Exhibit 10.4
CANDIE'S, INC. 401(K) SAVINGS PLAN
ADOPTION AGREEMENT #005
NONSTANDARDIZED 401(k) PROFIT SHARING PLAN
The undersigned, Candies, Inc. ("Employer"), by executing this Adoption
Agreement, elects to establish a retirement plan and trust ("Plan") under the
CPI Qualified Plan Consultants, Inc. Defined Contribution Prototype Plan and
Trust (basic plan document # 01 ). The Employer, subject to the Employer's
Adoption Agreement elections, adopts fully the Prototype Plan and Trust
provisions. This Adoption Agreement, the basic plan document and any attached
appendices or addenda, constitute the Employer's entire plan and trust document.
All section references within this Adoption Agreement are Adoption Agreement
section references unless the Adoption Agreement or the context indicate
otherwise. All article references are basic plan document and Adoption Agreement
references as applicable. Numbers in parenthesis which follow headings are
references to basic plan document sections. The Employer makes the following
elections granted under the corresponding provisions of the basic plan document.
ARTICLE I
DEFINITIONS
1. PLAN (1.21). The name of the Plan as adopted by the Employer is Candie's,
Inc. 401(k) Savings Plan.
2. TRUSTEE (1.33). The Trustee executing this Adoption Agreement is: (Choose one
of (a), (b) or (c))
[n/a](a) A discretionary Trustee. See Plan Section 10.03[A].
[X] (b) A nondiscretionary Trustee. See Plan Section 10.03[B].
[n/a](c) A Trustee under a separate trust agreement. See Plan Section 10.03[G].
3. EMPLOYEE (1.11). The following Employees are not eligible to participate in
the Plan: (Choose (a) or one or more of (b) through (g) as applicable)3 p.11
[n/a] (a) No exclusions.
[n/a] (b) Collective bargaining Employees.
[n/a] (c) Nonresident aliens.
[n/a] (d) Leased Employees.
[X] (e) Reclassified Employees.
[n/a] (f) Classifications: .
[n/a](g) Exclusions by types of contributions. The following classification(s)
of Employees are not eligible for the specified contributions:
Employee classification:
Contribution type:
4. COMPENSATION (1.07). The Employer makes the following election(s) regarding
the definition of Compensation for purposes of the contribution allocation
formula under Article III: (Choose one of (a), (b) or (c))4 p.11
[n/a] (a) W-2 wages increased by Elective Contributions.
[n/a](b) Code ss.3401(a) federal income tax withholding wages increased by
Elective Contributions.
[X] (c) 415 compensation.
[Note: Each of the Compensation definitions in (a), (b) and (c) includes
Elective Contributions. See Plan Section 1.07(D). To exclude Elective
Contributions, the Employer must elect (g).]
Compensation taken into account. For the Plan Year in which an Employee first
becomes a Participant, the Plan Administrator will determine the allocation of
Employer contributions (excluding deferral contributions) by taking into
account: (Choose one of (d) or (e))
[X] (d) Plan Year. The Employee's Compensation for the entire Plan Year.
[n/a](e) Compensation while a Participant. The Employee's Compensation only for
the portion of the Plan Year in which the Employee actually is a
Participant.
Modifications to Compensation definition. The Employer elects to modify the
Compensation definition elected in (a), (b) or (c) as follows. (Choose one or
more of (f) through (n) as applicable. If the Employer elects to allocate its
nonelective contribution under Plan Section 3.04 using permitted disparity, (i),
(j), (k) and (l) do not apply):
[n/a](f) Fringe benefits. The Plan excludes all reimbursements or other expense
allowances, fringe benefits (cash and noncash), moving expenses, deferred
compensation and welfare benefits.
[n/a](g) Elective Contributions. The Plan excludes a Participant's Elective
Contributions. See Plan Section 1.07(D).
[n/a] (h) Exclusion. The Plan excludes Compensation in excess of: .
[n/a] (i) Bonuses. The Plan excludes bonuses.
[n/a] (j) Overtime. The Plan excludes overtime.
[n/a] (k) Commissions. The Plan excludes commissions.
[n/a](l) Nonelective contributions. The following modifications apply to the
definition of Compensation for nonelective contributions: .
[n/a](m) Deferral contributions. The following modifications apply to the
definition of Compensation for deferral contributions: .
[n/a](n) Matching contributions. The following modifications apply to the
definition of Compensation for matching contributions: .
5. PLAN YEAR/LIMITATION YEAR (1.24). Plan Year and Limitation Year mean the
12-consecutive month period (except for a short Plan Year) ending every: (Choose
(a) or (b). Choose (c) if applicable)
[n/a] (a) December 31.
[X] (b) Other: January 31 .
[n/a](c) Short Plan Year: commencing on: and ending on:_________.
6. EFFECTIVE DATE (1.10). The Employer's adoption of the Plan is a: (Choose one
of (a) or (b))
[n/a] (a) New Plan. The Effective Date of the Plan is: .
[X] (b) Restated Plan. The restated Effective Date is: February 1, 1997 .
This Plan is an amendment and restatement of an existing retirement
plan(s) originally established effective as of: February 1, 1995.
7. HOUR OF SERVICE/ELAPSED TIME METHOD (1.15). The crediting method for Hours of
Service is: (Choose one or more of (a) through (d) as applicable)
[X] (a) Actual Method. See Plan Section 1.15(B).
[n/a](b) Equivalency Method. The Equivalency Method is: . [Note: Insert
"daily," "weekly," "semi-monthly payroll periods" or "monthly."] See Plan
Section 1.15(C).
[n/a](c) Combination Method. In lieu of the Equivalency Method specified in
(b), the Actual Method applies for purposes of: .
[n/a](d) Elapsed Time Method. In lieu of crediting Hours of Service, the
Elapsed Time Method applies for purposes of crediting Service for: (Choose
one or more of (1), (2) or (3) as applicable)
[n/a] (1) Eligibility under Article II.
[n/a] (2) Vesting under Article V.
[n/a] (3) Contribution allocations under Article III.
8. PREDECESSOR EMPLOYER SERVICE (1.30). In addition to the predecessor service
the Plan must credit by reason of Section 1.30 of the Plan, the Plan credits as
Service under this Plan, service with the following predecessor employer(s): N/A
..8 p.33
[Note: If the Plan does not credit any additional predecessor service under this
Section 1.30, insert "N/A" in the blank line. The Employer also may elect to
credit predecessor service with specified Participating Employers only. See the
Participation Agreement.] Service with the designated predecessor employer(s)
applies: (Choose one or more of (a) through (d) as applicable)
[n/a](a) Eligibility. For eligibility under Article II. See Plan Section 1.30
for time of Plan entry.
[n/a] (b) Vesting. For vesting under Article V.
[n/a](c) Contribution allocation. For contribution allocations under Article
III.
[n/a] (d) Exceptions. Except for the following Service: .
ARTICLE II
ELIGIBILITY REQUIREMENTS
9. ELIGIBILITY (2.01).9 p.33
Eligibility conditions. To become a Participant in the Plan, an Employee must
satisfy the following eligibility conditions: (Choose one or more of (a) through
(e) as applicable) [Note: If the Employer does not elect (c), the Employer's
elections under (a) and (b) apply to all types of contributions. The Employer as
to deferral contributions may not elect (b)(2) and may not elect more than 12
months in (b)(4) and (b)(5).]
[X] (a) Age. Attainment of age 21 (not to exceed age 21).
[X] (b) Service. Service requirement. (Choose one of (1) through (5))
[X] (1) One Year of Service.
[n/a] (2) Two Years of Service, without an intervening Break in Service.
See Plan Section 2.03(A).
[n/a] (3) One Hour of Service (immediate completion of Service
requirement). The Employee satisfies the Service requirement on
his/her Employment Commencement Date.
[n/a] (4) months (not exceeding 24).
[n/a] (5) An Employee must complete Hours of Service within the time
period following the Employee's Employment Commencement Date. If
an Employee does not complete the stated Hours of Service during
the specified time period (if any), the Employee is subject to the
One Year of Service requirement. [Note: The number of hours may
not exceed 1,000 and the time period may not exceed 24 months. If
the Plan does not require the Employee to satisfy the Hours of
Service requirement within a specified time period, insert "N/A"
in the second blank line.]
