Exhibit 10(F)
Prototype 401(k) Adoption Agreement,
Retirement Plan, and Trust Agreement
T. Rowe Price Trust Company
[T. Rowe Price Logo]
T. ROWE PRICE TRUST COMPANY
PROTOTYPE 401(k) ADOPTION AGREEMENT, RETIREMENT PLAN, AND
TRUST AGREEMENT
TABLE OF CONTENTS
I. 401 (k) Retirement Plan Adoption Agreement ......... 1
II. GUST Transition Optional Supplement ................ 22
III. EGTRRA Adoption Agreement .......................... 25
IV. Prototype 401(k) Retirement Plan Document .......... 29
V. EGTRRA Amendment ................................... 88
VI. 401(k) Retirement Plan Trust Agreement ............. 92
VII. IRS Opinion Letter ................................. 101
IMPORTANT INSTRUCTIONS:
Sections I - III need to be completed, signed, and returned to T. Rowe
Price. Please keep a copy of the sections that you return to T. Rowe Price.
Sections IV - VII are for your reference and files.
T. ROWE PRICE TRUST COMPANY
401(k) RETIREMENT PLAN
ADOPTION AGREEMENT
Name of Employer: LTX Corporation
Address: LTX Park at University Avenue
Westwood, Massachusetts 02090
Phone No: (781) 467-5327
Plan Contact: Jill Barres
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T. ROWE PRICE
TRUST COMPANY
401(k) RETIREMENT PLAN
ADOPTION AGREEMENT
This is the Adoption Agreement for defined contribution plan #001 of basic plan
document #03, which is a combined prototype section 401(k)/profit sharing
defined contribution plan. (Prior to the amendment and restatement of this plan
document and adoption agreement, the plan document was T. Rowe Price Trust
Company basic plan document #01.) This Adoption Agreement may be used only in
conjunction with basic plan document #03.
Note: Before executing this Adoption Agreement, the Employer should consult
with a tax adviser or attorney. This plan may not meet the Employer's
requirements for continued plan qualification. In addition, failure to
properly complete this Adoption Agreement may result in plan
disqualification.
The Employer hereby establishes a section 401(k) plan and a trust for such plan
upon the respective terms and conditions contained in the section 401(k)
prototype plan #03 and the Trust Agreement to the plan and appoints as
Trustee(s) of such trust the person(s) who has(have) executed this Adoption
Agreement evidencing his/her/its/their acceptance of such appointment.
The Plan and Trust Agreement shall be supplemented and modified by the terms and
conditions contained in the Adoption Agreement and any supplements thereto and
shall be effective on the date(s) specified herein.
After the Employer has notified T. Rowe Price Trust Company it has adopted the
prototype plan, T. Rowe Price Trust Company will inform the Employer of any
amendments made to the prototype plan or the discontinuance or abandonment of
the prototype plan after T. Rowe Price Trust Company receives such notice and
until the earlier of (i) the date the Employer notifies T. Rowe Price Trust
Company it has ceased to use this prototype plan or (ii) the date the Plan's
asset records are not kept by T. Rowe Price Trust Company or any affiliate of T.
Rowe Price Trust Company.
1. Plan Data.
(Complete 1.1 or 1.2, and complete 1.3)
1.1 New Plan.
(a) Name of Plan:
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(Please print or type complete, legal name of the Plan)
(b) Effective Date of the Plan:
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(month/day/year)
(c) Plan Year End:
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(month/day)
1.2 If this is an amendment of existing plan, complete the following:
(a) Name of Existing Plan:
LTX Corporation Growth and Investment Program
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(Please print or type complete, legal name of the Plan)
(b) Initial Effective Date of Plan: 10/01/1995
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(c) Effective Date of Amended Plan (complete (1) or (2))
(1) If the plan is being amended and restated to
comply with GUST (the 1994-1998 laws - GATT, USERRA,
SBJPA, TRA'97 and IRSRRA - that require plan
amendments):
01/01/1997
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Effective Date of Amendment (month/day/year)
(If the Plan's initial effective date was on or before January
1, 1997, enter the first day of the Plan Year beginning in
1997. If the Plan's initial effective date was after December
31, 1996, enter the Plan's initial effective date.)
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(2) If the Plan is not being amended to comply with GUST:
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Effective Date of Amendment (month/day/year)
(Usually, this is the first day of the Plan Year in which the
amendment is effective.)
Note: The provisions of a cash or deferred arrangement may be made effective as
of the first day of the Plan Year in which the cash or deferred
arrangement is adopted, but a salary deferral mechanism may not be adopted
retroactively.
(d) Plan Year End: 12/31
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(month/day)
1.3 Plan Number: 001
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(3 digits)
2. Employer Data.
2.1 Employer: LTX Corporation
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(Print or type complete legal name of business)
Employer shall also mean any Employer(s) associated with the
Employer named above under section 414(b), 414(c) or 414(m) of the
Code.
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2.2 Employer's Taxable Year End: 07/31
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2.3 Employer's Tax ID #: 04-2594045
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2.4 The Employer is: [X] a corporate entity.
[ ] a non-corporate entity.
[ ] a corporation electing Subchapter S treatment.
3. Crediting of Service.
3.1 For purposes of determining eligibility to participate, Early
Retirement Age (if applicable) and vesting, service shall be credited
based on the following method (Choose (a) or (b)):
(a) [X] Elapsed Time. Under this method, service is measured from
date of employment with the Employer to date of termination of
employment with the Employer and a period of service shall
include any period of severance of less than 12 consecutive
months. (Plan Section 1.19)
(b) [ ] Hours of Service. Under this method, a year of service is a
12 consecutive month period during which the Employee
completes at least 1,000 Hours of Service. (Plan Section 1.30)
Complete (1) and (2).
(1) Hours of Service will be determined on the basis of the
method selected below. Only one method may be selected. The
method selected will be applied to all Employees.
(A) [ ] On the basis of actual hours for which an
Employee is paid or entitled to payment by the
Employer.
(B) [ ] On the basis of days worked for the Employer. An
Employee will be credited with ten Hours of Service
if under Plan Section 1.30 such Employee would be
credited with at least one Hour of Service during
the day.
(C) [ ] On the basis of weeks worked for the Employer. An
Employee will be credited with 45 Hours of Service
if under Plan Section 1.30 such Employee would be
credited with at least one Hour of Service during
the week.
(D) [ ] On the basis of semimonthly payroll periods worked
for the Employer. An Employee will be credited with
95 Hours of Service if under Plan Section 1.30 such
Employee would be credited with at least one Hour of
Service during the semimonthly payroll period.
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(E)[ ] On the basis of months worked for the Employer. An
Employee will be credited with 190 Hours of Service if
under Plan Section 1.30 such Employee would be credited
with at least one Hour of Service during the month.
(2) Twelve Consecutive Month Period.
(A) Vesting. For purposes of determining vesting, a Year of
Vesting Service is a Plan Year in which an Employee
completes at least 1,000 Hours of Service. (Plan Section
1.59)
(B) Eligibility. For purposes of determining eligibility to
participate in the Plan (Years of Eligibility Service),
the initial eligibility computation period is the twelve
consecutive month period beginning on the day an
Employee first performs an Hour of Service for the
Employer. (Plan Section 1.58) The following twelve
consecutive month periods shall begin on (choose one):
[ ] The first anniversary of the date an Employee
first performs an Hour of Service for the Employer.
[ ] The first day of each Plan Year beginning after
the date the Employee first performs
3.2 Service with predecessor Employer. (Plan Section 2.3) Complete (a) or (b)
Note: If this is a continuation of a predecessor plan, service under the
predecessor plan must be counted.
(a) [X] No credit will be given for service with a predecessor Employer.
(b) [ ] Credit will be given for service with the following predecessor
Employer(s):
Note: If this is not a continuation of a predecessor plan, service with a
predecessor employer must be limited as provided in accordance with the
provisions of regulation section 1.401(a)(4)-5(a)(3).
4. Eligibility.
Note: If the period of time selected is or includes a fractional year, an
Employee will not be required to complete any specified number of Hours
of Service to receive credit for such fractional year even if the
Employer elected in Section 3 of this Adoption Agreement to credit
service using the Hours of Service method.
4.1 Participation Requirements. All Employees shall be eligible to participate
in this Plan in accordance with the provisions of Article II of the Plan,
except the following (Plan Section 2.3):
[ ] Employees who have not attained age _____ (cannot be later than 21);
[ ] Employees who have not completed _____ months (not to exceed 12
months) of service;
[ ] Employees who have not completed one Year of Eligibility Service
(Hours of Service method);
[ ] Employees included in a unit of Employees covered by a collective
bargaining agreement, if retirement benefits were the subject of good
faith bargaining between the Employer and employee representatives.
Employee representatives do not include any organization more than half
of whose members are Employees who are owners, officers or executives
of the Employer;
[ ] Employees who are nonresident aliens and who receive no earned income
from the Employer which constitutes income from sources within the
United States;
[ ] Employees included in the following job classifications:
[ ] Hourly
[ ] Employees; Salaried Employees;
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[X] Leased Employees;
[X] Other class or classes of Employees:
Cooperative students and interns, and temporary or seasonal
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employees who are hired for less than a 12-month period
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(Note: that these classifications cannot be based on age or
service and must be based on specific objective criteria that are
not subject to Employer discretion. An exclusion of "part-time"
Employees is not permissible.)
[ ] Employees of the following Employers aggregated under section
414(b), 414(c) or 414(m) of the Code:
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Note: If no entries are made above, all Employees shall be eligible to
participate in the Plan on the earlier of the Effective Date or the
Entry Date coincident with or next following the date of employment.
4.2 The Entry Dates shall be (choose one): (Plan Section 1.25)
(a)[ ] the first day of each Plan Year and the first day of the
seventh month in each Plan Year.
(b)[ ] the first day of each Plan Year and the first day of each
quarter thereafter.
(c)[ ] the first day of each Plan Year and the first day of each
month thereafter.
(d)[X] the date on which the eligibility requirements of the Plan,
if any are applicable, are met.
5. Compensation. (Plan Section 1.13)
Note: Do not complete this Section 5 of this Adoption Agreement if the Plan
is intended to be a "safe harbor" cash or deferred arrangement. If
the Plan is a "safe harbor" cash or deferred arrangement, check this
box [ ] and complete Section 9 of this Adoption Agreement.
5.1 Subject to the following provisions of this Section of the Adoption
Agreement, for purposes of determining contributions and allocations
to a Participant's Account, Compensation will mean a Participant's
(choose one):
(a)[X] W-2 earnings (including salary deferrals); or
(b)[ ] Compensation as that term is defined in section 415 of the
Code; or
(c)[ ] Wages as defined in section 3401(a) of the Code.
For the Plan Year but excluding the following:
Profit Sharing Bonus Plan payments
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Note: If this Plan has a Discretionary Profit Sharing Contribution
allocation formula that is integrated with Social Security (Plan
Section 5.1(b)), Compensation must be defined as W-2 earnings,
compensation as defined in section 415 of the Code or wages as
defined in section 3401(a) of the Code; no exclusions are allowed.
5.2 Compensation for a Plan Year will mean
(a)[X] Compensation paid to the Employee by the Employer during
the entire Plan Year.
(b)[ ] Compensation paid to the Employee by the Employer only during
that portion of the Plan Year during which the Employee was
eligible to participate in the Plan.
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6. Participant Contributions.
6.1. Elective Deferrals. (Plan Section 3.2(b)) Complete (a) or (b).
(a)[ ] Elective Deferrals are not permitted.
(b)[X] A Participant may elect to defer an amount up to 15% of his
or her Compensation paid during a pay period.
Notwithstanding the foregoing, Elective Deferrals made on behalf of a
Participant for a Plan Year shall not exceed $________. (If the immediately
preceding sentence is not completed, only the percentage limit will apply
to Elective Deferrals.)
6.2. Employee After-Tax Contributions. (Plan Section 3.2(a)) Complete (a)
or (b).
(a)[X] Employee After-Tax Contributions are not permitted.
(b)[ ] A Participant may make Employee After-Tax Contributions to
the Plan in an amount up to ____% of his or her Compensation
paid during a pay period.
Notwithstanding the foregoing, Employee After-Tax Contribution made on
behalf of a Participant for a Plan Year shall not exceed $______. (If the
immediately preceding sentence is not completed, only the percentage limit
will apply to Employee After-Tax Contributions.)
Note: Even if this is a "safe harbor" cash or deferred arrangement,
Employee After-Tax Contributions are always subject to the ACP Test.
6.3 Combined Limits on Participant Contributions
If the Employer elects 6.1(b) and 6.2(b), above, a Participant's
aggregate Elective Deferrals and Employee After-Tax Contributions for
a pay period may not exceed ____% of his or her Compensation paid
during a pay period.
Note: If the Plan is intended to qualify as a "safe harbor" cash or
deferred arrangement, each Participant must be able to make Elective
Deferrals in an amount that is at least sufficient for the
Participant to receive the maximum amount of safe harbor matching
contributions available under the Plan. For instance, if the Employer
elects the Safe Harbor Matching Contribution in Section 9 of this
Adoption Agreement, a Participant must have the ability to make
Elective Deferrals up to at least 5% of Total Compensation as defined
in Section 9.1 of this Adoption Agreement.
6.4 Rollovers. (Plan Section 3.2(c)) Complete (a) or (b).
(a)[ ] The Plan does not accept rollovers.
(b)[X] The Plan accepts rollovers.
6.5 Participant-Directed Plan-to-Plan Transfers. (Plan Section 3.2(d))
Choose one.
(a)[X] The Plan does not accept Participant-directed plan-to-plan
transfers.
(b)[ ] The Plan accepts Participant-directed plan-to-plan transfers.
7. Employer Contributions.
Do not complete this Section 7 of this Adoption Agreement if this Plan is
intended to be a "safe harbor" cash or deferred arrangement. If this Plan is
intended to be a "safe harbor" cash or deferred arrangement, check this box
[ ] and complete Section 9 of this Adoption Agreement.
7.1 Matching Contributions. (Plan Section 3.3(a))
(a) Matching Contributions. Complete (1) or (2)
(1)[X] shall be made to the Plan. The type of Matching
Contribution shall be (choose (A) or (B)):
(A)[ ] Mandatory (Complete (b)(1) and (d) below)
(B)[X] Discretionary (Complete (b)(2) and (d) below)
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(2)[ ] shall not be made to Plan. (If this subparagraph (2) is elected, do
not complete the following paragraphs (b), (c) or (d)).
(b) Matching Contribution Formula. (Complete (1) or (2))
(1) Mandatory Matching Contribution. (Complete (A) and/or (B). If both (A)
and (B) are completed, complete (C).)
(A)[ ] Match on Elective Deferrals. The Employer shall contribute
and allocate to each eligible Participant's Matching
Contributions subaccount an amount equal to ____% of the
Participant's Elective Deferrals up to ____% of the
Participant's Compensation.
Notwithstanding the foregoing, the Matching Contribution made
on behalf of an eligible Participant for the Plan Year with
respect to Elective Deferrals shall not exceed $____. (If the
immediately preceding sentence is not completed, only the
percentage limitation will apply to Matching Contributions.)
(B)[ ] Match on Employee After-Tax Contributions. The Employer shall
contribute and allocate to each eligible Participant's Matching
Contribution subaccount an amount equal to ____% of the
Participant's Employee After-Tax Contributions up to ____% of
the Participant's Compensation.
Notwithstanding the foregoing, the Matching Contribution made
on behalf of an eligible Participant for the Plan Year with
respect to Employee After-Tax Contributions shall not exceed
$____. (If the immediately preceding sentence is not completed,
only the percentage limitation will apply to Matching
Contributions.)
(C)[ ] Match on Elective Deferrals and Employee After-Tax
Contributions. If the Employer makes Matching Contributions
with respect to both Elective Deferrals and Employee After-Tax
Contributions, choose (i) or (ii).
(i) [ ] Matching Contributions shall be limited only as
provided in (A) and (B) above.
(ii)[ ] In addition to any limitations on Matching
Contributions described above, for purposes of
calculating such Matching Contributions, the total of
an eligible Participant's Elective Deferrals and
Employee After-Tax Contributions shall be treated as
not exceeding ____% of the Participant's Compensation.
Notwithstanding the foregoing, the Matching Contribution made
on behalf of an eligible Participant with respect to the
Participant's total Elective Deferrals and Employee After-Tax
Contributions for the Plan Year shall not exceed $____. (If
the immediately preceding sentence is not completed, only the
percentage limitation(s) will apply to Matching Contributions
made with respect to Elective Deferrals and Employee After-Tax
Contributions.)
(2) Discretionary Matching Contributions (Complete (A) and/or (B). If both
(A) and (B) are completed, complete (C).)
(A)[X] Discretionary Match on Elective Deferrals. The Employer may
make discretionary Matching Contributions from Plan Year to
Plan Year as it deems advisable. Such discretionary Matching
Contributions, if made, shall be equal to a specified
percentage of each eligible Participant's Elective Deferrals,
except that the Employer may establish a limit (expressed
either as a uniform dollar amount or percentage of
Compensation) on the amount of Elective Deferrals which shall
be matched.
(B)[ ] Discretionary Match on Employee After-Tax Contributions. The
Employer may make discretionary Matching Contributions from
Plan Year to Plan Year as it deems advisable. Such
discretionary Matching Contributions, if made, shall be equal
to a specified percentage of each Participant's Employee
After-Tax Contributions, except that the Employer may establish
a limit (expressed either as a uniform dollar amount or
percentage of Compensation) on the amount of Employee After-Tax
Contributions which shall be matched.
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(C)[ ] Discretionary Match on Elective Deferrals and Employee
After-Tax Contributions. If the Employer makes discretionary
Matching Contributions with respect to both Elective Deferrals
and Employee After-Tax Contributions, choose (i) or (ii).
(i) [ ] Discretionary Matching Contributions shall be limited
only as provided in (A) and (B) above.
(ii)[ ] In addition to any limitations on discretionary Matching
Contributions described above, for purposes of
calculating the amount of discretionary Matching
Contributions, such discretionary Matching Contributions,
if made, shall be equal to a specified percentage of the
total of a Participant's Elective Deferrals and Employee
After-Tax Contributions, which may be treated as not
exceeding a uniform dollar amount or percentage of
Compensation.
(c) Eligibility for Matching Employer Contributions. A Participant shall be
eligible to receive a Matching Contribution (whether mandatory or
discretionary) for a Plan Year only if (choose one):
(1)[ ] For a plan using the Hours of Service method of crediting service,
(i) his employment with the Employer terminates during the Plan Year
by reason of death, retirement on or after Early Retirement Age, if
applicable, or Normal Retirement Age, or Total and Permanent
Disability, or (ii) he completes at least 1,000 Hours of Service
during the Plan Year and is employed by the Employer on the last day
of the Plan Year.
(2)[ ] For a plan using the Hours of Service method of crediting service,
he completes at least 1,000 Hours of Service during the Plan Year.
(3)[ ] For a plan using the Hours of Service method of crediting service,
(i) his employment with the Employer terminates during the Plan Year
by reason of death, retirement on or after Early Retirement Age, if
applicable, or Normal Retirement Age, or Total and Permanent
Disability, or (ii) he completes at least 1,000 Hours of Service
during the Plan Year.
(4)[ ] (i) His employment with the Employer terminates during the Plan
Year by reason of death, retirement on or after Early Retirement
Age, if applicable, or Normal Retirement Age, or Total and Permanent
Disability, or (ii) he is employed by the Employer on the last day
of the Plan Year.
(5)[ ] He is employed by the Employer on the last day of the Plan Year.
(6)[X] He was a Participant in the Plan at any time during the Plan Year.
Note: If the Employer selects (1), (4) or (5) above, the Employer may not make
any Matching Contribution for a Plan Year until after the end of the Plan
Year. If the Employer selects (2) or (3) above, the Employer may not make
a Matching Contribution for a Plan Year until that Participant has
satisfied the requirements of (2) or (3), as applicable, during such Plan
Year.
(d) Period for Calculating Matching Contributions. For purposes of
calculating the amount of Matching Contributions, such calculations
shall be performed on the basis of a Participant's Elective Deferrals
and/or Employee After-Tax Contributions made and Compensation paid
(choose one):
(1)[ ] During each payroll period.
(2)[X] During the Plan Year (or, if 5.2(b) is elected above, during
that portion of the Plan Year during which the Participant was
eligible to participate in the Plan).
Note: If the Employer selects (2), the Employer may make Matching Contributions
on a per payroll period basis. After the end of the Plan Year, the
Employer must also perform the calculation on a Plan Year basis to
determine if additional Matching Contributions must be made for the Plan
Year.
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7.2 Discretionary Profit Sharing Contributions. (Plan Section 3.3(b))
(a) Discretionary Profit Sharing Contributions (choose (1) or (2))
(1)[ ] Shall not be made to the Plan.
(2)[X] May be made to the Plan each Plan Year as determined by the
Employer.
Complete (b) and (c) only if the immediately preceding box is selected.
(b) Eligibility for Discretionary Profit Sharing Contributions. A
Participant shall be eligible to share in the allocation of
Discretionary Profit Sharing Contributions for a Plan Year only if
(choose one):
(1)[ ] For a plan using the Hours of Service method of crediting
service, (i) his employment with the Employer terminates during
the Plan Year by reason of death, retirement on or after Early
Retirement Age, if applicable, or Normal Retirement Age, or
Total and Permanent Disability, or (ii) he completes at least
1,000 Hours of Service during the Plan Year and is employed by
the Employer on the last day of the Plan Year.
(2)[ ] For a plan using the Hours of Service method of crediting
service, he completes at least 1,000 Hours of Service during the
Plan Year.
(3)[ ] For a plan using the Hours of Service method of crediting
service, (i) his employment with the Employer terminates during
the Plan Year by reason of death, retirement on or after Early
Retirement Age, if applicable, or Normal Retirement Age, or
Total and Permanent Disability, or (ii) he completes at least
1,000 Hours of Service during the Plan Year.
(4)[ ] (i) His employment with the Employer terminates during the
Plan Year by reason of death, retirement on or after Early
Retirement Age, if applicable, or Normal Retirement Age, or
Total and Permanent Disability, or (ii) he is employed by the
Employer on the last day of the Plan Year.
(5)[X] He is employed by the Employer on the last day of the Plan
Year.
(6)[ ] He was a Participant in the Plan at any time during the Plan
Year.
Note: The Employer may not allocate any Discretionary Profit Sharing
Contribution for a Plan Year until after the end of the Plan Year.
(c) Allocation of Discretionary Profit Sharing Contributions. (Complete
(1) or (2). If the Employer maintains any other plan in addition to
this Plan, only one plan may provide for permitted disparity (i.e.,
integration with Social Security).)
(1)[X] Nonintegrated - Discretionary Profit Sharing Contributions for
a Plan Year shall be allocated to the Discretionary Profit
Sharing Contribution subaccount of all Participants eligible for
an allocation of such contribution in the ratio in which each
such eligible Participant's Compensation for such Plan Year
bears to the Compensation of all such eligible Participants for
such Plan Year.
(2)[ ] Integrated - Discretionary Profit Sharing Contributions for a
Plan Year shall be integrated with Social Security and allocated
in accordance with the provisions of Plan Section 5.1(b). The
Plan's Integration Level shall be (choose (A) or (B)):
(A)[ ] The Social Security Taxable Wage Base.
(B)[ ] ____% (not to exceed 100%) of the Social Security Taxable
Wage Base.
Note: If the Employer maintains any other plan in addition to this Plan, only
one plan may be integrated with Social Security.
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8. ADP and ACP Nondiscrimination Testing.
Note: This Section does not apply in any Plan Year the Plan is a safe harbor
cash or deferred arrangement.
8.1 First Plan Year
(a) ADP Test - The plan document provides that for the first Plan Year the
Plan permits any Participant to make Elective Deferrals, the prior
year's ADP of Non-Highly Compensated Employees shall be 3% unless the
Employer checks the box below. (Plan Section 3.6(a))
[ ] If this box is checked, and if this is not a successor plan, for the
first Plan Year this Plan permits any Participant to make Elective
Deferrals, the ADP used in the ADP Test for Participants who are
Non-Highly Compensated Employees shall be such first Plan Year's ADP
of such Non-Highly Compensated Employees.
Note: The Employer may not check this box if the Employer has elected Current
Year Testing.
(b) ACP Test - The plan document provides that for the first Plan Year the
Plan permits any Participant to make Employee After-Tax Contributions
or provides for Matching Contributions, the prior year's ACP of
Non-Highly Compensated Employees shall be 3% unless the Employer
checks the box below. (Plan Section 3.7(a))
[ ] If this box is checked, and if this is not a successor plan, for the
first Plan Year this Plan permits any Participant to make Employee
After-Tax Contributions, or provides for Matching Contributions, or
both, the ACP used in the ACP test for Participants who are Non-Highly
Compensated Employees shall be such first Plan Year's ACP for such
Non-Highly Compensated Employees.
Note: The Employer may not check this box if the Employer has elected Current
Year Testing.
8.2 Current Year Testing. (Sections 3.6(a) and 3.7(a))
[ ] If this box is checked, the Plan is using Current Year Testing for
purposes of the ADP and ACP tests.
Note: Once the Employer has elected Current Year Testing, the Employer cannot
elect out of Current Year Testing unless (i) the Plan has been using
Current Year Testing for the preceding five Plan Years or, if lesser,
the number of Plan Years the Plan has been in existence, or (ii) the
Plan otherwise meets one of the conditions specified in IRS Notice 98-1
(or superceding guidance) for changing from Current Year Testing.
8.3 Determining Highly Compensated Employees.
(a) Top Paid Group Election. (Plan Section 1.29)
[ ] In determining who is a Highly Compensated Employee, the Employer
makes a top-paid group election by checking this box. The effect of
this election is that an Employee (who is not a Five Percent Owner at
any time during the determination year or the look-back year) with
compensation in excess of $80,000 (as adjusted) for the look-back year
is a Highly Compensated Employee only if the Employee was in the
top-paid group for the look-back year.
(b) Calendar Year Data Election. (Plan Section 1.29)
[ ] In determining who is a Highly Compensated Employee (other than a
Five Percent Owner), the Employer makes a calendar year data election
by checking this box. The effect of this election is that the
look-back year is the calendar year beginning with or within the
look-back year.
Note: If both of these elections are made, the look-back year in determining
the top-paid group must be the calendar year beginning with or within
the look-back year. If either election is made, the election(s) must
apply consistently to the determination years of all plans of the
Employer, except that (i) the consistency requirement does not apply to
determination years beginning in 1997, and (ii) for determination years
beginning in 1998 and 1999, satisfaction of the consistency requirement
is determined without regard to any nonretirement plan of the Employer.
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8.4 Testing Compensation. (Plan Section 3.1(j))
For purposes of applying the ADP and ACP Tests, Testing Compensation will
mean any definition of compensation permitted under section 414(s) of the
Code and will mean (choose (a) or (b)):
(a)[X] Testing Compensation paid to the Employee by the Employer during
the entire Plan Year.
(b)[ ] Testing Compensation paid to the Employee by the Employer only
during that portion of the Plan Year during which the Employee was
eligible to participate in the Plan.
9. Safe Harbor CODA Provisions.
Note: Complete this Article if the Plan is intended to be a "safe harbor"
cash or deferred arrangement.
9.1 Compensation. Complete both (a) and (b) below. (Plan Section 1.52)
For purposes of determining Safe Harbor Matching Contributions, Safe
Harbor Nonelective Contributions and ACP Test Only Safe Harbor Matching
Contributions, Total Compensation shall be used.
(a) Total Compensation will mean a Participant's (choose one):
(1)[ ] W-2 earnings (including salary deferrals).
(2)[ ] Compensation as that term is defined in section 415 of the
Code.
(3)[ ] Wages as defined in section 3401(a) of the Code.
(b) Total Compensation for a Plan Year will mean (choose one):
(1)[ ] Total Compensation paid to the Employee by the Employer during
the entire Plan Year.
(2)[ ] Total Compensation paid to the Employee by the Employer only
during that portion of the Plan Year during which the
Participant was eligible to participate in the Plan.
9.2 Type of Employer Safe Harbor Contribution. (Choose (a) or (b)) (Plan
Section 4.2)
Note: Formulas (a)(1) and (a)(2) automatically satisfy both the ADP and ACP
Tests for a Plan Year if no other Matching Contributions are made
during the Plan Year.
Formula (b) (Safe Harbor Nonelective Contribution) automatically
satisfies the ADP Test for a Plan Year. If the Employer would like to
make a matching contribution in addition to the Safe Harbor Nonelective
Contribution, the ACP Test Only Safe Harbor Matching Contribution
automatically satisfies the ACP test for the Plan Year if no other
matching contributions are made during the Plan Year.
Regardless of what type of safe harbor contribution the Employer makes
to the Plan, Employee After-Tax Contributions are always subject to the
ACP Test. If the Employer makes any type of matching contributions in
addition to matching contributions in formulas (a) or (b), the matching
contributions are subject to the ACP Test using Current Year Testing.
Safe Harbor Matching Contributions and Safe Harbor Nonelective
Contributions are immediately nonforfeitable. ACP Test Only Safe Harbor
Matching Contributions may be subject to a vesting schedule.
(a) Safe Harbor Matching Contribution. (Choose (1) or (2))
(1)[ ] Safe Harbor Basic Matching Contribution. The Employer shall
contribute and allocate to each Participant's Safe Harbor
Matching Contribution subaccount an amount equal to 100% of the
Participant's Elective Deferrals up to 3% of the Participant's
Total Compensation (as determined in accordance with Section
9.1(a) above), plus 50% of the Participant's Elective Deferrals
from 3% to 5% of the Participant's Total Compensation.
(2)[ ] Safe Harbor Enhanced Matching Contribution. The Employer shall
contribute and allocate to each Participant's Safe Harbor
Matching Contribution subaccount an amount equal to ____% (must
be at least 100%) of the Participant's Elective Deferrals up to
____% (must be at least 4% and cannot be more than 6%) of the
Participant's Total Compensation.
11
(b) Safe Harbor Nonelective Contribution. If the Employer selects (1), it may
elect (2).
(1)[ ] Safe Harbor Nonelective Contribution. The Employer shall
contribute and allocate to each Participant's Safe Harbor
Nonelective Contribution subaccount an amount equal to 3% of the
Participant's Total Compensation for the Plan Year, regardless
of whether the Participant has made contributions to the Plan
during such Plan Year.
(2) ACP Test Only Safe Harbor Matching Contribution. In addition to
the Safe Harbor Nonelective Contribution, the Employer may elect
to make the following ACP Test Only Safe Harbor Matching
Contribution (which automatically satisfies only the ACP Test):
[ ] The Employer shall contribute and allocate to each
Participant's ACP Test Only Safe Harbor Matching
Contribution subaccount an amount equal to ____% of the
Participant's Elective Deferrals up to ____% (cannot be more
than 6%) of the Participant's Total Compensation.
9.3 Calculation of Safe Harbor Matching Contributions and ACP Test Only Safe
Harbor Matching Contributions. For purposes of calculating the amount of
Safe Harbor Matching Contributions and ACP Test Only Safe Harbor Matching
Contributions, such calculations shall be performed on the basis of a
Participant's Elective Deferrals made and Total Compensation paid (choose
one):
(a)[ ] During each payroll period.
(b)[ ] During the Plan Year (or, if 9.1(b)(2) is elected above, during
the portion of the Plan Year during which the Participant was
eligible to participate in the Plan).
Note: Safe Harbor Nonelective Contributions must be calculated on the basis
of Total Compensation paid during the Plan Year (or, if 9.1(b)(2) is
elected above, during that portion of the Plan Year during which the
Participant was eligible to participate in the Plan).
10. Vesting and Forfeitures.
10.1 Vesting of Certain Employer Contribution Accounts. (Plan Section 7.2)
All Participant contribution subaccounts are 100% vested. Safe Harbor
Matching Contribution and Safe Harbor Nonelective Contribution
subaccounts are immediately 100% vested.
Matching Contribution (including ACP Test Only Safe Harbor Matching
Contribution) and Discretionary Profit Sharing Contribution
subaccounts are vested in accordance with the following schedule.
(Complete (a), (b) or (c)) If no schedule below is selected, a
Participant shall be immediately 100% vested in all portions of his
Account.
Discretionary
Matching Profit Sharing
Contributions Contributions
(a) 100% full and immediate [ ] [ ]
(b) 5-year cliff (or graded) [ ] [ ]
after 1 Year of Vesting Service % %
after 2 Years of Vesting Service % %
after 3 Years of Vesting Service % %
after 4 Years of Vesting Service % %
after 5 Years of Vesting Service 100% 100%
12
(c) 7-year graded [X] [X]
after 1 Year of Vesting Service 20% 20%
after 2 Years of Vesting Service 40% 40%
(must be at least 20%) after 3 Years of Vesting Service 60% 60%
(must be at least 40%) after 4 Years of Vesting Service 80% 80%
(must be at least 60%) after 5 Years of Vesting Service 100% 100%
(must be at least 80%) after 6 Years of Vesting Service 100% 100%
after 7 Years of Vesting Service 100% 100%
Note: For purposes of vesting, Matching Contributions includes ACP Test Only
Safe Harbor Matching Contributions.
10.2 Forfeitures. Forfeitures shall be allocated in accordance with the
provisions of Section 5.5 of the Plan. To the extent provided in such
Section, forfeitures of unvested Employer Contributions shall be (choose
(a) or (b)):
(a)[X] used to reduce Matching Contributions and/or Safe Harbor
Contributions.
(b)[ ] allocated among other Participants in accordance with the provisions
of Section 5.5(f) of the Plan.
11. Loans. (Plan Article VIII)
11.1 [ ] will not be permitted.
11.2 [X] will be permitted up to 50% (not more than 50%) of the
Participant's vested account balance.
12. In-Service Withdrawals.
12.1 Hardship Distributions (Plan Section 9.3)
(a) Hardship distributions
(1)[ ] will not be permitted.
(2)[X] will be permitted.
(b) Hardship distributions may be made from
(1)[ ] Elective Deferral subaccounts only.
(2)[X] Elective Deferral, vested Employer Matching Contribution
and vested Discretionary Profit Sharing Contribution
subaccounts.
Note: Hardship distributions of Qualified Non-Elective Contribution, Qualified
Matching Contribution and Safe Harbor Contribution subaccounts are not
allowed. For purposes of vesting, Matching Contributions includes ACP Test
Only Safe Harbor Matching Contributions.
12.2 Age 59 1/2. In-service distributions after age 59 1/2(Plan Section
9.4)
(a) [X] will not be permitted.
(b) [ ] will be permitted.
12.3 Retirement Age. In-service distributions to Participants who have
reached Early or Normal Retirement Age (Plan Section 9.2)
(a)[ ] shall not be permitted except to the extent hardship and/or age 59
1/2 in-service distributions are elected above.
(b)[X] shall be permitted on and after the date the Participant has reached
age 65.0 (not less than 59 1/2).
13
13. Benefits.
A Participant shall be 100% vested in his Account if he is employed by the
Employer upon reaching Normal or Early Retirement Age under the Plan.
13.1 Normal Retirement Age. (Choose (a) or (b)) (Plan Section 1.35)
(a) [x] The date on which a Participant reaches age ______ (not more
than 65 or less than 55). If no age is indicated, Normal
Retirement Age shall be 65.
(b) [ ] The later of the date a Participant reaches age ________ (not
more than 65) or the _____ (not more than 5th) anniversary of
the day the Participant commenced participation in the Plan.
(The participation commencement date is the first day of the
first Plan Year in which the Participant commenced
participation in the Plan.)
13.2 Early Retirement Age. (Choose (a) or (b)) (Plan Section 1.16)
(a) [x] Early retirement will not be permitted under the Plan.
(b) [ ] The date on which a Participant reaches age ______ (not less
than 55) and completes ______ Years of Vesting Service (not
more than 15).
13.3 Method of Distribution. (Plan Section 10.7)
Subject to Article XI of the Plan, benefits under the Plan shall be
paid under the following method or methods (Choose (a), (b), and/or
(c)):
(a) [x] Single sum payment;
(b) [x] Periodic installments;
(c) [ ] A paid-up annuity contract.
Note: If this is a continuation of an existing plan, you may eliminate a
form of benefit previously offered only in accordance with section
411(d)(6) of the Code and the regulations thereunder.
13.4 Required Beginning Date.
The Plan provides that any Participant working for the Employer who
reached age 70 1/2in years prior to 1997 (other than a Five Percent
Owner) may elect to stop his minimum required distributions and
restart distributions by the April 1 of the year after the year in
which he retires from the Employer. When the Participant's benefits
restart, there will be a new annuity starting date unless the
following is elected (Plan Section 10.9(a)(vi)(B)(2)):
[ ] There will not be a new annuity starting date when benefits
restart after retirement.
14. Top Heavy Provisions.
In any Plan Year the Plan is determined to be top heavy, the following
provisions shall become effective.
14.1 Vesting. For any Plan Year in which this Plan is top heavy, the
following minimum vesting schedule will automatically apply to the
Plan (Choose (a), (b) or (c)) (Plan Section 12.4):
(a) [x] Years of Vesting Service Nonforfeitable Percentage
after 1 year 0%
after 2 years 20% (must be at least 20%)
after 3 years 40% (must be at least 40%)
after 4 years 60% (must be at least 60%)
after 5 years 80% (must be at least 80%)
after 6 years 100%
14
(b)[ ] Years of Vesting Service Vested Percentage
1 year _____% ________%
2 years _____% ________%
3 years 100% 100%
________________________________________________________________________________
(c)[ ] See vesting schedule selected in Section 10 of this Adoption
Agreement. (This option may be selected only if the vesting
schedule(s) selected in Section 10 of this Adoption Agreement
is(are) at least as rapid as one of the top-heavy vesting
schedules shown in (a) and (b) above.)
If the vesting schedule under the Plan shifts in or out of the above
schedule for any Plan Year because of the Plan's top heavy status,
such shift is an amendment to the vesting schedule and the election in
Section 7.4 of the Plan applies.
14.2 Minimum Allocation. If the Participant also participates in another
qualified defined contribution plan maintained by the Employer, the
required minimum allocation shall be provided (Choose (a) or (b))
(Plan Section 12.3(d)):
(a)[X] under this Plan.
(b)[ ] under the following qualified plan maintained by the Employer:
___________________________________________________________________________
15. Allocation Limitation.
All Employers must complete Section 15.1 of this Adoption Agreement. If the
Employer maintains or ever maintained another qualified plan in which any
Participant in this Plan is (or was) a Participant or could become a
Participant, the Employer may be required to complete Sections 15.2 and 15.3 of
this Adoption Agreement. If the Employer does not maintain and never maintained
any other qualified plan in which any Participant in this Plan is (or was) a
Participant or could become a Participant, the Employer must check this box [X]
and it need not complete Sections 15.2 and 15.3 of this Adoption Agreement.
15.1 Annual Additions Compensation. For purposes of determining Annual
Additions Limitations, Annual Additions Compensation shall be used.
Annual Additions Compensation shall mean the following type of
compensation paid to a Participant during the Plan Year (choose one)
(Plan Section 6.1(a)):
(a)[X] W-2 earnings (including salary deferrals).
(b)[ ] Compensation as defined in section 415 of the Code.
(c)[ ] Wages as defined in section 3401(a) of the Code.
15.2 Multiple Defined Contribution Plans. If the Participant is covered
under another qualified defined contribution plan maintained by the
Employer other than a master or prototype plan (choose one) (Plan
Section 6.3(g)):
(a)[ ] The provisions of (a) through (f) of Section 6.3 of the Plan
will apply as if the other plan were a master or prototype
plan.
(b)[ ] Provide below the method under which the plans will limit total
Annual Additions to the maximum permissible amount, and will
properly reduce any excess amounts, in a manner that precludes
Employer discretion.
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
15
15.3 Defined Benefit Plan. For Limitation Years beginning before January 1,
2000, if the Participant is or has ever been a Participant in a
defined benefit plan maintained by the Employer, the Employer must
provide below the method it will use to satisfy the limitation for
defined contribution plans in section 415(c) of the Code and, for
Limitation Years beginning before January 1, 2000, the 1.0 limitation
of section 415(e) of the Code, in a manner that precludes Employer
discretion. (Plan Section 6.4)
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
16. Employer Securities. (Plan Sections 1.1 and 5.6) (Choose 16.1 or 16.2)
16.1[X] The Plan does not permit investment in qualifying employer
securities, within the meaning of section 407(d)(5) of ERISA.
16.2[ ] The Plan may invest in qualifying employer securities, within the
meaning of section 407(d)(5) of ERISA. Unless otherwise limited by
supplement to this Adoption Agreement, Accounts may be invested in
qualifying employer securities in the same manner as other
allowable Investment Options under the terms of the Plan and the
Trust Agreement.
17. Plan Administration. (Plan Article XIII)
The Administrator of the Plan shall be (Choose 17.1, 17.2, 17.3 or 17.4):
Note: Neither T. Rowe Price Trust Company nor any of its affiliates may be
appointed Plan Administrator.
17.1 [ ] The Trustee;
17.2 [ ] The Employer;
17.3 [X] Retirement Plan Committee;
17.4 [ ] Other (complete the following).
Name: ____________________________________________________________
Address: _________________________________________________________
Note: If no Plan Administrator is indicated above, the Employer shall be
deemed the Plan Administrator.
17. Supplements.
If additional space is required to specify an elective feature under the
Plan or to amend the Plan, please attach additional pages as needed. Each
additional page must reference the Section of the Adoption Agreement or the
Plan to which the amendment applies and must be signed by the Employer and
Trustee(s). In addition, each supplemental page must be numbered, and the
total number of pages in the Adoption Agreement and additional pages must
be indicated in the last Section of the Adoption Agreement.
16
18. The Trustee(s).
The Employer hereby appoints the following to serve as Trustee(s):
Name: T. Rowe Price Trust Company
___________________________________________________________________________
(Print or type complete legal name)
Address:___________________________________________________________________
___________________________________________________________________
_________________________________ _______________________________
Witness Signature of Trustee
Dated:___________________________ (If the Trustee is a business entity,
the signa- ture must be that of an
authorized individual for the business.
Also, please print below the name and
title of the authorized individual:
______________________________________)
Name:______________________________________________________________________
Address:___________________________________________________________________
___________________________________________________________________
_________________________________ _______________________________
Witness Signature of Trustee
Dated:___________________________ (If the Trustee is a business entity,
the signa- ture must be that of an
authorized individual for the business.
Also, please print below the name and
title of the authorized individual:
______________________________________)
Name:______________________________________________________________________
Address:___________________________________________________________________
___________________________________________________________________
_________________________________ _______________________________
Witness Signature of Trustee
Dated:___________________________ (If the Trustee is a business entity,
the signa- ture must be that of an
authorized individual for the business.
Also, please print below the name and
title of the authorized individual:
______________________________________)
17
19. Employer Signature.
The Employer represents that the information in this Adoption Agreement
shall become effective only when approved and countersigned by the
Trustee(s). The right to reject this Adoption Agreement for any reason is
reserved by the Trustee(s).
