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EXHIBIT 10.12
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
DEFINED CONTRIBUTION PLAN
BASIC PLAN DOCUMENT NUMBER 03
The Plan set forth herein may be adopted by an Employer and accepted by
the Plan Administrator and, if applicable, the Trustee by executing an Adoption
Agreement, which together shall constitute the Employer's Plan, for the
exclusive benefit of its eligible Employees and their Beneficiaries, as fully as
if set forth in said Adoption Agreement; provided, however, no Employer may
adopt this Plan except with the consent of Connecticut General Life Insurance
Company.
ARTICLE I - DEFINITIONS
1.1 Accrued Benefit. The term Accrued Benefit means the value of the
Participant's Account on any applicable date.
1.2 Additional Matching Contributions. The term Additional Matching
Contributions means additional discretionary Matching Contributions made to the
Plan by the Employer, as authorized by its Board of Directors by resolution.
Additional Matching Contributions shall be treated as Matching Contributions for
nondiscrimination testing and allocation purposes.
1.3 Adoption Agreement. The term Adoption Agreement means the
prescribed agreement by which the Employer adopts this Plan, and which sets
forth the elective provisions of this Plan as specified by the Employer.
1.4 Alternate Payee. The term Alternate Payee means a person, other
than the Participant, identified under a QDRO to be a recipient of part or all
of the Participant's benefit under the Plan.
1.5 Annuity. The term Annuity means a series of payments made over a
specified period of time.
1.6 Annuity Contract. The term Annuity Contract means the group
annuity contract form issued by the Insurance Company to fund the benefits
provided under this Plan, as such contract may be amended from time to time in
accordance with the terms thereof. The Employer will specify and communicate to
its Employees the types of investments available under this Plan and Annuity
Contract.
1.7 Annuity Starting Date. The term Annuity Starting Date means the
first day of the first period for which an amount is paid as an Annuity or any
other form.
1.8 Beneficiary. The term Beneficiary means the beneficiary or
beneficiaries entitled to any benefits under a Participant's Account hereunder
upon the death of a Participant, Beneficiary or Alternate Payee pursuant to a
QDRO. If any Life Insurance Policy is purchased on the life of a
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Participant hereunder, the Beneficiary under such Policy shall be designated
separately therein. However, any such Beneficiary designation shall be subject
to the terms of Section 3C.
A Participant's Beneficiary shall be his Spouse, if any, unless
the Participant designates a person or persons other than his Spouse as
Beneficiary with his Spouse's written consent. A Participant may designate a
Beneficiary on the form approved by the Plan Administrator.
If any distribution is made to a Beneficiary in the form of an
Annuity, and if such Annuity provides for a death benefit, then such Beneficiary
shall also have a right to designate a beneficiary and to change that
beneficiary from time to time. As an alternative to receiving the benefit in the
form of an Annuity, the Beneficiary may elect to receive a single cash payment
or any other form of payment provided by the Employer's election in the Adoption
Agreement.
If no Beneficiary has been designated pursuant to the provisions
of this Section, or if no Beneficiary survives the Participant and he has no
surviving Spouse, then the Beneficiary under the Plan shall be the deceased
Participant's surviving children in equal shares or, if there are no surviving
children, the Participant's estate. If a Beneficiary dies after becoming
entitled to receive a distribution under the Plan but before distribution is
made to him in full, and if no other Beneficiary has been designated to receive
the balance of the distribution in that event, the estate of the deceased
Beneficiary shall be the Beneficiary for the balance of the distribution.
If the Employer so elects in the Adoption Agreement, an
Alternate Payee and/or Beneficiary shall be allowed to direct the investment of
his segregated portion of the Participant's Account, pursuant to Section 5A. An
individual who is designated as an Alternate Payee in a QDRO relating to a
Participant's benefits under this Plan shall be treated as a Beneficiary
hereunder, to the extent provided by such order.
1.9 Board of Directors. The term Board of Directors means the
Employer's board of directors or other comparable governing body.
1.10 CODA. The term CODA means cash or deferred arrangement as
described in Code section 401(k) and the regulations thereunder.
1.11 Code. The term Code means the Internal Revenue Code of 1986, as
amended from time to time.
1.12 Compensation. The term Compensation means Compensation as
defined below. For any Self-Employed Individual covered under the Plan,
Compensation shall mean Earned Income. Compensation shall include only that
Compensation which is actually paid to the Participant during the applicable
Determination Period. Except as provided elsewhere in this Plan, the
"Determination Period" shall be the period elected by the Employer in the
Adoption Agreement. If the Employer makes no election, the Determination Period
shall be the Plan Year.
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An Employer may elect in the Adoption Agreement to use one of
the following definitions of Compensation for purposes of allocating all
contributions:
(a) Wages, Tips, and Other Compensation Box on Form W-2.
(Information required to be reported under Code sections 6041, 6051 and 6052).
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)).
(b) Section 3401(a) Wages. Wages as defined in 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)).
(c) 415 Safe-Harbor Compensation. Wages, salaries, and fees
for professional services and other amounts received (without regard to whether
or not an amount is paid in cash) for personal services actually rendered in the
course of employment with the Employer maintaining the Plan to the extent that
the amounts are includable in gross income (including, but not limited to,
commissions paid salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums, tips, bonuses, fringe
benefits, and reimbursements or other expense allowances under a nonaccountable
plan as described in Code section 1.62-2(c)), and excluding the following:
(1) Employer contributions to a plan of deferred
compensation which are not includable in the Employee's gross income for the
taxable year in which contributed, or Employer contributions under a simplified
employee pension plan to the extent such contributions are deductible by the
Employee, or any distributions from a plan of deferred compensation;
(2) Amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture;
(3) Amounts realized from the sale, exchange or
other disposition of stock acquired under a qualified stock option; and
(4) Other amounts which received special tax
benefits, or contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract described in
Code section 403(b) (whether or not the contributions are actually excludable
from the gross income of the Employee).
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(d) Modified Wages, Tips, and Other Compensation Box on Form
W-2. Compensation as defined in subsection (a) above, but reduced by all of the
following items (even if includable in gross income): reimbursements or other
expense allowances, fringe benefits (cash or noncash), moving expenses, deferred
compensation, and welfare benefits. This definition may not be used by
standardized plans or plans using a contribution or allocation formula that is
integrated with Social Security.
(e) Modified Section 3401(a) Wages. Compensation as defined
in subsection (c) above, but reduced by all of the following items (even if
includable in gross income): reimbursements or other expense allowances, fringe
benefits (cash or noncash), moving expenses, deferred compensation, and welfare
benefits. This definition may not be used by standardized plans or plans using a
contribution or allocation formula that is integrated with Social Security.
(f) Modified 415 Safe-Harbor Compensation. Compensation as
defined in subsection (d) above, but reduced by all of the following items (even
if includable in gross income): reimbursements or other expense allowances,
fringe benefits (cash or noncash), moving expenses, deferred compensation, and
welfare benefits. This definition may not be used by standardized plans or plans
using a contribution or allocation formula that is integrated with Social
Security.
(g) Regular or Base Salary or Wages. Regular or base salary
or wages (excluding overtime and bonuses) received during the applicable period
by the Employee from the Employer. This definition may not be used by
standardized plans or plans using a contribution or allocation formula that is
integrated with Social Security.
(h) Regular or Base Salary Wages plus Overtime And/or
Bonuses. Regular or base salary or wages, plus either or both overtime and/or
bonuses, as elected by the Employer in the Adoption Agreement, received during
the applicable period by the Employee from the Employer. This definition may not
be used by standardized plans or plans using a contribution or allocation
formula that is integrated with Social Security.
(i) A Reasonable Alternative Definition of Compensation, as
that term is used in Code section 414(s)(3) and the regulations thereunder,
provided that the definition does not favor Highly Compensated Employees and
satisfies the nondiscrimination requirements under Code section 414(s). This
definition may not be used by standardized plans or plans using a contribution
or allocation formula that is integrated with Social Security.
Notwithstanding the above, if elected by the Employer in
the Adoption Agreement, Compensation shall include any amount which is
contributed by the Employer pursuant to a salary reduction agreement and which
is not includable in the gross income of the Employee under Code sections 125,
402(e)(3), 402(h)(1)(B) or 403(b).
For years beginning on or after January 1, 1989, and
before 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 $200,000. This limitation shall be adjusted by the
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Secretary at the same time and in the same manner as under Code section 415(d)
(unless a lesser amount is elected by the Employer in the Adoption Agreement),
except that the dollar increase in effect on January 1 of any calendar year is
effective for Plan Years beginning in such calendar year and the first
adjustment to the $200,000 limitation is effective on January 1, 1990.
For Plan Years beginning on or after January 1, 1994,
the annual Compensation of each Participant taken into account for determining
all benefits provided under the Plan for any Plan Year shall not exceed
$150,000, as adjusted for increases in the cost-of-living in accordance with
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.
If a Determination Period consists of fewer than 12
calendar months, then the annual compensation limit is an amount equal to the
annual compensation limit for the calendar year in which the compensation period
begins, multiplied by the ratio obtained by dividing the number of full months
in the period by 12.
In determining the Compensation of a Participant for
purposes of this limit, the rules of Code section 414(q)(6) shall apply, except
in applying such rules, the term "family" shall include only the spouse of the
Participant and any lineal descendants of the Participant who have not attained
age 19 before the close of the year. If, as a result of the application of such
rules, the adjusted annual Compensation limit is exceeded, then (except for
purposes of determining the portion of Compensation up to the integration level
if this Plan uses a contribution or allocation formula that is integrated with
Social Security), the limit shall be prorated among the affected individuals in
proportion to each such individual's Compensation as determined under this
Section prior to the application of this limit.
If Compensation for any prior Determination Period is
taken into account in determining an Employee's contributions or benefits for
the current year, the Compensation for such prior Determination Period is
subject to the applicable annual compensation limit in effect for that prior
period. For this purpose, in determining allocations in Plan Years beginning on
or before January 1, 1989, the annual compensation limit in effect for
Determination Periods before that date is $200,000. In addition, in determining
allocations in Plan Years beginning on or after January 1, 1994, the annual
compensation limit in effect for Determination Periods beginning before that
date is $150,000.
1.13 Considered Net Profits. The term Considered Net Profits means
the entire amount of the accumulated or current operating profits (excluding
capital gains from the sale or involuntary conversion of capital or business
assets) of the Employer after all expenses and charges other than (1) the
Employer contribution to this and any other qualified plan, and (2) federal,
state or local taxes based upon or measured by income, as determined by the
Employer, either on an estimated basis or a final basis, in accordance with the
generally accepted accounting principles used by the Employer. When, for any
Plan Year, the amount of Considered Net Profits has been determined by the
Employer, and the Employer contribution made on the basis of such determination,
such determination and contribution shall be final and conclusive and shall not
be subject to change
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because of any adjustments in income or expense which may be required by the
Internal Revenue Service or otherwise. Such determination and contribution shall
not be open to question by any Participant either before or after the Employer
contribution has been made.
In the case of an Employer that is a non-profit entity, the
term Considered Net Profits means the entire amount of the accumulated or
current operating surplus (excluding capital gains from the sale or involuntary
conversion of capital or business assets) of the Employer after all expenses and
charges other than (1) the contribution made by the Employer to the Plan, and
(2) federal, state or local taxes based upon or measured by income, in
accordance with the generally accepted accounting principles used by the
Employer.
1.14 Contribution Period. The term Contribution Period means that
regular period, specified by the Employer in its Adoption Agreement, for which
the Employer shall make Employer contributions, if any, and that regular period
specified by the Employer in its Adoption Agreement, for which Participants may
make Employee Contributions, if any, and Elective Deferral Contributions, if
any. The first Contribution Period may be an irregular period, not longer than
one month, commencing not prior to the Effective Date. However, the first
Contribution Period for Elective Deferral Contributions may not commence before
the later of the Plan's Effective Date or adoption date.
1.15 Davis-Bacon Act. The term Davis-Bacon Act means the Davis-Bacon
Act (40 U.S.C. section 276(a) et seq., as amended from time to time), which
guarantees minimum wages to laborers and mechanics employed on Federal
government contracts for the construction, alteration, or repair of public
buildings or works. The minimums are the amounts found by the Secretary of Labor
to be prevailing for similar workers in the area in which the work is to be
done.
The term "wages" as used in the Davis-Bacon Act includes, in
addition to the basic hourly rate of pay, contributions irrevocably made to
trustees for pension benefits for laborers and mechanics employed on Federal
government contracts and the cost of other fringe benefits. However, overtime
pay is to be computed only on the basis of the basic hourly rate of pay.
1.16 Disability. The term Disability means a Participant's incapacity
to engage in any substantial gainful activity because of a medically
determinable physical or mental impairment which 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 performance and degree of such impairment shall be
supported by medical evidence. All Participants in similar circumstances shall
be treated alike.
If elected by the Employer in the Adoption Agreement,
nonforfeitable contributions will be made to the Plan on behalf of each disabled
Participant who is not a Highly Compensated Employee (within the meaning of
Section 1.29 of the Plan).
1.17 Disability Retirement Date. The term Disability Retirement Date
means the first day of the month after the Plan Administrator has determined
that a Participant's incapacity is a Disability. A Participant who retires from
the Service of the Employer as of his Disability
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Retirement Date shall have a Vesting Percentage of 100% and shall be entitled to
receive a distribution of the entire value of his Participant's Account and any
Life Insurance Policies, or the values thereof, as of his Disability Retirement
Date, subject to the provisions of Section 3A and Section 3C.
1.18 Early Retirement Date. If the Employer has specified in its
Adoption Agreement that Early Retirement is permitted, then the term Early
Retirement Date means the first day of the month coinciding with or next
following the date a Participant is separated from Service with the Employer for
any reason other than death or Disability, provided that on such date the
Participant has attained the conditions specified by the Employer in its
Adoption Agreement and has not attained his Normal Retirement Age. A Participant
who retires from the Service of the Employer on his Early Retirement Date shall
have a Vesting Percentage of 100% and shall be entitled to receive a
distribution of the entire value of his Participant's Account and any Life
Insurance Policies, or the values thereof, as of his Early Retirement Date,
subject to the provisions of Section 3A and Section 3C.
If a Participant separates from Service before satisfying the
age requirement for Early Retirement, but has satisfied the Service requirement,
the Participant shall be 100% vested as of his Termination of Employment date,
but he will not be eligible for a distribution of the entire value of his
Participant's Account until satisfying such age requirement.
1.19 Earned Income. The term Earned Income means the net earnings
from self-employment in the trade or business with respect to which the Plan is
established, and for which the personal services of the individual are a
material income-producing factor. Net earnings will be determined without regard
to items not included in gross income and the deductions allocable to such
items. Net earnings are reduced by contributions made by the Employer to a
qualified plan to the extent deductible under Code section 404.
Net earnings shall be determined with regard to the deductions
allowed to the taxpayer by Code section 164(f) for taxable years beginning after
December 31, 1989.
1.20 Effective Date. The term Effective Date means the date specified
by the Employer in its Adoption Agreement as the Effective Date of the Plan.
1.21 Elective Deferral Contributions. The term Elective Deferral
Contributions means contributions made by the Employer to the Plan at the
election of the Participant, in lieu of cash compensation, and shall include
contributions made pursuant to a Salary Deferral Agreement or other deferral
mechanism.
With respect to any taxable year, a Participant's elective
deferral is the sum of all Employer contributions made on behalf of such
Participant pursuant to an election to defer under any CODA, any simplified
employee pension cash or deferred arrangement as described in section
402(h)(1)(B), any eligible deferred compensation plan as described in section
457, any plan described in section 501(c)(18), and any Employer contributions
made on the behalf of a Participant
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for the purchase of an annuity contract under section 403(b) pursuant to a
salary reduction agreement.
Elective Deferral Contributions shall not include those
contributions properly distributed as Excess Annual Additions, as defined in
Section 4C.1(b).
1.22 Employee. The term Employee means any employee of the Employer
maintaining the Plan or any other employer required to be aggregated with such
Employer under Code sections 414(b), (c), (m), or (o).
The term Employee also includes any Leased Employee deemed to be
an Employee of the Employer in accordance with Code sections 414(n) or (o).
1.23 Employee Contributions. The term Employee Contributions means
contributions to this Plan or any other plan, that are designated or treated at
the time of contribution as after-tax contributions made by the Employee and are
allocated to a separate account to which attributable earnings and losses are
allocated. Such term includes Required Employee Contributions, Voluntary
Employee Contributions, Prior Required Employee Contributions, and Prior
Voluntary Employee Contributions.
1.24 Employer. The term Employer means the employer that adopts this
Plan. In the case of a group of Employers that constitutes a controlled group of
corporations (as defined in Code section 414(b)) or that constitutes trades or
businesses (whether or not incorporated) that are under common control (as
defined in section 414(c)) or that constitutes an affiliated service group (as
defined in section 414(m)), Service with all such employers shall be considered
Service with the Employer for purposes of eligibility and vesting. The term
Employer shall also mean any Adopting Employer as defined in Section 6E.2.
A state or local government or political subdivision thereof, or
any agency or instrumentality thereof, or any organization exempt from tax under
Subtitle A of the code, may not elect a 401(k) option (CODA) in the Adoption
Agreement.
1.25 Entry Date. The term Entry Date means either the Effective Date
or each applicable date thereafter as specified by the Employer in its Adoption
Agreement, when an Employee who has fulfilled the eligibility requirements
commences participation in the Plan.
If an Employee is not in the active Service of the Employer as
of his initial Entry Date, his subsequent Entry Date shall be the date he
returns to the active Service of the Employer, provided he still meets the
eligibility requirements. If an Employee does not enroll as a Participant as of
his initial Entry Date, his subsequent Entry Date shall be the applicable Entry
Date as specified by the Employer in the Adoption Agreement when the Employee
actually enrolls as a Participant.
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1.26 ERISA. The term ERISA means the Employee Retirement Income
Security Act of 1974 (PL93-406) as it may be amended from time to time, and any
regulations issued pursuant thereto as such Act and such regulations affect this
Plan and Trust.
1.27 Fiduciary. The term Fiduciary means any or all of the following,
as applicable:
(a) Any Person who exercises any discretionary authority or
control respecting the management of the Plan or its assets;
(b) Any Person who renders investment advice for a fee or
other compensation, direct or indirect, respecting any monies or other property
of the Plan or has authority or responsibility to do so;
(c) Any Person who has discretionary authority or
responsibility in the administration of the Plan;
(d) Any Person who has been designated by a Named Fiduciary
pursuant to authority granted by the Plan, who acts to carry out a fiduciary
responsibility, subject to any exceptions granted directly or indirectly by
ERISA.
1.28 Forfeiture. The term Forfeiture means the amount, if any, by
which the value of a Participant's Account exceeds his Vested Interest upon the
occurrence of an immediate Break-in-Service, a 1-Year Break-in-Service or 5
consecutive 1-Year Breaks-in-Service, as elected by the Employer in its Adoption
Agreement pursuant to Section 3D.5, following such Participant's Termination of
Employment.
1.29 Highly Compensated Employee. The term Highly Compensated
Employee includes both Highly Compensated Active Employees and Highly
Compensated Former Employees.
As elected by the Employer in the Adoption Agreement, the method
to determine Highly Compensated Employees shall be:
(a) Traditional Method: A "Highly Compensated Active
Employee" includes any Employee who performs service for the Employer during the
Determination Year and who, during the Look-Back Year;
(1) Received Compensation from the Employer in
excess of $75,000 (as adjusted pursuant to Code section 415(d)); or
(2) Received Compensation from the Employer in
excess of $50,000 (as adjusted pursuant to Code section 415(d)) and was a member
of the top-paid group for such year; or
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(3) Was an officer of the Employer and received
Compensation during such year that is greater than 50 percent of the dollar
limitation in effect under Code section 415(b)(1)(A).
The term Highly Compensated Employee also
includes: (1) Employees who are described in the preceding sentence if the term
"Determination Year" is substituted for the term "Look-Back Year" and who are
one of the 100 employees who received the most Compensation from the Employer
during the Determination Year; and (2) Employees who are 5-percent owners at any
time during the Look-Back Year or Determination Year.
If no officer has satisfied the Compensation
requirement of (3) above during either a Determination Year or Look-Back Year,
the highest paid officer for such year shall be treated as a Highly Compensated
Employee.
For this purpose, the Determination Year shall
be the Plan Year. The Look-Back Year shall be the period elected by the Employer
in the Adoption Agreement.
A "Highly Compensated Former Employee" includes
any Employee who separated from Service (or was deemed to have separated) prior
to the Determination Year, performs no service for the Employer during the
Determination Year, and was a highly compensated active employee for either the
separation year or any Determination Year ending on or after the Employee's 55th
birthday.
If an Employee is, during a Determination Year
or Look-Back Year, a family member of either a 5-percent owner who is an active
or former Employee or a Highly Compensated Employee who is one of the 10 most
Highly Compensated Employees ranked on the basis of Compensation paid by the
Employer during-such year (a "Top 10 Highly Compensated Employee"), then the
family member and the 5-percent owner or Top 10 Highly Compensated Employee
shall be aggregated. In such case, the family member and 5-percent owner or Top
10 Highly Compensated Employee shall be treated as a single Employee receiving
Compensation and Plan contributions or benefits equal to the sum of such
Compensation and contributions or benefits of the family member and 5-percent
owner or Top 10 Highly Compensated Employee. For purposes of this Section, the
term "family member" includes the Spouse, lineal ascendants and descendants of
the Employee or former Employee and the spouses of such lineal ascendants and
descendants.
The determination of who is a Highly Compensated
Employee, including the determinations of the number and identity of the
Employees in the top-paid group, the top 100 Employees, the number of Employees
treated as officers and the Compensation that is considered, will be made in
accordance with Code section 414(q) and the regulations thereunder.
For purposes of this definition, Compensation
shall mean compensation as defined in Code section 415(c)(3) except that
elective or salary reduction contributions to a cafeteria plan, CODA or
tax-sheltered annuity shall be included in Compensation.
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(b) Simplified Method For Employers In More than One
Geographic Area: If elected by the Employer in the Adoption Agreement, the
Traditional Method above will be modified by substituting $50,000 for $75,000 in
(1) and by disregarding (2). This simplified definition of Highly Compensated
Employee will apply to Employers that maintain significant business activities
(and employ Employees) in at least two significant, separate geographic areas.
(c) Alternative Simplified Method: If elected by the
Employer in the Adoption Agreement, Highly Compensated Employees shall be
determined as follows: A Highly Compensated Active Employee includes any
Employee who performs service for the Employer during the Determination Year and
who:
(1) Is a 5-percent owner; or
(2) Received Compensation from the Employer in
excess of $75,000 (as adjusted pursuant to Code section 415(d)); or
(3) Received Compensation from the Employer in
excess of $50,000 (as adjusted pursuant to Code section 415(d)) and was a member
of the top-paid group for such year; or
(4) Was an officer of the Employer and received
Compensation during such year that is greater than 50 percent of the dollar
limitation in effect under Code section 415(b)(1)(A).
Under this simplified definition, the look-back
provisions of Code section 414(q) do not apply.
(d) Alternative Simplified Method With Snapshot: If the
Alternative Simplified Method of determining Highly Compensated Employees is
selected by the Employer, the Employer may elect in the Adoption Agreement to
substantiate that the Plan complies with the nondiscrimination requirements on
the basis of the Employer's work force on a single day during the Plan Year,
provided that day is reasonably representative of the Employer's work force and
the Plan's coverage throughout the Plan Year. The day elected by the Employer
and indicated on the Adoption Agreement shall be the "Snapshot Day."
To apply the Alternative Simplified Method on a snapshot
basis:
(1) The Employer determines who is a Highly
Compensated Employee on the basis of the data as of the Snapshot Day, except as
provided in (3) below.
(2) If the determination of who is a Highly
Compensated Employee is made earlier than the last day of the Plan Year, the
Employee's Compensation that is used to determine an Employee's status must be
protected for the Plan Year under a reasonable method established by the
Employer.
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(3) If there are Employees not employed on the
Snapshot Day who are taken into account in testing, they must be determined to
be either Highly Compensated Employees or non-Highly Compensated Employees. In
addition to those Employees who are determined to be Highly Compensated
Employees on the Plan's Snapshot Day, the Employer must treat as a Highly
Compensated Employee any eligible Employee for the Plan Year who:
(a) Terminated employment prior to the
Snapshot Day and was a Highly Compensated Employee in the prior Plan Year;
(b) Terminated employment prior to the
Snapshot Day and (i) was a 5-percent owner, or (ii) has Compensation for the
Plan Year greater than or equal to the projected Compensation of any Employee
who is treated as a Highly Compensated Employee on the Snapshot Day (except for
Employees who are Highly Compensated Employees solely because they are 5 percent
owners or officers), or (iii) was an officer and has Compensation greater than
or equal to the projected Compensation of any other officer who is a Highly
Compensated Employee on the Snapshot Day solely because that person is an
officer; or
(c) Becomes employed after the Snapshot Day
and (i) is a 5 percent owner, or (ii) has Compensation for the Plan Year greater
than or equal to the projected Compensation of any Employee who is treated as a
Highly Compensated Employee on the Snapshot Day (except for Employees who are
Highly Compensated Employees solely because they are 5-percent owners or
officers), or (iii) is an officer and has Compensation greater than or equal to
the projected Compensation of any officer who is a Highly Compensated Employee
on the Snapshot Day solely because that person is an officer.
1.30 Insurance Company. The term Insurance Company means Connecticut
General Life Insurance Company, a legal reserve life insurance company of
Hartford, Connecticut. If any company other than Connecticut General Life
Insurance Company has issued any Life Insurance Policy held by the Trustee under
the Plan, then with respect to such Policy only and matters pertaining directly
thereto, the term Insurance Company shall be deemed to refer to such other
issuing company.
1.31 Late Retirement Date. The term Late Retirement Date means the
first day of the month coinciding with or next following the date a Participant
is separated from Service with the Employer after his Normal Retirement Age, for
any reason other than death.
1.32 Leased Employee. The term Leased Employee means any person
(other than an Employee of the recipient Employer) who, pursuant to an agreement
between the recipient Employer and any other person ("leasing organization"),
has performed services for the recipient Employer (or for the recipient Employer
and related persons determined in accordance with Code section 414(n)(6)) on a
substantially full-time basis for a period of at least one year, and such
services are of a type historically performed by employees in the business field
of the recipient Employer. Contributions or benefits provided a Leased Employee
by the leasing organization which are
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attributable to services performed for the recipient Employer shall be treated
as provided by the recipient Employer.
A Leased Employee shall not be considered an Employee of the
recipient Employer if: such employee is covered by a money purchase pension plan
of the leasing organization providing: (a) a nonintegrated employer contribution
rate of at least 10 percent of compensation, as defined in Code section
415(c)(3), but including amounts contributed by the employer pursuant to a
salary reduction agreement which are excludable from the Leased Employee's gross
income under Code section 125, section 402(e)(3), section 402(h)(1)(B) or
section 403(b), (b) immediate participation, and (c) full and immediate vesting;
and Leased Employees do not constitute more than 20 percent of the recipient's
non-highly compensated work force.
1.33 Life Annuity. The term Life Annuity means an Annuity payable
over the life or life expectancy of one or more individuals.
1.34 Life Insurance Policy. The term Life Insurance Policy (or
Policy) means a policy of individual life insurance purchased from the Insurance
Company on the life of any Participant.
1.35 Matching Contributions. The term Matching Contributions means
contributions made by the Employer to the Plan for a Participant on account of
either Elective Deferral Contributions or Required Employee Contributions. In
addition, any Forfeiture reallocated as a Matching Contribution shall be
considered a Matching Contribution for purposes of this Plan. If elected by the
Employer in the Adoption Agreement, Matching Contributions shall be made out of
Considered Net Profits in an amount specified by the Employer in its Adoption
Agreement for each $1.00 contributed as either an Elective Deferral Contribution
or a Required Employee Contribution, as further specified by the Employer in its
Adoption Agreement. The term Matching Contributions shall include Additional
Matching Contributions.
Should there be insufficient Considered Net Profits of the
Employer for such Employer contribution, the amount of such Matching
Contributions may be diminished to the amount that can be made from the
Employer's Considered Net Profits.
The Employer may designate at the time of contribution that all
or a portion of such Matching Contributions be treated as Qualified Matching
Contributions.
If elected by the Employer in the Adoption Agreement, Partners
shall not be entitled to receive Matching Contributions. If Partners are
entitled to receive Matching Contributions, such Contributions shall be
considered Elective Deferral Contributions for all purposes under this Plan.
1.36 Money Purchase Pension Contributions. The term Money Purchase
Pension Contributions means contributions made to the Plan by the Employer in
accordance with a definite formula as specified in the Adoption Agreement.
