Exhibit 10.53
MFS RETIREMENT SERVICES, INC.
PROTOTYPE PAIRED DEFINED CONTRIBUTION PLANS
For
CORPORATIONS, ASSOCIATIONS AND SELF-EMPLOYED INDIVIDUALS
APRIL, 2002
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER.......................... 12
2 2 DESIGNATION OF ADMINISTRATIVE AUTHORITY.............................. 12
2.3 ALLOCATION AND DELEGATION OF RESPONSIBILITIES........................ 13
2.4 POWERS AND DUTIES OF THE ADMINISTRATOR............................... 13
2.5 RECORDS AND REPORTS.................................................. 14
2.6 APPOINTMENT OF ADVISERS.............................................. 14
2.7 INFORMATION FROM EMPLOYER............................................ 14
2.8 PAYMENT OF EXPENSES.................................................. 14
2.9 MAJORITY ACTIONS..................................................... 14
2.10 CLAIMS PROCEDURE..................................................... 14
2.11 CLAIMS REVIEW PROCEDURE.............................................. 15
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY............................................ 15
3.2 EFFECTIVE DATE OF PARTICIPATION...................................... 15
3.3 DETERMINATION OF ELIGIBILITY......................................... 15
3.4 TERMINATION OF ELIGIBILITY........................................... 16
3.5 OMISSION OF ELIGIBLE EMPLOYEE........................................ 16
3.6 INCLUSION OF INELIGIBLE EMPLOYEE..................................... 16
3.7 REHIRED EMPLOYEES.................................................... 16
3.8 ELECTION NOT TO PARTICIPATE.......................................... 17
3.9 CONTROL OF ENTITIES BY OWNER-EMPLOYEE................................ 17
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION...................... 17
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION........................... 17
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS................. 17
4.4 MAXIMUM ANNUAL ADDITIONS............................................. 22
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS............................ 25
4.6 ROLLOVERS............................................................ 26
4.7 PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLANS.......................... 27
4.8 VOLUNTARY EMPLOYEE CONTRIBUTIONS..................................... 27
4.9 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS........................... 28
4.10 DIRECTED INVESTMENT ACCOUNT.......................................... 28
4.11 INTEGRATION IN MORE THAN ONE PLAN.................................... 29
4.12 UNIFORMED SERVICES................................................... 29
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND.......................................... 30
5.2 METHOD OF VALUATION.................................................. 30
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT............................ 30
6.2 DETERMINATION OF BENEFITS UPON DEATH................................. 30
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY..................... 31
6.4 DETERMINATION OF BENEFITS UPON TERMINATION........................... 31
6.5 DISTRIBUTION OF BENEFITS............................................. 33
6.6 DISTRIBUTION OF BENEFITS UPON DEATH.................................. 37
6.7 TIME OF SEGREGATION OR DISTRIBUTION.................................. 39
6.8 DISTRIBUTION FOR MINOR BENEFICIARY................................... 39
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN....................... 40
6.10 IN-SERVICE DISTRIBUTION.............................................. 40
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP.................................... 40
6.12 SPECIAL RULE FOR NON-ANNUITY PLANS................................... 40
6.13 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION...................... 41
6.14 DIRECT ROLLOVERS..................................................... 41
6.15 TRANSFER OF ASSETS FROM A MONEY PURCHASE PLAN........................ 42
ARTICLE VII
TRUSTEE AND CUSTODIAN
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE................................ 42
7.2 POWERS AND DUTIES OF DISCRETIONARY TRUSTEE........................... 43
7.3 DIRECTED TRUSTEE..................................................... 45
7.4 POWERS AND DUTIES OF CUSTODIAN....................................... 47
7.5 LIFE INSURANCE....................................................... 47
7.6 LOANS TO PARTICIPANTS................................................ 48
7.7 MAJORITY ACTIONS..................................................... 49
7.8 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES........................ 49
7.9 ANNUAL REPORT OF THE TRUSTEE......................................... 50
7.10 AUDIT................................................................ 50
7.11 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE....................... 50
7.12 TRANSFER OF INTEREST................................................. 51
7.13 TRUSTEE INDEMNIFICATION.............................................. 51
7.14 EMPLOYER SECURITIES AND REAL PROPERTY................................ 51
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT............................................................ 53
8.2 TERMINATION.......................................................... 53
8.3 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS.......................... 54
ARTICLE IX
TOP HEAVY PROVISIONS
9.1 TOP HEAVY PLAN REQUIREMENTS.......................................... 54
9.2 DETERMINATION OF TOP HEAVY STATUS.................................... 54
ARTICLE X
MISCELLANEOUS
10.1 EMPLOYER ADOPTIONS................................................... 55
10.2 PARTICIPANT'S RIGHTS................................................. 56
10.3 ALIENATION........................................................... 56
10.4 CONSTRUCTION OF PLAN................................................. 56
10.5 GENDER AND NUMBER.................................................... 56
10.6 LEGAL ACTION......................................................... 56
10.7 PROHIBITION AGAINST DIVERSION OF FUNDS............................... 56
10.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE........................... 57
10.9 INSURER'S PROTECTIVE CLAUSE.......................................... 57
10.10 RECEIPT AND RELEASE FOR PAYMENTS..................................... 57
10.11 ACTION BY THE EMPLOYER............................................... 57
10.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY................... 57
10.13 HEADINGS............................................................. 58
10.14 APPROVAL BY INTERNAL REVENUE SERVICE................................. 58
10.15 UNIFORMITY........................................................... 58
10.16 PAYMENT OF BENEFITS.................................................. 58
ARTICLE XI
PARTICIPATING EMPLOYERS
11.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER.......................... 58
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS.............................. 58
11.3 DESIGNATION OF AGENT................................................. 58
11.4 EMPLOYEE TRANSFERS................................................... 58
11.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES................ 59
11.6 AMENDMENT............................................................ 59
11.7 DISCONTINUANCE OF PARTICIPATION...................................... 59
11.8 ADMINISTRATOR'S AUTHORITY............................................ 59
11.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE.................... 59
ARTICLE XII
CASH OR DEFERRED PROVISIONS
12.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION...................... 60
12.2 PARTICIPANT'S SALARY REDUCTION ELECTION.............................. 60
12.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS................. 62
12.4 ACTUAL DEFERRAL PERCENTAGE TESTS..................................... 64
12.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS....................... 65
12.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS................................. 68
12.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS................... 70
12.8 SAFE HARBOR PROVISIONS............................................... 72
12.9 ADVANCE DISTRIBUTION FOR HARDSHIP.................................... 74
ARTICLE XIII
SIMPLE 401(K) PROVISIONS
13.1 DEFINITIONS.......................................................... 74
13.2 CONTRIBUTIONS........................................................ 75
13.3 ELECTION AND NOTICE REQUIREMENTS..................................... 75
13.4 VESTING REQUIREMENTS................................................. 76
13.5 TOP HEAVY RULES...................................................... 76
13.6 NONDISCRIMINATION TESTS.............................................. 76
ARTICLE I
DEFINITIONS
As used in this Plan, the following words and phrases shall have the
meanings set forth herein unless a different meaning is clearly required by the
context:
1.1 "ACP" means the Actual Contribution Percentage determined
pursuant to Section 12.6(e).
1.2 "ACT" means the Employee Retirement Income Security Act of
1974, as it may be amended from time to time.
1.3 "ADP" means the Actual Deferral Percentage determined pursuant
to Section 12.4(e).
1.4 "ADMINISTRATOR" means the Employer unless another person or
entity has been designated by the Employer pursuant to Section 2.2 to administer
the Plan on behalf of the Employer.
1.5 "ADOPTION AGREEMENT" means the separate agreement which is
executed by the Employer and sets forth the elective provisions of this Plan and
Trust as specified by the Employer.
1.6 "AFFILIATED EMPLOYER" means any corporation which is a member
of a controlled group of corporations (as defined in Code Section 414(b)) which
includes the Employer; any trade or business (whether or not incorporated) which
is under common control (as defined in Code Section 414(c)) with the Employer;
any organization (whether or not incorporated) which is a member of an
affiliated service group (as defined in Code Section 414(m)) which includes the
Employer; and any other entity required to be aggregated with the Employer
pursuant to Treasury Regulations under Code Section 414(o).
1.7 "ANNIVERSARY DATE" means the last day of the Plan Year.
1.8 "ANNUITY STARTING DATE" means, with respect to any
Participant, the first day of the first period for which an amount is paid as an
annuity, or, in the case of a benefit not payable in the form of an annuity, the
first day on which all events have occurred which entitle the Participant to
such benefit.
1.9 "BENEFICIARY" means the person (or entity) to whom all or a
portion of a deceased Participant's interest in the Plan is payable, subject to
the restrictions of Sections 6.2 and 6.6.
1.10 "CODE" means the Internal Revenue Code of 1986, as amended.
1.11 "COMPENSATION" with respect to any Participant means one of
the following as elected or stated in the Adoption Agreement:
(a) Information required to be reported under Code
Sections 6041, 6051 and 6052 (Wages, tips and other compensation as
reported on Form W-2). Compensation means wages, within the meaning of
Code Section 3401(a), and all other payments of compensation to an
Employee by the Employer (in the course of the Employer's trade or
business) for which the Employer is required to furnish the Employee a
written statement under Code Sections 6041(d), 6051(a)(3) and 6052.
Compensation must be determined without regard to any rules under Code
Section 3401(a) that limit the remuneration included in wages based on
the nature or location of the employment or the services performed
(such as the exception for agricultural labor in Code Section
3401(a)(2)).
(b) Code Section 3401(a) Wages. Compensation means wages
within the meaning of Code Section 3401(a) for the purposes of income
tax withholding at the source but determined without regard to any
rules that limit the remuneration included in wages based on the nature
or location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2)).
(c) 415 Safe-Harbor Compensation. Compensation means
wages, salaries, and fees for professional services and other amounts
received (without regard to whether or not an amount is paid in cash)
for personal services actually rendered in the course of employment
with the Employer maintaining the Plan to the extent that the amounts
are includible in gross income (including, but not limited to,
commissions paid salespersons, 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 Section 1.62-2(c)), and excluding the following:
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(1) Employer contributions to a plan of deferred
compensation which are not includible in the Employee's gross
income for the taxable year in which contributed, or Employer
contributions under a simplified employee pension plan to the
extent such contributions are excludable from the Employee's
gross income, or any distributions from a plan of deferred
compensation;
(2) 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;
(3) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option;
and
(4) Other amounts which receive special tax benefits, or
contributions made by the Employer (whether or not under a
salary reduction agreement) towards the purchase of an annuity
contract described in Code Section 403(b) (whether or not the
contributions are actually excludable from the gross income of
the Employee).
However, Compensation for any Self-Employed Individual shall
be equal to Earned Income.
Compensation shall include only that Compensation which is actually paid to the
Participant during the determination period. Notwithstanding the preceding
sentence, Compensation for a Participant in a defined contribution plan who is
permanently and totally disabled (as defined in Code Section 22(e)(3)) is the
Compensation such Participant would have received for the Limitation Year if the
Participant had been paid at the rate of compensation paid immediately before
becoming permanently and totally disabled. For Limitation Years beginning before
January 1, 1997, such imputed compensation for a disabled Participant may be
taken into account only if the Participant is not a Highly Compensated Employee
and contributions made on behalf of such Participant are nonforfeitable when
made. Except as otherwise provided in this Plan, the determination period shall
be the period elected by the Employer in the Adoption Agreement. If the Employer
makes no election, the determination period shall be the Plan Year. Furthermore,
unless otherwise elected in the Adoption Agreement, Compensation for a
determination period shall only be recognized for an Employee's period of
participation in the component of the Plan for which Compensation is being used.
Notwithstanding the above, if elected or stated in the
Adoption Agreement, Compensation shall include all of the following types of
elective contributions and all of the following types of deferred compensation:
(a) Elective contributions that are made by the Employer
on behalf of a Participant that are not includible in gross income
under Code Sections 125, 132(f)(4), 402(e)(3), 402(h)(1)(B) and 403(b);
(b) Compensation deferred under an eligible deferred
compensation plan within the meaning of Code Section 457(b); and
(c) Employee contributions (under governmental plans)
described in Code Section 414(h)(2) that are picked up by the employing
unit and thus are treated as Employer contributions.
Compensation in excess of $150,000 (or such other amount as
adjusted in accordance with the Code) shall be disregarded for all purposes
other than for purposes of salary deferral elections. Such amount shall be
adjusted by the Commissioner for increases in the cost-of-living in accordance
with Code Section 401(a)(17)(B). The cost-of-living adjustment in effect for a
calendar year applies to any determination period beginning in such calendar
year. If a determination period consists of fewer than twelve (12) months, the
$150,000 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 twelve (12).
Notwithstanding the foregoing, except as otherwise elected in
an Adoption Agreement, the family member aggregation rules of Code Sections
401(a)(17) and 414(q)(6) as in effect prior to the enactment of the Small
Business Job Protection Act of 1996 shall not apply to this Plan effective with
respect to Plan Years beginning after December 31, 1996.
If, in the Adoption Agreement, the Employer elects to exclude
a class of Employees from the Plan, then Compensation for any Employee who
becomes eligible or ceases to be eligible to participate during a determination
period shall only include Compensation while the Employee is an Eligible
Employee.
If, in connection with the adoption of any amendment, the
definition of Compensation has been modified, then, except as otherwise provided
herein, for Plan Years prior to the Plan Year which includes the adoption date
of such amendment, Compensation means compensation determined pursuant to the
terms of the Plan then in effect.
1.12 "CONTRACT" OR "POLICY" means any life insurance policy,
retirement income policy, or annuity contract (group or individual) issued by
the Insurer. In the event of any conflict between the terms of this Plan and the
terms of any contract purchased hereunder, the Plan provisions shall control.
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1.13 "DESIGNATED INVESTMENT ALTERNATIVE" means, as defined under 29
CFR 2550.404c-1, a specific investment identified by name by the Employer (or
such other Fiduciary who has been given the authority to select investment
options) as an available investment under the Plan to which Plan assets may be
invested by the Trustee pursuant to the investment direction of a Participant.
1.14 "DIRECTED INVESTMENT OPTION" means a Designated Investment
Alternative and any other investment permitted by the Plan and the Participant
Direction Procedures to which Plan assets may be invested pursuant to the
investment direction of a Participant.
1.15 "EARLY RETIREMENT DATE" means the date specified in the
Adoption Agreement on which a Participant or Former Participant satisfies the
requirements specified in the Adoption Agreement (Early Retirement Age). If
elected in the Adoption Agreement, a Participant shall become fully Vested upon
satisfying such requirements if the Participant is still employed at the Early
Retirement Age.
A Former Participant who separates from service after
satisfying any service requirement but before satisfying the age requirement for
Early Retirement Age and who thereafter reaches the age requirement contained
herein shall be entitled to receive benefits under this Plan (other than any
accelerated vesting and allocations of Employer's contributions) as though the
requirements for Early Retirement Age had been satisfied.
1.16 "EARNED INCOME" means the net earnings from self-employment in
the trade or business with respect to which the Plan is established, for which
the personal services of the individual are a material income-producing factor.
Net earnings will be determined without regard to items not included in gross
income and the deductions allocable to such items. Net earnings are reduced by
contributions by the Employer to a qualified Plan to the extent deductible under
Code Section 404. In addition, net earnings shall be determined with regard to
the deduction allowed to the taxpayer by Code Section 164(f), for taxable years
beginning after December 31, 1989.
1.16A "ELAPSED TIME METHOD" means the service crediting method under
which an Employee will receive credit for the aggregate of all time period(s)
commencing with the Employee's first day of employment or reemployment and
ending on the date a Break in Service begins. The first day of employment or
reemployment is the first day the employee performs an Hour of Service. An
Employee will also receive credit for any period of severance of less than 12
consecutive months. Fractional periods of a year will be expressed in terms of
days.
1.17 "ELECTIVE DEFERRALS" means the Employer's contributions to the
Plan that are made pursuant to a Participant's deferral election pursuant to
Section 12.2, excluding any such amounts distributed as excess annual additions
pursuant to Section 4.5. Elective Deferrals shall be subject to the requirements
of Sections 12.2(b) and 12.2(c) and shall, except as otherwise provided herein,
be required to satisfy the nondiscrimination requirements of Treasury Regulation
Section 1.401(k)-1(b)(2), the provisions of which are specifically incorporated
herein by reference.
1.18 "ELIGIBLE EMPLOYEE" means any Eligible Employee as elected in
the Adoption Agreement. However, with respect to a non-standardized Adoption
Agreement, Employees classified by the Employer as independent contractors who
are subsequently determined by the IRS to be Employees shall not be Eligible
Employees. Furthermore, with respect to a standardized Adoption Agreement, the
Employees of an entity which becomes an Affiliated Employer as the result of a
"Section 410(b)(6)(C) transaction" may only be treated as Eligible Employees
after the earlier of the date the entity adopts the Plan as a Participating
Employer or the first day of the second Plan Year beginning after the date of
such transaction (after the expiration of the transition period for certain
dispositions or acquisitions set forth in Code Section 410(b)(6)(C)). With
respect to a non-standardized Adoption Agreement, the Employees of an Affiliated
Employer may not be treated as Eligible Employees until the date the entity
adopts the Plan as a Participating Employer.
If, in the Adoption Agreement, the Employer elects to exclude
union employees, then Employees whose employment is governed by a collective
bargaining agreement between the Employer and "employee representatives" under
which retirement benefits were the subject of good faith bargaining shall not be
eligible to participate in this Plan. For this purpose, the term "employee
representatives" does not include any organization more than half of whose
members are employees who are owners, officers, or executives of the Employer.
If, in the Adoption Agreement, the Employer elects to exclude
non-resident aliens, then Employees who are non-resident aliens (within the
meaning of Code Section 7701(b)(1)(B)) who received no earned income (within the
meaning of Code Section 911(d)(2)) from the Employer which constitutes income
from sources within the United States (within the meaning of Code Section
861(a)(3)) shall not be eligible to participate in this Plan.
1.19 "EMPLOYEE" means any person who is employed by the Employer,
and excludes any person who is employed as an independent contractor. The term
"Employee" shall also include any person who is an employee of an Affiliated
Employer and any Leased Employees to the extent required by Code Section 414(n)
or (o).
1.20 "EMPLOYER" means the entity specified in the Adoption
Agreement, any successor which shall maintain this Plan and any predecessor
which has maintained this Plan. In addition, unless the context means otherwise,
the term "Employer" shall include any Participating Employer (as defined in
Section 11.1) which shall adopt this Plan.
1.21 "EXCESS AGGREGATE CONTRIBUTIONS" means, with respect to any
Plan Year, the excess of:
3
(a) The aggregate Contribution Percentage Amounts (as defined in
Section 12.6(e)) actually made on behalf of Highly Compensated
Participants for such Plan Year and taken into account in computing the
numerator of the ACP, over
(b) The maximum Contribution Percentage Amounts permitted by the
ACP test in Section 12.6 (determined by reducing contributions made on
behalf of Highly Compensated Participants in order of their
Contribution Percentages, beginning with the highest of such
percentages).
Such determination shall be made after first taking into account corrections of
any Excess Deferrals pursuant to Section 12.2 and then taking into account
adjustments of any Excess Contributions pursuant to Section 12.5.
1.22 "EXCESS COMPENSATION" means, with respect to a Plan that is
integrated with Social Security (permitted disparity), a Participant's
Compensation which is in excess of the amount elected in the Adoption Agreement.
However, if Compensation is based on less than a twelve (12)
month period, Excess Compensation shall be reduced by a fraction, the numerator
of which is the number of full months in the short period and the denominator of
which is twelve (12).
1.23 "EXCESS CONTRIBUTIONS" means, with respect to any Plan Year,
the excess of:
(a) The aggregate amount of Employer contributions actually made
on behalf of Highly Compensated Participants for such Plan Year and
taken into account in computing the numerator of the ADP, over
(b) The maximum amount of such contributions permitted by the ADP
test in Section 12.4 (determined by reducing contributions made on
behalf of Highly Compensated Participants in order of the actual
deferral ratios, beginning with the highest of such ratios).
In determining the amount of Excess Contributions to be distributed and/or
recharacterized with respect to an affected Highly Compensated Participant as
determined herein, such amount shall be reduced by any Excess Deferrals
previously distributed to such affected Highly Compensated Participant for the
Participant's taxable year ending with or within such Plan Year.
1.24 "EXCESS DEFERRALS" means, with respect to any taxable year of
a Participant, those elective deferrals (within the meaning of Code Section
402(g)) that are includible in the Participant's gross income under Code Section
402(g) to the extent such Participant's elective deferrals for the taxable year
exceed the dollar limitation under such Code Section. Excess Deferrals shall be
treated as an Annual Addition pursuant to Section 4.4 when contributed to the
Plan unless distributed to the affected Participant not later than the first
April 15th following the close of the Participant's taxable year in which the
Excess Deferral was made. Additionally, for purposes of Sections 4.3(f) and 9.2,
Excess Deferrals shall continue to be treated as Employer contributions even if
distributed pursuant to Section 12.2(e). However, Excess Deferrals of Non-Highly
Compensated Participants are not taken into account for purposes of Section
12.4.
1.25 "FIDUCIARY" means any person who (a) exercises any
discretionary authority or discretionary control respecting management of the
Plan or exercises any authority or control respecting management or disposition
of its assets, (b) renders investment advice for a fee or other compensation,
direct or indirect, with respect to any monies or other property of the Plan or
has any authority or responsibility to do so, or (c) has any discretionary
authority or discretionary responsibility in the administration of the Plan.
1.26 "FISCAL YEAR" means the Employer's accounting year as
specified in the Adoption Agreement.
1.27 "FORFEITURE" means, with respect to a Former Participant who
has severed employment, that portion of the Participant's Account that is not
Vested. Unless otherwise elected in the Adoption Agreement, Forfeitures occur
pursuant to (a) below.
A Forfeiture will occur on the earlier of:
(1) The last day of the Plan Year in which a Former
Participant who has severed employment with the Employer
incurs five (5) consecutive 1-Year Breaks in Service, or
(2) The distribution of the entire Vested portion of the
Participant's Account of a Former Participant who has severed
employment with the Employer. For purposes of this provision,
if the Former Participant has a Vested benefit of zero, then
such Former Participant shall be deemed to have received a
distribution of such Vested benefit as of the year in which
the severance of employment occurs.
Regardless of the preceding provisions, if a Former Participant is eligible to
share in the allocation of Employer contributions or Forfeitures in the year in
which the Forfeiture would otherwise occur, then the Forfeiture will not occur
until the end of the first Plan Year for which the Former Participant is not
eligible to share in the allocation of Employer contributions or Forfeitures.
Furthermore, the term Forfeiture shall also include amounts deemed to be
Forfeitures pursuant to any other provision of this Plan.
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1.28 "FORMER PARTICIPANT" means a person who has been a
Participant, but who has ceased to be a Participant for any reason.
1.29 "414(S) COMPENSATION" means a definition of compensation that
satisfies the nondiscrimination requirements of Code Section 414(s) and the
Treasury Regulations thereunder and, if applicable, as elected in the Adoption
Agreement. An Employer may limit the period taken into account to that part of
the Plan Year or calendar year in which an Employee was a Participant in the
component of the Plan being tested. The period used to determine 414(s)
Compensation must be applied uniformly to all Participants for the Plan Year. To
the extent elected in the Adoption Agreement, 414(s) Compensation shall not
include elective amounts that are not includable in gross income of the
Participant under Code Section 132(f)(4) for Plan Years beginning on or after
January 1, 2001, or the first day of the first Plan Year (no earlier than
January 1, 1998) for which the Plan was operated to exclude amounts.
1.30 "415 COMPENSATION" means, with respect to any Participant,
such Participant's (a) Wages, tips and other compensation on Form W-2, (b)
Section 3401(a) wages or (c) 415 safe-harbor compensation as elected or stated
in the Adoption Agreement for purposes of Compensation. 415 Compensation shall
be based on the full Limitation Year regardless of when participation in the
Plan commences. Furthermore, regardless of any election made in the Adoption
Agreement, with respect to Limitation Years beginning after December 31, 1997,
415 Compensation shall include any elective deferral (as defined in Code Section
402(g)(3)) and any amount which is contributed or deferred by the Employer at
the election of the Participant and which is not includible in the gross income
of the Participant by reason of Code Section 125 or 457. For Limitation Years
beginning prior to January 1, 1998, 415 Compensation shall exclude such amounts
and for Limitation Years beginning on or after January 1, 2001 or the first day
of the first Limitation Year after December 31, 1997, for which the Plan was
operated in accordance with the amendment of Section 415(c)(3) pursuant to the
Community Renewal Tax Relief Act of 2000 (the "CRA amendment of Section
415(c)(3)"). 415 Compensation shall include any amount not includible in gross
income of the Participant by reason of Code Section 132(f)(4).
Except as otherwise provided herein, if, in connection with
the adoption of any amendment, the definition of 415 Compensation has been
modified, then for Plan Years prior to the Plan Year which includes the adoption
date of such amendment, 415 Compensation means compensation determined pursuant
to the terms of the Plan then in effect.
1.31 "HIGHLY COMPENSATED EMPLOYEE" means, effective for Plan Years
beginning after December 31, 1996, an Employee described in Code Section 414(q)
and the Treasury Regulations thereunder, and generally means any Employee who:
(a) was a five percent (5%) owner as defined in Section 1.37(c) at any
time during the determination year or the look-back year; or
(b) for the look-back year had 415 Compensation from the Employer in
excess of $80,000 and, if elected in the Adoption Agreement, was in the
Top-Paid Group for the look-back year. The $80,000 amount is adjusted
at the same time and in the same manner as under Code Section 415(d),
except that the base period is the calendar quarter ending September
30, 1996.
The "determination year" means the Plan Year for which testing
is being performed and the look-back year means the immediately preceding twelve
(12) month period. However, if the calendar year data election is made in the
Adoption Agreement, for purposes of (b) above, the look-back year shall be the
calendar year beginning within the twelve (12) month period immediately
preceding the determination year. Notwithstanding the preceding sentence, if the
calendar year data election is effective with respect to a Plan Year beginning
in 1997, then for such Plan Year the look-back year shall be the calendar year
ending with or within the Plan Year for which testing is being performed, and
the determination year shall be the period of time, if any, which extends beyond
the look-back year and ends on the last day of the Plan Year for which testing
is being performed.
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 Treasury Regulation Section
1.414(q)-1T, A-4 and IRS Notice 97-45 (or any superseding guidance).
In determining whether an employee is a Highly Compensated
Employee for a Plan Year beginning in 1997, the amendments to Code Section
414(q) stated above are treated as having been in effect for years beginning in
1996.
For purposes of this Section, for Plan Years beginning prior
to January 1, 1998, the determination of 415 Compensation shall be made by
including amounts that would otherwise be excluded from a Participant's gross
income by reason of the application of Code Sections 125, 402(e)(3),
402(h)(1)(B) and, in the case of Employer contributions made pursuant to a
salary reduction agreement, Code Section 403(b). For purposes of this Section,
for limitation years beginning on or after January 2, 2001, or the first day of
the first limitation year for which the Plan was operated in accordance with the
CRA Amendment of Section 415(c)(3), but in no case earlier than the first day of
the first limitation year beginning on or after January 1, 1998, the
compensation paid or made available during such limitation year shall include
elective amounts that are not includable in the gross income of the employee by
reason of Section 132(f)(4).
In determining who is a Highly Compensated Employee, Employees
who are non-resident aliens and who received no earned income (within the
meaning of Code Section 911(d)) from the Employer constituting United States
source income within the meaning of Code Section 861(a)(3) shall not be treated
as Employees. Additionally, all Affiliated Employers shall be taken into account
as a single employer and Leased Employees within the meaning of Code Sections
414(n)(2) and 414(o)(2) shall be considered Employees
5
unless such Leased Employees are covered by a plan described in Code Section
414(n)(5) and are not covered in any qualified plan maintained by the Employer.
The exclusion of Leased Employees for this purpose shall be applied on a uniform
and consistent basis for all of the Employer's retirement plans.
1.32 "HIGHLY COMPENSATED PARTICIPANT" means any Highly Compensated
Employee who is eligible to participate in the component of the Plan being
tested.
1.33 "HOUR OF SERVICE" means (1) each hour for which an Employee is
directly or indirectly compensated or entitled to compensation by the Employer
for the performance of duties during the applicable computation period (these
hours will be credited to the Employee for the computation period in which the
duties are performed); (2) each hour for which an Employee is directly or
indirectly compensated or entitled to compensation by the Employer (irrespective
of whether the employment relationship has terminated) for reasons other than
performance of duties (such as vacation, holidays, sickness, jury duty,
disability, lay-off, military duty or leave of absence) during the applicable
computation period (these hours will be calculated and credited pursuant to
Department of Labor Regulation Section 2530.200b-2 which is incorporated herein
by reference); (3) each hour for which back pay is awarded or agreed to by the
Employer without regard to mitigation of damages (these hours will be credited
to the Employee for the computation period or periods to which the award or
agreement pertains rather than the computation period in which the award,
agreement or payment is made). The same Hours of Service shall not be credited
both under (1) or (2), as the case may be, and under (3).
Notwithstanding (2) above, (i) no more than 501 Hours of
Service are required to be credited to an Employee on account of any single
continuous period during which the Employee performs no duties (whether or not
such period occurs in a single computation period); (ii) an hour for which an
Employee is directly or indirectly paid, or entitled to payment, on account of a
period during which no duties are performed is not required to be credited to
the Employee if such payment is made or due under a plan maintained solely for
the purpose of complying with applicable workers' compensation, or unemployment
compensation or disability insurance laws; and (iii) Hours of Service are not
required to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee. Furthermore, for
purposes of (2) above, a payment shall be deemed to be made by or due from the
Employer regardless of whether such payment is made by or due from the Employer
directly, or indirectly through, among others, a trust fund, or insurer, to
which the Employer contributes or pays premiums and regardless of whether
contributions made or due to the trust fund, insurer, or other entity are for
the benefit of particular Employees or are on behalf of a group of Employees in
the aggregate.
Hours of Service will be credited for employment with all
Affiliated Employers and for any individual considered to be a Leased Employee
pursuant to Code Section 414(n) or 414(o) and the Treasury Regulations
thereunder. Furthermore, the provisions of Department of Labor Regulations
Section 2530.200b-2(b) and (c) are incorporated herein by reference.
Hours of Service will be determined on the basis of the method
elected in the Adoption Agreement.
1.34 "INSURER" means any legal reserve insurance company which
shall issue one or more Contracts or Policies under the Plan.
1.35 "INVESTMENT MANAGER" means an entity that (a) has the power to
manage, acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person, firm, or
corporation registered as an investment adviser under the Investment Advisers
Act of 1940, a bank, or an insurance company.
1.35A "IRS" means the United States Internal Revenue Service.
1.36 "JOINT AND SURVIVOR ANNUITY" means an annuity for the life of
a Participant with a survivor annuity for the life of the Participant's spouse
which is not less than fifty percent (50%), nor more than one-hundred percent
(100%) of the amount of the annuity payable during the joint lives of the
Participant and the Participant's spouse which can be purchased with the
Participant's Vested interest in the Plan reduced by any outstanding loan
balances pursuant to Section 7.6.
1.37 "KEY EMPLOYEE" means an Employee as defined in Code Section
416(i) and the Treasury Regulations thereunder. Generally, any Employee or
former Employee (as well as each of such Employee's or former Employee's
Beneficiaries) is considered a Key Employee if, the individual at any time
during the Plan Year that contains the Determination Date or any of the
preceding four (4) Plan Years, has been included in one of the following
categories:
(a) an officer of the Employer (as that term is defined within the
meaning of the Treasury Regulations under Code Section 416) having
annual 415 Compensation greater than fifty percent (50%) of the amount
in effect under Code Section 415(b)(1)(A) for any such Plan Year;
(b) one of the ten Employees having annual 415 Compensation from
the Employer for a Plan Year greater than the dollar limitation in
effect under Code Section 415(c)(1)(A) for the calendar year in which
such Plan Year ends and owning (or considered as owning within the
meaning of Code Section 318) both more than one-half percent (1/2%)
interest and the largest interests in the Employer;
6
(c) a "five percent (5%) owner" of the Employer. Five percent (5%)
owner means any person who owns (or is considered as owning within the
meaning of Code Section 318) more than five percent (5%) of the value
of the outstanding stock of the Employer or stock possessing more than
five percent (5%) of the total combined voting power of all stock of
the Employer or, in the case of an unincorporated business, any person
who owns more than five percent (5%) of the capital or profits interest
in the Employer; and
(d) a "one percent (1%) owner" of the Employer having an annual
415 Compensation from the Employer of more than $150,000. One percent
(1%) owner means any person who owns (or is considered as owning within
the meaning of Code Section 318) more than one percent (1%) of the
value of the outstanding stock of the Employer or stock possessing more
than one percent (1%) of the total combined voting power of all stock
of the Employer or, in the case of an unincorporated business, any
person who owns more than one percent (1%) of the capital or profits
interest in the Employer.
In determining percentage ownership hereunder, employers that would otherwise be
aggregated under Code Sections 414(b), (c), (m) and (o) shall be treated as
separate employers. 011230 In determining whether an individual has 415
Compensation of more than $150,000, 415 Compensation from each employer required
to be aggregated under Code Sections 414(b), (c), (m) and (o) shall be taken
into account. Furthermore, for purposes of this Section, for Plan Years
beginning prior to January 1, 1998, the determination of 415 Compensation shall
be made by including amounts that would otherwise be excluded from a
Participant's gross income by reason of the application of Code Sections 125,
402(e)(3), 402(h)(1)(B) and, in the case of Employer contributions made pursuant
to a salary reduction agreement, Code Section 403(b). For Limitation Years
beginning on and after the earlier of January 1, 2001 or the first day of the
first Limitation Year for which the plan was operated in accordance with the CRA
amendment of Section 415(c)(3), but in no case earlier than the first day of the
first Limitation Year beginning on or after January 1, 1998, for purposes of
this Section 415 Compensation paid or made available during such Limitation
Years shall include elective amounts that are not includable in the gross income
of the Employee by reason of Section 132(f)(4).
1.38 "LATE RETIREMENT DATE" means the date of, or the first day of
the month or the Anniversary Date coinciding with or next following, whichever
corresponds to the election in the Adoption Agreement for the Normal Retirement
Date, a Participant's actual retirement after having reached the Normal
Retirement Date.
1.39 "LEASED EMPLOYEE" means, effective with respect to Plan Years
beginning on or after January 1, 1997, any person (other than an Employee of the
recipient Employer) who, pursuant to an agreement between the recipient Employer
and any other person or entity ("leasing organization"), has performed services
for the recipient (or for the recipient and related persons determined in
accordance with Code Section 414(n)(6)) on a substantially full time basis for a
period of at least one year, and such services are performed under primary
direction or control by the recipient Employer. Contributions or benefits
provided a Leased Employee by the leasing organization which are attributable to
services performed for the recipient Employer shall be treated as provided by
the recipient Employer. Furthermore, Compensation for a Leased Employee shall
only include Compensation from the leasing organization that is attributable to
services performed for the recipient Employer.
A Leased Employee shall not be considered an employee of the
recipient Employer if: (a) such employee is covered by a money purchase pension
plan providing: (1) a nonintegrated employer contribution rate of at least 10
percent of compensation, as defined in Code Section 415(c)(3), but for Plan
Years beginning prior to January 1, 1998, including amounts contributed pursuant
to a salary reduction agreement which are excludable from the employee's gross
income under Code Sections 125, 402(e)(3), 402(h)(1)(B), or 403(b), (2)
immediate participation, and (3) full and immediate vesting; and (b) leased
employees do not constitute more than 20 percent of the recipient Employer's
nonhighly compensated workforce.
1.40 "LIMITATION YEAR" means the determination period used to
determine Compensation. However, the Employer may elect a different Limitation
Year in the Adoption Agreement or by adopting a written resolution to such
effect. All qualified plans maintained by the Employer must use the same
Limitation Year. Furthermore, unless there is change to a new Limitation Year,
the Limitation Year will be a twelve (12) consecutive month period. In the case
of an initial Limitation Year, the Limitation Year will be the twelve (12)
consecutive month period ending on the last day of the period specified in the
Adoption Agreement (or written resolution). If the Limitation Year is amended to
a different twelve (12) consecutive month period, the new Limitation Year must
begin on a date within the Limitation Year in which the amendment is made.
1.41 "NET PROFIT" means, with respect to any Fiscal Year, the
Employer's net income or profit for such Fiscal Year determined upon the basis
of the Employer's books of account in accordance with generally accepted
accounting principles, without any reduction for taxes based upon income, or for
contributions made by the Employer to this Plan and any other qualified plan.
1.42 "NON-ELECTIVE CONTRIBUTION" means the Employer's contributions
to the Plan other than Elective Deferrals, any Qualified Non-Elective
Contributions and any Qualified Matching Contributions. Employer matching
contributions which are not Qualified Matching Contributions shall be considered
a Non-Elective Contribution for purposes of the Plan.
1.42A "NON-HIGHLY COMPENSATED EMPLOYEE" means any Employee who is
not a Highly Compensated Employee.
7
1.43 "NON-HIGHLY COMPENSATED PARTICIPANT" means any Participant who
is not a Highly Compensated Employee. However, if pursuant to Sections 12.4 or
12.6 the prior year testing method is used to calculate the ADP or the ACP, a
Non-Highly Compensated Participant shall be determined using the definition of
Highly Compensated Employee in effect for the preceding Plan Year.
1.44 "NON-KEY EMPLOYEE" means any Employee or former Employee (and
such Employee's or former Employee's Beneficiaries) who is not, and has never
been, a Key Employee.
1.45 "NORMAL RETIREMENT AGE" means the age elected in the Adoption
Agreement at which time a Participant's Account shall be nonforfeitable (if the
Participant is employed by the Employer on or after that date).
1.46 "NORMAL RETIREMENT DATE" means the date elected in the
Adoption Agreement.
1.47 "1-YEAR BREAK IN SERVICE" means, if the Hour of Service method
is elected in the Adoption Agreement, the applicable computation period during
which an Employee has not completed more than 500 Hours of Service. Further,
solely for the purpose of determining whether a Participant has incurred a
1-Year Break in Service, Hours of Service shall be recognized for authorized
leaves of absence and maternity and paternity leaves of absence.
"Authorized leave of absence" means an unpaid, temporary
cessation from active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military service, or
any other reason.
A "maternity or paternity leave of absence" means an absence
from work for any period by reason of the Employee's pregnancy, birth of the
Employee's child, placement of a child with the Employee in connection with the
adoption of such child, or any absence for the purpose of caring for such child
for a period immediately following such birth or placement. For this purpose,
Hours of Service shall be credited for the computation period in which the
absence from work begins, only if credit therefore is necessary to prevent the
Employee from incurring a 1-Year Break in Service, or, in any other case, in the
immediately following computation period. The Hours of Service credited for a
maternity or paternity leave of absence shall be those which would normally have
been credited but for such absence, or, in any case in which the Administrator
is unable to determine such hours normally credited, eight (8) Hours of Service
per day. The total Hours of Service required to be credited for a maternity or
paternity leave of absence shall not exceed the number of Hours of Service
needed to prevent the Employee from incurring a 1-Year Break in Service.
If the Elapsed Time method is elected in the Adoption
Agreement, a 1-Year Break in Service means a twelve (12) consecutive month
period beginning on the severance from service date or any anniversary thereof
and ending on the next succeeding anniversary of such date; provided, however,
that the Employee during such twelve (12) consecutive month period does not
perform an Hour of Service for the Employer.
1.48 "OWNER-EMPLOYEE" means a sole proprietor who owns the entire
interest in the Employer or a partner (or member in the case of a limited
liability company treated as a partnership or sole proprietorship for federal
income tax purposes) who owns more than ten percent (10%) of either the capital
interest or the profits interest in the Employer and who receives income for
personal services from the Employer.
1.49 "PARTICIPANT" means any Eligible Employee who has satisfied
the requirements of Section 3.2 and has not for any reason become ineligible to
participate further in the Plan.
1.50 "PARTICIPANT DIRECTED ACCOUNT" means that portion of a
Participant's interest in the Plan with respect to which the Participant has
directed the investment in accordance with the Participant Direction Procedures.
1.51 "PARTICIPANT DIRECTION PROCEDURES" means such instructions,
guidelines or policies, the terms of which are incorporated herein, as shall be
established pursuant to Section 4.10 and observed by the Administrator and
applied and provided to Participants who have Participant Directed Accounts.
1.52 "PARTICIPANT'S ACCOUNT" means the account established and
maintained by the Administrator for each Participant with respect to such
Participant's total interest under the Plan resulting from (a) the Employer's
contributions in the case of a Profit Sharing Plan or Money Purchase Plan, and
(b) the Employer's Non-Elective Contributions in the case of a 401(k) Profit
Sharing Plan. Separate accountings shall be maintained with respect to that
portion of a Participant's Account attributable to Employer matching,
contributions and to Employer discretionary contributions made pursuant to
Section 12.1(a)(3).
1.53 "PARTICIPANT'S COMBINED ACCOUNT" means the total aggregate
amount of a Participant's interest under the Plan resulting from Employer
contributions (including Elective Deferrals).
1.54 "PARTICIPANT'S ELECTIVE DEFERRAL ACCOUNT" means the account
established and maintained by the Administrator for each Participant with
respect to such Participant's total interest in the Plan resulting from Elective
Deferrals. Amounts in the Participant's Elective Deferral Account are
nonforfeitable when made and are subject to the distribution restrictions of
Section 12.2(c).
8
1.55 "PARTICIPANT'S ROLLOVER ACCOUNT" means the separate account
established and maintained by the Administrator for each Participant with
respect to such Participant's interest in the Plan resulting from amounts
transferred from another qualified plan or conduit Individual Retirement Account
in accordance with Section 4.6.
1.56 "PARTICIPANT'S TRANSFER ACCOUNT" means the account established
and maintained by the Administrator for each Participant with respect to the
total interest in the Plan resulting from amounts transferred to this Plan from
a direct plan-to-plan transfer in accordance with Section 4.7
1.57 "PERIOD OF SERVICE" means the aggregate of all periods
commencing with an Employee's first day of employment or reemployment with the
Employer or an Affiliated Employer and ending on the first day of a Period of
Severance. The first day of employment or reemployment is the first day the
Employee performs an Hour of Service. An Employee will also receive partial
credit for any Period of Severance of less than twelve (12) consecutive months.
Fractional periods of a year will be expressed in terms of days.
Periods of Service with any Affiliated Employer shall be
recognized. Furthermore, Periods of Service with any predecessor employer which
maintained this Plan shall be recognized. Periods of Service with any other
predecessor employer shall be recognized as elected in the Adoption Agreement.
In determining Periods of Service for purposes of vesting
under the Plan, Periods of Service will be excluded as elected in the Adoption
Agreement and as specified in Section 3.7.
In the event the method of crediting service is amended from
the Hour of Service method to the Elapsed Time method, an Employee will receive
credit for a period of service consisting of:
(a) A number of years equal to the number of Years of Service
credited to the Employee before the computation period during which the
amendment occurs; and
(b) The greater of (1) the period of service that would be
credited to the Employee under the Elapsed Time Method for service
during the entire computation period in which the transfer occurs or
(2) the service taken into account under the Hour of Service Method as
of the date of the amendment.
In addition, the Employee will receive credit for service subsequent to the
amendment commencing on the day after the last day of the computation period in
which the transfer occurs.
1.58 "PERIOD OF SEVERANCE" means a continuous period of time during
which an Employee is not employed by the Employer. Such period begins on the
date the Employee retires, quits or is discharged, or if earlier, the twelve
(12) month anniversary of the date on which the Employee was otherwise first
absent from service.
In the case of an individual who is absent from work for
maternity or paternity reasons, the twelve (12) consecutive month period
beginning on the first anniversary of the first day of such absence shall not
constitute a one year Period of Severance. For purposes of this paragraph, an
absence from work for maternity or paternity reasons means an absence (a) by
reason of the pregnancy of the individual, (b) by reason of the birth of a child
of the individual, (c) by reason of the placement of a child with the individual
in connection with the adoption of such child by such individual, or (d) for
purposes of caring for such child for a period beginning immediately following
such birth or placement.
1.59 "PLAN" means this instrument (also referred to as MFS
Retirement Services, Inc. Prototype Paired Defined Contribution Plans for
Corporations, Associations and Self-Employed Individuals, Basic Plan Document
#01 and the Adoption Agreement as adopted by the Employer, including all
amendments thereto and any addendum which is specifically permitted pursuant to
the terms of the Plan.
1.60 "PLAN YEAR" means the Plan's accounting year as specified in
the Adoption Agreement.
1.61 "PRE-RETIREMENT SURVIVOR ANNUITY" means an immediate annuity
for the life of a Participant's spouse, the payments under which must be equal
to the benefit which can be provided with the percentage, as specified in the
Adoption Agreement, of the Participant's Vested interest in the Plan as of the
date of death. If no election is made in the Adoption Agreement, the percentage
shall be equal to fifty percent (50%). Furthermore, if less than one hundred
percent (100%) of the Participant's Vested interest in the Plan is used to
provide the Pre-Retirement Survivor Annuity, a proportionate share of each of
the Participant's accounts shall be used to provide the Pre-Retirement Survivor
Annuity.
1.62 "QUALIFIED MATCHING CONTRIBUTION" means any Employer matching
contributions that are made pursuant to Sections 12.1(a)(2), if elected in the
Adoption Agreement, 12.5 and 12.7.
1.63 "QUALIFIED MATCHING CONTRIBUTION ACCOUNT" means the account
established hereunder to which Qualified Matching Contributions are allocated.
Amounts in the Qualified Matching Contribution Account are nonforfeitable when
made and are subject to the distribution restrictions of Section 12.2(c).
9
1.64 "QUALIFIED NON-ELECTIVE CONTRIBUTION" means the Employer's
contributions to the Plan that are made pursuant to Sections 12.1(a)(4), if
elected in the Adoption Agreement, 12.5 and 12.7.
1.65 "QUALIFIED NON-ELECTIVE CONTRIBUTION ACCOUNT" means the
account established hereunder to which Qualified Non-Elective Contributions are
allocated. Amounts in the Qualified Non-Elective Contribution Account are
nonforfeitable when made and are subject to the distribution restrictions of
Section 12.2(c).
1.66 "QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTION ACCOUNT" means the
account established hereunder to which a Participant's tax deductible qualified
voluntary employee contributions made pursuant to Section 4.9 are allocated.
1.67 "TREASURY REGULATION" means the Income Tax Regulations as
promulgated by the Secretary of the Treasury or a delegate of the Secretary of
the Treasury, and as amended from time to time.
1.68 "RETIRED PARTICIPANT" means a person who has been a
Participant, but who has become entitled to retirement benefits under the Plan.
1.69 "RETIREMENT DATE" means the date as of which a Participant
retires for reasons other than Total and Permanent Disability, whether such
retirement occurs on a Participant's Normal Retirement Date, Early Retirement
Date or Late Retirement Date (see Section 6.1).
1.70 "SELF-EMPLOYED INDIVIDUAL" means an individual who has Earned
Income for the taxable year from the trade or business for which the Plan is
established, and, also, an individual who would have had Earned Income but for
the fact that the trade or business had no net profits for the taxable year. A
Self-Employed Individual shall be treated as an Employee.
1.71 "SHAREHOLDER-EMPLOYEE" means a Participant who owns more than
five percent (5%) of the Employer's outstanding capital stock during any year in
which the Employer elected to be taxed as a Small Business Corporation (S
Corporation) under the applicable Code sections relating to Small Business
Corporations.
1.72 "SHORT PLAN YEAR" means, if specified in the Adoption
Agreement, a Plan Year of less than a twelve (12) month period. If there is a
Short Plan Year, the following rules shall apply in the administration of this
Plan. In determining whether an Employee has completed a Year of Service (or
Period of Service if the Elapsed Time Method is used) for benefit accrual
purposes in the Short Plan Year, the number of the Hours of Service (or months
of service if the Elapsed Time Method is used) required shall be proportionately
reduced based on the number of days (or months) in the Short Plan Year. The
determination of whether an Employee has completed a Year of Service (or Period
of Service) for vesting and eligibility purposes shall be made in accordance
with Department of Labor Regulation Section 2530.203-2(c). In addition, if this
Plan is integrated with Social Security, then the integration level shall be
proportionately reduced based on the number of months in the Short Plan Year.
1.73 "SUPER TOP HEAVY PLAN" means a plan which would be a Top Heavy
Plan if sixty percent (60%) is replaced with ninety percent (90%) in Section
9.2(a). However, effective as of the first Plan Year beginning after December
31, 1999, no Plan shall be considered a Super Top Heavy Plan.
1.74 "TAXABLE WAGE BASE" means, with respect to any Plan Year, the
contribution and benefit base under Section 230 of the Social Security Act at
the beginning of such Plan Year.
1.75 "TERMINATED PARTICIPANT" means a person who has been a
Participant, but whose employment has been terminated other than by death, Total
and Permanent Disability or retirement.
1.76 "TOP HEAVY PLAN" means a plan described in Section 9.2(a).
1.77 "TOP HEAVY PLAN YEAR" means a Plan Year commencing after
December 31, 1983, during which the Plan is a Top Heavy Plan.
1.78 "TOP-PAID GROUP" shall be determined pursuant to Code Section
414(q) and the Treasury Regulations thereunder and generally means the top
twenty percent (20%) of Employees who performed services for the Employer during
the applicable year, ranked according to the amount of 415 Compensation received
from the Employer during such year. All Affiliated Employers shall be taken into
account as a single employer, and Leased Employees shall be treated as Employees
if required pursuant to Code Section 414(n) or (o). Employees who are
non-resident aliens who received no earned income (within the meaning of Code
Section 911(d)(2)) from the Employer constituting United States source income
within the meaning of Code Section 861(a)(3) shall not be treated as Employees.
Furthermore, for the purpose of determining the number of active Employees in
any year, the following additional Employees may also be excluded, however, such
Employees shall still be considered for the purpose of identifying the
particular Employees in the Top-Paid Group:
(a) Employees with less than six (6) months of service;
10
(b) Employees who normally work less than 171/2hours per week;
(c) Employees who normally work less than six (6) months during a
year; and
(d) Employees who have not yet attained age twenty-one (21).
In addition, if ninety percent (90%) or more of the Employees
of the Employer are covered under agreements the Secretary of Labor finds to be
collective bargaining agreements between Employee representatives and the
Employer, and the Plan covers only Employees who are not covered under such
agreements, then Employees covered by such agreements shall be excluded from
both the total number of active Employees as well as from the identification of
particular Employees in the Top- Paid Group.
The foregoing exclusions set forth in this Section shall be
applied on a uniform and consistent basis for all purposes for which the Code
Section 414(q) definition is applicable. Furthermore, in applying such
exclusions, the Employer may substitute any lesser service, hours or age.
1.79 "TOTAL AND PERMANENT DISABILITY" Unless elected otherwise in
the Adoption Agreement, means the inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than twelve (12) months. The
permanence and degree of such impairment shall be supported by medical evidence.
The disability of a Participant shall be determined by a licensed physician
chosen by the Administrator. However, if the condition constitutes total
disability under the federal Social Security Acts, the Administrator may rely
upon such determination that the Participant is Totally and Permanently Disabled
for the purposes of this Plan. The determination shall be applied uniformly to
all Participants.
1.80 "TRUSTEE" means the person or entity named in the Adoption
Agreement, or any successors thereto.
1.81 "TRUST FUND" means the assets of the Plan and Trust as the
same shall exist from time to time.
1.82 "VALUATION DATE" means the date or dates specified in the
Adoption Agreement. Regardless of any election to the contrary or in the absence
of any election, the Valuation Date shall include the Anniversary Date and may
include any other date or dates deemed necessary or appropriate by the
Administrator for the valuation of Participants' Accounts during the Plan Year,
which may include any day that the Trustee, any transfer agent appointed by the
Trustee or the Employer, or any stock exchange used by such agent, are open for
business.
1.83 "VESTED" means the nonforfeitable portion of any account
maintained on behalf of a Participant.
1.84 "VOLUNTARY CONTRIBUTION ACCOUNT" means the account established
and maintained by the Administrator for each Participant with respect to such
Participant's total interest in the Plan resulting from the Participant's
after-tax voluntary Employee contributions made pursuant to Section 4.8.
Amounts recharacterized as after-tax voluntary Employee
contributions pursuant to Section 12.5 shall remain subject to the limitations
of Section 12.2. Therefore, a separate accounting shall be maintained with
respect to that portion of the Voluntary Contribution Account attributable to
after-tax voluntary Employee contributions made pursuant to Section 4.8.
1.85 "YEAR OF SERVICE" means the computation period of twelve (12)
consecutive months, herein set forth, and during which an Employee has completed
at least 1000 Hours of Service or, if less, the number of Hours of Service
specified in the Adoption Agreement.
For purposes of eligibility for participation, the initial
computation period shall begin with the date on which the Employee first
performs an Hour of Service (employment commencement date). The initial
computation period beginning after a 1-Year Break in Service shall be measured
from the date on which an Employee again performs an Hour of Service. The
succeeding computation periods shall begin on the anniversary of the Employee's
employment commencement date. However, if elected in the Adoption Agreement, the
computation period after the initial computation period shall shift to the
current Plan Year which includes the anniversary of the date on which the
Employee first performed an Hour of Service, and subsequent computation periods
shall be the Plan Year. If there is a shift to the Plan Year, an Employee who is
credited with the number of Hours of Service to be credited with a Year of
Service in both the initial eligibility computation period and the first Plan
Year which commences prior to the first anniversary of the Employee's initial
eligibility computation period will be credited with two (2) Years of Service
for purposes of eligibility to participate.
If two (2) Years of Service are required as a condition of
eligibility, a Participant will only have completed two (2) Years of Service for
eligibility purposes upon completing two (2) consecutive Years of Service
without an intervening 1-Year Break-in-Service.
