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EXHIBIT 10 CITIZENS FIRST SAVINGS BANK 401(K) PLAN
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CITIZENS FIRST SAVINGS BANK
401(K) PLAN
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS......................................................1
1.1 "Act"............................................................1
1.2 "Administrator"..................................................1
1.3 "Affiliated Employer"............................................1
1.4 "Aggregate Account"..............................................1
1.5 "Anniversary Date" ..............................................1
1.6 "Beneficiary"....................................................2
1.7 "Code"...........................................................2
1.8 "Compensation"...................................................2
1.9 "Contract" or "Policy" ..........................................3
1.10 "Deferred Compensation"..........................................3
1.11 "Designated Investment Alternative"..............................3
1.12 "Directed Investment Option".....................................3
1.13 "Early Retirement Date.".........................................3
1.14 "Elective Contribution"..........................................3
1.15 "Eligible Employee"..............................................3
1.16 "Employee".......................................................4
1.17 "Employer".......................................................4
1.18 "Excess Aggregate Contributions".................................4
1.19 "Excess Contributions"...........................................4
1.20 "Excess Deferred Compensation"...................................4
1.21 "Fiduciary"......................................................5
1.22 "Fiscal Year"....................................................5
1.23 "Forfeiture".....................................................5
1.24 "Former Participant".............................................5
1.25 "415 Compensation"...............................................5
1.26 "414(s) Compensation"............................................6
1.27 "Highly Compensated Employee"....................................6
1.28 "Highly Compensated Former Employee".............................7
1.29 "Highly Compensated Participant".................................7
1.30 "Hour of Service"................................................7
1.31 "Income".........................................................8
1.32 "Investment Manager"............................................10
1.33 "Key Employee"..................................................10
1.34 "Late Retirement Date"..........................................11
1.35 "Leased Employee"...............................................11
1.36 "Non-Elective Contribution".....................................12
1.37 "Non-Highly Compensated Participant"............................12
1.38 "Non-Key Employee"..............................................12
1.39 "Normal Retirement Age".........................................12
1.40 "Normal Retirement Date"........................................12
1.41 "1-Year Break in Service".......................................12
1.42 "Participant"...................................................13
(i)
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1.43 "Participant Direction Procedures"..............................13
1.44 "Participant's Account".........................................13
1.45 "Participant's Combined Account"................................13
1.46 "Participant's Directed Account"................................13
1.47 "Participant's Elective Account"................................13
1.48 "Plan"..........................................................13
1.49 "Plan Year".....................................................13
1.50 "Qualified Non-Elective Contribution"...........................13
1.51 "Regulation"....................................................14
1.52 "Retired Participant"...........................................14
1.53 "Retirement Date"...............................................14
1.54 "Super Top Heavy Plan"..........................................14
1.55 "Terminated Participant"........................................14
1.56 "Top Heavy Plan"................................................14
1.57 "Top Heavy Plan Year"...........................................14
1.58 "Top Paid Group"................................................14
1.59 "Trustee".......................................................15
l.60 "Trust Fund"....................................................15
l.61 "USERRA"........................................................15
l.62 "Valuation Date"................................................15
1.63 "Vested"........................................................15
1.64 "Year of Service"...............................................15
ARTICLE II ADMINISTRATION..................................................16
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER.....................16
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY.........................17
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR..........................17
2.4 RECORDS AND REPORTS.............................................18
2.5 APPOINTMENT OF ADVISERS.........................................19
2.6 PAYMENT OF EXPENSES.............................................19
2.7 CLAIMS PROCEDURE................................................19
2.8 CLAIMS REVIEW PROCEDURE.........................................19
ARTICLE III ELIGIBILITY.....................................................20
3.1 CONDITIONS OF ELIGIBILITY.......................................20
3.2 EFFECTIVE DATE OF PARTICIPATION.................................20
3.3 DETERMINATION OF ELIGIBILITY....................................20
3.4 TERMINATION OF ELIGIBILITY......................................21
3.5 OMISSION OF ELIGIBLE EMPLOYEE...................................21
3.6 INCLUSION OF INELIGIBLE EMPLOYEE................................21
3.7 ELECTION NOT TO PARTICIPATE.....................................21
ARTICLE IV CONTRIBUTION AND ALLOCATION.....................................22
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION...................22
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION.........................22
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION........................26
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4.4 ALLOCATION OF CONTRIBUTION AND EARNINGS.........................26
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS................................29
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS..................33
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS............................35
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS..............39
4.9 MAXIMUM ANNUAL ADDITIONS........................................41
4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS.......................45
4.11 TRANSFERS FROM QUALIFIED PLANS..................................45
4.12 DIRECTED INVESTMENT ACCOUNT.....................................47
ARTICLE V VALUATIONS......................................................49
5.1 VALUATION OF THE TRUST FUND.....................................49
5.2 METHOD OF VALUATION.............................................49
ARTICLE VI DETERMINATION AND DISTRIBUTION OF BENEFITS......................50
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT.......................50
6.2 DETERMINATION OF BENEFITS UPON DEATH............................50
6.3 DISABILITY RETIREMENT BENEFITS..................................51
6.4 DETERMINATION OF BENEFITS UPON TERMINATION......................51
6.5 DISTRIBUTION OF BENEFITS........................................54
6.6 DISTRIBUTION OF BENEFITS UPON DEATH.............................56
6.7 TIME OF SEGREGATION OR DISTRIBUTION.............................57
6.8 DISTRIBUTION FOR MINOR BENEFICIARY..............................58
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN..................58
6.10 PRE-RETIREMENT DISTRIBUTION.....................................58
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP...............................58
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION.................60
ARTICLE VII TRUSTEE.........................................................60
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE...........................60
7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE.....................62
7.3 OTHER POWERS OF THE TRUSTEE.....................................63
7.4 LOANS TO PARTICIPANTS...........................................65
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS........................67
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES...................67
7.7 ANNUAL REPORT OF THE TRUSTEE....................................67
7.8 AUDIT...........................................................68
7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE..................69
7.10 TRANSFER OF INTEREST............................................70
7.11 DIRECT ROLLOVER.................................................70
ARTICLE VIII AMENDMENT, TERMINATION AND MERGERS.............................71
8.1 AMENDMENT.......................................................71
8.2 TERMINATION.....................................................72
8.3 MERGER OR CONSOLIDATION.........................................72
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ARTICLE IX TOP HEAVY.......................................................72
9.1 TOP HEAVY PLAN REQUIREMENTS.....................................72
9.2 DETERMINATION OF TOP HEAVY STATUS...............................73
ARTICLE X MISCELLANEOUS...................................................76
10.1 PARTICIPANT'S RIGHTS............................................76
10.2 ALIENATION......................................................76
10.3 CONSTRUCTION OF PLAN............................................77
10.4 GENDER AND NUMBER...............................................78
10.5 LEGAL ACTION....................................................78
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS..........................78
10.7 BONDING.........................................................78
10.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE......................79
10.9 INSURER'S PROTECTIVE CLAUSE.....................................79
10.10 RECEIPT AND RELEASE FOR PAYMENTS................................79
10.11 ACTION BY THE EMPLOYER..........................................79
10.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY..............80
10.13 HEADINGS........................................................80
10.14 APPROVAL BY INTERNAL REVENUE SERVICE............................81
10.15 UNIFORMITY......................................................81
ARTICLE XI PARTICIPATING EMPLOYERS.........................................81
11.1 ADOPTION BY OTHER EMPLOYERS.....................................81
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS.........................82
11.3 DESIGNATION OF AGENT............................................83
11.4 EMPLOYEE TRANSFERS..............................................83
11.5 PARTICIPATING EMPLOYER CONTRIBUTION.............................83
11.6 AMENDMENT.......................................................83
11.7 DISCONTINUANCE OF PARTICIPATION.................................84
11.8 ADMINISTRATOR'S AUTHORITY.......................................84
(iv)
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CITIZENS FIRST SAVINGS BANK
401(K) PLAN
THIS AGREEMENT, hereby made and entered into this 1st day of February,
2000, by and between Citizens First Savings Bank (herein referred to as the
"Employer") and Citizens First Savings Bank (herein referred to as the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Employer desires to recognize the contribution made to its
successful operation by its employees and to reward such contribution by means
of a 401(k) Profit Sharing Plan for those employees who shall qualify as
Participants hereunder;
NOW, THEREFORE, effective January 1, 2000, (hereinafter called the
"Effective Date"), the Employer hereby establishes a 401(k) Profit Sharing Plan
and creates this trust (which plan and Trust are hereinafter called the "Plan")
for the exclusive benefit of the Participants and their Beneficiaries, and the
Trustee hereby accepts the Plan on the following terms:
ARTICLE I
DEFINITIONS
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time.
1.2 "Administrator" means the Employer unless another person or entity has
been designated by the Employer pursuant to Section 2.2 to administer the Plan
on behalf of the Employer.
1.3 "Affiliated Employer" means any corporation which is a member of a
controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Regulations under Code Section 414(o).
1.4 "Aggregate Account" means, with respect to each Participant, the value
of all accounts maintained on behalf of a Participant, whether attributable to
Employer or Employee contributions, subject to the provisions of Section 9.2.
1.5 "Anniversary Date" means December 31st.
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1.6 "Beneficiary" means the person to whom the share of a deceased
Participant's total account is payable, subject to the restrictions of Sections
6.2 and 6.6.
1.7 "Code" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.
1.8 "Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments of
compensation by the Employer (in the course of the Employer's trade or business)
for a Plan Year for which the Employer is required to furnish the Participant 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)).
For purposes of this Section, the determination of Compensation
shall be made by:
(a) excluding overtime.
(b) excluding commissions.
(c) excluding bonuses.
(d) excluding amounts which are contributed by the Employer pursuant
to a salary reduction agreement and which are not includable in the gross
income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b) and Employee contributions described in
Code Section 414(h)(2) that are treated as Employer contributions.
For a Participant's initial year of participation, Compensation
shall be recognized as of such Employee's effective date of participation
pursuant to Section 3.2.
Compensation in excess of $150,000 shall be disregarded. Such amount
shall be adjusted for increases in the cost of living in accordance with Code
Section 401(a)(17), except that the dollar increase in effect on January 1 of
any calendar year shall be effective for the Plan Year beginning with or within
such calendar year. For any short Plan Year the Compensation limit shall be an
amount equal to the Compensation limit for the calendar year in which the Plan
Year begins multiplied by the ratio obtained by dividing the number of all
months in the short Plan Year by twelve (12).
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For purposes of this Section, if the Plan is a plan described in
Code Section 413(c) or 414(f) (a plan maintained by more than one Employer), the
limitation applies separately with respect to the Compensation of any
Participant from each Employer maintaining the Plan.
1.9 "Contract" or "Policy" means any life insurance policy, retirement
income or annuity policy or annuity contract (group or individual) issued
pursuant to the terms of the Plan.
1.10 "Deferred Compensation" with respect to any Participant means the
amount of the Participant's total Compensation which has been contributed to the
Plan in accordance with the Participant's deferral election pursuant to Section
4.2 excluding any such amounts distributed as excess "annual additions" pursuant
to Section 4.10(a).
1.11 "Designated Investment Alternative" means a specific investment
identified by name by a Fiduciary as an available investment under the Plan
which may be acquired or disposed of by the Trustee pursuant to the investment
direction by a Participant.
1.12 "Directed Investment Option" means one or more of the following:
(a) a Designated Investment Alternative.
(b) any other investment permitted by the Plan and the Participant
Direction Procedures and acquired or disposed of by the Trustee
pursuant to the investment direction of a Participant.
1.13 "Early Retirement Date." This Plan does not provide for a retirement
date prior to Normal Retirement Date.
1.14 "Elective Contribution" means the Employer contributions to the Plan
of Deferred Compensation excluding any such amounts distributed as excess
"annual additions" pursuant to Section 4.10(a). In addition, any Employer
Qualified Non-Elective Contribution made pursuant to Section 4.6(b) which is
used to satisfy the "Actual Deferral Percentage" tests shall be considered an
Elective Contribution for purposes of the Plan. Any contributions deemed to be
Elective Contributions (whether or not used to satisfy the "Actual Deferral
Percentage" tests) shall be subject to the requirements of Sections 4.2(b) and
4.2(c) and shall further be required to satisfy the nondiscrimination
requirements of Regulation 1.401(k)-1(b)(5), the provisions of which are
specifically incorporated herein by reference.
1.15 "Eligible Employee" means any Employee.
Employees who are Leased Employees within the meaning of Code
Sections 414(n)(2) and 414(o)(2) shall not be eligible to participate in this
Plan.
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Employees whose employment is governed by the terms of a collective
bargaining agreement between Employee representatives (within the meaning of
Code Section 7701(a)(46)) and the Employer under which retirement benefits were
the subject of good faith bargaining between the parties will not be eligible to
participate in this Plan unless such agreement expressly provides for coverage
in this Plan.
Employees who are nonresident aliens (within the meaning of Code
Section 7701(b)(1)(B)) and who receive no earned income (within the meaning of
Code Section 911(d)(2)) from the Employer which constitutes income from sources
within the United States (within the meaning of Code Section 861(a)(3)) shall
not be eligible to participate in this Plan.
Employees of Affiliated Employers shall not be eligible to
participate in this Plan unless such Affiliated Employers have specifically
adopted this Plan in writing.
1.16 "Employee" means any person who is employed by the Employer or
Affiliated Employer. Employee shall include Leased Employees within the meaning
of Code Sections 414(n)(2) and 414(o)(2) unless such Leased Employees are
covered by a plan described in Code Section 414(n)(5) and such Leased Employees
do not constitute more than 20% of the recipient's non-highly compensated work
force.
1.17 "Employer" means Citizens First Savings Bank and any successor which
shall maintain this Plan; and any predecessor which has maintained this Plan.
The Employer is a corporation, with principal offices in the State of Michigan.
In addition, where appropriate, the term Employer shall include any
Participating Employer (as defined in Section 11.1) which shall adopt this Plan.
1.18 "Excess Aggregate Contributions" means, with respect to any Plan
Year, the excess of the aggregate amount of the Employer matching contributions
made pursuant to Section 4.1(b) and any qualified non-elective contributions or
elective deferrals taken into account pursuant to Section 4.7(c) on behalf of
Highly Compensated Participants for such Plan Year, over the maximum amount of
such contributions permitted under the limitations of Section 4.7(a) (determined
by reducing contributions made on behalf of Highly Compensated Participants in
order of the actual contribution ratios beginning with the highest of such
ratios).
1.19 "Excess Contributions" means, with respect to a Plan Year, the excess
of Elective Contributions used to satisfy the "Actual Deferral Percentage" tests
made on behalf of Highly Compensated Participants for the Plan Year over the
maximum amount of such contributions permitted under Section 4.5(a) (determined
by reducing contributions made on behalf of Highly Compensated Participants in
order of the actual deferral ratios beginning with the highest of such ratios).
Excess Contributions shall be treated as an "annual addition" pursuant to
Section 4.9(b).
1.20 "Excess Deferred Compensation" means, with respect to any taxable
year of a Participant, the excess of the aggregate amount of such Participant's
Deferred Compensation and
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the elective deferrals pursuant to Section 4.2(f) actually made on behalf of
such Participant for such taxable year, over the dollar limitation provided for
in Code Section 402(g), which is incorporated herein by reference. Excess
Deferred Compensation shall be treated as an "annual addition" pursuant to
Section 4.9(b) when contributed to the Plan unless distributed to the affected
Participant not later than the first April 15th following the close of the
Participant's taxable year. Additionally, for purposes of Sections 9.2 and
4.4(g), Excess Deferred Compensation shall continue to be treated as Employer
contributions even if distributed pursuant to Section 4.2(f). However, Excess
Deferred Compensation of Non-Highly Compensated Participants is not taken into
account for purposes of Section 4.5(a) to the extent such Excess Deferred
Compensation occurs pursuant to Section 4.2(d).
1.21 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition of its
assets, (b) renders investment advice for a fee or other compensation, direct or
indirect, with respect to any monies or other property of the Plan or has any
authority or responsibility to do so, or (c) has any discretionary authority or
discretionary responsibility in the administration of the Plan, including, but
not limited to, the Trustee, the Employer and its representative body, and the
Administrator.
1.22 "Fiscal Year" means the Employer's accounting year of 12 months
commencing on April 1st of each year and ending the following March 31st.
1.23 "Forfeiture" means that portion of a Participant's Account that is
not Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a Terminated
Participant's Account, or
(b) the last day of the Plan Year in which the Participant incurs
five (5) consecutive 1-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case of a
Terminated Participant whose Vested benefit is zero, such Terminated Participant
shall be deemed to have received a distribution of his Vested benefit upon his
termination of employment. Restoration of such amounts shall occur pursuant to
Section 6.4(e)(2). In addition, the term Forfeiture shall also include amounts
deemed to be Forfeitures pursuant to any other provision of this Plan.
1.24 "Former Participant" means a person who has been a Participant, but
who has ceased to be a Participant for any reason.
1.25 "415 Compensation" with respect to any Participant means such
Participant's wages as defined in Code Section 3401(a) and all other payments of
compensation by the Employer (in the course of the Employer's trade or business)
for a Plan Year for which the
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Employer is required to furnish the Participant a written statement under Code
Sections 6041(d), 6051(a)(3) and 6052. "415 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)).
For Plan Years beginning after December 31, 1997, for purposes of
this Section, the determination of "415 Compensation" shall include any elective
deferral (as defined in Code Section 402(g)(3)), and any amount which is
contributed or deferred by the Employer at the election of the Participant and
which is not includible in the gross income of the Participant by reason of Code
Sections 125 or 457.
1.26 "414(s) Compensation" with respect to any Participant means such
Participant's "415 Compensation" paid during a Plan Year. The amount of "414(s)
Compensation" with respect to any Participant shall include "414(s)
Compensation" for the entire twelve (12) month period ending on the last day of
such Plan Year, except that "414(s) Compensation" shall only be recognized for
that portion of the Plan Year during which an Employee was a Participant in the
Plan.
For purposes of this Section, the determination of "414(s)
Compensation" shall be made by excluding amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
"414(s) Compensation" in excess of $150,000 shall be disregarded.
Such amount shall be adjusted for increases in the cost of living in accordance
with Code Section 401(a)(17), except that the dollar increase in effect on
January 1 of any calendar year shall be effective for the Plan Year beginning
with or within such calendar year. For any short Plan Year the "414(s)
Compensation" limit shall be an amount equal to the "414(s) Compensation" limit
for the calendar year in which the Plan Year begins multiplied by the ratio
obtained by dividing the number of full months in the short Plan Year by twelve
(12).
1.27 "Highly Compensated Employee" means an Employee described in Code
Section 414(q) and the Regulations thereunder, and generally means an Employee
who performed services for the Employer during the "determination year" and is
in one or more of the following groups:
(a) Employees who at any time during the "determination year" or
"look-back year" were "five percent owners" as defined in Section
1.33(c).
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(b) Employees who received "415 Compensation" during the "look-back
year" from the Employer in excess of $80,000 and were in the Top
Paid Group of Employees for the Plan Year.
The "determination year" shall be the Plan Year for which testing is
being performed, and the "look-back year" shall be the immediately preceding
twelve-month period.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions. Additionally, the
dollar threshold amount specified in (b) above shall be adjusted at such time
and in the same manner as under Code Section 415(d), except that the base period
shall be the calendar quarter ending September 30, 1996. In the case of such an
adjustment, the dollar limit which shall be applied is the limit for the
calendar year in which the "look-back year" begins.
In determining who is a Highly Compensated Employee, Employees who
are non- resident aliens and who received no earned income (within the meaning
of Code Section 911(d)(2)) from the Employer constituting United States source
income within the meaning of Code Section 861(a)(3) shall not be treated as
Employees. Additionally, all Affiliated Employers shall be taken into account as
a single employer and Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall be considered Employees unless such Leased
Employees are covered by a plan described in Code Section 414(n)(5) and are not
covered in any qualified plan maintained by the Employer. The exclusion of
Leased Employees for this purpose shall be applied on a uniform and consistent
basis for all of the Employer's retirement plans. Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without regard to
whether they performed services during the "determination year."
1.28 "Highly Compensated Former Employee" means a former Employee who had
a separation year prior to the "determination year" and was a Highly Compensated
Employee in the year of separation from service or in any "determination year"
after attaining age 55. Notwithstanding the foregoing, an Employee who separated
from service prior to 1987 will be treated as a Highly Compensated Former
Employee only if during the separation year (or year preceding the separation
year) or any year after the Employee attains age 55 (or the last year ending
before the Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner." For purposes
of this Section, "determination year," "415 Compensation" and "five percent
owner" shall be determined in accordance with Section 1.27. Highly Compensated
Former Employees shall be treated as Highly Compensated Employees. The method
set forth in this Section for determining who is a "Highly Compensated Former
Employee" shall be applied on a uniform and consistent basis for all purposes
for which the Code Section 414(g) definition is applicable.
