VANGUARD FIDUCIARY TRUST COMPANY
PROTOTYPE BASIC PLAN DOCUMENT
(AS AMENDED FOR EGTRRA)
(VANGUARD LOGO)
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TABLE OF CONTENTS
DEFINITIONS
ACP Test Safe Harbor Matching Contributions 1
Actual Contribution Percentage (ACP) 1
Actual Deferral Percentage (ADP) 1
Adopting Employer 1
Adoption Agreement 1
ADP Test Safe Harbor Contributions 1
Alternate Payee 1
Annual Additions 1
Annuity Starting Date 1
Basic Matching Contributions 2
Basic Plan Document 2
Beneficiary 2
Break in Eligibility Service 2
Break in Vesting Service 2
Catch-Up Contributions 2
Code 2
Compensation 2
Contributing Participant 4
Contribution Percentage 4
Contribution Percentage Amounts 4
Custodian 4
Deductible Employee Contributions 4
Defined Contribution Dollar Limitation 4
Designated Beneficiary 4
Determination Date 4
Determination Period 4
Direct Rollover 4
Directed Trustee 5
Disability 5
Discretionary Trustee 5
Distribution Calendar Year 5
Domestic Relations Order 5
Earliest Retirement Age 5
Early Retirement Age 5
Earned Income 5
Effective Date 5
Elapsed Time 5
Election Period 6
Elective Deferrals 6
Eligibility Computation Period 6
Eligible Employee 6
Eligible Employer for SIMPLE 401(k) Plan 6
Eligible Participant 7
Eligible Retirement Plan 7
Eligible Rollover Distribution 7
Employee 7
Employer 7
Employer Contribution 7
Employer Money Purchase Pension Contribution 8
Employer Target Benefit Pension Contribution 8
Employer Profit Sharing Contribution 8
Employment Commencement Date 8
Enhanced Matching Contributions 8
Entry Dates 8
ERISA 8
Excess Aggregate Contributions 8
Excess Annual Additions 8
Excess Contributions 8
Excess Elective Deferrals 8
Fiduciary 8
Forfeiture 8
Fund 9
Highest Average Compensation 9
Highly Compensated Employee 9
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(i)
DEFINITIONS
Hours of Service 9
Indirect Rollover 10
Individual Account 10
Investment Fiduciary 10
Investment Fund 10
Key Employee 10
Leased Employee 10
Life Expectancy 10
Limitation Year 10
Master or Prototype Plan 10
Matching Contribution 10
Maximum Permissible Amount 11
Month of Eligibility Service 11
Nondeductible Employee Contributions 11
Normal Retirement Age 11
Owner-Employee 11
Participant 11
Participant's Benefit 11
Permissive Aggregation Group 11
Plan 11
Plan Administrator 11
Plan Sequence Number 12
Plan Year 12
Pre-Age 35 Waiver 12
Pre-Tax Elective Deferrals 12
Present Value 12
Prior Plan 12
Projected Annual Benefit 12
Prototype Sponsor 12
Qualified Domestic Relations Order 12
Qualified Election 13
Qualified Joint and Survivor Annuity 13
Qualified Matching Contributions 13
Qualified Nonelective Contributions 13
Qualified Preretirement Survivor Annuity 13
Qualifying Contributing Participant 13
Qualifying Employer Security(ies) 14
Qualifying Participant 14
Recipient 14
Required Aggregation Group 14
Required Beginning Date 14
Roth Elective Deferrals 14
Roth IRA 14
Safe Harbor CODA 15
Safe Harbor Nonelective Contributions 15
Self-Employed Individual 15
Separate Fund 15
Severance from Employment 15
SIMPLE 401(k) Year 15
SIMPLE IRA 15
Spouse 15
Straight Life Annuity 15
Taxable Wage Base 15
Termination of Employment 15
Top-Heavy Plan 15
Traditional IRA 15
Trustee 15
Valuation Date 15
Vested 15
Vested Account Balance 15
Year of Eligibility Service 16
Year of Vesting Service 16
SECTION ONE: EFFECTIVE DATES 16
SECTION TWO: ELIGIBILITY REQUIREMENTS 16
2.01 Eligibility to Participate 16
2.02 Plan Entry 16
2.03 Transfer To or From Ineligible Class 17
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DEFINITIONS
2.04 Return as a Participant After Break in Eligibility Service 17
2.05 Determinations Under This Section 17
2.06 Terms of Employment 17
SECTION THREE: CONTRIBUTIONS 17
3.01 Elective Deferrals 17
3.02 Matching Contributions 19
3.03 Safe Harbor CODA 20
3.04 Employer Contributions 20
3.05 Qualified Nonelective Contributions 28
3.06 Qualified Matching Contributions 28
3.07 Rollover Contributions 29
3.08 Transfer Contributions 29
3.09 Deductible Employee Contributions 29
3.10 Nondeductible Employee Contributions 29
3.11 Other Limitations on SIMPLE 401(k) Contributions 29
3.12 Limitation on Allocations 30
3.13 Actual Deferral Percentage Test (ADP) 31
3.14 Actual Contribution Percentage Test (ACP) 33
SECTION FOUR: VESTING AND FORFEITURES 35
4.01 Determining the Vested Portion of Participant Individual Accounts 35
4.02 100 Percent Vesting of Certain Contributions 37
4.03 Forfeitures and Vesting of Matching Contributions 37
SECTION FIVE: DISTRIBUTIONS AND LOANS TO PARTICIPANTS 37
5.01 Distributions 37
5.02 Form of Distribution to a Participant 41
5.03 Distributions Upon the Death of a Participant 41
5.04 Form of Distribution to Beneficiaries 42
5.05 Required Minimum Distribution Requirements 42
5.06 Annuity Contracts 45
5.07 Distributions in-Kind 45
5.08 Procedure for Missing Participants or Beneficiaries 45
5.09 Claims Procedures 45
5.10 Joint and Survivor Annuity Requirements 46
5.11 Liability for Withholding on Distributions 47
5.12 Distribution of Excess Elective Deferrals 47
5.13 Distribution of Excess Contributions 48
5.14 Distribution of Excess Aggregate Contributions 48
5.15 Recharacterization 49
5.16 Loans To Participants 49
SECTION SIX: DEFINITIONS 50
SECTION SEVEN: MISCELLANEOUS 50
7.01 The Fund 50
7.02 Individual Accounts 51
7.03 Powers and Duties of the Plan Administrator 51
7.04 Expenses and Compensation 52
7.05 Information from Employer 52
7.06 Plan Amendments 53
7.07 Plan Merger or Consolidation 54
7.08 Permanency 54
7.09 Method and Procedure for Termination 54
7.10 Continuance of Plan by Successor Employer 54
7.11 Failure of Plan Qualification 54
7.12 Governing Laws and Provisions 55
7.13 State Community Property Laws 55
7.14 Headings 55
7.15 Gender and Number 55
7.16 Standard of Fiduciary Conduct 55
7.17 General Undertaking of all Parties 55
7.18 Agreement Binds Heirs, Etc. 55
7.19 Determination of Top-Heavy Status 55
7.20 Inalienability of Benefits 56
7.21 Bonding 56
7.22 Investment Authority 57
7.23 Procedures and Other Matters Regarding Domestic Relations Orders 59
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DEFINITIONS
7.24 Indemnification of Prototype Sponsor. 59
7.25 Military Service 59
SECTION EIGHT: TRUSTEE AND CUSTODIAN 60
8.01 Financial Organization as Custodian 60
8.02 Trustee 61
8.03 Compensation and Expenses 65
8.04 No Obligation to Question Data 65
8.05 Resignation 65
SECTION NINE: ADOPTING EMPLOYER SIGNATURE 65
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QUALIFIED RETIREMENT PLAN AND TRUST
DEFINED CONTRIBUTION BASIC PLAN DOCUMENT 01
DEFINITIONS
When used in the Plan with initial capital letters, the following words and
phrases have the meanings set forth below unless the context indicates that
other meanings are intended.
ACP TEST SAFE HARBOR MATCHING CONTRIBUTIONS
Means Matching Contributions described in Plan Section 303(B).
ACTUAL CONTRIBUTION PERCENTAGE (ACP)
Means the average of the Contribution Percentages of the Eligible Participants
in a group of either Highly Compensated Employees or non-Highly Compensated
Employees.
ACTUAL DEFERRAL PERCENTAGE (ADP)
Means, for a specified group of Participants (either Highly Compensated
Employees or non-Highly Compensated Employees) 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 to the Fund on behalf of such
Participant for the Plan Year to (2) the Participant's Compensation for such
Plan Year. For purposes of calculating the ADP, Employer Contributions on behalf
of any Participant shall include: (1) any Elective Deferrals (other than
Catch-up Contributions) made pursuant to the Participant's salary deferral
election or pursuant to automatic Elective Deferral enrollment, if applicable
(including Excess Elective Deferrals of Highly Compensated Employees), but
excluding (a) Excess Elective Deferrals of Participants who are non-Highly
Compensated Employees that arise solely from Elective Deferrals made under the
Plan or plans of this Employer and (b) Elective Deferrals that are taken into
account in the Actual Contribution Percentage test (provided the ADP test is
satisfied both before and after exclusion of these Elective Deferrals); and (2)
if elected by the Employer, Qualified Nonelective Contributions and/or Qualified
Matching Contributions. For purposes of computing Actual Deferral Percentages,
an Employee who would be a Participant but for the failure to make Elective
Deferrals shall be treated as a Participant on whose behalf no Elective
Deferrals are made.
ADOPTING EMPLOYER
Means any corporation, sole proprietor, or other entity named in the Adoption
Agreement and any successor who by merger, consolidation, purchase, or otherwise
assumes the obligations of the Plan. The Adopting Employer shall be a named
fiduciary for purposes of ERISA Section 402(a).
ADOPTION AGREEMENT
Means the document executed by the Adopting Employer through which it adopts the
Plan and trust and thereby agrees to be bound by all terms and conditions of the
Plan and trust.
ADP TEST SAFE HARBOR CONTRIBUTIONS
Means any Basic Matching Contributions, Enhanced Matching Contributions, and
Safe Harbor Nonelective Contributions.
ALTERNATE PAYEE
Means any Spouse, former Spouse, child, or other dependent of a Participant who
is recognized by a Domestic Relations Order as having a right to receive all, or
a portion of, the benefits payable under the Plan with respect to such
Participant.
ANNUAL ADDITIONS
Means the sum of the following amounts credited to a Participant for the
Limitation Year:
a. Employer Contributions,
b. Nondeductible Employee Contributions,
c. Forfeitures,
d. amounts allocated 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. Also amounts derived from contributions paid or accrued
which are attributable to post-retirement medical benefits, allocated to
the separate account of a key employee (as defined in Code Section 41
9A(d)(3)), under a welfare benefit fund (as defined in Code Section
419(e)), maintained by the Employer,
e. amounts allocated under a simplified employee pension plan,
f. Excess Contributions (including amounts recharacterized), and
g. Excess Aggregate Contributions.
For this purpose, any Excess Annual Additions applied in Plan Section 3.
12(A)(4) or 3.l2(B)(6) in the Limitation Year to reduce Employer Contributions
will be considered Annual Additions for such Limitation Year.
ANNUITY STARTING DATE
Means the first day of the first period for which an amount is paid as an
annuity or any other form.
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BASIC MATCHING CONTRIBUTIONS
Means Matching Contributions made pursuant to the Safe Harbor CODA formula
described in Section Three of the Adoption Agreement, if applicable.
BASIC PLAN DOCUMENT
Means this prototype Plan and trust document.
BENEFICIARY
Means the individual(s) or entity(ies) designated pursuant to Plan Section Five.
BREAK IN ELIGIBILITY SERVICE
Means a 12-consecutive month period which coincides with an Eligibility
Computation Period during which an Employee fails to complete more than 500
Hours of Service (or such lesser number of Hours of Service specified in the
Adoption Agreement for this purpose) or such periods specified in the Elapsed
Time definition, if applicable.
BREAK IN VESTING SERVICE
Means a Plan Year (or other vesting computation period described in the
definition of Year of Vesting Service) during which an Employee fails to
complete more than 500 Hours of Service (or such lesser number of Hours of
Service specified in the Adoption Agreement for this purpose) or such period
specified in the Elapsed Time definition, if applicable.
CATCH-UP CONTRIBUTIONS
Means Elective Deferrals made pursuant to Plan Section Three, that are in excess
of an otherwise applicable Plan limit and that are made by Participants who are
age 50 or older by the end of their taxable years. An otherwise applicable Plan
limit is a limit in the Plan that applies to Elective Deferrals without regard
to Catch-up Contributions, such as the limits on Annual Additions, the dollar
limitation on Elective Deferrals under Code Section 402(g) (not counting
Catch-up Contributions), the limit imposed by the Actual Deferral Percentage
(ADP) test under Code Section 401(k)(3), or any other allowable limit imposed by
the Employer. Catch-up Contributions for a Participant for a taxable year may
not exceed (1) the dollar limit on Catch-up Contributions under Code Section
414(v)(2)(B)(1) for the taxable year or (2) when added to other Elective
Deferrals, an amount that would enable the Employer to satisfy other statutory
or regulatory requirements (eg., income tax withholding, FICA and FUTA
withholding, etc.). The dollar limit on Catch-up Contributions in Code Section
414(v)(2)(B)(1) is $1,000 for taxable years beginning in 2002, increasing by
$1,000 for each year thereafter up to $5,000 for taxable years beginning in 2006
and later years. After 2006, the $5,000 limit will be adjusted by the Secretary
of the Treasury for cost-of-living increases under Code Section 414(c)(2)(C).
Any such adjustments will be in multiples of $500. Different limits apply to
Catch-up Contributions under SIMPLE 401(k) Plans.
CODE
Means the Internal Revenue Code of 1986 as amended from time to time.
COMPENSATION
A. GENERAL DEFINITION
The following definition of Compensation shall apply.
As elected by the Adopting Employer in the Adoption Agreement (and if no
election is made, W-2 wages will apply), Compensation shall mean one of the
following:
1. W-2 wages - Compensation is defined as information required to be
reported under Code Sections 6041, 6051, and 6052 (wages, tips, and
other compensation as reported on Form W-2). Compensation is further
defined as 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 in Code Section 3401(a) that
limit the remuneration included in wages based on the nature or
location of the employment or the services performed (such as the
exception for agricultural labor in Code Section 3401(a)(2)).
2. Section 3401 (a) wages - Compensation is defined as 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)).
3. 415 safe-harbor compensation - Compensation is defined as 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 to 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 1.62-2(c)), and excluding the following:
a. Employer contributions to a plan of deferred compensation which
are not includible in the Employee's gross income for the taxable
year in which contributed, or employer contributions under a
simplified employee pension plan to the extent such contributions
are deductible by the Employee, or any distributions from a plan
of deferred compensation;
b. Amounts realized from the exercise of a nonqualified stock
option, or when restricted stock (or property) held by the
Employee either becomes freely transferable or is no longer
subject to a substantial risk of forfeiture;
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c. Amounts realized from the sale, exchange, or other disposition of
stock acquired under a qualified stock option; and
d. Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in Code Section 403(b) (whether or not the
contributions are actually excludable from the gross income of
the Employee).
For any Self-Employed Individual covered under the Plan, Compensation will
mean Earned Income.
B. DETERMINATION PERIOD AND OTHER RULES
Unless otherwise indicated in the Adoption Agreement or required by law or
regulation, where an Employee becomes an Eligible Participant on any date
subsequent to the first day of the applicable Determination Period,
Compensation shall include only that Compensation paid to the Employee
during the portion of the Determination Period they were an Eligible
Participant, unless otherwise required by either the Code or ERISA (e.g.,
full year compensation used in the calculation of the minimum allocation in
a Top-Heavy Plan). Except as otherwise provided in this Plan (e.g.,
continued coverage of disabled Participants), Compensation received by an
Employee during a Determination Period in which the Employee does not
perform services for the Employer will be disregarded.
Unless otherwise indicated in the Adoption Agreement, Compensation shall
include (a) any amount which is contributed by the Employer pursuant to a
salary reduction agreement and which is not includible in the gross income
of the Employee under Code Sections 125, 132(f)(4), 402(e)(3),
402(h)(l)(B), 403(b); (b) compensation deferred under an eligible deferred
compensation plan within the meaning of Code Section 457(b) (deferred
compensation plans of state and local governments and tax-exempt
organizations); and (c) employee contributions (under government plans)
described in Code Section 414(h)(2) but shall not include deemed Code
Section 125 compensation.
For purposes of applying the limitations of Plan Section 3.12, Compensation
for a Limitation Year is the Compensation actually paid or made available
in gross income during such Limitation Year. Notwithstanding the preceding
sentence, Compensation for a defined contribution plan Participant 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. 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, 132(f), or 457.
If elected by the Employer in the Adoption Agreement, amounts under Code
Section 125 include any amounts not available to a Participant in cash in
lieu of group health coverage (deemed Code Section 125 compensation). An
amount will be treated as an amount under Code Section 125 only if the
Employer does not request or collect information regarding the
Participants' other health coverage as part of the enrollment process for
the health plan.
For Limitation Years beginning after 2004, except as otherwise elected in
the Adoption Agreement, payments made within 2 1/2 months after Severance
from Employment will be Compensation within the meaning of Code Section
415(c)(3) if they are payments that, absent a Severance from Employment,
would have been paid to the Employee if the Employee continued in
employment with the Employer and are regular compensation for services
during the Employee's regular working hours, compensation for services
outside the Employee's regular working hours (such as overtime or shift
differential), commissions, bonuses, or other similar compensation. For
Limitation Years beginning after 2004, except as otherwise elected in the
Adoption Agreement, payments made within 2 1/2 months after Severance from
Employment will not be Compensation within the meaning of Code Section 41
5(c)(3) if they are payments for accrued bona fide sick, vacation, or other
leave, but only if the Employee would have been able to use the leave if
employment had continued. Any payments not described above are not
considered Compensation if paid after Severance from Employment, even if
they are paid within 2 1/2 months following Severance from Employment,
except for payments to an individual who does not currently perform
services for the Employer by reason of qualified military service (within
the meaning of Code Section 414(u)(1)) to the extent these payments do not
exceed the amounts the individual would have received if the individual had
continued to perform services for the Employer rather than entering
qualified military service.
C. COMPENSATION FOR ADP, ACP AND CODE SECTION 401(A)(4) TESTING
Compensation for purposes of ADP, ACP and Code Section 40l(a)(4) testing
will be W-2 wages unless another definition of Compensation is elected on
the Adoption Agreement for allocation and other general purposes or another
definition is required by law or regulation. Notwithstanding the foregoing,
a Plan Administrator has the option from year to year to use a different
definition of Compensation for testing purposes provided the definition of
Compensation satisfies Code Section 414(s) and the regulations thereunder,
D. LIMITS ON COMPENSATION
The annual Compensation of each Participant taken into account in
determining allocations shall not exceed $200,000, as adjusted for
cost-of-living increases in accordance with Code Section 401(a)(l7)(B).
Annual Compensation means Compensation during the Plan Year or such other
consecutive 12-month period over which Compensation is otherwise determined
under the Plan (Determination Period). The cost-of-living adjustment in
effect for the calendar year applies to annual Compensation for the
Determination Period that begins with or within such calendar year.
If a Determination Period consists of fewer than 12 months, the annual
Compensation limit is an amount equal to the otherwise applicable annual
Compensation limit multiplied by a fraction, the numerator of which is the
number of months in the short Determination Period, and the denominator of
which is 12.
If Compensation for any prior Determination Period is taken into account in
determining an Employee's allocations or benefits for the current
Determination Period, the Compensation for such prior Determination Period
is subject to the applicable annual Compensation limit in effect for that
prior period.
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E. SIMPLE 401(K) RULES
Notwithstanding anything in this Plan to the contrary, if an Eligible
Employer has established a SIMPLE 401(k) plan, Compensation means, for
purposes of the definition of Eligible Employer and for purposes of Plan
Sections 3.01(H) and 3.02, 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 Elective
Deferral contributions made under this or any other 401(k) plan, and, if
applicable, elective deferrals under a Section 408(p) SIMPLE IRA plan, a
SARSEP plan, or a 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 605l(a)(8)). Compensation also
includes amounts paid for domestic service (as described in Code Section
3401(a)(3)). For Self-Employed Individuals, Compensation means net earnings
from self-employment determined under Code Section 1402(a) before
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 in
Plan Sections 3.01(H) and 3,02.
F. SAFE HARBOR CODA RULES
Notwithstanding anything in this Plan to the contrary, if an Adopting
Employer has elected in the Adoption Agreement to apply the Safe Harbor
CODA provisions to this Plan, Compensation means Compensation as defined in
this Definitions Section of the Plan and, if applicable, the definition of
Compensation for allocation and other general purposes selected in the
Adoption Agreement, except, for purposes of Section 3.03, 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 salary
reduction agreement, 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 1.414(s)-1 (d)(2) and 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.
CONTRIBUTING PARTICIPANT
Means a Participant who has enrolled as a Contributing Participant pursuant to
either Plan Sections 3.01 or 3.10 and on whose behalf the Employer is
contributing Elective Deferrals to the Plan (or is making Nondeductible Employee
Contributions).
CONTRIBUTION PERCENTAGE
Means the ratio (expressed as a percentage) of the Participant's Contribution
Percentage Amounts to the Participant's Compensation for the Plan Year.
CONTRIBUTION PERCENTAGE AMOUNTS
Means the sum of the Nondeductible Employee Contributions, Matching
Contributions, and Qualified Matching Contributions (to the extent not taken
into account for purposes of the ADP test) made under the Plan on behalf of the
Participant for the Plan Year. Such Contribution Percentage Amounts shall not
include Matching Contributions that are forfeited either to correct Excess
Aggregate Contributions or because the contributions to which they relate are
Excess Deferrals, Excess Contributions, Excess Aggregate Contributions, or
Excess Annual Additions which are distributed pursuant to Plan Section 3.
12(A)(4)(c).
The Employer may elect, in a uniform and nondiscriminatory manner, to use either
Qualified Nonelective Contributions or Elective Deferrals, or both, in the
Contribution Percentage Amounts. Elective Deferrals may only be included in the
Contribution Percentage Amounts if the Plan passes the ADP test both before and
after the exclusion of such Elective Deferrals.
CUSTODIAN
Means an entity appointed in the Adoption Agreement (or, if applicable, in a
separate custodial agreement) by the Adopting Employer to hold the assets of the
trust as Custodian or any duly appointed successor as provided in Plan Section
8.05.
DEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Means any qualified voluntary employee contributions (as defined in Code Section
219(e)(2) made after December 31, 1981, in a taxable year beginning after such
date and made for a taxable year beginning before January 1, 1987, and allowable
as a deduction under Code Section 219(a) for such taxable year.
DEFINED CONTRIBUTION DOLLAR LIMITATION
Means $40,000, as adjusted under Code Section 415(d).
DESIGNATED BENEFICIARY
Means the individual who is designated by the Participant as the Beneficiary of
the Participant's interest under the Plan and who is the designated Beneficiary
under Code Section 401(a)(9) and Treasury Regulation 1.40l(a)(9)-4.
DETERMINATION DATE
Means for any Plan Year after 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 year.
DETERMINATION PERIOD
Means, except as provided elsewhere in this Plan, the Plan Year unless the
Adopting Employer has selected another period in the Adoption Agreement.
DIRECT ROLLOVER
Means a payment by the Plan to the Eligible Retirement Plan specified by the
Recipient (or, if necessary pursuant to Plan Section 5.01(B)(1), an individual
retirement account (IRA) under Code Sections 408(a), 408(b), or 408A (for Roth
Elective Deferrals), as selected by the Adopting Employer in the Adoption
Agreement).
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DIRECTED TRUSTEE
Means the Trustee that is designated as the Directed Trustee in the Adoption
Agreement. The Directed Trustee shall be responsible for investing the Fund and
performing the responsibilities of the Trustee set forth in the Plan in
accordance with specific instructions provided by the Adopting Employer or the
Plan Administrator (or Participant or Beneficiary) in accordance with
instructions (either in writing or in any other form permitted by rules
promulgated by the IRS or DOL) from one of the foregoing.
DISABILITY
Unless the Adopting Employer has elected a different definition in the Adoption
Agreement or as otherwise provided in the Plan, Disability 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 12 months. The permanence and degree of such impairment shall be
supported by medical evidence satisfactory to the Plan Administrator.
DISCRETIONARY TRUSTEE
Means a Trustee that is designated as a Discretionary Trustee in the Adoption
Agreement and enters into an agreement with the Adopting Employer whereby the
Trustee and not the Adopting Employer will select the appropriate investments
for the Fund in accordance with the Plan's funding policy statement or will
perform such other tasks identified in such agreement between the Trustee and
Adopting Employer.
DISTRIBUTION CALENDAR YEAR
Means a calendar year for which a minimum distribution is required. For
distributions beginning before the Participant's death, the first Distribution
Calendar Year is the calendar year immediately preceding the calendar year which
contains the Participant's Required Beginning Date. For distributions beginning
after the Participant's death, the first Distribution Calendar Year is the
calendar year in which distributions are required to begin pursuant to Plan
Section 5.05(D). 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.
DOMESTIC RELATIONS ORDER
Means any judgment, decree, or order (including approval of a property
settlement agreement) that:
a. relates to the provision of child support, alimony payments, or marital
property rights to a spouse, former spouse, child, or other dependent of a
Participant, and
b. is made pursuant to state domestic relations law (including applicable
community property laws).
EARLIEST RETIREMENT AGE
Means, for purposes of the Qualified Joint and Survivor Annuity provisions of
the Plan, the earliest date on which, under the Plan, the Participant could
elect to receive retirement benefits.
EARLY RETIREMENT AGE
Means the age specified in the Adoption Agreement. The Plan will not have an
Early Retirement Age if none is specified in the Adoption Agreement.
EARNED INCOME
Means the net earnings from self-employment in the trade or business with
respect to which the Plan is established, for which 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.
Net earnings shall be determined with regard to the deduction allowed to the
Employer by Code Section 164(f).
EFFECTIVE DATE
Means the date the Plan or amendment or restatement of the Plan becomes
effective as indicated in the Adoption Agreement. Notwithstanding the foregoing,
unless otherwise provided in this Basic Plan Document, the Effective Date of
mandatory Plan changes resulting from the Economic Growth and Tax Relief
Reconciliation Act of 2001 (EGTRRA) and the Job Creation and Worker Assistance
Act of 2002 (JCWAA) shall be the later of the original Effective Date of the
Plan or the first day of the Plan Year in which the legislative or regulatory
change became effective. For optional changes made available by EGTRRA, the
Effective Date shall be the date the plan began to operate in accordance with
such optional change, as indicated by a Plan amendment if a written amendment
was required for such change.
ELAPSED TIME-MEANS
A. SPECIAL RULES WHERE ELAPSED TIME METHOD IS BEING USED
If elected by the Adopting Employer in the Adoption Agreement,
the following definition of Elapsed Time shall apply for purposes
of determining service. When this definition applies, the
definitions of break in service and hour of service in the
Elapsed Time definition will replace the definitions of Break in
Eligibility Service, Break in Vesting Service, and Hours of
Service found in the Definitions Section of the Plan.
For purposes of determining an Employee's initial or continued
eligibility to participate in the Plan or the Vested interest in
the Participant's Individual Account balance derived from
Employer Contributions, an Employee will receive credit for the
aggregate of all time periods 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 months or days.
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For purposes of this definition, hour of service will mean each hour for
which an Employee is paid or entitled to payment for the performance of
duties for the Employer. Break in service is a period of severance of at
least 12 consecutive months. Period of severance is a continuous period of
time during which the Employee is not employed by the Employer. Such period
begins on the date the Employee retires, quits, or is discharged, or if
earlier, the 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 12-consecutive month period beginning on the first
anniversary of the first date of such absence shall not constitute a break
in service, For purposes of this Elapsed Time definition, an absence from
work for maternity or paternity reasons means an absence 1) by reason of
the pregnancy of the individual, 2) by reason of the birth of a child of
the individual, 3) by reason of the placement of a child with the
individual in connection with the adoption of such child by such
individual, or 4) for purposes of caring for such child for a period
beginning immediately following such birth or placement.
Each Employee will share in Employer Contributions for the period beginning
on the date the Employee commences participation under the Plan and ending
on the date on which such Employee severs employment with the Employer or
is no longer a member of an eligible class of Employees.
If the Employer is a member of an affiliated service group (under Code
Section 414(m)), a controlled group of corporations (under Code Section
414(b)), a group of trades or businesses under common control (under Code
Section 414(c)), or any other entity required to be aggregated with the
Employer pursuant to Code Section 414(o), service will be credited for any
employment for any period of time for any other member of such group.
Service will also be credited for any individual required under Code
Section 414(n) or Code Section 414(o) to be considered an Employee of any
Employer aggregated under Code Section 414(b),(c),or (m).
B. CHANGES IN METHODS OF CREDITING SERVICE
The Plan may be amended to change the method of crediting service between
the general rules discussed in this Elapsed Time definition and the Hours
of Service method discussed in the Hours of Service definition provided
each Employee with respect to whom the method of crediting service is
changed is afforded the protection described in Treasury Regulation
1.410(a)-7(g) and other applicable rules promulgated by the IRS.
ELECTION PERIOD
Means the period which begins on the first day of the Plan Year in which the
Participant attains age 35 and ends on the date of the Participant's death, If a
Participant separates from service before the first day of the Plan Year in
which age 35 is attained, with respect to the account balance as of the date of
separation, the Election Period shall begin on the date of separation.
ELECTIVE DEFERRALS
Means any Employer Contributions made either as a Pre-Tax Elective Deferral or,
effective on or after January 1, 2006, as a Roth Elective Deferral to the Plan
at the election of the Participant or pursuant to automatic Elective Deferral
enrollment, in lieu of cash compensation, and shall include contributions made
pursuant to a salary reduction agreement. With respect to any taxable year, a
Participant's Elective Deferrals are 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
simplified employee pension plan cash or deferred arrangement as described in
Code Section 408(k)(6), any SIMPLE IRA Plan described in Code Section 408(p),
any plan as described under Code Section 501(c)(18), 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.
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 of the Participant, in excess of the dollar limitation contained in Code
Section 402(g) in effect at the beginning of such taxable year. In the case of a
Participant age 50 or over by the end of the taxable year, the dollar limitation
described in the preceding sentence is increased by the amount of Elective
Deferrals that can be Catch-up Contributions, The dollar limitation contained in
Code Section 402(g) is $10,500 for taxable years beginning in 2000 and 2001
increasing to $11,000 for taxable years beginning in 2002 and increasing by
$1000 for each year thereafter up to $15,000 for taxable years beginning in 2006
and later years. After 2006, the $15,000 limit will be adjusted by the Secretary
of the Treasury for cost-of-living increases under Code Section 402(g)(4). Any
adjustments will be in multiples of $500.