For vesting purposes, and all other purposes not specifically
addressed in this Section, the computation period shall be the period elected in
the Adoption Agreement. If no election is made in the Adoption Agreement, the
computation period shall be the Plan Year.
11
In determining Years of Service for purposes of vesting under
the Plan, Years of Service will be excluded as elected in the Adoption Agreement
and as specified in Section 3.7.
Years of Service and 1-Year Breaks in Service will be measured
on the same computation period.
Years of Service with any Affiliated Employer shall be
recognized. Furthermore, Years of Service with any predecessor employer which
maintained this Plan shall be recognized. Years of Service with any other
predecessor employer shall be recognized as elected in the Adoption Agreement.
In the event the method of crediting service is amended from
the Elapsed Time Method to the Hour of Service Method, an Employee will receive
credit:
(a) The number of Years of Service equal to the number of 1-year
Periods of Service credited to the Employee as of the date of the
amendment; and
(b) In the computation period which includes the date of the amendment,
a number of Hours of Service (using the Hours of Service equivalency
method elected in the Adoption Agreement) to any fractional part of a
year credited to the Employee under this Section as of the date of the
amendment.
ARTICLE II
ADMINISTRATION
2.1 POWERS AND RESPONSIBILITIES OF THE EMPLOYER
(a) In addition to the general powers and
responsibilities otherwise provided for in this Plan, the Employer
shall be empowered to appoint and remove the Trustee and the
Administrator from time to time as it deems necessary for the proper
administration of the Plan to ensure that the Plan is being operated
for the exclusive benefit of the Participants and their Beneficiaries
in accordance with the terms of the Plan, the Code, and the Act. The
Employer may appoint counsel, specialists, advisers, agents (including
any nonfiduciary agent) and other persons as the Employer deems
necessary or desirable in connection with the exercise of its fiduciary
duties under this Plan. The Employer may compensate such agents or
advisers from the assets of the Plan as fiduciary expenses (but not
including any business (settlor) expenses of the Employer), to the
extent not paid by the Employer.
(b) The Employer shall establish a funding policy and
method, i.e., it shall determine whether the Plan has a short run need
for liquidity (e.g., to pay benefits) or whether liquidity is a long
run goal and investment growth (and stability of same) is a more
current need, or shall appoint a qualified person to do so. If the
Trustee has discretionary authority, the Employer or its delegate shall
communicate such needs and goals to the Trustee, who shall coordinate
such Plan needs with its investment policy. The communication of such a
funding policy and method shall not, however, constitute a directive to
the Trustee as to the investment of the Trust Funds. Such funding
policy and method shall be consistent with the objectives of this Plan
and with the requirements of Title I of the Act.
(c) The Employer may appoint, at its option, an
Investment Manager, investment adviser, or other agent to provide
direction to the Trustee with respect to any or all of the Plan assets.
Such appointment shall be given by the Employer in writing in a form
acceptable to the Trustee and shall specifically identify the Plan
assets with respect to which the Investment Manager or other agent
shall have the authority to direct the investment.
(d) The Employer shall periodically review the
performance of any Fiduciary or other person to whom duties have been
delegated or allocated by it under the provisions of this Plan or
pursuant to procedures established hereunder. This requirement may be
satisfied by formal periodic review by the Employer or by a qualified
person specifically designated by the Employer, through day-to-day
conduct and evaluation, or through other appropriate ways.
2.2 DESIGNATION OF ADMINISTRATIVE AUTHORITY
The Employer may appoint one or more Administrators. If the
Employer does not appoint an Administrator, the Employer will be the
Administrator. Any person, including, but not limited to, the Employees of the
Employer, shall be eligible to serve as an Administrator. Any person so
appointed shall signify acceptance by filing written acceptance with the
Employer. An Administrator may resign by delivering a written resignation to the
Employer or be removed by the Employer by delivery of written notice of removal,
to take effect at a date specified therein, or upon delivery to the
Administrator if no date is specified. Upon the resignation or removal of an
Administrator, the Employer may designate in writing a successor to this
position.
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2.3 ALLOCATION AND DELEGATION OF RESPONSIBILITIES
If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the Employer and
accepted in writing by each Administrator. In the event that no such delegation
is made by the Employer, the Administrators may allocate the responsibilities
among themselves, in which event the Administrators shall notify the Employer
and the Trustee in writing of such action and specify the responsibilities of
each Administrator. The Trustee thereafter shall accept and rely upon any
documents executed by the appropriate Administrator until such time as the
Employer or the Administrators file with the Trustee a written revocation of
such designation.
2.4 POWERS AND DUTIES OF THE ADMINISTRATOR
The primary responsibility of the Administrator is to
administer the Plan for the exclusive benefit of the Participants and their
Beneficiaries, subject to the specific terms of the Plan. The Administrator
shall administer the Plan in accordance with its terms and shall have the power
and discretion to construe the terms of the Plan and determine all questions
arising in connection with the administration, interpretation, and application
of the Plan. Any such determination by the Administrator shall be conclusive and
binding upon all persons. The Administrator may establish procedures, correct
any defect, supply any information, or reconcile any inconsistency in such
manner and to such extent as shall be deemed necessary or advisable to carry out
the purpose of the Plan; provided, however, that any procedure, discretionary
act, interpretation or construction shall be done in a nondiscriminatory manner
based upon uniform principles consistently applied and shall be consistent with
the intent that the Plan continue to be deemed a qualified plan under the terms
of Code Section 401(a), and shall comply with the terms of the Act and all
regulations issued pursuant thereto. The Administrator shall have all powers
necessary or appropriate to accomplish its duties under this Plan.
The Administrator shall be charged with the duties of the
general administration of the Plan as set forth under the terms of the Plan,
including, but not limited to, the following:
(a) the discretion to determine all questions relating to
the eligibility of an Employee to participate or remain a Participant
hereunder and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with
respect to the amount and the kind of benefits to which any Participant
shall be entitled hereunder;
(c) to authorize and direct the Trustee with respect to
all discretionary or otherwise directed disbursements from the Trust
Fund;
(d) to maintain all necessary records for the
administration of the Plan;
(e) to interpret the provisions of the Plan and to make
and publish such rules for regulation of the Plan that are consistent
with the terms hereof;
(f) to determine the size and type of any Contract to be
purchased from any Insurer, and to designate the Insurer from which
such Contract shall be purchased;
(g) to compute and certify to the Employer and to the
Trustee from time to time the sums of money necessary or desirable to
be contributed to the Plan;
(h) to consult with the Employer and the Trustee
regarding the short and long-term liquidity needs of the Plan in order
that the Trustee can exercise any investment discretion (if the Trustee
has such discretion), in a manner designed to accomplish specific
objectives;
(i) to prepare and implement a procedure for notifying
Participants and Beneficiaries of their rights to elect Joint and
Survivor Annuities and Pre-Retirement Survivor Annuities if required by
the Plan, Code and Treasury Regulations thereunder;
(j) to assist Participants regarding their rights,
benefits, or elections available under the Plan;
(k) to act as the named Fiduciary responsible for
communicating with Participants as needed to maintain Plan compliance
with Act Section 404(c) (if the Employer intends to comply with Act
Section 404(c)) including, but not limited to, the receipt and
transmission of Participants' directions as to the investment of their
accounts under the Plan and the formation of policies, rules, and
procedures pursuant to which Participants may give investment
instructions with respect to the investment of their accounts;
(l) to determine the validity of, and take appropriate
action with respect to, any qualified domestic relations order received
by it; and
13
(m) to carry out the duties, rights, powers and authority
ascribed to it under the provisions of Article VII of the Plan,
including, without limitation, the duties, rights, powers and authority
of the Administrator when the Trustee is a Directed Trustee.
2.5 RECORDS AND REPORTS
The Administrator shall keep a record of all actions taken and
shall keep all other books of account, records, and other data that may be
necessary for proper administration of the Plan and shall be responsible for
supplying all information and reports to the IRS, Department of Labor,
Participants, Beneficiaries and others as required by law.
2.6 APPOINTMENT OF ADVISERS
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, agents (including
nonfiduciary agents) and other persons as the Administrator or the Trustee deems
necessary or desirable in connection with the administration of this Plan,
including but not limited to agents and advisers to assist with the
administration and management of the Plan, and thereby to provide, among such
other duties as the Administrator may delegate,assistance with maintaining Plan
records and the providing of investment information to the Plan's investment
fiduciaries and, if applicable, to Plan Participants.
2.7 INFORMATION FROM EMPLOYER
The Employer shall supply full and timely information to the
Administrator on all pertinent facts as the Administrator may require in order
to perform its functions hereunder and the Administrator shall advise the
Trustee of such of the foregoing facts as may be pertinent to the Trustee's
duties under the Plan. The Administrator may rely upon such information as is
supplied by the Employer and shall have no duty or responsibility to verify such
information.
2.8 PAYMENT OF EXPENSES
All expenses of administration may be paid out of the Trust
Fund unless paid by the Employer. Such expenses shall include any expenses
incident to the functioning of the Administrator, or any person or persons
retained or appointed by any named Fiduciary incident to the exercise of their
duties under the Plan, including, but not limited to, fees of accountants,
counsel, Investment Managers, agents (including nonfiduciary agents) appointed
for the purpose of assisting the Administrator or Trustee in carrying out the
instructions of Participants as to the directed investment of their accounts (if
permitted) and other specialists and their agents, the costs of any bonds
required pursuant to Act Section 412, and other costs of administering the Plan.
Until paid, the expenses shall constitute a liability of the Trust Fund. Any
administration expense paid to the Trust Fund as a reimbursement shall not be
considered an Employer Contribution.
2.9 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
administrative authority pursuant to Section 2.3, if there is more than one
Administrator, then they shall act by a majority of their number, but may
authorize one or more of them to sign all papers on their behalf.
2.10 CLAIMS PROCEDURE
Claims for benefits under the Plan may be filed in writing
with the Administrator. Written notice of the disposition of a claim shall be
furnished to the claimant within ninety (90) days after the application is
filed, or such period as is required by applicable law or Department of Labor
regulation. In the event the claim is denied, the reasons for the denial shall
be specifically set forth in the notice in language calculated to be understood
by the claimant, pertinent provisions of the Plan shall be cited, and, where
appropriate, an explanation as to how the claimant can perfect the claim will be
provided. In addition, the claimant shall be furnished with an explanation of
the Plan's claims review procedure.
14
2.11 CLAIMS REVIEW PROCEDURE
Any Employee, former Employee, or Beneficiary of either, who
has been denied a benefit by a decision of the Administrator pursuant to Section
2.10 shall be entitled to request the Administrator to give further
consideration to the claim by filing with the Administrator a written request
for a hearing. Such request, together with a written statement of the reasons
why the claimant believes such claim should be allowed, shall be filed with the
Administrator no later than sixty (60) days after receipt of the written
notification provided for in Section 2.10. The Administrator shall then conduct
a hearing within the next sixty (60) days, at which the claimant may be
represented by an attorney or any other representative of such claimant's
choosing and expense and at which the claimant shall have an opportunity to
submit written and oral evidence and arguments in support of the claim. At the
hearing (or prior thereto upon five (5) business days written notice to the
Administrator) the claimant or the claimant's representative shall have an
opportunity to review all documents in the possession of the Administrator which
are pertinent to the claim at issue and its disallowance. Either the claimant or
the Administrator may cause a court reporter to attend the hearing and record
the proceedings. In such event, a complete written transcript of the proceedings
shall be furnished to both parties by the court reporter. The full expense of
any such court reporter and such transcripts shall be borne by the party causing
the court reporter to attend the hearing. A final decision as to the allowance
of the claim shall be made by the Administrator within sixty (60) days of
receipt of the appeal (unless there has been an extension of sixty (60) days due
to special circumstances, provided the delay and the special circumstances
occasioning it are communicated to the claimant within the sixty (60) day
period). Such communication shall be written in a manner calculated to be
understood by the claimant and shall include specific reasons for the decision
and specific references to the pertinent Plan provisions on which the decision
is based. Notwithstanding the preceding, to the extent any of the time periods
specified in this Section are amended by law or Department of Labor regulation,
then the time frames specified herein shall automatically be changed in
accordance with such law or regulation.
ARTICLE III
ELIGIBILITY
3.1 CONDITIONS OF ELIGIBILITY
Any Eligible Employee shall be eligible to participate
hereunder on the date such Employee has satisfied the conditions of eligibility
elected in the Adoption Agreement.
3.2 EFFECTIVE DATE OF PARTICIPATION
An Eligible Employee who has satisfied the conditions of
eligibility pursuant to Section 3.1 shall become a Participant effective as of
the date elected in the Adoption Agreement. If said Employee is not employed on
such date, but is reemployed before a 1-Year Break in Service has occurred, then
such Employee shall become a Participant on the date of reemployment or, if
later, the date that the Employee would have otherwise entered the Plan had the
Employee not terminated employment.
Unless specifically provided otherwise in the Adoption
Agreement, an Eligible Employee who satisfies the Plan's eligibility requirement
conditions by reason of recognition of service with a predecessor employer will
become a Participant as of the day the Plan credits service with a predecessor
employer or, if later, the date the Employee would have otherwise entered the
Plan had the service with the predecessor employer been service with the
Employer.
If an Employee, who has satisfied the Plan's eligibility
requirements and would otherwise have become a Participant, shall go from a
classification of a noneligible Employee to an Eligible Employee, such Employee
shall become a Participant on the date such Employee becomes an Eligible
Employee or, if later, the date that the Employee would have otherwise entered
the Plan had the Employee always been an Eligible Employee.
If an Employee, who has satisfied the Plan's eligibility
requirements and would otherwise become a Participant, shall go from a
classification of an Eligible Employee to a noneligible class of Employees, such
Employee shall become a Participant in the Plan on the date such Employee again
becomes an Eligible Employee, or, if later, the date that the Employee would
have otherwise entered the Plan had the Employee always been an Eligible
Employee. However, if such Employee incurs a 1-Year Break in Service,
eligibility will be determined under the break in service rules set forth in
Section 3.7.
3.3 DETERMINATION OF ELIGIBILITY
The Administrator shall determine the eligibility of each
Employee for participation in the Plan based upon information furnished by the
Employer. Such determination shall be conclusive and binding upon all persons,
as long as the same is made pursuant to the Plan and the Act. Such determination
shall be subject to review pursuant to Section 2.11.
15
3.4 TERMINATION OF ELIGIBILITY
In the event a Participant shall go from a classification of
an Eligible Employee to an ineligible Employee, such Former Participant shall
continue to vest in the Plan for each Year of Service (or Period of Service, if
the Elapsed Time Method is used) completed while an ineligible Employee, until
such time as the Participant's Account is forfeited or distributed pursuant to
the terms of the Plan. Additionally, the Former Participant's interest in the
Plan shall continue to share in the earnings of the Trust Fund.
3.5 OMISSION OF ELIGIBLE EMPLOYEE
If, in any Plan Year, any Employee who should have been
included as a Participant in the Plan is erroneously omitted and discovery of
such omission is not made until after a contribution by the Employer for the
year has been made and allocated, then the Employer shall make a subsequent
contribution, if necessary after the application of Section 4.3(e), so that the
omitted Employee receives the total amount which the Employee would have
received (including both Employer contributions and earnings thereon) had the
Employee not been omitted. Such contribution shall be made regardless of whether
it is deductible in whole or in part in any taxable year under applicable
provisions of the Code. Any corrections or adjustments under this Section shall
be made in accordance with the IRS Employee Plans Compliance Resolution System.
3.6 INCLUSION OF INELIGIBLE EMPLOYEE
If, in any Plan Year, any person who should not have been
included as a Participant in the Plan is erroneously included and discovery of
such inclusion is not made until after a contribution for the year has been made
and allocated, the Employer shall be entitled to recover the contribution made
with respect to the ineligible person provided the error is discovered within
twelve (12) months of the date on which it was made. Otherwise, the amount
contributed with respect to the ineligible person shall constitute a Forfeiture
for the Plan Year in which the discovery is made. Notwithstanding the forgoing,
any Elective Deferrals made by an ineligible person shall be distributed to the
person (along with any earnings attributable to such Elective Deferrals). Any
corrections or adjustments under this Section shall be made in accordance with
the IRS Employee Plans Compliance Resolution System.
3.7 REHIRED EMPLOYEES AND BREAKS IN SERVICE
(a) If any Participant becomes a Former Participant due
to severance from employment with the Employer and is reemployed by the
Employer before a 1-Year Break in Service occurs, the Former
Participant shall become a Participant as of the reemployment date.
(b) If any Participant becomes a Former Participant due
to severance from employment with the Employer and is reemployed after
a 1-Year Break in Service has occurred, Years of Service (or Periods of
Service if the Elapsed Time Method is being used) shall include Years
of Service (or Periods of Service if the Elapsed Time Method is being
used) prior to the 1-Year Break in Service subject to the following
rules:
(1) In the case of a Former Participant who
under the Plan does not have a nonforfeitable right
to any interest in the Plan resulting from Employer
contributions, Years of Service (or Periods of
Service) before a period of 1-Year Breaks in Service
will not be taken into account if the number of
consecutive 1-Year Breaks in Service equals or
exceeds the greater of (A) five (5) or (B) the
aggregate number of pre-break Years of Service (or
Periods of Service). Such aggregate number of Years
of Service (or Periods of Service) will not include
any Years of Service (or Periods of Service)
disregarded under the preceding sentence by reason of
prior 1-Year Breaks in Service;
(2) A Former Participant who has not had Years
of Service (or Periods of Service) before a 1-Year
Break in Service disregarded pursuant to (1) above,
shall participate in the Plan as of the date of
reemployment;
(c) After a Former Participant who has severed employment
with the Employer incurs five (5) consecutive 1-Year Breaks in Service,
the Vested portion of such Former Participant's Account attributable to
pre-break service shall not be increased as a result of post-break
service. In such case, separate accounts will be maintained as follows:
(1) one account for nonforfeitable benefits
attributable to pre-break service; and
(2) one account representing the Participant's
Employer-derived account balance in the Plan
attributable to post-break service.
(d) If any Participant becomes a Former Participant due
to separation from service with the Employer and is reemployed by the
Employer before five (5) consecutive 1-Year Breaks in Service, and such
Former Participant had received a distribution of the entire Vested
interest prior to reemployment, then the forfeited account shall be
reinstated only if the Former Participant repays the full amount which
had been distributed. Such repayment must be made before the earlier of
five (5) years after the first date on which the Participant is
subsequently reemployed by the Employer or the close of the first
period of five (5) consecutive 1-Year Breaks in Service commencing
after the distribution. If a distribution occurs for any reason other
than a severance of employment, the time for repayment may not end
earlier than five (5) years after the date of distribution. In the
16
event the Former Participant does repay the full amount distributed,
the undistributed forfeited portion of the Participant's Account must
be restored in full, unadjusted by any gains or losses occurring
subsequent to the Valuation Date preceding the distribution. The source
for such reinstatement may be Forfeitures occurring during the Plan
Year. If such source is insufficient, then the Employer will contribute
an amount which is sufficient to restore the Participant's Account,
provided, however, that if a discretionary contribution is made for
such year, such contribution will first be applied to restore any such
accounts and the remainder shall be allocated in accordance with the
terms of the Plan. If a non-Vested Former Participant was deemed to
have received a distribution and such Former Participant is reemployed
by the Employer before five (5) consecutive 1-Year Breaks in Service,
then such Participant will be deemed to have repaid the deemed
distribution as of the date of reemployment.
3.8 ELECTION NOT TO PARTICIPATE
An Employee may, subject to the approval of the Employer,
elect voluntarily not to participate in the Plan provided, however that such
election is a one-time irrevocable election made pursuant to Treasury Regulation
Section 1.401(k) - 1(a)(3)(iv). The election not to participate must be
communicated to the Employer, in writing, within a reasonable period of time
before the beginning of a Plan Year. For standardized Plans, a Participant or an
Eligible Employee may not elect not to participate.
3.9 CONTROL OF ENTITIES BY OWNER-EMPLOYEE
Effective with respect to Plan Years beginning after December
31, 1996, if this Plan provides contributions or benefits for one or more
Owner-Employees, the contributions on behalf of any Owner-Employee shall be made
only with respect to the Earned Income for such Owner-Employee which is derived
from the trade or business with respect to which such Plan is established.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
(a) For a money purchase plan:
(1) The Employer will make contributions on the following
basis. On behalf of each Participant eligible to share in
allocations, for each year of such Participant's participation
in this Plan, the Employer will contribute the amount elected
in the Adoption Agreement. The Employer must obtain a waiver
from the IRS for any Plan Year in which it is unable to make
the full required contribution to the Plan. In the event a
waiver is obtained, this Plan shall be deemed to be an
individually designed plan.
(2) Notwithstanding the foregoing, with respect to an
Employer which is not a tax-exempt entity, the Employer's
contribution for any Fiscal Year will generally not exceed the
maximum amount allowable as a deduction to the Employer under
the provisions of Code Section 404. However, to the extent
necessary to provide the top heavy minimum allocations, the
Employer shall make a contribution even if it exceeds the
amount that is deductible under Code Section 404.
(b) For a profit sharing plan:
(1) For each Plan Year, the Employer will contribute to
the Plan such amount as elected by the Employer in the
Adoption Agreement.
(2) Additionally, the Employer will contribute to the
Plan the amount necessary, if any, to provide the top heavy
minimum allocations, even if it exceeds current or accumulated
Net Profit or the amount that is deductible under Code Section
404.
4.2 TIME OF PAYMENT OF EMPLOYER'S CONTRIBUTION
Unless otherwise provided by contract, the Employer may make
its contribution to the Plan for a particular Plan Year at such time as the
Employer, in its sole discretion, determines. If the Employer makes a
contribution for a particular Plan Year after the close of that Plan Year, the
Employer will designate to the Trustee the Plan Year for which the Employer is
making its contribution.
4.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an
account in the name of each Participant to which the Administrator
shall credit as of each Anniversary Date, or other Valuation Date, all
amounts allocated to each such Participant as set forth herein.
17
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation
of the Employer's contribution, if any, for each Plan Year. Within a
reasonable period of time after the date of receipt by the
Administrator of such information, the Administrator shall allocate any
contributions as follows:
(1) For a money purchase plan (other than a money
purchase plan which is integrated by allocation):
(i) The Employer's contribution shall be
allocated to Participant's Account in the manner set
forth in 4.1 herein and as specified in the Adoption
Agreement.
(ii) However, regardless of the preceding, a
Participant shall only be eligible to share in the
allocations of the Employer's contribution for the
Plan Year if the conditions set forth in the Adoption
Agreement are satisfied, unless a contribution is
required pursuant to Section 4.3(f). Furthermore, for
non-standardized Plans, regardless of any election in
the Adoption Agreement to the contrary, for the Plan
Year in which this Plan terminates, a Participant
shall only be eligible to share in the allocation of
the Employer's contributions for the Plan Year if the
Participant is employed at the end of the Plan Year
and has completed a Year of Service (or Period of
Service if the Elapsed Time Method is elected).
(2) For an integrated profit sharing plan or a money
purchase plan which is integrated by allocation:
(i) Subject to the overall permitted disparity
limits, Employer contributions for the Plan Year plus
any forfeitures will be allocated to the account of
each Participant who either completes more than 500
hours of service during the Plan Year or who is
employed on the last day of the Plan Year as follows:
STEP ONE: Contributions and forfeitures will be
allocated to each Participant's Account in the ratio
that each Participant's total Compensation bears to
all Participants total Compensation, but not in
excess of 3% of each Participant's Compensation.
STEP TWO: Any contributions and forfeitures remaining
after the allocation in Step One will be allocated to
each Participant's account in the ratio that each
Participant's Compensation for the Plan Year in
excess of the integration level bears to the Excess
Compensation of all Participants, but not in excess
of 3% of each Participant's Compensation. For
purposes of this Step Two, in the case of any
Participant who has exceeded the cumulative permitted
disparity limit described below, such Participant's
total Compensation for the Plan Year will be taken
into account.
STEP THREE: Any contributions and forfeitures
remaining after the allocation in Step Two will be
allocated to each Participant's Account in the ratio
that the sum of each Participant's total Compensation
and Excess Compensation bears to the sum of all
Participant's total Compensation and Excess
Compensation, but not in excess of the profit-sharing
maximum disparity rate. For purposes of this Step
Three, in the case of any Participant who has
exceeded the cumulative permitted disparity limit
described below, two times such Participant's total
Compensation for the Plan Year will be taken into
account.
STEP FOUR: Any remaining Employer contributions or
forfeitures will be allocated to each Participant's
account in the ratio that each Participant's total
Compensation for the Plan Year bears to all
Participants' total Compensation for that year.
(ii) The integration level shall be equal to the
taxable wage base or such lesser amount elected by
the Employer in the Adoption Agreement. The taxable
wage base is the contribution and benefit base under
section 230 of the Social Security Act at the
beginning of the Plan Year.
(iii) However, regardless of the preceding, a
Participant shall only be eligible to share in the
allocations of the Employer's contribution for the
year if the conditions set forth in the Adoption
Agreement are satisfied, unless a contribution is
required pursuant to Section 4.3(f). Furthermore, for
non-standardized Plans, regardless of any election in
the Adoption Agreement to the contrary, for the Plan
Year in which this Plan terminates, a Participant
shall only be eligible to share in the allocation of
the Employer's contributions for the Plan Year if the
Participant is employed at the end of the Plan Year
and has completed a Year of Service (or Period of
Service if the Elapsed Time Method is elected).
(3) For a non-integrated profit sharing plan:
(i) The Employer's contribution shall be
allocated to each Participant's Account in accordance
with the allocation method elected in the Adoption
Agreement.
(ii) However, regardless of the preceding, a
Participant shall only be eligible to share in the
allocations of the Employer's contribution for the
Plan Year if the conditions set forth in the Adoption
Agreement are satisfied, unless a contribution is
required pursuant to Section 4.3(f). Furthermore, for
non-standardized Plans, regardless of
18
any election in the Adoption Agreement to the
contrary, for the Plan Year in which this Plan
terminates, a Participant shall only be eligible to
share in the allocation of the Employer's
contributions for the Plan Year if the Participant is
employed at the end of the Plan Year and has
completed a Year of Service (or Period of Service if
the Elapsed Time Method is elected).
(4) Overall Permitted Disparity Limits:
Annual Overall Permitted Disparity Limit:
Notwithstanding the preceding paragraphs, if in any
Plan Year this Plan benefits any Participant who
benefits under another qualified plan or simplified
employee pension, as defined in Code Section 408(k),
maintained by the Employer that either provides for
or imputes permitted disparity (integrates), then
such plans will be considered to be one plan and will
be considered to comply with the permitted disparity
rules if the extent of the permitted disparity of all
such plans does not exceed 100%. For purposes of the
preceding sentence, the extent of the permitted
disparity of a plan is the ratio, expressed as a
percentage, which the actual benefits, benefit rate,
offset rate, or employer contribution rate, whatever
is applicable under the Plan, bears to the limitation
under Code Section 401(l) applicable to such Plan.
The annual disparity limit will be determined in
accordance with Treasury Reg. Section 1.401(l)-5(b).
Notwithstanding the foregoing, if the Employer
maintains two or more standardized paired plans, only
one plan may provide for permitted disparity.
Cumulative Permitted Disparity Limit: With respect to
a Participant who benefits or has benefited under a
defined benefit or target benefit plan of the
Employer, effective for Plan Years beginning on or
after January 1, 1994, the cumulative permitted
disparity limit for the Participant is thirty five
(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 the Plan, any
other qualified plan or simplified employee pension
plan (whether or not terminated) ever maintained by
the Employer, while such plan either provides for or
imputes permitted disparity. 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 which neither provides for nor
imputes permitted disparity for any year beginning on
or after January 1, 1994, then such Participant has
no cumulative permitted disparity limit.
For purposes of this Section, benefiting means
benefiting under the Plan for any Plan Year during
which a Participant received or is deemed to receive
an allocation in accordance with Treasury Regulation
Section 1.410(b)-3(a).
(c) Except as otherwise elected in the Adoption Agreement
or as provided in Section 4.10 with respect to Participant Directed
Accounts, as of each Valuation Date, before allocation of any Employer
contributions and Forfeitures, any earnings or losses (net appreciation
or net depreciation) of the Trust Fund (exclusive of assets segregated
for distribution) shall be allocated in the same proportion that each
Participant's and Former Participant's nonsegregated accounts bear to
the total of all Participants' and Former Participants' nonsegregated
accounts as of such date. If any nonsegregated account of a Participant
has been distributed prior to the Valuation Date subsequent to a
Participant's termination of employment, no earnings or losses shall be
credited to such account.
(d) Participants' Accounts shall be debited for any
insurance or annuity premiums paid, if any, and credited with any
dividends or interest received on Contracts.
(e) On or before each Anniversary Date any amounts which
became Forfeitures may be made available to reinstate previously
forfeited account balances of Former Participants, if any, in
accordance with Section 3.7(d), used to satisfy any contribution that
may be required pursuant to Section 3.5 and/or 6.9, or used to pay any
administrative expenses of the Plan. The remaining Forfeitures, if any,
shall be treated in accordance with the Adoption Agreement. If no
election is made in the Adoption Agreement, any remaining Forfeitures
will be used to reduce any future Employer contributions under the
Plan. Regardless of the preceding sentences, in the event the
allocation of Forfeitures provided herein shall cause the annual
additions (as defined in Section 4.4) to any Participant's Account to
exceed the amount allowable by the Code, an adjustment shall be made in
accordance with Section 4.5. Except, however, a Participant shall only
be eligible to share in the allocations of Forfeitures for the year if
the conditions set forth in the Adoption Agreement are satisfied,
unless a contribution is required pursuant to Section 4.3(f).
(f) Minimum Allocations Required for Top Heavy Plan
Years: Notwithstanding the foregoing, for any Top Heavy Plan Year, the
sum of the Employer's contributions and Forfeitures allocated to the
Participant's Combined Account of each Non-Key Employee shall be equal
to at least three percent (3%) of such Non-Key Employee's 415
Compensation (reduced by contributions and forfeitures, if any,
allocated to each Non-Key Employee in any defined contribution plan
included with this Plan in a required aggregation group (as defined in
Section 9.2(f)). However, if (i) the sum of the Employer's
contributions and Forfeitures allocated to the Participant's Combined
Account of each Key Employee for such Top Heavy Plan Year is less than
three percent (3%) of each Key Employee's 415 Compensation and (ii)
this Plan is not required to be included in a required aggregation
group (as defined in Section 9.2(f)) to enable a defined benefit plan
to meet the requirements of Code Section 401(a)(4) or 410, the sum of
the Employer's contributions and Forfeitures allocated to the
Participant's Combined
19
Account of each Non-Key Employee shall be equal to the largest
percentage allocated to the Participant's Combined Account of any Key
Employee.
However, for each Non-Key Employee who is a
Participant in a paired profit sharing plan or 401(k) profit sharing
plan and a paired money purchase plan, the minimum three percent (3%)
allocation specified above shall be provided in the money purchase
plan.
If this is an integrated Plan, then for any Top Heavy
Plan Year the Employer's contribution shall be allocated as follows and
shall still be required to satisfy the other provisions of this
subsection:
(1) An amount equal to three percent (3%) multiplied by
each Participant's Compensation for the Plan Year shall be
allocated to each Participant's Account. If the Employer does
not contribute such amount for all Participants, the amount
shall be allocated to each Participant's Account in the same
proportion that such Participant's total Compensation for the
Plan Year bears to the total Compensation of all Participants
for such year.
(2) The balance of the Employer's contribution over the
amount allocated under subparagraph (1) hereof shall be
allocated to each Participant's Account in a dollar amount
equal to three percent (3%) multiplied by a Participant's
Excess Compensation. If the Employer does not contribute such
amount for all Participants, each Participant will be
allocated a share of the contribution in the same proportion
that such Participant's Excess Compensation bears to the total
Excess Compensation of all Participants for that year. For
purposes of this paragraph, in the case of any Participant who
has exceeded the cumulative permitted disparity limit
described in Section 4.3(b)(4), such Participant's total
Compensation will be taken into account.
(3) The balance of the Employer's contribution over the
amount allocated under subparagraph (2) hereof shall be
allocated to each Participant's Account in a dollar amount
equal to 2.7% multiplied by the sum of each Participant's
total Compensation plus Excess Compensation. If the Employer
does not contribute such amount for all Participants, each
Participant will be allocated a share of the contribution in
the same proportion that such Participant's total Compensation
plus Excess Compensation for the Plan Year bears to the total
Compensation plus Excess Compensation of all Participants for
that year. For purposes of this paragraph in the case of any
Participant who has exceeded the cumulative permitted
disparity limit described in Section 4.3(b)(4), such
Participant's total Compensation rather than Compensation plus
Excess Compensation will be taken into account
Regardless of the preceding, 1.3% shall be substituted for
2.7% above if Excess Compensation is based on more than 20%
and less than or equal to 80% of the Taxable Wage Base. If
Excess Compensation is based on less than 100% and more than
80% of the Taxable Wage Base, then 2.4% shall be substituted
for 2.7% above.
(4) The balance of the Employer's contributions over the
amount allocated above, if any, shall be allocated to each
Participant's Account in the same proportion that such
Participant's total Compensation for the Plan Year bears to
the total Compensation of all Participants for such year.
For each Non-Key Employee who is a Participant in
this Plan and another non-paired defined contribution plan maintained
by the Employer, the minimum three percent (3%) allocation specified
above shall be provided as specified in the Adoption Agreement.
(g) For purposes of the minimum allocations set forth
above, the percentage allocated to the Participant's Combined Account
of any Key Employee shall be equal to the ratio of the sum of the
Employer's contributions and Forfeitures allocated on behalf of such
Key Employee divided by the 415 Compensation for such Key Employee.
(h) For any Top Heavy Plan Year, the minimum allocations
set forth in this Section shall be allocated to the Participant's
Combined Account of all Non-Key Employees who are Participants and who
are employed by the Employer on the last day of the Plan Year,
including Non-Key Employees who have (1) failed to complete a Year of
Service; or (2) declined to make mandatory contributions (if required)
or, in the case of a cash or deferred arrangement, Elective Deferrals
to the Plan.
(i) Notwithstanding anything herein to the contrary, in
any Plan Year in which the Employer maintains both this Plan and a
defined benefit pension plan included in a required aggregation group
(as defined in Section 9.2(f)) which is top heavy, the Employer will
not be required (unless otherwise elected in the Adoption Agreement) to
provide a Non-Key Employee with both the full separate minimum defined
benefit plan benefit and the full separate defined contribution plan
allocations. In such case, the top heavy minimum benefits will be
provided as elected in the Adoption Agreement and, if applicable, as
follows:
(1) If the 5% defined contribution minimum is elected in
the Adoption Agreement:
(i) The requirements of Section 9.1
will apply except that each Non-Key Employee who is a
Participant in the profit sharing plan or money purchase
plan and who is also a Participant in the defined
benefit
20
plan will receive a minimum allocation of five percent
(5%) of such Participant's 415 Compensation from the
applicable defined contribution plan(s).
(ii) For each Non-Key Employee who is a
Participant only in the defined benefit plan the Employer
will provide a minimum non-integrated benefit equal to
two percent (2%) of such Participant's highest five (5)
consecutive year average 415 Compensation for each Year
of Service while a participant in the plan, in which the
Plan is top heavy, not to exceed ten (10).
(iii) For each Non-Key Employee who is a
Participant only in this defined contribution plan, the
Employer will provide a minimum allocation equal to three
percent (3%) of such Participant's 415 Compensation.
(2) If the 7 1/2% defined contribution minimum is
elected in the Adoption Agreement, the provisions of (1) above
shall apply except as provided below:
(i) The minimum allocation specified in
Section 4.3(i)(1)(i) will be seven and one-half percent
(7 1/2%) for Plan Years beginning prior to January 1,
2000, in which the Plan is a Top Heavy Plan, but not a
Super Top Heavy Plan.
(ii) The minimum benefit specified in
Section 4.3(i)(1)(ii) will be three percent (3%) for
years beginning prior to January 1, 2000, in which the
Plan is a Top Heavy Plan, but not a Super Top Heavy Plan.
(iii) The minimum allocation specified in
Section 4.3(i)(1)(iii) will be four percent (4%) for
years beginning prior to January 1, 2000, in which the
Plan is a Top Heavy Plan, but not a Super Top Heavy Plan.
(3) If the 2% defined benefit minimum is elected in the
Adoption Agreement, for each Non-Key Employee who is a
Participant only in the defined benefit plan the Employer will
provide a minimum non-integrated benefit equal to two percent
(2%) of such Participant's highest five (5) consecutive year
average of 415 Compensation for each Year of Service while a
participant in the plan, in which the Plan is top heavy, not
to exceed ten (10).
(4) If the 3% defined benefit minimum is elected in the
Adoption Agreement, for each Non-Key Employee who is a
Participant only in the defined benefit plan, the Employer
will provide a minimum non-integrated benefit equal to three
percent (3%) of such Participant's highest five (5)
consecutive year average of 415 Compensation for each Year of
Service while a participant in the plan, in which the Plan is
top heavy, not to exceed ten (10). Regardless of the
preceding, for years in which the Plan is Super Top Heavy and
for years beginning after December 31, 1999, two percent (2%)
shall be substituted for three percent (3%).
(j) For the purposes of this Section, 415 Compensation
will be limited to the same dollar limitations set forth in Section 1.11
adjusted in such manner as permitted under Code Section 415(d).
(k) Notwithstanding anything in this Section to the
contrary, all information necessary to properly reflect a given transaction may
not be available until after the date specified herein for processing such
transaction, in which case the transaction will be reflected when such
information is received and processed. Subject to express limits that may be
imposed under the Code, the processing of any contribution, distribution or
other transaction may be delayed for any legitimate business reason (including,
but not limited to, failure of systems or computer programs, failure of the
means of the transmission of data, force majeure, the failure of a service
provider to timely receive values or prices, and correction for errors or
omissions or the errors or omissions of any service provider). The processing
date of a transaction will be binding for all purposes of the Plan.
(l) Notwithstanding anything to the contrary, if this is
a non-standardized Plan that would otherwise fail to meet the requirements of
Code Section 410(b)(1) or 410(b)(2)(A)(i) and the Treasury Regulations
thereunder (including Treasury Regulation Section 1.401(a)(4)-2(b)(4)(vi)(D)(3)
which treats Participants only receiving top heavy minimums as not benefiting)
because Employer contributions would not be allocated to a sufficient number or
percentage of Participants for a Plan Year, then the following rules may be
applied:
(1) The group of Participants eligible to share in the
Employer's contributions or Forfeitures for the Plan Year will
be expanded to include the minimum number of Participants who
would not otherwise be eligible as are necessary to satisfy
the requirements of Code section 410(b)(1)(B). The specific
Participants who shall become eligible under the terms of this
paragraph shall be those who have not separated from service
prior to the last day of the Plan Year and, when compared to
similarly situated Participants, have completed the greatest
number of Hours of Service in the Plan Year.
(2) If after application of paragraph (1) above, the
requirements of Code section 410(b)(1)(B) are still not
satisfied, then the group of Participants eligible to share in
the Employer's contributions or Forfeitures for the Plan Year
shall be further expanded to include the minimum number of
Participants who have separated from service prior to the
21
last day of the Plan Year as are necessary to satisfy the
applicable test. The specific Participants who shall become
eligible to share shall be those Participants, when compared
to similarly situated Participants, who have completed the
greatest number of Hours of Service in the Plan Year before
separation from service.
Nothing in this subsection shall permit the reduction
of a Participant's accrued benefit. Therefore any amounts that have
previously been allocated to Participants may not be reallocated to
satisfy these requirements. In such event, the Employer shall make an
additional contribution equal to the amount such affected Participants
would have received had they been included in the allocations, even if
it exceeds the amount that would be deductible under Code Section 404.
Any adjustment to the allocations pursuant to this paragraph shall be
considered a retroactive amendment adopted by the last day of the Plan
Year.
4.4 MAXIMUM ANNUAL ADDITIONS
(a)(1) If a 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 Code Section 419(e))
maintained by the Employer, or an individual medical account (as
defined in Code Section 415(l)(2)) maintained by the Employer, or a
simplified employee pension (as defined in Code Section 408(k))
maintained by the Employer which provides Annual Additions (as defined
below), the amount of Annual Additions which may be credited to the
Participant's accounts for any Limitation Year shall not exceed the
lesser of the Maximum Permissible Amount or any other limitation
contained in this Plan. If the Employer contribution that would
otherwise be contributed or allocated to the Participant's accounts
would cause the Annual Additions for the Limitation Year to exceed the
Maximum Permissible Amount, the amount contributed or allocated will be
reduced so that the Annual Additions for the Limitation Year will equal
the Maximum Permissible Amount, and any amount in excess of the Maximum
Permissible Amount which would have been allocated to such Participant
may be allocated to other Participant's accounts in a manner consistent
with that specified in the Adoption Agreement.
(2) Prior to determining the Participant's actual 415
Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount for a Participant on
the basis of a reasonable estimation of the Participant's 415
Compensation for the Limitation Year, uniformly determined for
all Participants similarly situated.
(3) As soon as is administratively feasible after the end
of the Limitation Year the Maximum Permissible Amount for such
Limitation Year shall be determined on the basis of the
Participant's actual 415 Compensation for such Limitation
Year.
For Limitation Years beginning after December 31,
1997, for purposes of applying the limitations of this Article,
Compensation paid or made available during such Limitation Year shall
include any elective deferral (as defined in Code Section 402(g)(3)),
and any amount which is contributed or deferred by the Employer at the
election of the Employee and which is not includible in the gross
income of the Employee by reason of Code Section 125 or 457. For
Limitation Years beginning on or after January 1, 2001 (or, if
applicable, a date no earlier than January 1, 1998) to the extent
elected in the Adoption Agreement, for purposes of applying the
limitations of this Article, Compensation shall include any amount not
includible in gross income of the Participant by reason of Code Section
132(f)(4).
(b)(1) This subsection applies if, in addition to this Plan,
a Participant is covered under another qualified master or prototype
defined contribution plan maintained by the Employer, a welfare benefit
fund (as defined in Code Section 419(e)) maintained by the Employer, an
individual medical account (as defined in Code Section 415(l)(2))
maintained by the Employer, or a simplified employee pension (as
defined in Code Section 408(k)) maintained by the Employer, which
provides Annual Additions, during any Limitation Year. The Annual
Additions which may be credited to a Participant's accounts under this
Plan for any such Limitation Year shall not exceed the Maximum
Permissible Amount reduced by the Annual Additions credited to a
Participant's accounts under the other plans and welfare benefit funds,
individual medical accounts, and simplified employee pensions for the
same Limitation Year. If the Annual Additions with respect to the
Participant under other defined contribution plans and welfare benefit
funds maintained by the Employer are less than the Maximum Permissible
Amount and the Employer contribution that would otherwise be
contributed or allocated to the Participant's accounts under this Plan
would cause the Annual Additions for the Limitation Year to exceed this
limitation, the amount contributed or allocated will be reduced so that
the Annual Additions under all such plans and welfare benefit funds for
the Limitation Year will equal the Maximum Permissible Amount, and any
amount in excess of the Maximum Permissible Amount which would have
been allocated to such Participant may be allocated to other
Participants. If the Annual Additions with respect to the Participant
under such other defined contribution plans, welfare benefit funds,
individual medical accounts and simplified employee pensions in the
aggregate are equal to or greater than the Maximum Permissible Amount,
no amount will be contributed or allocated to the Participant's account
under this Plan for the Limitation Year.
(2) Prior to determining the Participant's actual 415
Compensation for the Limitation Year, the Employer may
determine the Maximum Permissible Amount for a Participant on
the basis of a reasonable estimation of the Participant's 415
Compensation for the Limitation Year, uniformly determined for
all Participants similarly situated.
22
(3) As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual 415 Compensation for the Limitation Year.
(4) If, pursuant to Section 4.4(b)(3) or Section 4.5, a
Participant's Annual Additions under this Plan and such other
plans would result in an Excess Amount (as defined below) for
a Limitation Year, the Excess Amount will be deemed to consist
of the Annual Additions last allocated, except that Annual
Additions attributable to a simplified employee pension will
be deemed to have been allocated first, followed by Annual
Additions to a welfare benefit fund or individual medical
account, and then by Annual Additions to a plan subject to
Code Section 412, regardless of the actual allocation date.
(5) 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, times
(ii) the ratio of (1) the Annual Additions
allocated to the Participant for the
Limitation Year as of such date under this
Plan to (2) the total Annual Additions
allocated to the Participant for the
Limitation Year as of such date under this
and all the other qualified defined
contribution plans.
(6) Any Excess Amount attributed to this Plan will be
disposed of in the manner described in Section 4.5.
(c) If the Participant is covered under another qualified
defined contribution plan maintained by the Employer which is not a
Master or Prototype Plan (as defined below), Annual Additions which may
be credited to the Participant's Combined Account under this Plan for
any Limitation Year will be limited in accordance with Section 4.4(b),
unless the Employer provides other limitations in the Adoption
Agreement.
(d) For any Limitation Year beginning prior to the date
the Code Section 415(e) limits are repealed with respect to this Plan
(as specified in the Adoption Agreement for the GUST transitional
rules), if the Employer maintains, or at any time maintained, a
qualified defined benefit plan covering any Participant in this Plan,
then the sum of the Participant's Defined Benefit Plan Fraction (as
defined below) and Defined Contribution Plan Fraction (as defined
below) may not exceed 1.0. In such event, the rate of accrual in the
defined benefit plan will be reduced to the extent necessary so that
the sum of the Defined Contribution Fraction and Defined Benefit
Fraction will equal 1.0. However, the Employer may specify an
alternative method under which the plans involved will satisfy the
limitations of Code Section 415(e), including increased top heavy
minimum benefits so that the combined limitation is 1.25 rather than
1.0. This subsection 4.4(d) does not apply for Limitation Years
beginning on or after January 1, 2000.
(e) For purposes of applying the limitations of Code
Section 415, the transfer of funds from one qualified plan to another
is not an Annual Addition. In addition, the following are not Employee
contributions for the purposes of Section 4.4(f)(1)(b): (1) rollover
contributions (as defined in Code Sections 402(c), 403(a)(4), 403(b)(8)
and 408(d)(3)); (2) repayments of loans made to a Participant from the
Plan; (3) repayments of distributions received by an Employee pursuant
to Code Section 411(a)(7)(B) (cash-outs); (4) repayments of
distributions received by an Employee pursuant to Code Section
411(a)(3)(D) (mandatory contributions); and (5) Employee contributions
to a simplified employee pension excludable from gross income under
Code Section 408(k)(6).
(f) For purposes of this Section, the following terms
shall be defined as follows:
(1) "Annual Additions" means the sum credited to a
Participant's accounts for any Limitation Year of (a) Employer
contributions, (b) Employee contributions (except as provided
below), (c) forfeitures, (d) amounts allocated, after March
31, 1984, to an individual medical account, as defined in Code
Section 415(l)(2), which is part of a pension or annuity plan
maintained by the Employer, (e) amounts derived from
contributions paid or accrued after December 31, 1985, in
taxable years ending after such date, which are attributable
to post-retirement medical benefits allocated to the separate
account of a key employee (as defined in Code Section
419A(d)(3)) under a welfare benefit fund (as defined in Code
Section 419(e)) maintained by the Employer and (f) allocations
under a simplified employee pension. Except, however, the
Compensation percentage limitation referred to in paragraph
(f)(9)(ii) below shall not apply to: (1) any contribution for
medical benefits (within the meaning of Code Section
419A(f)(2)) after separation from service which is otherwise
treated as an Annual Addition, or (2) any amount otherwise
treated as an Annual Addition under Code Section 415(l)(1).
Notwithstanding the foregoing, for Limitation Years beginning
prior to January 1, 1987, only that portion of Employee
contributions equal to the lesser of Employee contributions in
excess of six percent (6%) of 415 Compensation or one-half of
Employee contributions shall be considered an Annual Addition.
For this purpose, any Excess Amount applied
under Section 4.5 in the Limitation Year to reduce Employer
contributions shall be considered Annual Additions for such
Limitation Year.
23
(2) "Defined Benefit Fraction" means a fraction, the
numerator of which is the sum of the Participant's Projected
Annual Benefits (as defined below) under all the defined
benefit plans (whether or not terminated) maintained by the
Employer, and the denominator of which is the lesser of one
hundred twenty-five percent (125%) of the dollar limitation
determined for the Limitation Year under Code Sections
415(b)(1)(A) as adjusted by Code Section 415(d) or one hundred
forty percent (140%) of the Highest Average Compensation (as
defined below) including any adjustments under Code Section
415(b).
Notwithstanding the above, if the
Participant was a Participant as of the first day of the first
Limitation Year beginning after December 31, 1986, in one or
more defined benefit plans maintained by the Employer which
were in existence on May 6, 1986, the denominator of this
fraction will not be less than one hundred twenty-five percent
(125%) of the sum of the annual benefits under such plans
which the Participant had accrued as of the end of the close
of the last Limitation Year beginning before January 1, 1987,
disregarding any changes in the terms and conditions of the
plan after May 5, 1986. The preceding sentence applies only if
the defined benefit plans individually and in the aggregate
satisfied the requirements of Code Section 415 for all
Limitation Years beginning before January 1, 1987.
Notwithstanding the foregoing, for any Top
Heavy Plan Year, one hundred percent (100%) shall be
substituted for one hundred twenty-five percent (125%) unless
the extra minimum allocation or benefit is being made pursuant
to the Employer's election in the Adoption Agreement. However,
for any Plan Year in which this Plan is a Super Top Heavy
Plan, one hundred percent (100%) shall always be substituted
for one hundred twenty-five percent (125%).
(3) "Defined Contribution Dollar Limitation" means
$30,000 as adjusted under Code Section 415(d).
(4) "Defined Contribution Fraction" means a fraction, the
numerator of which is the sum of the Annual Additions to the
Participant's accounts under all the defined contribution
plans (whether or not terminated) maintained by the Employer
for the current and all prior Limitation Years, (including the
Annual Additions attributable to the Participant's
nondeductible voluntary employee contributions to any defined
benefit plans, whether or not terminated, maintained by the
Employer and the Annual Additions attributable to all welfare
benefit funds (as defined in Code Section 419(e)), individual
medical accounts (as defined in Code Section 415(l)(2)), and
simplified employee pensions (as defined in Code Section
408(k)) maintained by the Employer), and the denominator of
which is the sum of the maximum aggregate amounts for the
current and all prior Limitation Years in which the Employee
had 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 one
hundred twenty-five percent (125%) of the dollar limitation
determined under Code Section 415(c)(1)(A) as adjusted by Code
Section 415(d) or thirty-five percent (35%) of the
Participant's 415 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 5, 1986, the numerator of this fraction will be adjusted
if the sum of this fraction and the Defined Benefit Fraction
would otherwise exceed 1.0 under the terms of this Plan. Under
the adjustment, an amount equal to the product of (1) the
excess of the sum of the fractions over 1.0 times (2) the
denominator of this fraction, will be permanently subtracted
from the numerator of this fraction. The adjustment is
calculated using the fractions as they would be computed as of
the end of the last Limitation Year beginning before January
1, 1987, and disregarding any changes in the terms and
conditions of the plan made after May 5, 1986, but using the
Code Section 415 limitation applicable to the first Limitation
Year beginning on or after January 1, 1987.
For Limitation Years beginning prior to January 1, 1987, the
Annual Additions shall not be recomputed to treat all Employee
contributions as Annual Additions.
Notwithstanding the foregoing, for any Top
Heavy Plan Year, one hundred percent (100%) shall be
substituted for one hundred twenty-five percent (125%) unless
the extra minimum allocation or benefit is being made pursuant
to the Employer's election in the Adoption Agreement. However,
for any Plan Year in which this Plan is a Super Top Heavy
Plan, one hundred percent (100%) shall always be substituted
for one hundred twenty-five percent (125%).
(5) "Employer" means the Employer that adopts this Plan
and all Affiliated Employers, except that for purposes of this
Section, the determination of whether an entity is an
Affiliated Employer shall be made by applying Code Section
415(h).
(6) "Excess Amount" means the excess of the Participant's
Annual Additions for the Limitation Year over the Maximum
Permissible Amount.
24
(7) "Highest Average Compensation" means the average
Compensation for the three (3) consecutive Years of Service
with the Employer while a Participant in the Plan that
produces the highest average. A Year of Service with the
Employer is the twelve (12) consecutive month period ending on
the last day of the Limitation Year.
(8) "Master or Prototype Plan" means a plan the form of
which is the subject of a favorable opinion letter from the
IRS.
(9) "Maximum Permissible Amount" means the maximum Annual
Addition that may be contributed or allocated to a
Participant's accounts under the Plan for any Limitation Year,
which shall not exceed the lesser of:
(i) the Defined Contribution Dollar Limitation,
or
(ii) twenty-five percent (25%) of the
Participant's 415 Compensation for the
Limitation Year.
The Compensation Limitation referred to in
(ii) shall not apply to any contribution for medical benefits
(within the meaning of Code Sections 401(h) or 419A(f)(2))
which is otherwise treated as an Annual Addition under Code
Section 415(l)(1) or Code Section 419A(d)(2).
If a short Limitation Year is created
because of an amendment changing the Limitation Year to a
different twelve (12) consecutive month period, the Maximum
Permissible Amount will not exceed the Defined Contribution
Dollar Limitation multiplied by a fraction, the numerator of
which is the number of months in the short Limitation
Year and the denominator of which is twelve (12).
(10) "Projected Annual Benefit" means the annual
retirement benefit (adjusted to an actuarially equivalent
straight life annuity if such benefit is expressed in a form
other than a straight life annuity or qualified joint and
survivor annuity) to which the Participant would be entitled
under the terms of the plan assuming:
(i) the Participant will continue employment
until Normal Retirement Age (or current age, if later),
and
(ii) the Participant's 415 Compensation for the
current Limitation Year and all other relevant factors
used to determine benefits under the Plan will remain
constant for all future Limitation Years.
For purposes of this subsection, straight life annuity means
an annuity that is payable in equal installments for the life
of the Participant that terminates upon the Participant's
death.