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1.29 "Highly Compensated Participant" means any Highly Compensated
Employee who is eligible to participate in the Plan.
1.30 "Hour of Service" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties (these hours will be credited to the Employee for
the computation period in which the duties are performed); (2) each hour for
which an Employee is directly or indirectly compensated or entitled to
compensation by the Employer (irrespective of whether the employment
relationship has terminated) for reasons other than performance of duties (such
as vacation, holidays, sickness, jury duty, disability, lay-off, military duty
or leave of absence) during the applicable computation period (these hours will
be calculated and credited pursuant to Department of Labor regulation
2530.200b-2 which is incorporated herein by reference); (3) each hour for which
back pay is awarded or agreed to by the Employer without regard to mitigation of
damages (these hours will be credited to the Employee for the computation period
or periods to which the award or agreement pertains rather than the computation
period in which the award, agreement or payment is made). The same Hours of
Service shall not be credited both under (1) or (2), as the case may be, and
under (3).
Notwithstanding the above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single continuous
period during which the Employee performs no duties (whether or not such period
occurs in a single computation period); (ii) an hour for which an Employee is
directly or indirectly paid, or entitled to payment, on account of a period
during which no duties are performed is not required to be credited to the
Employee if such payment is made or due under a plan maintained solely for the
purpose of complying with applicable worker's compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of this Section, a payment shall be deemed to be made
by or due from the Employer regardless of whether such payment is made by or due
from the Employer directly, or indirectly through, among others, a trust fund,
or insurer, to which the Employer contributes or pays premiums and regardless of
whether contributions made or due to the trust fund, insurer, or other entity
are for the benefit of particular Employees or are on behalf of a group of
Employees in the aggregate.
For purposes of this Section, Hours of Service will be credited for
employment with other Affiliated Employers. The provisions of Department of
Labor regulations 2530.200b- 2(b) and (c) are incorporated herein by reference.
1.31 "Income" means the income or losses allocable to "excess amounts"
which shall equal the sum of the allocable gain or loss for the "applicable
computation period" and the allocable gain or loss for the period between the
end of the "applicable computation period" and
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the date of distribution ("gap period"). The income allocable to excess amounts"
for the "applicable computation period" and the "gap period" is calculated
separately and is determined by multiplying the income for the "applicable
computation period" or the "gap period" by a fraction. The numerator of the
fraction is the "excess amount" for the "applicable computation period." The
denominator of the fraction is the total account balance" attributable to
"Employer contributions" as of the end of the "applicable computation period" or
the "gap period," reduced by the gain allocable to such total amount for the
"applicable computation period" or the "gap period" and increased by the loss
allocable to such total amount for the "applicable computation period" or the
"gap period." The provisions of this Section shall be applied:
(a) For purposes of Section 4.2(f), by substituting:
(1) "Excess Deferred Compensation" for "excess amounts";
(2) "taxable year of the Participant" for "applicable
computation period";
(3) "Deferred Compensation" for "Employer contributions";
and
(4) "Participant's Elective Account" for "account balance."
(b) For purposes of Section 4.6(a), by substituting:
(1) "Excess Contributions" for "excess amounts";
(2) "Plan Year" for "applicable computation period";
(3) "Elective Contributions" for "Employer contributions";
and
(4) "Participant's Elective Account" for "account balance."
(c) For purposes of Section 4.8(a), by substituting:
(1) "Excess Aggregate Contributions" for "excess amounts";
(2) "Plan Year" for "applicable computation period";
(3) "Employer matching contributions made pursuant to
Section 4.1(b) and any qualified non-elective
contributions or elective deferrals taken into account
pursuant to Section 4.7(c)" for "Employer
contributions"; and
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(4) "Participant's Account" for "account balance."
In lieu of the "fractional method" described above, a "safe harbor
method" may be used to calculate the allocable Income for the "gap period."
Under the "safe harbor method," allocable Income for the "gap period" shall be
deemed to equal ten percent (10%) of the Income allocable to "excess amounts"
for the "applicable computation period" multiplied by the number of calendar
months in the "gap period." For purposes of determining the number of calendar
months in the "gap period," a distribution occurring on or before the fifteenth
day of the month shall be treated as having been made on the last day of the
preceding month and a distribution occurring after such fifteenth day shall be
treated as having been made on the first day of the next subsequent month.
Income allocable to any distribution of Excess Deferred Compensation
on or before the last day of the taxable year of the Participant shall be
calculated from the first day of the taxable year of the Participant to the date
on which the distribution is made pursuant to either the "fractional method" or
the "safe harbor method." Under such "safe harbor method," allocable Income for
such period shall be deemed to equal ten percent (10%) of the Income allocable
to such Excess Deferred Compensation multiplied by the number of calendar months
in such period. For purposes of determining the number of calendar months in
such period, a distribution occurring on or before the fifteenth day of the
month shall be treated as having been made on the last day of the preceding
month and a distribution occurring after such fifteenth day shall be treated as
having been made on the first day of the next subsequent month.
1.32 "Investment Manager" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
1.33 "Key Employee" means an Employee as defined in Code Section 416(i)
and the Regulations thereunder. Generally, any Employee or former Employee (as
well as each of his Beneficiaries) is considered a Key Employee if he, at any
time during the Plan Year that contains the "Determination Date" or any of the
preceding four (4) Plan Years, has been included in one of the following
categories:
(a) an officer of the Employer (as that term is defined within the
meaning of the Regulations under Code Section 416) having annual
"415 Compensation" greater than 50 percent of the amount in effect
under Code Section 415(b)(1)(A) for any such Plan Year.
(b) one of the ten employees having annual "415 Compensation" from
the Employer for a Plan Year greater than the dollar limitation in
effect under Code Section 415(c)(1)(A) for the calendar year in
which such Plan Year ends and
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owning (or considered as owning within the meaning of Code Section
318) both more than one-half percent interest and the largest
interests in the Employer.
(c) a "five percent owner" of the Employer. "Five percent owner"
means any person who owns (or is considered as owning within the
meaning of Code Section 318) more than five percent (5%) of the
outstanding stock of the Employer or stock possessing more than five
percent (5%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person
who owns more than five percent (5%) of the capital or profits
interest in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate
employers.
(d) a "one percent owner" of the Employer having an annual "415
Compensation" from the Employer of more than $150,000. "One percent
owner" means any person who owns (or is considered as owning within
the meaning of Code Section 318) more than one percent (1%) of the
outstanding stock of the Employer or stock possessing more than one
percent (1%) of the total combined voting power of all stock of the
Employer or, in the case of an unincorporated business, any person
who owns more than one percent (1%) of the capital or profits
interest in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate
employers. However, in determining whether an individual has "415
Compensation" of more than $150,000, "415 Compensation" from each
employer required to be aggregated under Code Sections 414(b), (c),
(m) and (o) shall be taken into account.
For purposes of this Section, the determination of "415
Compensation" shall be made by including amounts which are contributed by the
Employer pursuant to a salary reduction agreement and which are not includible
in the gross income of the Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee contributions described in Code
Section 414(h)(2) that are treated as Employer contributions.
1.34 "Late Retirement Date" means the first day of the month coinciding
with or next following a Participant's actual Retirement Date after having
reached his Normal Retirement Date.
1.35 "Leased Employee" means any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any other
person ("leasing organization") has performed services for the recipient (or for
the recipient and related persons determined in accordance with Code Section
414(n)(6)) on a substantially full time basis for a period of at least one year,
and such services are performed under primary direction or control by the
recipient employer. Contributions or benefits provided a Leased Employee by the
leasing
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organization which are attributable to services performed for the recipient
employer shall be treated as provided by the recipient employer. A Leased
Employee shall not be considered an Employee of the recipient:
(a) if such employee is covered by a money purchase pension plan
providing:
(1) a non-integrated employer contribution rate of at least
10% of compensation, as defined in Code Section
415(c)(3), but including amounts which are contributed
by the Employer pursuant to a salary reduction agreement
and which are not includible in the gross income of the
Participant under Code Sections 125, 402(e)(3),
402(h)(1)(B), 403(b) or 457(b), and Employee
contributions described in Code Section 414(h)(2) that
are treated as Employer contributions.
(2) immediate participation; and
(3) full and immediate vesting; and
(b) if Leased Employees do not constitute more than 20% of the
recipient's non-highly compensated workforce.
1.36 "Non-Elective Contribution" means the Employer contributions to the
Plan excluding, however, contributions made pursuant to the Participant's
deferral election provided for in Section 4.2 and any Qualified Non-Elective
Contribution used in the "Actual Deferral Percentage" tests.
1.37 "Non-Highly Compensated Participant" means any Participant who is not
a Highly Compensated Employee.
1.38 "Non-Key Employee" means any Employee or former Employee (and his
Beneficiaries) who is not a Key Employee.
1.39 "Normal Retirement Age" means the Participant's 65th birthday. A
Participant shall become fully Vested in his Participant's Account upon
attaining his Normal Retirement Age.
1.40 "Normal Retirement Date" means the first day of the month coinciding
with or next following the Participant's Normal Retirement Age.
1.41 "1-Year Break in Service" means the applicable computation period
during which an Employee has not completed more than 500 Hours of Service with
the Employer. Further, solely for the purpose of determining whether a
Participant has incurred a 1-Year Break in
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Service, Hours of Service shall be recognized for "authorized leaves of absence"
and "maternity and paternity leaves of absence." Years of Service and 1-Year
Breaks in Service shall be measured on the same computation period.
"Authorized leave of absence" means an unpaid, temporary cessation
from active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military service, or
any other reason.
A "maternity or paternity leave of absence" means, for Plan Years
beginning after December 31, 1984, an absence from work for any period by reason
of the Employee's pregnancy, birth of the Employee's child, placement of a child
with the Employee in connection with the adoption of such child, or any absence
for the purpose of caring for such child for a period immediately following such
birth or placement. For this purpose, Hours of Service shall be credited for the
computation period in which the absence from work begins, only if credit
therefore is necessary to prevent the Employee from incurring a 1-Year Break in
Service, or, in any other case, in the immediately following computation period.
The Hours of Service credited for a "maternity or paternity leave of absence"
shall be those which would normally have been credited but for such absence, or,
in any case in which the Administrator is unable to determine such hours
normally credited, eight (8) Hours of Service per day. The total Hours of
Service required to be credited for a "maternity or paternity leave of absence"
shall not exceed 501.
1.42 "Participant" means any Eligible Employee who participates in the
Plan and has not for any reason become ineligible to participate further in the
Plan.
1.43 "Participant Direction Procedures" means such instructions,
guidelines or policies, the terms of which are incorporated herein, as shall be
established pursuant to Section 4.12 and observed by the Administrator and
applied and provided to Participants who have Participant Directed Accounts.
1.44 "Participant's Account" means the account established and maintained
by the Administrator for each Participant with respect to his total interest in
the Plan and Trust resulting from the Employer Non-Elective Contributions.
1.45 "Participant's Combined Account" means the total aggregate amount of
each Participant's Elective Account and Participant's Account.
1.46 "Participant's Directed Account" means that portion of a
Participant's interest in the Plan with respect to which the Participant has
directed the investment in accordance with the Participant Direction Procedure.
1.47 "Participant's Elective Account" means the account established and
maintained by the Administrator for each Participant with respect to his total
interest in the Plan and Trust resulting from the Employer Elective
Contributions used to satisfy the "Actual Deferral Percentage" tests. A separate
accounting shall be maintained with respect to that portion of the Participant's
Elective Account attributable to such Elective Contributions pursuant to Section
4.2 and any Employer Qualified Non-Elective Contributions.
1.48 "Plan" means this instrument, including all amendments thereto.
1.49 "Plan Year" means the Plan's accounting year of twelve (12) months
commencing on January 1st of each year and ending the following December 31st.
1.50 "Qualified Non-Elective Contribution" means any Employer
contributions made pursuant to Section 4.6(b) and Section 4.8(f). Such
contributions shall be considered an Elective Contribution for the purposes of
the Plan and used to satisfy the "Actual Deferral Percentage" tests or the
"Actual Contribution Percentage" tests.
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1.51 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or his delegate, and as amended from time to time.
1.52 "Retired Participant" means a person who has been a Participant, but
who has become entitled to retirement benefits under the Plan.
1.53 "Retirement Date" means the date as of which a Participant retires
whether such retirement occurs on a Participant's Normal Retirement Date or Late
Retirement Date (see Section 6.1).
1.54 "Super Top Heavy Plan" means a plan described in Section 9.2(b).
1.55 "Terminated Participant" means a person who has been a Participant,
but whose employment has been terminated other than by death or retirement.
1.56 "Top Heavy Plan" means a plan described in Section 9.2(a).
1.57 "Top Heavy Plan Year" means a Plan Year during which the Plan is a
Top Heavy Plan.
1.58 "Top Paid Group" means the top 20 percent of Employees who performed
services for the Employer during the applicable year, ranked according to the
amount of "415 Compensation" (determined for this purpose in accordance with
Section 1.27) received from the Employer during such year. All Affiliated
Employers shall be taken into account as a single employer, and Leased Employees
within the meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered
Employees unless such Leased Employees are covered by a plan described in Code
Section 414(n)(5) and are not covered in any qualified plan maintained by the
Employer. Employees who are non-resident aliens and who received no earned
income (within the meaning of Code Section 911(d)(2)) from the Employer
constituting United States source income within the meaning of Code Section
861(a)(3) shall not be treated as Employees. Additionally, for the purpose of
determining the number of active Employees in any year, the following additional
Employees shall also be excluded; however, such Employees shall still be
considered for the purpose of identifying the particular Employees in the Top
Paid Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2 hours per week;
(c) Employees who normally work less than six (6) months during a
year; and
(d) Employees who have not yet attained age 21.
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In addition, if 90 percent or more of the Employees of the Employer
are covered under agreements the Secretary of Labor finds to be collective
bargaining agreements between Employee representatives and the Employer, and the
Plan covers only Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from both the total
number of active Employees as well as from the certification of particular
Employees in the Top Paid Group.
The foregoing exclusions set forth in this Section shall be applied
on a uniform and consistent basis for all purposes for which the Code Section
414(q) definition is applicable.
1.59 "Trustee" means the person or entity named as trustee herein or in
any separate trust forming a part of this Plan, and any successors.
l.60 "Trust Fund" means the assets of the Plan and Trust as the same
shall exist from time to time.
l.61 "USERRA" means the Uniformed Services Employment and Reemployment
Rights Act of 1994. Notwithstanding any provision of this Plan to
the contrary, effective December 12, 1994, contributions, benefits
and service credit with respect to qualified military service will
be provided in accordance with Code Section 414(u).
l.62 "Valuation Date" means the Anniversary Date and such other date or
dates deemed necessary by the Administrator. The Valuation Date may
include any day during the Plan Year that the Trustee, any transfer
agent appointed by the Trustee or the Employer and any stock
exchange used by such agent are open for business.
1.63 "Vested" means the nonforfeitable portion of any account maintained
on behalf of a Participant.
1.64 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, during which an Employee has at least 1000
Hours of Service.
For purposes of eligibility for participation, the initial
computation period shall begin with the date on which the Employee first
performs an Hour of Service. The participation computation period beginning
after a 1-Year Break in Service shall be measured from the date on which an
Employee again performs an Hour of Service. The participation computation period
shall shift to the Plan Year which includes the anniversary of the date on which
the Employee first performed an Hour of Service. An Employee who is credited
with the required Hours of Service in both the initial computation period (or
the computation period beginning after a 1- Year Break in Service) and the Plan
Year which includes the anniversary of the date on which the Employee first
performed an Hour of Service, shall be credited with two (2) Years of Service
for purposes of eligibility to participate.
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For vesting purposes, the computation periods shall be the Plan
Year, including periods prior to the Effective Date of the Plan.
The computation period shall be the Plan Year if not otherwise set
forth herein.
Notwithstanding the foregoing, for any short Plan Year, the
determination of whether an Employee has completed a Year of Service shall be
made in accordance with Department of Labor regulation 2530.203-2(c).
Years of Service with any Affiliated Employer shall be recognized.
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) In addition to the general powers and responsibilities otherwise
provided for in this Plan, the Employer shall be empowered to
appoint and remove the Trustee and the Administrator from time to
time as it deems necessary for the proper administration of the Plan
to ensure that the Plan is being operated for the exclusive benefit
of the Participants and their Beneficiaries in accordance with the
terms of the Plan, the Code, and the Act. The Employer may appoint
counsel, specialists, advisers, agents (including any nonfiduciary
agent) and other persons as the Employer deems necessary or
desirable in connection with the exercise of its fiduciary duties
under this Plan. The Employer may compensate such agents or advisers
from the assets of the Plan as fiduciary expenses (but not including
any business (settlor) expenses of the Employer), to the extent not
paid by the Employer.
(b) The Employer may, by written agreement or designation, appoint
at its option an Investment Manager (qualified under the Investment
Company Act of 1940 as amended), investment adviser, or other agent
to provide direction to the Trustee with respect to any or all of
the Plan assets. Such appointment shall be given by the Employer in
writing in a form acceptable to the Trustee and shall specifically
identify the Plan assets with respect to which the Investment
Manager or other agent shall have authority to direct the
investment.
(c) The Employer shall establish a "funding policy and method,"
I.E., it shall determine whether the Plan has a short run need for
liquidity (E.G., to pay benefits) or whether liquidity is a long run
goal and investment growth (and stability of same) is a more current
need, or shall appoint a qualified person to do so. The Employer or
its delegate shall communicate such needs and goals to the Trustee,
who shall coordinate such Plan needs with its investment policy. The
communication of such a "funding policy and method" shall not,
however, constitute a directive to the Trustee as to investment of
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the Trust Funds. Such "funding policy and method" shall be
consistent with the objectives of this Plan and with the
requirements of Title I of the Act.
(d) The Employer shall periodically review the performance of any
Fiduciary or other person to whom duties have been delegated or
allocated by it under the provisions of this Plan or pursuant to
procedures established hereunder. This requirement may be satisfied
by formal periodic review by the Employer or by a qualified person
specifically designated by the Employer, through day-to-day conduct
and evaluation, or through other appropriate ways.
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer shall be the Administrator. The Employer may appoint
any person, including, but not limited to, the Employees of the Employer, to
perform the duties of the Administrator. Any person so appointed shall signify
his acceptance by filing written acceptance with the Employer. Upon the
resignation or removal of any individual performing the duties of the
Administrator, the Employer may designate a successor.
2.3 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to administer the
Plan for the exclusive benefit of the Participants and their Beneficiaries,
subject to the specific terms of the Plan. The Administrator shall administer
the Plan in accordance with its terms and shall have the power and discretion to
construe the terms of the Plan and to determine all questions arising in
connection with the administration, interpretation, and application of the Plan.
Any such determination by the Administrator shall be conclusive and binding upon
all persons. The Administrator may establish procedures, correct any defect,
supply any information, or reconcile any inconsistency in such manner and to
such extent as shall be deemed necessary or advisable to carry out the purpose
of the Plan; provided, however, that any procedure, discretionary act,
interpretation or construction shall be done in a nondiscriminatory manner based
upon uniform principles consistently applied and shall be consistent with the
intent that the Plan shall continue to be deemed a qualified plan under the
terms of Code Section 401(a), and shall comply with the terms of the Act and all
regulations issued pursuant thereto. The Administrator shall have all powers
necessary or appropriate to accomplish his duties under this Plan.
The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the following:
(a) the discretion to determine all questions relating to the
eligibility of Employees to participate or remain a Participant
hereunder and to receive benefits under the Plan;
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(b) to compute, certify, and direct the Trustee with respect to the
amount and the kind of benefits to which any Participant shall be
entitled hereunder;
(c) to authorize and direct the Trustee with respect to all
nondiscretionary or otherwise directed disbursements from the Trust;
(d) to maintain all necessary records for the administration of the
Plan;
(e) to interpret the provisions of the Plan and to make and publish
such rules for regulation of the Plan as are consistent with the
terms hereof;
(f) to determine the size and type of any Contract to be purchased
from any insurer, and to designate the insurer from which such
Contract shall be purchased;
(g) to compute and certify to the Employer and to the Trustee from
time to time the sums of money necessary or desirable to be
contributed to the Plan;
(h) to consult with the Employer and the Trustee regarding the short
and long- term liquidity needs of the Plan in order that the Trustee
can exercise any investment discretion in a manner designed to
accomplish specific objectives;
(i) to prepare and implement a procedure to notify Eligible
Employees that they may elect to have a portion of their
Compensation deferred or paid to them in cash;
(j) to act as the named Fiduciary responsible for communications
with Participants as needed to maintain Plan compliance with ERISA
Section 404(c), including but not limited to the receipt and
transmitting of Participant's directions as to the investment of
their account(s) under the Plan and the formulation of policies,
rules, and procedures pursuant to which Participants may give
investment instructions with respect to the investment of their
accounts;
(k) to assist any Participant regarding his rights, benefits, or
elections available under the Plan.