[n/a](c) Alternative 401(k)/401(m) eligibility conditions. In lieu of the
elections in (a) and (b), the Employer elects the following eligibility
conditions for the following types of contributions: (Choose (1) or (2) or
both if the Employer wishes to impose less restrictive eligibility
conditions for deferral/Employee contributions or for matching
contributions)
(1) [n/a] Deferral/Employee contributions: (Choose one of a.
through d. Choose e. if applicable)
a. [n/a] One Year of Service
b. [n/a] One Hour of Service (immediate completion of Service
requirement)
c. [n/a] months (not exceeding 12) d. [n/a] An Employee must
complete Hours of Service within the time period
following an Employee's Employment Commencement Date.
If an Employee does not complete the stated Hours of
Service during the specified time period (if any),
the Employee is subject to the One Year of Service
requirement. [Note: The number of hours may not
exceed 1,000 and the time period may not exceed 12
months. If the Plan does not require the Employee to
satisfy the Hours of Service requirement within a
specified time period, insert "N/A" in the second
blank line.]
e. [n/a] Age (not exceeding age 21)
(2) [n/a] Matching contributions: (Choose one of f. through i.
Choose j. if applicable)
f. [n/a] One Year of Service
g. [n/a] One Hour of Service (immediate completion of Service
requirement)
h. [n/a] months (not exceeding 24)
i. [n/a] An Employee must complete Hours of Service within the
time period following an Employee's Employment
Commencement Date. If an Employee does not complete the
stated Hours of Service during the specified time period
(if any), the Employee is subject to the One Year of
Service requirement. [Note: The number of hours may not
exceed 1,000 and the time period may not exceed 24
months. If the Plan does not require the Employee to
satisfy the Hours of Service requirement within a
specified time period, insert "N/A" in the second
blank line.]
j. [n/a] Age (not exceeding age 21)
[n/a](d) Service requirements: .
[Note: Any Service requirement the Employer elects in (d) must be
available under other Adoption Agreement elections or a
combination thereof.]
[n/a](e) Dual eligibility. The eligibility conditions of this Section 2.01 apply
solely to an Employee employed by the Employer after . If the Employee was
employed by the Employer by the specified date, the Employee will become a
Participant on the latest of: (i) the Effective Date; (ii) the restated
Effective Date; (iii) the Employee's Employment Commencement Date; or (iv)
on the date the Employee attains age (not exceeding age 21).
Plan Entry Date. "Plan Entry Date" means the Effective Date and: (Choose one of
(f) through (j). Choose (k) if applicable) [Note: If the Employer does not elect
(k), the elections under (f) through (j) apply to all types of contributions.
The Employer must elect at least one Entry Date per Plan Year.]
[n/a](f) Semi-annual Entry Dates. The first day of the Plan Year and the first
day of the seventh month of the Plan Year.
[n/a] (g) The first day of the Plan Year.
[n/a] (h) Employment Commencement Date (immediate eligibility).
[X] (i) The first day of each: Plan Year quarter (e.g., "Plan Year quarter").
[n/a] (j) The following Plan Entry Dates: .
[n/a](k) Alternative 401(k)/401(m) Plan Entry Date(s). For the alternative
401(k)/401(m) eligibility conditions under (c), Plan Entry Date means:
(Choose (1) or (2) or both as applicable)
(1)[n/a] Deferral/Employee contributions 2)[n/a] Matching contributions
(Choose one of a. through d.) (Choose one of e. through h.)
a. [n/a] Semi-annual Entry Dates e. [n/a]Semi-annual Entry Dates
b. [n/a] The first day of the Plan Year f. [n/a]The first day of the Plan Year
c. [n/a] Employment Commencement Date g. [n/a]Employment Commencement Date
(immediate eligibility) (immediate eligibility)
d. [n/a] The first day of each: h. [n/a]The first day of each:
Time of participation. An Employee will become a Participant, unless excluded
under Section 1.11, on the Plan Entry Date (if employed on that date): (Choose
one of (l), (m) or (n). Choose (o) if applicable): [Note: If the Employer does
not elect (o), the election under (l), (m) or (n) applies to all types of
contributions.]
[X] (l) Immediately following or coincident with
[n/a] (m) Immediately preceding or coincident with
[n/a] (n) Nearest
[n/a](o) Alternative 401(k)/401(m) election(s): (Choose (1) or (2) or both as
applicable)
(1) [n/a] Deferral contributions (2) [n/a] Matching contributions
(Choose one of b., c. or d.)
a. [n/a] Immediately following b. [n/a] Immediately following
or coincident with or coincident with
c. [n/a] Immediately preceding
or coincident
with
d. [n/a] Nearest
the date the Employee completes the eligibility conditions described in this
Section 2.01. [Note: Unless otherwise excluded under Section 1.11, an Employee
must become a Participant by the earlier of: (1) the first day of the Plan Year
beginning after the date the Employee completes the age and service requirements
of Code ss.410(a); or (2) 6 months after the date the Employee completes those
requirements.]
10. YEAR OF SERVICE - ELIGIBILITY (2.02). (Choose (a) and (b) as applicable):
[Note: If the Employer does not elect a Year of Service condition or elects the
Elapsed Time Method, the Employer should not complete (a) or (b).]
[X] (a) Year of Service. An Employee must complete 1000 Hour(s) of Service
during an eligibility computation period to receive credit for a Year of
Service under Article II: [Note: The number may not exceed 1,000. If left
blank, the requirement is 1,000.]
[X] (b) Eligibility computation period. After the initial eligibility
computation period described in Plan Section 2.02, the Plan measures the
eligibility computation period as: (Choose one of (1) or (2))
[X] (1) The Plan Year beginning with the Plan Year which includes the
first anniversary of the Employee's Employment Commencement Date.
[n/a](2) The 12-consecutive month period beginning with each anniversary
of the Employee's Employment Commencement Date.
11. PARTICIPATION - BREAK IN SERVICE (2.03). The one year hold-out rule
described in Plan Section 2.03(B): (Choose one of (a), (b) or (c))
[X] (a) Not applicable. Does not apply to the Plan.
[n/a] (b) Applicable. Applies to the Plan and to all Participants.
[n/a](c) Limited application. Applies to the Plan, but only to a Participant
who has incurred a Separation from Service.
12. ELECTION NOT TO PARTICIPATE (2.06). The Plan: (Choose one of (a) or (b))
[X] (a) Election not permitted. Does not permit an eligible Employee to elect
not to participate.
[n/a](b) Irrevocable election. Permits an Employee to elect not to participate
if the Employee makes a one-time irrevocable election prior to the
Employee's Plan Entry Date.
ARTICLE III
EMPLOYER CONTRIBUTIONS, DEFERRAL CONTRIBUTIONS AND FORFEITURES
13. AMOUNT AND TYPE (3.01). The amount and type(s) of the Employer's
contribution to the Trust for a Plan Year or other specified period will equal:
(Choose one or more of (a) through (f) as applicable)13 p.55
[X] (a) Deferral contributions (401(k) arrangement). The dollar or percentage
amount by which each Participant has elected to reduce his/her
Compensation, as provided in the Participant's salary reduction agreement
and in accordance with Section 3.02.
[X] (b) Matching contributions (other than safe harbor matching contributions
under Section 3.01(d)). The matching contributions made in accordance with
Section 3.03.
[X] (c) Nonelective contributions (profit sharing). The following nonelective
contribution (Choose (1) or (2) or both as applicable): [Note: The Employer
may designate as a qualified nonelective contribution, all or any portion
of its nonelective contribution. See Plan Section 3.04(F).]
[X] (1) Discretionary. An amount the Employer in its sole discretion may
determine.
[n/a] (2) Fixed. The following amount:
[n/a](d) 401(k) safe harbor contributions. The following 401(k) safe harbor
contributions described in Plan Section 14.02(D): (Choose one of (1), (2)
or (3). Choose (4), if applicable)
[n/a](1) Safe harbor nonelective contribution. The safe harbor nonelective
contribution equals % of a Participant's Compensation [Note: the
amount in the blank must be at least 3%.].