(g) Notwithstanding anything contained in this Section to
the contrary, the limitations, adjustments and other requirements
prescribed in this Section shall at all times comply with the
provisions of Code Section 415 and the Treasury Regulations thereunder,
the terms of which are specifically incorporated herein by reference.
4.5 ADJUSTMENT FOR EXCESSIVE ANNUAL ADDITIONS
Allocation of Annual Additions to a Participant's
Combined Account for a Limitation Year generally will cease once the
limits of Section 4.4 have been reached for such Limitation Year.
However, if as a result of the allocation of Forfeitures, a reasonable
error in estimating a Participant's annual 415 Compensation, a
reasonable error in determining the amount of elective deferrals
(within the meaning of Code Section 402(g)(3)) that may be made with
respect to any Participant under the limits of Section 4.4, or other
facts and circumstances to which Treasury Regulation Section
1.415-6(b)(6) shall be applicable, the Annual Additions under this Plan
would cause the maximum provided in Section 4.4 to be exceeded, the
Excess Amount will be disposed of in one of the following manners, as
uniformly determined by the Plan Administrator for all Participants
similarly situated:
(a) Any after-tax voluntary Employee
contributions (plus attributable earnings), to the extent they
would reduce the Excess Amount, will be distributed to the
Participant;
(b) If, after the application of subparagraph
(a), an Excess Amount still exists, any unmatched Elective
Deferrals (and for Limitation Years beginning after December
31, 1995, any earnings attributable to such Elective
Deferrals), to the extent they would reduce the Excess Amount,
will be distributed to the Participant;
(c) To the extent necessary, matched Elective
Deferrals and Employer matching contributions will be
proportionately reduced from the Participant's Account. The
Elective Deferrals (and for Limitation Years beginning after
December 31, 1995, any earnings attributable to such Elective
Deferrals) will be distributed to the Participant and the
related Employer matching contributions will be forfeited;
25
(d) If, after the application of subparagraphs
(a), (b) and (c), 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 will be used to reduce Employer contributions
(including any allocation of Forfeitures) for such Participant
in the next Limitation Year, and each succeeding Limitation
Year if necessary;
(e) If, after the application of subparagraphs
(a), (b) and (c), an Excess Amount still exists, and the
Participant is not covered by the Plan at the end of a
Limitation Year, the Excess Amount will be held unallocated in
a suspense account. The suspense account will be applied to
reduce future Employer contributions (including allocation of
any Forfeitures) for all remaining Participants in the next
Limitation Year, and each succeeding Limitation Year if
necessary; and
(f) If a suspense account is in existence at any
time during a Limitation Year pursuant to this Section, no
investment gains and losses shall be allocated to such
suspense account. If a suspense account is in existence at any
time during a particular Limitation Year, all amounts in the
suspense account must be allocated to Participants' Accounts
before any Employer contributions or any Employee
contributions may be made to the Plan for that Limitation
Year. Except as provided in (a), (b) and (c) above, Excess
Amounts may not be distributed to Participants or Former
Participants.
4.6 ROLLOVERS
(a) Unless elected otherwise in the Adoption Agreement,
with the consent of the Administrator, the Plan may accept a rollover,
provided the rollover will not jeopardize the tax-exempt status of the
Plan or create adverse tax consequences for the Employer. The amounts
rolled over shall be placed in a Participant's Rollover Account. Such
account shall be fully Vested at all times and shall not be subject to
forfeiture for any reason. For purposes of this Section, the term
Participant shall include any Eligible Employee who is not yet a
Participant if, pursuant to the Adoption Agreement, a rollover is
permitted by such Eligible Employee.
(b) Amounts in a Participant's Rollover Account shall be
held by the Trustee pursuant to the provisions of this Plan and may not
be withdrawn by, or distributed to the Participant, in whole or in
part, except as elected in the Adoption Agreement and subsection (c)
below. The Trustee shall have no duty or responsibility to inquire as
to the propriety of the amount, value or type of assets transferred,
nor to conduct any due diligence with respect to such assets; provided,
however, that such assets are otherwise eligible to be held by the
Trustee under the terms of this Plan.
(c) At Normal Retirement Date, or such other date when
the Participant or Eligible Employee or such Participant's or Eligible
Employee's Beneficiary shall be entitled to receive benefits, the
Participant's Rollover Account shall be used to provide additional
benefits to the Participant or the Participant's Beneficiary. Any
distribution of amounts held in a Participant's Rollover Account shall
be made in a manner which is consistent with and satisfies the
provisions of Sections 6.5 and 6.6, including, but not limited to, all
notice and consent requirements of Code Sections 411(a)(11) and 417 and
the Treasury Regulations thereunder. Furthermore, such amounts shall be
considered to be part of a Participant's benefit in determining whether
an involuntary cash-out of benefits may be made without Participant
consent.
(d) The Administrator may direct that rollovers made
after a Valuation Date be segregated into a separate account for each
Participant until such time as the allocations pursuant to this Plan
have been made, at which time they may remain segregated, invested as
part of the general Trust Fund or, if elected in the Adoption
Agreement, directed by the Participant.
(e) For purposes of this Section, the term "qualified
plan" shall mean any tax qualified plan under Code Section 401(a), or
any other plans from which distributions are eligible to be rolled over
into this Plan pursuant to the Code. The term "rollover" means: (i)
amounts transferred to this Plan directly from another qualified plan;
(ii) distributions received by an Employee from other qualified plans
which are eligible for tax-free rollover to a qualified plan and which
are transferred by the Employee to this Plan within sixty (60) days
following receipt thereof; (iii) amounts transferred to this Plan from
a conduit individual retirement account provided that the conduit
individual retirement account has no assets other than assets which (A)
were previously distributed to the Employee by another qualified plan
(B) were eligible for tax-free rollover to a qualified plan and (C)
were deposited in such conduit individual retirement account within
sixty (60) days of receipt thereof; (iv) amounts distributed to the
Employee from a conduit individual retirement account meeting the
requirements of clause (iii) above, and transferred by the Employee to
this Plan within sixty (60) days of receipt thereof from such conduit
individual retirement account; and (v) any other amounts which are
eligible to be rolled over to this Plan pursuant to the Code.
(f) Prior to accepting any rollovers to which this
Section applies, the Administrator may require the Employee to
establish (by providing opinion of counsel or otherwise) that the
amounts to be rolled over to this Plan meet the requirements of this
Section and the Code.
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4.7 PLAN-TO-PLAN TRANSFERS FROM QUALIFIED PLANS
(a) With the consent of the Administrator, amounts may be
transferred (within the meaning of Code Section 414(l)) to this Plan
from other tax qualified plans under Code Section 401(a), provided the
plan from which such funds are transferred permits the transfer to be
made and the transfer will not jeopardize the tax-exempt status of the
Plan or Trust or create adverse tax consequences for the Employer.
Prior to accepting any transfers to which this Section applies, the
Administrator may require an opinion of counsel that the amounts to be
transferred meet the requirements of this Section. The amounts
transferred shall be placed in a Participant's Transfer Account.
Furthermore, for Vesting purposes, the Participant's Transfer Account
shall be treated as a separate Participant's Account.
(b) Amounts in a Participant's Transfer Account shall be
held by the Trustee pursuant to the provisions of this Plan and may not
be withdrawn by, or distributed to the Participant, in whole or in
part, except as elected in the Adoption Agreement and subsection (d)
below, provided the restrictions of subsection (c) below and Section
6.15 are satisfied. The Trustee shall have no duty or responsibility to
inquire as to the propriety of the amount, value or type of assets
transferred, nor to conduct any due diligence with respect to such
assets; provided, however, that such assets are otherwise eligible to
be held by the Trustee under the terms of this Plan.
(c) Except as permitted by Treasury Regulations
(including Treasury Regulation Section 1.411(d)-4), amounts
attributable to elective contributions (as defined in Treasury
Regulation Section 1.401(k)-1(g)(3)), including amounts treated as
elective contributions, which are transferred from another qualified
plan in a plan-to-plan transfer (other than a direct rollover) shall be
subject to the distribution limitations provided for in Treasury
Regulation Section 1.401(k)-1(d).
(d) At Normal Retirement Date, or such other date when
the Participant or the Participant's Beneficiary shall be entitled to
receive benefits, the Participant's Transfer Account shall be used to
provide additional benefits to the Participant or the Participant's
Beneficiary. Any distribution of amounts held in a Participant's
Transfer Account shall be made in a manner which is consistent with and
satisfies the provisions of Sections 6.5 and 6.6, including, but not
limited to, all notice and consent requirements of Code Sections
411(a)(11) and 417 and the Treasury Regulations thereunder.
Furthermore, such amounts shall be considered to be part of a
Participant's benefit in determining whether an involuntary cash-out of
benefits may be made without Participant consent.
(e) The Administrator may direct that Employee transfers
made after a Valuation Date be segregated into a separate account for
each Participant until such time as the allocations pursuant to this
Plan have been made, at which time they may remain segregated, invested
as part of the general Trust Fund or, if elected in the Adoption
Agreement, directed by the Participant.
(f) Notwithstanding anything herein to the contrary, a
transfer directly to this Plan from another qualified plan (or a
transaction having the effect of such a transfer) shall only be
permitted if it will not result in the elimination or reduction of any
Section 411(d)(6) protected benefit as described in Section
8.1(e).
4.8 VOLUNTARY EMPLOYEE CONTRIBUTIONS
(a) If elected in the Adoption Agreement, each
Participant may, in accordance with nondiscriminatory procedures
established by the Administrator, elect to make after-tax voluntary
Employee contributions to this Plan. Such contributions must generally
be paid to the Trustee within a reasonable period of time after being
received by the Employer.
(b) The balance in each Participant's Voluntary
Contribution Account shall be fully Vested at all times and shall not
be subject to Forfeiture for any reason.
(c) A Participant may elect at any time to withdraw
after-tax voluntary Employee contributions from such Participant's
Voluntary Contribution Account and the actual earnings thereon in a
manner which is consistent with and satisfies the provisions of Section
6.5, including, but not limited to, all notice and consent requirements
of Code Sections 411(a)(11) and 417 and the Treasury Regulations
thereunder. If the Administrator maintains sub-accounts with respect to
after-tax voluntary Employee contributions (and earnings thereon) which
were made on or before a specified date, a Participant shall be
permitted to designate which sub-account shall be the source for the
withdrawal. Forfeitures of Employer contributions shall not occur
solely as a result of an Employee's withdrawal of after-tax voluntary
Employee contributions.
In the event a Participant has received a hardship
distribution pursuant to Treasury Regulation Section
1.401(k)-1(d)(2)(iii)(B) from any plan maintained by the Employer, then
the Participant shall be barred from making any after-tax voluntary
Employee contributions for a period of twelve (12) months after receipt
of the hardship distribution.
(d) At Normal Retirement Date, or such other date when
the Participant or the Participant's Beneficiary is entitled to receive
benefits, the Participant's Voluntary Contribution Account shall be
used to provide additional benefits to the Participant or the
Participant's Beneficiary.
27
4.9 QUALIFIED VOLUNTARY EMPLOYEE CONTRIBUTIONS
(a) If this is an amendment to a Plan that previously
permitted deductible voluntary Employee contributions, then each
Participant who made Qualified Voluntary Employee Contributions within
the meaning of Code Section 219(e)(2) as it existed prior to the
enactment of the Tax Reform Act of 1986, shall have such contributions
held in a separate Qualified Voluntary Employee Contribution Account
which shall be fully Vested at all times. Such contributions, however,
shall not be permitted for taxable years beginning after December 31,
1986.
(b) A Participant may, upon written request delivered to
the Administrator, make withdrawals from such Participant's Qualified
Voluntary Employee Contribution Account. Any distribution shall be made
in a manner which is consistent with and satisfies the provisions of
Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 411(a)(11) and 417 and the Regulations
thereunder.
(c) At Normal Retirement Date, or such other date when
the Participant or the Participant's Beneficiary is entitled to receive
benefits, the Qualified Voluntary Employee Contribution Account shall
be used to provide additional benefits to the Participant or the
Participant's Beneficiary.
4.10 DIRECTED INVESTMENT ACCOUNT
(a) If elected in the Adoption Agreement, all
Participants may direct the Trustee as to the investment of all or a
portion of their individual account balances as set forth in the
Adoption Agreement and within limits set by the Employer. Participants
may direct the Trustee, in writing (or in such other form which is
acceptable to the Trustee), to invest their accounts in specific
assets, specific funds or other investments permitted under the Plan
and the Participant Direction Procedures. That portion of the account
of any Participant that is subject to investment direction of such
Participant will be considered a Participant Directed Account.
(b) The Administrator will establish a Participant
Direction Procedure, to be applied in a uniform and nondiscriminatory
manner, setting forth the permissible investment options under this
Section, how often changes between investments may be made, and any
other limitations and provisions that the Administrator may impose on a
Participant's right to direct investments.
(c) The Administrator may, in its discretion, include or
exclude by amendment or other action from the Participant Direction
Procedures such instructions, guidelines or policies as it deems
necessary or appropriate to ensure proper administration of the Plan,
and may interpret the same accordingly.
(d) As of each Valuation Date, all Participant Directed
Accounts shall be charged or credited with the net earnings, gains,
losses and expenses as well as any appreciation or depreciation in the
market value using publicly listed fair market values when available or
appropriate as follows:
(1) to the extent the assets in a Participant Directed
Account are accounted for as pooled assets or investments, the
allocation of earnings, gains and losses of each Participant's
Account shall be based upon the total amount of funds so
invested in a manner proportionate to the Participant's share
of such pooled investment; and
(2) to the extent the assets in a Participant Directed
Account are accounted for as segregated assets, the allocation
of earnings, gains on and losses from such assets shall be
made on a separate and distinct basis.
(e) Investment directions will be processed as soon as
administratively practicable after proper investment directions are
received from the Participant. No guarantee is made by the Plan,
Employer, Administrator or Trustee that investment directions will be
processed on a daily basis, and no guarantee is made in any respect
regarding the processing time of an investment direction.
Notwithstanding any other provision of the Plan, the Employer,
Administrator or Trustee reserves the right to not value an investment
option on any given Valuation Date for any reason deemed appropriate by
the Employer, Administrator or Trustee. Furthermore, the processing of
any investment transaction may be delayed for any legitimate business
reason (including, but not limited to, failure of systems or computer
programs, failure of the means of the transmission of data, force
majeure, the failure of a service provider to timely receive values or
prices, and correction for errors or omissions or the errors or
omissions of any service provider). The processing date of a
transaction will be binding for all purposes of the Plan and considered
the applicable Valuation Date for an investment transaction.
(f) If the Employer has elected in the Adoption Agreement
that it intends to operate any portion of this Plan as an Act Section
404(c) plan, the Participant Direction Procedures should provide an
explanation of the circumstances under which Participants and their
Beneficiaries may give investment instructions, including but not
limited to, the following:
(1) the conveyance of instructions by the Participants
and their Beneficiaries to invest Participant Directed
Accounts in a Directed Investment Option;
28
(2) the name, address and phone number of the Fiduciary
(and, if applicable, the person or persons designated by the
Fiduciary to act on its behalf) responsible for providing
information to the Participant or a Beneficiary upon request
relating to the Directed Investment Options;
(3) applicable restrictions on transfers to and from any
Designated Investment Alternative;
(4) any restrictions on the exercise of voting, tender
and similar rights related to a Directed Investment Option by
the Participants or their Beneficiaries;
(5) a description of any transaction fees and expenses
which affect the balances in Participant Directed Accounts in
connection with the purchase or sale of a Directed Investment
Option; and
(6) general procedures for the dissemination of
investment and other information relating to the Designated
Investment Alternatives as deemed necessary or appropriate,
including but not limited to a description of the following:
(i) the investment vehicles available under the
Plan, including specific information regarding any
Designated Investment Alternative;
(ii) any designated Investment Managers; and
(iii) a description of the additional information
that may be obtained upon request from the Fiduciary
designated to provide such information.
(g) With respect to those assets in a Participant
Directed Account, the Participant or Beneficiary shall direct the
Trustee with regard to any voting, tender and similar rights associated
with the ownership of such assets (hereinafter referred to as the
"Stock Rights"), unless elected otherwise in the Adoption Agreement, as
follows:
(1) each Participant or Beneficiary shall direct the
Trustee to vote or otherwise exercise such Stock Rights in
accordance with the provisions, conditions and terms of any
such Stock Rights;
(2) such directions shall be provided to the Trustee by
the Participant or Beneficiary in accordance with the
procedure as established by the Administrator and the Trustee
shall vote or otherwise exercise such Stock Rights with
respect to which it has received directions to do so under
this Section; and
(3) to the extent to which a Participant or Beneficiary
does not instruct the Trustee to vote or otherwise exercise
such Stock Rights, such Participants or Beneficiaries shall be
deemed to have directed the Trustee that such Stock Rights
remain nonvoted and unexercised.
(h) Any information regarding investments available under
the Plan, to the extent not required to be described in the Participant
Direction Procedures, may be provided to Participants in one or more
documents (or in any other form, including, but not limited to,
electronic media) which are separate from the Participant Direction
Procedures and are not thereby incorporated by reference into this
Plan.
4.11 INTEGRATION IN MORE THAN ONE PLAN
If the Employer maintains qualified retirement plans that
provide for permitted disparity (integration), the provisions of Section
4.3(b)(4) will apply. Furthermore, If the Employer maintains two or more
standardized paired plans, only one plan may provide for permitted disparity.
4.12 QUALIFIED MILITARY SERVICE
Notwithstanding any provisions of this Plan to the contrary,
effective as of the later of December 12, 1994, or the Effective Date of the
Plan, contributions, benefits and service credit with respect to qualified
military service will be provided in accordance with Code Section 414(u).
Furthermore, loan repayments may be suspended under this Plan as permitted under
Code Section 414(u)(4).
29
ARTICLE V
VALUATIONS
5.1 VALUATION OF THE TRUST FUND
The Administrator shall direct the Trustee, as of each
Valuation Date, to determine the net worth of the assets comprising the Trust
Fund as it exists on the Valuation Date. In determining such net worth, the
Trustee shall value the assets comprising the Trust Fund at their fair market
value (or their contractual value in the case of a Contract or Policy) as of the
Valuation Date and shall deduct all expenses for which the Trustee has not yet
been paid by the Employer or the Trust Fund. The Trustee may update the value of
any shares held in a Participant Directed Account by reference to the number of
shares held on behalf of the Participant, priced at the market value as of the
Valuation Date.
5.2 METHOD OF VALUATION
In determining the fair market value of securities held in the
Trust Fund which are listed on a registered stock exchange, the Administrator
shall direct the Trustee to value the same at the prices they were last traded
on such exchange preceding the close of business on the Valuation Date. If such
securities were not traded on the Valuation Date, or if the exchange on which
they are traded was not open for business on the Valuation Date, then the
securities shall be valued at the prices at which they were last traded prior to
the Valuation Date. Any unlisted security held in the Trust Fund shall be valued
at its bid price next preceding the close of business on the Valuation Date,
which bid price shall be obtained from a registered broker or an investment
banker. In determining the fair market value of assets other than securities for
which trading or bid prices can be obtained, the Trustee may appraise such
assets itself, or in its discretion, employ one or more appraisers for that
purpose and rely on the values established by such appraiser or appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 DETERMINATION OF BENEFITS UPON RETIREMENT
Every Participant may terminate employment with the Employer
and retire for purposes hereof on the Participant's Normal Retirement Date or
Early Retirement Date. However, a Participant may postpone the termination of
employment with the Employer to a later date, in which event the participation
of such Participant in the Plan, including the right to receive allocations
pursuant to Section 4.3, shall continue until such Participant's Retirement
Date. Upon a Participant's Retirement Date, or, if elected in the Adoption
Agreement, the attainment of Normal Retirement Date without termination of
employment with the Employer, or as soon thereafter as is practicable, the
Administrator shall direct the distribution, at the election of the Participant,
of all amounts credited to such Participant's Combined Account in accordance
with Section 6.5.
6.2 DETERMINATION OF BENEFITS UPON DEATH
(a) Upon the death of a Participant before the
Participant's Retirement Date or other termination of employment, all
amounts credited to such Participant's Combined Account shall, unless
elected otherwise in the Adoption Agreement, become fully Vested. The
Administrator shall direct, in accordance with the provisions of
Sections 6.6 and 6.7, the distribution of the deceased Participant's
Vested accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the
Administrator shall direct, in accordance with the provisions of
Sections 6.6 and 6.7, the distribution of any remaining Vested amounts
credited to the accounts of such deceased Former Participant to such
Former Participant's Beneficiary.
(c) The Administrator may require such proper proof of
death and such evidence of the right of any person to receive payment
of the value of the account of a deceased Participant or Former
Participant as the Administrator may deem desirable. The
Administrator's determination of death and of the right of any person
to receive payment shall be conclusive.
(d) Unless otherwise elected in the manner prescribed in
Section 6.6, the Beneficiary of the Pre-Retirement Survivor Annuity
shall be the Participant's surviving spouse. Except, however, the
Participant may designate a Beneficiary other than the spouse for the
Pre-Retirement Survivor Annuity if:
(1) the Participant and the Participant's spouse have
validly waived the Pre-Retirement Survivor Annuity in the
manner prescribed in Section 6.6, and the spouse has waived
the right to be the Participant's Beneficiary,
(2) the Participant is legally separated or has been
abandoned (within the meaning of local law) and the
Participant has a court order to such effect (and there is no
qualified domestic relations order as defined in Code Section
414(p) which provides otherwise),
(3) the Participant has no spouse, or
30
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall
be made on a form satisfactory to the Administrator. A Participant may
at any time revoke a designation of a Beneficiary or change a
Beneficiary by filing written (or in such other form as permitted by
the IRS) notice of such revocation or change with the Administrator.
However, the Participant's spouse must again consent in writing (or in
such other form as permitted by the IRS) to any change in Beneficiary
unless the original consent acknowledged that the spouse had the right
to limit consent only to a specific Beneficiary and that the spouse
voluntarily elected to relinquish such right.
(e) A Participant may, at any time, designate a
Beneficiary for death benefits, if any, payable under the Plan that are
in excess of the Pre-Retirement Survivor Annuity without the waiver or
consent of the Participant's spouse. In the event no valid designation
of Beneficiary exists, or if the Beneficiary is not alive at the time
of the Participant's death, the death benefit will be paid in the
following order of priority, unless the Employer specifies a different
order of priority in an addendum to the Adoption Agreement, to:
(1) The Participant's surviving spouse;
(2) The Participant's children, including adopted
children, per stirpes
(3) The Participant's surviving parents, in equal shares;
or
(4) The Participant's estate.
If the Beneficiary does not predecease the Participant, but dies prior
to distribution of the death benefit, the death will be paid to the
Beneficiary's estate.
(f) If the Plan provides an insured death benefit and a
Participant dies before any insurance coverage to which the Participant
is entitled under the Plan is effected, the death benefit from such
insurance coverage shall be limited to the standard rated premium which
was or should have been used for such purpose.
(g) In the event of any conflict between the terms of
this Plan and the terms of any Contract issued hereunder, the Plan
provisions shall control.
6.3 DETERMINATION OF BENEFITS IN EVENT OF DISABILITY
In the event of a Participant's Total and Permanent Disability
prior to the Participant's Retirement Date or other termination of employment,
all amounts credited to such Participant's Combined Account shall, unless
elected otherwise in the Adoption Agreement, become fully Vested. In the event
of a Participant's Total and Permanent Disability, the Administrator, in
accordance with the provisions of Sections 6.5 and 6.7, shall direct the
distribution to such Participant of all Vested amounts credited to such
Participant's Combined Account.
6.4 DETERMINATION OF BENEFITS UPON TERMINATION
(a) If a Participant's employment with the Employer is
terminated for any reason other than death, Total and Permanent
Disability, or retirement, then such Participant shall be entitled to
such benefits as are provided hereinafter pursuant to this Section.
Distribution of the funds due to a Terminated
Participant shall be made on the occurrence of an event which would
result in the distribution had the Terminated Participant remained in
the employ of the Employer (upon the Participant's death, Total and
Permanent Disability, Early or Normal Retirement). However, at the
election of the Participant, the Administrator shall direct that the
entire Vested portion of the Terminated Participant's Combined Account
be payable to such Terminated Participant provided the conditions, if
any, set forth in the Adoption Agreement have been satisfied. Any
distribution under this paragraph shall be made in a manner which is
consistent with and satisfies the provisions of Section 6.5, including
but not limited to, all notice and consent requirements of Code
Sections 411(a)(11) and 417 and the Treasury Regulations thereunder.
Regardless of whether distributions in kind are
permitted, in the event that the amount of the Vested portion of the
Terminated Participant's Combined Account equals or exceeds the fair
market value of any insurance Contracts, the Trustee, when so directed
by the Administrator and agreed to by the Terminated Participant, shall
assign, transfer, and set over to such Terminated Participant all
Contracts on such Terminated Participant's life in such form or with
such endorsements, so that the settlement options and forms of payment
are consistent with the provisions of Section 6.5. In the event that
the Terminated Participant's Vested portion does not at least equal the
fair market value of the Contracts, if any, the Terminated Participant
may pay over to the Trustee the sum needed to make the distribution
equal to the value of the Contracts being assigned or transferred, or
the Trustee, pursuant to the Participant's election, may borrow the
cash value of the Contracts from
31
the Insurer so that the value of the Contracts is equal to the Vested
portion of the Terminated Participant's Combined Account and then
assign the Contracts to the Terminated Participant.
Notwithstanding the above, unless otherwise elected
in the Adoption Agreement, if the value of a Terminated Participant's
Vested benefit derived from Employer and Employee contributions does
not exceed $5,000 (or, $3,500 for distributions made prior to the later
of the first day of the first Plan Year beginning on or after August 5,
1997, or the date specified in the Adoption Agreement) the
Administrator shall direct that the entire Vested benefit be paid to
such Participant in a single lump-sum without regard to the consent of
the Participant or the Participant's spouse. A Participant's Vested
benefit shall not include Qualified Voluntary Employee Contributions
within the meaning of Code Section 72(o)(5)(B) for Plan Years beginning
prior to January 1, 1989. Furthermore, the determination of whether the
$5,000 (or, if applicable, $3,500) threshold has been exceeded is
generally based on the value of the Vested benefit as of the Valuation
Date preceding the date of the distribution. However, if the lookback
rule applies, the applicable threshold is deemed to be exceeded if the
Vested benefit exceeded the applicable threshold at the time of any
prior distribution. The lookback rule generally applies to all
distributions made prior to March 22, 1999. With respect to
distributions made on or after March 22, 1999, the lookback rule
applies if either (1) the provisions of Section 6.12 do not apply or
(2) a Participant has begun to receive distributions pursuant to an
optional form of benefit under which at least one scheduled periodic
distribution has not yet been made, and if the value of the
Participant's benefit, determined at the time of the first distribution
under that optional form of benefit exceeded the applicable threshold.
However, the Plan does not fail to satisfy the requirements of this
paragraph if, prior to the adoption of this Prototype Plan, the
lookback rule was applied to all distributions. Notwithstanding the
preceding, the lookback rule will not apply to any distributions made
on or after October 17, 2000, the effective date of Treasury
Regulations that repeal the lookback rule for distributions that are
not already exempt from such rules.
(b) The Vested portion of any Participant's Account shall
be a percentage of such Participant's Account determined on the basis
of the Participant's number of Years of Service (or Periods of Service
if the Elapsed Time Method is elected) according to the vesting
schedule specified in the Adoption Agreement. However, a Participant's
entire interest in the Plan shall be non-forfeitable upon the
Participant's Normal Retirement Age (if the Participant is employed by
the Employer on or after such date).
(c) For any Top Heavy Plan Year, the minimum top heavy
vesting schedule elected by the Employer in the Adoption Agreement will
automatically apply to the Plan. If no top heavy vesting schedule is
elected and the regular vesting schedule(s) elected in the Adoption
Agreement do not satisfy the minimum top heavy vesting requirements
under Code Section 416(b), a 6 year graded or, if applicable, a 3 year
cliff schedule (as provided under Code Section 416(b)) will
automatically apply to the Plan and shall be treated as a Plan
amendment pursuant to this Plan.. The minimum top heavy vesting
schedule applies to all benefits within the meaning of Code Section
411(a)(7) except those attributable to Employee contributions,
including benefits accrued before the effective date of Code Section
416 and benefits accrued before the Plan became top heavy. Further, no
decrease in a Participant's Vested percentage shall 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 the Vested percentage of such Employee's Participant's
Account shall be determined without regard to this Section 6.4(c).
If in any subsequent Plan Year the Plan ceases to be
a Top Heavy Plan, then unless a specific Plan amendment is made to
provide otherwise, the Administrator will continue to use the vesting
schedule in effect while the Plan was a Top Heavy Plan.
(d) Notwithstanding the vesting schedule above, upon the
complete discontinuance of the Employer's contributions to the Plan (if
this is a profit sharing plan) or upon any full or partial termination
of the Plan, all amounts then credited to the account of any affected
Participant shall become 100% Vested and shall not thereafter be
subject to Forfeiture.
(e) If this is an amended or restated Plan, then
notwithstanding the vesting schedule specified in the Adoption
Agreement, the Vested percentage of a Participant's Account shall not
be less than the Vested percentage attained as of the later of the
effective date or adoption date of this amendment and restatement. The
computation of a Participant's nonforfeitable percentage of such
Participant's interest in the Plan shall not be reduced as the result
of any direct or indirect amendment to this Article, or due to changes
in the Plan's status as a Top Heavy Plan.
(f) If the Plan's vesting schedule is amended, or if the
Plan is amended in any way that directly or indirectly affects the
computation of the Participant's nonforfeitable percentage or if the
Plan is deemed amended by an automatic change to a top heavy vesting
schedule, then each Participant with at least three (3) Years of
Service (or Periods of Service if the Elapsed Time Method is elected)
as of the expiration date of the election period may elect to have such
Participant's nonforfeitable percentage computed under the Plan without
regard to such amendment or change. If a Participant fails to make such
election, then such Participant shall be subject to the new vesting
schedule. The Participant's election period shall commence on the
adoption date of the amendment and shall end sixty (60) days after the
latest of:
(1) the adoption date of the amendment,
32
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of
the amendment from the Employer or Administrator.
(g) In determining Years of Service or Periods of Service
for purposes of vesting under the Plan, Years of Service or Periods of
Service shall be excluded as elected in the Adoption Agreement.
6.5 DISTRIBUTION OF BENEFITS
(a)(1) Unless otherwise elected as provided below, a
Participant who is married on the Annuity Starting Date and who does
not die before the Annuity Starting Date shall receive the value of all
Plan benefits in the form of a Joint and Survivor Annuity. The Joint
and Survivor Annuity is an annuity that commences immediately and shall
be equal in value to a single life annuity. Such joint and survivor
benefits following the Participant's death shall continue to the spouse
during the spouse's lifetime at a rate equal to fifty percent (50%) of
the rate at which such benefits were payable to the Participant. This
Joint and Survivor Annuity shall be considered the designated qualified
Joint and Survivor Annuity and the automatic form of payment for the
purposes of this Plan. However, the Participant may, without spousal
consent, elect to receive a smaller annuity benefit with continuation
of payments to the spouse at a rate of seventy-five percent (75%) or
one hundred percent (100%) of the rate payable to a Participant during
the Participant's lifetime, which alternative Joint and Survivor
Annuities shall be equal in value to the automatic Joint and 50%
Survivor Annuity. An unmarried Participant shall receive the value of
such Participant's benefit in the form of a life annuity. Such
unmarried Participant, however, may elect to waive the life annuity.
The election must comply with the provisions of this Section as if it
were an election to waive the Joint and Survivor Annuity by a married
Participant, but without fulfilling the spousal consent requirement.
The Participant may elect to have any annuity provided for in this
Section distributed upon the attainment of the earliest retirement age
under the Plan. The "earliest retirement age" is the earliest date on
which, under the Plan, the Participant could elect to receive
retirement benefits.
(2) Any election to waive the Joint and Survivor Annuity
must be made by the Participant in writing (or in such other
form as permitted by the IRS) during the election period and
be consented to in writing (or in such other form as permitted
by the IRS) by the Participant's spouse. If the spouse is
legally incompetent to give consent, the spouse's legal
guardian, even if such guardian is the Participant, may give
consent. Such election shall designate a Beneficiary (or a
form of benefits) that may not be changed without spousal
consent (unless the consent of the spouse expressly permits
designations by the Participant without the requirement of
further consent by the spouse). Such spouse's consent shall be
irrevocable and must acknowledge the effect of such election
and be witnessed by a Plan representative or a notary public.
Such consent shall not be required if it is established to the
satisfaction of the Administrator that the required consent
cannot be obtained because there is no spouse, the spouse
cannot be located, or other circumstances that may be
prescribed by Treasury Regulations. The election made by the
Participant and consented to by such Participant's spouse may
be revoked by the Participant in writing (or in such other
form as permitted by the IRS) without the consent of the
spouse at any time during the election period. A revocation of
a prior election shall cause the Participant's benefits to be
distributed as a Joint and Survivor Annuity. The number of
revocations shall not be limited. Any new election must comply
with the requirements of this paragraph. A former spouse's
waiver shall not be binding on a new spouse.
(3) The election period to waive the Joint and Survivor
Annuity shall be the ninety (90) day period ending on the
Annuity Starting Date.
(4) For purposes of this Section, spouse or surviving
spouse means 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 Code Section 414(p)
(5) With regard to the election, except as otherwise
provided herein, the Administrator shall provide to the
Participant no less than thirty (30) days and no more than
ninety (90) days before the Annuity Starting Date a written
(or such other form as permitted by the IRS) explanation of:
(i) the terms and conditions of the Joint and
Survivor Annuity,
(ii) the Participant's right to make and the
effect of an election to waive the Joint and Survivor
Annuity,
(iii) the right of the Participant's spouse to
consent to any election to waive the Joint and
Survivor Annuity, and
(iv) the right of the Participant to revoke such
election, and the effect of such revocation.
(6) Notwithstanding the above, with respect to
distributions made on or after December 31, 1996, if the
Participant elects (with spousal consent if applicable) to
waive the requirement that the explanation be provided at
least thirty (30) days before the Annuity Starting Date, the
election period shall be extended to the thirtieth (30th) day
after
33
the date on which such explanation is provided to the
Participant, unless the thirty (30) day period is waived
pursuant to the following provisions.
Any distribution provided for in this
Section made on or after December 31, 1996, may commence less
than thirty (30) days after the notice required by Code
Section 417(a)(3) is given provided the following requirements
are satisfied:
(i) the Administrator clearly informs the
Participant that the Participant has a right to a
period of thirty (30) days after receiving the notice
to consider whether to waive the Joint and Survivor
Annuity and to elect (with spousal consent) a form of
distribution other than a Joint and Survivor Annuity;
(ii) the Participant is permitted to revoke any
affirmative distribution election at least until the
Annuity Starting Date or, if later, at any time prior
to the expiration of the seven (7) day period that
begins the day after the explanation of the Joint and
Survivor Annuity is provided to the Participant;
(iii) the Annuity Starting Date is after the time
that the explanation of the Joint and Survivor
Annuity is provided to the Participant. However, the
Annuity Starting Date may be before the date that any
affirmative distribution election is made by the
Participant and before the date that the distribution
is permitted to commence under (iv) below; and
(iv) distribution in accordance with the
affirmative election does not commence before the
expiration of the seven (7) day period that begins
the day after the explanation of the Joint and
Survivor Annuity is provided to the Participant.
(b) In the event a married Participant duly elects
pursuant to paragraph (a)(2) above not to receive the benefit in the
form of a Joint and Survivor Annuity, or if such Participant is not
married, in the form of a life annuity, the Administrator, pursuant to
the election of the Participant, shall direct the distribution to a
Participant or Beneficiary any amount to which the Participant or
Beneficiary is entitled under the Plan in one or more of the following
methods which are permitted pursuant to the Adoption Agreement:
(1) One lump-sum payment in cash or in property;
(2) Partial withdrawals;
(3) Payments over a period certain in monthly, quarterly,
semiannual, or annual cash installments. In order to provide
such installment payments, the Administrator may (A) segregate
the aggregate amount thereof in a separate, federally insured
savings account, certificate of deposit in a bank or savings
and loan association, money market certificate or other liquid
short-term security or (B) purchase a nontransferable annuity
contract for a term certain (with no life contingencies)
providing for such payment. The period over which such payment
is to be made shall not extend beyond the Participant's life
expectancy (or the life expectancy of the Participant and the
Participant's designated Beneficiary);
(4) Purchase of or providing an annuity. However, such
annuity may not be in any form that will provide for payments
over a period extending beyond either the life of the
Participant (or the lives of the Participant and the
Participant's designated Beneficiary) or the life expectancy
of the Participant (or the life expectancy of the Participant
and the Participant's designated Beneficiary).
(c) The present value of a Participant's Joint and
Survivor Annuity derived from Employer and Employee contributions may
not be paid without the Participant's written (or in such other form as
permitted by the IRS) consent if the value exceeds, or has ever
exceeded at the time of any prior distribution, $5,000 (or $3,500, for
distributions made prior to the later of the first day of the first
Plan Year beginning after August 5, 1997, or the date specified in the
Adoption Agreement) and if the account balance is not immediately
distributable. Further, the spouse of a Participant must consent in
writing (or in such other form as permitted by the IRS) to any
immediate distribution. If the value of the Participant's benefit
derived from Employer and Employee contributions does not exceed, and
has never exceeded at the time of any prior distribution, $5,000 (or
$3,500, for distributions made prior to the later of the first day of
the first Plan Year beginning after August 5, 1997, or the date
specified in the Adoption Agreement) the Administrator will distribute
such benefit in a lump-sum without such Participant's consent. No
distribution may be made under the preceding sentence after the Annuity
Starting Date unless the Participant and the Participant's spouse
consent in writing (or in such other form as permitted by the IRS) to
such distribution. Any consent required under this paragraph must be
obtained not more than ninety (90) days before commencement of the
distribution and shall be made in a manner consistent with Section
6.5(a)(2). Notwithstanding the preceding, the lookback rule (which
provides that if the present value at the time of a distribution
exceeds the applicable dollar threshold, then the present value at any
subsequent time is deemed to exceed the threshold) will not apply to
any distributions made after October 16, 2000, the effective date of
Treasury Regulations that repeal such rule.
34
(d) If the value of a Participant's vested benefit:
(1) for Plan Years beginning before the later of August
6, 1997 or the date specified in the Adoption
Agreement, exceeds $3,500 (or exceeded $3,500 at the
time of any prior distribution),
(2) for Plan Years beginning after the later of August 5,
1997 or the date specified in the Adoption Agreement,
and for a distribution made prior to March 22, 1999,
exceeds $5,000 (or exceeded $5,000 at the time of any
prior distribution),
(3) and for Plan Years beginning after the later of
August 5, 1997 or the date specified in the Adoption
Agreement and for a distribution made after March 21,
1999, that either exceeds $5,000 or is a remaining
payment under a selected optional form of payment
that exceeded $5,000 at the time the selected payment
began,
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.
A benefit is "immediately distributable" if any part of the benefit
could be distributed to the Participant (or surviving spouse) before
the Participant attains (or would have attained if not deceased) the
later of the Participant's Normal Retirement Age or age 62. With regard
to this required consent:
(1) No consent shall be valid unless the Participant has
received a general description of the material features and an
explanation of the relative values of the optional forms of
benefit available under the Plan that would satisfy the notice
requirements of Code Section 417;
(2) The Participant must be informed of the right to
defer receipt of the distribution. If a Participant fails to
consent, it shall be deemed an election to defer the
commencement of payment of any benefit. However, any election
to defer the receipt of benefits shall not apply with respect
to distributions that are required under Section 6.5(e);
(3) Notice of the rights specified under this paragraph
shall be provided no less than thirty (30) days and no more
than ninety (90) days before the Annuity Starting Date;
(4) Written (or such other form as permitted by the IRS)
consent of the Participant to the distribution must not be
made before the Participant receives the notice and must not
be made more than ninety (90) days before the Annuity Starting
Date; and
(5) No consent shall be valid if a significant detriment
is imposed under the Plan on any Participant who does not
consent to the distribution.
(e) Notwithstanding any provision in the Plan to the
contrary, for Plan Years beginning after December 31, 1996, the
distribution of a Participant's benefits, whether under the Plan or
through the purchase of an annuity Contract, shall be made in
accordance with the following requirements and shall otherwise comply
with Code Section 401(a)(9) and the Treasury Regulations thereunder
(including Treasury Regulation Section 1.401(a)(9)-2), the provisions
of which are incorporated herein by reference:
(1) A Participant's benefits will be distributed or must
begin to be distributed not later than the Participant's
required beginning date. Alternatively, distributions to a
Participant must begin no later than the Participant's
required beginning date and must be made over the life of the
Participant (or the lives of the Participant and the
Participant's designated Beneficiary) or the life expectancy
of the Participant (or the life expectancies of the
Participant and the Participant's designated Beneficiary) in
accordance with Treasury Regulations. However, if the
distribution is to be in the form of a joint and survivor
annuity or single life annuity, then distributions must begin
no later than the required beginning date and must be made
over the life of the Participant (or the lives of the
Participant and the Participant's designated Beneficiary) in
accordance with Treasury Regulations.
(2) The "required beginning date" for a Participant who
is a five percent (5%) owner with respect to the Plan Year
ending in the calendar year in which such Participant attains
age 70 1/2 means, unless the Employer has elected to continue
the pre-SBJPA (Small Business Job Protection Act of 1996)
rules in the Adoption Agreement, April 1st of the calendar
year following the calendar year in which the Participant
attains age 70 1/2. Once distributions have begun to a five
percent (5%) owner under this subsection, they must continue
to be distributed, even if the Participant ceases to be a five
percent (5%) owner in a subsequent year.
(3) The "required beginning date" for a Participant other
than a five percent (5%) owner means, unless the Employer has
elected to continue the pre-SBJPA rules in the Adoption
Agreement, April 1st of the calendar year following the later
of the calendar year in which the Participant attains age 70
1/2 or the calendar year in which the Participant retires.
35
(4) If the election is made to continue the pre-SBJPA
rules, then except as provided below, the "required beginning
date" is April 1st of the calendar year following the calendar
year in which a Participant attains age 70 1/2.
(i) However, the required beginning date for a
Participant who had attained age 70 1/2 before
January 1, 1988, and was not a five percent (5%)
owner (within the meaning of Code Section 416) at any
time during the Plan Year ending with or within the
calendar year in which the Participant attained age
66 1/2 or any subsequent Plan Year, is April 1st of
the calendar year following the calendar in which the
Participant retires.
(ii) Notwithstanding (i) above, the required
beginning date for a Participant who was a five
percent (5%) owner (within the meaning of Code
Section 416) at any time during the five (5) Plan
Year period ending in the calendar year in which the
Participant attained age 70 1/2 is April 1st of the
calendar year in which the Participant attained age
70 1/2. In the case of a Participant who became a
five percent (5%) owner during any Plan Year after
the calendar year in which the Participant attained
age 70 1/2, the required beginning date is April 1st
of the calendar year following the calendar year in
which such subsequent Plan Year ends.
(5) If this is an amendment or restatement of a plan that
contained the pre-SBJPA rules and an election is made to use
the post-SBJPA rules, then the transition rules elected in the
Adoption Agreement will apply.
(6) Except as otherwise provided herein, five percent
(5%) owner means, for purposes of this Section, a Participant
who is a five percent (5%) owner as defined in Code Section
416 at any time during the Plan Year ending with or within the
calendar year in which such owner attains age 70 1/2.
(7) Distributions to a Participant and such Participant's
Beneficiaries will only be made in accordance with the
incidental death benefit requirements of Code Section
401(a)(9)(G) and the Treasury Regulations thereunder.
(f) For purposes of this Section, the life expectancy of
a Participant and/or a Participant's spouse (other than in the case of
a life annuity) shall or shall not be redetermined annually as elected
in the Adoption Agreement and in accordance with RegulationsTreasury
Regulations. If the Participant or the Participant's spouse may elect,
pursuant to the Adoption Agreement, to have life expectancies
recalculated, then the election, once made shall be irrevocable. If no
election is made by the time distributions must commence, then the life
expectancy of the Participant and the Participant's spouse shall not be
subject to recalculation. Life expectancy and joint and last survivor
life expectancy shall be computed using the return multiples in Tables
V and VI of Treasury Regulation Section 1.72-9.
(g) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of any
annuity Contract purchased and distributed to a Participant or spouse
shall comply with all of the requirements of this Plan.
(h) Subject to the spouse's right of consent afforded
under the Plan, the restrictions imposed by this Section shall not
apply if a Participant has, prior to January 1, 1984, made a written
designation to have retirement benefits paid in an alternative method
acceptable under Code Section 401(a) as in effect prior to the
enactment of the Tax Equity and Fiscal Responsibility Act of 1982
("TEFRA").
(i) If a distribution is made to a Participant who has
not severed employment and who is not fully Vested in the Participant's
Account and the Participant may increase the Vested percentage in such
account:
(1) A separate account shall be established for the
Participant's interest in the Plan as of the time of the
distribution, and
(2) At any relevant time the Participant's Vested portion of
the separate account shall be equal to an amount ("X")
determined by the formula:
X equals P(AB plus RxD)) - (R x D)
For purposes of applying the formula: P is the Vested
percentage at the relevant time, AB is the account
balance at the relevant time, D is the amount of
distribution, and R is the ratio of the account balance
at the relevant time to the account balance after
distribution.
(j) Notwithstanding any provision of this Plan to the
contrary, with respect to distributions under the Plan made in calendar
years beginning on or after January 1, 2002 (or earlier as specified in
the Adoption Agreement), the Plan will apply the minimum distribution
requirements of Section 401(a)(9) of the Code in accordance with the
Treasury Regulations under Code Section 401(a)(9) that were proposed in
January 2001. This provision shall continue in effect until the end of
the last calendar year beginning before the effective date of final
Treasury Regulations under Code Section 401(a)(9) or such other date
specified in guidance published by the IRS.
36
6.6 DISTRIBUTION OF BENEFITS UPON DEATH
(a) Unless otherwise elected as provided below, a Vested
Participant who dies before the Annuity Starting Date and who has a
surviving spouse shall have the Pre-Retirement Survivor Annuity paid to
the surviving spouse. The Participant's spouse may direct that payment
of the Pre-Retirement Survivor Annuity commence within a reasonable
period after the Participant's death. If the spouse does not so direct,
payment of such benefit will commence at the time the Participant would
have attained the later of Normal Retirement Age or age 62. However,
the spouse may elect a later commencement date. Any distribution to the
Participant's spouse shall be subject to the rules specified in Section
6.6(h).
(b) Any election to waive the Pre-Retirement Survivor
Annuity before the Participant's death must be made by the Participant
in writing (or in such other form as permitted by the IRS) during the
election period and shall require the spouse's irrevocable consent in
the same manner provided for in Section 6.5(a)(2). Further, the
spouse's consent must acknowledge the specific nonspouse Beneficiary.
Notwithstanding the foregoing, the nonspouse Beneficiary need not be
acknowledged, provided the consent of the spouse acknowledges that the
spouse has the right to limit consent only to a specific Beneficiary
and that the spouse voluntarily elects to relinquish such right.
(c) The election period to waive the Pre-Retirement
Survivor Annuity shall begin on the first day of the Plan Year in which
the Participant attains age 35 and end on the date of the Participant's
death. An earlier waiver (with spousal consent) may be made provided a
written (or such other form as permitted by the IRS) explanation of the
Pre-Retirement Survivor Annuity is given to the Participant and such
waiver becomes invalid at the beginning of the Plan Year in which the
Participant turns age 35. In the event a Participant separates from
service prior to the beginning of the election period, the election
period shall begin on the date of such separation from service.
(d) With regard to the election, the Administrator shall
provide each Participant within the applicable election period, with
respect to such Participant (and consistent with Treasury Regulations),
a written (or such other form as permitted by the IRS) explanation of
the Pre-Retirement Survivor Annuity containing comparable information
to that required pursuant to Section 6.5(a)(5). For the purposes of
this paragraph, the term "applicable period" means, with respect to a
Participant, whichever of the following periods ends last:
(1) 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;
(2) A reasonable period after the individual becomes a
Participant. For this purpose, in the case of an individual
who becomes a Participant after age 32, the explanation must
be provided by the end of the three-year period beginning with
the first day of the first Plan Year for which the individual
is a Participant;
(3) A reasonable period ending after the Plan no longer
fully subsidizes the cost of the Pre-Retirement Survivor
Annuity with respect to the Participant; or
(4) A reasonable period ending after Code Section
401(a)(11) applies to the Participant.
For purposes of applying this subsection, a reasonable period ending
after the enumerated events described in (2), (3) and (4) is the end of
the two (2) year period beginning one (1) year prior to the date the
applicable event occurs, and ending one (1) 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 (2) year period beginning one (1) year prior to separation and
ending one (1) year after separation. If such a Participant thereafter
returns to employment with the Employer, the applicable period for such
Participant shall be redetermined.
(e) The Pre-Retirement Survivor Annuity provided for in
this Section shall apply only to Participants who are credited with an
Hour of Service on or after August 23, 1984. Former Participants who
are not credited with an Hour of Service on or after August 23, 1984,
shall be provided with rights to the Pre-Retirement Survivor Annuity in
accordance with Section 303(e)(2) of the Retirement Equity Act of 1984.
(f) If the value of the Pre-Retirement Survivor Annuity
derived from Employer and Employee contributions does not exceed, and
has never exceeded at the time of any prior distribution, $5,000 (or,
$3,500 for distributions made prior to the later of the first day of
the first Plan Year beginning after August 5, 1997, or the date
specified in the Adoption Agreement) the Administrator shall direct the
distribution of such amount to the Participant's spouse as soon as
practicable. No distribution may be made under the preceding sentence
after the Annuity Starting Date unless the spouse consents in writing
(or in such other form as permitted by the IRS). If the value exceeds,
or has ever exceeded at the time of any prior distribution, $5,000 (or,
if applicable, $3,500), an immediate distribution of the entire amount
may be made to the surviving spouse, provided such surviving spouse
consents in writing (or in such other form as permitted by the IRS) to
such distribution. Any consent required under this paragraph must be
obtained not more than ninety (90) days before commencement of the
distribution and shall be made in a manner consistent with Section
6.5(a)(2). Notwithstanding the preceding, the lookback rule (which
provides that if
37
the present value at the time of a distribution exceeds the applicable
dollar threshold, then the present value at any subsequent time is
deemed to exceed the threshold) will not apply to any distributions
made after October 16, 2000, the effective date of Treasury Regulations
that repeal such rule.
(g) Death benefits may be paid to a Participant's
Beneficiary in one of the following optional forms of benefits subject
to the rules specified in Section 6.6(h) and the elections made in the
Adoption Agreement. Such optional forms of distributions may be elected
by the Participant in the event there is an election to waive the
Pre-Retirement Survivor Annuity, and for any death benefits in excess
of the Pre-Retirement Survivor Annuity. However, if no optional form of
distribution was elected by the Participant prior to death, then the
Participant's Beneficiary may elect the form of distribution.
(1) One lump-sum payment in cash or in property.
(2) Partial withdrawals.
(3) Payment in monthly, quarterly, semi-annual, or annual
cash installments over a period to be determined by the
Participant or the Participant's Beneficiary. In order to
provide such installment payments, the Administrator may (A)
segregate the aggregate amount thereof in a separate,
federally insured savings account, certificate of deposit in a
bank or savings and loan association, money market certificate
or other liquid short-term security or (B) purchase a
nontransferable annuity contract for a term certain (with no
life contingencies) providing for such payment. After periodic
installments commence, the Beneficiary shall have the right to
reduce the period over which such periodic installments shall
be made, and the cash amount of such periodic installments
shall be adjusted accordingly.
(4) In the form of an annuity over the life expectancy of
the Beneficiary.
(5) If death benefits in excess of the Pre-Retirement
Survivor Annuity are to be paid to the surviving spouse, such
benefits may be paid pursuant to (1), (2) or (3) above, or
used to purchase an annuity so as to increase the payments
made pursuant to the Pre-Retirement Survivor Annuity.
(h) Notwithstanding any provision in the Plan to the
contrary, distributions upon the death of a Participant shall be made
in accordance with the following requirements and shall otherwise
comply with Code Section 401(a)(9) and the Treasury Regulations
thereunder.
(1) If it is determined, pursuant to Treasury
Regulations, that the distribution of a Participant's interest
has begun and the Participant dies before the entire interest
has been distributed, the remaining portion of such interest
shall be distributed at least as rapidly as under the method
of distribution elected pursuant to Section 6.5 as of the date
of death.
(2) If a Participant dies before receiving any
distributions of the interest in the Plan or before
distributions are deemed to have begun pursuant to Treasury
Regulations, then the death benefit shall be distributed to
the Participant's Beneficiaries in accordance with the
following rules subject to the elections made in the Adoption
Agreement and Subsections 6.6(h)(3) and 6.6(i) below:
(i) The entire death benefit shall be
distributed to the Participant's Beneficiaries by
December 31st of the calendar year in which the fifth
anniversary of the Participant's death occurs;
(ii) The 5-year distribution requirement of (i)
above shall not apply to any portion of the deceased
Participant's interest which is payable to or for the
benefit of a designated Beneficiary. In such event,
such portion shall be distributed over the life of
such designated Beneficiary (or over a period not
extending beyond the life expectancy of such
designated Beneficiary) provided such distribution
begins not later than December 31st of the calendar
year immediately following the calendar year in which
the Participant died (or such later date as may be
prescribed by Treasury Regulations);
(iii) However, in the event the Participant's
spouse (determined as of the date of the
Participant's death) is the designated Beneficiary,
the provisions of (ii) above shall apply except that
the requirement that distributions commence within
one year of the Participant's death shall not apply.
In lieu thereof, distributions must commence on or
before the later of: (1) December 31st of the
calendar year immediately following the calendar year
in which the Participant died; or (2) December 31st
of the calendar year in which the Participant would
have attained age 70 1/2. If the surviving spouse
dies before distributions to such spouse begin, then
the 5-year distribution requirement of this Section
shall apply as if the spouse was the Participant.