2.4 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and shall
keep all other books of account, records, policies, and other data that may be
necessary for proper administration of the Plan and shall be responsible for
supplying all information and reports to the Internal Revenue Service,
Department of Labor, Participants, Beneficiaries and others as required by law.
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2.5 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, agents (including
nonfiduciary agents) and other persons as the Administrator or the Trustee deems
necessary or desirable in connection with the administration of this Plan,
including but not limited to agents and advisers to assist with the
administration and management of the Plan, and thereby to provide, among such
other duties as the Administrator may appoint, assistance with maintaining Plan
records and the providing of investment information to the Plan's investment
fiduciaries and to Plan Participants.
2.6 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust Fund
unless paid by the Employer. Such expenses shall include any expenses incident
to the functioning of the Administrator, or any person or persons retained or
appointed by any Named Fiduciary incident to the exercise of their duties under
the Plan, including, but not limited to, fees of accountants, counsel,
Investment Managers, agents (including nonfiduciary agents) appointed for the
purpose of assisting the Administrator or the Trustee in carrying out the
instructions of Participants as to the directed investment of their accounts and
other specialists and their agents, and other costs of administering the Plan.
Until paid, the expenses shall constitute a liability of the Trust Fund.
2.7 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be furnished
to the claimant within 90 days after the application is filed. In the event the
claim is denied, the reasons for the denial shall be specifically set forth in
the notice in language calculated to be understood by the claimant, pertinent
provisions of the Plan shall be cited, and, where appropriate, an explanation as
to how the claimant can perfect the claim will be provided. In addition, the
claimant shall be furnished with an explanation of the Plan's claims review
procedure.
2.8 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who has
been denied a benefit by a decision of the Administrator pursuant to Section 2.7
shall be entitled to request the Administrator to give further consideration to
his claim by filing with the Administrator (on a form which may be obtained from
the Administrator) a request for a hearing. Such request, together with a
written statement of the reasons why the claimant believes his claim should be
allowed, shall be filed with the Administrator no later than 60 days after
receipt of the written notification provided for in Section 2.7. The
Administrator shall then conduct a hearing within the next 60 days, at which the
claimant may be represented by an attorney or any other representative of his
choosing and at which the claimant shall have an opportunity to submit written
and oral evidence and arguments in support of his claim. At the hearing (or
prior thereto
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upon 5 business days written notice to the Administrator) the claimant or his
representative shall have an opportunity to review all documents in the
possession of the Administrator which are pertinent to the claim at issue and
its disallowance. Either the claimant or the Administrator may cause a court
reporter to attend the hearing and record the proceedings. In such event, a
complete written transcript of the proceedings shall be furnished to both
parties by the court reporter. The full expense of any such court reporter and
such transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim shall be
made by the Administrator within 60 days of receipt of the appeal (unless there
has been an extension of 60 days due to special circumstances, provided the
delay and the special circumstances occasioning it are communicated to the
claimant within the 60 day period). Such communication shall be written in a
manner calculated to be understood by the claimant and shall include specific
reasons for the decision and specific references to the pertinent Plan
provisions on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee who has completed one (1) Year of Service and
has attained age 18 shall be eligible to participate hereunder as of the date he
has satisfied such requirements.
3.2 EFFECTIVE DATE OF PARTICIPATION
Any Eligible Employee shall become a Participant effective as of the
first day of the month coinciding with or next following the date such Employee
met the eligibility requirements of Section 3.1, provided said Employee was
still employed as of such date (or if not employed on such date, as of the date
of rehire if a 1-Year Break in Service has not occurred).
In the event an Employee who is not a member of an eligible class of
Employees becomes a member of an eligible class, such Employee will participate
immediately if such Employee has satisfied the minimum age and service
requirements and would have otherwise previously become a Participant.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each Employee
for participation in the Plan based upon information furnished by the Employer.
Such determination shall be conclusive and binding upon all persons, as long as
the same is made pursuant to the Plan and the Act. Such determination shall be
subject to review per Section 2.8.
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3.4 TERMINATION OF ELIGIBILITY
(a) In the event a Participant shall go from a classification of an
Eligible Employee to an ineligible Employee, such Former Participant
shall continue to vest in his interest in the Plan for each Year of
Service completed while a noneligible Employee, until such time as
his Participant's Account shall be forfeited or distributed pursuant
to the terms of the Plan. Additionally, his interest in the Plan
shall continue to share in the earnings of the Trust Fund.
(b) In the event a Participant is no longer a member of an eligible
class of Employees and becomes ineligible to participate, such
Employee will participate immediately upon returning to an eligible
class of Employees.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such omission is
not made until after a contribution by his Employer for the year has been made,
the Employer shall make a subsequent contribution with respect to the omitted
Employee in the amount which the said Employer would have contributed with
respect to him had he not been omitted. Such contribution shall be made
regardless of whether or not it is deductible in whole or in part in any taxable
year under applicable provisions of the Code.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been included
as a Participant in the Plan is erroneously included and discovery of such
incorrect inclusion is not made until after a contribution for the year has been
made, the Employer shall not be entitled to recover the contribution made with
respect to the ineligible person regardless of whether or not a deduction is
allowable with respect to such contribution. In such event, the amount
contributed with respect to the ineligible person shall constitute a Forfeiture
(except for Deferred Compensation which shall be distributed to the ineligible
person) for the Plan Year in which the discovery is made.
3.7 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer, elect
voluntarily not to participate in the Plan. The election not to participate must
be communicated to the Employer, in writing, at least thirty (30) days before
the beginning of a Plan Year.
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ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER CONTRIBUTION
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of all
Participants made pursuant to Section 4.2(a), which amount shall be
deemed an Employer Elective Contribution.
(b) On behalf of each Participant who is eligible to share in
matching contributions for the Plan Year, a matching contribution
equal to 50% of each such Participant's Deferred Compensation, which
amount shall be deemed an Employer Non-Elective Contribution.
Except, however, in applying the matching percentage
specified above, only salary reductions up to 4% of annual
Compensation shall be considered.
(c) Additionally, to the extent necessary, the Employer shall
contribute to the Plan the amount necessary to provide the top heavy
minimum contribution. All contributions by the Employer shall be
made in cash.
4.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer from 1% to 15% of his
Compensation which would have been received in the Plan Year, but
for the deferral election. A deferral election (or modification of
an earlier election) 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 latest of the date the
Employer adopts this cash or deferred arrangement, or the date such
arrangement first became effective. For purposes of this Section,
Compensation shall be determined prior to any reductions made
pursuant to Code Sections 125, 402(e)(3), 402(h)(1)(B), 403(b) or
457(b), and Employee contributions described in Code Section
414(h)(2) that are treated as Employer contributions.
The amount by which Compensation is reduced shall be
that Participant's Deferred Compensation and be treated as an
Employer Elective Contribution and allocated to that Participant's
Elective Account.
(b) The balance in each Participant's Elective Account shall be
fully Vested at all times and shall not be subject to Forfeiture for
any reason.
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(c) Notwithstanding anything in the Plan to the contrary, amounts
held in the Participant's Elective Account may not be distributable
(including any offset of loans) earlier than:
(1) a Participant's separation from service, or death;
(2) a Participant's attainment of age 59 1/2;
(3) the termination of the Plan without the establishment or
existence of a "successor plan," as that term is
described in Regulation 1.401(k)-1(d)(3);
(4) the date of disposition by the Employer to an entity
that is not an Affiliated Employer of substantially all
of the assets (within the meaning of Code Section
409(d)(2)) used in a trade or business of such
corporation if such corporation continues to maintain
this Plan after the disposition with respect to a
Participant who continues employment with the
corporation acquiring such assets;
(5) the date of disposition by the Employer or an Affiliated
Employer who maintains the Plan of its interest in a
subsidiary (within the meaning of Code Section
409(d)(3)) to an entity which is not an Affiliated
Employer but only with respect to a Participant who
continues employment with such subsidiary; or
(6) the proven financial hardship of a Participant, subject
to the limitations of Section 6.11.
(d) For each Plan Year, a Participant's Deferred Compensation made
under this Plan and all other plans, contracts or arrangements of
the Employer maintaining this Plan shall not exceed, during any
taxable year of the Participant, the limitation imposed by Code
Section 402(g), as in effect at the beginning of such taxable year.
If such dollar limitation is exceeded, a Participant will be deemed
to have notified the Administrator of such excess amount which shall
be distributed in a manner consistent with Section 4.2(f). The
dollar limitation shall be adjusted annually pursuant to the method
provided in Code Section 415(d) in accordance with Regulations.
(e) In the event a Participant has received a hardship distribution
from his Participant's Elective Account pursuant to Section 6.11(b)
or pursuant to Regulation l.401(k)-1(d)(2)(iv)(B)) from any other
plan maintained by the Employer, then such Participant shall not be
permitted to elect to have Deferred Compensation contributed to the
Plan on his behalf for a period of twelve (12)
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months following the receipt of the distribution. Furthermore, the
dollar limitation under Code Section 402(g) shall be reduced, with
respect to the Participant's taxable year following the taxable year
in which the hardship distribution was made, by the amount of such
Participant's Deferred Compensation, if any, pursuant to this Plan
(and any other plan maintained by the Employer) for the taxable year
of the hardship distribution.
(f) If a Participant's Deferred Compensation under this Plan
together with any elective deferrals (as defined in Regulation
1.402(g)-1(b)) under another qualified cash or deferred arrangement
(as defined in Code Section 401(k)), a simplified employee pension
(as defined in Code Section 403(k)), a salary reduction arrangement
(within the meaning of Code Section 3121(a)(5)(D)), a deferred
compensation plan under Code Section 457(b), or a trust described in
Code Section 501(c)(18) cumulatively exceed the limitation imposed
by Code Section 402(g) (as adjusted annually in accordance with the
method provided in Code Section 415(d) pursuant to Regulations) for
such Participant's taxable year, the Participant may, not later than
March 1 following the close of the Participant's taxable year,
notify the Administrator in writing of such excess and request that
his Deferred Compensation under this Plan be reduced by an amount
specified by the Participant. In such event, the Administrator may
direct the Trustee to distribute such excess amount (and any Income
allocable to such excess amount) to the Participant not later than
the first April 15th following the close of the Participant's
taxable year. Any distribution of less than the entire amount of
Excess Deferred Compensation and Income shall be treated as a pro
rata distribution of Excess Deferred Compensation and Income. The
amount distributed shall not exceed the Participant's Deferred
Compensation under the Plan for the taxable year (and any Income
allocable to such excess amount). Any distribution on or before the
last day of the Participant's taxable year must satisfy each of the
following conditions:
(l) the distribution must be made after the date on which
the Plan received the Excess Deferred Compensation;
(2) the Participant shall designate the distribution as
Excess Deferred Compensation; and
(3) the Plan must designate the distribution as a
distribution of Excess Deferred Compensation.
Any distribution made pursuant to this Section 4.2(f)
shall be made first from unmatched Deferred Compensation
and, thereafter, from Deferred Compensation which is
matched. Matching contributions which relate to such
Deferred Compensation shall be forfeited.
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(g) Notwithstanding Section 4.2(f) above, a Participant's Excess
Deferred Compensation shall be reduced, but not below zero, by any
distribution of Excess Contributions pursuant to Section 4.6(a) for
the Plan Year beginning with or within the taxable year of the
Participant.
(h) At Normal Retirement Date, or such other date when the
Participant shall be entitled to receive benefits, the fair market
value of the Participant's Elective Account shall be used to provide
additional benefits to the Participant or his Beneficiary.
(i) Employer Elective Contributions made pursuant to this Section
may be segregated into a separate account for each Participant in a
federally insured savings account, certificate of deposit in a bank
or savings and loan association, money market certificate, or other
short-term debt security acceptable to the Trustee until such time
as the allocations pursuant to Section 4.4 have been made.
(j) The Employer and the Administrator shall implement the salary
reduction elections provided for herein in accordance with the
following:
(1) A Participant must make his initial salary deferral
election within a reasonable time, not to exceed thirty
(30) days, after entering the Plan pursuant to Section
3.2. If the Participant fails to make an initial salary
deferral election within such time, then such
Participant may thereafter make an election in
accordance with the rules governing modifications. The
Participant shall make such an election by entering into
a written salary reduction agreement with the Employer
and filing such agreement with the Administrator. Such
election shall initially be effective beginning with the
pay period following the acceptance of the salary
reduction agreement by the Administrator, shall not have
retroactive effect and shall remain in force until
revoked.
(2) A Participant may modify a prior election during the
Plan Year and concurrently make a new election by filing
a written notice with the Administrator within a
reasonable time before the pay period for which such
modification is to be effective. However, modifications
to a salary deferral election shall only be permitted
quarterly, during election periods established by the
Administrator prior to the first day of each Plan Year
quarter. Any modification shall not have retroactive
effect and shall remain in force until revoked.
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(3) A Participant may elect to prospectively revoke his
salary reduction agreement in its entirety at any time
during the Plan Year by providing the Administrator with
thirty (30) days' written notice of such revocation (or
upon such shorter notice period as may be acceptable to
the Administrator). Such revocation shall become
effective as of the beginning of the first pay period
coincident with or next following the expiration of the
notice period. Furthermore, the termination of the
Participant's employment, or the cessation of
participation for any reason, shall be deemed to revoke
any salary reduction agreement then in effect, effective
immediately following the close of the pay period within
which such termination or cessation occurs.
4.3 TIME OF PAYMENT OF EMPLOYER CONTRIBUTION
The Employer shall generally pay to the Trustee its contribution to
the Plan for each Plan Year within the time prescribed by law, including
extensions of time, for the filing of the Employer federal income tax return for
the Fiscal Year.
However, Employer Elective Contributions accumulated through payroll
deductions shall be paid to the Trustee as of the earliest date on which such
contributions can reasonably be segregated from the Employer general assets, but
in any event within ninety (90) days from the date on which such amounts would
otherwise have been payable to the Participant in cash. The provisions of
Department of Labor regulations 2510.3-102 are incorporated herein by reference.
Furthermore, any additional Employer contributions which are allocable to the
Participant's Elective Account for a Plan Year shall be paid to the Plan no
later than the twelve- month period immediately following the close of such Plan
Year.
4.4 ALLOCATION OF CONTRIBUTION AND EARNINGS
(a) The Administrator shall establish and maintain an account in the
name of each Participant to which the Administrator shall credit as
of each Anniversary Date all amounts allocated to each such
Participant as set forth herein.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper
allocation of the Employer contributions for each Plan Year. Within
a reasonable period of time after the date of receipt by the
Administrator of such information, the Administrator shall allocate
such contribution as follows:
(1) With respect to the Employer Elective Contribution made
pursuant to Section 4.1(a), to each Participant's
Elective Account in an
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amount equal to each such Participant's Deferred
Compensation for the year.
(2) With respect to the Employer Non-Elective Contribution
made pursuant to Section 4.1(b), to each Participant's
Account in accordance with Section 4.1(b).
Only Participants who are actively employed on the last
day of the Plan Year or who complete more than 500 Hours
of Service during the Plan Year prior to terminating
employment shall be eligible to share in the matching
contribution for the year. In determining whether a
Participant has completed more than 500 Hours of Service
during a short Plan Year, the number of the Hours of
Service required shall be proportionately reduced based
on the number of full months in the short Plan Year.
(c) As of each Anniversary Date any amounts which became Forfeitures
since the last Anniversary Date shall first be made available to
reinstate previously forfeited account balances of Former
Participants, if any, in accordance with Section 6.4(e)(2). The
remaining Forfeitures, if any, shall be used to reduce the
contribution of the Employer hereunder for the Plan Year in which
such Forfeitures occur.
(d) For any Top Heavy Plan Year, Employees not otherwise eligible to
share in the allocation of contributions as provided above, shall
receive the minimum allocation provided for in Section 4.4(g) if
eligible pursuant to the provisions of Section 4.4(i).
(e) Notwithstanding the foregoing, Participants who are not actively
employed on the last day of the Plan Year due to Retirement (Normal
or Late) or death shall share in the allocation of contributions for
that Plan Year.
(f) As of each Valuation Date, any earnings or losses (net
appreciation or net depreciation) of the Trust Fund shall be
allocated in the same proportion that each Participant's and Former
Participant's time weighted average nonsegregated accounts bear to
the total of all Participants' and Former Participants' time
weighted average nonsegregated accounts as of such date. Earnings or
losses with respect to a Participant's Directed Account shall be
allocated in accordance with Section 4.12.
Participants' transfers from other qualified plans
deposited in the general Trust Fund shall share in any earnings and
losses (net appreciation or net depreciation) of the Trust Fund in
the same manner provided above. Each
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segregated account maintained on behalf of a Participant shall be
credited or charged with its separate earnings and losses.
(g) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year, the sum
of the Employer contributions allocated to the Participant's
Combined Account of each Employee shall be equal to at least three
percent (3%) of such Employee's "415 Compensation" (reduced by
contributions and forfeitures, if any, allocated to each Employee in
any defined contribution plan included with this Plan in a Required
Aggregation Group). However, if (1) the sum of the Employer
contributions allocated to the Participant's Combined Account of
each Key Employee for such Top Heavy Plan Year is less than three
percent (3%) of each Key Employee's "415 Compensation" and (2) this
Plan is not required to be included in an Aggregation Group to
enable a defined benefit plan to meet the requirements of Code
Section 401(a)(4) or 410, the sum of the Employer contributions
allocated to the Participant's Combined Account of each Employee
shall be equal to the largest percentage allocated to the
Participant's Combined Account of any Key Employee. However, in
determining whether a Non-Key Employee has received the required
minimum allocation, such Non-Key Employee's Deferred Compensation
and matching contributions needed to satisfy the "Actual
Contribution Percentage" tests pursuant to Section 4.7(a) shall not
be taken into account.
However, no such minimum allocation shall be required in
this Plan for any Employee who participates in another defined
contribution plan subject to Code Section 412 included with this
Plan in a Required Aggregation Group.
(h) For purposes of the minimum allocations set forth above, the
percentage allocated to the Participant's Combined Account of any
Key Employee shall be equal to the ratio of the sum of the Employer
contributions allocated on behalf of such Key Employee divided by
the "415 Compensation" for such Key Employee.
(i) For any Top Heavy Plan Year, the minimum allocations set forth
above shall be allocated to the Participant's Combined Account of
all Employees who are Participants and who are employed by the
Employer on the last day of the Plan Year, including Employees who
have (1) failed to complete a Year of Service; and (2) declined to
make mandatory contributions (if required) or, in the case of a cash
or deferred arrangement, elective contributions to the Plan.
(j) In lieu of the above, in any Plan Year in which an Employee is a
Participant in both this Plan and a defined benefit pension plan
included in a Required Aggregation Group which is top heavy, the
Employer shall not be
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required to provide such Employee with both the full separate
defined benefit plan minimum benefit and the full separate defined
contribution plan minimum allocation.
Therefore, for any Plan Year when the Plan is a Top
Heavy Plan, an Employee who is participating in this Plan and a
defined benefit plan maintained by the Employer shall receive a
minimum monthly accrued benefit in the defined benefit plan equal to
the product of (1) one-twelfth (1/12th) of "415 Compensation"
averaged over the five (5) consecutive "limitation years" (or actual
"limitation years," if less) which produce the highest average and
(2) the lesser of (i) two percent (2%) multiplied by years of
service when the plan is top heavy or (ii) twenty percent (20%).
(k) For the purposes of this Section, "415 Compensation" shall be
limited to $150,000. Such amount shall be adjusted for increases in
the cost of living in accordance with Code Section 401(a)(17),
except that the dollar increase in effect on January 1 of any
calendar year shall be effective for the Plan Year beginning with or
within such calendar year. For any short Plan Year the "415
Compensation" limit shall be an amount equal to the "415
Compensation" limit for the calendar year in which the Plan Year
begins multiplied by the ratio obtained by dividing the number of
full months in the short Plan Year by twelve (12).
(l) Notwithstanding anything herein to the contrary, Participants
who terminated employment for any reason during the Plan Year shall
share in the salary reduction contributions made by the Employer for
the year of termination without regard to the Hours of Service
credited.