Note: The Employer may rely on an opinion letter issued by the Internal
Revenue Service as evidence that the Plan is qualified under Code
section 401 only to the extent provided in Announcement 2001-77,
2001-30 I.R.B. The Employer may not rely on the opinion letter in
certain other circumstances or with respect to certain qualification
requirements, which are specified in the opinion letter issued with
respect to the plan and in Announcement 2001-77. In order to have
reliance in such circumstances or with respect to such qualification
requirements, application for a determination letter must be made to
Employee Plans Determinations of the Internal Revenue Service.
Employers with inquiries regarding the adoption of the prototype plan
document, the sponsoring organization's intended meaning of any prototype
plan document provision or the effect of the Opinion Letter should call:
T. Rowe Price Trust Company
100 East Pratt Street
Baltimore, Maryland 21202
(410) 345-4432
This Adoption Agreement consists of a total of 27 pages, which consist of
this Adoption Agreement and
[x] If this box is checked, the Optional Supplement to this Adoption
Agreement. (The Optional Supplement may be used only by an Employer
retroactively restating its plan for GUST. It may not be used after
the GUST restatement period.)
[x] If this box is checked, supplemental page(s) consisting of 1 page(s).
Also check one of the following:
[ ] Changes have been made to the plan document and/or trust agreement
that are not included in a supplemental page.
[x] No changes have been made to the plan document and/or trust agreement
that are not included in a supplemental page.
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed by its duly authorized officers this ____ day of August, 2002.
LTX Corporation
-------------------------------------------------------------------
Employer (Print or type complete legal name)
By:
----------------------------------------------------------------
Authorized Signature of Employer
Mark J. Gallenberger, Vice President and Chief Financial Officer
----------------------------------------------------------------
Name and Title (Please print or type)
----------------------------------------------------------------
Date
18
Duplicate Signature Page
If T. Rowe Price is your Trustee, please sign and return both sets of signature
pages. If T. Rowe Price is not your Trustee, please sign and return only one set
of signature pages.
18. The Trustee(s).
The Employer hereby appoints the following to serve as Trustee(s):
T. Rowe Price Trust Company
Name:______________________________________________________________________
(Print or type complete legal name)
Address:___________________________________________________________________
___________________________________________________________________
_____________________________ ________________________________
Witness Signature of Trustee
Dated:_______________________________ (If the Trustee is a business
entity, the signature must be
that of an authorized individual
for the business. Also, please
print below the name and title
of the authorized individual:
_______________________________)
Name:______________________________________________________________________
Address:___________________________________________________________________
___________________________________________________________________
_____________________________ ________________________________
Witness Signature of Trustee
Dated:_______________________________ (If the Trustee is a business
entity, the signature must be
that of an authorized individual
for the business. Also, please
print below the name and title
of the authorized individual:
_______________________________)
Name:______________________________________________________________________
Address:___________________________________________________________________
___________________________________________________________________
_____________________________ ________________________________
Witness Signature of Trustee
Dated:_______________________________ (If the Trustee is a business
entity, the signature must be
that of an authorized individual
for the business. Also, please
print below the name and title
of the authorized individual:
_______________________________)
19
Duplicate Signature Page
If T. Rowe Price is your Trustee, please sign and return both sets of signature
pages. If T. Rowe Price is not your Trustee, please sign and return only one set
of signature pages.
19. Employer Signature.
The Employer represents that the information in this Adoption Agreement
shall become effective only when approved and countersigned by the
Trustee(s). The right to reject this Adoption Agreement for any reason is
reserved by the Trustee(s).
Note: The Employer may rely on an opinion letter issued by the Internal
Revenue Service as evidence that the Plan is qualified under Code
section 401 only to the extent provided in Announcement 2001-77,
2001-30 I.R.B. The Employer may not rely on the opinion letter in
certain other circumstances or with respect to certain qualification
requirements, which are specified in the opinion letter issued with
respect to the plan and in Announcement 2001-77. In order to have
reliance in such circumstances or with respect to such qualification
requirements, application for a determination letter must be made to
Employee Plans Determinations of the Internal Revenue Service.
Employers with inquiries regarding the adoption of the prototype plan
document, the sponsoring organization's intended meaning of any prototype
plan document provision or the effect of the Opinion Letter should call:
T. Rowe Price Trust Company
100 East Pratt Street
Baltimore, Maryland 21202
(410) 345-4432
This Adoption Agreement consists of a total of 27 pages, which consist of
this Adoption Agreement and
[x] If this box is checked, the Optional Supplement to this Adoption
Agreement. (The Optional Supplement may be used only by an Employer
retroactively restating its plan for GUST. It may not be used after
the GUST restatement period.)
[x] If this box is checked, supplemental page(s) consisting of 1 page(s).
Also check one of the following:
[ ] Changes have been made to the plan document and/or trust agreement
that are not included in a supplemental page.
[x] No changes have been made to the plan document and/or trust agreement
that are not included in a supplemental page.
IN WITNESS WHEREOF, the Employer has caused this Adoption Agreement to be
executed by its duly authorized officers this ____ day of August, 2002.
LTX Corporation
-------------------------------------------------------------------
Employer (Print or type complete legal name)
By:
----------------------------------------------------------------
Authorized Signature of Employer
Mark J. Gallenberger, Vice President and Chief Financial Officer
----------------------------------------------------------------
Name and Title (Please print or type)
----------------------------------------------------------------
Date
20
[THIS PAGE INTENTIONALLY LEFT BLANK]
21
GUST TRANSITION OPTIONAL SUPPLEMENT
TO THE T. ROWE PRICE TRUST COMPANY
401(k) RETIREMENT PLAN ADOPTION AGREEMENT
(Defined Contribution Plan #001 of Basic Plan Document #03)
Instructions: Only an Employer that is retroactively restating its plan for GUST
needs to complete this Optional Supplement. If the Employer needs to use this
Optional Supplement to conform the plan document to the operation of the Plan,
complete all applicable sections below, execute this Optional Supplement and
check the first box at the end of section 19 of the Adoption Agreement.
1. Family Aggregation
The plan document provides that the family aggregation rules shall no longer
apply in Plan Years beginning after December 31, 1996. If the Employer
elects to continue to apply the family aggregation rules of sections
401(a)(17)(A) and 414(q)(6) of the Code to conform this plan document to the
operation of the Plan, check the box below and describe the last Plan Year
the family aggregation rules will apply (Plan Sections 1.13(f) and 1.29):
[ ]
----------------------------------------------------------------------
2. Combined Plan Limit of Code Section 415(e)
The plan document provides that the combined plan limit of Code Section
415(e) shall no longer apply to Limitation Years beginning after December
31, 1999. If the Employer desires to continue the combined plan limit of
Code Section 415(e) after the Limitation Year beginning in 1999 in order to
conform this plan document to the operation of the Plan, check the box below
and describe the last Limitation Year the combined plan limit will apply
(Plan Section 6.4):
[ ]
----------------------------------------------------------------------
Note: The last Limitation Year designated here also will apply for purposes
of section 15.3 of the Adoption Agreement, if applicable.
Note: Family aggregation and the combined plan limit may be extended only
for a limited time. They may be extended only through years beginning
before the date the Employer adopts its GUST-restated plan.
3. Hardship distributions
The plan document provides that a hardship distribution from a Participant's
Elective Deferral subaccount after December 31, 1998, shall not qualify as
an eligible rollover distribution. (Plan Section 10.7(b)(i))
[ ] By checking this box the Employer elects that a hardship distribution
from a Participant's Elective Deferral subaccount in 1999 shall
qualify as an eligible rollover distribution.
4. Spousal Consent to Loans
The plan document provides that for Plan Years beginning before January 1,
2002 (or such earlier date the Employer elects below), a Participant's
spouse must consent to a loan if any part of the Participant's account
balance is used for security for a loan. For Plan Years beginning on and
after January 1, 2002 (or such earlier date the Employer elects below), a
spouse's consent to a loan will be required only if a part of the
Participant's account balance that is subject to the qualified joint and
survivor annuity requirements of the Retirement Equity Act of 1984 ("REACT")
is used as security for the loan. (Plan Section 8.1(b)(ii))
22
If the Employer did not require spousal consent to loans (except to the
extent required by REACT) at an earlier date and desires to conform this
plan document to the operation of the Plan, check the applicable box below
and insert the appropriate date the Plan first did not require spousal
consent to loans:
[x] Plan Years beginning on and after January 1, 1997 (no earlier than
1997 and no later than 2001).
[ ] _______________, ______ (If the first date the Plan did not require
spousal consent to loans is not on the first day of a Plan Year,
insert the actual date the Plan first did not require spousal consent
to loans.)
5. ADP and ACP Nondiscrimination Testing
For Plan Years beginning after 1996, an Employer may elect to use current
year or prior year data for Non-Highly Compensated Employees in performing
the ADP and ACP Tests. In order to conform this plan document with the
operation of the Plan for Plan Years beginning before the Employer adopts
this prototype plan for its GUST-restated plan, the Employer must complete
the following (Plan Sections 3.6(a) and 3.7(a)):
Plan Year Begins ADP Test ACP Test
---------------- -------- --------
January 1 , 1997 [ ] Current Year Data [ ] Current Year Data
---------------- [x] Prior Year Data [x] Prior Year Data
January 1 , 1998 [ ] Current Year Data [ ] Current Year Data
---------------- [x] Prior Year Data [x] Prior Year Data
January 1 , 1999 [ ] Current Year Data [ ] Current Year Data
---------------- [x] Prior Year Data [x] Prior Year Data
January 1 , 2000 [x] Current Year Data [x] Current Year Data
---------------- [ ] Prior Year Data [ ] Prior Year Data
January 1 , 2001 [ ] Current Year Data [ ] Current Year Data
---------------- [x] Prior Year Data [x] Prior Year Data
January 1 , 2002 [ ] Current Year Data [ ] Current Year Data
---------------- [x] Prior Year Data [x] Prior Year Data
Note: The Plan must use the same testing method for both the ADP Test and
the ACP Test in any Plan Year beginning on or after the date the
Employer adopts its GUST-restated prototype plan.
6. Calendar Year Calculation Election
[ ] By checking this box, for the Plan Year beginning in 1997, the
Employer makes the election to use the calendar year ending with or
within the determination year to determine whether an Employee is a
Highly Compensated Employee in the look-back year. (Plan Section 1.29)
IN WITNESS WHEREOF, the Employer has caused this Optional Supplement to the
Adoption Agreement to be executed by its duly authorized officer this ___
day of August, 2002.
LTX Corporation
----------------------------------------------------------------
Name of Employer (Please print)
By:
----------------------------------------------------------------
Authorized Signature for Employer
Mark J. Gallenberger, Vice President and Chief Financial Officer
----------------------------------------------------------------
Name and Title (Please print)
23
[THIS PAGE INTENTIONALLY LEFT BLANK]
24
EGTRRA ADOPTION AGREEMENT
FOR THE 401(k) RETIREMENT PLAN
SPONSORED BY T. ROWE PRICE TRUST COMPANY
This EGTRRA Adoption Agreement is intended to be adopted with the T. Rowe Price
Trust Company 401(k) Retirement Plan Adoption Agreement for basic plan document
#03, which is a prototype profit sharing plan with a cash or deferred
arrangement, sponsored by T. Rowe Price Trust Company.
I. Minimum Top-Heavy Benefits for Employees Also Covered Under Another Plan:
The employer should describe below the extent, if any, to which the
top-heavy minimum benefit requirement of section 416(c) of the Code shall
be met in another plan. This should include the name of the other plan, the
minimum benefit that will be provided under such other plan and the
employees who will receive the minimum benefit under such other plan. (Plan
Article XII and EGTRRA Amendment Article IV)
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II. VESTING OF EMPLOYER MATCHING CONTRIBUTIONS
Note: An employer must complete this Article II even if the vesting
schedule for employer matching contributions is already at least as
rapid as one of the vesting schedules shown below. (EGTRRA
Amendment Article V)
A. Vesting Schedule for Employer Matching Contributions. (choose one
and complete any blanks under "Nonforfeitable Percentage" in the
option you select):
Note: The selected vesting schedule will apply to all participants,
regardless of whether they have an hour of service after
2001, and will apply to all matching contributions,
regardless of when they were made.
[ ] Option 1. A participant's accrued benefit derived from
employer matching contributions shall be fully and
immediately vested.
[ ] Option 2. A participant's accrued benefit derived from
employer matching contributions shall vest according to the
following schedule:
Years of Vesting Service Nonforfeitable Percentage
after 1 year _______%
after 2 years _______%
after 3 years 100%
[x] Option 3. A participant's accrued benefit derived from
employer matching contributions shall vest according to the
following schedule:
Years of Vesting Service Nonforfeitable Percentage
after 1 year 20%
after 2 years 40% (must be at least 20%)
after 3 years 60% (must be at least 40%)
after 4 years 80% (must be at least 60%)
after 5 years 100% (must be at least 80%)
after 6 years 100%
25
B. Vesting Schedule for Other Employer Contributions.
Check the following option if the vesting schedule selected in A
above will apply to all employer contributions in the same manner the
vesting schedule selected in A applies to employer matching
contributions.
[x] The vesting schedule selected in A above will apply to all
employer contributions.
III. Rollovers From Other Plans (EGTRRA Amendment Article VII)
A. Rollovers. (Choose one)
[ ] 1. The plan does not accept any type of rollover. (If this
option is selected, skip to B below.)
[x] 2. The plan will accept participant rollover contributions
and/or direct rollovers of distributions made after December
31, 2001, from the types of plans specified below beginning
on the effective date specified in B, below. (Complete a, b
and c below)
a. Direct Rollovers. (rollovers made directly from another plan)
(Choose i or ii)
[ ] i. No, the plan will not accept a direct rollover
of an eligible rollover distribution from any type of
plan.
[x] ii. Yes, the plan will accept a direct rollover of an
eligible rollover distribution from (check each one
that applies):
[ ] a qualified plan described in section 401(a) or
403(a) of the Code, including after-tax employee
contributions.
[x] a qualified plan described in section 401(a) or
403(a) of the Code, excluding after-tax employee
contributions.
[ ] an annuity contract described in section 403(b) of
the Code, excluding after-tax employee
contributions.
[x] an eligible plan under section 457(b) of the Code
which is maintained by a state, a political
subdivision of a state, or any agency or
instrumentality of a state or political
subdivision of a state.
b. Indirect Rollovers. (participant rollover contributions from
other plans) (choose i or ii)
[x] i. No, the plan will not accept a participant indirect
rollover contribution of an eligible rollover
distribution from any type of plan.
[ ] ii. Yes, the plan will accept a participant indirect
rollover contribution of an eligible rollover
distribution from (check each one that applies):
[ ] a qualified plan described in section 401(a) or
403(a) of the Code.
[ ] an annuity contract described in section 403(b) of
the Code.
[ ] an eligible plan under section 457(b) of the Code
which is maintained by a state, a political
subdivision of a state, or any agency or
instrumentality of a state or political
subdivision of a state.
Note: Under EGTRRA, indirect rollovers from a plan cannot
include after-tax employee contributions.
c. Participant Rollover Contributions from Traditional IRAs.
The plan (choose one):
[ ] will
[x] will not
26
accept a participant rollover contribution of the portion of a
distribution from an individual retirement account or annuity
described in section 408(a) or 408(b) of the Code that is
eligible to be rolled over and would otherwise be includible in
gross income.
Note: Under EGTRRA, contributory and conduit Traditional IRAs may
be rolled over to a qualified 401(a) plan; however,
nondeductible contributions and after-tax contributions in
a Traditional IRA are not eligible for rollover to a
qualified 401(a) plan.
B. Effective Date of Rollover Provision. The foregoing rollover
election(s) shall be effective 01/01/2002 (enter a date no earlier
than January 1, 2002).
IV. CATCH-UP CONTRIBUTIONS (EGTRRA Amendment Article IX)
A. Eligibility to Make Catch-Up Contributions. (Choose one)
[x] Catch-up contributions shall not be permitted.
[ ] Catch-up contributions shall be permitted after
____________________ (insert a date no earlier than December 31,
2001).
B. Catch-Up Contributions and Matching Contributions. Complete this
section B only if catch-up contributions are permitted
In determining the amount of a participant's employer matching
contributions (choose one),
[ ] Catch-up contributions shall be counted.
[ ] Catch-up contributions shall not be counted.
V. Distributions Upon Severance From Employment (EGTRRA Amendment Article XI)
(Choose one)
[ ] The plan will not permit distributions upon a severance from
employment.
[x] The plan will permit distributions upon a severance from employment
regardless of when the severance from employment occurred.
This EGTRRA Adoption Agreement consists of ___ pages, which consist of this
EGTRRA Adoption Agreement and
[ ] If this box is checked, supplemental page(s) consisting of ___
page(s).
IN WITNESS WHEREOF, the Employer has caused this EGTRRA Adoption Agreement to be
executed by its duly authorized officers this _____ day of August, 2002.
LTX Corporation
----------------------------------------------------------------
(Print Name of Employer)
By:
------------------------------------------------------------
Authorized Signature for Employer
Mark J. Gallenberger, Vice President and Chief Financial Officer
----------------------------------------------------------------
Name and Title (please print)
27
Supplemental Page
TO THE T. ROWE PRICE TRUST COMPANY
401(k) RETIREMENT PLAN ADOPTION AGREEMENT
1. Effective January 1, 2002, under Section 12.2 of the Adoption Agreement
in-service distributions after age (Plan Section 9.4) will be permitted and
Section 12.2 is amended to provide that the box opposite Section 12.2(b) is
checked and the box opposite Section 12.2(a) is not checked.
2. Effective January 1, 1997, a Participant may elect to defer an amount up to
15% of his or her compensation paid during a pay period.
3. Effective November 1, 2002, under Section 6.1(b) of the Adoption Agreement,
a Participant may elect to defer an amount up to 20% of his or her
compensation paid during a pay period.
4. Effective January 1, 1997, as provided in Section 4.2 of the Adoption
Agreement, the Entry Dates shall be the date on which the eligibility
requirements of the Plan are met.
5. Effective January 1, 2002, hardship withdrawals shall not be limited to 80%
of a participant's account and shall be subject to the terms of the
Adoption Agreement and the prototype plan.
IN WITNESS WHEREOF, the Employer has caused this Supplemental Page to be
executed by its duly authorized officers this __ day of August, 2002.
LTX Corporation
By:
--------------------------------------------------------------
(Authorized Signature of Employer)
Mark J. Gallenberger, Vice President & Chief Financial Officer
--------------------------------------------------------------
Name and Title (Please print or type)
--------------------------------------------------------------
Date
The Employer hereby appoints the following to serve as Trustee(s):
Name: T. Rowe Price Trust Company
---------------------------------------------------------
Address:
---------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
---------------------------- --------------------------
Witness Signature of Trustee
Dated:
---------------------------- (If the Trustee is a
business entity, The
signature must be that of
an Authorized individual
for the business. Also,
please print below the
name and Title of the
authorized individual.)
--------------------------
S-1
T. ROWE PRICE TRUST COMPANY
PROTOTYPE 401(k)
RETIREMENT PLAN
29
TABLE OF CONTENTS
PLAN DOCUMENTS
ARTICLE I - DEFINITIONS ................................................... 34
1.1 ACCOUNT ............................................ 34
1.2 ACP TEST ONLY SAFE HARBOR MATCHING CONTRIBUTIONS ... 35
1.3 ACP TEST ........................................... 35
1.4 ADMINISTRATOR OR PLAN ADMINISTRATOR ................ 35
1.5 ADOPTION AGREEMENT ................................. 35
1.6 ADP TEST ........................................... 35
1.7 AFFILIATED EMPLOYER ................................ 35
1.8 ANNUAL ADDITIONS ................................... 35
1.9 BENEFITING ......................................... 36
1.10 BENEFICIARY ........................................ 36
1.11 BREAKS IN SERVICE .................................. 36
1.12 CODE ............................................... 36
1.13 COMPENSATION ....................................... 36
1.14 CURRENT YEAR TESTING ............................... 37
1.15 DISCRETIONARY PROFIT SHARING ....................... 37
1.16 EARLY RETIREMENT AGE ............................... 37
1.17 EARNED INCOME ...................................... 37
1.18 EFFECTIVE DATE ..................................... 37
1.19 ELAPSED TIME ....................................... 37
1.20 ELECTIVE DEFERRALS ................................. 38
1.21 EMPLOYEE ........................................... 38
1.22 EMPLOYEE AFTER-TAX CONTRIBUTIONS ................... 38
1.23 EMPLOYER ........................................... 38
1.24 EMPLOYER CONTRIBUTION ACCOUNTS ..................... 39
1.25 ENTRY DATE ......................................... 39
1.26 ERISA .............................................. 39
1.27 FAMILY MEMBER ...................................... 39
1.28 FIVE PERCENT OWNER ................................. 39
1.29 HIGHLY COMPENSATED EMPLOYEE ........................ 39
1.30 HOUR OF SERVICE .................................... 39
1.31 INVESTMENT OPTIONS ................................. 40
1.32 LEASED EMPLOYEE .................................... 40
1.33 MATCHING CONTRIBUTIONS ............................. 41
1.34 NON-HIGHLY COMPENSATED EMPLOYEE .................... 41
1.35 NORMAL RETIREMENT AGE .............................. 41
1.36 OPTIONAL SUPPLEMENT ................................ 41
1.37 OWNER-EMPLOYEE ..................................... 41
1.38 PARTICIPANT ........................................ 41
1.39 PARTICIPANT-DIRECTED TRANSFER ...................... 41
1.40 PLAN ............................................... 41
1.41 PLAN YEAR .......................................... 41
1.42 QUALIFIED MATCHING CONTRIBUTIONS ................... 41
1.43 QUALIFIED NONELECTIVE CONTRIBUTIONS ................ 41
1.44 RETIREMENT ......................................... 41
1.45 ROLLOVER CONTRIBUTIONS ............................. 41
1.46 SAFE HARBOR CONTRIBUTIONS .......................... 41
1.47 SAFE HARBOR MATCHING CONTRIBUTIONS ................. 41
1.48 SAFE HARBOR NONELECTIVE CONTRIBUTIONS .............. 41
1.49 SECTION 415 COMPENSATION ........................... 42
1.50 SELF-EMPLOYED INDIVIDUAL ........................... 42
1.51 SPONSOR ............................................ 42
30
1.52 TOTAL COMPENSATION ....................................... 42
1.53 TOTAL AND PERMANENT DISABILITY ........................... 42
1.54 TRUST OR TRUST FUND ...................................... 43
1.55 TRUST AGREEMENT .......................................... 43
1.56 TRUSTEE .................................................. 43
1.57 VALUATION DATE ........................................... 43
1.58 YEAR OF ELIGIBILITY SERVICE .............................. 43
1.59 YEAR OF VESTING SERVICE .................................. 43
ARTICLE II - ELIGIBILITY AND PARTICIPATION ...................................... 43
2.1 ACTIVE PARTICIPATION ..................................... 43
2.2 EXCLUSION OF CERTAIN EMPLOYEES ........................... 43
2.3 PREDECESSOR EMPLOYERS .................................... 44
2.4 RE-EMPLOYMENT ............................................ 44
ARTICLE III - CONTRIBUTIONS ..................................................... 44
3.1 DEFINITIONS .............................................. 44
3.2 EMPLOYEE CONTRIBUTIONS ................................... 46
3.3 EMPLOYER CONTRIBUTIONS ................................... 47
3.4 CONTRIBUTION LIMITATION .................................. 47
3.5 EXCESS ELECTIVE DEFERRALS ................................ 48
3.6 ACTUAL DEFERRAL PERCENTAGE TEST .......................... 48
3.7 AVERAGE CONTRIBUTION PERCENTAGE TEST ..................... 50
3.8 MULTIPLE USE TEST ........................................ 51
3.9 PREVENTION OR CURE OF ADP TEST FAILURES .................. 52
3.10 PREVENTION OR CURE OF ACP TEST FAILURES .................. 52
3.11 DISTRIBUTION OF EXCESS CONTRIBUTIONS TO CURE ADP TEST
FAILURE .................................................. 52
3.12 QUALIFIED NONELECTIVE CONTRIBUTIONS TO PREVENT OR
CURE ADP AND/OR ACP TEST FAILURE ......................... 53
3.13 QUALIFIED MATCHING CONTRIBUTION TO PREVENT OR CURE ADP
AND/OR ACP TEST FAILURE .................................. 53
3.14 RECHARACTERIZATION OF EXCESS CONTRIBUTION TO CURE ADP
TEST FAILURE ............................................. 54
3.15 SAFE HARBOR NONELECTIVE CONTRIBUTION TO PREVENT ADP
TEST FAILURE ............................................. 54
3.16 ELECTIVE DEFERRALS TO CURE ACP TEST FAILURE .............. 54
3.17 FORFEITURE AND/OR DISTRIBUTION OF EXCESS AGGREGATE
CONTRIBUTIONS TO CURE ACP TEST FAILURE ................... 54
ARTICLE IV - SAFE HARBOR CODA ................................................... 55
4.1 RULES OF APPLICATION ..................................... 55
4.2 SAFE HARBOR CONTRIBUTIONS ................................ 55
4.3 NOTICE REQUIREMENT ....................................... 55
4.4 SPECIAL RULE ............................................. 56
ARTICLE V - ALLOCATION OF FUNDS ................................................. 56
5.1 ALLOCATION OF DISCRETIONARY PROFIT SHARING CONTRIBUTIONS . 56
5.2 ALLOCATION OF NET EARNINGS OR LOSSES OF THE TRUST ........ 57
5.3 VALUATIONS ............................................... 57
5.4 ACCOUNTING FOR DISTRIBUTIONS ............................. 57
5.5 ALLOCATION OF FORFEITURES ................................ 57
5.6 INVESTMENT OF FUNDS ...................................... 58
31
ARTICLE VI - LIMITATION ON ALLOCATIONS ..................................... 58
6.1 DEFINITIONS ......................................... 58
6.2 PARTICIPANTS NOT COVERED UNDER OTHER PLANS .......... 60
6.3 PARTICIPANTS COVERED UNDER OTHER DEFINED
CONTRIBUTION PLANS .................................. 61
6.4 PARTICIPANTS COVERED UNDER BOTH DEFINED BENEFIT
AND DEFINED CONTRIBUTION PLANS ...................... 62
ARTICLE VII - VESTING ...................................................... 62
7.1 EMPLOYEE AFTER-TAX CONTRIBUTION, ELECTIVE DEFERRAL,
ROLLOVER CONTRIBUTION, PARTICIPANT-DIRECTED TRANSFER,
QUALIFIED NONELECTIVE CONTRIBUTION, QUALIFIED MATCHING
CONTRIBUTION, SAFE HARBOR MATCHING CONTRIBUTION AND
SAFE HARBOR NONELECTIVE CONTRIBUTION SUBACCOUNTS .... 62
7.2 MATCHING CONTRIBUTION, DISCRETIONARY PROFIT SHARING
CONTRIBUTION AND ACP TEST ONLY SAFE HARBOR MATCHING
CONTRIBUTION SUBACCOUNTS ............................ 62
7.3 DETERMINATION OF YEARS OF VESTING SERVICE ........... 63
7.4 AMENDMENTS TO VESTING SCHEDULE ...................... 64
7.5 FORFEITURE OF NONVESTED AMOUNTS ..................... 64
7.6 REINSTATEMENT OF BENEFIT ............................ 65
ARTICLE VIII - LOANS ....................................................... 65
8.1 GENERAL PROVISIONS .................................. 65
8.2 AMOUNT OF LOAN ...................................... 65
8.3 MANNER OF MAKING LOANS .............................. 66
8.4 TERM OF LOAN ........................................ 66
8.5 SECURITY FOR LOAN ................................... 66
8.6 SEGREGATED INVESTMENT ............................... 66
8.7 REPAYMENT OF LOAN ................................... 66
8.8 DEFAULT ON LOAN ..................................... 66
ARTICLE IX - IN-SERVICE WITHDRAWALS ........................................ 66
9.1 WITHDRAWAL OF EMPLOYEE AFTER-TAX CONTRIBUTIONS,
ROLLOVER CONTRIBUTIONS AND TRANSFER CONTRIBUTIONS ... 66
9.2 WITHDRAWAL AFTER ATTAINMENT OF EARLY OR NORMAL
RETIREMENT AGE ...................................... 67
9.3 HARDSHIP WITHDRAWALS ................................ 67
9.4 AGE 59 1/2WITHDRAWALS ............................... 67
9.5 MANNER OF MAKING WITHDRAWALS ........................ 67
9.6 LIMITATIONS ON WITHDRAWALS .......................... 68
9.7 SPECIAL CIRCUMSTANCES ............................... 68
ARTICLE X - DISTRIBUTION PROVISIONS ........................................ 68
10.1 RETIREMENT DISTRIBUTIONS ............................ 68
10.2 DEATH BENEFITS ...................................... 68
10.3 TOTAL AND PERMANENT DISABILITY BENEFITS ............. 70
10.4 TERMINATION OF EMPLOYMENT PRIOR TO RETIREMENT, DEATH
OR TOTAL AND PERMANENT DISABILITY ................... 70
10.5 COMMENCEMENT OF LIFETIME DISTRIBUTIONS .............. 70
10.6 COMMENCEMENT OF DEATH BENEFITS ...................... 71
10.7 METHODS OF DISTRIBUTIONS ............................ 72
10.8 MISSING PARTICIPANTS AND BENEFICIARIES .............. 73
10.9 MINIMUM REQUIRED DISTRIBUTIONS ...................... 73
32
ARTICLE XI - JOINT AND SURVIVOR ANNUITY REQUIREMENTS ............................ 76
11.1 APPLICABILITY ............................................ 76
11.2 DEFINITIONS .............................................. 76
11.3 QUALIFIED JOINT AND SURVIVOR ANNUITY ..................... 77
11.4 QUALIFIED PRERETIREMENT SURVIVOR ANNUITY ................. 77
11.5 NOTICE REQUIREMENT ....................................... 77
11.6 SPECIAL RULE FOR PROFIT SHARING PLANS .................... 79
11.7 TRANSITIONAL RULES ....................................... 79
ARTICLE XII - TOP HEAVY PROVISIONS .............................................. 80
12.1 APPLICABILITY ............................................ 80
12.2 DEFINITIONS .............................................. 80
12.3 MINIMUM ALLOCATION ....................................... 82
12.4 VESTING .................................................. 83
ARTICLE XIII - ADMINISTRATION OF PLAN ........................................... 83
13.1 DUTIES AND RESPONSIBILITY OF FIDUCIARIES; ALLOCATION OF
FIDUCIARY RESPONSIBILITY ................................. 83
13.2 POWERS AND RESPONSIBILITIES OF THE PLAN ADMINISTRATOR .... 83
13.3 ALLOCATION OF DUTIES AND RESPONSIBILITIES ................ 84
13.4 APPOINTMENT OF THE PLAN ADMINISTRATOR .................... 84
13.5 EXPENSES ................................................. 84
13.6 LIABILITIES .............................................. 84
13.7 CLAIMS PROCEDURE ......................................... 84
ARTICLE XIV - AMENDMENT, TERMINATION AND MERGER ................................. 85
14.1 AMENDMENT ................................................ 85
14.2 PLAN TERMINATION; DISCONTINUANCE OF EMPLOYER
CONTRIBUTIONS ............................................ 86
14.3 SUCCESSOR EMPLOYER ....................................... 86
14.4 MERGER, CONSOLIDATION OR TRANSFER ........................ 86
ARTICLE XV - MISCELLANEOUS PROVISIONS ........................................... 86
15.1 EXCLUSIVE BENEFIT OF PARTICIPANTS AND BENEFICIARIES ...... 86
15.2 NONGUARANTEE OF EMPLOYMENT ............................... 87
15.3 RIGHTS TO TRUST ASSETS ................................... 87
15.4 NONALIENATION OF BENEFITS ................................ 87
15.5 GENDER ................................................... 87
15.6 TITLES AND HEADINGS ...................................... 87
15.7 FAILURE OF EMPLOYER'S PLAN TO QUALIFY .................... 87
15.8 COMPLIANCE WITH LAWS, RULES AND REGULATIONS .............. 87
15.9 MILITARY SERVICE ......................................... 87
33
T. ROWE PRICE TRUST COMPANY
PROTOTYPE 401(k) RETIREMENT PLAN
DOCUMENT
This is an amendment and restatement of the T. Rowe Price Trust Company basic
plan document #03 profit sharing plan with a cash or deferred arrangement. This
amendment and restatement incorporates the provisions of the Uruguay Round
Agreements Act ("GATT"), the Uniformed Services Employment and Re-employment
Rights Act of 1994 ("USERRA"), the Small Business Job Protection Act of 1996
("SBJPA"), the Taxpayer Relief Act of 1997 ("TRA `97") and the Internal Revenue
Service Restructuring and Reform Act of 1998 ("IRSRRA"), these acts collectively
being referred to as "GUST." (Prior to this amendment and restatement, this
document was T. Rowe Price Trust Company basic plan document #01.)
ARTICLE I - DEFINITIONS
1.1 Account. A separate Account with the following subaccounts shall
be established and maintained for each Participant:
(a) ACP Test Only Safe Harbor Matching Contributions. An ACP Test
Only Safe Harbor Matching Contribution subaccount to which
shall be credited (or debited, as the case may be) (i) ACP
Test Only Safe Harbor Matching Contributions made to the Plan
on behalf of the Participant; (ii) the allocable expenses and
net earnings or net losses on the investment of the assets of
the sub-account; and (iii) distributions from such
subaccount.
(b) Discretionary Profit Sharing Contributions. A Discretionary
Profit Sharing Contribution subac-count to which shall be
credited (or debited, as the case may be) (i) the
Participant's share of Discretionary Profit Sharing
Contributions allocated under Section 5.1(b); (ii) the
allocable expenses and net earnings or net losses on the
investment of the assets of such subaccount; and (iii)
distributions from such subaccount.
(c) Elective Deferrals. An Elective Deferral subaccount to which
shall be credited (or debited, as the case may be) (i) the
Participant's Elective Deferrals made under this Plan; (ii)
the allocable expenses and net earnings or net losses on the
investment of the assets of the subaccount; and (iii)
distributions from such subaccount.
(d) Employee After-Tax Contributions. A nondeductible voluntary
contribution subaccount to which shall be credited (or
debited, as the case may be) (i) Employee After-Tax
Contributions made by the Participant to the Plan; (ii) the
allocable expenses and net earnings or net losses on the
investment of the assets of such subaccount; and (iii)
distributions from such subaccount.
(e) Matching Contributions. A Matching Contribution subaccount to
which shall be credited (or debited, as the case may be) (i)
Matching Contributions made by the Employer to the Plan on
behalf of the Participant; (ii) the allocable expenses and
net earnings or net losses on the investment of the assets of
such subaccount; and (iii) distributions from such
subaccount.
(f) Qualified Matching Contributions. A Qualified Matching
Contribution subaccount to which shall be credited (or
debited, as the case may be) (i) Qualified Matching
Contributions made to the Plan on behalf of the Participant;
(ii) the allocable expenses and net earnings or net losses on
the investment of assets in such subaccount; and (iii)
distributions from such subaccount.
(g) Qualified Nonelective Contributions. A Qualified Nonelective
Contribution subaccount to which shall be credited (or
debited, as the case may be) (i) Qualified Nonelective
Contributions made to the Plan on behalf of the Participant;
(ii) the allocable expenses and net earnings or net losses on
the investment of the assets of the subaccount; and (iii)
distributions from such subaccount.
(h) Participant-Directed Transfers. A Participant-Directed
Transfer subaccount to which shall be credited (or debited,
as the case may be) (i) plan-to-plan transfers made at the
request and on behalf of the Participant to the Plan; (ii)
the allocable expenses and net earnings or net losses on the
investment of the assets of the subaccount; and (iii)
distributions from such subaccount.
34
(i) Rollover Contributions. A Rollover Contribution subaccount to
which shall be credited (or debited, as the case may be) (i)
Rollover Contributions made by the Participant to the Plan;
(ii) the allocable expenses and net earnings or net losses on
the investment of the assets of such subac-count; and (iii)
distributions from such subaccount.
(j) Safe Harbor Matching Contributions. A Safe Harbor Matching
Contribution subaccount to which shall be credited (or
debited, as the case may be) (i) Safe Harbor Matching
Contributions made to the Plan on behalf of the Participant;
(ii) the allocable expenses and net earnings or net losses on
the investment of the assets of such subaccount; and (iii)
distributions from such subaccount.
(k) Safe Harbor Nonelective Contributions. A Safe Harbor
Nonelective Contribution subaccount to which shall be
credited (or debited, as the case may be) (i) Safe Harbor
Nonelective Contributions made to the Plan on behalf of the
Participant; (ii) the allocable expenses and net earnings or
net losses on the investment of the assets of the subaccount;
and (iii) distributions from such subaccount.
The Plan Administrator may also establish such other Accounts,
subaccounts and segregated accounts as may be necessary to
properly account for Plan assets.
1.2 ACP Test Only Safe Harbor Matching Contributions. Contributions
made by the Employer to the Plan and Trust as described in Section
4.2 and in Section 9.2(b)(2) of the Adoption Agreement.
1.3 ACP Test. The average contribution percentage test described in
Section 3.7.
1.4 Administrator or Plan Administrator. The person, persons or entity
designated by the Employer in the Adoption Agreement to administer
and operate the Plan within the meaning of section 3(16)(A) of
ERISA. If no such designation is made, the Employer shall be the
Plan Administrator.
1.5 Adoption Agreement. The document executed by the Employer and the
Trustee(s) by which the Employer adopts this Plan and the Trust
Agreement forming a part thereof and wherein the Employer selects
from the options contained therein certain provisions relating to
the operation of the Plan. The Adoption Agreement shall be
incorporated into and deemed a part of the Plan and the Trust
Agreement.
1.6 ADP Test. The actual deferral percentage test described in Section
3.6.
1.7 Affiliated Employer. The Employer and any trade or business which
is a member of a controlled group of corporations (as defined in
section 414(b) of the Code) which includes the Employer, any trade
or business (whether or not incorporated) which is under common
control (as defined in section 414(c) of the Code) with the
Employer, any organization (whether or not incorporated) which is
a member of an affiliated service group (as defined in section
414(m) of the Code) which includes the Employer, and any other
entity required to be aggregated with the Employer pursuant to
regulations under section 414(o) of the Code.
1.8 Annual Additions. Annual Additions for a Plan Year shall mean the
sum of:
(a) Employer contributions;
(b) Employee contributions;
(c) Forfeitures;
(d) Amounts allocated, after March 31, 1984, to an individual
medical benefit account, as defined in section 415(l)(2) of
the Code, which is part of a pension or annuity plan
maintained by the Employer, are treated as Annual Additions
to a defined contribution plan. Also amounts derived from
contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable
to post-retirement medical benefits, allocated to the
separate account of a key employee, as defined in section
419A(d)(3) of the Code, or under a welfare benefit fund, as
defined in section 419(e) of the Code, maintained by the
Employer are treated as Annual Additions to a defined
contribution plan; and
(e) Allocations under a simplified employee pension.
For this purpose, any excess amount applied under Section 6.2 or
6.3 in the Plan Year to reduce Employer contributions will be
considered Annual Additions for such Plan Year.
35
1.9 Benefiting. A Participant is treated as benefiting under the Plan
for any Plan Year during which the Participant received or is
deemed to receive an allocation in accordance with Section
1.410(b)-3(a).
1.10 Beneficiary. The person or persons so designated by the
Participant to receive his benefits under the Plan in the event of
his death, or if the Participant fails to make such a designation
or the designated person(s) fail to survive the Participant, the
person(s) determined in accordance with Section 10.2(c).
1.11 Break in Service. A Break in Service shall be a Plan Year in which
an Employee fails to complete more than 500 Hours of Service with
the Employer; except that for purposes of determining Years of
Eligibility Service, a Break in Service shall be the
12-consecutive month period designated by the Employer in the
Adoption Agreement for determining Years of Eligibility Service
during which an Employee fails to complete more than 500 Hours of
Service. If the Employer elects the Elapsed Time method of
calculating service, a Break in Service shall be determined as
described in the definition of Elapsed Time.
1.12 Code. The Internal Revenue Code of 1986, as amended from time to
time, and any successor statute.
1.13 Compensation.
(a) Subject to the following provisions of this Section,
Compensation shall mean one of the following, as elected by
the Employer in the Adoption Agreement, paid during the
period elected by the Employer in the Adoption Agreement:
(i) W-2 Earnings - Compensation is defined as wages within
the meaning of section 3401(a) of the Code and all
other payments of compensation to an Employee by the
Employer (in the course of the Employer's trade or
business) for which the Employer is required to
furnish the Employee a written statement under
sections 6041(d), 6051(a)(3) and 6052 of the
Code.Compensation must be determined without regard to
any rules under section 3401(a) of the Code that limit
the remuneration included in wages based on the nature
or location of employment or the services performed
(such as the exception for agricultural labor in
section 3401(a)(2) of the Code). Unless elected
otherwise by the Employer in the Adoption Agreement,
Compensation shall include any amount which is
contributed by the Employer pursuant to a salary
reduction agreement and which is not includible in the
gross income of the Employee under section 125,
402(e)(3), 402(h)(1)(B) or 403(b) of the Code, and,
for years beginning after December 31, 2000, elective
amounts that are not includible in the gross income of
the Employee under section 132(f)(4) of the Code.
(ii) Section 415 Compensation as defined in Section 1.49.
(iii) Section 3401(a) wages - Compensation is defined as
wages within the meaning of section 3401(a) of the
Code for purposes of income tax withholding at the
source but determined without regard to any rules that
limit the remuneration included in wages based on the
nature or location of the employment or the services
performed (such as the exemption for agricultural
labor in section 3401(a)(2) of the Code).
(b) Notwithstanding the foregoing provisions of subsection (a),
Compensation shall not include such amounts as the Employer
may elect to exclude in the Adoption Agreement.
(c) For any Self-Employed Individual covered under the Plan,
Compensation will mean Earned Income.
(d) Compensation shall include only that compensation which is
actually paid to the Participant during the Plan Year.
(e) For Plan Years beginning on and after January 1, 1989, and
before January 1, 1994, the annual Compensation of each
Participant taken into account under the Plan for any Plan
Year shall not exceed $200,000, as adjusted by the Secretary
of Treasury at the same time and in the same manner as under
section 415(d) of the Code.
(f) For Plan Years beginning on or after January 1, 1994, the
annual Compensation of each Employee taken into account under
the Plan shall not exceed the OBRA `93 annual compensation
limit. The OBRA `93 annual compensation limit is $200,000 as
adjusted by the Commissioner of the Internal Revenue Service
for increases in the cost of living in accordance with
section 401(a)(17)(B)
36
of the Code. The cost-of-living adjustment in effect for a
calendar year applies to any period, not exceeding 12 months, over
which Compensation is determined (determination period) beginning
in such calendar year. If a determination period consists of fewer
than 12 months, the OBRA `93 annual compensation limit will be
multiplied by a fraction, the numerator of which is the number of
months in the determination period, and the denominator of which
is 12. If Compensation for any prior determination period is taken
into account in determining an Employee's benefits accruing in the
then current Plan Year, the Compensation for that prior
determination period is subject to the OBRA `93 annual
compensation limit in effect for that prior determination period.