ELIGIBILITY COMPUTATION PERIOD
Means, with respect to an Employee's initial Eligibility Computation Period, the
12-consecutive month period commencing on the Employee's Employment Commencement
Date. Unless otherwise specified in the Adoption Agreement, the Employee's
subsequent Eligibility Computation Periods shall be the Plan Year commencing
with the Plan Year beginning during the Employee's initial Eligibility
Computation Period. An Employee shall not be credited with a Year of Eligibility
Service before the end of the 12-consecutive month period regardless of when
during such period the Employee completes the required number of Hours of
Service.
ELIGIBLE EMPLOYEE
Means, if the Employer has adopted a SIMPLE 401(k) Plan, any Employee who is
entitled to make Elective Deferrals under the terms of the Plan. Notwithstanding
the foregoing, if the Employer has elected to apply the Safe Harbor CODA
provisions of Plan Section 3.03, Eligible Employee means an Employee 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 Plan Section 5.0l(C)(2) or to statutory
limitations, such as Code Sections 402(g) and 415.
ELIGIBLE EMPLOYER FOR SIMPLE 401(K) PLAN
Means, with respect to any SIMPLE 401(k) Year, an Employer that had no more
than 100 Employees who received at least $5,000 of Compensation, or such lesser
amount indicated in the Adoption Agreement, from the Employer for the preceding
SIMPLE 401(k) Year and is therefore eligible to establish a SIMPLE 401(k) Plan.
In applying the preceding sentence, all Employees of controlled groups of
corporations under Code Section 414(b), all Employees of trades or businesses
(whether incorporated or not) under common control under Code Section
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414(c), all Employees of affiliated service groups under Code Section 414(m),
and Leased Employees required to be treated as the Employer's Employees under
Code Section 414(n), are taken into account.
An Eligible Employer that adopts a SIMPLE 401(k) and that fails to be an
Eligible Employer for any subsequent SIMPLE 401(k) Year, is treated as an
Eligible Employer for the two SIMPLE 401(k) Years following the last SIMPLE 40
1(k) Year the Employer was an Eligible Employer. If the failure is due to any
acquisition, disposition, or similar transaction involving an Eligible Employer,
the preceding sentence applies only if the provisions of Code Section 41
0(b)(6)(C)(i) are satisfied.
ELIGIBLE PARTICIPANT
Means any Employee who is eligible to make a Nondeductible Employee Contribution
or an Elective Deferral (if the Employer takes such contributions into account
in the calculation of the Contribution Percentages), or to receive a Matching
Contribution (including Forfeitures) or a Qualified Matching Contribution.
If a Nondeductible Employee Contribution is required as a condition of
participation in the Plan, any Employee who would be a Participant in the Plan
if such Employee made such a contribution shall be treated as an Eligible
Participant on behalf of whom no Nondeductible Employee Contributions are made.
ELIGIBLE RETIREMENT PLAN
Means, for purposes of the Direct Rollover provisions of the Plan, an individual
retirement account described in Code Sections 408(a) or 408A, an individual
retirement annuity described in Code Section 408(b), an annuity plan described
in Code Section 403(a), an annuity contract described in Code Section 403(b), an
eligible plan under Code Section 457(b) which is maintained by a state,
political subdivision of a state, or an 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), or a qualified trust
described in Code Section 401(a) that accepts the Recipient's Eligible Rollover
Distribution. The definition of Eligible Retirement Plan shall also apply in the
case of a distribution to a surviving Spouse, or to a Spouse or former Spouse
who is the Alternate Payee under a Qualified Domestic Relations Order, as
defined in Code Section 414(p).
If any portion of an Eligible Rollover Distribution is attributable to payments
or distributions from a designated Roth account, an Eligible Retirement Plan
with respect to such portion shall include only another designated Roth account
of the individual from whose account the payments or distributions were made, or
a Roth IRA of such individual.
ELIGIBLE ROLLOVER DISTRIBUTION
Means any distribution of all or any portion of the balance to the credit of the
Recipient, except that an Eligible Rollover Distribution does not include
a. any distribution that is one of a series of substantially equal periodic
payments (paid at least annually) made for the life (or Life Expectancy) of
the Recipient or the joint lives (or joint life expectancies) of the
Recipient and the Recipient's Designated Beneficiary, or for a specified
period of ten years or more;
b. any distribution to the extent such distribution is required under Code
Section 401(a)(9);
c. the portion of any other distribution that is not includible in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities);
d. any hardship distribution described in Plan Section 5.0l(C)(2); and
e. any other distribution(s) that is reasonably expected to total less than
$200 during a year.
For distributions made after December 31, 2001, 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 Code Section 408(a) or (b), or to a
qualified defined contribution plan described in Code Section 401(a) or 403(a)
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.
EMPLOYEE
Means any person employed by an Employer maintaining the Plan or by any other
employer required to be aggregated with such Employer under Code Sections
414(b), (c), (m) or (o).
The term Employee shall also include any Leased Employee deemed to be an
Employee of any Employer described in the previous paragraph as provided in Code
Sections 414(n) or (o).
EMPLOYER
Means the Adopting Employer, and, unless otherwise provided in the Adoption
Agreement, all members of a controlled group of corporations (as defined in Code
Section 414(b) as modified by Code Section 415(h)), all commonly controlled
trades or businesses (as defined in Code Section 414(c) as modified by Code
Section 415(h)) or affiliated service groups (as defined in Code Section 414(m))
of which the Adopting Employer is apart, and any other entity required to be
aggregated with the Employer pursuant to Treasury regulations under Code Section
414(o). A partnership is considered to be the Employer of each of the partners
and a sole proprietorship is considered to be the Employer of a sole proprietor.
EMPLOYER CONTRIBUTION
Means the amount contributed by the Employer each year as determined under this
Plan. The term Employer Contribution shall include Elective Deferrals made to
the Plan unless such contributions are intended to be excluded for purposes of
either the Plan or any act under the Code, ERISA, or any additional rules,
regulations, or other pronouncements promulgated by either the IRS or DOL.
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EMPLOYER MONEY PURCHASE PENSION CONTRIBUTION
Means an Employer Contribution made pursuant to the section of the Money
Purchase Pension Plan Adoption Agreement titled "Employer Money Purchase Pension
Contributions." The Employer must make Employer Money Purchase Pension
Contributions without regard to current or accumulated earnings or profits.
EMPLOYER TARGET BENEFIT PENSION CONTRIBUTION
Means an Employer Contribution made pursuant to the section of the Target
Benefit Pension Plan Adoption Agreement titled "Employer Target Benefit Pension
Contributions." The Employer must make Employer Target Benefit Pension
Contributions without regard to current or accumulated earnings or profits.
EMPLOYER PROFIT SHARING CONTRIBUTION
Means an Employer Contribution made pursuant to the section of the Adoption
Agreement titled "Employer Profit Sharing Contributions." The Employer may make
Employer Profit Sharing Contributions without regard to current or accumulated
earnings or profits, unless otherwise indicated in the Adoption Agreement.
EMPLOYMENT COMMENCEMENT DATE
Means, with respect to an Employee, the date such Employee first performs an
Hour of Service for the Employer.
ENHANCED MATCHING CONTRIBUTIONS
Means Matching Contributions described in Code Section 401(k)(12)(B)(iii) and
made pursuant to the Safe Harbor CODA formula elected by the Employer in the
Adoption Agreement.
ENTRY DATES
Means the first day of the Plan Year and the first day of the seventh month of
the Plan Year, unless the Adopting Employer has specified different dates in the
Adoption Agreement.
ERISA
Means the Employee Retirement Income Security Act of 1974 as amended from time
to time.
EXCESS AGGREGATE CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of
a. the aggregate Contribution Percentage Amounts taken into account in
computing the numerator of the Contribution Percentage actually made on
behalf of Highly Compensated Employees for such Plan Year, over
b. the maximum Contribution Percentage Amounts permitted by the ACP test
(determined by hypothetically reducing contributions made on behalf of
Highly Compensated Employees in order of their Contribution Percentages
beginning with the highest of such percentages).
Such determination shall be made after first determining Excess Elective
Deferrals pursuant to the definition provided herein and then determining Excess
Contributions pursuant to the definition provided herein.
EXCESS ANNUAL ADDITIONS
Means the excess of the Participant's Annual Additions for the Limitation Year
over the Maximum Permissible Amount.
EXCESS CONTRIBUTIONS
Means, with respect to any Plan Year, the excess of
a. the aggregate amount of Employer Contributions actually taken into account
in computing the ADP of Highly Compensated Employees for such Plan Year,
over
b. the maximum amount of such contributions permitted by the ADP test
(determined by hypothetically reducing contributions made on behalf of
Highly Compensated Employees in order of the ADPs, beginning with the
highest of such percentages).
EXCESS ELECTIVE DEFERRALS
Means those Elective Deferrals that either (1) are made during the Participant's
taxable year and exceed the dollar limitation under Code Section 402(g)
(increased, if applicable, by the dollar limitation on Catch-up Contributions
defined in Code Section 414(v)) for such year; or (2) are made during a
calendar year and exceed the dollar limitation under Code Section 402(g)
(increased, if applicable, by the dollar limitation on Catch-up Contributions
defined in Code Section 414(v)) for the Participant's taxable year beginning in
such calendar year, counting only Elective Deferrals made under this Plan and
any other plan, contract or arrangement maintained by the Employer. Excess
Elective Deferrals shall be treated as Annual Additions under the Plan, unless
such amounts are distributed no later than the first April 15 following the
close of the Participant's taxable year.
FIDUCIARY
Means a person who exercises any discretionary authority or control with respect
to management of the Plan, renders investment advice as defined in ERISA Section
3(21) or has any discretionary authority or responsibility regarding the
administration of the Plan. The Employer and such other individuals either
appointed by the Employer or deemed to be fiduciaries as a result of their
actions shall serve as Fiduciaries under this Plan and fulfill the fiduciary
responsibilities described in Part 4, Title I of ERISA.
FORFEITURE
Means that portion of a Participant's Individual Account derived from Employer
Contributions that the Participant is not entitled to receive (i.e., the
nonvested portion).
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FUND
Means the Plan assets received and held by the Trustee for which it serves as
Trustee (or Custodian, if applicable) for the Participants' exclusive benefit.
HIGHEST AVERAGE COMPENSATION
Means the average compensation for the three consecutive years of service with
the Employer that produces the highest average.
HIGHLY COMPENSATED EMPLOYEE
Means any Employee who 1) was a five-percent owner at any time during the year
or the preceding year, or 2) for the preceding year had Compensation from the
Employer in excess of $80,000 and, if elected by the Adopting Employer in the
Adoption Agreement, was in the top-paid group for the preceding 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.
For this purpose the applicable year of the Plan for which a determination is
being made is called a determination year and the preceding 12- month period is
called a look-back year unless the Adopting Employer has made a calendar year
data election in the Adoption Agreement. If a calendar year data election is
made, the look-back year shall be the calendar year ending within the Plan Year
for purposes of determining who is a Highly Compensated Employee (other than as
a five-percent owner).
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 1 .414(q)-1T, A-4,
Notice 97-45 and any subsequent guidance issued by the IRS.
The determination of who is a Highly Compensated Employee, including, but not
limited to, the determinations of the number and identity of Employees in the
top-paid group and the Compensation that is considered, will be made in
accordance with Code Section 414(q) and the regulations thereunder.
HOURS OF SERVICE - Means
A. GENERAL RULES FOR CREDITING HOURS OF SERVICE
1. Each hour for which an Employee is paid, or entitled to payment, for
the performance of duties for the Employer. These hours will be
credited to the Employee for the computation period in which the
duties are performed; and
2. Each hour for which an Employee is paid, or entitled to payment, by
the Employer on account of a period of time during which no duties are
performed (irrespective of whether the employment relationship has
terminated) due to vacation, holiday, illness, incapacity (including
Disability), layoff jury duty, military duty or leave of absence. No
more than 501 Hours of Service will be credited under this paragraph
for any single continuous period (whether or not such period occurs in
a single computation period). Hours under this paragraph shall be
calculated and credited pursuant to Labor Regulation Section 253
0.200b-2 which is incorporated herein by this reference.
3. Each hour for which back pay, irrespective of mitigation of damages,
is either awarded or agreed to by the Employer. The same Hours of
Service will not be credited both under paragraph (1) or paragraph
(2), as the case may be, and under this paragraph (3). 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.
4. Solely for purposes of determining whether a Break in Eligibility
Service or a Break in Vesting Service has occurred in a computation
period (the computation period for purposes of determining whether a
Break in Vesting Service has occurred is the Plan Year or other
vesting computation period described in the definition of a Year of
Vesting Service), an individual who is absent from work for maternity
or paternity reasons shall receive credit for the Hours of Service
which would otherwise have been credited to such individual but for
such absence, or in any case in which such hours cannot be determined,
eight Hours of Service per day of such absence. For purposes of this
paragraph, an absence from work for maternity or paternity reasons
means an absence 1) by reason of the pregnancy of the individual, 2)
by reason of a birth of a child of the individual, 3) by reason of the
placement of a child with the individual in connection with the
adoption of such child by such individual, or 4) for purposes of
caring for such child for a period beginning immediately following
such birth or placement. The Hours of Service credited under this
paragraph shall be credited 1) in the Eligibility Computation Period
or Plan Year or other vesting computation period described in the
definition of a Year of Service in which the absence begins if the
crediting is necessary to prevent a Break in Eligibility Service or a
Break in Vesting Service in the applicable period, or 2) in all other
cases, in the following Eligibility Computation Period or Plan Year or
other vesting computation period described in the definition of a Year
of Service.
5. Hours of Service will be credited for employment with other members of
an affiliated service group (under Code Section 414(m)), a controlled
group of corporations (under Code Section 414(b)), or a group of
trades or businesses under common control (under Code Section 414(c))
of which the Adopting Employer is a member, and any other entity
required to be aggregated with the Employer pursuant to Code Section 4
14(o) and the regulations thereunder.
Hours of Service will also be credited for any individual considered
an Employee for purposes of this Plan under Code Sections 414(n) or
414(o) and the regulations thereunder.
6. Where the Employer maintains the plan of a predecessor employer,
service for such predecessor employer shall be treated as service for
the Employer. If the Employer does not maintain the plan of a
predecessor employer, service for such predecessor employer will not
be treated as service for the Employer unless specifically elected in
the Adoption Agreement.
7. The above method for determining Hours of Service may be altered as
specified in the Adoption Agreement.
8. Hours of Service shall apply unless the Adopting Employer has
indicated in the Adoption Agreement that a method other than Hours of
Service will be used for determining service.
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9
B. CHANGES IN METHODS OF CREDITING SERVICE
The Plan may be amended to change the method of crediting service between
the general rules discussed in paragraph (A) and the Elapsed Time method
discussed in the Elapsed Time definition provided each Employee with
respect to whom the method of crediting service is changed is afforded the
protection described in Treasury Regulation 1.410(a)-7(g) and other
applicable rules promulgated by the IRS.
INDIRECT ROLLOVER
Means a rollover contribution received by this Plan from an Employee that
previously received a distribution from another plan rather than having such
amount directly rolled over to this Plan from the distributing plan.
INDIVIDUAL ACCOUNT
Means the account established and maintained under this Plan for each
Participant in accordance with Plan Section 7.02(A).
INVESTMENT FIDUCIARY
Means the Employer, a Trustee with full trust powers, any Individual Trustee(s),
or any investment manager, as applicable, that under the terms of the Plan is
vested with the responsibility and authority to select investment options for
the Plan and to direct the investment of the assets of the Fund. In no event
shall a Custodian or a Directed Trustee be an Investment Fiduciary for any
purpose whatsoever.
INVESTMENT FUND
Means a subdivision of the Fund established pursuant to Plan Section 7.01(B).
KEY EMPLOYEE
Means, for Plan Years beginning after December 31, 2001, any Employee or former
Employee (including any deceased Employee) who at any time during the Plan Year
that includes the Determination Date is an officer of the Employer and whose
annual compensation is greater than $130,000 (as adjusted under Code Section
416(i)(1) for Plan Years beginning after December 31, 2002), a five percent
owner of the Employer, or a one-percent owner of the Employer who has annual
compensation of more than $150,000. For Plan Years beginning on or after January
1, 2001, except as otherwise provided in the Adoption Agreement, Compensation
shall also include elective amounts that are not includible in the gross income
of the Employee by reason of Code Section 132(f)(4).
In determining whether a plan is top-heavy for Plan Years beginning before
January 1, 2002, Key Employee means any Employee or former Employee (including
any deceased Employee) who at any time during the five-year period ending on the
Determination Date, is an officer of the Employer having annual compensation
that exceeds 50 percent of the dollar limitation under Code Section
415(b)(1)(A), an owner (or considered an owner under Code Section 318) of one
of the ten largest interests in the Employer if such Participant's compensation
exceeds 100 percent of the dollar limitation under Code Section 415(c)(1)(A), a
five-percent owner of the Employer, or a one-percent owner of the Employer who
has annual compensation of more than $150,000. Annual compensation means
compensation as defined in Code Section 415(c)(3), but including amounts
contributed by the Employer pursuant to a salary reduction agreement which are
excludable from the Employee's gross income in Code Sections 125, 402(e)(3),
402(h)(1)(B) 403(b). The determination period is the Plan Year containing the
Determination Date and the four preceding Plan Years.
The determination of who is a Key Employee will be made in accordance with Code
Section 416(i)(1) and the Treasury Regulations thereunder.
LEASED EMPLOYEE
Means, any person (other than an Employee of the recipient Employer) who,
pursuant to an agreement between the recipient Employer and any other person
("leasing organization"), has performed services for the recipient Employer (or
for the recipient Employer and related persons determined in accordance with
Code Section 414(n)(6)) on a substantially full time basis for a period of at
least one year, and such services are performed under primary direction or
control by the recipient Employer. Contributions or benefits provided to 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.
A Leased Employee shall not be considered an Employee of the recipient if: (1)
such Leased Employee is covered by a money purchase pension plan providing a) a
nonintegrated employer contribution rate of at least 10 percent of compensation,
as defined in Code Section 415(c)(3), but including amounts contributed pursuant
to a salary reduction agreement, which are excludable from the Leased Employee's
gross income under Code Sections 125, 402(e)(3), 402(h)(1)(B) or 403(b), b)
immediate participation, and c) full and immediate vesting; and (2) Leased
Employees do not constitute more than 20 percent of the recipient's non-Highly
compensated work force.
LIFE EXPECTANCY
Means life expectancy as computed by using the Single Life Table in Treasury
Regulation 1.401(a)(9)-9, Q&A- 1.
LIMITATION YEAR
Means the Plan Year, unless the Adopting Employer has selected another
12-consecutive month period in the Adoption Agreement. All qualified plans
maintained by the Employer must use the same Limitation Year. If the Limitation
Year is amended to a different 12-consecutive month period, the new Limitation
Year must begin on a date within the Limitation Year in which the amendment is
made.
MASTER OR PROTOTYPE PLAN
Means a plan, the form of which is the subject of a favorable opinion letter
from the IRS.
MATCHING CONTRIBUTION
Means an Employer Contribution made to this or any other defined contribution
plan on behalf of a Participant on account of an Elective Deferral or a
Nondeductible Employee Contribution made by such Participant under a plan
maintained by the Employer.
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MAXIMUM PERMISSIBLE AMOUNT
Means the maximum Annual Addition that may be contributed or allocated to a
Participant's Individual Account under the Plan for any Limitation Year.
For Limitation Years beginning before January 1, 2002, the Maximum Permissible
Amount shall not exceed the lesser of
a. the Defined Contribution Dollar Limitation, or
b. 25 percent of the Participant's Compensation for the Limitation Year,
For Limitation Years beginning on or after January 1, 2002, except for Catch-up
Contributions, the Maximum Permissible Amount shall not exceed the lesser of
a. $40,000, as adjusted for increases in the cost-of-living under Code
Section 415(d), or
b. 100 percent of the Participant's Compensation (within the meaning of Code
Section 415(c)(3)) for the Limitation Year.
The compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits after separation from service (within the
meaning of Code Section 401(h) or Section 419A(f)(2)) which is otherwise treated
as an Annual Addition.
If a short Limitation Year is created because of an amendment changing the
Limitation Year to a different 12-consecutive month period, the Maximum
Permissible Amount will not exceed the Defined Contribution Dollar Limitation
multiplied by the following fraction:
Number of months in the short Limitation Year
12
MONTH OF ELIGIBILITY SERVICE
Means the calendar month during which the Employee completes the number of Hours
of Service designated in the Adoption Agreement. If the Adoption Agreement
indicates a specific number of Months of Eligibility Service and no Hours of
Service requirement is selected, the Employee will be deemed to be required to
complete 831/3 Hours of Service if actual hours are used to determine
eligibility. If an Hours of Service requirement is designated per month, that
number when multiplied by the number of Months of Eligibility Service indicated
in the Adoption Agreement cannot exceed 1000. Employees not meeting the hours
requirement within the initial number of months indicated in the Adoption
Agreement will satisfy the Month of Eligibility Service requirement when they
complete 1,000 Hours of Service within the Eligibility Computation Period.
NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
Means any contribution, other than Roth Elective Deferrals, made to the Plan by
or on behalf of a Participant that is included in the Participant's gross income
in the year in which made and that is maintained under a separate account to
which earnings and losses are allocated.
NORMAL RETIREMENT AGE
Means the age specified in the Adoption Agreement. If the Employer enforces a
mandatory retirement age, the Normal Retirement Age is the lesser of that
mandatory age or the age specified in the Adoption Agreement. If no age is
specified in the Adoption Agreement, the Normal Retirement Age shall be age
591/2.
OWNER-EMPLOYEE
Means an individual who is a sole proprietor, or who is a partner owning more
than 10 percent of either the capital or the profits interest of the
partnership.
PARTICIPANT
Means any Employee or former Employee of the Employer who has met the Plan's age
and service requirements, has entered the Plan, and who is or may become
eligible to receive a benefit of any type from this Plan or whose Beneficiary
may be eligible to receive any such benefit.
PARTICIPANT'S BENEFIT
Means the Participant's Individual Account 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 Participant's Individual Account as of dates in
the valuation calendar year after the Valuation Date and decreased by
distributions made in the valuation calendar year after the Valuation Date. The
Participant's Benefit 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.
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.
PLAN
Means the prototype defined contribution plan adopted by the Employer that is
intended to satisfy the requirements of Code Section 401 and ERISA Section 501.
The Plan consists of this Basic Plan Document plus the corresponding Adoption
Agreement as completed and signed by the Adopting Employer.
PLAN ADMINISTRATOR
The Adopting Employer shall be the Plan Administrator unless the managing body
of the Adopting Employer designates a person or persons other than the Adopting
Employer as the Plan Administrator and so notifies the Trustee (or Custodian,
if applicable). The Adopting Employer shall also be the Plan Administrator if
the person or persons so designated ceases to be the Plan Administrator. The
Adopting Employer may
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establish an administrative committee that will carry out the Plan
Administrator's duties. Members of the administrative committee may allocate the
Plan Administrator's duties among themselves. If the managing body of the
Adopting Employer designates a person or persons other than the Adopting
Employer as Plan Administrator, such person or persons shall serve at the
pleasure of the Adopting Employer and shall serve pursuant to such procedures as
such managing body may provide. Each such person shall be bonded as may be
required by law. The term Plan Administrator shall include any person authorized
to perform the duties of the Plan Administrator and properly identified to the
Trustee or Custodian as such. The Prototype Sponsor shall in no case be
designated as the Plan Administrator. The Plan Administrator shall be a named
Fiduciary of the Plan for purposes of ERISA Section 402(a).
PLAN SEQUENCE NUMBER
Means the three digit number the Adopting Employer assigned to the Plan in the
Adoption Agreement. The Plan Sequence Number identifies the number of qualified
retirement plans the Employer maintains or has maintained. The Plan Sequence
Number is 001 for the Employers first qualified retirement plan, 002 for the
second, etc.
PLAN YEAR
Means the 12-consecutive month period which coincides with the Adopting
Employer's tax year or such other 12-consecutive month period as is designated
in the Adoption Agreement. Notwithstanding the foregoing, a Plan Year may be a
period less than 12 months, as defined in the Adoption Agreement.
PRE-AGE 35 WAIWER
A Participant who will not yet attain age 35 as of the end of any current Plan
Year may make a special Qualified Election to waive the Qualified Preretirement
Survivor Annuity for the period beginning on the date of such election and
ending on the first day of the Plan Year in which the Participant will attain
age 35. Such election shall not be valid unless the Participant receives an
explanation of the Qualified Preretirement Survivor Annuity in such terms as are
comparable to the explanation required in Plan Section 5.10(D)(1). Qualified
Preretirement Survivor Annuity coverage will be automatically reinstated as of
the first day of the Plan Year in which the Participant attains age 35. Any new
waiver on or after such date shall be subject to the full requirements of Plan
Section 5.10.
PRE-TAX ELECTIVE DEFERRALS
Means Elective Deferrals that are not included in a Participant's gross income
at the time deferred. Elective Deferrals will be characterized as Pre-Tax
Elective Deferrals unless the Roth Elective Deferral option is selected in the
Adoption Agreement and, if the Plan permits Roth Elective Deferrals in addition
to Pre-Tax Elective Deferrals, the Qualifying Participant also designates the
deferral as a Roth Elective Deferral.
PRESENT VALUE
Unless otherwise indicated in the Adoption Agreement, for purposes of
establishing the Present Value of benefits under a defined benefit plan to
compute the top-heavy ratio, any benefit shall be discounted only for mortality
and interest based on the interest rate and mortality table specified for this
purpose in the defined benefit plan.
PRIOR PLAN
Means A plan that was replaced by adoption of this Plan document as indicated in
the Adoption Agreement.
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 that
a. the Participant will continue employment until Normal Retirement Age under
the Plan (or current age, if later), and
b. the Participant's Compensation for the current Limitation Year and all
other relevant factors used to determine benefits under the Plan will
remain constant for all future Limitation Years.
PROTOTYPE SPONSOR
Means the entity specified in the Adoption Agreement that makes this prototype
Plan available to employers for adoption.
QUALIFIED DOMESTIC RELATIONS ORDER
A. IN GENERAL
Means A Domestic Relations Order
1. that creates or recognizes the existence of an Alternate Payee's
rights to, or assigns to an Alternate Payee the right to, receive all
or a portion of the benefits payable with respect to A Participant
under the Plan, and
2. with respect to which the requirements described in the remainder of
this section are met.
B. SPECIFICATION OF FACTS
A Domestic Relations Order shall be a Qualified Domestic Relations Order
only if the order clearly specifies
1. the name and last known mailing address (if any) of the Participant
and the name and mailing address of each Alternate Payee covered by
the order,
2. the amount or percentage of the Participant's benefits to be paid by
the Plan to each such Alternate Payee, or the manner in which such
amount or percentage is to be determined,
3. the number of payments or period to which such order applies, and
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4. each plan to which such order applies.
C. ADDITIONAL REQUIREMENTS
In addition to paragraph (B) above, a Domestic Relations Order shall be
considered a Qualified Domestic Relations Order only if such order
1. does not require the Plan to provide any type or form of benefit, or
any option not otherwise provided under the Plan,
2. does not require the Plan to provide increased benefits, and
3. does not require benefit to an Alternate Payee that are required to be
paid to another Alternate Payee under another order previously
determined to be a Qualified Domestic Relations Order.
D. EXCEPTION FOR CERTAIN PAYMENTS
A Domestic Relations Order shall not be treated as failing to meet the
requirements above solely because such order requires that payment of
benefits be made to an Alternate Payee
1. on or after the date on which the Participant attains (or would have
attained) the earliest retirement age as defined in Code Section
414(p)(4)(B),
2. as if the Participant had retired on the date on which such payment is
to begin under such order, and
3. in any form in which such benefits may be paid under the Plan to the
Participant (other than in a Qualified Joint and Survivor Annuity)
with respect to the Alternate Payee and their subsequent spouse.
QUALIFIED ELECTION
Means a waiver of a Qualified Joint and Survivor Annuity or a Qualified
Preretirement Survivor Annuity. Any waiver of a Qualified Joint and Survivor
Annuity or a Qualified Preretirement Survivor Annuity shall not be effective
unless a) the Participant's Spouse consents to the election (either in writing
or in any other form permitted under rules promulgated by the IRS and DOL), b)
the election designates a specific Beneficiary, including any class of
beneficiaries or any contingent beneficiaries, which may not be changed without
spousal consent (or the Spouse expressly permits designations by the Participant
without any further spousal consent), c) the Spouse's consent acknowledges the
effect of the election, and d) the Spouse's consent is witnessed by a Plan
representative or notary public. Additionally, a Participant's waiver of the
Qualified Joint and Survivor Annuity shall not be effective unless the election
designates a form of benefit payment which may not be changed without spousal
consent (or the Spouse expressly permits designations by the Participant without
any further spousal consent). If it is established to the satisfaction of a Plan
representative that there is no Spouse or that the Spouse cannot be located, a
waiver by the Participant will be deemed a Qualified Election. In addition, if
the Spouse is legally incompetent to give consent, the Spouse's legal guardian,
even if the guardian is the Participant, may give consent. If the Participant is
legally separated or the Participant has been abandoned (within the meaning of
local law) and the Participant has a court order to such effect, spousal consent
is not required unless a Qualified Domestic Relations Order provides otherwise.
Any consent by a Spouse obtained under this provision (or establishment that the
consent of a Spouse may not be obtained) shall be effective only with respect to
such Spouse. A consent that permits designations by the Participant without any
requirement of further consent by such Spouse must acknowledge that the Spouse
has the right to limit consent to a specific Beneficiary, and a specific form of
benefit where applicable, and that the Spouse voluntarily elects to relinquish
either or both of such rights. A revocation of a prior waiver may be made by a
Participant without the consent of the Spouse at any time before the
commencement of benefits. The number of revocations shall not be limited. No
consent obtained under this provision shall be valid unless the Participant has
received notice as provided in Plan Section 5.10(D).
QUALIFIED JOINT AND SURVIVOR ANNUITY
Means an immediate annuity for the life of the Participant with a survivor
annuity for the life of the Spouse which is not less than 50 percent and not
more than 100 percent of the amount of the annuity which is payable during the
joint lives of the Participant and the Spouse and which is the amount of benefit
which can be purchased with the Participant's vested account balance. The
percentage of the survivor annuity under the Plan shall be 50 percent, unless a
different percentage is elected by the Adopting Employer in the Adoption
Agreement.