(m) If a Former Participant is reemployed after five (5) consecutive
1-Year Breaks in Service, then separate accounts shall be maintained
as follows:
(1) one account for nonforfeitable benefits attributable to
pre-break service; and
(2) one account representing his status in the Plan
attributable to post-break service.
4.5 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Maximum Annual Allocation: For each Plan Year, the annual
allocation derived from Employer Elective Contributions to a Highly
Compensated Participant's Elective Account shall satisfy one of the
following tests:
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(1) The "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not be more than the
"Actual Deferral Percentage" of the Non-Highly
Compensated Participant group (for the preceding Plan
Year if the prior year testing method is used to
calculate the "Actual Deferral Percentage" for the
Non-Highly Compensated Participant group) multiplied by
1.25, or
(2) The excess of the "Actual Deferral Percentage" for the
Highly Compensated Participant group over the "Actual
Deferral Percentage" for the Non-Highly Compensated
Participant group (for the preceding Plan Year if the
prior year testing method is used to calculate the
"Actual Deferral Percentage" for the Non-Highly
Compensated Participant group) shall not be more than
two percentage points. Additionally, the "Actual
Deferral Percentage" for the Highly Compensated
Participant group shall not exceed the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant
group (for the preceding Plan Year if the prior year
testing method is used to calculate the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant
group) multiplied by 2. The provisions of Code Section
401(k)(3) and Regulation 1.401(k)-1(b) are incorporated
herein by reference.
However, in order to prevent the multiple use of the
alternative method described in (2) above and in Code
Section 401(m)(9)(A), any Highly Compensated Participant
eligible to make elective deferrals pursuant to Section
4.2 and to make Employee contributions or to receive
matching contributions under this Plan or under any
other plan maintained by the Employer or an Affiliated
Employer shall have a combination of his Elective
Contributions and Employer matching contributions
reduced pursuant to Section 4.6(a) and Regulation
1401(m)-2, the provisions of which are incorporated
herein by reference.
Notwithstanding the above, if the prior year testing
method is used for the first Plan Year, the "Actual
Deferral Percentage" for the Non-Highly Compensated
Participant group shall be determined for such Plan
Year. However, the Plan shall not have a first Plan Year
(1) if the Plan is aggregated under Regulation l.401(k)-
1(g)(11) with any other plan that was or that included a
Code Section 401(k) plan in the prior year, or (2) the
Plan is a "successor plan" as defined in Internal
Revenue Service Notice 98-1, Section V and any
superseding guidance.
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(b) For the purposes of this Section "Actual Deferral Percentage"
means, with respect to the Highly Compensated Participant group and
Non-Highly Compensated Participant group for a Plan Year, the
average of the ratios, calculated separately for each Participant in
such group, of the amount of Employer Elective Contributions
allocated to each Participant's Elective Account for such Plan Year,
to such Participant's "414(s) Compensation" for such Plan Year. The
actual deferral ratio for each Participant and the "Actual Deferral
Percentage" for each group shall be calculated to the nearest
one-hundredth of one percent. Employer Elective Contributions
allocated to each Non-Highly Compensated Participant's Elective
Account shall be reduced by Excess Deferred Compensation to the
extent such excess amounts are made under this Plan or any other
plan maintained by the Employer.
(c) For the purposes of Sections 4.5(a) and 4.6, a Highly
Compensated Participant and a Non-Highly Compensated Participant
shall include any Employee eligible to make a deferral election
pursuant to Section 4.2, whether or not such deferral election was
made or suspended pursuant to Section 4.2.
(d) If the Plan uses the prior year testing method, the "Actual
Deferral Percentage" for the Non-Highly Compensated Participant
group is determined without regard to changes in the group of
Non-Highly Compensated Participants who are eligible under the Plan
in the testing year. However, if the Plan results from, or is
otherwise affected by, a "Plan Coverage Change" that becomes
effective during the testing year, then the "Actual Deferral
Percentage" for the Non-Highly Compensated Participant group for the
prior year is the Weighted Average Of The Actual Deferral
Percentages For The Prior Year Subgroups." Notwithstanding the
above, if ninety (90) percent or more of the total number of
Non-Highly Compensated Participants from all "Prior Year Subgroups"
are from a single "Prior Year Subgroup," then in determining the
"Actual Deferral Percentage" for the Non-Highly Compensated
Participants for the prior year, the Employer may elect to use the
"Actual Deferral Percentage" for Non-Highly Compensated Participants
for the prior year under which that single "Prior Year Subgroup" was
eligible, in lieu of using the weighted averages. For purposes of
this Section the following definitions shall apply:
(1) "Plan Coverage Change" means a change in the group or
groups of eligible Participants on account of (i) the
establishment or amendment of a plan, (ii) a plan
merger, consolidation, or spinoff under Code Section
414(1), (iii) a change in the way plans within the
meaning of Code Section 414(1) are combined or separated
for purposes of Regulation 1.401(k)-1(g)(11), or (iv) a
combination of any of the foregoing.
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(2) "Prior Year Subgroup" means all Non-Highly Compensated
Participants for the prior year who, in the prior year,
were eligible Participants under a specific Code Section
401(k) plan maintained by the Employer and who would
have been eligible Participants in the prior year under
the plan tested if the plan coverage change had first
been effective as of the first day of the prior year
instead of first being effective during the testing
year.
(3) "Weighted Average Of The Actual Deferral Percentages For
The Prior Year Subgroups" means the sum, for all prior
year subgroups, of the "Adjusted Actual Deferral
Percentages."
(4) "Adjusted Actual Deferral Percentage" with respect to a
plan year subgroup means the Actual Deferral Percentage
for Non-Highly Compensated Participants for the prior
year of the specific plan under which the members of the
prior year subgroup were eligible Participants,
multiplied by a fraction, the numerator of which is the
number of Non-Highly Compensated Participants in the
prior year subgroup and the denominator of which is the
total number of Non-Highly Compensated Participants in
all prior year subgroups.
(e) For the purposes of this Section and Code Sections 401(a)(4),
410(b) and 401(k), if two or more Plans which include cash or
deferred arrangements are considered one plan for the purposes of
Code Section 401(a)(4) or 410(b) (other than Code Section
410(b)(2)(A)(ii)), the cash or deferred arrangements included in
such plans shall be treated as one arrangement. In addition, two or
more cash or deferred arrangements may be considered as a single
arrangement for purposes of determining whether or not such
arrangements satisfy Code Sections 401(a)(4), 410(b) and 401(k). In
such a case, the cash or deferred arrangements included in such
plans and the plans including such arrangements shall be treated as
one arrangement and as one plan for purposes of this Section and
Code Sections 401(a)(4), 410(b) and 401(k). Any adjustment to the
Non-Highly Compensated Participant actual deferral ratio for the
prior year shall be made in accordance with Internal Revenue Service
Notice 98-1 and any superseding guidance. Plans may be aggregated
under this paragraph (e) only if they have the same plan year.
Notwithstanding the above, for Plan Years beginning after December
31, 1996, if two or more plans which include cash or deferred
arrangements are permissively aggregated under Regulation
1.410(b)-7(d), all plans permissively aggregated must use either the
current year testing method or the prior year testing method for the
testing year.
Notwithstanding the above, an employee stock ownership
plan described in Code Section 4975(e)(7) or 409 may not be combined
with this Plan
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for purposes of determining whether the employee stock ownership
plan or this Plan satisfies this Section and Code Sections
401(a)(4), 410(b) and 401(k).
(f) For the purposes of this Section, if a Highly Compensated
Participant is a Participant under two or more cash or deferred
arrangements (other than a cash or deferred arrangement which is
part of an employee stock ownership plan as defined in Code Section
4375(e)(7) or 409) of the Employer or an Affiliated Employer, all
such cash or deferred arrangements shall be treated as one cash or
deferred arrangement for the purpose of determining the actual
deferral ratio with respect to such Highly Compensated Participant.
However, if the cash or deferred arrangements have different plan
years, this paragraph shall be applied by treating all cash or
deferred arrangements ending with or within the same calendar year
as a single arrangement.
(g) For the purpose of this Section, when calculating the "Actual
Deferral Percentage" for the Non-Highly Compensated Participant
group, the year testing method shall be used. Any change from the
current year testing method to the prior year testing method shall
be made pursuant to Internal Revenue Service Notice 98-1, Section
VII (or superseding guidance), the provisions of which are
incorporated herein by reference.
4.6 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
In the event (or if it is anticipated) that the initial allocations of the
Employer Elective Contributions made pursuant to Section 4.4 do (or might) not
satisfy one of the tests set forth in Section 4.5(a), the Administrator shall
adjust Excess Contributions pursuant to the options set forth below:
(a) On or before the fifteenth day of the third month following the
end of each Plan Year, the Highly Compensated Participant having the
largest amount of Elective Contributions shall have a portion of his
Elective Contributions distributed to him until the total amount of
Excess Contributions has been distributed, or until the amount of
his Elective Contributions equals the Elective Contributions of the
Highly Compensated Participant having the second largest amount of
Elective Contributions. This process shall continue until the total
amount of Excess Contributions has been distributed. In determining
the amount of Excess Contributions to be distributed with respect to
an affected Highly Compensated Participant as determined herein,
such amount shall be reduced pursuant to Section 4.2(f) by any
Excess Deferred Compensation previously distributed to such affected
Highly Compensated Participant for his taxable year ending with or
within such Plan Year.
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(1) With respect to the distribution of Excess Contributions
pursuant to (a) above, such distribution:
(i) may be postponed but not later than the close of
the Plan Year following the Plan Year to which
they are allocable;
(ii) shall be adjusted for Income; and
(iii) shall be designated by the Employer as a
distribution of Excess Contributions (and Income).
(2) Any distribution of less than the entire amount of
Excess Contributions shall be treated as a pro rata
distribution of Excess Contributions and Income.
(3) Matching contributions which relate to Excess
Contributions shall be forfeited unless the related
matching contribution is distributed as an Excess
Aggregate Contribution pursuant to Section 4.8.
(b) Within twelve (12) months after the end of the Plan Year, the
Employer may make a special Qualified Non-Elective Contribution on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure of) one
of the tests set forth in Section 4.5(a). Such contribution shall be
allocated to the Participant's Elective Account of each Non-Highly
Compensated Participant in the same proportion that each Non-Highly
Compensated Participant's Compensation for the year bears to the
total Compensation of all Non-Highly Compensated Participants.
However, if the prior year testing method is used, the
special Qualified Non-Elective Contribution shall be allocated in
the prior Plan Year to the Participant's Elective Account on behalf
of each Non-Highly Compensated Participant who was employed by the
Employer on the last day of the prior Plan Year in the same
proportion that each such Non-Highly Compensated Participant's
Compensation for the prior Plan Year bears to the total Compensation
of all such Non-Highly Compensated Participants for the prior Plan
Year. Such contribution shall be made by the Employer prior to the
end of the current Plan Year.
Notwithstanding the above, if the testing method changes
from the current year testing method to the prior year testing
method, then for purposes of preventing the double counting of
Qualified Non-Elective Contributions for the first testing year to
which the change is effective, any special Qualified Non- Elective
Contribution on behalf of Non-Highly Compensated Participants used
to
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satisfy the "Actual Deferral Percentage" or "Actual Contribution
Percentage" test under the current year testing method for the prior
year testing year shall be disregarded.
(c) If during a Plan Year the projected aggregate amount of Elective
Contributions to be allocated to all Highly Compensated Participants
under this Plan would, by virtue of the tests set forth in Section
4.5(a), cause the Plan to fail such tests, then the Administrator
may automatically reduce proportionately or in the order provided in
Section 4.6(a) each affected Highly Compensated Participant's
deferral election made pursuant to Section 4.2 by an amount
necessary to satisfy one of the tests set forth in Section 4.5(a).
4.7 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) The "Actual Contribution Percentage" for the Highly Compensated
Participant group shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly
Compensated Participant group (for the preceding Plan
Year if the prior year testing method is used to
calculate the "Actual Contribution Percentage" for the
Non-Highly Compensated Participant group); or
(2) the lesser of 200 percent of such percentage for the
Non-Highly Compensated Participant group (for the
preceding Plan Year if the prior year testing method is
used to calculate the "Actual Contribution Percentage"
for the Non-Highly Compensated Participant group), or
such percentage for the Non-Highly Compensated
Participant group (for the preceding Plan Year if the
prior year testing method is used to calculate the
"Actual Contribution Percentage" for the Non-Highly
Compensated Participant group) plus 2 percentage points.
However, to prevent the multiple use of the alternative
method described in this paragraph and Code Section
401(m)(9)(A), any Highly Compensated Participant
eligible to make elective deferrals pursuant to Section
4.2 or any other cash or deferred arrangement maintained
by the Employer or an Affiliated Employer and to make
Employee contributions or to receive matching
contributions under this Plan or under any plan
maintained by the Employer or an Affiliated Employer
shall have a combination of his Elective Contributions
and Employer matching contributions reduced pursuant to
Regulation 1.401(m)-2 and Section 4.8(a). The
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42
provisions of Code Section 401(m) and Regulations
1.401(m)-1(b) and 1.401(m)-2 are incorporated herein by
reference.
Notwithstanding the above, if the prior year testing
method is used for the first Plan Year, the "Actual
Contribution Percentage" for the Non-Highly Compensated
Participant group shall be determined for such Plan
Year. However, the Plan shall not have a first Plan Year
(1) if the Plan is aggregated under Regulation
1.401(m)-1(g)(14) with any other plan that was or that
included a Code Section 401(m) plan in the prior year,
or (2) the Plan is a "successor plan" as defined in
Internal Revenue Service Notice 98- 1, Section V and any
superseding guidance.
(b) For the purposes of this Section and Section 4.8, "Actual
Contribution Percentage" for a Plan Year means, with respect to the
Highly Compensated Participant group and Non-Highly Compensated
Participant group (for the preceding Plan Year if the prior year
testing method is used to calculate the "Actual Contribution
Percentage" for the Non-Highly Compensated Participant group), the
average of the ratios (calculated separately for each Participant in
each group rounded to the nearest one-hundredth of one percent) of:
(1) the sum of Employer matching contributions made pursuant
to Section 4.1(b) on behalf of each such Participant for
such Plan Year; to
(2) the Participant's "414(s) Compensation" for such Plan
Year.
(c) For purposes of determining the "Actual Contribution
Percentage," only Employer matching contributions contributed to the
Plan prior to the end of the succeeding Plan Year shall be
considered. In addition, the Administrator may elect to take into
account, with respect to Employees eligible to have Employer
matching contributions pursuant to Section 4.1(b) allocated to their
accounts, elective deferrals (as defined in Regulation
1.402(g)-1(b)) and qualified non- elective contributions (as defined
in Code Section 401(m)(4)(C)) contributed to any plan maintained by
the Employer. Such elective deferrals and qualified non- elective
contributions shall be treated as Employer matching contributions
subject to Regulation 1.401(m)-1(b)(5) which is incorporated herein
by reference. However, the Plan Year must be the same as the plan
year of the plan to which the elective deferrals and the qualified
non-elective contributions are made.
(d) For purposes of this Section and Code Sections 401(a)(4), 410(b)
and 401(m), if two or more plans of the Employer to which matching
contributions, Employee contributions, or both, are made are treated
as one plan for purposes of
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Code Sections 401(a)(4) or 410(b) (other than the average benefits
test under Code Section 410(b)(2)(A)(ii)), such plans shall be
treated as one plan. In addition, two or more plans of the Employer
to which matching contributions, Employee contributions, or both,
are made may be considered as a single plan for purposes of
determining whether or not such plans satisfy Code Sections
401(a)(4), 410(b) and 401(m). In such a case, the aggregated plans
must satisfy this Section and Code Sections 401(a)(4), 410(b) and
401(m) as though such aggregated plans were a single plan. Any
adjustment to the Non-Highly Compensated Participant actual
contribution ratio for the prior year shall be made in accordance
with Internal Revenue Service Notice 98-1 and any superseding
guidance. Plans may be aggregated under this paragraph (e) only if
they have the same plan year. Notwithstanding the above, for Plan
Years beginning after December 31, 1996, if two or more plans which
include cash or deferred arrangements are permissively aggregated
under Regulation l.410(b)-7(d), all plans permissively aggregated
must use either the current year testing method or the prior year
testing method for the testing year.
Notwithstanding the above, an employee stock ownership
plan described in Code Section 4975(e)(7) or 409 may not be
aggregated with this Plan for purposes of determining whether the
employee stock ownership plan or this Plan satisfies this Section
and Code Sections 401(a)(4), 410(b) and 401(m).
(e) If a Highly Compensated Participant is a Participant under two
or more plans (other than an employee stock ownership plan as
defined in Code Section 4975(e)(7) or 409) which are maintained by
the Employer or an Affiliated Employer to which matching
contributions, Employee contributions, or both, are made, all such
contributions on behalf of such Highly Compensated Participant shall
be aggregated for purposes of determining such Highly Compensated
Participant's actual contribution ratio. However, if the plans have
different plan years, this paragraph shall be applied by treating
all plans ending with or within the same calendar year as a single
plan.
(f) For purposes of Sections 4.7(a) and 4.8, a Highly Compensated
Participant and Non-Highly Compensated Participant shall include any
Employee eligible to have Employer matching contributions (whether
or not a deferral election was made or suspended) or voluntary
employee contributions (whether or not voluntary employee
contributions are made) allocated to his account for the Plan Year.
(g) If the Plan uses the Prior year testing method, the "Actual
Contribution Percentage" for the Non-Highly Compensated Participant
group is determined without regard to changes in the group of
Non-Highly Compensated Participants who are eligible under the Plan
in the testing year. However, the Plan results from,
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or is otherwise affected by, a "Plan Coverage Change" that becomes
effective during the testing year, then the "Actual Contribution
Percentage" for the Non- Highly Compensated Participant group for
the prior year is the "Weighted Average Of The Actual Contribution
Percentages For The Prior Year Subgroups." Notwithstanding the
above, if ninety (90) percent or more of the total number of
Non-Highly Compensated Participants from all "Prior Year Subgroups"
are from a single "Prior Year Subgroup," then in determining the
"Actual Contribution Percentage" for the Non-Highly Compensated
Participants for the prior year, the Employer may elect to use the
"Actual Contribution Percentage" for Non-Highly Compensated
Participants for the prior year under which that single "Prior Year
Subgroup" was eligible, in lieu of using the weighted averages. For
purposes of this Section the following definitions shall apply:
(1) "Plan Coverage Change" means a change in the group or
groups of eligible Participants on account of (i) the
establishment or amendment of a plan, (ii) a plan
merger, consolidation, or spinoff under Code Section
414(1), (iii) a change in the way plans within the
meaning of Code Section 414(1) are combined or separated
for purposes of Regulation 1.401(k)-1(g)(11), or (iv) a
combination of any of the foregoing.
(2) "Prior Year Subgroup" means all Non-Highly Compensated
Participants for the prior year who, in the prior year,
were eligible Participants under a specific Code Section
401(m) plan maintained by the Employer and who would
have been eligible Participants in the prior year under
the plan tested if the plan coverage change had first
been effective as of the first day of the prior year
instead of first being effective during the testing
year.
(3) "Weighted Average Of The Actual Contribution Percentages
For The Prior Year Subgroups" means the sum, for all
prior year subgroups, of the "Adjusted Actual
Contribution Percentages."
(4) "Adjusted Actual Contribution Percentage" with respect
to a prior year subgroup means the Actual Contribution
Percentage for Non- Highly Compensated Participants for
the prior year of the specific plan under which the
members of the prior year subgroup were eligible
Participants, multiplied by a fraction, the numerator of
which is the number of Non-Highly Compensated
Participants in the prior year subgroup and the
denominator of which is the total number of Non-Highly
Compensated Participants in all prior year subgroups.
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(h) For the purpose of this Section, when calculating the "Actual
Contribution Percentage" for the Non-Highly Compensated Participant
group, the year testing method shall be used. Any change from the
current year testing method to the prior year testing method shall
be made pursuant to Internal Revenue Service Notice 98-1, Section
VII (or superseding guidance), the provisions of which are
incorporated herein by reference.
4.8 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event (or if it is anticipated) that the "Actual
Contribution Percentage" for the Highly Compensated Participant
group exceeds (or might exceed) the "Actual Contribution Percentage"
for the Non-Highly Compensated Participant group pursuant to Section
4.7(a), the Administrator (on or before the fifteenth day of the
third month following the end of the Plan Year, but in no event
later than the close of the following Plan Year) shall direct the
Trustee to distribute to the Highly Compensated Participant having
the largest amount of contributions determined pursuant to Section
4.7(b)(2), his Vested portion of such contributions (and Income
allocable to such contributions) and, if forfeitable, forfeit such
non-Vested Excess Aggregate Contributions attributable to Employer
matching contributions (and Income allocable to such forfeitures)
until the total amount of Excess Aggregate Contributions has been
distributed, or until his remaining amount equals the amount of
contributions determined pursuant to Section 4.7(b)(2) of the Highly
Compensated Participant having the second largest amount of
contributions. This process shall continue until the total amount of
Excess Aggregate Contributions has been distributed.