For this purpose, in determining allocations in Plan Years
beginning on or after January 1, 1989, the OBRA `93 annual
compensation limit is $200,000. In addition, in determining
allocations in Plan Years beginning on or after January 1, 1994,
the OBRA `93 annual compensation limit is $150,000, as adjusted.
In determining the Compensation of a Participant for purposes of
this limitation, the rules of section 414(q)(6) of the Code shall
apply, except in applying such rules, the term "family" shall
include only the spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19 before
the close of the year. If, as a result of the application of such
rules, the applicable annual compensation limitation is exceeded,
then (except for purposes of determining the portion of
Compensation up to the integration level if this Plan provides for
permitted disparity) the limitation shall be prorated among the
affected individuals in proportion to each such individual's
Compensation as determined under this Section prior to the
application of this limitation. This subsection shall be effective
in Plan Years beginning after December 31, 1988, and before
January 1, 1997, unless the Employer elects a later year than 1997
in the Optional Supplement.
1.14 Current Year Testing. Application of the ADP and ACP Tests using
the current year's ADP and ACP, respectively, of Participants who
are Highly Compensated Employees with the current year's ADP and
ACP, respectively, of Participants who are Non-Highly Compensated
Employees.
1.15 Discretionary Profit Sharing Contributions. Contributions of the
Employer to the Plan and Trust as described in Section 3.3(b) and
the Adoption Agreement.
1.16 Early Retirement Age. If the Employer elects in the Adoption
Agreement, the date on which a Participant satisfies the age
and/or service requirements specified by the Employer in the
Adoption Agreement.
1.17 Earned Income. The annual net earnings from self-employment in the
trade or business with respect to which the Plan is established,
provided that personal services of the individual are a material
income-producing factor. Net earnings will be determined without
regard to items not included in gross income and the deductions
allocable to such items. Net earnings are reduced by contributions
by the Employer to a qualified plan to the extent deductible under
section 404 of the Code. Net earnings shall be determined with
regard to the deduction allowed to the Employer by section 164(f)
of the Code for taxable years beginning after December 31, 1989.
1.18 Effective Date. Except as otherwise specified herein, the
effective date of the Plan is the first day for which the Plan
document is effective as specified in the Adoption Agreement. If
the Employer is adopting this Plan as an amendment and restatement
of an existing plan, the provisions of the existing plan shall
apply prior to the effective date of the amendment and restatement
unless an earlier date is specified herein. The effective date of
the amendment and restatement shall be specified in the Adoption
Agreement.
1.19 Elapsed Time. If an Employer elects in the Adoption Agreement to
use Elapsed Time for purposes of determining eligibility to
participate, vesting and Early Retirement Age (if applicable), the
following definitions shall replace the otherwise required Year of
Eligibility Service, Year of Vesting Service and Break in Service
definitions. For purposes of this Section, Hour of Service shall
mean each hour for which an Employee is paid or entitled to
payment for the performance of duties for the Employer.
(a) An Employee will receive credit for the aggregate of all time
period(s) commencing with the Employee's first day of
employment or reemployment with the Employer and ending on
the date a Break in Service begins. The first day of
employment or reemployment is the first day the Employee
performs an Hour of Service. An Employee will be credited
with a Year of Service for
37
each completed 365 days of service with the Employer, which
service need not be consecutive, regardless of the number of
hours worked. An Employee will also receive credit for any
Period of Severance of less than 12 consecutive months.
Fractional periods of a year will be expressed in terms of
days.
(b) A Break in Service is a Period of Severance of at least 12
consecutive months. In the case of an individual who is
absent from work for maternity or paternity reasons, the 12
consecutive month period beginning on the first anniversary
of the first date of such absence shall not constitute a
Break in Service. For purposes of this subsection, an absence
from work for maternity or paternity reasons means an absence
(i) by reason of the pregnancy of the individual, (ii) by
reason of the birth of a child of the individual, (iii) by
reason of the placement of a child with the individual in
connection with the adoption of such child by such
individual, or (iv) for purposes of caring for such child for
a period beginning immediately following such birth or
placement.
(c) A Period of Severance is a continuous period of time during
which the Employee is not employed by the Employer. Such
period begins on the earlier of (i) the date on which the
Employee's employment with the Employer terminates by reason
of retirement, death, discharge or resignation, or (ii) the
first anniversary of the date on which the Employee was
absent from work with the Employer (with or without pay) for
any other reason, other than an approved leave of absence
granted in writing by the Employer, according to a uniform
rule applied without discrimination, provided the Employee
returns to the employ of the Employer upon completion of the
leave.
(d) If the Employer is a member of an affiliated service group
(under section 414(m) of the Code), a controlled group of
corporations (under section 414(b) of the Code), or a group
of trades or businesses under common control (under section
414(c) of the Code) or any other entity required to be
aggregated with the Employer pursuant to section 414(o) of
the Code and the regulations thereunder, service will be
credited for any employment for any period of time for any
other member of such group. Service will also be credited for
any individual required under section 414(n) or (o) of the
Code and the regulations thereunder to be considered an
Employee of any Employer aggregated under section 414(b), (c)
or (m) of the Code.
1.20 Elective Deferrals. Any Employer contributions made to the Plan at
the election of a Participant, in lieu of cash compensation,
pursuant to a salary reduction agreement or other deferral
mechanism. With respect to any taxable year, a Participant's
Elective Deferrals are the sum of all such employer contributions
made on behalf of such Participant pursuant to an election to
defer under any qualified cash or deferred arrangement as
described in section 401(k) of the Code, any salary reduction
simplified employee pension described in section 408(k)(6) of the
Code, any SIMPLE IRA plan described in section 408(p) of the Code,
any eligible deferred compensation plan under section 457 of the
Code, any plan as described in section 501(c)(18) of the Code and
any employer contributions made on behalf of a Participant
pursuant to a salary reduction agreement for the purchase of an
annuity contract under section 403(b) of the Code. Elective
Deferrals shall not include any deferrals properly distributed as
excess Annual Additions.
1.21 Employee. Any person, including a Self-Employed Individual,
employed by the Employer maintaining the Plan or of any other
employer required to be aggregated with such Employer under
section 414(b), (c), (m) or (o) of the Code and including Leased
Employees of such employers within the meaning of section
414(n)(2) or (o) of the Code. Notwithstanding the foregoing, if
such Leased Employees constitute twenty percent or less of the
Employer's non-highly compensated work force within the meaning of
section 414(n)(5)(C)(ii) of the Code, the term "Employee" shall
not include those Leased Employees covered by a plan described in
section 414(n)(5) of the Code unless otherwise provided by the
terms of the Plan.
1.22 Employee After-Tax Contributions. Any contribution made to the
Plan by or on behalf of a Participant that was included in the
Participant's gross income in the year in which made as described
in Section 3.2(a) and the Adoption Agreement.
1.23 Employer. The entity that adopts the Plan by execution of an
Adoption Agreement.
38
1.24 Employer Contribution Accounts. The portion of a Participant's
Account consisting of his Employer Matching Contributions,
Discretionary Profit Sharing Contributions, Qualified Nonelective
Contributions, Qualified Matching Contributions, Safe Harbor
Matching Contributions, Safe Harbor Nonelective Contributions and
ACP Test Only Safe Harbor Matching Contributions subaccounts.
1.25 Entry Date. The Effective Date shall be the first Entry Date;
thereafter, Entry Dates shall be the dates specified in the
Adoption Agreement.
1.26 ERISA. The Employee Retirement Income Security Act of 1974, as
amended.
1.27 Family Member. An Employee's spouse and lineal ascendants or
descendants and the spouses of such lineal ascendants or
descendants.
1.28 Five Percent Owner. Any person who owns (or is considered to own
within the meaning of section 318 of the Code) more than 5% of the
interests in the Employer.
1.29 Highly Compensated Employee. For Plan Years beginning after
December 31, 1996, the term Highly Compensated Employee means any
Employee who during the Plan Year: (1) was a Five Percent Owner at
any time during the Plan Year or the look-back year, or (2) for
the look-back year had Section 415 Compensation from the Employer
in excess of $80,000 (adjusted at the same time and in the same
manner as under section 415(d) of the Code, except that the base
period is the calendar quarter ending September 30, 1996) and, if
the Employer so elects in the Adoption Agreement, was in the
top-paid group (i.e., top 20% of Employees ranked by compensation)
for the look-back year.
For this purpose, the Plan Year of the Plan for which a
determination is being made is called a determination year and the
preceding 12-month period is called a look-back year. If the
Employer so elects in the Adoption Agreement, the look-back year
shall be the calendar year beginning with or within the look-back
year.
The determination of who is a highly compensated former employee
is based on the rules applicable to determining highly compensated
employee status as in effect for that determination year, in
accordance with section 1.414(q)-1T, A-4 of the Temporary Income
Tax Regulations and Notice 97-45.
In determining whether an Employee is a Highly Compensated
Employee for years beginning in 1997, (1) the amendments to Code
Section 414(q) stated above are treated as having been in effect
for the 1996 Plan Year, and (2) if the Employer so elects in the
Optional Supplement, the look-back year shall be the calendar year
ending with or within the determination year.
Effective for Plan Years beginning before January 1, 1997, or such
later year than 1997 that the Employer elects in the Optional
Supplement, if an Employee is, during a determination year or
look-back year, a Family Member of either a Five Percent Owner who
is an active or former Employee or a Highly Compensated Employee
who is one of the ten most Highly Compensated Employees ranked on
the basis of compensation paid by the Employer during such year,
then the Family Member and Five Percent Owner or top ten Highly
Compensated Employee shall be aggregated. In such case, the Family
Member and Five Percent Owner or top ten Highly Compensated
Employee shall be treated as a single Employee receiving
compensation and Plan contributions or benefits equal to the sum
of such compensation and contributions or benefits of the Family
Member and Five Percent Owner or top ten Highly Compensated
Employee.
1.30 Hour of Service.
(a) An Hour of Service shall mean and include each hour for which
an Employee is compensated by the Employer, or is entitled to
be so compensated, for services rendered by him to the
Employer. These hours will be credited to the Employee for
the computation period in which the duties are performed.
(b) An Hour of Service shall also mean and include each hour for
which an Employee is compensated by the Employer, or is
entitled to be so compensated, on account of a period of time
during which no services are rendered by him to the Employer
(regardless of whether the Employee shall have ceased to be
an Employee) due to vacation, holiday, illness, incapacity
(including disability), layoff, jury duty, military duty or
leave of absence. No more than 501 Hours of Service shall be
credited pursuant to this subsection (b) on account of any
single continuous period during which an Employee
39
renders no services to the Employer (whether or not such
period occurs in a single computation period). Hours under
this Section will be calculated and credited pursuant to
section 2530.200b-2 of the Department of Labor Regulations
which is incorporated herein by this reference.
(c) An Hour of Service shall also mean and include each hour for
which back pay, without regard to mitigation of damages, has
been awarded or agreed to by the Employer. The same Hours of
Service shall not be credited both under subsection (a) or
subsection (b), whichever shall be applicable, and also under
this subsection (c). The 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.
Hours of Service will be credited for employment with other
members of an affiliated service group (under section 414(m)
of the Code), a controlled group of corporations (under
section 414(b) of the Code), or a group of trades or
businesses under common control (under section 414(c) of the
Code), of which the adopting Employer is a member, and any
other entity required to be aggregated with the Employer
pursuant to section 414(o) of the Code and the regulations
thereunder.
Hours of Service will also be credited for any individual
considered an Employee under section 414(n) or 414(o) of the
Code, and regulations thereunder.
Solely for purposes of determining whether a Break in Service
for participation and vesting purposes has occurred in a
computation period, an individual who is absent from work for
maternity or paternity reasons shall receive credit for the
Hours of Service which would otherwise have been credited to
such individual but for such absence, or in any case in which
such hours cannot be determined, eight Hours of Service per
day of such absence. For purposes of this subsection, an
absence from work for maternity or paternity reasons means an
absence (i) by reason of the pregnancy of the individual,
(ii) by reason of a birth of a child of the individual, (iii)
by reason of the placement of a child with the individual in
connection with the adoption of such child by such
individual, or (iv) for purposes of caring for such child for
a period beginning immediately following such birth or
placement. The Hours of Service credited under this paragraph
shall be credited only (i) in the computation period in which
the absence begins if the crediting is necessary to prevent a
Break in Service in that period, or (ii) in all other cases,
in the following computation period.
Hours of Service will be determined on the basis of the
method selected in the Adoption Agreement.
1.31 Investment Options. Any regulated investment company
registered under the Investment Company Act of 1940 the
investment adviser of which is T. Rowe Price Associates, Inc.
or any of its affiliates, any common trust funds or
collective investment funds of the Sponsor qualified under
sections 401 and 501 of the Code, and any other funding
vehicle (including, but not limited to, limited partnership
interests which receive investment advice from T. Rowe Price
Associates, Inc. or an affiliate) made available to the Plan
by T. Rowe Price Trust Company which the Employer selects
under the terms of the Plan.
1.32 Leased Employee. A Leased Employee is any person (other than
an Employee of the recipient) who, pursuant to an agreement
between the recipient and any other person ("leasing
organization"), has performed services for the recipient (or
for the recipient and related persons determined in
accordance with section 414(n)(6) of the Code) on a
substantially full time basis for a period of at least one
year and such services are performed under primary direction
and control of the recipient.
Any Leased Employee shall be treated as an employee of the
recipient employer. However, contributions or benefits
provided by the leasing organization which are attributable
to service performed for the recipient employer shall be
treated as provided by the recipient employer. The preceding
sentence shall not apply to any Leased Employee if Leased
Employees do not constitute more than twenty percent of the
employer's non-highly compensated force and, if such leased
employee is covered by a money purchase pension plan
providing: (a) a nonintegrated employer contribution rate of
at least ten percent of compensation as defined in section
415(c)(3) of the Code, but including amounts contributed by
the employer pursuant to a salary reduction agreement which
are excludible from the employee's gross income under section
125, 402(e)(3), 402(h)(1)(B) or 403(b) of the Code, and, for
years beginning after December 31, 2000, elective amounts
that are not included in gross income of the Employee
40
under section 132(f)(4) of the Code, (b) full and immediate
vesting, and (c) each employee of the leasing organization
(other than employees who perform substantially all of their
services for the leasing organization) immediately
participate in the Plan.
1.33 Matching Contributions. A contribution by the Employer made
to this or any other defined contribution plan on behalf of a
Participant on account of a Participant's Elective Deferrals
or on account of a Participant's Employee After-Tax
Contributions under this or any other plan maintained by the
Employer as set forth in Section 3.3(a) and the Adoption
Agreement. Matching Contributions shall not include Qualified
Matching Contributions, Safe Harbor Matching Contributions or
ACP Test Only Safe Harbor Matching Contributions.
1.34 Non-Highly Compensated Employee. An Employee of the Employer
who during the Plan Year is neither a Highly Compensated
Employee nor, for Plan Years beginning before January 1,
1997, a Family Member of a Highly Compensated Employee during
such Plan Year.
1.35 Normal Retirement Age. The date on which a Participant
attains age 65 unless otherwise specified in the Adoption
Agreement. If the Employer enforces a mandatory retirement
age, the Normal Retirement Age is the lesser of that
mandatory age or the age specified in the Adoption Agreement.
1.36 Optional Supplement. A supplement to the Adoption Agreement
that may be executed by the Employer at the time it is
retroactively restating its plan to comply with GUST.
1.37 Owner-Employee. An individual who is sole proprietor, if the
Employer is a sole proprietorship, or a partner who owns more
than ten percent of either the capital or profits interests
of the partnership.
1.38 Participant. A person who has met the eligibility
requirements as specified in the Adoption Agreement and whose
Account hereunder has been neither completely forfeited nor
completely distributed.
1.39 Participant-Directed Transfer. A plan-to-plan transfer made
at the request of a Participant as described in Section
3.2(d).
1.40 Plan. The retirement plan set forth herein and in the
Adoption Agreement as amended from time to time.
1.41 Plan Year. The twelve consecutive month period designated by
the Employer in the Adoption Agreement.
1.42 Qualified Matching Contributions. Contributions made by the
Employer as described in Section 3.13 and allocated to the
Participant's Account that are subject to the distribution
and nonforfeitability requirements of section 401(k) of the
Code when made.
1.43 Qualified Nonelective Contributions. Contributions made by
the Employer as described in Section 3.12 and allocated to
the Participant's Account that the Participant may not elect
to receive in cash until distributed from the Plan; that are
nonforfeitable when made; and that are distributable only in
accordance with distribution provisions that are applicable
to Elective Deferrals and Qualified Matching Contributions.
1.44 Retirement. Termination of a Participant's employment with
the Employer on or after the Participant's Early Retirement
Age or Normal Retirement Age.
1.45 Rollover Contribution. A rollover contribution made to the
Plan by a Participant as described in Section 3.2(c).
1.46 Safe Harbor Contributions. Safe Harbor Matching
Contributions, Safe Harbor Nonelective Contributions and ACP
Test Only Safe Harbor Matching Contributions.
1.47 Safe Harbor Matching Contributions. Contributions of the
Employer to the Plan and Trust as described in Section 4.2
and in Section 9.2(a) of the Adoption Agreement. Safe Harbor
Matching Contributions do not include ACP Test Only Safe
Harbor Matching Contributions.
1.48 Safe Harbor Nonelective Contributions. Contributions of the
Employer to the Plan and Trust as described in Section 4.2
and in Section 9.2(b)(1) of the Adoption Agreement.
41
1.49 Section 415 Compensation. A Participant's Earned Income,
wages, salaries and fees for professional services and other
amounts received (without regard to whether an amount is paid
in cash) or made available for personal services actually
rendered in the course of employment with the Employer
maintaining the Plan (including, but not limited to,
commissions paid salesmen, compensation for services on the
basis of a percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits and reimbursements
or other expense allowances under a nonaccountable plan (as
described in Treasury Regulation 1.62-2(c)), but excluding
the following:
(a) Employer contributions to a plan of deferred
compensation which are not includible in the
Employee's gross income for the taxable year in which
contributed, or Employer contributions under a
simplified employee pension plan to the extent such
contributions are excluded from the Employee's gross
income, or any distributions from a plan of deferred
compensation;
(b) Amounts realized from the exercise of a nonqualified
stock option, or when restricted stock (or property)
held by the Employee either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture;
(c) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(d) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not
under a salary reduction agreement) towards the
purchase of an annuity contract described in section
403(b) of the Code (whether or not the contributions
are actually excludable from the gross income of the
Employee).
For Plan Years beginning after December 31, 1998, Section 415
Compensation for any Plan Year shall be limited as provided
in Section 1.13(f). Section 415 Compensation, (a) for years
beginning after December 31, 1997, shall include any elective
deferral (as defined in section 402(g)(3) of the Code), and
any amount which is contributed or deferred by the Employer
at the election of the Employee and which is not includible
in the gross income of the Employee by reason of section 125
or 457 of the Code, and (b) for years beginning after
December 31, 2000, shall include elective amounts that are
not included in the gross income of the Employee under
section 132(f)(4) of the Code.
1.50 Self-Employed Individual. An individual who has Earned Income
for the taxable year from the trade, business or partnership
with respect to which the Plan is established; also, an
individual who would have had Earned Income but for the fact
the trade, business or partnership had no net profits for the
taxable year.
1.51 Sponsor. The Sponsor of this prototype plan document is T.
Rowe Price Trust Company.
1.52 Total Compensation. Subject to the following provisions of
this Section, for purposes of determining the amount of Safe
Harbor Contributions, Total Compensation shall mean one of
the following, as elected by the Employer in the Adoption
Agreement, paid during the period elected by the Employer in
the Adoption Agreement:
(a) W-2 earnings as defined in Section 1.13(a)(i).
(b) Section 415 Compensation as defined in Section
1.13(a)(ii).
(c) Section 3401(a) wages as defined in Section
1.13(a)(iii).
For purposes of determining Total Compensation, W-2 earnings,
Section 415 Compensation and section 3401(a) wages shall be
determined in accordance with the provisions of subsections
(c) through (f) of Section 1.13 as if the term "Total
Compensation" were substituted for the term "Compensation" in
each place the term "Compensation" appears in such
subsections.
1.53 Total and Permanent Disability. The inability of an Employee
while employed by the Employer to engage in any substantial
gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result
in death or to last for a continuous period of at least
twelve months.
42
1.54 Trust or Trust Fund. The fund maintained by the Trustee(s) for the
investment of Plan assets in accordance with the terms and
conditions of the Trust Agreement.
1.55 Trust Agreement. The agreement between the Employer and the
Trustee(s) under which the assets of the Plan are held,
administered and managed. The provisions of the Trust Agreement
shall be deemed a part of the Plan.
1.56 Trustee. The individual or corporate Trustee or Trustees under the
Trust Agreement as they may be constituted from time to time. Such
Trustee or Trustees shall be named in and a party to the Adoption
Agreement.
1.57 Valuation Date. The last day of the Plan Year and such other dates
as may be designated by the Plan Administrator from time to time.
1.58 Year of Eligibility Service. Unless the Employer elects in the
Adoption Agreement to credit service under the Elapsed Time
method, a Year of Eligibility Service is an eligibility
computation period during which an Employee completes at least
1,000 Hours of Service. For this purpose, the initial eligibility
computation period shall be the twelve consecutive month period
beginning with the day the Employee first performs an Hour of
Service for the Employer. The succeeding twelve consecutive month
periods shall commence on one of the two following days as elected
by the Employer in the Adoption Agreement:
(a) The first anniversary of the date the Employee first
completes an Hour of Service for the Employer; or
(b) The first day of each Plan Year beginning after the date on
which the Employee first completes an Hour of Service for the
Employer.
If the Employer elects to credit service under the Elapsed Time
method, see the definition of Elapsed Time for the applicable
rules to calculate service.
1.59 Year of Vesting Service. Unless the Employer elects in the
Adoption Agreement to credit service under the Elapsed Time
method, a Year of Vesting Service is a Plan Year during which an
Employee completes at least 1,000 Hours of Service. If the
Employer elects to credit service under the Elapsed Time method,
see the definition of Elapsed Time for the applicable rules to
calculate service.
ARTICLE II - ELIGIBILITY AND PARTICIPATION
2.1 Active Participation. Subject to the following Sections of this
Article II, each Employee shall be eligible to participate in the
Plan on the Entry Date coincident with or next following the date
on which such Employee satisfies the eligibility requirements set
forth in the Adoption Agreement.
2.2 Exclusion of Certain Employees. To the extent provided in the
Adoption Agreement, the following Employees shall be excluded from
participation in the Plan;
(a) Employees not meeting the age and service requirements,
(b) Employees who are included in a unit of Employees covered by
a collective bargaining agreement between employee
representatives and one or more Employers, if there is
evidence that retirement benefits were the subject of good
faith bargaining between such employee representatives and
such Employer or Employers. For this purpose, the term
"employee representatives" does not include any organization
where more than one half of the membership is comprised of
owners, officers and executives of the Employer,
(c) Employees who are nonresident aliens and who receive no
earned income from the Employer which constitutes income from
sources within the United States;
(d) Employees included in certain ineligible job classifications;
(e) Leased Employees; and
(f) Employees employed by certain members of the aggregated group
of employers including the Employer.
43
In the event an Employee who is not a member of the eligible class
of Employees becomes a member of the eligible class, such Employee
shall participate immediately if such Employee has satisfied the
minimum age and service requirements set forth in the Adoption
Agreement.
In the event a Participant is no longer a member of an eligible
class of Employees and becomes ineligible to participate, but has
not incurred a Break in Service, such Employee shall participate
immediately upon returning to an eligible class of Employees. If
such Participant incurs a Break in Service, eligibility to
participate will be determined under Section 2.4.
2.3 Predecessor Employers. To the extent provided in the Adoption
Agreement, service with a predecessor employer shall be deemed
service with the Employer for purposes of this Plan. If this Plan
is a continuation of a predecessor employer's plan, service with
the predecessor employer may not be disregarded for purposes of
this Plan.
2.4 Re-employment.
(a) A former Participant shall become a Participant immediately
upon returning to the employ of the Employer if such former
Participant is a member of an eligible class of Employees and
had a non-forfeitable right to all or a portion of the
Participant's Account derived from Employer contributions at
the time of termination from service.
(b) A former Participant who did not have a nonforfeitable right
to any portion of his Account derived from Employer
contributions at the time of termination from service shall
be considered a new Employee for eligibility purposes if the
number of consecutive 1-year Breaks in Service equals or
exceeds the greater of five or the aggregate number of Years
of Eligibility Service before such Breaks in Service. If such
former Participant's Years of Eligibility Service prior to
termination from service may not be disregarded pursuant to
the preceding sentence, such former Participant shall
participate immediately upon re-employment if he is a member
of an eligible class of Employees.
ARTICLE III - CONTRIBUTIONS
3.1 Definitions. For the purposes of this Article III, the following
definitions shall apply:
(a) Actual Deferral Percentage. For a specified group of
Participants for a Plan Year, "Actual Deferral Percentage"
shall mean the average of the ratios (calculated separately
for each Participant in such group) of (i) the amount of
Employer deferral contributions actually paid over to the
Plan on behalf of such Participant for the Plan Year to (ii)
the Participant's Testing Compensation for such Plan Year.
Employer deferral contributions made on behalf of any
Participant shall include: (i) any Elective Deferrals made
pursuant to the Participant's deferral election (including
Excess Elective Deferrals of Highly Compensated Employees),
but excluding (A) Excess Elective Deferrals of Non-Highly
Compensated Employees that arise solely from Elective
Deferrals made under the Plan or plans of this Employer, and
(B) Elective Deferrals that are taken into account in the ACP
Test (provided the ADP Test is satisfied both with and
without exclusion of these Elective Deferrals); and (ii) at
the election of the Plan Administrator, Qualified Nonelective
Contributions and Qualified Matching Contributions taken into
account as Elective Deferrals. For purposes of computing
Actual Deferral Percentages, an Employee who would be a
Participant but for the failure to make Elective Deferrals
shall be treated as a Participant on whose behalf no Elective
Deferrals are made.
(b) Aggregate Limit. "Aggregate Limit" shall mean the sum of (i)
125% of the greater of the ADP of the Non-Highly Compensated
Employees for the prior Plan Year or the ACP of Non-Highly
Compensated Employees under the Plan subject to section
401(m) of the Code for the Plan Year beginning with or within
the prior Plan Year of the cash or deferred arrangement, and
(ii) the lesser of 200% or two plus the lesser of such ADP or
ACP. "Lesser" is substituted for "greater" in "(i)", above,
and "greater" is substituted for "lesser" after "two plus
the" in "(ii)" if it would result in a larger Aggregate
Limit. If the Employer has elected in the Adoption Agreement
to use Current Year Testing, then, in calculating the
Aggregate Limit for a particular Plan Year, the Non-Highly
Compensated Employees' ADP and ACP for that Plan Year,
instead of the prior Plan Year, is used.
44
(c) Average Contribution Percentage. "Average Contribution
Percentage" is the average of the Contribution Percentages of
the eligible Participants in a group.
(d) Contribution Percentage. "Contribution Percentage" is the
ratio (expressed as a percentage) of an eligible
Participant's Contribution Percentage Amounts to such
eligible Participant's Testing Compensation for the Plan
Year.
(e) Contribution Percentage Amounts. "Contribution Percentage
Amounts" is the sum of the Employee After-Tax Contributions,
Matching Contributions and Qualified Matching Contributions
(to the extent not taken into account for purposes of the ADP
test) made under the Plan on behalf of the Participant for
the Plan Year. Such Contribution Percentage Amounts shall not
include Matching Contributions that are forfeited either to
correct Excess Aggregate Contributions or because the
contributions to which they relate are Excess Elective
Deferrals, Excess Contributions or Excess Aggregate
Contributions. The Plan Administrator may include Qualified
Nonelective Contributions in the Contribution Percentage
Amounts. The Plan Administrator also may elect to use
Elective Deferrals in Contribution Percentage Amounts so long
as the ADP test is met before the Elective Deferrals are used
in the ACP test and continues to be met following the
exclusion of those Elective Deferrals that are used to meet
the ACP test.
(f) Deferral Percentage. "Deferral Percentage" with respect to
any Plan Year is the ratio (expressed as a percentage) of a
Participant's Elective Deferrals (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both,
if treated as Elective Deferrals for purposes of the ADP
Test) to such Participant's Testing Compensation.
(g) Excess Aggregate Contributions. With respect to any Plan
Year, "Excess Aggregate Contributions" shall mean the excess
of (i) the aggregate Contribution Percentage Amounts taken
into account in computing the numerator of the Contribution
Percentage actually made on behalf of Highly Compensated
Employees for such Plan Year, over (ii) the maximum
Contribution Percentage Amounts permitted by the ACP Test
(determined by hypothetically reducing contributions made on
behalf of Highly Compensated Employees in order of their
Contribution Percentages beginning with the highest of such
percentages).
(h) Excess Contribution. With respect to a Plan Year, "Excess
Contributions" shall mean the excess of (i) the aggregate
amount of Elective Deferrals and amounts treated as Elective
Deferrals actually taken into account in computing the ADP of
Highly Compensated Employees for such Plan Year, over (ii)
the maximum amount of such contributions permitted by the ADP
Test (determined by hypothetically reducing contributions
made on behalf of the Highly Compensated Employees in order
of the ADPs, beginning with the highest of such percentages).
(i) Excess Elective Deferrals. Those Elective Deferrals that are
includible in a Participant's gross income under section
402(g) of the Code to the extent such Participant's Elective
Deferrals for a taxable year exceed the dollar limitation
under such Code section. Excess Elective Deferrals shall be
treated as Annual Additions under the Plan, unless such
amounts are distributed no later than the first April 15
following the close of the Participant's taxable year in
which such Excess Elective Deferrals arose.
(j) Testing Compensation. "Testing Compensation" shall mean any
definition of compensation allowed under section 414(s) of
the Code and the regulations thereunder for that portion of
the Plan Year designated by the Employer in the ADP and ACP
Nondiscrimination Testing section of the Adoption Agreement.
Testing Compensation shall be determined in accordance with
the provisions of subsections (c) through (f) of Section 1.13
as if the term "Testing Compensation" were substituted for
the term "Compensation" in each place the term "Compensation"
appears in such subsections.
45
3.2 Employee Contributions.
(a) Employee After-Tax Contributions. To the extent provided in
the Adoption Agreement and subject to any other applicable
limitations in this Plan, a Participant may make voluntary
after-tax Employee contributions to the Plan through payroll
deduction or in any other manner acceptable to the Employer.
A Participant shall at all times have a nonforfeitable
interest in his Employee After-Tax Contributions subaccount.
(b) Elective Deferrals.
(i) To the extent provided in the Adoption Agreement, a
Participant may make Elective Deferrals to the Trust
in amounts not to exceed the limitations specified in
the Adoption Agreement or any other limitations
specified in this Plan. A Participant's Elective
Deferrals shall be made by direct reduction of
Compensation, with such reduction to be accomplished
through regular payroll reduction.
(ii) The Elective Deferrals of a Participant shall be
limited in accordance with the provisions of this
subsection and any other applicable provisions of the
Plan. No Participant shall be permitted to have
Elective Deferrals made under this Plan, or any other
qualified plan maintained by the Employer, during any
taxable year, in excess of the dollar limitation
contained in section 402(g) of the Code in effect at
the beginning of such taxable year.
(iii) Participants may elect to commence Elective Deferrals
at least once each Plan Year during a period
established by the Employer. Such election may not be
made retroactively, and the election must remain in
effect until modified or terminated. Participants may
terminate the election or change the amounts
designated to be deducted at any time by the
submission of such change of designation to the Plan
Administrator. The Plan Administrator shall establish
a uniform date on which such changes shall be
effective.
(iv) No contributions or benefits (other than Matching
Contributions, Safe Harbor Matching Contributions, ACP
Test Only Safe Harbor Matching Contributions or
Qualified Matching Contributions) may be conditioned
upon an Employee's Elective Deferrals.
(c) Rollovers. If the Employer elects in the Adoption Agreement,
a Participant, or an Employee who would otherwise be eligible
to participate in the Plan but for the failure to satisfy any
age or service condition for eligibility to participate, who
has participated in any other qualified plan described in
section 401(a) of the Code or in a qualified annuity plan
described in section 403(a) of the Code shall be permitted,
subject to the approval of the Plan Administrator, to make a
rollover (or direct rollover) contribution to the Plan of all
or part of an amount received by such individual that is
attributable to participation in such other plan (reduced by
any nondeductible voluntary contributions the Participant
made to the plan), provided that the rollover contribution
complies with all requirements of section 402(c), 403(a)(4)
or 408(d)(3)(A)(ii) of the Code, whichever is applicable.
Before approving such a rollover, the Plan Administrator may
request from the individual or the sponsor of such other plan
any documents that the Plan Administrator, in its discretion,
deems necessary to determine that such rollover meets the
preceding requirements.
(d) Participant-Directed Transfers. If the Employer elects in the
Adoption Agreement, the Plan may accept at the request of a
Participant (or an Employee who would otherwise be eligible
to participate in the Plan but for the failure to satisfy any
age or service condition for eligibility to participate),
subject to the approval of the Plan Administrator, a direct
transfer of funds from a plan which the Employer reasonably
believes to be qualified under section 401(a) of the Code.
Any such transfer shall be accounted for separately and shall
be nonforfeitable at all times. Distribution from such
Participant-Directed Transfer subaccount shall not be
available prior to the Participant's death, Total and
Permanent Disability, termination of employment with the
Employer or prior to Plan termination if such assets are
transferred (within the meaning of section 414(l) of the
Code) to this Plan from a money purchase pension plan
qualified under section 401(a) of the Code (other than any
portion of those assets attributable to nondeductible
voluntary contributions made to the plan).
46
(e) Rollovers or Participant-Directed Transfers.
(i) If a rollover contribution or a Participant-Directed
Transfer is made on behalf of an Employee who is not
yet eligible to participate in the Plan, his Rollover
or Participant-Directed Transfer subaccount shall
constitute his entire interest in the Plan, and he
shall not be considered a Participant for any other
purpose of the Plan until he meets the eligibility
requirements for participation.
(ii) Unless otherwise approved by the Plan Administrator
and the Trustee, rollovers and Participant-Directed
Transfers shall be made in cash or cash equivalents.
3.3 Employer Contributions.
(a) Matching Contributions. If the Employer elects in the
Adoption Agreement to make Matching Contributions, for each
Plan Year the Employer shall contribute to the Trust an
amount as shall be determined by the Employer in accordance
with the matching contribution formula specified in the
Adoption Agreement. Matching Contributions shall be made on
behalf of those Participants specified by the Employer in the
Adoption Agreement.
(b) Discretionary Profit Sharing Contributions. If the Employer
elects in the Adoption Agreement to make Discretionary Profit
Sharing Contributions, the Employer may contribute to the
Trust an amount as may be determined by the Employer for each
Plan Year. Subject to the minimum top-heavy allocation rules
of Section 12.3 and the exclusions specified in this
subsection, Discretionary Profit Sharing Contributions for a
Plan Year shall be allocated to the Accounts of those
Participants specified by the Employer in the Adoption
Agreement and shall be allocated to Participants in
accordance with the provisions of Section 7.1(b) and the
Adoption Agreement.
(c) Qualified Nonelective Contributions. In its discretion, the
Employer may make Qualified Nonelective Contributions as
described in Section 3.12.
(d) Qualified Matching Contributions. In its discretion, the
Employer may make Qualified Matching Contributions as
described in Section 3.13.
(e) Safe Harbor Matching Contributions. If the Employer elects in
the Adoption Agreement to make Safe Harbor Matching
Contributions, for each Plan Year the Employer shall
contribute to the Trust on behalf of each Participant who has
made Elective Deferrals during such Plan Year an amount as
determined in accordance with the Safe Harbor Matching
Contribution formula specified in the Adoption Agreement.
(f) Safe Harbor Nonelective Contributions. If the Employer elects
in the Adoption Agreement to make Safe Harbor Nonelective
Contributions, for each Plan Year the Employer shall
contribute to the Trust on behalf of each Participant an
amount equal to 3% of the Participant's Total Compensation,
as determined in accordance with the Safe Harbor CODA section
of the Adoption Agreement, for such Plan Year or, if the
Employer so elects in the Safe Harbor CODA section of the
Adoption Agreement, Total Compensation, as determined in
accordance with the Safe Harbor CODA section of the Adoption
Agreement, for such period of time during the Plan Year in
which the Participant was eligible to participate in the
Plan.
(g) ACP Test Only Safe Harbor Matching Contributions. If the
Employer elects in the Adoption Agreement to make ACP Test
Only Safe Harbor Matching Contributions, for each Plan Year
the Employer shall contribute to the Trust on behalf of each
Participant who has made Elective Deferrals during such Plan
Year an amount as determined by the Employer in accordance
with the ACP Test Only Safe Harbor Matching Contribution
formula specified in the Adoption Agreement.
3.4 Contribution Limitation. All contributions to the Plan shall be
made without regard to current or accumulated earnings and profits
of the Employer for the taxable year(s) ending with or within the
Plan Year. Notwithstanding the foregoing, the Plan shall be
designed to qualify as a profit sharing plan for purposes of the
Code. In no event shall any Employer contribution (plus any
Elective Deferrals) exceed the maximum amount deductible from the
Employer's income under section 404 of the Code or any amount
allocated to the Account of a Participant exceed the maximum
limitations under section 415 of the Code provided in Article VI.
47
3.5 Excess Elective Deferrals.
(a) General. A Participant may assign to this Plan any Excess
Elective Deferrals made during a taxable year of the
Participant by notifying the Plan Administrator on or before
March 1 following the close of the Participant's taxable year
of the Excess Elective Deferrals to be assigned to the Plan.
(A Participant is deemed to notify the Plan Administrator of
any Excess Elective Deferrals that arise by taking into
account only those Elective Deferrals made to this Plan and
any other plans of this Employer.) Notwithstanding any other
provision of the Plan, Excess Elective Deferrals, plus any
income and minus any loss allocable thereto, shall be
distributed after the preceding taxable year and no later
than April 15 following the close of the preceding taxable
year to any Participant to whose Account Excess Elective
Deferrals were assigned for the preceding year and who claims
Excess Elective Deferrals for such taxable year.
(b) Calculation of Income or Loss. The income or loss allocable
to Excess Elective Deferrals is equal to the amount of income
or loss allocable to the Participant's Elective Deferral
subaccount for the taxable year multiplied by a fraction, the
numerator of which is such Participant's Excess Elective
Deferrals for the year and the denominator of which is the
sum of (i) the Participant's account balance attributable to
Elective Deferrals as of the beginning of the year and (ii)
the Participant's Elective Deferrals for the year.
(c) Tax Treatment. Excess Elective Deferrals that are distributed
after April 15 are includible in the Participant's gross
income in both the taxable year in which deferred and the
taxable year in which distributed.
(d) Forfeiture of Certain Matching Contributions. All Matching
Contributions (whether or not vested) that were made on
account of an Excess Elective Deferral that has been
distributed in accordance with this Section 3.5 shall be
forfeited before the last day of the twelve-month period
immediately following the close of the taxable year in which
such Excess Elective Deferrals were made.
3.6 Actual Deferral Percentage Test.
(a) Prior Year Testing. The Actual Deferral Percentage
(hereinafter "ADP") for a Plan Year for Participants who are
Highly Compensated Employees for each Plan Year and the prior
year's ADP for Participants who were Non-Highly Compensated
Employees for the prior Plan Year must satisfy one of the
following tests:
(i) The ADP for a Plan Year for Participants who are
Highly Compensated Employees for the Plan Year shall
not exceed the prior year's ADP for Participants who
were Non-Highly Compensated Employees for the prior
Plan Year multiplied by 1.25; or
(ii) The ADP for a Plan Year for Participants who are
Highly Compensated Employees for the Plan Year shall
not exceed the prior year's ADP for Participants who
were Non-Highly Compensated Employees for the prior
Plan Year multiplied by 2.0, provided that the ADP for
Participants who were Highly Compensated Employees for
the Plan Year does not exceed the ADP for Participants
who were Non-Highly Compensated Employees in the prior
Plan Year by more than two percentage points.
For the first Plan Year the Plan permits any Participant to
make Elective Deferrals and this is not a successor plan, for
purposes of the foregoing tests, the prior year's ADP of
Non-Highly Compensated Employees shall be 3 percent unless
the Employer has elected in the Adoption Agreement to use the
Plan Year's ADP for these Participants.
Current Year Testing. If elected by the Employer in the
Adoption Agreement, the ADP tests in (i) and (ii), above,
will be applied by comparing the current Plan Year's ADP for
Participants who are Highly Compensated Employees with the
current Plan Year's ADP for Participants who are Non-Highly
Compensated Employees. Once made, this election can be undone
only if the Plan meets the requirements for changing to Prior
Year Testing set forth in Notice 98-1 (or superseding
guidance).
For Plan Years beginning before the Employer adopts this
document for its GUST-restated plan, the ADP Test in any such
Plan Year will be performed using Prior Year Testing or
Current Year Testing as the Employer elects in the Optional
Supplement.
48
(b) Special Rules.
(i) The Deferral Percentage for any Participant who is a
Highly Compensated Employee for the Plan Year, and who
is eligible to have Elective Deferrals (and Qualified
Nonelective Contributions or Qualified Matching
Contributions, or both, if treated as Elective
Deferrals for purposes of the ADP Test) allocated to
his or her Accounts under two or more cash or deferred
arrangements described in section 401(k) of the Code
that are maintained by the Employer, shall be
determined as if such Elective Deferrals (and, if
applicable, such Qualified Nonelective Contributions
or Qualified Matching Contributions, or both) were
made under a single arrangement. If a Highly
Compensated Employee participates in two or more cash
or deferred arrangements that have different plan
years, all cash or deferred arrangements ending with
or within the same calendar year shall be treated as a
single arrangement. Notwithstanding the foregoing,
certain plans shall be treated as separate if
mandatorily disaggregated under regulations under
section 401(k) of the Code.
(ii) In the event that this Plan satisfies the requirements
of section 401(k), 401(a)(4) or 410(b) of the Code
only if aggregated with one or more other plans, or if
one or more other plans satisfy the requirements of
such sections of the Code only if aggregated with this
Plan, then this Section shall be applied by
determining the Deferral Percentage of Employees as if
all such plans were a single plan. Any adjustments to
the Non-Highly Compensated Employee ADP for the prior
year will be made in accordance with Notice 98-1 and
any superseding guidance, unless the Employer has
elected in the Adoption Agreement to use the Current
Year Testing method. Plans may be aggregated in order
to satisfy section 401(k) of the Code only if they
have the same plan year and use the same ADP testing
method.