[n/a](2) Basic safe harbor matching contribution. A matching contribution
equal to 100% of each Participant's deferral contributions not
exceeding 3% of the Participant's Compensation, plus 50% of each
Participant's deferral contributions in excess of 3% but not in excess
of 5% of the Participant's Compensation. For this purpose,
"Compensation" means Compensation for: . [Note: The Employer must
complete the blank line with the applicable time period for computing
the Employer's basic safe harbor match, such as "each payroll period,"
"each month," "each Plan Year quarter" or "the Plan Year".]
[n/a](3) Enhanced safe harbor matching contribution. (Choose one of a. or
b.).
[n/a] a. Uniform percentage. An amount equal to % of each
Participant's deferral contributions not exceeding % of the
Participant's Compensation. For this purpose, "Compensation"
means Compensation for: . [See the Note in (d)(2).]
[n/a] b. Tiered formula. An amount equal to the specified
matching percentage for the corresponding level of each
Participant's deferral contribution percentage. For this purpose,
"Compensation" means Compensation for: . [See the Note in
(d)(2).]
Deferral Contribution Percentage Matching Percentage
------------------------------- ----------
------------------------------- ----------
------------------------------- ----------
[Note: The matching percentage may not increase as the deferral contribution
percentage increases and the enhanced matching formula otherwise must satisfy
the requirements of Code ss.ss.401(k)(12)(B)(ii) and (iii). If the Employer
wishes to avoid ACP testing on its enhanced safe harbor matching contribution,
the Employer also must limit deferral contributions taken into account (the
"Deferral Contribution Percentage") for the matching contribution to 6% of Plan
Year Compensation.]
[n/a](4) Another plan. The Employer will satisfy the 401(k) safe harbor
contribution in the following plan: .
[n/a](e) Davis-Bacon contributions. The amount(s) specified for the applicable
Plan Year or other applicable period in the Employer's Davis-Bacon
contract(s). The Employer will make a contribution only to Participants
covered by the contract and only with respect to Compensation paid under
the contract. If the Participant accrues an allocation of nonelective
contributions (including forfeitures) under the Plan in addition to the
Davis-Bacon contribution, the Plan Administrator will: (Choose one of (1)
or (2))
[n/a](1) Not reduce the Participant's nonelective contribution allocation
by the Davis-Bacon contribution.
[n/a](2) Reduce the Participant's nonelective contribution allocation by
the Davis-Bacon contribution.
[n/a](f) Frozen Plan. This Plan is a frozen Plan effective: . For any period
following the specified date, the Employer will not contribute to the Plan,
a Participant may not contribute and an otherwise eligible Employee will
not become a Participant in the Plan.
14. DEFERRAL CONTRIBUTIONS (3.02). The following limitations and terms apply to
an Employee's deferral contributions: (If the Employer elects Section 3.01(a),
the Employer must elect (a). Choose (b) or (c) as applicable)14 p.66
[X] (a) Limitation on amount. An Employee's deferral contributions are subject
to the following limitation(s) in addition to those imposed by the Code:
(Choose (1), (2) or (3) as applicable)
[X] (1) Maximum deferral amount: 75% of Compensation .
[n/a] (2) Minimum deferral amount: . ------------
[n/a] (3) No limitations.
For the Plan Year in which an Employee first becomes a Participant, the Plan
Administrator will apply any percentage limitation the Employer elects in (1) or
(2) to the Employee's Compensation: (Choose one of (4) or (5) unless the
Employer elects (3))
[n/a](4) Only for the portion of the Plan Year in which the Employee
actually is a Participant.
[X] (5) For the entire Plan Year.
[n/a](b) Negative deferral election. The Employer will withhold % from the
Participant's Compensation unless the Participant elects a lesser
percentage (including zero) under his/her salary reduction agreement. See
Plan Section 14.02(C). The negative election will apply to: (Choose one of
(1) or (2))
[n/a](1) All Participants who have not deferred at least the automatic
deferral amount as of: .
[n/a](2) Each Employee whose Plan Entry Date is on or following the
negative election effective date.
[X] (c) Cash or deferred contributions. For each Plan Year for which the
Employer makes a designated cash or deferred contribution under Plan
Section 14.02(B), a Participant may elect to receive directly in cash not
more than the following portion (or, if less, the 402(g) limitation) of
his/her proportionate share of that cash or deferred contribution: (Choose
one of (1) or (2))
[X] (1) All or any portion. [n/a] (2) %. --------
Modification/revocation of salary reduction agreement. A Participant
prospectively may modify or revoke a salary reduction agreement, or may file a
new salary reduction agreement following a prior revocation, at least once per
Plan Year or during any election period specified by the basic plan document or
required by the Internal Revenue Service. The Plan Administrator also may
provide for more frequent elections in the Plan's salary reduction agreement
form.
15. MATCHING CONTRIBUTIONS (INCLUDING ADDITIONAL SAFE HARBOR MATCH UNDER PLAN
SECTION 14.02(D)(3)) (3.03). The Employer matching contribution is: (If the
Employer elects Section 3.01(b), the Employer must elect one or more of (a), (b)
or (c) as applicable. Choose (d) if applicable)15 p.77
[n/a](a) Fixed formula. An amount equal to % of each Participant's deferral
contributions.
[X] (b) Discretionary formula. An amount (or additional amount) equal to a
matching percentage the Employer from time to time may deem advisable of
the Participant's deferral contributions. The Employer, in its sole
discretion, may designate as a qualified matching contribution, all or any
portion of its discretionary matching contribution. The portion of the
Employer's discretionary matching contribution for a Plan Year not
designated as a qualified matching contribution is a regular matching
contribution.
[n/a](c) Multiple level formula. An amount equal to the following percentages
for each level of the Participant's deferral contributions. [Note: The
matching percentage only will apply to deferral contributions in excess of
the previous level and not in excess of the stated deferral contribution
percentage.]
Deferral Contribution Percentage Matching Percentage
------------------------------- ----------
------------------------------- ----------
------------------------------- ----------
[n/a](d) Related Employers. If two or more Related Employers contribute to this
Plan, the Plan Administrator will allocate matching contributions and
matching contribution forfeitures only to the Participants directly
employed by the contributing Employer. The matching contribution formula
for the other Related Employer(s) is: . [Note: If the Employer does not
elect (d), the Plan Administrator will allocate all matching contributions
and matching forfeitures without regard to which contributing Related
Employer directly employs the Participant.]
Time period for matching contributions. The Employer will determine its matching
contribution based on deferral contributions made during each: (Choose one of
(e) through (h))
[X] (e) Plan Year.
[n/a] (f) Plan Year quarter.
[n/a] (g) Payroll period.
[n/a](h) Alternative time period: . [Note: Any alternative time period the
Employer elects in (h) must be the same for all Participants and may not
exceed the Plan Year.]
Deferral contributions taken into account. In determining a Participant's
deferral contributions taken into account for the above-specified time period
under the matching contribution formula, the following limitations apply:
(Choose one of (i), (j) or (k))
[n/a](i) All deferral contributions. The Plan Administrator will take into
account all deferral contributions.
[n/a](j) Specific limitation. The Plan Administrator will disregard deferral
contributions exceeding % of the Participant's Compensation. [Note: To
avoid the ACP test in a safe harbor 401(k) plan, the Employer must limit
deferrals and Employee contributions which are subject to match to 6% of
Plan Year Compensation.]
[X] (k) Discretionary. The Plan Administrator will take into account the
deferral contributions as a percentage of the Participant's Compensation as
the Employer determines.
Other matching contribution requirements. The matching contribution formula is
subject to the following additional requirements: (Choose (l) or (m) or both if
applicable)
[X] (l) Matching contribution limits. A Participant's matching contributions
may not exceed: (Choose one of (1) or (2))
[X] (1) an amount to be determined by the Plan Administrator . [Note: The
Employer may elect (1) to place an overall dollar or percentage limit
on matching contributions.]