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1.37 Named Fiduciary. The term Named Fiduciary means the
Administrator and any other Fiduciary designated by the Employer, and any
successor thereto.
1.38 Nonelective Contributions. The term Nonelective Contributions
means contributions made to the Plan by the Employer in accordance with a
definite formula as specified in the Adoption Agreement. The Employer may
designate at the time of contribution that the Nonelective Contribution shall be
treated as a Qualified Nonelective Contribution.
1.39 Non-Trusteed. The term Non-Trusteed means that the Employer has
specified in the Adoption Agreement that there will not be a Trust as a part of
the Plan. Contributions under a Non-Trusteed plan will be made directly to the
Insurance Company. If the Employer specifies in the Adoption Agreement that the
Plan is Non-Trusteed, then the terms and provisions of this Plan relating to the
Trust shall be of no force or effect.
1.40 Normal Retirement Age. The term Normal Retirement Age means the
age selected 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.
Notwithstanding the vesting schedule elected by the Employer in
the Adoption Agreement, an Employee's right to his or her account balance shall
be nonforfeitable upon the attainment of Normal Retirement Age.
1.41 Normal Retirement Date. The term Normal Retirement Date means
the first day of the month coinciding with or next following the date a
Participant attains his Normal Retirement Age. If a Participant retires from the
Service of the Employer on his Normal Retirement Date, he shall receive a
distribution of the entire value of his Participant's Account, as of his Normal
Retirement Date, subject to the provisions of Section 3A and Section 3C.
1.42 Owner-Employee. The term Owner-Employee means an individual who
is a sole proprietor, or who is a Partner owning more than 10 percent of either
the capital or profits interest of the Partnership.
1.43 Participant. The term Participant means any person who has a
Participant's Account in the Plan and/or Trust.
If elected by the Employer in the Adoption Agreement, for
purposes of the investment of contributions as described in Section 5A, the term
Participant shall include former Participants, Beneficiaries, and Alternate
Payees. Former Participants shall include those Participants who upon
Termination of Employment elected to defer distribution in accordance with
Section 3A of the Plan.
1.44 Participant's Account. The term Participant's Account means the
sum of the following sub-accounts maintained on behalf of each Participant.
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(a) Money Purchase Pension Contributions, if any, plus any
income and minus any loss thereon;
(b) Nonelective Contributions, if any, plus any income and
minus any loss thereon;
(c) Matching Contributions, if any, plus any income and
minus any loss thereon;
(d) Qualified Nonelective Contributions, if any, plus any
income and minus any loss thereon;
(e) Qualified Matching Contributions, if any, plus any
income and minus any loss thereon;
(f) Prior Employer Contributions, if any, plus any income
and minus any loss thereon;
(g) Elective Deferral Contributions, if any, plus any income
and minus any loss thereon;
(h) Employee Contributions, if any, plus any income and
minus any loss thereon;
(i) QVEC Contributions, if any, plus any income and minus
any loss thereon.
(j) Rollover Contributions, if any, plus any income and
minus any loss thereon;
A Participant's Account shall be invested in accordance with
rules established by the Plan Administrator that shall be applied in a
consistent and nondiscriminatory manner.
1.45 Participant's Employer Stock Account. The term Participant's
Employer Stock Account means that portion, if any, of the Participant's Account
which is invested in shares of the Employer's stock. Such Participant's Employer
Stock Account shall be credited with dividends paid, if any. Such Participant's
Employer Stock Account will be valued on each day that the public exchange, over
which the Employer's stock, is traded, is open for unrestricted trading.
Amounts that are invested in the Participant's Employer Stock
Account may be invested in any short term account prior to actual investment in
the Participant's Employer Stock Account.
As elected by the Employer in the Adoption Agreement:
(a) The Trustee will vote the shares of the Employer's stock
invested in the Participant's Employer Stock Account; or
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(b) The Trustee will vote the shares of the Employer's stock
in accordance with any instructions received by the Trustee from the
Participant. The Trustee may request voting instructions from the Participants
provided this is done in a consistent and nondiscriminatory manner.
The ability of a Participant who is subject to the
reporting requirements of section 16(a) of the Securities Exchange Act of 1934
(the "Act") to make withdrawals or investment changes involving the
Participant's Employer Stock Account may be restricted by the Plan Administrator
to comply with the rules under section 16(b) of the Act.
A money purchase pension plan making an initial
investment in shares of the Employer's stock after December 31, 1974, may not
acquire shares to the extent that the aggregate fair market value of the
Employer's stock held by the Plan will exceed 10 percent of the fair market
value of the assets of the Plan.
1.46 Partner. The term Partner means a member of a Partnership.
1.47 Partnership. The term Partnership means a partnership as defined
in Code section 7701(a)(2) and the regulations thereunder and includes a
syndicate, group, pool, joint venture, or other unincorporated organization
through or by means of which any business, financial operation, or venture is
carried on, and which is not a corporation or a trust or estate within the
meaning of the Code. A joint undertaking merely to share expenses is not a
Partnership. In addition, mere co-ownership of property which is maintained,
kept in repair, and rented or leased does not constitute a Partnership.
1.48 Person. The term Person means any natural person, partnership,
corporation, trust or estate.
1.49 Plan. The term Plan means this Connecticut General Life
Insurance Company Defined Contribution Plan and the Adoption Agreement as
adopted by the Employer and as both may be amended from time to time.
1.50 Plan Administrator. The term Plan Administrator means the Person
or Persons designated by the Employer in its Adoption Agreement and any
successor(s) thereto. If more than one Person shall be designated, the committee
thus formed shall be known as the Administrative Committee and all references in
the Plan to the Plan Administrator shall be deemed to apply to the
Administrative Committee. The Plan Administrator shall signify in writing his
acceptance of his responsibility as a Named Fiduciary.
1.51 Plan Year. The term Plan Year means the 12-consecutive month
period specified by the Employer in the Adoption Agreement.
If the Plan Year changes to a different 12-consecutive month
period, the first new Plan Year shall begin before the end of the last old Plan
Year. In this event, the period beginning on
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the first day of the last old Plan Year and ending on the day before the first
day of the first new Plan Year shall be treated as a short Plan Year for
purposes of determining Highly Compensated Employees, performing the
Nondiscrimination Tests set forth in Section 4A, and applying the Top-Heavy
provisions of Section 7A. However, Service will be credited in accordance with
the provisions of Section 2A.8.
1.52 Prevailing Wage Law. The term Prevailing Wage Law means any
statute or ordinance that requires the Employer to pay its Employees working on
public contracts at wage rates not less than those determined pursuant to that
statute classes of workers in the geographical area where the contract is
performed, including the Davis-Bacon Act and similar Federal, state, or
municipal prevailing wage statutes.
1.53 Prior Employer Contributions. The term Prior Employer
Contributions means contributions made by the Employer prior to the date
indicated on the Adoption Agreement.
1.54 Prior Required Employee Contributions. The term Prior Required
Employee Contributions means Employee post-tax contributions that the Employer
required as either a condition of participation, or for receiving an Employer
contribution, prior to the date indicated on the Adoption Agreement.
1.55 Prior Voluntary Employee Contributions. The term Prior Voluntary
Employee Contributions means post-tax contributions made voluntarily by an
Employee prior to the date indicated on the Adoption Agreement.
1.56 QDRO. The term QDRO means a Qualified Domestic Relations Order
as determined in accordance with Code section 414(p) and regulations thereunder.
1.57 Qualified Matching Contributions. The term Qualified Matching
Contributions means Matching Contributions which are subject to the distribution
and nonforfeitability requirements of Code section 401(k) when made.
1.58 Qualified Nonelective Contributions. The term Qualified
Nonelective Contributions means Nonelective Contributions made by the Employer
and allocated to Participants' accounts that the Participants may not elect to
receive in cash until distributed from the Plan; that are nonforfeitable when
made; and that are distributable only in accordance with the distribution
provisions that are applicable to Elective Deferral Contributions and Qualified
Matching Contributions.
1.59 QVEC Contributions. The term QVEC Contributions means voluntary
amounts contributed by the Participant prior to January 1, 1987, which the
Participant designated in writing were eligible for a tax deduction under Code
section 219(a).
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QVEC Contributions will be maintained in a separate account,
which will be nonforfeitable (i.e., 100% vested) at all times. The account will
share in the gains and losses under the Plan in the same manner as described in
Section 5A.3 of the Plan.
1.60 Required Employee Contributions. The term Required Employee
Contributions means Employee post-tax contributions that the Employer requires
either as a condition of participation or for receipt of an Employer
contribution.
1.61 Rollover Contribution. The term Rollover Contribution means an
amount representing all or part of a distribution from a pension or profit
sharing plan meeting the requirements of Code section 401(a), which is eligible
for rollover to this Plan in accordance with the requirements set forth in Code
section 402 (including Direct Rollovers) or Code section 408(d)(3), whichever is
applicable.
1.62 Salary Deferral Agreement. The term Salary Deferral Agreement
means an agreement between a Participant and the Employer to defer receipt of a
portion of the Participant's Compensation by making Elective Deferral
Contributions to the Plan.
1.63 Self-Employed Individual. The term Self-Employed Individual
means an individual who has Earned Income for the taxable year from the trade or
business for which the Plan is established; also, an individual who would have
Earned Income but for the fact that the trade or business had no net profits for
the taxable year.
1.64 Serious Financial Hardship. The term Serious Financial Hardship
means an immediate and heavy financial need of the Participant where such
Participant lacks the available resources to meet the hardship. The Plan
Administrator shall make a determination of whether a Serious Financial Hardship
exists in accordance with the applicable provisions of Section 3E.
1.65 Shareholder-Employee. The term Shareholder-Employee means an
Employee or officer of an electing small business S corporation 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.
1.66 Social Security Integration Level. The term Social Security
Integration Level means the Social Security Taxable Wage Base or such lesser
amount specified by the Employer in the Adoption Agreement. If the Social
Security Taxable Wage Base is amended, the Social Security Integration Level
will be deemed to have been amended.
1.67 Social Security Taxable Wage Base. The term Social Security
Taxable Wage Base means the contribution and benefit base in effect under
section 230 of the Social Security Act at the beginning of the Plan Year.
1.68 Sponsoring Organization. The term Sponsoring Organization means
Connecticut General Life Insurance Company, a legal reserve life insurance
company of Hartford, Connecticut.
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1.69 Spouse. The term Spouse means the lawful wife of a male
Participant, or the lawful husband of a female Participant. However, a former
Spouse will be treated as the Spouse or surviving Spouse and a current Spouse
will not be treated as the Spouse or surviving Spouse to the extent provided
under a QDRO.
1.70 Straight Life Annuity. The term Straight Life Annuity means an
annuity payable in equal installments for the life of the Participant, and that
terminates upon the Participant's death.
1.71 Termination of Employment. The term Termination of Employment
means a severance of the Employer-Employee relationship which occurs prior to a
Participant's Normal Retirement Age for any reason other than Early Retirement,
Disability, or death.
1.72 True-Up Contributions. The term True-Up Contributions means
Additional Matching Contributions made to the Plan by the Employer so that total
Matching Contributions for each Participant are calculated on an annual basis
rather than on the basis selected by the Employer in the Adoption Agreement.
1.73 Trust. The term Trust means the Trust Agreement if the Employer
specifies in the Adoption Agreement that the Plan is Trusteed. The Trust
Agreement is entered into by the Employer, the Plan Administrator and the
Trustee by completing and signing the Adoption Agreement, which Trust Agreement
forms a part of, and implements the provisions of the Plan as it applies to the
Employer. If the Employer specifies in the Adoption Agreement that the Plan is
Non-Trusteed, then the terms and provisions of this Plan relating to the Trust
shall be of no force and effect.
1.74 Trustee. The term Trustee means the trustee(s) designated by the
Employer in its Adoption Agreement, if applicable, and any successor(s) thereto.
1.75 Vested Interest. The term Vested Interest means the
nonforfeitable right to an immediate or deferred benefit on any date in the
amount which is equal to the sum of (a), (b) and (c) below:
(a) The value on that date of that portion of the
Participant's Account that is attributable to and derived from Employee
Contributions, if any;
(b) The value on that date of the portion of the
Participant's Account attributable to Elective Deferral Contributions, if any;
Qualified Nonelective Contributions, if any; QVEC Contributions, if any;
Rollover Contributions, if any; and Qualified Matching Contributions, if any;
(c) The value on that date of that portion of the
Participant's Account that is attributable to and derived from contributions
made by the Employer (and Forfeitures, if any), multiplied by his Vesting
Percentage determined on the date applicable.
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Employer contributions described in subsection (c), plus
the earnings thereon, shall be, at any relevant time, a part of the
Participant's Vested Interest equal to an amount ("X") determined by the
following formula:
X = P(AB+D)-D
For purposes of applying this formula:
P = The Participant's Vesting Percentage at the relevant time.
AB = The account balance attributable to such contributions,
plus the earnings thereon, at the relevant time.
D = The amount of any distribution.
1.76 Vesting Percentage. The term Vesting Percentage means the
Participant's nonforfeitable interest in Money Purchase Pension Contributions,
Matching Contributions, Nonelective Contributions, or Prior Employer
Contributions credited to his Participant's Account, plus any income and minus
any loss thereon. The Vesting Percentage for each such Employer contribution is
computed in accordance with one of the schedules listed below, based on Years of
Service with the Employer, as specified by the Employer in its Adoption
Agreement:
(a) 100% full and immediate;
(b) 100% after 3 Years of Service;
(c) 20% per Year of Service, 100% at 5 Years of Service;
(d) 20% after 3 Years of Service, 20% per Year of Service
thereafter, 100% at 7 Years of Service;
(e) 20% after 2 Years of Service, 20% per Year of Service
thereafter, 100% at 6 Years of Service;
(f) 100% after 5 Years of Service;
(g) 25% after 1 Year of Service, 100% after 4 Years of
Service;
(h) Other.
However, if a Participant dies prior to attaining his
Normal Retirement Age, his Vesting Percentage shall be 100%.
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1.77 Voluntary Employee Contributions. The term Voluntary Employee
Contributions means post-tax contributions made voluntarily by an Employee.
ARTICLE II - GENERAL PROVISIONS
2A. SERVICE
2A.1 Service. The term Service means active employment with the
Employer as an Employee.
2A.2 Absence from Employment. Absence from employment on account of a
leave of absence authorized by the Employer pursuant to the Employer's
established leave policy will be counted as employment with the Employer
provided that such leave of absence is of not more than two years' duration.
Absence from employment on account of active duty with the Armed Forces of the
United States will be counted as employment 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 date the Plan Administrator receives notice that
the Employee will not return. The Employer's leave policy shall be applied in a
uniform and nondiscriminatory manner to all Participants under similar
circumstances.
For purposes of determining an Employee's eligibility and
vesting status for periods while the Employee is absent from work for reasons
covered under the Family and Medical Leave Act, Service will be credited in
accordance with and to the extent required by the provisions of the Family and
Medical Leave Act.
If the Employer has elected in the Adoption Agreement to
determine Service based upon 1,000 Hours, then the following Sections 2A.3
through 2A.8 shall apply.
2A.3 Hour of Service. The term Hour of Service means:
(a) Each hour for which an Employee is directly or
indirectly paid, or entitled to payment, by the Employer for the performance of
duties. These hours shall be credited to the Employee for the Computation Period
or Periods, as defined in Section 2A.5, in which the duties were performed; and
(b) Each hour for which an Employee is paid or entitled to
payment, by the Employer on account of a period of time during which no duties
are performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
disability), layoff, jury duty, military duty or leave of absence. No more than
501 Hours of Service will be credited under this paragraph for a single
Computation Period (whether or not the period occurs in a single Computation
Period). Hours under this paragraph will be calculated and credited pursuant to
section 2530.200b-2 of the Department of Labor regulations which are
incorporated herein by this reference; and
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(c) Each hour for which back pay, irrespective of mitigation
of damages, has been either awarded or agreed to by the Employer. The same Hours
of Service will not be credited under subsection (a) or subsection (b), as the
case may be, and under this subsection (c). These hours shall be credited to the
Employee for the Computation Period or periods to which the award or agreement
pertains rather than the Computation Period in which the award, agreement or
payment is made; and Hours of Service will be credited for employment with other
members of an affiliated service group (under Code section 414(m)), a controlled
group of corporations (under Code section 414(b)), or a group of trades or
businesses under common control (under Code section 414(c)), of which the
adopting Employer is a member, and any other entity required to be aggregated
with the Employer pursuant to Code section 414(o).
Hours of Service will also be credited for any
individual considered an Employee for purposes of this Plan under Code sections
414(n) or 414(o).
Solely for purposes of determining whether a 1-Year
Break-in-Service, as defined in Section 2A.4, for participation and vesting
purposes has occurred in a Computation Period, an individual who is absent from
work for maternity or paternity reasons shall receive credit for the Hours of
Service which would otherwise have been credited to such individual but for such
absence, or in any case in which such hours cannot be determined, eight (8)
Hours of Service per day of such absence. For purposes of this paragraph, an
absence from work for maternity or paternity reasons means an absence (1) by
reason of the pregnancy of the individual, (2) by reason of a birth of a child
of the individual, (3) by reason of the placement of a child with the individual
in connection with the adoption of such child by such individual, or (4) for
purposes of caring for such child for a period beginning immediately following
such birth or placement. The Hours of Service credited under this paragraph
shall be credited (1) in the Computation Period in which the absence begins if
the crediting is necessary to prevent a Break-in-Service in that period, or (2)
in all other cases, in the following Computation Period.
Service shall be determined on the basis of the method
selected in the Adoption Agreement.
2A.4 1-Year Break-in-Service. The term 1-Year Break-in-Service means
any Computation Period during which an Employee fails to complete more than 500
Hours of Service.
2A.5 Year(s) of Service. The term Year(s) of Service means a
12-consecutive month period ("Computation Period") during which an Employee has
completed at least 1,000 Hours of Service.
(a) Eligibility Computation Period. For purposes of
determining Years of Service and Breaks-in-Service for eligibility, the
12-consecutive month period shall begin with the date on which the Employee
first performs an Hour of Service for the Employer and, where additional periods
are necessary, succeeding anniversaries of his employment commencement date. The
employment commencement date is the date on which the Employee first performs an
Hour of Service for the Employer maintaining the Plan.
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(b) Vesting Computation Period. As elected by the Employer
in the Adoption Agreement, for computing Years of Service and Breaks-in-Service
for vesting, the 12-consecutive month period:
(1) Shall be the Plan Year; or
(2) Shall begin with the date on which the Employee
first performs an Hour of Service for the Employer and, where additional periods
are necessary, succeeding anniversaries of that date.
However, active participation as of the last day
of the Plan Year is not required in order for a Participant to be credited with
a Year of Service for vesting purposes.
(c) Contribution Computation Period. If the Employer
specifies an annual Contribution Period in its Adoption Agreement for the
purpose of determining a Participant's eligibility to receive a contribution,
the 12-consecutive month period shall be any Plan Year during which the
Participant is credited with at least 1,000 Hours of Service. However, when an
Employee first becomes a Participant or resumes active participation in the Plan
following a 1-Year Break-in-Service on a date other than the first day of the
Plan Year, all Hours of Service credited to the Participant during that Plan
Year, including those Hours credited prior to the date the Employee enrolls (or
reenrolls) as an Participant in the Plan shall be counted. Furthermore, the
Employer may require in its Adoption Agreement that a Participant be a
Participant as of the last day of the Plan Year in order to be eligible to
receive a contribution for a Plan Year.
(d) If in its Adoption Agreement the Employer permits Early
Retirement, the 12-consecutive month period for determining Early Retirement
shall be the Plan Year. However, active participation as of the last day of the
Plan Year is not required in order for a Participant to be credited with a Year
of Service.
Service with a predecessor organization of the Employer
shall be treated as Service with the Employer for the purposes of subsections
(a), (b) and (d) above in any case in which the Employer maintains the plan of
such predecessor organization. In addition, if elected by the Employer in the
Adoption Agreement, service with a predecessor organization of the Employer
shall be treated as Service with the Employer, even if the Employer does not
maintain the plan of such predecessor organization.
If elected in the Adoption Agreement, service with a
subsidiary or affiliate of the Employer that is not related to the Employer
under the provisions of Code sections 414(b), (c) or (m) shall be treated as
Service with the Employer for purposes of (a), (b) and (d) above.
2A.6 Determining Vesting Percentage. Vesting credit shall be given
for each Year of Service except those periods specifically excluded in the
Adoption Agreement.
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If a Participant completes less than 1,000 Hours of Service
during a Plan Year while remaining in the service of the Employer, his Vesting
Percentage shall not be increased for such Plan Year. However, at such time as
the Participant again completes at least 1,000 Hours of Service in any
subsequent Plan Year, his Vesting Percentage shall then take into account all
Years of Service with the Employer except those specifically excluded in the
Adoption Agreement.
If an individual who ceases to be an Employee and is
subsequently rehired as an Employee enrolls (or reenrolls) in the Plan, upon his
participation (or reparticipation) his Vesting Percentage shall then take into
account all Years of Service except those specifically excluded in the Adoption
Agreement.
In the case of a Participant who has 5 consecutive 1-Year
Breaks-in-Service, all Years of Service after such Breaks-in-Service will be
disregarded for the purpose of vesting the Employer-derived account balance that
accrued before such breaks. However, both pre-break and post-break Service will
count for the purpose of vesting the Employer-derived account balance that
accrues after such Breaks-in-Service. Both accounts will share in the earnings
and losses of the fund.
In the case of a Participant who does not have 5-consecutive
1-Year Breaks-in-Service, both the pre-break and post-break Service will count
in vesting both the pre-break and post-break Employer-derived account balance.
2A.7 Excluded Years of Service for Vesting. In determining the
Vesting Percentage of an Employee, all Years of Service with the Employer(s)
maintaining the Plan shall be taken into account, except that the following
periods may be excluded, as specified by the Employer in its Adoption Agreement:
(a) Years of Service prior to the time a Participant
attained age 18;
(b) Years of Service during which the Employer did not
maintain the Plan or a predecessor plan;
(c) Years of Service during a period for which the Employee
made no Required Employee Contributions;
(d) Years of Service prior to any 1-Year Break-in-Service,
until the Employee completes one Year of Service following such 1-Year
Break-in-Service.
(e) In the case of an Employee who has no Vested Interest in
Employer contributions, Years of Service before any period of consecutive 1-Year
Breaks-in-Service if the number of such consecutive 1-Year Breaks-in-Service
equals or exceeds the greater of (i) 5, or (ii) the total number of Years of
Service before such break.
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For the purposes of this Section, a predecessor plan
shall mean a plan of the Employer that was terminated within five years
preceding or following the Effective Date of this Plan.
2A.8 Change in Plan Years. If the Plan Year is changed, the following
special rules shall apply.
(a) Vesting Computation Periods. If the Vesting Computation
Period is the Plan Year, Years of Service and 1-Year Breaks-in-Service shall be
measured over two overlapping 12-consecutive month periods. The first such
period shall begin on the first day of the last old Plan Year and the second
such period shall begin on the first day of the first new Plan Year, thereby
creating an overlap. All Hours of Service performed during the overlap period
must be counted in both Vesting Computation Periods. A Participant who completes
at least 1,000 Hours of Service during each such period shall be credited with
two Years of Service for Vesting.
(b) Contribution Computation Periods. To determine a
Participant's eligibility to receive a contribution for a short Plan Year, the
1,000 Hours of Service requirement shall be prorated by multiplying by a
fraction, the numerator of which is the number of full months in the short Plan
Year and the denominator of which is 12.
If the Employer has elected in the Adoption Agreement to
determine Service based upon Elapsed Time, then the following Sections 2A.9 and
2A.10 shall apply.
2A.9 Elapsed Time. If the Employer has selected an eligibility
requirement in the Adoption Agreement that is or includes a fractional Year(s)
of Service requirement, the provisions of this Section shall apply.
(a) For purposes of determining an Employee's initial or
continued eligibility to participate in the Plan, or the Participant's Vested
Interest in Employer contributions, an Employee will receive credit for the
aggregate of all time period(s) commencing with the Employee's first day of
employment or reemployment and ending on the date a Break-in-Service (as defined
in this Section) begins. The first day of employment or reemployment is the
first day the Employee performs an Hour of Service. An Employee will also
receive credit for any Period of Severance of less than 12-consecutive months.
Fractional periods of a year will be expressed in terms of days.
(b) For purposes of this Section, "Hour of Service" shall
mean each hour for which an Employee is paid or entitled to payment for the
performance of duties for the Employer.
(c) For purposes of this Section, a "Break-in-Service" is a
Period of Severance of at least 12 consecutive months.
(d) 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,
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quits or is discharged, or if earlier, the 12-month anniversary of the date on
which the Employee was otherwise first absent from Service.
(e) In the case of an individual who is absent from work for
maternity or paternity reasons, the 12-consecutive month period beginning on the
first anniversary of the first day of such absence shall not constitute a
Break-in-Service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (1) 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 such child by such individual, or (4) for purposes of caring for
such child for a period beginning immediately following such birth or placement.
Each Employee will share in Employer contributions for
the period beginning on the date the Employee commences participation under the
Plan and ending on the date on which such Employee severs employment with the
Employer or is no longer a member of an eligible class of Employees.
(f) If the Employer is a member of an affiliated service
group (under Code section 414(m)), a controlled group of corporations (under
Code section 414(b)), a group of trades or businesses under common control
(under Code section 414(c)) or any other entity required to be aggregated with
the Employer pursuant to Code section 414(o), Service will be credited for any
employment for any period of time for any other member of such group. Service
will also be credited for any individual required under Code section 414(n) or
Code section 414(o) to be considered an Employee of any Employer aggregated
under Code sections 414(b), (c), or (m) of such group.
2A.10 Excluded Periods of Service for Vesting. In determining the
Vesting Percentage of an Employee, all Periods of Service with the Employer(s)
maintaining the Plan shall be taken into account, except that the following
periods may be excluded, as specified by the Employer in its Adoption Agreement:
(a) Periods of Service prior to the time a Participant
attained age 18;
(b) Periods of Service during which the Employer did not
maintain the Plan or a predecessor plan;
(c) Periods of Service during which the Employee made no
Required Employee Contributions;
(d) Periods of Service prior to any one-year Period of
Severance, until the Employee completes a one-year period of Service following
such Period of Severance;
(e) In the case of an Employee who has no Vested Interest in
Employer contributions, Periods of Service before any Period of Severance if the
number of consecutive one-
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year Periods of Severance equals or exceeds the greater of (i) 5, or (ii) the
total number of one-year Periods of Service before such Period of Severance.
For the purposes of this Section, a predecessor plan
shall mean a plan of the Employer that was terminated within five years
preceding or following the Effective Date of this Plan.
2B. ELIGIBILITY, ENROLLMENT AND PARTICIPATION
2B.1 Eligibility. Each Employee shall be eligible to participate in
the Plan and receive an appropriate allocation of Employer contributions as of
the Entry Date following the day he meets the following requirements, if any,
specified by the Employer in its Adoption Agreement, relating to:
(a) Required service;
(b) Minimum attained age;
(c) Job class requirements.
In addition to the eligibility conditions stated above, the
Employer may specify in the Adoption Agreement certain groups of Employees who
are not eligible to participate in the Plan.
Notwithstanding the foregoing, if the Employer's Plan as set
forth herein replaces or amends a preceding plan, then those Employees
participating under the Plan as written prior to such replacement or amendment
shall be eligible to be Participants hereunder without regard to length of
Service or minimum attained age otherwise required herein.
2B.2 Enrollment. Each eligible Employee may enroll as of his Entry
Date by completing and delivering to the Plan Administrator an enrollment form
and, if applicable, a payroll deduction authorization and/or a Salary Deferral
Agreement.
2B.3 Reemployed Participant. In the case of an individual who ceases
to be an Employee and is subsequently rehired as an Employee, the following
provisions shall apply in determining eligibility to again participate in the
Plan:
(a) If the Employee had met the eligibility requirements as
specified in Section 2B.1, such Employee will become a Participant in the Plan
in accordance with Section 2B.2 as of the date he is reemployed as an Employee.
(b) If the Employee had not formerly met the eligibility
requirements specified in Section 2B.1, such Employee will become a Participant
in the Plan after meeting the requirements of Section 2B.1 in accordance with
Section 2B.2.
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2B.4 Eligible Class. If a Participant becomes ineligible to
participate because he is no longer a member of an eligible class of Employees,
such Employee shall participate immediately upon his return to an eligible class
of Employees. If such Participant incurs a Break-in-Service, eligibility will be
determined under the Break-in-Service rules of the Plan.
If an Employee who is not a member of the eligible class of
Employees becomes a member of the eligible class, such Employee shall
participate immediately if such Employee has satisfied the minimum age and
Service requirements and would have previously become a Participant had he been
in the eligible class. If such Participant incurs a Break-in-Service,
eligibility will be determined under the Break-in-Service rules of the Plan.