(iii) Effective for Plan Years beginning before January 1,
1997, for purposes of determining the Deferral
Percentage of a Participant who is a Five Percent
Owner or one of the ten most highly-paid Highly
Compensated Employees, the Elective Deferrals (and
Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if treated as
Elective Deferrals for purposes of the ADP Test) and
Testing Compensation of such Participant shall include
the Elective Deferrals (and, if applicable, Qualified
Nonelective Contributions and Qualified Matching
Contributions) and Testing Compensation for the Plan
Year of Family Members. Family Members, with respect
to such Highly Compensated Employees, shall be
disregarded as separate Employees in determining the
ADP both for Participants who are Non-Highly
Compensated Employees and for Participants who are
Highly Compensated Employees.
(iv) For purposes of applying the ADP Test, Elective
Deferrals, Qualified Nonelective Contributions and
Qualified Matching Contributions must be made before
the last day of the twelve-month period immediately
following the Plan Year to which such contributions
relate.
(v) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ADP Test and the
amount of Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, used in
such test.
(vi) If the Employer elects to apply section 410(b)(4)(B)
of the Code in determining whether the Plan meets the
minimum coverage requirements of section 410(b)(1) of
the Code, the Employer may, in determining whether the
Plan satisfies the ADP Test, exclude from
consideration all eligible Employees (other than
Highly Compensated Employees) who have not met the
minimum age and service requirements of section
410(a)(1)(A) of the Code.
(c) Safe Harbor CODA.
(i) If the Employer has elected in the Adoption Agreement
to make Safe Harbor Matching Contributions or Safe
Harbor Nonelective Contributions during a Plan Year,
the provisions of this Section 3.6 shall not apply.
(ii) If the Employer suspends making Safe Harbor Matching
Contributions or Safe Harbor Nonelective Contributions
during a Plan Year, the provisions of this Section 3.6
shall apply using Current Year Testing.
49
(iii) If the Employer wants to maintain the option to amend
the Plan during a Plan Year to provide for Safe Harbor
Nonelective Contributions during such Plan Year, the
ADP and ACP Tests must be applied using Current Year
Testing during such Plan Year.
3.7 Average Contribution Percentage Test.
(a) Prior Year Testing. The Average Contribution Percentage
(hereinafter "ACP") for a Plan Year for Participants who are
Highly Compensated Employees for each Plan Year and the prior
year's ACP for Participants who were Non-Highly Compensated
Employees for the prior Plan Year must satisfy one of the
following tests:
(i) The ACP for a Plan Year for Participants who are
Highly Compensated Employees for the Plan Year shall
not exceed the prior year's ACP for Participants who
were Non-Highly Compensated Employees for the prior
Plan Year multiplied by 1.25; or
(ii) The ACP for a Plan Year for Participants who are
Highly Compensated Employees for the Plan Year shall
not exceed the prior year's ACP for Participants who
were Non-Highly Compensated Employees for the prior
Plan Year multiplied by 2.0, provided that the ACP for
Participants who are Highly Compensated Employees does
not exceed the ACP for Participants who were
Non-Highly Compensated Employees in the prior Plan
Year by more than two percentage points.
For the first Plan Year the Plan permits any Participant to make
Employee After-Tax Contributions, provides for Matching
Contributions, or both, and this is not a successor plan, for
purposes of the foregoing tests, the prior year's ACP of
Non-Highly Compensated Employees shall be 3 percent unless the
Employer has elected in the Adoption Agreement to use the Plan
Year's ACP for these Participants.
Current Year Testing. If elected by the Employer in the Adoption
Agreement, the ACP tests in (i) and (ii), above, will be applied
by comparing the current Plan Year's ACP for Participants who are
Highly Compensated Employees for each Plan Year with the current
Plan Year's ACP for Participants who are Non-Highly Compensated
Employees. Once made, this election can be undone only if the Plan
meets the requirements for changing to Prior Year Testing set
forth in Notice 98-1 (or superseding guidance).
For Plan Years beginning before the Employer adopts this document
for its GUST-restated plan, the ACP Test in any such Plan Year
will be performed using Prior Year Testing or Current Year Testing
as the Employer elects in the Optional Supplement.
(b) Special Rules.
(i) For purposes of this Section, the Contribution
Percentage for any Participant who is a Highly
Compensated Employee and who is eligible to have
Contribution Percentage Amounts allocated to his or
her Account under two or more plans described in
section 401(a) of the Code or cash or deferred
arrangements described in section 401(k) of the Code
that are maintained by the Employer shall be
determined as if the total of such Contribution
Percentage Amounts were made under a single plan. If
Contribution Percentage Amounts are made on behalf of
a Highly Compensated Employee in two or more plans
that have different plan years, all such plans that
have plan years ending with or within the same
calendar year shall be treated as a single plan.
Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggre-gated
under regulations under section 410(b) of the Code.
(ii) In the event that this Plan satisfies the requirements
of section 401(m), 401(a)(4) or 410(b) of the Code
only if aggregated with one or more other plans, or if
one or more other plans satisfy the requirements of
such sections of the Code only if aggregated with this
Plan, then this Section shall be applied by
determining the ACP of Employees as if all such plans
were a single plan. Any adjustments to the Non-Highly
Compensated Employee ACP for the prior year will be
made in accordance with Notice 98-1 and any
superseding guidance, unless the Employer has elected
in the Adoption Agreement to use the Current Year
Testing method. Plans may be aggregated in order to
satisfy section 401(m) of the Code only if they have
the same plan year and use the same ACP testing
method.
50
(iii) Effective for Plan Years beginning before January 1,
1997, for purposes of determining the Contribution
Percentage of a Participant who is a Five Percent
Owner or one of the ten most highly-paid Highly
Compensated Employees, the Contribution Percentage
Amounts and Testing Compensation of such Participant
shall include the Contribution Percentage Amounts and
Testing Compensation for the Plan Year of Family
Members. Family Members, with respect to Highly
Compensated Employees, shall be disregarded as
separate Employees in determining the Contribution
Percentage both for Participants who are Non-Highly
Compensated Employees and for Participants who are
Highly Compensated Employees.
(iv) For purposes of applying the ACP Test, Employee
After-Tax Contributions are considered to have been
made in the Plan Year in which contributed to the
Trust. Qualified Matching Contributions and Qualified
Nonelective Contributions will be considered made for
a Plan Year if made no later than the end of the
twelve-month period beginning on the day after the
close of the Plan Year.
(v) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the
amount of Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, used in
such test.
(vi) If the Employer elects to apply section 410(b)(4)(B)
of the Code in determining whether the Plan meets the
minimum coverage requirements of section 410(b)(1) of
the Code, the Employer may, in determining whether the
Plan satisfies the ACP Test, exclude from
consideration all eligible Employees (other than
Highly Compensated Employees) who have not met the
minimum age and service requirements of section
410(a)(1)(A) of the Code.
(c) Safe Harbor CODA.
(i) If the Employer has elected in the Adoption Agreement
to make Safe Harbor Matching Contributions or ACP Test
Only Safe Harbor Matching Contributions during a Plan
Year, the provisions of this Section 3.7 shall apply
as follows:
(A) If only Safe Harbor Matching Contributions (or
ACP Test Only Safe Harbor Matching Contributions)
or Elective Deferrals, or both, are allowed, the
provisions of this Section 3.7 shall not apply.
(B) If Employee After-Tax Contributions are allowed
or if the Employer makes any type of matching
contribution other than Safe Harbor Matching
Contributions or ACP Test Only Safe Harbor
Matching Contributions under the Plan during a
Plan Year, the provisions of this Section 3.7
shall apply during such Plan Year using Current
Year Testing except that the Employer may elect
to disregard Safe Harbor Matching Contributions
and ACP Test Only Safe Harbor Matching
Contributions in performing such Current Year
Testing.
(ii) If the Employer suspends making Safe Harbor Matching
Contributions or ACP Test Only Safe Harbor Matching
Contributions during a Plan Year, the provisions of
this Section 3.7 shall apply using Current Year
Testing.
(iii) If the Employer wants to maintain the option to amend
the Plan during a Plan Year to provide for Safe Harbor
Nonelective Contributions during such Plan Year, the
ADP and ACP Tests must be applied using Current Year
Testing during such Plan Year.
3.8 Multiple Use Test. If one or more Highly Compensated Employees
participate in both a cash or deferred arrangement and a plan
subject to the ACP Test maintained by the Employer and the sum of
the ADP and ACP of those Highly Compensated Employees subject to
either or both tests exceeds the Aggregate Limit, then the ADP or
ACP, or both, of those Highly Compensated Employees who also
participate in a cash or deferred arrangement will be reduced in
the manner determined by the Plan Administrator so that the limit
is not exceeded. The amount by which each Highly Compensated
Employee's Deferral Percentage or Contribution Percentage Amount,
or both, is reduced shall be treated as an Excess Aggregate
Contribution. The ADP and ACP of the Highly Compensated Employees
are determined after any corrections required to meet the ADP and
ACP Tests. Impermissible multiple use does not occur if either the
ADP or ACP of the Highly Compensated Employees does not exceed
1.25 multiplied by the ADP and ACP of the Non-Highly Compensated
Employees.
51
3.9 Prevention or Cure of ADP Test Failures. The Plan Administrator
may, in its sole discretion, use any one or a combination of the
following methods to prevent or cure any ADP Test failure in
accordance with section 401(k) of the Code and the regulations
thereunder:
(a) The Plan Administrator may refuse to accept any or all
prospective Elective Deferrals to be contributed by a Highly
Compensated Employee.
(b) The Plan Administrator may distribute any or all Excess
Contributions in accordance with the provisions of Section
3.11.
(c) The Employer may, in its sole discretion, elect to contribute
a Qualified Nonelective Contribution in accordance with the
provisions of Section 3.12.
(d) Subject to the requirements of Section 3.13, the Plan
Administrator may, in its sole discretion, elect to treat
Qualified Matching Contributions as if they were Elective
Deferrals for purposes of the ADP test.
(e) The Plan Administrator may recharacterize Excess
Contributions as Employee After-Tax Contributions in
accordance with the provisions of Section 3.14.
(f) The Employer may, in its sole discretion, elect to make a
Safe Harbor Nonelective Contribution in accordance with the
provisions of Section 3.15.
3.10 Prevention or Cure of ACP Test Failures. The Plan Administrator
may, in its sole discretion, use any one or a combination of the
following methods to prevent or cure any ACP Test failure in
accordance with section 401(m) of the Code and the regulations
thereunder:
(a) The Plan Administrator may refuse to accept any or all
prospective Elective Deferrals or Employee After-Tax
Contributions, or both, to be contributed by a Highly
Compensated Employee.
(b) The Plan Administrator may elect to contribute a Qualified
Matching Contribution in accordance with the provisions of
Section 3.13.
(c) The Plan Administrator may forfeit, if forfeitable, or
distribute, if not forfeitable, Excess Aggregate
Contributions in accordance with Section 3.17.
(d) The Plan Administrator may elect to treat Qualified
Nonelective Contributions or Elective Deferrals, or both, as
if they were Matching Contributions in accordance with
Sections 3.12 and 3.16, respectively, subject to the
requirements of Section 3.1(e).
(e) If the Employer has elected the Safe Harbor CODA in the
Adoption Agreement for a Plan Year, and if Employee After-Tax
Contributions can be made to the Plan in such Plan Year, the
Plan Administrator may, in its sole discretion, use any one
or a combination of the following methods to prevent or cure
any ACP Test failure:
(i) The Plan Administrator may refuse to accept any or all
prospective Employee After-Tax Contributions to be
contributed by a Highly Compensated Employee.
(ii) The Plan Administrator may distribute Employee
After-Tax Contributions (and any income or loss
allocable thereto) that are Excess Aggregate
Contributions.
3.11 Distribution of Excess Contributions to Cure ADP Test Failure.
(a) General Rule. Notwithstanding any other provision of this
Plan, Excess Contributions for a Plan Year, plus any income
and minus any loss allocable thereto, shall be distributed to
Participants to whose Accounts such Excess Contributions were
allocated for the preceding Plan Year no later than twelve
months following the last day of such preceding Plan Year.
Excess Contributions are allocated to the Highly Compensated
Employees with the largest amounts of Elective Deferrals and
amounts treated as Elective Deferrals taken into account in
calculating the ADP Test for the year in which the excess
arose, beginning with the Highly Compensated Employee with
the largest amount of such Elective Deferrals and amounts
treated as Elective Deferrals and continuing in descending
order until all Excess Contributions have been allocated. For
purposes of the preceding sentence, the "largest amount" is
determined after distribution of any Excess Elective
Deferrals. If such excess amounts are distributed more than 2
1/2months after the last day of the Plan Year in which such
excess amounts arose, a 10% excise tax on such amounts will
be imposed on the Employer.
52
For Plan Years beginning before January 1, 1997, Excess
Contributions of a Participant who is subject to the Family
Member aggregation rules shall be allocated among the Family
Members of such Participant in proportion to the Elective
Deferrals (and amounts treated as Elective Deferrals) of each
Family Member that is combined to determine the combined ADP
of such Participant.
(b) Calculation of Income or Loss. The income or loss allocable
to Excess Contributions allocated to each Participant is
equal to the amount of income or loss allocable to the
Participant's Elective Deferral subaccount (and, if
applicable, the Qualified Nonelective Contribution subaccount
or the Qualified Matching Contribution subaccount, or both)
for the Plan Year multiplied by a fraction, the numerator of
which is such Participant's Excess Contributions for the Plan
Year and the denominator of which is the sum of (i) the
Participant's account balance attributable to Elective
Deferrals (and Qualified Nonelective Contributions or
Qualified Matching Contributions, or both, if any of such
contributions are included in the ADP Test) as of the
beginning of the Plan Year, and (ii) Elective Deferrals (and
Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, if any such contributions are
included in the ADP Test).
(c) Method of Distribution. Excess Contributions shall be
distributed from the Participant's Elective Deferral
subaccount, Qualified Nonelective Contribution subaccount (if
applicable) or Qualified Matching Contribution subaccount (if
applicable), or any such subaccounts, in the manner
determined by the Plan Administrator.
(d) Forfeiture of Certain Matching Contributions. Any Matching
Contribution (whether or not vested) that was made on account
of an Excess Contribution that has been distributed in
accordance with this Section 3.11 shall be forfeited no later
than twelve months after the close of the Plan Year in which
such Excess Contribution occurred.
(e) Annual Additions. Excess Contributions shall be treated as
Annual Additions under the Plan.
3.12 Qualified Nonelective Contributions to Prevent or Cure ADP and/or
ACP Test Failure. The Employer may, in its sole discretion, elect
to contribute a Qualified Nonelective Contribution in any amount
to prevent or cure any ADP Test and/or ACP Test failure for a Plan
Year within twelve months after the close of the Plan Year to
which such contribution relates. Qualified Nonelective
Contributions for a Plan Year shall be allocated only to the
Accounts of Participants who are Non-Highly Compensated Employees
in one of the following methods selected by the Plan
Administrator:
(a) In the ratio in which each such Non-Highly Compensated
Employee's Compensation as defined in the Adoption Agreement
for the Plan Year for which the Qualified Nonelective
Contribution is being made bears to the total such
Compensation of all such Non-Highly Compensated Employees for
such Plan Year.
(b) Beginning with the Non-Highly Compensated Employee with the
lowest such Compensation for such Plan Year and continuing in
ascending order an amount no greater than the Maximum
Permissible Amount, as defined in Section 6.1(j), reduced by
any Annual Additions credited to such Non-Highly Compensated
Employee under this Plan or any other plan of the Employer as
if such amount of the Qualified Nonelective Contribution
allocated to such Non-Highly Compensated Employee were
included as an Annual Addition for such Plan Year.
3.13 Qualified Matching Contribution to Prevent or Cure ADP and/or ACP
Test Failure. The Employer may, in its sole discretion, elect to
contribute a Qualified Matching Contribution in any amount to
prevent or cure any ADP Test and/or ACP Test failure for a Plan
Year within twelve months after the close of the Plan Year to
which such contribution relates. Qualified Matching Contributions
for a Plan Year shall be allocated to the Accounts of Participants
who are Non-Highly Compensated Employees and who would be eligible
for an allocation of Matching Contributions in accordance with
Section 3.3(a) in accordance with one of the following methods:
(a) If the Employer makes Matching Contributions only on behalf
of Participants who make Elective Deferrals, in the ratio in
which the Elective Deferrals for such Plan Year of each
Participant who is a Non-Highly Compensated Employee and who
is eligible for a Matching Contribution for such Plan Year
bear to the total Elective Deferrals of all such Non-Highly
Compensated Employees for such Plan Year.
53
(b) If the Employer makes Matching Contributions only on behalf
of Participants who make Employee After-Tax Contributions, in
the ratio in which the Employee After-Tax Contributions for
such Plan Year of each Participant who is a Non-Highly
Compensated Employee and who is eligible for a Matching
Contribution for such Plan Year bear to the total Employee
After-Tax Contributions of all such Non-Highly Compensated
Employees for such Plan Year.
(c) If the Employer makes Matching Contributions on behalf of
Participants who make Elective Deferrals or Employee
After-Tax Contributions, or both, in the ratio in which the
total Elective Deferrals and Employee After-Tax Contributions
for such Plan Year of each Participant who is a Non-Highly
Compensated Employee and is eligible for a Matching
Contribution for such Plan Year bear to the total Elective
Deferrals and Employee After-Tax Contributions of all such
Non-Highly Compensated Employees for such Plan Year.
3.14 Recharacterization of Excess Contributions to Cure ADP Test
Failure. If the Employer elects in the Adoption Agreement to allow
Participants to make Employee After-Tax Contributions to the Plan,
the Plan Administrator, in its sole discretion, may treat Excess
Contributions allocated to a Highly Compensated Employee as an
amount distributed to him or her and then contributed by him or
her to the Plan as an Employee After-Tax Contribution.
Recharacterized Excess Contributions will remain nonfor-feitable.
Excess Contributions may not be recharacterized to the extent such
amounts in combination with other Employee After-Tax Contributions
made by that Employee would exceed any stated limit under the Plan
on Employee After-Tax Contributions.
Recharacterization must occur no later than 2 1/2months after the
last day of the Plan Year in which such Excess Contributions arose
and is deemed to occur no earlier than the date the last Highly
Compensated Employee is informed in writing of the amount
recharacterized and the consequences thereof. Recharacterized
amounts will be taxable to the Participant for the Participant's
taxable year in which the Participant would have received them in
cash.
3.15 Safe Harbor Nonelective Contribution to Prevent ADP Test Failure.
The Employer may elect to make a Safe Harbor Nonelective
Contribution during a Plan Year as described in Notice 2000-3 and
any superceding guidance.
3.16 Elective Deferrals to Cure ACP Test Failure. The Plan
Administrator may, in its sole discretion, elect to treat Elective
Deferrals as if they were Matching Contributions for a Plan Year
as long as the ADP Test is met before the Elective Deferrals are
used in the ACP Test and continues to be met following the
exclusion of those Elective Deferrals that are used to meet the
ACP Test.
3.17 Forfeiture and/or Distribution of Excess Aggregate Contributions
to Cure ACP Test Failure. Notwithstanding any other provision of
this Plan, Excess Aggregate Contributions for a Plan Year, plus
any income and minus any loss allocable thereto, may be forfeited,
if forfeitable, or if not forfeitable, distributed, no later than
twelve months after the close of the Plan Year to which such
contributions relate, to Participants to whose Accounts such
Excess Aggregate Contributions were allocated for such Plan Year.
Excess Aggregate Contributions are allocated to the Highly
Compensated Employees with the largest Contribution Percentage
Amounts taken into account in calculating the ACP Test for the
Plan Year in which the excess arose, beginning with the Highly
Compensated Employee with the largest amount of such Contribution
Percentage Amounts and continuing in descending order until all
the Excess Aggregate Contributions have been allocated. For
purposes of the preceding sentence, the "largest amount" is
determined after distribution of any Excess Contributions. For
Plan Years beginning before January 1, 1997, Excess Aggregate
Contributions of a Participant who is subject to the Family Member
aggregation rules shall be allocated among the Family Members of
such Participant in proportion to the Matching Contributions (or
amounts treated as Matching Contributions) of each Family Member
that is combined to determine the combined ACP of such
Participant. Excess Aggregate Contributions shall be forfeited, if
forfeitable, or distributed, if not forfeitable, in the manner
determined by the Plan Administrator from the Participant's
Matching Contribution subaccount and/or Qualified Matching
Contribution subaccount (and/or, if applicable, the Participant's
Qualified Nonelective Contribution subaccount or Elective Deferral
subaccount, or both).
54
If Excess Aggregate Contributions are distributed more than 2 1/2
months after the last day of the Plan Year in which such excess
amounts arose, a 10% excise tax will be imposed on the Employer
maintaining the Plan with respect to those amounts. Excess
Aggregate Contributions shall be treated as Annual Additions
under the Plan.
The income or loss allocable to Excess Aggregate Contributions
allocated to a Participant is equal to the amount of income or
loss allocable to the Participant's Employee After-Tax
Contributions subaccount, Matching Contribution subaccount,
Qualified Matching Contribution subaccount (if any, and if all
amounts therein are not used in the ADP Test) and, if applicable,
Qualified Nonelective Contribution subaccount and Elective
Deferral subaccount for the Plan Year multiplied by a fraction,
the numerator of which is such Participant's Excess Aggregate
Contributions for the year and the denominator of which is the sum
of (i) the Participant's account balance(s) attributable to
Contribution Percentage Amounts as of the beginning of the Plan
Year, and (ii) Contribution Percentage Amounts made during the
Plan Year.
Forfeitures of Excess Aggregate Contributions shall be reallocated
to Participants' Accounts as described in Section 5.5.
Any Matching Contribution (whether or not vested) that was made on
account of an Excess Aggregate Contribution that has been
distributed in accordance with this Section 3.17 shall be
forfeited no later than twelve months after the close of the Plan
Year in which such Excess Aggregate Contribution occurred.
ARTICLE IV - SAFE HARBOR CODA
4.1 Rules of Application.
(a) Except as specifically provided in this Article, if the
Employer has elected the safe harbor CODA option in the
Adoption Agreement, the provisions of this Article IV shall
apply and any provisions relating to the ADP Test described
in Section 3.6 or the ACP Test described in Section 3.7 do
not apply. Notwithstanding the foregoing,
(i) If the Employer has elected in the Adoption Agreement
to permit Employee After-Tax Contributions during a
Plan Year in which the Employer has elected the safe
harbor CODA, such Employee After-Tax Contributions
shall be subject to the ACP Test described in Section
3.7.
(ii) If the Employer has elected in the Adoption Agreement
to make Safe Harbor Nonelective Contributions and
Matching Contributions, such Matching Contributions
shall be subject to the ACP Test described in Section
3.7.
(b) To the extent that any other provision of the Plan is
inconsistent with the provisions of this Article, the
provisions of this Article shall govern.
4.2 Safe Harbor Contributions. If the Employer elects in the Adoption
Agreement to make Safe Harbor Contributions, for each Plan Year
the Employer shall contribute to the Trust an amount as shall be
determined by the Employer in accordance with the Safe Harbor
Contribution formula(s) specified in the Adoption Agreement. If
the payroll period method is used to determine Safe Harbor
Matching Contributions and/or ACP Test Only Safe Harbor Matching
Contributions, such contributions made with respect to any Plan
Year quarter beginning after May 1, 2000, must be contributed to
the Plan by the last day of the following Plan Year quarter.
4.3 Notice Requirement.
(a) At least 30 days, but not more than 90 days, before the
beginning of a Plan Year, the Employer will provide each
Participant a notice of the safe harbor matching and/or
nonelective contribution formula used under the Plan, how
such contributions are fully vested when made, how and when
to make salary deferral elections and how to obtain
additional information about the Plan, written in a manner
calculated to be understood by the average Participant. If an
Employee becomes a Participant after the 90th day before the
beginning of the Plan Year and does not receive the notice
for that reason, the notice must be provided no more than 90
days before the Employee becomes a Participant but no later
than the day the Employee becomes a Participant.
55
(b) In addition to any other election periods provided under the
Plan, each Participant may make or modify a salary deferral
election during the 30-day period immediately following
receipt of the notice described in subsection (a) above.
4.4 Special Rule. Notwithstanding the foregoing provisions of the
Article, the provisions of Notice 98-52 and Notice 2000-3 (and any
superceding guidance) shall govern the operation of a Plan that
makes a safe harbor CODA election in the Adoption Agreement.
ARTICLE V - ALLOCATION OF FUNDS
5.1 Allocation of Discretionary Profit Sharing Contributions.
(a) Definitions. For the purposes of this Section 5.1, the
following definitions shall apply.
(i) Integration Level. The Social Security Taxable Wage
Base or such lesser percentage of the Social Security
Taxable Wage Base elected by the Employer in the
Adoption Agreement.
(ii) Maximum Profit Sharing Disparity Rate. The lesser of:
(A) 2.7% (5.7% if the Plan is not Top-Heavy);
(B) The applicable percentage determined in
accordance with the table below:
If the Integration Level is
More Than But Not More Than The Applicable Percentage Is:
Top-Heavy Not Top-Heavy
$0 20% of SSTWB 2.7% 5.7%
20% of SSTWB 80% of SSTWB 1.3% 4.3%
80% of SSTWB 100% of SSTWB 2.4% 5.4%
If the Integration Level is equal to SSTWB, the applicable
percentage is 2.7% (5.7% if the Plan is not Top-Heavy).
(iii) SSTWB or Social Security Taxable Wage Base. The
contribution and benefit base in effect under section
230 of the Social Security Act on the first day of the
Plan Year.
(b) Formula. If the Employer elects in the Adoption Agreement to
make Discretionary Profit Sharing Contributions, all
Discretionary Profit Sharing Contributions it elects to make
for any Plan Year shall be allocated to the Account of each
Participant eligible for such an allocation, as designated by
the Employer in the Adoption Agreement, in the ratio that
such Participant's Compensation bears to the Compensation of
all such Participants. However, if the Discretionary Profit
Sharing Contribution formula selected in the Adoption
Agreement provides for allocations under the permitted
disparity rules, Discretionary Profit Sharing Contributions
for the Plan Year shall be allocated to the Accounts of
Participants eligible for such an allocation as follows:
If the Plan is Top-Heavy (as defined in Article XII) for the
Plan Year, begin at Step One; if the Plan is not Top-Heavy
for the Plan Year, begin at Step Three.
Step One. Contributions (and forfeitures, if applicable) will
be allocated to each eligible Participant's Discretionary
Profit Sharing Contributions subaccount in the ratio that
each eligible Participant's Compensation bears to all such
Participants' Compensation, but not in excess of 3% of each
Participant's Compensation.
Step Two. Any contributions (and forfeitures, if applicable)
remaining after the allocation in Step One will be allocated
to each eligible Participant's Discretionary Profit Sharing
Contributions subaccount in the ratio that each eligible
Participant's Compensation for the Plan Year in excess of the
Integration Level (hereinafter "Excess Compensation") bears
to the Excess Compensation of all such Participants, but not
in excess of 3% of Compensation.
56
Step Three. Any contributions (and forfeitures, if
applicable) remaining after the allocation in Step Two if the
Plan is Top-Heavy will be allocated to each eligible
Participant's Discretionary Profit Sharing Contributions
subaccount in the ratio that the sum of each eligible
Participant's Compensation and Excess Compensation bears to
the sum of all such Participants' Compensation and Excess
Compensation, but not in excess of the Maximum Profit Sharing
Disparity Rate.
Step Four. Any remaining contributions (and forfeitures, if
applicable) will be allocated to each eligible Participant's
Discretionary Profit Sharing Contributions subaccount in the
ratio that each such Participant's Compensation for the Plan
Year bears to the total of all such Participants'
Compensation for that year.
If the Employer maintains any other plan that provides for
permitted disparity, and if any Participant in this Plan is
eligible to participate in such other plan, this Plan may not
provide for permitted disparity.
Effective for Plan Years beginning on or after January 1, 1995,
the cumulative permitted disparity limit for a Participant is 35
total cumulative permitted disparity years. Total cumulative
permitted disparity years means the number of years credited to
the Participant for allocation or accrual purposes under this Plan
or any other qualified plan or simplified employee pension plan
(whether or not terminated) ever maintained by the Employer. For
purposes of determining the Participant's cumulative permitted
disparity limit, all years ending in the same calendar year are
treated as the same year. If the Participant has not benefited
under a defined benefit or target benefit plan for any year
beginning on or after January 1, 1994, the Participant has no
cumulative disparity limit.
5.2 Allocation of Net Earnings or Losses of the Trust. Earnings,
dividends, capital gain distributions, appreciation, depreciation,
losses and accrued but unpaid interest and any other earnings or
losses from assets in a specific Participant's Account or
subaccount or in a segregated account under the Plan shall be
allocated to such Account, subaccount, or segregated account.
5.3 Valuations. In determining the earnings or losses of the Trust, as
of each Valuation Date the Trust shall be valued in accordance
with the provisions of the Trust Agreement.
5.4 Accounting for Distributions. All distributions made to a
Participant or his Beneficiary and any transfers to another
qualified plan shall be charged to the appropriate subaccount of
the Participant's Account as of the date of the distribution or
transfer.
5.5 Allocation of Forfeitures. Any forfeitures arising under the Plan,
including forfeitures of Excess Aggregate Contributions, shall be
allocated in the following order of priority as of the Plan Year
in which forfeitures occur:
(a) First, forfeitures shall be used to the extent necessary to
restore a returning Participant's Account as provided in
Section 7.5 and to restore a formerly unlocatable
Participant's or Beneficiary's Account as provided in Section
7.6;
(b) Next, if the Employer so elects in the Adoption Agreement,
forfeitures shall be treated as an Employer contribution,
shall be used to reduce Matching Contributions and/or Safe
Harbor Contributions required under the Plan and shall be
allocated to the appropriate Matching Contribution
subaccounts, Safe Harbor Matching Contribution subaccounts,
Safe Harbor Nonelective Contribution subaccounts and/or ACP
Test Only Safe Harbor Matching Contribution subaccounts of
the Participants on whose behalf such contributions are to be
made;
(c) Next, forfeitures shall be treated as Employer contributions
and shall be allocated to Participants' Accounts to the
extent necessary to satisfy the minimum allocation provisions
of Section 12.3.
(d) Next, to the extent elected by the Plan Administrator,
forfeitures shall be treated as a Qualified Nonelective
Contribution or a Qualified Matching Contribution and shall
be allocated as provided in Sections 3.12 and 3.13,
respectively;
(e) Next, to the extent elected by the Plan Administrator,
forfeitures shall be used to pay reasonable costs of
administering the Plan;
57
(f) Any remaining forfeitures shall be treated as Employer
contributions and shall be allocated as follows:
(i) If the Employer has elected in the Adoption Agreement
that it may make Discretionary Profit Sharing
Contributions to the Plan, such forfeitures shall be
treated as Discretionary Profit Sharing Contributions
and allocated in accordance with the provisions of
Section 5.1(b);
(ii) If the Employer has not elected in the Adoption
Agreement that it may make Discretionary Profit
Sharing Contributions to the Plan, such forfeitures
shall be allocated as follows:
(A) In any Plan Year in which the Plan is not a safe
harbor cash or deferred arrangement, such
forfeiture shall be treated as Matching
Contributions and allocated to each Participant's
Matching Contribution subaccount in the ratio
that each Participant's Matching Contributions
for the Plan Year bear to the total of all
Participants' Matching Contributions for the Plan
Year.
(B) In any Plan Year in which the Plan is a safe
harbor cash or deferred arrangement, such
forfeitures shall be treated as Discretionary
Profit Sharing Contributions and allocated to the
Account of each Participant in the ratio that
each Participant's Compensation for the Plan Year
bears to the Compensation of all such
Participants for the Plan Year.
5.6 Investment of Funds.
(a) Investment Control. Subject to the provisions of subsection
(c) below, the management and control of the Trust shall be
vested in the Plan Administrator, and the Trustee shall be
subject to the directions of the Plan Administrator made in
accordance with the terms of the Plan and ERISA.
(b) Investment Limitations. The Trustee shall invest all funds
received from the Employer in the Investment Options in the
manner from time to time directed in writing by the Employer.
(c) Participant Directed Investments. Each Participant, subject
to such reasonable restrictions as the Employer, the Plan
Administrator or the Sponsor may impose for administrative
convenience, may direct the Plan Administrator on what
percentage of his or her Account will be invested in each
Investment Option. No person, including the Trustee and the
Employer, shall be responsible for any loss or for any breach
of fiduciary duty which results from a Participant's or
Beneficiary's exercise of investment control.
(d) Failure of a Participant to Make an Investment Election. If a
Participant does not make a designation of an Investment
Option, the Employer shall direct the Trustee to invest all
amounts held or received on account of such Participant in
the Investment Option(s) designated by the Employer.
(e) Employer Securities. If provided in the Adoption Agreement,
the Employer and/or Participants may direct that
contributions will be invested in qualifying employer
securities (within the meaning of section 407(d)(5) of
ERISA), subject to such restrictions as the Employer, the
Administrator or the Sponsor may impose for administrative
convenience or legal compliance.
ARTICLE VI - LIMITATION ON ALLOCATIONS
6.1 Definitions. For purposes of this Article VI, the following
definitions shall apply:
(a) Annual Additions Compensation shall mean one of the following
as elected by the Employer in the Adoption Agreement, paid
during the period elected by the Employer in the Adoption
Agreement:
(i) W-2 earnings as defined in Section 1.13(a)(i).
(ii) Section 415 Compensation as defined in Section
1.13(a)(ii).
(iii) Section 3401(a) wages as defined in Section
1.13(a)(iii).
For the purposes of determining Annual Additions Compensation, W-2
earnings, section 415 Compensation and section 3401(a) wages shall
be determined in accordance with the provisions of subsections (c)
through (f) of Section 1.13 as if the term "Annual Additions
Compensation" were substituted for the term "Compensation" in each
place the term "Compensation" appears in such subsections.
58
(b) Defined Benefit Fraction shall mean a fraction, the numerator
of which is the sum of the Participant's Projected Annual
Benefits under all defined benefit plans (whether or not
terminated) maintained by the Employer, and the denominator
of which is the lesser of 125% of the dollar limitation in
effect for the Limitation Year under section 415(b) and (d)
of the Code or 140% of the Highest Average Compensation
including any adjustments under section 415(b) of the Code.
Notwithstanding the above, if the Participant was a Participant as
of the first day of the first Limitation Year beginning after
December 31, 1986, in one or more defined benefit plans maintained
by the Employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than 125% of the sum
of the annual benefits under such plans which the Participant had
accrued as of the close of the last Limitation Year beginning
before January 1, 1987, disregarding any changes in the terms and
conditions of the plan after May 5, 1986. The preceding sentence
applies only if the defined benefit plans individually and in the
aggregate satisfied the requirements of section 415 of the Code
for all Limitation Years beginning before January 1, 1987.
(c) Defined Contribution Dollar Limitation shall mean $30,000, as
adjusted under section 415(d) of the Code.
(d) Defined Contribution Fraction shall mean a fraction, the
numerator of which is the sum of the Annual Additions to the
Participant's account under all 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, individual medical accounts and simplified employee
pensions maintained by the Employer), and the denominator of
which is the sum of the maximum aggregate amount for the
current and all prior Limitation Years of service with the
Employer (regardless of whether a defined contribution plan
was maintained by the Employer). The maximum aggregate amount
in any Limitation Year is the lesser of 125% of the dollar
limitation determined under section 415(b) and (d) of the
Code in effect under section 415(c)(1)(A) of the Code or 35%
of the Participant's Annual Additions 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 (i) the excess
of the sum of the fractions over 1.0 times (ii) the
denominator of this fraction, will be permanently subtracted
from the numerator of this fraction. The adjustment is
calculated using the fractions as they would be computed as
of the end of the last Limitation Year beginning before
January 1, 1987, and disregarding any changes in the terms
and conditions of the plan made after May 5, 1986, but using
the section 415 limitation applicable to the first Limitation
Year beginning on or after January 1, 1987.
Annual Additions for any Limitation Year beginning before
January 1, 1987, shall not be recomputed to treat all
Employee After-Tax Contributions as an Annual Addition.
(e) Employer shall mean the Employer that adopts this Plan, and
all members of a controlled group of corporations (as defined
in section 414(b) of the Code as modified by section 415(h)
of the Code), all commonly controlled trades or businesses
(as defined in section 414(c) of the Code as modified by
section 415(h) of the Code) or affiliated service groups (as
defined in section 414(m) of the Code) of which the adopting
Employer is a part and any other entity required to be
aggregated with the Employer pursuant to regulations under
section 414(o) of the Code.
(f) Excess Amount shall mean the excess of the Participant's
Annual Additions for the Limitation Year over the Maximum
Permissible Amount.
(g) Highest Average Compensation shall mean the average Annual
Additions Compensation of a Participant for the three
consecutive years of service (as measured by the Limitation
Year) with the Employer that produces the highest average.
59
(h) Limitation Year shall mean the Plan Year. All qualified plans
maintained by the Employer must use the same Limitation Year.
If the Limitation Year is amended to a different 12
consecutive month period, the new Limitation Year must begin
on a date within the Limitation Year in which the amendment
is made.
(i) Master or Prototype Plan shall mean a plan the form of which
is the subject of a favorable opinion letter from the
Internal Revenue Service.
(j) Maximum Permissible Amount. The maximum Annual Additions that
may be contributed or allocated to a Participant's Account
under this Plan for any Limitation Year shall not exceed the
lesser of:
(i) The Defined Contribution Dollar Limitation; or
(ii) Twenty-five percent of the Participant's Annual
Additions Compensation for the Limitation Year.
The Annual Additions Compensation limitation referred to in
(ii) above shall not apply to any contribution for medical
benefits (within the meaning of section 401(h) or 419A(f)(2)
of the Code) which is otherwise treated as an Annual Addition
under section 415(l)(1) or 419A(d)(2) of the Code.
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different 12 consecutive
month period, the Maximum Permissible Amount shall not exceed
the Defined Contribution Dollar Limitation, multiplied by the
following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
(k) Projected Annual Benefit shall mean the annual retirement
benefit (adjusted to an actuarially equivalent straight life
annuity if such benefit is expressed in a form other than a
straight life annuity or qualified joint and survivor
annuity) to which a Participant would be entitled under the
terms of the plan assuming:
(i) the Participant will continue employment until the
normal retirement age under the plan (or current age
if later); and
(ii) the Participant's compensation for the current
Limitation Year and all other relevant factors used to
determine benefits under the plan remain constant for
all future Limitation Years.
6.2 Participants Not Covered Under Other Plans.
(a) If the Participant does not participate in, and has never
participated in another qualified plan maintained by the
Employer, or a welfare benefit fund (as defined in section
419(e) of the Code) maintained by the Employer or an
individual medical account (as defined in section 415(l)(2)
of the Code) maintained by the Employer, or a simplified
employee pension (as defined in Section 408(k) of the Code)
maintained by the Employer, which provides an Annual
Addition, the amount of Annual Additions which may be
credited to the Account of the Participant for any Limitation
Year shall not exceed the lesser of the Maximum Permissible
Amount or any other limitation contained in this Plan. If
contributions for and/or allocations to the Account of the
Participant would cause the Annual Additions for the
Limitation Year to exceed the Maximum Permissible Amount, the
amount contributed or allocated will be reduced to the extent
that the Annual Additions for the Limitation Year will equal
the Maximum Permissible Amount.
(b) Prior to determining a Participant's Annual Additions
Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount for the Participant
on the basis of a reasonable estimation of the Participant's
Annual Additions Compensation for the Limitation Year,
uniformly determined for all Participants similarly situated.
(c) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's Annual Additions Compensation for the
Limitation Year.
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(d) If, for any Limitation Year, the maximum Annual Additions is
exceeded by reason of allocation of forfeitures, a reasonable
error in estimating a Participant's Annual Additions
Compensation, a reasonable error in determining the amount of
Elective Deferrals or under other limited facts and
circumstances approved by the Internal Revenue Service, then,
any such excess shall be disposed of in the following order:
(i) Any Employee After-Tax Contributions, and any income
attributable thereto, to the extent they would reduce
the Excess Amount, shall be returned to the
Participant;
(ii) Any Elective Deferrals, and any income attributable
thereto, to the extent they would reduce the Excess
Amount, shall be returned to the Participant;
(iii) If, after the application of paragraph (ii), an Excess
Amount still exists and the Participant is covered by
the Plan at the end of the Limitation Year, the Excess
Amount in the Participant's Account shall be used to
reduce Employer contributions (including any
allocation of forfeitures) for such Participant in the
next Limitation Year, and each succeeding Limitation
Year, if necessary;
(iv) If, after the application of paragraph (ii), an Excess
Amount still exists and the Participant is not covered
by the Plan at the end of the Limitation Year, the
Excess Amount shall be held unallocated in a suspense
account. The suspense account shall be used to reduce
future Employer contributions for all remaining
Participants in the next Limitation Year, and each
succeeding Limitation Year if necessary;
(v) If a suspense account is in existence at any time
during the Limitation Year pursuant to this Section,
amounts held in the suspense account may not be
distributed to the Participants or Beneficiaries. Any
balance which may be in the suspense account upon
termination of the Plan shall revert to the Employer.
If a suspense account is in existence at any time
during a particular Limitation Year, all amounts in
the suspense account must be allocated and reallocated
to Participants' Accounts before any Employer or any
Employee contributions may be made to the Plan for
that Limitation Year. Excess Amounts may not be
distributed to Participants or former Participants.
6.3 Participants Covered Under Other Defined Contribution Plans.
(a) This Section applies if, in addition to this Plan, the
Participant is covered under another qualified master or
prototype defined contribution plan maintained by the
Employer, a welfare benefit fund (as defined in section
419(e) of the Code) maintained by the Employer, an individual
medical account (as defined in section 415(l)(2) of the Code)
maintained by the Employer or a simplified employee pension
(as defined in section 408(k) of the Code) maintained by the
Employer, that provides an Annual Addition during any
Limitation Year. The Annual Additions which may be credited
to the Account of a Participant under this Plan for any such
Limitation Year shall not exceed the Maximum Permissible
Amount reduced by the Annual Additions credited to the
account of the Participant under the other plans and welfare
benefit funds for the same Limitation Year. If the Annual
Additions with respect to the Participant under other defined
contribution plans and welfare funds maintained by the
Employer are less than the Maximum Permissible Amount and the
Employer contributions that would otherwise be contributed or
allocated to the Account of the Participant under this Plan
would cause the Annual Additions for the Limitation Year to
exceed the Maximum Permissible Amount, the amount contributed
or allocated will be reduced so that the Annual Additions
under all plans and funds for the Limitation Year shall equal
the Maximum Permissible Amount. If Annual Additions with
respect to the Participant under such other defined
contribution plans and welfare benefit funds in the aggregate
are equal to or greater than the Maximum Permissible Amount,
no amount will be contributed or allocated to the Account of
the Participant under this Plan for the Limitation Year.
(b) Prior to determining the Participant's Annual Additions
Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount for a Participant in
the manner described in Section 6.2(b).
61
(c) As soon as administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year shall be determined on the basis of the
Participant's Annual Additions Compensation for the
Limitation Year.