If the correction of Excess Aggregate Contributions
attributable to Employer matching contributions is not in proportion
to the Vested and non- Vested portion of such contributions, then
the Vested portion of the Participant's Account attributable to
Employer matching contributions after the correction shall be
subject to Section 6.5(f).
(b) Any distribution and/or forfeiture of less than the entire
amount of Excess Aggregate Contributions (and Income) shall be
treated as a pro rata distribution and/or forfeiture of Excess
Aggregate Contributions and Income. Distribution of Excess Aggregate
Contributions shall be designated by the Employer as a distribution
of Excess Aggregate Contributions (and Income). Forfeitures of
Excess Aggregate Contributions shall be treated in accordance with
Section 4.4.
(c) Excess Aggregate Contributions, including forfeited matching
contributions, shall be treated as Employer contributions for
purposes of Code Sections 404 and 415 even if distributed from the
Plan.
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46
Forfeited matching contributions that are reallocated to
Participants' Accounts for the Plan Year in which the forfeiture
occurs shall be treated as an "annual addition" pursuant to Section
4.9(b) for the Participants to whose Accounts they are reallocated
and for the Participants from whose Accounts they are forfeited.
(d) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after
first determining the Excess Contributions, if any, to be treated as
voluntary Employee contributions due to recharacterization for the
plan year of any other qualified cash or deferred arrangement (as
defined in Code Section 401(k)) maintained by the Employer that ends
with or within the Plan Year.
(e) If during a Plan Year the projected aggregate amount of Employer
matching contributions to be allocated to all Highly Compensated
Participants under this Plan would, by virtue of the tests set forth
in Section 4.7(a), cause the Plan to fail such tests, then the
Administrator may automatically reduce proportionately or in the
order provided in Section 4.8(a) each affected Highly Compensated
Participant's projected share of such contributions by an amount
necessary to satisfy one of the tests set forth in Section 4.7(a).
(f) Notwithstanding the above, within twelve (12) months after the
end of the Plan Year, the Employer may make a special Qualified
Non-Elective Contribution on behalf of Non-Highly Compensated
Participants in an amount sufficient to satisfy (or to prevent an
anticipated failure of) one of the tests set forth in Section
4.7(a). Such contribution shall be allocated to the Participant's
Account of Non- Highly Compensated Participant in the same
proportion that each Non-Highly Compensated Participant's
Compensation for the Plan Year bears to the total Compensation of
all Non-Highly Compensated Participants for the Plan Year. A
separate accounting of any special Qualified Non-Elective
Contribution shall be maintained in the Participant's Account.
However, if the prior year testing method is used, the
special Qualified Non-Elective Contribution shall be allocated in
the prior Plan Year to the Participant's Account on behalf of each
Non-Highly Compensated Participant who was employed by the Employer
on the last day of the prior Plan Year in the same proportion that
each such Non-Highly Compensated Participant's Compensation for the
prior Plan Year bears to the total Compensation of all such
Non-Highly Compensated Participants for the prior Plan Year. Such
contribution shall be made by the Employer prior to the end of the
current Plan Year. A separate accounting of any special Qualified
Non-Elective Contributions shall be maintained in the Participant's
Account.
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Notwithstanding the above, if the testing method changes
from the current year testing method to the prior year testing
method, then for purposes of preventing the double counting of
Qualified Non-Elective Contributions for the first testing year for
which the change is effective, any special Qualified Non- Elective
Contribution on behalf of Non-Highly Compensated Participants used
to satisfy the "Actual Deferral Percentage" or "Actual Contribution
Percentage" test under the current year testing method for the prior
year testing year shall be disregarded.
4.9 MAXIMUM ANNUAL ADDITIONS
(a) Notwithstanding the foregoing, the maximum "annual additions"
credited to a Participant's accounts for any "limitation year" shall
equal the lesser of: (1) $30,000 adjusted annually as provided in
Code Section 415(d) pursuant to the Regulations, or (2) twenty-five
percent (25%) of the Participant's "415 Compensation" for such
"limitation year." For any short "limitation year," the dollar
limitation in (1) above shall be reduced by a fraction, the
numerator of which is the number of full months in the short
"limitation year" and the denominator of which is twelve (12).
(b) For purposes of applying the limitations of Code Section 415,
"annual additions" means the sum credited to a Participant's
accounts for any "limitation year" of (1) Employer contributions,
(2) Employee contributions, (3) forfeitures, (4) amounts allocated,
after March 31, 1984, to an individual medical account, as defined
in Code Section 415(1)(2) which is part of a pension or annuity plan
maintained by the Employer and (5) 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 plan (as defined in Code Section 419(e)) maintained
by the Employer. Except, however, the "415 Compensation" percentage
limitation referred to in paragraph (a)(2) above shall not apply to:
(1) any contribution for medical benefits (within the meaning of
Code Section 419A(f)(2)) after separation from service which is
otherwise treated as an "annual addition," or (2) any amount
otherwise treated as an "annual addition" under Code Section
415(1)(1).
(c) For purposes of applying the limitations of Code Section 415,
the transfer of funds from one qualified plan to another is not an
"annual addition." In addition, the following are not Employee
contributions for the purposes of Section 4.9(b)(2): (1) rollover
contributions (as defined in Code Sections 402(e)(6), 403(a)(4);
403(b)(8) and 408(d)(3)); (2) repayments of loans made to a
Participant from the Plan; (3) repayments of distributions received
by an Employee pursuant to Code Section 411(a)(7)(B) (cash-outs);
(4) repayments of distributions received
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by an Employee pursuant to Code Section 411(a)(3)(D) (mandatory
contributions); and (5) Employee contributions to a simplified
employee pension excludable from gross income under Code Section
408(k)(6).
(d) For purposes of applying the limitations of Code Section 415,
the "limitation year" shall be the Plan Year.
(e) For the purpose of this Section, all qualified defined benefit
plans (whether terminated or not) ever maintained by the Employer
shall be treated as one defined benefit plan, and all qualified
defined contribution plans (whether terminated or not) ever
maintained by the Employer shall be treated as one defined
contribution plan.
(f) For the purpose of this Section, if the Employer is a member of
a controlled group of corporations, trades or businesses under
common control (as defined by Code Section 1563(a) or Code Section
414(b) and (c) as modified by Code Section 415(h)), is a member of
an affiliated service group (as defined by Code Section 414(m)), or
is a member of a group of entities required to be aggregated
pursuant to Regulations under Code Section 414(o), all Employees of
such Employers shall be considered to be employed by a single
Employer.
(g) For the purpose of this Section, if this Plan is a Code Section
413(c) plan, each Employer who maintains this Plan will be
considered to be a separate Employer.
(h)(1)If a Participant participates in more than one defined
contribution plan maintained by the Employer which have different
Anniversary Dates, the maximum "annual additions" under this Plan
shall equal the maximum "annual additions" for the "limitation year"
minus any "annual additions" previously credited to such
Participant's accounts during the "limitation year."
(2) If a Participant participates in both a defined
contribution plan subject to Code Section 412 and a
defined contribution plan not subject to Code Section
412 maintained by the Employer which have the same
Anniversary Date, "annual additions" will be credited to
the Participant's accounts under the defined
contribution plan subject to Code Section 412 prior to
crediting "annual additions" to the Participant's
accounts under the defined contribution plan not subject
to Code Section 412.
(3) If a Participant participates in more than one defined
contribution plan not subject to Code Section 412
maintained by the Employer which have the same
Anniversary Date, the maximum "annual
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49
additions" under this Plan shall equal the product of
(A) the maximum "annual additions" for the "limitation
year" minus any "annual additions" previously credited
under subparagraphs (1) or (2) above, multiplied by (B)
a fraction (i) the numerator of which is the "annual
additions" which would be credited to such Participant's
accounts under this Plan without regard to the
limitations of Code Section 415 and (ii) the denominator
of which is such "annual additions" for all plans
described in this subparagraph.
(i) If an Employee is (or has been) a Participant in one or more
defined benefit plans and one or more defined contribution plans
maintained by the Employer, the sum of the defined benefit plan
fraction and the defined contribution plan fraction for any
"limitation year" may not exceed 1.0.
(j) The defined benefit plan fraction for any "limitation year" is a
fraction, the numerator of which is the sum of the Participant's
projected annual benefits under all the defined benefit plans
(whether or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent of the dollar
limitation determined for the "limitation year" under Code Sections
415(b) and (d) or 140 percent of the highest average compensation,
including any adjustments under Code Section 415(b).
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first "limitation year"
beginning after 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 close of the last "limitation
year" beginning before January 1, 1987, disregarding any changes in
the terms and conditions of the plan after May 5, 1986. The
preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements of Code
Section 415 for all "limitation years" beginning before January 1,
1987.
(k) The defined contribution plan fraction for any "limitation year"
is a fraction, the numerator of which is the sum of the annual
additions to the Participant's Account under all the defined
contribution plans (whether or not terminated) maintained by the
Employer for the current and all prior "limitation years" (including
the annual additions attributable to the Participant's nondeductible
Employee contributions to all defined benefit plans, whether or not
terminated, maintained by the Employer, and the annual additions
attributable to all welfare benefit funds, as defined in Code
Section 419(e), and individual medical accounts, as defined in Code
Section 415(1)(2), maintained by the
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50
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 Code Section 415 limitation
applicable to the first "limitation year" beginning on or after
January 1, 1987. The annual addition for any "limitation year"
beginning before January 1, 1987 shall not be recomputed to treat
all Employee contributions as annual additions.
(1) Notwithstanding the foregoing, for any "limitation year" in
which the Plan is a Top Heavy Plan, 100 percent shall be substituted
for 125 percent in Sections 4.9(j) and 4.9(k).
(m) If the sum of the defined benefit plan fraction and the defined
contribution plan fraction shall exceed 1.0 in any "limitation year"
for any Participant in this Plan, the Administrator shall adjust the
numerator of the defined benefit plan fraction so that the sum of
both fractions shall not exceed 1.0 in any "limitation year" for
such Participant.
(n) Notwithstanding anything contained in this Section to the
contrary, the limitations, adjustments and other requirements
prescribed in this Section shall at all times comply with the
provisions of Code Section 415 and the Regulations thereunder, the
terms of which are specifically incorporated herein by reference.
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4.10 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
(a) If, as a result of a reasonable error in estimating a
Participant's Compensation, a reasonable error in determining the
amount of elective deferrals (within the meaning of Code Section
402(g)(3)) that may be made with respect to any Participant under
the limits of Section 4.9 or other facts and circumstances to which
Regulation 1.415-6(b)(6) shall be applicable, the "additions" under
this Plan would cause the maximum "annual additions" to be exceeded
for any Participant, the Administrator shall (1) distribute any
elective deferrals (within the meaning of Code Section 402(g)(3)) or
return any Employee contributions (whether voluntary or mandatory),
and for the distribution of gains attributable to those elective
deferrals and Employee contributions, to the extent that the
distribution or return would reduce the "excess amount" in the
Participant's accounts (2) hold any "excess amount" remaining after
the return of any elective deferrals or voluntary Employee
contributions in a "Section 415 suspense account" (3) use the
"Section 415 suspense account" in the next "limitation year" (and
succeeding "limitation years" if necessary) to reduce Employer
contributions for that Participant if that Participant is covered by
the Plan as of the end of the "limitation year," or if the
Participant is not so covered, allocate and reallocate the "Section
415 suspense account" in the next "limitation year" (and succeeding
"limitation years" if necessary) to all Participants in the Plan
before any Employer or Employee contributions which would constitute
"annual additions" are made to the Plan for such "limitation year"
(4) reduce Employer contributions to the Plan for such "limitation
year" by the amount of the "Section 415 suspense account" allocated
and reallocated during such "limitation year."
(b) For purposes of this Article, "excess amount" for any
Participant for a "limitation year" shall mean the excess, if any,
of (1) the "annual additions" which would be credited to his account
under the terms of the Plan without regard to the limitations of
Code Section 415 over (2) the maximum "annual additions" determined
pursuant to Section 4.9.
(c) For purposes of this Section, "Section 415 suspense account"
shall mean an unallocated account equal to the sum of "excess
amounts" for all Participants in the Plan during the "limitation
year." The "Section 415 suspense account" shall not share in any
earnings or losses of the Trust Fund.
4.11 TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be
transferred from other qualified plans by Participants, provided
that the trust from which such funds are transferred permits the
transfer to be made and the transfer will not jeopardize the tax
exempt status of the Plan or Trust or create adverse tax
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52
consequences for the Employer. The amounts transferred shall be set
up in a separate account herein referred to as a "Participant's
Rollover Account." Such account shall be fully Vested at all times
and shall not be subject to Forfeiture for any reason.
(b) Amounts in a Participant's Rollover Account shall be held by the
Trustee pursuant to the provisions of this Plan and may not be
withdrawn by, or distributed to the Participant, in whole or in
part, except as provided in paragraphs (c) and (d) of this Section.
(c) Except as permitted by Regulations (including Regulation
1.411(d)-4), amounts attributable to elective contributions (as
defined in Regulation 1.401(k)- 1(g)(3)), including amounts treated
as elective contributions, which are transferred from another
qualified plan in a plan-to-plan transfer shall be subject to the
distribution limitations provided for in Regulation 1.401(k)-1(d).
(d) The Administrator, at the election of the Participant, shall
direct the Trustee to distribute all or a portion of the amount
credited to the Participant's Rollover Account. Any distributions of
amounts held in a Participant's Rollover Account shall be made in a
manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Section 411(a)(11) and the Regulations
thereunder. Furthermore, such amounts shall be considered as part of
a Participant's benefit in determining whether an involuntary
cash-out of benefits without Participant consent may be made.
(e) The Administrator may direct that employee transfers made after
a Valuation Date be segregated into a separate account for each
Participant in a federally insured savings account, certificate of
deposit in a bank or savings and loan association, money market
certificate or other short term debt security acceptable to the
Trustee until such time as the allocations pursuant to this Plan
have been made, at which time they may remain segregated or be
invested as part of the general Trust Fund, to be determined by the
Administrator.
(f) For purposes of this Section, the term "qualified plan" shall
mean any tax qualified plan under Code Section 401(a). The term
"amounts transferred from other qualified plans" shall mean: (i)
amounts transferred to this Plan directly from another qualified
plan; (ii) distributions from another qualified plan which are
eligible rollover distributions and which are either transferred by
the Employee to this Plan within sixty (60) days following his
receipt thereof or are transferred pursuant to a direct rollover;
(iii) amounts transferred to this Plan from a conduit individual
retirement account provided that the conduit individual retirement
account has no assets other than assets which (A) were previously
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53
distributed to the Employee by another qualified plan as a lump-sum
distribution (B) were eligible for tax-free rollover to a qualified
plan and (C) were deposited in such conduit individual retirement
account within sixty (60) days of receipt thereof and other than
earnings on said assets; and (iv) amounts distributed to the
Employee from a conduit individual retirement account meeting the
requirements of clause (iii) above, and transferred by the Employee
to this Plan within sixty (60) days of his receipt thereof from such
conduit individual retirement account.
(g) Prior to accepting any transfers to which this Section applies,
the Administrator may require the Employee to establish that the
amounts to be transferred to this Plan meet the requirements of this
Section and may also require the Employee to provide an opinion of
counsel satisfactory to the Employer that the amounts to be
transferred meet the requirements of this Section.
(h) This Plan shall not accept any direct or indirect transfers (as
that term is defined and interpreted under Code Section 401(a)(11)
and the Regulations thereunder) from a defined benefit plan, money
purchase plan (including a target benefit plan) stock bonus or
profit sharing plan which would otherwise have provided for a life
annuity form of payment to the Participant.
(i) Notwithstanding anything herein to the contrary, a transfer
directly to this Plan from another qualified plan (or a transaction
having the effect of such a transfer) shall only be permitted if it
will not result in the elimination or reduction of any "Section
411(d)(6) protected benefit" as described in Section 8.1.
4.12 DIRECTED INVESTMENT ACCOUNT
(a) Participants may, subject to a procedure established by the
Administrator (the Participant Direction Procedures) and applied in
a uniform nondiscriminatory manner, direct the Trustee to invest all
of their accounts in specific assets, specific funds or other
investments permitted under the Plan and the Participant Direction
Procedures. That portion of the interest of any Participant so
directing will thereupon be considered a Participant's Directed
Account.
(b) As of each Valuation Date, all Participant Directed Accounts
shall be charged or credited with the net earnings, gains, losses
and expenses as well as any appreciation or depreciation in the
market value using publicly listed fair market values when available
or appropriate.
(1) To the extent that the assets in a Participant's
Directed Account are accounted for as pooled assets or
investments, the allocation of earnings, gains and
losses of each Participant's Directed Account shall be
based upon the total amount of funds so invested, in a
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manner proportionate to the Participant's share of such
pooled investment.
(2) To the extent that the assets in the Participant's
Directed Account are accounted for as segregated assets,
the allocation of earnings, gains and losses from such
assets shall be made on a separate and distinct basis.
(c) The Participant Direction Procedures shall provide an
explanation of the circumstances under which Participants and their
Beneficiaries may give investment instructions, including, but need
not be limited to, the following:
(1) the conveyance of instructions by the Participants and
their Beneficiaries to invest Participant Directed
Accounts in Directed Investments;
(2) the name, address and phone number of the Fiduciary
(and, if applicable, the person or persons designated by
the Fiduciary to act on its behalf) responsible for
providing information to the Participant or a
Beneficiary upon request relating to the investments in
Directed Investments;
(3) applicable restrictions on transfers to and from any
Designated Investment Alternative;
(4) any restrictions on the exercise of voting, tender and
similar rights related to a Directed Investment by the
Participants or their Beneficiaries;
(5) a description of any transaction fees and expenses which
affect the balances in Participant Directed Accounts in
connection with the purchase or sale of Directed
Investments; and
(6) general procedures for the dissemination of investment
and other information relating to the Designated
Investment Alternatives as deemed necessary or
appropriate, including but not limited to a description
of the following:
(i) the investment vehicles available under the Plan,
including specific information regarding any Designated
Investment Alternative;
(ii) any designated Investment Managers; and
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(iii) a description of the additional information which
may be obtained upon request from the Fiduciary
designated to provide such information.
(d) Any information regarding investments available under the Plan,
to the extent not required to be described in the Participant
Direction Procedures, may be provided to the Participant in one or
more written documents which are separate from the Participant
Direction Procedures and are not thereby incorporated by reference
into this Plan.
(e) The Administrator may, at its discretion, include in or exclude
by amendment or other action from the Participant Direction
Procedures such instructions, guidelines or policies as it deems
necessary or appropriate to ensure proper administration of the
Plan, and may interpret the same accordingly.
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each Valuation
Date, to determine the net worth of the assets comprising the Trust Fund as it
exists on the Valuation Date. In determining such net worth, the Trustee shall
value the assets comprising the Trust Fund at their fair market value as of the
Valuation Date and shall deduct all expenses for which the Trustee has not yet
obtained reimbursement from the Employer or the Trust Fund. The Trustee may
update the value of any shares held in the Participant Directed Account by
reference to the number of shares held by that Participant, priced at the market
value as of the Valuation Date.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the Trust
Fund which are listed on a registered stock exchange, the Administrator shall
direct the Trustee to value the same at the prices they were last traded on such
exchange preceding the close of business on the Valuation Date. If such
securities were not traded on the Valuation Date, or if the exchange on which
they are traded was not open for business on the Valuation Date, then the
securities shall be valued at the prices at which they were last traded prior to
the Valuation Date. Any unlisted security held in the Trust Fund shall be valued
at its bid price next preceding the close of business on the Valuation Date,
which bid price shall be obtained from a registered broker or an investment
banker. In determining the fair market value of assets other than securities for
which trading or bid prices can be obtained, the Trustee may appraise such
assets itself, or in its discretion, employ one or more appraisers for that
purpose and rely on the values established by such appraiser or appraisers.
