% vesting immediately upon
participation.
[ ] [ ] (b) 100% after _____ years of
Vesting Service.
[ ] [ ] (c) Graded vesting schedule:
___% ___% immediately upon participation;
___% ___% after 1 year of Vesting Service;
___% ___% after 2 years of Vesting Service;
___% ___% after 3 years of Vesting Service;
___% ___% after 4 years of Vesting Service;
___% ___% after 5 years of Vesting Service;
___% ___% after 6 years of Vesting Service;
___% ___% 100% after 7 years of Vesting
Service.
B. Allocation of Forefeitures Forfeitures, if any, shall be (select one
from each applicable column):
Matching Profit Sharing
ontributions Contributions
[[X]] [[X]] (1) first, used to reduce Employer
contributions; second, any remaining
forfeitures shall be used to offset
the Employer's Plan administrative
costs; and third, any remaining
forfeitures shall be allocated to
Participants.
[ ] [ ] (2) first, used to offset the
Employer's Plan administrative
costs; second, any remaining
forfeitures shall be used to reduce
Employer contributions; and third,
any remaining forfeitures shall be
allocated to Participants.
[ ] [ ] (3) allocated to Participants in
the ratio which the Compensation of
each Participant for the Plan Year
bears to the total Compensation for
the Plan Year of all Participants
otherwise entitled to share in the
Employer contributions. If the
Profit Sharing portion of the Plan
is integrated with Social Security,
forfeitures attributable to Profit
Sharing Contributions shall be
allocated in accordance with the
formula elected by the Employer.
C. Vesting Service
For purposes of determining Years of Service for Vesting Service (select
(1) or (2) and/or (3)):
[[X]] (1) All Years of Service shall be included.
[ ] (2) Years of Service before the Participant attained age 18 shall be
excluded.
[ ] (3) Service with the Employer prior to the effective date of the Plan
shall be excluded.
Article X. In-Service Distributions and Loans
A. In-Service Distributions
[[X]] (1) In-service distributions may be made from any of the
Participant's vested Accounts, at any time upon or after the occurrence of the
following events (select all applicable):
[[X]] (a) a Participant's attainment of age ____ (no lower than 59-1/2).
[ ] (b) January 1 of the calendar year in which the Participant attains age
70-1/2.
[ ] (2) In-service distributions are not permitted (subject to Section
5.7.3 of the Plan).
B. Hardship Distributions:
Hardship distributions are:
[[X]] (1) permitted and shall be made from the vested portion of a
Participant's Accounts (other than his or her Qualified Nonelective
Contributions Account, Qualified Matching Contributions Account, QVEC Account,
earnings accrued after December 31, 1988 on the Participant's Pre-Tax
Contributions, or Safe Harbor Contributions under Section 3.16) as provided in
Section 5.9.1.
[ ] (2) not permitted.
C. Loans:
Loans are:
Non-Profit Profit Sharing
Sharing Contributions
Contributions
[[X]] [[X]] (1) permitted
[ ] [ ] (2) not permitted.
Article XI. Trust
[ ] If this item is checked, the Employer elects to establish a Group Trust
consisting of such Plan assets as shall from time to time be transferred to the
Trustee pursuant to Article X of the Plan. The Trust Fund shall be a Group Trust
consisting of assets of this Plan plus assets of the following plans of the
Employer or of an Affiliate:
Article XII. Miscellaneous
A. Identification of Sponsor
The address and telephone number of the Sponsor's authorized representative
is PO Box 1510, Pennington, New Jersey 08534-1510; 800-434-6945. This authorized
representative can answer inquiries regarding the adoption of the Plan, the
intended meaning of any Plan provisions, and the effect of the opinion letter.
The Sponsor will inform the Primary Employer of any amendments made to the
Plan or the discontinuance or abandonment of the Plan. In order to receive
notification, the Primary Employer hereby agrees to promptly notify the Sponsor
at the address indicated above of any change in company contact, business
address, or intent to terminate use of the Merrill Lynch Prototype Plan.
B. Plan Registration
1. Initial Registration
This Plan must be registered with the Sponsor, Merrill Lynch, Pierce Fenner
and Smith Incorporated, in order to be considered a Prototype Plan by the Sponsor.
Registration is required so that the Sponsor is able to provide the
Administrator with documents, forms and announcements relating to the
administration of the Plan and with Plan amendments and other documents, all of
which relate to administering the Plan in accordance with applicable law and
maintaining compliance of the Plan with the law.