2B.5 Waiver of Participation. Notwithstanding any provision of the
Plan to the contrary, if Required Employee Contributions are elected by the
Employer in the Adoption Agreement, any Employee in accordance with the rules of
the Plan may decline to become a Participant or cease to be a Participant by
filing a written waiver of participation with the Plan Administrator in the
manner prescribed. Such waiver must be filed prior to the date such Employee is
eligible to become a Participant, or in the case of a current Participant, in
the last month of the Plan Year immediately preceding the Plan Year for which he
wishes to cease being a Participant.
Any Employee who files such a waiver shall not become a
Participant, or if a current Participant, shall elect to cease to be such as of
the first day of the succeeding Plan Year; and such Employee shall not receive
any additional Compensation or other sums by reason of his waiver of
participation.
Any such waiver may be rescinded by an Employee who is not a
Partner effective on the first day of the first Plan Year following one or more
Plan Years commencing after the filing of such waiver in which he was not a
Participant, in which event he shall become a Participant, or again become a
Participant, as the case may be, effective as of such date. A Partner may make a
one-time irrevocable waiver of participation upon the later of his commencement
of employment with the Employer or the date he is first eligible to participate
in the Plan.
No Employee who is eligible to participate in a standardized
plan may waive participation or voluntarily reduce his or her Compensation for
purposes of this Plan.
2B.6 Trades or Businesses Controlled by Owner-Employees. If this Plan
provides contributions or benefits for one or more Owner-Employees who control
both the business for which this Plan is established and one or more other
trades or businesses, this Plan and any plans established for other trades or
businesses must, when looked at as a single plan, satisfy Code sections 401(a)
and (d) for the Employees of this and all other trades or businesses. If the
Plan provides contributions or benefits for one or more Owner-Employees who
control one or more other trades or businesses, the employees of the other
trades or businesses must be included in a plan which satisfies Code sections
401(a) and (d) and which provides contributions and benefits not less favorable
than those provided for Owner-Employees under this Plan.
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If an individual is covered as an Owner-Employee under the plans
of two or more trades or businesses which he does not control and the individual
controls a trade or business, then the contributions or benefits of the
Employees under the plan of the trades or businesses which he does control must
be as favorable as those provided for him under the most favorable plan of the
trade or business which he does not control.
For purposes of the preceding paragraphs, an Owner-Employee or
two or more Owner-Employees will be considered to control a trade or business if
the Owner-Employee or two or more Owner-Employees together:
(1) own the entire interest in an unincorporated trade or
business, or
(2) in the case of a partnership, own more than 50 percent
of either the capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee or two
or more Owner-Employees shall be treated as owning any interest in a Partnership
that is owned, directly or indirectly, by a Partnership which such
Owner-Employee or such two or more Owner-Employees are considered to control
within the meaning of the preceding sentence.
2C. CONTRIBUTIONS AND ALLOCATIONS
2C.1 Profit Sharing/Thrift Plan with 401(k) Feature.
(a) Contributions - Employer. For each Plan Year, as
specified in the Adoption Agreement, the Employer shall make one or more of the
following contributions.
(1) Elective Deferral Contributions.
(2) Matching Contributions.
(3) Nonelective Contributions.
(b) Contributions - Participant. For each Plan Year, as
specified in the Adoption Agreement, each Participant may make periodic Required
Employee Contributions or Voluntary Employee Contributions.
For Plans that contain a CODA, a Participant may elect
to make a Voluntary Employee Contribution in a lump sum. Such lump sum Voluntary
Employee Contribution may be made (1) as of the Effective Date, or (2) as
elected by the Employer in the Adoption Agreement. Voluntary Employee
Contributions shall be subject to the terms of Section 4B.
(c) Fail-Safe Contribution. The Employer reserves the right
to make a discretionary Nonelective Contribution to the Plan for any Plan Year,
if the Employer determines
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that such a contribution is necessary to ensure the Actual Deferral Percentage
test or the Actual Contribution Percentage test will be satisfied for that Plan
Year. Such amount shall be designated by the Employer at the time of
contribution as a Qualified Nonelective Contribution and shall be known as a
Fail-Safe Contribution.
The Fail-Safe Contribution shall be made on behalf of
all eligible non-Highly Compensated Employees who are Participants and who are
considered under the Actual Deferral Percentage test or, if applicable, the
Actual Contribution Percentage test, and shall be allocated to the Participant's
Account of each such Participant in an amount equal to a fixed percentage of
such Participant's Compensation. The fixed percentage shall be equal to the
minimum fixed percentage necessary to be contributed by the Employer on behalf
of each eligible non-Highly Compensated Employee who is a Participant so that
the Actual Deferral Percentage test or, if applicable, the Actual Contribution
Percentage test, is satisfied.
(d) Contributions - Changes. For each Plan Year, a
Participant may change the amount of his Required Employee Contributions,
Voluntary Employee Contributions, or Elective Deferral Contributions as often as
the Plan Administrator allows (on a consistent and nondiscriminatory basis), on
certain dates prescribed by the Plan Administrator.
(e) Contributions - Timing.
(1) Elective Deferral Contributions shall be paid by
the Employer to the Trust or the Insurance Company, as elected by the Employer
in the Adoption Agreement, but never later than 90 days following the date of
deferral.
(2) Matching Contributions made on other than an
annual basis shall be paid to the Trust or Insurance Company, as elected by the
Employer in the Adoption Agreement. Matching Contributions, including Additional
Matching Contributions, made on an annual basis shall be paid to the Trust or
the Insurance Company, as applicable, at the end of the Plan Year, or as soon as
possible on or after the last day of such Plan Year, but in no event later than
the date prescribed by law for filing the Employer's income tax return,
including any extension thereof. To the extent that Matching Contributions are
used to purchase Life Insurance Policies, then such contributions for any Plan
Year may be paid to the Trust when premiums for such Policies are due during the
Plan Year.
(3) Nonelective Contributions made on other than an
annual basis shall be paid to the Trust or Insurance Company, as applicable, as
elected by the Employer in the Adoption Agreement. Nonelective Contributions
made on an annual basis shall be paid to the Trust or the Insurance Company, as
applicable, at the end of the Plan Year, or as soon as possible on or after the
last day of such Plan Year, but in any event not later than the date prescribed
by law for filing the Employer's income tax return, including any extension
thereof. To the extent that Nonelective Contributions are used to purchase Life
Insurance Policies, then such contributions for any Plan Year may be paid to the
Trust when premiums for such Policies are due during the Plan Year.
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(4) Employee Contributions shall be transferred by
the Employer to the Trust or the Insurance Company, as elected by the Employer
in the Adoption Agreement, but never later than 90 days following the date such
contributions are made by the Employee.
(5) The Fail-Safe Contribution for any Plan Year as
determined above shall be paid to the Insurance Company at the end of the Plan
Year, or as soon as possible on or after the last day of such Plan Year, but in
no event later than the date which is prescribed by law for filing the
Employer's income tax return, including any extensions thereof.
(f) Contributions - Allocations. The allocation of
Nonelective Contributions shall be made in accordance with (1), (2), (3) or (4)
below, as specified by the Employer in the Adoption Agreement.
(1) Formula A: Compensation Ratio - Not Integrated
with Social Security. The allocation to each Participant shall be made in the
proportion that the Compensation paid to each Participant eligible to receive an
allocation bears to the Compensation paid to all Participants eligible to
receive an allocation.
(2) Formula B: Integrated with Social Security -
Step Rate Method.
Base Contribution: An amount equal to a
percentage (as specified in the Adoption Agreement) of the Compensation of each
Participant up to the Social Security Integration Level;
Excess Contribution: In addition, an amount
equal to a percentage (as specified in the Adoption Agreement) of the
Participant's Compensation which is in excess of the Social Security Integration
Level, subject to the Limitations on Allocations in accordance with Section 4B.
This Excess Contribution percentage shall not exceed the lesser of:
(A) twice the Base Contribution or
(B) the Base Contribution plus the greater
of:
(i) the old age insurance portion of
the Old Age Survivor Disability (OASDI) tax rate; or
(ii) 5.7%.
If the Employer has elected in the Adoption
Agreement to use a Social Security Integration Level that in any Plan Year is
the greater of $10,000 or 20% but less than 100% of the Social Security Taxable
Wage Base, then the 5.7% limitation specified in 2C.1(f)(2)(B)(ii) shall be
adjusted in accordance with the following table:
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IF THE SOCIAL SECURITY INTEGRATION LEVEL
- ------------------------------------------------------------ ADJUST
IS MORE THAN BUT NOT MORE THAN 5.7% TO
------------ ----------------- -------
the greater of $10,000 or 20% 80% of the Social Security 4.3%
of the Social Security Taxable Taxable Wage Base
Wage Base
80% of the Social Security 100% of the Social Security 5.4%
Taxable Wage Base Taxable Wage Base
In the case of any Participant who has exceeded
the Cumulative Permitted Disparity Limit described in Section 2C.1(g),
Nonelective Contributions shall be allocated in an amount equal to the Excess
Contribution percentage of two times such Participant's total Compensation for
the Plan Year.
Any remaining Nonelective Contributions or
Forfeitures will be allocated to each Participant's Account in the ratio that
each Participant's total Compensation for the Plan Year bears to all
Participants' total Compensation for that Plan Year.
(3) Formula B: Integrated with Social Security -
Maximum Disparity Method.
Subject to the Limitations on Allocations
specified in Section 4B, for each Plan Year the allocation to each Participant
shall be made in accordance with the following:
(A) An amount equal to 5.7% of the sum of
each Participant's total Compensation plus Compensation that is in excess of the
Social Security Integration Level shall be allocated to each Participant's
Account. If the Employer does not contribute such amount for all Participants,
an amount shall be allocated to each Participant's Account equal to the same
proportion that each Participant's total Compensation plus Compensation that is
in excess of the Social Security Integration Level bears to the total
Compensation plus Compensation in excess of the Social Security Integration
Level of all Participants in the Plan. In the case of any Participant who has
exceeded the Cumulative Permitted Disparity Limit described in Section 2C.1(g),
two times such Participant's total Compensation for the Plan Year will be taken
into account.
If the Employer has elected in the
Adoption Agreement to use a Social Security Integration Level that in any Plan
Year is the greater of $10,000 or 20% but less than 100% of the Social Security
Taxable Wage Base, then the 5.7% limitation specified in this subsection shall
be adjusted in accordance with the following table:
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IF THE SOCIAL SECURITY INTEGRATION LEVEL
- ------------------------------------------------------------ ADJUST
IS MORE THAN BUT NOT MORE THAN 5.7% TO
------------ ----------------- -------
the greater of $10,000 or 20% 80% of the Social Security 4.3%
of the Social Security Taxable Taxable Wage Base
Wage Base
80% of the Social Security 100% of the Social Security 5.4%
Taxable Wage Base Taxable Wage Base
(B) The balance of the Nonelective
Contribution (if any) shall be allocated to the Participant's Account in the
proportion that each Participant's Compensation bears to the total Compensation
of all Participants.
(4) Formula C: Flat Dollar Amount.
The allocation to each Participant shall be a
flat dollar amount as elected by the Employer in the Adoption Agreement. Formula
C may not be elected under a standardized plan.
(g) Allocation Requirements.
Employer contributions shall be allocated to the
accounts of Participants in accordance with the allocation requirement as
specified by the Employer in its Adoption Agreement. If the Employer has adopted
a standardized plan, the allocation of any nonannual contribution made by the
Employer shall be made to each Participant who is a Participant on any day of
the Contribution Period regardless of Hours of Service.
Annual Overall Permitted Disparity Limit.
Notwithstanding the preceding paragraph, for any Plan Year this Plan benefits
any Participant who benefits under another qualified plan or simplified employee
pension plan, as defined in Code section 408(k), maintained by the Employer that
provides for permitted disparity (or imputes disparity), Employer contributions
and Forfeitures will be allocated to the account of each Participant who either
completes more than 500 Hours of Service during the Plan Year or who is employed
as of the last day of the Plan Year in the ratio that such Participant's total
Compensation bears to the total Compensation of all Participants.
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 mean 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 benefitted under a
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defined benefit or target benefit plan for any year beginning on or after
January 1, 1994, the Participant has no Cumulative Permitted Disparity Limit.
(h) Forfeitures. Forfeitures will be used in the manner
elected in the Adoption Agreement as follows:
(1) To reduce Employer contributions or pay Plan
expenses; or
(2) Allocated in accordance with the allocation
formula elected in the Adoption Agreement; or
(3) First, to reduce Employer contributions or pay
Plan expenses, with any remaining Forfeitures allocated in accordance with the
allocation formula elected in the Adoption Agreement.
(i) Expenses. The Employer may contribute to the Plan the
amount necessary to pay any reasonable expenses of administering the Plan. In
lieu of the Employer contributing the amount necessary to pay such charges,
these expenses may be paid from Plan assets.
(j) Special Rules - Elective Deferral Contributions.
(1) Each Participant may elect to defer his
Compensation in an amount specified in the Adoption Agreement, subject to the
limitations of this Section. A Salary Deferral Agreement (or modification of an
earlier Salary Deferral Agreement) may not be made with respect to Compensation
which is currently available on or before the date the Participant executed such
election, or if later, the later of the date the Employer adopts this CODA, or
the date such arrangement first becomes effective. Any elections made pursuant
to this Section shall become effective as soon as administratively feasible.
(2) If elected by the Employer in the Adoption
Agreement, each Participant may elect to defer and have allocated for a Plan
Year all or a portion of any cash bonus paid during the Plan Year. A deferral
election may not be made with respect to cash bonuses which are currently
available on or before the date the Participant executed such election.
(3) Elective Deferral Contributions will be
allocated to the Participant's Account and shall be 100 percent vested and
nonforfeitable at all times.
(4) During any taxable year, no Participant shall be
permitted to have Elective Deferral Contributions made under this Plan, or any
other qualified plan maintained by the Employer, in excess of the dollar
limitation contained in Code section 402(g) in effect at the beginning of such
taxable year. If a Participant takes a withdrawal of Elective Deferral
Contributions due to a Serious Financial Hardship, as provided in Section 3E.5,
his Elective Deferral Contributions for his taxable year immediately following
the taxable year of such distribution may
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not exceed the Code section 402(g) limit for such taxable year less the amount
of Elective Deferral Contributions made for the Participant in the taxable year
of the distribution.
(5) Elective Deferral Contributions that are not in
excess of the limits described in subsection (4) above shall be subject to the
Limitations on Allocations in accordance with Section 4B.
Elective Deferral Contributions that are in
excess of the limits described in (4) above shall also be subject to the Section
4B limitations, as further provided in Section 4C.2.
(6) An Employee's eligibility to make Elective
Deferral Contributions under a CODA may not be conditioned upon the completion
of more than one (1) Year-of-Service or the attainment of more than age
twenty-one (21).
(7) A Participant may modify the amount of Elective
Deferral Contributions such Participant makes to the Plan as often as the Plan
Administrator allows, as specified in the Adoption Agreement, but in no event
not less frequently than once per calendar year. Such modification may be made
by filing a written notice with the Plan Administrator within the time period
prescribed by the Plan Administrator.
(k) Suspension of Contributions.
(1) Elective Deferral Contributions. The following
provisions shall apply with respect to suspension of Elective Deferral
Contributions.
(A) Voluntary Suspension. A Participant may
elect to suspend his Salary Deferral Agreement for Elective Deferral
Contributions by filing a written notice thereof with the Plan Administrator.
Such Contributions shall be suspended on the date specified in such notice,
which date must be at least 15 days after such notice is filed. The notice shall
specify the period for which such suspension shall be effective.
(B) Suspension for Leave. A Participant who
is absent from employment on account of an authorized unpaid leave of absence or
military leave shall have his Salary Deferral Agreement suspended during such
leave. Such suspension of contributions shall be effective on the date payment
of Compensation by the Employer to him ceases, and shall remain in effect until
payment of Compensation resumes.
(C) Withdrawal Suspension. A Participant who
elects a withdrawal in accordance with Section 3E may have his Elective Deferral
Contributions suspended on the date such election becomes effective. Such
suspension shall remain in effect for the number of months specified therein.
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(D) Non-Elective Suspension. A Participant
who ceases to meet the eligibility requirements as specified in Section 2B.1 but
who remains in the employ of the Employer shall have his Elective Deferral
Contributions suspended, effective as of the date he ceases to meet the
eligibility requirements. Such suspension shall remain in effect until he again
meets such eligibility requirements.
The Participant may elect to reactivate
his Salary Deferral Agreement for Elective Deferral Contributions by filing a
written notice thereof with the Plan Administrator. The Salary Deferral
Agreement shall be reactivated following the expiration of the suspension period
described above.
(2) Required Employee Contributions. The following
provisions shall apply with respect to suspension of Required Employee
Contributions by Participants. In the event that a Participant suspends his
Required Employee Contributions, he shall automatically have his Voluntary
Employee Contributions suspended for the same period of time.
(A) Voluntary Suspension. A Participant may
elect to suspend his payroll deduction authorization for his Required Employee
Contributions by filing a written notice thereof with the Plan Administrator.
Such notice shall be effective, and his applicable contributions shall be
suspended, on the date specified in such notice, which date must be at least 15
days after such notice is filed. The notice shall specify the period for which
such suspension shall be effective. Such period must be a minimum of one month
and may extend indefinitely.
(B) Suspension for Leave. A Participant who
is absent from employment on account of an authorized unpaid leave of absence or
military leave shall have his payroll deduction authorization for Required
Employee Contributions suspended during such leave. Such suspension of
contributions shall be effective on the date payment of Compensation by the
Employer to him ceases, and shall remain in effect until payment of Compensation
resumes.
(C) Withdrawal Suspension. A Participant who
elects a withdrawal in accordance with Section 3E may have his Required Employee
Contributions suspended on the date such election becomes effective. Such
suspension shall remain in effect for the number of months specified under the
provisions of Section 3E.
(D) Involuntary Suspension. A Participant
who ceases to meet the eligibility requirements as specified in Section 2B.1 but
who remains in the employ of the Employer shall have his Required Employee
Contributions suspended, effective as of the date he ceases to meet the
eligibility requirements. Such suspension shall remain in effect until he again
meets such eligibility requirements.
The Participant may elect to reactivate
his payroll deduction authorization by filing a written notice thereof with the
Plan Administrator. The payroll deduction authorization shall be reactivated
following the expiration of the suspension period described above.
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(3) Voluntary Employee Contributions. The following
provisions apply with respect to suspension of Voluntary Employee Contributions
by Participants.
(A) Voluntary Suspension. A Participant may
elect to suspend his payroll deduction authorization for his Voluntary Employee
Contributions by filing a written notice thereof with the Plan Administrator.
Such notice shall be effective, and his applicable contributions shall be
suspended, on the date specified in such contributions shall be suspended, on
the date specified in such notice, which date must be at least 15 days after
such notice is filed. The notice shall specify the period for which such
suspension shall be effective.
(B) Suspension for Leave. A Participant who
is absent from employment on account of an authorized unpaid leave of absence or
military leave shall have his payroll deduction order for Voluntary Employee
Contributions suspended during such leave. Such suspension of contributions
shall be effective on the date payment of Compensation by the Employer to him
ceases, and shall remain in effect until payment of Compensation resumes.
(C) Withdrawal Suspension. A Participant who
elects a withdrawal in accordance with Section 3E may have his Voluntary
Employee Contributions suspended on the date such election becomes effective.
Such suspension shall remain in effect for the number of months specified
therein.
(D) Involuntary Suspension. A Participant
who ceases to meet the eligibility requirements as specified in Section 2B.1 but
who remains in the employ of the Employer shall have his Voluntary Employee
Contributions suspended, effective as of the date he ceases to meet the
eligibility requirements. Such suspension shall remain in effect until he again
meets such eligibility requirements.
The Participant may elect to reactivate
his payroll deduction authorization by filing a written notice thereof with the
Plan Administrator. The payroll deduction authorization shall be reactivated
following the expiration of the suspension period described above.
2C.2 Money Purchase Pension Plan.
(a) Contributions - Employer. As specified in the Adoption
Agreement, the Employer shall contribute an amount equal to a fixed percentage
of each Participant's Compensation, a flat dollar amount, or an amount
integrated with Social Security in accordance with (1), (2) or (3) below:
(1) Formula A: Not Integrated with Social Security.
An amount equal to a percentage from 1% to 25% of the Compensation of each
Participant, as elected by the Employer in the Adoption Agreement, subject to
the Limitations on Allocations in accordance with Section 4B.
(2) Formula B: Flat Dollar Amount. An amount, as
elected by the Employer in the Adoption Agreement. Formula B may not be elected
under a standardized plan.
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(3) Formula C: Integrated with Social Security.
Base Contribution: An amount equal to a
percentage (as specified in tile Adoption Agreement) of Compensation of each
Participant up to the Social Security Integration Level;
Excess Contribution: In addition, an amount
equal to a percentage (as specified in the Adoption Agreement) of the
Participant's Compensation which is in excess of the Social Security Integration
Level, subject to the Limitations on Allocations in accordance with Section 4B.
This Excess Contribution percentage shall not exceed the lesser of:
(A) twice the Base Contribution or
(B) the Base Contribution plus the greater
of:
(i) old age insurance portion of the
Old Age Survivor Disability (OASDI) tax rate; or
(ii) 5.7%.
If the Employer has elected in the Adoption
Agreement to use a Social Security Integration Level that in any Plan Year is
the greater of $10,000 or 20% but less than 100% of the Social Security Taxable
Wage Base, then the 5.7% limitation specified in 2C.2(a)(3)(B)(ii) shall be
adjusted in accordance with the following table:
IF THE SOCIAL SECURITY INTEGRATION LEVEL
- ------------------------------------------------------------ ADJUST
IS MORE THAN BUT NOT MORE THAN 5.7% TO
------------ ----------------- -------
the greater of $10,000 or 20% 80% of the Social Security 4.3%
of the Social Security Taxable Taxable Wage Base
Wage Base
80% of the Social Security 100% of the Social Security 5.4%
Taxable Wage Base Taxable Wage Base
However, in the case of any Participant who has exceeded the Cumulative
Permitted Disparity Limit described below, the Employer will contribute for each
Participant who either completes more than 500 Hours of Service during the Plan
Year or is employed on the last day of the Plan Year, an amount equal to the
Excess Contribution percentage multiplied by the Participant's total
Compensation.
Annual Overall Permitted Disparity Limit.
Notwithstanding the preceding provisions of this Section 2C.2(a), for any Plan
Year this Plan benefits any Participant who benefits under another qualified
plan or simplified employee pension plan, as defined in Code
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section 408(k), maintained by the Employer that provides for permitted disparity
(or imputes disparity), Employer contributions and Forfeitures will be allocated
to the account of each Participant who either completes more than 500 Hours of
Service during the Plan Year or who is employed as of the last day of the Plan
Year in the ratio that such Participant's total Compensation bears to the total
Compensation of all Participants.
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 mean 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 benefitted under a
defined benefit or target benefit plan for any year beginning on or after
January 1, 1994, the Participant has no Cumulative Permitted Disparity Limit.
(b) Contributions - Participant. The Plan Administrator will
not accept Required Employee Contributions or Voluntary Employee Contributions
that are made for Plan Years beginning after the Plan Year in which this
document is being adopted by the Employer. Required Employee Contributions and
Voluntary Employee Contributions for Plan Years beginning after December 31,
1986, but before the Plan Year in which this document is adopted, will be
limited so as to meet the nondiscrimination test of Code section 401(m) as
provided in Section 4A.4.
(c) Contributions - Timing. Contributions made on other than
an annual basis shall be paid to the Trust or Insurance Company, as applicable,
not less frequently than monthly or every four weeks. Contributions made on an
annual basis shall be paid to the Trust or the Insurance Company, as applicable,
at the end of the Plan Year, or as soon as possible on or after the last day of
such Plan Year, but in any event not later than the date prescribed by law for
filing the Employer's income tax return, including any extension thereof. To the
extent that contributions are used to purchase Life Insurance Policies, such
contributions for any Plan Year may be paid to the Trust when premiums for such
Policies are due during the Plan Year.
(d) Contributions - Allocation. Employer Contributions shall
be allocated to the Participants' Account in accordance with the allocation
requirements as specified by the Employer in the Adoption Agreement. If the
Employer has adopted a standardized plan, the allocation of any nonannual
contribution made by the Employer shall be made for each Participant who is a
Participant on any day of the Contribution Period regardless of Hours of
Service.
(e) Forfeitures. Forfeitures will be used in the manner
elected in the Adoption Agreement as follows:
(1) To reduce Employer contributions or pay Plan
expenses; or
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(2) Allocated in the same manner elected in the
Adoption Agreement for the allocation of Employer contributions; or
(3) First, to reduce Employer contributions or pay
Plan expenses, with any remaining Forfeitures allocated in the same manner
elected in the Adoption Agreement for the allocation of Employer contributions.
(f) Expenses. The Employer may contribute to the Plan the
amount necessary to pay any applicable expense charges and administration
charges. In lieu of the Employer contributing the amount necessary to pay such
charges, these expenses may be paid from Plan assets.
2C.3 Rollover Contributions. If elected by the Employer in the
Adoption Agreement, and without regard to the limitations imposed under Section
4B, the Plan may receive Rollover Contributions on behalf of an Employee, if the
Employee is so entitled under Code sections 402(c), 403(a)(4), or 408(d)(3)(A).
Contributions may be rolled over either directly or indirectly, in the form of
cash, and may be all or a portion of the funds eligible for rollover. Receipt of
Rollover Contributions shall be subject to the approval of the Plan
Administrator. Before approving the receipt of a Rollover Contribution, the Plan
Administrator may request any documents or other information from an Employee or
opinions of counsel which the Plan Administrator deems necessary to establish
that such amount is a Rollover Contribution.
If Rollover Contributions are elected by the Employer in the
Adoption Agreement, they may be received from an Employee who is not otherwise
eligible to participate in the Plan. Rollover Contributions may be withdrawn by
such Employee pursuant to the provisions of the Adoption Agreement and Section
3E. In addition, such Employee may direct the investment and transfer of amounts
in his Participant's Account pursuant to the terms of Section 5A. Upon
Termination of Employment, such Employee shall be entitled to a distribution of
his Participant's Account.
2C.4 Contributions Subject to Davis-Bacon Act. If the Employer
designates under the Adoption Agreement that Employer contributions are to be
made in different amounts for different contracts subject to the Davis-Bacon Act
or other Prevailing Wage Law, the Employer shall file with the Plan
Administrator an irrevocable written designation for each Prevailing Wage Law
project, stating the hourly contribution rate to be contributed to the Plan by
the Employer for each class of Employees working on the project in order to
comply with the Prevailing Wage Law applicable to the project. The contribution
rate designation shall be irrevocable with respect to work on that project,
although the hourly contribution rate may be increased prospectively by the
filing of a new written contribution rate designation with the Plan
Administrator.
2C.5 QVEC Contributions. The Plan Administrator will not accept QVEC
Contributions which are made for a taxable year beginning after December 31,
1986. Contributions made prior to that date will be maintained in a separate
account that will be nonforfeitable at all times. The account will share in the
gains and losses under the Plan in the same manner as described in Section 5A.3
of the Plan. No part of the QVEC Contributions portion of the Participant's
Account
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will be used to purchase Life Insurance Policies. No part of the QVEC
Contributions portion of the Participant's Account will be available for loans.
Subject to Section 3C, Joint and Survivor Annuity Requirements (if applicable),
the Participant may withdraw any part of his QVEC Contributions by making a
written application to the Plan Administrator.
ARTICLE III - DISTRIBUTIONS
3A. TIMING AND FORM OF BENEFITS
3A.1 Payment of Benefits. The rules and procedures for electing the
timing and form of distribution effective for each Participant or Beneficiary
shall be formulated and administered by the Plan Administrator in a consistent
manner for all Participants in similar circumstances. For money purchase and
target benefit plans, the normal form of distribution shall be a Life Annuity.
For a profit sharing plan, the normal form of distribution shall be cash. For
any plan, the distribution shall be made within an administratively reasonable
time following the date the application for distribution is filed with the Plan
Administrator.
If elected by the Employer in the Adoption Agreement, a
Participant, or his Beneficiary as the case may be, may elect to receive
distribution of all or a portion of his Vested Interest in one or a combination
of the following forms of payment:
(a) Single sum cash payment;
(b) Life Annuity;
(c) Installment Payments (i.e., a series of periodic
single-sum cash payments over time, with no life contingency);
(d) Installment Refund Annuity (i.e., an Annuity that
provides for fixed monthly payments for a period certain of not less than 3 nor
more than 15 years. If a Participant dies before the period certain expires, the
Annuity will be paid to the Participant's Beneficiary for the remainder of the
period certain. The period certain shall be chosen by the Participant at the
time the Annuity is purchased with the Participant's Vested Interest. The
Installment Refund Annuity is not a Life Annuity and in no event shall the
period certain extend to a period which equals or exceeds the life expectancy of
the Participant);
(e) Employer stock, to the extent the Participant is
invested therein.