(3) Notwithstanding subparagraph (2) above, or any
elections made in the Adoption Agreement, if a Participant's
death benefits are to be paid in the form of a Pre-Retirement
Survivor Annuity, then distributions to the Participant's
surviving spouse must commence on or before the later of: (1)
December 31st of the calendar year immediately following the
calendar year in which the Participant died; or (2) December
31st of the calendar year in which the Participant would have
attained age 70 1/2.
38
(i) For purposes of Section 6.6(h)(2), the election by a
designated Beneficiary to be excepted from the 5-year distribution
requirement must be made no later than December 31st of the calendar
year following the calendar year of the Participant's death. Except,
however, with respect to a designated Beneficiary who is the
Participant's surviving spouse, the election must be made by the
earlier of: (1) December 31st of the calendar year immediately
following the calendar year in which the Participant died or, if later,
December 31st of the calendar year in which the Participant would have
attained age 70 1/2; or (2) December 31st of the calendar year which
contains the fifth anniversary of the date of the Participant's death.
An election by a designated Beneficiary must be in writing (or in such
other form as permitted by the IRS) and shall be irrevocable as of the
last day of the election period stated herein. In the absence of an
election by the Participant or a designated Beneficiary, the 5-year
distribution requirement shall apply.
(j) For purposes of this Section, the life expectancy of
a Participant and a Participant's spouse (other than in the case of a
life annuity) shall or shall not be redetermined annually as elected in
the Adoption Agreement and in accordance with RegulationsTreasury
Regulations. If the Participant may elect, pursuant to the Adoption
Agreement, to have life expectancies recalculated, then the election,
once made shall be irrevocable. If no election is made by the time
distributions must commence, then the life expectancy of the
Participant and the Participant's spouse shall not be subject to
recalculation. Life expectancy and joint and last survivor life
expectancy shall be computed using the return multiples in Tables V and
VI of Treasury Regulation Section 1.72-9.
(k) For purposes of this Section, 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.
(l) In the event that less than 100% of a Participant's
interest in the Plan is distributed to such Participant's spouse, the
portion of the distribution attributable to the Participant's Voluntary
Contribution Account shall be in the same proportion that the
Participant's Voluntary Contribution Account bears to the Participant's
total interest in the Plan.
(m) Subject to the spouse's right of consent afforded
under the Plan, the restrictions imposed by this Section shall not
apply if a Participant has, prior to January 1, 1984, made a written
designation to have death benefits paid in an alternative method
acceptable under Code Section 401(a) as in effect prior to the
enactment of TEFRA.
(n) Notwithstanding any provision of this Plan to the
contrary, with respect to distributions under the Plan made in calendar
years beginning on or after January 1, 2002 (or earlier as specified in
the Adoption Agreement), the Plan will apply the minimum distribution
requirements of Section 401(a)(9) of the Code in accordance with the
Treasury Regulations under Code Section 401(a)(9) that were proposed in
January 2001. This provision shall continue in effect until the end of
the last calendar year beginning before the effective date of final
Treasury Regulations under Code Section 401(a)(9) or such other date
specified in guidance published by the IRS.
6.7 TIME OF DISTRIBUTION
Except as limited by Sections 6.5 and 6.6, whenever a
distribution is to be made, or a series of payments are to commence, the
distribution or series of payments may be made or begun on such date or as soon
thereafter as is practicable. However, unless a Former Participant elects in
writing to defer the receipt of benefits (such election may not result in a
death benefit that is more than incidental), the payment of benefits shall begin
not later than the sixtieth (60th) day after the close of the Plan Year in which
the latest of the following events occurs: (a) the date on which the Participant
attains the earlier of age 65 or the Normal Retirement Age specified herein; (b)
the tenth (10th) anniversary of the year in which the Participant commenced
participation in the Plan; or (c) the date the Participant terminates service
with the Employer.
Notwithstanding the foregoing, the failure of a Participant
and, if applicable, the Participant's spouse, to consent to a distribution that
is immediately distributable (within the meaning of Section 6.5(d)), shall be
deemed to be an election to defer the commencement of payment of any benefit
sufficient to satisfy this Section.
6.8 DISTRIBUTION FOR MINOR OR INCOMPETENT BENEFICIARY
In the event a distribution is to be made to a minor or
incompetent Beneficiary, then the Administrator may direct that such
distribution be paid to the legal guardian, or if none in the case of a minor
Beneficiary, to a parent of such Beneficiary, or to the custodian for such
Beneficiary under the Uniform Gifts to Minors Act or the Uniform Transfers to
Minors Act, if such is permitted by the laws of the state in which said
Beneficiary resides. Such a payment to the legal guardian, custodian or parent
of a minor or incompetent Beneficiary shall fully discharge the Trustee,
Employer, and Plan from further liability on account thereof.
39
6.9 LOCATION OF PARTICIPANT OR BENEFICIARY UNKNOWN
In the event that all, or any portion, of the distribution
payable to a Participant or Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or Normal Retirement Age, remain unpaid
solely by reason of the inability of the Administrator, after sending a
registered letter, return receipt requested, to the last known address, and
after further diligent effort, to ascertain the whereabouts of such Participant
or Beneficiary, the amount so distributable shall be treated as a Forfeiture
pursuant to the Plan. Notwithstanding the foregoing, if the value of a
Participant's Vested benefit derived from Employer and Employee contributions
does not exceed $5,000, then the amount distributable shall be treated as a
Forfeiture at the time it is determined that the whereabouts of the Participant
or the Participant's Beneficiary can not be ascertained. In the event a
Participant or Beneficiary is located subsequent to the Forfeiture, such benefit
shall be restored, first from Forfeitures, if any, and then from an additional
Employer contribution, if necessary. However, regardless of the preceding, a
benefit that is lost by reason of escheat under applicable state law is not
treated as a Forfeiture for purposes of this Section nor as an impermissible
forfeiture under the Code.
6.10 IN-SERVICE DISTRIBUTION
If elected in the Adoption Agreement, at such time as the
conditions set forth in the Adoption Agreement have been satisfied, then the
Administrator, at the election of a Participant who has not severed employment
with the Employer, shall direct the distribution of up to the entire Vested
amount then credited to the accounts as elected in the Adoption Agreement
maintained on behalf of such Participant. In the event that the Administrator
makes such a distribution, the Participant shall continue to be eligible to
participate in the Plan on the same basis as any other Employee. Any
distribution made pursuant to this Section shall be made in a manner consistent
with Section 6.5, including, but not limited to, all notice and consent
requirements of Code Sections 411(a)(11) and 417 and the Treasury Regulations
thereunder.
6.11 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) For profit sharing plans and 401(k) profit sharing
plans (except to the extent Section 12.9 applies), if elected in the
Adoption Agreement, the Administrator, at the election of the
Participant, shall direct the distribution to any Participant in any
one Plan Year up to the lesser of 100% of the Vested interest of the
Participant's Combined Account valued as of the last Valuation Date or
the amount necessary to satisfy the immediate and heavy financial need
of the Participant. Any distribution made pursuant to this Section
shall be deemed to be made as of the first day of the Plan Year or, if
later, the Valuation Date immediately preceding the date of
distribution, and the account from which the distribution is made shall
be reduced accordingly. Withdrawal under this Section shall be
authorized only if the distribution is for an immediate and heavy
financial need. The Administrator will determine whether there is an
immediate and heavy financial need based on the facts and
circumstances. An immediate and heavy financial need includes, but is
not limited to, a distribution for one of the following:
(1) Medical expenses described in Code Section 213(d)
incurred by the Participant, the Participant's spouse, or any
of the Participant's dependents (as defined in Code Section
152) or necessary for these persons to obtain medical care as
described in Code Section 213(d);
(2) Costs directly related to the purchase (excluding
mortgage payments) of a principal residence for the
Participant;
(3) Funeral expenses for a member of the Participant's
family;
(4) Payment of tuition, related educational fees, and
room and board expenses, for the next twelve (12) months of
post-secondary education for the Participant, the
Participant's spouse, children, or dependents (as defined in
Code Section 152); or
(5) Payments necessary to prevent the eviction of the
Participant from the Participant's principal residence or
foreclosure on the mortgage on that residence.
(b) If elected in the Adoption Agreement, no distribution
shall be made pursuant to this Section from the Participant's Account
until such Account has become fully Vested.
(c) Any distribution made pursuant to this Section shall
be made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all notice
and consent requirements of Code Sections 411(a)(11) and 417 and the
Treasury Regulations thereunder.
6.12 SPECIAL RULE FOR CERTAIN PROFIT SHARING PLANS
(a) The provisions of this Section apply, if elected in
the Adoption Agreement, to a Participant in a profit sharing plan or
401(k) profit sharing plan. However, regardless of the preceding and
any election in the Adoption Agreement, this Section shall not apply to
any Participant if it is determined that this Plan is a direct or
indirect transferee of assets (other than through a direct rollover) of
a defined benefit plan or money purchase plan (including a target
benefit plan). Furthermore, if any election is
40
made to use the provisions of this Section and this Plan is a direct or
indirect transferee of assets (other than through a direct rollover)
from a stock bonus or profit sharing plan which would otherwise provide
for a life annuity form of payment to the Participant, then the
provisions of subsection (c) below will apply.
(b) If an election is made to not offer a life annuity
form of distribution, a Participant shall be prohibited from electing
benefits in the form of a life annuity and the Joint and Survivor
Annuity provisions of Section 6.5 shall not apply.
(c) If an election is made to offer annuities as a form
of distribution but not as the normal form of distribution, then the
Joint and Survivor Annuity provisions of Section 6.5 shall not apply if
a Participant does not elect an annuity form of distribution.
Furthermore, subsection (e) shall not apply if a Participant elects an
annuity form of distribution.
(d) Upon the death of a Participant, the Participant's
entire Vested account balances will be paid to the Participant's
surviving spouse, or, if there is no surviving spouse or the surviving
spouse has consented to waive the benefit, in accordance with Section
6.6, to the Participant's designated Beneficiary.
(e) Except to the extent otherwise provided in this
Section, the provisions of Sections 6.2, 6.5 and 6.6 regarding spousal
consent shall be inoperative with respect to this Plan.
(f) If a distribution is one to which Code Sections
401(a)(11) and 417 do not apply, such distribution may commence less
than thirty (30) days after the notice required under Treasury
Regulation Section 1.411(a)-11(c) is given, provided that:
(1) the Plan Administrator clearly informs the
Participant that the Participant has a right to a period of at
least thirty (30) days after the notice to consider the
decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
6.13 QUALIFIED DOMESTIC RELATIONS ORDER DISTRIBUTION
All rights and benefits, including elections, provided to a
Participant in this Plan shall be subject to the rights afforded to any
alternate payee under a qualified domestic relations order. Furthermore, a
distribution to an alternate payee shall be permitted if such distribution is
authorized by a qualified domestic relations order, even if the affected
Participant has not reached the earliest retirement age under the Plan. For the
purposes of this Section, "alternate payee," "qualified domestic relations
order" and "earliest retirement age" shall have the meanings set forth under
Code Section 414(p).
6.14 DIRECT ROLLOVERS
(a) Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a distributee's election under this
Section, a distributee may elect, at the time and in the manner
prescribed by the Administrator, to have any portion of an eligible
rollover distribution paid directly to an eligible retirement plan
specified by the distributee in a direct rollover.
(b) For purposes of this Section, the following
definitions shall apply:
(1) An "eligible rollover distribution" means any
distribution described in Code Section 402(c)(4) and generally
includes any distribution of all or any portion of the balance
to the credit of the distributee, except that an eligible
rollover distribution does not include: any distribution that
is one of a series of substantially equal periodic payments
(not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint
life expectancies) of the distributee and the distributee's
designated beneficiary, or for a specified period of ten (10)
years or more; any distribution to the extent such
distribution is required under Code Section 401(a)(9); the
portion of any other distribution(s) that is not includible in
gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer
securities); for distributions made after December 31, 1998,
any hardship distribution described in Code Section
401(k)(2)(B)(i)(V); and any other distribution reasonably
expected to total less than $200 during a year.
(2) An "eligible retirement plan" is an individual
retirement account described in Code Section 408(a), an
individual retirement annuity described in Code Section
408(b), an annuity plan described in Code Section 403(a), or a
qualified plan described in Code Section 401(a), that accepts
the distributee's eligible rollover distribution. However, in
the case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual
retirement account or individual retirement annuity.
(3) A "distributee" includes an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's
spouse or former spouse who is the alternate payee under a
41
qualified domestic relations order, as defined in Code Section
414(p), are distributees with regard to the interest of the
spouse or former spouse.
(4) A "direct rollover" is a payment by the Plan to the
eligible retirement plan specified by the distributee.
6.15 TRANSFER OF ASSETS FROM A MONEY PURCHASE PLAN
(a) This Section shall be effective as of the following date:
(1) for Plans not entitled to extended reliance as
described in Revenue Ruling 94-76, the first day of the first
Plan Year beginning on or after December 12, 1994, or if
later, 90 days after December 12, 1994; or
(2) for Plans entitled to extended reliance as described
in Revenue Ruling 94-76, as of the first day of the first Plan
Year following the Plan Year in which the extended reliance
period applicable to the Plan ends. However, in the event of a
transfer of assets to the Plan from a money purchase plan that
occurs after the date of the most recent determination letter,
the effective date of the amendment shall be the date
immediately preceding the date of such transfer of assets.
(b) Notwithstanding any provision of this Plan to the
contrary, to the extent that any optional form of benefit under this
Plan permits a distribution prior to the Employee's retirement, death,
disability, or severance from employment, and prior to Plan
termination, the optional form of benefit is not available with respect
to benefits attributable to assets (including the post-transfer
earnings thereon) and liabilities that are transferred, within the
meaning of Code Section 414(l), to this Plan from a money purchase
pension plan qualified under Code Section 401(a) (other than any
portion of those assets and liabilities attributable to after-tax
voluntary Employee contributions or to a direct or indirect rollover
contribution).
ARTICLE VII
TRUSTEE AND CUSTODIAN
7.1 BASIC RESPONSIBILITIES OF THE TRUSTEE
(a) The provisions of this Article, other than
Section 7.6 shall not apply to this Plan if a separate trust agreement
is being used as specified in the Adoption Agreement.
(b) The Trustee is accountable to the Employer
for the funds contributed to the Trust Fund by the Employer, but the
Trustee does not have any duty to see that the contributions received
comply with the provisions of the Plan. The Trustee is not obligated to
collect any contributions from the Employer, nor is it under a duty to
see that funds deposited with it are deposited in accordance with the
provisions of the Plan.
(c) The Trustee will credit and distribute the
Trust Fund as directed by the Administrator. The Trustee shall not be
responsible in any way to determine whether any payee or distributee is
entitled to any payment or whether the distribution is proper or within
the terms of the Plan, or as to the manner of making any payment or
distribution. The Trustee is accountable only to the Administrator for
any payment or distribution made by it in good faith on the order or
direction of the Administrator.
(d) The Trustee shall have no liability with
respect to the investment of assets when directed by a Participant
(pursuant to the Participant Direction Procedures if the Plan permits
Participant directed investments), the Employer, Administrator or an
Investment Manager or other agent appointed by the Employer with
respect to the investment of any or all Plan assets, but shall be
responsible only to execute such investment instructions as so
directed.
(1) The Trustee shall be entitled to rely fully
on the written (or other form acceptable to the Administrator and the
Trustee, including but not limited to voice recorded and electronically
mailed) instructions of a Participant (pursuant to the Participant
Direction Procedures), the Employer, or any Fiduciary or nonfiduciary
agent of the Employer, in the discharge of such duties, and shall not
be liable for any loss or other liability, resulting from such
direction (or lack of direction) of the investment of any part of the
Plan assets.
(2) The Trustee may delegate the duty to execute
such instructions to any nonfiduciary agent, which may be an affiliate
of the Trustee or any Plan representative.
(3) The Trustee may refuse to comply with any
direction from a Participant in the event the Trustee, in its sole and
absolute discretion, deems such directions improper. The Trustee shall
not be responsible or liable for any loss or expense, which may result
from the Trustee's refusal or failure to comply with any directions
from a Participant. In no event
42
shall this provision be construed to impose any additional duty or
obligation on the Trustee to determine the legality or propriety of any
direction from a Participant.
(4) Any costs and expenses related to compliance
with the Participant's directions shall be borne by the Participant's
Directed Account, unless paid by the Employer.
(e) The Trustee will maintain records of
receipts and disbursements and furnish to the Employer and/or
Administrator for each Plan Year a written annual report pursuant to
Section 7.9.
(f) The Trustee may employ a bank or trust
company pursuant to the terms of its usual and customary bank agency
agreement, under which the duties of such bank or trust company shall
be of a custodial, clerical or record-keeping nature.
(g) No amendment to the Plan shall place any
greater burden on the Trustee without its written consent.
(h) The Trustee shall not be liable for interest
on any cash or cash balances maintained in the Trust Fund.
(i) The Trustee may consult with legal counsel
concerning any questions which may arise with reference to its rights
and duties under the Plan, and the opinion of such counsel shall be
full and complete protection in respect of any action taken or omitted
by the Trustee hereunder in good faith and in accordance with the
opinion of such counsel.
(j) Any notice from the Trustee provided for in
this Agreement shall be effective if sent by first-class mail to the
recipient's last address on the Trustee's records.
(k) The Trustee may rely upon and shall be
protected in acting upon any communication from the person signing the
Adoption Agreement or from any other persons authorized by the Employer
or Administrator to give instructions concerning the Plan. The Trustee
shall be entitled to rely conclusively upon, and shall be fully
protected in any action or omitting to take an action in good faith in
reliance upon, any instructions, notices, communications or instruments
believed to be genuine and properly communicated. Any such notification
may be proved by original copy or reproduced copy thereof, including,
without limitation, a photocopy, a facsimile transmission, an
electronic image or any other electronic reproduction. For purposes of
this Section, the Trustee may (but is not required to) give the same
effect to a telephonic instructions, voice recording, or any
instruction received through electronic commerce as it gives to a
written instruction, and the Trustee's action in doing so shall be
protected to the same extent as if such telephonic or electronic
instructions were, in fact, a written instruction. Any such instruction
may be proved by audio-recorded tape, electronic reproduction or other
means acceptable to the Trustee, as the case may be. If the Trustee
receives an instruction or other information that is, in the opinion of
the Trustee, incomplete or not clear, the Trustee may request
instructions or other information from the Administrator. Pending
receipt of any such instructions or other information, the Trustee
shall not be liable to anyone for any loss resulting from any delay,
action or inaction on the part of the Trustee.
(l) Neither the Trustee nor the Employer shall
knowingly cause the Plan to engage in any transaction prohibited by
Section 406 or Section 407(a) of the Act or Section 4975 of the Code,
for which there is no general or specific exemption. If the Trustee is
a Directed Trustee, the Employer or the Administrator represents and
covenants that it shall be fully responsible for identifying all
investments or other transactions that may constitute a prohibited
transaction and any instructions or directions to the Directed Trustee
under the terms of this Plan shall constitute a certification that such
directions or instructions will not result in the Plan engaging in a
prohibited transaction.
7.2 POWERS AND DUTIES OF DISCRETIONARY TRUSTEE
(a) This Section applies to and describes the
authority of the Trustee, if the Employer, in the Adoption Agreement,
designates the Trustee to administer the trust as a discretionary
Trustee. If so designated, then the Trustee has the discretion and
authority to invest, manage, and control the Plan assets except,
however, with respect to those assets which are subject to the
investment direction of a Participant (if Participant directed
investments are permitted), or an Investment Manager, the
Administrator, or other agent of the Employer if the Employer should
appoint such manager, the Administrator or agent as to all or a portion
of the assets of the Plan. The exercise of any investment discretion
hereunder shall be consistent with the funding policy and method
determined by the Employer. This Section also applies to, and describes
the authority of, the Administrator (or another party to whom the
Administrator has properly delegated its authority) to instruct and
direct a Directed Trustee if the Employer, in the Adoption Agreement,
designates a Directed Trustee. In that event, the term "Trustee" refers
to the Administrator (or delegate) in its capacity to instruct or
direct the Directed Trustee.
(b) The Trustee shall, except as otherwise
provided in this Plan, invest and reinvest the Trust Fund to keep the
Trust Fund invested without distinction between principal and income
and in such securities or property, real or
43
personal, wherever situated, as the Trustee shall deem advisable,
including, but not limited to, stocks, common or preferred, open-end or
closed-end mutual funds, bonds and other evidences of indebtedness or
ownership, and real estate or any interest therein. The Trustee shall
at all times in making investments of the Trust Fund consider, among
other factors, the short and long-term financial needs of the Plan on
the basis of information furnished by the Employer. In making such
investments, the Trustee shall not be restricted to securities or other
property of the character expressly authorized by the applicable law
for trust investments; however, the Trustee shall give due regard to
any limitations imposed by the Code or the Act so that at all times
this Plan may qualify as a qualified Plan and Trust.
(c) The Trustee, in addition to all powers and
authorities under common law, statutory authority, including the Act,
and other provisions of this Plan, shall have the following powers and
authorities to be exercised in the Trustee's sole discretion:
(1) To purchase, or subscribe for, any
securities or other property and to retain the same. In conjunction
with the purchase of securities, margin accounts may be opened and
maintained;
(2) To sell, exchange, convey, transfer, grant
options to purchase, or otherwise dispose of any securities or other
property held by the Trustee, by private contract or at public auction.
No person dealing with the Trustee shall be bound to see to the
application of the purchase money or to inquire into the validity,
expediency, or propriety of any such sale or other disposition, with or
without advertisement;
(3) To vote upon any stocks, bonds, or other
securities; to give general or special proxies or powers of attorney
with or without power of substitution; to exercise any conversion
privileges, subscription rights or other options, and to make any
payments incidental thereto; to oppose, or to consent to, or otherwise
participate in, corporate reorganizations or other changes affecting
corporate securities, and to delegate discretionary powers, and to pay
any assessments or charges in connection therewith; and generally to
exercise any of the powers of an owner with respect to stocks, bonds,
securities, or other property. However, the Trustee shall not vote
proxies relating to securities for which it has not been assigned full
investment management responsibilities. In those cases where another
party has such investment authority or discretion, the Trustee will
deliver all proxies to said party who will then have full
responsibility for voting those proxies;
(4) To cause any securities or other property to
be registered in the Trustee's own name, in the name of one or more of
the Trustee's nominees, in a clearing corporation, in a depository, or
in book entry form or in bearer form, or in one or more brokerage
accounts with securities held in the broker-dealer's street name, but
the books and records of the Trustee shall at all times show that all
such investments are part of the Trust Fund;
(5) To invest in a common, collective, or pooled
trust fund (the provisions of which are incorporated herein by
reference) maintained by any corporate Trustee hereunder pursuant to
Revenue Ruling 81-100, all or such part of the Trust Fund as the
Trustee may deem advisable, and such part or all of the Trust Fund so
transferred shall be subject to all the terms and provisions of the
common, collective, or pooled trust fund which contemplate the
commingling for investment purposes of such trust assets with trust
assets of other trusts. The Trustee may withdraw from such common,
collective, or pooled trust fund all or such part of the Trust Fund as
the Trustee may deem advisable;
(6) To borrow or raise money for the purposes of
the Plan in such amount, and upon such terms and conditions, as the
Trustee shall deem advisable; and for any sum so borrowed, to issue a
promissory note as Trustee, and to secure the repayment thereof by
pledging all, or any part, of the Trust Fund; and no person lending
money to the Trustee shall be bound to see to the application of the
money lent or to inquire into the validity, expediency, or propriety of
any borrowing;
(7) To accept and retain for such time as it may
deem advisable any securities or other property received or acquired by
it as Trustee hereunder, whether or not such securities or other
property would normally be purchased as investments hereunder;
(8) 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;
(9) To settle, compromise, or submit to
arbitration any claims, debts, or damages due or owing to or from the
Plan, to commence or defend suits or legal or administrative
proceedings, and to represent the Plan in all suits and legal and
administrative proceedings;
(10) To employ suitable agents and counsel and to
pay their reasonable expenses and compensation, and such agents or
counsel may or may not be agents or counsel for the Employer;
44
(11) To apply for and procure from the Insurer as
an investment of the Trust Fund such annuity, or other Contracts (on
the life of any Participant, or in the case of a Profit Sharing Plan,
on the joint life of a Participant and any person in whom the
Participant has an insurable interest) as the Administrator shall deem
proper; to exercise, at any time or from time to time, whatever rights
and privileges may be granted under such annuity, or other Contracts;
to collect, receive, and settle for the proceeds of all such annuity,
or other Contracts as and when entitled to do so under the provisions
thereof;
(12) To invest funds of the Trust in time
deposits or savings accounts bearing a reasonable rate of interest or
in cash or cash balances without liability for interest thereon,
including specific authority to invest in any type of deposit of the
Trustee (or of a financial institution related to a Trustee);
(13) To invest in Treasury Bills and other forms
of United States government obligations;
(14) To sell, purchase and acquire put or call
options if the options are traded on and purchased through a national
securities exchange registered under the Securities Exchange Act of
1934, as amended, or, if the options are not traded on a national
securities exchange, are guaranteed by a member firm of the New York
Stock Exchange;
(15) To deposit monies in federally insured
savings accounts or certificates of deposit in banks or savings and
loan associations;
(16) To pool all or any of the Trust Fund, from
time to time, with assets belonging to any other qualified employee
pension benefit trust created by the Employer or any Affiliated
Employer, and to commingle such assets and make joint or common
investments and carry joint accounts on behalf of this Plan and such
other trust or trusts, allocating undivided shares or interests in such
investments or accounts or any pooled assets of the two or more trusts
in accordance with their respective interests;
(17) Notwithstanding anything hereinabove to the
contrary, the Trustee shall not, at any time after December 31, 1981,
invest any portion of a Participant's Directed Account in collectibles
within the meaning of Code Section 408(m);
(18) To distribute loan proceeds to Participants
and Beneficiaries in accordance with Section 7.6 and to accept such
documentation, notices, communications and validations (including
signatures) in connection with such loans as the Trustee determines or
as directed by the Administrator if the Trustee is a Directed Trustee;
and
(19) To do all such acts and exercise all such
rights and privileges, although not specifically mentioned herein, as
the Trustee may deem necessary to carry out the purposes of the Plan.
7.3 DIRECTED TRUSTEE
(a) Notwithstanding any of the provisions of
this Plan to the contrary, and to the extent permitted by applicable
law, this Section 7.3 shall apply in the event MFS Heritage Trust (or
any successor appointed by the sponsoring organization of this Plan) or
any other eligible entity is designated to serve as a Directed Trustee
of this Plan. A Directed Trustee shall serve in accordance with this
Section.
(b) The Administrator, which for purposes of
this Section shall also mean a person who has been delegated the
authority of Administrator in accordance with the terms of the Plan,
shall direct the Directed Trustee in the performance of the duties and
obligations of the Trustee set forth in the Plan, or as may exist under
common law or statutory authority (including the Act), unless the
Administrator has properly delegated its authority hereunder to another
party other than the Directed Trustee in accordance with the terms of
the Plan. The Employer represents that all directions given by it or
the Administrator or any other person, whether to the Trustee or to any
service agent, shall comply with the terms of the Plan, the Act and all
other applicable law.
(c) Powers, rights and authority of a Trustee
under the terms of the Plan or under common law or statutory authority
(including the Act) shall vest in, and shall be exercised solely by,
the Administrator by directing the Directed Trustee, or if the Plan
Administrator has properly delegated its authority hereunder to another
party other than the Directed Trustee in accordance with the terms of
the Plan, by such other party directing the Trustee.
(d) The duties and obligations of a Directed
Trustee shall be limited to holding title to Plan assets and performing
such clerical, administrative, ministerial or recordkeeping duties as
may be associated therewith or pursuant to instructions or directions
from the Plan Administrator in the exercise of the Administrator's
fiduciary authority hereunder (including Trustee direction authority
pursuant to Section 7.3(b) or Section 7.3(c). No amendment to the Plan
shall place any other duties and obligations on the Trustee without its
written consent. The Trustee may consult with legal counsel
45
concerning any questions that may arise with reference to its rights
and duties under the Plan, and the opinion of such counsel shall be
full and complete protection in respect of any action taken or omitted
by the Trustee hereunder in good faith and in accordance with the
opinion of such counsel.
(e) The Employer, Administrator and Trustee
expressly acknowledge and agree that the Trustee is a directed trustee
as described in Section 403(a) of the Act, that this Section shall
constitute an allocation of fiduciary duties for purposes of Section
403(a) of the Act and that the Directed Trustee shall have no residual
fiduciary obligations whatsoever with respect to Plan assets or Plan
operations, no responsibility or obligation whatsoever to ascertain or
to inquire with respect to the propriety of any action, of any Plan
fiduciary, and in all respects shall have no obligation other than the
Trustee function of holding title to Plan Assets and such
administrative, clerical or ministerial duties as may be associated
therewith or with the exercise of authority (including Trustee
authority to direct or instruct the Trustee hereunder) by the
Administrator. The Employer, Administrator and Trustee intend that the
provisions of this Section be construed and interpreted accordingly.
(f) A Directed Trustee shall be under no duty
whatsoever to question or otherwise ascertain the propriety or
authority of any fiduciary action, instructions or directions hereunder
including, without limitation, any instructions or directions received
from the Employer, Administrator or Participant.
(g) The performance by the Directed Trustee of
any act or exercise of any right or power of a Trustee as enumerated
under the terms of the Plan or as may exist under common law or
statutory authority, including the Act, shall be taken only as directed
by the Employer, by the Administrator in its fulfillment of its duties
and obligations or the exercise of its powers and rights hereunder or
as directed by the Participants as to matters that may be directed by
Participants. The Trustee shall be under no duty to take any action
other than as herein specified with respect to the Trust Fund unless
the Administrator, Employer or Participant shall furnish the Trustee
with instructions in proper form and such instructions shall have been
specifically agreed to by the Trustee in writing; or to defend or
engage in any suit with respect to the Trust Fund unless the Trustee
shall have first agreed in writing to do so and shall have been fully
indemnified to the satisfaction of the Trustee. The Trustee shall be
entitled to rely conclusively upon, and shall be fully protected in
taking any action or omitting to take an action in good faith in
reliance upon, any instructions, notices, communications or instruments
believed to be genuine and properly communicated. Any such notification
may be proved by original copy or reproduced copy thereof, including,
without limitation, a photocopy, a facsimile transmission, an
electronic image or any other electronic reproduction. For purposes of
this Section, the Trustee may (but is not required to) give the same
effect to a telephonic instruction, voice recording, or any instruction
received through electronic commerce as it gives to a written
instruction, and the Trustee's action in doing so shall be protected to
the same extent as if such telephonic or electronic instructions were,
in fact, a written instruction. Any such instruction may be proved by
audio-recorded tape, electronic reproduction or other means acceptable
to the Trustee, as the case may be. If the Trustee receives
instructions or other information that are, in the opinion of the
Trustee, incomplete or not clear, the Trustee may request instructions
or other information from the Administrator. Pending receipt of any
such instructions or other information, the Trustee shall not be liable
to anyone for any loss resulting from any delay, action or inaction on
the part of the Trustee.
(h) A reference to a Trustee in Sections 7.1,
7.3, 7.8, 7.9, 7.11, 7.12 and 7.13 shall include a Directed Trustee. A
reference to a Trustee in Sections 7.2, 7.5, 7.6, 7.10 and 7.14 shall
not apply to a Directed Trustee provided, however, that a Directed
Trustee may, upon the instruction of the Administrator or other
fiduciary designated by the Administrator exercising authority under
such provisions, or, as to matters subject to Participant direction,
upon instruction of a Participant, perform any clerical, administrative
or ministerial tasks required to permit the fiduciary to perform under
such Sections or the Participant to exercise his or her authority under
the Plan.
(i) The receipt by the Directed Trustee of (a)
Instructions or direction from the Plan Administrator to the Directed
Trustee concerning the voting of securities (including Employer
securities) pursuant to Section 7.14(b)(ii) or tendering or exchanging
of securities (including Employer securities) pursuant to Section
7.14(b) as to which the Administrator is directing the Trustee pursuant
to the Administrator's authority under Section 7.14 ("Administrator
Instructions") and/or (b) instructions from Participants to the
Directed Trustee as to the voting of shares or other action concerning
shares credited to their accounts ("Participant Instructions"), shall
be deemed to be a certification by the Plan Administrator, to the
effect that:
(1) the Employer (or Administrator) has complied
with the Employer's or Administrator's
obligation under Section 7.14(b);
(2) in connection with Participant Instructions:
(i) the Employer or Administrator has
established procedures for the
collection and timely transmission
of Participants' voting, tender,
exchange or other directions to the
Directed Trustee;
(ii) the Employer or Administrator has
furnished to Participants all
information required by law to be
provided to Participants and has
furnished such information in a
timely basis as required by law;
and
46
(iii) the Employer or Administrator has
informed Participants of the manner
in which unallocated shares if any
will be voted or tendered and how
the Administrator will instruct the
Directed Trustee to treat
non-responses from Participants.
(3) The execution by the Directed Trustee of any
such Administrator Instructions or
Participants Instructions is in compliance
with all applicable laws and regulations
including the Act and regulations
thereunder.
(j) Neither the Directed Trustee nor any
custodian shall exercise rights (including voting rights) with respect
to securities held by the Directed Trustee or a custodian under the
Plan, except as instructed by the person authorized (the "Authorized
Person") to exercise such rights under the Plan including the Employer,
Administrator or Participant (in the case of Participant Directed
Accounts or Participant voting rights). The Directed Trustee and each
custodian are individually authorized and instructed to furnish to any
issuer (an "Issuer") of securities (including the Employer in the case
of "qualifying employer securities" as permitted under Section 7.14 of
this Plan) or to other appropriate parties, including, without
limitation, proxy solicitation firms, proxy tabulation firms, and
transfer agents, such authorization (including executed proxies) as the
Issuer or other party may require from the Trustee or custodian, as the
legal owner or the person recognized as having the authority of the
legal owner of the securities, for the Issuer or other party to accept,
process and otherwise follow the instructions of the Authorized Party
in connection with the exercise of any right with respect to such
securities.
A Directed Trustee, to the extent permitted by
applicable law, and in the manner consistent with this Article, may
satisfy its obligations to follow directions from an Authorized Person
in connection with the exercise of rights with respect to securities or
other property held by the Directed Trustee by: (i) causing, or
establishing a mechanism for, the communication of instructions of the
Authorized Person to the appropriate recipient or collector of the
votes or other communications from the holders of the securities or
other property; (ii) utilizing such agents and designees as the
Directed Trustee may from time to time deem appropriate including,
without limitation, proxy solicitation and/or proxy tabulation firms;
(iii) utilizing such means of communication as the Directed Trustee
deems appropriate including, without limitation, telephonic and
electronic communications of all kinds (such as electronic mail) and
(iv) to accept and recognize signatures (and all other forms of
validation) in electronic or other format. Such mechanism may permit
instructions of the Authorized Person to automatically constitute the
direction of the legal owner of the securities or other property.
Notwithstanding the foregoing, the Administrator is
the Authorized Person who shall vote the proxies of mutual fund shares
and the Participants are the Authorized Persons who shall vote the
proxies of Employer securities and securities held in brokerage
accounts. With respect to the exercise of any other rights, including
voting rights, associated with any other securities held by the Trustee
or custodian under the Plan, the Administrator shall exercise such
rights unless otherwise agreed to by the Employer and the Trustee. The
Administrator shall be responsible for determining whether all
Authorized Persons have properly exercised rights to securities,
including voting rights, and whether the proxy solicitation and/or
proxy tabulation firms have received the votes or other communications
from such Authorized Persons.
(k) Unless otherwise elected in the Adoption
Agreement, if MFS Heritage Trust Company is the Directed Trustee,
Participant Directed Investments will be required for all accounts and
Section 4.10 shall apply.
47
7.4 CUSTODIANS
(a) If there is a discretionary Trustee, the Employer may
appoint, or instruct the Trustee to appoint, one or more custodians.
Such custodians shall have the same powers, rights and duties as a
Directed Trustee. Any reference in the Plan to a Directed Trustee also
is a reference to a custodian unless the context of the Plan indicates
otherwise.
(b) If there is a Directed Trustee, the Employer may
appoint, or instruct the Directed Trustee to appoint, one or more
custodians and to enter into custody agreements with such custodians
pursuant to which the custodians may hold assets of the Plan and
perform such services as may be specified in such custody agreements
including, without limitation, establishing appropriate asset accounts
and reporting and accounting procedures.
(c) A limitation of the Trustee's or Directed Trustee's
liability by Plan provision is also a limitation of each custodian's
liability. Any action taken by the custodian at the direction of a
discretionary Trustee or Administrator satisfies any provision in the
Plan requiring the Trustee to take such action.
7.5 LIFE INSURANCE
(a) The Trustee, at the direction of the
Administrator and pursuant to instructions from the individual
designated in the Adoption Agreement for such purpose and subject to
the conditions set forth in the Adoption Agreement, shall ratably apply
for, own, and pay all premiums on Contracts on the lives of the
Participants or, in the case of a profit sharing plan (including a
401(k) profit sharing plan), on the joint lives of a Participant and
any person in whom the Participant has an insurable interest. Any
initial or additional Contract purchased on behalf of a Participant
shall have a face amount of not less than $1,000, the amount set forth
in the Adoption Agreement, or the limitation of the Insurer, whichever
is greater. If a life insurance Contract is to be purchased for a
Participant, the aggregate premium for ordinary life insurance for each
Participant must be less than 50% of the aggregate employer
contributions and Forfeitures allocated to a Participant's Combined
Account. For purposes of this limitation, ordinary life insurance
Contracts are Contracts with both non-decreasing death benefits and
non-increasing premiums. If term insurance or universal life insurance
is purchased with such contributions, the aggregate premium must be 25%
or less of the aggregate contributions and Forfeitures allocated to a
Participant's Combined Account. If both term insurance and ordinary
life insurance are purchased with such contributions, the amount
expended for term insurance plus one-half of the premium for ordinary
life insurance may not in the aggregate exceed 25% of the aggregate
Employer contributions and Forfeitures allocated to a Participant's
Combined Account. Notwithstanding the preceding, the limitations
imposed herein with respect to the purchase of life insurance shall not
apply, in the case of a Profit Sharing Plan, to the portion of a
Participant's Account that has accumulated for at least two (2) Plan
Years or to the entire Participant's Account if a Participant has been
a Participant in the Plan for at least five (5) years.
(b) The Trustee must distribute the Contracts to
the Participant or convert the entire value of the Contracts at or
before retirement into cash or provide for a periodic income so that no
portion of such value may be used to continue life insurance protection
beyond retirement. Furthermore, if a policy is purchased on the joint
lives of the Participant and another person and such other person
predeceases the Participant, then the Trustee may not maintain the
Contract under this Plan.
(c) Notwithstanding anything hereinabove to the
contrary, amounts credited to a Participant's Qualified Voluntary
Employee Contribution Account pursuant to Section 4.9, shall not be
applied to the purchase of life insurance Contracts.
(d) The Trustee will be the owner of any life
insurance Contract purchased under the terms of this Plan. The Contract
must provide that the proceeds will be payable to the Trustee; however,
the Trustee shall be required to pay over all proceeds of the Contract
to the Participant's designated Beneficiary in accordance with the
distribution provisions of Article VI. A Participant's spouse will be
the designated Beneficiary pursuant to Section 6.2, unless a qualified
election has been made in accordance with Sections 6.5 and 6.6 of the
Plan, if applicable. Under no circumstances shall the Trust retain any
part of the proceeds. However, the Trustee shall not pay the proceeds
in a method that would violate the requirements of the Act, as stated
in Article VI of the Plan, or Code Section 401(a)(9) and the Treasury
Regulations thereunder. In the event of any conflict between the terms
of this Plan and the terms of any insurance Contract purchased
hereunder, the Plan provisions shall control.
48
7.6 LOANS TO PARTICIPANTS
(a) If specified in the Adoption Agreement, the Trustee
(or the Administrator if the Trustee is a Directed Trustee or if loans
are treated as Participant directed investments pursuant to the
Adoption Agreement) may, in the Trustee's (or, if applicable, the
Administrator's) sole discretion, make loans to Participants or
Beneficiaries under the following circumstances: (1) loans shall be
made available to all Participants and Beneficiaries on a reasonably
equivalent basis; (2) loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount made
available to other Participants; (3) loans shall bear a reasonable rate
of interest; (4) loans shall be adequately secured; and (5) loans shall
provide for periodic repayment over a reasonable period of time.
(b) Loans shall not be made to any Shareholder-Employee
or Owner-Employee unless an exemption for such loan is obtained
pursuant to Act Section 408 or such loan would otherwise not be a
prohibited transaction pursuant to Code Section 4975 and Act Sections
406 and 408.
(c) Loans made pursuant to this Section (when added to
the outstanding balance of all other loans made by the Plan to the
Participant) may, in accordance with a uniform and nondiscriminatory
policy established by the Administrator, be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the Participant
during the one year period ending on the day before the date
on which such loan is made, over the outstanding balance of
loans from the Plan to the Participant on the date on which
such loan was made, or
(2) one-half(1/2) of the present value of the
non-forfeitable accrued benefit of the Participant under this
Plan and all other plans of the Employer.
(d) No Participant loan shall take into account the
present value of such Participant's Qualified Voluntary Employee
Contribution Account.
(e) Loans shall be required to provide for level
amortization with payments to be made not less frequently than
quarterly, over a period not to exceed five (5) years. However, loans
used to acquire any dwelling unit which, within a reasonable time, is
to be used (determined at the time the loan is made) as the principal
residence of the Participant shall provide for periodic repayment over
a reasonable period of time that may exceed five (5) years. For this
purpose, principal residence has the same meaning as principal
residence under Code Section 1034. Notwithstanding the foregoing, loan
repayments may be suspended under this Plan as permitted under Code
Section 414(u)(4) for qualified military service.
(f) An assignment or pledge of any portion of a
Participant's interest in the Plan and a loan, pledge, or assignment
with respect to any insurance Contract purchased under the Plan, shall
be treated as a loan under this Section.
(g) If the Vested interest of a Participant is used to
secure any loan made pursuant to this Section, then the written (or
such other form as permitted by the IRS) consent of the Participant's
spouse shall be required in a manner consistent with Section 6.5(a),
provided the spousal consent requirements of such Section apply to the
Plan. Such consent must be obtained within the 90-day period prior to
the date the loan is made. Any security interest held by the Plan by
reason of an outstanding loan to the Participant or Former Participant
shall be taken into account in determining the amount of the death
benefit or Pre-Retirement Survivor Annuity. However, unless the loan
program established pursuant to this Section provides otherwise, no
spousal consent shall be required under this paragraph if the total
Vested interest subject to the security is not in excess of $5,000 (or,
$3,500 effective for loans made prior to the later of the first day of
the first Plan Year beginning after August 5, 1997, or the date
specified in the Adoption Agreement).
(h) A Participant loan program shall be established which
must include, but need not be limited to, the following:
(1) the identity of the person or positions authorized to
administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of
loans offered, including what constitutes a hardship or
financial need if selected in the Adoption Agreement;
(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a
Participant loan; and
(7) the events constituting default and the steps that
will be taken to preserve Plan assets.
49
Such Participant loan program shall be contained in a
separate written document which, when properly executed, is hereby
incorporated by reference and made a part of this Plan. Furthermore,
such Participant loan program may be modified or amended in writing
from time to time without the necessity of amending this Section of the
Plan.
(i) Notwithstanding anything in this Plan to the
contrary, if a Participant or Beneficiary defaults on a loan made
pursuant to this Section, then the loan default will be a distributable
event to the extent permitted by the Code and Treasury Regulations.
(j) Notwithstanding anything in this Section to the
contrary, if this is an amendment and restatement of an existing plan,
any loans made prior to the date this amendment and restatement is
adopted shall be subject to the terms of the plan in effect at the time
such loan was made.
(k) For purposes of this Section, the term "Participant"
shall mean any Employee as defined in Article I.
7.7 MAJORITY ACTIONS
Except where there has been an allocation and delegation of
powers, if there shall be more than one Trustee, they shall act by a majority of
their number, but they may authorize one or more of them to sign papers on their
behalf.
7.8 TRUSTEE'S COMPENSATION AND EXPENSES AND TAXES
The Trustee shall be paid such reasonable compensation as set
forth in the Trustee's fee schedule (if the Trustee has such a schedule) or as
agreed upon in writing by the Employer and the Trustee. However, an individual
serving as Trustee who already receives full-time compensation from the Employer
shall not receive compensation from this Plan. In addition, the Trustee shall be
reimbursed for any reasonable expenses, including reasonable counsel fees
incurred by it as Trustee. Such compensation and expenses shall be paid from the
Trust Fund unless paid or advanced by the Employer. All taxes of any kind
whatsoever that may be levied or assessed under existing or future laws upon, or
in respect of, the Trust Fund or the income thereof, shall be paid from the
Trust Fund.
7.9 ANNUAL REPORT OF THE TRUSTEE
(a) Within a reasonable period of time after the later of the
Anniversary Date or receipt of the Employer's contribution for each Plan Year,
the Trustee, or its agent, shall furnish to the Employer and Administrator a
written statement of account with respect to the Plan Year for which such
contribution was made setting forth:
(1) the net income, or loss, of the Trust Fund;
(2) the gains, or losses, realized by the Trust Fund upon
sales or other disposition of the assets;
(3) the increase, or decrease, in the value of the Trust
Fund;
(4) all payments and distributions made from the Trust
Fund; and
(5) such further information as the Trustee and/or
Administrator deems appropriate.
(b) The Employer, promptly upon its receipt of each such statement
of account, shall acknowledge receipt thereof in writing and advise the Trustee
and/or Administrator of its approval or disapproval thereof. Failure by the
Employer to disapprove any such statement of account within thirty (30) days
after its receipt thereof shall be deemed an approval thereof. The approval by
the Employer of any statement of account shall be binding on the Employer and
the Trustee as to all matters contained in the statement to the same extent as
if the account of the Trustee had been settled by judgment or decree in an
action for a judicial settlement of its account in a court of competent
jurisdiction in which the Trustee, the Employer and all persons having or
claiming an interest in the Plan were parties. However, nothing contained in
this Section shall deprive the Trustee of its right to have its accounts
judicially settled if the Trustee so desires.
7.10 AUDIT
(a) If an audit of the Plan's records shall be required
by the Act and the regulations thereunder for any Plan Year, the
Administrator shall direct the Trustee to engage on behalf of all
Participants an independent qualified public accountant for that
purpose. Such accountant shall, after an audit of the books and records
of the Plan in accordance with generally accepted auditing standards,
within a reasonable period after the close of the Plan Year, furnish to
the Administrator and the Trustee a report of the audit setting forth
the accountant's opinion as to whether any statements, schedules or
lists, that are required by Act Section 103 or the Secretary of Labor
to be filed with the Plan's annual report, are presented fairly in
conformity with generally accepted accounting principles applied
consistently.
50
(b) All auditing and accounting fees shall be an expense
of and may, at the election of the Employer, be paid from the Trust
Fund.
(c) If some or all of the information necessary to enable
the Administrator to comply with Act Section 103 is maintained by a
bank, insurance company, or similar institution, regulated, supervised,
and subject to periodic examination by a state or federal agency, then
it shall transmit and certify the accuracy of that information to the
Administrator as provided in Act Section 103(b) within one hundred
twenty (120) days after the end of the Plan Year or such other date as
may be prescribed under regulations of the Secretary of Labor.
7.11 RESIGNATION, REMOVAL AND SUCCESSION OF TRUSTEE
(a) Unless otherwise agreed to by both the Trustee and
the Employer, a Trustee may resign at any time by delivering to the
Employer, at least thirty (30) days before its effective date, a
written notice of resignation.
(b) Unless otherwise agreed to by both the Trustee and
the Employer, the Employer may remove a Trustee at any time by
delivering to the Trustee, at least thirty (30) days before its
effective date, a written notice of such Trustee's removal.
(c) Upon the death, resignation, incapacity, or removal
of any Trustee, a successor may be appointed by the Employer; and such
successor, upon accepting such appointment in writing and delivering
same to the Employer, shall, without further act, become vested with
all the powers and responsibilities of the predecessor as if such
successor had been originally named as a Trustee herein. Until such a
successor is appointed, any remaining Trustee or Trustees shall have
full authority to act under the terms of the Plan.
(d) The Employer may designate one or more successors
prior to the death, resignation, incapacity, or removal of a Trustee.
In the event a successor is so designated by the Employer and accepts
such designation, the successor shall, without further act, become
vested with all the powers and responsibilities of the predecessor as
if such successor had been originally named as Trustee herein
immediately upon the death, resignation, incapacity, or removal of the
predecessor.
(e) Whenever any Trustee hereunder ceases to serve as
such, the Trustee shall furnish to the Employer and Administrator a
written statement of account with respect to the portion of the Plan
Year during which the individual or entity served as Trustee. This
statement shall be either (i) included as part of the annual statement
of account for the Plan Year required under Section 7.9 or (ii) set
forth in a special statement. Any such special statement of account
should be rendered to the Employer no later than the due date of the
annual statement of account for the Plan Year. The procedures set forth
in Section 7.9 for the approval by the Employer of annual statements of
account shall apply to any special statement of account rendered
hereunder and approval by the Employer of any such special statement in
the manner provided in Section 7.9 shall have the same effect upon the
statement as the Employer's approval of an annual statement of account.
No successor to the Trustee shall have any duty or responsibility to
investigate the acts or transactions of any predecessor who has
rendered all statements of account required by Section 7.9 and this
subparagraph.
7.12 TRANSFER OF INTEREST
Notwithstanding any other provision contained in this Plan,
the Trustee at the direction of the Administrator shall transfer the Vested
interest, if any, of a Participant to another trust forming part of a pension,
profit sharing, or stock bonus plan maintained by such Participant's new
employer and represented by said employer in writing as meeting the requirements
of Code Section 401(a), provided that the trust to which such transfers are made
permits the transfer to be made.
7.13 TRUSTEE INDEMNIFICATION
The Trustee shall not be responsible in any way for the
collection of contributions provided for under the Plan, the purpose or
propriety of any distribution made pursuant to Section V hereof, or any action
or inaction taken pursuant to the direction of the Administrator and/or
Employer. The Plan and Employer shall at all times fully indemnify and save
harmless the Trustee, its agents, affiliates, successors and assigns, and their
officers, directors, and employees, from any and all liability arising from
distributions so made or actions so taken (or not taken), and from any and all
other liability whatsoever which may arise in connection with this Agreement,
except liability arising form the gross negligence or willful misconduct of the
Trustee. The Trustee shall be under no duty to take any action other than as
herein specified with respect to the Trust Account unless the Administrator or
Employer shall furnish the Trustee with instructions in proper form and such
instructions shall have been specifically agreed to by the Trustee in writing;
or to defend or engage in any suit with respect to the Trust Account unless the
Trustee shall have first agreed in writing to do so and shall have been fully
indemnified to the satisfaction of the Trustee.
7.14 EMPLOYER SECURITIES AND REAL PROPERTY
(a) The Trustee shall be empowered to acquire
and hold qualifying Employer securities and qualifying Employer real property,
as those terms are defined in the Act. However, no more than 100%, in the case
of a Profit Sharing Plan or 401(k)
51
Plan or ten percent (10%), in the case of a money purchase plan of the fair
market value of all the assets in the Trust Fund may be invested in qualifying
Employer securities and qualifying Employer real property.
Notwithstanding the above, for Plan Years beginning
after December 31, 1998, if the Plan does not permit Participants to direct the
investment of the portion of their Elective Account attributable to Elective
Deferrals, then the Trustee shall not be permitted to acquire or hold qualifying
Employer securities and qualifying Employer real property if the fair market
value of such securities and property should amount to more than ten percent
(10%) of the portion of a Participant's Elective Account attributable to
Elective Deferrals.
(b) The following provisions shall apply in the
event and to the extent that the Plan permits each Participant to direct the
investment of the Participant Accounts:
(i) Voting of Stock. Each Participant shall have
the right to instruct the Trustee as to the
manner in which to vote that number of
shares of Employer stock credited to the
Participant Account. The number of shares
deemed credited to a Participant's Account
shall be determined as of the date of record
determined by the Employer for which an
allocation has been completed under Section
4.3 and Employer stock has actually been
credited to a Participant's Account. To
facilitate the Participants' voting rights,
the Employer shall deliver to each
Participant, on a timely basis, a copy of
all proxies, notices and other information
which it distributes to shareholders
generally and such other information as may
be required by law or as may be necessary to
permit a Participant to exercise the
Participant's authority to direct action
with respect to all shares in such
Participant's Account and as may be
necessary to permit the Administrator to
direct action with respect to unallocated
shares.
The directions of Participants shall be
communicated in writing, telephonically or
electronically and shall be held in
confidence by the Trustee or the
Intermediary as defined in paragraph (iii)
below and not divulged to the Employer or
any officer or employee thereof. Upon
receipt of the directions, the Trustee shall
vote as directed by the Participants. The
Trustee shall not vote those shares of
Employer stock credited to Participants'
Accounts for which no voting directions have
been received. The party having the voting
authority under Section 7.2(c)(3) above
shall instruct the Trustee how to vote any
shares of Employer stock that have not been
credited to Participants' Accounts.
(ii) Tender Offer or Exchange Offer. In the event
of a tender offer or exchange offer, each
Participant shall have the right to direct
the Trustee as to whether the shares of
Employer stock credited to his or her
Participant's Account shall be tendered or
exchanged in response to such offer. The
number of shares credited to Participants'
accounts shall be determined as of the date
of record determined by the Employer for
which an allocation has been completed under
Section 4.3 and Employer stock has actually
been credited to Participants' Accounts. To
facilitate the right to instruct the Trustee
as to a tender or exchange offer, the
Employer shall distribute to each
Participant the same information as may be
distributed to the stockholders of the
Employer in connection with such offer and
such additional information as may be
required by law or as may be necessary to
permit a Participant to exercise the
Participant's authority to direct action
with respect to all shares in such
Participant's Account and as may be
necessary to permit the Administrator to
direct action with respect to unallocated
shares.