The Primary Employer and all participating Employers must sign and date the
Adoption Agreement. Upon receipt and acceptance by Merrill Lynch, Pierce Fenner
and Smith Incorporated of the Adoption Agreement, the Plan will be registered as
a Prototype Plan of Merrill Lynch, Pierce Fenner and Smith Incorporated. An
authorized representative will countersign the Adoption Agreement and a copy of
the countersigned Adoption Agreement will be returned to the Primary Employer.
Countersignature of the Adoption Agreement acknowledges receipt of the Adoption
Agreement by Merrill Lynch, Pierce Fenner and Smith Incorporated, but does not
represent that the Sponsor has reviewed or assumes responsibility for the
provisions selected within the Adoption Agreement. Merrill Lynch, Pierce Fenner
and Smith Incorporated reserves the right to reject any Adoption Agreement.
2. Registration Renewal
Annual registration renewal is required in order for the Employer to
continue to receive any and all necessary updating documents. The Sponsor
reserves the right to charge a registration renewal fee and change such fee from
time to time. The Sponsor will notify the Primary Employer of any registration
renewal fee and of any change to such registration renewal fee.
C. Prototype Replacement Plan
This Adoption Agreement is a replacement prototype plan for (1) Merrill
Lynch Special Prototype Defined Contribution Plan - Nonstandardized 401(k) Plan,
Employee Thrift Plan, Profit Sharing Plan Adoption Agreement # 03-004.
D. Reliance
The adopting Employer may rely on an opinion letter issued by the Internal
Revenue Service as evidence that the Plan is qualified under Code Section 401
only to the extent provided in Announcement 2001-77, 2001-30 I.R.B.
The Employer may not rely on the opinion letter in certain other
circumstances or with respect to certain qualification requirements, which are
specified in the opinion letter issued with respect to the Plan and in
Announcement 2001-77.
In order to have reliance in such circumstances or with respect to such
qualification requirements, application for a determination letter must be made
to Employee Plans Determinations of the Internal Revenue Service.
E. Plan Document
This Adoption Agreement may only be used in conjunction with the Merrill
Lynch Special/Flexible Prototype Defined Contribution Plan and Trust Base Plan
Document #03.
F. Proper Completion of Adoption Agreement
Failure to properly fill out this Adoption Agreement may result in the
failure of the Plan to qualify under Internal Revenue Code Section 401(a). Each
participating Employer and its independent legal and tax advisors are
responsible for the adoption and qualification of this Plan and any related tax
consequences.
PRIMARY EMPLOYER'S SIGNATURE
The undersigned hereby adopts the Plan and Trust.
Name of Primary Employer:
Meridian Bioscience, Inc.
/s/ Melissa Lueke
Print Name: Melissa Lueke
Title: VP and CFO
Dated: January 8, 2004
PARTICIPATING EMPLOYERS
The undersigned hereby adopts the Plan and Trust.
Name of Employer
1.Meridian Bioscience Corporation Authorized Signature: /s/ Lisa Kaminsk
Print Name: Lisa Kaminsk
Title: Corporate Director
of Human Resources
Date: 1/8/2004
2.Viral Antigens, Inc. Authorized Signature: /s/ Lisa Kaminsk
Print Name: Lisa Kaminsk
Title: Corporate Director of
Human Resources
Date: 1/8/2004
3.BIODESIGN International Incorporated Authorized Signature: /s/ Lisa Kaminsk
Print Name: Lisa Kaminsk
Title: Corporate Director of
Human Resources
Date: 1/8/2004
Only an Affiliate may adopt this Plan. The Plan may only be adopted or
restated pursuant to a duly authorized action evidenced by the above signature
of the person authorized to adopt the Plan on behalf of the Employer and as
permitted by the Primary Employer. By adopting this Plan, each participating
Employer delegates to the Primary Employer the authority to amend the Plan.
TO BE COMPLETED BY MERRILL LYNCH:
Sponsor Acknowledgment:
Subject to the terms and conditions of the Prototype Plan and this Adoption
Agreement, Merrill Lynch, Pierce Fenner and Smith Incorporated as the Prototype
Sponsor acknowledges receipt of this Adoption Agreement. Authorized Signature:
MERRILL LYNCH TRUST CO., FSB AS TRUSTEE
To be completed by Merrill Lynch Trust Co., FSB:
Acceptance By Trustee:
The undersigned hereby accept all of the terms, conditions, and obligations
of appointment as Trustee under the Plan, Trust and this Adoption Agreement. If
the Employer has elected a Group Trust in this Adoption Agreement, the
undersigned Trustee(s) shall be the Trustee(s) of the Group Trust.
SEAL MERRILL LYNCH TRUST CO., FSB
By: /s/ Melanie Madeira/AVP
Melanie Madeira/AVP
Dated: 2/1/2004
Meridian Bioscience (VIVO)
Filed: 12 Jan 05, 12:00am