All distributions are subject to the provisions of
Section 3C, Joint and Survivor Annuity Requirements.
If the value of a Participant's Vested Interest has
never exceeded $3,500 at anytime, the Employer shall indicate in the Adoption
Agreement whether a distribution shall be made in the form of a single sum cash
payment upon such Participant's Termination of Employment
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and may not be deferred or the Participant may elect to defer distribution until
the April 1 following the calendar year in which he reaches age 70-1/2. If the
Employer permits Participants to defer such distributions, failure to make an
election will be deemed to be an election to defer to the April 1 following the
calendar year in which the Participant reaches age 70-1/2.
If the Participant's Vested Interest exceeds (or at the
time of any prior distribution exceeded) $3,500, and such amount is immediately
distributable, the Participant and the Participant's Spouse, if required (or
where either the Participant or the Spouse has died, the survivor) must consent
to any distribution of such account balance. The consent of the Participant and
the Participant's Spouse, if required, 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.
An account balance is considered immediately
distributable if any part of the account balance could be distributed to the
Participant (or surviving Spouse) before the Participant attains (or would have
attained if not deceased) the later of Normal Retirement Age or age 62.
Instead of consenting to a distribution, the Participant
may elect to defer the distribution until the April 1 following the calendar
year in which he reaches age 70-1/2. Failure to make an election will be deemed
to be an election to defer to the April 1 following the calendar year in which
he reaches age 70-1/2.
The Plan Administrator shall notify the Participant and
the Participant's Spouse of the right to defer any distribution. Such
notification shall include a general description of the material features and an
explanation of the relative values of the optional forms of benefit available
under the Plan in a manner that would satisfy the notice requirements of Code
section 417(a)(3), and shall be provided no less than 30 days and no more than
90 days prior to the Annuity Starting Date.
If the distribution is one to which Code sections
401(a)(11) and 417 do not apply, such distribution may commence less than 30
days after the notice required under Code regulation section 1.411(a)-11(c) is
given, provided that:
(a) The Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at least 30 days after receiving
the notice to consider the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option); and
(b) The Participant, after receiving the notice,
affirmatively elects a distribution.
Notwithstanding the foregoing, only the Participant need
consent to the commencement of a distribution in the form of a Qualified Joint
and Survivor Annuity while the account balance is immediately distributable.
Furthermore, if payment in the form of a Qualified Joint and Survivor Annuity is
not required with respect to the Participant pursuant to Section 3C.6 of the
Plan, only the Participant need consent to the distribution of an account
balance that is
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immediately distributable. Neither the consent of the Participant nor the
Participant's Spouse shall be required to the extent that a distribution is
required to satisfy Code section 401(a)(9) or section 415. 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 any entity within
the same controlled group as the Employer 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 any entity
within the same controlled group as the Employer 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.
For purposes of determining the applicability of the
foregoing consent requirements to distributions made before the first day of the
first Plan Year beginning after December 31, 1988, the Participant's vested
account balance shall not include amounts attributable to QVEC Contributions
made between December 31, 1981 and January 1, 1987, plus gains and minus losses
thereon ("accumulated QVEC Contributions").
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.
A Participant who terminates employment and does not
consent to an immediate distribution shall have his distribution deferred. Such
a distribution shall commence no later than the April 1 following the date the
Participant attains age of 70-1/2. Loans may not be initiated for Participants
covered by this paragraph except if, after his Termination of Employment, the
Participant is still a party-in-interest (as defined in ERISA). A Participant
who continues to maintain an account balance under the Plan may elect to
withdraw an amount which is equal to any whole percentage (not to exceed 100%)
from his Participant's Account. Such an election shall be made in accordance
with Section 3E. Such Participant as described herein shall have the authority
to direct the transfer of his Vested Interest in accordance with Section 5A.2.
The election to defer distribution may be revoked at any time by submitting a
written request to the Plan Administrator. Any Forfeiture attributable to
withdrawals shall be subject to the requirements of Sections 3D.1 and 3E.8 of
the Plan. A Participant whose Termination of Employment is on or after his Early
Retirement Date may elect to defer the distribution subject to the requirements
of Section 3B.
3A.2 Commencement of Benefits. Unless the Participant elects
otherwise, distribution of benefits will begin no later than the 60th day after
the latest of the close of the Plan Year in which:
(a) The Participant attains age 65 (or Normal Retirement
Age, if earlier);
(b) The 10th anniversary of the year in which the
Participant commenced participation in the Plan occurs; or,
(c) The Participant terminates Service with the Employer.
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Notwithstanding the foregoing, the failure of a
Participant and Spouse to consent to a distribution, if required, while a
benefit is immediately distributable within the meaning of Section 3A.1 of the
Plan, shall be deemed to be an election to defer distribution to the date the
Participant attains age 70-1/2.
However, in no event shall distribution of that portion
of a Participant's Account attributable to Elective Deferral Contributions,
Qualified Matching Contributions, and Qualified Nonelective Contributions be
made prior to the earliest of the Participant's Retirement, death, Disability,
separation from Service, attainment of age 59-1/2, or, with respect to Elective
Deferral Contributions only, due to Serious Financial Hardship, unless such
distribution is made on account of:
(a) The Employer's sale, to an unrelated entity, of its
interest in a subsidiary (within the meaning of Code section 409(d)(3)), where
the Employer continues to maintain this Plan and the Participant continues
employment with the subsidiary; or
(b) The Employer's sale, to an unrelated corporation, of
substantially all assets (within the meaning of Code section 409(d)(2)) used in
its trade or business, where the Employer continues to maintain this Plan and
the Participant continues employment with the employer acquiring such assets; or
(c) The termination of the Plan, as provided in Section 7B,
without the establishment of another defined contribution plan, other than an
employee stock ownership plan (as defined in Code sections 4975(e) or 409) or a
simplified employee pension plan as defined in Code section 408(k).
All distributions that may be made in accordance with
one or more of the preceding distributable events are subject to the spousal and
Participant consent requirements (if applicable) of Code sections 401(a)(11) and
417. In addition, distributions made after March 31, 1988, which are triggered
by any of the events described in the immediately preceding paragraphs (a), (b),
or (c), must be made in a lump sum.
3A.3 From Life Insurance Policies. The Trustee shall arrange with the
Insurance Company any distribution due to any Participant during his lifetime
from any Life Insurance Policy or Policies on his life. The manner of
distribution shall be a transfer of the values of said Policy or Policies to the
Participant's Account for distribution as a portion thereof in accordance with
this Section.
Subject to Section 3c, Joint and Survivor Annuity Requirements,
the Policies on a participant's life will be converted to cash or an Annuity or
distributed to the Participant upon commencement of benefits.
In the event of any conflict between the terms of this Plan and
the terms of any Life Insurance Policy purchased hereunder, the Plan provisions
shall control.
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3A.4 Nontransferable. Any Annuity Contract distributed herefrom must
be nontransferable.
3A.5 Alternate Payee Special Distribution. Distributions pursuant to
Section 5D.8 may be made without regard to the age or employment status of the
Participant.
3B. MINIMUM DISTRIBUTION REQUIREMENTS
3B.1 Definitions.
(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. If Life Expectancy is being
recalculated, the Applicable Life Expectancy shall be the Life Expectancy 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 Code section 401(a)(9) and the regulations thereunder. If a
Participant's Beneficiary, as determined in accordance with Section 1.8, is his
estate, such Participant shall be treated as having no 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
pursuant to Section 3B.3 below.
(d) 5-Percent Owner. For purposes of this Section, the term
5-Percent Owner means a 5-percent 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 Employee attains age 66-1/2 or any later Plan Year.
(e) Life Expectancy. The term Life Expectancy means life
expectancy and joint and last survivor expectancy as computed by use of the
expected return multiples in Tables V and VI of section 1.72-9 of the Income Tax
Regulations.
Unless otherwise elected by the Participant (or Spouse,
in the case of distributions described in Section 3B.3(b)(2)) by the time
distributions are required to begin, Life
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Expectancies shall be recalculated annually. Such election shall be irrevocable
as to the Participant (or Spouse) and shall apply to all subsequent years. The
Life Expectancy of a non-Spouse Beneficiary may not be recalculated.
(f) Participant's Benefit. The term Participant's Benefit
means:
(1) The Participant's Vested Interest 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 Participant's Account 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.
(2) Exception for second Distribution Calendar Year.
For purposes of paragraph (1) 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.
(g) Required Beginning Date. The term Required Beginning
Date means:
(1) General Rule. The first Required Beginning Date
of a Participant is the first day of April of the calendar year following the
calendar year in which the Participant attains age 70-1/2.
(2) Transitional Rules. The Required Beginning Date
of a Participant who attains age 70-1/2 before January 1, 1988, shall be
determined in accordance with (A) or (B) below:
(A) Non-5-Percent Owners. The Required
Beginning Date of a Participant who is not a 5-Percent Owner is the first day of
April of the calendar year following the calendar year in which the later of
retirement or attainment of age 70-1/2 occurs.
(B) 5-Percent Owners. The Required Beginning
Date of a Participant who is a 5-Percent Owner during any year beginning after
December 31, 1979 is the first day of April following the later of:
(i) The calendar year in which the
Participant attains age
(ii) The earlier of the calendar year
which ends with or within the Plan Year in which the Participant becomes a
5-Percent Owner, or the calendar year in which the Participant retires.
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The Required Beginning Date of a
Participant who is not a 5-Percent Owner who attained age 70-1/2 during 1988 and
who has not retired as of January 1, 1989 is April 1, 1990.
(3) Once distributions have begun to a 5-Percent Owner under
this Section, they must continue to be distributed, even if the Participant
ceases to be a 5-Percent Owner in a later year.
3B.2 Distribution Requirements.
(a) Except as otherwise provided in Section 3C, joint and
Survivor Annuity Requirements, the requirements of this Section 3B shall apply
to any distribution of a Participant's Accrued Benefit and will take precedence
over any inconsistent provisions of this Plan. Unless otherwise specified, the
provisions of this Section apply to calendar years beginning after December 31,
1984.
(b) All distributions required under this Section 3B shall
be determined and made in accordance with regulations under section 401(a)(9),
including the minimum distribution incidental benefit requirement of regulations
section 1.401(a)(9)-2.
A Participant's entire Vested Interest must be
distributed or begin to be distributed no later than the Participant's Required
Beginning Date.
(c) Limits on Distribution Periods. As of the first
Distribution Calendar Year, distributions, if not made in a single sum, may only
be made over one of the following periods (or a combination thereof):
(1) The life of the Participant;
(2) The life of the Participant and a Designated
Beneficiary;
(3) A period certain not extending beyond the Life
Expectancy of the Participant; or
(4) A period certain not extending beyond the joint
and last survivor expectancy of the Participant and a Designated Beneficiary.
(d) Determination of amount to be distributed each year. If
the Participant's Vested Interest is to be distributed in other than a single
sum, the following minimum distribution rules shall apply on or after the
Required Beginning Date:
(1) If the Participant's entire Vested Interest 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
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extending beyond the Life Expectancy of the Designated Beneficiary, the amount
required to be distributed for each calendar year, beginning with distributions
for the first Distribution Calendar Year, must at least equal the quotient
obtained by dividing the Participant's benefit by the Applicable Life
Expectancy.
(2) 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.
(3) For calendar years beginning after December 31,
1988, the amount to be distributed each year, beginning with distributions for
the first Distribution Calendar Year, shall not be less than the quotient
obtained by dividing the Participant's benefit by the lesser of (1) the
Applicable Life Expectancy or (2) if the Participant's Spouse is not the
Designated Beneficiary, the applicable divisor determined from the table set
forth in regulations section 1.401(a)(9)-2, Q&A-4. Distributions after the death
of the Participant shall be distributed using the Applicable Life Expectancy in
Section 3B.2(d)(1) above, as the relevant divisor without regard to regulations
section 1.401(a)(9)-2.
(4) 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.
(e) 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 regulations thereunder.
3B.3 Death Distribution Provisions. Upon the death of the
Participant, the following distribution provisions shall take effect:
(a) Distributions Beginning Before Death. If the Participant
dies after distribution of his entire Vested Interest has begun, the remaining
portion of such entire Vested Interest will continue to be distributed at least
as rapidly as under the method of distribution being used prior to the
Participant's death.
(b) Distributions Beginning After Death. If the Participant
dies before distribution of his entire Vested Interest begins, distribution of
the Participant's entire Vested Interest shall be completed by December 31 of
the calendar year containing the fifth anniversary of the Participant's death
except to the extent that an election is made to receive distributions in
accordance with (1) or (2) below:
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(1) If any portion of the Participant's entire
Vested Interest is payable to a Designated Beneficiary, distributions may be
made over the Life Expectancy of the Designated Beneficiary commencing on or
before December 31 of the calendar year immediately following the calendar year
in which the Participant died;
(2) If the Designated Beneficiary is the
Participant's surviving Spouse, the date distributions are required to begin in
accordance with (1) above shall not be earlier than the later of (i) December 31
of the calendar year immediately following the calendar year in which the
Participant died and (ii) December 31 of the calendar year in which the
Participant would have attained age 70-1/2.
If the Participant has not made an election
pursuant to this Section 3B.3(b) by the time of his or her death, the
Participant's Designated Beneficiary must elect the method of distribution no
later than the earlier of (1) December 31 of the calendar year in which
distributions would be required to begin under this Section, or (2) December 31
of the calendar year which contains the fifth anniversary of the Participant's
date of death. 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 Vested Interest must be completed by December 31 of the
calendar year containing the fifth anniversary of the Participant's death and
will be paid in the form of a single sum cash payment.
(c) For purposes of Section 3B.3(b) above, if the surviving
Spouse dies after the Participant, but before payments to such Spouse begin, the
provisions of this Section, with the exception of paragraph (b)(2) therein,
shall be applied as if the surviving Spouse were the Participant.
(d) For purposes of this Section, distribution of a
Participant's entire Vested Interest pursuant to Section 3B.3(b) is considered
to begin on the Participant's Required Beginning Date (or, if paragraph (c)
above is applicable, the date distribution is required to begin to the Surviving
Spouse). If distribution in the form of an Annuity irrevocably commences to the
Participant before the Required Beginning Date, the date distribution is
considered to begin is the date distribution actually commences.
3B.4 Transitional Rule.
(a) Notwithstanding the other requirements of this Section
3B and subject to the requirements of Section 3C, Joint and Survivor Annuity
Requirements, distribution on behalf of any Employee, including a 5-Percent
Owner, may be made in accordance with all of the following requirements
(regardless of when such distribution commences):
(1) The distribution by the 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.
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(2) The distribution is in accordance with a method
of distribution designated by the Employee whose entire Vested Interest in the
Plan is being distributed or, if the Employee is deceased, by a Beneficiary of
such Employee.
(3) Such designation was in writing, was signed by
the Employee or the Beneficiary, and was made before January 1, 1984.
(4) The Employee had accrued a benefit under the
Plan as of December 31, 1983.
(5) The method of distribution designated by the
Employee or the Beneficiary specifies the time at which distribution will
commence, the period over which distributions will be made, and in the case of
any distribution upon the Employee's death, the Beneficiaries of the Employee
listed in order of priority.
(b) A distribution upon death will not be covered by this
transitional rule unless the information in the designation contains the
required information described above with respect to the distribution to be made
upon the death of the Employee.
(c) For any distribution that 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 subsections (a)(1) and (5).
(d) If a designation is revoked, any subsequent distribution
must satisfy the requirements of Code section 401(a)(9) and related regulations.
If a designation is revoked subsequent to the date distributions are required to
begin, the Plan must distribute by the end of the calendar year following the
calendar year in which the revocation occurs the total amount not yet
distributed which would have been required to have been distributed to satisfy
Code section 401(a)(9) and related regulations, except for the TEFRA section
242(b)(2) election. For calendar years beginning after December 31, 1988, such
distributions must meet the minimum distribution incidental benefit requirements
in regulations section 1.401(a)(9)-2. Any changes in the designation will be
considered to be a revocation of the designation. However, the mere substitution
or addition of another Beneficiary (one not named in the designation) under the
designation will not be considered to be a revocation of the designation, so
long as such substitution or addition does not alter the period over which
distributions are to be made under the designation, directly or indirectly (for
example, by altering the relevant measuring life). In the case in which an
amount is transferred or rolled from one plan to another plan, the rules in Q&A
J-2 and Q&A J-3 shall apply.
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3C. JOINT AND SURVIVOR ANNUITY REQUIREMENTS
3C.1 Applicability. Except as provided in Section 3C.6, the
provisions of this Section 3C shall apply to any Participant who is credited
with at least one Hour of Service with the Employer on or after August 23, 1984,
and such other Participants as provided in Section 3C.7.
3C.2 Definitions. The following definitions shall apply to this
Section 3C.
(a) Earliest Retirement Age. The term Earliest Retirement
Age means the earliest date on which, under the Plan, the Participant could
elect to receive retirement benefits.
(b) Election Period. The term Election Period means the
period which begins on the first day of the Plan Year in which the Participant
attains age 35 and ends on the date of the Participant's death. If a Participant
separates from service prior to the first day of the Plan Year in which he
attains age 35, with respect to the Vested Account Balance as of the date of
separation, the election period shall begin on the date of separation.
Pre-age 35 waiver: A Participant who will not yet attain
age 35 as of the end of any current Plan Year may make a special Qualified
Election to waive the Qualified Preretirement Survivor Annuity for the period
beginning on the date of such election and ending on the first day of the Plan
Year in which the Participant will attain age 35. Such election shall not be
valid unless the Participant receives a written explanation of the Qualified
Preretirement Survivor Annuity in such terms as are comparable to the
explanation required under Section 3C.5(a). Except as provided in Section 3C.6,
Qualified Preretirement Survivor coverage will be automatically reinstated as of
the first day of the Plan Year in which the Participant attains age 35. Any new
waiver on or after such date shall be subject to the full requirements of this
Section 3C.
(c) Qualified Election. The term Qualified Election means a
waiver of a Qualified Joint and Survivor Annuity or a Qualified Preretirement
Survivor Annuity. Any waiver of a Qualified Joint and Survivor Annuity or a
Qualified Preretirement Survivor Annuity shall not be effective unless: (a) the
Participant's Spouse consents in writing to the election; (b) the election
designates a specific Beneficiary, including any class of beneficiaries or any
contingent beneficiaries, which may not be changed without spousal consent (or
the Spouse expressly permits designations by the Participant without any further
spousal consent); (c) the Spouse's consent acknowledges the effect of the
election; and (d) the Spouse's consent is witnessed by a Plan representative or
notary public.
Additionally, a Participant's waiver of the Qualified
Joint and Survivor Annuity shall not be effective unless the election designates
a form of benefit payment which may not be changed without spousal consent (or
the Spouse expressly permits designations by the Participant without any further
spousal consent). If it is established to the satisfaction of a Plan
representative that there is no Spouse or that the Spouse cannot be located, a
waiver will be deemed a Qualified Election.
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Any consent by a Spouse obtained under this provision
(or establishment that the consent of a Spouse may not be obtained) shall be
effective only with respect to such Spouse. A consent that permits designations
by the Participant without any requirement of further consent by such Spouse
must acknowledge that the Spouse has the right to limit consent to a specific
Beneficiary, and a specific form of benefit where applicable, and that the
Spouse voluntarily elects to relinquish either or both of such rights. A
revocation of a prior waiver may be made by a Participant without the consent of
the Spouse at any time before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained under this provision shall
be valid unless the Participant has received notice as provided in Section 3C.5
below.
(d) Qualified Joint and Survivor Annuity. The term Qualified
Joint and Survivor Annuity means an immediate Annuity for the life of the
Participant with a survivor Annuity for the life of the Spouse which is not less
than 50 percent and not more than 100 percent of the amount of the Annuity which
is payable during the joint lives of the Participant and the Spouse and which is
the amount of benefit which can be purchased with the Participant's Vested
Account Balance. The percentage of the survivor annuity binder the Plan shall be
50 percent (unless a different percentage is elected by the Participant).
(e) Vested Account Balance. The term Vested Account Balance
means the aggregate value of the Participant's vested account balances derived
from contributions made by both the Participant and Employer, whether vested
before or upon death, including the proceeds of insurance contracts, if any, on
the Participant's life and Rollover Contributions. The provisions of this
Section 3C shall apply to a Participant who is vested in amounts attributable to
Employer contributions, Employee Contributions (or both) made under this Plan at
the time of death or distribution.
3C.3 Qualified Joint and Survivor Annuity. Unless an optional form of
benefit is selected pursuant to a Qualified Election within the 90-day period
ending on the Annuity Starting Date, a married Participant's Vested Account
Balance will be paid in the form of a Qualified Joint and Survivor Annuity and
an unmarried Participant's Vested Account Balance will be paid in the form of a
Life Annuity. The Participant may elect to have such Annuity distributed upon
attainment of the Earliest Retirement Age under the Plan.
3C.4 Qualified Preretirement Survivor Annuity. Unless an optional
form of benefit has been selected within the Election Period pursuant to a
Qualified Election, if a Participant dies before the Annuity Starting Date, then
no less than 50 percent (or 100 percent if so elected in the Adoption Agreement)
of the Participant's Vested Account Balance shall be applied toward the purchase
of an Annuity for the life of the surviving Spouse. If less than 100 percent is
selected, then the remaining portion of the Vested Account Balance shall be paid
to the Participant's Beneficiary. If less than 100 percent of the Vested Account
Balance is paid to the surviving Spouse, the amount of Employee Contributions
allocated to the surviving Spouse will be in the same proportion as the Employee
Contributions bears to the total Vested Account Balance of the Participant. The
surviving Spouse may elect to have such Annuity distributed within a reasonable
period after the Participant's death.
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3C.5 Notice Requirements.
(a) In the case of a Qualified Joint and Survivor Annuity,
the Plan Administrator shall no less than 30 days and no more than 90 days prior
to the Annuity Starting Date provide each Participant with a written explanation
of: (i) the terms and conditions of a Qualified Joint and Survivor Annuity; (ii)
the Participant's right to make and the effect of an election to waive the
Qualified Joint and Survivor Annuity form of benefit; (iii) the rights of a
Participant's Spouse; and (iv) the right to make, and the effect of, a
revocation of a previous election to waive the Qualified Joint and Survivor
Annuity.
(b) In the case of a Qualified Preretirement Survivor
Annuity, the Plan Administrator shall provide each Participant within the
applicable period (described in subsection (c) below) for such Participant a
written explanation of the Qualified Preretirement Survivor Annuity in such
terms and in such manner as would be comparable to the explanation provided for
meeting the requirements of Section 3C.5(a) applicable to a Qualified Joint and
Survivor Annuity.
(c) The "applicable period" for a Participant is whichever
of the following periods ends last: (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 individual becomes a
Participant; (iii) a reasonable period ending after the Qualified Joint and
Survivor Annuity is no longer fully subsidized; (iv) a reasonable period ending
after this Section 3C first applies to the Participant. Notwithstanding the
foregoing, notice must be provided within a reasonable period ending after
separation from Service before attaining age 35.
For purposes of applying the preceding paragraph, a
reasonable period ending after the enumerated events described in (ii), (iii)
and (iv) is the end of the two-year period beginning one year prior to the date
the applicable event occurs, and ending one year after that date. In the case of
a participant who separates from Service before the Plan Year in which he
attains age 35, notice shall be provided within the two-year period beginning
one year prior to separation and ending one year after separation. If such a
Participant thereafter returns to employment with the Employer, the applicable
period for such Participant shall be redetermined.
(d) Notwithstanding the other requirements of this Section,
the respective notices prescribed by this Section need not be given to a
Participant if (1) the Plan "fully subsidizes" the costs of a Qualified Joint
and Survivor Annuity or Qualified Preretirement Survivor Annuity, and (2) the
Plan does not allow the Participant to waive the Qualified Joint and Survivor
Annuity or Qualified Preretirement Survivor Annuity and does not allow a married
Participant to designate a nonspouse Beneficiary. For purposes of this Section
3C.5(d), a Plan fully subsidizes the costs of a benefit if no increase in cost
or decrease in benefits to the Participant may result from the Participant's
failure to elect another benefit.
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3C.6 Safe Harbor Rules.
(a) This Section shall apply to a Participant in a profit
sharing plan, and to any distribution made on or after the first day of the
first Plan Year beginning after December 31, 1988, from or under a separate
account attributable solely to accumulated QVEC Contributions (as described in
Section 3A.1), and maintained on behalf of a Participant in a money purchase
pension plan (including a target benefit plan), if the following conditions are
met: (1) the Participant does not or cannot elect payments in the form of a Life
Annuity; and (2) on the death of a Participant, the Participant's Vested Account
Balance will be paid to the Participant's surviving Spouse, but if there is no
surviving Spouse, or if the surviving Spouse has consented in a manner
conforming to a Qualified Election, then to the Participant's designated
Beneficiary.
(b) The surviving Spouse may elect to have distribution of
the Vested Account Balance commence within the 90-day period following the date
of the Participant's death. The account balance shall be adjusted for gains or
losses occurring after the Participant's death in accordance with the provisions
of the Plan governing the adjustment of account balances for other types of
distributions.
(c) The Participant may waive the spousal death benefit
described in this Section 3C.6 at any time provided that no such waiver shall be
effective unless it satisfies the conditions of Section 3C.2(c) (other than the
notification requirement referred to therein) that would apply to the
Participant's waiver of the Qualified Preretirement Survivor Annuity.
(d) If this Section 3C.6 is operative, then the other
provisions of this Section 3C, other than Section 3C.7, shall be inoperative.
This Section 3C.6 shall not be operative with respect to
a Participant in a profit sharing plan if the plan is a direct or indirect
transferee of a defined benefit plan, money purchase plan, a target benefit
plan, stock bonus, or profit sharing plan that is subject to the survivor
annuity requirements of Code sections 401(a)(11) and 417.
(e) For purposes of this Section 3C.6, the term Vested
Account Balance shall mean, in the case of a money purchase pension plan or a
target benefit plan, the Participant's separate account balance attributable
solely to accumulated QVEC Contributions (as described in Section 3A.1). In the
case of a profit sharing plan, the term Vested Account Balance shall have the
same meaning as provided in Section 3C.2(e).
3C.7 Transitional Rules.
(a) Any living Participant not receiving benefits on August
23, 1984, who would otherwise not receive the benefits prescribed by the
previous Sections of this Section 3C must be given the opportunity to elect to
have the prior Sections of this Section 3C apply if such Participant is credited
with at least one Hour of Service under this Plan or a predecessor plan in a
Plan Year
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beginning on or after January 1, 1976, and such Participant had at least 10
years of vesting Service when he separated from Service.
(b) Any living Participant not receiving benefits on August
23, 1984, who was credited with at least one Hour of Service under this Plan or
a predecessor plan on or after September 2, 1974, and who is not otherwise
credited with any Service in a Plan Year beginning on or after January 1, 1976,
must be given the opportunity to have his benefits paid in accordance with
Section 3C.7(d).
(c) The respective opportunities to elect (as described in
Sections 3C.7(a) and 3C.7(b) above) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984, and ending on the
date benefits would otherwise commence to said Participants.
(d) Any Participant who has elected pursuant to Section
3C.7(b), and any Participant who does not elect under Section 3C.7(a), or who
meets the requirements of Section 3C.7(a), except that such Participant does not
have at least 10 years of vesting Service when he separates from Service, shall
have his benefits distributed in accordance with all of the following
requirements if benefits would have been payable in the form of a Life Annuity:
(1) Automatic Joint and Survivor Annuity. If
benefits in the form of a Life Annuity become payable to a married Participant
who:
(A) Begins to receive payments under the
Plan on or after Normal Retirement Age; or
(B) Dies on or after Normal Retirement Age
while still working for the Employer; or
(C) Begins to receive payments on or after
the Qualified Early Retirement Age; or
(D) Separates from Service on or after
attaining Normal Retirement Age (or the Qualified Early Retirement Age) and
after satisfying the eligibility requirements for the payment of benefits under
the Plan and thereafter dies before beginning to receive such benefits;
then such benefits will be received under this
Plan in the form of a Qualified Joint and Survivor Annuity, unless the
Participant has elected otherwise during the Election Period. The Election
Period must begin at least 6 months before the Participant attains Qualified
Early Retirement Age and end not more than 90 days before the commencement of
benefits. Any election hereunder will be in writing and may be changed by the
Participant at any time.