(d) If, pursuant to Section 6.3(a) or as a result of the
allocation of forfeitures, a Participant's Annual Additions
under this Plan and such other plans would result in an
Excess Amount for a Limitation Year, the Excess Amount shall
be deemed to consist of the Annual Additions last allocated,
except that Annual Additions attributable to a simplified
employer pension will be deemed to have been allocated first,
followed by annual additions to a welfare benefit fund or
individual medical account, regardless of the actual
allocation date.
(e) If an Excess Amount was allocated to a Participant on an
allocation date of this Plan which coincides with an
allocation date of another plan, the Excess Amount attributed
to this Plan will be the product of:
(i) the total Excess Amount allocated as of such date,
(ii) the ratio of (1) the Annual Additions allocated to the
Participant for the Limitation Year as of such date
under this Plan to (2) the total Annual Additions
allocated to the Participant for the Limitation Year
as of such date under this and all the other qualified
master or prototype defined contribution plans.
(f) Any Excess Amount attributed to this Plan shall be disposed
of in the manner described in Section 6.2(d).
(g) If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a
master or prototype plan, Annual Additions which may be
credited to the Participant's Account under this Plan for any
Limitation Year will be limited in accordance with
subsections (a) through (f) above as though the other plan
were a master or prototype plan unless the Employer provides
other limitations in the Adoption Agreement.
6.4 Participants Covered Under Both Defined Benefit and Defined
Contribution Plans. If the Employer maintains, or at any time
maintained, a qualified defined benefit plan covering any
Participant in this Plan, the sum of the Participant's Defined
Benefit Fraction and Defined Contribution Fraction shall not
exceed 1.0 in any Limitation Year. The Annual Additions which may
be credited to the Account of a Participant under this Plan for
any Limitation Year will be limited in accordance with the
Adoption Agreement. Unless otherwise elected by the Employer in
the Optional Supplement, this Section 6.4 shall not apply for
Limitation Years beginning on or after January 1, 2000.
ARTICLE VII - VESTING
7.1 Employee After-Tax Contribution, Elective Deferral, Rollover
Contribution, Participant-Directed Transfer, Qualified Nonelective
Contribution, Qualified Matching Contribution, Safe Harbor
Matching Contribution and Safe Harbor Nonelective Contribution
Subaccounts.
A Participant's Employee After-Tax Contribution subaccount,
Elective Deferral subaccount, Rollover Contribution subaccount,
Participant-Directed Transfer subaccount, Qualified Nonelective
Contribution subaccount, Qualified Matching Contribution
subaccount, Safe Harbor Matching Contribution subaccount and Safe
Harbor Nonelective Contribution subaccount shall be fully vested
and nonforfeitable at all times.
7.2 Matching Contribution, Discretionary Profit Sharing Contribution
and ACP Test Only Safe Harbor Matching Contribution Subaccounts.
(a) General. Notwithstanding the vesting schedule selected by the
Employer in the Adoption Agreement, the Participant's
Matching Contribution subaccount, Discretionary Profit
Sharing Contribution subaccount and ACP Test Only Safe Harbor
Matching Contribution subaccount shall be fully vested and
nonforfeitable upon the Participant's death, Total and
Permanent Disability or attainment of Normal or Early
Retirement Age while employed by the Employer. In the absence
of any of the preceding events, and subject to the provisions
of Sections 3.5(d), 3.11(d), 3.17, 12.4 and 14.2(b), the
Participant's Matching Contribution subaccount, Discretionary
Profit Sharing Contribution subaccount and ACP Test Only Safe
Harbor Matching Contribution subaccount shall be vested in
accordance with the vesting schedule(s) specified in the
Adoption Agreement. The schedule(s) must be at least as
favorable to Participants as either schedule in (i) or (ii)
below. If no vesting
62
schedule is selected in the Adoption Agreement, a Participant
shall be considered 100% vested all portions of his Account.
(i) Graduated vesting according to one of the following schedules:
Years of Vesting Service Percent Vested
3 but less than 4 20%
4 but less than 5 40%
5 but less than 6 60%
6 but less than 7 80%
7 or more 100%
OR
Years of Vesting Service Percent Vested
5 or more 100%
(ii) 100% full and immediate.
For purposes of this Article, if the Employer elects in the Adoption
Agreement to calculate service using the Elapsed Time method, "Year(s)
of Service" as defined in Section 1.19 shall be substituted for
"Year(s) of Vesting Service."
(b) In-Service Distributions When Not Fully Vested. If a distribution is
made from a Participant's Matching Contribution subaccount,
Discretionary Profit Sharing Contribution subaccount or ACP Test Only
Safe Harbor Matching Contribution subaccount at a time when the
Participant is not 100% vested in such subaccount and the
Participant's employment with the Employer has not terminated, then
(i) A separate remainder subaccount will be established for the
Participant's interest in such Matching Contribution,
Discretionary Profit Sharing Contribution or ACP Test Only Safe
Harbor Matching Contribution subaccount at the time of the
distribution, and
(ii) At any subsequent time, the Participant's vested portion of such
separate subaccount will be equal to an amount "X" determined
under the formula:
X = P(AB + (RxD)) - (RxD)
where
P = the Participant's vested percentage determined under
subsection (a) at the relevant time.
AB = the amount in such separate subaccount at the relevant time.
R = the ratio of AB to the amount in the subaccount after the
distribution.
D = the amount of the distribution.
7.3 Determination of Years of Vesting Service. For purposes of determining the
vested and nonfor-feitable percentage of the Participant's Matching
Contribution, Discretionary Profit Sharing Contribution and ACP Test Only
Safe Harbor Matching Contribution subaccounts, except as provided in the
following sentence, all of the Participant's Years of Vesting Service with
the Employer or an Affiliated Employer shall be taken into account. In the
case of a Participant who has five consecutive 1-year Breaks in Service,
all Years of Vesting Service after such Breaks in Service shall be
disregarded for purposes of determining the Participant's vested benefit
derived from Employer contributions which accrued before such breaks, but
both pre-break and post-break service shall count for purposes of
determining the Participant's vested benefit derived from Employer
contributions accruing after such breaks. If the Employer maintains the
plan of a predecessor employer, Years of Vesting Service with such employer
will be treated as service with the Employer.
63
7.4 Amendments to Vesting Schedule.
(a) Participants' Election Rights. If the Plan's vesting schedule is
amended, or the Plan is amended in any way that directly or indirectly
affects the computation of a Participant's nonforfeitable percentage,
each Participant with at least three years of service, whether or not
consecutive, with the Employer may elect, within a reasonable period
after the adoption of the amendment or change, to have the
nonforfeitable percentage computed under the Plan without regard to
such amendment or change. For any Participants who do not have at
least one Hour of Service in any Plan Year beginning after December
31, 1988, the preceding sentence shall be applied by substituting
"five years of service" for "three years of service" where such
language appears.
(b) Election Period. The period during which the election may be made
shall commence with the date the amendment is adopted or deemed to be
made and shall end on the latest of:
(i) 60 days after the amendment is adopted;
(ii) 60 days after the amendment becomes effective; or
(iii) 60 days after the Participant is issued written notice of the
amendment by the Employer or Plan Administrator.
7.5 Forfeiture of Nonvested Amounts. For Plan Years beginning before 1985, any
portion of a Participant's Account that is not vested shall be forfeited by
him as of the last day of the Plan Year in which he incurs a Break in
Service. For Plan Years beginning after 1984, any portion of a
Participant's Account that is not vested shall be forfeited in accordance
with the following rules:
(a) Distribution in Full. If a Participant's service with the Employer
terminates and if the entire vested portion of the Participant's
Account is distributed to him at any time before the end of the fifth
Plan Year following the Plan Year in which his employment terminated,
the remaining portion of the Participant's Account shall be forfeited
as of the end of the Plan Year in which such distribution occurs, as
long as the Participant has not resumed employment with the Employer
by such date. However, if the Participant has no vested interest in
his Account at the time of his termination of employment, the Plan
Administrator nonetheless shall treat the Participant as if he had
received a distribution on the date his employment terminated and
shall forfeit the Participant's entire Account as soon as
administratively feasible after the date his employment terminated. If
the Participant returns as an Employee before the end of five
consecutive Breaks in Service measured from the day immediately after
the date of his distribution (or measured from the date his employment
terminated in the case of a Participant who had no vested interest in
his Account) then his unvested Account balance (determined as of the
date of the distribution of his vested interest, unadjusted by
subsequent gains and losses, or in the case of a Participant who had
no vested interest in his Account, determined as of the date his
employment terminated) shall be restored as of the end of the Plan
Year in which he is reemployed. In such case, the Participant's
Account shall be restored first out of the forfeitures for such Plan
Year and, if such forfeitures are insufficient to restore such
Account, the Employer shall make a special contribution to the Plan to
the extent necessary so that the Participant's Account is fully
restored.
(b) Partial or No Distributions. If a Participant's service with the
Employer terminates and if part of his entire vested interest in his
Account is distributed to him before he incurs five consecutive Breaks
in Service, a separate remainder subaccount shall be established for
that portion of the Participant's Account that is not vested. Such
separate subaccount shall be forfeited at the earliest of (i) his date
of death following termination of employment, or (ii) the end of the
Plan Year in which the Participant incurs five consecutive Breaks in
Service. If a Participant's service with the Employer terminates and
if no part of his vested interest in his Account is distributed to him
before he incurs five consecutive Breaks in Service, that portion of
the Participant's Account that is not vested shall be forfeited at the
earlier of (i) his date of death following termination of employment,
or (ii) at the end of Plan Year in which the Participant incurs five
consecutive Breaks in Service. If all or any portion of such a
Participant's vested benefits are distributed before a forfeiture is
permitted and if the Participant returns to work as an Employee after
the distribution and before he incurs five consecutive Breaks in
Service, his vested interest in such separate subaccount at any time
shall be determined by applying the formula in Section 7.2(b)(ii).
64
(c) No restoration made pursuant to subsection (a) or (b) shall be
deemed to be Annual Additions for purposes of Article VI.
7.6 Reinstatement of Benefit. If a vested benefit is forfeited because the
Participant or Beneficiary cannot be found, such benefit (determined
as of the date of forfeiture) will be reinstated if a claim is made by
the Participant or Beneficiary, or if the Participant or Beneficiary
is subsequently located by the Plan Administrator.
ARTICLE VIII - LOANS
8.1 General Provisions.
(a) Eligibility for Loans. If the Employer so elects in the Adoption
Agreement, loans shall be made available to any Participant or
Beneficiary who is a party-in-interest (as defined in section
3(14) of ERISA) on a reasonably equivalent basis. Loans will not
be made to any shareholder-employee, Owner-Employee or
Participant or Beneficiary who is not a party-in-interest (as
defined in section 3(14) of ERISA). For purposes of this
requirement, a shareholder-employee means an Employee or officer
of an electing small business (subchapter S) corporation who owns
(or is considered as owning within the meaning of section
318(a)(1) of the Code) on any day during the taxable year of such
corporation more than 5% of the outstanding stock of the
corporation.
(b) Spousal Consent Rules.
(i) For Plan Years beginning before January 1, 2002 (or such
earlier date elected by the Employer in the Optional
Supplement), a Participant must obtain the consent of his or
her spouse, if any, to use the Account as security for a
loan. Spousal consent shall be obtained no earlier than the
beginning of the 90-day period that ends on the date on
which the loan is to be so secured. The consent must be in
writing, must acknowledge the effect of the loan and must be
witnessed by a Plan representative or notary public. Such
consent shall thereafter be binding with respect to the
consenting spouse or any subsequent spouse with respect to
that loan. A new consent shall be required if the Account is
used for renegotiation, extension, renewal or other revision
of the loan.
(ii) Effective as of the first day of the Plan Year beginning on
or after January 1, 2002 (or such earlier date elected by
the Employer in the Optional Supplement), only if any
portion of a Participant's Account used as security for a
loan is subject to the joint and survivor annuity
requirements of Article XI, must the Participant obtain the
consent of his or her spouse, if any, to use such portion of
his or her Account as security for the loan. Spousal consent
shall be obtained no earlier than the beginning of the
90-day period that ends on the date on which the loan is to
be so secured. The consent must be in writing, must
acknowledge the effect of the loan, and must be witnessed by
a Plan representative or notary public. Such consent shall
thereafter be binding with respect to the consenting spouse
or any subsequent spouse with respect to that loan. A new
consent shall be required if the vested Account is used for
renegotiation, extension, renewal or other revision of the
loan.
If a valid spousal consent has been obtained in accordance with
subsection (b)(i) or (b)(ii), then, notwithstanding any other
provision of this Plan, the portion of the Participant's vested
Account used as a security interest held by the Plan by reason of
a loan outstanding to the Participant shall be reduced by the
amount of the outstanding loan for purposes of determining the
amount of the Account payable at the time of death or
distribution, but only if the reduction is used as repayment of
the loan. If less than 100% of the Participant's vested Account
(determined without regard to the preceding sentence) is payable
to the Participant's surviving spouse, then the vested Account
shall be adjusted by first reducing the vested Account by the
amount of the security used as repayment of the loan, and then
determining the benefit payable to the surviving spouse.
8.2 Amount of Loan. Loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount made
available to other Employees. Loans to any Participant or Beneficiary
will not be made to the extent that such loan, when added to the
outstanding balance of all other loans to the Participant or
Beneficiary, would exceed the lesser of:
65
(a) $50,000 reduced by the excess (if any) of the highest outstanding
balance of loans during the one year period ending on the day
before the loan is made, over the outstanding balance of loans
from the Plan on the date the loan is made; or
(b) one-half of the vested Account of the Participant.
For the purpose of the above limitation, all loans from all plans
of the Employer and Affiliated Employers are aggregated.
8.3 Manner of Making Loans. The Plan's loan program will be administered
by the Plan Administrator. A request by a Participant for a loan shall
be made to the Plan Administrator and shall specify the amount of the
loan. The terms and conditions on which the Plan Administrator shall
approve loans under the Plan shall be applied on a uniform and
nondiscriminatory basis with respect to all Participants. If a
Participant's request for a loan is approved by the Plan
Administrator, the Plan Administrator shall furnish the Trustee with
written instructions directing the Trustee to make the loan in a
single sum payment of cash to the Participant. In making any loan
payment under this Article, the Trustee shall be fully entitled to
rely on the instructions furnished by the Plan Administrator and shall
be under no duty to make any inquiry or investigation with respect
thereto.
8.4 Terms of Loan. Loans shall be made on such terms and subject to such
limitations as the Plan Administrator may prescribe. Furthermore, any
loan shall, by its terms, require that repayment (principal and
interest) be amortized in level payments, not less frequently than
quarterly, over a period not extending beyond five years from the date
of the loan, unless such loan is used to acquire a dwelling unit
which, within a reasonable time (determined at the time the loan is
made), will be used as the principal residence of the Participant. The
rate of interest to be charged shall be determined by the Plan
Administrator.
8.5 Security for Loan. Any loan to a Participant under the Plan shall be
secured by the pledge of the Participant's vested interest in his
Account. Such pledge shall be evidenced by a promissory note by the
Participant which shall provide that, in the event of any default by
the Participant on a loan repayment, the Plan Administrator shall be
authorized (to the extent permitted by law) to take any and all other
actions necessary and appropriate to enforce collection of the unpaid
loan. An assignment or pledge of any portion of the Participant's
interest in the Plan will be treated as a loan under this Article.
8.6 Segregated Investment. Loans shall be considered a
Participant-directed investment.
8.7 Repayment of Loan. The Plan Administrator shall have the sole
responsibility for ensuring that a Participant timely makes all loan
payments and for notifying the Trustee in the event of any default by
the Participant on the loan. Each loan payment shall be paid to the
Trustee and shall be accompanied by instructions from the Plan
Administrator that identify the Participant on whose behalf the loan
payment is being made. Loan payments will be suspended under the Plan
as permitted under the terms and conditions of the loan program and
loan document.
8.8 Default on Loan. In the event of a default by a Participant on a loan
payment, all remaining payments on the loan shall be immediately due
and payable. The Plan Administrator shall take any and all actions
necessary and appropriate to enforce collection of the unpaid loan.
However, attachment of the Participant's Account pledged as security
will not occur until a distributable event occurs under the Plan.
ARTICLE IX - IN-SERVICE WITHDRAWALS
9.1 Withdrawal of Employee After-Tax Contributions, Rollover Contributions
and Participant-Directed Transfer Contributions. Subject to any other
applicable requirements of this Plan, any Participant who has made
Employee After-Tax Contributions, Rollover Contributions or a
Participant-Directed Transfer may have paid to him as an in-service
withdrawal all or any portion of the value of his Employee After-Tax
Contribution subaccount, his Rollover Contributions subaccount or his
Participant-Directed Transfer subaccount in a single sum payment. No
forfeitures will occur solely as a result of withdrawals from such
subaccounts.
66
9.2 Withdrawal After Attainment of Early or Normal Retirement Age. If
elected by the Employer in the Section of the Adoption Agreement
containing election options for in-service withdrawals upon attaining
Early or Normal Retirement Age, a Participant shall be permitted to
withdraw all or a portion of his vested Account on or after the
attainment of age 59 1/2(or such later age designated by the Employer
in such Section of the Adoption Agreement).
9.3 Hardship Withdrawals.
(a) General Rule. If the Employer so elects in the Adoption
Agreement, distribution in a single sum payment of Elective
Deferrals (and earnings thereon accrued as of the later of
December 31, 1988, and the end of the last Plan Year ending
before July 1, 1989) and/or the vested portion of Matching
Contribution and Discretionary Profit Sharing Contribution
subaccounts, as elected by the Employer in the Adoption
Agreement, may be made to a Participant in the event of hardship.
(Hardship distributions may not be made from Safe Harbor
Contribution subaccounts). For the purposes of this Section,
hardship is defined as an immediate and heavy financial need of
the Participant where such Participant lacks other available
resources.
(b) Needs Considered Immediate and Heavy. The only financial needs
considered immediate and heavy are the following:
(i) Expenses incurred or necessary for medical care (within the
meaning of section 213(d) of the Code) of the Employee, the
Employee's spouse, children or dependents (as described in
section 152 of the Code);
(ii) Costs directly related to the purchase (excluding mortgage
payments) of a principal residence for the Employee;
(iii) Payment of tuition, and related educational fees, and room
and board expenses, for the next twelve months of
post-secondary education for the Employee, the Employee's
spouse, children or dependents; or
(iv) The need to prevent the eviction of the Employee from, or a
foreclosure on the mortgage of, the Employee's principal
residence.
(c) Necessary to Satisfy Need. A distribution will be considered as
necessary to satisfy an immediate and heavy financial need of the
Employee only if:
(i) The Employee has obtained all distributions, other than
hardship distributions, and all non-taxable loans under all
plans maintained by the Employer;
(ii) All plans maintained by the Employer provide that the
Employee's Elective Deferrals (and Employee contributions)
will be suspended for twelve months after the receipt of the
hardship distribution;
(iii) The distribution is not in excess of the amount of an
immediate and heavy financial need (including amounts
necessary to pay any federal, state or local income taxes or
penalties reasonably anticipated to result from the
distribution); and
(iv) All plans maintained by the Employer provide that the
Employee may not make Elective Deferrals for the Employee's
taxable year immediately following the taxable year of the
hardship distribution in excess of the applicable limit
under section 402(g) of the Code for such taxable year less
the amount of such Employee's Elective Deferrals for the
taxable year of the hardship distribution.
9.4 Age 59 1/2 Withdrawals. If elected by the Employer in the Adoption
Agreement, a Participant shall be permitted to withdraw all or a
portion of his vested Account balance on or after the attainment of
age 59 1/2.
9.5 Manner of Making Withdrawals. Any withdrawal by a Participant under
the Plan shall be made only after the Participant files a request with
the Plan Administrator specifying the nature of the withdrawal (and
the reasons therefore, if a hardship withdrawal) and the amount of
funds requested to be withdrawn and, if applicable, including the
spousal consent required under Article XI. Upon approving any
withdrawal, the Plan Administrator shall furnish the Trustee with
written instructions directing the Trustee to make the withdrawal in a
single sum payment of cash to the Participant; provided, however,
67
that in-service withdrawals after Early or Normal Retirement Age may
be made in any form of distribution selected by the Employer in the
Adoption Agreement. In making any withdrawal payment, the Trustee
shall be fully entitled to rely on the instructions furnished by the
Plan Administrator and shall be under no duty to make any inquiry or
investigation with respect thereto.
9.6 Limitations on Withdrawals. The Plan Administrator may prescribe
uniform and nondiscriminatory rules and procedures limiting the number
of times a Participant may make a withdrawal under the Plan during any
Plan Year and the minimum amount a Participant may withdraw on any
single occasion.
9.7 Special Circumstances. Elective Deferral, Qualified Nonelective
Contribution, Qualified Matching Contribution, Safe Harbor Matching
Contribution and Safe Harbor Nonelective Contribution subac-counts may
be distributed upon:
(a) Plan Termination. Termination of the Plan without the
establishment of another defined contribution plan, other than an
employee stock ownership plan (as defined in section 4975(e)(7)
of the Code) or a simplified employee pension plan (as defined in
section 408(k) of the Code) or a SIMPLE IRA plan (as defined in
section 408(p) of the Code).
(b) Disposition of Assets. The disposition by a corporate Employer to
an unrelated corporation of substantially all of the assets
(within the meaning of section 409(d)(2) of the Code) used in a
trade or business of such corporate Employer if such corporate
Employer continues to maintain this Plan after the disposition,
but only with respect to Employees who continue employment with
the corporation acquiring such assets.
(c) Disposition of Subsidiary. The disposition by a corporate
Employer to an unrelated entity of such corporate Employer's
interest in a subsidiary (within the meaning of section 409(d)(3)
of the Code) if such corporate Employer continues to maintain
this Plan, but only with respect to Employees who continue
employment with such subsidiary.
Distributions that are triggered by any of the foregoing events
must be made in a single sum payment.
ARTICLE X - DISTRIBUTION PROVISIONS
10.1 Retirement Distributions. If a Participant's Normal or Early
Retirement Date should occur prior to the termination of his
employment with the Employer, all amounts then credited to such
Participant's Account shall become 100% vested regardless of the
number of the Participant's Years of Vesting Service. If a
Participant's employment with the Employer is terminated on or after
his Early or Normal Retirement Date, such termination shall be deemed
"Retirement," and the Plan Administrator shall direct the Trustee to
take such action as may be necessary to distribute to such
Participant, in one of the methods provided in Section 10.7, the value
of his Account.
(a) Deferred Retirement. If a Participant's employment continues
after his Early or Normal Retirement Date, his participation in
the Plan shall continue and, subject to Section 10.9, the
distribution of his benefits shall be postponed until the earlier
of (i) the date on which his Retirement becomes effective, or
(ii) subject to applicable provisions of the Plan regarding
in-service distribution, the date the Participant elects to
receive his benefits.
(b) Participant Status After Retirement. Upon a Participant's
Retirement, his participation as an active Participant hereunder
shall cease, subject to his right to share in contributions made
with respect to the Plan Year of his Retirement if he otherwise
qualifies for such contributions in such Plan Year.
10.2 Death Benefits. Upon the death of a Participant before Retirement or
before other termination of employment with the Employer, all amounts
then credited to his Account shall become 100% vested, regardless of
the number of his Years of Vesting Service. The Plan Administrator
shall direct the Trustee to distribute the value of the Participant's
Account, in one of the methods provided in Section 10.7, and at the
time provided in Section 10.6, to any surviving Beneficiary designated
by the Participant in accordance with the provisions of subsection (c)
below.
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(a) Death of Former Employee. Upon the death of a former Employee before
distribution of his vested interest in his Account has begun, the Trustee,
in accordance with the instructions of the Plan Administrator and in
accordance with the provisions of this Article, shall take such action as
may be necessary to distribute his vested interest in his Account, in one
of the methods provided in Section 10.7 hereof and commencing at such time
provided in Section 10.6, to any surviving Beneficiary designated in
accordance with the provisions of subsection (c) below. Upon the death of a
former Participant after distribution of his benefits has begun and before
the entire vested interest in his Account has been distributed to him, the
Plan Administrator shall direct the Trustee to distribute the remaining
portion of such interest to any surviving Beneficiary designated in
accordance with the provisions of subsection (c) below at least as rapidly
as under the method of distribution being used as of the date of his death.
(b) Proof of Death. The Plan Administrator may require such proper proof of
death and such evidence of the right of any person to receive payment of
the vested interest of a deceased Participant or former Participant as it
may deem desirable. The Plan Administrator's determination of death and of
the right of any person to receive payment shall be conclusive.
(c) Beneficiary Designation. Each Participant may designate one or more primary
Beneficiaries and one or more secondary Beneficiaries by filing written
notice with the Plan Administrator on a form acceptable to the Plan
Administrator. However, in the case of a married Participant, the
Participant shall be deemed to have designated his surviving spouse as his
sole primary Beneficiary, notwithstanding any contrary written notice,
unless such spouse filed a written voluntary consent with the Plan
Administrator irrevocably consenting to the Participant's designation of a
non-spouse Beneficiary, which consent shall be notarized or witnessed by
the Plan Administrator, and shall acknowledge the effect of the
Participant's designation of Beneficiary. A married Participant may not
subsequently change the designated non-spouse Beneficiary unless his
spouse's voluntary consent acknowledges that the spouse has a right to
consent to a specific beneficiary and expressly permits designations by the
Participant without further spousal consent or his spouse has filed a
written consent with the Plan Administrator, irrevocably consenting to such
change, which consent shall be notarized or witnessed by the Plan
Administrator, and shall acknowledge the effect of the change. Subject to
the two preceding sentences, a Participant may change any designated
Beneficiary by filing written notice of the change with the Plan
Administrator in the form prescribed by the Plan Administrator. If any
Participant fails to designate a Beneficiary, or if his designated
Beneficiary or Beneficiaries do not survive the Participant, the Plan
Administrator shall designate a Beneficiary or Beneficiaries on his behalf,
in the following order:
(i) The Participant's spouse, if living at the time of the Participant's
death.
(ii) The Participant's issue, per stirpes.
(iii) The Participant's parents equally.
(iv) The estate of the Participant.
After a Participant's death, any actual Beneficiary of the deceased Participant
may designate one or more primary beneficiaries and one or more secondary
beneficiaries to receive the Beneficiary's interest in the Plan attributable to
the Participant's benefits after the Beneficiary's death, to the extent such
designation is not inconsistent with the Participant's beneficiary designation.
If the Beneficiary fails to designate a beneficiary or if none of his designated
beneficiaries survive him, the Plan Administrator shall, to the extent not
inconsistent with the Participant's beneficiary designation, designate a
beneficiary or beneficiaries on the Beneficiary's behalf, in the following
order:
(i) The Beneficiary's spouse, if living at the time of the Beneficiary's
death.
(ii) The Beneficiary's issue, per stirpes.
(iii) The Beneficiary's parents equally.
(iv) The Beneficiary's estate.
69
10.3 Total and Permanent Disability Benefits. If, prior to his Retirement or
other termination of employment with the Employer, the Plan Administrator
determines that a Participant has incurred a Total and Permanent
Disability, the Participant shall be deemed to have retired by reason of
Total and Permanent Disability, and his Account shall become 100% vested,
regardless of the number of his Years of Vesting Service. The Plan
Administrator shall determine the date as of which such Retirement shall
become effective. The Trustee, in accordance with the instructions of the
Plan Administrator and in accordance with the provisions of this Article,
shall take such action as may be necessary to distribute the value of the
Participant's Account(s) to the Participant commencing at such time, and in
one of the methods, provided in Sections 10.5 and 10.7 hereof.
10.4 Termination of Employment Prior to Retirement, Death or Total and Permanent
Disability. If a Participant's employment with the Employer terminates for
any reason other than Retirement, Total and Permanent Disability or death,
the Plan Administrator shall direct the Trustee to take such action as may
be needed to distribute to such Participant the vested portion of his
Account, as determined in accordance with Article VII. Such distribution
shall be made commencing at such time, and in one of the methods, provided
in Sections 10.5 and 10.7 hereof.
10.5 Commencement of Lifetime Distributions.
(a) Upon Retirement or Total and Permanent Disability. The distribution of
benefits payable to a Participant who retires by reason of Retirement
or Total and Permanent Disability shall commence as soon as is
administratively feasible after a date on or after the Participant's
Retirement as he elects, but in no event later than his required
beginning date. Notwithstanding the foregoing provisions of this
subsection (a), if such a Participant's total vested benefits do not
exceed $5,000, his vested benefits shall be distributed to him in a
single sum payment as soon as administratively feasible after his
Retirement or termination of employment with the Employer by reason of
Total and Permanent Disability.
(b) Distribution Upon Termination of Employment and Restrictions on
Immediate Distribution. If the value of a Participant's vested account
balance derived from Employer and Employee contributions exceeds
$5,000, and the account balance is immediately distributable, the
Participant and the Participant's spouse (or where either the
Participant or the spouse has died, the survivor) must consent to any
distribution of such account balance. The consent of the Participant
and the Participant's spouse shall be obtained in writing within the
90-day period ending on the annuity starting date. The annuity
starting date is the first day of the first period for which an amount
is paid as an annuity or any other form. The Plan Administrator shall
notify the Participant and the Participant's spouse of the right to
defer any distribution until the Participant's account balance is no
longer immediately distributable. Such notification shall include a
general description of the material features, and an explanation of
the relative values, of the optional forms of benefit available under
the Plan in a manner that would satisfy the notice requirements of
section 417(a)(3) of the Code and shall be provided no less than 30
days and no more than 90 days prior to the annuity starting date.
However, distribution may commence less than 30 days after the notice
described in the preceding sentence is given provided the Plan
Administrator clearly informs the Participant that the Participant has
a right to a period of at least 30 days after receiving the notice to
consider the decision of whether to elect distribution (and, if
applicable, a particular distribution option), and the Participant,
after receiving the notice, affirmatively elects a distribution.
Notwithstanding the foregoing, only the Participant need consent to
the commencement of a distribution in the form of a qualified joint
and survivor annuity while the account balance is immediately
distributable. (Furthermore, if payment in the form of a qualified
joint and survivor annuity is not required with respect to the
Participant pursuant to Section 11.6 of the Plan, only the Participant
need consent to the distribution of an account balance that is
immediately distributable.) Neither the consent of the Participant nor
the Participant's spouse shall be required to the extent that a
distribution is required to satisfy section 401(a)(9) or 415 of the
Code. In addition, upon termination of this Plan, if the Plan does not
offer an annuity option (purchased from a commercial provider), the
Participant's account balance will be distributed to the Participant
or, if the Participant does not consent to an immediate distribution,
transferred to another defined contribution plan (other than an
employee stock ownership plan as defined in section 4975(e)(7) of the
Code) within the same controlled group.
70
An account balance is immediately distributable if any part of the
account balance could be distributed to the Participant (or surviving
spouse) before the Participant attains (or would have attained if not
deceased) the later of Normal Retirement Age or age 62.
For purposes of determining the applicability of the foregoing consent
requirements to distributions made before the first day of the first
Plan Year beginning after December 31, 1988, the Participant's vested
account balance shall not include amounts attributable to accumulated
deductible employee contributions within the meaning of section
72(o)(5)(B) of the Code.
(c) Force-Outs. Notwithstanding the foregoing provisions of subsections
(a) and (b), a Participant's vested benefits shall be distributed to
him in a single sum payment as soon as is administratively feasible
after the date on which his employment with the Employer terminated if
his vested benefits:
(i) for Plan Years beginning before August 6, 1997, do not exceed
$3,500 (or did not exceed $3,500 at the time of any prior
distribution),
(ii) for Plan Years beginning after August 5, 1997, and for a
distribution made prior to March 22, 1999, did not exceed
$5,000 (or did not exceed $5,000 at the time of any prior
distribution), and
(iii) for a distribution made after March 21, 1999, that either did
not exceed $5,000 or is a remaining payment under a selected
optional form of payment that did not exceed $5,000 at the time
the selected payment began.
If a Participant would have received a distribution under the
preceding sentence but for the fact that the Participant's vested
Account exceeded $5,000 after the Participant's employment terminated
and if at a later time such vested Account is reduced such that it is
not greater than $5,000, the Plan Administrator may direct that the
Participant will receive a distribution of such vested Account, and
the nonvested portion will be forfeited. For the purposes hereof, if
the value of a Participant's vested Account is zero, the Participant
shall be deemed to have received a distribution of such Account.
(d) Statutory Requirements. Unless the Participant elects otherwise,
distribution of his benefits shall commence during the sixty day
period immediately following the end of the Plan Year in which occurs
the latest of:
(i) the Participant's Normal Retirement Age,
(ii) the 10-year anniversary of the date on which the Participant
commenced participation in the Plan, and
(iii) the date the Participant's employment with the Employer
terminates.
Notwithstanding the foregoing, the failure of a Participant (and
spouse, if applicable) to consent to a distribution while a benefit is
immediately distributable, as defined in subsection (b), shall be
deemed to be an election to defer commencement of payment of any
benefit sufficient to satisfy this Section.
(e) In-Service Distributions. The distribution of a Participant's vested
benefits shall not commence prior to the time his employment with the
Employer terminates, except in the following circumstances:
(i) Withdrawals made in accordance with the provisions of Article
IX,
(ii) Payments to an alternate payee pursuant to a qualified domestic
relations order as described in section 414(p) of the Code, or
(iii) Minimum required distributions made on and after his required
beginning date.
10.6 Commencement of Death Benefits.
(a) Subject to Section 10.9, if a Participant dies before his benefit
payments have commenced, his death benefits, if any, shall be payable
beginning at such reasonable time after the Participant's death as his
Beneficiary elects, subject to and in accordance with the following
provisions:
71
(i) Non-Spouse Beneficiary. In the case of a Beneficiary other than
the Participant's surviving spouse, benefits must commence no
later than the December 31 that coincides with or immediately
follows the fifth anniversary of the Participant's death. If
the beginning date of such benefits is after the December 31
that coincides with or immediately follows the first
anniversary of the Participant's death, the Beneficiary's
entire interest in the Participant's death benefits must be
distributed no later than the December 31 that coincides with
or immediately follows the fifth anniversary of the
Participant's death.
(ii) Spouse Beneficiary. If the Participant's Beneficiary is the
Participant's surviving spouse, the surviving spouse may elect
to defer the commencement of benefits to the December 31 that
coincides with or immediately follows the later of (i) the
first anniversary of the Participant's death, or (ii) the date
on which the Participant would have attained age 70 1/2. If the
Participant's Beneficiary is his surviving spouse, and if his
surviving spouse dies after the Participant dies but prior to
the time the Participant's death benefits have commenced, the
provisions of this Section 10.6 shall apply as if the surviving
spouse were the Participant, except that the surviving spouse
of the deceased Participant's surviving spouse shall not
qualify as a surviving spouse.
(iii) Election Period. Any election made by a Beneficiary under this
Section must be made no later than the December 31 that
coincides with or immediately follows the first anniversary of
the Participant's death and must be irrevocable as of such
date, except that if the Participant's Beneficiary is the
Participant's surviving spouse, the surviving spouse may defer
making such election to the earlier of (i) the December 31 that
coincides with or immediately follows the fifth anniversary of
the Participant's death, or (ii) the last date on which the
surviving spouse could defer the commencement of benefits under
paragraph (ii). If a Beneficiary fails to make a proper
election hereunder, the Plan Administrator shall direct the
Trustee to distribute the Beneficiary's interest in the
Participant's death benefits in full no later than the December
31 that coincides with or immediately follows the fifth
anniversary of the Participant's death.
(b) If a Participant dies after distribution of his or her interest has
begun, the remaining portion of such interest will continue to be
distributed at least as rapidly as under the method of distribution
being used before the Participant's death.
10.7 Methods of Distribution.
(a) General Rule. Subject to Article XI, all benefits shall be distributed
in accordance with one of the following methods selected by the
Employer in the Adoption Agreement as the Participant or Beneficiary,
as the case may be, may elect during the 90-day period before the date
benefits commence:
(i) In monthly, quarterly, semi-annual or annual installments over
a period certain not to exceed the life expectancy of the
Participant (or Beneficiary in the case of a Participant who
dies prior to the time his benefits commenced) or the joint and
last survivor life expectancy of the Participant and his
Beneficiary so that the amount distributed in each Plan Year
equals the amount determined by dividing the Participant's
vested account balance on the last day of the immediately
preceding Plan Year by the period certain determined in
accordance with this paragraph (i) which shall be reduced by
one for each Plan Year after the Plan Year in which the
Participant's benefits commence.
(ii) Payment to the Participant or Beneficiary in a single sum
payment.
(iii) A paid-up, nontransferable annuity contract (selected by the
Plan Administrator) for the life of the Participant (or
Beneficiary in the case of a Participant who dies prior to the
time his benefits commenced) or the joint life of the
Participant and the Participant's Beneficiary that complies
with the requirements of the Plan.
Payment of benefits generally shall be in cash. To the extent a
Participant's vested Account is invested in qualifying employer
securities (within the meaning of section 407(d)(5) of ERISA) or in a
regulated investment company registered under the Investment Company
Act of 1940 whose investment adviser is T. Rowe Price Associates, Inc.
or any affiliate thereof or any successor thereto, the Participant may
elect to have such benefits distributed in-kind.
72
(b) Direct Rollover. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under
this Article X, for all distributions made on or after January 1,
1993, a distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an
eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover. For purposes
of this subsection, the following definitions shall apply:
(i) An "eligible rollover distribution" is any distribution of all
or a 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 section 401(a)(9) of the Code;
any hardship distribution described in section
401(k)(2)(B)(i)(IV) of the Code received after December 31,
1998 (or, if elected by the Employer in the Optional
Supplement, December 31, 1999); and the portion of any
distribution that is not includible in gross income (determined
without regard to the exclusion for net unrealized appreciation
with respect to employer securities).
(ii) An "eligible retirement plan" is an individual retirement
account described in section 408(a) of the Code, an individual
retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a
qualified trust described in section 401(a) of the Code, that
accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to
the surviving spouse, an eligible retirement plan is an
individual retirement account or individual retirement annuity.
(iii) 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
retirement order, as described section 414(p) of the Code, are
distributees with regard to the interest of the spouse or
former spouse.
(iv) A "direct rollover" is a payment by the Plan to the eligible
retirement plan specified by the distributee.
10.8 Missing Participants and Beneficiaries. If the Plan Administrator is unable
to locate a Participant or Beneficiary entitled to vested benefits
hereunder after making reasonable efforts to do so, the Plan Administrator
may direct the Trustee to forfeit such vested benefits or direct the
Trustee to continue to hold such Participant's or Beneficiary's Account. If
the vested benefits are forfeited and if the Participant or Beneficiary
subsequently is found or makes a claim for the benefits, the vested
benefits will be reinstated in accordance with the provisions of Section
7.6.
10.9 Minimum Required Distributions. If the Participant's interest is to be
distributed in other than a single sum before the required beginning date,
the following minimum distribution rules, which shall be determined in
accordance with proposed regulations under section 401(a)(9) of the Code,
shall apply on or after the required beginning date notwithstanding any
other provision of the Plan to the contrary:
(a) Definitions. For the purposes of this Section 10.9, the following
definitions shall apply:
(i) Applicable Life Expectancy. The Life Expectancy (or joint and
last survivor expectancy) is calculated using the attained age
of the Participant (or Designated Beneficiary) as of the
Participant's (or Designated Beneficiary's) birthday in the
applicable calendar year reduced by one for each calendar year
which has elapsed since the date Life Expectancy was first
calculated. If Life Expectancy is being recalculated, the
Applicable Life Expectancy shall be the Life Expectancy as so
recalculated. The applicable calendar year shall be the first
Distribution Calendar Year, and if Life Expectancy is being
recalculated such succeeding calendar year(s). If annuity
payments commence in accordance with Section 10.9(c) before the
Required Beginning Date, the Applicable Calendar Year is the
year such payments commence. If distribution is in the form of
an immediate annuity purchased after the Participant's death
with the Participant's remaining interest, the Applicable
Calendar Year is the year of purchase.
73
(ii) Designated Beneficiary. The individual who is designated as the
Beneficiary under the Plan on the Required Beginning Date in
accordance with section 401(a)(9) of the Code and the proposed
regulations thereunder.
(iii) Distribution Calendar Year. A calendar year for which a minimum
distribution is required. For distributions beginning before
the Participant's death, the first Distribution Calendar Year
is the calendar year immediately preceding the calendar year
which contains the Participant's Required Beginning Date. For
distributions beginning after the Participant's death, the
first Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to Section 10.6
above.
(iv) Life Expectancy. Life Expectancy and joint and last survivor
expectancy are computed by use of the expected return multiples
in Tables V and VI of section 1.72-9 of the Income Tax
Regulations. Unless otherwise elected by the Participant (or
spouse, in the case of distributions described in Section
10.6(b)(ii)) by the time distributions are required to begin,
Life Expectancies shall be recalculated annually. Such election
shall be irrevocable as to the Participant (or spouse) and
shall apply to all subsequent years. The Life Expectancy of a
non-spouse Beneficiary may not be recalculated.
(v) Participant's Benefit.
(A) The Account balance as of the last Valuation Date in the
calendar year immediately preceding the Distribution
Calendar Year (valuation calendar year) increased by the
amount of any contributions or forfeitures allocated to
the Account balance as of dates in the calendar year after
the Valuation Date and decreased by distributions made in
the valuation calendar year after the Valuation Date.
(B) For purposes of subparagraph (A) above, if any portion of
the minimum distribution for the first Distribution
Calendar Year is made in the second Distribution Calendar
Year on or before the Required Beginning Date, the amount
of the minimum distribution made in the second
Distribution Calendar Year shall be treated as if it had
been made in the immediately preceding Distribution
Calendar Year.
(vi) Required Beginning Date.
(A) General rule. The Required Beginning Date of a Participant
is the first day of April of the calendar year following
the later of the calendar year in which the Participant
attains age 70 1/2 or retires, except that benefit
distributions to a Five Percent Owner must commence by the
first day of April of the calendar year following the
calendar year in which the Five Percent Owner attains age
70 1/2.
(B) Transitional rules. Notwithstanding the foregoing:
(1) Any Participant attaining age 70 1/2 in 1996 may
elect by December 31, 1997, to defer distributions
until the calendar year following the calendar year
in which the Participant retires.
(2) Any Participant attaining age 70 1/2 in years prior
to 1997 may elect to stop distributions and
recommence distributions by the April 1 of the
calendar year following the calendar year in which
the Participant retires. Unless the Employer elects
otherwise in the Adoption Agreement, there is a new
annuity starting date upon recommencement of
distributions.
(C) Once distributions have begun to a Five Percent Owner
under this subsection, they must continue to be
distributed even if the Participant ceases to be a Five
Percent Owner in a subsequent year.
(b) Individual Account.
(i) If a Participant's benefit is to be distributed over (1) a
period not extending beyond the life expectancy of the
Participant or the joint life and last survivor expectancy of
the Participant and the Participant's Designated Beneficiary or
(2) a period not extending beyond the life
74
expectancy of the Designated Beneficiary, the amount required
to be distributed for each calendar year, beginning with
distributions for the first Distribution Calendar Year, must at
least equal the quotient obtained by dividing the Participant's
benefit by the Applicable Life Expectancy.