The directions of Participants shall be
communicated in writing, telephonically or
electronically and shall be held in
confidence by the Trustee or the
Intermediary, as defined in paragraph (iii)
below and not divulged to the Employer, or
any officer or employee thereof. Upon
receipt of the directions, the Trustee shall
take such action as directed by the
Participants. The Trustee shall not tender
or exchange those shares of Employer stock
credited to Participants' Accounts for which
no directions have been received. The
Administrator shall instruct the Trustee
whether to tender or exchange those shares
of Employer stock that have not been
credited to Participants' Accounts.
(iii) The Employer shall be responsible for
determining whether, under the circumstances
prevailing at a given time, its fiduciary
duty to Participants and Beneficiaries under
the Plan and the Act requires that the
Employer follow the advice of independent
counsel as to the voting of Employer stock.
The Employer will, in addition, establish
procedures for the collection and timely
transmission of each Participant's
directions to the Trustee. Such procedures
shall include such measures as may be
necessary to insure the confidentiality of
each Participant's directions, which
measures may include, without limitation,
appointment of an independent third party
(the "Intermediary") to receive directions
from each Participant, to compile the
aggregate results of Participant directions
52
and to communicate such results to the
Trustee. For purposes of this Section 7.14,
the term Participant includes any
Beneficiary with an account in the Plan that
is invested in Employer stock.
(c) In addition, the following provisions shall
apply in the event that MFS Heritage Trust Company (or any successor
appointed by the sponsoring organization of this Plan) or other entity
is designated to serve as a Directed Trustee of this Plan:
(i) Employer Stock Limitation. The investment in
qualifying Employer securities shall be
restricted to publicly-traded common stock
of the Employer or of an affiliate of the
Employer.
(ii) Employer Certification. The receipt by the
Directed Trustee of instructions or
directions from the Employer or
Administrator pursuant to this Section 7.14
shall be deemed to be certifications by the
Employer or Administrator that the
provisions of this Section 7.14, the Act and
all applicable securities laws and
regulations have been complied with by the
Employer or Administrator.
(d) In addition to its duties as described in
Section 2.4 of the Plan, the Administrator will be responsible for
filing all reports required under the Act and federal or state
securities laws with respect to the Plan's ownership interest in
Employer stock. The Administrator will establish such procedures, as it
shall deem necessary for compliance with such reporting requirements
and to monitor and restrict transfers into and out of Employer stock
pursuant to the applicable requirements, if any, of Section 16 of the
Securities Act of 1934, Section 404(c) of the Act and any other
applicable law.
ARTICLE VIII
AMENDMENT, TERMINATION AND MERGERS
8.1 AMENDMENT
(a) The Employer shall have the right at any time to
amend this Plan subject to the limitations of this Section. However,
any amendment that affects the rights, duties or responsibilities of
the Trustee or Administrator may only be made with the Trustee's or
Administrator's written consent. Any such amendment shall become
effective as provided therein upon its execution. The Trustee shall not
be required to execute any such amendment unless the amendment affects
the duties of the Trustee hereunder.
(b) The Employer may (1) change the choice of options in
the Adoption Agreement, (2) add any addendum to the Adoption Agreement
that is specifically permitted pursuant to the terms of Revenue
Procedure 2000-20 or other Internal Revenue Service guidance applicable
to master and prototype plans; (3) add overriding language to the
Adoption Agreement when such language is necessary to satisfy Code
Sections 415 or 416 because of the required aggregation of multiple
plans, and (4) add certain model amendments published by the IRS which
specifically provide that their adoption will not cause the Plan to be
treated as an individually designed plan. An Employer that amends the
Plan for any other reason, including a waiver of the minimum funding
requirement under Code Section 412(d), will no longer participate in
this prototype plan and this Plan will be considered to be an
individually designed plan. Notwithstanding the preceding, the
attachment to the Adoption Agreement of any addendum specifically
authorized by the Plan or a list of any Section 411(d)(6) protected
benefits which must be preserved shall not be considered an amendment
to the Plan.
(c) The Employer expressly delegates authority to the
sponsoring organization of this Plan, the right to amend this Plan by
submitting a copy of the amendment to each Employer who has adopted
this Plan, after first having received a ruling or favorable
determination from the IRS that the Plan as amended qualifies under
Code Section 401(a) and the Act (unless a ruling or determination is
not required by the IRS).
(d) No amendment to the Plan shall be effective if it
authorizes or permits any part of the Trust Fund (other than such part
as is required to pay taxes and administration expenses) to be used for
or diverted to any purpose other than for the exclusive benefit of the
Participants or their Beneficiaries or estates; or causes any reduction
in the amount credited to the account of any Participant; or causes or
permits any portion of the Trust Fund to revert to or become property
of the Employer.
(e) Except as permitted by Regulations (including
Treasury Regulation Section 1.411(d)-4) or other IRS guidance, no Plan
amendment or transaction having the effect of a Plan amendment (such as
a merger, plan transfer or similar transaction) shall be effective if
it eliminates or reduces any Section 411(d)(6) protected benefit or
adds or modifies conditions relating to Section 411(d)(6) protected
benefits which results in a further restriction on such benefits unless
such Section 411(d)(6) protected benefits are preserved with respect to
benefits accrued as of the later of the adoption date or effective date
of the amendment. Section 411(d)(6) protected benefits are benefits
described in Code Section 411(d)(6)(A), early retirement benefits and
retirement-type subsidies, and optional forms of benefit.
53
No amendment to the Plan shall be effective or restrict an optional
form of benefit. The preceding sentence shall not apply to a Plan
amendment that eliminates or restricts the ability or 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
(1) and (2) below:
(1) 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 (1), 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.
(2) 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: (i) the 90th day after the date
the Participant receiving the distribution has been
furnished a summary that reflects the amendment and
that satisfies the requirements of the Act and 29 CFR
2520.104b-3 relating to a summary of material
modifications or (ii) the first day of the second
Plan Year following the Plan Year in which the
amendment is adopted.
8.2 TERMINATION
(a) The Employer shall have the right at any time to
terminate the Plan by delivering to the Trustee and Administrator
written notice of such termination. Upon any full or partial
termination, all amounts credited to the affected Participants'
Combined Accounts shall become 100% Vested and shall not thereafter be
subject to forfeiture, and all unallocated amounts, including
Forfeitures, shall be allocated to the accounts of all Participants in
accordance with the provisions hereof.
(b) Upon the full termination of the Plan, the Employer
shall direct the distribution of the assets to Participants in a manner
that is consistent with and satisfies the provisions of Section 6.5.
Distributions to a Participant shall be made in cash (or in property if
permitted in the Adoption Agreement) or through the purchase of
irrevocable nontransferable deferred commitments from the Insurer.
Except as permitted by Treasury Regulations, the termination of the
Plan shall not result in the reduction of Section 411(d)(6) protected
benefits as described in Section 8.1(e).
(c) This Plan and Trust shall automatically terminate
when all assets have been distributed. In addition to the Employer's
termination of this Plan and Trust, the Employer directs the Trustee to
distribute all assets of this Plan and Trust upon the occurrence of any
of the following events: (i) an order or a direction by the Department
of Labor, by a trustee in bankruptcy, or by a court of competent
jurisdiction that requires a distribution of Plan assets; (ii) the
merger, consolidation or reorganization of the Employer, unless all
assets are merged into the surviving entity's plan and trust or the
surviving entity adopts this Plan and Trust within a reasonable period
following such merger, consolidation or reorganization; and/or (iii)
when the Employer or Administrator fails to provide rollover, transfer
or distribution instructions to the Trustee within a reasonable period
following the liquidation, dissolution or complete cessation of the
Employer's business. In such circumstances, the Trustee shall
distribute all assets in the Plan pursuant to rollover, transfer or
distribution instructions from the Employer or Administrator or, in the
absence of such instructions, the Trustee shall distribute or transfer
all assets in the Plan in accordance with the directions of the
Participants or Beneficiaries and in accordance with their interests in
the Plan.
8.3 MERGER, CONSOLIDATION OR TRANSFER OF ASSETS
This Plan may be merged or consolidated with, or its assets
and/or liabilities may be transferred to any other plan only if the benefits
which would be received by a Participant of this Plan, in the event of a
termination of the plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would have
received if the Plan had terminated immediately before the transfer, merger or
consolidation and such transfer, merger or consolidation does not otherwise
result in the elimination or reduction of any Section 411(d)(6) protected
benefits as described in Section 8.1(e).
ARTICLE IX
TOP HEAVY PROVISIONS
9.1 TOP HEAVY PLAN REQUIREMENTS
For any Top Heavy Plan Year, the Plan shall provide the
special vesting requirements of Code Section 416(b) pursuant to Section 6.4 of
the Plan and the special minimum allocation requirements of Code Section 416(c)
pursuant to Section 4.3(f) of the Plan.
54
9.2 DETERMINATION OF TOP HEAVY STATUS
(a) This Plan shall be a Top Heavy Plan for any Plan Year
beginning after December 31, 1983, if any of the following conditions
exists:
(1) if the top heavy ratio for this Plan exceeds sixty percent
(60%) and this Plan is not part of any required aggregation
group or permissive aggregation group;
(2) if this Plan is a part of a required aggregation group but
not part of a permissive aggregation group and the top heavy
ratio for the group of plans exceeds sixty percent (60%); or
(3) if this Plan is a part of a required aggregation group and
part of a permissive aggregation group and the top heavy ratio
for the permissive aggregation group exceeds sixty percent
(60%).
(b) "Top heavy ratio" means, with respect to a
determination date:
(1) If the Employer maintains one or more defined
contribution plans (including any simplified employee pension
plan (as defined in Code Section 408(k)) and the Employer has
not maintained any defined benefit plan which during the
5-year period ending on the determination date has or has had
accrued benefits, the top heavy ratio for this plan alone or
for the required aggregation group or permissive aggregation
group as appropriate is a fraction, the numerator of which is
the sum of the account balances of all Key Employees as of the
determination date (including any part of any account balance
distributed in the 5-year period ending on the determination
date), 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), both computed in accordance with Code Section 416 and
the Treasury Regulations thereunder. Both the numerator and
denominator of the top heavy ratio are increased to reflect
any contribution not actually made as of the determination
date, but which is required to be taken into account on that
date under Code Section 416 and the Treasury Regulations
thereunder.
(2) 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 has or has had any accrued benefits,
the top heavy ratio for any required aggregation group or
permissive aggregation group as appropriate is a fraction, the
numerator of which is the sum of account balances under the
aggregated defined contribution plan or plans for all Key
Employees, determined in accordance with (1) above, and the
present value of accrued benefits under the aggregated defined
benefit plan or plans for all Key Employees as of the
determination date, and the denominator of which is the sum of
the account balances under the aggregated defined contribution
plan or plans for all participants, determined in accordance
with (1) above, and the present value of accrued benefits
under the defined benefit plan or plans for all participants
as of the determination date, all determined in accordance
with Code Section 416 and the Treasury 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.
(3) For purposes of (1) and (2) above, the value of
account balances and the present value of accrued benefits
will be determined as of the most recent valuation date that
falls within or ends with the 12-month period ending on the
determination date, except as provided in Code Section 416 and
the Treasury Regulations thereunder for the first and second
plan years of a defined benefit plan. The account balances and
accrued benefits of a participant (i) who is not a Key
Employee but who was a Key Employee in a prior year, or (ii)
who has not been credited with at least one Hour of Service
with any Employer maintaining the plan at any time during the
5-year period ending on the determination date will be
disregarded. The calculation of the top heavy ratio, and the
extent to which distributions, rollovers, and transfers are
taken into account will be made in accordance with Code
Section 416 and the Treasury Regulations thereunder.
Deductible Employee contributions will not be taken into
account for purposes of computing the top heavy ratio. When
aggregating plans the value of account balances and accrued
benefits will be calculated with reference to the
determination dates that fall within the same calendar year.
The accrued benefit of a participant other than a Key Employee
shall be determined under (i) the method, if any, that
uniformly applies for accrual purposes under all defined
benefit plans maintained by the employer, or (ii) if there is
no such method, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional
rule of Code Section 411(b)(1)(C).
(c) "Determination date" means, for any Plan Year
subsequent to the first Plan Year, the last day of the preceding Plan
Year. For the first Plan Year of the Plan, determination date means the
last day of that Plan Year.
(d) "Permissive aggregation group" means the required
aggregation group of plans plus any other plan or plans of the Employer
which, when considered as a group with the required aggregation group,
would continue to satisfy the requirements of Code Sections 401(a)(4)
and 410.
55
(e) "Present value" means the present value based only on
the interest and mortality rates specified in the Adoption Agreement.
(f) "Required aggregation group" means: (1) each
qualified plan of the Employer in which at least one Key Employee
participates or participated at any time during the determination
period (regardless of whether the plan has terminated), and (2) any
other qualified plan of the Employer which enables a plan described in
(l) to meet the requirements of Code Sections 401(a)(4) or 410.
(g) "Valuation date" means the date elected by the
Employer in the Adoption Agreement as of which account balances or
accrued benefits are valued for purposes of calculating the top heavy
ratio. Regardless of any election to the contrary or in the absence of
any election, the Valuation Date shall include the Anniversary Date and
may include any other date or dates deemed necessary or appropriate by
the Administrator for the valuation of Participants' Accounts during
the Plan Year, which may include any day that the Trustee, any transfer
agent appointed by the Trustee or the Employer, or any stock exchange
used by such agent, are open for business.
ARTICLE X
MISCELLANEOUS
10.1 EMPLOYER ADOPTIONS
(a) Any organization may become the Employer hereunder by
executing the Adoption Agreement in a form satisfactory to the Trustee,
and it shall provide such additional information as the Trustee may
require. The consent of the Trustee to act as such shall be signified
by its execution of the Adoption Agreement or a separate Trust
agreement (if elected in the Adoption Agreement).
(b) Except as otherwise provided in this Plan, the
affiliation of the Employer and the participation of its Participants
shall be separate and apart from that of any other employer and its
participants hereunder.
10.2 PARTICIPANT'S RIGHTS
This Plan shall not be deemed to constitute a contract between the
Employer and any Participant or to be a consideration or an inducement for the
employment of any Participant or Employee. Nothing contained in this Plan shall
be deemed to give any Participant or Employee the right to be retained in the
service of the Employer or to interfere with the right of the Employer to
discharge any Participant or Employee at any time regardless of the effect which
such discharge shall have upon the Employee as a Participant of this Plan.
10.3 ALIENATION
(a) Subject to the exceptions provided below and as
otherwise permitted by the Code and the Act, no benefit which shall be
payable to any person (including a Participant or the Participant's
Beneficiary) shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge,
and any attempt to anticipate, alienate, sell, transfer, assign,
pledge, encumber, or charge the same shall be void; and no such benefit
shall in any manner be liable for, or subject to, the debts, contracts,
liabilities, engagements, or torts of any such person, nor shall it be
subject to attachment or legal process for or against such person, and
the same shall not be recognized except to such extent as may be
required by law.
(b) Subsection (a) shall not apply to the extent a
Participant or Beneficiary is indebted to the Plan by reason of a loan
made pursuant to Section 7.6. At the time a distribution is to be made
to or for a Participant's or Beneficiary's benefit, such portion of the
amount to be distributed as shall equal such indebtedness shall be paid
to the Plan, to apply against or discharge such indebtedness. Prior to
making a payment, however, the Participant or Beneficiary must be given
notice by the Administrator that such indebtedness is to be so paid in
whole or part from the Participant's interest in the Plan. If the
Participant or Beneficiary does not agree that the indebtedness is a
valid claim against the Participant's interest in the Plan, the
Participant or Beneficiary shall be entitled to a review of the
validity of the claim in accordance with procedures provided in
Sections 2.10 and 2.11.
(c) Subsection (a) shall not apply to a qualified
domestic relations order defined in Code Section 414(p), and those
other domestic relations orders permitted to be so treated by the
Administrator under the provisions of the Retirement Equity Act of
1984. The Administrator shall establish a written procedure to
determine the qualified status of domestic relations orders and to
administer distributions under such qualified orders. Further, to the
extent provided under a qualified domestic relations order, a former
spouse of a Participant shall be treated as the spouse or surviving
spouse for all purposes under the Plan.
(d) Notwithstanding any provision of this Section to the
contrary, an offset to a Participant's accrued benefit against an
amount that the Participant is ordered or required to pay the Plan with
respect to a judgment, order, or decree issued,
56
or a settlement entered into, on or after August 5, 1997, shall be
permitted in accordance with Code Sections 401(a)(13)(C) and (D).
10.4 CONSTRUCTION OF PLAN
This Plan and Trust shall be construed and enforced according
to the Code, the Act and the laws of the state or commonwealth in which the
Employer's (or if there is a corporate Trustee, the Trustee's) principal office
is located (unless otherwise designated in the Adoption Agreement), other than
its laws respecting choice of law, to the extent not pre-empted by the Act.
10.5 GENDER AND NUMBER
Wherever any words are used herein in the masculine, feminine
or neuter gender, they shall be construed as though they were also used in
another gender in all cases where they would so apply, and whenever any words
are used herein in the singular or plural form, they shall be construed as
though they were also used in the other form in all cases where they would so
apply.
10.6 LEGAL ACTION
In the event any claim, suit, or proceeding is brought
regarding the Trust and/or Plan established hereunder to which the Trustee, the
Employer or the Administrator may be a party, and such claim, suit, or
proceeding is resolved in favor of the Trustee, the Employer or the
Administrator, they shall be entitled to be reimbursed from the Trust Fund for
any and all costs, attorney's fees, and other expenses pertaining thereto
incurred by them for which they shall have become liable.
10.7 PROHIBITION AGAINST DIVERSION OF FUNDS
(a) Except as provided below and otherwise specifically
permitted by law, it shall be impossible by operation of the Plan or of
the Trust, by termination of either, by power of revocation or
amendment, by the happening of any contingency, by collateral
arrangement or by any other means, for any part of the corpus or income
of any Trust Fund maintained pursuant to the Plan or any funds
contributed thereto to be used for, or diverted to, purposes other than
the exclusive benefit of Participants, Former Participants, or their
Beneficiaries.
(b) In the event the Employer shall make a contribution
under a mistake of fact pursuant to Act Section 403(c)(2)(A), the
Employer may demand repayment of such contribution at any time within
one (1) year following the time of payment and the Trustee shall return
such amount to the Employer within the one (1) year period. Earnings of
the Plan attributable to the contributions may not be returned to the
Employer but any losses attributable thereto must reduce the amount so
returned.
(c) Except as specifically stated in the Plan, any
contribution by the Employer (if the Employer is not tax-exempt) to the
Plan is conditioned upon the deductibility of the contribution by the
Employer under the Code and, to the extent any such deduction is
disallowed, the Employer may, within one (1) year following a final
determination of the disallowance, whether by agreement with the IRS or
by final decision of a court of competent jurisdiction, demand
repayment of such disallowed contribution and the Trustee shall return
such contribution within one (1) year following the disallowance.
Earnings of the Plan attributable to the contribution may not be
returned to the Employer, but any losses attributable thereto must
reduce the amount so returned.
10.8 EMPLOYER'S AND TRUSTEE'S PROTECTIVE CLAUSE
The Employer, Administrator and Trustee, and their successors,
shall not be responsible for the validity of any Contract issued hereunder or
for the failure on the part of the Insurer to make payments provided by any such
Contract, or for the action of any person which may delay payment or render a
Contract null and void or unenforceable in whole or in part.
10.9 INSURER'S PROTECTIVE CLAUSE
Except as otherwise agreed upon in writing between the
Employer and the Insurer, an Insurer which issues any Contracts hereunder shall
not have any responsibility for the validity of this Plan or for the tax or
legal aspects of this Plan. The Insurer shall be protected and held harmless in
acting in accordance with any written direction of the Administrator or Trustee,
and shall have no duty to see to the application of any funds paid to the
Trustee, nor be required to question any actions directed by the Administrator
or Trustee. Regardless of any provision of this Plan, the Insurer shall not be
required to take or permit any action or allow any benefit or privilege contrary
to the terms of any Contract which it issues hereunder, or the rules of the
Insurer.
57
10.10 RECEIPT AND RELEASE FOR PAYMENTS
Any payment to any Participant, the Participant's legal
representative, Beneficiary, or to any guardian or committee appointed for such
Participant or Beneficiary in accordance with the provisions of this Plan,
shall, to the extent thereof, be in full satisfaction of all claims hereunder
against the Trustee and the Employer.
10.11 ACTION BY THE EMPLOYER
Whenever the Employer under the terms of the Plan is permitted
or required to do or perform any act or matter or thing, it shall be done and
performed by a person duly authorized by its legally constituted authority.
10.12 NAMED FIDUCIARIES AND ALLOCATION OF RESPONSIBILITY
The named Fiduciaries of this Plan are (1) the Employer, (2)
the Administrator, (3) the Trustee (if the Trustee has discretionary authority
as elected in the Adoption Agreement or as otherwise agreed upon by the Employer
and the Trustee), and (4) any Investment Manager appointed hereunder. The named
Fiduciaries shall have only those specific powers, duties, responsibilities, and
obligations as are specifically given them under the Plan including, but not
limited to, any agreement allocating or delegating their responsibilities, the
terms of which are incorporated herein by reference. In general, the Employer
shall have the sole responsibility for making the contributions provided for
under the Plan; and shall have the sole authority to appoint and remove the
Trustee and the Administrator; to formulate the Plan's funding policy and
method; and to amend the elective provisions of the Adoption Agreement or
terminate, in whole or in part, the Plan. The Administrator shall have the sole
responsibility for the administration of the Plan, which responsibility is
specifically described in the Plan. If the Trustee has discretionary authority,
it shall have the sole responsibility of management of the assets held under the
Trust, except those assets, the management of which has been assigned to an
Investment Manager or Administrator, who shall be solely responsible for the
management of the assets assigned to it, all as specifically provided in the
Plan. Each named Fiduciary warrants that any directions given, information
furnished, or action taken by it shall be in accordance with the provisions of
the Plan, authorizing or providing for such direction, information or action.
Furthermore, each named Fiduciary may rely upon any such direction, information
or action of another named Fiduciary as being proper under the Plan, and is not
required under the Plan to inquire into the propriety of any such direction,
information or action. It is intended under the Plan that each named Fiduciary
shall be responsible for the proper exercise of its own powers, duties,
responsibilities and obligations under the Plan. No named Fiduciary shall
guarantee the Trust Fund in any manner against investment loss or depreciation
in asset value. Any person or group may serve in more than one Fiduciary
capacity.
10.13 HEADINGS
The headings and subheadings of this Plan have been inserted
for convenience of reference and are to be ignored in any construction of the
provisions hereof.
10.14 APPROVAL BY INTERNAL REVENUE SERVICE
Notwithstanding anything herein to the contrary, if, pursuant
to a timely application filed by or on behalf of the Plan, the Commissioner of
Internal Revenue Service or the Commissioner's delegate should determine that
the Plan does not initially qualify as a tax-exempt plan under Code Sections 401
and 501, and such determination is not contested, or if contested, is finally
upheld, then if the Plan is a new plan, it shall be void ab initio and all
amounts contributed to the Plan, by the Employer, less expenses paid, shall be
returned within one (1) year and the Plan shall terminate, and the Trustee shall
be discharged from all further obligations. If the disqualification relates to
an amended plan, then the Plan shall operate as if it had not been amended. 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.
10.15 UNIFORMITY
All provisions of this Plan shall be interpreted and applied
in a uniform, nondiscriminatory manner.
10.16 PAYMENT OF BENEFITS
Except as otherwise provided in the Plan, benefits under this
Plan shall be paid, subject to Sections 6.10, 6.11 and 12.9, only upon death,
Total and Permanent Disability, normal or early retirement, termination of
employment, or termination of the Plan.
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ARTICLE XI
PARTICIPATING EMPLOYERS
11.1 ELECTION TO BECOME A PARTICIPATING EMPLOYER
Notwithstanding anything herein to the contrary, with the
consent of the Employer and Trustee, any Affiliated Employer may adopt the
Employer's Plan and all of the provisions hereof, and participate herein and be
known as a Participating Employer, by a properly executed document evidencing
said intent and will of such Participating Employer. Regardless of the
preceding, an entity that ceases to be an Affiliated Employer may continue to be
a Participating Employer through the end of the transition period for certain
dispositions set forth in Code Section 410(b)(6)(C). In the event a
Participating Employer is not an Affiliated Employer and the transition period
in the preceding sentence, if applicable, has expired, then this Plan will be
considered an individually designed plan.
11.2 REQUIREMENTS OF PARTICIPATING EMPLOYERS
(a) Each Participating Employer shall be required to
select the same Adoption Agreement provisions as those selected by the
Employer other than the Plan Year, the Fiscal Year, and such other
items that must, by necessity, vary among employers.
(b) The Trustee may, but shall not be required to,
commingle, hold and invest as one Trust Fund all contributions made by
Participating Employers, as well as all increments thereof.
(c) Any expenses of the Plan which are to be paid by the
Employer or borne by the Trust Fund shall be paid by each Participating
Employer in the same proportion that the total amount standing to the
credit of all Participants employed by such Employer bears to the total
standing to the credit of all Participants.
11.3 DESIGNATION OF AGENT
Each Participating Employer shall be deemed to be a part of
this Plan; provided, however, that with respect to all of its relations with the
Trustee and Administrator for purposes of this Plan, each Participating Employer
shall be deemed to have designated irrevocably the Employer as its agent. Unless
the context of the Plan clearly indicates the contrary, the word Employer shall
be deemed to include each Participating Employer as related to its adoption of
the Plan.
11.4 EMPLOYEE TRANSFERS
In the event an Employee is transferred between Participating
Employers, accumulated service and eligibility shall be carried with the
Employee involved. No such transfer shall effect a termination of employment
hereunder, and the Participating Employer to which the Employee is transferred
shall thereupon become obligated hereunder with respect to such Employee in the
same manner as was the Participating Employer from whom the Employee was
transferred.
11.5 PARTICIPATING EMPLOYER'S CONTRIBUTION AND FORFEITURES
Any contribution or Forfeiture subject to allocation during
each Plan Year shall be allocated among all Participants of all Participating
Employers in accordance with the provisions of this Plan. However, if a
Participating Employer is not an Affiliated Employer (due to the transition rule
for certain dispositions set forth in Code Section 410(b)(6)(C)) then any
contributions made by such Participating Employer will only be allocated among
the Participants eligible to share of the Participating Employer. On the basis
of the information furnished by the Administrator, the Trustee may keep separate
books and records concerning the affairs of each Participating Employer
hereunder and as to the accounts and credits of the Employees of each
Participating Employer. The Trustee may, but need not, register Contracts so as
to evidence that a particular Participating Employer is the interested Employer
hereunder, but in the event of an Employee transfer from one Participating
Employer to another, the employing Participating Employer shall immediately
notify the Trustee thereof.
11.6 AMENDMENT
Amendment of this Plan by the Employer at any time when there
shall be a Participating Employer that is an Affiliated Employer hereunder shall
only be by the written action of each and every Participating Employer and with
the consent of the Trustee where such consent is necessary in accordance with
the terms of this Plan.
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11.7 DISCONTINUANCE OF PARTICIPATION
Except in the case of a standardized Plan, any Participating
Employer that is an Affiliated Employer shall be permitted to discontinue or
revoke its participation in the Plan at any time. At the time of any such
discontinuance or revocation, satisfactory evidence thereof and of any
applicable conditions imposed shall be delivered to the Trustee. The Trustee
shall thereafter transfer, deliver and assign Contracts and other Trust Fund
assets allocable to the Participants of such Participating Employer to such new
trustee or custodian as shall have been designated by such Participating
Employer, in the event that it has established a separate qualified retirement
plan for its employees provided, however, that no such transfer shall be made if
the result is the elimination or reduction of any Section 411(d)(6) protected
benefits as described in Section 8.1(e). If no successor is designated, the
Trustee shall retain such assets for the Employees of said Participating
Employer pursuant to the provisions of Article VII hereof. In no such event
shall any part of the corpus or income of the Trust Fund as it relates to such
Participating Employer be used for or diverted to purposes other than for the
exclusive benefit of the employees of such Participating Employer.
11.8 ADMINISTRATOR'S AUTHORITY
The Administrator shall have authority to make any and all
necessary rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of this Article.
11.9 PARTICIPATING EMPLOYER CONTRIBUTION FOR AFFILIATE
If any Participating Employer is prevented in whole or in part
from making a contribution which it would otherwise have made under the Plan by
reason of having no current or accumulated earnings or profits, or because such
earnings or profits are less than the contribution which it would otherwise have
made, then, pursuant to Code Section 404(a)(3)(B), so much of the contribution
which such Participating Employer was so prevented from making may be made, for
the benefit of the participating employees of such Participating Employer, by
other Participating Employers who are members of the same affiliated group
within the meaning of Code Section 1504 to the extent of their current or
accumulated earnings or profits, except that such contribution by each such
other Participating Employer shall be limited to the proportion of its total
current and accumulated earnings or profits remaining after adjustment for its
contribution to the Plan made without regard to this paragraph which the total
prevented contribution bears to the total current and accumulated earnings or
profits of all the Participating Employers remaining after adjustment for all
contributions made to the Plan without regard to this paragraph.
A Participating Employer on behalf of whose employees a
contribution is made under this paragraph shall not be required to reimburse the
contributing Participating Employers.
ARTICLE XII
CASH OR DEFERRED PROVISIONS
Except as specifically provided elsewhere in this Plan, the
provisions of this Article shall apply with respect to any 401(k) profit sharing
plan regardless of any provisions in the Plan to the contrary.
12.1 FORMULA FOR DETERMINING EMPLOYER'S CONTRIBUTION
(a) For each Plan Year, the Employer will (or may with
respect to any discretionary contributions) contribute to the Plan:
(1) The amount of the total salary reduction elections of
all Participants made pursuant to Section 12.2(a), which
amount shall be deemed Elective Deferrals, plus
(2) If elected in the Adoption Agreement, a matching
contribution and/or a Qualified Matching Contribution equal to
the percentage, if any, specified in the Adoption Agreement of
the Elective Deferrals or Voluntary Employee Contributions, if
applicable, of each Participant eligible to share in the
allocations of the matching contribution and/or qualified
matching contributions, plus
(3) If elected in the Adoption Agreement, a fixed amount,
a prevailing wage contribution or a discretionary amount
determined each year by the Employer, which amount if any,
shall be deemed an Employer's Non-Elective Contribution, plus
(4) If elected in the Adoption Agreement, a discretionary
Qualified Non-Elective Contribution.
(b) Notwithstanding the foregoing, if the Employer is not
a tax-exempt entity, then the Employer's contributions for any Fiscal
Year may generally not exceed the maximum amount allowable as a
deduction to the Employer under the provisions of Code Section 404.
However, to the extent necessary to provide the top heavy minimum
allocations, the Employer
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shall make a contribution even if it exceeds current or accumulated Net
Profit or the amount which is deductible under Code Section 404. All
contributions by the Employer shall be made in cash or in such property
as is acceptable to the Trustee.
12.2 PARTICIPANT'S SALARY REDUCTION ELECTION
(a) Each Participant may elect to defer a percentage or
dollar amount of Compensation which would have been received in the
Plan Year, but for the salary reduction election, subject to the
limitations of this Section and the Adoption Agreement. A salary
reduction election (or modification of an earlier election) may not be
made with respect to Compensation which is currently available on or
before the date the Participant executed such election, or if later,
the later of the date the Employer adopts this cash or deferred
arrangement or the date such arrangement first became effective. Any
elections made pursuant to this Section shall become effective as soon
as is administratively feasible. If the automatic election option is
elected in the Adoption Agreement, then in the event a Participant
fails to make a deferral election and does not affirmatively elect to
receive cash, such Participant shall be deemed to have made a deferral
election equal to the percentage of Compensation set forth in the
Adoption Agreement. The automatic election may, in accordance with
procedures established by the Administrator, be applied to all
Participants or to Eligible Employees who become Participants after a
certain date. For purposes of this Section, Compensation in excess of
the annual dollar limitation of Code Section 401(a)(17) ($150,000 as
adjusted) shall not apply.
Additionally, if elected in the Adoption Agreement,
each Participant may elect to defer a different percentage or amount of
any cash bonus to be paid by the Employer during the Plan Year. A
deferral election may not be made with respect to cash bonuses which
are currently available on or before the date the Participant executes
such election.
The amount by which Compensation and/or cash bonuses
are reduced shall be that Participant's Elective Deferrals and shall be
treated as an Employer contribution and allocated to that Participant's
Elective Deferral Account.
Once made, a Participant's election to reduce
Compensation shall remain in effect until modified or terminated.
Modifications may be made as specified in the Adoption Agreement, and
terminations may be made at any time. Any modification or termination
of an election will become effective as soon as is administratively
feasible.
The Employer may allow Participants upon proper
notice and approval to enter into a special salary reduction agreement
to make Elective Deferrals in an amount up to one hundred percent of
their compensation for one or more payroll periods in the final month
of the Plan Year. However, catch-up contributions and annual bonus
contributions may not cause a Participant's elective Deferral
contributions for the Plan Year to exceed his Compensation times the
Plan's maximum allowable deferral percentage or the maximum dollar
amount permitted under Section 402(g) of the Code. The Employer has the
right to refuse to allow a Participant to make such contributions if
they would adversely affect the Plan's ability to pass the ADP Test
and/or the A C P Test.
(b) The balance in each Participant's Elective Deferral
Account, Qualified Matching Contribution Account and Qualified
Non-Elective Contribution Account shall be fully Vested at all times
and, except as otherwise provided herein, shall not be subject to
Forfeiture for any reason.
(c) Amounts held in a Participant's Elective Deferral
Account, Qualified Matching Contribution Account and Qualified
Non-Elective Account may only be distributable as provided in (4), (5)
or (6) below or as provided under the other provisions of this Plan,
but in no event prior to the earlier of the following events or any
other events permitted by the Code or Treasury Regulations:
(1) the Participant's separation from service, Total and
Permanent Disability, or death;
(2) the Participant's attainment of age 59 1/2;
(3) the proven financial hardship of the Participant,
subject to the limitations of Section 12.9;
(4) the termination of the Plan without the existence at
the time of Plan termination of another defined contribution
plan or the establishment of a successor defined contribution
plan by the Employer or an Affiliated Employer within the
period ending twelve months after distribution of all assets
from the Plan maintained by the Employer. For this purpose, a
defined contribution does not include an employee stock
ownership plan (as defined in Code Section 4975(e)(7) or 409),
a simplified employee pension plan (as defined in Code Section
408(k)), or a simple individual retirement account plan (as
defined in Code Section 408(p));
(5) the date of the sale by the Employer to an entity
that is not an Affiliated Employer of substantially all of the
assets (within the meaning of Code Section 409(d)(2)) with
respect to a Participant who continues employment with the
corporation acquiring such assets; or
61
(6) the date of the sale by the Employer or an Affiliated
Employer of its interest in a subsidiary (within the meaning
of Code Section 409(d)(3)) to an entity that is not an
Affiliated Employer with respect to a Participant who
continues employment with such subsidiary.
Distributions that are made because of (4), (5), or (6) above
must be made in a lump-sum.
(d) A Participant's elective deferrals made under this
Plan and all other plans, contracts or arrangements of the Employer
maintaining this Plan during any calendar year shall not exceed the
dollar limitation imposed by Code Section 402(g), as in effect at the
beginning of such calendar year. This dollar limitation shall be
adjusted annually pursuant to the method provided in Code Section
415(d) in accordance with Treasury Regulations. For this purpose,
elective deferrals means, with respect to a calendar year, the sum of
all Employer contributions made on behalf of such Participant pursuant
to an election to defer under any qualified cash or deferred
arrangement as described in Code Section 401(k), any simple IRA Plan
described in Code Section 408(p)(2), any salary reduction simplified
employee pension (as defined in Code Section 408(k)(6)), any eligible
deferred compensation plan under Code Section 457, any plans described
under Code Section 501(c)(18), and any Employer contributions made on
the behalf of a Participant for the purchase of an annuity contract
under Code Section 403(b) pursuant to a salary reduction agreement.
Elective deferrals shall not include any deferrals properly distributed
as excess Annual Additions pursuant to Section 4.5.
(e) If a Participant has Excess Deferrals for a taxable
year, the Participant may, not later than March 1st following the close
of such taxable year, notify the Administrator in writing of such
excess and request that the Participant's Elective Deferrals under this
Plan be reduced by an amount specified by the Participant. In such
event, the Administrator shall direct the distribution of such excess
amount (and any Income allocable to such excess amount) to the
Participant not later than the first April 15th following the close of
the Participant's taxable year. Any distribution of less than the
entire amount of Excess Deferrals and Income shall be treated as a pro
rata distribution of Excess Deferrals and Income. The amount
distributed shall not exceed the Participant's Elective Deferrals under
the Plan for the taxable year. Any distribution on or before the last
day of the Participant's taxable year must satisfy each of the
following conditions:
(1) the Participant shall designate the distribution as
Excess Deferrals;
(2) the distribution must be made after the date on which
the Plan received the Excess Deferrals; and
(3) the Plan must designate the distribution as a
distribution of Excess Deferrals.
Regardless of the preceding, if a Participant has
Excess Deferrals solely from elective deferrals made under this Plan or
under any other plan maintained by the Employer, a Participant will be
deemed to have notified the Administrator of such excess amount and the
Administrator shall direct the distribution of such Excess Deferrals in
a manner consistent with the provisions of this subsection.
Any distribution made pursuant to this subsection
shall be made first from unmatched Elective Deferrals and, thereafter,
from Elective Deferrals which are matched. Matching contributions which
relate to Excess Deferrals which are distributed pursuant to this
Section 12.2(e) shall be treated as a Forfeiture to the extent required
pursuant to Code Section 401(a)(4) and the Treasury Regulations
thereunder.
For the purpose of this subsection, "Income" means
the amount of income or loss allocable to a Participant's Excess
Deferrals for the Plan Year, which amount shall be allocated in the
same manner as income or losses are allocated pursuant to Section
4.3(c). However, Income for the period between the end of the taxable
year of the Participant and the date of the distribution (the "gap
period") is not required to be distributed.
(f) Notwithstanding the preceding, a Participant's Excess
Deferrals shall be reduced, but not below zero, by any distribution
and/or recharacterization of Excess Deferrals pursuant to Section
12.5(a) for the Plan Year beginning with or within the taxable year of
the Participant.
(g) In the event a Participant has received a hardship
distribution pursuant to Treasury Regulation Section
1.401(k)-1(d)(2)(iii)(B) from any other plan maintained by the Employer
or from the Participant's Elective Deferral Account pursuant to Section
12.9, then such Participant shall not be permitted to elect to have
Elective Deferrals contributed to the Plan for a period of twelve (12)
months following the receipt of the distribution. Furthermore, the
dollar limitation under Code Section 402(g) shall be reduced, with
respect to the Participant's taxable year following the taxable year in
which the hardship distribution was made, by the amount of such
Participant's Elective Deferrals, if any, made pursuant to this Plan
(and any other plan maintained by the Employer) for the taxable year of
the hardship distribution.
(h) At Normal Retirement Date, or such other date when
the Participant shall be entitled to receive benefits, the fair market
value of the Participant's Elective Deferral Account shall be used to
provide benefits to the Participant or the Participant's Beneficiary.
62
(i) If during a Plan Year, it is projected that the
aggregate amount of Elective Deferrals to be allocated to all Highly
Compensated Participants under this Plan would cause the Plan to fail
the actual deferral percentage tests set forth in Section 12.4, then
the Administrator may automatically reduce the deferral amount of
affected Highly Compensated Participants, beginning with the Highly
Compensated Participant who has the highest actual deferral ratio until
it is anticipated the Plan will pass the tests or until the actual
deferral ratio equals the actual deferral ratio of the Highly
Compensated Participant having the next highest actual deferral ratio.
This process may continue until it is anticipated that the Plan will
satisfy one of the tests set forth in Section 12.4.
(j) The Employer and the Administrator shall establish
procedures necessary to implement the salary reduction elections
provided for herein. Such procedures may contain limits on salary
deferral elections such as limiting elections to whole percentages of
Compensation or to equal dollar amounts per pay period that an election
is in effect. Such procedures shall also include procedures for
providing each newly hired Employee, and each current Employee on an
annual basis, with a notice that explains the Compensation reduction
elections (including any automatic Compensation deduction election) and
the Employee's right to elect to have or not have such Compensation
reduction contributions made to the Plan or to alter the amount of
those contributions, including the procedure for exercising that right
and the timing for implementation of any such election.
12.3 ALLOCATION OF CONTRIBUTION, FORFEITURES AND EARNINGS
(a) The Administrator shall establish and maintain an
account in the name of each Participant to which the Administrator
shall credit as of each Anniversary Date, or other Valuation Date, all
amounts allocated to each such Participant as set forth herein.
(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper allocation
of Employer contributions for each Plan Year. Within a reasonable
period of time after the date of receipt by the Administrator of such
information, the Administrator shall allocate contributions as follows:
(1) With respect to Elective Deferrals made pursuant to
Section 12.1(a)(1), to each Participant's Elective Deferral
Account in an amount equal to each such Participant's Elective
Deferrals for the year.
(2) With respect to the Employer's matching contribution
made pursuant to Section 12.1(a)(2), to each Participant's
Account, or Participant's Qualified Matching Contribution
Account, as elected in the Adoption Agreement, in accordance
with Section 12.1(a)(2).
Except, however, in order to be entitled to receive any
Employer matching contribution, a Participant must satisfy the
conditions for sharing in the Employer matching contribution
as set forth in the Adoption Agreement. Furthermore,
regardless of any election in the Adoption Agreement to the
contrary, for the Plan Year in which this Plan terminates, a
Participant shall only be eligible to share in the allocation
of the Employer's contributions for the Plan Year if the
Participant is employed at the end of the Plan Year and has
completed a Year of Service (or Period of Service if the
Elapsed Time Method is elected).
(3) With respect to the Employer's Non-Elective
Contribution made pursuant to Section 12.1(a)(3), to each
Participant's Account in accordance with the provisions of
Section 4.3(b)(2) or (3) whichever is applicable.
(4) With respect to the Employer's Qualified Non-Elective
Contribution made pursuant to Section 12.1(a)(4), to each
Participant's (excluding Highly Compensated Employees, if
elected in the Adoption Agreement) Qualified Non-Elective
Contribution Account in accordance with the Adoption
Agreement.
(c) Notwithstanding anything in the Plan to the contrary,
in determining whether a Non-Key Employee has received the required
minimum allocation pursuant to Section 4.3(f) such Non-Key Employee's
Elective Deferrals and matching contributions used to satisfy the ADP
tests of Section 12.4 or the ACP tests of Section 12.6 shall not be
taken into account.
(d) Notwithstanding anything herein to the contrary,
Participants who terminated employment during the Plan Year shall share
in the salary reduction contributions made by the Employer for the year
of termination without regard to the Hours of Service credited.
(e) Notwithstanding anything herein to the contrary
(other than Sections 4.3(f) and 11.3(f)), Participants shall only share
in the allocations of the Employer's matching contribution made
pursuant to Section 12.1(a)(2), the Employer's Non-Elective
Contributions made pursuant to Section 12.1(a)(3), the Employer's
Qualified Non-Elective Contribution made pursuant to Section
12.1(a)(4), and Forfeitures as provided in the Adoption Agreement.
Furthermore, for non-standardized plans, regardless of any election in
the Adoption Agreement to the contrary, for the Plan Year in which this
Plan terminates, a Participant shall only be eligible to share in the
allocation of the Employer's contributions for the Plan Year if the
Participant is
63
employed at the end of the Plan Year and has completed a Year of
Service (or Period of Service if the Elapsed Time Method is elected).
(f) Notwithstanding anything to the contrary, if this is
a non-standardized Plan that would otherwise fail to meet the
requirements of Code Section 410(b)(1) or 410(b)(2)(A)(i) and the
Treasury Regulations thereunder (including Treasury Regulation Section
1.401(a)(4)-2(b)(4)(vi)(D)(3) which treats Participants only receiving
top heavy minimums as not benefiting) because Employer contributions
would not be allocated to a sufficient number or percentage of
Participants for a Plan Year, then the following rules may be applied:
(1) The group of Participants eligible to share in the
Employer's contributions or Forfeitures for the Plan Year will
be expanded to include the minimum number of Participants who
would not otherwise be eligible as are necessary to satisfy
the requirements of Code Section 410(b)(1)(B). The specific
Participants who shall become eligible under the terms of this
paragraph shall be those who have not separated from service
prior to the last day of the Plan Year and, when compared to
similarly situated Participants, have completed the greatest
number of Hours of Service in the Plan Year.
(2) If after application of paragraph (1) above, the
requirements of Code Section 410(b)(1)(B) are still not
satisfied, then the group of Participants eligible to share in
the Employer's contribution or Forfeitures for the Plan Year
shall be further expanded to include the minimum number of
Participants who have separated from service prior to the last
day of the Plan Year as are necessary to satisfy the
applicable test. The specific Participants who shall become
eligible to share shall be those Participants, when compared
to similarly situated Participants, who have completed the
greatest number of Hours of Service in the Plan Year before
separation from service.
Nothing in this subsection shall permit the reduction
of a Participant's accrued benefit. Therefore any amounts that have
previously been allocated to Participants may not be reallocated to
satisfy these requirements. In such event, the Employer shall make an
additional contribution equal to the amount such affected Participants
would have received had they been included in the allocations, even if
it exceeds the amount that would be deductible under Code Section 404.
Any adjustment to the allocations pursuant to this paragraph shall be
considered a retroactive amendment adopted by the last day of the Plan
Year.
12.4 ACTUAL DEFERRAL PERCENTAGE TESTS
(a) Except as otherwise provided herein, this subsection
applies if the prior year testing method is elected in the Adoption
Agreement. The Actual Deferral Percentage ("ADP") for a Plan Year for
Participants who are Highly Compensated Employees ("HCEs") for each
Plan Year and the prior year's ADP for Participants who were Non-Highly
Compensated Employees ("NHCEs") for the prior Plan Year must satisfy
one of the following tests:
(1) The ADP for a Plan Year for Participants who are HCEs
for the Plan Year shall not exceed the prior year's ADP for
Participants who were NHCEs for the prior Plan Year multiplied
by 1.25; or
(2) The ADP for a Plan Year for Participants who are HCEs
for the Plan Year shall not exceed the prior year's ADP for
Participants who were NHCEs for the prior Plan Year multiplied
by 2.0, provided that the ADP for Participants who are HCEs
does not exceed the prior year's ADP for Participants who were
NHCEs in the prior Plan Year by more than two (2) percentage
points.
Notwithstanding the above, for purposes of applying the
foregoing tests with respect to the first Plan Year in which
the Plan permits any Participant to make Elective Deferrals,
the ADP for the prior year's NHCEs shall be deemed to be three
percent (3%) unless the Employer has elected in the Adoption
Agreement to use the current Plan Year's ADP for these
Participants. However, the provisions of this paragraph may
not be used if the Plan is a successor plan or is otherwise
prohibited from using such provisions pursuant to IRS Notice
98-1 (or superceding guidance).
(b) Notwithstanding the foregoing, if the current year
testing method is elected in the Adoption Agreement, the ADP tests in
(a)(1) and (a)(2), above shall be applied by comparing the current Plan
Year's ADP for Participants who are HCEs with the current Plan Year's
ADP (rather than the prior Plan Year's ADP) for Participants who are
NHCEs for the current Plan Year. Once made, this election can only be
changed if the Plan meets the requirements for changing to the prior
year testing method set forth in IRS Notice 98-1 (or superseding
guidance).
(c) This subsection applies to prevent the multiple use
of the test set forth in subsection (a)(2) above. Any HCE eligible to
make Elective Deferrals pursuant to Section 12.2 and to make after-tax
voluntary Employee contributions or to receive matching contributions
under this Plan or under any other plan maintained by the Employer or
an Affiliated Employer, shall have either the actual deferral ratio
adjusted in the manner described in Section 12.5 or the actual
contribution ratio adjusted in the manner described in Section 12.7 so
that the Aggregate Limit is not exceeded pursuant to Treasury
Regulation Section 1.401(m)-2, the provisions of which are incorporated
herein by reference. The amounts in excess of the Aggregate Limit shall
be treated as either an Excess Contribution or an Excess Aggregate
Contribution. The ADP and ACP of the HCEs
64
are determined after any corrections required to meet the ADP and ACP
tests and are deemed to be the maximum permitted under such tests for
the Plan Year. Multiple use does not occur if either the ADP or ACP of
the HCEs does not exceed 1.25 multiplied by the ADP and ACP of the
NHCEs.
"Aggregate Limit" means the sum of (i) 125 percent of the greater of
the ADP of the NHCEs for the prior Plan Year or the ACP of such NHCEs
under the Plan subject to Code Section 401(m) 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 (2) plus the lesser of
such ADP or ACP. "Lesser" is substituted for "greater" in (i) above,
and "greater" is substituted for "lesser" after "two (2) plus the" in
(ii) above if it would result in a larger Aggregate Limit. If the
Employer has elected in the Adoption Agreement to use the current year
testing method, then in calculating the Aggregate Limit for a
particular Plan Year, the NHCEs ADP and ACP for that Plan Year, instead
of the prior Plan Year, is used.
(d) A Participant is an HCE for a particular Plan Year if
the Participant meets the definition of an HCE in effect for that Plan
Year. Similarly, a Participant is an NHCE for a particular Plan Year if
the Participant does not meet the definition of an HCE in effect for
that Plan Year.
(e) For the purposes of this Section and Section 12.5,
ADP means, for a specific group of Participants for a Plan Year, the
average of the ratios (calculated separately for each Participant in
such group) of (1) the amount of Employer contributions actually paid
over to the Plan on behalf of such Participant for the Plan Year to (2)
the Participant's 414(s) Compensation for such Plan Year. Employer
contributions on behalf of any participant shall include: (1) any
Elective Deferrals made pursuant to the Participant's deferral election
(including Excess Deferrals of HCEs), but excluding (i) Excess
Deferrals of NHCEs that arise solely from Elective Deferrals made under
the plan or plans of this Employer and (ii) Elective Deferrals that are
taken into account in the ACP Test set forth in Section 12.6 (provided
the ADP test is satisfied both with and without exclusion of these
Elective Deferrals); and (2) at the election of the Employer, Qualified
Non-Elective Contributions and Qualified Matching Contributions to the
extent such contributions are not used to satisfy the ACP test.
The actual deferral ratio for each Participant and
the ADP for each group shall be calculated to the nearest one-hundredth
of one percent. Elective Deferrals allocated to each Non-Highly
Compensated Participant's Elective Deferral Account shall be reduced by
Excess Deferrals to the extent such excess amounts are made under this
Plan or any other plan maintained by the Employer. Elective Deferrals
allocated to each Highly Compensated Participant's Elective Deferral
Account shall not be reduced by Excess Deferrals to the extent such
excess amounts are made under this Plan or any other plan maintained by
the Employer.
(f) For purposes of this Section and Section 12.5, a
Highly Compensated Participant and a Non-Highly Compensated Participant
shall include any Employee eligible to make salary deferrals pursuant
to Section 12.2 for the Plan Year. Such Participants who fail to make
Elective Deferrals shall be treated for ADP purposes as Participants on
whose behalf no Elective Deferrals are made.
(g) In the event this Plan satisfies the requirements of
Code Sections 401(a)(4), 401(k), or 410(b) only if aggregated with one
or more other plans, or if one or more other plans satisfy the
requirements of such sections of the Code only if aggregated with this
Plan, then this Section shall be applied by determining the ADP of
Employees as if all such plans were a single plan. Any adjustments to
the NHCE ADP for the prior year will be made in accordance with IRS
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 Code Section 401(k)
only if they have the same Plan Year and use the same ADP testing
method.
(h) The ADP for any Participant who is an HCE for the
Plan Year and who is eligible to have Elective Deferrals (and Qualified
Non-Elective Contributions or Qualified Matching Contributions, or
both, if treated as Elective Deferrals for purposes of the ADP test)
allocated to such Participant's accounts under two (2) or more
arrangements described in Code Section 401(k), that are maintained by
the Employer, shall be determined as if such Elective Deferrals (and,
if applicable, such Qualified Non-Elective Contributions or Qualified
Matching Contributions, or both) were made under a single arrangement
for purposes of determining such HCE's actual deferral ratio. However,
if the cash or deferred arrangements have different Plan Years, this
paragraph shall be applied by treating all cash or deferred
arrangements ending with or within the same calendar year as a single
arrangement. Notwithstanding the foregoing, certain plans shall be
treated as separate if mandatorily disaggregated under Treasury
Regulations under Code Section 401.
(i) For purposes of determining the ADP and the amount of
Excess Contributions pursuant to Section 12.5, only Elective Deferrals,
Qualified Non-elective Contributions and Qualified Matching
Contributions contributed to the Plan prior to the end of the twelve
(12) month period immediately following the Plan Year to which the
contributions relate shall be considered.
(j) Notwithstanding anything in this Section to the
contrary, the provisions of this Section and Section 12.5 may be
applied separately (or will be applied separately to the extent
required by Treasury Regulations) to each plan within the meaning of
Treasury Regulation Section 1.401(k)-1(g)(11). Furthermore, for Plan
Years beginning after December 31, 1998,
65
the provisions of Code Section 401(k)(3)(F) may be used to exclude from
consideration all NHCEs who have not satisfied the minimum age and
service requirements of Code Section 410(a)(1)(A).
12.5 ADJUSTMENT TO ACTUAL DEFERRAL PERCENTAGE TESTS
(a) In the event (or, with respect to subsection (c) when
the prior year testing method is being used, if it is anticipated) that
for Plan Years beginning after December 31, 1996, the Plan does not
satisfy one of the tests set forth in Section 12.4, the Administrator
shall adjust Excess Contributions or the Employer shall make
contributions pursuant to the options set forth below or any
combination thereof. However, if the prior year testing method is being
used and it is anticipated that the Plan might not satisfy one of such
tests, then the Employer may make contributions pursuant to the options
set forth in subsection (c) below.