[n/a](2) 4% of a Participant's Compensation for the Plan Year under the
discretionary matching contribution formula. [Note: The Employer must
elect (2) if it elects a discretionary matching formula with the safe
harbor 401(k) contribution formula and wishes to avoid the ACP test.]
[n/a](m) Qualified matching contributions. The Plan Administrator will allocate
as qualified matching contributions, the matching contributions specified
in Adoption Agreement Section: . The Plan Administrator will allocate all
other matching contributions as regular matching contributions. [Note: If
the Employer elects two matching formulas, the Employer may use (m) to
designate one of the formulas as a qualified matching contribution.]
16. CONTRIBUTION ALLOCATION (3.04).16 p.88
Employer nonelective contributions (3.04(A)).The Plan Administrator will
allocate the Employer's nonelective contribution under the following
contribution allocation formula: (Choose one of (a), (b) or (c). Choose (d) if
applicable)
[X] (a) Nonintegrated (pro rata) allocation formula.
[n/a](b) Permitted disparity. The following permitted disparity formula and
definitions apply to the Plan: (Choose one of (1) or (2). Also choose (3))
[n/a] (1) Two-tiered allocation formula.
[n/a] (2) Four-tiered allocation formula.
[n/a](3) For purposes of Section 3.04(b), "Excess Compensation" means
Compensation in excess of: (Choose one of a. or b.)
[n/a] a. % of the taxable wage base in effect on the first
--------
day of the Plan Year, rounded to the next highest
$ (not exceeding the taxable wage base).
--------
[n/a] b. The following integration level: .
[Note: The integration level cannot exceed the taxable wage
base in effect for the Plan Year for which this Adoption
Agreement first is effective.]
[n/a](c) Uniform points allocation formula. Under the uniform points allocation
formula, a Participant receives: (Choose (1) or both (1) and (2) as
applicable)
[n/a](1) point(s) for each Year of Service. Year of Service means: .
--- -----
[n/a](2) One point for each $ [not to exceed $200] increment of Plan
------
Year Compensation.
[n/a](d) Incorporation of contribution formula. The Plan Administrator will
allocate the Employer's nonelective contribution under Section(s)
3.01(c)(2), (d)(1) or (e) in accordance with the contribution formula
adopted by the Employer under that Section.
Qualified nonelective contributions. (3.04(F)). The Plan Administrator will
allocate the Employer's qualified nonelective contributions to: (Choose one of
(e) or (f))
[X] (e) Nonhighly compensated Employees only.
[n/a] (f) All Participants.
Related Employers. (Choose (g) if applicable)
[n/a](g) Allocate only to directly employed Participants. If two or more Related
Employers adopt this Plan, the Plan Administrator will allocate all
nonelective contributions and forfeitures attributable to nonelective
contributions only to the Participants directly employed by the
contributing Employer. If a Participant receives Compensation from more
than one contributing Employer, the Plan Administrator will determine the
allocations under this Section 3.04 by prorating the Participant's
Compensation between or among the participating Related Employers. [Note:
If the Employer does not elect 3.04(g), the Plan Administrator will
allocate all nonelective contributions and forfeitures without regard to
which contributing Related Employer directly employs the Participant. The
Employer may not elect 3.04(g) under a safe harbor 401(k) Plan.]
17. FORFEITURE ALLOCATION (3.05). The Plan Administrator will allocate a
Participant forfeiture: (Choose one or more of (a), (b) or (c) as applicable)
[Note: Even if the Employer elects immediate vesting, the Employer should
complete Section 3.05. See Plan Section 9.11.]17 p.99
[X] (a) Matching contribution forfeitures. To the extent attributable to
matching contributions: (Choose one of (1) through (4))
[n/a] (1) As a discretionary matching contribution.
[X] (2) To reduce matching contributions.
[n/a] (3) As a discretionary nonelective contribution.
[n/a] (4) To reduce nonelective contributions.
[X] (b) Nonelective contribution forfeitures. To the extent attributable to
Employer nonelective contributions: (Choose one of (1) through (4))
[n/a] (1) As a discretionary nonelective contribution.
[X] (2) To reduce nonelective contributions.
[n/a] (3) As a discretionary matching contribution.
[n/a] (4) To reduce matching contributions.
[n/a](c) Reduce administrative expenses. First to reduce the Plan's ordinary and
necessary administrative expenses for the Plan Year and then allocate any
remaining forfeitures in the manner described in Sections 3.05(a) or (b) as
applicable.
Timing of forfeiture allocation. The Plan Administrator will allocate
forfeitures under Section 3.05 in the Plan Year: (Choose one of (d) or (e))
[n/a] (d) In which the forfeiture occurs.
[X] (e) Immediately following the Plan Year in which the forfeiture occurs.
18. ALLOCATION CONDITIONS (3.06)
Allocation conditions. The Plan does not apply any allocation conditions to
deferral contributions, 401(k) safe harbor contributions (under Section 3.01(d))
or to Davis-Bacon contributions (except as the Davis-Bacon contract provides).
To receive an allocation of matching contributions, nonelective contributions,
qualified nonelective contributions or Participant forfeitures, a Participant
must satisfy the following allocation condition(s): (Choose one or more of (a)
through (i) as applicable)
[X] (a) Hours of Service condition. The Participant must complete at least the
specified number of Hours of Service (not exceeding 1,000) during the Plan
Year: 1000 .
[X] (b) Employment condition. The Participant must be employed by the Employer
on the last day of the Plan Year (designate time period).
[n/a] (c) No allocation conditions.
[n/a](d) Elapsed Time Method. The Participant must complete at least the
specified number (not exceeding 182) of consecutive calendar days of
employment with the Employer during the Plan Year: .
[n/a](e) Termination of Service/501 Hours of Service coverage rule. The
Participant either must be employed by the Employer on the last day of the
Plan Year or must complete at least 501 Hours of Service during the Plan
Year. If the Plan uses the Elapsed Time Method of crediting Service, the
Participant must complete at least 91 consecutive calendar days of
employment with the Employer during the Plan Year.
[n/a](f) Special allocation conditions for matching contributions. The
Participant must complete at least Hours of Service during the (designate
time period) for the matching contributions made for that time period.
[n/a](g) Death, Disability or Normal Retirement Age. Any condition specified in
Section 3.06 applies if the Participant incurs a Separation from Service
during the Plan Year on account of:___ (e.g., death, Disability or Normal
Retirement Age)
[X] (h) Suspension of allocation conditions for coverage. The suspension of
allocation conditions of Plan Section 3.06(E) applies to the Plan.
[X] (i) Limited allocation conditions. The Plan does not impose an allocation
condition for the following types of contributions: matching contributions
. [Note: Any election to limit the Plan's allocation conditions to certain
contributions must be the same for all Participants, be definitely
determinable and not discriminate in favor of Highly Compensated
Employees.]
ARTICLE IV
PARTICIPANT CONTRIBUTIONS
19. EMPLOYEE (AFTER TAX) CONTRIBUTIONS (4.02). The following elections apply to
Employee contributions: (Choose one of (a) or (b). Choose (c) if applicable) 19
p.1010
[X] (a) Not permitted. The Plan does not permit Employee contributions.
[n/a](b) Permitted. The Plan permits Employee contributions subject to the
following limitations: . [Note: Any designated limitation(s) must be the
same for all Participants, be definitely determinable and not discriminate
in favor of Highly Compensated Employees.]
[n/a](c) Matching contribution. For each Plan Year, the Employer's matching
contribution made with respect to Employee contributions is: .
ARTICLE V
VESTING REQUIREMENTS
20. NORMAL/EARLY RETIREMENT AGE (5.01). A Participant attains Normal Retirement
Age (or Early Retirement Age, if applicable) under the Plan on the following
date: (Choose one of (a) or (b). Choose (c) if applicable)20 p.1111
[X] (a) Specific age. The date the Participant attains age 65___. [Note: The
age may not exceed age 65.]
[n/a](b) Age/participation. The later of the date the Participant attains years
of age or the anniversary of the first day of the Plan Year in which the
Participant commenced participation in the Plan. [Note: The age may not
exceed age 65 and the anniversary may not exceed the 5th.]