QUALIFIED MATCHING CONTRIBUTIONS
Means Matching Contributions that are nonforfeitable when made to the Plan and
that are distributable only in accordance with the distribution provisions
(other than for hardships) applicable to Elective Deferrals.
QUALIFIED NONELECTIVE CONTRIBUTIONS
Means Employer Contributions (other than Matching Contributions, Qualified
Matching Contributions, or Employer Profit Sharing Contributions) allocated to
Participants' Individual Accounts that the Participants may not elect to receive
in cash until distributed from the Plan; that are nonforfeitable when made to
the Plan; and that are distributable only in accordance with the distribution
provisions (other than hardships) that are applicable to Elective Deferrals.
QUALIFIED PRERETIREMENT SURVIROR ANNUITY
Means a survivor annuity for the life of the surviving Spouse of the Participant
if the payments are not less than the amounts which would be payable as a
survivor annuity under the Qualified Joint and Survivor Annuity under the Plan
in accordance with Code Section 417(c).
QUALIFYING CONTRIBUTING PARTICIPANT
Means a Contributing Participant who satisfies the requirements described in
Plan Section 3.02 to be entitled to receive a Matching Contribution (and
Forfeitures, if applicable) for a Plan Year.
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QUALIFYING EMPLOYER SECURITY(IES)
Means stock that is issued by the Employer and transferred to this Plan and that
is subject to the requirements of ERISA Section 407 and meets the requirements
of ERISA Section 407(d)(5),
QUALIFYING PARTICIPANT
A Participant is a Qualifying Participant and is entitled to share in the
Employer Contribution for any Plan Year if the Participant was a Participant on
at least one day during the Plan Year and satisfies any additional conditions
specified in the Adoption Agreement. If this Plan is a standardized plan, unless
the Employer specifies more favorable conditions in the Adoption Agreement, a
Participant will be a Qualifying Participant for a Plan Year if the Participant
either completes more than 500 Hours of Service (three consecutive calendar
months if the Elapsed Time method of determining service applies) during the
Plan Year or is employed on the last day of the Plan Year. The determination of
whether a Participant is entitled to share in the Employer Contribution shall be
made as of the last day of each Plan Year. If the Elapsed Time method of
determining service applies, each Employee will share in Employer Contributions
for the period beginning on the date the Employee commences participation under
the Plan and ending on the date on which such Employee severs employment with
the Employer or is no longer a member of an eligible class of Employees.
RECIPIENT
A Recipient includes an Employee or former Employee. In addition, the Employee's
or former Employee's surviving Spouse and the Employee's or former Employee's
Spouse or former Spouse who is the Alternate Payee under a Qualified Domestic
Relations Order, as defined in Code Section 414(p), are Recipients with regard
to the interest of the Spouse or former Spouse.
REQUIRED AGGREGATION GROUP
Means (a) each qualified plan of the Employer in which at least one Key Employee
participates or participated at any time during the Plan Year containing the
Determination Date or any of the four preceding Plan Years (regardless of
whether the Plan has terminated), and (b) any other qualified plan of the
Employer which enables a plan described in (a) to meet the requirements of Code
Section 401(a)(4) or 410.
REQUIRED BEGINNING DATE
Means April 1 of the calendar year following the calendar year in which the
Participant attains age 70 1/2 or retires, whichever is later, except that
benefit distributions to a five-percent owner must commence by the April 1 of
the calendar year following the calendar year in which the Participant attains
age 70 1/2. Notwithstanding the foregoing, the Required Beginning Date is one of
the following as selected by the Adopting Employer in the Adoption Agreement:
(a) the Required Beginning Date of a Participant is April 1 of the calendar
year following the calendar year in which the Participant attains age
70 1/2;
(b) the Required Beginning Date of a Participant is April 1 of the calendar
year following the calendar year in which the Participant attains age 70
1/2, except that benefit distributions to a Participant (other than a
five-percent owner) with respect to benefits accrued after the later of the
adoption or effective date of an amendment to the Plan that implements the
changes to the Required Minimum Distribution rules of this Definition must
commence by the later of the April 1 of the calendar year following the
calendar year in which the Participant attains age 70 1/2 or retires; or
(c) the Required Beginning Date of a Participant is April 1 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
except that benefit distributions to a five-percent owner must commence by
the April 1 of the calendar year following the calendar year in which the
Participant attains age 70 1/2;
(1) any Participant (other than a five-percent owner) attaining age 70 1/2
after 1995 may elect by the April 1 of the calendar year following the
year in which the Participant attained age 70 1/2, (or by December 31,
1997, in the case of a Participant attaining age 70 1/2 in 1996) to
defer distributions until the calendar year following the calendar
year in which the Participant retires. If no such election is made the
Participant will begin receiving distributions by April 1 of the
calendar year following the year in which the Participant attained age
70 1/2 (or by December 31, 1997, in the case of a Participant
attaining age 70 1/2 in 1996);
(2) any Participant (other than a five-percent owner) attaining age 70 1/2
before 1997 may elect to stop distributions and recommence by April 1
of the calendar year following the year in which the Participant
retires. To satisfy the Joint and Survivor Annuity Requirements
described in Section 5.10, the requirements in Notice 97-75, Q&A-8,
must be satisfied for any Participant who elects to stop
distributions. There is either (as elected by the Employer in the
Adoption Agreement)
a) a new annuity starting date upon recommencement, or
b) no new annuity starting date upon recommencement.
A Participant is treated as a five-percent owner for purposes of this
section if such Participant is a five-percent 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.
Once distributions have begun to a five-percent owner under this section,
they must continue to be distributed, even if the Participant ceases to be
a five-percent owner in a subsequent year.
ROTH ELECTIVE DEFERRALS
Means Elective Deferrals that are includible in a Participant's gross
income at the time deferred and have been irrevocably designated as Roth
Elective Deferrals by the Participant in their deferral election.
ROTH IRA
Means an individual retirement account as defined in Code Section 408A.
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SAFE HARBOR CODA
Means a Plan that has elected to make contributions in accordance with Plan
Section 3.03.
SAFE HARBOR NONELECTIVE CONTRIBUTIONS
Means Employer Contributions made in an amount equal to at least three percent
of each Participant's Compensation on behalf of each Eligible Employee, unless
otherwise specified in the Adoption Agreement. Such contributions shall be made
without regard to whether a Participant makes an Elective Deferral or a
Nondeductible Employee Contribution.
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, including 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.
SEPARATE FUND
Means a subdivision of the Fund held in the name of a particular Participant or
Beneficiary representing certain assets held for that Participant or
Beneficiary. The assets that comprise a Participant's Separate Fund are those
assets earmarked for the Participant and those assets subject to the
Participant's individual direction pursuant to Plan Section 7.22(B).
SEVERANCE FROM EMPLOYMENT
Means an Employee ceases to be an Employee of the Employer maintaining the Plan.
An Employee does not have a Severance from Employment if, in connection with a
change of employment, the employee's new employer maintains such plan with
respect to the employee.
SIMPLE 401(K) YEAR
Means the calendar year and is applicable only if the Employer has adopted a
SIMPLE 401(k) Plan.
SIMPLE IRA
Means an individual retirement account that satisfies the requirements of Code
Sections 408(p) and 408(a).
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.
STRAIGHT LIFE ANNUITY
Means an annuity payable in equal installments for the life of the Participant,
that terminates upon the Participant's death.
TAXABLE WAGE BASE
Means, with respect to any taxable year, the contribution and benefit base in
effect in Section 230 of the Social Security Act at the beginning of the Plan
Year.
TERMINATION OF EMPLOYMENT
Means that the employment status of an Employee ceases for any reason other than
death. An Employee who does not return to work for the Employer on or before the
expiration of an authorized leave of absence from such Employer shall be deemed
to have incurred a Termination of Employment when such leave ends.
TOP-HEAVY PLAN
Means a Plan determined to be a Top-Heavy Plan for any Plan Year pursuant to
Plan Section 7.19.
TRADITIONAL IRA
Means an individual retirement account as defined in Code section 408(a).
TRUSTEE
Means, if applicable, an individual, individuals, or corporation specified in
the Adoption Agreement as Trustee or any duly appointed successor as provided in
Plan Section 8.05, A corporate Trustee must be a bank, trust company, broker,
dealer or clearing agency as defined in Labor Regulation 2550.403(a)-l(b).
VALUATION DATE
Means the valuation date or dates as specified in the Adoption Agreement. If no
date is specified in the Adoption Agreement, the Valuation Date shall be the
last day of the Plan Year and each additional date designated by the Plan
Administrator which is selected in a uniform and nondiscriminatory manner when
the assets of the Fund are valued at their then fair market value.
Notwithstanding the foregoing, for purposes of calculating the top heavy ratio,
the Valuation Date shall be the last day of the initial Plan Year and the last
day of the preceding Plan Year for each subsequent Plan Year.
VESTED
Means nonforfeitable, that is, an unconditional and legally enforceable claim
against the Plan that is obtained by a Participant or the Participant's
Beneficiary to that part of an immediate or deferred benefit under the Plan that
arises from a Participant's Years of Vesting Service.
VESTED ACCOUNT BALANCE
Means the aggregate value of the Participant's Vested account balances derived
from Employer and Nondeductible Employee Contributions (including rollovers),
whether Vested before or upon death, including the proceeds of insurance
contracts, if any, on the Participant's life. This definition shall apply to a
Participant who is vested in amounts attributable to Employer Contributions,
Nondeductible Employee Contributions, or both at the time of death or
distribution.
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YEAR OF ELIGIBILITY SERVICE
Means a 12-consecutive month period which coincides with an Eligibility
Computation Period during which an Employee completes at least 1,000 Hours of
Service (or such lesser number of Hours of Service specified in the Adoption
Agreement). An Employee does not complete a Year of Eligibility Service before
the end of the 12-consecutive month period regardless of when during such period
the Employee completes the required number of Hours of Service.
YEAR OF VESTING SERVICE
Means a Plan Year during which an Employee completes at least 1,000 Hours of
Service (or such lesser number of Hours of Service specified in the Adoption
Agreement for this purpose). Notwithstanding the preceding sentence, if the
Adopting Employer so indicates in the Adoption Agreement, vesting shall be
computed by reference to the 12-consecutive month period beginning with the
Employee's Employment Commencement Date and each successive 12-month period
commencing on the anniversaries thereof, or some other 12-consecutive month
period.
Years of Vesting Service shall not include any period of time excluded from
Years of Vesting Service in the Adoption Agreement. However, if an Employee
becomes ineligible to participate in the Plan because they are no longer a
member of an eligible class of Employees, but has not incurred a Break in
Vesting Service, such Employee shall continue to accumulate Years of Vesting
Service.
In the event the Plan Year is changed to a new 12-month period, Employees shall
receive credit for Years of Vesting Service, in accordance with the preceding
provisions of this definition, for each of the Plan Years (the old and new Plan
Years) that overlap as a result of such change.
SECTION ONE: EFFECTIVE DATES
Pursuant to the Definitions section of the Plan, the Effective Date means the
date the Plan becomes effective as indicated in the Adoption Agreement. However,
certain provisions of the Plan may have effective dates different from the Plan
Effective Date, if, for example, the Plan is amended subsequent to the Effective
Date.
SECTION TWO: ELIGIBILITY REQUIREMENTS
2.01 ELIGIBILITY TO PARTICIPATE
Each Employee, except an Employee who belongs to a class of Employees
excluded from participation as indicated in the Adoption Agreement, shall
be eligible to participate in this Plan upon satisfying the age and Years
of Eligibility Service requirements specified in the Adoption Agreement.
If no age is specified in the Adoption Agreement, there will not be an age
requirement. If no option for Years of Eligibility Service is selected, no
Years of Eligibility Service will be required.
Notwithstanding the preceding paragraph, if the Adoption Agreement does
not permit Employers to restrict participation of certain classes of
Employees, the following Employees will be excluded from participation in
the Plan.
A. UNION EMPLOYEES - Employees included in a unit of Employees covered
by a collective bargaining agreement between the Employer and
Employee representatives, if retirement benefits were the subject of
good faith bargaining and if two percent or less of the Employees
who are covered pursuant to that agreement are professionals as
defined in Treasury Regulation 1,410(b)-9. For this purpose, the
term "Employee representatives" does not include any organization in
which more than half of the members are Employees who are owners,
officers, or executives of the Employer.
B. NON-RESIDENT ALIENS - 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)).
C. ACQUIRED Employees - Employees who became Employees as the result
of certain acquisitions or dispositions as described under Code
Section 410(b)(6)(C). Such Employees will be excluded from
participation during the transition period beginning on the date of
the change in the members of the group and ending on the last day of
the first Plan Year beginning after the date of the change. A
transaction under Code Section 410(b)(6)(C) is an asset or stock
acquisition, merger, or similar transaction involving a change in
the employer of the employees of a trade or business.
Notwithstanding the preceding, Employees who are not eligible to
participate in the Plan because of their classification as "part-time,
seasonal or temporary employees, or any other employment classification
that is directly or indirectly based on the number of Hours of Service
that an Employee is customarily scheduled to work, will become eligible to
participate in the Plan as of the Entry Date coincident with or next
following such Employee's satisfaction of 1,000 Hours of Service in an
Eligibility Computation Period.
2.02 PLAN ENTRY
A. PLAN RESTATEMENT - If this Plan is an amendment or restatement of a
Prior Plan, each Employee who was a Participant in the Prior Plan
before the Effective Date shall continue to be a Participant in this
Plan.
B. EFFECTIVE DATE - An Employee will become a Participant in the Plan
as of the Effective Date if the Employee has met the eligibility
requirements of Plan Section 2.01 as of such date, After the
Effective Date, each Employee will become a Participant on the first
Entry Date coinciding with or following the date the Employee
satisfies the eligibility requirements of Plan Section 2.01, unless
the Adopting Employer selects retroactive Entry Dates in the
Adoption Agreement.
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C. NOTIFICATION - The Plan Administrator shall notify each Employee
who becomes eligible to be a Participant under this Plan and shall
furnish the Employee with the enrollment forms or other documents
which are required of Participants. Such notification shall be in
writing (or in any other form permitted under rules promulgated by
the IRS or DOL). The eligible Employee shall execute such forms or
documents and make available such information as may be required in
the administration of the Plan.
2.03 TRANSFER TO OR FROM INELIGIBLE CLASS
If an Employee who had been a Participant becomes ineligible to
participate because they are no longer a member of an eligible class of
Employees, but has not incurred a Break in Eligibility Service, such
Employee shall participate immediately following the date of reemployment
upon their return to an eligible class of Employees. If such Employee
incurs a Break in Eligibility Service, their eligibility to participate
shall be determined by Plan Section 2.04.
An Employee who is not a member of the eligible class of Employees will
become a Participant immediately upon becoming a member of the eligible
class, provided such Employee has satisfied the age and Years of
Eligibility Service requirements. If such Employee has not satisfied the
age and Years of Eligibility Service requirements as of the date they
become a member of the eligible class, such Employee shall become a
Participant on the first Entry Date coinciding with or following the date
they satisfy those requirements, unless otherwise indicated in the
Adoption Agreement.
2.04 RETURN AS A PARTICIPANT AFTER BREAK IN ELIGIBILITY SERVICE
A. EMPLOYEE NOT A PARTICIPANT BEFORE BREAK - If an Employee incurs a
Break in Eligibility Service before satisfying the Plan's eligibility
requirements, such Employee's Years of Eligibility Service before such
Break in Eligibility Service will not be taken into account.
B. EMPLOYEE A PARTICIPANT BEFORE BREAK - If a Participant incurs a Break
in Eligibility Service, such Participant shall continue to participate
in the Plan, or, if terminated, shall participate immediately
following the date of reemployment, except as set forth in Plan
Section 2.04(C).
2.05 DETERMINATIONS UNDER THIS SECTION
The Plan Administrator shall determine the eligibility of each Employee to
be a Participant. This determination shall be conclusive and binding upon
all persons except as otherwise provided herein or by law.
2.06 TERMS OF EMPLOYMENT
Nothing with respect to the establishment of the Plan and trust or any
action taken with respect to the Plan, nor the fact that a common law
Employee has become a Participant shall give to that Employee any right to
employment or continued employment or to grant any other rights except as
specifically set forth in this Plan document, ERISA, or other applicable
law; nor shall the Plan or trust limit the right of the Employer to
discharge an Employee or to otherwise deal with an Employee without regard
to the effect such treatment may have upon the Employee's rights under the
Plan.
SECTION THREE: CONTRIBUTIONS
3.01 ELECTIVE DEFERRALS
Each Employee who satisfies the eligibility requirements specified in the
Adoption Agreement for making Pre-Tax Elective Deferrals and/or Roth
Elective Deferrals, if applicable, may begin making such Elective
Deferrals to the Plan by enrolling as a Contributing Participant.
A. REQUIREMENTS TO ENROLL AS A CONTRIBUTING PARTICIPANT - Each
Employee who satisfies the eligibility requirements specified in the
Adoption Agreement for Elective Deferrals may enroll as a
Contributing Participant on the first Entry Date coinciding with or
following the date the Employee satisfies the eligibility
requirements, or if applicable, the first Entry Date following the
date on which the Employee returns to the eligible class of
Employees pursuant to Plan Section 2.03. A Participant who wishes to
enroll as a Contributing Participant must deliver (either in writing
or in any other form permitted by the IRS and the DOL) a salary
reduction agreement (or agreement to make Nondeductible Employee
Contributions) to the Plan Administrator except as set forth in Plan
Section 3.01(E) below. Except for occasional, bona fide
administrative considerations as set forth in the Treasury
Regulations, contributions made pursuant to such election cannot
precede the earlier of 1) the date on which services relating to the
contribution are performed, and 2) the date on which the
Compensation that is subject to the election would be payable to the
Employee in the absence of an election to defer. Any limits on
Elective Deferrals designated by the Employer in Adoption Agreement
Section Three may be determined either periodically throughout the
Plan Year (e.g., each payroll period) or at the end of the Plan Year
so long as the determination is made in a uniform and
nondiscriminatory manner.
Notwithstanding the dates set forth in Plan Section 3.01(A) as of
which a Participant may enroll as a Contributing Participant, the
Plan Administrator shall have the authority to designate, in a
nondiscriminatory manner, additional enrollment dates during the
12-month period beginning on the Effective Date (or the date that
Elective Deferrals may commence, if later) in order that an orderly
first enrollment might be completed. In addition, if the Adopting
Employer has indicated in the Adoption Agreement that Participants
may make separate deferral elections with respect to bonuses,
Participants shall be afforded a reasonable period of time before
the issuance of such bonuses to elect to defer all or part of them
into the Plan. Such an election to defer all or part of a bonus
shall be independent of any other salary reduction agreement and
shall not constitute a modification to any pre-existing salary
reduction agreement. If a Plan permits both Pre-Tax and Roth
Elective Deferrals and the Participant fails to designate whether
their Elective Deferrals are Pre-Tax or Roth Elective Deferrals, the
Participant will be deemed to have designated the Elective Deferral
as Pre-Tax.
(C)2010 Ascensus, Inc., Brainerd, MN
17
Notwithstanding anything in this Plan to the contrary, if this Plan
is subject to ERISA, the Employer shall deliver Elective Deferrals
to the Trustee (or Custodian, if applicable) as soon as such
contributions can reasonably be segregated from the general assets
of the Employer. In no event, however, shall Elective Deferrals be
deposited with the Trustee (or Custodian, if applicable) later than
the 15th business day of the month following the month in which the
Elective Deferrals would otherwise have been payable to a
Participant in cash or by such other deadline determined under rules
promulgated by the DOL. If this Plan is not subject to ERISA, the
Employer shall deposit Elective Deferrals with the Trustee (or
Custodian, if applicable) as of such time as is required by the IRS
and DOL.
B. CEASING ELECTIVE DEFERRALS - Except as otherwise provided in the
Adoption Agreement, a Participant may cease Elective Deferrals (or
Nondeductible Employee Contributions) and thus withdraw as a
Contributing Participant as of any such times established by the
Plan Administrator in a uniform and nondiscriminatory manner by
revoking the authorization to the Employer to make Elective
Deferrals (or Nondeductible Employee Contributions) on their behalf.
A Participant who desires to withdraw as a Contributing Participant
shall give notice of withdrawal to the Plan Administrator at least
30 days (or such shorter period as the Plan Administrator shall
permit in a uniform and nondiscriminatory manner) before the
effective date of withdrawal. A Participant shall cease to be a
Contributing Participant upon their Termination of Employment, or on
account of termination of the Plan. Notwithstanding anything in this
Plan to the contrary, each Employee who has entered into a salary
reduction agreement under a SIMPLE 401(k) Plan may terminate such
agreement at any time during the year.
C. RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE
DEFERRALS - Except as otherwise provided in the Adoption Agreement,
a Participant who has withdrawn as a Contributing Participant in
Plan Section 3.01(B) (or because the Participant has taken a
hardship distribution pursuant to Plan Section 5.01(C)(2)(b)) may
not again become a Contributing Participant until the first day of
the Plan Year and the first day of the seventh month of the Plan
Year following such withdrawal, unless the Plan Administrator, in a
uniform and nondiscriminatory manner, permits withdrawing
Participants to resume their status as Contributing Participants
sooner (provided that Participants who take withdrawals pursuant to
Plan Section 5.01(C)(2)(b) shall be subject to the conditions of
that Section).
D. CHANGING ELECTIVE DEFERRAL AMOUNTS - A Contributing Participant or
a Participant who has met the eligibility requirements in the
Adoption Agreement but who is not currently making Elective
Deferrals (or Nondeductible Employee Contributions), may modify
their salary reduction agreement (or agreement to make Nondeductible
Employee Contributions) to increase or decrease (within the limits
placed on Elective Deferrals or Nondeductible Employee Contributions
in the Adoption Agreement) the amount of their Compensation deferred
into the Plan or change the type of their future Elective Deferrals
(Roth or Pre-Tax), if applicable. Except as otherwise provided in
the Adoption Agreement, such modification may be made as of such
times established by the Plan Administrator in a uniform and
nondiscriminatory manner. A Contributing Participant who desires to
make such a modification shall complete and deliver (either in
writing or in any other form permitted by the IRS and the DOL) a new
salary reduction agreement (or agreement to make Nondeductible
Employee Contributions to the Plan Administrator). The Plan
Administrator may prescribe such uniform and nondiscriminatory rules
it deems appropriate to carry out the terms of this Plan Section
3.01(D).
E. AUTOMATIC ELECTIVE DEFERRALS AND AUTOMATIC ELECTIVE DEFERRAL
INCREASES
1. Automatic Elective Deferrals - Each Employee who satisfies
the eligibility requirements specified in the Adoption
Agreement for Elective Deferrals will be given a reasonable
opportunity to enroll as a Contributing Participant.
Notwithstanding the foregoing, if the Adopting Employer so
elected in the Adoption Agreement, eligible Employees who fail
to provide the Employer a salary reduction agreement
indicating either 1) their desire not to make Elective
Deferrals, or 2) the amount or percentage of Compensation to
be deferred, will automatically have the amount or percentage
of Compensation listed in the Adoption Agreement withheld from
their Compensation and contributed as an Elective Deferral.
Elective Deferrals for such Contributing Participants shall
continue at the rate specified in the Adoption Agreement until
1) the Contributing Participant provides the Employer a salary
reduction agreement (either in writing or in any other form
permitted under rules promulgated by the IRS and the DOL) to
the contrary, or unless 2) the Employer reduces or ceases
Elective Deferrals for such Participant pursuant to Plan
Section 3.13(B)(8), or 3) Elective Deferrals are increased in
accordance with Plan Section 3.01(E)(2). Contributions made
pursuant to this Plan Section 3.01(E) will be characterized
as Pre-Tax Elective Deferrals unless designated as Roth
Elective Deferrals in the Adoption Agreement and will not be
characterized as Nondeductible Employee Contributions.
An Employer who adopts automatic Elective Deferrals as
described in this Plan Section 3.01(E)(1) shall establish
uniform and nondiscriminatory procedures designed to ensure
that each eligible Employee is provided an effective
opportunity to make a salary deferral election. Such
procedures shall include, but are not limited to, the means by
which notice will be provided to each eligible Employee of
their right to complete a salary reduction agreement
specifying a different amount or percentage of Compensation
(including no Compensation) to be contributed to the Plan and
a reasonable period of time for completing such a salary
reduction agreement.
2. Automatic Elective Deferral Increases - If the Adopting
Employer so elects in the Adoption Agreement, the Elective
Deferral percentage or amount for Contributing Participants
will be adjusted automatically by the Employer in the
increments and time periods stated in the Adoption Agreement.
Automatic Elective Deferral increases will be initiated by the
Adopting Employer only for those Contributing Participants who
fail to provide the Employer a salary reduction agreement on
or before the date indicated in the Adoption Agreement and who
are automatically enrolled pursuant to this Plan Section
3.01(E)(l) unless otherwise elected on the Adoption Agreement.
In addition to the foregoing, the Plan Administrator, in a
uniform and nondiscriminatory manner, may establish
operational procedures to enable all Contributing
Participants, including those who were not automatically
enrolled as Contributing Participants pursuant to Plan Section
3.0l(E)(l), to elect to have their Elective Deferrals
automatically increased.
(C)2010 Ascensus, Inc., Brainerd, MN
18
An Employer who adopts the automatic Elective Deferral
increase feature described in this Plan Section 3.01(E)(2)
shall establish uniform and nondiscriminatory procedures
designed to ensure that each Contributing Participant is
provided an effective opportunity to make and modify their
salary deferral election such that automatic Elective Deferral
increases will not apply to such Participant. Such procedures
shall include, but are not limited to, the means by which
notice will be provided to each Contributing Participant of
their right to complete a salary reduction agreement
discontinuing automatic Elective Deferral increases and a
reasonable period of time for completing such a salary
reduction agreement.
F. PRE-TAX VS. ROTH ELECTIVE DEFERRALS - If the Adopting Employer so
elects in the Adoption Agreement, each Employee who enrolls as a
Contributing Participant may specify whether their Elective
Deferrals are to be characterized as Pre-Tax Elective Deferrals,
Roth Elective Deferrals, or a specified combination, A Contributing
Participant's election will remain in effect until superseded by
another election. Elective Deferrals contributed to the Plan as one
type, either Roth or Pre-Tax, may not later be reclassified as the
other type. A Contributing Participant's Roth Elective Deferrals
will be deposited in the Contributing Participant's Roth Elective
Deferral subaccount in the Plan. No contributions other than Roth
Elective Deferrals and properly attributable earnings will be
credited to each Contributing Participant's Roth Elective Deferral
account, and gains, losses, and other credits or charges will be
allocated on a reasonable and consistent basis to such subaccount.
G. CATCH-UP CONTRIBUTIONS - Unless elected otherwise in the Adoption
Agreement, all Employees who are eligible to make Elective Deferrals
under this Plan and who are age 50 or older by the end of their
taxable year will be eligible to make Catch-up Contributions.
Catch-up Contributions are not subject to the limits on Annual
Additions under Code Section 415, are not counted in the ADP test,
and are not counted in determining the minimum allocation under Code
Section 416 (but Catch-up Contributions made in prior years are
counted in determining whether the Plan is top-heavy). Provisions in
the Plan relating to Catch-up Contributions apply to Elective
Deferrals made after 2001.
H. ELECTIVE DEFERRALS TO A SIMPLE 401(K) PLAN - Notwithstanding
anything in this Plan to the contrary, if the Employer is an
Eligible Employer for SIMPLE 401(k) Plans and has established a
SIMPLE 401(k) Plan, each Eligible Employee may deliver (either in
writing or in any other form permitted by the IRS and the DOL) a
salary reduction election and have their Compensation reduced for
the SIMPLE 40 1(k) Year in any amount selected by the Employee
subject to the limitation described below. The Employer will make
Elective Deferral contributions to this Plan in the amount by which
the Employee's Compensation has been reduced.
The total Elective Deferrals to a SIMPLE 401(k) for any Eligible
Employee cannot exceed the limitation on Elective Deferrals in
effect for the SIMPLE 401(k)Year. The limitation on Elective
Deferrals to a SIMPLE 401(k) Plan is $6,000 for 2000, $6,500 for
2001, $7,000 for 2002 and increased by $1,000 for each SIMPLE 401(k)
Year thereafter up to $10,000 for 2005 and later years. After 2005,
the $10,000 limit will be adjusted by the Secretary of the Treasury
for cost-of-living increases under Code Section 408(p)(2)(E). Any
such adjustments will be in multiples of $500. Beginning in 2002,
the amount of an Eligible Employee's Elective Deferrals permitted
for a SIMPLE 401(k) Year is increased for Employees age 50 or older
by the end of the SIMPLE 401(k) Year by the amount of allowable
Catch-up Contributions. The amount of allowable Catch-up
Contributions is $500 for 2002, increasing by $500 for each year
thereafter up to $2,500 for 2006. After 2006, the $2,500 limit will
be adjusted by the Secretary of the Treasury for the cost-of-living
increases under Code Section 414(v)(2)(C). Catch-up Contributions
are otherwise treated the same as other Elective Deferrals.
In addition to any other election periods provided under the Plan,
each Eligible Employee in a SIMPLE 401(k) Plan may make or modify a
salary reduction agreement during the 60-day period immediately
preceding each January 1.
For the SIMPLE 401(k) Year an Employee becomes eligible to make
Elective Deferral contributions under a SIMPLE 401(k) Plan, the
60-day election period requirement described above is deemed
satisfied if the Employee may make or modify a salary reduction
agreement during a 60-day period that includes either the date the
Employee becomes eligible or the day before.
I. SIMPLE 401(K) NOTICE REQUIREMENTS - The Employer will notify each
Eligible Employee before the 60-day election period described in
Plan Section 3.01(H) that they can complete a salary reduction
agreement or modify a prior salary reduction agreement during that
period. The notification must indicate whether the Employer will
provide the three-percent Matching Contribution or a two-percent
nonelective contribution described in Plan Section 3.02.
3.02 MATCHING CONTRIBUTIONS
The Employer may elect to make Matching Contributions under the Plan on
behalf of Qualifying Contributing Participants as provided in the Adoption
Agreement. To be a Qualifying Contributing Participant for a Plan Year,
the Participant must make Elective Deferrals (or Nondeductible Employee
Contributions, if the Employer has agreed to match such contributions) for
the Plan Year, satisfy any age and Years of Eligibility Service and other
requirements that are specified for Matching Contributions in the Adoption
Agreement, and also satisfy any additional conditions set forth in the
Adoption Agreement for this purpose. The Employer may make Matching
Contributions at the same time as it contributes Elective Deferrals or at
any other time as permitted by law and regulation. The proper Matching
Contribution amount may be determined by the Employer at any time during a
Plan Year, including, but not limited to, such time as Matching
Contributions are delivered to the Trustee (or Custodian, if applicable)
or at the end of the Plan Year so long as the amount of Matching
Contributions is determined in a uniform and nondiscriminatory manner.