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ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate his employment with the Employer and
retire for the purposes hereof on his Normal Retirement Date. However, a
Participant may postpone the termination of his employment with the Employer to
a later date, in which event the participation of such Participant in the Plan,
including the right to receive allocations pursuant to Section 4.4, shall
continue until his Late Retirement Date. Upon a Participant's Retirement Date or
attainment of his Normal Retirement Date without termination of employment with
the Employer, or as soon thereafter as practicable, the Trustee shall
distribute, at the election of the Participant, all amounts credited to such
Participant's Combined Account in accordance with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before his Retirement Date or
other termination of his employment, all amounts credited to such
Participant's Combined Account shall become fully Vested. The
Administrator shall direct the Trustee, in accordance with the
provisions of Sections 6.6 and 6.7, to distribute the value of the
deceased Participant's accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the Administrator shall
direct the Trustee, in accordance with the provisions of Sections
6.6 and 6.7, to distribute any remaining Vested amounts credited to
the accounts of a deceased Former Participant to such Former
Participant's Beneficiary.
(c) Any security interest held by the Plan by reason of an
outstanding loan to the Participant or Former Participant shall be
taken into account in determining the amount of the death benefit.
(d) The Administrator may require such proper proof of death and
such evidence of the right of any person to receive payment of the
value of the account of a deceased Participant or Former Participant
as the Administrator may deem desirable. The Administrator's
determination of death and of the right of any person to receive
payment shall be conclusive.
(e) The Beneficiary of the death benefit payable pursuant to this
Section shall be the Participant's spouse. Except, however, the
Participant may designate a Beneficiary other than his spouse if:
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(1) the spouse has waived the right to be the Participant's
Beneficiary, or
(2) the Participant is legally separated or has been
abandoned (within the meaning of local law) and the
Participant has a court order to such effect (and there
is no "qualified domestic relations order" as defined in
Code Section 414(p) which provides otherwise), or
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall be
made on a form satisfactory to the Administrator. A Participant may
at any time revoke his designation of a Beneficiary or change his
Beneficiary by filing written notice of such revocation or change
with the Administrator. However, the Participant's spouse must again
consent in writing to any change in Beneficiary unless the original
consent acknowledged that the spouse had the right to limit consent
only to a specific Beneficiary and that the spouse voluntarily
elected to relinquish such right. In the event no valid designation
of Beneficiary exists at the time of the Participant's death, the
death benefit shall be payable to his estate.
(f) Any consent by the Participant's spouse to waive any rights to
the death benefit must be in writing, must acknowledge the effect of
such waiver, and be witnessed by a Plan representative or a notary
public. Further, the spouse's consent must be irrevocable and must
acknowledge the specific nonspouse Beneficiary.
6.3 DISABILITY RETIREMENT BENEFITS
No disability benefits, other than those payable upon termination of
employment, are provided in this Plan.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) If a Participant's employment with the Employer is terminated
for any reason other than death or retirement, such Participant
shall be entitled to such benefits as are provided hereinafter
pursuant to this Section 6.4.
Distribution of the funds due to a Terminated
Participant shall be made on the occurrence of an event which would
result in the distribution had the Terminated Participant remained
in the employ of the Employer (upon the Participants death or Normal
Retirement). However, at the election of the
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Participant, the Administrator shall direct the Trustee to cause the
entire Vested portion of the Terminated Participant's Combined
Account to be payable to such Terminated Participant. Any
distribution under this paragraph shall be made in a manner which is
consistent with and satisfies the provisions of Section 6.5,
including, but not limited to, all notice and consent requirements
of Code Section 411(a)(11) and the Regulations thereunder.
If the value of a Terminated Participant's Vested
benefit derived from Employer and Employee contributions does not
exceed $5,000, the Administrator shall direct the Trustee to cause
the entire Vested benefit to be paid to such Participant in a single
lump sum.
For purposes of this Section 6.4, if the value of a
Terminated Participant's Vested benefit is zero, the Terminated
Participant shall be deemed to have received a distribution of such
Vested benefit.
(b) The Vested portion of any Participant's Account shall be a
percentage of the total amount credited to his Participant's Account
determined on the basis of the Participant's number of Years of
Service according to the following schedule:
Vesting Schedule
Years of Service Percentage
Less than 3 0%
3 100%
(c) Notwithstanding the vesting schedule above, upon the
complete discontinuance of the Employer contributions to the
Plan or upon any full or partial termination of the Plan, all
amounts credited to the account of any affected Participant
shall become 100% Vested and shall not thereafter be subject to
Forfeiture.
(d) The computation of a Participant's nonforfeitable percentage
of his interest in the Plan shall not be reduced as the result
of any direct or indirect amendment to this Plan. For this
purpose, the Plan shall be treated as having been amended if the
Plan provides for an automatic change in vesting due to a change
in top heavy status. In the event that the Plan is amended to
change or modify any vesting schedule, a Participant with at
least three (3) Years of Service as of the expiration date of
the election period may elect to have his nonforfeitable
percentage computed under the Plan without regard to such
amendment. If a Participant fails to make such election, then
such Participant shall be subject to the new vesting schedule.
The Participant's election period
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shall commence on the adoption date of the amendment and shall
end 60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of the
amendment from the Employer or Administrator.
(e)(1) If any Former Participant shall be reemployed by the
Employer before a 1-Year Break in Service occurs, he
shall continue to participate in the Plan in the same
manner as if such termination had not occurred.
(2) If any Former Participant shall be reemployed by the
Employer before five (5) consecutive 1-Year Breaks in
Service, and such Former Participant had received, or
was deemed to have received, a distribution of his
entire Vested interest prior to his reemployment, his
forfeited account shall be reinstated only if he repays
the full amount distributed to him before the earlier of
five (5) years after the first date on which the
Participant is subsequently reemployed by the Employer
or the close of the first period of five (5) consecutive
1-Year Breaks in Service commencing after the
distribution, or in the event of a deemed distribution,
upon the reemployment of such Former Participant. In the
event the Former Participant does repay the full amount
distributed to him, or in the event of a deemed
distribution, the undistributed portion of the
Participant's Account must be restored in full,
unadjusted by any gains or losses occurring subsequent
to the Valuation Date coinciding with or preceding his
termination. The source for such reinstatement shall
first be any Forfeitures occurring during the year. If
such source is insufficient, then the Employer shall
contribute an amount which is sufficient to restore any
such forfeited Accounts.
(3) If any Former Participant is reemployed after a 1-Year
Break in Service has occurred, Years of Service shall
include Years of Service prior to his 1-Year Break in
Service subject to the following rules:
(i) If a Former Participant has a 1-Year Break in
Service, his pre-break and post-break service
shall be used for
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computing Years of Service for eligibility and for
vesting purposes only after he has been employed
for one (1) Year of Service following the date of
his reemployment with the Employer;
(ii) Any Former Participant who under the Plan does not
have a nonforfeitable right to any interest in the
Plan resulting from Employer contributions shall
lose credits otherwise allowable under (i) above
if his consecutive 1-Year Breaks in Service equal
or exceed the greater of (A) five (5) or (B) the
aggregate number of his pre-break Years of
Service;
(iii) After five (5) consecutive 1-Year Breaks in
Service, a Former Participant's Vested Account
balance attributable to pre-break service shall
not be increased as a result of post- break
service;
(iv) If a Former Participant is reemployed by the
Employer, he shall participate in the Plan
immediately on his date of reemployment;
(v) If a Former Participant (a 1-Year Break in Service
previously occurred, but employment had not
terminated) is credited with an Hour of Service
after the first eligibility computation period in
which he incurs a 1-Year Break in Service, he
shall participate in the Plan immediately.
(f) In determining Years of Service for purposes of vesting
under the Plan, Years of Service prior to the vesting computation
period in which an Employee attained his eighteenth birthday shall
be excluded.
6.5 DISTRIBUTION OF BENEFITS
(a) The Administrator, pursuant to the election of the
Participant, shall direct the Trustee to distribute to a Participant
or his Beneficiary any amount to which he is entitled under the Plan
in one lump-sum payment in cash or in property.
(b) Any distribution to a Participant who has a benefit which
exceeds $5,000 shall require such Participant's consent if such
distribution occurs prior to the later of his Normal Retirement Age
or age 62. With regard to this required consent:
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(1) The Participant must be informed of his right to defer
receipt of the distribution. If a Participant fails to
consent, it shall be deemed an election to defer the
distribution of any benefit. However, any election to
defer the receipt of benefits shall not apply with
respect to distributions which are required under
Section 6.5(c).
(2) Notice of the rights specified under this paragraph
shall be provided no less than 30 days and no more than
90 days before the date the distribution commences.
(3) Consent of the Participant to the distribution must not
be made before the Participant receives the notice and
must not be made more than 90 days before the date the
distribution commences.
(4) No consent shall be valid if a significant detriment is
imposed under the Plan on any Participant who does not
consent to the distribution.
Any such distribution may commence less than 30 days
after the notice required under Regulation l.411(a)-11(c) is
given, provided that: (1) the Administrator clearly informs the
Participant that the Participant has a right to a period of at
least 30 days after receiving the notice to consider the
decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and (2) the
Participant, after receiving the notice, affirmatively elects a
distribution.
(c) Notwithstanding any provision in the Plan to the contrary,
the distribution of a Participant's benefits shall be made in
accordance with the following requirements and shall otherwise
comply with Code Section 401(a)(9) and the Regulations thereunder
(including Regulation 1.401(a)(9)-2), the provisions of which are
incorporated herein by reference:
(1) A Participant's benefits shall be distributed or must
begin to be distributed to him not later than April 1st
of the calendar year following the later of (i) the
calendar year in which the Participant attains age 70
1/2 or (ii) the calendar year in which the Participant
retires, provided, however, that this clause (ii) shall
not apply in the case of a Participant who is a "five
(5) percent owner" at any time during the Plan Year
ending with or within the calendar year in which such
owner attains age 70 1/2. Such distributions shall be
equal to or greater than any required distribution.
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(2) Distributions to a Participant and his Beneficiaries
shall only be made in accordance with the incidental
death benefit requirements of Code Section 401(a)(9)(G)
and the Regulations thereunder.
(d) For purposes of this Section, the life expectancy of a
Participant and a Participant's spouse may, at the election of the
Participant or the Participant's spouse, be redetermined in
accordance with Regulations. The election, once made, shall be
irrevocable. If no election is made by the time distributions must
commence, then the life expectancy of the Participant and the
Participant's spouse shall not be subject to recalculation. Life
expectancy and joint and last survivor expectancy shall be computed
using the return multiples in Tables V and VI of Regulation 1.72-9.
(e) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of any
annuity Contract purchased and distributed to a Participant or
spouse shall comply with all of the requirements of the Plan.
(f) If a distribution is made at a time when a Participant is
not fully Vested in his Participant's Account and the Participant
may increase the Vested percentage in such account:
(1) a separate account shall be established for the
Participant's interest in the Plan as of the time of the
distribution; and
(2) at any relevant time, the Participant's Vested portion
of the separate account shall be equal to an amount
("X") determined by the formula:
X equals P(AB plus (R x D)) - (R x D)
For purposes of applying the formula: P is the Vested percentage
at the relevant time, AB is the account balance at the relevant
time, D is the amount of distribution, and R is the ratio of the
account balance at the relevant time to the account balance
after distribution.
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) The death benefit payable pursuant to Section 6.2 shall be
paid to the Participant's Beneficiary in one lump-sum payment in
cash or in property subject to the rules of Section 6.6(b).
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(b) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant shall be made in
accordance with the following requirements and shall otherwise
comply with Code Section 401(a)(9) and the Regulations thereunder.
If it is determined pursuant to Regulations that the distribution of
a Participant's interest has begun and the Participant dies before
his entire interest has been distributed to him, the remaining
portion of such interest shall be distributed at least as rapidly as
under the method of distribution selected pursuant to Section 6.5 as
of his date of death. If a Participant dies before he has begun to
receive any distributions of his interest under the Plan or before
distributions are deemed to have begun pursuant to Regulations, then
his death benefit shall be distributed to his Beneficiaries by
December 31st of the calendar year in which the fifth anniversary of
his date of death occurs.
However, the 5-year distribution requirement of the preceding
paragraph shall not apply to any portion of the deceased
Participant's interest which is payable to or for the benefit of a
designated Beneficiary. In such event, such portion may, at the
election of the Participant (or the Participant's designated
Beneficiary) be distributed over a period not extending beyond the
life expectancy of such designated Beneficiary provided such
distribution begins not later than December 31st of the calendar
year immediately following the calendar year in which the
Participant died. However, in the event the Participant's spouse
(determined as of the date of the participant's death) is his
Beneficiary, the requirement that distributions commence within one
year of a Participant's death shall not apply. In lieu thereof,
distributions must commence on or before the later of: (1) December
31st of the calendar year immediately following the calendar year in
which the Participant died; or (2) December 31st of the calendar
year in which the Participant would have attained age 70 1/2. If the
surviving spouse dies before distributions to such spouse begin,
then the 5-year distribution requirement of this Section shall apply
as if the spouse was the Participant.
6.7 TIME OF SEGREGATION OR DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever the Trustee is
to make a distribution, the distribution may be made as soon as is practicable.
However, unless a Former Participant elects in writing to defer the receipt of
benefits (such election may not result in a death benefit that is more than
incidental), the payment of benefits shall occur not later than the 60th day
after the close of the Plan Year in which the latest of the following events
occurs: (a) the date on which the Participant attains the earlier of age 65 or
the Normal Retirement Age specified herein; (b) the 10th anniversary of the year
in which the Participant commenced participation in the Plan; or (c) the date
the Participant terminates his service with the Employer.
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6.8 DISTRIBUTION FOR MINOR BENEFICIARY
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal guardian,
or if none, to a parent of such Beneficiary or a responsible adult with whom the
Beneficiary maintains his residence, or to the custodian for such Beneficiary
under the Uniform Gift to Minors Act or Gift to Minors Act, if such is permitted
by the laws of the state in which said Beneficiary resides. Such a payment to
the legal guardian, custodian or parent of a minor Beneficiary shall fully
discharge the Trustee, Employer, and Plan from further liability on account
thereof.
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution payable
to a Participant or his Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or his Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or his Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. In the event a Participant or Beneficiary is located
subsequent to his benefit being reallocated, such benefit shall be restored
unadjusted for earnings or losses.
6.10 PRE-RETIREMENT DISTRIBUTION
At such time as a Participant shall have attained the age of 59 1/2
years, the Administrator, at the election of the Participant, shall direct the
Trustee to distribute all or a portion of the amount then credited to the
accounts maintained on behalf of the Participant. However, no distribution from
the Participant's Account shall occur prior to 100% vesting. In the event that
the Administrator makes such a distribution, the Participant shall continue to
be eligible to participate in the Plan on the same basis as any other Employee.
Any distribution made pursuant to this Section shall be made in a manner
consistent with Section 6.5, including, but not limited to, all notice and
consent requirements of Code Section 411(a)(11) and the Regulations thereunder.
Notwithstanding the above, pre-retirement distributions from a
Participant's Elective Account shall not be permitted prior to the Participant
attaining age 59 1/2 except as otherwise permitted under the terms of the Plan.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of the Participant, shall
direct the Trustee to distribute to any Participant in any one Plan
Year up to the lesser of 100% of his Participant's Elective Account
valued as of the last Valuation Date or the amount necessary to
satisfy the immediate and heavy financial need of the Participant.
Any distribution made pursuant to this Section shall be deemed to be
made as of the first day of the Plan Year or, if later, the
Valuation Date
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immediately preceding the date of distribution, and the
Participant's Elective Account shall be reduced accordingly.
Withdrawal under this Section is deemed to be on account of an
immediate and heavy financial need of the Participant if the
withdrawal is for:
(1) Expenses for medical care described in Code Section
213(d) previously incurred by the Participant, his
spouse, or any of his dependents (as defined in Code
Section 152) or necessary for these persons to obtain
medical care;
(2) The costs directly related to the purchase of a
principal residence for the Participant (excluding
mortgage payments);
(3) Payment of tuition, related educational fees, and room
and board expenses for the next twelve (12) months of
post-secondary education for the Participant, his
spouse, children, or dependents; or
(4) Payments necessary to prevent the eviction of the
Participant from his principal residence or foreclosure
on the mortgage of the Participant's principal
residence.
(b) No distribution shall be made pursuant to this Section
unless the Administrator, based upon the Participant's
representation and such other facts as are known to the
Administrator, determines that all of the following conditions are
satisfied:
(1) The distribution is not in excess of the amount of the
immediate and heavy financial need of the Participant.
The amount of the immediate and heavy financial need may
include any amounts necessary to pay any federal, state,
or local income taxes or penalties reasonably
anticipated to result from the distribution;
(2) The Participant has obtained all distributions, other
than hardship distributions, and all nontaxable (at the
time of the loan) loans currently available under all
plans maintained by the Employer;
(3) The Plan, and all other plans maintained by the
Employer, provide that the Participant's elective
deferrals and voluntary Employee contributions will be
suspended for at least twelve (12) months after receipt
of the hardship distribution or, the Participant,
pursuant to a legally enforceable agreement, will
suspend his elective deferrals and voluntary Employee
contributions to the Plan
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and all other plans maintained by the Employer for at
least twelve (12) months after receipt of the hardship
distribution; and
(4) The Plan, and all other plans maintained by the
Employer, provide that the Participant may not make
elective deferrals for the Participant's taxable year
immediately following the taxable year of the hardship
distribution in excess of the applicable limit under
Code Section 402(g) for such next taxable year less the
amount of such Participant's elective deferrals for the
taxable year of the hardship distribution.
(c) Notwithstanding the above, distributions from the
Participant's Elective Account pursuant to this Section shall be
limited solely to the Participant's total Deferred Compensation as
of the date of distribution, reduced by the amount of any previous
distributions pursuant to this Section and Section 6.10.
(d) Any distribution made pursuant to this Section shall be made
in a manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Section 411(a)(11) and the Regulations
thereunder.
6.12 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
"alternate payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such distribution is
authorized by a "qualified domestic relations order," even if the affected
Participant has not separated from service and has not reached the "earliest
retirement age" under the Plan. For the purposes of this Section, "alternate
payee," "qualified domestic relations order" and "earliest retirement age" shall
have the meaning set forth under Code Section 414(p).
ARTICLE VII
TRUSTEE
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
(a) The Trustee shall have the following categories of
responsibilities:
(1) Consistent with the "funding policy and method"
determined by the Employer, to invest, manage, and
control the Plan assets subject, however, to the
direction of a Participant with respect to
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his Participant Directed Accounts, the Employer or an
Investment Manager appointed by the Employer or any
agent of the Employer;
(2) At the direction of the Administrator, to pay benefits
required under the Plan to be paid to Participants, or,
in the event of their death, to their Beneficiaries; and
(3) To maintain records of receipts and disbursements and
furnish to the Employer and/or Administrator for each
Plan Year a written annual report per Section 7.7.
(b) In the event that the Trustee shall be directed by a
Participant (pursuant to the Participant Direction Procedures), or
the Employer, or an Investment Manager or other agent appointed by
the Employer with respect to the investment of any or all Plan
assets, the Trustee shall have no liability with respect to the
investment of such assets, but shall be responsible only to execute
such investment instructions as so directed.
(1) The Trustee shall be entitled to rely fully on the
written instructions of a Participant (pursuant to the
Participant Direction Procedures), or the Employer, or
any Fiduciary or nonfiduciary agent of the Employer, in
the discharge of such duties, and shall not be liable
for any loss or other liability, resulting from such
direction (or lack of direction) of the investment of
any part of the Plan assets.
(2) The Trustee may delegate the duty to execute such
instructions to any nonfiduciary agent, which may be an
affiliate of the Trustee or any Plan representative.
(3) The Trustee may refuse to comply with any direction from
the Participant in the event the Trustee, in its sole
and absolute discretion, deems such directions improper
by virtue of applicable law. The Trustee shall not be
responsible or liable for any loss or expense which may
result from the Trustee's refusal or failure to comply
with any directions from the Participant.
(4) Any costs and expenses related to compliance with the
Participant's directions shall be borne by the
Participant's Directed Account, unless paid by the
Employer.
(c) If there shall be more than one Trustee, they shall act by a
majority of their number, but may authorize one or more of them to
sign papers on their behalf.
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7.2 INVESTMENT POWERS AND DUTIES OF THE TRUSTEE
(a) The Trustee shall invest and reinvest the Trust Fund to keep
the Trust Fund invested without distinction between principal and
income and in such securities or property, real or personal,
wherever situated, as the Trustee shall deem advisable, including,
but not limited to, stocks, common or preferred, bonds and other
evidences of indebtedness or ownership, and real estate or any
interest therein. The Trustee shall at all times in making
investments of the Trust Fund consider, among other factors, the
short and long-term financial needs of the Plan on the basis of
information furnished by the Employer. In making such investments,
the Trustee shall not be restricted to securities or other property
of the character expressly authorized by the applicable law for
trust investments; however, the Trustee shall give due regard to any
limitations imposed by the Code or the Act so that at all times the
Plan may qualify as a qualified Profit Sharing Plan and Trust.