[n/a](c) Early Retirement Age. Early Retirement Age is the later of: (i) the
date a Participant attains age or (ii) the date a Participant reaches
his/her anniversary of the first day of the Plan Year in which the
Participant commenced participation in the Plan.
21. PARTICIPANT'S DEATH OR DISABILITY (5.02). The 100% vesting rule under Plan
Section 5.02 does not apply to: (Choose (a) or (b) or both as applicable)
[n/a] (a) Death.
[n/a] (b) Disability.
22. VESTING SCHEDULE (5.03). A Participant has a 100% Vested interest at all
times in his/her deferral contributions, qualified nonelective contributions,
qualified matching contributions, 401(k) safe harbor contributions and
Davis-Bacon contributions (unless otherwise indicated in (f)). The following
vesting schedule applies to Employer regular matching contributions and to
Employer nonelective contributions: (Choose (a) or choose one or more of (b)
through (f) as applicable)22 p.1111
[n/a](a) Immediate vesting. 100% Vested at all times. [Note: The Employer must
elect (a) if the Service condition under Section 2.01 exceeds One Year of
Service or more than twelve months.]
[X] (b) Top-heavy vesting schedules. [Note: The Employer must choose one of
(b)(1), (2) or (3) if it does not elect (a).]
[n/a](1) 6-year graded as specified [X](3) Modified top-heavy schedule
in the Plan.
[n/a](2) 3-year cliff as specified in
the Plan.
Years of Vested
Service Percentage
Less than 1 ........... 0%
1 ........... 25%
2 ........... 50%
3 ........... 75%
4 ........... 100%
5 ........... 100%
6 or more ... 100%
[n/a](c) Non-top-heavy vesting schedules. [Note: The Employer may elect one of
(c)(1), (2) or (3) in addition to (b).]
[n/a](1)7-year graded as specified. [n/a] (3) Modified non-top-heavy schedule
in the Plan
[n/a](2)5-year cliff as specified
in the Plan.
Years of Vested
Service Percentage
Less than 1 ........... ___%
1 ........... ___%
2 ........... ___%
3 ........... ___%
4 ........... ___%
5 ........... ___%
6 ........... ___%
7 or more ... ___%
If the Employer does not elect (c), the vesting schedule elected in (b) applies
to all Plan Years. [Note: The modified top-heavy schedule of (b)(3) must satisfy
Code ss.416. If the Employer elects (c)(3), the modified non-top-heavy schedule
must satisfy Code ss.411(a)(2).]
[n/a](d) Separate vesting election for regular matching contributions. In lieu
of the election under (a), (b) or (c), the following vesting
schedule applies to a Participant's regular matching contributions:
(Choose one of (1) or (2))
[n/a] (1) 100% Vested at all times.
[n/a](2) Regular matching vesting schedule: . [Note: The vesting schedule
completed under (d)(2) must comply with Code ss.411(a)(4).]
[n/a](e) Application of top-heavy schedule. The non-top-heavy schedule elected
under (c) applies in all Plan Years in which the Plan is not a top-heavy
plan. [Note: If the Employer does not elect (e), the top-heavy vesting
schedule will apply for the first Plan Year in which the Plan is top-heavy
and then in all subsequent Plan Years.]
[n/a](f) Special vesting provisions: . [Note: Any special vesting provision
must satisfy Code ss.411(a). Any special vesting provision must be
definitely determinable, not discriminate in favor of Highly Compensated
Employees and not violate Code ss.401(a)(4).]
23. YEAR OF SERVICE - VESTING (5.06). (Choose (a) and (b)): [Note: If the
Employer elects the Elapsed Time Method or elects immediate vesting, the
Employer should not complete (a) or (b).]
[X] (a) Year of Service. An Employee must complete at least 1000 Hours of
Service during a vesting computation period to receive credit for a Year of
Service under Article V. [Note: The number may not exceed 1,000. If left
blank, the requirement is 1,000.]
[X] (b) Vesting computation period. The Plan measures a Year of Service on the
basis of the following 12-consecutive month period: (Choose one of (1) or
(2))
[X] (1) Plan Year.
[n/a] (2) Employment year (anniversary of Employment Commencement Date).
24. EXCLUDED YEARS OF SERVICE - VESTING (5.08). The Plan excludes the following
Years of Service for purposes of vesting: (Choose (a) or choose one or more of
(b) through (f) as applicable)24 p.1212
[X] (a) None. None other than as specified in Plan Section 5.08(a).
[n/a](b) Age 18. Any Year of Service before the Year of Service during which
the Participant attained the age of 18.
[n/a](c) Prior to Plan establishment. Any Year of Service during the period the
Employer did not maintain this Plan or a predecessor plan.
[n/a](d) Parity Break in Service. Any Year of Service excluded under the rule
of parity. See Plan Section 5.10.
[n/a](e) Prior Plan terms. Any Year of Service disregarded under the terms of
the Plan as in effect prior to this restated Plan.
[n/a](f) Additional exclusions. Any Year of Service before: . [Note: Any
exclusion specified under (f) must comply with Code ss.411(a)(4). Any
exclusion must be definitely determinable, not discriminate in favor of
Highly Compensated Employees and not violate Code ss.401(a)(4). If the
Employer elects immediate vesting, the Employer should not complete Section
5.08.]
ARTICLE VI
DISTRIBUTION OF ACCOUNT BALANCE
25. TIME OF PAYMENT OF ACCOUNT BALANCE (6.01). The following time of
distribution elections apply to the Plan:25 p.1313
Separation from Service/Vested Account Balance not exceeding $5,000. Subject to
the limitations of Plan Section 6.01(A)(1), the Trustee will distribute in a
lump sum (regardless of the Employer's election under Section 6.04) a separated
Participant's Vested Account Balance not exceeding $5,000: (Choose one of (a)
through (d))
[X] (a) Immediate. As soon as administratively practicable following the
Participant's Separation from Service.
[n/a](b) Designated Plan Year. As soon as administratively practicable in the
Plan Year beginning after the Participant's Separation from Service.
[n/a](c) Designated Plan Year quarter. As soon as administratively practicable
in the Plan Year quarter beginning after the Participant's Separation from
Service.
[n/a](d) Designated distribution. As soon as administratively practicable in
the: following the Participant's Separation from Service. [Note: The
designated distribution time must be the same for all Participants, be
definitely determinable, not discriminate in favor of Highly Compensated
Employees and not violate Code ss.401(a)(4).]
Separation from Service/Vested Account Balance exceeding $5,000. A separated
Participant whose Vested Account Balance exceeds $5,000 may elect to commence
distribution of his/her Vested Account Balance no earlier than: (Choose one of
(e) through (i). Choose (j) if applicable)
[X] (e) Immediate. As soon as administratively practicable following the
Participant's Separation from Service.
[n/a](f) Designated Plan Year. As soon as administratively practicable in the
Plan Year beginning after the Participant's Separation from Service.
[n/a](g) Designated Plan Year quarter. As soon as administratively practicable
in the Plan Year quarter following the Plan Year quarter in which the
Participant elects to receive a distribution.
[n/a](h) Normal Retirement Age. As soon as administratively practicable after
the close of the Plan Year in which the Participant attains Normal
Retirement Age and within the time required under Plan Section 6.01(A)(2).
[n/a](i) Designated distribution. As soon as administratively practicable in
the: following the Participant's Separation from Service. [Note: The
designated distribution time must be the same for all Participants, be
definitely determinable, not discriminate in favor of Highly Compensated
Employees and not violate Code ss.401(a)(4).]
[n/a](j) Limitation on Participant's right to delay distribution. A Participant
may not elect to delay commencement of distribution of his/her Vested
Account Balance beyond the later of attainment of age 62 or Normal
Retirement Age. [Note: If the Employer does not elect (j), the Plan permits
a Participant who has Separated from Service to delay distribution until
his/her required beginning date. See Plan Section 6.01(A)(2).]
Participant elections prior to Separation from Service. A Participant, prior to
Separation from Service may elect any of the following distribution options in
accordance with Plan Section 6.01(C). (Choose (k) or choose one or more of (l)
through (o) as applicable). [Note: If the Employer elects any in-service
distributions option, a Participant may elect to receive one in-service
distribution per Plan Year unless the Plan's in-service distribution form
provides for more frequent in-service distributions.]