For Plan Years beginning in 2006 (or such earlier date on which the final
regulations under Treasury Regulation Section 1.401(k) and 1.401(m) became
effective), Matching Contributions with respect to a non-Highly
Compensated Employee taken into account under the Actual Contribution
Percentage (ACP) test cannot exceed the greatest of 1) 5 percent of
Compensation, 2) the amount of the Qualifying Contributing Participant's
Elective Deferrals, and 3) the product of two times the plan's
representative matching rate and the Qualifying Contributing Participant's
Elective Deferrals for a year. The "representative matching rate," for
this purpose, is the lowest matching rate for any eligible non-Highly
Compensated Employee among a group of eligible non-Highly Compensated
Employees that consists of one half of all non-Highly Compensated
Employees for the Plan Year who make Elective Deferrals for the Plan Year
(or if greater, the lowest matching rate for all eligible non-Highly
Compensated Employees in the Plan who are employed by
(C)2010 Ascensus, Inc., Brainerd, MN
19
the Employer on the last day of the Plan Year and who make Elective
Deferrals for the Plan Year). The "matching rate" is generally the
Matching Contribution made for a Qualifying Contributing Participant,
divided by their Elective Deferrals for the year. If the matching rate is
not the same for all levels of Elective Deferrals, the matching rate is
determined assuming that a Qualifying Contributing Participant's Elective
Deferrals are equal to six percent of Compensation.
Notwithstanding the foregoing, if an Eligible Employer has established a
SIMPLE 401(k) Plan, the Employer will contribute a Matching Contribution
to the Plan on behalf of each Employee who makes an Elective Deferral
contribution as set forthin Plan Section 3.01(H). The amount of the
Matching Contribution will be equal to the Employee's Elective Deferral
contribution up to a limit of three percent of the Employee's Compensation
for the entire SIMPLE 401(k) Year. For any year, instead of a Matching
Contribution to a SIMPLE 401(k) Plan, however, the Employer may elect to
contribute a nonelective contribution of two percent of Compensation for
the full SIMPLE 401(k) Year for each Eligible Employee who received at
least $5,000 of Compensation (or such lesser amount as elected by the
Employer in the Adoption Agreement) for the SIMPLE 401(k) Year.
3.03 SAFE HARBOR CODA
If the Adopting Employer has elected the Safe Harbor CODA option in the
Adoption Agreement, and if the provisions of this Plan Section 3.03 are
followed for the Plan Year, then any provisions relating to the ADP Test
described in Code Section 401(k)(3) or the ACP Test described in Code
Section 401(m)(2) shall not apply. To the extent that any other provision
of the Plan is inconsistent with the provisions of this Plan Section 3.03,
the provisions of this Section shall apply.
A. ADP TEST SAFE HARBOR CONTRIBUTIONS - The Employer will make the ADP
Test Safe Harbor Contributions, if any, indicated in the Adoption
Agreement on behalf of each Eligible Employee unless such
contributions are otherwise limited in the Adoption Agreement. If
the Adopting Employer so provides in the Adoption Agreement, the ADP
Test Safe Harbor Contributions will be made to the defined
contribution plan indicated in the Adoption Agreement and not to
this Plan. However, even though another plan is listed in the
Adoption Agreement, such contributions will be made to this Plan
unless 1) each Eligible Employee under this Plan is also eligible
under the other plan, and 2) the other plan has the same Plan Year
as this Plan. The Employer may make ADP Test Safe Harbor
Contributions at the same time as it contributes Elective Deferrals
or at any other time as permitted by law and regulation. The proper
ADP Test Safe Harbor Contribution amount may be determined by the
Employer at any time during a Plan Year, including, but not limited
to, such time as ADP Test Safe Harbor Contributions are delivered to
the Trustee (or Custodian, if applicable)) or at the end of the Plan
Year so long as the amount of ADP Test Safe Harbor Contributions is
determined in a uniform and nondiscriminatory manner.
In addition, such contributions cannot be made with regard to
permitted disparity rules under Code Section 401(1).
B. ACP TEST SAFE HARBOR MATCHING CONTRIBUTIONS - In addition to the ADP
Test Safe Harbor Contributions described in the Definition Section
of the Plan, the Employer will make the ACP Test Safe Harbor
Matching Contributions, if any, indicated in the Adoption Agreement
on behalf of each Eligible Employee for the Plan Year. The Employer
may make ACP Test Safe Harbor Contributions at the same time as it
contributes Elective Deferrals or at any other time as permitted by
law and regulation. The proper ACP Test Safe Harbor Contribution
amount may be determined by the Employer at any time during a Plan
Year, including, but not limited to, such time as ACP Test Safe
Harbor Contributions are delivered to the Trustee (or Custodian, if
applicable) or at the end of the Plan Year so long as the amount of
ACP Test Safe Harbor Contributions is determined in a uniform and
nondiscriminatory manner.
C. NOTICE REQUIREMENT - At least 30 days, but not more than 90 days,
or any other reasonable period before the beginning of the Plan Year
(or such other times if permitted by the IRS), the Employer will
provide each Eligible Employee a comprehensive notice of the
Employee's rights and obligations under the Plan, written in a
manner calculated to be understood by the average Eligible Employee.
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 90 days before the
Employee becomes eligible but not later than the date the Employee
becomes eligible. Notwithstanding the foregoing, the Employer may
change this notice requirement pursuant to rules promulgated by the
IRS.
Notwithstanding the foregoing, the Employer will also satisfy the
notice requirements of this Plan Section 3.03(C) if the Employer
provides a contingent notice that would otherwise satisfy the
requirements in the preceding paragraph except that in lieu of
specifying the amount of the ADP Test Safe Harbor Contribution, the
notice states that the Employer will determine during the Plan Year
whether to make a Safe Harbor Nonelective Contribution. If a
contingent notice is provided and the Employer decides to make a
Safe Harbor Nonelective Contribution, the Employer must deliver a
follow-up notice to each Eligible Employee no later than 30 days or
any other reasonable period before the last day of the Plan Year
notifying them of the Safe Harbor Nonelective Contribution and must
execute all necessary Plan amendments. If an Employer fails to
provide a follow-up notice, no Safe Harbor Nonelective Contribution
will be required and the Plan will not qualify as a Safe Harbor CODA
for that year. The Plan may qualify as a Safe Harbor CODA for
subsequent years following proper notice and contributions.
D. ELECTION PERIODS - In addition to any other election periods
provided under the Plan, each Eligible Employee may make or modify a
deferral election during the 30-day period immediately following
receipt of the notice described in Plan Section 3.03(C) above.
Notwithstanding the foregoing, the Employer may change the election
periods described above pursuant to rules promulgated by the IRS.
3.04 EMPLOYER CONTRIBUTIONS
A. OBLIGATION TO CONTRIBUTE-Except as otherwise indicated in the
Adoption Agreement, the Employer may contribute an amount to be
determined from year to year. If this Plan is a profit sharing plan,
the Employer may, in its sole discretion, make contributions without
regard to current or accumulated earnings or profits unless
otherwise indicated in the Adoption Agreement.
(C)2010 Ascensus, Inc., Brainerd, MN
20
B. ALLOCATION FORMULA AND THE RIGHT TO SHARE IN THE EMPLOYER
CONTRIBUTION
1. General - Except as otherwise indicated in the Adoption
Agreement, Employer Profit Sharing Contributions shall be
allocated to all Qualifying Participants using a pro rata
allocation formula. Under the pro rata allocation formula,
Employer Profit Sharing Contributions shall be allocated to
the Individual Accounts of Qualifying Participants in the
ratio that each Qualifying Participant's Compensation for the
Plan Year bears to the total Compensation of all Qualifying
Participants for the Plan Year. The Employer Contribution for
any Plan Year will be deemed allocated to each Participant's
Individual Account as of the last day of that Plan Year.
Notwithstanding the foregoing, Employer Profit Sharing
Contributions, Employer Money Purchase Pension Contributions,
and Employer Target Benefit Pension Contributions shall be
allocated to the Plan on behalf of each Participant who has
incurred a Disability and who is a non-Highly Compensated
Employee if so specified in the Adoption Agreement.
Any Employer Contribution for a Plan Year must satisfy Code
Section 401(a)(4) and the Treasury Regulations thereunder for
such Plan Year.
2. Special Rules for Integrated Plans -
a. EXCESS INTEGRATED ALLOCATION FORMULA - If the Adopting
Employer has selected the excess integrated allocation
formula in the Adoption Agreement, subject to the
overall permitted disparity limits, Employer Profit
Sharing Contributions shall be allocated as follows (the
Employer may start with Step 3 if this Plan is not
top-heavy).
Step 1. Employer Profit Sharing Contributions shall
first be allocated pro rata to Qualifying
Participants in the manner described in Plan
Section 3.04(B)(l). The percent so allocated
under Step 1 shall not exceed three percent of
each Qualifying Participant's Compensation.
Step 2. Any Employer Profit Sharing Contributions
remaining after the allocation in Step 1 shall
be allocated to each Qualifying Participant's
Individual Account in the ratio that each
Qualifying Participant's Compensation for the
Plan Year in excess of the integration level
bears to all Qualifying Participants'
Compensation in excess of the integration level,
but not in excess of three percent of each
Qualifying Participant's Compensation. For
purposes of this Step 2, in the case of any
Qualifying Participant who has exceeded the
cumulative permitted disparity limit described
below, such Qualifying Participant's total
compensation for the Plan Year will be taken
into account.
Step 3. Any Employer Profit Sharing Contributions
remaining after the allocation in Step 2 shall
be allocated to each Qualifying Participant's
Individual Account in the ratio that the sum of
each Qualifying Participant's total Compensation
and Compensation in excess of the integration
level bears to the sum of all Qualifying
Participants' total Compensation and
Compensation in excess of the integration level,
but not in excess of the applicable profit
sharing maximum disparity rate as described
below. For purposes of this Step 3, in the case
of any Qualifying Participant who has exceeded
the cumulative permitted disparity limit
described below, two times such Qualifying
Participant's total compensation for the Plan
Year will be taken into account.
Step 4. Any Employer Profit Sharing Contributions
remaining after the allocation in Step 3 shall
be allocated pro rata to Qualifying Participants
in the manner described in Plan Section 3.04(B)
(1).
b. BASE INTEGRATED ALLOCATION FORMULA - If the Adopting
Employer has selected the base integrated allocation
formula in the Adoption Agreement, subject to the
overall permitted disparity limits, Employer Profit
Sharing Contributions shall be allocated as follows. The
Base Integrated Allocation Formula is not available for
years in which the Plan is top heavy.
Step 1. Employer Profit Sharing Contributions shall
first be allocated to each Qualifying
Participant's Individual Account in the ratio
that the sum of each Qualifying Participant's
total Compensation and Compensation in excess
of the integration level bears to the sum of
all Qualifying Participants' total Compensation
and Compensation in excess of the integration
level, but not in excess of the non-top heavy
profit sharing maximum disparity rate as
described below.
Step 2. Any Employer Profit Sharing Contributions
remaining after the allocation in Step 1 shall
be allocated pro rata to Qualifying Participants
in the manner described in Plan Section 3.04(B)
(1).
c. MAXIMUM DISPARITY RATE - If the Adopting Employer has
selected the integrated contribution or allocation
formula in the Adoption Agreement, the integration level
shall be defined in the Adoption Agreement. If the
Adopting Employer has selected the integrated
contribution or allocation formula and no integration
level is selected in the Adoption Agreement, the Taxable
Wage Base will be the integration level. The maximum
disparity rate shall be determined in accordance with
the following table.
(C)2010 Ascensus, Inc., Brainerd, MN
21
MAXIMUM DISPARITY RATE
Top-Heavy Non-Top-Heavy
Integration Level Money Purchase Profit Sharing Profit Sharing
----------------- -------------- -------------- ---------------
Taxable Wage Base (TWB) 5.7% 2.7% 5.7%
More than $0 but not more
than 20 percent of TWB 5.7% 2.7% 5.7%
More than 20 percent of TWB but
not more than 80 percent of TWB 4.3% 1.3% 4.3%
More than 80 percent of TWB but
less than TWB 5.4% 2.4% 5.4%
d. Annual overall permitted disparity limit:
Notwithstanding the preceding paragraphs, for 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 provides for permitted disparity
(or imputes disparity), if this is a profit sharing
plan, Employer Profit Sharing Contributions and
forfeitures shall be allocated to the account of each
Qualifying Participant in the ratio that such Qualifying
Participant's total Compensation bears to the total
Compensation of all Qualifying Participants. If this
Plan is a money purchase pension plan, Employer Money
Purchase Pension Contributions shall be made to the
account of each Qualifying Participant in an amount
equal to the excess contribution percentage multiplied
by the Participant's total Compensation.
e. Cumulative permitted disparity limit: Effective for
Plan Years beginning on or after January 1, 1995, the
cumulative permitted disparity limit for a Participant
is 35 total cumulative permitted disparity years. Total
cumulative permitted years means the number of years
credited to the Participant for allocation or accrual
purposes under this Plan, any other qualified plan or
simplified employee pension plan (whether or not
terminated) ever maintained by the Employer. For
purposes of determining the Participant's cumulative
permitted disparity limit, all years ending in the same
calendar year are treated as the same year. If the
Participant has not benefited under a defined benefit or
target benefit plan for any year beginning on or after
January 1, 1994, the Participant has no cumulative
disparity limit.
Compensation shall mean compensation as defined in the
Definition section of the Plan, without regard to any
exclusions selected in Section Six of the Adoption Agreement.
3. Special Rules for Government Contract Plans - If the Employer
so elects in the Adoption Agreement, for each Hour of Service
of covered employment under a government contract, the
Employer shall contribute to the Plan such amounts for each
Qualifying Participant as determined by the hourly rate
designated for each Qualifying Participant's work
classification on the wage determination sheet, or part
thereof, as determined by the Employer pursuant to the terms
of the contracts to which the Employer is a party and which
are subject to the provisions of any federal, state, or
municipal prevailing wage law to which the Employer is a
party.
4. Minimum Coverage Test - This paragraph shall apply to any
nonstandardized Plan if, for any Plan Year, the Plan fails to
satisfy the ratio percentage test described in Code Section 41
0(b)(1) as of the last day of any such Plan Year. The ratio
percentage test is satisfied if, on the last day of the Plan
Year, taking into account all Employees, or former Employees
who were employed by the Employer on any day during the Plan
Year, either the Plan benefits at least 70 percent of
Employees who are not Highly Compensated Employees or the Plan
benefits a percentage of Employees who are not Highly
Compensated Employees which is at least 70 percent of the
percentage of Highly Compensated Employees benefiting under
the Plan. A Participant is treated as benefiting under the
Plan for any Plan Year during which the Participant received
or is deemed to receive an allocation in accordance with Code
Section 1.410(b)-3(a). If the Plan fails the ratio percentage
test, the Employer Contribution for the Plan Year will be
allocated to Participants in the first class of Participants
set forth below. If the Plan still fails, then the Employer
Contribution will also be allocated to Participants in the
next class and each succeeding class until the Plan satisfies
the minimum coverage requirements. A class shall be covered
only if necessary to satisfy those requirements. The classes,
in order of priority, are as follows.
a. Participants who are still employed on the last day of
the Plan Year who have completed 90 percent of the
number of Hours of Service to otherwise be a Qualifying
Participant or Qualifying Contributing Participant, if
applicable;
b. Participants who are still employed on the last day of
the Plan Year who have completed 80 percent of the
number of Hours of Service to otherwise be a Qualifying
Participant or Qualifying Contributing Participant, if
applicable;
c. Participants who are still employed on the last day of
the Plan Year who have completed 70 percent of the
number of Hours of Service to otherwise be a Qualifying
Participant or Qualifying Contributing Participant, if
applicable;
d. Participants who are still employed on the last day of
the Plan Year who have completed 60 percent of the
number of Hours of Service to otherwise be a Qualifying
Participant or Qualifying Contributing Participant, if
applicable;
(C)2010 Ascensus, Inc., Brainerd, MN
22
e. Participants who are still employed on the last day of
the Plan Year who have completed 50 percent of the
number of Hours of Service to otherwise be a Qualifying
Participant or Qualifying Contributing Participant, if
applicable;
f. Any Participant still employed on the last day of the
Plan Year;
g. Participants who are not employed on the last day of
the Plan Year because the Participant has died, incurred
a Disability, or attained Normal Retirement Age;
h. Participants who are not employed on the last day of
the Plan Year who have completed at least 1,000 Hours of
Service during the Plan Year;
i. Participants who are not employed on the last day of
the Plan Year who have completed at least 750 Hours of
Service for the Plan Year;
j. Participants who are not employed on the last day of
the Plan Year who have completed at least 500 Hours of
Service for the Plan Year.
If the minimum coverage test is performed after any
Employer Contribution has been allocated and the Plan
fails the minimum coverage test, the Employer shall make
an additional contribution to the Plan on behalf of
those Participants that are entitled thereto pursuant to
items (a) through (j) above. The amount of the
contribution for such Participants shall be determined
pursuant to the Plan's allocation formula.
Notwithstanding the foregoing, an Employer may utilize
the average benefits test in lieu of the ratio
percentage test and the correction option described
above, to satisfy minimum coverage.
5. Special Rule for Owner-Employees - If this Plan provides
contributions or benefits for one or more Owner-Employees,
contributions on behalf of any Owner-Employee may be made only
with respect to the Earned Income of such Owner-Employee.
6. Inclusion of Ineligible Employees - If any Employee who is
not a Qualifying Participant is erroneously treated as a
Qualifying Participant during a Plan Year, then, except as
otherwise provided in Plan Section 3.04(F), the Employer will
not be eligible to receive any portion of the contribution
erroneously allocated to the Individual Account of the
ineligible Employee. The Employer must correct the inclusion
of ineligible employees using any method permitted under the
Employee Plans Compliance Resolution System (EPCRS) or allowed
by the IRS or DOL under regulations or other guidance. The
EPCRS is currently described in IRS Revenue Procedure 2006-27.
7. Exclusion of Eligible Participant - If the Plan is a profit
sharing plan, and if in any Plan Year, any Participant is
erroneously excluded and discovery of such exclusion is not
made until after the Employer Contribution has been made and
allocated, then the Employer must contribute for the excluded
Participant the amount, including earnings thereon, which the
Employer would have contributed for the Employee. The Employer
must correct the exclusion of eligible employees using any
method permitted under the Employee Plans Compliance
Resolution System (EPCRS) or allowed by the IRS or DOL under
regulations or other guidance. The EPCRS is currently
described in IRS Revenue Procedure 2006-27.
8. Cross-Tested Allocation Formula - If elected by the Adopting
Employer in the Adoption Agreement, the Employer will
determine the total amount of Employer Profit Sharing
Contributions for each Plan Year and either (1) allocate such
total amount to Participant groups (the "participant group
allocation method"), or (2) allocate such total amount using
age weighted allocation rates (the "age weighted allocation
method"). Employer Profit Sharing Contributions will be
allocated to each Qualifying Participant.
a. Participant Group Allocation (New Comparability)
Method- If the Employer has elected the Participant
group allocation method in the Adoption Agreement,
either each Participant will constitute a "separate
allocation group" for purposes of allocating Employer
Profit Sharing Contributions or Participants will be
divided into groups specified on the Adoption Agreement.
Only a limited number of allocation rates (defined
below) is permitted, and the number of allocation rates
cannot be greater than the maximum allowable number of
allocation rates. The maximum allowable number of
allocation rates is equal to the sum of the allowable
number of allocation rates for eligible non-Highly
Compensated Employees and the allowable number of
allocation rates for eligible Highly Compensated
Employees. The allowable number of allocation rates for
eligible Highly Compensated Employees is equal to the
number of eligible Highly Compensated Employees, limited
to 25. The allowable number of non-Highly Compensated
Employee allocation rates depends on the number of
eligible non-Highly Compensated Employees, limited to
25.
The allocation will be made as follows: First, the total
amount of Employer Profit Sharing Contributions is
allocated among the deemed aggregated allocation groups
in portions determined by the Employer. A deemed
aggregated allocation group consists of all of the
separate allocation groups that have the same allocation
rate, Second, within each deemed aggregated allocation
group, the allocated portion is allocated to each
Qualifying Participant in the ratio that such Qualifying
Participant's Compensation bears to the total
Compensation of all Qualifying Participants in the
group. An allocation rate is the amount of Employer
Profit Sharing Contributions allocated to a Qualifying
Participant for a year, expressed as a percentage of
Compensation. The number of eligible non-Highly
Compensated Employees to which a particular allocation
rate applies must reflect a reasonable classification of
Employees, and no Employee can be assigned to more than
one deemed aggregated allocation group for a Plan Year.
(C)2010 Ascensus, Inc., Brainerd, MN
23
For a Plan with only one or two eligible non-Highly
Compensated Employees, the allowable number of
non-Highly Compensated Employee allocation rates is one.
For a Plan with 3 to 8 eligible non-Highly Compensated
Employees, the allowable number of non-Highly
Compensated Employee allocation rates cannot exceed two.
For a Plan with 9 to 11 eligible non-Highly Compensated
Employees, the allowable number of non-Highly
Compensated Employee allocation rates cannot exceed
three.
For a Plan with 12 to 19 eligible non-Highly Compensated
Employees, the allowable number of non-Highly
Compensated Employee allocation rates cannot exceed
four.
For a Plan with 20 to 29 eligible non-Highly Compensated
Employees, the allowable number of non-Highly
Compensated Employee allocation rates cannot exceed
five.
For a Plan with 30 or more eligible non-Highly
Compensated Employees, the allowable number of
non-Highly Compensated Employee allocation rates cannot
exceed the number of eligible non-Highly Compensated
Employees divided by five (rounded down to the next
whole number if the result of dividing is not a whole
number), but shall not exceed 25.
b. Age Weighted Allocation Method- If the age weighted
allocation method is elected in the Adoption Agreement.
the total Employer Profit Sharing Contribution will be
allocated to each Qualifying Participant such that the
equivalent benefit accrual rate for each Qualifying
Participant is identical. The equivalent benefit accrual
rate is the annual annuity commencing at the Qualifying
Participant's testing age, expressed as a percentage of
the Qualifying Participant's Compensation which is
provided from the allocation of Employer Profit Sharing
Contributions and forfeitures for the Plan Year, using
standardized actuarial assumptions that satisfy Treasury
Regulation 1.401(a)(4)-12. The Qualifying Participant's
testing age is the later of Normal Retirement Age, or
the Qualifying Participant's current age.
i. If the age-weighted formula for allocations and
the safe harbor requirements of Section
1.401(a)(4)-2(b)(3) of the Income Tax Regulations
are selected in the Adoption Agreement, then, to
the extent necessary, the following steps shall be
taken:
(a) Identify the Employees of the Employer who
are not Highly Compensated Employees of such
Employer who participate in the Plan and
determine the average allocation rate for
such group of Employees.
(b) Identify the Employees of the Employer who
are Highly Compensated Employees of such
Employer who participate in the Plan and
determine the average allocation rate for
such group of Employees.
(c) As of the date of allocation, determine
that amount by which the average allocation
rate for the group of Participants who are
not Highly Compensated Employees is less
than the average allocation rate of the
group of the Participants who are Highly
Compensated Employees.
(d) Lower the aggregate allocation to all of
the Highly Compensated Employees by the
amount necessary to cause the average
allocation rate of the Participants who are
not Highly Compensated Employees (as
determined after including the amount by
which the Highly Compensated Employees'
allocation is lowered and that is
subsequently allocated to the Participants
who are not Highly Compensated) to equal the
average allocation rate of the Participants
who are Highly Compensated Employees (as
determined after the Highly Compensated
Employees' allocation has been lowered).
(e) Reallocate the aggregate amount of the
contributions after the reduction in (d)
above to the Participants who are Highly
Compensated Employees using the allocation
formula in the Adoption Agreement; provided
that for purposes of this allocation,
"Qualifying Participants" shall mean only
those Participants who are Highly
Compensated Employees and "Employer Profit
Sharing Contributions" shall mean only those
contributions allocated to Participants who
are Highly Compensated Employees.
(f) Reallocate the aggregate amount of the
contributions after the increase in (d)
above to the Participants who are not Highly
Compensated Employees using the allocation
formula in the Adoption Agreement; provided
that for purposes of this allocation,
"Qualifying Participants" shall mean only
those Participants who are not Highly
Compensated Employees and "Employer Profit
Sharing Contributions" shall mean only those
contributions allocated to Participants who
are not Highly Compensated Employees.
ii. If the age-weighted formula for allocations and
the general test requirements of Section
1,401(a)(4)-2(c) of the Income Tax Regulations are
selected in the Adoption Agreement, then, to the
extent necessary, the following steps shall be
taken for each rate group of the Employer which
fails to satisfy the rules of that Section:
(a) Identify the Employees of the Employer who
are not Highly Compensated Employees of such
Employer who participate in the Plan and who
are not part of the applicable rate group
because their allocation rates are too low
and arrange them in order of their
allocation rates from the highest to the
lowest.
(b) Identify the Highly Compensated Employees
who participate in the Plan and are in the
rate group and arrange them in order of
their allocation rates from the highest to
the lowest.
(C)2010 Ascensus, Inc., Brainerd, MN
24
(c) As of the date of allocation, lower the
allocation of the Highly Compensated
Employee with the highest allocation rate
determined in (b) above. The reduction shall
equal the amount which when added to the
Individual Account of the individual in (a)
above who has the highest allocation rate
will cause that rate to be increased to
equal that of the Highly Compensated
Employee with respect to whom the rate group
is constructed. As of the date of
allocation, that reduction shall be added to
such individual's Individual Account.
(d) Repeat (c) above with respect to the
individual in (a) above who has the next
highest equivalent accrual rate and continue
that process with the other individuals
described in (a) above in the order of their
allocation rates from the highest to the
lowest until such rules are satisfied for
the rate group. If the allocation rate of a
Highly Compensated Employee is lowered under
(c) above or this clause (d) to the point
where it is equal to that of one or more
other Highly Compensated Employees in the
rate group, then any further reductions in
allocations shall be apportioned between the
former and latter Highly Compensated
Employees in a manner that causes their
allocation rates to be reduced by the same
amount.
9. Minimum Gateway Requirements for New Comparability Plans - If
a new comparability allocation formula is selected in the
Adoption Agreement, the benefit provided under the allocation
method of that formula must satisfy one of the following
gateway tests by making the appropriate selections in the
Adoption Agreement:
a. The Plan must provide an allocation that uses broadly
available allocation rates. The Plan will have broadly
available allocation rates for the Plan Year if each
allocation rate under the Plan is currently available
during the Plan Year to a group of Employees that
satisfies the requirements under Code Section 410(b)
(without regard to the average benefit percentage test
of Treasury Regulation 1.410(b)-5) and as otherwise
specified in Treasury Regulation 1.401(a)(4)-(b)(l)
(iii).
b. The Plan satisfies a minimum allocation gateway for a
plan that is not a combination of permissively
aggregated defined contribution and defined benefit
plans, or a plan in which the aggregated plan is not
considered primarily defined benefit in character, if it
otherwise satisfies Treasury Regulation 1,401(a)(4)-8(b)
(1)(vi). The Plan will satisfy such gateway if:
i. each non-Highly Compensated Employee who is
eligible to participate has an allocation rate
that is at least one- third of the allocation rate
of the Highly Compensated Employee with the
highest allocation rate; or
ii. each non-Highly Compensated Employee who is
eligible to participate receives an allocation of
at least 5% of such Employee's Compensation, as
defined in Code Section 4l5(c)(3), for the period
during which the non-Highly Compensated Employee
is eligible to receive an allocation under this
Section.
For purposes of determining the allocation rate in
(i) above, such allocation rate shall equal the
quotient of the Employer Profit Sharing
Contribution allocated to a Participant divided by
the Participant's Compensation.
The Employer must make additional contributions to
a Participant who is a non-Highly Compensated
Employee and who receives only a top-heavy minimum
contribution or a Safe Harbor Nonelective
Contribution, in order to satisfy the minimum
allocation gateway. The amount of such additional
contribution shall be equal to the difference
between the amount required to satisfy the minimum
allocation gateway and the top-heavy minimum or
Safe Harbor Nonelective Contribution received by
such Employee, whichever is applicable.
Notwithstanding the foregoing, this Plan document cannot
be used if this Plan is a combination of permissively
aggregated defined contribution and defined benefit
plans, in which the aggregated plan is considered
primarily defined benefit in character, as defined in
Treasury Regulation 1.401(a)(4)-9(b)(2)(v)(B).
10. Minimum Allocation Gateway for New Comparability - One-Third
Approach - If a selection is made in the Adoption Agreement to
satisfy a minimum allocation gateway for new comparability
purposes and to reallocate contributions from Highly
Compensated Employees to non-Highly Compensated Employees in
order to provide each a non-Highly Compensated Employee with
an allocation rate which is equal to at least one-third of the
allocation rate of the Highly Compensated Employee with the
highest allocation rate, then, to the extent necessary, the
following steps shall be taken:
a. Identify the Employees of the Employer who participate
in the Plan who are non-Highly Compensated Employees of
such Employer and arrange them in order of their
allocation rates from the highest to the lowest.
b. Identify the Highly Compensated Employees of the
Employer who participate in the Plan and arrange them in
order of their allocation rates from the highest to the
lowest.
c. As of the date of allocation, lower the allocation to
the Highly Compensated Employee with the highest
allocation rate determined in (b) above. The reduction
shall equal the lesser of (i) the amount necessary so
that the non-Highly Compensated Employee with the lowest
allocation rate receives an allocation equal to
one-third of the allocation rate of the Highly
Compensated Employee with the highest allocation rate,
or (ii) the amount which would cause such Highly
Compensated Employee's allocation rate to equal the
allocation rate of the Highly Compensated Employee with
the next highest allocation rate. As of the date of
allocation, that reduction shall be added to the
Individual Account of the non-Highly Compensated
Employee described in (i) above.
(C)2010 Ascensus, Inc., Brainerd, MN
25
d. Repeat the procedures in (c) above until all non-Highly
Compensated Employees have an allocation rate equal to at
least one-third of the allocation rate of the Highly
Compensated Employee with the highest allocation rate. If
the allocation rate of a Highly Compensated Employee is
lowered under (c) above or this clause (d) to the point
where it is equal to that of the Highly Compensated
Employees with the next highest allocation rate, then any
further reductions in allocations shall be apportioned
between the former and latter Highly Compensated Employees
in a manner that causes their equivalent allocation rates to
be reduced by the same amount.
e. Participants whose sole allocation for a Plan Year consists
of either a minimum allocation made pursuant to Plan Section
3.04(E) or a Safe Harbor Nonelective Contribution are
considered benefiting for purposes of the minimum allocation
gateway. Allocation rates shall include such contributions
when determining whether the minimum gateway allocation has
been satisfied.