(b) On or before the fifteenth day of the third month
following the end of each Plan Year, but in no event later than the
close of the following Plan Year, the Highly Compensated Participant
having the largest amount of Elective Deferrals shall have a portion of
such Elective Deferrals (and "Income" allocable to such amounts)
distributed (and/or, at the Participant's election, recharacterized as
an after-tax voluntary Employee contribution pursuant to Section 4.8)
until the total amount of Excess Contributions has been distributed, or
until the amount of the Participant's Elective Deferrals equals the
Elective Deferrals of the Highly Compensated Participant having the
next largest amount of Elective Deferrals. This process shall continue
until the total amount of Excess Contributions has been distributed.
Any distribution and/or recharacterization of Excess Contributions
shall be made in the following order:
(1) With respect to the distribution of Excess
Contributions, such distribution:
(i) may be postponed but not later than the close of
the Plan Year following the Plan Year to which they are
allocable;
(ii) shall be made first from unmatched Elective
Deferrals and, thereafter, from Elective Deferrals which
are matched. Matching contributions which relate to
Excess Contributions shall be forfeited unless they are
considered distributed as an Excess Aggregate
Contribution pursuant to Section 12.7;
(iii) shall be adjusted for Income; and
(iv) shall be designated by the Employer as a
distribution of Excess Contributions (and Income).
(2) With respect to the recharacterization of Excess
Contributions pursuant to (a) above, such recharacterized
amounts:
(i) shall be deemed to have occurred on the date on
which the last of those Highly Compensated Participants
with Excess Contributions to be recharacterized is
notified of the recharacterization and the tax
consequences of such recharacterization;
(ii) shall not exceed the amount of Elective Deferrals
on behalf of any Highly Compensated Participant for any
Plan Year;
(iii) shall be treated as after-tax voluntary Employee
contributions for purposes of Code Section 401(a)(4) and
Treasury Regulation Section 1.401(k)-1(b). However, for
purposes of Sections 4.3(f) and 9.2 (top heavy rules),
recharacterized Excess Contributions continue to be
treated as Employer contributions that are Elective
Deferrals. Excess Contributions (and Income attributable
to such amounts) recharacterized as after-tax voluntary
Employee contributions shall continue to be
nonforfeitable and subject to the same distribution
rules provided for in Section 12.2(c); and
(iv) are not permitted if the amount recharacterized
plus after-tax voluntary Employee contributions actually
made by such Highly Compensated Participant, exceed the
maximum amount of after-tax voluntary Employee
contributions (determined prior to application of
Section 12.6) that such Highly Compensated Participant
is permitted to make under the Plan in the absence of
recharacterization.
(3) Any distribution and/or recharacterization of less
than the entire amount of Excess Contributions shall be
treated as a pro rata distribution and/or recharacterization
of Excess Contributions and Income.
(4) For the purpose of this Section, "Income" means the
income or losses allocable to Excess Contributions for the
Plan Year, which amount shall be allocated at the same time
and in the same manner as income or losses are allocated
pursuant to Section 4.3(c). However, Income for the period
between the end of the Plan Year and the date of the
distribution (the "gap period") is not required to be
distributed.
66
(5) Excess Contributions shall be treated as Employer
contributions for purposes of Code Sections 404 and 415 even
if distributed from the Plan.
(c) Notwithstanding the above, within twelve (12) months
after the end of the Plan Year, if the Employer has elected in the
Adoption Agreement to use the current year testing method under
Treasury Reg. Section 1.401(k)-1(b)(5)(i), the Employer may make a
special Qualified Non-Elective Contribution or Qualified Matching
Contribution in accordance with one of the following provisions which
contribution shall be allocated to the Qualified Non-Elective
Contribution Account or Qualified Matching Contribution Account of each
Non-Highly Compensated Participant eligible to share in the allocation
in accordance with such provision. The Employer shall provide the
Administrator with written notification of the amount of the
contribution being made and to which provision it relates.
(1) A Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated in the same proportion that
each Non-Highly Compensated Participant's 414(s) Compensation
for the year (or prior year if the prior year testing method
is being used) bears to the total 414(s) Compensation of all
Non-Highly Compensated Participants for such year.
(2) A Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated in the same proportion that
each Non-Highly Compensated Participant's 414(s) Compensation
for the year (or prior year if the prior year testing method
is being used) bears to the total 414(s) Compensation of all
Non-Highly Compensated Participants for such year. However,
for purposes of this contribution, Non-Highly Compensated
Participants in non-standardized plans who are not employed at
the end of the Plan Year (or at the end of the prior Plan Year
if the prior year testing method is being used) shall not be
eligible to share in the allocation and shall be disregarded.
(3) A Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated in equal amounts (per capita).
(4) A Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated in equal amounts (per capita).
However, for purposes of this contribution, Non-Highly
Compensated Participants in non-standardized plans who are not
employed at the end of the Plan Year (or at the end of the
prior Plan Year if the prior year testing method is being
used) shall not be eligible to share in the allocation and
shall be disregarded.
(5) A Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated to the Qualified Non-Elective
Contribution Account of the Non-Highly Compensated Participant
having the lowest 414(s) Compensation, until one of the tests
set forth in Section 12.4 is satisfied (or is anticipated to
be satisfied), or until such Non-Highly Compensated
Participant has received the maximum Annual Addition pursuant
to Section 4.4. This process shall continue until one of the
tests set forth in Section 12.4 is satisfied (or is
anticipated to be satisfied).
(6) Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated to the Qualified Non-Elective
Contribution Account of the Non-Highly Compensated Participant
having the lowest 414(s) Compensation, until one of the tests
set forth in Section 12.4 is satisfied (or is anticipated to
be satisfied), or until such Non-Highly Compensated
Participant has received the maximum Annual Addition pursuant
to Section 4.4. This process shall continue until one of the
tests set forth in Section 12.4 is satisfied (or is
anticipated to be satisfied). However, for purposes of this
contribution, Non-Highly Compensated Participants in
non-standardized plans who are not employed at the end of the
Plan Year (or at the end of the prior Plan Year if the prior
year testing method is being used) shall not be eligible to
share in the allocation and shall be disregarded.
(7) A Qualified Matching Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated to the Qualified Matching
Contribution Account of each Non-Highly Compensated
Participant in the same proportion that each Non-Highly
Compensated Participant's Elective Deferrals for the year
bears to the total Elective Deferrals of all Non-Highly
Compensated Participants.
(8) A Qualified Matching Contribution on behalf of
Non-Highly Compensated Participants in an amount sufficient to
satisfy (or to prevent an anticipated failure of) one of the
tests set forth in Section 12.4. Such contribution
67
shall be allocated to the Qualified Matching Contribution
Account of each Non-Highly Compensated Participant in the same
proportion that each Non-Highly Compensated Participant's
Elective Deferrals for the year bears to the total Elective
Deferrals of all Non-Highly Compensated Participants. However,
for purposes of this contribution, Non-Highly Compensated
Participants in non-standardized plans who are not employed at
the end of the Plan Year (or at the end of the prior Plan Year
if the prior year testing method is being used) shall not be
eligible to share in the allocation and shall be disregarded.
(9) A Qualified Matching Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated to the Qualified Matching
Contribution Account of the Non-Highly Compensated Participant
having the lowest Elective Deferrals until one of the tests
set forth in Section 12.4 is satisfied (or is anticipated to
be satisfied), or until such Non-Highly Compensated
Participant has received the maximum Annual Addition pursuant
to Section 4.4. This process shall continue until one of the
tests set forth in Section 12.4 is satisfied (or is
anticipated to be satisfied).
(10) A Qualified Matching Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated to the Qualified Matching
Contribution Account of the Non-Highly Compensated Participant
having the lowest Elective Deferrals until one of the tests
set forth in Section 12.4 is satisfied (or is anticipated to
be satisfied), or until such Non-Highly Compensated
Participant has received the maximum Annual Addition pursuant
to Section 4.4. This process shall continue until one of the
tests set forth in Section 12.4 is satisfied (or is
anticipated to be satisfied). However, for purposes of this
contribution, Non-Highly Compensated Participants in
non-standardized plans who are not employed at the end of the
Plan Year (or at the end of the prior Plan Year if the prior
year testing method is being used) shall not be eligible to
share in the allocation and shall be disregarded.
(d) If during a Plan Year, it is projected that the
aggregate amount of Elective Deferrals to be allocated to all Highly
Compensated Participants under this Plan would cause the Plan to fail
the tests set forth in Section 12.4, then the Administrator may
automatically reduce the deferral amount of affected Highly Compensated
Participants, beginning with the Highly Compensated Participant who has
the highest actual deferral ratio until it is anticipated the Plan will
pass the tests or until the actual deferral ratio equals the actual
deferral ratio of the Highly Compensated Participant having the next
highest actual deferral ratio. This process may continue until it is
anticipated that the Plan will satisfy one of the tests set forth in
Section 12.4. Alternatively, the Employer may specify a maximum
percentage of Compensation that may be deferred by Highly Compensated
Participants.
(e) Any Excess Contributions (and Income) which are
distributed on or after 2-1/2 months after the end of the Plan Year
shall be subject to the ten percent (10%) Employer excise tax imposed
by Code Section 4979.
12.6 ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) Except as otherwise provided herein, this subsection
applies if the prior year testing method is elected in the Adoption
Agreement. The "Actual Contribution Percentage" ("ACP") for
Participants who are HCEs for each Plan Year and the prior year's ACP
for Participants who were NHCEs for the prior Plan Year must satisfy
one of the following tests:
(1) The ACP for a Plan Year for Participants who are HCEs
for the Plan Year shall not exceed the prior year's ACP for
Participants who were NHCEs for the prior Plan Year multiplied
by 1.25; or
(2) The ACP for a Plan Year for Participants who are HCEs
for the Plan Year shall not exceed the prior year's ACP for
Participants who were NHCEs for the prior Plan Year multiplied
by 2.0, provided that the ACP for Participants who are HCEs
does not exceed the prior year's ACP for Participants who were
NHCEs in the prior Plan Year by more than two (2) percentage
points.
Notwithstanding the above, for purposes of applying the
foregoing tests with respect to the first Plan Year in which
the Plan permits any Participant to make Employee
contributions, provides for matching contributions, or both,
the ACP for the prior year's NHCEs shall be deemed to be three
percent (3%) unless the Employer has elected in the Adoption
Agreement to use the current Plan Year's ACP for these
Participants. However, the provisions of this paragraph may
not be used if the Plan is a successor plan or is otherwise
prohibited from using such provisions pursuant to IRS Notice
98-1 (or superceding guidance).
(b) Notwithstanding the preceding, if the current year
testing method is elected in the Adoption Agreement, the ACP tests in
(a)(1) and (a)(2), above shall be applied by comparing the current Plan
Year's ACP for Participants who are HCEs with the current Plan Year's
ACP (rather than the prior Plan Year's ACP) for Participants who are
NHCEs for the current Plan Year. Once made, this election can only be
changed if the Plan meets the requirements for changing to the prior
year testing method set forth in IRS Notice 98-1 (or superseding
guidance).
68
(c) This subsection applies to prevent the multiple use
of the test set forth in subsection (a)(2) above. Any HCE eligible to
make Elective Deferrals pursuant to Section 12.2 and to make
nondeductible voluntary Employee contributions or to receive matching
contributions under this Plan or under any other plan maintained by the
Employer or an Affiliated Employer, shall have either the actual
deferral ratio adjusted in the manner described in Section 12.5 or the
actual contribution ratio reduced in the manner described in Section
12.7 so that the Aggregate Limit is not exceeded pursuant to Treasury
Regulation Section 1.401(m)-2, the provisions of which are incorporated
herein by reference. The amounts in excess of the Aggregate Limit shall
be treated as either an Excess Contribution or an Excess Aggregate
Contribution. The ADP and ACP of the HCEs are determined after any
corrections required to meet the ADP and ACP tests and are deemed to be
the maximum permitted under such test for the Plan Year. Multiple use
does not occur if either the ADP or ACP of the HCEs does not exceed
1.25 multiplied by the ADP and ACP of the NHCEs.
"Aggregate Limit" means the sum of (i) 125 percent of the greater of
the ADP of the NHCEs for the Plan Year or the ACP of such NHCEs under
the plan subject to Code Section 401(m) 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) above if it would
result in a larger Aggregate Limit. If the Employer has elected in the
Adoption Agreement to use the current year testing method, then in
calculating the Aggregate Limit for a particular Plan Year, the NHCEs
ADP and ACP for that Plan Year, instead of the prior Plan Year, is
used.
(d) A Participant is an HCE for a particular Plan Year if
the Participant meets the definition of a HCE in effect for that Plan
Year. Similarly, a Participant is a NHCE for a particular Plan Year if
the Participant does not meet the definition of an HCE in effect for
that Plan Year.
(e) For the purposes of this Section and Section 12.7,
ACP for a specific group of Participants for a Plan Year means the
average of the Contribution Percentages (calculated separately for each
Participant in such group). For this purpose, "Contribution Percentage"
means the ratio (expressed as a percentage) of the Participant's
Contribution Percentage Amounts to the Participant's 414(s)
Compensation. The actual contribution ratio for each Participant
and the ACP for each group, shall be calculated to the nearest
one-hundredth of one percent of the Participant's 414(s) Compensation.
(f) "Contribution Percentage Amounts" means the sum of
(i) nondeductible voluntary Employee contributions, (ii) Employer
Matching Contributions made pursuant to Section 12.1(b) (including
Qualified Matching Contributions to the extent such Qualified Matching
Contributions are not used to satisfy the tests set forth in Section
12.4), (iii) Excess Contributions recharacterized as nondeductible
voluntary Employee contributions pursuant to Section 12.5, and (iv)
Qualified Non-Elective Contributions (to the extent not used to satisfy
the tests set forth in Section 12.4). However, Contribution Percentage
Amounts shall not include Matching Contributions that are forfeited
either to correct Excess Aggregate Contributions or due to Code Section
401(a)(4) and the Treasury Regulations thereunder because the
contributions to which they relate are Excess Deferrals, Excess
Contributions, or Excess Aggregate Contributions. In addition,
Contribution Percentage Amounts may include Elective Deferrals provided
the ADP test in Section 12.4 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.
(g) For purposes of determining the ACP and the amount of
Excess Aggregate Contributions pursuant to Section 12.7, only Employer
Matching Contributions (excluding Matching Contributions forfeited or
distributed pursuant to Section 12.2(e), 12.5(b), or 12.7(b))
contributed to the Plan prior to the end of the succeeding Plan Year
shall be considered. In addition, the Administrator may elect to take
into account, with respect to Employees eligible to have Employer
Matching Contributions made pursuant to Section 12.1(b) or after-tax
voluntary Employee contributions made pursuant to Section 4.8 allocated
to their accounts, elective deferrals (as defined in Treasury
Regulation Section 1.402(g)-1(b)) and qualified non-elective
contributions (as defined in Code Section 401(m)(4)(C)) contributed to
any plan maintained by the Employer. Such elective deferrals and
qualified non-elective contributions shall be treated as Employer
matching contributions subject to Treasury Regulation Section
1.401(m)-1(b)(2) which is incorporated herein by reference. The Plan
Year must be the same as the plan year of the plan to which the
elective deferrals and the qualified non-elective contributions are
made.
(h) In the event that this Plan satisfies the
requirements of Code Sections 401(a)(4), 401(m), or 410(b) only if
aggregated with one or more other plans, or if one or more other plans
satisfy the requirements of such sections of the Code only if
aggregated with this Plan, then this Section shall be applied by
determining the ACP of Employees as if all such plans were a single
plan. Plans may be aggregated in order to satisfy Code section 401(m)
only if they have the same Plan Year.
Any adjustments to the NHCE ACP for the prior year
will be made in accordance with IRS 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 Code Section 401(k) only if they have the same Plan Year and
use the same ACP testing method.
(i) For the purposes of this Section, if an HCE is a
Participant under two (2) or more plans (other than an employee stock
ownership plan as defined in Code Section 4975(e)(7)) which are
maintained by the Employer or an Affiliated
69
Employer to which Matching Contributions, nondeductible voluntary
Employee contributions, or both, are made, all such contributions on
behalf of such HCE shall be aggregated for purposes of determining such
HCE's actual contribution ratio. However, if the plans have different
plan years, this paragraph shall be applied by treating all plans
ending with or within the same calendar year as a single plan.
(j) For purposes of this Section and Section 12.7, a
Highly Compensated Participant and a Non-Highly Compensated Participant
shall include any Employee eligible to have Matching Contributions made
pursuant to Section 12.1(a)(2) (whether or not a deferral election was
made or suspended pursuant to Section 12.2(g)) allocated to such
Participant's account for the Plan Year or to make salary deferrals
pursuant to Section 12.2 (if the Employer uses salary deferrals to
satisfy the provisions of this Section) or after-tax voluntary Employee
contributions pursuant to Section 4.8 (whether or not nondeductible
voluntary Employee contributions are made) allocated to the
Participant's Account for the Plan Year.
(k) For purposes of this Section, "Matching Contribution"
means an Employer contribution made to the Plan, or to a contract
described in Code Section 403(b), on behalf of a Participant on account
of a nondeductible voluntary Employee contribution made by such
Participant, or on account of a Participant's elective deferrals under
a plan maintained by the Employer.
(l) For purposes of determining the ACP and the amount of
Excess Aggregate Contributions pursuant to Section 12.7, only Elective
Deferrals, Qualified Non-elective Contributions and Qualified Matching
Contributions contributed to the Plan prior to the end of the twelve
(12) month period immediately following the Plan Year to which the
contributions relate shall be considered.
(m) Notwithstanding anything in this Section to the
contrary, the provisions of this Section and Section 12.7 may be
applied separately (or will be applied separately to the extent
required by Treasury Regulations) to each plan within the meaning of
Treasury Regulation Section 1.401(k)-1(g)(11). Furthermore, for Plan
Years beginning after December 31, 1998, the provisions of Code Section
401(k)(3)(F) may be used to exclude from consideration all NHCEs who
have not satisfied the minimum age and service requirements of Code
Section 410(a)(1)(A).
12.7 ADJUSTMENT TO ACTUAL CONTRIBUTION PERCENTAGE TESTS
(a) In the event (or, with respect to subsection (g)
below when the prior year testing method is being used, if it is
anticipated) that for Plan Years beginning after December 31, 1996, the
Plan does not satisfy one of the tests set forth in Section 12.6, the
Administrator shall adjust Excess Aggregate Contributions or the
Employer shall make contributions pursuant to the options set forth
below or any combination thereof. However, if the prior year testing
method is being used and it is anticipated that the Plan might not
satisfy one of such tests, then the Employer may make contributions
pursuant to the options set forth in subsection (c) below.
(b) On or before the fifteenth day of the third month
following the end of the Plan Year, but in no event later than the
close of the following Plan Year the Highly Compensated Participant
having the largest Contribution Percentage Amounts shall have a portion
of such Contribution Percentage Amounts (and Income allocable to such
amounts) distributed or, if non-Vested, Forfeited (including Income
allocable to such Forfeitures) until the total amount of Excess
Aggregate Contributions has been distributed, or until the amount of
the Participant's Contribution Percentage Amounts equals the
Contribution Percentage Amounts of the Highly Compensated Participant
having the next largest amount of Contribution Percentage Amounts. This
process shall continue until the total amount of Excess Aggregate
Contributions has been distributed or forfeited. Any distribution
and/or Forfeiture of Contribution Percentage Amounts shall be made in
the following order:
(1) After-tax voluntary Employee contributions including
Excess Contributions recharacterized as after-tax voluntary
Employee contributions pursuant to Section 12.5(b)(2).
Matching contributions which relate to Excess Aggregate
Contributions shall be forfeited;
(2) Employer matching contributions forfeited above.
(3) Remaining Employer matching contributions.
(c) Any distribution or Forfeiture of less than the
entire amount of Excess Aggregate Contributions (and Income) shall be
treated as a pro rata distribution of Excess Aggregate Contributions
and Income. Distribution of Excess Aggregate Contributions shall be
designated by the Employer as a distribution of Excess Aggregate
Contributions (and Income). Forfeitures of Excess Aggregate
Contributions shall be treated in accordance with Section 4.3. However,
no such Forfeiture may be allocated to a Highly Compensated Participant
whose contributions are reduced pursuant to this Section.
(d) For the purpose of this Section, Income means the
income or losses allocable to Excess Aggregate Contributions for the
Plan Year, which amount shall be allocated at the same time and in the
same manner as income or losses
70
are allocated pursuant to Section 4.3(c). However, Income for the
period between the end of the Plan Year and the date of the
distribution (the "gap period") is not required to be distributed.
(e) Excess Aggregate Contributions attributable to
amounts other than nondeductible voluntary Employee contributions,
including forfeited matching contributions, shall be treated as
Employer contributions for purposes of Code Sections 404 and 415 even
if distributed from the Plan.
(f) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made after first
determining the Excess Contributions, if any, to be treated as
nondeductible voluntary Employee contributions due to
recharacterization for the plan year of any other qualified cash or
deferred arrangement (as defined in Code Section 401(k)) maintained by
the Employer that ends with or within the Plan Year or which are
treated as after-tax voluntary Employee contributions due to
recharacterization pursuant to Section 12.5.
(g) Notwithstanding the above, within twelve (12) months
after the end of the Plan Year, if the Employer has elected in the
Adoption Agreement to use the current year testing method under
Treasury Reg. Section 1.401(k)-1(b)(5)(i), the Employer may make a
special Qualified Non-Elective Contribution or Qualified Matching
Contribution in accordance with one of the following provisions which
contribution shall be allocated to the Qualified Non-Elective
Contribution Account or Qualified Matching Contribution Account of each
Non-Highly Compensated eligible to share in the allocation in
accordance with such provision. The Employer shall provide the
Administrator with written notification of the amount of the
contribution being made and for which provision it is being made
pursuant to.
(1) A Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.6. Such
contribution shall be allocated in the same proportion that
each Non-Highly Compensated Participant's 414(s) Compensation
for the year (or prior year if the prior year testing method
is being used) bears to the total 414(s) Compensation of all
Non-Highly Compensated Participants for such year.
(2) A Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.6. Such
contribution shall be allocated in the same proportion that
each Non-Highly Compensated Participant's 414(s) Compensation
for the year (or prior year if the prior year testing method
is being used) bears to the total 414(s) Compensation of all
Non-Highly Compensated Participants for such year. However,
for purposes of this contribution, Non-Highly Compensated
Participants in non-standardized plans who are not employed at
the end of the Plan Year (or at the end of the prior Plan Year
if the prior year testing method is being used) shall not be
eligible to share in the allocation and shall be disregarded.
(3) A Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.6. Such
contribution shall be allocated in equal amounts (per capita).
(4) A Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.6. Such
contribution shall be allocated in equal amounts (per capita).
However, for purposes of this contribution, Non-Highly
Compensated Participants in non-standardized plans who are not
employed at the end of the Plan Year (or at the end of the
prior Plan Year if the prior year testing method is being
used) shall not be eligible to share in the allocation and
shall be disregarded.
(5) A Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.6. Such
contribution shall be allocated to the Qualified Non-Elective
Contribution Account of the Non-Highly Compensated Participant
having the lowest 414(s) Compensation, until one of the tests
set forth in Section 12.6 is satisfied (or is anticipated to
be satisfied), or until such Non-Highly Compensated
Participant has received the maximum Annual Addition pursuant
to Section 4.4. This process shall continue until one of the
tests set forth in Section 12.6 is satisfied (or is
anticipated to be satisfied).
(6) A Qualified Non-Elective Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.6. Such
contribution shall be allocated to the Qualified Non-Elective
Contribution Account of the Non-Highly Compensated Participant
having the lowest 414(s) Compensation, until one of the tests
set forth in Section 12.6 is satisfied (or is anticipated to
be satisfied), or until such Non-Highly Compensated
Participant has received the maximum Annual Addition pursuant
to Section 4.4. This process shall continue until one of the
tests set forth in Section 12.6 is satisfied (or is
anticipated to be satisfied). However, for purposes of this
contribution, Non-Highly Compensated Employees in
non-standardized plans who are not employed at the end of the
Plan Year (or at the end of the prior Plan Year if the prior
year testing method is being used) shall not be eligible to
share in the allocation and shall be disregarded.
71
(7) A Qualified Matching Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.6. Such
contribution shall be allocated on behalf of each Non-Highly
Compensated Participant in the same proportion that each
Non-Highly Compensated Participant's Elective Deferrals for
the Plan Year bears to the total Elective Deferrals of all
Non-Highly Compensated Participants. The Employer shall
designate, at the time the contribution is made, whether the
contribution made pursuant to this provision shall be a
Qualified Matching Contribution allocated to a Participant's
Qualified Matching Contribution Account or a Qualified
Non-Elective Contribution allocated to a Participant's
Qualified Non-Elective Contribution Account.
(8) A Qualified Matching Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.6. Such
contribution shall be allocated on behalf of each Non-Highly
Compensated Participant in the same proportion that each
Non-Highly Compensated Participant's Elective Deferrals for
the year bears to the total Elective Deferrals of all
Non-Highly Compensated Participants. The Employer shall
designate, at the time the contribution is made, whether the
contribution made pursuant to this provision shall be a
Qualified Matching Contribution allocated to a Participant's
Qualified Matching Contribution Account or an Employer
Non-Elective Contribution allocated to a Participant's
Non-Elective Account. However, for purposes of this
contribution, Non-Highly Compensated Participants in
non-standardized plans who are not employed at the end of the
Plan Year (or at the end of the prior Plan Year if the prior
year testing method is being used) shall not be eligible to
share in the allocation and shall be disregarded.
(9) A Qualified Matching Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated on behalf of the Non-Highly
Compensated Participant having the lowest Elective Deferrals
until one of the tests set forth in Section 12.4 is satisfied
(or is anticipated to be satisfied), or until such Non-Highly
Compensated Participant has received the maximum Annual
Addition pursuant to Section 4.4. This process shall continue
until one of the tests set forth in Section 12.4 is satisfied
(or is anticipated to be satisfied). The Employer shall
designate, at the time the contribution is made, whether the
contribution made pursuant to this provision shall be a
Qualified Matching Contribution allocated to a Participant's
Qualified Matching Contribution Account or an Employer
Non-Elective Contribution allocated to a Participant's
Non-Elective Account.
(10) A Qualified Matching Contribution may be made on
behalf of Non-Highly Compensated Participants in an amount
sufficient to satisfy (or to prevent an anticipated failure
of) one of the tests set forth in Section 12.4. Such
contribution shall be allocated on behalf of the Non-Highly
Compensated Participant having the lowest Elective Deferrals
until one of the tests set forth in Section 12.4 is satisfied
(or is anticipated to be satisfied), or until such Non-Highly
Compensated Participant has received the maximum Annual
Addition pursuant to Section 4.4. This process shall continue
until one of the tests set forth in Section 12.4 is satisfied
(or is anticipated to be satisfied). The Employer shall
designate, at the time the contribution is made, whether the
contribution made pursuant to this provision shall be a
Qualified Matching Contribution allocated to a Participant's
Qualified Matching Contribution Account or a Qualified
Non-Elective Contribution allocated to a Participant's
Qualified Non-Elective Contribution Account. However, for
purposes of this contribution, Non-Highly Compensated
Participants in non-standardized plans who are not employed at
the end of the Plan Year (or at the end of the prior Plan Year
if the prior year testing method is being used) shall not be
eligible to share in the allocation and shall be disregarded.
(h) Any Excess Aggregate Contributions (and Income) which
are distributed on or after 2-1/2 months after the end of the Plan Year
shall be subject to the ten percent (10%) Employer excise tax imposed
by Code Section 4979.
12.8 SAFE HARBOR PROVISIONS
(a) The provisions of this Section will apply if
the Employer has elected, in the Adoption Agreement, to use
the ADP Test Safe Harbor or ACP Test Safe Harbor. If the
Employer has elected to use the ADP Test Safe Harbor for a
Plan Year, then the provisions relating to the ADP test
described in Section 12.4 and in Code Section 401(k)(3) do not
apply for such Plan Year. In addition, if the Employer has
also elected to use the ACP Test Safe Harbor for a Plan Year,
then the provisions relating to the ACP test described in
Section 12.6 and in Code Section 401(m)(2) do not apply for
such Plan Year. Furthermore, to the extent any other provision
of the Plan is inconsistent with the provisions of this
Section, the provisions of this Section will govern.
(b) For purposes of this Section, the following
definitions apply:
(1) "ACP Test Safe Harbor" means the method
described in subsection (c) below for satisfying the
ACP test of Code Section 401(m)(2).
(2) "ACP Test Safe Harbor Matching
Contributions" means Matching Contributions described
in subsection (d)(1).
72
(3) "ADP Test Safe Harbor" means the method
described in subsection (c) for satisfying the ADP
test of Code Section 401(k)(3).
(4) "ADP Test Safe Harbor Contributions" means
Matching Contributions and nonelective contributions
described in subsection (c)(1) below.
(5) "Compensation" means Compensation as defined
in Section 1.11, except, for purposes of this
Section, no dollar limit, other than the limit
imposed by Code Section 401(a)(17), applies to the
Compensation of a Non-Highly Compensated Employee.
However, solely for purposes of determining the
Compensation subject to a Participant's deferral
election, the Employer may use an alternative
definition to the one described in the preceding
sentence, provided such alternative definition is a
reasonable definition within the meaning of Treasury
Regulation Section 1.414(s)-1(d)(2), permits each
Participant to elect sufficient Elective Deferrals to
receive the maximum amount of Matching Contributions
(determined using the definition of Compensation
described in the preceding sentence) available to the
Participant under the Plan and does not limit the
dollar amount of Compensation taken into account for
Non-Highly Compensated Participants.
(6) "Eligible Participant" means a Participant
who is eligible to make Elective Deferrals under the
Plan for any part of the Plan Year (or who would be
eligible to make Elective Deferrals but for a
suspension due to a hardship distribution described
in Section 12.9 or to statutory limitations, such as
Code Sections 402(g) and 415) and who is not excluded
as an Eligible Participant under the 401(k) Safe
Harbor elections in the Adoption Agreement.
(7) "Matching Contributions" means contributions
made by the Employer on account of an Eligible
Participant's Elective Deferrals.
(c) The provisions of this subsection apply for
purposes of satisfying the ADP Test Safe Harbor.
(1) The ADP Test Safe Harbor Contribution is the
contribution elected by the Employer in the Adoption
Agreement to be used to satisfy the ADP Test Safe
Harbor. However, if no contribution is elected in the
Adoption Agreement, the Employer will contribute to
the Plan for the Plan Year a Basic Matching
Contribution on behalf of each Eligible Employee. The
Basic Matching Contribution is equal to (i)
one-hundred percent (100%) of the amount of an
Eligible Participant's Elective Deferrals that do not
exceed three percent (3%) of the Participant's
Compensation for the Plan Year, plus (ii) fifty
percent (50%) of the amount of the Participant's
Elective Deferrals that exceed three percent (3%) of
the Participant's Compensation but do not exceed five
percent (5%) of the Participant's Compensation.
(2) Except as provided in subsection (e) below,
for purposes of the Plan, a Basic Matching
Contribution or an Enhanced Matching Contribution
will be treated as a Qualified Matching Contribution
and a Nonelective Safe Harbor Contribution will be
treated as a Qualified Non-Elective Contribution.
Accordingly, the ADP Test Safe Harbor Contribution
will be fully Vested and subject to the distribution
restrictions set forth in Section 12.2(c) (i.e., may
generally not be distributed earlier than separation
from service, death, disability, an event described
in Section 401(k)(1), or, in case of a profit sharing
plan, the attainment of age 59-1/2.). In addition,
such contributions must satisfy the ADP Test Safe
Harbor without regard to permitted disparity under
Code Section 401(1).
(3) Except as otherwise permitted by the IRS, at
least thirty (30) days, but not more than ninety (90)
days, before the beginning of the Plan Year, the
Employer will provide each Eligible Participant a
comprehensive notice of the Participant's rights and
obligations under the Plan, written in a manner
calculated to be understood by the average
Participant. If an Employee becomes eligible 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 ninety (90) days
before the Employee becomes eligible but not later
than the date the Employee becomes eligible.
(4) In addition to any other election periods
provided under the Plan, each Eligible Participant
may make or modify a deferral election during the
thirty (30) day period immediately following receipt
of the notice described in subsection (3) above.
Furthermore, if the ADP Test Safe Harbor is a
Matching Contribution each Eligible Employee must be
permitted to elect sufficient Elective Deferrals to
receive the maximum amount of Matching Contributions
available to the Participant under the Plan.
(d) The provisions of this subsection apply if
the Employer has elected to satisfy the ACP Test Safe Harbor.
73
(1) In addition to the ADP Test Safe Harbor
Contributions, the Employer will make any Matching
Contributions in accordance with elections made in
the Adoption Agreement. Such additional Matching
Contributions will be considered ACP Test Safe Harbor
Matching Contributions.
(2) Notwithstanding any election in the Adoption
Agreement to the contrary, an Eligible Participant's
Elective Deferrals in excess of six percent (6%) of
Compensation may not be taken into account in
applying ACP Test Safe Harbor Matching Contributions.
In addition, effective with respect to Plan Years
beginning after December 31, 1999, any portion of an
ACP Test Safe Harbor Matching Contribution
attributable to a discretionary Matching Contribution
may not exceed four percent (4%) of an Eligible
Participant's Compensation.
(e) The Plan is required to satisfy the ACP test
of Code Section 401(m)(2), using the current year testing
method, if the Plan permits after-tax voluntary Employee
contributions or if matching contributions that do not satisfy
the ACP Test Safe Harbor may be made to the Plan. In such
event, only ADP Test Safe Harbor Contributions or ACP Test
Safe Harbor Contributions that exceed the amount needed to
satisfy the ADP Test Safe Harbor or ACP Test Safe Harbor (if
the Employer has elected to use the ACP Test Safe Harbor) may
be treated as Qualified Non-Elective Contributions or
Qualified Matching Contributions in applying the ACP test. In
addition, in applying the ACP test, elective contributions may
not treated as matching contributions under Code Section
401(m)(3). Furthermore, in applying the ACP test, the Employer
may elect to disregard with respect to all Eligible
Participants (1) all Matching Contributions if the only
Matching Contributions made to the Plan satisfy the ADP Test
Safe Harbor Contribution (the "Basic Matching Contribution" or
the "Enhanced Matching Contribution") and (2) if the ACP Test
Safe Harbor is satisfied, Matching Contributions that do not
exceed four (4%) of each Participant's Compensation.
12.9 ADVANCE DISTRIBUTION FOR HARDSHIP
(a) The Administrator, at the election of a Participant,
shall direct the Trustee to distribute to the Participant in any one
Plan Year up to the lesser of (1) 100% of the Participant's total
account or, if less, 100% of the Participant's accounts as elected in
the Adoption Agreement valued as of the last Valuation Date or (2) the
amount necessary to satisfy the immediate and heavy financial need of
the Participant. Any distribution made pursuant to this Section shall
be deemed to be made as of the first day of the Plan Year or, if later,
the Valuation Date immediately preceding the date of distribution, and
the account from which the distribution is made shall be reduced
accordingly. Withdrawal under this Section shall be authorized only if
the distribution is for one of the following or any other item
permitted under Treasury Regulation Section 1.401(k)-1(d)(2)(iv):
(1) Medical expenses described in Code Section 213(d)
incurred by the Participant, the Participant's spouse, or any
of the Participant's dependents (as defined in Code Section
152) or necessary for these persons to obtain medical care as
described in Code Section 213(d);
(2) Costs directly related to the purchase (excluding
mortgage payments) of a principal residence for the
Participant;
(3) Payment of tuition and related educational fees, and
room and board expenses, for the next twelve (12) months of
post-secondary education for the Participant, the
Participant's spouse, children, or dependents (as defined in
Code Section 152); or
(4) Payments necessary to prevent the eviction of the
Participant from the Participant's principal residence or
foreclosure on the mortgage on that residence.
(b) No distribution shall be made pursuant to this
Section unless the Administrator, based upon the Participant's
representation and such other facts as are known to the Administrator,
determines that all of the following conditions are satisfied:
(1) The distribution is not in excess of the amount of
the immediate and heavy financial need of the Participant
(including any amounts necessary to pay any federal, state, or
local taxes or penalties reasonably anticipated to result from
the distribution);
(2) The Participant has obtained all distributions, other
than hardship distributions, and all nontaxable loans
currently available under all plans maintained by the Employer
(to the extent the loan would not increase the hardship);
(3) The Plan, and all other plans maintained by the
Employer, provide that the Participant's elective deferrals
and nondeductible voluntary Employee contributions will be
suspended for at least twelve (12) months after receipt of the
hardship distribution; and
(4) The Plan, and all other plans maintained by the
Employer, provide that the Participant may not make elective
deferrals for the Participant's taxable year immediately
following the taxable year of the hardship distribution in
excess
74
of the applicable limit under Code Section 402(g) for such
next taxable year less the amount of such Participant's
elective deferrals for the taxable year of the hardship
distribution.
(c) Notwithstanding the above, distributions from the
Participant's Elective Deferral Account, Qualified Matching
Contribution Account and Qualified Non-Elective Account pursuant to
this Section shall be limited solely to the Participant's Elective
Deferrals and any income attributable thereto credited to the
Participant's Elective Deferral Account as of December 31, 1988.
(d) Any distribution made pursuant to this Section shall
be made in a manner which is consistent with and satisfies the
provisions of Section 6.5, including, but not limited to, all notice
and consent requirements of Code Sections 411(a)(11) and 417 and the
Treasury Regulations thereunder.
ARTICLE XIII
SIMPLE 401(K) PROVISIONS
13.1 DEFINITIONS
(a) "Compensation" means, for purposes of this Article,
the sum of the wages, tips, and other compensation from the Employer
subject to federal income tax withholding (as described in Code Section
6051(a)(3)) and the Employee's salary reduction contributions made
under this or any other 401(k) plan, and, if applicable, elective
deferrals under a Code Section 408(p) SIMPLE plan, a SARSEP, or a Code
Section 403(b) annuity contract and compensation deferred under a Code
Section 457 plan, required to be reported by the Employer on Form W-2
(as described in Code Section 6051(a)(8)). For self-employed
individuals, compensation means net earnings from self-employment
determined under Code Section 1402(a) prior to subtracting any
contributions made under this Plan on behalf of the individual. The
provisions of the plan implementing the limit on Compensation under
Code Section 401(a)(17) apply to the compensation under this Article.
(b) "Eligible employee" means, for purposes of this
Article, any Participant who is entitled to make Elective Deferrals
described in Code Section 402(g) under the terms of the Plan.
(c) "Year" means the calendar year.
13.2 CONTRIBUTIONS
(a) Salary Reduction Contributions
(1) Each eligible employee may make a salary reduction
election to have compensation reduced for the year in any
amount selected by the Employee subject to the limitation in
subsection (c) below. The Employer will make a salary
reduction contribution to the Plan, as an Elective Deferral,
in the amount by which such employee's compensation has been
reduced.
(2) The total salary reduction contribution for the year
cannot exceed $6,000 for any Employee. To the extent permitted
by law, this amount will be adjusted to reflect any annual
cost-of-living increases announced by the IRS.
(b) Other Contributions
(1) Matching Contributions -- Unless (2) below is elected,
each year the Employer will contribute a matching contribution
to the Plan on behalf of each Employee who makes a salary
reduction election under Section 13.3(a). The amount of the
matching contribution will be equal to the Employee's salary
reduction contribution up to a limit of three percent (3%) of
the Employee's compensation for the full year.
(2) Nonelective Contribution -- For any year, instead of a
matching contribution, the Employer may elect to contribute a
nonelective contribution of two percent (2%) of compensation
for the year for each eligible employee who received at least
$5,000 of compensation from the Employer for the year.
(c) Limitation on Other Contributions
No Employer or Employee contributions may be made to this Plan
for the year other than salary reduction contributions
described in Section 13.3(a), matching or nonelective
contributions described in Section 13.3(b) and rollover
contributions described in Treasury Regulation Section
1.402(c)-2, Q&A-1(a). Furthermore, the provisions of Section
4.4 which implement the limitations of Code Section 415 apply
to contributions made pursuant to this Section.
75
13.3 ELECTION AND NOTICE REQUIREMENTS
(a) Election Period
(1) In addition to any other election periods provided under
the Plan, each eligible employee may make or modify a salary
reduction election during the 60-day period immediately
preceding each January 1st.
(2) For the year an Employee becomes eligible to make salary
reduction contributions under this Article, the 60-day
election period requirement of subsection (a)(1) is deemed
satisfied if the Employee may make or modify a salary
reduction election during a 60-day period that includes either
the date the Employee becomes eligible or the day before.
(3) Each eligible employee may terminate a salary reduction
election at any time during the year.
(b) Notice Requirements
(1) The Employer will notify each eligible employee prior to
the 60-day election period described in Section 13.4(a) that a
salary reduction election or a modification to a prior
election may be made during that period.
(2) The notification described in (1) above will indicate
whether the Employer will provide a matching contribution
described in Section 13.3(b)(1) or a two percent (2%)
nonelective contribution described in section 13.3(b)(2).
13.4 VESTING REQUIREMENTS
All benefits attributable to contributions made pursuant to this
Article are nonforfeitable at all times.
13.5 TOP HEAVY RULES
The Plan is not treated as a Top Heavy Plan under Code Section 416 for
any year for which the provisions of this Article are effective and satisfied.
13.6 NONDISCRIMINATION TESTS
The Plan is treated as meeting the requirements of Code Sections
401(k)(3)(A)(ii) and 401(m)(2) for any year for which the provisions of this
Article are effective and satisfied. Accordingly, Sections 12.4, 12.5, 12.6 and
12.7 shall not apply to the Plan.
76
ADOPTION AGREEMENT FOR
MFS RETIREMENT SERVICES, INC.
NON-STANDARDIZED 401(K) PROFIT SHARING
PLAN AND TRUST
The undersigned Employer adopts the MFS Retirement Services, Inc. Prototype
Non-Standardized 401(k) Profit Sharing Plan and Trust and elects the following
provisions:
CAUTION: Failure to properly fill out this Adoption Agreement may result in
disqualification of the Plan.
EMPLOYER INFORMATION (An amendment to the Adoption Agreement is not needed
solely to reflect a change in the information in this Section.)
1. EMPLOYER'S NAME, ADDRESS AND TELEPHONE NUMBER
Name: Baldwin Americas Corporation
Address: 12 Commerce Drive
Street
Shelton Connecticut 06484
------------------------- ---------------- ----------
City State Zip
Telephone: 203-402-1000
2. EMPLOYER'S TAXPAYER IDENTIFICATION NUMBER 06-1316654
3. TYPE OF ENTITY
a. [X] Corporation (including Tax-exempt or Non-profit Corporation).
b. [ ] Professional Service Corporation.
c. [ ] S Corporation.
d. [ ] Limited Liability Company that is taxed as:
1. [ ] a partnership or sole proprietorship.
2. [ ] a Corporation.
3. [ ] an S Corporation.
e. [ ] Sole Proprietorship.
f. [ ] Partnership (including Limited Liability).
g. [ ] Other:________________________________________________________
AND, the Employer is a member of...
h. [ ] a controlled group?
i. [ ] an affiliated service group?
4. EMPLOYER FISCAL YEAR means the 12 consecutive month period:
Beginning on July 1st (e.g., January 1st)
-----------------------------------
month day
and ending on June 30th
-----------------------------------
month day
PLAN INFORMATION
(An amendment to the Adoption Agreement is not needed solely to reflect a change
in the information in items 9 through 11 of this Section.)
5. PLAN NAME:
Baldwin Technology Profit Sharing and Savings Plan
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
(C) Copyright 2002 MFS Retirement Services, Inc. April, 2002
1
6. EFFECTIVE DATE
a. [ ] This is a new Plan effective as of_____________ (hereinafter
called the "Effective Date").
b. [ ] This is an amendment and restatement of a previously
established qualified Plan and Trust of the Employer which was
originally effective_______________ (hereinafter called the
"Effective Date"). The effective date of this amendment and
restatement is_____________________.
c. [X] FOR GUST RESTATEMENTS: This is an amendment and restatement of
a previously established qualified Plan and Trust of the
Employer to bring the Plan into compliance with GUST (GATT,
USERRA, SBJPA and TRA '97). The original Plan effective date
was June 29, 1955 (hereinafter called the "Effective Date").
Except as specifically provided in the Plan, the effective
date of this amendment and restatement is September 1, 2003 .
(Enter a date during the current Plan Year. The Plan contains
appropriate retroactive effective dates with respect to
provisions for the appropriate laws.)
7. PLAN YEAR means the 12 consecutive month period:
Beginning on January 1st (e.g., January 1st)
----------------------------------
month day
and ending on December 31st
----------------------------------
month day
except that there will be a short Plan Year:
a. [X] N/A
b. [ ] beginning on ___________________________ (e.g., July 1, 2000)
month day, year
and ending on __________________________
month day, year
8. VALUATION DATE means:
a. [X] Every day that the Trustee, any transfer agent appointed by
the Trustee or the Employer, and any stock exchange used by
such agent are open for business (daily valuation).
b. [ ] Other (specify day or dates):_________________________________
9. PLAN NUMBER assigned by the Employer (select one)
a. [X] 001.
b. [ ] 002.
c. [ ] 003.
d. [ ] Other:________________________________________________________
10. TRUSTEE(S): (Please complete either a., b., or c. and d. and e. if
applicable)
a. [ ] NAME(S) AND TITLE(S) OF INDIVIDUAL TRUSTEE(S):
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
______________________________________________________________
NOTE: An Individual Trustee may not act as a Directed
(Nondiscretionary) Trustee.
b. [ ] NAME(S) OF BANK OR TRUST COMPANY TRUSTEE(S):__________________
c. [X] MFS HERITAGE TRUST COMPANY (MHTC)
(C) Copyright 2002 MFS Retirement Services, Inc. April, 2002
2
NOTE: MHTC serves only as Directed (Nondiscretionary) Trustee and
only when all Plan investments are maintained on a participant
recordkeeping system used by MFS Retirement Services, Inc.
pursuant to a contract for recordkeeping and administrative
support services and all other requirements imposed by MHTC
are satisfied. The Plan Administrator is responsible for
directing MHTC in the performance of the rights, powers,
duties, and obligations of the Trustee, including, without
limitation, those rights, powers, duties and obligations with
respect to the investment and distribution of Plan assets.
d. AND, if b. above is completed, is the Trustee a Directed
(Nondiscretionary) Trustee? (If so, Plan assets are invested in
accordance with directions provided by the Plan Administrator).
1. [ ] Yes. 2. [ ] No. 3. [ ] N/A.
e. AND, shall a separate trust agreement be used with this Plan?
1. [ ] Yes. 2. [ ] No.
NOTE: If Yes, an executed copy of the trust agreement between the
Trustee and the Employer must be attached to this Plan. The
Plan and trust agreement will be read and construed together.
The responsibilities, rights and powers of the Trustee shall
be those specified in the trust agreement.
11. TRUSTEES' MAILING ADDRESS:
a. [ ] Use Employer Address and Telephone Number.
b. [ ] Use other Address:
______________________________________________________________
Street
_______________________ _______________ __________________
City State Zip
_______________________
Telephone
c. [X] If MFS HERITAGE TRUST COMPANY is selected as trustee.
c/o RSI
P.O. Box 55274, Boston, MA 02205-5274
12. PLAN ADMINISTRATOR'S NAME, ADDRESS AND TELEPHONE NUMBER:
(If none is named, the Employer will become the Administrator.)
a. [X] Employer (Use Employer address and telephone number).
b. [ ] Use name, address and telephone number below:
Name:_________________________________________________________
Address:______________________________________________________
Street
_______________________ _______________ __________________
City State Zip
Telephone:_______________________________
13. CONSTRUCTION OF PLAN
This Plan shall be governed by the laws of the state or commonwealth
where the Employer's (or, in the case of a corporate Trustee, such
Trustee's) principal place of business is located unless another state
or commonwealth is specified: New Hampshire.
If MFS Heritage Trust Company is selected as directed
(nondiscretionary) Trustee in Section 10. above, the Plan shall be
governed by the laws of the state of New Hampshire.
(C) Copyright 2002 MFS Retirement Services, Inc. April, 2002
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ELIGIBILITY REQUIREMENTS
14. ELIGIBLE EMPLOYEES (Plan Section 1.18)
For all purposes of the Plan (except as elected below) Eligible
Employees are all Employees (including Leased Employees) except:
a. [ ] N/A. No exclusions.
b. [X] The following are excluded (select all that apply):
1. [ ] Union Employees (as defined in Plan Section 1.18)
2. [ ] Non-resident aliens (as defined in Plan Section 1.18)
3. [ ] Salaried Employees.
4. [ ] Highly Compensated Employees.
5. [X] Leased Employees.
6. [ ] Other (must not be based upon hours
worked):__________________________
However, for purposes of Employer Matching Contributions, Eligible
Employees are all Employees (including Leased Employees) except:
c. [X] N/A. The option elected in either a. or b. above applies for
Employer Matching Contributions.
d. [ ] The following are excluded (select all that apply):
1. [ ] Union Employees (as defined in Plan Section 1.18)
2. [ ] Non-resident aliens (as defined in Plan Section 1.18)
3. [ ] Salaried Employees
4. [ ] Highly Compensated Employees
5. [ ] Leased Employees
6. [ ] Other (must not be based upon hours
worked):______________________
And, for purposes of Employer Profit Sharing Contributions, Eligible
Employees are all Employees (including Leased Employees) except:
e. [X] N/A. The option elected in either a. or b. above applies for
Employer Profit Sharing Contributions.
f. [ ] No exclusions
g. [ ] The following are excluded (select all that apply):
1. [ ] Union Employees (as defined in Plan Section 1.18)
2. [ ] Non-resident aliens (as defined in Plan Section 1.18)
3. [ ] Salaried Employees
4. [ ] Highly Compensated Employees
5. [ ] Leased Employees
6. [ ] Other (must not be based upon hours
worked):___________________________
15. THE FOLLOWING AFFILIATED EMPLOYERS (Plan Section 1.6) will adopt this
Plan as Participating Employers (if there is more than one, or if
Affiliated Employers adopt this Plan after the date the Adoption
Agreement is executed, attach additional executed "Affiliated Employer
Participation Agreement(s)" to this Adoption Agreement):
a. [X] N/A
b. [ ] Name of Employer:_____________________________________________
Address:______________________________________________________
City: ____________________ State:_____________ Zip:_________
Telephone:________________ Federal Tax Identification
Number:____________
Type of Entity (select one):
c. [ ] Corporation (including Tax-exempt or Non-profit Corporation)
d. [ ] Professional Service Corporation
e. [ ] S Corporation
f. [ ] Limited Liability Company
g. [ ] Sole Proprietorship
h. [ ] Partnership (including Limited Liability Partnership)
i. [ ] Other:________________________________________________________
NOTE: Employees of an Affiliated Employer that does not adopt this
Adoption Agreement as a Participating Employer shall not be
Eligible Employees. This Plan could violate the Code Section
410(b) coverage rules if all Affiliated Employers do not adopt
the Plan.
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16. CONDITIONS OF ELIGIBILITY (Plan Section 3.1)
Any Eligible Employee will be eligible to participate in the Plan upon
satisfaction of the following:
NOTE: If the Year(s) of Service 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. If expressed in months of service, an
Employee will not be required to complete any specified number
of Hours of Service in a particular month, unless elected
below.
Eligibility for all purposes of the Plan (except as elected below):
a. [X] No age or service required. (skip b. and c. below)
b. [ ] Completion of the following service requirement which is based
on Years of Service (or Periods of Service if the Elapsed Time
Method is elected):
1. [ ] No service requirement
2. [ ] 1/2 Year of Service or Period of Service
3. [ ] 1 Year of Service or Period of Service
4. [ ] ______________Hours of Service within_______________
months from the Eligible Employee's employment
commencement date, but in no event more than 1 Year of
Service.
5. [ ] Other:____________________(may not exceed one (1) Year
of Service or Period of Service)
c. [ ] Attainment of age:
1. [ ] No Age Requirement
2. [ ] 20 1/2
3. [ ] 21
4. [ ] Other:______________(may not exceed 21)
d. [ ] The service and/or age requirements specified above shall be
waived with respect to any Eligible Employee who was employed
on______________ and such Eligible Employee shall enter the
Plan as of such date. The requirements to be waived are
(select one or both):
1. [ ] service requirement
2. [ ] age requirement
NOTE: If d. is elected, the Plan may violate the nondiscrimination
rules.
However, the following eligibility requirements will apply for purposes
of Employer Matching Contributions:
e. [X] N/A. The options elected in a. - d. above apply for Employer
Matching Contributions.
f. [ ] No age or service requirements. (skip g. and h. below)
g. [ ] Completion of the following service requirement which is based
on Years of Service (or Periods of Service if the Elapsed Time
Method is elected):
1. [ ] No service requirement
2. [ ] 1/2 Year of Service or Period of Service
3. [ ] 1 Year of Service or Period of Service
4. [ ] ______________Hours of Service within_______________
months from the Eligible Employee's employment
commencement date, but in no event more than 1 Year of
Service.
5. [ ] 2 Years of Service or Periods of Service
6. [ ] Other____________________(may not exceed two (2) Years
of Service or Periods of Service)
h. [ ] Attainment of age:
1. [ ] No Age Requirement
2. [ ] 20 1/2
3. [ ] 21
4. [ ] Other:_____________________________ (may not exceed 21)
i. [ ] The service and/or age requirements specified above shall be
waived with respect to any Eligible Employee who was employed
on___________ and such Eligible Employee shall enter the Plan
as of such date. The requirements to be waived are (select one
or both):
1. [ ] service requirement
2. [ ] age requirement
NOTE: If more than 1 Year of Service is elected, 100% immediate
vesting is required. Also, if i. is elected, the Plan may
violate the nondiscrimination rules.