[n/a](k) None. A Participant does not have any distribution option prior to
Separation from Service, except as may be provided under Plan Section
6.01(C).
[X] (l) Deferral contributions. Distribution of all or any portion (as
permitted by the Plan) of a Participant's Account Balance attributable to
deferral contributions if: (Choose one or more of (1), (2) or (3) as
applicable)
[X] (1) Hardship (safe harbor hardship rule). The Participant has incurred
a hardship in accordance with Plan Sections 6.09 and 14.11(A).
[X] (2) Age. The Participant has attained age 59 1/2 (Must be at least age
59 1/2).
[n/a] (3) Disability. The Participant has incurred a Disability.
[n/a](m) Qualified nonelective contributions/qualified matching
contributions/safe harbor contributions. Distribution of all or any portion
of a Participant's Account Balance attributable to qualified nonelective
contributions, to qualified matching contributions, or to 401(k) safe
harbor contributions if: (Choose (1) or (2) or both as applicable)
[n/a](1) Age. The Participant has attained age (Must be at least age 59
1/2).
[n/a] (2) Disability. The Participant has incurred a Disability.
[n/a](n) Nonelective contributions/regular matching contributions. Distribution
of all or any portion of a Participant's Vested Account Balance
attributable to nonelective contributions or to regular matching
contributions if: (Choose one or more of (1) through (5) as applicable)
[n/a](1) Age/Service conditions. (Choose one or more of a. through d. as
applicable):
[n/a] a. Age. The Participant has attained age .
[n/a] b. Two-year allocations. The Plan Administrator has allocated
the contributions to be distributed for a period of not less
than Plan Years before the distribution date. [Note: The
minimum number of years is 2.]
[n/a] c. Five years of participation. The Participant has
participated in the Plan for at least Plan Years. [Note: The
minimum number of years is 5.]
[n/a] d. Vested. The Participant is % Vested in his/her Account
Balance. See Plan Section 5.03(A). [Note: If an Employer makes
more than one election under Section 6.01(n)(1), a Participant
must satisfy all conditions before the Participant is eligible
for the distribution.]
[n/a](2) Hardship. The Participant has incurred a hardship in accordance
with Plan Section 6.09.
[n/a](3) Hardship (safe harbor hardship rule). The Participant has
incurred a hardship in accordance with Plan Sections 6.09 and
14.11(A).
[n/a] (4) Disability. The Participant has incurred a Disability.
[n/a](5) Designated condition. The Participant has satisfied the following
condition(s): . [Note: Any designated condition(s) must be the same
for all Participants, be definitely determinable and not discriminate
in favor of Highly Compensated Employees.]
[X] (o) Participant contributions. Distribution of all or any portion of a
Participant's Account Balance attributable to the following Participant
contributions described in Plan Section 4.01: (Choose one of (1), (2) or
(3))
[X] (1) All Participant contributions.
[n/a] (2) Employee contributions only.
[n/a] (3) Rollover contributions only.
Participant loan default/offset. See Section 6.08 of the Plan.
26. DISTRIBUTION METHOD (6.03). A separated Participant whose Vested Account
Balance exceeds $5,000 may elect distribution under one of the following
method(s) of distribution described in Plan Section 6.03: (Choose one or more of
(a) through (d) as applicable)26 p.1414
[X] (a) Lump sum.
[n/a] (b) Installments.
[X] (c) Installments for required minimum distributions only.
[n/a](d) Annuity distribution option(s): . [Note: Any optional method of
distribution may not be subject to Employer, Plan Administrator or Trustee
discretion.]
27. JOINT AND SURVIVOR ANNUITY REQUIREMENTS (6.04). The joint and survivor
annuity distribution requirements of Plan Section 6.04: (Choose one of (a) or
(b))
[X] (a) Profit sharing plan exception. Do not apply to a Participant, unless
the Participant is a Participant described in Section 6.04(H) of the Plan.
[n/a] (b) Applicable. Apply to all Participants.
ARTICLE IX
PLAN ADMINISTRATOR - DUTIES WITH RESPECT TO PARTICIPANTS' ACCOUNTS
28. ALLOCATION OF NET INCOME, GAIN OR LOSS (9.08). For each type of contribution
provided under the Plan, the Plan allocates net income, gain or loss using the
following method: (Choose one or more of (a) through (e) as applicable)
[X] (a) Deferral contributions/Employee contributions. (Choose one or more of
(1) through (5) as applicable)
[X] (1) Daily valuation method. Allocate on each business day of the
Plan Year during which Plan assets for which there is an
established market are valued and the Trustee is conducting
business.
[n/a] (2) Balance forward method. Allocate using the balance forward
method.
[n/a] (3) Weighted average method. Allocate using the weighted average
method, based on the following weighting period: . See Plan
Section 14.12.
[n/a] (4) Balance forward method with adjustment. Allocate pursuant to
the balance forward method, except treat as part of the relevant
Account at the beginning of the valuation period % of the
contributions made during the following valuation period: .
[n/a] (5) Individual account method. Allocate using the individual
account method. See Plan Section 9.08.
[X] (b) Matching contributions. (Choose one or more of (1) through (5) as
applicable)
[X] (1) Daily valuation method. Allocate on each business day of the
Plan Year during which Plan assets for which there is an
established market are valued and the Trustee is conducting
business.
[n/a] (2) Balance forward method. Allocate using the balance forward
method.
[n/a] (3) Weighted average method. Allocate using the weighted average
method, based on the following weighting period: . See Plan
Section 14.12.
[n/a] (4) Balance forward method with adjustment. Allocate pursuant to
the balance forward method, except treat as part of the relevant
Account at the beginning of the valuation period % of the
contributions made during the following valuation period: .
[n/a] (5) Individual account method. Allocate using the individual
account method. See Plan Section 9.08.
[X] (c) Employer nonelective contributions. (Choose one or more of (1) through
(5) as applicable)
[X] (1) Daily valuation method. Allocate on each business day of the
Plan Year during which Plan assets for which there is an
established market are valued and the Trustee is conducting
business.
[n/a] (2) Balance forward method. Allocate using the balance forward
method.
[n/a] (3) Weighted average method. Allocate using the weighted average
method, based on the following weighting period: . See Plan
Section 14.12.
[n/a] (4) Balance forward method with adjustment. Allocate pursuant to
the balance forward method, except treat as part of the relevant
Account at the beginning of the valuation period % of the
contributions made during the following valuation period: .
[n/a] (5) Individual account method. Allocate using the individual
account method. See Plan Section 9.08.
[n/a](d) Specified method. Allocate pursuant to the following method: . [Note:
The specified method must be a definite predetermined formula which is not
based on Compensation, which satisfies the nondiscrimination requirements
of Treas. Reg. ss.1.401(a)(4) and which is applied uniformly to all
Participants.]
[n/a](e) Interest rate factor. In accordance with Plan Section 9.08(E), the
Plan includes interest at the following rate on distributions made more
than 90 days after the most recent valuation date: .
ARTICLE X
TRUSTEE AND CUSTODIAN, POWERS AND DUTIES
29. INVESTMENT POWERS (10.03). The following additional investment options or
limitations apply under Plan Section 10.03: The Employer Matching Contributions
will be made in 90% qualifying Employer securities and 10% cash . [Note: Enter
"N/A" if not applicable.]
30. VALUATION OF TRUST (10.15). In addition to the last day of the Plan Year,
the Trustee must value the Trust Fund on the following valuation date(s):
(Choose one of (a) through (d))
[X] (a) Daily valuation dates. Each business day of the Plan Year on which Plan
assets for which there is an established market are valued and the Trustee
is conducting business.
[n/a](b) Last day of a specified period. The last day of each of the Plan Year.
[n/a] (c) Specified dates: .
[n/a] (d) No additional valuation dates.