(2) Election of Early Survivor Annuity. A
Participant who is employed after attaining the Qualified Early Retirement Age
will be given the opportunity to elect, during the
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Election Period, to have a survivor Annuity payable on death. If the Participant
elects the survivor Annuity, payments under such Annuity must not be less than
the payments which would have been made to the Spouse under the Qualified Joint
and Survivor Annuity if the Participant had retired on the day before his or her
death. Any election under this provision will be in writing and may be changed
by the Participant at any time. The Election Period begins on the later of (1)
the 90th day before the Participant attains the Qualified Early Retirement Age,
or (2) the date on which participation begins, and ends on the date the
Participant terminates employment.
(3) For purposes of this Section 3C.7(d):
(A) Qualified Early Retirement Age is the
latest of:
(i) The earliest date, under the
Plan, on which the Participant may elect to receive retirement benefits;
(ii) The first day of the 120th month
beginning before the Participant reaches Normal Retirement Age; or
(iii) The date the Participant begins
participation.
(B) Qualified Joint and Survivor Annuity is
an Annuity for the life of the Participant with a survivor Annuity for the life
of the Spouse as described in Section 3C.2(d).
3D. TERMINATION OF EMPLOYMENT
3D.1 Distribution. A Participant who terminates employment shall be
entitled to receive a distribution of his entire Vested Interest. Such
distribution shall be further subject to the terms and conditions of Section 3C.
The method used, as elected by the Employer in the Adoption Agreement, is one of
the following:
(a) Immediate (Cash-Out Method). If at the time of his
Termination of Employment the Participant is not 100% vested and does not take a
distribution from the portion of his Vested Interest that is attributable to
contributions made by the Employer, the non-vested portion of his Participant's
Account will become a Forfeiture upon the date such terminated Participant
incurs 5 consecutive 1-Year Breaks-in-Service.
However, if at the time of his Termination of Employment
the Participant is not 100% vested and does take a distribution from the portion
of his Vested Interest that is attributable to contributions made by the
Employer, or if the Participant is 0% vested, the non-vested portion of his
Participant's Account will become a Forfeiture immediately upon the
Participant's Termination of Employment date.
If a Participant whose non-vested portion of his
Participant's Account became a Forfeiture in accordance with the terms of the
preceding paragraph is later rehired by the Employer
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and re-enrolls in the Plan before incurring 5 consecutive 1-Year
Breaks-in-Service, then the amount of the Forfeiture shall be restored to the
Participant's Account by the Employer in accordance with the repayment provision
elected by the Employer in the Adoption Agreement and described in Section 3D.2.
(b) 1-Year Break-in-Service (Cash-Out Method). If at the
time of his Termination of Employment the Participant is not 100% vested and
does not take a distribution from the portion of his Vested Interest that is
attributable to contributions made by the Employer, the non-vested portion of
his Participant's Account will become a Forfeiture upon the date such terminated
Participant incurs 5 consecutive 1-Year Breaks-in-Service.
However, if at the time of his Termination of Employment
the Participant is not 100% vested and does take a distribution from the portion
of his Vested Interest that is attributable to contributions made by the
Employer, or if the Participant is 0% vested, the non-vested portion of his
Participant's Account will become a Forfeiture upon the date such terminated
Participant incurs a 1-Year Break-in-Service.
If a terminated Participant, whose non-vested portion of
his Participant's Account became a Forfeiture in accordance with the terms of
the preceding paragraph, is later rehired by the Employer and re-enrolls in the
Plan before incurring 5 consecutive 1-Year Breaks-in-Service, then the amount of
the Forfeiture shall be restored to the Participant's Account by the Employer in
accordance with the repayment provision elected by the Employer in the Adoption
Agreement and described in Section 3D.2.
(c) 5 Consecutive 1-Year Breaks-in-Service. If at the time
of his Termination of Employment the Participant is not 100% vested, the
non-vested portion of his Participant's Account will become a Forfeiture upon
the date the terminated Participant incurs 5 consecutive 1-Year
Breaks-in-Service.
3D.2 Repayment of Prior Distribution. If a terminated Participant is
later rehired by the Employer and re-enrolls in the Plan, the following Optional
Payback or Required Payback provisions, as elected by the Employer in the
Adoption Agreement, will apply:
(a) Optional Payback:
(1) If the Participant was 0% vested at his
Termination of Employment and did not incur 5 consecutive 1-Year
Breaks-in-Service after such date, the amount which became a Forfeiture, if any,
shall be restored by the Employer at the time such Participant re-enrolls in the
Plan.
(2) If the Participant was vested but not 100%
vested at his Termination of Employment and did not incur 5 consecutive 1-Year
Breaks-in-Service after such date, the amount which became a Forfeiture, if any,
shall be restored by the Employer at the time such Participant re-enrolls in the
Plan. In addition, the Participant may repay the full amount of the distribution
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attributable to Employer contributions, if any, made at his Termination of
Employment. Such repayment of Employer contributions, however, must be made
before the Participant has incurred 5 consecutive 1-Year Breaks-in-Service
following the date he received the distribution or five years after the
Participant is rehired by the Employer, whichever is earlier.
(3) If the Participant had incurred 5 consecutive
1-Year Breaks-in-Service after his termination of Employment, the amount of the
Participant's Account that became a Forfeiture shall remain a Forfeiture and
such Participant shall be prohibited from repaying a distribution made at his
Termination of Employment.
(b) Required Payback:
(1) If the Participant was 0% vested at his
Termination of Employment and did not incur 5 consecutive 1-Year
Breaks-in-Service after such date, the amount which became a Forfeiture, if any,
shall be restored by the Employer at the time such Participant re-enrolls in the
Plan.
(2) If the Participant was vested but not 100%
vested at his Termination of Employment and did not incur 5 consecutive 1-Year
Breaks-in-Service after such date, the Participant shall be required to repay
the full amount of the distribution attributable to Employer contributions, if
any, made at his Termination of Employment. Such repayment of Employer
contributions, however, must be made before the Participant has incurred 5
consecutive 1-Year Breaks-in-Service following the date he received the
distribution or five years after the Participant is rehired by the Employer,
whichever is earlier.
When the Participant makes such repayment, the
amount which became a Forfeiture, if any, shall be restored by the Employer at
the same time such repayment is made. However, if the Participant does not repay
the distribution made in accordance with this Section 3D within the period of
time specified above, that Forfeiture shall remain a Forfeiture.
(3) If the Participant had incurred 4 consecutive
1-Year Breaks-in-Service after his Termination of Employment, the amount of the
Participant's Account that became a Forfeiture shall remain a Forfeiture and
such Participant shall be prohibited from repaying the distribution made at his
Termination of Employment.
3D.3 Life Insurance Policy. If all or any portion of the value of any
Life Insurance Policy on the Participant's life will become a Forfeiture, the
Participant shall have the right to buy such policy from the Trustee for the
then value of such policy less the value of any Vested Interest therein, within
30 days after written notice from the Trustee is mailed to his last known
address.
3D.4 No Further Rights or Interest. A Participant shall have no
further interest in or any rights to any portion of his Participant's Account
that becomes a Forfeiture due to his Termination of Employment once the
Participant incurs 5 consecutive 1-Year Breaks-in-Service in accordance with
Section 2A.4.
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3D.5 Forfeiture. Any Forfeiture arising in accordance with the
provisions of Section 3D.1 shall be treated as follows:
Any amount of Forfeitures shall be used in accordance with (a),
(b), or (c) below, in the manner set forth in Section 2C.
(a) Employer Credit. Forfeitures shall be used by the
Employer to reduce and in lieu of the Employer contribution next due under
Section 2C, or to pay Plan expenses, at the earliest opportunity after such
Forfeiture becomes available.
(b) Reallocation. Forfeitures shall be allocated in
accordance with the allocation formula of the contributions from which they
arose.
(c) Employer Credit and Reallocation of Remainder.
Forfeitures shall first be used to reduce and in lieu of the Employer
contribution next due under Section 2C, or to pay Plan expenses, at the earliest
opportunity after such Forfeiture becomes available. Any Forfeitures remaining
following use as an Employer credit shall be allocated in accordance with the
allocation formula of the contributions from which they arose.
Notwithstanding anything above to the contrary, if
Forfeitures are generated immediately or upon the occurrence of a 1-Year
Break-in-Service, and a former Participant returns to employment with the
Employer after Forfeitures are generated but prior to the occurrence of 5
consecutive 1-Year Breaks-in-Service, Forfeitures, if any, will first be used to
make whole the nonvested account of such Participant, equal to the value of the
nonvested account at the time the Participant terminated employment with the
Employer in accordance with the applicable provisions of Section 3D.2. In the
event that the available Forfeitures are not sufficient to make whole the
nonvested account, the Employer will make an additional contribution sufficient
to make the nonvested account whole.
3D.6 Lost Participant. If a benefit is forfeited because the
Participant or Beneficiary cannot be found, as discussed in Section 5D.7, such
benefit will be reinstated if a claim is made by the Participant or Beneficiary.
3D.7 Deferral of Distribution. If elected by the Employer, and as
discussed in Section 3A.1, a Participant who terminates employment and does not
consent to an immediate distribution shall have his distribution deferred (and
may be responsible for all fees and expenses associated with maintaining his
account in a deferred status).
3E. WITHDRAWALS
3E.1 Withdrawal - Employee Contributions.
(a) Required Employee Contributions. If the Employer has
elected in its Adoption Agreement to allow for a withdrawal of Required Employee
Contributions and earnings
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thereon, then a Participant may elect to withdraw from his Participant's Account
an amount equal to any whole percentage (not exceeding 100%) of his entire
Vested Interest in his Participant's Account attributable to Required Employee
Contributions plus any income and minus any loss thereon. On the date the
election becomes effective, the Participant shall be suspended from making any
further contributions to the Plan, and from having any Matching Contributions
made on his behalf for a period, as elected by the Employer in its Adoption
Agreement.
(b) Voluntary Employee Contributions. If the Employer has
elected in its Adoption Agreement to allow for withdrawal of Voluntary Employee
Contributions and earnings thereon, then a Participant may elect to withdraw
from his Participant's Account an amount which is equal to any whole percentage
(not exceeding 100%) of the entire Vested Interest in his Participant's Account
attributable to Voluntary Employee Contributions plus any income and minus any
loss thereon.
(c) Prior Required Employee Contributions. If the Employer
has elected in its Adoption Agreement to allow for a withdrawal of Prior
Required Employee Contributions and earnings thereon, then a Participant may
elect to withdraw from his Participant's Account an amount equal to any whole
percentage (not exceeding 100%) of his entire Vested Interest in his
Participant's Account attributable to Prior Required Employee Contributions plus
any income and minus any loss thereon.
(d) Prior Voluntary Employee Contributions. If the Employer
has elected in its Adoption Agreement to allow for withdrawal of Prior Voluntary
Employee Contributions and earnings thereon, then a Participant may elect to
withdraw from his Participant's Account an amount which is equal to any whole
percentage (not exceeding 100%) of the entire Vested Interest in his
Participant's Account attributable to Prior Voluntary Employee Contributions
plus any income and minus any loss thereon.
If a Participant elects a withdrawal under the provisions of
this Section, he may not elect another withdrawal under this Section for an
additional period specified by the Employer in its Adoption Agreement.
The Participant shall notify the Plan Administrator in writing
of his election to make a withdrawal under this Section. Any such election shall
be effective as of the date specified in such notice, which date must be at
least 15 days after notice is filed.
No Forfeitures will occur solely as a result of an Employee's
withdrawal of Employee Contributions.
3E.2 Withdrawal - Elective Deferral Contributions. If the Participant
has attained age 59-1/2, and if selected by the Employer in its Adoption
Agreement, the Participant may elect to withdraw from his Participant's Account
an amount which is equal to any whole percentage (not exceeding 100%) of his
Vested Interest in his Participant's Account attributable to his Elective
Deferral Contributions and earnings thereon.
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The Participant shall notify the Plan Administrator in writing
of his election to make a withdrawal under this Section. Any such election shall
be effective as of the date specified in such notice, which date must be at
least 15 days after notice is filed.
3E.3 Withdrawal - Employer Contributions. If the Employer has
specified in its Adoption Agreement that withdrawals of Matching Contributions,
Nonelective Contributions, or Prior Employer Contributions, if applicable, are
permitted, a Participant, who has been a Participant for at least 60 consecutive
months, may elect to withdraw from his Participant's Account an amount equal to
a whole percentage (not to exceed 100%) of his Vested Interest in his
Participant's Account attributable to Matching Contributions (and reallocated
Forfeitures, if applicable), Nonelective Contributions, (and reallocated
Forfeitures, if applicable), or Prior Employer Contributions (and reallocated
Forfeitures, if applicable), along with earnings. On the date the election
becomes effective, the Participant may be suspended from making Employee
Contributions and Elective Deferral Contributions, if any, and from having
Employer contributions made on his behalf for a period of time, as selected by
the Employer in its Adoption Agreement. In lieu of or in addition to the
60-months of participation requirement, the Employer may specify in the Adoption
Agreement that withdrawal of Employer contributions, to the extent vested, shall
be available upon or following the attainment of age 59-1/2.
In the event a Participant's suspension period occurs during a
year (or years) when no Employer contributions are made, such suspension shall
be taken into account when the next Employer contribution(s) is made.
The Participant shall notify the Plan Administrator in writing
of his election to make a withdrawal under this Section. Any such election shall
be effective as of the date specified in such notice, which date must be at
least 15 days after notice is filed.
3E.4 Withdrawal for Serious Financial Hardship of Contributions Other
than Elective Deferral Contributions. Except as provided in Sections 7B.1 and
7B.7(e), if the Plan is a profit sharing plan or a thrift plan, and if the
Employer has elected in its Adoption Agreement to permit withdrawals due to the
occurrence of events that constitute Serious Financial Hardships to a
Participant, such Participant may withdraw all or a portion of his Vested
Interest (excluding Elective Deferral Contributions, Qualified Nonelective
Contributions, Qualified Matching Contributions, and earnings on these
contributions). Such Serious Financial Hardship must be shown by positive
evidence submitted to the Plan Administrator that the hardship is of sufficient
magnitude to impair the Participant's financial security. Withdrawals shall be
determined in a consistent and nondiscriminatory manner, and shall not affect
the Participant's rights under the Plan to make additional withdrawals or to
continue to be a Participant.
3E.5 Withdrawal for Serious Financial Hardship of Elective Deferral
Contributions. If the Employer has selected in its Adoption Agreement, a
distribution may be made on account of Serious Financial Hardship if
subparagraphs (a) and (b) of this Section are satisfied. The funds available for
withdrawal shall be the portion of a Participant's Account attributable to
Elective Deferral Contributions, including any earnings credited to such
contributions as of the end of the last Plan
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Year ending before July 1, 1989 ("pre-1989 earnings"), and if applicable,
Qualified Matching Contributions credited to the Participant's Account as of the
end of the last Plan Year ending before July 1, 1989, Qualified Nonelective
Contributions credited to the Participant's Account as of the end of the last
Plan Year ending before July 1, 1989, and any pre-1989 earnings attributable to
Qualified Matching Contributions, or Qualified Nonelective Contributions.
Qualified Matching Contributions credited to the Participant's Account after the
end of the last Plan Year ending before July 1, 1989, Qualified Nonelective
Contributions credited to the Participant's Account after the end of the last
Plan Year ending before July 1, 1989, and earnings on Elective Deferral
Contributions, Qualified Matching Contributions, and Qualified Nonelective
Contributions credited after the end of the last Plan Year ending before July 1,
1989 shall not be eligible for withdrawal under this Section. For purposes of
this Section, a distribution may be made on account of a hardship only if the
distribution is made on account of an immediate and heavy financial need of the
Employee where such Employee lacks other available resources.
(a) The following are the only financial needs considered
immediate and heavy for purposes of this Section:
(i) Expenses for medical care described in Code
section 213(d) previously incurred by the Employee, the Employee's Spouse, or
any dependents of the Employee (as defined in Code section 152) or necessary for
these persons to obtain medical care described in Code section 213(d);
(ii) Costs directly related to the purchase of a
principal residence for the Employee (excluding mortgage payments);
(iii) Payments necessary to prevent the eviction of
the Employee from the Employee's principal residence or foreclosure on the
mortgage on that residence; or
(iv) Tuition payments, related educational fees and
amounts distributed for the payment of room-and-board expenses for the next 12
months of post-secondary education for the Employee, his or her Spouse, or any
of his or her dependents.
(b) To the extent the amount of distribution requested does
not exceed the amount required to relieve the Participant's financial need, such
distribution will be considered as necessary to satisfy an immediate and heavy
financial need of the Employee only if:
(i) The Employee has obtained all distributions,
other than hardship distributions, and all nontaxable loans under all plans
maintained by the Employer;
(ii) All plans maintained by the Employer provide
that the Employee's Elective Deferral Contributions and if applicable, Employee
Contributions, will be suspended for 12 months after the receipt of the hardship
distribution;
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(iii) The distribution is not in excess of the amount
of the immediate and heavy financial need (including amounts necessary to pay
any federal, state, or local income taxes or penalties reasonably anticipated to
result from the distribution); and
(iv) All plans maintained by the Employer provide
that the Employee may not make Elective Deferral Contributions for the
Employee's taxable year immediately following the taxable year of the hardship
distribution in excess of the applicable limit under Code section 402(g) for
such taxable year less the amount of such Employee's Elective Deferral
Contributions for the taxable year of the hardship distribution.
3E.6 Withdrawal - QVEC Contributions and Rollover Contributions. If
selected by the Employer in its Adoption Agreement, a Participant may elect to
withdraw from his Participant's Account as often during each Plan Year as
elected by the Employer in the Adoption Agreement, any amount up to 100% of his
entire Vested Interest in his Participant's Account attributable to his QVEC
Contributions or Rollover Contributions along with earnings thereon.
The Participant shall notify the Plan Administrator in writing
of his election to make a withdrawal under this Section. Any such election shall
be effective as of the date specified in such notice, which date must be at
least 15 days after notice is filed.
3E.7 Notification. The Participant shall notify the Plan
Administrator in writing of his election to make a withdrawal under Section 3E.
Any such election shall be effective as of the date specified in such notice,
which date must be at least 15 days after such notice is filed. Payment of the
withdrawal shall be subject to the terms and conditions of Section 3A. All
withdrawals made under the provisions of Section 3E shall be subject to the
spousal consent requirements of Section 3C, as applicable.
3E.8 Vesting Continuation. In the event a partially vested
Participant takes a withdrawal of less than 100% of his Vested Interest in
accordance with Section 3E.3 or 3E.4 or 3E.5, the remaining portion of his
Participant's Account attributable to Employer contributions shall vest
according to the formula as set forth in Section 1.75.
3E.9 Withdrawal - Participant's Employer Stock Account. The ability
of a Participant who is subject to the reporting requirements of section 16(a)
of the Securities Exchange Act of 1934 (the "Act") to make withdrawals or
investment changes involving the Participant's Employer Stock Account may be
restricted by the Plan Administrator to comply with the rules under section
16(b) of the Act.
3E.10 Withdrawal by Terminated Participants. Terminated Participants
who have deferred distribution of their benefit may make withdrawals from the
Plan in the same manner as selected by the Employer in its Adoption Agreement
for withdrawals preceding termination.
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3F. DIRECT ROLLOVERS
3F.1 Definitions.
(a) Direct Rollover. The term Direct Rollover means a
payment by the Plan to the Eligible Retirement Plan specified by the
Distributee.
(b) Distributee. The term Distributee means 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 who is the Alternate Payee
under a QDRO, are Distributees with regard to the interest of the Spouse or
former Spouse.
(c) Eligible Retirement 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 plan described in Code section
401(a), that accepts the Distributee's Eligible Rollover Distribution. However,
in the case of an Eligible Rollover Distribution to the surviving Spouse, an
Eligible Retirement Plan is an individual retirement account or an individual
retirement annuity.
(d) Eligible Rollover Distribution. The term Eligible
Rollover Distribution means any distribution of all or any portion of the
balance to the credit of the Distributee, except that an Eligible Rollover
Distribution does not include: 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); and the
portion of any distribution that is not includable in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
employer securities); and any other distribution(s) that is reasonably expected
to total less than $200 during a "year."
3F.2 Direct Rollovers. This Section applies to distributions made on
or after January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Distributee's election under this Section,
a Distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an Eligible Rollover Distribution that is
equal to at least $500 paid directly to an Eligible Retirement Plan specified by
the Distributee in a Direct Rollover.
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ARTICLE IV - LEGAL LIMITATIONS ON CONTRIBUTIONS
4A. NONDISCRIMINATION TESTS
4A.1 Definitions.
(a) Actual Contribution Percentage. The term Actual
Contribution Percentage (ACP) means the average of the Actual Contribution
Ratios of the Eligible Participants in a group.
(b) Actual Contribution Ratio. The term Actual Contribution
Ratio means the ratio (expressed as a percentage) of a Participant's
Contribution Percentage Amounts to that Participant's Compensation for the Plan
Year (whether or not the Employee was a Participant for the entire Plan Year).
(c) Actual Deferral Percentage. The term Actual Deferral
Percentage (ADP) means the average of the Actual Deferral Ratios for a specified
group of Participants.
(d) Actual Deferral Ratio. The term Actual Deferral Ratio
means the ratio (expressed as a percentage) of a Participant's Deferral
Percentage Amounts to that Participant's Compensation for such Plan Year. The
Actual Deferral Ratio for an Employee who is eligible to be a Participant but
fails to make Elective Deferral Contributions shall be zero.
(e) Aggregate Limit. The term Aggregate Limit means the sum
of: (i) 125 percent of the greater of the ADP of the non-Highly Compensated
Employees for the Plan Year or the ACP of non-Highly Compensated Employees under
the plan subject to Code section 401(m) for the Plan Year beginning with or
within the Plan Year of the CODA and (ii) the lesser of 200% or two plus the
lesser of such ADP or ACP. "Lesser" is substituted for "greater" in "(i),"
above, and "greater" is substituted for "lesser" after "two plus the" in "(ii)"
if it would result in a larger Aggregate Limit.
(f) Contribution Percentage Amounts. The term Contribution
Percentage Amounts means the sum of the Employee Contributions, Matching
Contributions, Qualified Matching Contributions (to the extent not taken into
account for purposes of the ADP test) and Qualified Nonelective 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. Such Contribution
Percentage Amounts shall not include Matching Contributions that are forfeited
either to correct Excess Aggregate Contributions or because the contributions to
which they relate are Excess Elective Deferral Contributions, Excess
Contributions, or Excess Aggregate Contributions. The Employer may elect to use
Elective Deferrals in the Contribution Percentage Amounts as long as the ADP
test (as described in Section 4A.2) is met before the Elective Deferrals are
used in the ACP test (as described in Section 4A.4) and the ADP test continues
to be met following the exclusion of those Elective Deferrals that are used to
meet the ACP test.
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(g) Deferral Percentage Amounts. The term Deferral
Percentage Amounts means any Elective Deferral Contributions made pursuant to
the Participant's deferral election, including Excess Elective Deferral
Contributions of Highly Compensated Employees, but excluding Elective Deferral
Contributions that are taken into account in the ACP test (provided the ADP test
is satisfied both with and without exclusion of these Elective Deferral
Contributions). In addition, the Employer may choose to make Qualified
Nonelective Contributions and Qualified Matching Contributions.
(h) Eligible Participant. The term Eligible Participant
means any Employee who is eligible to make an Employee Contribution or Elective
Deferral Contribution (if the Employer takes such contributions into account in
the calculation of the Actual Contribution Ratio), or to receive a Matching
Contribution (including Forfeitures) or a Qualified Matching Contribution. If an
Employee Contribution is required as a condition of participation in the Plan,
any Employee who would be a Participant in the Plan if such Employee made the
Required Employee Contribution shall be treated as an Eligible Participant on
behalf of whom no Employee Contributions are made.
If the Employer has elected in its Adoption Agreement to provide for Elective
Deferral Contributions, then Sections 4A.2 through 4A.5 shall apply.
4A.2 Actual Deferral Percentage Test. The ADP for Participants who
are Highly Compensated Employees for each Plan Year and the ADP for Participants
who are non-Highly Compensated Employees for the same Plan Year must satisfy one
of the following tests:
(a) The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for Participants who are
non-Highly Compensated Employees for the same Plan Year multiplied by 1.25; or
(b) The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for Participants who are
non-Highly Compensated Employees for the same Plan Year multiplied by 2.0,
provided that the ADP for Participants who are Highly Compensated Employees does
not exceed the ADP for Participants who are non-Highly Compensated Employees by
more than two (2) percentage points.
4A.3 Special Rules - ADP Test.
(a) The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have Elective Deferral
Contributions (and Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, if treated as Elective Deferrals for purposes of the ADP
test) allocated to his accounts under two or more CODAs maintained by the
Employer, shall be determined as if such Elective Deferral Contributions (and,
if applicable, such Qualified Nonelective Contributions or Qualified Matching
Contributions, or both) were made under a single CODA. If a Highly Compensated
Employee participates in two or more CODAs that have different Plan Years, such
CODAs are treated as a single CODA with respect to the Plan Years ending with or
within the same calendar year. Notwithstanding the foregoing, certain plans
shall be treated as separate if mandatorily disaggregated under regulations
under Code section 401(k).
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(b) 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 Code sections only
if aggregated with this Plan, then this Section shall be applied by determining
the ADP of Employees as if all such plans were a single plan. For Plan Years
beginning after December 31, 1989, plans may be aggregated in order to satisfy
Code section 401(k) only if they have the same Plan Year.
(c) If a Highly Compensated Employee is subject to the
family aggregation rules of section 414(q)(6) because that Participant is either
a 5-percent owner or one of the top 10 Highly Compensated Employees, the
combined Actual Deferral Ratio for the family group (which is treated as one
Highly Compensated Employee) must be determined by combining the Elective
Deferral Contributions (and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if treated as Elective Deferral Contributions
for purposes of the ADP test), and Compensation for the Plan Year of all the
family members (as defined in section 414(q)(6)). Such family members shall be
disregarded as separate Employees in determining the ADP for both Highly
Compensated Employees and non-Highly Compensated Employees.
(d) For purposes of determining the ADP test, Elective
Deferral Contributions, Qualified Nonelective Contributions and Qualified
Matching Contributions must be made before the last day of the 12-month period
immediately following the Plan Year to which such contributions relate.
(e) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP test and the amount of Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, used in such test.
(f) The determination and treatment of the Deferral
Percentage Amounts of any Participant shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
(g) If the Employer determines before the end of the Plan
Year that the Plan may not satisfy the ADP test for the Plan Year, the Employer
may require that the amounts of Elective Deferral Contributions being allocated
to the accounts of Highly Compensated Employees be reduced to the extent
necessary to prevent Excess Contributions from being made to the Plan.
Although the Employer may reduce the amounts of Elective
Deferral Contributions that may be allocated to the Participant's Accounts of
Highly Compensated Employees, the affected Employees shall continue to
participate in the Plan. When the situation that resulted in the reduction of
Elective Deferral Contributions ceases to exist, the Employer shall reinstate
the amounts of Elective Deferral Contributions elected by the affected
Participants in their Salary Deferral Agreement to the fullest extent possible.
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If the Employer has elected in its Adoption Agreement, to provide for Employee
Contributions and/or Matching Contributions required to be tested under Code
section 401(m), then Sections 4A.4 and 4A.5 shall apply.
4A.4 Actual Contribution Percentage Test. The ACP for Participants
who are Highly Compensated Employees for each Plan Year and the ACP for
Participants who are non-Highly Compensated Employees for the same Plan Year
must satisfy one of the following tests:
(a) The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for Participants who are
non-Highly Compensated Employees for the same Plan Year multiplied by 1.25; or
(b) The ACP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ACP for Participants who are
non-Highly Compensated Employees for the same Plan Year multiplied by two (2),
provided that the ACP for Participants who are Highly Compensated Employees does
not exceed the ACP for Participants who are non-Highly Compensated Employees by
more than two (2) percentage points.
4A.5 Special Rules - ADP/ACP Tests.
(a) Multiple Use: If one or more Highly Compensated
Employees participates in both a CODA and a plan subject to the ACP test
maintained by the Employer, and the sum of the ADP and ACP of those Highly
Compensated Employees subject to either or both tests exceeds the Aggregate
Limit, then the ACP of those Highly Compensated Employees who also participate
in a CODA will be reduced (beginning with such Highly Compensated Employee whose
Actual Contribution Ratio is the highest) so that the limit is not exceeded. The
amount by which each Highly Compensated Employee's Contribution Percentage
Amounts are reduced shall be treated as an Excess Aggregate Contribution. The
ADP and ACP of the Highly Compensated Employees are determined after any
corrections required to meet the ADP and ACP tests. Multiple use does not occur
if both the ADP and ACP of the Highly Compensated Employees does not exceed 1.25
multiplied by the ADP and ACP of the non-Highly Compensated Employees.