11. Minimum Allocation Gateway for New Comparability- Five Percent
Approach- If a selection is made in the Adoption Agreement to
satisfy a minimum allocation gateway under new comparability and
to reallocate contributions from Highly Compensated Employees to
non-Highly Compensated Employees in order to provide each
non-Highly Compensated Employee with an allocation of at least 5%
of such Employee's Compensation, as defined in Code Section
415(c)(3), for the period during which the non-Highly Compensated
Employee is eligible to receive an allocation under this Section,
then, to the extent necessary, the following steps shall be
taken.
a. Identify the Employees of the Employer who participate in
the Plan who are non-Highly Compensated Employees of such
Employer and arrange them in order of their allocation rates
from the highest to the lowest.
b. Identify the Highly Compensated Employees of the Employer
who participate in the Plan and arrange them in order of
their allocation rates from the highest to the lowest.
c. As of the date of allocation, lower the allocation to the
Highly Compensated Employee with the highest allocation rate
determined in (b) above. The reduction shall equal the
lesser of(i) the amount necessary so that the non-Highly
Compensated Employee with the lowest allocation rate
receives an allocation equal to 5% of such Employee's
Compensation, as defined in Code Section 415(c)(3), for the
period during which the non-Highly Compensated Employee is
eligible to receive an allocation under this Section, or
(ii) the amount which would cause such Highly Compensated
Employee's allocation rate to equal the allocation rate of
the Highly Compensated Employee with the next highest
allocation rate. As of the date of allocation, that
reduction shall be added to the Individual Account of the
non- Highly Compensated Employee described in (i) above.
d. Repeat the procedures in (c) above until all Employees of
the non-Highly Compensated Employees have an allocation rate
equal to at least 5% of such Employee's Compensation, as
defined in Code Section 415(c)(3), for the period during
which the each of the non-Highly Compensated Employees are
eligible to receive an allocation under this Section. If the
allocation rate of a Highly Compensated Employee is lowered
under (c) above or this clause (d) to the point where it is
equal to that of the Highly Compensated Employees with the
next highest allocation rate, then any further reductions in
allocations shall be apportioned between the former and
latter Highly Compensated Employees in a manner that causes
their equivalent allocation rates to be reduced by the same
amount.
e. If the allocation rate of the Highly Compensated Employees
are less than 5%, either before any reallocation pursuant to
this (11), or as a result of any reallocation pursuant to
this (11), then for that Plan Year, the Employer Profit
Sharing Contributions shall be allocated as if the Employer
had elected a pro rata allocation formula (as described in
Adoption Agreement Section Three).
f. Participants whose sole allocation for a Plan Year consists
of either a minimum allocation made pursuant to Plan Section
3.04(E) or a Safe Harbor Nonelective Contribution are
considered benefiting for purposes of the minimum allocation
gateway. Allocation rates shall include such contributions
when determining whether the minimum gateway allocation has
been satisfied.
C. ALLOCATION OF FORFEITURES - Forfeitures may be, at the Employer's
discretion, applied first to the payment of the Plan's administrative
expenses in accordance with Plan Section 7.04 or applied to the
restoration of Participants' Individual Accounts pursuant to Plan
Section 4.01(C)(3). Any remaining Forfeitures shall be allocated as
follows:
1. Profit Sharing Plan - If this is a profit sharing plan, unless
the Adoption Agreement indicates otherwise, Forfeitures will be
used to reduce Employer Contributions. Notwithstanding the
foregoing, Forfeitures arising under Plan Section 3.12 (Excess
Annual Additions) may be allocated to Qualifying Participants in
accordance with Plan Section 3.04(B).
2. 401(k) Profit Sharing Plan - If this is a 401(k) profit sharing
plan, unless the Adoption Agreement indicates otherwise,
Forfeitures of Employer Profit Sharing Contributions, Matching
Contributions, ACP Test Safe Harbor Matching Contributions, and
Excess Aggregate Contributions shall be used to reduce Employer
Contributions. Notwithstanding the foregoing, Forfeitures arising
under Plan Section 3.12 (Excess Annual Additions) may be
allocated to Qualifying Participants in accordance with Plan
Section 3.04(B).
3. Money Purchase Pension Plan and Target Benefit Pension Plan- If
this Plan is a money purchase pension plan or a target benefit
pension plan, unless the Adoption Agreement indicates otherwise,
Forfeitures shall be used to reduce Employer Money Purchase
Pension Contributions or Employer Target Benefit Pension
Contributions to the Plan. Notwithstanding the foregoing,
Forfeitures arising under Plan Section 3.12 (Excess Annual
Additions), other than forfeitures arising under a target benefit
plan, may be allocated to Qualifying Participants in accordance
with Plan Section 3.04(B).
(C)2010 Ascensus, Inc., Brainerd, MN
26
Forfeitures must be applied as of the last day of the Plan Year
in which the Forfeitures arose or, if necessary, any subsequent
Plan Year following the Plan Year in which the Forfeiture arose.
Notwithstanding the foregoing, Forfeitures must be applied in a
uniform and nondiscriminatory manner if applied either to the
payment of the Plan's administrative expenses or to the
restoration of Participants' Individual Accounts pursuant to Plan
Section 4.01(C)(3), Forfeitures that are reallocated to
Participants' Individual Accounts need not be reallocated to the
same contribution source from which they were forfeited.
D. TIMING OF EMPLOYER CONTRIBUTION - Unless otherwise specified in the
Plan or permitted by law or regulation, the Employer Contribution made
by an Employer for each Plan Year shall be deposited with the Trustee
(or Custodian, if applicable) not later than the due date for filing
the Employer's income tax return for its tax year in which the Plan
Year ends, including extensions thereof. Notwithstanding the
foregoing, Employer Contributions may be deposited during the Plan
Year for which they are being made.
E. MINIMUM ALLOCATION FOR TOP-HEAVY PLANS - The contribution and
allocation provisions of this Plan Section 3.04(E) shall apply for any
Plan Year with respect to which this Plan is a Top-Heavy Plan and
shall supersede any conflicting provisions in the Plan or Adoption
Agreement.
1. Except as otherwise provided in (3) and (4) below, the Employer
Contributions and Forfeitures allocated on behalf of any
Participant who is not a Key Employee shall not be less than the
lesser of three percent of such Participant's Compensation or (in
the case where the Employer does not maintain a defined benefit
plan in addition to this Plan which designates this Plan to
satisfy Code Section 401, the largest percentage of Employer
Contributions and Forfeitures, as a percentage of the Key
Employee's Compensation, as limited by Code Section 401(a)(17),
allocated on behalf of any Key Employee for that year. The
minimum allocation is determined without regard to any Social
Security contribution. Unless the Adopting Employer, in the
Adoption Agreement, elects to allocate a top-heavy contribution
to Participants who are Key Employees, only Participants who are
not Key Employees will be entitled to receive the minimum
allocation. Notwithstanding the foregoing, if the Employer
maintains a defined benefit plan in addition to this Plan and
specifies in the Adoption Agreement that the minimum allocation
will be made to this Plan, then except as provided in (3) and (4)
below, Employer Contributions and Forfeitures allocated on behalf
of any Participant who is not a Key Employee shall not be less
than five percent of such Participant's Compensation. For
purposes of the preceding sentences, the largest percentage of
Employer Contributions and Forfeitures as a percentage of each
Key Employee's Compensation shall be determined by treating
Elective Deferrals as Employer Contributions. This minimum
allocation shall be made even though under other Plan provisions,
the Participant would not otherwise be entitled to receive an
allocation, or would have received a lesser allocation for the
year because of 1) the Participant's failure to complete 1,000
Hours of Service (or any comparable period provided in the Plan),
or 2) the Participant's failure to make mandatory Nondeductible
Employee Contributions to the Plan, or 3) Compensation less than
a stated amount.
2. For purposes of computing the minimum allocation, Compensation
shall mean Compensation as provided in the Definitions Section of
the Plan as limited by Code Section 401(a)(17) and shall include
any amounts contributed by the Employer pursuant to a salary
reduction agreement and which is not includible in gross income
under Code Sections 402(g), 125, 132(f)(4), or 457. Compensation
for the full Determination Year will be used in calculating the
minimum allocation.
3 The provision in (1) above shall not apply to any Participant
who was not employed by the Employer on the last day of the Plan
Year.
4. The provision in (1) above shall not apply to any Participant to
the extent the Participant is covered under any other plan or
plans of the Employer and the Adopting Employer has provided in
the Adoption Agreement that the minimum allocation or benefit
requirement applicable to Top-Heavy Plans will be met in the
other plan or plans.
5. The minimum allocation required under this Section 3.04(E) (to
the extent required to be nonforfeitable under Code Section
416(b)) may not be forfeited under Code Section 411(a)(3)(B) or
411(a)(3)(D).
6. Elective Deferrals (and for Plan Years beginning before 2002,
Matching Contributions) may not be taken into account for
purposes of satisfying the minimum allocation requirement
applicable to Top-Heavy Plans described in Plan Section
3.04(E)(1). Qualified Nonelective Contributions may, however, be
taken into account for such purposes.
F. RETURN OF THE EMPLOYER CONTRIBUTION TO THE EMPLOYER UNDER SPECIAL
CIRCUMSTANCES - Any contribution made by the Employer because of a
mistake of fact must be returned to the Employer within one year of
the contribution.
In the event that the Commissioner of Internal Revenue determines that
the Plan is not initially qualified under the Code, any contributions
made incident to that initial qualification by the Employer must be
returned to the Employer within one year after the date the initial
qualification is denied, but only if the application for qualification
is made by the time prescribed by law for filing the Employer's return
for the taxable year in which the Plan is adopted, or such later date
as the Secretary of the Treasury may prescribe.
In the event that a contribution made by the Employer under this Plan
is conditioned on deductibility and is not deductible under Code
Section 404, the contribution, to the extent of the amount disallowed,
must be returned to the Employer within one year after the deduction
is disallowed.
If applicable, no contract will be purchased under the Plan unless
such contract or a separate definite written agreement between the
Employer and the insurer provides that no value under contracts
providing benefits under the Plan or credits determined by the insurer
(on account of dividends, earnings, or other experience rating
credits, or surrender or cancellation credits) with respect to such
contracts may be paid or returned to the Employer or diverted to or
used for other than the exclusive benefit of the
(C)2010 Ascensus, Inc., Brainerd, MN
27
Participants or their Beneficiaries. However, any contribution made by
the Employer because of a mistake of fact must be returned to the
Employer within one year of the contribution.
3.05 QUALIFIED NONELECTIVE CONTRIBUTIONS
The Employer may elect to make Qualified Nonelective Contributions under
the Plan. The amount of such contribution, if any, to the Plan for each
Plan Year, shall be determined by the Employer.
A. QUALIFIED NONELECTIVE CONTRIBUTIONS USED TO SATISFY TESTING
REQUIREMENTS - Unless another allocation formula is specified in the
Adoption Agreement, or in the situation in which an Employer wishes to
allocate a Qualified Nonelective Contribution in addition to the
allocation formula in the Adoption Agreement, Qualified Nonelective
Contributions will be allocated to the Individual Accounts of
non-Highly Compensated Employees who are eligible Participants
following any allocation formula permitted under the law or regulation
for purpose of satisfying the Actual Deferral Percentage test, the
Actual Contribution Percentage test, or both. Notwithstanding the
foregoing, no allocation shall be required in excess of the amount
required to satisfy the Actual Deferral Percentage test, the Actual
Contribution Percentage test, or both. Qualified Nonelective
Contributions may be made during the Plan Year for which they are
being made; however, the Employer must follow the allocation
requirements set forth in this Section 3.05 and must adhere to the
eligibility requirements applicable to Elective Deferrals, including a
forfeiture of allocations where such eligibility requirements are not
satisfied.
For Plan Years beginning in 2006 (or such earlier date on which the
final regulations under Treasury Regulation 1.401(k) and 1.401(m)
became effective), Qualified Nonelective Contributions taken into
account under the Actual Deferral Percentage (ADP) test cannot exceed
the product of the non-Highly Compensated Employee's Compensation and
the greater of i) 5 percent (10 percent if the Qualified Nonelective
Contribution is made in connection with an Employer's obligation to
pay prevailing wages under the Davis-Bacon Act plan) or ii) two times
the Plan's representative contribution rate. The "representative
contribution rate," for this purpose, is the lowest applicable
contribution rate of any eligible non-Highly Compensated Employee
among a group of eligible non-Highly Compensated Employees that
consists of one half of all non-Highly Compensated Employees for the
Plan Year (or if greater, the lowest applicable percentage
contribution rate of any eligible non-Highly Compensated Employee in
the group of all eligible non-Highly Compensated Employees for the
Plan Year and who is employed by the Employer on the last day of the
Plan Year). The "applicable contribution rate" for these purposes is
the sum of the Qualified Matching Contributions taken into account for
the ADP test for the eligible non-Highly Compensated Employees for the
Plan Year and the Qualified Nonelective Contributions made for the
eligible non-Highly Compensated Employee for the Plan Year, divided by
the eligible non-Highly compensated Employee's Compensation for the
same period.
If the current year testing rules apply to the Plan, in lieu of
distributing Excess Contributions or Excess Aggregate Contributions as
provided in Plan Sections 5.13 and 5.14, the Employer may, if
permitted in the Adoption Agreement, use all or any portion of the
Qualified Nonelective Contributions to satisfy either the Actual
Deferral Percentage test, the Actual Contribution Percentage test, or
both, The option to use all or any portion of the Qualified
Nonelective Contributions to satisfy either the Actual Deferral
Percentage test or the Actual Contribution Percentage test is not
available if prior year testing rules apply to the Plan
B. SPECIAL RULES FOR GOVERNMENT CONTRACT PLANS - If the Employer so
elects in the Adoption Agreement, for each Hour of Service of covered
employment under a government contract, the Employer shall contribute
to the Plan such Qualified Nonelective Contribution amounts for each
eligible Participant as determined by the hourly rate designated for
each eligible Participant's work classification on the wage
determination sheet, or part thereof, as determined by the Employer
pursuant to the terms of the contracts to which the Employer is a
party and which are subject to the provisions of any federal, state,
or municipal prevailing wage law to which the Employer is a party. In
addition to any Qualified Nonelective Contribution made under this
Plan Section 3.05(B), the Employer may contribute additional Qualified
Nonelective Contributions to be allocated to the Individual Accounts
of non-Highly Compensated Employees who are eligible Participants
following any allocation formula permitted under the law or regulation
for the purpose of satisfying the Actual Deferral Percentage test, the
Actual Contribution Percentage test, or both, as set forth in Plan
Section 3.05(A). Such additional Qualified Nonelective Contributions
can be taken into account for a Plan Year for a non-Highly
Compensation Employee only to the extent such contributions do not
exceed 10 percent of that non-Highly Compensated Employee's
Compensation.
3.06 QUALIFIED MATCHING CONTRIBUTIONS
The Employer may elect to make Qualified Matching Contributions under the
Plan. Unless specified otherwise in the Adoption Agreement, the amount of
such contribution, if any, to the Plan for each Plan Year, shall be
determined by the Employer. In addition, in lieu of distributing Excess
Contributions or Excess Aggregate Contributions as provided in Plan
Sections 5.13 and 5.14, the Employer may use Qualified Matching
Contributions to satisfy either the Actual Deferral Percentage test, the
Actual Contribution Percentage test, or both, pursuant to Treasury
Regulations under Code Sections 401(k) and 401(m).
Unless another allocation formula is specified in the Adoption Agreement,
Qualified Matching Contributions, if made, shall be in an amount equal to
that percentage of the Elective Deferrals (and Nondeductible Employee
Contributions) of each non-Highly Compensated Employee that would be
sufficient to cause the Plan to satisfy the Actual Contribution Percentage
test, the Actual Deferral Percentage test, or both. For Plan Years
beginning in 2006 (or such earlier date on which the final regulations
under Treasury Regulation 1.401(k) and 1.401(m) became effective), if
Qualified Matching Contributions exceed 100 percent of a Qualifying
Contributing Participant's Elective Deferrals, the additional ACP testing
restrictions listed in Plan Section 3.02 will apply.
Notwithstanding anything in this Section to the contrary, all or any
portion of the Qualified Matching Contributions may be included in the ADP
and ACP tests if the Employer has elected to use the current year testing
rules.
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3.07 ROLLOVER CONTRIBUTIONS
Unless otherwise indicated in the Adoption Agreement, an Employee may make
Indirect Rollover and/or Direct Rollover contributions to the Plan from
distributions made from plans described in Code Sections 401(a), 403(a),
403(b), 408, and 457(b) (if maintained by a governmental entity) (excluding
Nondeductible Employee Contributions and Roth Elective Deferrals except as
otherwise indicated in the Adoption Agreement) unless an Employee is either
an Employee of a related employer that does not participate in this Plan or
a member of any excluded class in Adoption Agreement Section Two and Plan
Section 2.01. The Plan Administrator may require the Employee to certify,
either in writing or in any other form permitted under rules promulgated by
the IRS and DOL, that the contribution qualifies as a rollover contribution
under the applicable provisions of the Code. If it is later determined that
all or part of a rollover contribution was ineligible to be contributed to
the Plan, the Plan Administrator shall direct that any ineligible amounts,
plus earnings or losses attributable thereto (determined in the manner
described in Plan Section 7.02(B)), be distributed from the Plan to the
Employee as soon as administratively feasible.
A separate account shall be maintained by the Plan Administrator for each
Employee's rollover contributions, which will be nonforfeitable at all
times. Such account will share in the income and gains and losses of the
Fund in the manner described in Plan Section 7.02(B). Where the Adoption
Agreement does not permit Employer designation with respect to rollover
contributions, the Employer may, in a uniform and nondiscriminatory manner,
allow only Employees who have become Participants in the Plan to make
rollover contributions.
3.08 TRANSFER CONTRIBUTIONS
Unless otherwise indicated in the Adoption Agreement, the Trustee (or
Custodian, if applicable) may receive any amounts transferred to it in the
name of an Employee from the trustee or custodian of another plan qualified
under Code Section 401(a), unless an Employee is either employed by a
related employer that does not participate in this Plan or a member of any
excluded class in Adoption Agreement Section Two and Plan Section 2.01.
Whether any particular transfer may be accepted by the Plan, and the
procedures for the receipt of such transfers by the Plan, will be
determined by the requirements of Treasury Regulation 1.411(d)-4, Q&A-3
and other rules promulgated by the IRS. Nothing in this Plan prohibits the
Plan Administrator from permitting (or prohibiting) Participants to
transfer their Individual Accounts to other eligible plans, provided such
transfers are permitted (or prohibited) in a uniform and nondiscriminatory
manner, If it is later determined that all or part of a transfer
contribution was ineligible to be transferred into the Plan, the Plan
Administrator shall direct that any ineligible amounts, plus earnings or
losses attributable thereto (determined in the manner described in Plan
Section 7.02(B)), be distributed from the Plan to the Employee as soon as
administratively feasible. Notwithstanding the foregoing, the Employer may,
at its discretion, also return the amount transferred to the transferor
plan or correct the ineligible transfer using any other method permitted by
the IRS under regulation or other guidance.
A separate account shall be maintained by the Plan Administrator for each
Employee's transfer contributions, which will, if applicable, be
nonforfeitable at all times. Such account will share in the income and
gains and losses of the Fund in the manner described in Plan Section
7.02(B). Where the Adoption Agreement does not permit Employer designation
with respect to transfer contributions, the Employer may, in a uniform and
nondiscriminatory manner, allow only Employees who have become Participants
in the Plan to make transfer contributions. Notwithstanding the foregoing,
an Employee's separate account established solely on account of an event
described in Code Section 4140) shall continue to be subject to the Plan's
vesting schedule except as otherwise provided therein. If transfers are
associated with distributable events and the Employees are eligible to
receive single sum distributions consisting entirely of Eligible Rollover
Contributions, the transfers will be considered Direct Rollovers.
3.09 DEDUCTIBLE EMPLOYEE CONTRIBUTIONS
The Plan Administrator will not accept Deductible Employee Contributions
that are made for a taxable year beginning after December 31, 1986.
Contributions made before that date will be maintained in a separate
account, which will be nonforfeitable at all times. The account will share
in the gains and losses of the Fund in the same manner as described in Plan
Section 7.02(B). No part of the Deductible Employee Contributions account
will be used to purchase life insurance. Subject to Plan Section 5.10 (if
applicable), the Participant may withdraw any part of the Deductible
Employee Contribution account by making a written application to the Plan
Administrator.
3.10 NONTWDUCTIBLE EMPLOYEE CONTRIBUTIONS
If this Plan is subject to Code Section 401(k) and the Adopting Employer
so allows in the Adoption Agreement, a Participant may contribute
Nondeductible Employee Contributions to the Plan by enrolling as a
Contributing Participant pursuant to the applicable provisions of Plan
Section 3.01. The Employer shall establish uniform and nondiscriminatory
rules and procedures for Nondeductible Employee Contributions as it deems
necessary and advisable including, but not limited to, rules describing any
amounts or percentages of Compensation Participants may or must contribute
to the Plan. Nondeductible Employee Contributions for Plan Years beginning
after December 31, 1986, together with any Matching Contributions, will be
limited so as to satisfy the Actual Contribution Percentage test in Plan
Section 3.14. Notwithstanding the foregoing, contributions made to the Plan
on an after-tax basis (e.g., to repay defaulted loans or to buy back
previously forfeited amounts as described in Plan Section 4.01(C)(3)) do
not constitute Nondeductible Employee Contributions and will not,
therefore, be subject to the nondiscrimination test of Code Section 401(m)
or the Annual Additions limits of Code Section 415.
A separate account will be maintained by the Plan Administrator for the
Nondeductible Employee Contributions of each Participant.
3.11 OTHER LIMITATIONS ON SIMPLE 401(K) CONTRIBUTIONS
If the Employer has established a SIMPLE 401(k) Plan, no Employer or
Employee contributions may be made to this Plan for the SIMPLE 401(k) Year
other than Elective Deferrals described in Plan Section 3.01(H), Matching
or nonelective contributions described in Plan Section 3.02, and rollover
contributions described in Plan Section 3.07.
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29
3.12 LIMITATION ON ALLOCATIONS
A. If the Participant does not participate in, and has never
participated in another qualified 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 plan (as defined in Code Section 408(k)) maintained
by the Employer, which provides an Annual Addition as defined in the
Definitions Section of the Plan, the following rules shall apply.
1. The amount of Annual Additions which may be credited to the
Participant's Individual Account for any Limitation Year will not
exceed the lesser of the Maximum Permissible Amount or any other
limitation contained in this Plan. If the Employer Contribution
that would otherwise be contributed or allocated to the
Participant's Individual Account would cause the Annual Additions
for the Limitation Year to exceed the Maximum Permissible Amount,
the amount contributed or allocated may be reduced so that the
Annual Additions for the Limitation Year will equal the Maximum
Permissible Amount.
2. Before determining the Participant's actual Compensation for the
Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant on the basis of a reasonable
estimate of the Participant's 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 the
Limitation Year will be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
4. If, pursuant to Plan Section 3.12(A)(3) or as a result of the
allocation of Forfeitures or a reasonable error in determining a
Participant's maximum Elective Deferral or any other circumstance
permitted under rules promulgated by the IRS, there is an Excess
Annual Addition, the excess will be disposed of as follows.
a. Profit Sharing Plan - If this Plan is a profit sharing
plan, the Excess Annual Additions shall be deemed
Forfeitures and shall be allocated in accordance with Plan
Section 3.04(C) to all Qualifying Participants that have not
reached their Annual Additions limit. If all Qualifying
Participants have reached their Annual Additions limit
before all Excess Annual Additions have been allocated, the
remaining 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.
b. Money Purchase Pension Plan or Target Benefit Plan - If
this Plan is either a money purchase pension plan or a
target benefit plan, Excess Annual Additions shall be held
unallocated in a suspense account. The suspense account
shall be used to reduce future Employer Contributions made
to Qualifying Participants in the next Limitation Year and
succeeding Limitation Years, if necessary.
c. 401(k) Profit Sharing Plan - If this Plan is a 401(k)
profit sharing plan, any Nondeductible Employee
Contributions and Elective Deferrals, plus any income
allocable thereto, shall be distributed to the Participant
to the extent this would reduce the Excess Annual Additions.
Income allocable to such Excess Annual Additions shall be
computed in a manner consistent with the manner described in
Plan Section 7.02(B) (i.e., the usual manner used by the
Plan Administrator for allocating income or loss to
Participants' Individual Accounts).
If, after distributing Nondeductible Employee Contributions
(including any earnings thereon) and Elective Deferrals
(including any earnings thereon), Excess Annual Additions
still exist, the Excess Annual Additions attributable to
Employer Profit Sharing Contributions shall be deemed
Forfeitures and shall be allocated in accordance with Plan
Section 3.04(C) to all Qualifying Participants who have not
reached their Annual Additions limit, If all Qualifying
Participants have reached their Annual Additions limit
before all Excess Annual Additions have been allocated, the
remaining 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 Qualifying Participants in the next
Limitation Year and each succeeding Limitation Year, if
necessary.
If a suspense account is in existence at any time during a
Limitation Year pursuant to this Plan Section 3.12, it will
participate in the allocation of the Fund's investment gains and
losses. If a suspense account is in existence at any time during
a particular Limitation Year, all amounts in the suspense account
must be allocated and reallocated to Participants' Individual
Accounts before any Employer Contributions or any Nondeductible
Employee Contributions may be made to the Plan for that
Limitation Year. Excess Annual Additions may not be distributed
to Participants or former Participants.
B. If, in addition to this Plan, the Participant is covered under
another qualified master or prototype defined contribution plan
maintained by the Employer, a welfare benefit fund maintained by the
Employer, an individual medical account maintained by the Employer, or
a simplified employee pension plan maintained by the Employer that
provides an Annual Addition as defined in the Definitions Section of
the Plan during any Limitation Year, the following rules apply.
1. The Annual Additions which may be credited to a Participant's
Individual Account under this Plan for any such Limitation Year
will not exceed the Maximum Permissible Amount, reduced by the
Annual Additions credited to a Participant under the other
qualified Master or Prototype Plans, welfare benefit funds,
individual medical account, and simplified employee pension plans
for the same Limitation Year. If the Annual Additions with
respect to the Participant under other qualified Master or
Prototype defined contribution plans, welfare benefit funds,
individual medical accounts, and simplified employee pension
plans maintained by the Employer are less than the Maximum
Permissible Amount, and the Employer Contribution that would
otherwise be contributed or allocated to the Participant's
Individual Account under this Plan would cause the Annual
Additions for the Limitation Year to exceed this limitation, the
amount contributed or allocated may be reduced so
(C) 2010 Ascensus, Inc., Brainerd, MN
30
that the Annual Additions under all such plans and funds for the
Limitation Year will equal the Maximum Permissible Amount. If the
Annual Additions with respect to the Participant under such other
qualified Master or Prototype defined contribution plans, welfare
benefit funds, individual medical accounts, and simplified
employee pension plans in the aggregate are equal to or greater
than the Maximum Permissible Amount, no amount will be
contributed or allocated to the Participant's Individual Account
under this Plan for the Limitation Year.
2. Before determining the Participant's actual Compensation for the
Limitation Year, the Employer may determine the Maximum
Permissible Amount for a Participant in the manner described in
Plan Section 3.12(A)(2).
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 Compensation for the Limitation Year.
4. If, pursuant to Plan Section 3.12(B)(3) or as a result of the
allocation of Forfeitures or a reasonable error in determining a
Participant's Elective Deferral or any other circumstance
permitted under rules promulgated by the IRS, a Participant's
Annual Additions under this Plan and such other plans would
result in Excess Annual Additions for a Limitation Year, the
Excess Annual Additions will be deemed to consist of the Annual
Additions last allocated, except that Annual Additions
attributable to a simplified employee pension plan will be deemed
to have been allocated first, followed by Annual Additions to a
welfare benefit fund or individual medical account, regardless of
the actual allocation date.
5. If Excess Annual Additions were allocated to a Participant on an
allocation date of this Plan which coincides with an allocation
date of another plan, the Excess Annual Additions attributed to
this Plan will be the product of
(i) the total Excess Annual Additions allocated as of such date,
multiplied by
(ii) the ratio of (a) the Annual Additions allocated to the
Participant for the Limitation Year as of such date under
this Plan to (b) the total Annual Additions allocated to the
Participant for the Limitation Year as of such date under
this and all the other qualified prototype defined
contribution plans.
6. Any Excess Annual Additions attributed to this Plan will be
disposed of in the manner described in Plan Section 3.12(A)(4).
7. If the Participant is covered under another qualified defined
contribution plan maintained by the Employer, other than a Master
or Prototype Plan, the provisions of Plan Section 3.12(B)(1)
through 3.12(B)(6) will apply as if the other plan were a Master
or Prototype Plan. In the event this method cannot be
administered because of conflicting language in the other plan,
the Employer must provide, through a written attachment to the
Plan, the method under which the plans will limit total Annual
Additions to the Maximum Permissible Amount, and will properly
reduce any Excess Annual Additions in a manner that precludes
Employer discretion.
C. The provisions of this Plan Section 3.12 shall apply to SIMPLE 401(k)
contributions made pursuant to Plan Sections 3.01(H) and 3.02.
D. Adoption Agreement elections to include or exclude items from
Compensation that are inconsistent with Code Section 415 and the
corresponding regulations will be disregarded for purposes determining
a Participant's Annual Additions limit.
3.13 ACTUAL DEFERRAL PERCENTAGE TEST (ADP)
A. LIMITS ON HIGHLY COMPENSATED EMPLOYEES - the Actual Deferral
Percentage (hereinafter "ADP") for a Plan Year for Participants who
are Highly Compensated Employees for each Plan Year and the ADP for
Participants who are non-Highly Compensated Employees for the same
Plan Year must satisfy one of the following tests.
1. The ADP for Participants who are Highly Compensated Employees
for the Plan Year shall not exceed the ADP for Participants who
are non-Highly Compensated Employees for the same Plan Year
multiplied by 1.25; or
2. The ADP for Participants who are Highly Compensated Employees
for the Plan Year shall not exceed the ADP for Participants who
are non-Highly Compensated Employees for the same Plan Year
multiplied by 2.0 provided that the ADP for Participants who are
Highly Compensated Employees does not exceed the ADP for
Participants who are non-Highly Compensated Employees by more
than two percentage points.
The Plan must satisfy the ADP test using either the prior year
testing or current year testing requirements described below.
Notwithstanding the foregoing, the prior year testing method
described below will apply to this Plan unless otherwise elected
by the Employer.