(b) The Trustee may employ a bank or trust company pursuant to
the terms of its usual and customary bank agency agreement, under
which the duties of such bank or trust company shall be of a
custodial, clerical and record-keeping nature.
(c) The Trustee may from time to time transfer to a common,
collective, pooled trust fund or money market fund maintained by any
corporate Trustee or affiliate thereof hereunder, all or such part
of the Trust Fund as the Trustee may deem advisable, and such part
or all of the Trust Fund so transferred shall be subject to all the
terms and provisions of the common, collective, pooled trust fund or
money market fund which contemplate the commingling for investment
purposes of such trust assets with trust assets of other trusts. The
Trustee may transfer any part of the Trust Fund intended for
temporary investment of cash balances to a money market fund
maintained by Citizens First Savings Bank or its affiliates. The
Trustee may, from time to time, withdraw from such common,
collective, pooled trust fund or money market fund all or such part
of the Trust Fund as the Trustee may deem advisable.
(d) With respect to assets in a Participant's Directed
Investment Account, the Participant or Beneficiary shall direct the
Trustee with regard to any voting, tender and similar rights
associated with the ownership of such assets, (I.E., the "Stock
Right(s)") as follows:
(1) Each Participant or Beneficiary shall direct the Trustee
to vote or otherwise exercise such Stock Rights in
accordance with the provisions, conditions and terms of
any such Stock Right(s).
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(2) Such directions shall be provided to the Trustee by the
Participant or Beneficiary in accordance with the
procedure as established by the Administrator. The
Trustee shall vote or otherwise exercise such Stock
Right(s) with respect to which it has received
directions to do so under this Section.
(3) To the extent to which a Participant or Beneficiary does
not instruct the Trustee or does not issue valid
directions to the Trustee to vote or otherwise exercise
such Stock Right(s), such Participants or Beneficiaries
shall be deemed to have directed the Trustee that such
Stock Rights remain nonvoted and unexercised.
7.3 OTHER POWERS OF THE TRUSTEE
The Trustee, in addition to all powers and authorities under common
law, statutory authority, including the Act, and other provisions of the Plan,
shall have the following powers and authorities, to be exercised in the
Trustee's sole discretion:
(a) To purchase, or subscribe for, any securities or other
property and to retain the same. In conjunction with the purchase of
securities, margin accounts may be opened and maintained;
(b) To sell, exchange, convey, transfer, grant options to
purchase, or otherwise dispose of any securities or other property
held by the Trustee, by private contract or at public auction. No
person dealing with the Trustee shall be bound to see to the
application of the purchase money or to inquire into the validity,
expediency, or propriety of any such sale or other disposition, with
or without advertisement;
(c) To vote upon any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with or without
power of substitution; to exercise any conversion privileges,
subscription rights or other options, and to make any payments
incidental thereto; to oppose, or to consent to, or otherwise
participate in, corporate reorganizations or other changes affecting
corporate securities, and to delegate discretionary powers, and to
pay any assessments or charges in connection therewith; and
generally to exercise any of the powers of an owner with respect to
stocks, bonds, securities, or other property. However, the Trustee
shall not vote proxies relating to securities for which it has not
been assigned full investment management responsibilities. In those
cases where another party has such investment authority or
discretion, the Trustee will deliver all proxies to said party who
will then have full responsibility for voting those proxies;
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(d) To cause any securities or other property to be registered
in the Trustee's own name or in the name of one or more of the
Trustee's nominees, and to hold any investments in bearer form, but
the books and records of the Trustee shall at all times show that
all such investments are part of the Trust Fund;
(e) To borrow or raise money for the purposes of the Plan in
such amount, and upon such terms and conditions, as the Trustee
shall deem advisable; and for any sum so borrowed, to issue a
promissory note as Trustee, and to secure the repayment thereof by
pledging all, or any part, of the Trust Fund; and no person lending
money to the Trustee shall be bound to see to the application of the
money lent or to inquire into the validity, expediency, or propriety
of any borrowing;
(f) To keep such portion of the Trust Fund in cash or cash
balances as the Trustee may, from time to time, deem to be in the
best interests of the Plan, without liability for interest thereon;
(g) To accept and retain for such time as the Trustee may deem
advisable any securities or other property received or acquired as
Trustee hereunder, whether or not such securities or other property
would normally be purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other
instruments that may be necessary or appropriate to carry out the
powers herein granted;
(i) To settle, compromise, or submit to arbitration any claims,
debts, or damages due or owing to or from the Plan, to commence or
defend suits or legal or administrative proceedings, and to
represent the Plan in all suits and legal and administrative
proceedings;
(j) To employ suitable agents and counsel and to pay their
reasonable expenses and compensation, and such agent or counsel may
or may not be agent or counsel for the Employer;
(k) To apply for and procure from responsible insurance
companies, to be selected by the Administrator, as an investment of
the Trust Fund such annuity, or other Contracts (on the life of any
Participant) as the Administrator shall deem proper; to exercise, at
any time or from time to time, whatever rights and privileges may be
granted under such annuity, or other Contracts; to collect, receive,
and settle for the proceeds of all such annuity or other Contracts
as and when entitled to do so under the provisions thereof;
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(1) To invest funds of the Trust in time deposits or savings
accounts bearing a reasonable rate of interest in the Trustee's
bank;
(m) To invest in Treasury Bills and other forms of United States
government obligations;
(n) To invest in shares of investment companies registered under
the Investment Company Act of 1940, including any money market fund
advised by or offered through Citizens First Savings Bank;
(o) To sell, purchase and acquire put or call options if the
options are traded on and purchased through a national securities
exchange registered under the Securities Exchange Act of 1934, as
amended, or, if the options are not traded on a national securities
exchange, are guaranteed by a member firm of the New York Stock
Exchange;
(p) To deposit monies in federally insured savings accounts
or certificates of deposit in banks or savings and loan
associations;
(q) To pool all or any of the Trust Fund, from time to time,
with assets belonging to any other qualified employee pension
benefit trust created by the Employer or an affiliated company of
the Employer, and to commingle such assets and make joint or common
investments and carry joint accounts on behalf of this Plan and such
other trust or trusts, allocating undivided shares or interests in
such investments or accounts or any pooled assets of the two or more
trusts in accordance with their respective interests;
(r) To appoint a nonfiduciary agent or agents to assist the
Trustee in carrying out any investment instructions of Participants
and of any Investment Manager or Fiduciary, and to compensate such
agent(s) from the assets of the Plan, to the extent not paid by the
Employer;
(s) To do all such acts and exercise all such rights and
privileges, although not specifically mentioned herein, as the
Trustee may deem necessary to carry out the purposes of the Plan.
7.4 LOANS TO PARTICIPANTS
(a) The Trustee may, in the Trustee's discretion, make loans to
Participants and Beneficiaries under the following circumstances:
(1) loans shall be made available to all Participants and
Beneficiaries on a reasonably equivalent basis; (2) loans shall not
be made available to Highly Compensated Employees in an amount
greater than the amount made available to other Participants and
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Beneficiaries; (3) loans shall bear a reasonable rate of interest;
(4) loans shall be adequately secured; and (5) loans shall provide
for repayment over a reasonable period of time.
(b) Loans made pursuant to this Section (when added to the
outstanding balance of all other loans made by the Plan to the
Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the
Participant during the one year period ending on the day
before the date on which such loan is made, over the
outstanding balance of loans from the Plan to the
Participant on the date on which such loan was made, or
(2) one-half (1/2) of the present value of the non-
forfeitable accrued benefit of the Participant under the
Plan.
For purposes of this limit, all plans of the Employer
shall be considered one plan.
(c) Loans shall provide for level amortization with payments to
be made not less frequently than quarterly over a period not to
exceed five (5) years. However, loans used to acquire any dwelling
unit which, within a reasonable time, is to be used (determined at
the time the loan is made) as a principal residence of the
Participant shall provide for periodic repayment over a reasonable
period of time that may exceed five (5) years. For this purpose, a
principal residence has the same meaning as a principal residence
under Code Section 1034. Loan repayments will be suspended under
this Plan as permitted under Code Section 414(u)(4).
(d) Any loans granted or renewed shall be made pursuant to a
Participant loan program. Such loan program shall be established in
writing and must include, but need not be limited to, the following:
(1) the identity of the person or positions authorized to
administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans
offered;
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(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a Participant
loan; and
(7) the events constituting default and the steps that will
be taken to preserve Plan assets.
Such Participant loan program shall be contained in a separate
written document which, when properly executed, is hereby
incorporated by reference and made a part of the Plan. Furthermore,
such Participant loan program may be modified or amended in writing
from time to time without the necessity of amending this Section.
7.5 DUTIES OF THE TRUSTEE REGARDING PAYMENTS
At the direction of the Administrator, the Trustee shall, from time
to time, in accordance with the terms of the Plan, make payments out of the
Trust Fund. The Trustee shall not be responsible in any way for the application
of such payments.
7.6 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as shall from
time to time be agreed upon in writing by the Employer and the Trustee. An
individual serving as Trustee who already receives full-time pay from the
Employer shall not receive compensation from the Plan. In addition, the Trustee
shall be reimbursed for any reasonable expenses, including reasonable counsel
fees incurred by it as Trustee. Such compensation and expenses shall be paid
from the Trust Fund unless paid or advanced by the Employer. All taxes of any
kind and all kinds whatsoever that may be levied or assessed under existing or
future laws upon, or in respect of, the Trust Fund or the income thereof, shall
be paid from the Trust Fund.
7.7 ANNUAL REPORT OF THE TRUSTEE
Within a reasonable period of time after the later of the
Anniversary Date or receipt of the Employer contribution for each Plan Year, the
Trustee shall furnish to the Employer and Administrator a written statement of
account with respect to the Plan Year for which such contribution was made
setting forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust Fund upon
sales or other disposition of the assets;
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(c) the increase, or decrease, in the value of the Trust
Fund;
(d) all payments and distributions made from the Trust Fund;
and
(e) such further information as the Trustee and/or Administrator
deems appropriate. The Employer, forthwith upon its receipt of each
such statement of account, shall acknowledge receipt thereof in
writing and advise the Trustee and/or Administrator of its approval
or disapproval thereof. Failure by the Employer to disapprove any
such statement of account within thirty (30) days after its receipt
thereof shall be deemed an approval thereof. The approval by the
Employer of any statement of account shall be binding as to all
matters embraced therein as between the Employer and the Trustee to
the same extent as if the account of the Trustee had been settled by
judgment or decree in an action for a judicial settlement of its
account in a court of competent jurisdiction in which the Trustee,
the Employer and all persons having or claiming an interest in the
Plan were parties; provided, however, that nothing herein contained
shall deprive the Trustee of its right to have its accounts
judicially settled if the Trustee so desires.
7.8 AUDIT
(a) If an audit of the Plan's records shall be required by the
Act and the regulations thereunder for any Plan Year, the
Administrator shall direct the Trustee to engage on behalf of all
Participants an independent qualified public accountant for that
purpose. Such accountant shall, after an audit of the books and
records of the Plan in accordance with generally accepted auditing
standards, within a reasonable period after the close of the Plan
Year, furnish to the Administrator and the Trustee a report of his
audit setting forth his opinion as to whether any statements,
schedules or lists that are required by Act Section 103 or the
Secretary of Labor to be filed with the Plan's annual report, are
presented fairly in conformity with generally accepted accounting
principles applied consistently. All auditing and accounting fees
shall be an expense of and may, at the election of the
Administrator, be paid from the Trust Fund.
(b) If some or all of the information necessary to enable the
Administrator to comply with Act Section 103 is maintained by a
bank, insurance company, or similar institution, regulated and
supervised and subject to periodic examination by a state or federal
agency, it shall transmit and certify the accuracy of that
information to the Administrator as provided in Act Section 103(b)
within one hundred twenty (120) days after the end of the Plan Year
or by such other date as may be prescribed under regulations of the
Secretary of Labor.
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7.9 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) The Trustee may resign at any time by delivering to the
Employer, at least thirty (30) days before its effective date, a
written notice of his resignation.
(b) The Employer may remove the Trustee by mailing by registered
or certified mail, addressed to such Trustee at his last known
address, at least thirty (30) days before its effective date, a
written notice of his removal.
(c) Upon the death, resignation, incapacity, or removal of any
Trustee, a successor may be appointed by the Employer; and such
successor, upon accepting such appointment in writing and delivering
same to the Employer, shall, without further act, become vested with
all the estate, rights, powers, discretions, and duties of his
predecessor with like respect as if he were originally named as a
Trustee herein. Until such a successor is appointed, the remaining
Trustee or Trustees shall have full authority to act under the terms
of the Plan.
(d) The Employer may designate one or more successors prior to
the death, resignation, incapacity, or removal of a Trustee. In the
event a successor is so designated by the Employer and accepts such
designation, the successor shall, without further act, become vested
with all the estate, rights, powers, discretions, and duties of his
predecessor with the like effect as if he were originally named as
Trustee herein immediately upon the death, resignation, incapacity,
or removal of his predecessor.
(e) Whenever any Trustee hereunder ceases to serve as such, he
shall furnish to the Employer and Administrator a written statement
of account with respect to the portion of the Plan Year during which
he served as Trustee. This statement shall be either (i) included as
part of the annual statement of account for the Plan Year required
under Section 7.7 or (ii) set forth in a special statement. Any such
special statement of account should be rendered to the Employer no
later than the due date of the annual statement of account for the
Plan Year. The procedures set forth in Section 7.7 for the approval
by the Employer of annual statements of account shall apply to any
special statement of account rendered hereunder and approval by the
Employer of any such special statement in the manner provided in
Section 7.7 shall have the same effect upon the statement as the
Employer's approval of an annual statement of account. No successor
to the Trustee shall have any duty or responsibility to investigate
the acts or transactions of any predecessor who has rendered all
statements of account required by Section 7.7 and this subparagraph.
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7.10 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan, the
Trustee at the direction of the Administrator shall transfer the Vested
interest, if any, of such Participant in his account to another trust forming
part of a pension, profit sharing or stock bonus plan maintained by such
Participant's new employer and represented by said employer in writing as
meeting the requirements of Code Section 401(a), provided that the trust to
which such transfers are made permits the transfer to be made.
7.11 DIRECT ROLLOVER
(a) 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 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.
(b) For purposes of this Section the following definitions
shall apply:
(1) An eligible rollover distribution is any distribution of
all or any portion of the balance to the credit of the
distributee, except that an eligible rollover
distribution does not include: 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); the portion of any other distribution
that is not includible in gross income (determined
without regard to the exclusion for net unrealized
appreciation with respect to employer securities); any
hardship distribution described in Code Section
401(k)(2)(B)(i)(IV); and any other distribution that is
reasonably expected to total less than $200 during a
year.
(2) An eligible retirement plan is an individual retirement
account described in Code Section 403(a), an individual
retirement annuity described in Code Section 408(b), an
annuity plan described in Code Section 403(a), or a
qualified trust described in Code Section 401(a), that
accepts the distributee's eligible rollover
distribution. However, in the case of an eligible
rollover distribution to the
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surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement
annuity.
(3) A distributee includes an Employee or former Employee.
In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under
a qualified domestic relations order, as defined in Code
Section 414(p), are distributees with regard to the
interest of the spouse or former spouse.
(4) A direct rollover is a payment by the Plan to the
eligible retirement plan specified by the distributee.
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to amend the
Plan, subject to the limitations of this Section. However, any
amendment which affects the rights, duties or responsibilities of
the Trustee and Administrator, other than an amendment to remove the
Trustee or Administrator, may only be made with the Trustee's and
Administrator's written consent. Any such amendment shall become
effective as provided therein upon its execution. The Trustee shall
not be required to execute any such amendment unless the Trust
provisions contained herein are a part of the Plan and the amendment
affects the duties of the Trustee hereunder.
(b) No amendment to the Plan shall be effective if it authorizes
or permits any part of the Trust Fund (other than such part as is
required to pay taxes and administration expenses) to be used for or
diverted to any purpose other than for the exclusive benefit of the
Participants or their Beneficiaries or estates; or causes any
reduction in the amount credited to the account of any Participant;
or causes or permits any portion of the Trust Fund to revert to or
become property of the Employer.
(c) Except as permitted by Regulations, no Plan amendment or
transaction having the effect of a Plan amendment (such as a merger,
plan transfer or similar transaction) shall be effective to the
extent it eliminates or reduces any "Section 411(d)(6) protected
benefit" or adds or modifies conditions relating to "Section
411(d)(6) protected benefits" the result of which is a further
restriction on such benefit unless such protected benefits are
preserved with respect to benefits accrued as of the later of the
adoption date or effective date of the
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amendment. "Section 411(d)(6) protected benefits" are benefits
described in Code Section 411(d)(6)(A), early retirement benefits
and retirement-type subsidies, and optional forms of benefit.
8.2 TERMINATION
(a) The Employer shall have the right at any time to terminate
the Plan by delivering to the Trustee and Administrator written
notice of such termination. Upon any full or partial termination,
all amounts credited to the affected Participants' Combined Accounts
shall become 100% Vested as provided in Section 6.4 and shall not
thereafter be subject to forfeiture, and all unallocated amounts
shall be allocated to the accounts of all Participants in accordance
with the provisions hereof.
(b) Upon the full termination of the Plan, the Employer shall
direct the distribution of the assets of the Trust Fund to
Participants in a manner which is consistent with and satisfies the
provisions of Section 6.5. Distributions to a Participant shall be
made in cash or in property or through the purchase of irrevocable
nontransferable deferred commitments from an insurer. Except as
permitted by Regulations, the termination of the Plan shall not
result in the reduction of "Section 411(d)(6) protected benefits" in
accordance with Section 8.1(c).
8.3 MERGER OR CONSOLIDATION
This Plan and Trust may be merged or consolidated with, or its
assets and/or liabilities may be transferred to, any other plan and trust only
if the benefits which would be received by a Participant of this Plan, in the
event of a termination of the Plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation, and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any "Section 411(d)(6) protected
benefits" in accordance with Section 8.1(c).
ARTICLE IX
TOP HEAVY
9.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the special
vesting requirements of Code Section 416(b) pursuant to Section 6.4 of the Plan
and the special minimum allocation requirements of Code Section 416(c) pursuant
to Section 4.4 of the Plan.
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9.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year in
which, as of the Determination Date, (1) the Present Value of
Accrued Benefits of Key Employees and (2) the sum of the Aggregate
Accounts of Key Employees under this Plan and all plans of an
Aggregation Group, exceeds sixty percent (60%) of the Present Value
of Accrued Benefits and the Aggregate Accounts of all Key and
Non-Key Employees under this Plan and all plans of an Aggregation
Group.
If any Participant is a Non-Key Employee for any Plan Year, but
such Participant was a Key Employee for any prior Plan Year, such
Participant's Present Value of Accrued Benefit and/or Aggregate
Account balance shall not be taken into account for purposes of
determining whether this Plan is a Top Heavy or Super Top Heavy Plan
(or whether any Aggregation Group which includes this Plan is a Top
Heavy Group). In addition, if a Participant or Former Participant
has not performed any services for any Employer maintaining the Plan
at any time during the five year period ending on the Determination
Date, any accrued benefit for such Participant or Former Participant
shall not be taken into account for the purposes of determining
whether this Plan is a Top Heavy or Super Top Heavy Plan.
(b) This Plan shall be a Super Top Heavy Plan for any Plan Year
in which, as of the Determination Date, (1) the Present Value of
Accrued Benefits of Key Employees and (2) the sum of the Aggregate
Accounts of Key Employees under this Plan and all plans of an
Aggregation Group, exceeds ninety percent (90%) of the Present Value
of Accrued Benefits and the Aggregate Accounts of all Key and
Non-Key Employees under this Plan and all plans of an Aggregation
Group.
(c) Aggregate Account: A Participant's Aggregate Account as
of the Determination Date is the sum of:
(1) his Participant's Combined Account balance as of the
most recent valuation occurring within a twelve (12)
month period ending on the Determination Date;
(2) an adjustment for any contributions due as of the
Determination Date. Such adjustment shall be the amount
of any contributions actually made after the Valuation
Date but due on or before the Determination Date, except
for the first Plan Year when such adjustment shall also
reflect the amount of any contributions made after the
Determination Date that are allocated as of a date in
that first Plan Year.
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(3) any Plan distributions made within the Plan Year that
includes the Determination Date or within the four (4)
preceding Plan Years. However, in the case of
distributions made after the Valuation Date and prior to
the Determination Date, such distributions are not
included as distributions for top heavy purposes to the
extent that such distributions are already included in
the Participant's Aggregate Account balance as of the
Valuation Date. Notwithstanding anything herein to the
contrary, all distributions, including distributions
under a terminated plan which if it had not been
terminated would have been required to be included in an
Aggregation Group, will be counted. Further,
distributions from the Plan (including the cash value of
life insurance policies) of a Participant's account
balance because of death shall be treated as a
distribution for the purposes of this paragraph.