(b) For purposes of this Section, the Actual Contribution
Ratio for any Participant who is a Highly Compensated Employee and who is
eligible to have Contribution Percentage Amounts allocated to his account under
two or more plans described in Code section 401(a), or CODAs that are maintained
by the Employer, shall be determined as if the total of such Contribution
Percentage Amounts was made under each plan. If a Highly Compensated Employee
participates in two or more CODAs that have different Plan Years, all CODAs
ending with or within the same calendar year are treated as a single CODA.
Notwithstanding the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under regulations under Code section 401(m).
(c) 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 shall be
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applied by determining the Actual Contribution Ratio of Employees as if all such
plans were a single plan. For Plan Years beginning after December 31, 1989,
plans may be aggregated in order to satisfy Code section 401(m) only if they
have the same Plan Year.
(d) For purposes of determining the Actual Contribution
Ratio of a Participant who is a 5-percent owner or one of the Top 10 Highly
Compensated Employees, the Contribution Percentage Amounts and Compensation for
such Participant shall include the Contribution Percentage Amounts and
Compensation for the Plan Year of family members (as defined in Code section
414(q)(6)). Such family members shall be disregarded as separate Employees in
determining the ACP for Highly Compensated Employees and non-Highly Compensated
Employees.
(e) For purposes of determining the ACP test, Employee
Contributions are considered to have been made in the Plan Year in which
contributed to the Plan. Qualified Matching Contributions and Qualified
Nonelective Contributions are considered made for a Plan Year if made no later
than the end of the 12-month period beginning on the day after the close of the
Plan Year.
(f) 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.
(g) The determination and treatment of the Contribution
Percentage Amounts of any Participant shall satisfy such other requirements as
may be prescribed by the Secretary of the Treasury.
4B. LIMITATIONS ON ALLOCATIONS
4B.1 Definitions. The following definitions apply for purposes of
Section 4B.
(a) Annual Additions. The term Annual Additions means the
sum of the following amounts credited to a Participant's Account for the
Limitation Year:
(1) All contributions made by the Employer which
shall include:
Elective Deferral Contributions;
Money Purchase Pension Contributions;
Matching Contributions;
Nonelective Contributions;
Qualified Nonelective Contributions;
Qualified Matching Contributions;
Prior Employer Contributions;
(2) Employee Contributions;
(3) Forfeitures; and
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(4) Amounts allocated after March 31, 1984 to an
individual medical account, as defined in Code section 415(l)(2), which is part
of a pension or annuity plan maintained by the Employer, are treated as Annual
Additions to a defined contribution plan. Also, amounts derived from
contributions paid or accrued after December 31, 1985 in taxable years ending
after such date, which are attributable to post-retirement medical benefits
allocated to the separate account of a Key Employee as defined in Code section
419A(d)(3), under a welfare benefit fund as defined in Code section 419(e),
maintained by the Employer, are treated as Annual Additions to a defined
contribution plan; and
(5) Allocations under a simplified employee pension
plan.
For this purpose, any Excess Annual Additions applied
under Sections 4C.3 or 4B.5(f) in the Limitation Year to reduce Employer
contributions will be considered Annual Additions for such Limitation Year.
(b) Compensation. As elected by the Employer in the Adoption
Agreement, the term Compensation means all of a Participant's:
(1) Wages, Tips, and Other Compensation Box on Form
W-2. (Information required to be reported under Code sections 6041, 6051 and
6052). 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)).
(2) Section 3401(a) Wages. Wages as defined in 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)).
(3) 415 Safe-Harbor Compensation. Wages, salaries,
and fees for professional services and other amounts received (without regard to
whether or not an amount is paid in cash) for personal services actually
rendered in the course of employment with the Employer maintaining the Plan to
the extent that the amounts are includable in gross income (including, but not
limited to, commissions paid salesmen, compensation for services on the basis of
a percentage of profits, commissions on insurance premiums, tips, bonuses,
fringe benefits, and reimbursements or other expense allowances under a
nonaccountable plan as described in Code section 1.62-2(c)), and excluding the
following:
(A) Employer contributions to a plan of
deferred compensation which are not includable in the Employee's gross income
for the taxable year in which contributed,
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or Employer contributions under a simplified employee pension plan to the extent
such contributions are deductible by the Employee, or any distributions from a
plan of deferred compensation;
(B) Amounts realized from the exercise of a
non-qualified stock option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer subject to a
substantial risk of forfeiture;
(C) Amounts realized from the sale, exchange
or other disposition of stock acquired under a qualified stock option; and
(D) Other amounts which received special tax
benefits, or contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract described in
Code section 403(b) (whether or not the contributions are actually excludable
from the gross income of the Employee).
For any Self-Employed Individual, Compensation means
Earned Income.
For Limitation Years beginning after December 31, 1991,
for purposes of applying the limitations of this Section 4B, Compensation for a
Limitation Year is the Compensation actually paid or includable in gross income
during such Limitation Year.
Notwithstanding the preceding sentence, Compensation for
a Participant in a defined contribution plan who is permanently and totally
disabled (as defined in Code section 22(e)(3)) is the Compensation such
Participant would have received for the Limitation Year if the Participant had
been paid at the rate of Compensation paid immediately before becoming
permanently and totally disabled; such imputed Compensation for the disabled
Participant may be taken into account only if the Participant is not a Highly
Compensated Employee and contributions made on behalf of such Participant are
nonforfeitable when made.
(c) Defined Benefit Fraction. The term Defined Benefit
Fraction means a fraction, the numerator of which is the sum of the
Participant's Projected Annual Benefits under all the defined benefit plans
(whether or not terminated) maintained by the Employer, and the denominator of
which is the lesser of 125 percent of the dollar limitation determined for the
Limitation Year under Code sections 415(b) and (d), or 140 percent of the
Highest Average Compensation including any adjustments under Code section
415(b).
Notwithstanding the above, if the Participant was a
Participant as of the first day of the Limitation Year beginning after December
31, 1986 in one or more defined benefit plans maintained by the Employer which
were in existence on May 6, 1986, the denominator of this fraction will not be
less than 125 percent of the sum of the annual benefits under such plans which
the Participant had accrued as of the later of the close of the last Limitation
Year beginning before January 1, 1987, disregarding any changes in the terms and
conditions of the Plan after May 5, 1986. The preceding sentence applies only if
the defined benefit plans individually and in the aggregate
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satisfied the requirements of Code section 415 for all Limitation Years
beginning before January 1, 1987.
Notwithstanding the foregoing, for any Top-Heavy Plan
Year, 100 shall be substituted for 125 unless the extra minimum allocation is
being made pursuant to the Employer's election in the Adoption Agreement.
However, for any Plan Year in which this Plan is a Super Top-Heavy Plan, 100
shall be substituted for 125 in any event.
(d) Defined Contribution Dollar Limitation. The term Defined
Contribution Dollar Limitation means $30,000 or if greater, one-fourth of the
defined benefit dollar limitation set forth in Code section 415(b)(1) as in
effect for the Limitation Year.
(e) Defined Contribution Fraction. The term Defined
Contribution Fraction means a fraction, the numerator of which is the sum of the
Annual Additions to the Participant's accounts under all the defined
contribution plans (whether or not terminated) maintained by the Employer for
the current and all prior Limitation Years (including the Annual Additions
attributable to the Participant's nondeductible employee contributions to all
defined benefit plans, whether or not terminated, maintained by the Employer,
and the Annual Additions attributable to all welfare benefit funds, as defined
in Code section 419(e), individual medical accounts, as defined in Code section
415(l)(2), and simplified employee pension plans, as defined in Code section
408(k), maintained by the Employer), and the denominator of which is the sum of
the maximum aggregate amounts for the current and all prior Limitation Years of
service with the Employer (regardless of whether a defined contribution plan was
maintained by the Employer). The maximum aggregate amount in any Limitation Year
is the lesser of 125 percent of the dollar limitation determined under Code
sections 415(b) and (d) in effect under Code section 415(c)(1)(A) or 35 percent
of the Participant's Compensation for such year.
If the Employee was a Participant as of the end of the
first day of the first Limitation Year beginning after December 31, 1986, in one
or more defined contribution plans maintained by the Employer which were in
existence on May 6, 1986, the numerator of this fraction will be adjusted if the
sum of this fraction and the Defined Benefit Fraction would otherwise exceed 1.0
under the terms of this Plan. Under the adjustment, an amount equal to the
product of (1) the excess of the sum of the fractions over 1.0 times (2) the
denominator of this fraction, will be permanently subtracted from the numerator
of this fraction. The adjustment is calculated using the fractions as they would
be computed as of the end of the last Limitation Year beginning before January
1, 1987, and disregarding any changes in the terms and conditions of the Plan
made after May 5, 1986, but using the section 415 limitation applicable to the
first Limitation Year beginning on or after January 1, 1987.
Notwithstanding the foregoing, for any Top-Heavy Plan
Year, 100 shall be substituted for 125 unless the extra minimum allocation is
being made pursuant to the Employer's election in the Adoption Agreement.
However, for any Plan Year in which this Plan is a Super Top-Heavy Plan, 100
shall be substituted for 125 in any event.
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The Annual Additions for any Limitation Year beginning
before January 1, 1987 shall not be recomputed to treat all Employee
Contributions as Annual Additions.
(f) Employer. For purposes of this Section 4B, the term
Employer means the Employer that adopts this Plan, and all members of a
controlled group of corporations (as defined in Code section 414(b) as modified
by section 415(h)), a group of commonly controlled trades or businesses (as
defined in Code section 414(c) as modified by section 415(h)) or affiliated
service groups (as defined in Code section 414(m)) of which the adopting
Employer is a part and any other entity required to be aggregated with the
Employer pursuant to regulations under Code section 414(o).
(g) Highest Average Compensation. The term Highest Average
Compensation means the average Compensation for the three consecutive Years of
Service with the Employer that produces the highest average. A Year of Service
with the Employer is the 12-consecutive month period defined in Section 2A.5.
(h) Limitation Year. The term Limitation Year means a
calendar year, or the 12-consecutive month period elected by the Employer in the
Limitation Year section of the Adoption Agreement. All qualified plans
maintained by the Employer must use the same Limitation Year. If the Limitation
Year is amended to a different 12-consecutive month period, the new Limitation
Year must begin on a date within the Limitation Year in which the amendment is
made.
(i) Master or Prototype Plan. The term Master or Prototype
Plan means a plan the form of which is the subject of a favorable opinion letter
from the national office of the Internal Revenue Service.
(j) Maximum Permissible Amount. The term Maximum Permissible
Amount means the maximum Annual Additions that may be contributed or allocated
to a Participant's Account under the Plan for any Limitation Year, which shall
not exceed the lesser of:
(1) The Defined Contribution Dollar Limitation, or
(2) 25 percent of the Participant's Compensation for
the Limitation Year.
The Compensation limitation referred to in (2) above,
shall not apply to any contribution for medical benefits (within the meaning of
Code section 401(h) or 419A(f)(2)) which is otherwise treated as Annual
Additions under Code sections 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
---------------------------------------------
12
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(k) Projected Annual Benefit. The term Projected Annual
Benefit means the annual retirement benefit (adjusted to an actuarially
equivalent Straight Life Annuity if such benefit is expressed in a form other
than a Straight Life Annuity or Qualified Joint and Survivor Annuity) to which
the Participant would be entitled under the terms of the Plan assuming:
(1) The Participant will continue employment until
Normal Retirement Age under the Plan (or current age, if later); and
(2) The Participant's Compensation for the current
Limitation Year and all other relevant factors used to determine benefits under
the Plan will remain constant for all future Limitation Years.
4B.2 Basic Limitation. If the Participant does not participate in,
and has never participated in another qualified plan or welfare benefit fund
maintained by the Employer, as defined in Code section 419(e), or an individual
medical account, as defined in Code section 415(l)(2), maintained by the
Employer, or a simplified employee pension, as defined in Code section 408(k),
maintained by the Employer, which provides Annual Additions as defined in
Section 4B.1(a), 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 contributions that would otherwise be contributed or allocated to
the Participant's Account would cause the Annual Additions for the Limitation
Year to exceed the Maximum Permissible Amount, the amount contributed or
allocated will be reduced so that the Annual Additions for the Limitation Year
will equal the Maximum Permissible Amount.
4B.3 Estimated Maximum Permissible Amount. Prior to determining the
Participant's actual Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount for a Participant on the basis of a
reasonable estimation of the Participant's Compensation for the Limitation Year,
uniformly determined for all Participants similarly situated.
4B.4 Actual Maximum Permissible Amount. As soon as administratively
feasible after the end of the Limitation Year, the Maximum Permissible Amount
for the Limitation Year will be determined on the basis of the Participant's
actual Compensation for the Limitation Year.
4B.5 Participants Covered by Another Prototype Defined Contribution
Plan.
(a) This Section applies if, in addition to this Plan, the
Participant is covered under another qualified Master or Prototype defined
contribution Plan maintained by the Employer, or a welfare benefit fund, as
defined in Code section 419(e), maintained by the Employer, or an individual
medical account as defined in Code section 415(l)(2), maintained by the
Employer, or a simplified employee pension plan, as defined in Code section
408(k), that provides Annual Additions as defined in Section 4B.1(a), during any
Limitation Year. The Annual Additions which may be credited to a Participant's
Account under this Plan for any such Limitation Year will not exceed the Maximum
Permissible Amount reduced by the Annual Additions credited to a Participant's
account under the other qualified Master and Prototype defined contribution
Plans,
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welfare benefit funds, individual medical accounts, and simplified employee
pension plans for the same Limitation Year. If the Annual Additions with respect
to the Participant under other qualified Master and Prototype defined
contribution Plans, welfare benefit funds, individual medical accounts, and
simplified employee pension plans maintained by the Employer are less than the
Maximum Permissible Amount and the Employer contributions that would otherwise
be contributed or allocated to the Participant's Account under this Plan would
cause the Annual Additions for the Limitation Year to exceed this limitation,
the amount contributed or allocated will be reduced so that the Annual Additions
under all such plans and funds for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with respect to the Participant
under such other qualified master and prototype defined contribution plans,
welfare benefit funds, individual medical accounts, and simplified employee
pension plans, in the aggregate are equal to or greater than the Maximum
Permissible Amount, no amount will be contributed or allocated to the
Participant's Account under this Plan for the Limitation Year.
(b) Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer may determine the estimated
Maximum Permissible Amount for a Participant in the manner described in Section
4B.3.
(c) As soon as is administratively feasible after the end of
the Limitation Year, the Maximum Permissible Amount for the Limitation Year will
be determined on the basis of the Participant's actual Compensation for the
Limitation Year.
(d) If, pursuant to Section 4B.5(c), or as a result of the
allocation of Forfeitures, a Participant's Annual Additions under this Plan and
such other plans would result in Excess Annual Additions as defined in Section
4C.1(b) for a Limitation Year, the Excess Annual Additions 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 account, regardless of the actual allocation date.
(e) If Excess Annual Additions were allocated to a
Participant on an allocation date of this Plan which coincides with an
allocation date of another plan, the Excess Annual Additions attributed to this
Plan will be the product of:
(1) The total Excess Annual Additions allocated as
of such date, multiplied by
(2) The ratio of (i) the Annual Additions allocated
to the Participant for the Limitation Year as of such date under this Plan to
(ii) the total Annual Additions allocated to the Participant for the Limitation
Year as of such date under this and all the other qualified Master or Prototype
defined contribution Plans.
(f) Any Excess Annual Additions attributed to this Plan will
be disposed of in the manner described in Section 4C.3.
\
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4B.6 Participants Covered by Non-Prototype Defined Contribution Plan.
If the Participant is covered under another qualified defined contribution plan
maintained by the Employer which is not a Master or Prototype Plan, Annual
Additions which may be credited to the Participant's Account under this Plan for
any Limitation Year will be limited in accordance with Section 4B.5 as though
the other plan were a Master or Prototype Plan, unless the Employer provides
other limitations in the Limitations on Allocations section of the Adoption
Agreement.
4B.7 Participants Covered by Defined Benefit Plan. If the Employer
maintains, or at any time maintained, a qualified defined benefit plan covering
any Participant in this Plan, the sum of the Participant's Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction will not exceed 1.0 in any
Limitation Year. 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 Limitations on Allocations section of the Adoption Agreement.
4C. TREATMENT OF EXCESSES
4C.1 Definitions.
(a) Excess Aggregate Contributions. The term Excess
Aggregate Contributions means, with respect to any Plan Year, the excess of:
(1) The aggregate Contribution Percentage Amounts
taken into account in computing the ACP of Highly Compensated Employees for such
Plan Year, over
(2) The maximum Contribution Percentage Amounts
permitted by the ACP test (determined by reducing the Contribution Percentage
Amounts made on behalf of Highly Compensated Employees in order of their Actual
Contribution Ratios beginning with the highest of such ratios). Such
determination shall be made after first determining Excess Elective Deferral
Contributions, pursuant to Section 4C.2(a) and then determining Excess
Contributions pursuant to Section 4C.4.
(b) Excess Annual Additions. The term Excess Annual
Additions means the excess of the Participant's Annual Additions for the
Limitation Year over the Maximum Permissible Amount.
(c) Excess Contributions. The term Excess Contributions
means, with respect to any Plan Year, the excess of:
(1) The aggregate Deferral Percentage Amounts taken
into account in computing the ADP of Highly Compensated Employees for such Plan
Year, over
(2) The maximum Deferral Percentage Amounts
permitted by the ADP test (determined by reducing the Deferral Percentage
Amounts made on behalf of Highly
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Compensated Employees in order of their Actual Deferral Ratios, beginning with
the highest of such ratios).
(d) Excess Elective Deferral Contributions. The term Excess
Elective Deferral Contributions means those Elective Deferral Contributions that
are includable in a Participant's gross income under Code section 402(g) to the
extent such Participant's Elective Deferral Contributions for a taxable year
exceed the dollar limitation under such Code section. Excess Elective Deferral
Contributions shall be treated as Annual Additions under the Plan pursuant to
Section 4B, unless such amounts are distributed in accordance with the
provisions of Section 4C.2(a), below.
4C.2 Excess Elective Deferral Contributions.
(a) In the event that Elective Deferral Contributions made
during a calendar year exceed the limit specified in Section 2C.1(j)(4), then
the Excess Elective Deferral Contributions, plus any income and minus any loss
allocable thereto, shall be distributed to the Participant by the April 15
following the calendar year in which such amount was contributed, provided that
the Participant notifies the Plan Administrator no later than 30 days in advance
of his intent to withdraw such Excess Elective Deferral Contributions, or is
deemed to notify the Plan Administrator. A Participant is deemed to notify the
Plan Administrator of any Excess Elective Deferral Contributions that arise by
taking into account only those Elective Deferrals made to this Plan and any
other plans of this Employer. The spousal consent provisions of Section 3C shall
not apply to any distribution of Excess Elective Deferral Contributions.
(b) Excess Elective Deferral Contributions shall be adjusted
for any income or loss for the Employee's tax year. The income or loss allocable
to excess Elective Deferral Contributions is an amount determined by multiplying
the sum of the income or loss allocable to the Participant's Elective Deferral
Contribution account for the taxable year by a fraction, the numerator of which
is such Participant's Excess Elective Deferral Contributions for the taxable
year, and the denominator of which is equal to the sum of the Participant's
Account balance attributable to Elective Deferral Contributions as of the
beginning of the taxable year plus the Participant's Elective Deferral
Contributions for the taxable year. Income for the gap period (the period from
the end of the taxable year to the date of distribution) shall not be allocated
to Excess Elective Deferral Contributions.
(c) Matching Contributions, as defined in Section 1.35, that
are attributable to Excess Elective Deferral Contributions shall be forfeited,
and as such, shall be applied to reduce Employer contributions or pay Plan
expenses.
4C.3 Excess Annual Additions. If, pursuant to Section 4B.4 or as a
result of the allocation of Forfeitures, there are Excess Annual Additions, the
excess will be disposed of using any of the following methods:
(a) Employee Contributions or Elective Deferral
Contributions or both, to the extent they would reduce the Excess Annual
Additions, will be returned to the Participant. The
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Contributions returned in accordance with the preceding shall include any gains
or losses attributable to such Contributions.
Employee Contributions so returned will be disregarded
with respect to the ACP test. Elective Deferral Contributions so returned will
be disregarded with respect to the Elective Deferral limitation described in
Section 2C.1(j)(4) of the Plan and the ADP test.
(b) If, after the application of paragraph (a), Excess
Annual Additions still exist and the Participant is covered by the Plan at the
end of the Limitation Year, the Excess Annual Additions in the Participant's
Account, other than Employee Contributions and Elective Deferral Contributions,
will be used to reduce Employer contributions (including any allocation of
Forfeitures) for such Participant in the next Limitation Year, and each
succeeding Limitation Year, if necessary.
(c) If, after the application of paragraph (a), Excess
Annual Additions still exist and the Participant is not covered by the Plan at
the end of a Limitation Year, the Excess Annual Additions will be held
unallocated in a suspense account. The suspense account will be applied to
reduce future Employer contributions (including allocation of any Forfeiture)
for all remaining Participants in the next Limitation Year, and each succeeding
Limitation Year if necessary.
(d) If a suspense account is in existence at any time during
the Limitation Year pursuant to this Section, it will not participate in the
allocation of the Trust or Insurance Company's gains and losses. If a suspense
account is in existence at any time during a particular Limitation Year, all
amounts in the suspense account must be allocated and reallocated to the
Participants' Account before any Employer or Employee Contributions may be made
to the Plan for that Limitation Year. Except as provided in Section 4C.3(a),
Excess Annual Additions may not be distributed to Participants or former
Participants.
4C.4 Excess Contributions.
(a) Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable thereto, shall be
distributed no later than the last day of each Plan Year to Participants to
whose Participants' Accounts such Excess Contributions were allocated for the
preceding Plan Year. If such excess amounts are distributed more than 2-1/2
months after the last day of the Plan Year in which such excess amounts arose, a
ten percent excise tax will be imposed on the Employer maintaining the Plan with
respect to such amounts.
Such distributions shall be made to Highly Compensated
Employees on the basis of the respective portions of the Excess Contributions
attributable to each of such Employees.
The distribution of Excess Contributions made to the
family members of a family group that was combined for purposes of determining a
Highly Compensated Employee's Actual Deferral Ratio shall be allocated among the
family members in proportion to the Deferral Percentage Amounts (including any
amounts required to be taken into account under Sections
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4A.3(a) and (b) of the Plan) of each family member that is combined to determine
the Actual Deferral Ratio.
(b) Excess Contributions shall be treated as Annual
Additions, as defined in Section 4B.1, under the Plan in the Limitation Year in
which they arose.
(c) Excess Contributions shall be adjusted for any income or
loss for the Plan Year. The income or loss allocable to Excess Contributions is
an amount determined by multiplying the sum of the income or loss allocable to
the Participant's Account for Deferral Percentage Amounts for the Plan Year, by
a fraction, the numerator of which is such Participant's Excess Contributions
for the Plan Year and the denominator of which is equal to the sum of the
Participant's Account balance attributable to Deferral Percentage Amounts as of
the beginning of the Plan Year plus the Participant's Deferral Percentage
Amounts for the Plan Year. Income for the gap period (the period from the end of
the Plan Year to the date of distribution) shall not be allocated to Excess
Contributions.
(d) Excess Contributions shall be distributed from the
Participant's Account for Elective Contributions and Qualified Matching
Contributions (if applicable) in proportion to the Participant's Elective
Deferral Contributions and Qualified Matching Contributions (to the extent used
in the ADP test) for the Plan Year. Excess Contributions shall be distributed
from the Participant's Qualified Nonelective Contribution Account only to the
extent that such Excess Contributions exceed the balance in the Participant's
Account for Elective Contributions and Qualified Matching Contributions.
(e) Matching Contributions, as defined in Section 1.35, that
are attributable to Excess Contributions, shall be forfeited, and as such, shall
be applied to reduce Employer contributions or pay Plan expenses.
4C.5 Excess Aggregate Contributions.
(a) Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss allocable thereto,
shall be forfeited, if forfeitable, or if not forfeitable, distributed no later
than the last day of each Plan Year to Participants to whose Participants'
Accounts such Excess Aggregate Contributions were allocated for the preceding
Plan Year. If such Excess Aggregate Contributions are distributed more than
2-1/2 months after the last day of the Plan Year in which such excess amounts
arose, a ten percent excise tax will be imposed on the Employer maintaining the
Plan with respect to those amounts.
The distribution of Excess Aggregate Contributions made
to the family members of a family group that was combined for purposes of
determining a Highly Compensated Employee's Actual Contribution Ratio shall be
allocated among the family members in proportion to the Contribution Percentage
Amounts (including any amounts required to be taken into account under Sections
4A.5(a) and (b) of the Plan) of each family member that is combined to determine
the Actual Contribution Ratio.
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(b) Excess Aggregate Contributions shall be treated as
Annual Additions, as defined in Section 4B.1, in the Limitation Year in which
they arose.
(c) Excess Aggregate Contributions shall be adjusted for any
income or loss for the Plan Year. The income or loss allocable to Excess
Aggregate Contributions is an amount determined by multiplying the sum of the
income or loss allocable to the Participant's Account for Contribution
Percentage Amounts for the Plan Year by a fraction, the numerator of which is
such Participant's Excess Aggregate Contributions for the Plan Year, and the
denominator of which is equal to the sum of the Participant's Account balance
attributable to Contribution Percentage Amounts as of the beginning of the Plan
Year plus the Participant's Contribution Percentage Amounts for the Plan Year.
Income for the gap period (the period from the end of the Plan Year to the date
of distribution) shall not be allocated to Excess Aggregate Contributions.
(d) Excess Aggregate Contributions shall be forfeited, if
forfeitable, or distributed on a pro-rata basis from the Participant's Account
for Employee Contributions, Matching Contributions, and Qualified Matching
Contributions (and, if applicable, the Participant's Qualified Nonelective
Contributions or Elective Deferral Contributions, or both).
(e) Forfeitures of Excess Aggregate Contributions shall be
applied to reduce Employer contributions or pay Plan expenses.
(f) Matching Contributions as defined in Section 1.35 that
are attributable to Excess Aggregate Contributions shall be forfeited, and as
such, shall be applied to reduce Employer contributions or pay Plan expenses.
ARTICLE V - PARTICIPANT PROVISIONS
5A. ANNUITY CONTRACT AND PARTICIPANT'S ACCOUNT
5A.1 Participant's Account. A Participant's Account shall be
maintained on behalf of each Participant until such Account is distributed in
accordance with the terms of this Plan.
Each Participant shall have the exclusive authority to direct
the investment of Employee Contributions, Elective Deferral Contributions, QVEC
Contributions and Rollover Contributions, if applicable, from among the
investment options selected by the Employer.
If selected by the Employer in its Adoption Agreement, the
Participant, Beneficiary and/or Alternate Payee additionally shall have the
exclusive authority to direct the investment of contributions made by the
Employer from among the investment choices selected by the Employer.
5A.2 Investment Transfers. Each Participant, Beneficiary, and/or
Alternate Payee shall have the exclusive authority to direct the transfer of
amounts between the investment funds designated by the Employer attributable to
his Employee Contributions, Elective Deferral Contributions, QVEC Contributions
and Rollover Contributions, if applicable.
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If the Employer selects in its Adoption Agreement to grant the
Participant exclusive authority to direct the investment of contributions made
by the Employer, the Participant, Beneficiary, and/or Alternate Payee shall also
have the exclusive authority to transfer contributions made by the Employer from
among the investment choices selected by the Employer.
The transfer of amounts between investment funds shall be
subject to the rules of the investment funds in which the Participant's Account
is invested or is to be invested.
The Plan Administrator or the Participant, Beneficiary, and/or
Alternate Payee as the case may be, may change such amounts as often as the Plan
Administrator may allow in accordance with the terms of the investment funds in
which the Participant's Account is being invested.
The ability of a Participant who is subject to the reporting
requirements of section 16(a) of the Securities and Exchange Act of 1934 (the
"Act") to make withdrawals or investment changes involving the Participant's
Employer Stock Account may be restricted by the Plan Administrator to comply
with rules under section 16(b) of the Act.
5A.3 Participant's Account Valuation. A Participant's Account shall
be maintained on behalf of each Participant until such Account is distributed in
accordance with the terms of this Plan. At least once per year, as of the last
day of the Plan Year, each Participant's Account shall be adjusted, in the ratio
that the Participant's Account balance bears to all account balances invested
into the same investment vehicle, for any earnings, gains, losses,
contributions, withdrawals, expenses, and loans attributable to such Plan Year,
in order to obtain a new valuation of the Participant's Account. The assets of
the Plan will be valued annually at fair market value as of the last day of each
Plan Year.