(ii) For calendar years beginning before January 1, 1989, if the
Participant's spouse is not the Designated Beneficiary, the
method of distribution selected must assure that at least 50%
of the present value of the amount available for distribution
is paid within the life expectancy of the Participant.
(iii) For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with
distributions for the first Distribution Calendar Year shall
not be less than the quotient obtained by dividing the
Participant's benefit by the lesser of (1) the Applicable Life
Expectancy or (2) if the Participant's spouse is not the
Designated Beneficiary, the applicable divisor determined from
the table set forth in Q&A-4 of section 1.401(a)(9)-2 of the
proposed regulations. Distributions after the death of the
Participant shall be distributed using the Applicable Life
Expectancy as the relevant divisor without regard to proposed
regulations section 1.401(a)(9)-2.
(iv) The minimum distribution required for the Participant's first
Distribution Calendar Year must be made on or before the
Participant's Required Beginning Date. The minimum distribution
for other calendar years, including the minimum distribution
for the Distribution Calendar Year in which the Employee's
Required Beginning Date occurs, must be made on or before
December 31 of the Distribution Calendar Year.
(c) Other Forms. If the Participant's benefit is distributed in the form
of an annuity purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements of
section 401(a)(9) of the Code and the proposed regulations thereunder.
For purposes of this Section 10.9, any amount paid to a child of the
Participant will be treated as if it had been paid to the surviving
spouse if the amount becomes payable to the surviving spouse when the
child reaches the age of majority.
For the purposes of this Section 10.9, distribution of a Participant's
interest is considered to begin on the Participant's Required
Beginning Date (or, if the last sentence of Section 10.6(a)(ii) is
applicable, the date distribution is required to begin to the
surviving spouse pursuant to the first sentence of Section
10.6(a)(ii). If distribution in the form of an annuity irrevocably
commences to the Participant before the Required Beginning Date, the
date distribution is considered to begin is the date distribution
actually commences.
(d) Transitional Rule.
(i) Notwithstanding the other requirements of this Section and
subject to the requirements of Article XI, distribution on
behalf of any Employee, including a Five-Percent Owner, may be
made in accordance with all of the following requirements
(regardless of when such distribution commences):
(A) The distribution by the Plan is one which would not have
disqualified such Plan under section 401(a)(9) of the Code
as in effect prior to amendment by the Deficit Reduction
Act of 1984.
(B) The distribution is in accordance with a method of
distribution designated by the Employee whose interest in
the Plan is being distributed or, if the Employee is
deceased, by a Beneficiary of such Employee.
(C) Such designation was in writing, was signed by the
Employee or the Beneficiary, and was made before January
1, 1984.
(D) The Employee had accrued a benefit under the Plan as of
December 31, 1983.
75
(E) The method of distribution designated by the Employee
or the Beneficiary specifies the time at which
distribution will commence, the period over which
distributions will be made, and in the case of any
distribution upon the Employee's death, the
Beneficiaries of the Employee listed in order
priority.
(ii) A distribution upon death will not be covered by this
transitional rule unless the information in the
designation contains the required information described
above with respect to the distributions to be made upon
the death of the Employee.
(iii) For any distribution which commences before January 1,
1984, but continues after December 31, 1983, the Employee
or the Beneficiary to whom such distribution is being
made, will be presumed to have designated the method of
distribution under which the distribution is being made if
the method of distribution was specified in writing and
the distribution satisfies the requirements in
subparagraphs (d)(i)(A) and (E).
(iv) If a designation is revoked, any subsequent distribution
must satisfy the requirements of section 401(a)(9) of the
Code and the proposed regulations thereunder. If a
designation is revoked subsequent to the date
distributions are required to begin, the Plan must
distribute, by the end of the calendar year following the
calendar year in which the revocation occurs, the total
amount not yet distributed which would have been required
to have been distributed to satisfy section 401(a)(9) of
the Code and the proposed regulations thereunder, but for
the Code section 242(b)(2) election. For calendar years
beginning after December 31, 1988, such distributions must
meet the minimum distribution incidental benefit
requirements in section 1.401(a)(9)-2 of the proposed
regulations. Any changes in the designation will be
considered to be a revocation of the designation. However,
the mere substitution or addition of another Beneficiary
(one not named in the designation) under the designation
will not be considered to be a revocation of the
designation, so long as such substitution or addition does
not alter the period over which distributions are to be
made under the designation, directly or indirectly (for
example, by altering the relevant measuring life). In the
case in which an amount is transferred or rolled over from
one plan to another plan, the rules in Q&A J-2 and Q&A J-3
of the proposed regulations shall apply.
ARTICLE XI - JOINT AND SURVIVOR ANNUITY REQUIREMENTS
The provisions of this Article shall take precedence over any
conflicting provisions of the Plan.
11.1 Applicability.
Except as provided with respect to certain profit sharing plans in
Section 11.6 of this Article, the provisions of this Article shall
apply to any Participant who is credited with at least one Hour of
Service with the Employer on or after August 23, 1984, and such other
Participants as provided in Section 11.7.
11.2 Definitions.
For the purposes of this Article XI, the following definitions shall apply:
(a) Annuity Starting Date. The first day of the first period for
which an amount is paid as an annuity or any other form.
(b) Election Period. The period which begins on the first day of the
Plan Year in which the Participant attains age 35 and ends on the
date of the Participant's death. If a Participant separates from
service prior to the first day of the Plan Year in which age 35
is attained, with respect to the account balance as of the date
of separation, the election period shall begin on the date of
separation.
A Participant who has not yet attained age 35 as of the end of
any Plan Year may make a special qualified election to waive the
Qualified Preretirement Survivor Annuity for the period beginning
on the date of such election and ending on the first day of the
Plan Year in which the Participant attains age 35. Such election
shall not be valid unless the Participant receives a written
explanation of the Qualified Preretirement Survivor Annuity in
such terms as are comparable to the explanation required under
Section 11.5. Qualified Preretirement Survivor Annuity coverage
will be automatically reinstated as of the first day of the Plan
Year in which the Participant attains age 35. Any new waiver on
or after such date shall be subject to the full requirements of
this Article.
76
(c) Earliest Retirement Age. The earliest date on which, under the Plan,
the Participant could elect to receive retirement benefits.
(d) Qualified Election. A waiver of a Qualified Joint and Survivor Annuity
or a Qualified Preretirement Survivor Annuity. Any waiver of a
Qualified Joint and Survivor Annuity or a Qualified Preretirement
Survivor Annuity shall not be effective unless: (i) the Participant's
Spouse consents in writing to the election; (ii) the election
designates a specific Beneficiary, including any class of
Beneficiaries or any contingent Beneficiaries, which may not be
changed without spousal consent (or the Spouse expressly permits
designations by the Participant without any further spousal consent);
(iii) the Spouse's consent acknowledges the effect of the election;
and (iv) the Spouse's consent is witnessed by a Plan representative or
notary public. Additionally, a Participant's waiver of the Qualified
Joint and Survivor Annuity shall not be effective unless the election
designates a form of benefit payment which may not be changed without
spousal consent (or the Spouse expressly permits designations by the
Participant without any further spousal consent). If it is established
to the satisfaction of a Plan representative that there is no Spouse
or that the Spouse cannot be located, a waiver will be deemed a
qualified election.
Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be obtained) shall
be effective only with respect to such Spouse. A consent that permits
designations by the Participant without any requirement of further
consent by such Spouse must acknowledge that the Spouse has the right
to limit consent to a specific Beneficiary, and a specific form of
benefit where applicable, and that the Spouse voluntarily elects to
relinquish either or both of such rights. A revocation of a prior
waiver may be made by a Participant without the consent of the Spouse
at any time before the commencement of benefits. The number of
revocations shall not be limited. No consent obtained under this
provision shall be valid unless the Participant has received notice as
provided in Section 11.5 below.
(e) Qualified Joint and Survivor Annuity. An immediate nontransferable
annuity for the life of the Participant with a survivor annuity for
the life of the Spouse which is 50% of the amount of the annuity which
is payable during the joint lives of the Participant and the Spouse
and which is the amount of benefit which can be purchased with the
Participant's vested Account balance.
(f) Qualified Preretirement Survivor Annuity. An immediate nontransferable
annuity for the life of the Participant's surviving Spouse, in such
amount as may be purchased with the Participant's vested Account
balance.
(g) Spouse (surviving spouse). The spouse or surviving spouse of the
Participant, provided that a former spouse will be treated as the
spouse or surviving spouse (and a current spouse will not be treated
as the spouse or surviving spouse to the extent provided) under a
qualified domestic relations order as described in section 414(p) of
the Code.
11.3 Qualified Joint and Survivor Annuity. Unless an optional form of benefit is
selected pursuant to a Qualified Election within the 90-day period ending
on the Annuity Starting Date, a married Participant's vested Account
balance will be paid in the form of a Qualified Joint and Survivor Annuity
and an unmarried Participant's vested Account balance will be paid in the
form of a life annuity. The Participant may elect to have such annuity
distributed upon attainment of the Earliest Retirement Age under the Plan.
11.4 Qualified Preretirement Survivor Annuity. Unless an optional form of
benefit has been selected within the Election Period pursuant to a
Qualified Election, if a Participant dies before his Annuity Starting Date,
then the Participant's vested Account balance shall be applied toward the
purchase of an annuity for the life of the surviving Spouse. The surviving
Spouse may elect to have such annuity distributed immediately after the
Participant's death.
11.5 Notice Requirements.
(a) In the case of a Qualified Joint and Survivor Annuity as described in
Section 11.2(e), the Plan Administrator shall, no less than 30 days
and no more than 90 days prior to the Annuity Starting Date, provide
each Participant a written explanation of: (i) the terms and
conditions of a Qualified Joint and Survivor Annuity; (ii) the
Participant's right to make and the effect of an election to
77
waive the Qualified Joint and Survivor Annuity form of benefit; (iii) the
rights of a Participant's Spouse; and (iv) the right to make, and the
effect of, a revocation of a previous election to waive the Qualified Joint
and Survivor Annuity. If a distribution is in a form other than a Qualified
Joint and Survivor Annuity, such distribution may commence less than 30
days after the notice required under this Section 11.5(a) is given,
provided that:
(i) The Plan Administrator clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular distribution
option);
(ii) The Participant has a right to revoke any affirmative distribution
election at least until the Annuity Starting Date or, if later, at
any time prior to the expiration of the 7-day period that begins the
day after the notice is provided to the Participant; and
(iii) The Annuity Starting Date is a day after the date that the notice
was provided to the Participant.
The Annuity Starting Date may be a date prior to the date the notice is provided
to the Participant if the distribution does not begin until at least 30 days
after such notice is provided, subject to the waiver of the 30-day period as
described in this Section 11.5(a).
(b) In the case of a Qualified Preretirement Survivor Annuity as described in
Section 11.4, the Plan Administrator shall provide each Participant within
the applicable notice period a written explanation of the Qualified
Preretirement Survivor Annuity in such terms and in such manner as would be
comparable to the explanation provided for meeting the requirements of
Section 11.5(a) applicable to a Qualified Joint and Survivor Annuity.
The applicable notice period means with respect to a Participant, whichever
of the following periods ends last:
(i) the period beginning with the first day of the Plan Year in which
the Participant attains age 32 and ending with the close of the Plan
Year preceding the Plan Year in which the Participant attains age
35,
(ii) a reasonable period ending after the individual becomes a
Participant,
(iii) a reasonable period ending after notice is required because of the
cessation of a benefit subsidy as described in subsection (c) below,
(iv) a reasonable period ending after this Article first applies to the
Participant,
(v) a reasonable period after separation from service in the case of a
Participant who separates before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable period
ending after the enumerated events described in (ii), (iii) and (iv) is the
end of the two-year period beginning one year prior to the date the
applicable event occurs, and ending one year after that date. In the case
of a Participant who separates from service before the Plan Year in which
age 35 is attained, notice shall be provided within the two-year period
beginning one year prior to separation and ending one year after
separation. If such a Participant thereafter returns to employment with the
Employer, the applicable period for such Participant shall be redetermined.
(c) Notwithstanding the other requirements of this Section 11.5, the respective
notices prescribed by this Section need not be given to a Participant if
(i) the Plan "fully subsidizes" the costs of a Qualified Joint and Survivor
Annuity or Qualified Preretirement Survivor Annuity and (ii) the Plan does
not allow the Participant to waive the Qualified Joint and Survivor Annuity
or Qualified Preretirement Survivor Annuity and does not allow a married
Participant to designate a nonspouse Beneficiary. For purposes of this
Section 11.5(c), a plan fully subsidizes the costs of a benefit if no
increase in cost or decrease in benefits to the Participant may result from
the Participant's failure to elect another benefit.
78
(d) Notwithstanding the foregoing, a Participant's vested benefits shall
not be distributed in the form of a Qualified Joint and Survivor
Annuity or a Qualified Preretirement Survivor Annuity but shall be
distributed to him in a single sum payment as soon as is
administratively feasible after the date on which his employment
terminated or the date of his death, respectively, if the value of his
vested Account derived from Employer and Employee contributions does
not exceed (or at the time of any prior distribution (i) in Plan Years
beginning before August 6, 1997, did not exceed $3,500, or (ii) made
during the period beginning on the first day of the Plan Year
beginning after August 5, 1997, and ending on March 21, 1999, did not
exceed) $5,000.
11.6 Special Rule for Profit Sharing Plans.
(a) This Section shall apply to a Participant in a profit sharing plan,
and to any distribution, made on or after the first day of the first
Plan Year beginning after December 31, 1988, from or under a separate
account attributable solely to accumulated deductible employee
contributions, as defined in section 72(o)(5) of the Code, and
maintained on behalf of a Participant in a money purchase pension plan
(including a target benefit plan) if the following conditions are
satisfied: (i) the Participant cannot or does not elect payments in
the form of a life annuity, and (ii) on the death of the Participant,
the Participant's vested Account will be paid to the Participant's
surviving Spouse, but if there is no surviving Spouse, or, if the
surviving Spouse has already consented in a manner conforming to a
qualified election, then to the Participant's designated Beneficiary.
The surviving Spouse may elect to have distribution of the vested
Account commence within the 90-day period following the date of the
Participant's death. The Account balance shall be adjusted for gains
or losses occurring after the Participant's death in accordance with
the provisions of the Plan governing the adjustment of Account
balances for other types of distributions. However, this Section 11.6
shall not be operative with respect to the Participant if it is
determined that this profit sharing plan is a direct or indirect
transferee of a defined benefit plan, money purchase pension plan
(including a target benefit plan), stock bonus or profit sharing plan
which is subject to the survivor annuity requirement of sections
401(a)(11) and 417 of the Code. The preceding sentence shall apply
only with respect to asset transfers completed after December 31,
1984, and if the transferred assets and income thereon are accounted
for separately, then such sentence shall apply only with respect to
the transferred assets (and income thereon). If this Section is
operative, then except to the extent otherwise provided in Section
11.7, the other provisions of this Article shall be inoperative.
(b) The Participant may waive the spousal death benefit described in this
Section at any time provided that no such waiver shall be effective
unless it satisfies the conditions that would apply to the
Participant's waiver of the Qualified Preretirement Survivor Annuity.
(c) For purposes of this Section 11.6, vested Account balances shall mean,
in the case of a money purchase pension plan or a target benefit plan,
the Participant's separate Account attributable solely to accumulated
deductible employee contributions within the meaning of section
72(o)(5)(B) of the Code. In the case of a profit sharing plan, vested
Account balance shall have the same meaning as otherwise provided in
this plan document.
11.7 Transitional Rules.
(a) Any living Participant not receiving benefits on August 23, 1984, who
would otherwise not receive the benefits prescribed by the previous
Sections of this Article must be given the opportunity to elect to
have the prior Sections of this Article apply if such Participant is
credited with at least one Hour of Service under this Plan or a
predecessor plan in a Plan Year beginning on or after January 1, 1976,
and such Participant had at least 10 Years of Vesting Service when he
or she separated from service.
(b) Any living Participant not receiving benefits on August 23, 1984, who
was credited with at least one Hour of Service under this Plan or a
predecessor plan on or after September 2, 1974, and who is not
otherwise credited with any service in a Plan Year beginning on or
after January 1, 1976, must be given the opportunity to have his or
her benefits paid in accordance with Section 11.7(d) of this Article.
(c) The respective opportunities to elect (as described in subsections
11.7(a) and (b) above) must be afforded to the appropriate
Participants during the period commencing on August 23, 1984, and
ending on the date benefits would otherwise commence to said
Participants.
79
(d) Any Participant who has elected pursuant to subsection 11.7(b) of
this Article and any Participant who does not elect under
subsection 11.7(a) or who meets the requirements of subsection
11.7(a) except that such Participant does not have at least 10
Years of Vesting Service when he or she separates from service,
shall have his or her benefits distributed in accordance with all
of the following requirements if benefits would have been payable
in the form of a life annuity.
(i) Automatic joint and survivor annuity. If benefits in the
form of a life annuity become payable to a married
Participant who:
(1) begins to receive payments under the Plan on or after
Normal Retirement Age; or
(2) dies on or after Normal Retirement Age while still
working for the Employer; or
(3) begins to receive payments on or after the qualified
early retirement age; or
(4) separates from service on or after attaining Normal
Retirement Age (or the qualified early retirement
age) and after satisfying the eligibility
requirements for the payment of benefits under the
Plan and thereafter dies before beginning to receive
such benefits;
then such benefits will be received under this Plan in the
form of a Qualified Joint and Survivor Annuity, unless the
Participant has elected otherwise during the election
period. The election period must begin at least 6 months
before the Participant attains qualified early retirement
age and end not more than 90 days before the commencement
of benefits. Any election hereunder will be in writing and
may be changed by the Participant at any time.
(ii) Election of early survivor annuity. A Participant who is
employed after attaining the qualified early retirement
age will be given the opportunity to elect, during the
election period, to have a survivor annuity payable on
death. If the Participant elects the survivor annuity,
payments under such annuity must not be less than the
payments which would have been made to the spouse under
the Qualified Joint and Survivor Annuity if the
Participant had retired on the day before his or her
death. Any election under this provision will be in
writing and may be changed by the Participant at any time.
The election period begins on the later of (1) the 90th
day before the Participant attains the qualified early
retirement age, or (2) the date on which Participation
begins, and ends on the date the Participant terminates
employment.
(iii) Definitions. For purposes of this Section 11.7(d),
qualified early retirement age is the latest of:
(1) the earliest date, under the Plan, on which the
Participant may elect to receive retirement benefits,
(2) the first day of the 120th month beginning before the
Participant reaches Normal Retirement Age, or
(3) the date the Participant begins participation in the
Plan.
ARTICLE XII - TOP HEAVY PROVISIONS
12.1 Applicability. Notwithstanding any other provisions of the Plan or
Adoption Agreement to the contrary, if for any Plan Year the Plan
becomes a Top Heavy Plan, the requirements of this Article XII of the
Plan shall be applied for such Plan Year.
12.2 Definitions. The following terms shall have the following meanings in
the determination of whether the Plan is a Top Heavy Plan:
(a) Determination Date. For the first Plan Year of the Plan, the last
day of that Plan Year. For any Plan Year subsequent to the first
Plan Year, the last day of the preceding Plan Year.
(b) Employer. The Employer which adopted this Plan and any other
Employer some or all of whose Employees participate in this Plan
or in a retirement plan which is aggregated with this Plan as
part of a Permissive or Required Aggregation Group.
(c) Key Employee. Any Employee or former Employee (and the
Beneficiaries of such Employee) who, at any time during the
determination period, was an officer of the Employer if such
individual's annual compensation exceeds 50% of the dollar
limitation under section 415(b)(1)(A) of the Code,
80
an owner (or considered an owner under section 318 of the Code) of one of
the ten largest interests in the Employer if such individual's compensation
exceeds 100% of the dollar limitation under section 415(c)(1)(A) of the
Code, a 5-percent owner of the Employer, or a 1-percent owner of the
Employer who has annual compensation of more than $150,000. Annual
compensation means Annual Additions Compensation as defined in Section
6.1(a). The determination period is the Plan Year containing the
Determination Date and the four preceding Plan Years.
The determination of who is a Key Employee will be made in accordance with
section 416(i)(1) of the Code and the regulations thereunder.
(d) Non-Key Employee. Any Employee or former Employee (or any Beneficiary of
such Employee) who is not considered to be a Key Employee.
(e) Permissive Aggregation Group. The Required Aggregation Group of plans plus
any other plan or plans of the Employer which, when considered as a group
with the Required Aggregation Group, would continue to satisfy the
requirements of sections 401(a)(4) and 410 of the Code.
(f) Present Value. Present value shall be based on the interest and mortality
rates specified in plan document.
(g) Required Aggregation Group. (i) Each qualified plan of the Employer in
which at least one Key Employee participates or participated at any time
during the determination period (regardless of whether the plan has
terminated), and (ii) any other qualified plan of the Employer which
enables a plan described in (i) to meet the requirements of section
401(a)(4) or 410 of the Code.
(h) Top Heavy Plan. For any Plan Year beginning after December 31, 1983, this
Plan is Top Heavy if any of the following conditions exist:
(i) If the Top Heavy Ratio for this Plan exceeds 60% and this Plan is
not part of any Required Aggregation Group or Permissive Aggregation
Group of plans.
(ii) If this Plan is a part of a Required Aggregation Group of plans but
not part of a Permissive Aggregation Group and the Top Heavy Ratio
for the group of plans exceeds 60%.
(iii) If this Plan is a part of a Required Aggregation Group and part of a
Permissive Aggregation Group of plans and the Top Heavy Ratio for
the Permissive Aggregation Group exceeds 60%.
(i) Top Heavy Ratio.
(i) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer
has not maintained any defined benefit plan which during the 5-year
period ending on the Determination Date(s) has or has had accrued
benefits, the Top Heavy Ratio for this Plan alone or for the
Required or Permissible Aggregation Group, as appropriate, is a
fraction, the numerator of which is the sum of the account balances
of all Key Employees as of the Determination Date(s) (including any
part of any account balance distributed in the 5-year period ending
on the Determination Date(s)), and the denominator of which is the
sum of all account balances (including any part of any account
balance distributed in the 5-year period ending on the Determination
Date(s)), both computed in accordance with section 416 of the Code
and the regulations thereunder. Both the numerator and denominator
of the Top Heavy Ratio are increased to reflect any contribution not
actually made as of the Determination Date, but which is required to
be taken into account on that date under section 416 of the Code and
the regulations thereunder.
(ii) If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer
maintains or has maintained one or more defined benefit plans which
during the 5-year period ending on the Determination Date(s) has or
has had any accrued benefits, the Top Heavy Ratio for any Required
or Permissive Aggregation Group, as appropriate, is a fraction, the
numerator of which is the sum of account balances under the
aggregated defined contribution plan or plans for all Key Employees,
determined in accordance with paragraph (i)(i) above, and the
Present Value of accrued benefits under the aggregated defined
benefit plan or plans for all Key Employees as of the Determination
Date(s), and the denominator of which is the sum of the account
balances under the aggregated defined
81
contribution plan or plans for all Participants,
determined in accordance with paragraph (i)(i) above,
and the Present Value of accrued benefits under the
defined benefit plan or plans for all Participants as
of the Determination Date(s), all determined in
accordance with section 416 of the Code and the
regulations thereunder. The accrued benefits under a
defined benefit plan in both the numerator and
denominator of the Top Heavy Ratio are increased for
any distribution of an accrued benefit made in the
five-year period ending on the Determination Date.
(iii) For purposes of paragraphs (i)(i) and (i)(ii) above,
the value of account balances and the present value of
accrued benefits will be determined as of the most
recent Valuation Date that falls within or ends with
the 12-month period ending on the Determination Date,
except as provided in section 416 of the Code and the
regulations thereunder for the first and second plan
years of a defined benefit plan. The account balances
and accrued benefits of a Participant (A) who is not a
Key Employee but who was a Key Employee in a prior
year, or (B) who has not been credited with at least
one Hour of Service with any Employer maintaining the
Plan at any time during the 5-year period ending on
the Determination Date will be disregarded. The
calculation of the Top Heavy Ratio, and the extent to
which distributions, rollovers, nonde-ductible
employee contributions and transfers are taken into
account will be made in accordance with section 416(g)
of the Code and the regulations thereunder. When
aggregating plans, the value of account balances and
accrued benefits will be calculated with reference to
the Determination Dates that fall within the same
calendar year.
The accrued benefit of a Participant other than a Key
Employee shall be determined under (A) the method, if any,
that uniformly applies for accrual purposes under all defined
benefit plans maintained by the Employer, or (B) if there is
no such method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional
rule of section 411(b)(1)(C) of the Code.
12.3 Minimum Allocation.
(a) Except as otherwise provided in subsections (c) and (d)
below, the Employer contributions and forfeitures allocated
on behalf of any Participant who is not a Key Employee shall
not be less than the lesser of three percent of such
Participant's Annual Additions Compensation or, in the case
where the Employer has no defined benefit plan which
designates this Plan to satisfy section 401 of the Code, the
largest percentage of Employer contributions and forfeitures,
as a percentage of the Key Employee's Annual Additions
Compensation, as limited by section 401(a)(17) of the Code,
allocated on behalf of any Key Employee for that year. The
minimum allocation is determined without regard to any Social
Security contribution. This minimum allocation shall be made
even though, under other plan provisions, the Participant
would not otherwise be entitled to receive an allocation, or
would have received a lesser allocation for the year because
of (i) the Participant's failure to complete 1,000 Hours of
Service (or any equivalent provided in the Plan), (ii) the
Participant's failure to make mandatory Employee
contributions to the Plan, or (iii) compensation less than a
stated amount. Neither Elective Deferrals, Matching
Contributions, Safe Harbor Matching Contributions nor ACP
Test Only Safe Harbor Matching Contributions may be taken
into account for the purpose of satisfying the minimum
Top-Heavy contribution requirements.
(b) For purposes of computing the minimum allocation, Annual
Additions Compensation will mean Annual Additions
Compensation as defined in Section 6.1(a) of the Plan, as
limited by section 401(a)(17) of the Code.
(c) The provision in (a) above shall not apply to any Participant
who was not employed by the Employer on the last day of the
Plan Year.
(d) The provision in (a) above shall not apply to any Participant
to the extent the Participant is covered under any other plan
or plans of the Employer and the Employer has provided in the
Adoption Agreement that the minimum allocation or benefit
requirement applicable to Top-Heavy plans will be met in the
other plan or plans.
(e) The minimum allocation or benefit requirement applicable to
Top-Heavy plans (to the extent required to be nonforfeitable
under section 416(b) of the Code) may not be forfeited under
section 411(a)(3)(B) or 411(a)(3)(D) of the Code.
82
(f) If Employees are covered under both a Top-Heavy defined
benefit plan and defined contribution plan of the Employer,
the denominators of the defined benefit and defined
contribution fractions (as described in Section 6.1 of the
Plan) shall be computed by substituting a factor of 1.0 for
1.25. However, if the Top-Heavy Ratio does not exceed 90%,
the Employer may use a factor of 1.25 in the fractions
provided one of the following is used to satisfy the minimum
contribution requirements:
(i) a minimum benefit of 3% per year of service (up to
30%) is provided in the defined benefit plan;
(ii) a minimum contribution of 7 1/2% is provided in the
defined contribution plan; or
(iii) a minimum contribution of 4% is provided in the
defined contribution plan and a minimum benefit of 3%
per year of service (up to 30%) is provided in the
defined benefit plan.
12.4 Vesting. For any Plan Year in which this Plan is Top-Heavy, one of
the minimum vesting schedules as elected by the Employer in the
Adoption Agreement will automatically apply to the Plan. The
minimum vesting schedule applies to all benefits within the
meaning of section 411(a)(7) of the Code except those attributable
to Employee contributions, including benefits accrued before the
effective date of section 416 of the Code and benefits accrued
before the Plan became Top-Heavy. Further, no decrease in a
Participant's nonforfeitable percentage may occur in the event the
Plan's status as Top-Heavy changes for any Plan Year. However,
this Section does not apply to the account balances of any
Employee who does not have an Hour of Service after the Plan has
initially become Top-Heavy, and such Employee's account balance
attributable to Employer contributions and forfeitures will be
determined without regard to this Section.
ARTICLE XIII - ADMINISTRATION OF PLAN
13.1 Duties and Responsibility of Fiduciaries; Allocation of Fiduciary
Responsibility. A fiduciary to the Plan shall have only those
specific powers, duties, responsibilities and obligations as are
explicitly given him under the Plan and Trust Agreement. In
general, the Employer shall have the sole responsibility for
making contributions to the Plan required under Article III of the
Plan, appointing the Trustee and the Plan Administrator, and
determining the Investment Options available for investment under
the Plan. The Plan Administrator shall have the sole
responsibility for the administration of the Plan, as more fully
described in Section 13.2. It is intended that each fiduciary
shall not be responsible for any act or failure to act of another
fiduciary. A fiduciary may serve in more than one fiduciary
capacity with respect to the Plan. When T. Rowe Price Trust
Company acts as Trustee of a plan, it acts solely as a directed
trustee.
13.2 Powers and Responsibilities of the Plan Administrator.
(a) Administration of the Plan. The Plan Administrator shall have
all powers necessary to administer the Plan and total
discretion in interpreting and applying the provisions of the
Plan, including, but not limited to, the power to construe
and interpret the Plan documents; to decide all questions
relating to an individual's eligibility to participate in the
Plan; to determine the amount, manner and timing of any
distribution of benefits or any withdrawal under the Plan; to
approve and ensure the repayment of any loan to a Participant
under the Plan; to resolve any claim for benefits; and to
appoint or employ advisors, including legal counsel, to
render advice with respect to any of the Plan Administrator's
responsibilities under the Plan. Any construction,
interpretation or application of the Plan by the Plan
Administrator shall be final, conclusive and binding. All
actions by the Plan Administrator shall be taken pursuant to
uniform standards applied to all persons similarly situated.
The Plan Administrator shall have no power to add to,
subtract from or modify any of the terms of the Plan, or to
change or add to any benefits provided by the Plan, or to
waive or fail to apply any requirements of eligibility for a
benefit under the Plan.
(b) Furnishing Trustee with Instructions. The Plan Administrator
shall be responsible for furnishing the Trustee with written
instructions regarding all contributions to the Trust, all
distributions to Participants and all loans to Participants.
In addition, the Plan Administrator shall be responsible for
furnishing the Trustee with any further information
respecting the Plan which the Trustee may request for the
performance of its duties or for the purpose of making any
returns to the Internal Revenue Service or Department of
Labor as may be required of the Trustee.
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(c) Application and Forms for Benefits. The Plan Administrator
may require a Participant or Beneficiary to complete and file
with it an application for a benefit and to furnish all
pertinent information requested by it. The Plan Administrator
may rely upon all such information so furnished to it,
including the Participant's or Beneficiary's current mailing
address.
13.3 Allocation of Duties and Responsibilities. The Plan Administrator
may by written instrument allocate among its members or Employees
any of its duties and responsibilities not already allocated under
the Plan or may designate persons other than members or Employees
to carry out any of the Plan Administrator's duties and
responsibilities under the Plan. Any such duties or
responsibilities thus allocated must be described in the written
instrument. Such person must acknowledge in writing his acceptance
of the duties and responsibilities allocated to him.
13.4 Appointment of the Plan Administrator. The Employer shall
designate in the Adoption Agreement the Plan Administrator which
shall administer the Employer's Plan. Such Plan Administrator may
consist of an individual, a committee of two or more individuals,
whether or not, in either such case, the individual or any of such
individuals are Employees of the Employer, a consulting firm or
other independent agent, the Trustee (with its written consent) or
the Employer itself. Except as the Employer shall otherwise
expressly determine, the Plan Administrator shall be charged with
the full power and the responsibility for administering the Plan
in all its details. If no Plan Administrator has been appointed by
the Employer, or if the person designated as Plan Administrator by
the Employer is not serving as such for any reason, the Employer
shall be deemed to be the Plan Administrator of the Plan. The Plan
Administrator may be removed by the Employer, or may resign by
giving notice in writing to the Employer, and in the event of the
removal, resignation or death, or other termination of service by
the Plan Administrator, the Employer shall, as soon as
practicable, appoint a successor Plan Administrator, such
successor thereafter to have all of the rights, privileges, duties
and obligations of the predecessor Plan Administrator.
13.5 Expenses. All expenses of the Plan and Trust (including Trustee's
fees) shall, unless paid by the Employer, be paid from the Trust.
13.6 Liabilities. The Plan Administrator and each person to whom duties
and responsibilities have been allocated pursuant to this Plan
document may be indemnified and held harmless by the Employer with
respect to any alleged breach of responsibilities performed or to
be performed hereunder. The Employer and each Affiliated Employer
shall indemnify and hold harmless the Sponsor against all claims,
liabilities, fines and penalties and all expenses reasonably
incurred by or imposed upon it (including, but not limited to,
reasonable attorneys' fees) which arise as a result of actions or
failure to act in connection with the operation and administration
of the Plan.
13.7 Claims Procedure.
(a) Filing a Claim. Any Participant or Beneficiary under the Plan
may file a written claim for a Plan benefit with the Plan
Administrator or with a person named by the Plan
Administrator to receive claims under the Plan. The Plan
Administrator shall have sole and total discretion in
resolving claims.
(b) Notice of Denial of Claim. In the event of a denial or
limitation of any benefit or payment due to or requested by
any Participant or Beneficiary under the Plan ("claimant"),
claimant shall be given a written notification containing
specific reasons for the denial or limitation of his benefit.
The written notification shall contain specific reference to
the pertinent Plan provisions on which the denial or
limitation of his benefit is based. In addition, it shall
contain a description of any other material or information
necessary for the claimant to perfect a claim and an
explanation of why such material or information is necessary.
The notification shall further provide appropriate
information as to the steps to be taken if the claimant
wishes to submit his claim for review. This written
notification shall be given to a claimant within 90 days
after receipt of his claim by the Plan Administrator unless
special circumstances require an extension of time for
processing the claim. If such an extension of time for
processing is required, written notice of the extension shall
be furnished to the claimant prior to the termination of said
90-day period, and such notice shall indicate the special
circumstances which make the postponement appropriate.
84
(c) Right of Review. In the event of a denial or limitation of
his benefit, the claimant or his duly authorized
representative shall be permitted to review pertinent
documents and to submit to the Plan Administrator issues and
comments in writing. In addition, the claimant or his duly
authorized representative may make a written request for a
full and fair review of his claim and its denial by the Plan
Administrator; provided, however, that such written request
must be received by the Plan Administrator (or its delegate
to receive such requests) within 60 days after receipt by the
claimant of written notification of the denial or limitation
of the claim, or within 60 days after the claimant knew (or
should have known) of any other determination by the Plan
Administrator. The 60-day requirement may be waived by the
Plan Administrator in appropriate cases.
(d) Decision on Review. A decision shall be rendered by the Plan
Administrator within 60 days after the receipt of the request
for review, provided that where special circumstances require
an extension of time for processing the decision, it may be
postponed on written notice to the claimant (prior to the
expiration of the initial 60-day period) for an additional 60
days after the receipt of such request for review. Any
decision by the Plan Administrator shall be furnished to the
claimant in writing and shall set forth the specific reasons
for the decision and the specific Plan provisions on which
the decision is based.
(e) Court Action. No Participant or Beneficiary shall have the
right to seek judicial review of a denial of benefit, or to
bring any action in any court to enforce a claim for benefits
prior to filing a claim for benefits or exhausting his rights
to review under this Section 13.7.
ARTICLE XIV - AMENDMENT, TERMINATION AND MERGER
14.1 Amendments.
(a) The Employer expressly recognizes the authority of the
Sponsor to amend this prototype plan and trust from time to
time, except with respect to elections of the Employer in the
Adoption Agreement and the Optional Supplement, and the
Employer shall be deemed to have consented to any such
amendment. The Employer shall receive a written instrument
indicating the amendment of the prototype plan and trust, and
such amendment shall become effective as of the effective
date of such instrument. No such amendment shall in any way
impair, reduce or affect any Participant's vested and
nonforfeitable rights in the Trust.
(b) The Employer may (i) change the choice of options in the
Adoption Agreement, (ii) add overriding language in the
Adoption Agreement when such language is necessary to (A)
satisfy section 415 or 416 of the Code because of the
required aggregation of multiple plans, or (B) preserve
benefits protected under section 411(d)(6) of the Code, and
(iii) add certain model amendments published by the Internal
Revenue Service which specifically provide that their
adoption will not cause the Plan to be treated as
individually designed. If the Plan is amended by the Employer
for any other reason, including a waiver of the minimum
funding requirement under section 412(d) of the Code, or if
the Plan fails to attain or retain qualification, the Plan
will no longer participate in this master or prototype plan
and will be considered an individually designed plan.
(c) No amendment to the Plan shall be effective to the extent
that it has the effect of decreasing a Participant's accrued
benefit. Notwithstanding the preceding sentence, a
Participant's Account may be reduced to the extent permitted
under section 412(c)(8) of the Code. For purposes of this
subsection, a Plan amendment which has the effect of
decreasing a Participant's Account with respect to benefits
attributable to service before the amendment shall be treated
as reducing an accrued benefit. Furthermore, if the vesting
schedule of the Plan is amended, in the case of an Employee
who is a Participant as of the later of the date such
amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of
such Employee's right to his Account will not be less than
his percentage computed under the Plan without regard to such
amendment. No amendment to the Plan shall be effective to
eliminate or restrict an optional form of benefit. The
preceding sentence shall not apply to a Plan amendment that
eliminates or restricts the ability of a Participant to
receive payment of his or her Account balance under a
particular optional form of benefit if the amendment
satisfies the conditions in (i) and (ii) below:
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(i) The amendment provides a single-sum distribution form
that is otherwise identical to the optional form of
benefit eliminated or restricted. For purposes of this
condition (i), a single-sum distribution form is
otherwise identical only if it is identical in all
respects to the eliminated or restricted optional form
of benefit (or would be identical except that it
provides greater rights to the Participant) except
with respect to the timing of payments after
commencement.
(ii) The amendment is not effective unless the amendment
provides that the amendment shall not apply to any
distribution with an annuity starting date earlier
than the earlier of: (A) the 90th day after the date
the Participant receiving the distribution has been
furnished a summary that reflects the amendment and
that satisfies the ERISA requirements at 29 CFR
2520.104b-3 relating to a summary of material
modifications or (B) the first day of the second Plan
Year following the Plan Year in which the amendment is
adopted.
In addition, the Employer may amend the Plan to eliminate or
restrict optional forms of benefit for in-kind distributions
and/or elective transfers in accordance with section
411(d)(6) of the Code and the regulations thereunder.
14.2 Plan Termination; Discontinuance of Employer Contributions.
(a) The Employer may terminate the Plan at any time in whole or
in part. In the event of the dissolution, merger,
consolidation or reorganization of the Employer, the Plan
shall automatically terminate and the Trust shall be
liquidated as provided in subsection (b) below unless the
Plan is continued by a successor Employer in accordance with
Section 14.3.
(b) Upon the complete or partial termination of the Plan or the
complete discontinuance of Employer contributions under the
Plan, the Account balances of all Participants affected
thereby shall become fully vested and nonforfeitable, and,
after taking all steps necessary to ensure qualification of
the Plan upon termination, the Plan Administrator shall
direct the Trustee to distribute assets remaining in the
Trust, after payment of any expenses properly chargeable
thereto, to Participants or their Beneficiaries.
14.3 Successor Employer. In the event of the dissolution, merger,
consolidation or reorganization of the Employer, provision may be
made by which the Plan and Trust shall be continued by the
successor employer, in which case such successor employer shall be
substituted for the Employer under the Plan. The substitution of
the successor employer shall constitute an assumption of Plan
liabilities by the successor employer, and the successor employer
shall have all powers, duties and responsibilities of the Employer
under the Plan.
14.4 Merger, Consolidation or Transfer. In the event of a merger or
consolidation of the Plan with, or transfer of assets or
liabilities of the Plan to, any other plan, the transaction shall
be structured so that each Participant would (if the Plan then
terminated) receive a benefit immediately after the merger,
consolidation or transfer which is equal to or greater than the
benefit the Participant would have been entitled to receive
immediately before the merger, consolidation or transfer (if this
Plan had then terminated).
ARTICLE XV - MISCELLANEOUS PROVISIONS
15.1 Exclusive Benefit of Participants and Beneficiaries.
(a) All assets of the Trust shall be retained for the exclusive
benefit of Participants and their Beneficiaries and shall be
used only to pay benefits to such persons or to pay
reasonable fees and expenses of the Trust and of the
administration of the Plan. The assets of the Trust shall not
revert to the benefit of the Employer, except as otherwise
specifically provided in subsection (b).
(b) Contributions to the Trust under this Plan are subject to the
following conditions:
(i) If a contribution or any part thereof is made to the
Trust by the Employer under a mistake of fact, such
contribution or part thereof shall be returned to the
Employer within one year after the date the
contribution is made;
(ii) In the event that the Commissioner of Internal Revenue
determines that the Plan is not initially qualified
under the Code, any contribution made incident to that
initial qualification by the Employer must be returned
to the Employer within one year after the date the
initial
86
qualification is denied, but only if the application
for the qualification is made by the time prescribed
by law for filing the Employer's return for the
taxable year in which the Plan is adopted, or such
later date as the Secretary of the Treasury may
prescribe; and
(iii) Contributions to the Trust are specifically
conditioned on their deductibility under the Code and,
to the extent a deduction is disallowed for any such
contribution, such amount (to the extent so
disallowed) shall be returned to the Employer within
one year after the date of the disallowance of the
deduction.
15.2 Nonguarantee of Employment. Nothing contained in this Plan shall
be construed as a contract of employment between the Employer and
any Employee, or as a right of any Employee to be continued in the
employment of the Employer, or as a limitation of the right of the
Employer to discharge any of its Employees, with or without cause.
15.3 Rights to Trust Assets. No Employee, Participant or Beneficiary
shall have any right to, or interest in, any assets of the trust
upon termination of employment or otherwise, except as provided
under the Plan. All payments of benefits under the Plan shall be
made solely out of the assets of the Trust.
15.4 Nonalienation of Benefits. Except as provided under Article VIII
of the Plan with respect to Plan loans, benefits payable under the
Plan shall not be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance,
charge, garnishment, execution or levy of any kind, voluntary or
involuntary; provided, however, that the Plan Administrator shall
not be precluded from complying with a qualified domestic
relations order described in section 414(p) of the Code, or any
domestic relations order entered before January 1, 1985. Any
attempt to anticipate, alienate, sell, transfer, assign, pledge,
encumber, charge or otherwise dispose of any right to benefits
payable hereunder shall be void. The Trust shall not in any manner
be liable for, or subject to, the debts, contracts, liabilities,
engagements or torts of any person entitled to benefits hereunder.