Execution Page
The Trustee (and Custodian, if applicable), by executing this Adoption
Agreement, accepts its position and agrees to all of the obligations,
responsibilities and duties imposed upon the Trustee (or Custodian) under the
Prototype Plan and Trust. The Employer hereby agrees to the provisions of this
Plan and Trust, and in witness of its agreement, the Employer by its duly
authorized officers, has executed this Adoption Agreement, and the Trustee (and
Custodian, if applicable) has signified its acceptance, on: .
Name of Employer: Candies, Inc.
-------------------------------------
Employer's EIN: 11-2481903
-------------------------------------
Signed: /s/ Deborah Sorell Stehr
-------------------------------------
Deborah Sorell Stehr, Secretary
Name(s) of
Trustee:
Deborah Sorell Stehr
Neil Cole
Trust EIN (Optional):
Signed: /s/ Deborah Sorell Stehr
-------------------------------------
Deborah Sorell Stehr
Signed: /s/ Neil Cole
-------------------------------------
Neil Cole
Name of Custodian (Optional):
Signed:
-------------------------------------
[Name/Title]
31. Plan Number. The 3-digit plan number the Employer assigns to this Plan for
ERISA reporting purposes (Form 5500 Series) is: 002 .
Use of Adoption Agreement. Failure to complete properly the elections in this
Adoption Agreement may result in disqualification of the Employer's Plan. The
Employer only may use this Adoption Agreement in conjunction with the basic plan
document referenced by its document number on Adoption Agreement page one.
Execution for Page Substitution Amendment Only. If this paragraph is completed,
this Execution Page documents an amendment to Adoption Agreement Section(s)
effective , by substitute Adoption Agreement page number(s) . Prototype Plan
Sponsor. The Prototype Plan Sponsor identified on the first page of the basic
plan document will notify all adopting employers of any amendment of this
Prototype Plan or of any abandonment or discontinuance by the Prototype Plan
Sponsor of its maintenance of this Prototype Plan. For inquiries regarding the
adoption of the Prototype Plan, the Prototype Plan Sponsor's intended meaning of
any Plan provisions or the effect of the opinion letter issued to the Prototype
Plan Sponsor, please contact the Prototype Plan Sponsor at the following address
and telephone number: 1809 24th Street, Great Bend, KS 67530, (620) 793-8473 .
Reliance on Sponsor Opinion Letter. The Prototype Plan Sponsor has obtained from
the IRS an opinion letter specifying the form of this Adoption Agreement and the
basic plan document satisfy, as of the date of the opinion letter, Code ss.401.
An adopting Employer may rely on the Prototype Sponsor's IRS opinion letter 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
and in Announcement 2001-77. In order to have reliance in such circumstances or
with respect to such qualification requirements, the Employer must apply for a
determination letter to Employee Plans Determinations of the Internal Revenue
Service.
PARTICIPATION AGREEMENT
[n/a] Check here if not applicable and do not
complete this page.
The undersigned Employer, by executing this Participation Agreement, elects to
become a Participating Employer in the Plan identified in Section 1.21 of the
accompanying Adoption Agreement, as if the Participating Employer were a
signatory to that Adoption Agreement. The Participating Employer accepts, and
agrees to be bound by, all of the elections granted under the provisions of the
Prototype Plan as made by the Signatory Employer to the Execution Page of the
Adoption Agreement, except as otherwise provided in this Participation
Agreement.
45. EFFECTIVE DATE (1.10). The Effective Date of the Plan for the Participating
Employer is: February 1, 1997 .
46. NEW PLAN/RESTATEMENT. The Participating Employer's adoption of this Plan
constitutes: (Choose one of (a) or (b))
[n/a] (a) The adoption of a new plan by the Participating Employer.
[X] (b) The adoption of an amendment and restatement of a plan currently
maintained by the Participating Employer, identified as: Candies, Inc.
401(k) Savings Plan , and having an original effective date of: February 1,
1995 .
47. PREDECESSOR EMPLOYER SERVICE (1.30). In addition to the predecessor service
credited by reason of Section 1.30 of the Plan, the Plan credits as Service
under this Plan, service with this Participating Employer (Choose one or more of
(a) through (d) as applicable): [Note: If the Plan does not credit any
additional predecessor service under Section 1.30 for this Participating
Employer, do not complete this election.]
[n/a](a) Eligibility. For eligibility under Article II. See Plan Section 1.30
for time of Plan entry.
[n/a] (b) Vesting. For vesting under Article V.
[n/a](c) Contribution allocation. For contribution allocations under Article
III.
[n/a] (d) Exceptions. Except for the following Service: .
Name of Plan: Name of Participating Employer:
Candie's, Inc. 401(k) Savings Plan Brightstar Footwear, LLC
- ----------------------------------- ------------------------
Signed: /s/ Deborah Sorell Stehr
-------------------------------
Deborah Sorell Stehr, Secretary
[Date]
Participating Employer's EIN: 45-0463536
-------------------------------
Acceptance by the Signatory Employer to the Execution Page of the Adoption
Agreement and by the Trustee.
Name of Signatory Employer: Name(s) of Trustee:
Candie's, Inc. Deborah Sorell Stehr and Neil Cole
Signed:
Deborah Sorell Stehr
Signed: /s/ Deborah Sorell Stehr Signed:/s/ Neil Cole
------------------------------- ----------------------------
Deborah Sorell Stehr, Secretary Neil Cole
[Date] [Date] [Note: Each Participating Employer must execute a separate
Participation Agreement. If the Plan does not have a Participating Employer, the
Signatory Employer may delete this page from the Adoption Agreement.]
APPENDIX A
TESTING ELECTIONS/EFFECTIVE DATE ADDENDUM
35. The following testing elections and special effective dates apply: (Choose
one or more of (a) through (n) as applicable)
[X] (a) Highly Compensated Employee (1.14). For Plan Years beginning after
January 31, 2003 , the Employer makes the following election(s) regarding
the definition of Highly Compensated Employee:
(1) [X] Top paid group election.
(2) [n/a] Calendar year data election (fiscal year plan). [X] (b) 401(k)
current year testing. The Employer will apply the current year testing
method in applying the ADP and ACP tests effective for Plan Years
beginning after: January 31, 1997 . [Note: For Plan Years beginning on
or after the Employer's execution of its "GUST" restatement, the
Employer must use the same testing method within the same Plan Year
for both the ADP and ACP tests.]
[n/a](c) Compensation. The Compensation definition under Section 1.07 will apply
for Plan Years beginning after: .
[X] (d) Election not to participate. The election not to participate under
Section 2.06 is removed effective: February 1, 2003 .
[n/a](e) 401(k) safe harbor. The 401(k) safe harbor provisions under Section
3.01(d) are effective:_________.
[n/a](f) Negative election. The negative election provision under Section
3.02(b) is effective: .
[n/a](g) Contribution/allocation formula. The specified contribution(s) and
allocation method(s) under Sections 3.01 and 3.04 are effective: .
[X] (h) Allocation conditions. The allocation conditions of Section 3.06 are
effective: 3.06(g) removed effective February 1,2003.
[n/a](i) Benefit payment elections. The distribution elections of Section(s)
are effective:_______________.
[n/a](j) Election to continue pre-SBJPA required beginning date. A Participant
may not elect to defer commencement of the distribution of his/her Vested
Account Balance beyond the April 1 following the calendar year in which the
Participant attains age 70 1/2. See Plan Section 6.02(A).
[n/a](k) Elimination of age 70 1/2 in-service distributions. The Plan
eliminates a Participant's (other than a more than 5% owner) right to
receive in-service distributions on April 1 of the calendar year following
the year in which the Participant attains age 70 1/2 for Plan Years
beginning after: .
[n/a](l) Allocation of earnings. The earnings allocation provisions under
Section 9.08 are effective: .
[n/a](m) Elimination of optional forms of benefit. The Employer elects
prospectively to eliminate the following optional forms of benefit: (Choose
one or more of (1), (2) and (3) as applicable)
[n/a](1) QJSA and QPSA benefits as described in Plan Sections 6.04, 6.05
and 6.06 effective:___.
[n/a](2) Installment distributions as described in Section 6.03 effective:
___.
[n/a](3) Other optional forms of benefit (Any election to eliminate must
be consistent with Treas. Reg. ss.1.411(d)-4): .