5B. LIFE INSURANCE POLICIES
5B.1 Optional Purchase of Life Insurance. If the Employer in its
Adoption Agreement shall permit the purchase of life insurance on the lives of
some or all Participants hereunder, each eligible Participant may elect that a
portion of the Contribution made on his behalf shall be applied to the purchase
of a Life Insurance Policy or Policies on his life. The application for each
Policy shall be signed by the Participant and by the Trustee and shall conform
to the requirements of the Insurance Company, including any requested evidence
of insurability, and the requirements of this Section. All Life Insurance
Policies shall be issued so as to permit a common billing date. Any Policy on
the life of a Participant who can qualify for waiver of premium thereunder and
participant account contribution disability benefits thereunder may include such
benefits if applied for by the Participant. The Plan Administrator may adopt
reasonable rules regarding the purchase of Life Insurance Policies provided such
rules are administered in a consistent and nondiscriminatory manner. No
application shall be made hereunder for any Life Insurance Policy on the life of
a Participant acceptable to the Insurance Company at standard premium rates for
a face amount of less that $1,000 for the first, or any additional Policy issued
on the Participant's life.
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5B.2 Premiums on Life Insurance Policies. The premiums on all Life
Insurance Policies on the life of a Participant shall be paid from the portion
of his Participant's Account attributable to contributions made by the Employer,
to the extent sufficient therefor, otherwise in one of the following manners:
(a) By a loan against the Participant's Policy or Policies,
under the automatic premium loan provision thereof, or
(b) By payment out of his Participant's Account.
If the Participant is not acceptable to the Insurance Company as
a standard risk at standard rates, a Policy with the same premium but a lesser
death benefit may be purchased.
5B.3 Limitations on Premiums. In no case shall the cumulative total
premiums paid on all Policies held on the life of a Participant hereunder exceed
an amount equal to the applicable percentage set forth below of all
Contributions (other than Employee Contributions) and Forfeitures theretofore
allocated or currently due on his behalf:
(a) 49% in the case of ordinary life insurance or similar
policies.
(b) 25% in the case of term insurance policies or a
combination of policies, with premiums on ordinary life insurance or similar
policies being given half weight.
If such cumulative total premiums would otherwise exceed this
amount, the necessary steps to avoid this result shall be taken by reduction of
the Participant's life insurance coverage by changing all or a portion of his
coverage to paid-up life insurance or by selling the excess portion to the
Participant.
5B.4 Disposal. A Participant who no longer wishes to have any part of
his allocable share of Contributions used to pay the premiums for any Life
Insurance Policy or Policies may withdraw a prior election by written notice to
the Trustee to that effect. Any Policy shall be disposed of in accordance with
its provisions as the Trustee shall direct.
5B.5 Rights under Policies. Each Policy shall provide that the
Trustee shall have the right to receive any or all payments that may be due
during the Participant's lifetime. Any death benefit shall be payable directly
to the Beneficiary named in the Policy and the Participant shall have the right,
subject to the terms of Section 3C, either directly or through the Trustee, to
change the Beneficiary from time to time and to elect settlement options under
the policy for the benefit of the Beneficiary. The Trustee shall have the right
to exercise all other options and privileges contained in the policy and shall
exercise such rights and privileges in a manner consistent with the terms of the
Plan.
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5B.6 Loans. No loans shall be made against any of the Policies
hereunder either from the Insurance Company or any other source unless such
loans are made in order to pay amounts then due as premiums thereon.
5B.7 Conditions of Coverage. Except as may be otherwise provided in
any conditional or binding receipt issued by the Insurance Company, there shall
be no coverage and no death benefit payable under any Policy to be purchased
from the Insurance Company until such Policy shall have been delivered and the
premium therefor shall have been paid to the Insurance Company as a premium for
that Policy. Neither the Employer nor the Trustee shall have any responsibility
as to the effectiveness of any Life Insurance Policy purchased from the
Insurance Company hereunder nor be under any liability or obligation to pay any
amount to any Participant or his Beneficiary by reason of any failure or refusal
by the Insurance Company to make such payment.
5B.8 Policy Not Yet in Force. If at the death of any Participant, the
Trustee shall be holding any amount intended for the purchase of any Life
Insurance Policy on the Participant's life, but coverage under such Policy shall
not yet be in force, the Trustee shall credit such amount to the Participant's
Account to be disposed of as a portion thereof.
5B.9 Value of Policy. The value of any Policy on the life of a living
Participant for any purpose under this Plan shall be that amount which the
Insurance Company would pay upon surrender of such Policy in accordance with its
usual rules and practices.
5B.10 Dividends. If dividends are allowed on any Life Insurance
Policy, they shall be used to provide additional benefits under the Policy.
5B.11 Distribution. No life insurance protection shall continue in
force under the Plan subsequent to a Participant's retirement or Termination of
Employment, whichever occurs first. As of such date, any Life Insurance Policy
shall be distributed to the Participant in accordance with its terms and the
terms of Section 3C.3.
5B.12 Application. The Trustee, if the Plan is trusteed, or custodian,
if the Plan has a custodial account, shall apply for and will be the owner of
any Life Insurance Policy purchased under the terms of this Plan. The Life
Insurance Policy(ies) must provide that proceeds will be payable to the Trustee
(or custodian, if applicable). However, the Trustee (or custodian) shall be
required to pay over all proceeds of the Life Insurance Policy(ies) to the
Participant's designated Beneficiary in accordance with the distribution
provisions of this Plan. A Participant's Spouse will be the designated
Beneficiary of the proceeds in all circumstances unless a Qualified Election has
been made in accordance with Section 3C.2(c), Joint and Survivor Annuity
Requirements, if applicable. Under no circumstances shall the Trust (or
custodial account) retain any part of the proceeds.
In the event of any conflict between the provisions of this Plan
and any Life Insurance Policies or annuity contracts issued pursuant to the
Plan, the Plan provisions shall control.
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5C. LOANS
5C.1 Loans to Participants. If the Employer has specified in its
Adoption Agreement that loans are permitted, then the Plan Administrator may
make a bona fide loan to a Participant, in an amount which, when added to the
outstanding balance of all other loans to the Participant from all qualified
plans of the Employer, does not exceed the lesser of $50,000 reduced by the
excess of the Participant's highest outstanding loan balance during the 12
months preceding the date on which the loan is made over the outstanding loan
balance on the date the new loan is made, or 50% of the Participant's Vested
Interest in his Participant's Account excluding amounts attributable to QVEC
Contributions. Notwithstanding any provision in this paragraph to the contrary,
loans may not exceed a Participant's Vested Interest attributable to such
contributions.
In the event of default, foreclosure on the note and attachment
of security will not occur until a distributable event occurs in the Plan.
No loans will be made to any Shareholder-Employee or
Owner-Employee or to family members of Shareholder-Employees or Owner-Employees,
as defined in Code section 267(c)(4).
The loan shall be made under such terms, security interest, and
conditions as the Plan Administrator deems appropriate, provided, however, that:
(a) Loans shall be made available to all Participants and
parties-in-interest (as defined in ERISA and including Employees and
Beneficiaries), on a reasonably equivalent basis.
(b) Loans shall not be made available to Highly Compensated
Employees on a basis greater than the basis made available to other Employees.
(c) Loans must bear a reasonable rate of interest.
(d) Loans are adequately secured.
(e) Unless the provisions of Section 3C.6 apply to a
Participant, loans may be made only after a Participant obtains the consent of
his Spouse, if any, to use his Participant's Account as security for the loan.
Spousal consent shall be obtained no earlier than the beginning of the 90-day
period that ends on the date on which the loan is to be so secured. The consent
must be in writing, must acknowledge the effect of the loan, and must be
witnessed by a Plan representative or notary public. Such consent shall
thereafter be binding with respect to the consenting Spouse or any subsequent
Spouse with respect to that loan. A new consent shall be required if the
Participant's Account is used for renegotiation, extension, renewal or other
revision of the loan.
(f) Loans must be made in accordance with and subject to all
of the provisions of this Section SC.
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If a valid spousal consent has been obtained in
accordance with (e), then, notwithstanding any other provision of this Plan, the
portion of the Participant's Vested Interest used as a security interest held by
the Plan by reason of a loan outstanding to the Participant shall be taken into
account for purposes of determining the amount of the account balance payable at
the time of death or distribution, but only if the reduction is used as
repayment of the loan. If less than 100% of the Participant's Vested Interest in
his Participant's Account (determined without regard to the preceding sentence)
is payable to the surviving Spouse, then the Participant's Account shall be
adjusted by first reducing the Vested Interest by the amount of the security
used as repayment of the loan, and then determining the benefit payable to the
surviving Spouse.
5C.2 Loan Procedures. The Plan Administrator shall establish a
written set of procedures, set forth in the summary plan description or any
other established set of procedures, which becomes a part of such Plan by which
all loans will be administered. Such rules, which are incorporated herein by
reference, will include, but not be limited to the following:
(a) The person or persons authorized to administer the loan
program, identified by name or position;
(b) The loan application procedure;
(c) The basis for approving or denying loans;
(d) Any limits on the types of loans permitted;
(e) The procedure for determining a "reasonable" interest
rate;
(f) Acceptable collateral;
(g) Default conditions; and
(h) Steps which will be taken to preserve Plan assets in the
event of default.
5D. PARTICIPANTS' RIGHTS
5D.1 General Rights of Participants and Beneficiaries. The Plan is
established and the Plan or Trust assets are held for the exclusive purpose of
providing benefits for such Employees and their Beneficiaries as have qualified
to participate under the terms of the Plan.
5D.2 Filing a Claim for Benefits. A Participant or Beneficiary, or
the Employer acting in his behalf, shall notify the Plan Administrator of a
claim of benefits under the Plan. Such request shall be in writing to the Plan
Administrator and shall set forth the basis of such claim and shall authorize
the Plan Administrator to conduct such examinations as may be necessary to
determine the validity of the claim and to take such steps as may be necessary
to facilitate the payment of any benefits to which the Participant or
Beneficiary may be entitled under the terms of the Plan.
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5D.3 Denial of Claim. Whenever a claim for benefits by any
Participant or Beneficiary has been denied by a Plan Administrator, a written
notice, prepared in a manner calculated to be understood by the Participant,
must be provided, setting forth (1) the specific reasons for the denial; (2) the
specific reference to pertinent Plan provisions on which the denial is based;
(3) a description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or
information is necessary; and (4) an explanation of the Plan's claim review
procedure.
5D.4 Remedies Available to Participants. A Participant or Beneficiary
(1) may request a review by a Named Fiduciary, other than the Plan
Administrator, upon written application to the Plan; (2) may review pertinent
Plan documents; and (3) may submit issues and comments in writing to a Named
Fiduciary. A Participant or Beneficiary shall have 60 days after receipt by the
claimant of written notification of a denial of a claim to request a review of a
denied claim.
A decision by a Named Fiduciary shall be made promptly and not
later than 60 days after the Named Fiduciary's receipt of a request for review,
unless special circumstances require an extension of the time for processing in
which case a decision shall be rendered as soon as possible, but not later than
120 days after receipt of a request for review. The decision on review by a
Named Fiduciary shall be in writing and shall include specific reasons for the
decision, written in a manner calculated to be understood by the claimant, and
specific references to the pertinent Plan provisions on which the decision is
based.
A Participant or Beneficiary shall be entitled, either in his
own name or in conjunction with any other interested parties, to bring such
actions in law or equity or to undertake such administrative actions or to seek
such relief as may be necessary or appropriate to compel the disclosure of any
required information, to enforce or protect his rights, to recover present
benefits due to him or to clarify his rights to future benefits under the Plan.
5D.5 Limitation of Rights. Participation hereunder shall not grant
any Participant the right to be retained in the Service of the Employer or any
other rights or interest in the Plan or Trust fund other than those specifically
herein set forth.
5D.6 100% Vested Contributions. Each Participant, regardless of his
length of Service with the Employer, shall be fully vested (100%) at all times
in any portion of his Participant's Account attributable to the following
contributions, as applicable:
(a) Employee Contributions and earnings thereon;
(b) Elective Deferral Contributions and earnings thereon;
(c) Qualified Matching Contributions and earnings thereon;
(d) Qualified Nonelective Contributions and earnings
thereon;
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(e) Rollover Contributions and earnings thereon;
(f) QVEC Contributions and earnings thereon.
5D.7 Reinstatement of Benefit. In the event any portion of a benefit
which is payable to a Participant or a Beneficiary shall remain unpaid on
account of the inability of the Plan Administrator, after diligent effort, to
locate such Participant or Beneficiary, the amount so distributable shall be
treated as a Forfeiture under Section 3D. If a claim is made by the Participant
or Beneficiary for any benefit forfeited under this Section, such benefit must
be reinstated by the Employer.
5D.8 Non-Alienation. It is a condition of the Plan, and all rights of
each Participant shall be subject thereto, that no right or interest of any
Participant in the Plan shall be assignable or transferable in whole or in part,
either directly or by operation of law or otherwise, including, but without
limitation, execution, levy, garnishment, attachment, pledge, bankruptcy or in
any other manner, and no right or interest of any Participant in the Plan shall
be liable for or subject to any obligation or liability of such Participant. The
preceding sentence shall not preclude the enforcement of a federal tax levy made
pursuant to Code section 6331 or the collection by the United States on a
judgement resulting from an unpaid tax assessment.
The preceding paragraph shall also apply to the creation,
assignment, or recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless such order is
determined to be a QDRO. A domestic relations order entered before January 1,
1985 will be treated as a QDRO if payment of benefits pursuant to the order has
commenced as of such date, and may be treated as a QDRO if payment of benefits
has not commenced as of such date, even though the order does not satisfy the
requirements of Code section 414(p).
ARTICLE VI - OVERSEER PROVISIONS
6A. FIDUCIARY DUTIES AND RESPONSIBILITIES
6A.1 General Fiduciary Standard of Conduct. Each Fiduciary of the
Plan shall discharge his duties hereunder solely in the interest of the
Participants and their Beneficiaries and for the exclusive purpose of providing
benefits to Participants and their Beneficiaries and defraying reasonable
expenses of administering the Plan. Each Fiduciary shall act with the care,
skill, prudence and diligence under the circumstances that a prudent man acting
in a like capacity and familiar with such matters would use in conducting an
enterprise of like character and with like aims, in accordance with the
documents and instruments governing this Plan, insofar as such documents and
instruments are consistent with this standard.
6A.2 Service in Multiple Capacities. Any Person or group of Persons
may serve in more than one Fiduciary capacity with respect to this Plan,
specifically including service both as Trustee and Plan Administrator.
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6A.3 Limitations on Fiduciary Liability. Nothing in this Plan shall
be construed to prevent any Fiduciary from receiving any benefit to which he may
be entitled as a Participant or Beneficiary in this Plan, so long as the benefit
is computed and paid on a basis which is consistent with the terms of this Plan
as applied to all other Participants and Beneficiaries. Nor shall this Plan be
interpreted to prevent any Fiduciary from receiving any reasonable compensation
for services rendered, or for the reimbursement of expenses properly and
actually incurred in the performance of his duties with the Plan; except that no
Person so serving who already receives full-time pay from an Employer shall
receive compensation from this Plan, except for reimbursement of expenses
properly and actually incurred.
6A.4 Investment Manager. If an Investment Manager has been appointed
pursuant to Section 6B.7 of this Plan, he is required to acknowledge in writing
that he has undertaken a Fiduciary responsibility with respect to the Plan. The
Insurance Company's liability as a Fiduciary is limited to that arising from its
management of any assets of the Plan held by the Insurance Company in its
separate accounts.
6B. THE PLAN ADMINISTRATOR
6B.1 Designation and Acceptance. The Employer shall designate a
Person or Persons to serve as Plan Administrator under the Plan and such
Persons, by joining in the execution of the Adoption Agreement, accepts such
appointment and agrees to act in accordance with the terms of the Plan.
6B.2 Duties and Responsibility. The Plan Administrator shall
administer the Plan for the exclusive benefit of the Participants and their
Beneficiaries in a nondiscriminatory manner subject to the specific terms of the
Plan. The Plan Administrator shall perform all such duties as are necessary to
operate, administer, and manage the Plan in accordance with the terms thereof.
This shall include notification to the Insurance Company of any adjustment made
to a Participant's Account as a result of Excess Annual Additions as defined in
Section 4C.1(b).
The Plan Administrator shall comply with the regulatory
provisions of ERISA and shall furnish to each Participant (a) a summary plan
description, (b) upon written request, a statement of his total benefits accrued
and his vested benefits if any and (c) the information necessary to elect the
benefits available under the Plan. The Plan Administrator shall also file the
appropriate annual reports and any other data which may be required by
appropriate regulatory agencies.
Furthermore, the Plan Administrator shall take the necessary
steps to notify the appropriate interested parties whenever an application is
made to the Secretary of the Treasury for a determination letter in accordance
with Code section 7476 as amended.
6B.3 Special Duties. If the Employer that adopts this Plan is not the
Plan Administrator, and the Plan provides for either Employee Contributions or
Matching Contributions to be made, the Plan Administrator shall:
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(a) Maintain records that enable it to monitor the adopting
Employer's compliance with the requirements of Code section 401(m);
(b) Perform the ACP test, as described in Section 4A.4, for
the Employer on an annual basis; and
(c) Notify the Employer if it is required to correct Excess
Aggregate Contributions.
6B.4 Expenses and Compensation. The expenses necessary to administer
the Plan shall be taken from Participants' Accounts unless paid by the Employer,
including but not limited to those involved in retaining necessary professional
assistance from an attorney, an accountant, an actuary, or an investment
advisor. Nothing shall prevent the Plan Administrator from receiving reasonable
compensation for services rendered in administering this Plan, provided the Plan
Administrator is not a full-time Employee of any Employer adopting this Plan.
6B.5 Information from Employer. To enable the Plan Administrator to
perform his functions, the Employer shall supply full and timely information to
the Plan Administrator on all matters relating to this Plan as the Plan
Administrator may require.
6B.6 Administrative Committee; Multiple Signatures. In the event that
more than one Person has been duly nominated to serve on the Administrative
Committee and has signified in writing the acceptance of such designation, the
signature(s) of one or more Persons may be accepted by an interested party as
conclusive evidence that the Administrative Committee has duly authorized the
action therein set forth and as representing the will of and binding upon the
whole Administrative Committee. No Person receiving such documents or written
instructions and acting in good faith and in reliance thereon shall be obliged
to ascertain the validity of such action under the terms of this Plan. The
Administrative Committee 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.
6B.7 Resignation and Removal; Appointment of Successor. The Plan
Administrator, or any member of the Administrative Committee, may resign at any
time by delivering to the Employer a written notice of resignation, to take
effect at a date specified therein, which shall not be less than 30 days after
the delivery thereof, unless such notice shall be waived.
The Plan Administrator may be removed with or without cause by
the Employer by delivery of written notice of removal, to take effect at a date
specified therein, which shall be not less than thirty (30) days after delivery
thereof, unless such notice shall be waived.
The Employer, upon receipt of or giving notice of the
resignation or removal of the Plan Administrator, shall promptly designate a
successor Plan Administrator who must signify acceptance of this position in
writing. In the event no successor is appointed, the Board of Directors of the
Employer will function as the Administrative Committee until a new Plan
Administrator has been appointed and has accepted such appointment.
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6B.8 Investment Manager. The Plan Administrator may appoint, in
writing, an Investment Manager or Managers to whom is delegated the authority to
manage, acquire, invest or dispose of all or any part of the Plan or Trust
assets. With regard to the assets entrusted to his care, the Investment Manager
shall provide written instructions and directions to the Employer or Trustee, as
applicable, who shall in turn be entitled to rely upon such written direction.
This appointment and delegation shall be evidenced by a signed written
agreement.
6B.9 Delegation of Duties. The Plan Administrator shall have the
power, to the extent permitted by law, to delegate the performance of such
Fiduciary and non-Fiduciary duties, responsibilities and functions as the Plan
Administrator shall deem advisable for the proper management and administration
of the Plan in the best interests of the Participants and their Beneficiaries.
6C. TRUST AGREEMENT
This agreement entered into by and among the Employer, the Plan Administrator
and the Trustee pursuant to the Adoption Agreement completed and signed by the
Employer, the Plan Administrator and Trustee, hereby establishes the Trust with
the following provisions to form a part of and implement the provisions of the
Plan:
6C.1 Creation and Acceptance of Trust. The Trustee, by joining in the
execution of the Adoption Agreement, accepts the Trust hereby created and agrees
to act in accordance with the express terms and conditions herein stated.
6C.2 Trustee Capacity; Co-Trustees. The Trustee may be a Bank, Trust
Company or other corporation possessing trust powers under applicable State or
Federal law or one or more individuals or any combination thereof.
When two or more persons serve as Trustee, they are specifically
authorized, by a written agreement between themselves, to allocate specific
responsibilities, obligations or duties among themselves. An original copy of
such written agreement is to be delivered to the Plan Administrator.
6C.3 Resignation and Removal; Appointment of Successor Trustee. Any
Trustee may resign at any time by delivering to the Plan Administrator a written
notice of resignation, to take effect at a date specified therein, which shall
not be less than 30 days after the delivery thereof, unless such notice shall be
waived.
The Trustee may be removed with or without cause by the Board of
Directors by delivery of a written notice of removal, to take effect at a date
specified therein, which shall not be less than 30 days after delivery thereof,
unless such notice shall be waived.
In the case of the resignation or removal of a Trustee, the
Trustee shall have the right to a settlement of its account, which may be made,
at the option of the Trustee, either (1) by judicial
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settlement in an action instituted by the Trustee in a court of competent
jurisdiction, or (2) by written agreement of settlement between the Trustee and
the Plan Administrator.
Upon such settlement, all right, title and interest of such
Trustee in the assets of the Trust and all rights and privileges under this
Agreement theretofore vested in such Trustee shall vest in the successor
Trustee, and thereupon all future liability of such Trustee shall terminate;
provided, however, that the Trustee shall execute, acknowledge and deliver all
documents and written instruments which are necessary to transfer and convey the
right, title and interest in the Trust assets, and all rights and privileges to
the successor Trustee.
The Board of Directors, upon receipt of notice of the
resignation or removal of the Trustee, shall promptly designate a successor
Trustee, whose appointment is subject to acceptance of this Trust in writing and
shall notify the Insurance Company in writing of such successor Trustee.
6C.4 Taxes, Expenses and Compensation of Trustee. The Trustee shall
deduct from and charge against the Trust fund any taxes paid by it which may be
imposed upon the Trust fund or the income thereof or which the Trustee is
required to pay with respect to the interest of any person therein.
The Employer shall pay the Trustee annually its expenses in
administering the Trust and a reasonable compensation for its service as Trustee
hereunder if the Trustee is not an Employee of the Plan, at a rate to be agreed
upon from time to time. The reasonable compensation shall include that for any
extraordinary services.
6C.5 Trustee Entitled to Consultation. The Trustee shall be entitled
to advice of counsel, which may be counsel for the Plan or the Employer, in any
case in which the Trustee shall deem such advice necessary. With the exception
of those powers and duties specifically allocated to the Trustee by the express
terms of this Plan, it shall not be the responsibility of the Trustee to
interpret the terms of the Plan or Trust and the Trustee may request, and is
entitled to receive guidance and written direction from the Plan Administrator
on any point requiring construction or interpretation of the Plan documents.
6C.6 Rights, Powers and Duties of Trustee. The Trustee shall have the
following rights, powers, and duties:
(a) The Trustee shall be responsible for the safekeeping and
administering of the assets of this Plan and Trust in accordance with the
provisions of this Agreement and any amendments thereto. The duties of the
Trustee under this Agreement shall be determined solely by the express
provisions of this Agreement and no other further duties or responsibilities
shall be implied. Subject to the terms of this Plan and Trust, the Trustee shall
be fully protected and shall incur no liability in acting in, reliance upon the
written instructions or directions of the Plan Administrator or a duly
designated Investment Manager or any other Named Fiduciary.
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(b) The Trustee shall have all powers necessary or
convenient for the orderly and efficient performance of its duties hereunder,
including but not limited to those specified in this Section. The Trustee may
appoint one or more administrative agents or contract for the performance of
such administrative and service functions as it may deem necessary for the
effective installation and operation of the Plan and Trust.
(c) The Trustee shall have the power to collect and receive
any and all monies and other property due hereunder and to give full discharge
and acquittance therefor; to settle, compromise or submit to arbitration any
claims, debts or damages due or owing to or from the Trust; to commence or
defend suits or legal proceedings wherever, in its judgment, any interest of the
Trust requires it; and to represent the Trust in all suits or legal proceedings
in any court of law or equity or before any other body or tribunal. It shall
have the power generally to do all acts, whether or not expressly authorized,
which the Trustee in the exercise of its Fiduciary responsibility may deem
necessary or desirable for the protection of the Trust and the assets thereof.
(d) The Trustee shall make application to the Insurance
Company for the Annuity Contract required hereunder and shall take all necessary
steps to obtain any Life Insurance Policies elected on the lives of Participants
hereunder. In applying for the Annuity Contract, the Trustee may indicate that,
unless it directs the Insurance Company otherwise, it shall be entitled to
receive all cash payments for further distribution to Participants and
Beneficiaries.
(e) The Trustee may temporarily hold cash balances and shall
be entitled to deposit any such funds received in a bank account or bank
accounts in the name of the Trust in any bank or banks selected by the Trustee,
including the banking department of the Trustee, pending disposition of such
funds in accordance with the Trust. Any such deposit may be made with or without
interest.
(f) The Trustee shall obtain and deal with any Life
Insurance Policies or other assets of this Trust held or received under this
Plan only in accordance with the written directions from the Plan Administrator.
The Trustee shall be under no duty to determine any facts or the propriety of
any action taken or omitted by it in good faith pursuant to instructions from
the Plan Administrator.
(g) All contributions made to the Trust fund under this Plan
shall be paid by the Trustee to the Insurance Company under the Annuity Contract
within 30 days after the date such contributions were due under the Plan.
However, in lieu of holding any contributions made to the Trust fund, the
Trustee may direct that all such contributions be made directly to the Insurance
Company under the Annuity Contract or any Life Insurance Policy. The Employer
shall keep the Trustee informed of all contributions made directly to the
Insurance Company in accordance with the Trustee's instructions.
(h) If the whole or any part of the Trust shall become
liable for the payment of any estate, inheritance, income or other tax which the
Trustee shall be required to pay, the Trustee shall have full power and
authority to pay such tax out of, any monies or other property in its hands for
the
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account of the person whose interest hereunder is so liable. Prior to making any
payment, the Trustee may require such releases or other documents from any
lawful taxing authority as it shall deem necessary. The Trustee shall not be
liable for any nonpayment of tax when it distributes an interest hereunder on
instructions from the Plan Administrator.
(i) The Trustee shall keep a full, accurate and detailed
record of all transactions of the Trust which the Plan Administrator shall have
the right to examine at any time during the Trustee's regular business hours.
Following the close of the fiscal year of the Trust, or as soon as practical
thereafter, the Trustee shall furnish the Plan Administrator with a statement of
account. This account shall set forth all receipts, disbursements and other
transactions effected by the Trustee during said year.
The Plan Administrator shall promptly notify the Trustee
in writing of its approval or disapproval of the account. The Plan
Administrator's failure to disapprove the account within 60 days after receipt
shall be considered an approval. The approval by the Plan Administrator shall be
binding as to all matters embraced in any statement to the same extent as if the
account of the Trustee had been settled by judgment or decree of a court of
competent jurisdiction under which the Trustee, Plan Administrator, Employer and
all persons having or claiming any interest in the Trust were parties; provided,
however, that the Trustee may have its account judicially settled if it so
desires.
(j) If, at any time, there shall be a dispute as to the
person to whom payment or delivery of monies or property should be made by the
Trustee, or regarding any action to be taken by the Trustee, the Trustee may
postpone such payment, delivery or action, retaining the funds or property
involved, until such dispute shall have been resolved in a court of competent
jurisdiction or the Trustee shall have been indemnified to its satisfaction or
until it has received written direction from the Plan Administrator.
(k) Anything in this instrument to the contrary
notwithstanding, it shall be understood that the Trustee shall have no duty or
responsibility with respect to the determination of matters pertaining to the
eligibility of any Employee to become or remain a Participant hereunder, the
amount of benefit to which any Participant or Beneficiary shall be entitled
hereunder, all such responsibilities being vested in the Plan Administrator. The
Trustee shall have no duty to collect any contribution from the Employer and
shall not be concerned with the amount of any contribution nor the application
of any contribution formula.
6C.7 Evidence of Trustee Action. In the event that the Trustee
comprises two or more Trustees, then those Trustees may designate one such
Trustee to transmit all decisions of the Trustee and to sign all necessary
notices and other reports on behalf of the Trustee. All notices and other
reports bearing the signature of the individual Trustee so designated shall be
deemed to bear the signatures of all the individual Trustees and all parties
dealing with the Trustee are entitled to rely on any such notices and other
reports as authentic and as representing the action of the Trustee.