15.5 Gender. The use of the masculine pronoun shall extend to and
include the feminine gender, and the use of the feminine pronoun
shall extend to and include the masculine gender, wherever
appropriate; the use of the singular shall include the plural, and
the use of the plural shall include the singular, wherever
appropriate.
15.6 Titles and Headings. The titles or headings of the respective
Articles and Sections are inserted merely for convenience and
shall be given no legal effect.
15.7 Failure of Employer's Plan to Qualify. If the Employer's Plan
fails to attain or retain qualification, such Plan will no longer
participate in this prototype plan and will be considered an
individually designed plan.
15.8 Compliance with Laws, Rules and Regulations. If any of the
provisions of this Plan or of the Trust Agreement are at any time
in any way inconsistent with any laws of the United States of
America or the laws of any state if not preempted by ERISA, or any
regulations of the Internal Revenue Service, U.S. Department of
Labor, or any other Federal or state regulatory authority, in a
manner that adversely affects the qualified status of the Plan
under section 401(a) of the Code or the tax-exempt status of the
Trust under section 501(a) of the Code, or may result in any civil
penalties under ERISA or any other law, then the Employer, the
Plan Administrator and the Trustee shall comply with the
requirements of such laws or regulations, rather than with the
provisions of the Plan and Trust which are inconsistent therewith.
The Employer, the Plan Administrator and the Trustee shall incur
no liability for following such laws, rules or regulations.
15.9 Military Service. Notwithstanding any provision of the Plan to the
contrary, contributions, benefits and service credit with respect
to qualified military service will be provided in accordance with
section 414(u) of the Code.
87
EGTRRA AMENDMENT TO THE
T. ROWE PRICE TRUST COMPANY
PROTOTYPE 401(k) RETIREMENT PLAN
PREAMBLE
1. Adoption and effective date of amendment. This amendment of the T.
Rowe Price Trust Company Prototype 401(k) Retirement Plan basic
plan document #03 ("plan") is adopted to reflect certain
provisions of the Economic Growth and Tax Relief Reconciliation
Act of 2001 ("EGTRRA"). This amendment is intended as good faith
compliance with the requirements of EGTRRA and is to be construed
in accordance with EGTRRA and guidance issued thereunder. Except
as otherwise provided, this amendment shall be effective as of the
first day of the first plan year beginning after December 31,
2001, but shall not apply to taxable, plan or limitation years
beginning after December 31, 2010.
2. Supersession of inconsistent provisions. This amendment shall
supersede the provisions of the plan to the extent those
provisions are inconsistent with the provisions of this amendment.
ARTICLE I - PLAN LOANS FOR OWNER-EMPLOYEES AND SHAREHOLDER EMPLOYEES
Effective for plan loans made after December 31, 2001, plan provisions
prohibiting loans to any owner-employee or shareholder-employee shall
cease to apply.
ARTICLE II - LIMITATIONS ON CONTRIBUTIONS
2.1. Effective date. This article shall be effective for limitation
years beginning after December 31, 2001.
2.2. Maximum annual addition. Except to the extent permitted under
article IX of this amendment and section 414(v) of the Code, if
applicable, the annual addition that may be contributed or
allocated to a participant's account under the plan for any
limitation year shall not exceed the lesser of:
(a) $40,000, as adjusted for increases in the cost-of-living
under section 415(d) of the Code, or
(b) 100 percent of the participant's compensation, within the
meaning of section 415(c)(3) of the Code, for the limitation
year.
The compensation limit referred to in (b) shall not apply to any
contribution for medical benefits after separation from service
(within the meaning of section 401(h) or section 419A(f)(2) of the
Code) which is otherwise treated as an annual addition.
ARTICLE III - INCREASE IN COMPENSATION LIMIT
The annual compensation of each participant taken into account in
determining allocations for any plan year beginning after December 31,
2001, shall not exceed $200,000, as adjusted for cost-of-living
increases in accordance with section 401(a)(17)(B) of the Code. Annual
compensation means compensation during the plan year or such other
consecutive 12-month period over which compensation is otherwise
determined under the plan (the determination period). The
cost-of-living adjustment in effect for a calendar year applies to
annual compensation for the determination period that begins with or
within such calendar year.
ARTICLE IV - MODIFICATION OF TOP-HEAVY RULES
4.1. Effective date. This article shall apply for purposes of
determining whether the plan is a top-heavy plan under section
416(g) of the Code for plan years beginning after December 31,
2001, and whether the plan satisfies the minimum benefits
requirements of section 416(c) of the Code for such years. This
section amends Article XII of the plan.
4.2. Determination of top-heavy status.
(a) Key employee. Key employee means any employee or former
employee (including any deceased employee) who at any time
during the plan year that includes the determination date was
an officer of the employer having annual compensation greater
than $130,000 (as adjusted under section 416(i)(1) of the
Code for plan years beginning after December 31, 2002), a
5-percent owner of the employer or a 1-percent owner of the
employer having annual compensation of more than $150,000.
For this purpose, annual compensation means compensation
within the meaning of section 415(c)(3)
88
of the Code. The determination of who is a key employee will
be made in accordance with section 416(i)(1) of the Code and
the applicable regulations and other guidance of general
applicability issued thereunder.
(b) Determination of present values and amounts. This section
4.2(b) shall apply for purposes of determining the present
values of accrued benefits and the amounts of account
balances of employees as of the determination date.
(i) Distributions during year ending on the determination
date. The present values of accrued benefits and the
amounts of account balances of an employee as of the
determination date shall be increased by the
distributions made with respect to the employee under
the plan and any plan aggregated with the plan under
section 416(g)(2) of the Code during the 1-year period
ending on the determination date. The preceding
sentence shall also apply to distributions under a
terminated plan which, had it not been terminated,
would have been aggregated with the plan under section
416(g)(2)(A)(i) of the Code. In the case of a
distribution made for a reason other than separation
from service, death or disability, this provision
shall be applied by substituting "5-year period" for
"1-year period."
(ii) Employees not performing services during year ending
on the determination date. The accrued benefits and
accounts of any individual who has not performed
services for the employer during the 1-year period
ending on the determination date shall not be taken
into account.
4.3. Minimum benefits.
(a) Matching contributions. Employer matching contributions shall
be taken into account for purposes of satisfying the minimum
contribution requirements of section 416(c)(2) of the Code
and the plan. The preceding sentence shall apply with respect
to matching contributions under the plan or, if the plan
provides that the minimum contribution requirement shall be
met in another plan, under such other plan. Employer matching
contributions that are used to satisfy the minimum
contribution requirements shall be treated as matching
contributions for purposes of the actual contribution
percentage test and other requirements of section 401(m) of
the Code.
(b) Contributions under other plans. The employer may provide in
the EGTRRA Adoption Agreement that the minimum benefit
requirement shall be met in another plan (including another
plan that consists solely of a cash or deferred arrangement
which meets the requirements of section 401(k)(12) of the
Code and matching contributions with respect to which the
requirements of section 401(m)(11) of the Code are met).
4.4 Exception to top-heavy rules. The top-heavy requirements of
section 416 of the Code and Article XII of the plan shall not
apply in any year beginning after December 31, 2001, in which the
plan consists solely of a cash or deferred arrangement which meets
the requirements of section 401(k)(12) of the Code and matching
contributions with respect to which the requirements of section
401(m)(11) of the Code are met.
ARTICLE V - VESTING OF EMPLOYER MATCHING CONTRIBUTIONS
5.1. Applicability. This article shall apply to all participants with
accrued benefits derived from employer matching contributions.
5.2. Vesting schedule. A participant's accrued benefit derived from
employer matching contributions shall vest as provided by the
employer in the EGTRRA Adoption Agreement. If the vesting schedule
for employer matching contributions in Option 3 of Article II.A of
the EGTRRA Adoption Agreement is elected, the election in the
section of the plan that provides for the election of the former
vesting schedule under 411(a)(10) of the Code shall apply. If
elected by the Employer in the EGTRRA Adoption Agreement, the
vesting schedule elected in the EGTRRA Adoption Agreement shall
apply to all employer contributions.
ARTICLE VI - DIRECT ROLLOVERS OF PLAN DISTRIBUTIONS
6.1. Effective date. This article shall apply to distributions made
after December 31, 2001.
89
6.2. Modification of definition of eligible retirement plan. For
purposes of the direct rollover provisions in Article X of the
plan, an eligible retirement plan shall also mean an annuity
contract described in section 403(b) of the Code and an eligible
plan under section 457(b) of the Code that is maintained by a
state, political subdivision of a state or any agency or
instrumentality of a state or political subdivision of a state and
that agrees to separately account for amounts transferred into
such plan from this plan. The definition of eligible retirement
plan shall also apply in the case of a distribution to a surviving
spouse or to a spouse or former spouse who is the alternate payee
under a qualified domestic relations order as defined in section
414(p) of the Code.
6.3. Modification of definition of eligible rollover distribution to
exclude hardship distributions. For purposes of the direct
rollover provisions in Article X of the plan, any amount that is
distributed on account of hardship shall not be an eligible
rollover distribution, and the distributee may not elect to have
any portion of such a distribution paid directly to an eligible
retirement plan.
6.4. Modification of definition of eligible rollover distribution to
include after-tax employee contributions. For purposes of the
direct rollover provisions in Article X of the plan, a portion of
a distribution shall not fail to be an eligible rollover
distribution merely because the portion consists of after-tax
employee contributions which are not includible in gross income.
However, such portion may be transferred only to an individual
retirement account or annuity described in section 408(a) or (b)
of the Code or to a qualified defined contribution plan described
in section 401(a) or 403(a) of the Code that agrees to separately
account for amounts so transferred, including separately
accounting for the portion of such distribution which is
includible in gross income and the portion of such distribution
which is not so includible.
ARTICLE VII - ROLLOVERS FROM OTHER PLANS
If elected by the employer in the EGTRAA Adoption Agreement, the plan
will accept participant rollover contributions and/or direct rollovers
of distributions made after December 31, 2001, from the types of plans
specified in the EGTRAA Adoption Agreement, beginning on the effective
date specified in the EGTRAA Adoption Agreement.
ARTICLE VIII - REPEAL OF MULTIPLE USE TEST
The multiple use test described in Treasury Regulation section
1.401(m)-2 and Article III of the plan shall not apply for plan years
beginning after December 31, 2001.
ARTICLE IX - CATCH-UP CONTRIBUTIONS
If elected by the employer in the EGTRRA Adoption Agreement, all
employees who are eligible to make elective deferrals under this plan
and who have attained age 50 before the close of the plan year shall be
eligible to make catch-up contributions in accordance with, and subject
to the limitations of, section 414(v) of the Code. Such catch-up
contributions shall not be taken into account for purposes of the
provisions of the plan implementing the required limitations of
sections 402(g) and 415 of the Code. The plan shall not be treated as
failing to satisfy the provisions of the plan implementing the
requirements of section 401(k)(3), 401(k)(11), 401(k)(12), 410(b) or
416 of the Code, as applicable, by reason of the making of such
catch-up contributions. If elected by the Employer in the EGTRRA
Adoption Agreement, such catch-up contributions shall be counted in
determining the amount of a participant's employer matching
contributions.
ARTICLE X - SUSPENSION PERIOD AND CODE SECTION 402(g) LIMIT FOLLOWING HARDSHIP
DISTRIBUTION
10.1 Suspension period. A participant who receives a distribution of
elective deferrals after December 31, 2001, on account of hardship
shall be prohibited from making elective deferrals and employee
contributions under this and all other plans of the employer for 6
months after receipt of the distribution. A participant who
receives a distribution of elective deferrals in calendar year
2001 on account of hardship shall be prohibited from making
elective deferrals and employee contributions under this and all
other plans of the employer for the period specified in the
provisions of the plan relating to suspension of elective
deferrals that were in effect prior to this amendment.
10.2 Elimination of reduced Code section 402(g) limit after suspension
period ends. With respect to hardship distributions made after
December 31, 2001, the post-hardship suspension contribution limit
in Treasury regulation section 1.401(k)-1(d)(2)(iv)(B)(3) is
eliminated.
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ARTICLE XI - DISTRIBUTION UPON SEVERANCE FROM EMPLOYMENT
11.1. Effective date. If elected by the employer in the EGTRAA
Adoption Agreement, this section shall apply for distributions
and severances from employment occurring after the date
specified in the EGTRAA Adoption Agreement.
11.2. New distributable event. A participant's elective deferrals,
qualified nonelective contributions, qualified matching
contributions and earnings attributable to these contributions
shall be distributed on account of the participant's severance
from employment. However, such a distribution shall be subject
to the other provisions of the plan regarding distributions,
other than provisions that require a separation from service
before such amounts may be distributed.
91
401(k) RETIREMENT PLAN
TRUST AGREEMENT
The Employer has established a Plan to provide retirement, death and disability
benefits for eligible Employees and their Beneficiaries pursuant to section 401
of the Internal Revenue Code of 1986, as amended. As part of the Plan, the
Employer has requested such person or persons (individual, corporate, or other
entity), as may be designated in the Adoption Agreement, to serve as Trustee
pursuant to the Trust established for the investment of contributions under the
Plan upon the terms and conditions set forth in this Trust Agreement.
Unless the context of this Trust Agreement clearly indicates otherwise, the
terms defined in Article I of the Plan entered into by the Employer, of which
this Trust Agreement forms a part, shall, when used herein, have the same
meaning as in said Plan.
ARTICLE I - THE TRUST FUND
1.1 Establishment of Trust Fund. The Employer hereby establishes with
the Trustee a trust fund consisting of such sums of U. S. currency
and such other property acceptable to the Trustee as shall from
time to time be paid to the Trustee pursuant to this Trust
Agreement. All such money and property, together with all
investments and reinvestments made therewith and proceeds thereof,
less any payments or distributions made by the Trustee pursuant to
the terms of this Trust Agreement, are referred to as the Trust
Fund. The Trustee hereby accepts the Trust Fund and agrees to hold
it in accordance with the express provisions of this instrument
and the requirements of law.
1.2 Named Fiduciary. The Administrator, as set forth in the Adoption
Agreement, shall have exclusive authority with respect to the
management and control of the Trust Fund in accordance with the
Plan and this Trust Agreement and shall be acting as a "Named
Fiduciary" of the Plan in the performance of such activities. The
term "Named Fiduciary," as used throughout this Trust Agreement,
is deemed to refer to the Named Fiduciary of the Plan, as set
forth in this Section 1.2, and its duly authorized
representatives.
1.3 Nature of Trustee's Duties. In performing its duties hereunder,
the Trustee shall serve solely in the capacity of a directed
trustee within the meaning of section 403(a)(1) of ERISA. The
Trustee shall not be deemed to be the "administrator" as defined
in ERISA section 3(16)(A), the "plan sponsor" as defined in ERISA
section 3(16)(B), or a trustee with discretion to perform more
than the express ministerial duties pursuant to the terms of this
Trust Agreement.
1.4 Limitation of Trustee's Duties. The Trustee shall have no duty to:
(a) determine or enforce payment of any contribution due under the
Plan; (b) inquire whether any contribution made to the Trust Fund
is in accordance with the terms of the Plan or law; (c) determine
the adequacy of the funding policy adopted by the Employer or the
Named Fiduciary; (d) inquire as to the propriety of any investment
or distribution made under the Plan; or (e) ensure the tax
qualified status of the Plan under the Code.
ARTICLE II - ACCOUNTS
2.1 Establishing Accounts. The Trustee shall open and maintain, as
part of the Trust Fund, Participant accounts for such individuals
as the Administrator shall, from time to time, give written notice
to the Trustee as being Participants in the Plan. At the direction
of the Administrator, the Trustee shall also open and maintain
such other accounts as may be appropriate or desirable to aid in
the administration of the Plan. A separate account shall be
maintained for each Participant and shall be credited with the
contributions made and any forfeitures allocated to each such
Participant pursuant to the Plan (and all earnings thereon).
2.2 Charges Against Accounts. Upon receipt of written instructions
from the Administrator, the Trustee shall charge the appropriate
account of the Participant for any withdrawals or distributions
made under the Plan and any forfeiture of unvested interests
attributable to Employer contributions which may be required under
the Plan. The Administrator will give written instructions to the
Trustee specifying the manner in which Employer contributions and
any forfeiture of the nonvested portion of accounts, as allocated
by the Administrator in accordance with the provisions of the
Plan, are to be credited to the various accounts maintained for
Participants.
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2.3 Receipt of Contributions. The Trustee shall accept and hold in the
Trust Fund contributions made by the Employer and Participants
under the Plan. The Administrator shall give written instructions
to the Trustee specifying the specific Participants' accounts to
which contributions are to be credited, the amount of each such
credit which is attributable to Employer contributions and the
amount, if any, which is attributable to the Participants'
required or voluntary contributions. If written instructions are
not received by the Trustee, or if such instructions are received
but are deemed by the Trustee to be unclear, upon notice to the
Employer, the Trustee shall hold such contribution in cash,
without liability for rising security prices or distributions
made, pending receipt by it from the Administrator of written
instructions or other clarification. If any contributions or
earnings are less than any minimum which the then current
prospectus for the Investment Options require, the Trustee may
hold the specified portion of contribution or earnings in cash,
without interest, until such time as the proper amount has been
contributed or earned so that the investment in the Investment
Options required under the Plan may be made.
ARTICLE III - INVESTMENT OF THE TRUST FUND
3.1 Investment of the Trust Fund - In General. The Named Fiduciary
shall be solely responsible for directing the Trustee as to the
investment and disposition of the Trust Fund and shall have
responsibility for the overall diversification of the Trust Fund.
The Trustee shall invest and reinvest the Trust Fund only as
directed and the Trustee is specifically prohibited from having or
exercising any discretion with respect to the investment of the
Trust Fund.
3.2 Investment Powers of the Trustee. Subject to the limitations of
Section 3.1, the Trustee shall invest and reinvest the Trust Fund
as directed, free from any limitations imposed by state law on
investments of trust funds and without distinction between income
and principal, in any investment approved by the Named Fiduciary,
including equity or debt securities, insurance policies and
contracts, savings and time deposits, investment contracts issued
by a bank, insurance company or other financial or similar
institution, short-term instruments of deposit, registered
investment companies (including any investment company, the
advisor of which is an affiliate of the Trustee), investment
partnerships or other pooled investments funds, common, collective
or group trust funds (including any such fund held or maintained
by the Trustee or an affiliate of the Trustee) for commingling
assets of participating trusts, including but not limited to
assets of retirement plans which are qualified under section
401(a) of the Code (the instrument of trust creating any such
qualified common, collective or group trust fund, to the extent of
the Trust Fund's equitable share thereof, being adopted hereby).
The Trustee shall have the power to hold all or a portion of the
Trust Fund uninvested pending receipt of clear and proper
investment directions or pending receipt of a contribution amount
which is necessary to carry out an investment direction.
3.3 Investment Options. At the direction of the Named Fiduciary, the
Trustee shall establish one or more separate Investment Options
within the Trust Fund. Investment Options shall be established by
direct investment or through the medium of a bank, trust fund,
insurance contract or regulated investment company, as the Named
Fiduciary shall direct. Each Investment Option shall be held and
administered as part of the Trust Fund, but shall be separately
invested and accounted for on behalf of each Participant's Plan
account. To the extent authorized by the Plan and conditioned on
the Trustee's acceptance of such property pursuant to Section 1.1
hereof, the Named Fiduciary may direct the Trustee to establish
one or more Investment Options all or a portion of the assets of
which shall be invested in qualifying employer securities within
the meaning of section 407(d)(5) of ERISA ("Qualifying Employer
Securities"). Any such direction shall be deemed to include a
certification by the Named Fiduciary that the acquisition and
holding of such Qualifying Employer Securities by the Plan does
not constitute a prohibited transaction under section 406 of ERISA
or section 4975 of the Code. The Employer shall be solely
responsible for complying with any securities laws that may apply
to Qualifying Employer Securities held in the Trust Fund.
3.4 Participant Instructions. The Named Fiduciary's investment
direction to the Trustee may represent the aggregate of investment
instructions of Participants with respect to the assets in each
Participant's Plan account. All references in this Trust Agreement
to directions or instructions provided by the Named Fiduciary
shall be deemed to include Participant instructions that are
provided to the Named Fiduciary or its agent and delivered by the
Named Fiduciary or its agent to the Trustee. The Named
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Fiduciary shall have the duty to select and monitor all Investment
Options or other investment media made available to Participants
under the Plan. The Named Fiduciary or its agent shall ensure that
all Participants who are entitled to direct the investment of
assets in their Plan accounts previously received or receive a
copy of all material describing such Investment Options that is
required by law. If a Participant fails to direct the investment
of assets in the Participant's Plan accounts as permitted by the
Plan, the Named Fiduciary shall direct the Trustee as to the
investment of such assets.
3.5 Appointment of Investment Manager. The Named Fiduciary may appoint
one or more investment managers, as defined in section 3(38) of
ERISA ("Investment Manager") to manage, acquire and dispose of all
or a portion of the Trust Fund or an Investment Option. The Named
Fiduciary shall provide the Trustee with written notice of the
appointment of each Investment Manager and of the termination of
such appointment and direct the segregation of that portion of the
Trust Fund to be managed by the Investment Manager. The Named
Fiduciary also shall provide the Trustee with a copy of the
investment management agreement and an acknowledgement by the
Investment Manager that it is a fiduciary with respect to the Plan
within the meaning of section 3(21)(A) of ERISA. The Trustee shall
be entitled to rely on such documents until otherwise notified in
writing by the Named Fiduciary. The Trustee shall invest and
reinvest such portion of the Trust Fund under the management of
the Investment Manager as directed by the Investment Manager. The
Trustee shall be entitled to conclusively rely upon the valuation
of any securities or other property held in any portion of the
Trust Fund that is provided to it by such Investment Manager for
all purposes under this Trust Agreement.
3.6 Plan Loans. If provided in Article VIII of the Plan, and subject
to the limitations set forth therein, the Trustee shall invest
assets of the Trust Fund in loans to Participants or
Beneficiaries. Any such direction shall be deemed to include a
certification by the Named Fiduciary that such loan is in
accordance with provisions of the Plan and ERISA and does not
constitute a "prohibited transaction" under ERISA. The Trustee
shall accept as collateral for each Participant loan only the
appropriate amount of the Participant's Plan account designated by
the Plan or established policies. The Trustee shall invest all
loan repayments in accordance with the directions of the Named
Fiduciary and shall make distributions of defaulted loans as
directed by the Named Fiduciary.
3.7 Investment and Insurance Contracts. In the event that insurance
policies or contracts or investment contracts issued by a bank,
insurance company or other financial or similar institution
(including structured or synthetic investment contracts) are held
in the Trust Fund at the direction of the Named Fiduciary or an
Investment Manager ("Contracts"), the Trustee shall not be liable
for the refusal or inability of any insurance company, bank or
other financial institution to issue, change, pay proceeds or make
payments due under any Contract; for the form, terms, genuineness,
validity or sufficiency of any Contract; or for any delay in
payment or proceeds due under any Contract. The Trustee shall not
be responsible for the valuation of any Contract and the Trustee
shall be entitled to conclusively rely upon such valuation
provided by the issuer of the Contract for all purposes under this
Trust Agreement. The Trustee shall not be responsible for
evaluating or monitoring the financial condition or status of any
financial institution or insurance company issuing any such
Contract which the Named Fiduciary or an Investment Manager
directs the Trustee to hold or to purchase with the Trust Fund.
3.8 Trustee's Duty and Responsibility with Respect to the Trust Fund.
The Trustee shall have no duty to question any action or direction
of the Employer, the Named Fiduciary, an Investment Manager or a
Participant (pursuant to the provisions of Section 6.3) or the
failure of the Employer, the Named Fiduciary, an Investment
Manager or a Participant to give directions, or to review the
securities or other investments which are held pursuant to
directions of the Employer, the Named Fiduciary, an Investment
Manager or a Participant as to the investment, reinvestment,
retention or disposition of any such assets. The Trustee shall not
have any responsibility for diversification of such assets, for
any loss to or depreciation of such assets resulting from the
purchase, retention or sale of assets in accordance with the
direction of the Employer, the Named Fiduciary, an Investment
Manager or a Participant. The Trustee shall not be responsible for
any investment action taken or omitted by the Trustee in
accordance with any direction of the Employer, the Named
Fiduciary, an Investment Manager or Participant; any investment
inaction in the absence of an investment direction from the
Employer, the Named Fiduciary, an Investment Manager or
Participant; or any investment action taken by the Trustee
pursuant to an order to purchase or sell securities placed by the
Employer, the Named Fiduciary, an Investment Manager or
Participant directly with a broker, dealer or issuer.
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3.9 Knowledge of the Trustee. When the Trustee is subject to the
direction of the Employer, the Named Fiduciary, or an Investment
Manager in performing its duties under this Trust Agreement, the
Trustee's responsibilities will be limited to certain ministerial
duties with respect to the portion of the Trust Fund subject to
such direction, which duties do not involve the exercise of any
discretionary authority to manage or control Trust Fund assets and
which duties will be performed in the normal course of business by
employees of the Trustee, its affiliates or agents who are
unfamiliar with investment management ("Ministerial Duties").
Except as required by section 403(a)(1) of ERISA, the Trustee is
not undertaking any duty or obligation, express or implied, to
review, and will not be deemed to have reviewed, any transaction
involving the investment of the Trust Fund which it is directed to
perform by the Employer, the Named Fiduciary or an Investment
Manager except to the extent necessary to perform these
Ministerial Duties in accordance with such direction.
ARTICLE IV - OTHER MINISTERIAL DUTIES OF THE TRUSTEE
4.1 Other Ministerial Duties of the Trustee. The Trustee is authorized
and empowered with respect to the Trust Fund to perform the
following Ministerial Duties necessary to effectuate the
instructions and directions of the Named Fiduciary, the Plan
Administrator, an Investment Manager or a Participant:
a) 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.
b) To register any investment held by it in the name of the
Trustee or in the name of any custodian or its nominee, with
or without words indicating that such securities are held in
a fiduciary capacity, but the books and records of the
Trustee shall at all times show that all such investments are
part of the Trust Fund.
c) To hold or to appoint an agent or custodian to hold any
property hereunder in bearer form or in its own name or the
name of its nominee and to deposit or arrange for the deposit
of any securities or other property in a securities
depository or clearing agency; provided, however, that the
Trustee may not serve as custodian or appoint or terminate a
custodian for any plan assets, as defined in ERISA and the
regulations thereunder, which are managed by an affiliate of
the Trustee. Any agent or custodian so appointed shall be
paid fees as mutually agreed upon by the Employer and the
agent or custodian and paid in the same manner as other
expenses of the Trust Fund. The Trustee shall not hold any
property or securities hereunder in the same account as any
individual property of the Trustee.
d) To retain custody of original executed documents evidencing
loans to Participants made after the effective date of this
Trust Agreement and, to the extent provided to the Trustee by
the Employer, original executed documents evidencing
outstanding loans to Participants made prior to the effective
date of this Trust Agreement.
e) To employ suitable agents, counsel, financial consultants,
valuation experts or other professionals (who may also be
agents, counsel, consultants or experts for the Employer or
the Named Fiduciary) and to pay their reasonable expenses and
compensation out of the Trust Fund.
f) To trade all securities held in the Trust Fund as soon as
possible after an order is received and processed by the
Trustee or its agent in accordance with directions of the
Employer, the Named Fiduciary or an Investment Manager,
taking into account any trade delays which may occur due to
stock market constraints or the liquidity of the security.
Each and all of the foregoing powers may be exercised without
a court order or approval.
4.2 Valuation of Trust Fund. The Trustee, as of the Valuation Date set
forth in the Plan and at such other time or times as is necessary
or as the Trustee and the Named Fiduciary agree, shall determine
the net worth of the assets of the Trust Fund. The valuation shall
be based upon valuations provided by Investment Managers, trustees
of common trust funds, sponsors of registered investment
companies, records of securities exchanges or valuation services,
market data providers or qualified appraisers. Notwithstanding the
foregoing, the Trustee shall not be responsible for providing the
value of any Contracts, as described in Section 3.7, or for any
asset which is not liquid or not publicly traded, the value of
which shall be provided by the Named Fiduciary. The Trustee may
obtain the opinions of qualified appraisers, as necessary in the
discretion of the Trustee, to determine the fair market value of
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Qualifying Employer Securities, the fees of which appraiser shall,
unless paid by the Employer, be paid from the Trust Fund.
4.3 Trust Records. The Trustee shall keep accurate and detailed
records of all receipts, investments, disbursements and other
transactions required to be performed hereunder with respect to
the Trust Fund. The Trustee agrees to treat as confidential all
records and other information relative to the Trust Fund. The
Trustee shall not disclose such records and other information to
third parties except to the extent required by law or as requested
in writing by the Employer. The Trustee agrees to permit the
Employer to inspect the records of the Trust Fund maintained by
the Trustee during regular business hours and to permit the
Employer to audit the same upon the giving of reasonable notice to
the Trustee. The Trustee further agrees that it will provide the
Employer with information and records that the Employer may
reasonably require in order to perform audits of such records.
4.4 Confidentiality/Security of Records. Trustee and Employer agree to
treat as confidential and use only in connection with this Trust
Agreement all Plan data, records, computer programs and software,
reports and other documents, which are furnished to the other
under this Trust Agreement. Trustee and Employer will protect the
security of such records and will not disclose such records or
other information to third parties except as required by law or
when requested to do so by the other; provided, however, that the
Trustee and Employer may disclose such records or information to
its agents in the course of performing its duties under this Trust
Agreement or to take other reasonable actions required by the
Employer with respect to the Plan.
4.5 Accounting. Within 90 days after the close of the Plan's fiscal
year or such other period as the Employer and the Trustee may
agree, and within 90 days after the resignation or removal of the
Trustee, as provided herein, the Trustee shall file with the
Employer a written account setting forth all investments,
receipts, disbursement and other transactions effected by it
during such fiscal year or during the period from the close of the
last fiscal year to the date of such resignation or removal.
Unless the Employer files written objections to such account with
the Trustee within 180 days after the filing of such account with
the Employer, the accounting shall be deemed to be approved and
the Trustee shall, to the maximum extent permitted by applicable
law, be released and forever discharged from all liability for
further accountability to the Employer for the accuracy of such
accounting and for the propriety of all acts and the transactions
of the Trustee reflected in such account. If written objections
are specified and the matters in controversy cannot be settled
between the Employer and the Trustee, the Trustee may apply for a
judicial settlement of the account, the costs of such settlement
being allowed as an expense of the Trust Fund. The only necessary
party thereto in addition to the Trustee shall be the Employer.
4.6 Distributions and Other Payments. As provided in the Plan, the
Trustee shall make payment to such persons, including the
Employer, the Trustee, the Named Fiduciary, the Plan recordkeeper
and Participants, as the Named Fiduciary may direct from time to
time. The Named Fiduciary shall be responsible for insuring that
any distribution or other payment from the Trust Fund conforms to
the provisions of the Plan and ERISA. Excluding those fees and
expenses set forth in a separate fee schedule and the Plan's
recordkeeping agreement, which may be paid from the Trust Fund if
not paid directly by the Employer, the Named Fiduciary may direct
the Trustee to pay fees or expenses relating to the administration
of the Plan or Trust Fund by submitting to the Trustee all
expenses to be charged to the Trust Fund. Each submission also
shall include a certification executed by the Named Fiduciary that
all such expenses are proper and reasonable. Notwithstanding any
other provisions of this Trust Agreement, the Trustee may
condition any distribution or other payment of Trust Fund assets
upon receipt of satisfactory assurances that the approval of
appropriate governmental agencies or other authorities has been
secured and that all notice and other procedures required by
applicable law have been satisfied. The Trustee shall be entitled
to rely conclusively upon the Named Fiduciary's directions and
shall not be liable for any distribution or other payment made in
reliance upon the Named Fiduciary's directions.
4.7 Limitation of Duties. The Trustee is a party to this Trust
Agreement solely for the purposes set forth herein and neither the
Trustee nor any of its officers, directors, employees or agents
shall have any duties or obligations with respect to the Trust
Fund, except as expressly set forth herein. To the extent not
prohibited by ERISA, the Trustee shall not be responsible in any
way for any action or omission of the Employer or the Named
Fiduciary with respect to the performance of their respective
duties and
96
obligations set forth in this Trust Agreement and in the Plan. The
Trustee may rely upon such information, direction, action or
inaction of the Employer or the Named Fiduciary as being proper
under the Plan or the Trust Agreement and is not required to
inquire into the propriety of any such information, direction,
action or inaction.
ARTICLE V - DUTIES OF THE EMPLOYER
5.1 Duties of the Employer. In addition to any duties of the Employer
otherwise prescribed in this Trust Agreement, the Employer,
individually or through the Named Fiduciary, shall be responsible
for performing the following functions with respect to the Trust
Fund:
a) Transmitting all Trust Fund contributions made by or on
behalf of each Participant to the Trustee at such times and
in such manner as is mutually agreed between the Employer and
the Trustee;
b) Providing the Trustee with such information and data relevant
to the Plan as is necessary for the Trustee to properly
perform its duties hereunder;
c) Providing to the Trustee, on a timely basis, a copy of the
Plan including all amendments and restatements, and a copy of
the Plan's determination letter from the Internal Revenue
Service;
d) Determining that the contributions made by or on the behalf
of each Participant are in accordance with any applicable
federal and state law and regulations;
e) Assuring that the Plan maintains qualified status under
section 401(a) of the Code at all times while any Plan assets
are held in the Trust Fund;
f) Providing the Trustee with the value of any Contracts;
g) Determining the suitability of and selecting every investment
offered as an option under the Plan, including but not
limited to Qualifying Employer Securities;
h) Determining that loans to Participants are made and
administered in accordance with the Plan, ERISA and the Code;
i) Determining that all payments, including distributions to
Participants, are reasonable, proper and in accordance with
the Plan, ERISA and the Code;
j) Determining whether any domestic relations order is
"qualified" in accordance with section 414(p) of the Code and
directing the Trustee as to how to effect any such order; and
k) Ensuring that a Participant who makes a required or voluntary
contribution has previously received or receives a copy of
the then current prospectus relating to the Investment
Option(s) to which such contribution is invested.
l) Meeting any U.S. securities laws that may apply with respect
to offering Qualifying Employer Securities as an investment
option under the Plan. This includes, but is not limited to,
registering such stock with the Securities and Exchange
Commission ("SEC") and other government agencies, filing
reports with the SEC and other government agencies, and
preparing prospectuses, proxy solicitations and other similar
materials.
ARTICLE VI - VOTING, TENDER AND SIMILAR RIGHTS
6.1 General Provisions. Except to the extent otherwise provided in
Section 6.3 of this Trust Agreement, the Named Fiduciary (or the
Investment Manager with respect to assets under its management)
shall direct the Trustee as to the manner in which it shall; (i)
vote in person or by proxy, general or special, any securities
held in the Trust Fund; (ii) exercise conversion privileges,
subscription rights and other options; and (iii) participate in or
dissent from reorganizations, tender offers or other changes in
property rights.
6.2 Receipt of Notices. Upon receipt, the Trustee shall transmit to
the Named Fiduciary (or to the Investment Manager with the respect
to assets under its management) all notices of conversion,
redemption, tender, exchange, subscription, class action, claim in
insolvency proceedings or other rights or powers relating to any
investment in the Trust Fund, which notices are received by the
Trustee from its agents or custodian, from issuers of securities
and from the party (or its agents) extending such
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rights. The Trustee shall have no obligation to determine the
existence of any conversion, redemption, tender, exchange,
subscription, class action, claim in insolvency proceedings or
other right or power relating to any investments in the Trust
Fund.
6.3 Qualifying Employer Securities. If provided in Article V of the
Plan, the Trustee shall exercise all voting or tender offer rights
with respect to any Qualifying Employer Securities in the Trust
Fund which are allocated to the Plan accounts of Participants in
accordance with instructions from Participants. Each Participant
shall be a named fiduciary within the meaning of section 403(a)(1)
of ERISA for the purpose of directing the voting and tendering of
Qualifying Employer Securities allocated to his Plan account. Each
Participant may direct the Trustee, confidentially, how to vote or
whether or not to tender the Qualifying Employer Securities
representing shares allocated to his Plan account. Upon timely
receipt of direction, the Trustee shall vote or tender all such
shares of Qualifying Employer Securities as directed by the
Participants. The Employer shall direct the Trustee as to voting
of shares of Qualifying Employer Securities for which no
Participant direction is received. The Trustee shall use
reasonable procedures to inform Participants as to what action
will be taken in the absence of such affirmative instructions. In
the case of a tender offer or other right or option with respect
to Qualifying Employer Securities, a Participant who does not
issue valid directions to the Trustee to sell, offer to sell,
exchange or otherwise dispose of such Qualifying Employer
Securities shall be deemed to have directed the Trustee that such
shares allocated to his Participant Account remain invested in
Qualifying Employer Securities. The Employer shall provide the
Trustee with all information and assistance that the Trustee may
reasonably request in order for the Trustee to perform its duties
hereunder.
Notwithstanding the foregoing, the Trustee shall follow any
directions of the Employer or Participants in the performance of
these functions only to the extent that following such directions
would not violate the provisions of ERISA.
ARTICLE VII - RESIGNATION OR REMOVAL OF TRUSTEE
7.1 Resignation or Removal of Trustee. The Trustee may resign at any
time upon 60 days' prior written notice to the Employer and the
Employer may remove the Trustee at anytime upon 60 days' prior
written notice to the Trustee. If mutually agreed upon between the
parties, the 60 days' notice may be waived or reduced. Upon
resignation or removal of the Trustee, the Employer shall appoint
a successor trustee. Upon receipt by the Trustee of written
acceptance of such appointment by the successor trustee, the
Trustee shall transfer and pay over to the successor the Trust
Fund and all records (or copies) pertaining thereto. The Trustee
is authorized, however, to reserve such sum of money or property
as it may deem advisable for payment of any liabilities
constituting a charge against the Trust Fund or against the
Trustee, with any balance of such reserve remaining after payment
of all such items to be paid over to the successor trustee. Upon
the transfer and payment over the assets of the Trust Fund and
upon the settlement or approval of the account for the Trustee
pursuant to Section 4.5 herein, the Trustee shall be released and
discharged from any and all claims, demands, duties and
obligations arising out of the Trust Fund and its management
thereof.
7.2 Employer's Failure to Appoint Successor Trustee. If the Employer
has not appointed a successor trustee which has accepted such
appointment as of the effective date of the Trustee's resignation
or removal, the Trustee shall have the right to apply to a court
of competent jurisdiction for the appointment of such successor or
for a determination of its rights and obligations, the costs of
such action, unless paid by the Employer, being paid from the
Trust Fund.
ARTICLE VIII - AMENDMENT AND TERMINATION OF THE TRUST AGREEMENT
8.1 Amendment. As provided in Article XIV of the Plan, and subject to
the limitations set forth therein, the Plan and Trust Agreement
may be amended at any time, in whole or in part by the Employer.
No such amendment shall make it possible for any part of the
corpus or income of the Trust Fund to be used or diverted to
purposes other than the exclusive benefit of Participants and
their Beneficiaries and defraying reasonable expenses of
administering the Plan and trust created under this Trust
Agreement.
8.2 Termination. As provided in Article XIV of the Plan, and subject
to the limitations set forth therein, this Trust Agreement and the
trust created hereunder shall terminate upon the termination of
the Plan, unless expressly extended by the Employer. The trust
also shall terminate upon the dissolution or liquidation of the
Employer where no successor has elected to continue the Plan and
this Trust Agreement.
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Termination of the trust shall be effected by distribution of all
Trust Fund assets to the Participants or other persons entitled
thereto pursuant to the direction of the Named Fiduciary, subject
to the Trustee's right to reserve funds as provided in Section 7.1
hereof. Upon the completion of such distribution, the Trustee
shall be relieved from all further liability with respect to all
amounts so paid.
ARTICLE IX - MISCELLANEOUS
9.1 Written Instruction. Any direction of the Employer or the Named
Fiduciary pursuant to any provisions of this Trust Agreement shall
be set forth in writing from the Employer or the Named Fiduciary
to the Trustee and the Trustee shall be fully protected in relying
upon such written direction of the Employer or Named Fiduciary.
For purposes of this Section 9.1, written instructions shall
include the electronic or telephonic transmission of information
or data as mutually agreed upon by the Trustee and the Employer.
The Trustee shall be fully protected in relying upon any
communication that the Trustee reasonably believes to have been
given by the Employer or the Named Fiduciary or their duly
authorized representatives, or any individual having apparent
authority as such. The Trustee shall receive all directions or
instructions in writing provided that the Trustee may accept oral
directions for purchases or sales from the Named Fiduciary via
telephone or other electronic procedures as agreed to between the
Employer and the recordkeeper for the Plan.
9.2 Indemnification and Hold Harmless. The Employer shall indemnify
and hold harmless the Trustee (including its employees,
representatives and agents) from and against any liability, loss
or expense (including reasonable attorneys' fees) arising out of:
(a) the Trustee's performance of its duties or responsibilities
under this Trust Agreement, except to the extent that such loss or
expense arises from the Trustee's own willful misconduct or gross
negligence, (b) any action taken by the Trustee in accordance with
the direction or instructions of the Employer, the Named
Fiduciary, an Investment Manager, or a Participant or (c) any
matter relating to the Plan for which the Trustee has no
responsibility, control or liability under this Trust Agreement,
and (d) the failure of the Named Fiduciary or the Employer
(including its employees, representatives and agents) to perform
its duties under this Trust Agreement or with respect to the Plan;
provided, however, that this Section 9.2 shall not be construed to
relieve the Trustee from responsibility or liability for any duty
imposed upon directed trustees under section 403(a)(1) of ERISA.
9.3 Trustee's Fees, Expenses and Taxes. The Trustee shall give 90 days
advance written notice to the Employer whenever its fees are
changed. Such fees, any taxes of any kind whatsoever which may be
levied or assessed upon the Trust Fund, and any expenses incurred
by the Trustee in the performance of its duties hereunder,
including fees for legal services rendered to the Trustee, shall,
unless paid by the Employer, be paid from the Trust Fund in the
manner provided for in the Plan.
9.4 Merger, Consolidation or Transfer. As provided in Article XIV of
the Plan, and subject to the limitations set forth therein, in the
event of the merger, consolidation or transfer of any portion of
the Trust Fund to a trust fund held under any other plan, the
Trustee shall dispose of all or part, as the case may be, of the
Trust Fund, in accordance with the written directions of the Named
Fiduciary, subject to the right of the Trustee to reserve funds as
provided in Section 7.1 hereof.
9.5 Conflict with the Plan. In the event of any conflict between the
provisions of the Plan and this Trust Agreement with respect to
the rights or obligations of the Trustee, the provisions of this
Trust Agreement shall prevail.
9.6 Severability. If any provision of this Trust Agreement is held
invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provisions, and this Trust Agreement
shall be construed and enforced as if such provision had not been
included.
9.7 Surviving Sections. Notwithstanding any Sections of this Trust
Agreement to the contrary, Sections 7.1, 7.2, 8.2, 9.2 and 9.3
shall survive the termination of this Trust Agreement.