3. Prior Year Testing- The ADP for a Plan Year for Participants who
are Highly Compensated Employees for each Plan Year and the prior
year's ADP for Participants who were non-Highly Compensated
Employees for the prior Plan Year must satisfj one of the
following tests.
a. The ADP for a Plan Year for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
prior year's ADP for Participants who were non-Highly
Compensated Employees for the prior Plan Year multiplied by
1.25; or
b. The ADP for a Plan Year for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
prior year's ADP for Participants who were non-Highly
Compensated Employees for the prior Plan Year multiplied
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by 2.0, provided that the ADP for Participants who are
Highly Compensated Employees does not exceed the ADP for
Participants who were non-Highly Compensated Employees in
the prior Plan Year by more than two percentage points.
For the first Plan Year the Plan permits any Participant to make
Elective Deferrals and this is not a successor Plan, for purposes
of the foregoing tests, the prior year's non-Highly Compensated
Employees' ADP shall be three percent unless the Adopting
Employer has elected in the Adoption Agreement to use the actual
Plan Year's ADP for these Participants.
Notwithstanding the foregoing, if the Adopting Employer has
elected the Safe Harbor CODA option in the Adoption Agreement,
the current year testing provisions described in Plan Section 3.
13(A)(4) will apply.
4. Current Year Testing-If elected by the Employer in the Adoption
Agreement, the ADP tests in this Plan Section 3.l3(A)(1) and (2)
above will be applied by comparing the current Plan Year's ADP
for Participants who are Highly Compensated Employees with the
current Plan Year's ADP for Participants who are non-Highly
Compensated Employees. Once a current year testing election is
made, the Employer can elect prior year testing for a Plan Year
only if the Plan has used current year testing for each of the
preceding five Plan Years (or if less, the number of Plan Years
the Plan has been in existence) or if, as a result of a merger or
acquisition described in Code Section 410(b)(6)(C)(i), the
Employer maintains both a plan using prior year testing and a
plan using current year testing and the change is made within the
transition period described in Code Section 410(b)(6)(C)(ii).
Notwithstanding the foregoing, the Plan shall be treated as meeting
the ADP test if, within a reasonable period before any Plan Year, each
Participant eligible to participate is given a notice (either in
writing or in any other form permitted by Treasury Regulations or
other rules promulgated by the IRS) which satisfies the requirements
of Code Section 40l(k)(12)(D) and the Employer makes ADP Test Safe
Harbor Contributions pursuant to Code Sections 401(k)(12)(B) and (C)
respectively.
B. SPECIAL RULES
1. A Participant is a Highly Compensated Employee for a particular
Plan Year if they meet the definition of a Highly Compensated
Employee in effect for that Plan Year. Similarly, a Participant
is a non-Highly Compensated Employee for a particular Plan Year
if they do not meet the definition of a Highly Compensated
Employee in effect for that Plan Year.
2. The ADP for any Participant who is a Highly Compensated Employee
for the Plan Year and who is eligible to have Elective Deferrals
(and Qualified Nonelective Contributions or Qualified Matching
Contributions, or both, if treated as Elective Deferrals for
purposes of the ADP test) allocated to their Individual Accounts
under two 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
Nonelective Contributions or Qualified Matching Contributions, or
both) were made under a single arrangement. If a Highly
Compensated Employee participates in two or more cash or deferred
arrangements that have different Plan Years, all Elective
Deferrals made during the Plan Year under all such arrangements
shall be aggregated. For Plan Years beginning before 2006, cash
or deferred arrangements ending with or within the same calendar
year shall be treated as a single arrangement. Notwithstanding
the foregoing, certain plans shall be treated as separate if
mandatorily disaggregated under regulations under Code Section
401(k).
3. In the event that this Plan satisfies the requirements of Code
Sections 401(k), 401(a)(4), or 410(b) only if aggregated with
one or more other plans, or if one or more other plans satisfy
the requirements of such Code sections only if aggregated with
this Plan, then this Plan Section 3.13(B)(3) shall be applied by
determining the ADP of Participants as if all such plans were a
single plan. If more than 10 percent of the Employer's non-Highly
Compensated Employees are involved in a plan coverage change as
defined in Treasury Regulation 1401(k)-2(c)(4), then any
adjustments to the non-Highly Compensated Employee ADP for the
prior year will be made in accordance with such regulations,
unless the Adopting 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.
4. For purposes of satisfying the ADP test, Elective Deferrals,
Qualified Nonelective Contributions, and Qualified Matching
Contributions must be made before the end of the 12-month period
immediately following the Plan Year to which contributions
relate.
5. The Employer shall maintain records sufficient to demonstrate
satisfaction of the ADP test and the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, used in such test.
6. The determination and treatment of the ADP amounts of any
Participant shall satisfy such other requirements as may be
prescribed by the Secretary of the Treasury.
7. If the Employer elects to take Qualified Matching Contributions
into account as Elective Deferrals for purposes of the ADP test,
then (subject to such other requirements as may be prescribed by
the Secretary of the Treasury) the Employer may elect, in a
uniform and nondiscriminatory manner, to either include all
Qualified Matching Contributions in the ADP test or to include
only the amount of such Qualified Matching Contributions that are
needed to meet the ADP test.
8. In the event that the Plan Administrator determines that it is
not likely that the ADP test will be satisfied for a particular
Plan Year unless certain steps are taken before the end of such
Plan Year, the Plan Administrator may require Contributing
Participants who are Highly Compensated Employees to reduce or
cease future Elective Deferrals for such Plan Year in order to
satisfy that requirement. This reduction shall also be required
by the Plan Administrator in the event that the Plan
Administrator anticipates that the Employer will not be able to
deduct all Employer Contributions from its income for federal
income tax purposes. If the Plan Administrator requires
Contributing Participants to reduce or cease making Elective
(C)2010 Ascensus, Inc., Brainerd, MN
32
Deferrals under this paragraph, the reduction or cessation shall
begin with the Highly Compensated Employee with either the
largest amount of Elective Deferrals or the highest Contribution
Percentage for the Plan Year (on the date on which it is
determined that the ADP test will not likely be satisfied), as
elected by the Plan Administrator. All remaining Highly
Compensated Employees' Elective Deferrals for the Plan Year shall
be limited to such amount. Notwithstanding the foregoing, if it
is later determined that the ADP test for the Plan Year will be
satisfied, Highly Compensated Employees shall be permitted to
enroll again as Contributing Participants in accordance with the
terms of the Plan.
9. Elective Deferrals that are treated as Catch-up Contributions
because they exceed a Plan limit or a statutory limit will be
excluded from ADP testing. Amounts which are characterized as
Catch-up Contributions as a result of the ADP test will reduce
the amount of Excess Contributions distributed or Qualified
Nonelective Contributions or Qualified Matching Contributions
contributed to the Plan to correct an Excess Contribution.
10. Special Rule for Early Participation - If the Plan provides that
Employees are eligible to become Contributing Participants before
they have completed the minimum age and service requirements in
Code Section 410(a)(l)(A), and if the Plan applies Code Section
410(b)(4)(B) in determining whether the Plan satisfies the
requirements in Code Section 410(b)(1), then in determining
whether the Plan satisfies the ADP test, either:
a. pursuant to Code Section 401(k)(3)(F), the ADP test is
performed under the Plan (determined without regard to
disaggregation under Treasury Regulation 1.410(b)-7(c)(3)),
using the ADP for all eligible Highly Compensated Employees
for the Plan Year and the ADP of eligible non-Highly
Compensated Employees for the applicable year, disregarding
all non-Highly Compensated Employees who have not met the
minimum age and services requirements in Code Section
410(a)(i)(A); or
b. pursuant to Treasury Regulation 1.401(k)-1(b)(4), the Plan
is disaggregated into separate plans and the ADP test is
performed separately for all eligible Participants who have
completed the minimum age and service requirements of Code
Section 410(a)(1)(A) and for all eligible Participants who
have not completed the minimum age and service requirements
in Code Section 410(a)(1)(A).
C. Notwithstanding the foregoing, the ADP test described above
is treated as satisfied for any SIMPLE 401(k) Year in which
an Eligible Employer maintains this Plan as a SIMPLE 401(k)
Plan.
3.14 ACTUAL CONTRIBUTION PERCENTAGE TEST (ACP)
A. LIMITS ON HIGHLY COMPENSATED EMPLOYEES - The Actual Contribution
Percentage (hereinafter "ACP") for Participants who are Highly
Compensated Employees for each Plan Year and the ACP for Participants
who are non-Highly Compensated Employees for the same Plan Year must
satisfy one of the following tests.
1. The ACP for Participants who are Highly Compensated Employees
for the Plan Year shall not exceed the ACP for Participants who
are non-Highly Compensated Employees for the same Plan Year
multiplied by 1.25; or
2. The ACP for Participants who are Highly Compensated Employees
for the Plan Year shall not exceed the ACP for Participants who
are non-Highly Compensated Employees for the same Plan Year
multiplied by 2.0, provided that the ACP for the Participants who
are Highly Compensated Employees does not exceed the ACP for
Participants who are non-Highly Compensated Employees by more
than two percentage points.
The Plan must satisfy the ACP test using either the prior year
testing or current year testing requirements described below.
Notwithstanding the foregoing, the prior year testing method
described below will apply to this Plan unless otherwise elected
in the Adoption Agreement by the Adopting Employer.
3. Prior Year Testing - The ACP for a Plan Year for Participants who
are Highly Compensated Employees for each Plan Year and the prior
year's ACP for Participants who were non-Highly Compensated
Employees for the prior Plan Year must satisfy one of the
following tests.
a. The ACP for a Plan Year for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
prior year's ACP for Participants who were non-Highly
Compensated Employees for the prior Plan Year multiplied by
1.25; or
b. The ACP for a Plan Year for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
prior year's ACP for Participants who were non-Highly
Compensated Employees for the prior Plan Year multiplied by
2.0, provided that the ACP for Participants who are Highly
Compensated Employees does not exceed the ACP for
Participants who were non-Highly Compensated Employees in
the prior Plan Year by more than two percentage points.
For the first Plan Year, if this Plan permits any Participant to
make Nondeductible Employee Contributions, provides for Matching
Contributions or both, and this is not a successor Plan, for
purposes of the foregoing tests, the prior year's non-Highly
Compensated Employees' ACP shall be three percent unless the
Employer has elected in the Adoption Agreement to use the Plan
Year's ACP for these Participants.
Notwithstanding the foregoing, if the Adopting Employer has
elected the Safe Harbor CODA option in the Adoption Agreement,
the current year testing provisions described below will apply.
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4. Current Year Testing- If elected by the Adopting Employer in the
Adoption Agreement, the ACP tests in this Plan Section 3.1
4(A)(1) and (2), above, will be applied by comparing the current
Plan Year's ACP for Participants who are Highly Compensated
Employees for each Plan Year with the current Plan Year's ACP for
Participants who are non-Highly Compensated Employees. Once an
election to use current year testing is made, the Employer can
elect prior year testing for a Plan Year only if the Plan has
used current year testing for each of the preceding five Plan
Years (or if lesser, the number of Plan Years the Plan has been
in existence) or if, as a result of the merger or acquisition
described in Section 410(b)(6)(C)(i), the Employer maintains both
a plan using prior year testing and a plan using current year
testing and the change is made within the transition period
described in Code Section 410(b)(6)(C)(ii).
B. SPECIAL RULES
1. A Participant is a Highly Compensated Employee for a particular
Plan Year if they meet the definition of a Highly Compensated
Employee in effect for that Plan Year. Similarly, a Participant
is a non-Highly Compensated Employee for a particular Plan Year
if they do not meet the definition of a Highly Compensated
Employee in effect for that Plan Year.
2. For purposes of this Plan Section 3.14, the Contribution
Percentage for any Participant who is a Highly Compensated
Employee and who is eligible to have Contribution Percentage
Amounts allocated to their Individual Account under two or more
plans described in Code Section 401(a), or arrangements described
in Code Section 401(k) that are maintained by the Employer, shall
be determined as if the total of such Contribution Percentage
Amounts was made under each plan. If a Highly Compensated
Employee participates in two or more such plans or arrangements
that have different plan years, all Contribution Percentage
Amounts made during the Plan Year under all such plans and
arrangements shall be aggregated. For Plan Years beginning before
2006, all such plans and arrangements ending with or within the
same calendar year shall be treated as a single plan or
arrangement. Notwithstanding the foregoing, certain plans shall
be treated as separate if mandatorily disaggregated under
regulations under Code Section 401(m).
3. In the event that this Plan satisfies the requirements of Code
Sections 401(m), 401(a)(4) or 410(b) only if aggregated with
one or more other plans, or if one or more other plans satisfy
the requirements of such sections of the Code only if aggregated
with this Plan, then this Plan Section 3.14(B)(3) shall be
applied by determining the Contribution Percentage of Employees
as if all such plans were a single plan. If more than 10 percent
of the Employer's non-Highly Compensated Employees are involved
in a plan coverage change as defined in Treasury Regulation
1.401(m)-2(c)(4), then any adjustments to the non- Highly
Compensated Employee ACP for the prior year will be made in
accordance with such regulations, 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(m)
only if they have the same Plan Year and use the same ACP testing
method.
4. For purposes of determining the Actual Contribution Percentage
test, Nondeductible Employee Contributions are considered to have
been made in the Plan Year in which contributed to the Fund.
Matching Contributions and Qualified Nonelective Contributions
will be considered made for a Plan Year if made no later than the
end of the 12-month period beginning on the day after the close
of the Plan Year.
5. The Employer shall maintain records sufficient to demonstrate
satisfaction of the ACP test and the amount of Qualified
Nonelective Contributions or Qualified Matching Contributions, or
both, used in such test.
6. The determination and treatment of the Contribution Percentage
of any Participant shall satisfy such other requirements as may
be prescribed by the Secretary of the Treasury.
7. If the Employer elects to take Qualified Nonelective
Contributions into account as Contribution Percentage Amounts for
purposes of the ACP test, then (subject to such other
requirements as may be prescribed by the Secretary of the
Treasury) the Employer may elect, in a uniform and
nondiscriminatory manner, either to include all Qualified
Nonelective Contributions in the ACP test or to include only the
amount of such Qualified Nonelective Contributions that are
needed to meet the ACP test.
8. If the Employer elects to take Elective Deferrals into account
as Contribution Percentage Amounts for purposes of the ACP test,
then (subject to such other requirements as may be prescribed by
the Secretary of the Treasury) the Employer may elect, in a
uniform and nondiscriminatory manner, either to include all
Elective Deferrals in the ACP test or to include only the amount
of such Elective Deferrals that are needed to meet the ACP test.
9. Special Rule for Early Participation- If the Plan provides for
Matching Contributions or Nondeductible Employee Contributions
and provides that Employees are eligible to participate with
regard to such contributions before they have completed the
minimum age and service requirements in Code Section
410(a)(1)(A), and if the Plan applies Code Section 410(b)(4)(B)
in determining whether the Plan meets the requirements in Code
Section 410(b)(1), then in determining whether the Plan meets the
ACP test, either:
a. pursuant to Code Section 401(m)(5)(C), the ACP test is
performed under the Plan (determined without regard to
disaggregation under Treasury Regulation 1.410(b)-7(c)(3)),
using the ACP for all eligible Highly Compensated Employees
for the Plan Year and the ACP of eligible non-Highly
Compensated Employees for the applicable year, disregarding
all non-Highly Compensated Employees who have not met the
minimum age and service requirements in Code Section
410(a)(1)(A); or
b. pursuant to Treasury Regulation 1.401(m)-1(b)(4), the Plan
is disaggregated into separate plans and the ACP test is
performed separately for all eligible Participants who have
completed the minimum age and service requirements in Code
Section 410(a)(1)(A) and for all eligible Participants who
have not completed the minimum age and service requirements
in Code Section 410(a)(1)(A).
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C. Notwithstanding the foregoing, the ACP test described above is
treated as satisfied for any SIMPLE 401(k) Year in which an Eligible
Employer maintains this Plan as a SIMPLE 401(l) Plan.
SECTION FOUR: VESTING AND FORFEITURES
4.01 DETERMINING THE VESTED PORTION OF PARTICIPANT INDIVIDUAL ACCOUNTS
A. DETERMINING THE VESTED PORTION - In determining the Vested portion of
a Participant's Individual Account, the following rules apply.
1. Employer Contributions - The Vested portion of a Participant's
Individual Account derived from Employer Contributions other than
Elective Deferrals is determined by applying the vesting
schedule(s) selected in the Adoption Agreement (or the vesting
schedule(s) described in Plan Section 4.01(B) if the Plan is a
Top-Heavy Plan). In the event that there is not a vesting
schedule option provided in the Adoption Agreement, a Participant
shall be fully Vested in their Individual Account at all times.
Notwithstanding the foregoing, a Participant with accrued
benefits derived from Matching Contributions who has not
completed at least one Hour of Service under the Plan in a Plan
Year beginning after December 31, 2001, shall be subject to the
vesting schedule in effect after January 1, 2002, unless
otherwise elected by the Employer in an amendment adopting
provisions of the Economic Growth and Tax Relief Reconciliation
Act of 2001 (EGTRRA).
2. Other Contributions - A Participant is fully Vested in their
rollover contributions and transfer contributions (subject to the
exceptions provided in Plan Section 3.08), Elective Deferrals,
Deductible Employee Contributions, Nondeductible Employee
Contributions, Qualified Matching Contributions, and Qualified
Nonelective Contributions and any earnings thereon. No Forfeiture
will occur solely as a result of an Employee's withdrawal of such
contributions. Separate accounts for such contributions shall be
maintained for each Employee, including separate accounts for
Pre-Tax Elective Deferrals and Roth Elective Deferrals. Each
account will be credited with the applicable contributions and
earnings thereon.
3. Fully Vested Under Certain Circumstances - An Employee is fully
Vested in their Individual Account if any of the following
occurs:
a. the Employee reaches Normal Retirement Age;
b. the Plan is terminated or partially terminated as defined
by rules promulgated by the IRS; or
c. there exists a complete discontinuance of contributions
under the Plan.
Further, unless otherwise indicated in the Adoption Agreement, an
Employee is fully Vested if the Employee dies, incurs a
Disability, or satisfies the conditions for Early Retirement Age
(if applicable). Notwithstanding the foregoing, the portion of an
Employee's Individual Account attributable to Employer Profit
Sharing Contributions, Employer Money Purchase Pension
Contributions, or Employer Target Benefit Pension Contributions
that are made based on their imputed Compensation on account of
incurring a Disability shall be fully Vested at all times. In the
case of a partial termination, only those Employees who are
affected by the partial termination of the Plan shall become
fully Vested.
4. Participants in a Prior Plan - If a Participant was a participant
in a Prior Plan on the Effective Date, their Vested percentage
shall not be less than it would have been under such Prior Plan
as computed on the Effective Date.
5. SIMPLE 401(k) Exception - Notwithstanding anything in this Plan
to the contrary, all benefits attributable to contributions
described in Plan Section 3.01(H) are nonforfeitable at all
times, and all previous contributions made under the Plan are
nonforfeitable as of the beginning of the SIMPLE 401(k) Year in
which the SIMPLE 401(k) Plan is adopted.
6. ADP Test Safe Harbor Contribution Exception - Notwithstanding
anything in this Plan to the contrary, all benefits attributable
to ADP Test Safe Harbor Contributions shall be nonforfeitable at
all times.
7. ACP Test Safe Harbor Matching Contributions - Notwithstanding
anything in this Plan to the contrary, ACP Test Safe Harbor
Matching Contributions will be Vested as indicated in the
Matching Contributions vesting schedule in the Adoption
Agreement, but, in any event, such contributions shall be fully
Vested upon an Employee's attainment of Normal Retirement Age,
upon the complete or partial termination of the Plan, or upon the
complete discontinuance of Employer Contributions.
8. Government Contract Contributions - Notwithstanding anything in
this Plan to the contrary, contributions made by an Employer
pursuant to Plan Section 3.04(B)(3) shall be nonforfeitable at
all times.
A Participant shall not be fully Vested in their Individual Account
solely on account of a transaction described in Code Section 414(1),
except as otherwise provided therein.
B. MINIMUM VESTING SCHEDULE FOR TOP-HEAVY PLANS - The following vesting
provisions apply for any Plan Year in which this Plan is a Top-Heavy
Plan.
Notwithstanding the other provisions of this Plan Section 4.01 (unless
those provisions provide for more rapid vesting), the top-heavy Vested
portion of a Participant's Individual Account derived from Employer
Contributions and Forfeitures is determined by applying the vesting
schedule(s) selected in the Adoption Agreement.
(C)2010 Ascensus, Inc., Brainerd, MN
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The vesting schedule(s) selected in the Adoption Agreement applies to
all benefits within the meaning of Code Section 411 (a)(7), except for
those benefits which are nonforfeitable under the Code (e.g.,
Nondeductible Employee Contributions, including benefits accrued
before the effective date of Code Section 416 and benefits accrued
before the Plan became a Top-Heavy Plan, Elective Deferrals, Qualified
Nonelective Contributions, Qualified Matching Contributions, and ADP
Test Safe Harbor Contributions). Further, no decrease in a
Participant's Vested percentage may occur in the event the Plan's
status as a Top-Heavy Plan changes for any Plan Year. However, this
Plan Section 4.01(B) does not apply to the Individual Account of any
Employee who does not have an Hour of Service after the Plan has
initially become a Top-Heavy Plan, and such Employee's Individual
Account attributable to Employer Contributions and Forfeitures will be
determined without regard to this Plan Section 4.01(B).
C. TERMINATION OF EMPLOYMENT - If a Participant incurs a Termination of
Employment, any portion of their Individual Account which is not
Vested shall be held in a suspense account Such suspense account shall
share in any increase or decrease in the fair market value of the
assets of the Fund in accordance with Plan Section 7.02(B). The
disposition of such suspense account shall be as follows.
1. Cashout of Certain Terminated Participants - If the Vested value
of a terminated Participant's Individual Account does not exceed
$1,000 (or such other cashout level specified in the Adoption
Agreement) the Vested value of the Participant's Individual
Account maybe paid from the Plan pursuant to Plan Sections
5.01(B)(1) and 5.04(A), subject to a uniform and
non-discriminatory policy established by the Plan Administrator.
The portion which is not Vested shall be treated as a Forfeiture
and applied in accordance with Plan Section 3,04(C). If a
Participant would have received the Vested portion of their
Individual Account pursuant to the previous sentence but for the
fact that the Participant's Vested Individual Account exceeded
the cashout amount when the Participant terminated service, and
if at a later time such Individual Account is reduced such that
it is not greater than the cashout level, the Vested portion of
the Participant's Individual Account will be paid from the Plan
and the portion which is not Vested shall be treated as a
Forfeiture and applied in accordance with Plan Section 3.04(C).
For purposes of this Plan Section, if the value of the Vested
portion of a Participant's Individual Account is zero, the
Participant shall be deemed to have received a distribution of
such Vested Individual Account.
2. Terminated Participants Who Elect to Receive Distributions If
such terminated Participant elects to receive a distribution of
the entire Vested portion of their Individual Account in
accordance with Plan Section 5.01(B)(2), the portion which is not
Vested shall be treated as a Forfeiture. Such Forfeiture shall be
applied in accordance with Plan Section 3.04(C). If such
terminated Participant elects to receive a partial distribution
of their Vested Individual Account, no Forfeiture may occur until
the Participant elects to receive the remaining portion of their
Vested Individual Account.
3. Reemployed Participants Who Received Distributions - If such
Participant is deemed to receive a distribution pursuant to Plan
Section 4.01(C)(1) and the Participant subsequently resumes
employment before the date the Participant incurs five
consecutive Breaks in Vesting Service, upon the reemployment of
such Participant, the Employer-derived Individual Account balance
will be restored to the amount on the date of the deemed
distribution. If such Participant receives a distribution
pursuant to Plan Section 4.01(C)(l) or (2) and the Participant
subsequently resumes employment, the Participant's Employer-
derived Individual Account balance will be restored to the amount
on the date of distribution if the Participant repays to the Plan
the full amount of the distribution before the earlier of
a. five years after the first date on which the Participant is
subsequently re-employed by the Employer, or
b. the date the Participant incurs five consecutive Breaks in
Vesting Service following the date of the distribution.
Any restoration of a Participant's Individual Account pursuant to
this Plan Section 4.01(C)(3) shall be made from other
Forfeitures, income or gain to the Fund, or contributions made by
the Employer.
4. Reemployed Participants Who Did Not Receive Distributions- If
such Participant neither receives nor is deemed to receive a
distribution pursuant to Plan Section 4.01(C)(1) or (2) and the
Participant returns to the service of the Employer before
incurring five consecutive Breaks in Vesting Service, there shall
be no Forfeiture. Rather, the amount in such suspense account
shall be restored to such Participant's Individual Account.
D. VESTING BREAKS IN SERVICE
1. Vesting of Pre-Break Accruals - Years of Vesting Service credited
after a Participant incurs five consecutive Breaks in Vesting
Service shall be disregarded in determining the Vested portion of
such Participant's Individual Account that was accrued before the
five consecutive Breaks in Vesting Service. If a Participant who
has neither received a distribution nor has been deemed to
receive a distribution incurs five consecutive Breaks in Vesting
Service, the portion of the Participant's Individual Account
which is not Vested shall be treated as a Forfeiture and applied
in accordance with Plan Section 3.04(C).
2. Vesting of Post-Break Accruals - Years of Vesting Service
credited before a Break in Vesting Service shall apply for
purposes of determining the Vested portion of a Participant's
Individual Account that is accrued after such Break in Vesting
Service.
E. DISTRIBUTION BEFORE FULL VESTING
If a distribution is made to a Participant who was not then fully
Vested in their Individual Account derived from Employer
Contributions, and if the Participant may increase their Vested
percentage in their Individual Account, then the following rules shall
apply:
1. a separate account will be established for the Participant's
interest in the Plan as of the time of the distribution, and
(C)2010 Ascensus, Inc., Brainerd, MN
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2. at any relevant time, the Participant's Vested portion of the
separate account will be equal to an amount ("X") determined in
accordance with the standard formula described below unless the
Employer chooses, in a uniform and nondiscriminatory manner, to
apply the alternative formula.
Standard Formula: X=P (AB + (R x D)) - (R x D)
Alternative Formula: X=P (AB+D) - D
For purposes of the standard and alternative formulas described above,
"P" is the Vested percentage at the relevant time; "AB" is the
separate account balance at the relevant time; "D" is the amount of
the distribution; and "R" is the ratio of the separate account balance
at the relevant time to the separate account balance after
distribution.
4.02 100 PERCENT VESTING OF CERTAIN CONTRIBUTIONS
The Participant's accrned benefit derived from Elective Deferrals,
Qualified Nonelective Contributions, ADP Test Safe Harbor Contributions,
Nondeductible Employee Contributions, and Qualified Matching Contributions
is nonforfeitable. Separate accounts for Pre-Tax Elective Deferrals, Roth
Elective Deferrals, Qualified Nonelective Contributions, Nondeductible
Employee Contributions, Matching Contributions, and Qualified Matching
Contributions will be maintained for each Participant. Each account will be
credited with the applicable contributions and earnings thereon.
4.03 FORFEITURES AND VESTING OF MATCHING CONTRIBUTIONS
Matching Contributions, other than Qualified Matching Contributions, shall
be Vested in accordance with the vesting schedule for Matching
Contributions in the Adoption Agreement. In any event, an Employee's
Matching Contributions shall be fully Vested at Normal Retirement Age, upon
the complete or partial termination of the Plan, or upon the complete
discontinuance of Employer Contributions. Notwithstanding any other
provisions of the Plan, Matching Contributions or Qualified Matching
Contributions must be forfeited if the contributions to which they relate
are Excess Elective Deferrals (unless the Excess Elective Deferrals are for
non-Highly Compensated Employees, in which event the Plan Administrator
shall have discretion as to whether such amounts will be forfeited), Excess
Contributions, Excess Aggregate Contributions or Excess Annual Additions
which are distributed pursuant to Plan Section 3.1 2(A)(4)(c). Such
Forfeitures shall be allocated in accordance with Plan Section 3.04(C).
When a Participant incurs a Termination of Employment, whether a Forfeiture
arises with respect to Matching Contributions shall be determined in
accordance with Plan Section 4.01(C).
SECTION FIVE: DISTRIBUTIONS AND LOANS TO PARTICIPANTS
5.01 DISTRIBUTIONS
A. ELIGIBILITY FOR DISTRIBUTIONS
1. Entitlement to Distribution - The Vested portion of a
Participant's Individual Account attributable to Employer
Contributions (including ACP Test Safe Harbor Matching
Contributions) other than those described in Plan Section
5.01(A)(2) shall be distributable to the Participant upon 1) the
Participant satisfying the distribution eligibility requirements
specified in the Adoption Agreement, 2) the Participant's
Termination of Employment after attaining Normal Retirement Age,
3) the termination of the Plan, and 4) if the Plan designates an
Early Retirement Age, the Participant's Termination of Employment
after satisfying any Early Retirement Age conditions. If a
Participant separates from service before satisfying the Early
Retirement Age requirement, but has satisfied the service
requirement, the Participant will be entitled to elect an early
retirement benefit upon satisfying such age requirement. With
respect to item 1) above, if the Adoption Agreement does not
allow an Employer to specify distribution eligibility
requirements, the Vested portion of a Participant's Individual
Account shall be distributable to the Participant upon the
Participant's Termination of Employment, attainment of Normal
Retirement Age, Disability, attainment of age 59 1/2, or the
termination of the Plan. If a Participant who is entitled to a
distribution is not legally competent to request or consent to a
distribution, the Participant's court-appointed guardian, an
attorney in fact acting under a valid power of attorney, or any
other individual or entity authorized under state law to act on
behalf of the Participant, may request and accept a distribution
of the Vested portion of a Participant's Individual Account under
this Plan Section 5.01(A).
2. Special Requirements For Certain 401(k) Contributions - Elective
Deferrals, Qualified Nonelective Contributions, Qualified
Matching Contributions, and income allocable to each are not
distributable to a Participant or their Beneficiary or
Beneficiaries, in accordance with such Participant's or
Beneficiaries' election, earlier than upon the Participant's
Severance from Employment (separation from service for Plan Years
beginning before 2002), death, or Disability, except as listed
below.