(C) Copyright 2002 MFS Retirement Services, Inc. April, 2002
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And, the following eligibility requirements will apply for purposes of
Employer Profit Sharing Contributions:
j. [X] N/A. The options elected in a. - d. above apply for Employer
Profit Sharing Contributions.
k. [ ] No age or service requirements (skip l. and m. below).
l. [ ] Completion of the following service requirement which is based
on Years of Service (or Periods of Service if the Elapsed Time
Method is elected):
1. [ ] No service requirement
2. [ ] 1/2 Year of Service or Period of Service
3. [ ] 1 Year of Service or Period of Service
4. [ ] _______________Hours of Service within_________________
months from the Eligible Employee's employment
commencement date, but in no event more than 1 Year of
Service.
5. [ ] 2 Years of Service or Periods of Service
6. [ ] Other:___________________(may not exceed two (2) Years
of Service or Periods of Service)
m. [ ] Attainment of age:
1. [ ] No Age Requirement
2. [ ] 20 1/2
3. [ ] 21
4. [ ] Other:_________________________________________________
(may not exceed 21)
n. [ ] The service and/or age requirements specified above shall be
waived with respect to any Eligible Employee who was employed
on_________________ and such Eligible Employee shall enter the
Plan as of such date. The requirements to be waived are
(select one or both):
1. [ ] service requirement
2. [ ] age requirement
NOTE: If more than 1 Year of Service is elected, 100% immediate
vesting is required. Also, if n. is elected, the Plan may
violate the nondiscrimination rules.
(C) Copyright 2002 MFS Retirement Services, Inc. April, 2002
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17. EFFECTIVE DATE OF PARTICIPATION (Plan Section 3.2)
An Eligible Employee who has satisfied the applicable eligibility
requirements will become a Participant for all purposes of the Plan
(except as elected below) on (select one):
a. [X] the day on which such requirements are satisfied.
b. [ ] the first day of the month coinciding with or next following
the date on which such requirements are satisfied.
c. [ ] the first day of the Plan Year quarter coinciding with or next
following the date on which such requirements are satisfied.
d. [ ] the earlier of the first day of the seventh month or the first
day of the Plan Year coinciding with or next following the
date on which such requirements are satisfied.
e. [ ] the first day of the Plan Year next following the date on
which such requirements are satisfied. (Eligibility must be
1/2 Year of Service (or Period of Service) or less and age
must be 20 1/2 or less.)
f. [ ] Other:______________________ , provided that an Eligible
Employee who has satisfied the maximum age 21 and service
requirements (one (1) Year or Period of Service) and who is
otherwise entitled to participate, shall commence
participation no later than the earlier of (a) 6 months after
such requirements are satisfied, or (b) the first day of the
first Plan Year after such requirements are satisfied, unless
the Employee separates from service before such participation
date.
However, an Eligible Employee who has satisfied the applicable
eligibility requirements will become a Participant for purposes of
Employer Matching Contributions on (select one):
g. [X] N/A. The options elected in a. - f. above apply for Employer
Matching Contributions.
h. [ ] the day on which such requirements are satisfied.
i. [ ] the first day of the month coinciding with or next following
the date on which such requirements are satisfied.
j. [ ] the first day of the Plan Year quarter coinciding with or
following the date on which such requirements are satisfied.
k. [ ] the first day of the Plan Year in which such requirements are
satisfied.
l. [ ] the first day of the Plan Year in which such requirements are
satisfied, if such requirements are satisfied in the first 6
months of the Plan Year, or as of the first day of the next
succeeding Plan Year if such requirements are satisfied in the
last 6 months of the Plan Year.
m. [ ] the earlier of the first day of the seventh month or the first
day of the Plan Year coinciding with or next following the
date on which such requirements are satisfied.
n. [ ] the first day of the Plan Year next following the date on
which such requirements are satisfied, (Eligibility must be
1/2 Year of Service (or Period of Service) or less and age 20
1/2 or less.)
o. [ ] Other:_____________ , provided that an Eligible Employee who
has satisfied the maximum age 21 and service requirements (one
(1) Year or Period of Service (or more than one (1) year if
full and immediate vesting)) and who is otherwise entitled to
participate, shall commence participation no later than the
earlier of (a) 6 months after such requirements are satisfied,
or (b) the first day of the first Plan Year after such
requirements are satisfied, unless the Employee separates from
service before such participation date.
And, an Eligible Employee who has satisfied the applicable eligibility
requirements will become a Participant for purposes of Employer Profit
Sharing Contributions on (select one):
p. [X] N/A. The options elected in a. - f. above apply for Employer
Profit Sharing Contributions.
q. [ ] the day on which such requirements are satisfied.
r. [ ] the first day of the month coinciding with or next following
the date on which such requirements are satisfied.
s. [ ] the first day of the Plan Year quarter coinciding with or
following the date on which such requirements are satisfied.
t. [ ] the first day of the Plan Year in which such requirements are
satisfied.
u. [ ] the first day of the Plan Year in which such requirements are
satisfied, if such requirements are satisfied in the first 6
months of the Plan Year, or as of the first day of the next
succeeding Plan Year if such requirements are satisfied in the
last 6 months of the Plan Year.
v. [ ] the earlier of the first day of the seventh month or the first
day of the Plan Year coinciding with or next following the
date on which such requirements are satisfied.
w. [ ] the first day of the Plan Year next following the date on
which such requirements are satisfied, (Eligibility must be
1/2 Year of Service (or Period of Service) or less and age 20
1/2 or less.)
x. [ ] Other:___________________ , provided that an Eligible Employee
who has satisfied the maximum age 21 and service requirements
(one (1) Year or Period of Service (or more than one (1) year
if full and immediate vesting)) and who is otherwise entitled
to participate, shall commence participation no later than the
earlier of (a) 6 months after such requirements are satisfied,
or (b) the first day of the first Plan Year after such
requirements are satisfied, unless the Employee separates from
service before such participation date.
(C) Copyright 2002 MFS Retirement Services, Inc. April, 2002
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SERVICE
18. RECOGNITION OF SERVICE WITH PREDECESSOR EMPLOYER
a. [ ] No service with a predecessor employer shall be recognized.
b. [X] Service with:
1. [X] Kansa will be recognized except as follows (select a.
or all that apply of b. through d.):
a. [X] N/A, no limitations.
b. [ ] service will only be recognized for vesting
purposes.
c. [ ] service will only be recognized for
eligibility purposes.
d. [ ] service prior to_________________________ will
not be recognized.
2. [ ] ________________ will be recognized except as follows
(select a. or all that apply of b. through d.):
a. [ ] N/A, no limitations.
b. [ ] service will only be recognized for vesting
purposes.
c. [ ] service will only be recognized for
eligibility purposes.
d. [ ] service prior to_________________________ will
not be recognized.
NOTE: If the predecessor Employer maintained this qualified Plan or
maintained a qualified plan that has been merged with this
qualified Plan, then Years of Service (and/or Periods of
Service) with such predecessor Employer shall be recognized
pursuant to Plan Sections 1.57 and 1.85 and b(1) above being
marked. Attach additional sections for other predecessor
Employers.
19. SERVICE CREDITING METHOD
Elapsed Time Method (If the Plan only uses the Hours of Service Method,
skip to d. - h. below)
a. Shall be used for all money types under the Plan (except as
selected below) for purposes of:
1. [X] eligibility to participate.
2. [ ] vesting.
3. [ ] sharing in allocations or contributions.
b. However, for Employer Matching Contributions, the Elapsed Time
Method shall be used for purposes of:
1. [ ] N/A. The options elected in a. above apply for Employer
Matching Contributions.
2. [X] N/A. The Hours of Service Method will be used for Employer
Matching Contributions as selected in 19(d) - (h) below.
3. [ ] eligibility to participate.
4. [ ] vesting.
5. [ ] sharing in allocations or contributions.
c. And, for Employer Profit Sharing Contributions, the Elapsed Time
Method shall be used for purposes of:
1. [ ] N/A. The options elected in a. above apply for Employer
Profit Sharing Contributions.
2. [X] N/A. The Hours of Service Method will be used for Employer
Profit Sharing Contributions as selected in 19(d) - (h)
below.
3. [ ] eligibility to participate.
4. [ ] vesting.
5. [ ] sharing in allocations or contributions.
Hours of Service Method. (If the Plan only uses the Elapsed Time
Method, skip to 20., Vesting)
d. Shall be used for all money types under the Plan (except as
selected below) for purposes of:
1. [ ] Eligibility Computation. The eligibility computation period
after the initial eligibility computation period shall...
a. [ ] be based on the date an Employee first performs an
Hour of Service (initial computation period) and
subsequent computation periods shall be based on each
anniversary date thereof.
b. [ ] shift to the Plan Year after the initial computation
period.
2. [X] Vesting. The vesting computation period shall be...
a. [ ] the date an Employee first performs an Hour of
Service and each anniversary thereof.
b. [X] the Plan Year.
3. [ ] Sharing in Allocations or Contributions (the computation
period shall be the Plan Year).
(C) Copyright 2002 MFS Retirement Services, Inc. April, 2002
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e. However, for Employer Matching Contributions, the Hours of Service
Method shall be used for purposes of:
1. [X] N/A. The options elected in d. above apply for Employer
Matching Contributions.
2. [ ] N/A. The Elapsed Time Method will be used for Employer
Matching Contributions as selected in 19(a) - (c) above.
3. [ ] Eligibility Computation. The eligibility computation period
after the initial eligibility computation period shall...
a. [ ] be based on the date an Employee first performs an
Hour of Service (initial computation period) and
subsequent computation periods shall be based on each
anniversary date thereof.
b. [ ] shift to the Plan Year after the initial computation
period.
4. [ ] Vesting. The vesting computation period shall be...
a. [ ] the date an Employee first performs an Hour of
Service and each anniversary thereof.
b. [ ] the Plan Year.
5. [ ] Sharing in Allocations or Contributions (the computation
period shall be the Plan Year).
f. And, for Employer Profit Sharing Contributions, the Hours of
Service Method shall be used for purposes of:
1. [X] N/A. The options elected in d. above apply for Employer
Profit Sharing Contributions.
2. [ ] N/A. The Elapsed Time Method will be used for Employer
Profit Sharing Contributions as selected in 19(a) - (c)
above.
3. [ ] Eligibility Computation. The eligibility computation period
after the initial eligibility computation period shall...
a. [ ] be based on the date an Employee first performs an
Hour of Service (initial computation period) and
subsequent computation periods shall be based on each
anniversary date thereof.
b. [ ] shift to the Plan Year after the initial computation
period.
4. [ ] Vesting. The vesting computation period shall be...
a. [ ] the date an Employee first performs an Hour of
Service and each anniversary thereof.
b. [ ] the Plan Year.
5. [ ] Sharing in Allocations or Contributions (the computation
period shall be the Plan Year).
g. And, if the Hours of Service Method is being used, the Hours of
Service will be determined on the basis of the method selected
below. Only one method may be selected. The method selected below
will be applied to:
1. [X] all Employees.
2. [ ] salaried Employees only (for hourly Employees, actual Hours
of Service will be used).
On the basis of:
3. [X] actual hours for which an Employee is paid or entitled to
payment.
4. [ ] days worked. An Employee will be credited with ten Hours of
Service if under the Plan such Employee would be credited
with at least one Hour of Service during the day.
5. [ ] weeks worked. An Employee will be credited with forty-five
Hours of Service if under the Plan such Employee would be
credited with at least one Hour of Service during the week.
6. [ ] semi-monthly payroll periods. An Employee will be credited
with ninety-five Hours of Service if under the Plan such
Employee would be credited with at least one Hour of Service
during the semi-monthly payroll period.
7. [ ] months worked. An Employee will be credited with one hundred
ninety Hours of Service if under the Plan such Employee
would be credited with at least one Hour of Service during
the month.
h. And, a Year of Service means the applicable computation period
during which an Employee has completed at least 1000 (may not be
more than 1,000) Hours of Service (if left blank, the Plan will use
1,000 Hours of Service).
(C) Copyright 2002 MFS Retirement Services, Inc. April, 2002
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VESTING
20. VESTING OF PARTICIPANT'S INTEREST (Plan Section 6.4(b))
Vesting for Employer Contributions (except as otherwise elected in
20(j) - (s) below for Employer Matching Contributions). The vesting
schedule, based on a Participant's Years of Service (or Periods of
Service if the Elapsed Time Method is elected), shall be as follows:
a. [ ] N/A. No Employer Contributions.
b. [ ] 100% upon entering Plan. (Required if eligibility requirement
is greater than one (1) Year of Service or Period of Service.)
c. [ ] 3 Year Cliff: d. [ ] 5 Year Cliff:
0-2 years 0% 0-4 years 0%
3 years 100% 5 years 100%
e. [X] 6 Year Graded f. [ ] 4 Year Graded:
0-1 year 0% 1 year 25%
2 years 20% 2 years 50%
3 years 40% 3 years 75%
4 years 60% 4 years 100%
5 years 80%
6 years 100%
g. [ ] 5 Year Graded: h. [ ] 7 Year Graded:
1 year 20% 0-2 years 0%
2 years 40% 3 years 20%
3 years 60% 4 years 40%
4 years 80% 5 years 60%
5 years 100% 6 years 80%
7 years 100%
i. [ ] Other - Must be at least as li beral as either d. or h. above.
Service Percentage
1. %
2. %
3. %
4. %
5. %
6. %
7. %
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VESTING FOR EMPLOYER MATCHING CONTRIBUTIONS
The vesting schedule for Employer matching contributions, based on a
Participant's Years of Service (or Periods of Service if the Elapsed
Time Method is elected) shall be as follows:
j. [ ] N/A. No Employer Matching Contributions.
k. [ ] N/A. The schedule in 20(a) - (i) above shall also apply to
Employer Matching Contributions.
l. [X] 100% upon entering Plan. (Required if eligibility requirement is
greater than one (1) Year of Service or Period of Service.)
m. [ ] 3 Year Cliff
n. [ ] 5 Year Cliff
o. [ ] 6 Year Graded
p. [ ] 4 Year Graded
q. [ ] 5 Year Graded
r. [ ] 7 Year Graded
s. [ ] Other - Must be at least as liberal as either n. or r. above.
Service Percentage
1.
2.
3.
4.
5.
6.
7.
21. FOR AMENDED PLANS (Plan Section 6.4(f)) If the vesting schedule has
been amended to a less favorable schedule, enter the pre-amended
schedule below:
a. [X] Vesting schedule has not been amended, amended schedule is more
favorable in all years or prior schedule was immediate 100%
vesting.
b. [ ] Pre-amended schedule for all Employer Contributions except for
[ ] Employer Profit Sharing Contributions,
[ ] Employer Matching Contributions, [ ] N/A
[ ] Other: _____________________________________________________
Service Percentage
1.
2.
3.
4.
5.
6.
7.
(C) Copyright 2002 MFS Retirement Services, Inc. April, 2002
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22. TOP HEAVY VESTING (Plan Section 6.4(c)) If this Plan becomes a Top
Heavy Plan, the following vesting schedule, based on number of Years of
Service (or Periods of Service if the Elapsed Time Method is elected),
shall apply and shall be treated as a Plan amendment pursuant to this
Plan. Once effective, this schedule shall also apply to any
contributions made before the Plan became a Top Heavy Plan and shall
continue to apply if the Plan ceases to be a Top Heavy Plan unless an
amendment is made to change the vesting schedule.
a. [ ] N/A (the regular vesting schedule(s) already satisfies one of
the minimum top heavy schedules.)
b. [X] 6 Year Graded
c. [ ] 3 Year Cliff
d. [ ] Other - Must be at least as liberal as either b. or c. above.
Service Percentage
1.
2.
3.
4.
5.
6.
7.
NOTE: This Section does not apply to the account balances of any
Participant who does not have an Hour of Service after the Plan
has initially become top heavy. Such Participant's Account
balance attributable to Employer contributions and Forfeitures
will be determined without regard to this Section.
23. FOR VESTING PURPOSES, Years of Service (or Periods of Service)
attributable to the following shall be excluded (select all that
apply):
a. [X] No exclusions.
b. [ ] Service prior to the Effective Date of the Plan or a predecessor
plan.
c. [ ] Service prior to the time an Employee has attained age 18.
24. VESTING FOR DEATH AND TOTAL AND PERMANENT DISABILITY
Regardless of the vesting schedule(s), Participants shall become fully
Vested upon (select a. or all that apply of b. and c.)
a. [ ] N/A. Apply vesting schedule(s).
b. [X] Death.
c. [X] Total and Permanent Disability.
25. NORMAL RETIREMENT AGE ("NRA") (Plan Section 1.45) means the:
a. [X] date of a Participant's 65th birthday (not to exceed 65th).
b. [ ] later of a Participant's _______ birthday (not to exceed 65th)
or the ______ (not to exceed 5th) anniversary of the:
1. [ ] first day of the Plan Year in which participation in the
Plan commenced.
2. [ ] Participant's date of hire.
26. NORMAL RETIREMENT DATE (Plan Section 1.46) means the:
a. [ ] Participant's "NRA."
b. [X] first day of the month...
1. [X] coinciding with or next following the Participant's
"NRA."
2. [ ] nearest the Participant's "NRA."
c. [ ] Anniversary Date (Plan Section 1.7)...
1. [X] coinciding with or next following the Participant's
"NRA."
2. [ ] nearest the Participant's "NRA."
(C) Copyright 2002 MFS Retirement Services, Inc. April, 2002
12
27. EARLY RETIREMENT DATE (Plan Section 1.15).
a. Early retirement date means the:
1. [ ] No Early Retirement provision provided.
2. [ ] date on which a Participant...
a. [ ] attains age ___________
b. [ ] attains age ___________and completes at least ________
Years of Service (or Periods of Service) for vesting
purposes.
3. [ ] first day of the month coinciding with or next following the
date on which a Participant...
a. [ ] attains age _______________
b. [ ] attains age _______________and completes at least ____
Years of Service (or Periods of Service) for vesting
purposes.
4. [X] Anniversary Date (Plan Section 1.7) coinciding with or next
following the date on which a Participant...
a. [X] attains age 55
b. [ ] attains age _______and completes at least ___________
Years of Service (or Periods of Service) for vesting
purposes.
b. And, if 2., 3. or 4. is selected, shall a Participant become fully
Vested upon attainment of the Early Retirement Date?
1. [X] Yes.
2. [ ] No.
28. TOTAL AND PERMANENT DISABILITY (Plan Section 1.79) For purposes of this
Plan, Total and Permanent Disability shall mean:
a. [X] the inability to engage in any substantial gainful activity by
reason of any medically determinable physical or mental
impairment that can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not
less than twelve (12) months.
b. [ ] the inability to engage in any substantial, gainful activity in
the Employee's trade or profession for which the Employee is
best qualified through training or experience.
c. [ ] ________________________________________________________________
COMPENSATION (PLAN SECTION 1.11)
29. FOR ALL PURPOSES OF THE PLAN, other than Employer Matching
Contributions, Employer Profit Sharing Contributions, and 414(s)
Compensation, compensation:
a. With respect to any Participant means:
1. [X] Wages, tips and other compensation on Form W-2.
2. [ ] Section 3401(a) wages (wages for withholding purposes).
3. [ ] 415 safe-harbor compensation.
b. And, compensation shall be adjusted by (for salary deferral purposes
the Plan automatically includes amounts in 2 below): (select all
that apply)
1. [ ] N/A. No adjustments.
2. [X] including compensation which is not currently includible in
the Participant's gross income by reason of the application
of Code Sections 125 (cafeteria plan), 402(e)(3) (401(k)
plan), 402(h)(1)(B) (simplified employee pension plan),
414(h) (employer pickup contributions under a governmental
plan), 403(b) (tax sheltered annuity) or 457(b) (eligible
deferred compensation plan).
3. [ ] including elective amounts that are not includable in the
gross income of the employee by reason of Code Section 132(f)
(4) for Plan Years beginning on and after _______ (may not be
earlier than the first day of the first Plan Year beginning
on or after January 1, 1998).
4. [X] excluding reimbursements or other expense allowances, fringe
benefits (cash or non-cash), moving expenses, deferred
compensation (other than deferrals specified in 2. above) to
a qualified plan and welfare benefits.
5. [X] excluding Compensation paid during the determination period
prior to the period of participation in the component of the
Plan for which the definition is being used.
6. [ ] excluding overtime.
7. [ ] excluding bonuses.
8. [ ] excluding commissions.
9. [X] other: severance payments.
NOTE: If 6., 7., 8. or 9. is elected the definition of Compensation
could violate the nondiscrimination rules.
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30. FOR PURPOSES OF EMPLOYER MATCHING CONTRIBUTIONS, compensation:
a. With respect to any Participant means:
1. [X] Wages, tips and other compensation on Form W-2.
2. [ ] Section 3401(a) wages (wages for withholding purposes).
3. [ ] 415 safe-harbor compensation.
b. And, compensation shall be adjusted by: (select all that apply)
1. [ ] N/A. No adjustments.
2. [X] including compensation which is not currently includible in
the Participant's gross income by reason of the application
of Code Sections 125 (cafeteria plan), 402(e)(3) (401(k)
plan), 402(h)(1)(B) (simplified employee pension plan),
414(h) (employer pickup contributions under a governmental
plan), 403(b) (tax sheltered annuity) or 457(b) (eligible
deferred compensation plan).
3. [ ] including elective amounts that are not includable in the
gross income of the employee by reason of Code Section 132(f)
(4) for Plan Years beginning on and after _______ (may not be
earlier than the first day of the first Plan Year beginning
on or after January 1, 1998).
4. [X] excluding reimbursements or other expense allowances, fringe
benefits (cash or non-cash), moving expenses, deferred
compensation (other than deferrals specified in 2. above) to
a qualified plan and welfare benefits.
5. [X] excluding Compensation paid during the determination period
prior to the period of participation in the component of the
Plan for which the definition is being used.
6. [ ] excluding overtime.
7. [ ] excluding bonuses.
8. [ ] excluding commissions.
9. [X] other: severance payments.
NOTE: If 6., 7., 8. or 9. is elected the definition of Compensation
could violate the nondiscrimination rules.
31. FOR PURPOSES OF EMPLOYER PROFIT SHARING CONTRIBUTIONS, compensation:
a. With respect to any Participant means:
1. [X] Wages, tips and other compensation on Form W-2.
2. [ ] Section 3401(a) wages (wages for withholding purposes).
3. [ ] 415 safe-harbor compensation.
b. And, compensation shall be adjusted by: (select all that apply)
1. [ ] N/A. No adjustments.
2. [X] including compensation which is not currently includible in
the Participant's gross income by reason of the application
of Code Sections 125 (cafeteria plan), 402(e)(3) (401(k)
plan), 402(h)(1)(B) (simplified employee pension plan), 414
(h) (employer pickup contributions under a governmental
plan), 403(b) (tax sheltered annuity) or 457(b) (eligible
deferred compensation plan).
3. [ ] including elective amounts that are not includable in the
gross income of the employee by reason of Code Section 132(f)
(4) for Plan Years beginning on and after ______ (may not be
earlier than the first day of the first Plan Year beginning
on or after January 1, 1998).
4. [X] excluding reimbursements or other expense allowances, fringe
benefits (cash or non-cash), moving expenses, deferred
compensation (other than deferrals specified in 2. above) to
a qualified plan and welfare benefits.
5. [X] excluding Compensation paid during the determination period
prior to the period of participation in the component of the
Plan for which the definition is being used.
6. [ ] excluding overtime.
7. [ ] excluding bonuses.
8. [ ] excluding commissions.
9. [X] other: severance payments.
NOTE: If 6., 7., 8. or 9. is elected the definition of Compensation
could violate the nondiscrimination rules.
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32. FOR PURPOSES OF 414(s) COMPENSATION (Plan Section 1.29), compensation:
a. With respect to any Participant means:
1. [X] Wages, tips and other compensation on Form W-2.
2. [ ] Section 3401(a) wages (wages for withholding purposes).
3. [ ] 415 safe-harbor compensation.
b. And, compensation shall be adjusted by: (select all that apply)
1. [ ] N/A. No adjustments.
2. [X] including compensation which is not currently includible in
the Participant's gross income by reason of the application
of Code Sections 125 (cafeteria plan), 402(e)(3) (401(k)
plan), 402(h)(1)(B) (simplified employee pension plan),
414(h) (employer pickup contributions under a governmental
plan), 403(b) (tax sheltered annuity) or 457(b) (eligible
deferred compensation plan).
3. [ ] including elective amounts that are not includable in the
gross income of the employee by reason of Code Section
132(f)(4) for Plan Years beginning on and after ______ (may
not be earlier than the first day of the first Plan Year
beginning on or after January 1, 1998).
4. [X] excluding reimbursements or other expense allowances, fringe
benefits (cash or non-cash), moving expenses, deferred
compensation (other than deferrals specified in 2. above) to
a qualified plan and welfare benefits.
5. [X] excluding Compensation paid during the determination period
prior to the period of participation in the component of the
Plan for which the definition is being used.
6. [X] other: severance payments.
NOTE: If this is a GUST restatement, it may be necessary to complete
section 65. Also, if 6. is elected, the definition of
Compensation could violate the nondiscrimination rules.
33. COMPENSATION, for all purposes of the plan, shall be based on the
following determination period:
1. [X] the Plan Year.
2. [ ] the Fiscal Year coinciding with or ending within the Plan
Year.
3. [ ] the calendar year coinciding with or ending within the Plan
Year.
NOTE: The Limitation Year for Code Section 415 purposes shall be the
same as the determination period for Compensation unless an
alternative period is specified:________
CONTRIBUTIONS AND ALLOCATIONS
34. SALARY REDUCTION ARRANGEMENT - ELECTIVE DEFERRALS (Plan Section 12.2)
a. Each Participant may elect to have Compensation reduced by:
1. [ ] ______________%.
2. [ ] up to ____________%.
3. [X] from 1 % to 20 %.
4. [ ] up to the maximum percentage allowable not to exceed the
limits of Code Sections 401(k), 402(g), 404 and 415.
b. Highly Compensated Employees may only elect to reduce Compensation
by:
1. [X] N/A. Same limits as specified above.
2. [ ] up to _______________% (should not be greater than the limits
specified above).
3. [ ] the percentage equal to the deferral limit in effect under
Code Section 402(g)(3) for the calendar year that begins with
or within the Plan Year divided by the annual compensation
limit in effect for the Plan Year under Code Section 401(a)
(17).
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c. May a special salary reduction election with respect to bonuses be
made.
1. [ ] Yes, any Participant may elect to defer up to the entire
amount of any bonus.
2. [ ] Yes, any Participant may elect to defer up to _______________
% of any bonus.
3. [ ] Yes, any Non-Highly Compensated Employee may elect to defer
up to the entire amount of any bonus.
4. [ ] Yes, any Non-Highly Compensated Employee may elect to defer
up to ________________% of a bonus.
5. [X] No.
d. Participants may commence salary deferrals on the effective date of
participation and on any payroll period thereafter. Participants
may modify salary deferral elections:
1. [X] As of each payroll period.
2. [ ] On the first day of the month.
3. [ ] On the first day of each Plan Year quarter.
4. [ ] On the first day of the Plan Year or the first day of the 7th
month of the Plan Year.
5. [ ] Other: ____________________________(specify a date or dates).
e. Automatic Election: Shall Participants who do not affirmatively
elect to receive cash, to have Compensation deferred to the Plan,
or, for those participants eligible on ________, to have at least
the amount specified in 1. below contributed to the Plan
automatically have Compensation reduced?
1. [ ] Yes, by _________% of Compensation for Participants.
2. [X] No.
NOTE: If 1. is selected, certain notices must be provided to
employees.
f. Shall there be a special effective date for the salary deferral
component of the Plan?
1. [X] No.
2. [ ] Yes, the effective date of the salary deferral component of
the Plan is _________________(enter month, day and year).
35. 401(K) SAFE HARBOR PROVISIONS (Plan Section 12.8)
Will the ADP and/or ACP test safe harbor provisions be used? (select
a., b. or c.)
a. [ ] No. (If selected, skip to Question 36.)
b. [ ] Yes, but only the ADP (and NOT the ACP) Test Safe Harbor
provisions will be used.
c. [X] Yes, both the ADP and ACP Test Safe Harbor provisions will be
used.
IF c. is selected, does the Plan permit matching contributions in
addition to any safe harbor contributions elected in d. or e. below?
1. [X] No or N/A. Any matching contributions, other than any
Safe Harbor Matching Contributions elected in d. below,
will be suspended in any Plan Year in which the safe
harbor provisions are used.
2. [ ] Yes, the Employer may make matching contributions in
addition to any Safe Harbor Matching contributions
elected in d. below. (If elected, complete the provisions
of the Adoption Agreement relating to matching
contributions that will apply in addition to any
elections made in d. below.)
NOTE: Regardless of any election made, the Plan automatically provides
that only Elective Deferrals up to 6% of Compensation are taken
into account in applying the match set forth in that Question and
that the maximum discretionary matching contribution that may be
made on behalf of any Participant is 4% of Compensation.
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THE EMPLOYER WILL MAKE THE FOLLOWING ADP TEST SAFE HARBOR CONTRIBUTION
FOR THE PLAN YEAR:
NOTE: The ACP Test Safe Harbor is automatically satisfied if the only
matching contribution made to the Plan is either (1) a Basic
Matching Contribution or (2) an Enhanced Matching Contribution
that does not provide a match on Elective Deferrals in excess of
6% of Compensation.
d. [X] Safe Harbor Matching Contribution (select 1. or 2. AND 3.)
1. [X] BASIC MATCHING CONTRIBUTION. The Employer will make
Matching Contributions to the account of each "Eligible
Participant" in an amount equal to the sum of 100% of the
amount of the Participant's Elective Deferrals that do
not exceed 3% of the Participant's Compensation, plus 50%
of the amount of the Participant's Elective Deferrals
that exceed 3% of the Participant's Compensation but do
not exceed 5% of the Participant's Compensation.
2. [ ] ENHANCED MATCHING CONTRIBUTION. The Employer will make
Matching Contributions to the account of each "Eligible
Participant" in an amount equal to the sum of:
a. [ ] _________% (may not be less than 100%) of the
Participant's Elective Deferrals that do not
exceed __________% (if over 6% or if left blank,
the ACP test will still apply) of the
Participant's Compensation, plus
b. [ ] _____________% of the Participant's Elective
Deferrals that exceed _______________% of the
Participant's Compensation but do not exceed _____
% (if over 6% or if left blank the ACP test will
still apply) of the Participant's Compensation.
NOTE: a. and b. must be completed so that, at any rate of
Elective Deferrals, the matching contribution is at least
equal to the matching contribution receivable if the
Employer were making Basic Matching Contributions, but the
rate of match cannot increase as deferrals increase. For
example, if a. is completed to provide a match equal to
100% of deferrals up to 4% of Compensation, then b. need
not be completed.
3. [X] The safe harbor matching contribution will be made on the
following basis (and Compensation for such purpose will
be based on the applicable period):
a. [X] the entire Plan Year.
b. [ ] each payroll period.
c. [ ] all payroll periods ending with or within each
month.
d. [ ] all payroll periods ending with or within the Plan
Year quarter.
e. [ ] Nonelective Safe Harbor Contributions (select one)
1. [ ] The Employer will make a Safe Harbor Nonelective
Contribution to the account of each "Eligible
Participant" in an amount equal to _________% (may not be
less than 3%) of the Employee's Compensation for the Plan
Year.
2. [ ] The Employer will make a Safe Harbor Nonelective
Contribution to another defined contribution plan
maintained by the Employer (specify the name of the other
plan):__________.
FOR PURPOSES OF THE ADP Test Safe Harbor contribution, the term
"Eligible Participant" means any Participant who is eligible to make
Elective Deferrals with the following exclusions:
f. [ ] Highly Compensated Employees.
g. [X] Employees who have not satisfied the greatest minimum age and
service conditions permitted under Code Section 410(a).
h. [ ] Other: _________________________________________________________
(must be a category that could be excluded under the permissive
or mandatory disaggregation rules of Regulations 1.401(k)-1(b)
(3) and 1.401(m)-1(b)(31)).
SPECIAL EFFECTIVE DATE OF ADP AND ACP TEST SAFE HARBOR PROVISIONS
i. [X] N/A. The safe harbor provisions are effective as of the later of
the Effective Date of this Plan or, if this is an amendment or
restatement, the effective date of the amendment or restatement.
j. [ ] The ADP and ACP Test Safe Harbor provisions are effective for
the Plan Year beginning:________ (enter the first day of the
Plan Year for which the provisions are (or, for GUST updates,
were) effective and, if necessary, enter any other special
effective dates that apply with respect to the provisions).
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36. FORMULA FOR DETERMINING EMPLOYER MATCHING CONTRIBUTIONS (Plan Section
12.1(a)(2))
NOTE: Regardless of any election below, if the ACP test safe harbor is
being used then the Plan automatically provides that only
Elective Deferrals up to 6% of Compensation are taken into
account in applying the match set forth below and that the
maximum discretionary matching contribution that may be made on
behalf of any Participant is 4% of Compensation.
a. [X] N/A. There will not be any matching contributions (Skip to
Question 37).
b. [ ] The Employer will make matching contributions equal to _________
% of the Participant's Elective Deferrals, plus:
1. [ ] N/A.
2. [ ] an additional discretionary percentage, to be determined
by the Employer.
c. [ ] The Employer may make matching contributions equal to a
discretionary percentage of the Participant's Elective
Deferrals, to be determined by the Employer.
AND, in determining the matching contributions in b. and c.
above, only Elective Deferrals up to the percentage or dollar
amount specified below will be matched:
(select 1. and/or 2. OR 3.)
1. [ ] __________________% of a Participant's Compensation.
2. [ ] $ ________________.
3. [ ] a discretionary percentage of a Participant's
Compensation or a discretionary dollar amount, the
percentage or dollar amount to be determined by the
Employer on a uniform basis to all Participants.
d. [ ] The Employer may make matching contributions equal to a
discretionary percentage, to be determined by the Employer, of
each tier, to be determined by the Employer, of the
Participant's Elective Deferrals.
e. [ ] The Employer will make matching contributions equal to the sum
of _______% of the portion of the Participant's Elective
Deferrals which do not exceed ________% of the Participant's
Compensation or $_______ plus ________% of the portion of the
Participant's Elective Deferrals which exceed ________% of the
Participant's Compensation or $_______, but does not exceed
_______% of the Participant's Compensation or $_______.
f. [ ] The Employer will make matching contributions equal to the
percentage of Elective Deferrals determined under the following
schedule based on a Participant's Years of Service for Vesting
purposes (or Periods of Service if the Elapsed Time Method is
selected):
Participant's Total Service Matching Percentage
1. ____________________________ __________________________
2. ____________________________ __________________________
3. ____________________________ __________________________
4. ____________________________ __________________________
5. ____________________________ __________________________
g. [ ] Other Formula: _________________________________________________
NOTE: If d., e., f. or g. above is elected, the Plan may violate the
Code Section 401(a)(4) nondiscrimination requirements if the rate
of matching contributions increases as a Participant's Elective
Deferrals or Years of Service (or Periods of Service) increase.
If g. is elected, matching contributions can only be made with
respect to a Participant's Elective Deferrals.
(C) Copyright 2002 MFS Retirement Services, Inc. April, 2002
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PERIOD OF DETERMINING MATCHING CONTRIBUTIONS
Matching contributions will be made on the following basis (and any
Compensation or dollar limitation used in determining the match will be
based on the applicable period):
h. [ ] the entire Plan Year.
i. [ ] each payroll period.
j. [ ] all payroll periods ending within each month.
k. [ ] all payroll periods ending with or within the Plan Year quarter.
l. [ ] Other: _________________________________________________________
THE MATCHING CONTRIBUTION MADE ON BEHALF OF ANY PARTICIPANT for any
plan year will not exceed:
m. [ ] N/A.
n. [ ] $ __________________.
MATCHING CONTRIBUTIONS WILL BE MADE ON BEHALF OF:
o. [ ] all Participants.
p. [ ] only Non-Highly Compensated Employees.
37. FORMULA FOR DETERMINING QUALIFIED MATCHING CONTRIBUTIONS (Plan Section
12.1(a)(2))
NOTE: Regardless of any election below, if the ACP test safe harbor is
being used then the Plan automatically provides that only
Elective Deferrals up to 6% of Compensation are taken into
account in applying the match set forth below and that the
maximum discretionary matching contribution that may be made on
behalf of any Participant is 4% of Compensation.
a. [X] N/A. There will not be any qualified matching contributions
except for ADP/ACP Test Safe Harbor contributions or as provided
in Section 12.5(c) and 12.7(g). (Skip to Question 38).
b. [ ] The Employer will make qualified matching contributions equal to
___________________% of the Participant's Elective Deferrals,
plus:
1. [ ] N/A.
2. [ ] an additional discretionary percentage, to be determined
by the Employer.
c. [ ] The Employer may make qualified matching contributions equal to
a discretionary percentage of the Participant's Elective
Deferrals, to be determined by the Employer.
AND, in determining the qualified matching contribution in b.
and c. above, only Elective Deferrals up to the percentage or
dollar amount specified below will be matched:
(select 1. and/or 2. OR 3.)
1. [ ] _______________________% of a Participant's Compensation.
2. [ ] $ _____________________.
3. [ ] a discretionary percentage of a Participant's
Compensation or a discretionary dollar amount, the
percentage or dollar amount to be determined by the
Employer on a uniform basis to all Participants.
d. [ ] The Employer may make qualified matching contributions equal to
a discretionary percentage, to be determined by the Employer, of
each tier, to be determined by the Employer, of the
Participant's Elective Deferrals.
e. [ ] The Employer will make qualified matching contributions equal to
the sum __________of % of the portion of the Participant's
Elective Deferrals which do not exceed _______________% of the
Participant's Compensation or $ ____________plus ___________% of
the portion of the Participant's Elective Deferrals which exceed
________________________% of the Participant's Compensation or $
________________________, but does not exceed ________________%
of the Participant's Compensation or $ ________________.
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PERIOD OF DETERMINING QUALIFIED MATCHING CONTRIBUTIONS
Qualified Matching contributions will be made on the following basis
(and any Compensation or dollar limitation used in determining the
match will be based on the applicable period):
f. [ ]the entire Plan Year.
g. [ ]each payroll period.
h. [ ]all payroll periods ending within each month.
i. [ ]all payroll periods ending with or within the Plan Year quarter.
j. [ ]Other: _________________________________________________________.
THE QUALIFIED MATCHING CONTRIBUTION MADE ON BEHALF OF ANY PARTICIPANT
for any plan year will not exceed:
k. [ ] N/A.
l. [ ] $ _____________.
QUALIFIED MATCHING CONTRIBUTIONS WILL BE MADE ON BEHALF OF:
m. [ ] all Participants.
n. [ ] only Non-Highly Compensated Employees.
38. MAY EMPLOYER MATCHING OR QUALIFIED MATCHING CONTRIBUTIONS BE MADE IN
EMPLOYER STOCK?
a. [ ] Yes.
b. [ ] No.
39. ONLY PARTICIPANTS WHO SATISFY THE FOLLOWING CONDITIONS WILL BE ELIGIBLE
TO SHARE IN THE ALLOCATION OF MATCHING CONTRIBUTIONS OR QUALIFIED
MATCHING CONTRIBUTIONS (other than Qualified Matching Contributions
under Plan Sections 12.5(c) and 12.7(g)):
a. Requirements for Participants who are actively employed at the end
of the Plan Year.
1. [ ] No additional conditions.
2. [ ] A Participant must complete more than ____________Hours of
Service (not more than 1000) or__________________months of
service (not more than twelve (12)) if the Elapsed Time
Method is elected).
3. [ ] A Participant must complete a Year of Service (or Period of
Service if the Elapsed Time Method is elected). (Could cause
Plan to violate coverage requirements under Code Section
410.)
b. Requirements for Participants who are not actively employed at the
end of the Plan Year (except as otherwise provided in c(1) through
c(3) below).
1. [ ] No additional conditions.
2. [ ] A Participant must complete more than __________Hours of
Service (not more than 1000) or, if the Elapsed Time Method
is elected, ___________ months of service (not more than
twelve (12)).
3. [ ] A Participant must complete a Year of Service (or Period of
Service if the Elapsed Time Method is elected).
4. [ ] Participants will not share in such allocations, regardless
of service.
NOTE: If 2., 3. or 4. is elected, the Plan may violate the coverage
rules of Code Section 410(b).
c. Participants who are not actively employed at the end of the Plan
Year due to the following shall be eligible to share in the
allocation of matching contributions regardless of the above
conditions (select all that apply):
1. [ ] Death.
2. [ ] Total and Permanent Disability.
3. [ ] Early or Normal Retirement.
(C) Copyright 2002 MFS Retirement Services, Inc. April, 2002
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40. EMPLOYER PROFIT SHARING CONTRIBUTIONS (Plan Section 12.1(a)(3)).
a. Will a fixed Employer Profit Sharing Contribution be provided under
the Plan?
1. [X] No.
2. [ ] Yes, the Employer shall make a profit sharing contribution
each Plan Year in an amount equal to ____% of each eligible
Participant's Compensation.
3. [ ] Yes, the Employer shall make a profit sharing contribution
each Plan Year in an amount equal to $______ for each
eligible Participant.
4. [ ] Prevailing Wage Contribution. The Employer will make a
Prevailing Wage Contribution on behalf of each Participant
who performs services subject to the Service Contract Act,
Davis-Bacon Act or similar Federal, State, or Municipal
Prevailing Wage statutes. The Prevailing Wage Contribution
shall be an amount equal to the balance of the fringe
benefit payment for health and welfare for each
Participant (after deducting the cost of cash differential
payments for the Participant) based on the hourly
contribution rate for the Participant's employment
classification, as designated on Schedule A as attached to
this Adoption Agreement. Schedule A is incorporated herein
by reference. Notwithstanding anything in the Plan to the
contrary, the Prevailing Wage Contribution shall be fully
Vested. Furthermore, the Prevailing Wage Contribution
shall not be subject to any age or service requirements
set forth in Question 16. nor to any service or employment
conditions set forth in Question 43.
If selected, is the Prevailing Wage Contribution considered
a Qualified Non-Elective Contribution?
1. [ ] Yes.
2. [ ] No.
5. [ ] Yes, the following Integrated Allocation with Fixed
Contribution:
1. [ ] Subject to the overall permitted disparity limits,
the Employer will contribute an amount equal to
______% (base percentage) of each Participant's
TOTAL Compensation
2. [ ] plus ______% (excess contribution percentage (see
Note below)) of such Compensation in excess of:
a. [ ] The Taxable Wage Base
b. [ ] ____% (not to exceed 100%) of the Taxable
Wage Base (See Note below)
c. [ ] $___(not greater than the Taxable Wage Base)
(See Note below).
NOTE: The excess contribution percentage specified in 2. above may not
exceed the lesser of the FOLLOWING limits and shall be adjusted
each year as appropriate. However, in the case of any
Participant who has exceeded the cumulative permitted disparity
limit, the Employer will contribute an amount equal to the base
plus excess contribution percentages, multiplied by the
Participant's total Compensation.
1. The base percentage specified in 1. above.
2. 5.7%.
3. 4.3% if b. or c. above is more than 20% and less than or equal
to 80% of the Taxable Wage Base.
4. 5.4% if b. or d. above is more than 80% of the Taxable Wage
Base.
b. Will a discretionary Employer Profit Sharing Contribution be
provided under the Plan?
1. [ ] No.
2. [ ] Yes, the Employer may make a discretionary profit sharing
contribution out of its current or accumulated Net Profit.
3. [X] Yes, the Employer may make a discretionary profit sharing
contribution which is not limited to its current or
accumulated Net Profit.
(C) Copyright 2002 MFS Retirement Services, Inc. April, 2002
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c. The Employer's discretionary profit sharing contribution for a Plan
Year will be allocated as follows:
1. [X] NON-INTEGRATED ALLOCATION
a. [X] In the same ratio as each Participant's Compensation
bears to the total of such Compensation of all
Participants.
b. [ ] In the same dollar amount to all Participants (per
capita).
c. [ ] In the same dollar amount per Hour of Service
completed by each Participant.
d. [ ] In the same proportion that each Participant's points
bears to the total of such points of all
Participants. A Participant's points with respect to
any Plan Year shall be computed as follows (select
all that apply):
1. [ ] ______point(s) shall be allocated for each
Year of Service (or Period of Service if the
Elapsed Time Method is elected). However, the
maximum Years of Service (or Periods of
Service taken into account shall not exceed
_____ (leave blank if no limit on service
applies)).
2. [ ] _____point(s) shall be allocated for each
full $_______ (may not exceed $200) of
Compensation.
3. [ ] _____point(s) shall be allocated for each year
of attained age as of the end of the Plan
Year.
2. [ ] INTEGRATED ALLOCATION
In accordance with Plan Section 4.3(b)(2) based on a
Participant's Compensation in excess of:
a. [ ] The Taxable Wage Base.
b. [ ] _____% (not to exceed 100%) of the Taxable Wage Base.
(See Note below)
c. [ ] 80% of the Taxable Wage Base plus $1.00.
d. [ ] $____ (not greater than the Taxable Wage Base).
(See Note below)
NOTE: The integration percentage of 5.7% shall be reduced to:
1. 4.3% if b. or d. above is more than 20% and less than or equal
to 80% of the Taxable Wage Base.
2. 5.4% if b. or d. above is more than 80% of the Taxable Wage
Base.
41. QUALIFIED NON-ELECTIVE CONTRIBUTIONS (Plan Section 12.1(a)(4))
a. Will a Qualified Non-Elective Contribution be provided under the
Plan?
1. [X] N/A. There will be no Qualified Non-Elective Contributions
except for ADP/ACP Test Safe Harbor contributions or as
provided in Section 12.5(c) and 12.7(g).
2. [ ] The Employer will make a Qualified Non-Elective Contribution
equal to _________ % of the total Compensation of those
Participants eligible to share in the allocations.
3. [ ] The Employer may make a Qualified Non-Elective
Contribution in an amount to be determined by the Employer,
to be allocated in proportion to the Compensation of those
eligible to share in the allocations.
4. [ ] The Employer may make a Qualified Non-Elective Contribution
in the same dollar amount, to be determined by the Employer,
to all Participants eligible to share in the allocations
(per capita).
b. And, Qualified Non-Elective Contributions will be made on behalf of:
1. [ ] all Participants.
2. [ ] only Non-Highly Compensated Employees.
42. MAY EMPLOYER PROFIT SHARING OR QUALIFIED NON-ELECTIVE CONTRIBUTIONS BE
MADE IN EMPLOYER STOCK?
a. [ ] Yes
b. [X] No
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43. ONLY PARTICIPANTS WHO SATISFY THE FOLLOWING CONDITIONS WILL BE ELIGIBLE
TO SHARE IN THE ALLOCATION OF EMPLOYER PROFIT SHARING CONTRIBUTIONS,
QUALIFIED NON-ELECTIVE CONTRIBUTIONS (other than Qualified Non-Elective
Contributions under Plan Sections 12.5(c) and 12.7(g)) AND FORFEITURES.
a. Requirements for Participants who are actively employed at the end
of the Plan Year.
1. [X] No additional conditions
2. [ ] A Participant must complete more than ___ Hours of Service
(not more than 1000) or ____ months of service (not more
than twelve (12)) if the Elapsed Time Method is elected.
3. [ ] A Participant must complete a Year of Service (or Period of
Service if the Elapsed Time Method is elected). (Could cause
Plan to violate coverage requirements under Code Section
410.)
b. Requirements for Participants who are not actively employed at the
end of the Plan Year (except as otherwise provided in c(1) through
c(3) below).
1. [ ] No additional conditions
2. [ ] A Participant must complete more than ____ Hours of Service
(not more than 1000) or _____ months of service (not more
than twelve (12)) if the Elapsed Time Method is elected.
3. [ ] A Participant must complete a Year of Service (or Period of
Service if the Elapsed Time Method is elected).
4. [X] Participants will not share in such allocations, regardless
of service.
NOTE: If 2., 3. or 4. is elected, the Plan may violate the coverage
rules of Code Section 410(b).
c. Participants who are not actively employed at the end of the Plan
Year due to the following will be eligible to share in the
allocations regardless of the above conditions (select all that
apply):
1. [X] Death.
2. [X] Total and Permanent Disability.
3. [X] Early or Normal Retirement.
44. FORFEITURES (Plan Sections 1.27 and 4.3(e))
a. Except as provided in Plan Section 1.27, a Forfeiture will occur as
of the earlier of :
1. the last day of the Plan Year in which the Former Participant
incurs five (5) consecutive 1-Year Breaks in Service, or
2. the distribution of the entire Vested portion of the
Participant's Account.
b. Except as otherwise provided in c. below with respect to
Forfeitures attributable to matching contributions, Forfeitures
will be...
1. [ ] added to any Employer profit sharing contribution.
2. [X] used to reduce any Employer contribution.
3. [ ] added to any Employer matching contribution and allocated as
an additional matching contribution.
4. [ ] allocated to all Participants eligible to share in the
profit sharing allocations in the same proportion that each
Participant's Compensation for the Plan Year bears to the
Compensation of all Participants for such year.
5. [ ] allocated to all Non-Highly Compensated Employees eligible
to share in the profit sharing allocations (regardless of
whether a Participant elected any salary reductions) in
proportion to each such Participant's Compensation for the
year.
6. [ ] other:______________________________________________________
c. Forfeitures of matching contributions will be...
1. [ ] N/A. Same as above or no matching contributions.
2. [X] used to reduce the Employer's matching contribution.
3. [ ] added to any Employer matching contribution and allocated as
an additional matching contribution.
4. [ ] added to any Employer profit sharing contribution.
5. [ ] allocated to all Participants eligible to share in the
matching allocations (regardless of whether a Participant
elected any salary reductions) in proportion to each such
Participant's Compensation for the year.
6. [ ] allocated to all Non-Highly Compensated Employees eligible
to share in the matching allocations (regardless of whether
a Participant elected any salary reductions) in proportion
to each such Participant's Compensation for the year.
7. [ ] other:______________________________________________________
NOTE: Plan Section 4.3(e) automatically provides that Forfeitures may
be used to pay administrative expenses.
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45. ALLOCATIONS OF EARNINGS (Plan Section 4.3(c))
Allocations of earnings with respect to amounts which are not subject
to Participant directed investments and which are contributed to the
Plan after the previous Valuation Date will be determined...
a. [X] N/A, all assets in the Plan are subject to Participant directed
investments.
b. [ ] by using the actual investment experience of individual
accounts.
c. [ ] other: ________________________________________________
46. LIMITATIONS ON ALLOCATIONS (Plan Section 4.4)
a. If any Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a Master or
Prototype Plan, or if the Employer maintains a welfare benefit fund,
as defined in Code Section 419(e), or an individual medical account,
as defined in Code Section 415(l)(2), under which amounts are
treated as Annual Additions with respect to any Participant in this
Plan:
1. [X] N/A. The Employer does not maintain another qualified defined
contribution plan.
2. [ ] The provisions of Section 4.4(b) of the Plan will apply as if
the other plan were a master or prototype plan.
3. [ ] Specify 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:
_____________________________________________________________
b. If any Participant is a Participant in a qualified defined benefit
plan maintained by the Employer:
1. [X] N/A. The Employer does not maintain, and has never
maintained, a qualified defined benefit plan OR the
provisions of Code Section 415(e) no longer apply to the
Plan.
2. [ ] N/A. The provisions of Code Section 415(e) no longer apply to
this Plan effective with respect to Limitation Years
beginning after December 31, 1999, or if later _____ (if a
later date is entered, this Plan will not be considered a
safe harbor plan under Code Section 401(a)(4) and the
Regulations thereunder).
3. [ ] In any Limitation Year, the Annual Additions credited to the
Participant under this Plan may not cause the sum of the
Defined Benefit Plan Fraction and the Defined Contribution
Fraction to exceed 1.0. If the Employer's contribution that
would otherwise be made on the Participant's behalf during
the Limitation Year would cause the 1.0 limitation to be
exceeded, the rate of contribution under this Plan will be
reduced so that the sum of the fractions equals 1.0. If the
1.0 limitation is exceeded because of an Excess Amount, such
Excess Amount will be reduced in accordance with Section 4.5
of the Plan.
4. [ ] Specify and attach to the Adoption Agreement the method under
which the plans involved will satisfy the 1.0 limitation in a
manner that precludes Employer discretion.
DISTRIBUTIONS
47. FORM OF DISTRIBUTIONS (Plan Sections 6.5 and 6.6)
a. Distributions under the Plan may be made in (select all that
apply)...
1. [X] lump sums.
2. [X] substantially equal installments.
3. [ ] partial withdrawals provided the minimum withdrawal is $____.
b. And, pursuant to Plan Section 6.12,
1. [ ] no annuities are allowed (Plan Section 6.12(b) will apply and
the joint and survivor rules of Code Sections 401(a)(11) and
417 will not apply to the Plan).
2. [X] annuities are allowed as the normal form of distribution
(Plan Section 6.12 will not apply and the joint and survivor
rules of Code Sections 401(a)(11) and 417 will automatically
apply). If elected, the Pre-Retirement Survivor Annuity
(minimum spouse's death benefit) will be equal to:
a. [X] 100% of Participant's interest in the Plan.
b. [ ] 50% of Participant's interest in the Plan.
c. [ ] ___% (may not be less than 50%) of a Participant's
interest in the Plan.
3. [ ] annuities are allowed but are not the normal form of
distribution (Plan Section 6.12(c) will apply and the joint
and survivor rules of Code Sections 401(a)(11) and 417 will
only apply if an annuity form of distribution is elected by a
Participant). If elected, the optional forms of annuities
allowed are:
a. [ ] Life annuity
b. [ ] Other:________________________________________________
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AND if 2. or 3. is elected, the normal form of the Qualified Joint and
Survivor Annuity will be a joint and 50% survivor annuity unless
otherwise elected below:
1. [X] N/A.
2. [ ] Joint and 100% survivor annuity.
3. [ ] Joint and 75% survivor annuity.