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6C.8 Investment Policy. This Plan has been established for the sole
purpose of providing benefits to the Participants and their Beneficiaries. In
determining its investments hereunder, the Trustee shall take account of the
advice provided by the Plan Administrator as to funding policy and the short and
long-range needs of the Plan based on the evident and probable requirements of
the Plan as to the time benefits shall be payable and the requirements therefor.
6C.9 Period of the Trust. If it shall be determined that the
applicable State law requires a limitation on the period during which the
Employer's Trust shall continue, then such Trust shall not continue for a period
longer than 21 years following the death of the last of those Participants
including future Participants who are living at the Effective Date hereof. At
least 180 days prior to the end of the twenty-first year as described in the
first sentence of this Section the Employer, the Plan Administrator and the
Trustee shall provide for the establishment of a successor trust and transfer of
Plan assets to the Trustee. If applicable State law requires no such limitation,
then this Section shall not be operative.
6D. THE INSURANCE COMPANY
6D.1 Duties and Responsibilities. The Insurance Company shall issue
the Annuity Contract and any Policies hereunder and thereby assumes all the
duties and responsibilities set forth therein. The terms of the Annuity Contract
may be changed as provided therein without amending this Plan, provided such
changes shall conform (1) to the requirements for qualification under Code
section 401(a), as amended from time to time and (2) to ERISA, as amended from
time to time.
6D.2 Relation to Employer, Plan Administrator and Participants. The
Insurance Company may receive the statement of the Plan Administrator or, if the
Plan Administrator so designates, the Employer or the Trustee, as conclusive
evidence of any of the matters decided in the Plan, and the Insurance Company
shall be fully protected in taking or permitting any action on the basis thereof
and shall incur no liability or responsibility for so doing. The Insurance
Company shall not be required to look into the terms of the Plan, to question
any action by the Employer or the Plan Administrator or any Participant nor to
determine that such action is properly taken under the Plan. The Insurance
Company shall be fully discharged from any and all liability with respect to any
payment to any Participant hereunder in accordance with the terms of the Annuity
Contract or of any Policies under the Plan. The Insurance Company shall not be
required to take any action contrary to its normal rules and practices.
6D.3 Relation to Trustee. The Insurance Company shall not be required
to look into the terms of the Plan or question any action of the Trustee, and
the Insurance Company shall not be responsible for seeing that any action of the
Trustee is authorized by the terms hereof. The Insurance Company shall be under
no obligation to take notice of any change in Trustee until evidence of such
change satisfactory to the Insurance Company shall have been given to the
Insurance Company in writing at its home office.
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6E. ADOPTING EMPLOYER
6E.1 Election to Become Adopting Employer. With the consent of the
Employer and Trustee, if any, any employer, which along with the Employer is
included in a group of employers which constitute a controlled group of
corporations (as defined in Code section 414(b)) or which constitutes trade or
businesses (whether or not incorporated) which are under common control (as
defined in section 414(c)) or which constitutes an affiliated service group as
defined in section 414(m) and is identified as an Adopting Employer in the
Adoption Agreement, may adopt this Plan and all of its provisions.
6E.2 Definition. Any employer eligible to adopt this Plan under the
provisions of Section 6E.1 and which adopts this Plan and all of its provisions,
shall be known as an Adopting Employer and shall be included within the term
Employer, as defined in Section 1.24.
6E.3 Effective Date of Plan. The effective date of the Plan for an
Adopting Employer on other than the date specified in the Adoption Agreement
shall be the first day of the Plan Year in which such Adopting Employer adopts
this Plan.
6E.4 Forfeitures. Forfeitures of any nonvested portion of a
Participant's Account, as selected by the Employer in the Adoption Agreement,
shall be allocated only to other Participants who are employed by the Adopting
Employer who made the contributions to such Participant's Account, or shall be
used as a credit only for such Adopting Employer.
6E.5 Contributions. All contributions made by an Adopting Employer
shall be determined separately by each Adopting Employer and shall be paid to
and held by the Plan for the exclusive benefit of the Employees of such Adopting
Employer and the Beneficiaries of such Employees, subject to all the terms and
conditions of this Plan. The Plan Administrator shall keep separate books and
records concerning the affairs of each Adopting Employer and as to the accounts
and credits of the Employees of each Adopting Employer.
6E.6 Expenses. Subject to Section 6B.3, the expenses necessary to
administer the Plan of any Adopting Employer shall be taken from accounts of
Participants who are Employees of such Adopting Employer unless paid for by such
Adopting Employer. The expenses necessary to administer the Plan for each
Adopting Employer shall be determined by the ratio of the value of all
Participants' Accounts of such Adopting Employers to the total value of all
Participants' Accounts of each Adopting Employer.
6E.7 Substitution of Plans. Subject to the provisions of Section 7C,
any Adopting Employer shall be permitted to withdraw from its participation in
this Plan. The consent of the Employer or any other Adopting Employer shall not
be required.
6E.8 Termination of Plans. If any Adopting Employer elects to
terminate its Plan pursuant to Sections 7B.4, 7B.5 and 7B.6, such termination
shall in no way affect the Plan of any other Adopting Employer.
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6E.9 Amendment. Amendment of this Plan by the Employer or any
Adopting Employer shall only be by the written consent of the Employer and each
and every Adopting Employer and with the consent of the Trustee, if any, where
such consent is necessary in accordance with the terms of this Plan.
6E.10 Plan Administrator's Authority. The Plan Administrator shall
have authority to make any and all necessary rules or regulations, binding upon
all Adopting Employers and all Participants, to effectuate the purpose of this
Section 6E.
ARTICLE VII - SPECIAL CIRCUMSTANCES WHICH MAY AFFECT THE PLAN
7A. TOP-HEAVY PROVISIONS
7A.1 Definitions.
(a) Annual Compensation. The term Annual Compensation means
Compensation as defined in the Compensation section of the Adoption Agreement,
but including amounts contributed by the Employer pursuant to a salary reduction
agreement which are excludable from the Employee's gross income under Code
section 125, section 402(e)(3), section 402(h)(1)(B) or section 403(b).
(b) Determination Date. The term 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, it means the last day
of that year.
(c) Determination Period. The term Determination Period
means the Plan Year containing the Determination Date and the four preceding
Plan Years.
(d) Key Employee. The term Key Employee means any Employee
or former Employee (and the Beneficiaries of such Employee) who at any time
during the Determination Period was:
(1) An officer of the Employer if such individual's
Annual Compensation exceeds 50 percent of the dollar limitation under Code
section 415(b)(1)(A); or
(2) An owner (or considered an owner under Code
section 318) of one of the ten largest interests in the Employer if such
individual's Annual Compensation exceeds 100 percent of the dollar limitation
under Code section 415(c)(1)(A); or
(3) A 5-percent owner of the Employer; or
(4) A 1-percent owner of the Employer who has Annual
Compensation of more than $150,000.
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The determination of who is a Key Employee will be made
in accordance with Code section 416(I)(1) and related regulations.
(e) Permissive Aggregation Group. The term Permissive
Aggregation Group means the Required Aggregation Group of plans plus any other
plan or plans of the Employer which, when considered as a group with the
Required Aggregation Group, would continue to satisfy the requirements of Code
sections 401(a)(4) and 410.
(f) Present Value. Present Value shall be based only on the
interest and mortality rates specified in the Adoption Agreement.
(g) Required Aggregation Group. The term Required
Aggregation Group means (1) each qualified plan of the Employer in which at
least one Key Employee participates or participated at any time during the
Determination Period (regardless of whether the plan has terminated), and (2)
any other qualified plan of the Employer which enables a plan described in (1)
to meet the requirements of Code sections 401(a)(4) or 410.
(h) Top-Heavy Plan. For any Plan Year beginning after
December 31, 1983, this Plan is Top-Heavy if any of the following conditions
exists:
(1) If the Top-Heavy Ratio for this Plan exceeds 60
percent and this Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of plans.
(2) 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 percent.
(3) If this Plan is a part of a Required Aggregation
Group and part of a Permissive Aggregation Group of plans and the Top-Heavy
Ratio for the Permissive Aggregation Group exceeds 60 percent.
(i) Top-Heavy Ratio. The term Top-Heavy Ratio means:
(1) If the Employer maintains one or more defined
contribution plans (including any simplified employee pension plan) and the
Employer has not maintained any defined benefit plan which during the 5-year
period ending on the Determination Date(s) has or has had accrued benefits, the
Top-Heavy Ratio for this Plan alone or for the Required or Permissive
Aggregation Group, as appropriate, is a fraction, the numerator of which is the
sum of the account balances of all Key Employees as of the Determination Date(s)
(including any part of any account balance distributed in the 5-year period
ending on the Determination Date(s)), and the denominator of which is the sum of
all account balances (including any part of any account balance distributed in
the 5-year period ending on the Determination Date(s)), both computed in
accordance with Code section 416 and related regulations. Both the numerator and
denominator of the Top-Heavy Ratio
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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 related regulations.
(2) If the Employer maintains one or more defined
contribution plans (including any simplified employee pension plans as defined
in Code section 408(k)) and the Employer maintains or has maintained one or more
defined benefit plans, which during the 5-year period ending on the
Determination Date(s) has or has had any accrued benefits, the Top-Heavy Ratio
for any Required or Permissive Aggregation Group as appropriate is a fraction,
the numerator of which is the sum of account balances under the aggregated
defined contribution plan or plans for all Key Employees, determined in
accordance with (1) above, and the Present Value of accrued benefits under the
aggregated defined benefit plan or plans for all Key Employees as of the
Determination Date(s), and the denominator of which is the sum of the account
balances under the aggregated defined contribution plan or plans for all
Participants, determined in accordance with (1) above, and the Present Value of
accrued benefits under the defined benefit plan or plans for all Participants as
of the Determination Date(s), all determined in accordance with Code section 416
and related regulations. The accrued benefits under a defined benefit plan in
both the numerator and denominator of the Top-Heavy Ratio are increased for any
distribution of an accrued benefit made in the 5-year period ending on the
Determination Date.
(3) For purposes of (1) and (2) above, the value of
account balances and the Present Value of accrued benefits will be determined as
of the most recent Valuation Date that falls within or ends with the 12-month
period ending on the Determination Date, except as provided in 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 (ii) who
has not been credited with at least one Hour of Service with any Employer
maintaining the Plan at any time during the 5-year period ending on the
Determination Date shall be disregarded. The calculation of the Top-Heavy Ratio,
and the extent to which distributions, rollovers, and transfers are taken into
account, will be made in accordance with Code section 416 and the regulations
thereunder. QVEC Contributions will not be taken into account for purposes of
computing the Top-Heavy Ratio. When aggregating plans, the value of account
balances and accrued benefits will be calculated with reference to the
Determination Dates that fall within the same calendar year. The accrued benefit
of a Participant other than a Key Employee shall be determined under (a) the
method, if any, that uniformly applies for accrual purposes under all defined
benefit plans maintained by the Employer, or (b) if there is 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).
(j) Valuation Date. The term Valuation Date means the date
specified in the Top-Heavy Provisions section of the Adoption Agreement as of
which account balances or accrued benefit are valued for purposes of calculating
the Top-Heavy Ratio.
7A.2 Minimum Allocation. For any Plan Year in which the Plan is
Top-Heavy, the following will apply:
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(a) Except as otherwise provided in (c) and (d) below, the
Employer contributions and Forfeitures allocated on behalf of any Participant
who is not a Key Employee shall not be less than the lesser of three percent of
such Participant's Compensation or in the case where the Employer has no defined
benefit plan which designates this Plan to satisfy Code section 401, the largest
percentage of Employer contributions and Forfeitures, as limited by Code section
401(a)(17), allocated on behalf 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 year because of (1) the
Participant's failure to complete 1,000 Hours of Service (or any equivalent
provided in the Plan), or (2) the Participant's failure to make Required
Employee Contributions to the Plan, or (3) Compensation less than a stated
amount.
(b) For purposes of computing the Minimum Allocation,
Compensation shall mean Compensation as defined in the Compensation section of
the Adoption Agreement as limited by Code section 401(a)(17).
Notwithstanding the above, if elected by the Employer in
the Adoption Agreement, Compensation shall include any amount which is
contributed by the Employer pursuant to a salary reduction agreement and which
is not includable in the Employee's gross income under Code sections 125,
401(a)(8), 402(h) or 403(b).
(c) The provision in (a) above shall not apply to any
Participant who was not employed by the Employer on the last day of the Plan
Year.
(d) The provision in (a) above shall not apply to any
Participant to the extent the Participant is covered under any other plan or
plans of the Employer and the Employer has provided in the Top-Heavy Provisions
section of the Adoption Agreement that the Minimum Allocation or benefit
requirement applicable to Top-Heavy plans will be met in the other plan or
plans.
(e) The Minimum Allocation required (to the extent required to be
nonforfeitable under Code section 416(b)) may not be forfeited under Code
sections 411(a)(3)(B) or 411(a)(3)(D).
(f) Neither Elective Deferral Contributions nor Matching
Contributions may be taken into account for the purpose of satisfying this
Minimum Allocation Requirement.
7A.3 Minimum Vesting Schedule. For any Plan Year in which this Plan
is Top-Heavy, one of the minimum vesting schedules as elected by the Employer in
the Adoption Agreement will automatically apply to the Plan. The minimum vesting
schedule applies to all benefits within the meaning of Code section 411(a)(7)
except those attributable to Employee Contributions, Elective Deferral
Contributions, QVEC Contributions and Rollover Contributions including benefits
accrued before the effective date of Code section 416 and benefits accrued
before the Plan became Top-Heavy. Further, no decrease in a Participant's
nonforfeitable percentage may occur in the event the Plan's status as Top-Heavy
changes for any Plan Year. However, this Section does not apply to the
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account balances of any Employee who does not have an Hour of Service after the
Plan has initially become Top-Heavy. Such Employee's account balance
attributable to Employer contributions and Forfeitures will be determined
without regard to this Section.
7B. AMENDMENT, TERMINATION OR MERGER OF THE PLAN
7B.1 Amendment of Elections under Adoption Agreement by Employer. The
party elected by the Employer in the Adoption Agreement shall have the right
from time to time to change the elections under its Adoption Agreement in a
manner consistent with the Plan, provided that such amendment or modification
shall be in accordance with the Board of Director's resolution, if applicable,
that describes the amendment procedure and provided further that the written
amendment or modification is signed by the party elected by the Employer in the
Adoption Agreement. The amendment must be accepted by the Sponsoring
Organization. Upon any such change in the Elections under the Adoption
Agreement, the Plan Administrator, the Trustee and the Sponsoring Organization
shall be furnished a copy thereof. 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 or if the Plan is
deemed amended by an automatic change to a top-heavy vesting schedule, each
Participant with at least 3 years of Service with the Employer may elect, in
writing, 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. For Participants who do not have at least 1
Hour of Service in any Plan Year beginning after December 31, 1988, the
preceding sentence shall be applied by substituting "5 years of Service" for "3
years of Service" where such language appears.
The period during which the election must be made by the
Participant shall begin no later than the date the Plan amendment is adopted and
end no later than after the latest of the following dates:
(a) The date which is 60 days after the day the amendment is
adopted;
(b) The date which is 60 days after the day the amendment
becomes effective; or
(c) The date which is 60 days after the day the Participant
is issued written notice of the amendment by the Employer or Plan Administrator.
Such written election by a Participant shall be made to the Plan
Administrator, who shall then give written notice to the Insurance Company.
No amendment to the Plan shall be effective to the extent that
it has the effect of decreasing a Participant's Accrued Benefit. Notwithstanding
the preceding sentence, a Participant's Account balance may be reduced to the
extent permitted under Code section 412(c)(8). For purposes of this paragraph, a
Plan amendment which has the effect of decreasing a Participant's Account
balance or eliminating an optional form of benefit, with respect to benefits
attributable to service before the amendment, shall be treated as reducing an
Accrued Benefit. Furthermore, if the vesting
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schedule of a Plan is amended, in the case of an Employee who is a Participant
as of the later of the date such amendment is adopted or the date it becomes
effective, the 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.
In the event of an amendment to a money purchase pension plan
(including a target benefit plan) to convert it to a profit sharing plan
(including a thrift plan or plan with a 401(k) feature), the resulting plan
shall separately account in each affected Participant's Account for amounts
attributable to coverage under the money purchase plan, including future
earnings on such amounts. On and after the date of such amendment, these money
purchase plan amounts shall remain subject to the money purchase plan
restrictions on distribution.
The Employer may (1) change the choice of options in the
Adoption Agreement, (2) add overriding language in the Adoption Agreement when
such language is necessary to satisfy Code sections 415 or 416 because of the
required aggregation of multiple plans, and (3) add certain model amendments
published by the Internal Revenue Service which specifically provide that their
adoption will not cause the Plan to be treated as individually designed. An
Employer that amends the Plan for any other reason, including a waiver of the
minimum funding requirements under Code section 412(d), will no longer
participate in this prototype plan and will be considered to have an
individually designed plan.
7B.2 Amendment of Plan, Trust, and Form of Adoption Agreement. The
Sponsoring Organization may amend this Plan and Trust, and the form of the
Adoption Agreement, and the Employer in adopting this Plan and the Plan
Administrator and the Trustee in accepting appointment as Plan Administrator and
as Trustee, shall be deemed to have consented to any such amendment by executing
the Adoption Agreement, provided that the written consent of the Trustee and the
Plan Administrator to any change affecting their duties or responsibilities
shall first be obtained. Upon any such amendment by the Sponsoring Organization,
the Plan Administrator, the Employer and the Trustee shall be furnished with a
copy thereof.
7B.3 Conditions of Amendment. Neither the Sponsoring Organization nor
the Employer shall make any amendment which would cause the Plan to lose its
status as a qualified plan within the meaning of Code section 401(a).
7B.4 Termination of the Plan. The Employer intends to continue the
Plan indefinitely for the benefit of its Employees, but reserves the right to
terminate the Plan at any time by resolution of its Board of Directors. Upon
such termination, the liability of the Employer to make Employer contributions
hereunder shall terminate. The Plan shall terminate automatically upon complete
discontinuance of Employer contributions hereunder, if the Plan is a profit
sharing plan or a thrift plan.
7B.5 Full Vesting. Upon the termination or partial termination of the
Plan, or upon complete discontinuance of Employer contributions, the rights of
all affected Participants in and to the amounts credited to each such
Participant's Account and to any Policies on each Participant's life
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shall be 100% vested and nonforfeitable. Thereupon, each Participant shall
receive a total distribution of his Participant's Account (including any amounts
in the Forfeiture Account allocated in accordance with Section 7B.6) in
accordance with the terms and conditions of Section 2A. If the Plan terminates,
the assets will be distributed from the Trust as soon as administratively
feasible.
7B.6 Application of Forfeitures. Upon the termination of the Plan,
any amount in the Forfeiture account which has not been applied as of such
termination to reduce the Employer contribution, or has not been allocated as of
such termination, shall be credited on a pro-rata basis to each Participant's
Account in the same manner as the last Employer contribution made under the
Plan.
7B.7 Merger with Other Plan. In the case of any merger with or
transfer of assets or liabilities to any other qualified plan after September 2,
1974:
(a) The sum of the account balances in each plan shall equal
the fair market value (determined as of the date of the merger or transfer as if
the plan had then terminated) of the entire plan assets.
(b) The assets or liabilities of each plan shall be combined
to form the assets of the plan as merged (or transferred), and each Participant
in the plan merged (or transferred) shall have an account balance equal to the
sum of the account balances the Participant had in the plans immediately prior
to the merger (or transfer).
(c) Immediately after the merger (or transfer), each
Participant in the plan merged (or transferred) shall have an account balance
equal to the sum of the account balances the Participant had in the plans
immediately prior to the merger (or transfer).
(d) Immediately after the merger (or transfer), each
Participant in the plan merged (or transferred) shall be entitled to the same
optional benefit forms as they were entitled to immediately prior to the merger
(or transfer).
(e) In the event of a merger (or transfer) of a money
purchase pension plan (including a target benefit plan) and a profit sharing
plan (including a thrift plan or plan with a 401(k) feature), the resulting plan
shall separately account in each affected Participant's Account for amounts
attributable to coverage under the money purchase plan, including future
earnings on such amounts. On and after the date of such merger (or transfer),
these money purchase plan amounts shall remain subject to the money purchase
plan restrictions on distribution.
7B.8 Transfer from Other Plans. If elected in the Adoption Agreement,
the Employer may cause all or any of the assets held in another qualified
pension or profit sharing plan meeting the requirements of Code section 401(a)
to be transferred to the Plan pursuant to a merger or consolidation of this Plan
with such other plan or for any other allowable purpose. Upon receipt of such
assets, the Plan shall separately account for such amounts in each affected
Participant's
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Account. Such transfer shall be made without regard to the Limitations on
Allocations imposed in Section 4B.
7B.9 Transfer to Other Plans. Upon written direction from the
Employer, the Plan shall transfer some or all of the assets held under this Plan
to another qualified pension or profit sharing plan meeting the requirements of
Code section 401(a) and sponsored by the Employer.
7B.10 Approval by the Internal Revenue Service. Notwithstanding any
other provisions of this Plan, the Employer's adoption of this Plan is subject
to the condition precedent that the Employer's Plan shall be approved and
qualified by the Internal Revenue Service as meeting the requirements of Code
section 401(a) and, if applicable, that the Trust established hereunder shall be
entitled to exemption under the provisions of Code section 501(a). In the event
the Plan initially fails to qualify and the Internal Revenue Service issues a
final ruling that the Employer's Plan or Trust fails to so qualify as of the
Effective Date, all liability of the Employer to make further Employer
contributions hereunder shall cease. The Insurance Company, Plan Administrator,
Trustee and any other Named Fiduciary shall be notified immediately by the
Employer, in writing, of such failure to qualify. Upon such notification, the
value of the Participants' Accounts, including the then value of any Life
Insurance Policies, shall be distributed in cash subject to the terms and
conditions of Section 5B. That portion of such distribution which is
attributable to Participant's Employee Contributions, if any, shall be paid to
the Participant, and the balance of such distribution shall be paid to the
Employer. Upon the death of any Participant prior to the actual surrender of a
Life Insurance Policy or Policies on his life, the death benefit shall be
payable to the Participant's Beneficiary.
If the Employer's Plan fails to attain or retain qualification,
such Plan will no longer participate in this prototype plan and will be
considered an individually designed plan.
7B.11 Subsequent Unfavorable Determination. If the Employer is
notified subsequent to initial favorable qualification that the Plan is no
longer qualified within the meaning of Code section 401(a) or, if applicable,
that the Trust is no longer entitled to exemption under the provisions of Code
section 501(a), and if the Employer shall fail within a reasonable time to make
any necessary changes in order that the Plan shall so qualify, the Participants'
Accounts, including any Life Insurance Policies or the values thereof, shall be
fully vested and nonforfeitable and shall be disposed of in the manner set forth
in Sections 7B.5 and 7B.6 above.
7C. SUBSTITUTION OF PLANS
7C.1 Substitution of Plans. Subject to the provisions of Section
7B.7, the Employer may substitute an individually designed plan or a master or
another prototype plan for this Plan without terminating this Plan as embodied
herein, and this shall be deemed to constitute an amendment and restatement in
its entirety of this Plan as heretofore adopted by the Employer; provided,
however that the Employer shall have certified to the Insurance Company and the
Trustee, if applicable, that this Plan is being continued on a restated basis
which meets the requirements of Code section 401(a) and ERISA.
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Any such changes shall be subject to the provisions of Sections
7B.1 and 7B.2 of the Plan.
7C.2 Transfer of Assets. Upon 90 days' written notification from the
Employer and the Trustee (unless the Insurance Company shall accept a shorter
period of notification) that a different plan meeting the requirements set forth
in Section 7C.1 above has been executed and entered into by the Plan
Administrator and the Employer, and after the Insurance Company and the Trustee
have been furnished the Employer's certification in writing that the Employer
intends to continue the Plan as a qualified plan under Code section 401(a) and
ERISA, the Insurance Company shall transfer the value of all Participants'
Accounts under the Annuity Contract to the Trustee or such person or persons as
may be entitled to receive the same, in accordance with the terms of the Annuity
Contract. The Trustee shall likewise make a similar transfer, including all Life
Insurance Policies, or the values thereof, to such person or persons as may be
entitled to receive same. The Insurance Company and the Trustee may rely fully
on the representations or directions of the Employer with respect to any such
transfer and shall be fully protected and discharged with respect to any such
transfer made in accordance with such representations, instructions, or
directions.
7C.3 Substitution for Pre-Existing Master or Prototype Plan. This
Plan is designed:
(a) For adoption by an Employer not previously covered under
a master or prototype plan sponsored by Connecticut General Life Insurance
Company; or
(b) For adoption by an Employer in substitution for a
pre-existing master or prototype plan sponsored by Connecticut General Life
Insurance Company.
If this Plan is adopted in substitution for such a pre-existing
master or prototype plan, it shall be deemed to amend the Employer's prior Plan
in its entirety effective as of the date specified in the Employer's Adoption
Agreement. The Employer's Plan as so amended shall continue in full force and
effect and no termination thereof shall be deemed to have occurred.
7C.4 Partial Substitution or Partial Transfer of the Plan or Assets.
In the event this Plan is adopted as the result of a partial substitution or
partial transfer of the Plan or the assets under the prior Plan as a result of a
merger, spinoff, consolidation or any other allowable purpose, the Plan and all
transactions allowable under it are subject to the rules established by the
Employer to address the orderly transition of the Plan or assets.
ARTICLE VIII - MISCELLANEOUS
8.1 Nonreversion. This Plan has been adopted by the Employer for the
exclusive benefit of the Participants and their Beneficiaries. Except as
otherwise provided in Section 7B.10 and Section 8.6, under no circumstances
shall any funds contributed hereunder at any time revert to or be used by the
Employer, nor shall any such funds or assets of any kind be used other than for
the benefit of the Participants or their Beneficiaries.
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8.2 Gender and Number. When necessary to the meaning hereof, and
except when otherwise indicated by the context, either the masculine or the
neuter pronoun shall be deemed to include the masculine, the feminine, and the
neuter, and the singular shall be deemed to include the plural.
8.3 Reference to the Internal Revenue Code and ERISA. Any reference
herein to any section of the Internal Revenue Code, ERISA, or to any other
statute or law shall be deemed to include any successor law of similar import.
8.4 Governing Law. The Plan and Trust, if applicable, shall be
governed and construed in accordance with the laws of the state where the
Employer or Trustee has its principal office in the United States.
8.5 Compliance with the Internal Revenue Code and ERISA. This Plan
is intended to comply with all requirements for qualification under the Internal
Revenue Code and ERISA, and if any provision hereof is subject to more than one
interpretation or any term used herein is subject to more than one construction,
such ambiguity shall be resolved in favor of that interpretation or construction
which is consistent with the Plan being so qualified. If any provision of the
Plan is held invalid or unenforceable, such invalidity or unenforceability shall
not affect any other provisions, and this Plan shall be construed and enforced
as if such provision had not been included.
8.6 Contribution Recapture. Notwithstanding any other provisions of
this Plan, (1) in the case of a contribution which is made by an Employer by a
mistake of fact, Section 8.1 shall not prohibit the return of such contribution
to the Employer within one year after the payment of the contribution, and (2)
if a contribution is conditioned upon the deductibility of the contribution
under Code section 404, then, to the extent the deduction is disallowed, Section
8.1 shall not prohibit the return to the Employer of such contribution (to the
extent disallowed) within one year after the disallowance of the deduction. The
amount which may be returned to the Employer is the excess of (1) the amount
contributed over (2) the amount that would have been contributed had there not
occurred a mistake of fact or a mistake in determining the deduction. Earnings
attributable to the excess contribution may not be returned to the Employer, but
losses attributable thereto must reduce the amount to be so returned.
Furthermore, if the withdrawal of the amount attributable to the mistaken
contribution would cause the balance of any Participant's Account to be reduced
to less than the balance which would have been in the Participant's Account had
the mistaken amount not been contributed, then the amount to be returned to the
Employer would have to be limited so as to avoid such reduction.
In the event that the Commissioner of the Internal Revenue
determines that the Plan is not initially qualified under the Internal Revenue
Code, any contribution made incident to that initial qualification by the
Employer must be returned to the Employer within one year after the date the
initial qualification is denied, but only if the application for the
qualification is made by the time prescribed by law for filing the Employer's
return for the taxable year in which the Plan is adopted, or such later date as
the Secretary of the Treasury may prescribe.
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Notwithstanding the above, any excess or returned contribution
shall not be returned to the Employer if the Employer has taken Davis-Bacon Act
credit for such contribution. These excess or mistaken contributions shall be
paid to the Employee for whom such credit is taken.
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