Such amounts may also be distributed upon any one of the
following events:
a. termination of the Plan without the establishment of
another defined contribution plan, other than an employee
stock ownership plan (as defined in Code Section 4975(e) or
Code Section 409), a simplified employee pension plan (as
defined in Code Section 408(k)), a SIMPLE IRA Plan (as
defined in Code Section 408(p)), a plan or contract
described in Code Section 403(b), or a plan described in
Code Section 457(b) or (f) at any time during the period
beginning on the date of Plan termination and ending twelve
months after all assets have been distributed from the Plan;
(C) 2010 Ascensus, Inc., Brainerd, MN
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b. for Plan Years before 2002, disposition by a corporation to
an unrelated corporation of substantially all of the assets
(within the meaning of Code Section 409(d)(2)) used in a
trade or business of such corporation if such corporation
continues to maintain this Plan after the disposition, but
only with respect to Employees who continue employment with
the corporation acquiring such assets;
c. for Plan Years before 2002, disposition by a corporation to
an unrelated entity of such corporation's interest in a
subsidiary (within the meaning of Code Section 409(d)(3)) if
such corporation continues to maintain this Plan, but only
with respect to Employees who continue employment with such
subsidiary;
d. attainment of age 59 1/2 in the case of a profit sharing
plan, if elected in the Adoption Agreement. Notwithstanding
the foregoing, where no election is available in the
Adoption Agreement, distribution of Elective Deferrals shall
be permitted upon the attainment of age 59 1/2; or
e. existence of a hardship incurred by the Participant as
described in Plan Section 5.01 (C)(2)(b), if elected in the
Adoption Agreement. Notwithstanding the foregoing, where no
election is available in the Adoption Agreement,
distribution of Elective Deferrals shall be permitted upon
the existence of a hardship as described in Plan Section
5.01(C)(2)(b).
All distributions that may be made pursuant to one or more of the
foregoing distribution eligibility requirements are subject to
the spousal and Participant consent requirements (if applicable)
contained in Code Section 401(a)(11) and 417. In addition,
distributions which are triggered by either a., b., or c. above
must be made in a lump sum.
Notwithstanding the foregoing, ADP Test Safe Harbor Contributions
may not be distributed earlier than Severance from Employment,
death, Disability, an event described in Code Section 401 (k)
(10), or, in the case of a profit sharing plan, the attainment of
age 59 1/2.
For years beginning after 2005, if both Pre-Tax Elective
Deferrals and Roth Elective Deferrals were made for the year, the
Plan Administrator, in a uniform and nondiscriminatory manner,
may establish operational procedures, including ordering rules as
permitted under the law and related regulations, which specify
whether distributions, including corrective distributions of
Excess Elective Deferrals, Excess Contributions, Excess Aggregate
Contributions, or Excess Annual Additions, will consist of a
Participant's Pre-Tax Elective Deferrals, Roth Elective
Deferrals, or a combination of both, to the extent such type of
Elective Deferral was made for the year. The operational
procedures may include an option for Participants to designate
whether the distribution is being made from Pre-Tax or Roth
Elective Deferrals.
3. Distribution Request: When Distributed- A Participant or
Beneficiary entitled to a distribution who wishes to receive a
distribution must submit a request (either in writing or in any
other form permitted under rules promulgated by the IRS and DOL)
to the Plan Administrator. If required in writing, such request
shall be made upon a form provided or approved by the Plan
Administrator. Upon a valid request, the Plan Administrator shall
direct the Trustee (or Custodian, if applicable) to commence
distribution as soon as administratively feasible after the
request is received, except as otherwise provided in the Adoption
Agreement.
Distributions will be made based on the value of the Vested
portion of the Individual Account available at the time of actual
distribution. To the extent the distribution request is for an
amount greater than the Individual Account, the Trustee (or
Custodian, if applicable) shall be entitled to distribute the
entire Vested portion of the Individual Account.
B. DISTRIBUTIONS UPON TERMINATION OF EMPLOYMENT
1. Individual Account Balances Less Than or Equal to Cashout
Level-If the value of the Vested portion of a Participant's
Individual Account does not exceed the cashout level, the
following rules shall apply regarding Plan Section 4.01(C)(1). If
the value of the Vested portion of a Participant's Individual
Account does not qualify as an Eligible Rollover Distribution,
distribution from the Plan may be made to the Participant in a
single lump sum in lieu of all other forms of distribution under
the Plan following the Participant's Termination of Employment in
accordance with a uniform and nondiscriminatory operational
schedule established by the Plan Administrator. If the value of
the Vested portion of a Participant's Individual Account does not
exceed $1,000 and qualifies as an Eligible Rollover Distribution,
and the Participant does not elect to have such distribution paid
directly to an Eligible Retirement Plan specified by the
Participant in a Direct Rollover or to receive the distribution
in accordance with this Section Five of the Plan, distribution
shall be made to the Participant in a single lump sum in lieu of
all other forms of distribution under the Plan, unless specified
otherwise in the Adoption Agreement. If the value of the Vested
portion of a Participant's Individual Account exceeds $1,000 and
qualifies as an Eligible Rollover Distribution, and if the
Participant does not elect to have such distribution paid
directly to an Eligible Retirement Plan specified by the
Participant in a Direct Rollover or to receive the distribution
in accordance with this Section Five of the Plan, distribution
shall be paid by the Plan Administrator in a Direct Rollover to
an individual retirement arrangement (as described in Code
Section 408(a), 408(b) or 408A) designated by the Plan
Administrator. Notwithstanding the foregoing, if the Participant
is reemployed by the Employer before the occurrence of the
distribution, no distribution will be made under this paragraph.
The value of the Participant's Vested Individual Account for
purposes of this paragraph shall be determined by including
rollover contributions (and earnings allocable thereto) within
the meaning of Code Sections 402(c), 403(a)(4), 403(b)(8),
408(d)(3)(a)(ii), and 457(e)(16).
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2. Individual Account Balances Exceeding Cashout Level- If
distribution in the form of a Qualified Joint and Survivor
Annuity is required with respect to a Participant and either the
value of the Participant's Vested Individual Account exceeds the
cashout level or there are remaining payments to be made with
respect to a particular distribution option that previously
commenced, and if the Individual Account is immediately
distributable, the Participant must consent to any distribution
of such Individual Account.
If distribution in the form of a Qualified Joint and Survivor
Annuity is not required with respect to a Participant and the
value of such Participant's Vested Individual Account exceeds the
cashout level, and if the Individual Account is immediately
distributable, the Participant must consent to any distribution
of such Individual Account.
The consent of the Participant and the Participant's Spouse shall
be obtained (either in writing or in any other form permitted
under rules promulgated by the IRS and DOL) within the 90-day
period ending on the Annuity Starting Date. The Plan
Administrator shall notify the Participant and the Participant's
Spouse of the right to defer any distribution until the
Participant's Individual Account is no longer immediately
distributable. Such notification shall include a general
description of the material features, and an explanation of the
relative values of the optional forms of benefit available under
the Plan in a manner that would satisfy the notice requirements
of Code Section 417(a)(3), and shall be provided no less than 30
days and no more than 90 days before the Annuity Starting Date.
If a distribution is one to which Code Sections 401(a)(11) and
417 do not apply, such distribution may commence less than 30
days after the notice required in Treasury Regulation
1.411(a)-11(c) is given, provided that:
i. the Plan Administrator clearly informs the Participant that
the Participant has a right to a period of at least 30 days
after receiving the notice to consider the decision of
whether or not to elect a distribution (and, if applicable,
a particular distribution option), and
ii. the Participant, after receiving the notice, affirmatively
elects a distribution.
Notwithstanding the foregoing, only the Participant need consent
to the commencement of a distribution which is either made in the
form of a Qualified Joint and Survivor Annuity or is made from a
Plan which meets the Retirement Equity Act safe harbor rules of
Plan Section 5.10(E), while the Individual Account is immediately
distributable. Neither the consent of the Participant nor the
Participant's Spouse shall be required to the extent that a
distribution is required to satisfy Code Section 401(a)(9) or
Code Section 415. In addition, upon termination of this Plan, if
the Plan does not offer an annuity option (purchased from a
commercial provider), the Participant's Individual Account may,
without the Participant's consent, be distributed to the
Participant or transferred to another defined contribution plan
(other than an employee stock ownership plan as defined in Code
Section 4975(e)(7)) within the same controlled group.
An Individual Account is immediately distributable if any part of
the Individual Account could be distributed to the Participant
(or surviving Spouse) before the Participant attains or would
have attained (if not deceased) the later of Normal Retirement
Age or age 62.
3. Distribution Before Attainment of Normal Retirement Age - A
Participant who has incurred a Termination of Employment
before attaining Normal Retirement Age may elect to receive a
distribution with regard to Matching Contributions, Employer
Profit Sharing Contributions, Employer Money Purchase Pension
Contributions, and Employer Target Benefit Pension Contributions
as applicable, unless specified otherwise in the Adoption
Agreement. A Participant who has incurred a Severance from
Employment before attaining Normal Retirement Age may elect to
receive a distribution with regard to Qualified Matching
Contributions, Elective Deferrals, Qualified Nonelective
Contributions and ADP Test Safe Harbor Contributions unless
specified otherwise in the Adoption Agreement.
C. DISTRIBUTIONS DURING EMPLOYMENT
1. In-Service Withdrawals - If this is a profit sharing plan, unless
the Adoption Agreement provides otherwise, a Participant who is
not otherwise eligible to receive a distribution of their
Individual Account may elect to receive an in-service
distribution of all or part of the Vested portion of their
Individual Account attributable to Employer Contributions other
than those described in Plan Sections 5.01(A)(2) and
5.01(C)(2)(b), subject to the requirements of Plan Section 5.10
and further subject to the following limits.
a. Participant for five or more years - An Employee who has
been a Participant in the Plan for five or more years may
withdraw up to the entire Vested portion of their Individual
Account.
b. Participant for less than five years - Except as otherwise
provided in the Adoption Agreement, an Employee who has been
a Participant in the Plan for less than five years may
withdraw only the amount which has been in their Individual
Account attributable to Employer Contributions for at least
two full Plan Years, measured from the date such
contributions were allocated.
2. Hardship Withdrawals
a. Hardship Withdrawals of Matching Contributions and Employer
Profit Sharing Contributions - If this is a profit sharing
plan, then notwithstanding Plan Section 5.01(C)(1) (unless
the Adoption Agreement provides otherwise) a Participant may
elect to receive a hardship distribution of all or part of
the Vested portion of their Individual Account attributable
to Employer Contributions other than those described in Plan
Section 5.01(A)(2), subject to the requirements of Plan
Section 5.10.
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For purposes of this Section 5.01(C)(2)(a), hardship is
defined as an immediate and heavy financial need of the
Participant where such Participant lacks other available
resources. Except as otherwise provided in the Adoption
Agreement, financial needs considered immediate and heavy
include, but are not limited to, 1) expenses incurred or
necessary for medical care, described in Code Section 2
13(d), of the Employee, the Employee's Spouse or dependents,
2) the purchase (excluding mortgage payments) of a principal
residence for the Employee, 3) payment of tuition and
related educational fees for the next 12 months of
post-secondary education for the Employee, the Employee's
spouse, children or dependents, 4) payment to prevent the
eviction of the Employee from, or a foreclosure on the
mortgage of, the Employee's principal residence, 5) for
Plan Years after 2005, funeral or burial expenses for the
Participant's deceased parent, Spouse, child or dependent,
and 6) for Plan Years after 2005, payment to repair damage
to the Employee's principal residence that would qualify for
a casualty loss deduction under Code Section 165 (determined
without regard to whether the loss exceeds 10 percent of
adjusted gross income).
A distribution will be considered necessary to satisfy an
immediate and heavy financial need of the Employee only if
(1) the Employee has obtained all distributions, other
than hardship distributions, and all nontaxable loans
available under all plans maintained by the Employer,
(2) the distribution is not in excess of the amount of an
immediate and heavy financial need (including amounts
necessary to pay any federal, state, or local income
taxes or penalties reasonably anticipated to result
from the distribution).
b. Hardship Withdrawals of Elective Deferrals - Unless the
Adopting Employer has elected otherwise in the Adoption
Agreement, distribution of Elective Deferrals (including
Qualified Nonelective Contributions and Qualified Matching
Contributions that are treated as Elective Deferrals and any
earnings credited to a Participant's account as of the later
of December 31, 1988, and the end of the last Plan Year
ending before July 1, 1989) may be made to a Participant in
the event of hardship. For the purposes of this Section
5.01(C)(2)(b), hardship is defined as an immediate and heavy
financial need of the Employee where the distribution is
needed to satisfy the immediate and heavy financial need of
such Employee. Hardship distributions are subject to the
spousal consent requirements contained in Code Sections
401(a)(11) and 417, if applicable.
For purposes of determining whether a Participant has a
hardship, rules similar to those described in Plan Section
5.01(C)(2)(a) shall apply except that only the listed
financial needs shall be considered. In addition, a
distribution will be considered as necessary to satisfy an
immediate and heavy financial need of the Employee only if
(1) all plans maintained by the Employer provide that the
Employee's Elective Deferrals (and Nondeductible
Employee Contributions) will be suspended for six
months (12 months for hardship distributions before
2002) after the receipt of the hardship distribution;
and
(2) for hardship distributions before 2002, all plans
maintained by the Employer provide that the Employee
may not make Elective Deferrals for the Employee's
taxable year immediately following the taxable year of
the hardship distribution in excess of the applicable
limit under Code Section 402(g) for such taxable year
less the amount of such Employee's Elective Deferrals
for the taxable year of the hardship distribution.
D. MISCELLANEOUS DISTRIBUTION ISSUES
1. Distribution of Rollover, Transfer, and Nondeductible Employee
Contributions- The following rules shall apply with respect to
entitlement to distribution of rollover and transfer
contributions and Nondeductible Employee Contributions.
a. Entitlement to Distribution - If no election is available
in the Adoption Agreement, rollover contributions (including
rollovers of Nondeductible Employee Contributions) and
earnings thereon may be distributed at any time upon
request. If the Adopting Employer specifies in the Adoption
Agreement that Rollover contributions may not be distributed
at any time, such contributions will be subject to the
Plan's provisions governing distributions of either Employer
Profit Sharing Contributions (if this Plan is a profit
sharing plan), Employer Money Purchase Pension Contributions
(if this Plan is a money purchase pension plan), or Employer
Target Benefit Pension Contributions (if this Plan is a
target benefit pension plan). If the Adopting Employer
specifies in the Adoption Agreement that transfer
contributions may be distributed at any time or if no
election is available in the Adoption Agreement, transfer
contributions may be distributed at any time upon request
subject to the restrictions below and any other restrictions
required by either the Code or applicable regulations. If
the Adopting Employer specifies in the Adoption Agreement
that transfer contributions may not be distributed at
any time, such contributions will be subject to the Plan's
provisions governing distributions of either Employer Profit
Sharing Contributions (if this is a profit sharing plan),
Employer Money Purchase Pension Contributions (if this Plan
is a money purchase pension plan), or Employer Target
Benefit Pension Contributions (if this Plan is a target
benefit pension plan). Notwithstanding the foregoing, to the
extent that any optional form of benefit under this Plan
permits a distribution before the Employee's retirement,
death, Disability, attainment of Normal Retirement Age, or
Termination of Employment, and before 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(1)) to this Plan
from a money purchase pension plan or a target benefit
pension plan qualified under Code Section 401(a) (other
than any portion of those assets and liabilities
attributable to voluntary employee contributions). In
addition, if such transfers consist of Elective Deferrals or
amounts treated as Elective Deferrals (including earnings
thereon) from a 401(k) plan, the assets transferred shall
continue to be subject to the distribution restrictions
under Code Sections 401(k)(2) and 401(k)(10), unless
otherwise provided in the Adoption Agreement
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A Participant may at any time, and upon a request submitted to
the Plan Administrator (either in writing or in any other form
permitted under rules promulgated by the IRS and DOL), withdraw
an amount from their Individual Account attributable to
Nondeductible Employee Contributions (including earnings
thereon). In the event the portion of a Participant's Individual
Account attributable to Nondeductible Employee Contributions
experiences a loss such that the amount remaining in such
subaccount is less than the amount of Nondeductible Employee
Contributions made by the Participant, the maximum amount which
the Participant may withdraw is an amount equal to the remaining
portion of the Participant's Individual Account attributable to
Nondeductible Employee Contributions. Subject to Plan Section
5.10, Joint and Survivor Annuity Requirements (if applicable),
the Participant may withdraw any part of the Deductible Employee
Contribution account by delivering an application (either in
writing or in any other form permitted under rules promulgated by
the IRS and DOL) to the Plan Administrator.
b. Direct Rollovers of Eligible Rollover Distributions -
Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a Recipient's election under this Plan
Section 5.01(D)(1)(b), a Recipient may elect, at the time and in
the manner prescribed by the Plan Administrator, to have any
portion of an Eligible Rollover Distribution that is equal to at
least $500 (or such lesser amount if the Plan Administrator
permits in a uniform and nondiscriminatory manner) paid directly
to an Eligible Retirement Plan specified by the Recipient in a
Direct Rollover.
2. Option to Limit Frequency of In-Service Distributions- If this
is a profit sharing plan and the Adopting Employer has elected to
limit the number of in-service distributions in the Adoption
Agreement, then a Participant will be permitted only the number
of in-service distributions indicated in the Adoption Agreement
during the course of such Participant's employment with the
Employer. The amount which the Participant can withdraw will be
limited to the lesser of the amount determined under the limits
set forth in Plan Section 5.0 1(C) or the percentage of the
Participant's Individual Account specified by the Adopting
Employer in the Adoption Agreement. Distributions under this
Section 5.01(D)(2) will be subject to the requirements of Plan
Section 5.10.
3. Commencement of Benefits- Notwithstanding any other provision,
unless the Participant elects otherwise, distribution of benefits
will begin no later than the 60th day after the latest of the
close of the Plan Year in which
a. the Participant attains age 65 (or Normal Retirement Age,
if earlier),
b. the Participant reaches the 10th anniversary of the year in
which the Participant commenced participation in the Plan,
or
c. the Participant incurs a Termination of Employment.
Notwithstanding the foregoing, the failure of a Participant (and
Spouse, if applicable) to consent to a distribution while a
benefit is immediately distributable, within the meaning of Plan
Section 5.01(B)(2), shall be deemed to be an election to defer
commencement of payment of any benefit sufficient to satisfy this
Plan Section 5.01(D)(3).
5.02 FORM OF DISTRIBUTION TO A PARTICIPANT
If the value of the Vested portion of a Participant's Individual Account
exceeds $1,000 and the Participant has properly waived the Qualified Joint
and Survivor Annuity (if applicable), as described in Plan Section 5.10,
the Participant may request (either in writing or in any other form
permitted under rules promulgated by the IRS and DOL) that the Vested
portion of their Individual Account be paid to them in one or more of the
following forms of payment, unless specified otherwise in the Adoption
Agreement: 1) in a lump sum, 2) in a partial payment, 3) in installment
payments over a period not to exceed the Life Expectancy of the Participant
or the joint and last survivor Life Expectancy of the Participant and their
designated Beneficiary, or 4) applied to the purchase of an annuity
contract.
Notwithstanding anything in this Plan Section 5.02 to the contrary, a
Participant cannot elect payments in the form of a life annuity if the
Retirement Equity Act safe harbor rules of Plan Section 5.10(E) apply.
5.03 DISTRIBUTIONS UPON THE DEATH OF A PARTICIPANT
A. DESIGNATION OF BENEFICIARY - SPOUSAL CONSENT - Each Participant may
designate, on a form provided or approved by and delivered to the Plan
Administrator, one or more primary and contingent Beneficiaries to
receive all or a specified portion of the Participant's Individual
Account in the event of their death. A Participant may change or
revoke such Beneficiary designation by completing and delivering the
proper form to the Plan Administrator. If the Participant designates a
Spouse Beneficiary and the individual later ceases to be a Spouse,
such designation of the individual who becomes an ex-spouse (other
than by death) will be deemed void and the ex-spouse shall have no
rights as a Beneficiary unless redesignated as a Beneficiary by the
Participant subsequent to becoming an ex-spouse.
In the event that a Participant wishes to designate a primary
Beneficiary who is not their Spouse, their Spouse must consent (either
in writing or in any other form permitted under rules promulgated by
the IRS and DOL) to such designation, and the Spouse's consent must
acknowledge the effect of such designation and be witnessed by a
notary public or plan representative. Notwithstanding this consent
requirement, if the Participant establishes to the satisfaction of the
Plan Administrator that such consent may not be obtained because there
is no Spouse or the Spouse cannot be located, no consent shall be
required. In addition, if the Spouse is legally incompetent to give
consent, the Spouse's legal guardian, even if the guardian is the
Participant, may give consent. If the Participant is legally separated
or the Participant has been abandoned (within the meaning of local
law) and the Participant has a court order to such effect, spousal
consent is not required unless a Qualified Domestic Relations Order
provides otherwise. Any change of Beneficiary will require a new
spousal consent to the extent required by the Code or Treasury
Regulations.
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B. PAYMENT TO BENEFICIARY - If a Participant dies before the
Participant's entire Individual Account has been paid to them, such
deceased Participant's Individual Account shall be payable to any
surviving Beneficiary designated by the Participant, or, if no
Beneficiary survives the Participant, to the Participant's Spouse, or,
where no Spouse exists, to the Participant's estate. If the
Beneficiary is a minor, distribution will be deemed to have been made
to such Beneficiary if the portion of the Participant's Individual
Account to which the Beneficiary is entitled is paid to their legal
guardian or, if applicable, to their custodian under the Uniform Gifts
to Minors Act or the Uniform Transfers to Minors Act. If a Beneficiary
is not a minor but is not legally competent to request or consent to a
distribution, distributions will be deemed to have been made to such
Beneficiary if the portion of the Participant's Individual Account to
which the Beneficiary is entitled is paid to the Participant's
court-appointed guardian, an attorney in fact acting under a valid
power of attorney, or any other individual or entity authorized under
state law to act on behalf of the Beneficiary.
C. DISTRIBUTION REQUEST: WHEN DISTRIBUTED - A Beneficiary of a deceased
Participant entitled to a distribution who wishes to receive a
distribution must submit a request (either in writing or in any other
form permitted under rules promulgated by the IRS and DOL) to the Plan
Administrator. If required in writing, such request shall be made on a
form provided or approved by the Plan Administrator. Upon a valid
request, the Plan Administrator shall direct the Trustee (or
Custodian, if applicable) to commence distribution as soon as
administratively feasible after the request is received, except as
otherwise provided in the Adoption Agreement.
5.04 FORM OF DISTRIBUTION TO BENEFICIARIES
A. VALUE OF INDIVIDUAL ACCOUNT DOES NOT EXCEED $5,000 - If the value of
the Vested portion of a Participant's Individual Account does not
exceed $5,000, the value of the Vested portion of a Participant's
Individual Account may be made to the Beneficiary in a single lump sum
in lieu of all other forms of distribution under the Plan, as soon as
administratively feasible.
The value of the Participant's Vested Individual Account for purposes
of this paragraph shall be determined by including rollover
contributions (and earnings allocable thereto) within the meaning of
Code Sections 402(c), 403(a)(4), 403(b)(8), 408(d)(3)(A)(ii) and
457(e)(16).
B. VALUE OF INDIVIDUAL ACCOUNT EXCEEDS $5,000 - If the value of the
Vested portion of a Participant's Individual Account exceeds $5,000,
the preretirement survivor annuity requirements of Plan Section 5.10
shall apply unless waived in accordance with that Plan Section 5.10 or
unless the Retirement Equity Act safe harbor rules of Plan Section
5.10(E) apply. However, a surviving Spouse Beneficiary may elect any
form of payment allowable under the Plan in lieu of the preretirement
survivor annuity. Any such payment to the surviving Spouse must meet
the requirements of Plan Section 5.05.
C. OTHER FORMS OF DISTRIBUTION TO BENEFICIARY - If the value of a
Participant's Individual Account exceeds $5,000, and the Participant
has properly waived the preretirement survivor annuity, as described
in Plan Section 5.10 (if applicable), or if the Beneficiary is the
Participant's surviving Spouse, the Beneficiary may, subject to the
requirements of Plan Section 5.05, request (either in writing or in
any other form permitted under rules promulgated by the IRS and DOL)
that the Participant's Individual Account be paid in any form of
distribution permitted to be taken by the Participant under this Plan
other than applying the Individual Account toward the purchase of an
annuity contract, Notwithstanding the foregoing, installment payments
to a Beneficiary cannot be made over a period exceeding the Life
Expectancy of such Beneficiary.
5.05 REQUIRED MINIMUM DISTRIBUTION REQUIREMENTS
A. GENERAL RULES
1. Subject to Plan Section 5.10, the requirements of this Section
shall apply to any distribution of a Participant's interest and
will take precedence over any inconsistent provisions of this
Plan. Unless otherwise specified, the provisions of Plan Section
5.05 apply to calendar years beginning after December 31, 2002.
2. All distributions required under this Plan Section 5.05 shall be
determined and made in accordance with Treasury Regulation 1
.401(a)(9), including the minimum distribution incidental benefit
requirement of Code Section 401(a)(9)(G).
3. Limits on Distribution Periods - As of the first Distribution
Calendar Year, distributions to a Participant, if not made in a
single sum, may only be made over one of the following periods
(or a combination thereof):
a. the life of the Participant,
b. the joint lives of the Participant and a designated
Beneficiary,
c. a period certain not extending beyond the Life Expectancy
of the Participant, or
d. a period certain not extending beyond the joint life and
last survivor expectancy of the Participant and a Designated
Beneficiary.
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B. TIME AND MANNER OF DISTRIBUTION
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.
For purposes of this Plan Section 5.05(B) and Plan Section
5.05(D), unless Plan Section 5.05(D)(2)(a)(iii) applies,
distributions are considered to begin on the Participant's
Required Beginning Date. If Plan Section 5.05(D)(2)(a)(iii)
applies, distributions are considered to begin on the date
distributions are required to begin to the surviving Spouse under
Plan Section 5.05(D)(2)(a)(i). 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 in
Plan Section 5.05(D)(2)(a)(i)), the date distributions are
considered to begin is the date distributions actually commence.
Except as provided in the Adoption Agreement (or in a separate
IRS model amendment, if applicable), Participants or
Beneficiaries may elect on an individual basis whether the
five-year rule or the life expectancy rule in Plan Section
5.05(D) 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 in this Plan
Section 5.05(B), 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 the Beneficiary makes an election under this paragraph,
distributions will be made in accordance with this Plan Section
5.05(B) and Plan Section 5.05(D) and, if applicable, the election
in the Adoption Agreement (or in a separate IRS model amendment,
if applicable).
2. 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 Plan Section 5.05(C) and Plan
Section 5.05(D). 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 Code Section 401(a)(9) and the related Treasury
Regulations.
C. REQUIRED MINIMUM DISTRIBUTIONS DURING PARTICIPANT'S LIFETIME
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 Benefit
by the distribution period in the Uniform Lifetime Table set
forth in Treasury Regulation 1,401 (a)(9)-9, Q&A-2, 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 Benefit by
the number in the Joint and Last Survivor Table set forth in
Treasury Regulation 1.401(a)(9)-9, Q&A-3, using the
Participant's and Spouse's attained ages as of the
Participant's and Spouse's birthdays in the Distribution
Calendar Year.
2. Lifetime Required Minimum Distributions Continue Through Year of
Participant's Death- Required minimum distributions will be
determined under this Plan Section 5.05(C) beginning with the
first Distribution Calendar Year and up to and including the
Distribution Calendar Year that includes the Participant's date
of death.
D. REQUIRED MINIMUM DISTRIBUTIONS AFTER PARTICIPANT'S DEATH
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 benefit 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:
i. 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.
ii. 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.
iii. 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 Designated Beneficiary
in the year following the year of the Participant's
death, reduced by one for each subsequent year.
(C) 2010 Ascensus, Inc., Brainerd, MN
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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 benefit 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.
2. Death Before Date Distributions Begin
a. Participant Survived by Designated Beneficiary - Except as
provided in the Adoption Agreement (or in a separate IRS
model amendment, if applicable), 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 benefit by the remaining Life
Expectancy of the Participant's Designated Beneficiary,
determined as provided in Section 5.05(D)(l).
i. If the Participant's surviving Spouse is the
Participant's sole Designated Beneficiary, then, except
as provided in the Adoption Agreement (or in a separate
IRS model amendment, if applicable), 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 701/2, if later.
ii. If the Participant's surviving Spouse is not the
Participant's sole Designated Beneficiary, then, except
as provided in the Adoption Agreement (or in a separate
IRS model amendment, if applicable), distributions to
the Designated Beneficiary will begin by December 31 of
the calendar year immediately following the calendar
year in which the Participant died.
iii. 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 are required to
begin, this Plan Section 5.05(D)(2), other than Plan
Section 5.05(D)(2)(a), will apply as if the surviving
Spouse were the Participant.
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,
3. Election to Allow Designated Beneficiary Receiving Distributions
Under 5-Year Rule to Elect Life Expectancy Distributions Unless
specified otherwise in a separate IRS model amendment, a
Designated Beneficiary who is receiving payments under the
five-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 five-year period.
E. TEFRA SECTION 242(B) ELECTIONS
1. Notwithstanding the other requirements of this Plan Section 5.05
and subject to the requirements of Plan Section 5.10, Joint and
Survivor Annuity Requirements, distribution on behalf of any
Employee (or former Employee), including a five-percent owner,
who has made a designation in Section 242(b)(2) of the Tax Equity
and Fiscal Responsibility Act (a "Section 242(b)(2) Election" may
be made in accordance with all of the following requirements
(regardless of when such distribution commences).
a. The distribution by the Fund is one which would not have
qualified such Fund under Code Section 401(a)(9) as in
effect before amendment by the Deficit Reduction Act of
1984.
b. The distribution is in accordance with a method of
distribution designated by the Employee whose interest in
the Fund is being distributed or, if the Employee is
deceased, by a Beneficiary of such Employee.
c. Such designation was in writing, was signed by the Employee
or the Beneficiary, and was made before January 1, 1984.
d. The Employee had accrued a benefit under the Plan as of
December 31, 1983.
e. The method of distribution designated by the Employee or
the Beneficiary specifies the time at which distribution
will commence, the period over which distributions will be
made, and in the case of any distribution upon the Employees
death, the Beneficiaries of the Employee listed in order of
priority.
2. A distribution upon death will not be covered by this
transitional rule unless the information in the designation
contains the required information described above with respect to
the distributions to be made upon the death of the Employee.
3. If a designation is revoked, any subsequent distribution must
satisfy the requirements of Code Section 401(a)(9) and the
regulations thereunder, If a designation is revoked subsequent to
the date distributions are required to begin, the Plan must
distribute, by the end of the calendar year following the
calendar year in which the revocation occurs the total amount not
yet distributed which would have been required to have been
distributed to satisfy Code Section 401(a)(9) and the regulations
thereunder, but for an election made in Section 242(b)(2) of the
Tax Equity and Fiscal Responsibility Act of 1982. For calendar
years beginning after December 31, 1988, such distributions must
meet the minimum distribution incidental benefit requirements.