4. [ ] Joint and 66 2/3% survivor annuity.
NOTE: If this is an amendment to a plan which permitted annuities as
a form of distribution with respect to any portion of the Plan's
assets (or if this Plan has accepted a plan-to-plan transfer
(other than a direct rollover) of assets from a plan which
permitted annuities as a form of distribution) and the joint and
survivor annuity rules only apply to a Participant's interest in
the Plan attributable to such amounts, then select b(1). AND
b(2). or b(3). (whichever is applicable to such amounts) and
attach an addendum to this Adoption Agreement specifying the
assets subject to the joint and survivor annuity provisions.
c. And, distributions may be made in...
1. [ ] cash only (except for insurance or annuity contracts).
2. [X] cash or property.
48. CONDITIONS FOR DISTRIBUTIONS UPON TERMINATION OF EMPLOYMENT
Distributions upon termination of employment pursuant to Plan Section
6.4(a) of the Plan will not be made unless the following conditions
have been satisfied:
a. [ ] No distributions may be made until a Participant has reached
Early or Normal Retirement Date.
b. [X] Distributions may be made as soon as administratively feasible
at the Participant's election.
c. [ ] The Participant has incurred____________ 1-Year Break(s) in
Service (or Period(s) of Severance if the Elapsed Time Method is
elected).
d. [ ] Distributions may be made at the Participant's election as
soon as administratively feasible after the Plan Year
coincident with or next following termination of employment.
e. [ ] Distributions may be made at the Participant's election as
soon as administratively feasible after the Plan Year quarter
coincident with or next following termination of employment.
f. [ ] Distributions may be made at the Participant's election as
soon as administratively feasible after the Valuation Date
coincident with or next following termination of employment.
g. [ ] Distributions may be made at the Participant's election as soon
as administratively feasible after _________ months following
termination of employment.
h. [ ] Other _________ (must be objective conditions which are
ascertainable and are not subject to Employer discretion except
as otherwise permitted in Regulation 1.411(d)-4).
49. INVOLUNTARY DISTRIBUTIONS
Can involuntary distributions of amounts less than $5,000 be made in
accordance with the provisions of Sections 6.4, 6.5 and 6.6?
a. [ ] No.
b. [X] Yes.
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50. MINIMUM DISTRIBUTION TRANSITIONAL RULES (Plan Section 6.5(e))
NOTE: This Section does not apply to (1) a new Plan or (2) an
amendment or restatement of an existing Plan that never
contained the provisions of Code Section 401(a)(9) as in effect
prior to the amendments made by the Small Business Job
Protection Act of 1996 (SBJPA).
The "required beginning date" for a Participant who is not a "five
percent (5%) owner" is:
a. [ ] N/A. (This is a new Plan or this Plan has never included the
pre-SBJPA provisions.)
b. [ ] April 1st of the calendar year following the year in which the
Participant attains age 70 1/2. (The pre-SBJPA rules will
continue to apply.)
c. [X] April 1st of the calendar year following the later of the year
in which the Participant attains age 70 1/2 or retires (the
post-SBJPA rules), with the following exceptions (select one or
both and if no election is made, both will apply effective as of
January 1, 1996):
1. [X] A Participant who was already receiving required minimum
distributions under the pre-SBJPA rules as of January 1,
1996 (not earlier than January 1, 1996) may elect to stop
receiving distributions and have them recommence in
accordance with the post-SBJPA rules. Upon the
recommencement of distributions, if the Plan permits
annuities as a form of distribution then the following
will apply:
a. [X] N/A. Annuity distributions are not permitted.
b. [ ] Upon the recommencement of distributions, the
original Annuity Starting Date will be retained.
c. [ ] Upon the recommencement of distributions, a new
Annuity Starting Date is created.
2. [X] A Participant who had not begun receiving required
minimum distributions as of January 1, 1996 (not earlier
than January 1, 1996) may elect to defer commencement of
distributions until retirement. The option to defer the
commencement of distributions (i.e., to elect to receive
in-service distributions upon attainment of age 70 1/2)
will apply to all such Participants unless the option
below is elected:
a. [ ] N/A.
b. [X] This in-service distribution option will be
eliminated with respect to Participants who attain
age 70 1/2 in or after the calendar year that
begins after the later of (1) December 31, 1998,
or (2) the adoption date of the amendment and
restatement to bring the Plan into compliance with
SBJPA. (This option may only be elected if the
amendment to eliminate the in-service distribution
is adopted no later than the last day of the
remedial amendment period that applies to the Plan
for changes under SBJPA.)
51. LIFE EXPECTANCIES (Plan Section 6.5(f)) for minimum distributions
required pursuant to Code Section 401(a)(9) shall...
a. [ ] be recalculated at the Participant's election.
b. [ ] be recalculated.
c. [ ] not be recalculated.
d. [X] N/A.
52. DISTRIBUTIONS UPON DEATH (Plan Section 6.6(h))
Distributions upon the death of a Participant prior to receiving any
benefits shall...
a. [X] be made pursuant to the election of the Participant or
beneficiary.
b. [ ] begin within 1 year of death for a designated beneficiary and be
payable over the life (or over a period not exceeding the life
expectancy) of such beneficiary, except that if the beneficiary
is the Participant's spouse, begin prior to December 31st of the
year in which the Participant would have attained age 70 1/2.
c. [ ] be made within 5 years of death for all beneficiaries.
d. [ ] Other:__________________________________________________________
(must comply with 401(a)(9)).
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53. HARDSHIP DISTRIBUTIONS (Plan Sections 6.11 and/or 12.9)
a. Will hardship distributions be permitted?
1. [ ] No hardship distributions are permitted.
2. [X] Hardship distributions are permitted from the following
accounts (select all that apply):
a. [ ] all accounts (except as otherwise provided below).
b. [X] Participant's Elective Deferral Account.
c. [ ] Participant's Matching Contribution Account.
d. [ ] Participant's Profit Sharing Account.
e. [X] Participant's Rollover Account.
f. [ ] Participant's Transfer Account.
g. [ ] Participant's Voluntary Contribution Account.
h. [ ] Other:________________________________________________
NOTE: Distributions from a Participant's Elective Deferral Account are
limited to the portion of such account attributable to such
Participant's Elective Deferrals (and earnings attributable
thereto up to December 31, 1988). Hardship distributions are not
permitted from a Participant's Qualified Non-Elective Account,
Qualified Matching Contribution Account or Safe Harbor
Contribution Account.
b. Shall the safe harbor hardship rules of Section 12.9 apply to
distributions made from all accounts other than a Participant's
Elective Deferral Account?
1. [X] No or N/A. The provisions of Section 6.11 apply to
distributions from all accounts other than a Participant's
Elective Deferral Account.
2. [ ] Yes. The provisions of Section 12.9 apply to all
distributions.
c. Are distributions restricted to those accounts selected above in
which a Participant is fully Vested?
1. [X] Yes, distributions may only be made from accounts which are
fully Vested.
2. [ ] No. (If elected, the fraction at Plan Section 6.5(i) shall
apply in determining vesting of the portion of the account
balance not withdrawn).
d. The minimum hardship distribution shall be...
1. [X] N/A. There is no minimum.
2. [ ] $________(may not exceed $1,000).
54. IN-SERVICE DISTRIBUTIONS (Plan Section 6.10)
a. Will In-Service Distributions be permitted?
1. [ ] In-service distributions may not be made (except as otherwise
elected for Hardship Distributions).
2. [X] In-service distributions may be made to a Participant who has
not separated from service provided any one of the following
conditions have been satisfied (select all that apply):
a. [X] the Participant has attained age 59 1/2 .
b. [ ] the Participant has reached Normal Retirement Age.
c. [ ] the Participant has reached Early Retirement Age.
d. [ ] the Participant has been a Participant in the Plan for
at least_________ years (may not be less than five
(5)).
e. [ ] the amounts being distributed have accumulated in the
Plan for at least two (2) years.
b. In-Service Distributions are permitted from the following accounts
(select all that apply):
1. [X] all accounts (except as otherwise provided below).
2. [ ] Participant's Elective Deferral Account.
3. [ ] Participant's Matching Contribution Account.
4. [ ] Participant's Profit Sharing Account.
5. [ ] Participant's Safe Harbor Contribution Account.
6. [ ] Participant's Qualified Matching Contribution Account.
7. [ ] Participant's Qualified Non-Elective Contribution Account.
8. [ ] Participant's Rollover Account.
9. [ ] Participant's Transfer Account.
10. [ ] Participant's Voluntary Contribution Account.
11. [ ] Other: __________________________________________________
NOTE: Distributions from a Participant's Elective Deferral Account,
Qualified Matching Contribution Account, Qualified
Non-Elective Account and Safe Harbor Contribution Account are
subject to restrictions and generally may not be distributed
prior to age 59 1/2.
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c. Are distributions restricted to those accounts selected above in
which a Participant is fully Vested?
1. [ ] Yes, distributions may only be made from accounts which are
fully Vested.
2. [X] No. (If elected, the fraction at Section 6.5(i) will apply
in determining vesting of the portion of the account balance
not withdrawn.)
d. The minimum in-service distribution shall be...
1. [X] N/A. There is no minimum.
2. [ ] $______(may not exceed $1,000).
NONDISCRIMINATION TESTING
55. HIGHLY COMPENSATED EMPLOYEE (Plan Section 1.31)
a. Shall the Top Paid Group election apply when determining Highly
Compensated Employees? (The election made below for the latest year
shall continue to apply to subsequent Plan Years unless the Plan is
amended to a different election.)
1. [ ] Yes, for Plan Years beginning in:
a. [ ] 1997 b. [ ] 1998 c. [ ] 1999
d. [ ] 2000 e. [ ] 2001 f. [ ] _______
2. [X] No, for Plan Years beginning in:
a. [X] 1997 b. [X] 1998 c. [X] 1999
d. [X] 2000 e. [X] 2001 f. [ ] _______
b. Will the calendar year data election be used?
(For Plan Years beginning after 1997, the calendar year look-back
year data election may not be made if the Plan Year is a calendar
year. The election made below for the latest year shall continue to
apply to subsequent Plan Years unless the Plan is amended to a
different election.)
1. [ ] Yes, for Plan Years beginning in:
a. [ ] 1997 b. [ ] 1998 c. [ ] 1999
d. [ ] 2000 e. [ ] 2001 f. [ ] ______
2. [X] No, for Plan Years beginning in:
a. [X] 1997 b. [ ] 1998 c. [ ] 1999
d. [ ] 2000 e. [ ] 2001 f. [ ] ______
56. ADP AND ACP TESTS (Plan Sections 12.4 and 12.6). The actual deferral
ratio and actual contribution ratio for Non-Highly Compensated
Employees shall be based on the following. The election made below for
the latest year shall continue to apply to subsequent Plan Years unless
the Plan is amended to a different election.
a. [ ] N/A. This Plan is using the ADP and ACP Test Safe Harbor rules
for all years after the later of the Effective Date of the Plan
or, in the case of an amendment and restatement, the effective
date of the amendment and restatement.
b. [ ] PRIOR YEAR TESTING: The prior year ratio shall be used for the
Plan Year beginning in the year specified below. Furthermore, in
the case of the first year the 401(k) or 401(m) feature is added
to this Plan (unless this Plan is a successor plan), the amount
taken into account as the ADP and ACP of Non-Highly Compensated
Employees for the preceding Plan Year shall be 3%.
1. [ ] 1997 2. [ ] 1998 3. [ ] 1999
4. [ ] 2000 5. [ ] 2001 6. [ ] ________
c. [X] CURRENT YEAR TESTING: The current year ratio shall be used for
the Plan Year beginning in the year specified below:
1. [X] 1997 2. [X] 1998 3. [X] 1999
4. [X] 2000 5. [ ] 2001 6. [ ] _______
57. TRANSITIONAL RULE FOR PLAN YEARS BEGINNING PRIOR TO THE PLAN YEAR IN
WHICH THE PLAN IS AMENDED TO REFLECT THE PROVISIONS OF SBJPA.
Notwithstanding the above, if the method used to determine the ADP is
different than the method used to determine the ACP, then the method
selected in 56. above will apply for determining the ADP and the method
selected below will be used to determine the ACP ratio for Non-Highly
Compensated Employees for Plan Years beginning prior to the date the
Plan is amended to reflect the provisions of SBJPA.
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a. [X] N/A (Plan has already been amended for SBJPA or the ADP and ACP
ratios are determined using the same methods).
b. [ ] PRIOR YEAR TESTING: The prior year ratio shall be used for the
Plan Years beginning in the years specified below. Furthermore,
in the case of the first year the 401(m) feature is added to
this Plan (unless this Plan is a successor plan), the amount
taken into account as the ACP of Non-Highly Compensated
Employees for the preceding Plan Year shall be 3%.
1. [ ] 1997 2. [ ] 1998 3. [ ] 1999
4. [ ] 2000 5. [ ] 2001 6. [ ] _______
c. [ ] CURRENT YEAR TESTING: The current year ratio will be used for
the Plan Years beginning in the years specified below:
1. [ ] 1997 2. [ ] 1998 3. [ ] 1999
4. [ ] 2000 5. [ ] 2001 6. [ ] ______
TOP HEAVY REQUIREMENTS
58. TOP HEAVY DUPLICATIONS (Plan Section 4.3(i)): When a Non-Key Employee
is a Participant in this Plan and a Defined Benefit Plan maintained by
the Employer, indicate which method shall be utilized to avoid
duplication of top heavy minimum benefits (If b., c., d. or e. is
elected, f. must be completed)
a. [X] N/A. The Employer does not maintain a Defined Benefit Plan.
(Go to next Question)
b. [ ] The full top heavy minimum will be provided in each plan (if
selected, Plan Section 4.3(i) shall not apply).
c. [ ] 5% defined contribution minimum.
d. [ ] 2% defined benefit minimum.
e. [ ] Specify the method under which the Plans will provide top
heavy minimum benefits for Non-Key Employees that will preclude
Employer discretion and avoid inadvertent omissions:
________________________________________________________________
NOTE: If c., d., or e. is selected and the Defined Benefit Plan and
this Plan do not benefit the same Participants, the uniformity
requirement of the Section 401(a)(4) Regulations may be
violated.
AND, the "Present Value of Accrued Benefit" (Plan Section 9.2) for Top
Heavy purposes shall be based on...
f. [ ] Interest Rate:__________________________________________________
Mortality Table:________________________________________________
59. TOP HEAVY DUPLICATIONS (Plan Section 4.3(f)): Employer maintaining two
(2) or more Defined Contribution Plans.
a. [X] N/A. The Employer does not maintain another qualified defined
contribution plan.
b. [ ] A minimum, non-integrated contribution of 3% of each Non-Key
Employee's 415 Compensation shall be provided in the Money
Purchase Plan (or other plan subject to Code Section 412), where
the Employer maintains two (2) or more non-paired Defined
Contribution Plans.
c. [ ] Specify and attach to the Adoption Agreement the method under
which the Plans will provide top heavy minimum benefits for
Non-Key Employees that will preclude Employer discretion and
avoid inadvertent omissions, including any adjustments required
under Code Section 415(e).
MISCELLANEOUS
60. LOANS TO PARTICIPANTS (Plan Section 7.6)
a. Will Loans be permitted?
1. [X] Loans shall be permitted.
2. [ ] Loans shall not be permitted.
b. If loans are permitted (select all that apply)...
1. [ ] loans will only be made for hardship or financial necessity.
2. [X] the minimum loan will be $ 1000.00 (may not exceed $1,000).
3. [X] a Participant may only have one (1) (e.g., one (1)) loan(s)
outstanding at any time.
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c. Loans will only be permitted from the following accounts (select
all that apply):
1. [X] all accounts.
2. [ ] Participant's Elective Deferral Account.
3. [ ] Participant's Matching Contribution Account.
4. [ ] Participant's Profit Sharing Account.
5. [ ] Participant's Safe Harbor Contribution Account.
6. [ ] Participant's Qualified Matching Contributions Account.
7. [ ] Participant's Qualified Non-Elective Contribution Account.
8. [ ] Participant's Rollover Account.
9. [ ] Participant's Transfer Account.
10. [ ] Participant's Voluntary Contribution Account.
11. [ ] Other:_____________________________________________________
NOTE: All loans will be treated as Participant directed investments
under the Plan. Department of Labor Regulations require the
adoption of a separate written loan program setting forth the
requirements outlined in Plan Section 7.6.
61. DIRECTED INVESTMENT ACCOUNTS (Plan Section 4.10)
a. Does the Plan intend to comply with Act Section 404(c)?
1. [X] Yes.
2. [ ] No.
b. Will Participant directed investments be permitted?
1. [ ] No. Participant directed investments are not permitted.
2. [X] Participant directed investments are permitted for the
following accounts (select all that apply):
a. [X] all accounts.
b. [ ] Participant's Elective Deferral Account.
c. [ ] Participant's Matching Contribution Account.
d. [ ] Participant's Profit Sharing Account.
e. [ ] Participant's Safe Harbor Contribution Account.
f. [ ] Participant's Qualified Matching Contributions
Account.
g. [ ] Participant's Qualified Non-Elective Contribution
Account.
h. [ ] Participant's Rollover Account.
i. [ ] Participant's Transfer Account.
j. [ ] Participant's Voluntary Contribution Account.
k. [ ] Other:________________________________________________
c. If Participant directed investments are permitted, investment in
Employer Stock will be limited to the following amounts:
1. [X] N/A, there will be no limitations.
2. [ ] ____% of a Participant's Elective Deferral Account.
3. [ ] ____% of a Participant's Matching Contribution Account.
4. [ ] ____% of a Participant's Profit Sharing Account.
5. [ ] ____% of a Participant's Safe Harbor Contribution Account.
6. [ ] ____% of a Participant's Qualified Matching Contributions
Account.
7. [ ] ____% of a Participant's Qualified Non-Elective
Contribution Account.
8. [ ] ____% of a Participant's Rollover Account.
9. [ ] ____% of a Participant's Transfer Account.
10. [ ] ____% of a Participant's Voluntary Contribution Account.
11. [ ] ____% of __________________________________________________
d. If Participant directed investments are permitted, will voting
rights on directed investments be passed through to Participants?
1. [ ] No. Employer stock is not an alternative OR Plan is not
intended to comply with Act Section 404(c).
2. [X] Yes, for Employer stock and securities held in brokerage
accounts.
3. [ ] Yes, for all investments.
62. ROLLOVERS (Plan Section 4.6)
a. Will Rollovers be accepted by this Plan?
1. [ ] Rollovers will not be accepted by this Plan.
2. [X] Rollovers will be accepted by this Plan.
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b. If Rollovers are accepted by this Plan, rollovers may be accepted...
1. [X] from any Eligible Employee, even if not a Participant.
2. [ ] from Participants only.
c. And, distributions from a Participant's Rollover Account may be
made...
1. [ ] at any time.
2. [X] only when the Participant is otherwise entitled to a
distribution under the Plan.
63. EMPLOYEES' VOLUNTARY CONTRIBUTIONS (Plan Section 4.8)
a. [ ] After-tax voluntary Employee contributions will not be allowed.
b. [X] Each Participant may elect to make after-tax voluntary Employee
contributions:
1. [ ] up to _______ % of Compensation.
2. [X] from 1% to 10% of Compensation.
3. [ ] up to a percentage of Compensation equal to _____% minus
the rate of Salary Deferrals made by the Participant.
4. [ ] up to the maximum percentage allowable not to exceed the
limits of the Internal Revenue Code.
c. [X] If b. is selected, Highly Compensated Employees may only make
after-tax voluntary Employee contributions (should not be
greater than the limits specified above):
1. [X] N/A. Same limits as specified above.
2. [ ] up to ______% of Compensation.
3. [ ] from ______% to _______% of Compensation.
4. [ ] up to a percentage of Compensation equal to _______%
minus the rate of Salary Deferrals made by the Highly
Compensated Employees.
64. LIFE INSURANCE (Plan Section 7.5)
a. May life insurance be purchased?
1. [X] Life insurance may not be purchased.
2. [ ] Life insurance may be purchased at the option of the
Administrator.
3. [ ] Life insurance may be purchased at the option of the
Participant.
b. If life insurance may be purchased, the purchase of initial or
additional life insurance will be subject to the following
limitations (select all that apply):
1. [ ] N/A, no limitations.
2. [ ] The following limitations:
a. [ ] each initial Contract will have a minimum face amount
of $__________.
b. [ ] each additional Contract will have a minimum face
amount of $__________.
c. [ ] the Participant has completed ___________ Years of
Service (or Periods of Service).
d. [ ] the Participant has completed ___________ Years of
Service (or Periods of Service) while a Participant
in the Plan.
e. [ ] the Participant is under age ________ on the Contract
issue date.
f. [ ] the maximum amount of all Contracts on behalf of a
Participant may not exceed $ _____.
g. [ ] the maximum face amount of any life insurance
Contract will be $ ________.
GUST TRANSITION RULES
The following questions only apply if this is a GUST RESTATEMENT (i.e.,
Question 6.c. is selected). If this is not a GUST restatement, then
this Plan will not be considered an individually designed plan merely
because the following questions are deleted from the Adoption
Agreement.
65. COMPENSATION
The family aggregation rules of Code Section 401(a)(17) as in effect
under Code Section 414(q)(6) prior to the enactment of SBJPA do not
apply to this Plan effective as of:
a. [X] The first day of the first Plan Year beginning after 1996.
b. [ ] ________ (may not be prior to the first day of the first Plan
Year beginning in 1997 and may not be later than the first day
of the Plan Year following the Plan Year in which this GUST
restatement is adopted).
NOTE: If family aggregation continued to apply after 1996, the Plan is
not a safe harbor plan for Code Section 401(a)(4) purposes.
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AND, for Limitation Years beginning on and after January 1, 2001 or, if
earlier, (may not be earlier than the first day of the first Limitation
Year beginning on or after January 1, 1998), for purposes of 415
Compensation and for purposes of applying the limitations described in
section 4.4 of the Plan, compensation paid or made available during
such limitation years shall include elective amounts that are not
includable in the gross income of the employee by reason of Code
Section 132(f)(4).
[ ] Check and complete the following if the Plan has excluded from
414(s) Compensation amounts that are not includable in gross income
by reason of Code Section 132(f)(4):
[ ] For Plan Years beginning on and after ___________ (may not be
earlier than the first day of the first Plan Year for which the
Plan was operated to exclude such amounts in accordance with
Section 414(s) as amended by the Community Renewal Tax Relief
Act of 2000, but in no case earlier than the first day of the
first Plan Year beginning on or after January 1, 1998), 414(s)
Compensation shall not include elective amounts that are not
includible in the gross income of the Employee under Code
Section 132(f)(4).
66. LIMITATION ON ALLOCATIONS AND TOP HEAVY RULES
If any Participant is a Participant in this Plan and a qualified
defined benefit plan maintained by the Employer, then the limitations
of Code Section 415(e) as in effect under Code Section 414(q)(6) prior
to the enactment of SBJPA do not apply to this Plan effective with
respect to Limitation Years beginning in or after:
a. [X] N/A. The Employer does not maintain, and has never maintained,
a qualified defined benefit plan OR the provisions of Code
Section 415(e) have already been removed from this Plan.
b. [ ] ________(may not be prior to the first Limitation Year beginning
in 2000 and may not be later than the first Limitation Year
beginning after the Limitation Year in which this GUST
restatement is adopted).
NOTE: If the Code Section 415(e) limits continued to apply to
Limitation Years beginning after 1999, the Plan is not a safe
harbor plan for Code Section 401(a)(4) purposes.
AND, if b. is selected with a date that is later than the effective
date of this GUST restatement, then with respect to the Limitation Year
in which this restatement is adopted, if any Participant is a
Participant in this Plan and a qualified defined benefit plan
maintained by the Employer, specify the method under which the plans
involved will provide top heavy minimum benefits for Non-Key Employees
and will satisfy the limitations of Code Section 415(e) in a manner
that precludes Employer discretion:
c. [ ] N/A. The effective date of the GUST restatement is the date the
provisions of Code Section 415(e) no longer apply to this Plan.
d. [ ] ____
NOTE: If the top heavy minimum benefit is only provided in one plan
and the Defined Benefit Plan and this Plan do not benefit the
same Participants, the uniformity requirement of the Section
401(a)(4) Regulations may be violated.
67. INVOLUNTARY DISTRIBUTIONS
If the Plan provides for involuntary distributions (i.e., 49.b. is
elected) then the increase in the involuntary amount threshold from
$3,500 to $5,000 became effective with respect to distributions made on
or after:
a. [ ] N/A. The plan doesn't provide for involuntary distributions less
than $5,000.
b. [X] August 6, 1997, or if later January 1, 1998 (leave blank if not
applicable).
68. 2001 MINIMUM DISTRIBUTION TRANSITION RULES (Plan Section 6.5(e))
With respect to required minimum distributions under the Plan made on
or after January 1, 2002 or, as of ___________ (not earlier than
January 1, 2001), the Plan will apply the minimum distribution
requirements of section 401(a)(9) of the Internal Revenue Code in
accordance with the regulations under section 401(a)(9) that were
proposed on January 17, 2001 (the 2001 Proposed Regulations),
notwithstanding any provision of the Plan to the contrary. If a date
earlier than January 1, 2002 is selected above and the total amount of
required minimum distributions made to a participant for 2001 prior to
such date are equal to or greater than the amount of required minimum
distributions determined under the 2001 Proposed Regulations, then no
additional distributions are required for such participant for 2001 on
or after such date. In addition, if a date earlier than January 1, 2002
is selected above and the total amount of required minimum
distributions made to a participant for 2001 prior to such date are
less than the amount determined under the 2001 Proposed Regulations,
then the amount of required minimum distributions for 2001 on or after
such date will be determined so that the total amount of required
minimum distributions for 2001 is the amount determined under the 2001
Proposed Regulations. This amendment shall continue in effect until the
last calendar year beginning before the effective date of the final
regulations under section 401(a)(9) or such other date as may be
published by the Internal Revenue Service.
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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.
This Adoption Agreement may be used only in conjunction with the MFS Retirement
Services, Inc. Prototype Paired Defined Contribution Plans for Corporations,
Associations and Self-Employed Individuals, Basic Plan Document #01. This
Adoption Agreement and the basic Plan document shall together be known as MFS
Retirement Services, Inc. Non-Standardized 401(k) Profit Sharing Plan and Trust
# 001.
The adoption of this Plan, its qualification by the IRS, and the related tax
consequences are the responsibility of the Employer and its independent tax and
legal advisors.
MFS Retirement Services, Inc. will notify the Employer of any amendments made to
the Plan or of the discontinuance or abandonment of the Plan provided this Plan
has been acknowledged by MFS Retirement Services, Inc. or its authorized
representative. Furthermore, in order to be eligible to receive such
notification, we agree to notify MFS Retirement Services, Inc. of any change in
address.
The Employer fully acknowledges and agrees that MFS HERITAGE TRUST COMPANY
(MHTC) will act as Directed Trustee only when all Plan investments are
maintained on a participant recordkeeping system used by MFS Retirement
Services, Inc. pursuant to a contract for recordkeeping and administrative
support service and all other requirements imposed by MHTC are satisfied. The
Plan Administrator is responsible for directing MHTC in the performance of the
rights, powers, duties, and obligations of the Trustee, including without
limitation, those rights, powers, duties and obligations with respect to the
investment and distribution of Plan assets.
The Employer in adopting this prototype Plan hereby accepts full responsibility
for the tax and legal aspects of the Plan and Trust and hereby confirms that it
has received independent legal and tax advice from its own attorneys and
advisors. It is hereby agreed and understood by the parties hereto that neither
MFS nor any of its agents or employees has any responsibility with respect to
the legal or tax aspects of the Plan and Trust. The Employer acknowledges that
it has sole responsibility for maintaining all original documents relating to
this Plan.
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IN WITNESS WHEREOF, the Employer and Trustee hereby cause this Plan to be
executed on this ________________ day of ________________________,
_______________. Furthermore, this Plan may not be used unless acknowledged by
MFS Retirement Services, Inc. or its authorized representative.
EMPLOYER:
Baldwin Americas Corporation
- -----------------------------------------
(enter name)
By: _____________________________________
The signature of the Trustee appears on a separate trust agreement attached to
the Plan, or,
_________________________________________
_________________________________________
_________________________________________
The following Acceptance of the MFS Heritage Trust Company will be completed if
MHTC is named as Trustee:
By: [ILLEGIBLE]
-------------------------------------
Authorized Officer
MFS Heritage Trust Company
This Plan may not be used, and shall not be deemed to be a Prototype Plan,
unless an authorized representative of MFS Retirement Services, Inc. has
acknowledged the use of the Plan. Such acknowledgment is for administerial
purposes only. It acknowledges that the Employer is using the Plan but does not
represent that this Plan, including the choices selected on the Adoption
Agreement, has been reviewed by a representative of the prototype sponsor or
constitutes a qualified retirement plan.
By: [ILLEGIBLE]
-------------------------------------
Authorized Officer
MFS Retirement Services, Inc.
With regard to any questions regarding the provisions of the Plan, adoption of
the Plan, or the effect of an opinion letter from the IRS, call or write (this
information must be completed by the sponsor of this Plan or its designated
representative):
Name Christian Giorgi
Address MFS Retirement Services, Inc.
500 Boylston Street, Boston, Massachusetts 02116
Telephone (617) 954-5000
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AMENDMENT #1
TO THE
MFS RETIREMENT SERVICES, INC.
PROTOTYPE PAIRED DEFINED CONTRIBUTION PLANS
FOR
CORPORATIONS, ASSOCIATIONS AND SELF-EMPLOYED INDIVIDUALS
EGTRRA AMENDMENT
ARTICLE I
PREAMBLE
1.1 Adoption and effective date of amendment. This amendment of the 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.
1.2 Adoption by prototype sponsor. Except as otherwise provided herein,
pursuant to Section 5.01 of Revenue Procedure 2000-20 (or pursuant to
the corresponding provision in Revenue Procedure 89-9 or Revenue
Procedure 89-13), the sponsor hereby adopts this amendment on behalf of
all adopting employers.
ARTICLE II
ADOPTION AGREEMENT ELECTIONS
THE QUESTIONS IN THIS ARTICLE II ONLY NEED TO BE COMPLETED IN ORDER TO
OVERRIDE THE DEFAULT PROVISIONS SET FORTH BELOW. IF ALL OF THE DEFAULT
PROVISIONS WILL APPLY, THEN THESE QUESTIONS SHOULD BE SKIPPED AND THE
EMPLOYER DOES NOT NEED TO EXECUTE THIS AMENDMENT.
UNLESS THE EMPLOYER ELECTS OTHERWISE IN THIS ARTICLE II, THE FOLLOWING
DEFAULTS APPLY:
1) THE VESTING SCHEDULE FOR MATCHING CONTRIBUTIONS WILL BE A 6-YEAR
GRADED SCHEDULE (IF THE PLAN CURRENTLY HAS A GRADED SCHEDULE THAT
DOES NOT SATISFY EGTRRA) OR A 3 YEAR CLIFF SCHEDULE (IF THE PLAN
CURRENTLY HAS A CLIFF SCHEDULE THAT DOES NOT SATISFY EGTRRA), AND
SUCH SCHEDULE WILL APPLY TO ALL MATCHING CONTRIBUTIONS (EVEN THOSE
MADE PRIOR TO 2002).
2) ROLLOVERS ARE AUTOMATICALLY EXCLUDED IN DETERMINING WHETHER THE
$5,000 THRESHOLD HAS BEEN EXCEEDED FOR AUTOMATIC CASH-OUTS. THIS IS
APPLIED TO ALL PARTICIPANTS REGARDLESS OF WHEN THE DISTRIBUTABLE
EVENT OCCURRED.
3) THE SUSPENSION PERIOD AFTER A HARDSHIP DISTRIBUTION IS MADE WILL BE
6 MONTHS AND THIS WILL ONLY APPLY TO HARDSHIP DISTRIBUTIONS MADE
AFTER 2001.
4) CATCH-UP CONTRIBUTIONS WILL BE ALLOWED.
5) THE EMPLOYER MAY LIMIT THE SOURCE OF ROLLOVER CONTRIBUTIONS
RECEIVED BY THE PLAN ON AN OPERATIONAL AND NON-DISCRIMINATORY
BASIS.
2.1 VESTING SCHEDULE FOR MATCHING CONTRIBUTIONS
If there are matching contributions subject to a vesting schedule that
does not satisfy EGTRRA, then unless otherwise elected below, for
participants who complete an hour of service in a plan year beginning
after December 31, 2001, the following vesting schedule will apply to
all matching contributions subject to a vesting schedule:
If the plan has a graded vesting schedule (i.e., the vesting schedule
includes a vested percentage that is more than 0% and less than 100%)
the following will apply:
Years of vesting service Nonforfeitable percentage
2 20%
3 40%
4 60%
5 80%
6 100%
If the plan does not have a graded vesting schedule, then matching
contributions will be nonforfeitable upon the completion of 3 years of
vesting service.
The vesting schedule set forth herein shall only apply to participants
who complete an hour of service in a plan year beginning after December
31, 2001, and shall apply to ALL matching contributions subject to a
vesting schedule.
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2.2 EXCLUSION OF ROLLOVERS IN APPLICATION OF INVOLUNTARY CASH-OUT
PROVISIONS. Unless one of the options below is elected, effective for
distributions made after December 31, 2001, rollover contributions will
be excluded in determining the value of the participant's
nonforfeitable account balance for purposes of the plan's involuntary
cash-out rules.
a. [ ] Rollover contributions will not be excluded.
b. [ ] Rollover contributions will be excluded only with respect to
distributions made after _______. (Enter a date no earlier
than December 31, 2001).
2.3 SUSPENSION PERIOD OF HARDSHIP DISTRIBUTIONS. If the plan provides for
hardship distributions upon satisfaction of the safe harbor (deemed)
standards as set forth in Treas. Reg. Section 1.401(k)-1(d)(2)(iv),
then, unless the option below is elected, the 6 month suspension period
following a hardship distribution shall only apply to hardship
distributions made after December 31, 2001.
a. [ ] With regard to hardship distributions made during 2001, a
participant shall be prohibited from making elective
deferrals and employee contributions under this and all
other plans until the later of January 1, 2002, or 6 months
after receipt of the distribution.
b. [X] N/A.
2.4 CATCH-UP CONTRIBUTIONS (FOR 401(k) PROFIT SHARING PLANS ONLY): For plan
years beginning after December 31, 2001, or, as of_______ (not earlier
than January 1, 2002), the plan permits catch-up contributions and such
contributions shall be matched in accordance with the plan's matching
contribution formula (Article VI) unless elected below.
a. [ ] The plan does not permit catch-up contributions to be made.
b. [ ] The plan will not match catch-up contributions.
2.5 ROLLOVERS FROM OTHER PLANS. The plan permits the employer,
operationally and on a non-discriminatory basis, to limit the source of
rollover contributions that may be accepted (Article XII) except as
elected below.
a. [ ] The plan will not accept rollovers of after-tax employee
contributions.
b. [X] N/A.
ARTICLE III
VESTING OF MATCHING CONTRIBUTIONS
3.1 Applicability. This Article shall apply to participants who complete an
Hour of Service after December 31, 2001, with respect to accrued
benefits derived from employer matching contributions.
3.2 Vesting schedule. A participant's accrued benefit derived from employer
matching contributions shall vest as provided in Section 2.1 of this
amendment.
ARTICLE IV
INVOLUNTARY CASH-OUTS
4.1 Applicability and effective date. If the plan provides for involuntary
cash-outs of amounts less than $5,000, then unless otherwise elected in
Section 2.2 of this amendment, this Article shall apply for
distributions made after December 31, 2001, and shall apply to all
participants.
4.2 Rollovers disregarded in determining value of account balance for
involuntary distributions. For purposes of the Sections of the plan
that provide for the involuntary distribution of vested accrued
benefits of $5,000 or less, the value of a participant's nonforfeitable
account balance shall be determined without regard to that portion of
the account balance that is attributable to rollover contributions (and
earnings allocable thereto) within the meaning of Sections 402(c),
403(a)(4), 403(b)(8), 408(d)(3)(A)(ii), and 457(e)(16) of the Code. If
the value of the participant's nonforfeitable account balance as so
determined is $5,000 or less, then the plan shall immediately
distribute the participant's entire nonforfeitable account balance.
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ARTICLE V
HARDSHIP DISTRIBUTIONS
5.1 Applicability and effective date. If the plan provides for hardship
distributions upon satisfaction of the safe harbor (deemed) standards
as set forth in Treas. Reg. Section 1.401(k)-1(d)(2)(iv), then this
Article shall apply for calendar years beginning after 2001.
5.2 Suspension period following hardship distribution. 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.
Furthermore, if elected by the employer in Section 2.3 of this
amendment, 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 until the later of January 1, 2002, or 6
months after receipt of the distribution.
ARTICLE VI
CATCH-UP CONTRIBUTIONS
Catch-up Contributions. Unless otherwise elected in Section 2.4 of this
amendment, 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.
ARTICLE VII
INCREASE IN COMPENSATION LIMIT
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 VIII
PLAN LOANS
Plan loans for owner-employees or shareholder-employees. If the plan permits
loans to be made to participants, then 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 IX
LIMITATIONS ON CONTRIBUTIONS (IRC SECTION 415 LIMITS)
9.1 Effective date. This Section shall be effective for limitation years
beginning after December 31, 2001.
9.2 Maximum annual addition. Except to the extent permitted under Article
XIV 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.
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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 X
MODIFICATION OF TOP-HEAVY RULES
10.1 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 Article amends the top-heavy provisions of
the plan.
10.2 Determination of top-heavy status.
10.2.1 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) 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.
10.2.2 Determination of present values and amounts. This Section 10.2.2 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.
a. 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."
b. 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.
10.3 Minimum benefits.
10.3.1 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, 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.
10.3.2 Contributions under other plans. The employer may provide, in an
addendum to this amendment, 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). The
addendum 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.
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ARTICLE XI
DIRECT ROLLOVERS
11.1 Effective date. This Article shall apply to distributions made after
December 31, 2001.
11.2 Modification of definition of eligible retirement plan. For purposes of
the direct rollover provisions 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 which 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
which 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 relation order, as defined in Section 414(p) of the Code.
11.3 Modification of definition of eligible rollover distribution to exclude
hardship distributions. For purposes of the direct rollover provisions
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.
11.4 Modification of definition of eligible rollover distribution to include
after-tax employee contributions. For purposes of the direct rollover
provisions in 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 XII
ROLLOVERS FROM OTHER PLANS
Rollovers from other plans. Except as otherwise elected in Section 2.5 of this
amendment, the employer, operationally and on a nondiscriminatory basis, may
limit the source of rollover contributions that may be accepted by this plan.
ARTICLE XIII
REPEAL OF MULTIPLE USE TEST
Repeal of Multiple Use Test. The multiple use test described in Treasury
Regulation Section 1.401(m)-2 and the plan shall not apply for plan years
beginning after December 31, 2001.
ARTICLE XIV
ELECTIVE DEFERRALS
14.1 Elective Deferrals - Contribution Limitation. 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 for such taxable year, except to the extent permitted under
Article VI of this amendment and Section 414(v) of the Code, if
applicable.
14.2 Maximum Salary Reduction Contributions for SIMPLE plans. If this is a
SIMPLE 401(k) plan, then except to the extent permitted under Article
VI of this amendment and Section 414(v) of the Code, if applicable, the
maximum salary reduction contribution that can be made to this plan is
the amount determined under Section 408(p)(2)(A)(ii) of the Code for
the calendar year.
ARTICLE XV
SAFE HARBOR PLAN PROVISIONS
Modification of Top-Heavy Rules. The top-heavy requirements of Section 416 of
the Code and 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
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401(m)(11) of the Code are met.
ARTICLE XVI
DISTRIBUTION UPON SEVERANCE OF EMPLOYMENT
16.1 Effective date. This Article shall apply for distributions and
transactions made after December 31, 2001, regardless of when the
severance of employment occurred.
16.2 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.
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Except with respect to any election made by the employer in Article II, this
amendment is hereby adopted by the prototype sponsor on behalf of all adopting
employers on January 1, 2002.
MFS Retirement Services, Inc.
By: /s/ [ILLEGIBLE]
------------------
Authorized Officer
NOTE: THE EMPLOYER ONLY NEEDS TO EXECUTE THIS AMENDMENT IF AN ELECTION HAS BEEN
MADE IN ARTICLE II OF THIS AMENDMENT.
This amendment has been executed this __________ day of ________________________
______, ________.
Name of Employer: Baldwin Americas Corporation
By: _____________________________________
EMPLOYER
Name of Plan: Baldwin Technology Profit Sharing and Savings Plan
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AMENDMENT #2
TO THE
MFS RETIREMENT SERVICES, INC.
PROTOTYPE PAIRED DEFINED CONTRIBUTION PLANS
FOR
CORPORATIONS, ASSOCIATIONS AND SELF-EMPLOYED INDIVIDUALS
RMD MODEL AMENDMENT
ARTICLE I
PREAMBLE
Adoption by prototype sponsor.
This amendment of the MFS Retirement Services, Inc. Prototype Paired Defined
Contribution Plans for Corporations, Associations and Self-Employed Individuals,
Basic Plan Document #01 ("Plan") is a model amendment as provided in Revenue
Procedure 2002-29 and is adopted as Article XIV of the Plan to comply with the
final and temporary regulations under Section 401(a)(9) of the Internal Revenue
Code. Except as otherwise provided herein, pursuant to Section 5.01 of Revenue
Procedure 2000-20 and Section 3.03 of Revenue Procedure 2002-29, the sponsor
hereby adopts this amendment on behalf of all adopting employers.
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.
MINIMUM DISTRIBUTION REQUIREMENTS
Section 1. General Rules.
1.1. Effective Date. Unless an earlier effective date is specified in the
adoption agreement, the provisions of this article will apply for purposes of
determining required minimum distributions for calendar years beginning with the
2003 calendar year.
1.2. Coordination with Minimum Distribution Requirements Previously in Effect.
If the adoption agreement specifies an effective date of this article that is
earlier than calendar years beginning with the 2003 calendar year, required
minimum distributions for 2002 under this article will be determined as follows.
If the total amount of 2002 required minimum distributions under the Plan made
to the distributee prior to the effective date of this article equals or exceeds
the required minimum distributions determined under this article, then no
additional distributions will be required to be made for 2002 on or after such
date to the distributee. If the total amount of 2002 required minimum
distributions under the Plan made to the distributee prior to the effective date
of this article is less than the amount determined under this article, then
required minimum distributions for 2002 on and after such date will be
determined so that the total amount of required minimum distributions for 2002
made to the distributee will be the amount determined under this article.
1.3. Precedence. The requirements of this article will take precedence over any
inconsistent provisions of the Plan.
1.4. Requirements of Treasury Regulations Incorporated. All distributions
required under this article will be determined and made in accordance with the
Treasury regulations under section 401(a)(9) of the Internal Revenue Code.
1.5. TEFRA Section 242(b)(2) Elections. Notwithstanding the other provisions of
this article, distributions may be made under a designation made before January
1, 1984, in accordance with section 242(b)(2) of the Tax Equity and Fiscal
Responsibility Act (TEFRA) and the provisions of the Plan that relate to section
242(b)(2) of TEFRA.
Section 2. Time and Manner of Distribution.
2.1. Required Beginning Date. The participant's entire interest will be
distributed, or begin to be distributed, to the participant no later than the
participant's required beginning date.
2.2. Death of Participant Before Distributions Begin. If the participant dies
before distributions begin, the participant's entire interest will be
distributed, or begin to be distributed, no later than as follows:
(a) If the participant's surviving spouse is the participant's sole
designated beneficiary, then, except as provided in the adoption
agreement, distributions to the surviving spouse will begin by
December 31 of the calendar year immediately following the
calendar year in which the participant died, or by December 31 of
the calendar year in which the participant would have attained age
70 1/2, if later.
(b) If the participant's surviving spouse is not the participant's
sole designated beneficiary, then, except as provided in the
adoption agreement, distributions to the designated beneficiary
will begin by December 31 of the calendar year immediately
following the calendar year in which the participant died.
(c) If there is no designated beneficiary as of September 30 of the
year following the year of the participant's death, the
participant's entire interest will be distributed by December 31
of the calendar year containing the fifth anniversary of the
participant's death.
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(d) If the participant's surviving spouse is the participant's sole
designated beneficiary and the surviving spouse dies after the
participant but before distributions to the surviving spouse
begin, this section 2.2, other than section 2.2(a), will apply as
if the surviving spouse were the participant.
For purposes of this section 2.2 and section 4, unless section 2.2(d) applies,
distributions are considered to begin on the participant's required beginning
date. If section 2.2(d) applies, distributions are considered to begin on the
date distributions are required to begin to the surviving spouse under section
2.2(a). If distributions under an annuity purchased from an insurance company
irrevocably commence to the participant before the participant's required
beginning date (or to the participant's surviving spouse before the date
distributions are required to begin to the surviving spouse under section
2.2(a)), the date distributions are considered to begin is the date
distributions actually commence.
2.3. Forms of Distribution. Unless the participant's interest is distributed in
the form of an annuity purchased from an insurance company or in a single sum on
or before the required beginning date, as of the first distribution calendar
year distributions will be made in accordance with sections 3 and 4 of this
article. If the participant's interest is distributed in the form of an annuity
purchased from an insurance company, distributions thereunder will be made in
accordance with the requirements of section 401(a)(9) of the Code and the
Treasury regulations.
Section 3. Required Minimum Distributions During Participant's Lifetime.
3.1. Amount of Required Minimum Distribution For Each Distribution Calendar
Year. During the participant's lifetime, the minimum amount that will be
distributed for each distribution calendar year is the lesser of:
(a) the quotient obtained by dividing the participant's account
balance by the distribution period in the Uniform Lifetime Table
set forth in section 1.401(a)(9)-9 of the Treasury regulations,
using the participant's age as of the participant's birthday in
the distribution calendar year; or
(b) if the participant's sole designated beneficiary for the
distribution calendar year is the participant's spouse, the
quotient obtained by dividing the participant's account balance by
the number in the Joint and Last Survivor Table set forth in
section 1.401(a)(9)-9 of the Treasury regulations, using the
participant's and spouse's attained ages as of the participant's
and spouse's birthdays in the distribution calendar year.
3.2. Lifetime Required Minimum Distributions Continue Through Year of
Participant's Death. Required minimum distributions will be determined under
this section 3 beginning with the first distribution calendar year and up to and
including the distribution calendar year that includes the participant's date of
death.
Section 4. Required Minimum Distributions After Participant's Death.
4.1. Death On or After Date Distributions Begin.
(a) Participant Survived by Designated Beneficiary. If the participant
dies on or after the date distributions begin and there is a
designated beneficiary, the minimum amount that will be
distributed for each distribution calendar year after the year of
the participant's death is the quotient obtained by dividing the
participant's account balance by the longer of the remaining life
expectancy of the participant or the remaining life expectancy of
the participant's designated beneficiary, determined as follows:
(1) The participant's remaining life expectancy is calculated
using the age of the participant in the year of death,
reduced by one for each subsequent year.
(2) If the participant's surviving spouse is the
participant's sole designated beneficiary, the remaining
life expectancy of the surviving spouse is calculated for
each distribution calendar year after the year of the
participant's death using the surviving spouse's age as
of the spouse's birthday in that year. For distribution
calendar years after the year of the surviving spouse's
death, the remaining life expectancy of the surviving
spouse is calculated using the age of the surviving
spouse as of the spouse's birthday in the calendar year
of the spouse's death, reduced by one for each subsequent
calendar year.
(3) If the participant's surviving spouse is not the
participant's sole designated beneficiary, the designated
beneficiary's remaining life expectancy is calculated
using the age of the beneficiary in the year following
the year of the participant's death, reduced by one for
each subsequent year.
(b) No Designated Beneficiary. If the participant dies on or after the
date distributions begin and there is no designated beneficiary as
of September 30 of the year after the year of the participant's
death, the minimum amount that will be distributed for each
distribution calendar year after the year of the participant's
death is the quotient obtained by dividing the participant's
account balance by the participant's remaining life expectancy
calculated using the age of the participant in the year of death,
reduced by one for each subsequent year.
4.2. Death Before Date Distributions Begin.
(a) Participant Survived by Designated Beneficiary. Except as provided
in the adoption agreement, if the participant dies before the date
distributions begin and there is a designated beneficiary, the
minimum amount that will be distributed for each distribution
calendar year after the year of the participant's death is the
quotient obtained by dividing the participant's account balance by
the remaining life expectancy of the participant's designated
beneficiary, determined
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as provided in section 4.1.
(b) No Designated Beneficiary. If the participant dies before the date
distributions begin and there is no designated beneficiary as of
September 30 of the year following the year of the participant's
death, distribution of the participant's entire interest will be
completed by December 31 of the calendar year containing the fifth
anniversary of the participant's death.
(c) Death of Surviving Spouse Before Distributions to Surviving Spouse
Are Required to Begin. If the participant dies before the date
distributions begin, the participant's surviving spouse is the
participant's sole designated beneficiary, and the surviving
spouse dies before distributions are required to begin to the
surviving spouse under section 2.2(a), this section 4.2 will apply
as if the surviving spouse were the participant.
Section 5. Definitions.
5.1. Designated beneficiary. The individual who is designated as the beneficiary
under section 1.9 of Article I of the Plan and is the designated beneficiary
under section 401(a)(9) of the Internal Revenue Code and section 1.401(a)(9)-1,
Q&A-4, of the Treasury regulations.
5.2. Distribution calendar year. A calendar year for which a minimum
distribution is required. For distributions beginning before the participant's
death, the first distribution calendar year is the calendar year immediately
preceding the calendar year which contains the participant's required beginning
date. For distributions beginning after the participant's death, the first
distribution calendar year is the calendar year in which distributions are
required to begin under section 2.2. The required minimum distribution for the
participant's first distribution calendar year will be made on or before the
participant's required beginning date. The required minimum distribution for
other distribution calendar years, including the required minimum distribution
for the distribution calendar year in which the participant's required beginning
date occurs, will be made on or before December 31 of that distribution calendar
year.
5.3. Life expectancy. Life expectancy as computed by use of the Single Life
Table in section 1.401(a)(9)-9 of the Treasury regulations.
5.4. Participant's account balance. The account balance as of the last valuation
date in the calendar year immediately preceding the distribution calendar year
(valuation calendar year) increased by the amount of any contributions made and
allocated or forfeitures allocated to the account balance as of dates in the
valuation calendar year after the valuation date and decreased by distributions
made in the valuation calendar year after the valuation date. The account
balance for the valuation calendar year includes any amounts rolled over or
transferred to the Plan either in the valuation calendar year or in the
distribution calendar year if distributed or transferred in the valuation
calendar year.
5.5. Required beginning date. The date specified in section 6.5 of Article VI of
the Plan.
ADOPTION AGREEMENT ELECTIONS
(Check and complete section 2.1 below if any required minimum distributions for
the 2002 distribution calendar year were made in accordance with the
Section 401(a)(9) Final and Temporary Regulations.)
1. Effective Date of Plan Amendment for Section 401(a)(9) Final and
Temporary Treasury Regulations.
[X] Article XIV, Minimum Distribution Requirements, applies for
purposes of determining required minimum distributions for
distribution calendar years beginning with the 2003 calendar year,
as well as required minimum distributions for the 2002
distribution calendar year that are made on or after October 15,
2002.
(Check and complete any of the remaining sections if you wish to modify the
rules in sections 2.2 and 4.2 of Article XIV of the Plan.)
2. Election to Apply 5-Year Rule to Distributions to Designated
Beneficiaries.
[ ] If the participant dies before distributions begin and there is a
designated beneficiary, distribution to the designated beneficiary
is not required to begin by the date specified in section 2.2 of
Article XIV of the Plan, but the participant's entire interest
will be distributed to the designated beneficiary by December 31
of the calendar year containing the fifth anniversary of the
participant's death. If the participant's surviving spouse is the
participant's sole designated beneficiary and the surviving spouse
dies after the participant but before distributions to either the
participant or the surviving spouse begin, this election will
apply as if the surviving spouse were the participant.
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This election will apply to:
[ ] All distributions.
[ ] The following distributions:_____________________________________.
3. Election to Allow Participants or Beneficiaries to Elect 5-Year Rule.
[X] Participants or beneficiaries may elect on an individual basis
whether the 5-year rule or the life expectancy rule in sections
2.2 and 4.2 of Article XIV of the Plan applies to distributions
after the death of a participant who has a designated beneficiary.
The election must be made no later than the earlier of September
30 of the calendar year in which distribution would be required to
begin under section 2.2 of Article XIV of the Plan, or by
September 30 of the calendar year which contains the fifth
anniversary of the participant's (or, if applicable, surviving
spouse's) death. If neither the participant nor beneficiary makes
an election under this paragraph, distributions will be made in
accordance with sections 2.2 and 4.2 of Article XIV of the Plan
and, if applicable, the elections in section 2 above.
4. Election to Allow Designated Beneficiary Receiving Distributions Under
5-Year Rule to Elect Life Expectancy Distributions.
[ ] A designated beneficiary who is receiving payments under the
5-year rule may make a new election to receive payments under the
life expectancy rule until December 31, 2003, provided that all
amounts that would have been required to be distributed under the
life expectancy rule for all distribution calendar years before
2004 are distributed by the earlier of December 31, 2003 or the
end of the 5-year period.
Except with respect to any adoption agreement elections made by the employer
above, this amendment is hereby adopted by the prototype sponsor on behalf of
all adopting employers on __________________________, ______.
MFS Retirement Services, Inc.
By: /s/ [ILLEGIBLE]
------------------
Authorized Officer
NOTE: THE EMPLOYER ONLY NEEDS TO EXECUTE THIS AMENDMENT IF AN ADOPTION AGREEMENT
ELECTION HAS BEEN MADE ABOVE.
This amendment has been executed this _________________ day of _________________
_____________, ________.
Name of Employer: Baldwin Americas Corporation
By:_______________________________________________
EMPLOYER
Name of Plan: Baldwin Technology Profit Sharing and Savings Plan
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