(4) any Employee contributions, whether voluntary or
mandatory. However, amounts attributable to tax
deductible qualified voluntary employee contributions
shall not be considered to be a part of the
Participant's Aggregate Account balance.
(5) with respect to unrelated rollovers and plan-to-plan
transfers (ones which are both initiated by the Employee
and made from a plan maintained by one employer to a
plan maintained by another employer), if this Plan
provides the rollovers or plan-to-plan transfers, it
shall always consider such rollovers or plan-to-plan
transfers as a distribution for the purposes of this
Section. If this Plan is the plan accepting such
rollovers or plan-to-plan transfers, it shall not
consider such rollovers or plan-to-plan transfers as
part of the Participant's Aggregate Account balance.
(6) with respect to related rollovers and plan-to-plan
transfers (ones either not initiated by the Employee or
made to a plan maintained by the same employer), if this
Plan provides the rollover or plan-to- plan transfer, it
shall not be counted as a distribution for purposes of
this Section. If this Plan is the plan accepting such
rollover or plan-to-plan transfer, it shall consider
such rollover or plan-to-plan transfer as part of the
Participant's Aggregate Account balance, irrespective of
the date on which such rollover or plan-to-plan transfer
is accepted.
(7) For the purposes of determining whether two employers
are to be treated as the same employer in (5) and (6)
above, all employers
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aggregated under Code Section 414(b), (c), (m) and (o)
are treated as the same employer.
(d) "Aggregation Group" means either a Required Aggregation
Group or a Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each plan of the Employer
in which a Key Employee is a participant in the Plan
Year containing the Determination Date or any of the
four preceding Plan Years, and each other plan of the
Employer which enables any plan in which a Key Employee
participates to meet the requirements of Code Sections
401(a)(4) or 410, will be required to be aggregated.
Such group shall be known as a Required Aggregation
Group.
In the case of a Required Aggregation Group, each plan
in the group will be considered a Top Heavy Plan if the
Required Aggregation Group is a Top Heavy Group. No plan
in the Required Aggregation Group will be considered a
Top Heavy Plan if the Required Aggregation Group is not
a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also
include any other plan not required to be included in
the Required Aggregation Group, provided the resulting
group, taken as a whole, would continue to satisfy the
provisions of Code Sections 401(a)(4) and 410. Such
group shall be known as a Permissive Aggregation Group.
In the case of a Permissive Aggregation Group, only a
plan that is part of the Required Aggregation Group will
be considered a Top Heavy Plan if the Permissive
Aggregation Group is a Top Heavy Group. No plan in the
Permissive Aggregation Group will be considered a Top
Heavy Plan if the Permissive Aggregation Group is not a
Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar year
shall be aggregated in order to determine whether such
plans are Top Heavy Plans.
(4) An Aggregation Group shall include any terminated plan
of the Employer if it was maintained within the last
five (5) years ending on the Determination Date.
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(e) "Determination Date" means (a) the last day of the preceding
Plan Year, or (b) in the case of the first Plan Year, the last day
of such Plan Year.
(f) Present Value of Accrued Benefit: In the case of a defined
benefit plan, the Present Value of Accrued Benefit for a Participant
other than a Key Employee, shall be as determined using the single
accrual method used for all plans of the Employer and Affiliated
Employers, or if no such single method exists, using a method which
results in benefits accruing not more rapidly than the slowest
accrual rate permitted under Code Section 411(b)(1)(C). The
determination of the Present Value of Accrued Benefit shall 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.
(g) "Top Heavy Group" means an Aggregation Group in which,
as of the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key Employees
under all defined benefit plans included in the group,
and
(2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group,
exceeds sixty percent (60%) of a similar sum determined
for all Participants.
ARTICLE X
MISCELLANEOUS
10.1 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between the
Employer and any Participant or to be a consideration or an inducement for the
employment of any Participant or Employee. Nothing contained in this Plan shall
be deemed to give any Participant or Employee the right to be retained in the
service of the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at any time regardless of the effect which
such discharge shall have upon him as a Participant of this Plan.
10.2 ALIENATION
(a) Subject to the exceptions provided below, no benefit which
shall be payable out of the Trust Fund to any person (including a
Participant or his Beneficiary) shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any attempt to
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anticipate, alienate, sell, transfer, assign, pledge, encumber, or
charge the same shall be void; and no such benefit shall in any
manner be liable for, or subject to, the debts, contracts,
liabilities, engagements, or torts of any such person, nor shall it
be subject to attachment or legal process for or against such
person, and the same shall not be recognized by the Trustee, except
to such extent as may be required by law.
(b) This provision shall not apply to the extent a Participant
or Beneficiary is indebted to the Plan, as a result of a loan from
the Plan. At the time a distribution is to be made to or for a
Participant's or Beneficiary's benefit, such proportion of the
amount distributed as shall equal such loan indebtedness shall be
paid by the Trustee to the Trustee or the Administrator, at the
direction of the Administrator, to apply against or discharge such
loan indebtedness. Prior to making a payment, however, the
Participant or Beneficiary must be given written notice by the
Administrator that such loan indebtedness is to be so paid in whole
or part from his Participant's Combined Account. If the Participant
or Beneficiary does not agree that the loan indebtedness is a valid
claim against his Vested Participant's Combined Account, he shall be
entitled to a review of the validity of the claim in accordance with
procedures provided in Sections 2.7 and 2.8.
(c) This provision shall not apply to a "qualified domestic
relations order" defined in Code Section 414(p), and those other
domestic relations orders permitted to be so treated by the
Administrator under the provisions of the Retirement Equity Act of
1984. The Administrator shall establish a written procedure to
determine the qualified status of domestic relations orders and to
administer distributions under such qualified orders. Further, to
the extent provided under a "qualified domestic relations order," a
former spouse of a Participant shall be treated as the spouse or
surviving spouse for all purposes under the Plan.
(d) This provision shall not apply to an offset to a
Participant's accrued benefit against an amount that the Participant
is ordered or required to pay the Plan with respect to a judgment,
order, or decree issued, or a settlement entered into, on or after
August 5, 1997, in accordance with Code Sections 401(a)(13)(C) and
(D).
10.3 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according to the
Act and the laws of the State of Michigan, other than its laws respecting choice
of law, to the extent not preempted by the Act.
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10.4 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine or
neuter gender, they shall be construed as though they were also used in another
gender in all cases where they would so apply, and whenever any words are used
herein in the singular or plural form, they shall be construed as though they
were also used in the other form in all cases where they would so apply.
10.5 LEGAL ACTION
In the event any claim, suit, or proceeding is brought regarding the
Trust and/or Plan established hereunder to which the Trustee, the Employer or
the Administrator may be a party, and such claim, suit, or proceeding is
resolved in favor of the Trustee, the Employer or the Administrator, they shall
be entitled to be reimbursed from the Trust Fund for any and all costs,
attorney's fees, and other expenses pertaining thereto incurred by them for
which they shall have become liable.
10.6 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically
permitted by law, it shall be impossible by operation of the Plan or
of the Trust, by termination of either, by power of revocation or
amendment, by the happening of any contingency, by collateral
arrangement or by any other means, for any part of the corpus or
income of any trust fund maintained pursuant to the Plan or any
funds contributed thereto to be used for, or diverted to, purposes
other than the exclusive benefit of Participants, Retired
Participants, or their Beneficiaries.
(b) In the event the Employer shall make an excessive
contribution under a mistake of fact pursuant to Act Section
403(c)(2)(A), the Employer may demand repayment of such excessive
contribution at any time within one (1) year following the time of
payment and the Trustees shall return such amount to the Employer
within the one (1) year period. Earnings of the Plan attributable to
the excess contributions may not be returned to the Employer but any
losses attributable thereto must reduce the amount so returned.
10.7 BONDING
Every Fiduciary, except a bank or an insurance company, unless
exempted by the Act and regulations thereunder, shall be bonded in an amount not
less than 10% of the amount of the funds such Fiduciary handles; provided,
however, that the minimum bond shall be $1,000 and the maximum bond, $500,000.
The amount of funds handled shall be determined at the beginning of each Plan
Year by the amount of funds handled by such person, group, or class to be
covered and their predecessors, if any, during the preceding Plan Year, or if
there is no
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preceding Plan Year, then by the amount of the funds to be handled during the
then current year. The bond shall provide protection to the Plan against any
loss by reason of acts of fraud or dishonesty by the Fiduciary alone or in
connivance with others. The surety shall be a corporate surety company (as such
term is used in Act Section 412(a)(2)), and the bond shall be in a form approved
by the Secretary of Labor. Notwithstanding anything in the Plan to the contrary,
the cost of such bonds shall be an expense of and may, at the election of the
Administrator, be paid from the Trust Fund or by the Employer.
10.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
Neither the Employer, the Administrator, nor the Trustee, nor their
successors shall be responsible for the validity of any Contract issued
hereunder or for the failure on the part of the insurer to make payments
provided by any such Contract, or for the action of any person which may delay
payment or render a Contract null and void or unenforceable in whole or in part.
10.9 INSURER'S PROTECTIVE CLAUSE
Any insurer who shall issue Contracts hereunder shall not have any
responsibility for the validity of this Plan or for the tax or legal aspects of
this Plan. The insurer shall be protected and held harmless in acting in
accordance with any written direction of the Trustee, and shall have no duty to
see to the application of any funds paid to the Trustee, nor be required to
question any actions directed by the Trustee. Regardless of any provision of
this Plan, the insurer shall not be required to take or permit any action or
allow any benefit or privilege contrary to the terms of any Contract which it
issues hereunder, or the rules of the insurer.
10.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, his legal representative,
Beneficiary, or to any guardian or committee appointed for such Participant or
Beneficiary in accordance with the provisions of the Plan, shall, to the extent
thereof, be in full satisfaction of all claims hereunder against the Trustee and
the Employer, either of whom may require such Participant, legal representative,
Beneficiary, guardian or committee, as a condition precedent to such payment, to
execute a receipt and release thereof in such form as shall be determined by the
Trustee or Employer.
10.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted or
required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
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10.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The "named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator and (3) the Trustee. The named Fiduciaries shall have only those
specific powers, duties, responsibilities, and obligations as are specifically
given them under the Plan or as accepted by or assigned to them pursuant to any
procedure provided under the Plan, including but not limited to any agreement
allocating or delegating their responsibilities, the terms of which are
incorporated herein by reference. In general, unless otherwise indicated herein
or pursuant to such agreements, the Employer shall have the duties specified in
Article II hereof, as the same may be allocated or delegated thereunder,
including but not limited to the responsibility for making the contributions
provided for under Section 4.1; and shall have the authority to appoint and
remove the Trustee and the Administrator; to formulate the Plan's "funding
policy and method"; and to amend or terminate, in whole or in part, the Plan.
The Administrator shall have the responsibility for the administration of the
Plan, including but not limited to the items specified in Article II of the
Plan, as the same may be allocated or delegated thereunder. The Administrator
shall act as the named Fiduciary responsible for communicating with the
Participant according to the Participant Direction Procedures. The Trustee shall
have the responsibility of management and control of the assets held under the
Trust, except to the extent directed pursuant to Article II or with respect to
those assets, the management of which has been assigned to an Investment
Manager, who shall be solely responsible for the management of the assets
assigned to it, all as specifically provided in the Plan and any agreement with
the Trustee. Each named Fiduciary warrants that any directions given,
information furnished, or action taken by it shall be in accordance with the
provisions of the Plan, authorizing or providing for such direction, information
or action. Furthermore, each named Fiduciary may rely upon any such direction,
information or action of another named Fiduciary as being proper under the Plan,
and is not required under the Plan to inquire into the propriety of any such
direction, information or action. It is intended under the Plan that each named
Fiduciary shall be responsible for the proper exercise of its own powers,
duties, responsibilities and obligations under the Plan as specified or
allocated herein. No named Fiduciary shall guarantee the Trust Fund in any
manner against investment loss or depreciation in asset value. Any person or
group may serve in more than one Fiduciary capacity. In the furtherance of their
responsibilities hereunder, the "named Fiduciaries" shall be empowered to
interpret the Plan and Trust and to resolve ambiguities, inconsistencies and
omissions, which findings shall be binding, final and conclusive.
10.13 HEADINGS
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of the
provisions hereof.
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10.14 APPROVAL BY INTERNAL REVENUE SERVICE
(a) Notwithstanding anything herein to the contrary,
contributions to this Plan are conditioned upon the initial
qualification of the Plan under Code Section 401. If the Plan
receives an adverse determination with respect to its initial
qualification, then the Plan may return such contributions to the
Employer within one year after such determination, provided the
application for the determination is made by the time prescribed by
law for filing the Employer's return for the taxable year in which
the Plan was adopted, or such later date as the Secretary of the
Treasury may prescribe.
(b) Notwithstanding any provisions to the contrary, except
Sections 3.5, 3.6, and 4.1(c), any contribution by the Employer to
the Trust Fund is conditioned upon the deductibility of the
contribution by the Employer under the Code and, to the extent any
such deduction is disallowed, the Employer may, within one (1) year
following the disallowance of the deduction, demand repayment of
such disallowed contribution and the Trustee shall return such
contribution within one (1) year following the disallowance.
Earnings of the Plan attributable to the excess contribution may not
be returned to the Employer, but any losses attributable thereto
must reduce the amount so returned.
10.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner. In the event of any conflict between the
terms of this Plan and any Contract purchased hereunder, the Plan provisions
shall control.
ARTICLE XI
PARTICIPATING EMPLOYERS
11.1 ADOPTION BY OTHER EMPLOYERS
Notwithstanding anything herein to the contrary, with the consent of
the Employer and Trustee, any other corporation or entity, whether an affiliate
or subsidiary or not, may adopt this Plan and all of the provisions hereof, and
participate herein and be known as a Participating Employer, by a properly
executed document evidencing said intent and will of such Participating
Employer.
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11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each such Participating Employer shall be required to use
the same Trustee as provided in this Plan.
(b) The Trustee may, but shall not be required to, commingle,
hold and invest as one Trust Fund all contributions made by
Participating Employers, as well as all increments thereof. However,
the assets of the Plan shall, on an ongoing basis, be available to
pay benefits to all Participants and Beneficiaries under the Plan
without regard to the Employer or Participating Employer who
contributed such assets.
(c) The transfer of any Participant from or to an Employer
participating in this Plan, whether he be an Employee of the
Employer or a Participating Employer, shall not affect such
Participant's rights under the Plan, and all amounts credited to
such Participant's Combined Account as well as his accumulated
service time with the transferor or predecessor, and his length of
participation in the Plan, shall continue to his credit.
(d) All rights and values forfeited by termination of employment
shall inure only to the benefit of the Participants of the Employer
or Participating Employer by which the forfeiting Participant was
employed, except if the Forfeiture is for an Employee whose Employer
is an Affiliated Employer, then said Forfeiture shall inure to the
benefit of the Participants of those Employers who are Affiliated
Employers. Should an Employee of one ("First") Employer be
transferred to an associated ("Second") Employer which is an
Affiliated Employer, such transfer shall not cause his account
balance (generated while an Employee of "First" Employer) in any
manner, or by any amount to be forfeited. Such Employee's
Participant Combined Account balance for all purposes of the Plan,
including length of service, shall be considered as though he had
always been employed by the "Second" Employer and as such had
received contributions, forfeitures, earnings or losses, and
appreciation or depreciation in value of assets totaling the amount
so transferred.
(e) Any expenses of the Trust which are to be paid by the
Employer or borne by the Trust Fund shall be paid by each
Participating Employer in the same proportion that the total amount
standing to the credit of all Participants employed by such Employer
bears to the total standing to the credit of all Participants.
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11.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a party to this
Plan; provided, however, that with respect to all of its relations with the
Trustee and Administrator for the purpose of this Plan, each Participating
Employer shall be deemed to have designated irrevocably the Employer as its
agent. Unless the context of the Plan clearly indicates the contrary, the word
"Employer" shall be deemed to include each Participating Employer as related to
its adoption of the Plan.
11.4 EMPLOYEE TRANSFERS
It is anticipated that an Employee may be transferred between
Participating Employers, and in the event of any such transfer, the Employee
involved shall carry with him his accumulated service and eligibility. No such
transfer shall effect a termination of employment hereunder, and the
Participating Employer to which the Employee is transferred shall thereupon
become obligated hereunder with respect to such Employee in the same manner as
was the Participating Employer from whom the Employee was transferred.
11.5 PARTICIPATING EMPLOYER CONTRIBUTION
Any contribution subject to allocation during each Plan Year shall
be allocated only among those Participants of the Employer or Participating
Employer making the contribution, except if the contribution is made by an
Affiliated Employer, in which event such contribution shall be allocated among
all Participants of all Participating Employers who are Affiliated Employers in
accordance with the provisions of this Plan. On the basis of the information
furnished by the Administrator, the Trustee shall keep separate books and
records concerning the affairs of each Participating Employer hereunder and as
to the accounts and credits of the Employees of each Participating Employer. The
Trustee may, but need not, register Contracts so as to evidence that a
particular Participating Employer is the interested Employer hereunder, but in
the event of an Employee transfer from one Participating Employer to another,
the employing Employer shall immediately notify the Trustee thereof.
11.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there shall
be a Participating Employer hereunder shall only be by the written action of
each and every Participating Employer and with the consent of the Trustee where
such consent is necessary in accordance with the terms of this Plan.
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11.7 DISCONTINUANCE OF PARTICIPATION
Any Participating Employer shall be permitted to discontinue or
revoke its participation in the Plan. At the time of any such discontinuance or
revocation, satisfactory evidence thereof and of any applicable conditions
imposed shall be delivered to the Trustee. The Trustee shall thereafter
transfer, deliver and assign Contracts and other Trust Fund assets allocable to
the Participants of such Participating Employer to such new Trustee as shall
have been designated by such Participating Employer, in the event that it has
established a separate pension plan for its Employees, provided however, that no
such transfer shall be made if the result is the elimination or reduction of any
"Section 411(d)(6) protected benefits" in accordance with Section 8.1(c). If no
successor is designated, the Trustee shall retain such assets for the Employees
of said Participating Employer pursuant to the provisions of Article VII hereof.
In no such event shall any part of the corpus or income of the Trust as it
relates to such Participating Employer be used for or diverted to purposes other
than for the exclusive benefit of the Employees of such Participating Employer.
11.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all necessary
rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of this Article.
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IN WITNESS WHEREOF, this Plan has been executed the day and year first
above written.
Citizens First Savings Bank
By
-------------------------------------
EMPLOYER
Citizens First Savings Bank
By
-------------------------------------
TRUSTEE
ATTEST
---------------------------------
CFS FINANCIAL SERVICES, INC.
By
------------------------------------
EMPLOYER
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CERTIFICATE OF CORPORATE RESOLUTION
The undersigned Secretary of Citizens First Savings Bank (the Corporation)
hereby certifies that the following resolutions were duly adopted by the board
of directors of the Corporation on November 18, 1999, and that such resolutions
-----------------
have not been modified or rescinded as of the date hereof:
RESOLVED, that the form of Profit Sharing Plan and Trust effective January
1, 2000, presented to this meeting is hereby approved and adopted and that the
proper officers of the Corporation are hereby authorized and directed to execute
and deliver to the Trustee of the Plan one or more counterparts of the Plan.
RESOLVED, that for purposes of the limitations on contributions and
benefits under the Plan, prescribed by Section 415 of the Internal Revenue Code,
the "limitation year" shall be the Plan Year.
RESOLVED, that not later than the due date (including extensions hereof)
of the Corporation's federal income tax return for each of its fiscal years
hereafter, the Corporation shall contribute to the Plan for each such fiscal
year such amount as shall be determined by the board of directors of the
Corporation and that the Treasurer of the Corporation is authorized and directed
to pay such contribution to the Trustee of the Plan in cash or property and to
designate to the Trustee the year for which such contribution is made.
RESOLVED, that the proper officers of the Corporation shall act as soon as
possible to notify the employees of the Corporation of the adoption of the
Profit Sharing Plan by delivering to each employee a copy of the summary
description of the Plan in the form of the Summary Plan Description presented to
this meeting, which form is hereby approved.
The undersigned further certifies that attached hereto as Exhibits A, B
and C, respectively, are true copies of Citizens First Bank 401(k) Plan, Summary
Plan Description and Funding Policy and Method approved and adopted in the
foregoing resolutions.
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Secretary
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Date
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