[X] (n) Special effective date(s): Section 1.11(e) Reclassified employee
effective February 1, 2003. Section 2.01(b) Service requirement effective
June 1, 2001. Section 2.02 Years of service effective June 1, 2001. Section
3.02 Deferral limitation effective February 1, 2002. Section 3.03(e) Time
Period for Matching Contributions effective February 1, 2003. Section 3.05
Forfeiture allocation effective February 1, 2003 .
For periods prior to the above-specified special effective date(s), the Plan
terms in effect prior to its restatement under this Adoption Agreement will
control for purposes of the designated provisions. A special effective date may
not result in the delay of a Plan provision beyond the permissible effective
date under any applicable law.
APPENDIX B
GUST Remedial Amendment Period Elections
36. The following GUST restatement elections apply: (Choose one or more of (a)
through (j) as applicable)36 p.2020
[n/a](a) Highly Compensated Employee elections. The Employer makes the
following remedial amendment period elections with respect to the Highly
Compensated Employee definition:
(1) 1997:[n/a] Top paid group election. [n/a] Calendar year election.
[n/a] Calendar year data election.
(2) 1998:[n/a] Top paid group election. [n/a] Calendar year data election.
(3) 1999:[n/a] Top paid group election. [n/a] Calendar year data election.
(4) 2000:[n/a] Top paid group election. [n/a] Calendar year data election.
(5) 2001:[n/a] Top paid group election. [n/a] Calendar year data election.
(6) 2002:[n/a] Top paid group election. [n/a] Calendar year data election.
[X] (b) 401(k) testing methods. The Employer makes the following remedial
amendment period elections with respect to the ADP test and the ACP test:
[Note: The Employer may use a different testing method for the ADP and ACP
tests through the end of the Plan Year in which the Employer executes its
GUST restated Plan.]
ADP test ACP test
(1) 1997: [n/a]prior year [X] current year 1997: [n/a]prior year [X] current year
(2) 1998: [n/a]prior year [X] current year 1998: [n/a]prior year [X] current year
(3) 1999: [n/a]prior year [X] current year 1999: [n/a]prior year [X] current year
(4) 2000: [n/a]prior year [X] current year 2000: [n/a]prior year [X] current year
(5) 2001: [n/a]prior year [X] current year 2001: [n/a]prior year [X] current year
(6) 2002: [n/a]prior year [X] current year 2002: [n/a]prior year [X] current year
[X] (c) Delayed application of SBJPA required beginning date. The Employer
elects to delay the effective date for the required beginning date
provision of Plan Section 6.02 until Plan Years beginning after: December
31, 2002 .
[X] (d) Model Amendment for required minimum distributions. The Employer adopts
the IRS Model Amendment in Plan Section 6.02(E) effective February 1, 2001
. [Note: The date must not be earlier than January 1, 2001.]
Defined Benefit Limitation
[n/a](e) Code ss.415(e) repeal. The repeal of the Code ss.415(e) limitation is
effective for Limitation Years beginning after . [Note: If the Employer
does not make an election under (e), the repeal is effective for Limitation
Years beginning after December 31, 1999.]
Code ss.415(e) limitation. To the extent necessary to satisfy the limitation
under Plan Section 3.17 for Limitation Years beginning prior to the repeal of
Code ss.415(e), the Employer will reduce: (Choose one of (f) or (g))
[n/a](f) The Participant's projected annual benefit under the defined benefit
plan.
[n/a](g) The Employer's contribution or allocation on behalf of the Participant
to the defined contribution plan and then, if necessary, the Participant's
projected annual benefit under the defined benefit plan.
Coordination with top-heavy minimum allocation. The Plan Administrator will
apply the top-heavy minimum allocation provisions of Article XII with the
following modifications: (Choose (h) or choose (i) or (j) or both as applicable)
[n/a] (h) No modifications.
[n/a](i) For Non-Key Employees participating only in this Plan, the top-heavy
minimum allocation is the minimum allocation determined by substituting %
(not less than 4%) for "3%," except: (Choose one of (1) or (2)) [n/a] (1)
No exceptions. [n/a] (2) Plan Years in which the top-heavy ratio exceeds
90%.
[n/a](j) For Non-Key Employees also participating in the defined benefit plan,
the top-heavy minimum is: (Choose one of (1) or (2)) [n/a] (1) 5% of
Compensation irrespective of the contribution rate of any Key Employee:
(Choose one of a. or b.) [n/a] a. No exceptions. [n/a] b. Substituting "7
1/2%" for "5%" if the top-heavy ratio does not exceed 90%. [n/a] (2) 0%.
[Note: The defined benefit plan must satisfy the top-heavy minimum benefit
requirement for these Non-Key Employees.]
Actuarial assumptions for top-heavy calculation. To determine the top-heavy
ratio, the Plan Administrator will use the following interest rate and mortality
assumptions to value accrued benefits under a defined benefit plan: .
CHECKLIST OF EMPLOYER INFORMATION
AND EMPLOYER ADMINISTRATIVE ELECTIONS
Commencing with the 2003 Plan Year
The Prototype Plan permits the Employer to make certain administrative
elections not reflected in the Adoption Agreement. This form lists those
administrative elections and provides a means of recording the Employer's
elections. This checklist is not part of the Plan document.
37. Employer Information.
Candies, Inc.
[Employer Name]
400 Columbus Ave.
[Address]
Valhalla, New York 10595 (914) 769-8600
----------------------------- ------------------------------------
[City, State and Zip Code] [Telephone Number]
38. Form of Business.
(a) [X] Corporation (b) [n/a] S Corporation (c) [n/a] Limited Liability Company
(d) [n/a] Sole Proprietorship (e) [n/a] Partnership (f) [n/a]
39. Section 1.07(F) - Nondiscriminatory definition of Compensation. When testing
nondiscrimination under the Plan, the Plan permits the Employer to make
elections regarding the definition of Compensation. [Note: This election solely
is for purposes of nondiscrimination testing. The election does not affect the
Employer's elections under Section 1.07 which apply for purposes of allocating
Employer contributions and Participant forfeitures.]
(a) [X] The Plan will "gross up" Compensation for Elective Contributions.
(b) [n/a] The Plan will exclude Elective Contributions.
40. Section 4.04 - Rollover contributions.40 p.2121
(a) [X] The Plan accepts rollover contributions.
(b) [n/a] The Plan does not accept rollover contributions.
41. Section 8.06 - Participant direction of investment/404(c). The Plan
authorizes Participant direction of investment with Trustee consent. If the
Trustee permits Participant direction of investment, the Employer and the
Trustee should adopt a policy which establishes the applicable conditions and
limitations, including whether they intend the Plan to comply with ERISA
ss.404(c).41 p.2121
(a) [X] The Plan permits Participant direction of investment and is a 404(c)
plan.
(b) [n/a] The Plan does not permit Participant direction of investment or is a
non-404(c) plan.
42. Section 9.04[A] - Participant loans. The Plan authorizes the Plan
Administrator to adopt a written loan policy to permit Participant loans.42
p.2121
(a) [X] The Plan permits Participant loans subject to the following conditions:
(1) [X] Minimum loan amount: $ 1,000.
(2) [X] Maximum number of outstanding loans: two .
(3) [X] Reasons for which a Participant may request a loan:
a. [X] Any purpose. b. [n/a] Hardship events. c. [n/a] Other:
(4) [X] Suspension of loan repayments:
a. [n/a] Not permitted.
b. [X] Permitted for non-military leave of absence.
c. [X] Permitted for military service leave of absence.
(5) [X] The Participant must be a party in interest.
(b) [n/a] The Plan does not permit Participant loans.
43. Section 11.01 - Life insurance. The Plan with Employer approval authorizes
the Trustee to acquire life insurance.43 p.2121
(a) [n/a] The Plan will invest in life insurance contracts.
(b) [X] The Plan will not invest in life insurance contracts.
44. Surety bond company: . Surety bond amount: $
------------- ----------
Distribution of cash or property.
(a) [n/a] The lump sum distribution will be available as cash only.
(b) [X] The lump sum distribution will be available as cash and in-kind.
EGTRRA - Employer