9.8 Law Governing. This Trust Agreement shall be administered,
construed and enforced according to the laws of the state where
the Trustee has its principal place of business and applicable
federal law.
9.9 Predecessor and Successor Trustees. The Trustee shall not be
responsible and shall have no liability for the acts or omissions
of any of its predecessors or successors.
98
9.10 Successors and Assigns. This Trust Agreement shall be binding upon
the successors and assigns of the parties hereto.
9.11 Amendments. As provided in Article XIV of the Plan and subject to
the limitations set forth therein, the Plan and Trust Agreements
may be amended at any time, in whole or in part, by the Employer.
No amendment to the Plan or Trust Agreement shall place any
greater burden on the Trustee without the Trustee's written
consent.
9.12 Multiple Trustees. In the event that there shall be 2 or more
Trustees serving hereunder, any action taken or decision made by
any such Trustees may be taken or made by a majority of them with
the same effect as if all had joined therein, if there be more
than 2, or unanimously if there be 2.
100
Internal Revenue Service Department of the Treasury
Plan Description: Prototype Non-standardized Profit Sharing Plan with CODA
FFN: 50336500003-001 Case: 200001532 EIN: 52-1309931 Washington, DC 20224
Letter Serial No: K372181a
T ROWE PRICE TRUST CO Contact Person: Ms. Arrington 50-00197
100 EAST PRATT STREET Telephone Number: (202) 283-8811
BALTIMORE, MD 21202 In Reference to: T:EP:RA:T4
Date: 02/27/2002
Dear Applicant:
In our opinion, the form of the plan identified above is acceptable under
section 401 of the Internal Revenue Code for use by employers for the benefit of
their employees. This opinion relates only to the acceptability of the form of
the plan under the Internal Revenue Code. It is not an opinion of the effect of
other Federal or local statutes.
You must furnish a copy of this letter to each employer who adopts this plan.
You are also required to send a copy of the approved form of the plan, any
approved amendments and related documents to Employee Plans Determinations in
Cincinnati at the address specified in section 9.11 of Rev. Proc. 2000-20,
2000-6 I.R.D. 553.
This letter considers the changes in qualifications requirements made by the
Uruguay Round Agreements Act (GATT), Pub. L. 103-465, the Small Business Job
Protection Act of 1996, Pub. L. 104-188, the Uniformed Services Employment and
Reemployment Rights Act of 1994, Pub. L. 103-553, the Taxpayer Relief Act of
1997, Pub. L. 105-34, the Internal Revenue Service Restructuring and Reform Act
of 1998, Pub. L. 105-206 and the Community Renewal Tax Relief Act of 2000, Pub.
L. 106-554. These laws are referred to collectively as GUST.
Our opinion on the acceptability of the form of the plan is not a ruling or
determination as to whether an employer's plan qualifies under Code section
401(a). However, an employer that adopts this plan may rely on this letter with
respect to the qualification of its plan under Code section 401(a), as provided
for in Announcement 2001-77, 2001-30 I.R.B. and outlined below. The terms of the
plan must be followed in operation.
Except as provided below, our opinion does not apply with respect to the
requirements of: (a) Code sections 401(a)(4), 401(a)(26), 401(a), 410(b) and
434(s). Our opinion does not apply for purposes of Code section 401(a)(10)(B)
and section 401(a)(16). If an employer ever maintained another qualified plan
for one or more employees who are covered by this plan. For this purpose, the
employer will not be considered to have maintained another plan merely because
the employer has maintained another defined contribution plan(s), provided such
other plan(s) has been terminated prior to the effective date of this plan and
no annual additions have been credited to the account of any participant under
such other plan(s) as of any date within the limitation year of this plan.
Likewise, if this plan is first effective on or after the effective date of the
repeal of Code section 415(e), the employer will not be considered to have
maintained another plan merely because the employer has maintained a defined
benefit plan(s), provided the defined benefit plan(s) has been terminated prior
to the effective date of this plan. Our opinion also does not apply for purposes
of Code section 401(a)(16) if, after December 31, 1985, the employer maintains a
welfare benefit fund defined in Code section 419(e), which provides
postretirement medical benefits allocated to separate accounts for key employees
as defined in Code section 419A(d)(3).
Our opinion applies with respect to the requirements of Code section 410(b) if
100 percent of all nonexcludable employees benefit under the plan. Employers
that elect a safe harbor allocation formula and a safe harbor compensation
definition can also rely on an opinion letter with respect to the
nondiscriminatory amounts requirement under sections 401(a)(4) and the
requirement of sections 401(k) and 401(m) (except where the plan is a safe
harbor plan under section 401(k)(12) that provides for the safe harbor
contribution to be made under another plan).
101
T ROWE PRICE TRUST CO
FFN: 50336500003-001
Page 2
An employer that elects to continue to apply the pre-GUST family aggregation
rules in years beginning after December 31, 1996, or the combined plan limit of
section 415(e) in years beginning after December 31, 1999, will not be able to
rely on the opinion letter without a determination letter. The employer may
request a determination letter by filing an application with Employee Plans
Determinations on Form 5307, Application for Determination for Adopters of
Master or Prototype or Volume Submitter Plans.
If you, the matter or prototype sponsor, have any questions concerning the IRS
processing of this case, please call the above telephone number. This number is
only for use of the sponsor. Individual participants and/or adopting employers
with questions concerning the plan should contact the master or prototype
sponsor. The plan's adoption agreement must include the sponsor's address and
telephone number for inquiries by adopting employers.
If you write to the IRS regarding this plan, please provide your telephone
number and the most convenient time for us to call in case we need more
information. Whether you call or write, please refer to the Letter Serial Number
and File Folder Number shown in the heading of this letter.
You should keep this letter as a permanent record. Please notify us if you
modify or discontinue sponsorship of this plan.
Sincerely yours,
/s/ Paul T. Shultz
Director
Employee Plans Rulings & Agreements
102
T. ROWE PRICE TRUST COMPANY
401(k) RETIREMENT PLAN
ADOPTION AGREEMENT
Name of Employer:_______________________________________________________________
Address: _______________________________________________________________
_______________________________________________________________
Phone No: _______________________________________________________________
Plan Contact: _______________________________________________________________
103
T. ROWE PRICE
TRUST COMPANY
401(k) RETIREMENT PLAN
ADOPTION AGREEMENT
This is the Adoption Agreement for defined contribution plan #001 of basic plan
document #03, which is a combined prototype section 401(k)/profit sharing
defined contribution plan. (Prior to the amendment and restatement of this plan
document and adoption agreement, the plan document was T. Rowe Price Trust
Company basic plan document #01.) This Adoption Agreement may be used only in
conjunction with basic plan document #03.
Note: Before executing this Adoption Agreement, the Employer should consult
with a tax adviser or attorney. This plan may not meet the Employer's
requirements for continued plan qualification. In addition, failure to
properly complete this Adoption Agreement may result in plan
disqualification.
The Employer hereby establishes a section 401(k) plan and a trust for such plan
upon the respective terms and conditions contained in the section 401(k)
prototype plan #03 and the Trust Agreement to the plan and appoints as
Trustee(s) of such trust the person(s) who has(have) executed this Adoption
Agreement evidencing his/her/its/their acceptance of such appointment.
The Plan and Trust Agreement shall be supplemented and modified by the terms and
conditions contained in the Adoption Agreement and any supplements thereto and
shall be effective on the date(s) specified herein.
After the Employer has notified T. Rowe Price Trust Company it has adopted the
prototype plan, T. Rowe Price Trust Company will inform the Employer of any
amendments made to the prototype plan or the discontinuance or abandonment of
the prototype plan after T. Rowe Price Trust Company receives such notice and
until the earlier of (i) the date the Employer notifies T. Rowe Price Trust
Company it has ceased to use this prototype plan or (ii) the date the Plan's
asset records are not kept by T. Rowe Price Trust Company or any affiliate of T.
Rowe Price Trust Company.
1. Plan Data.
(Complete 1.1 or 1.2, and complete 1.3)
1.1 New Plan.
(a) Name of Plan:
-----------------------------------------------------------
(Please print or type complete, legal name of the Plan)
(b) Effective Date of the Plan:
--------------------------------
(month/day/year)
(c) Plan Year End:
---------------------------------------------
(month/day)
1.2 If this is an amendment of existing plan, complete the following:
(a) Name of Existing Plan:
-----------------------------------------------------------
(Please print or type complete, legal name of the Plan)
(b) Initial Effective Date of Plan:
-----------------------------------------------------------
(c) Effective Date of Amended Plan (complete (1) or (2))
(1) If the plan is being amended and restated to comply
with GUST (the 1994-1998 laws - GATT, USERRA, SBJPA,
TRA'97 and IRSRRA - that require plan amendments):
----------------------------------------------------
Effective Date of Amendment (month/day/year)
104
1.24 Employer Contribution Accounts. The portion of a Participant's Account
consisting of his Employer Matching Contributions, Discretionary Profit
Sharing Contributions, Qualified Nonelective Contributions, Qualified
Matching Contributions, Safe Harbor Matching Contributions, Safe Harbor
Nonelective Contributions and ACP Test Only Safe Harbor Matching
Contributions subaccounts.
1.25 Entry Date. The Effective Date shall be the first Entry Date; thereafter,
Entry Dates shall be the dates specified in the Adoption Agreement.
1.26 ERISA. The Employee Retirement Income Security Act of 1974, as amended.
1.27 Family Member. An Employee's spouse and lineal ascendants or descendants
and the spouses of such lineal ascendants or descendants.
1.28 Five Percent Owner. Any person who owns (or is considered to own within
the meaning of section 318 of the Code) more than 5% of the interests in
the Employer.
1.29 Highly Compensated Employee. For Plan Years beginning after December 31,
1996, the term Highly Compensated Employee means any Employee who during
the Plan Year: (1) was a Five Percent Owner at any time during the Plan
Year or the look-back year, or (2) for the look-back year had Section 415
Compensation from the Employer in excess of $80,000 (adjusted at the same
time and in the same manner as under section 415(d) of the Code, except
that the base period is the calendar quarter ending September 30, 1996)
and, if the Employer so elects in the Adoption Agreement, was in the
top-paid group (i.e., top 20% of Employees ranked by compensation) for
the look-back year.
For this purpose, the Plan Year of the Plan for which a determination is
being made is called a determination year and the preceding 12-month
period is called a look-back year. If the Employer so elects in the
Adoption Agreement, the look-back year shall be the calendar year
beginning with or within the look-back year.
The determination of who is a highly compensated former employee is based
on the rules applicable to determining highly compensated employee status
as in effect for that determination year, in accordance with section
1.414(q)-1T, A-4 of the Temporary Income Tax Regulations and Notice
97-45.
In determining whether an Employee is a Highly Compensated Employee for
years beginning in 1997, (1) the amendments to Code Section 414(q) stated
above are treated as having been in effect for the 1996 Plan Year, and
(2) if the Employer so elects in the Optional Supplement, the look-back
year shall be the calendar year ending with or within the determination
year.
Effective for Plan Years beginning before January 1, 1997, or such later
year than 1997 that the Employer elects in the Optional Supplement, if an
Employee is, during a determination year or look-back year, a Family
Member of either a Five Percent Owner who is an active or former Employee
or a Highly Compensated Employee who is one of the ten most Highly
Compensated Employees ranked on the basis of compensation paid by the
Employer during such year, then the Family Member and Five Percent Owner
or top ten Highly Compensated Employee shall be aggregated. In such case,
the Family Member and Five Percent Owner or top ten Highly Compensated
Employee shall be treated as a single Employee receiving compensation and
Plan contributions or benefits equal to the sum of such compensation and
contributions or benefits of the Family Member and Five Percent Owner or
top ten Highly Compensated Employee.
1.30 Hour of Service.
(a) An Hour of Service shall mean and include each hour for which an
Employee is compensated by the Employer, or is entitled to be so
compensated, for services rendered by him to the Employer. These
hours will be credited to the Employee for the computation period
in which the duties are performed.
(b) An Hour of Service shall also mean and include each hour for which
an Employee is compensated by the Employer, or is entitled to be
so compensated, on account of a period of time during which no
services are rendered by him to the Employer (regardless of
whether the Employee shall have ceased to be an Employee) due to
vacation, holiday, illness, incapacity (including disability),
layoff, jury duty, military duty or leave of absence. No more than
501 Hours of Service shall be credited pursuant to this subsection
(b) on account of any single continuous period during which an
Employee
105
105
renders no services to the Employer (whether or not such period
occurs in a single computation period). Hours under this Section
will be calculated and credited pursuant to section 2530.200b-2 of
the Department of Labor Regulations which is incorporated herein
by this reference.
(c) An Hour of Service shall also mean and include each hour for which
back pay, without regard to mitigation of damages, has been
awarded or agreed to by the Employer. The same Hours of Service
shall not be credited both under subsection (a) or subsection (b),
whichever shall be applicable, and also under this subsection (c).
The 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.
Hours of Service will be credited for employment with other
members of an affiliated service group (under section 414(m) of
the Code), a controlled group of corporations (under section
414(b) of the Code), or a group of trades or businesses under
common control (under section 414(c) of the Code), of which the
adopting Employer is a member, and any other entity required to be
aggregated with the Employer pursuant to section 414(o) of the
Code and the regulations thereunder.
Hours of Service will also be credited for any individual
considered an Employee under section 414(n) or 414(o) of the Code,
and regulations thereunder.
Solely for purposes of determining whether a Break in Service for
participation and vesting purposes has occurred in a computation
period, an individual who is absent from work for maternity or
paternity reasons shall receive credit for the Hours of Service
which would otherwise have been credited to such individual but
for such absence, or in any case in which such hours cannot be
determined, eight Hours of Service per day of such absence. For
purposes of this subsection, an absence from work for maternity or
paternity reasons means an absence (i) by reason of the pregnancy
of the individual, (ii) by reason of a birth of a child of the
individual, (iii) by reason of the placement of a child with the
individual in connection with the adoption of such child by such
individual, or (iv) for purposes of caring for such child for a
period beginning immediately following such birth or placement.
The Hours of Service credited under this paragraph shall be
credited only (i) in the computation period in which the absence
begins if the crediting is necessary to prevent a Break in Service
in that period, or (ii) in all other cases, in the following
computation period.
Hours of Service will be determined on the basis of the method
selected in the Adoption Agreement.
1.31 Investment Options. Any regulated investment company registered under the
Investment Company Act of 1940 the investment adviser of which is T. Rowe
Price Associates, Inc. or any of its affiliates, any common trust funds
or collective investment funds of the Sponsor qualified under sections
401 and 501 of the Code, and any other funding vehicle (including, but
not limited to, limited partnership interests which receive investment
advice from T. Rowe Price Associates, Inc. or an affiliate) made
available to the Plan by T. Rowe Price Trust Company which the Employer
selects under the terms of the Plan.
1.32 Leased Employee. For Plan Years beginning on and after January 1, 1997, a
Leased Employee is any person (other than an Employee of the recipient)
who, pursuant to an agreement between the recipient and any other person
("leasing organization"), has performed services for the recipient (or
for the recipient and related persons determined in accordance with
section 414(n)(6) of the Code) on a substantially full time basis for a
period of at least one year and such services are performed under primary
direction and control of the recipient.
Any Leased Employee shall be treated as an employee of the recipient
employer. However, contributions or benefits provided by the leasing
organization which are attributable to service performed for the
recipient employer shall be treated as provided by the recipient
employer. The preceding sentence shall not apply to any Leased Employee
if Leased Employees do not constitute more than twenty percent of the
employer's non-highly compensated force and, if such leased employee is
covered by a money purchase pension plan providing: (a) a nonintegrated
employer contribution rate of at least ten percent of compensation as
defined in section 415(c)(3) of the Code, but including amounts
contributed by the employer pursuant to a salary reduction agreement
which are excludible from the employee's gross income under section 125,
402(e)(3), 402(h)(1)(B) or 403(b) of the Code, and, for years beginning
after December 31, 2000, elective amounts that are not included in gross
income of the Employee
106
(iii) Effective for Plan Years beginning before January 1, 1997,
for purposes of determining the Contribution Percentage of
a Participant who is a Five Percent Owner or one of the ten
most highly-paid Highly Compensated Employees, the
Contribution Percentage Amounts and Testing Compensation of
such Participant shall include the Contribution Percentage
Amounts and Testing Compensation for the Plan Year of
Family Members. Family Members, with respect to Highly
Compensated Employees, shall be disregarded as separate
Employees in determining the Contribution Percentage both
for Participants who are Non-Highly Compensated Employees
and for Participants who are Highly Compensated Employees.
(iv) For purposes of applying the ACP Test, Employee After-Tax
Contributions are considered to have been made in the Plan
Year in which contributed to the Trust. Qualified Matching
Contributions and Qualified Nonelective Contributions will
be considered made for a Plan Year if made no later than
the end of the twelve-month period beginning on the day
after the close of the Plan Year.
(v) The Employer shall maintain records sufficient to
demonstrate satisfaction of the ACP test and the amount of
Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, used in such test.
(vi) If the Employer elects to apply section 410(b)(4)(B) of the
Code in determining whether the Plan meets the minimum
coverage requirements of section 410(b)(1) of the Code, the
Employer may, in determining whether the Plan satisfies the
ACP Test, exclude from consideration all eligible Employees
(other than Highly Compensated Employees) who have not met
the minimum age and service requirements of section
410(a)(1)(A) of the Code.
(c) Safe Harbor CODA.
(i) If the Employer has elected in the Adoption Agreement to
make Safe Harbor Matching Contributions or ACP Test Only
Safe Harbor Matching Contributions during a Plan Year, the
provisions of this Section 3.7 shall apply as follows:
(A) If only Safe Harbor Matching Contributions (or ACP
Test Only Safe Harbor Matching Contributions) or
Elective Deferrals, or both, are allowed, the
provisions of this Section 3.7 shall not apply.
(B) If Employee After-Tax Contributions are allowed or
if the Employer makes any type of matching
contribution other than Safe Harbor Matching
Contributions or ACP Test Only Safe Harbor Matching
Contributions under the Plan during a Plan Year, the
provisions of this Section 3.7 shall apply during
such Plan Year using Current Year Testing except
that the Employer may elect to disregard Safe Harbor
Matching Contributions and ACP Test Only Safe Harbor
Matching Contributions in performing such Current
Year Testing.
(ii) If the Employer suspends making Safe Harbor Matching
Contributions or ACP Test Only Safe Harbor Matching
Contributions during a Plan Year, the provisions of this
Section 3.7 shall apply using Current Year Testing.
(iii) If the Employer wants to maintain the option to amend the
Plan during a Plan Year to provide for Safe Harbor
Nonelective Contributions during such Plan Year, the ADP
and ACP Tests must be applied using Current Year Testing
during such Plan Year.
3.8 Multiple Use Test. If one or more Highly Compensated Employees
participate in both a cash or deferred arrangement and a plan subject to
the ACP Test maintained by the Employer and the sum of the ADP and ACP of
those Highly Compensated Employees subject to either or both tests
exceeds the Aggregate Limit, then the ADP or ACP, or both, of those
Highly Compensated Employees who also participate in a cash or deferred
arrangement will be reduced in the manner determined by the Plan
Administrator so that the limit is not exceeded. The amount by which each
Highly Compensated Employee's Deferral Percentage or Contribution
Percentage Amount, or both, is reduced shall be treated as an Excess
Aggregate Contribution. The ADP and ACP of the Highly Compensated
Employees are determined after any corrections required to meet the ADP
and ACP Tests. Impermissible multiple use does not occur if either the
ADP or ACP of the Highly Compensated Employees does not exceed 1.25
multiplied by the ADP and ACP of the Non-Highly Compensated Employees.
107
3.9 Prevention or Cure of ADP Test Failures. The Plan Administrator may, in its
sole discretion, use any one or a combination of the following methods to
prevent or cure any ADP Test failure in accordance with section 401(k) of
the Code and the regulations thereunder:
(a) The Plan Administrator may refuse to accept any or all prospective
Elective Deferrals to be contributed by a Highly Compensated Employee.
(b) The Plan Administrator may distribute any or all Excess Contributions
in accordance with the provisions of Section 3.11.
(c) The Employer may, in its sole discretion, elect to contribute a
Qualified Nonelective Contribution in accordance with the provisions
of Section 3.12.
(d) Subject to the requirements of Section 3.13, the Plan Administrator
may, in its sole discretion, elect to treat Qualified Matching
Contributions as if they were Elective Deferrals for purposes of the
ADP test.
(e) The Plan Administrator may recharacterize Excess Contributions as
Employee After-Tax Contributions in accordance with the provisions of
Section 3.14.
(f) The Employer may, in its sole discretion, elect to make a Safe Harbor
Nonelective Contribution in accordance with the provisions of Section
3.15.
3.10 Prevention or Cure of ACP Test Failures. The Plan Administrator may, in its
sole discretion, use any one or a combination of the following methods to
prevent or cure any ACP Test failure in accordance with section 401(m) of
the Code and the regulations thereunder:
(a) The Plan Administrator may refuse to accept any or all prospective
Elective Deferrals or Employee After-Tax Contributions, or both, to be
contributed by a Highly Compensated Employee.
(b) The Plan Administrator may elect to contribute a Qualified Matching
Contribution in accordance with the provisions of Section 3.13.
(c) The Plan Administrator may forfeit, if forfeitable, or distribute, if
not forfeitable, Excess Aggregate Contributions in accordance with
Section 3.17.
(d) The Plan Administrator may elect to treat Qualified Nonelective
Contributions or Elective Deferrals, or both, as if they were Matching
Contributions in accordance with Sections 3.12 and 3.16, respectively,
subject to the requirements of Section 3.1(e).
(e) If the Employer has elected the Safe Harbor CODA in the Adoption
Agreement for a Plan Year, and if Employee After-Tax Contributions can
be made to the Plan in such Plan Year, the Plan Administrator may, in
its sole discretion, use any one or a combination of the following
methods to prevent or cure any ACP Test failure:
(i) The Plan Administrator may refuse to accept any or all prospective
Employee After-Tax Contributions to be contributed by a Highly
Compensated Employee.
(ii) The Plan Administrator may distribute Employee After-Tax Contributions
(and any income or loss allocable thereto) that are Excess Aggregate
Contributions.
3.11 Distribution of Excess Contributions to Cure ADP Test Failure.
(a) General Rule. Notwithstanding any other provision of this Plan, Excess
Contributions for a Plan Year, plus any income and minus any loss
allocable thereto, shall be distributed to Participants to whose
Accounts such Excess Contributions were allocated for the preceding
Plan Year no later than twelve months following the last day of such
preceding Plan Year. For Plan Years beginning on and after January 1,
1997, Excess Contributions are allocated to the Highly Compensated
Employees with the largest amounts of Elective Deferrals and amounts
treated as Elective Deferrals taken into account in calculating the
ADP Test for the year in which the excess arose, beginning with the
Highly Compensated Employee with the largest amount of such Elective
Deferrals and amounts treated as Elective Deferrals and continuing in
descending order until all Excess Contributions have been allocated.
For purposes of the preceding sentence, the "largest amount" is
determined after distribution of any Excess Elective Deferrals. If
such excess amounts are distributed more than 2 1/2months after the
last day of the Plan Year in which such excess amounts arose, a 10%
excise tax on such amounts will be imposed on the Employer.
108
For Plan Years beginning before January 1, 1997, Excess Contributions of a
Participant who is subject to the Family Member aggregation rules shall be
allocated among the Family Members of such Participant in proportion to the
Elective Deferrals (and amounts treated as Elective Deferrals) of each
Family Member that is combined to determine the combined ADP of such
Participant.
(b) Calculation of Income or Loss. The income or loss allocable to Excess
Contributions allocated to each Participant is equal to the amount of
income or loss allocable to the Participant's Elective Deferral
subaccount (and, if applicable, the Qualified Nonelective Contribution
subaccount or the Qualified Matching Contribution subaccount, or both)
for the Plan Year multiplied by a fraction, the numerator of which is
such Participant's Excess Contributions for the Plan Year and the
denominator of which is the sum of (i) the Participant's account
balance attributable to Elective Deferrals (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if any of
such contributions are included in the ADP Test) as of the beginning
of the Plan Year, and (ii) Elective Deferrals (and Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, if any such contributions are included in the ADP Test).
(c) Method of Distribution. Excess Contributions shall be distributed from
the Participant's Elective Deferral subaccount, Qualified Nonelective
Contribution subaccount (if applicable) or Qualified Matching
Contribution subaccount (if applicable), or any such subaccounts, in
the manner determined by the Plan Administrator.
(d) Forfeiture of Certain Matching Contributions. Any Matching
Contribution (whether or not vested) that was made on account of an
Excess Contribution that has been distributed in accordance with this
Section 3.11 shall be forfeited no later than twelve months after the
close of the Plan Year in which such Excess Contribution occurred.
(e) Annual Additions. Excess Contributions shall be treated as Annual
Additions under the Plan.
3.12 Qualified Nonelective Contributions to Prevent or Cure ADP and/or ACP Test
Failure. The Employer may, in its sole discretion, elect to contribute a
Qualified Nonelective Contribution in any amount to prevent or cure any ADP
Test and/or ACP Test failure for a Plan Year within twelve months after the
close of the Plan Year to which such contribution relates. Qualified
Nonelective Contributions for a Plan Year shall be allocated only to the
Accounts of Participants who are Non-Highly Compensated Employees in one of
the following methods selected by the Plan Administrator:
(a) In the ratio in which each such Non-Highly Compensated Employee's
Compensation as defined in the Adoption Agreement for the Plan Year
for which the Qualified Nonelective Contribution is being made bears
to the total such Compensation of all such Non-Highly Compensated
Employees for such Plan Year.
(b) Beginning with the Non-Highly Compensated Employee with the lowest
such Compensation for such Plan Year and continuing in ascending order
an amount no greater than the Maximum Permissible Amount, as defined
in Section 6.1(j), reduced by any Annual Additions credited to such
Non-Highly Compensated Employee under this Plan or any other plan of
the Employer as if such amount of the Qualified Nonelective
Contribution allocated to such Non-Highly Compensated Employee were
included as an Annual Addition for such Plan Year.
3.13 Qualified Matching Contribution to Prevent or Cure ADP and/or ACP Test
Failure. The Employer may, in its sole discretion, elect to contribute a
Qualified Matching Contribution in any amount to prevent or cure any ADP
Test and/or ACP Test failure for a Plan Year within twelve months after the
close of the Plan Year to which such contribution relates. Qualified
Matching Contributions for a Plan Year shall be allocated to the Accounts
of Participants who are Non-Highly Compensated Employees and who would be
eligible for an allocation of Matching Contributions in accordance with
Section 3.3(a) in accordance with one of the following methods:
(a) If the Employer makes Matching Contributions only on behalf of Participants
who make Elective Deferrals, in the ratio in which the Elective Deferrals
for such Plan Year of each Participant who is a Non-Highly Compensated
Employee and who is eligible for a Matching Contribution for such Plan Year
bear to the total Elective Deferrals of all such Non-Highly Compensated
Employees for such Plan Year.
109
(b) If the Employer makes Matching Contributions only on behalf of
Participants who make Employee After-Tax Contributions, in the ratio
in which the Employee After-Tax Contributions for such Plan Year of
each Participant who is a Non-Highly Compensated Employee and who is
eligible for a Matching Contribution for such Plan Year bear to the
total Employee After-Tax Contributions of all such Non-Highly
Compensated Employees for such Plan Year.
(c) If the Employer makes Matching Contributions on behalf of
Participants who make Elective Deferrals or Employee After-Tax
Contributions, or both, in the ratio in which the total Elective
Deferrals and Employee After-Tax Contributions for such Plan Year of
each Participant who is a Non-Highly Compensated Employee and is
eligible for a Matching Contribution for such Plan Year bear to the
total Elective Deferrals and Employee After-Tax Contributions of all
such Non-Highly Compensated Employees for such Plan Year.
3.14 Recharacterization of Excess Contributions to Cure ADP Test Failure. If the
Employer elects in the Adoption Agreement to allow Participants to make
Employee After-Tax Contributions to the Plan, the Plan Administrator, in
its sole discretion, may treat Excess Contributions allocated to a Highly
Compensated Employee as an amount distributed to him or her and then
contributed by him or her to the Plan as an Employee After-Tax
Contribution. Recharacterized Excess Contributions will remain
nonfor-feitable. Excess Contributions may not be recharacterized to the
extent such amounts in combination with other Employee After-Tax
Contributions made by that Employee would exceed any stated limit under the
Plan on Employee After-Tax Contributions.
Recharacterization must occur no later than 2 1/2months after the last day
of the Plan Year in which such Excess Contributions arose and is deemed to
occur no earlier than the date the last Highly Compensated Employee is
informed in writing of the amount recharacterized and the consequences
thereof. Recharacterized amounts will be taxable to the Participant for the
Participant's taxable year in which the Participant would have received
them in cash.
3.15 Safe Harbor Nonelective Contribution to Prevent ADP Test Failure. The
Employer may elect to make a Safe Harbor Nonelective Contribution during a
Plan Year as described in Notice 2000-3 and any superceding guidance.
3.16 Elective Deferrals to Cure ACP Test Failure. The Plan Administrator may, in
its sole discretion, elect to treat Elective Deferrals as if they were
Matching Contributions for a Plan Year as long as the ADP Test is met
before the Elective Deferrals are used in the ACP Test and continues to be
met following the exclusion of those Elective Deferrals that are used to
meet the ACP Test.
3.17 Forfeiture and/or Distribution of Excess Aggregate Contributions to Cure
ACP Test Failure. Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions for a Plan Year, plus any income and minus any loss
allocable thereto, may be forfeited, if forfeitable, or if not forfeitable,
distributed, no later than twelve months after the close of the Plan Year
to which such contributions relate, to Participants to whose Accounts such
Excess Aggregate Contributions were allocated for such Plan Year. For Plan
Years beginning on and after January 1, 1997, Excess Aggregate
Contributions are allocated to the Highly Compensated Employees with the
largest Contribution Percentage Amounts taken into account in calculating
the ACP Test for the Plan Year in which the excess arose, beginning with
the Highly Compensated Employee with the largest amount of such
Contribution Percentage Amounts and continuing in descending order until
all the Excess Aggregate Contributions have been allocated. For purposes of
the preceding sentence, the "largest amount" is determined after
distribution of any Excess Contributions. For Plan Years beginning before
January 1, 1997, Excess Aggregate Contributions of a Participant who is
subject to the Family Member aggregation rules shall be allocated among the
Family Members of such Participant in proportion to the Matching
Contributions (or amounts treated as Matching Contributions) of each Family
Member that is combined to determine the combined ACP of such Participant.
Excess Aggregate Contributions shall be forfeited, if forfeitable, or
distributed, if not forfeitable, in the manner determined by the Plan
Administrator from the Participant's Matching Contribution subaccount
and/or Qualified Matching Contribution subaccount (and/or, if applicable,
the Participant's Qualified Nonelective Contribution subaccount or Elective
Deferral subaccount, or both).
110
(b) Direct Rollover. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under
this Article X, for all distributions made on or after January 1,
1993, a distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an
eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
For purposes of this subsection, the following definitions shall
apply:
(i) An "eligible rollover distribution" is any distribution of
all or a 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 section 401(a)(9) of the
Code; any hardship distribution described in section
401(k)(2)(B)(i)(IV) of the Code received after December 31,
1998 (or, if elected by the Employer in the Optional
Supplement, December 31, 1999); and the portion of any
distribution that is not includible in gross income
(determined without regard to the exclusion for net
unrealized appreciation with respect to employer
securities).
(ii) An "eligible retirement plan" is an individual retirement
account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b)
of the Code, an annuity plan described in section 403(a) of
the Code, or a qualified trust described in section 401(a)
of the Code, that accepts the distributee's eligible
rollover distribution. However, in the case of an eligible
rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or
individual retirement annuity.
(iii) 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 retirement order, as described section 414(p) of
the Code, are distributees with regard to the interest of
the spouse or former spouse.
(iv) A "direct rollover" is a payment by the Plan to the
eligible retirement plan specified by the distributee.
10.8 Missing Participants and Beneficiaries. If the Plan Administrator is
unable to locate a Participant or Beneficiary entitled to vested benefits
hereunder after making reasonable efforts to do so, the Plan
Administrator may direct the Trustee to forfeit such vested benefits or
direct the Trustee to continue to hold such Participant's or
Beneficiary's Account. If the vested benefits are forfeited and if the
Participant or Beneficiary subsequently is found or makes a claim for the
benefits, the vested benefits will be reinstated in accordance with the
provisions of Section 7.6.
10.9 Minimum Required Distributions. If the Participant's interest is to be
distributed in other than a single sum before the required beginning
date, the following minimum distribution rules, which shall be determined
in accordance with proposed regulations under section 401(a)(9) of the
Code, shall apply on or after the required beginning date notwithstanding
any other provision of the Plan to the contrary:
(a) Definitions. For the purposes of this Section 10.9, the following
definitions shall apply:
(i) Applicable Life Expectancy. The Life Expectancy (or joint
and last survivor expectancy) is calculated using the
attained age of the Participant (or Designated Beneficiary)
as of the Participant's (or Designated Beneficiary's)
birthday in the applicable calendar year reduced by one for
each calendar year which has elapsed since the date Life
Expectancy was first calculated. If Life Expectancy is
being recalculated, the Applicable Life Expectancy shall be
the Life Expectancy as so recalculated. The applicable
calendar year shall be the first Distribution Calendar
Year, and if Life Expectancy is being recalculated such
succeeding calendar year(s). If annuity payments commence
in accordance with Section 10.9(c) before the Required
Beginning Date, the Applicable Calendar Year is the year
such payments commence. If distribution is in the form of
an immediate annuity purchased after the Participant's
death with the Participant's remaining interest, the
Applicable Calendar Year is the year of purchase.
111
(ii) Designated Beneficiary. The individual who is designated as
the Beneficiary under the Plan on the Required Beginning
Date in accordance with section 401(a)(9) of the Code and
the proposed regulations thereunder.
(iii) Distribution Calendar Year. A calendar year for which a
minimum distribution is required. For distributions
beginning before the Participant's death, the first
Distribution Calendar Year is the calendar year immediately
preceding the calendar year which contains the
Participant's Required Beginning Date. For distributions
beginning after the Participant's death, the first
Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to Section
10.6 above.
(iv) Life Expectancy. Life Expectancy and joint and last
survivor expectancy are computed by use of the expected
return multiples in Tables V and VI of section 1.72-9 of
the Income Tax Regulations. Unless otherwise elected by the
Participant (or spouse, in the case of distributions
described in Section 10.6(b)(ii)) by the time distributions
are required to begin, Life Expectancies shall be
recalculated annually. Such election shall be irrevocable
as to the Participant (or spouse) and shall apply to all
subsequent years. The Life Expectancy of a non-spouse
Beneficiary may not be recalculated.
(v) Participant's Benefit.
(A) The Account balance as of the last Valuation Date in
the calendar year immediately preceding the
Distribution Calendar Year (valuation calendar year)
increased by the amount of any contributions or
forfeitures allocated to the Account balance as of
dates in the calendar year after the Valuation Date
and decreased by distributions made in the valuation
calendar year after the Valuation Date.
(B) For purposes of subparagraph (A) above, if any
portion of the minimum distribution for the first
Distribution Calendar Year is made in the second
Distribution Calendar Year on or before the Required
Beginning Date, the amount of the minimum
distribution made in the second Distribution
Calendar Year shall be treated as if it had been
made in the immediately preceding Distribution
Calendar Year.
(vi) Required Beginning Date.
(A) General rule. For calendar years beginning after
December 31, 1996, the Required Beginning Date of a
Participant is the first day of April of the
calendar year following the later of the calendar
year in which the Participant attains age 70 1/2or
retires, except that benefit distributions to a Five
Percent Owner must commence by the first day of
April of the calendar year following the calendar
year in which the Five Percent Owner attains age 70
1/2.
(B) Transitional rules. Notwithstanding the foregoing:
(1) Any Participant attaining age 70 1/2in 1996
may elect by December 31, 1997, to defer
distributions until the calendar year
following the calendar year in which the
Participant retires.
(2) Any Participant attaining age 70 1/2in years
prior to 1997 may elect to stop distributions
and recommence distributions by the April 1
of the calendar year following the calendar
year in which the Participant retires. Unless
the Employer elects otherwise in the Adoption
Agreement, there is a new annuity starting
date upon recommencement of distributions.
(C) Once distributions have begun to a Five Percent
Owner under this subsection, they must continue to
be distributed even if the Participant ceases to be
a Five Percent Owner in a subsequent year.
(b) Individual Account.
(i) If a Participant's benefit is to be distributed over (1) a
period not extending beyond the life expectancy of the
Participant or the joint life and last survivor expectancy
of the Participant and the Participant's Designated
Beneficiary or (2) a period not extending beyond the life
112
qualification is denied, but only if the application for
the qualification is made by the time prescribed by law for
filing the Employer's return for the taxable year in which
the Plan is adopted, or such later date as the Secretary of
the Treasury may prescribe; and
(iii) Contributions to the Trust are specifically conditioned on
their deductibility under the Code and, to the extent a
deduction is disallowed for any such contribution, such
amount (to the extent so disallowed) shall be returned to
the Employer within one year after the date of the
disallowance of the deduction.
15.2 Nonguarantee of Employment. Nothing contained in this Plan shall be
construed as a contract of employment between the Employer and any
Employee, or as a right of any Employee to be continued in the employment
of the Employer, or as a limitation of the right of the Employer to
discharge any of its Employees, with or without cause.
15.3 Rights to Trust Assets. No Employee, Participant or Beneficiary shall
have any right to, or interest in, any assets of the trust upon
termination of employment or otherwise, except as provided under the
Plan. All payments of benefits under the Plan shall be made solely out of
the assets of the Trust.
15.4 Nonalienation of Benefits. Except as provided under Article VIII of the
Plan with respect to Plan loans, benefits payable under the Plan shall
not be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution or levy
of any kind, voluntary or involuntary; provided, however, that the Plan
Administrator shall not be precluded from complying with a qualified
domestic relations order described in section 414(p) of the Code, or any
domestic relations order entered before January 1, 1985. Any attempt to
anticipate, alienate, sell, transfer, assign, pledge, encumber, charge or
otherwise dispose of any right to benefits payable hereunder shall be
void. The Trust shall not in any manner be liable for, or subject to, the
debts, contracts, liabilities, engagements or torts of any person
entitled to benefits hereunder.
15.5 Gender. The use of the masculine pronoun shall extend to and include the
feminine gender, and the use of the feminine pronoun shall extend to and
include the masculine gender, wherever appropriate; the use of the
singular shall include the plural, and the use of the plural shall
include the singular, wherever appropriate.
15.6 Titles and Headings. The titles or headings of the respective Articles
and Sections are inserted merely for convenience and shall be given no
legal effect.
15.7 Failure of Employer's Plan to Qualify. If the Employer's Plan fails to
attain or retain qualification, such Plan will no longer participate in
this prototype plan and will be considered an individually designed plan.
15.8 Compliance with Laws, Rules and Regulations. If any of the provisions of
this Plan or of the Trust Agreement are at any time in any way
inconsistent with any laws of the United States of America or the laws of
any state if not preempted by ERISA, or any regulations of the Internal
Revenue Service, U.S. Department of Labor, or any other Federal or state
regulatory authority, in a manner that adversely affects the qualified
status of the Plan under section 401(a) of the Code or the tax-exempt
status of the Trust under section 501(a) of the Code, or may result in
any civil penalties under ERISA or any other law, then the Employer, the
Plan Administrator and the Trustee shall comply with the requirements of
such laws or regulations, rather than with the provisions of the Plan and
Trust which are inconsistent therewith. The Employer, the Plan
Administrator and the Trustee shall incur no liability for following such
laws, rules or regulations.
15.9 Military Service. Notwithstanding any provision of the 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 section 414(u) of the Code.
113
EGTRRA AMENDMENT TO THE
T. ROWE PRICE TRUST COMPANY
PROTOTYPE 401(k) RETIREMENT PLAN
PREAMBLE
1. Adoption and effective date of amendment. This amendment of the T.
Rowe Price Trust Company Prototype 401(k) Retirement Plan basic plan
document #03 ("plan") is adopted to reflect certain provisions of the
Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA").
This amendment is intended as good faith compliance with the
requirements of EGTRRA and is to be construed in accordance with
EGTRRA and guidance issued thereunder. Except as otherwise provided,
this amendment shall be effective as of the first day of the first
plan year beginning after December 31, 2001, but shall not apply to
taxable, plan or limitation years beginning after December 31, 2010.
2. Supersession of inconsistent provisions. This amendment shall
supersede the provisions of the plan to the extent those provisions
are inconsistent with the provisions of this amendment.
ARTICLE I - PLAN LOANS FOR OWNER-EMPLOYEES AND SHAREHOLDER EMPLOYEES
Effective for plan loans made after December 31, 2001, plan provisions
prohibiting loans to any owner-employee or shareholder-employee shall cease
to apply.
ARTICLE II - LIMITATIONS ON CONTRIBUTIONS
2.1. Effective date. This article shall be effective for limitation years
beginning after December 31, 2001.
2.2. Maximum annual addition. Except to the extent permitted under article
IX of this amendment and section 414(v) of the Code, if applicable,
the annual addition that may be contributed or allocated to a
participant's account under the plan for any limitation year shall not
exceed the lesser of:
(a) $40,000, as adjusted for increases in the cost-of-living under
section 415(d) of the Code, or
(b) 100 percent of the participant's compensation, within the meaning
of section 415(c)(3) of the Code, for the limitation year.
The compensation limit referred to in (b) shall not apply to any
contribution for medical benefits after separation from service
(within the meaning of section 401(h) or section 419A(f)(2) of the
Code) which is otherwise treated as an annual addition.
ARTICLE III - INCREASE IN COMPENSATION LIMIT
The annual compensation of each participant taken into account in
determining allocations for any plan year beginning after December 31,
2001, shall not exceed $200,000, as adjusted for cost-of-living increases
in accordance with section 401(a)(17)(B) of the Code. Annual compensation
means compensation during the plan year or such other consecutive 12-month
period over which compensation is otherwise determined under the plan (the
determination period). The cost-of-living adjustment in effect for a
calendar year applies to annual compensation for the determination period
that begins with or within such calendar year.
ARTICLE IV - MODIFICATION OF TOP-HEAVY RULES
4.1. Effective date. This article shall apply for purposes of determining
whether the plan is a top-heavy plan under section 416(g) of the Code
for plan years beginning after December 31, 2001, and whether the plan
satisfies the minimum benefits requirements of section 416(c) of the
Code for such years. This section amends Article XII of the plan.
4.2. Determination of top-heavy status.
(a) Key employee. Key employee means any employee or former employee
(including any deceased employee) who at any time during the plan
year that includes the determination date was an officer of the
employer having annual compensation greater than $130,000 (as
adjusted under section 416(i)(1) of the Code for plan years
beginning after December 31, 2002), a 5-percent owner of the
employer or a 1-percent owner of the employer having annual
compensation of more than $150,000.For this purpose, annual
compensation means compensation within the meaning of section
415(c)(3)
114