Any changes in the designation will be considered to be a
revocation of the designation. However, the mere substitution or
addition of another Beneficiary (one not named in the
designation) under the designation will not be
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considered to be a revocation of the designation, so long as such
substitution or addition does not alter the period over which
distributions are to be made under the designation, directly or
indirectly (for example, by altering the relevant measuring
life).
4. In the case in which an amount is transferred or rolled over
from one plan to another plan, the rules in Treasury Regulation
1.401(a)(9)-8, Q&A-14 and Q&A-15, shall apply.
F. TRANSITION RULES
For plans in existence before 2003, required minimum distributions
before 2003 were made pursuant to plan Section 5.05(E), if applicable,
and Sections 5.05(F)(1) through 5.05(F)(3) below.
1. 2000 and Before- Required minimum distributions for calendar
years after 1984 and before 2001 were made in accordance with
Code Section 401(a)(9) and the Proposed Treasury Regulations
thereunder published in the Federal Register on July 27, 1987
(the "1987 Proposed Regulations").
2. 2001 - Required minimum distributions for calendar year 2001
were made in accordance with Code Section 401(a)(9) and the
Proposed Treasury Regulations in Section 401(a)(9) as published
in the Federal Register on January 17, 2001 (the "2001 Proposed
Regulations") unless a prior IRS model amendment provisions was
adopted that stated that the required minimum distributions for
2001 were made pursuant to the 1987 Proposed Regulations. If
distributions were made in 2001 under the 1987 Proposed
Regulations before the date in 2001 that the Plan began operating
under the 2001 Proposed Regulations, the special transition rule
in Announcement 2001-82, 2001-2 C.B. 123, applied.
3. 2002- Required minimum distributions for calendar year 2002 were
made in accordance with Code Section 401(a)(9) and the 2001
Proposed Regulations unless the prior IRS model amendment, if
applicable, provided either a. or b. below applies.
a. Required minimum distributions for 2002 were made pursuant
to the 1987 Proposed Regulations.
b. Required minimum distributions for 2002 were made pursuant
to the Final and Temporary Treasury Regulations under Code
Section 401(a)(9) published in the Federal Register on April
17, 2002 (the "2002 Final and Temporary Regulations") which
are described in Plan Sections 5.05(B) through 5.05(E). If
distributions were made in 2002 under either the 1987
Proposed Regulations or the 2001 Proposed Regulations before
the date in 2002 that the Plan began operating under the
2002 Final and Temporary Regulations, the special transition
rule in Section 1.2 of the model amendment in Revenue
Procedure 2002-29, 2002-1 C.B. 1176, applied.
5.06 ANNUITY CONTRACTS
Any annuity contract distributed under the Plan (if permitted or required
by this Section Five) must be nontransferable. The terms of any annuity
contract purchased and distributed by the Plan to a Participant or Spouse
shall comply with the requirements of the Plan.
5.07 DISTRIBUTIONS IN-KIND
The Plan Administrator may, but need not, cause any distribution under this
Plan to be made either in a form actually held in the Fund, or in cash by
converting assets other than cash into cash, or in any combination of the
two foregoing methods. Assets other than cash, or other assets with a
readily ascertainable market value, must be subject to a third party
appraisal before they may be distributed from the Plan.
5.08 PROCEDURE FOR MISSING PARTICIPANTS OR BENEFICIARIES
The Plan Administrator must take reasonable steps to locate Participants or
Beneficiaries who are entitled to distributions from the Plan. Such
measures may include, checking records of other plans maintained by the
Employer, contacting the Participant's Beneficiaries, using internet search
tools, commercial locator services, and credit reporting agencies, using
certified mail, or using a governmental letter-forwarding service. The Plan
Administrator should consider the cost of the measures relative to the
Individual Account balance when determining which measures are used.
In the event that the Plan Administrator cannot locate a Participant or
Beneficiary who is entitled to a distribution from the Plan or to whom a
distribution has been made but the distribution check remains uncashed
after taking all reasonable measures, the Plan Administrator may,
consistent with applicable laws, regulations, and other pronouncements
under the Code and ERISA, use any reasonable procedure to dispose of
distributable Plan assets, including treating the amount distributable as a
Forfeiture and allocating it in accordance with the terms of the Plan, and
if the Participant or Beneficiary is later located, restore such benefit in
the amount of the Forfeiture, unadjusted for earnings and losses to the
Plan.
In the event the Plan is terminated, payments must be made in a manner that
protects the benefit rights of a Participant or Beneficiary. Benefit rights
shall be deemed to be protected if the amount in a Participant's or
Beneficiary's Individual Account is placed into an IRA, used to purchase an
annuity contract, or transferred to another qualified retirement plan.
Benefit rights need not, however, be protected if an Individual Account
becomes subject to state escheat laws, or if a payment is made to satisfy
Code Section 401 (a)(9), or if such other process is followed that is
consistent with applicable statutory or regulatory guidance.
5.09 CLAIMS PROCEDURES
A. FILING A CLAIM FOR PLAN DISTRIBUTIONS - A Participant or Beneficiary
who has been denied a request for a distribution or loan and desires
to make a claim for the Vested portion of the Participant's Individual
Account shall file a request (either in writing or in any other form
permitted under rules promulgated by the IRS and DOL and acceptable to
the Plan Administrator) with the Plan Administrator. If such request
is required in writing, such request must be made on a form furnished
to them by the Plan Administrator for such purpose. The request shall
set forth the basis of the claim. The Plan Administrator is authorized
to conduct such examinations as may be necessary to facilitate the
payment of any benefits to which the Participant or Beneficiary may be
entitled under the terms of the Plan.
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B. DENIAL OF A CLAIM - Whenever a claim for a Plan distribution or loan
submitted in accordance with this Section 5.09 by any Participant or
Beneficiary has been wholly or partially denied, the Plan
Administrator must furnish such Participant or Beneficiary notice
(either in writing or in any other form permitted under rules
promulgated by the IRS and DOL) of the denial within 90 days of the
date the original claim was filed. This notice shall set forth the
specific reasons for the denial, specific reference to pertinent Plan
provisions on which the denial is based, a description of any
additional information or material needed to perfect the claim, an
explanation of why such additional information or material is
necessary, and an explanation of the procedures for appeal.
C. REMEDIES AVAILABLE - The Participant or Beneficiary shall have 60
days from receipt of the denial notice in which to make written
application for review by the Plan Administrator. The Participant or
Beneficiary may request that the review be in the nature of a hearing.
The Participant or Beneficiary shall have the right to representation,
to review pertinent documents, and to submit comments in writing (or
in any other form permitted by the IRS or DOL). The Plan Administrator
shall issue a decision on such review within 60 days after receipt of
an application for review as provided for in this Plan Section 5.09.
Upon a decision unfavorable to the Participant or Beneficiary, such
Participant or Beneficiary shall be entitled to bring such actions in
law or equity as may be necessary or appropriate to protect or clarity
their right to benefits under this Plan.
5.10 JOINT AND SURVIVOR ANNUITY REQUIREMENTS
A. APPLICATION - The provisions of this Section shall apply to any
Participant who is credited with at least one Hour of Service with the
Employer on or after August 23, 1984, and such other Participants as
provided in Treasury Regulations.
B. QUALIFIED JOINT AND SURVIVOR ANNUITY - Unless an optional form of
benefit is selected pursuant to a Qualified Election within the 90-day
period ending on the Annuity Starting Date, a married Participant's
Vested Account Balance will be paid in the form of a Qualified Joint
and Survivor Annuity and an unmarried Participant's Vested Account
Balance will be paid in the form of a life annuity. The Participant
may elect to have such annuity distributed upon attainment of the
Earliest Retirement Age under the Plan. In the case of a married
Participant, the Qualified Joint and Survivor Annuity must be at least
as valuable as any other optional form of benefit payable under the
Plan at the same time.
C. QUALIFIED PRERETIREMENT SURVIVOR ANNUITY - Unless an optional form of
benefit has been selected within the Election Period pursuant to a
Qualified Election, if a Participant dies before the Annuity Starting
Date then the Participant's Vested Account Balance shall be applied
toward the purchase of an annuity for the life of the surviving
Spouse. The surviving Spouse may elect to have such annuity
distributed within a reasonable period after the Participant's death.
D. NOTICE REQUIREMENTS
1. In the case of a Qualified Joint and Survivor Annuity, the Plan
Administrator shall no less than 30 days and not more than 90
days before the Annuity Starting Date provide each Participant an
explanation (either in writing or in any other form permitted
under rules promulgated by the IRS and DOL) of 1) the terms and
conditions of a Qualified Joint and Survivor Annuity, 2) the
Participant's right to make and the effect of an election to
waive the Qualified Joint and Survivor Annuity form of benefit,
3) the rights of a Participant's Spouse, and 4) the right to
make, and the effect of, a revocation of a previous election to
waive the Qualified Joint and Survivor Annuity.
The Annuity Starting Date for a distribution in a form other than
a Qualified Joint and Survivor Annuity may be less than 30 days
after receipt of the explanation described in the preceding
paragraph provided 1) the Participant has been provided with
information that clearly indicates that the Participant has at
least 30 days to consider whether to waive the Qualified Joint
and Survivor Annuity and elect (with spousal consent) a form of
distribution other than a Qualified Joint and Survivor Annuity,
2) the Participant is permitted to revoke any affirmative
distribution election at least until the annuity starting date
or, if later, at any time before the expiration of the seven-day
period that begins the day after the explanation of the Qualified
Joint and Survivor Annuity is provided to the Participant, and
3) the annuity starting date is a date after the date that the
explanation was provided to the Participant.
2. In the case of a Qualified Preretirement Survivor Annuity as
described in Plan Section 5.10(C), the Plan Administrator shall
provide each Participant within the applicable period for such
Participant an explanation (either in writing or in any other
form permitted under rules promulgated by the IRS and DOL) of the
Qualified Preretirement Survivor Annuity in such terms and in
such manner as would be comparable to the explanation provided
for meeting the requirements of Plan Section 5.10(D)(l)
applicable to a Qualified Joint and Survivor Annuity.
The applicable period for a Participant is 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 ending after the individual becomes a Participant, 3) a
reasonable period ending after Plan Section 5.10(D)(3) ceases to
apply to the Participant, and 4) a reasonable period ending after
this Plan Section 5.10 first applies to the Participant.
Notwithstanding the foregoing, notice must be provided within a
reasonable period ending after separation from service in the
case of a Participant who separates from service before attaining
age 35.
For purposes of applying the preceding paragraph, a reasonable
period ending after the enumerated events described in 2), 3) and
4) is the end of the two-year period beginning one year before
the date the applicable event occurs, and ending one year after
that date. In the case of a Participant who separates from
service before the Plan Year in which age 35 is attained, notice
shall be provided within the two-year period beginning one year
before separation and ending one year after separation. If such a
Participant thereafter returns to employment with the Employer,
the applicable period for such Participant shall be redetermined.
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3. Notwithstanding the other requirements of this Plan Section
5.10(D), the respective notices prescribed by this Plan Section
5.10(D), need not be given to a Participant if 1) the Plan "fully
subsidizes" the costs of a Qualified Joint and Survivor Annuity
or Qualified Preretirement Survivor Annuity, and 2) the Plan does
not allow the Participant to waive the Qualified Joint and
Survivor Annuity or Qualified Preretirement Survivor Annuity and
does not allow a married Participant to designate a non-Spouse
Beneficiary. For purposes of this Plan Section 5.10(D)(3), a plan
fully subsidizes the costs of a benefit if no increase in cost,
or decrease in benefits to the Participant may result from the
Participant's failure to elect another benefit.
E. RETIREMENT EQUITY ACT SAFE HARBOR RULES
1. Except as provided otherwise in the Adoption Agreement, the safe
harbor provisions of this Plan Section 5.10(E) shall apply to a
Participant in a profit sharing plan, and shall always apply to
any distribution made on or after the first day of the first Plan
Year beginning after December 31, 1988, from or under a separate
account attributable solely to accumulated deductible employee
contributions, as defined in Code Section 72(o)(5)(B), and
maintained on behalf of a Participant in a money purchase pension
plan, (including a target benefit pension plan) if the following
conditions are satisfied:
a. the Participant does not or cannot elect payments in the
form of a life annuity; and
b. on the death of a Participant, the Participant's Vested
Account Balance will be paid to the Participant's surviving
Spouse, but if there is no surviving Spouse, or if the
surviving Spouse has consented in a manner conforming to a
Qualified Election, then to the Participant's designated
Beneficiary. The surviving Spouse may elect to have
distribution of the Vested Account Balance commence within
the 90-day period following the date of the Participant's
death. The Vested Account Balance shall be adjusted for
gains or losses occurring after the Participant's death in
accordance with the provisions of the Plan governing the
adjustment of account balances for other types of
distributions. This Plan Section 5.10(E) shall not apply to
a Participant in a profit sharing plan if the plan is a
direct or indirect transferee of a defined benefit plan,
money purchase pension plan, a target benefit pension plan,
stock bonus, or profit sharing plan which is subject to the
survivor annuity requirements of Code Section 401(a)(11)
and Section 417. If this Plan Section 5.10(E) applies, then
no other provisions of this Plan Section 5.10 shall apply
except as provided in Treasury Regulations.
2. The Participant may waive the spousal death benefit described in
this Plan Section 5.10(E) at any time provided that no such
waiver shall be effective unless it is a Qualified Election
(other than the notification requirement referred to therein)
that would apply to the Participant's waiver of the Qualified
Preretirement Survivor Annuity.
3. For purposes of this Plan Section 5.10(E), Vested Account
Balance shall mean, in the case of a money purchase pension plan
or a target benefit pension plan, the Participant's separate
account balance attributable solely to accumulated deductible
employee contributions within the meaning of Code Section
72(o)(5)(B). In the case of a profit sharing plan, Vested Account
Balance shall have the same meaning as provided in the
Definitions Section of this Plan.
4. In the event this Plan is a direct or indirect transferee of or
a restatement of a plan previously subject to the survivor
annuity requirements of Code Sections 401(a)( 11) and 417 and
the Employer has selected to have this Plan Section 5.10(E)
apply, the provisions of this Plan Section 5.10(E) shall not
apply to any benefits accrued (including subsequent adjustments
for earnings and losses) before the adoption of these provisions.
Such amounts shall be separately accounted for in a manner
consistent with Plan Section 7.02 and administered in accordance
with the general survivor annuity requirements of Plan Section
5.10.
5.11 LIABILITY FOR WITHHOLDING ON DISTRIBUTIONS
The Plan Administrator shall be responsible for withholding federal income
taxes from distributions from the Plan, unless the Participant (or
Beneficiary, where applicable) elects not to have such taxes withheld. The
Trustee (or Custodian, if applicable) or other payor may act as agent for
the Plan Administrator to withhold such taxes and to make the appropriate
distribution reports, provided the Plan Administrator furnishes all the
information to the Trustee (or Custodian, if applicable) or other payor
which such payor may need to properly perform withholding and reporting.
5.12 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
A. GENERAL RULE-A Participant may assign to this Plan any Excess
Elective Deferrals made during a taxable year of the Participant by
notifying the Plan Administrator of the amount of the Excess Elective
Deferrals to be assigned to the Plan. Unless specified otherwise in
the Adoption Agreement, Participants who claim Excess Elective
Deferrals for the preceding calendar year must submit their claims
(either in writing or in any other form permitted under rules
promulgated by the IRS and DOL) to the Plan Administrator by March 1.
A Participant is deemed to notify the Plan Administrator of any Excess
Elective Deferrals that arise by taking into account only those
Elective Deferrals made to this Plan and any other plan, contract, or
arrangement of the Employer.
Notwithstanding any other provision of the Plan, Excess Elective
Deferrals, plus any income and minus any loss allocable thereto, shall
be distributed no later than April 15th to any Participant to whose
Individual Account Excess Elective Deferrals were assigned for the
preceding year and who claims Excess Elective Deferrals for such
taxable year except to the extent such Excess Elective Deferrals were
classified as Catch-up Contributions. For years beginning after 2005,
the Plan Administrator, in a uniform and nondiscriminatory manner,
will determine whether the distribution of Excess Elective Deferrals
for a year will be made first from the Participant's Pre-Tax Elective
Deferral account or the Roth Elective Deferral account, or a
combination of both, to the extent both Pre-Tax Elective Deferrals and
Roth Elective Deferrals were made for the year, or may allow
Participants to specify otherwise.
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B. DETERMINATION OF INCOME OR LOSS - Excess Elective Deferrals shall be
adjusted for any income or loss up to the date of the distribution.
The income or loss allocable to Excess Elective Deferrals is the sum
of: 1) the income or loss allocable to the Participant's Elective
Deferral account for the taxable year multiplied by a fraction, the
numerator of which is such Participant's Excess Elective Deferrals for
the year and the denominator of which is the Participant's Individual
Account balance attributable to Elective Deferrals without regard to
any income or loss occurring during such taxable year, and 2)10
percent of the amount determined under 1) multiplied by the number of
whole calendar months between the end of the Participant's taxable
year and the date of distribution, counting the month of distribution
if distribution occurs after the 15(th) day of such month.
Notwithstanding the preceding sentence, the Plan Administrator may
compute the income or loss allocable to Excess Elective Deferrals in
the manner described in Plan Section 7.02(B) (i.e., the usual manner
used by the Plan for allocating income or loss to Participants'
Individual Accounts or any reasonable method), provided such method is
used consistently for all Participants and for all corrective
distributions under the Plan for the Plan Year. The Plan will not fail
to use a reasonable method for computing the income or loss on Excess
Elective Deferrals merely because the income allocable is based on a
date that is no more than seven days before the distribution.
5.13 DISTRIBUTION OF EXCESS CONTRIBUTIONS
A. GENERAL RULE - Notwithstanding any other provision of this Plan,
Excess Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than 12 months after a Plan
Year to Participants to whose Individual Accounts such Excess
Contributions were allocated for such Plan Year, except to the extent
such Excess Contributions were classified as Catch-up Contributions.
Excess Contributions are allocated to the Highly Compensated Employees
with the largest amounts of Employer Contributions taken into account
in calculating the ADP test for the year in which the excess arose,
beginning with the Highly Compensated Employee with the largest amount
of such Employer Contributions and continuing in descending order
until all the Excess Contributions have been allocated. Both the total
amount of the Excess Contribution and, for purposes of the preceding
sentence, the "largest amount" are determined after distribution of
any Excess Deferrals. To the extent a Highly Compensated Employee has
not reached their Catch-up Contribution limit under the Plan, Excess
Contributions allocated to such Highly Compensated Employees as
Catch-up Contributions will not be treated as Excess Contributions. If
such Excess Contributions are distributed more than 2 1/2 months after
the last day of the Plan Year in which such Contributions arose, a 10
percent excise tax will be imposed on the Employer maintaining the
Plan with respect to such amounts. Excess Contributions shall be
treated as annual additions under the Plan even if distributed.
B. DETERMINATION OF INCOME OR LOSS - Excess Contributions shall be
adjusted for any income or loss up to the date of distribution. The
income or loss allocable to Excess Contributions allocated to each
Participant is the sum of: 1) the income or loss allocable to the
Participant's Elective Deferral account(s) (and, if applicable, the
Qualified Nonelective Contribution account or the Qualified Matching
Contributions account or both) for the Plan Year multiplied by a
fraction, the numerator of which is such Participant's Excess
Contributions for the year and the denominator of which is the
Participant's Individual Account balance attributable to Elective
Deferrals (and Qualified Nonelective Contributions or Qualified
Matching Contributions, or both, if any of such contributions are
included in the ADP test) without regard to any income or loss
occurring during such Plan Year, and 2)10 percent of the amount
determined under 1) multiplied by the number of whole calendar months
between the end of the Plan Year and the date of distribution,
counting the month of distribution if distribution occurs after the
15th day of such month. Notwithstanding the preceding sentence, the
Plan Administrator may compute the income or loss allocable to Excess
Contributions in the manner described in Plan Section 7.02(B) (i.e.,
the usual manner used by the Plan for allocating income or loss to
Participants' Individual Accounts or any reasonable method), provided
such method is used consistently for all Participants and for all
corrective distributions under the Plan for the Plan Year. The Plan
will not fail to use a reasonable method for computing the income or
loss on Excess Contributions merely because the income allocable is
based on a date that is no more than seven days before the
distribution.
C. ACCOUNTING FOR EXCESS CONTRIBUTIONS - Excess Contributions allocated
to a Participant shall be distributed from the Participant's Elective
Deferral account(s) and Qualified Matching Contribution account (if
applicable) in proportion to the Participant's Elective Deferrals and
Qualified Matching Contributions (to the extent used in the ADP test)
for the Plan Year. For years beginning after 2005, the Plan
Administrator, in a uniform and nondiscriminatory manner, will either
determine whether the distribution of Excess Contributions for a year
will be made first from the Participant's Pre-Tax Elective Deferral
account or the Roth Elective Deferral account, or a combination of
both, to the extent both Pre-Tax Elective Deferrals and Roth Elective
Deferrals were made for the year, or may allow Participants to specify
otherwise. Excess Contributions shall be distributed from the
Participant's Qualified Nonelective Contribution account only to the
extent that such Excess Contributions exceed the balance in the
Participant's Elective Deferral account(s) and Qualified Matching
Contribution account.
5.14 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS
A. GENERAL RULE - Notwithstanding any other provision of this Plan,
Excess Aggregate Contributions, plus any income and minus any loss
allocable thereto, shall be forfeited, if forfeitable, or if not
forfeitable, distributed no later than 12 months after a Plan Year to
Participants to whose accounts such Excess Aggregate Contributions
were allocated for such Plan Year. Excess Aggregate Contributions are
allocated to the Highly Compensated Employees with the largest
Contribution Percentage Amounts taken into account in calculating the
ACP test for the year in which the excess arose, beginning with the
Highly Compensated Employee with the largest amount of such
Contribution Percentage Amounts and continuing in descending order
until all the Excess Aggregate Contributions have been allocated. If
such Excess Aggregate Contributions are distributed more than 2 1/2
months after the last day of the Plan Year in which such Excess
Aggregate Contributions arose, a 10 percent excise tax will be imposed
on the Employer maintaining the Plan with respect to those amounts.
Excess Aggregate Contributions shall be treated as annual additions
under the Plan even if distributed.
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B. DETERMINATION OF INCOME OR LOSS - Excess Aggregate Contributions shall be
adjusted for any income or loss up to the date of distributions. The
income or loss allocable to Excess Aggregate Contributions allocated
to each Participant is the sum of: 1) the income or loss allocable to
the Participant's Nondeductible Employee Contribution account,
Matching Contribution account, Qualified Matching Contributions
account (if any, and if all amounts therein are not used in the ADP
test) and, if applicable, Qualified Nonelective Contribution account
and Elective Deferral account(s) for the Plan Year multiplied by a
fraction, the numerator of which is such Participant's Excess
Aggregate Contributions for the year and the denominator of which is
the Participant's Individual Account balance(s) attributable to
Contribution Percentage Amounts without regard to any income or loss
occurring during such Plan Year; and 2)10 percent of the amount
determined under 1) multiplied by the number of whole calendar months
between the end of the Plan Year and the date of distribution,
counting the month of distribution if distribution occurs after the
15(th) day of such month. Notwithstanding the preceding sentence, the
Plan Administrator may compute the income or loss allocable to Excess
Aggregate Contributions in the manner described in Plan Section
7.02(B) (i.e., the usual manner used by the Plan for allocating income
or loss to Participants' Individual Accounts or any reasonable
method), provided such method is used consistently for all
Participants and for all corrective distributions under the Plan for
the Plan Year. The Plan will not fail to use a reasonable method for
computing the income or loss on Excess Aggregate Contributions merely
because the income allocable is based on a date that is no more than
seven days before the distribution.
C. ACCOUNTING FOR EXCESS AGGREGATE CONTRIBUTIONS - Excess Aggregate
Contributions allocated to a Participant shall be forfeited, if
forfeitable, or distributed on a pro rata basis from the Participant's
Nondeductible Employee Contribution account, Matching Contribution
account, and Qualified Matching Contribution account (and, if
applicable, the Participant's Qualified Nonelective Contribution
account or Elective Deferral account, or both). For years beginning
after 2005, the Plan Administrator, in a uniform and nondiscriminatory
manner, will determine whether the distribution of Elective Deferrals
that are Excess Aggregate Contributions for a year will be made first
from the Participant's Pre-Tax Elective Deferral account or the Roth
Elective Deferral account, or a combination of both, to the extent
both Pre-Tax Elective Deferrals and Roth Elective Deferrals were made
for the year, or may allow Participants to specify otherwise.
5.15 RECHARACTERIZATION
Provided the Plan allows Participants to make Nondeductible Employee
Contributions, the Plan Administrator may, in a uniform and
nondiscriminatory manner, permit a Participant to elect to treat all or a
portion of an Excess Contribution allocated to them as an amount
distributed to the Participant and then contributed by the Participant to
the Plan as a Nondeductible Employee Contribution. Recharacterized amounts
will remain nonforfeitable and subject to the same distribution
requirements as Elective Deferrals. Amounts may not be recharacterized by a
Highly Compensated Employee to the extent that such amount in combination
with other Nondeductible Employee Contributions made by that Employee would
exceed any stated limit under the Plan on Nondeductible Employee
Contributions.
Recharacterization must occur no later than 2 1/2 months after the last day
of the Plan Year in which such Excess Contributions arose and is deemed to
occur no earlier than the date the last Highly Compensated Employee is
informed (either in writing or in any other form permitted under rules
promulgated by the IRS and DOL) of the amount recharacterized and the
consequences thereof. Recharacterized amounts will be taxable to the
Participant for the Participant's tax year in which the Participant would
have received them in cash.
5.16 LOANS TO PARTICIPANTS
If the Adoption Agreement so indicates, a Participant may receive a loan
from the Fund, subject to the following rules and the Plan's loan policy.
A. Loans shall be made available to all Participants on a reasonably
equivalent basis. Notwithstanding the foregoing, new loans shall not
be available to Participants who cease to be employed by the Employer,
unless such Participants are parties-in-interest as defined in ERISA
Section 3(14). In addition, existing loans shall be considered due and
payable at such time as a Participant ceases to be an Employee and the
loan will be considered in default and the Participant's Individual
Account will be reduced by the outstanding amount of the loan unless
otherwise specified in the loan policy statement or other loan
documentation.
B. Loans shall not be made available to Highly Compensated Employees in
an amount greater than the amount made available to other Employees.
C. Loans must be adequately secured and bear a reasonable interest rate.
D. No Participant loan shall exceed the Present Value of the Vested
portion of a Participant's Individual Account.
E. A Participant must obtain the consent of their Spouse, if any, to the
use of the Individual Account as security for the loan. Spousal
consent shall be obtained no earlier than the beginning of the 90 day
period that ends on the date on which the loan is to be so secured.
The consent must be in writing (or any other form permitted by the IRS
and DOL), must acknowledge the effect of the loan, and must be
witnessed by a notary public or plan representative. Such consent
shall thereafter be binding with respect to the consenting Spouse or
any subsequent Spouse with respect to that loan. A new consent shall
be required if the Individual Account is used for renegotiation,
extension, renewal, or other revision of the loan. Notwithstanding the
foregoing, no spousal consent is necessary if, at the time the loan is
secured, no consent would be required for a distribution under Code
Section 417(a)(2)(B). In addition, spousal consent is not required if
the Plan or the Participant is not subject to Code Section 401(a)(11)
at the time the Individual Account is used as security, or if the
total Individual Account subject to the security is less than or equal
to $5,000.
F. In the event of default, foreclosure on the note and attachment of
security will not occur until a distribution eligibility requirement
is met under the Plan.
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G. For plan loans made before January 1, 2002, no loans will be made to
any shareholder-employee or Owner-Employee. For purposes of this
requirement, a shareholder-employee means an employee or officer of an
electing small business (Subchapter S) corporation who owns (or is
considered as owning within the meaning of Code Section 318(a)(1)),
on any day during the taxable year of such corporation, more than five
percent of the outstanding stock of the corporation.
H. Loan repayments will be suspended under the Plan as permitted under
Code Section 414(u)(4) (USERRA).
I. For years beginning after 2005, if the Participant's Individual
Account contains both Pre-Tax Elective Deferrals and Roth Elective
Deferrals, the specific rules governing the loan program may also
designate the extent to which Pre-Tax Elective Deferrals, Roth
Elective Deferrals, or a combination of both will 1) be used to
calculate the maximum amount available for a loan, or 2) be available
as a source from which loan proceeds may be taken or which may be used
as security for a loan. To the extent permitted by law and related
regulations, the rules established by the Plan Sponsor may specify the
ordering rules to be applied in the event of a defaulted loan.
If a valid spousal consent has been obtained in accordance with Plan
Section 5.16(E), then, notwithstanding any other provisions of this Plan,
the portion of the Participant's Vested Individual Account used as a
security interest held by the Plan by reason of a loan outstanding to the
Participant shall be taken into account for purposes of determining the
amount of the Individual Account payable at the time of death or
distribution, but only if the reduction is used as repayment of the loan.
If less than 100 percent of the Participant's Vested Individual Account
(determined without regard to the preceding sentence) is payable to the
surviving Spouse, then the Individual Account shall be adjusted by first
reducing the Vested Individual Account by the amount of the security used
as repayment of the loan, and then determining the benefit payable to the
surviving Spouse.
To avoid taxation to the Participant, unless otherwise permitted by law or
regulatory guidance, no loan to any Participant or Beneficiary can be made
to the extent that such loan, when added to the outstanding balance of all
other loans to the Participant, would exceed the lesser of 1) $50,000
reduced by the excess (if any) of the highest outstanding balance of loans
during the one year period ending on the day before the loan is made, over
the outstanding balance of loans from the Plan on the date the loan is
made, or 2) 50 percent of the Present Value of the nonforfeitable
Individual Account of the Participant. For the purpose of the above
limitation, all loans from all plans of the Employer and other members of a
group of employers described in Code Sections 414(b), 414(e), and 414(m)
are aggregated. Furthermore, any loan shall by its terms require that
repayment (principal and interest) be amortized in level payments, not less
frequently than quarterly, over a period not extending beyond five years
from the date of the loan, unless such loan is used to acquire a dwelling
unit which, within a reasonable time (determined at the time the loan is
made), will be used as the principal residence of the Participant.
Notwithstanding the foregoing, a Participant will suspend their loan
repayments under this Plan as permitted under Code Section 414(u)(4). An
assignment or pledge of any portion of the Participant's interest in the
Plan and a loan, pledge, or assigmnent with respect to any insurance
contract purchased under the Plan, will be treated as a loan under this
paragraph.
The Plan Administrator shall administer the loan program in accordance with
specific rules that are documented either in writing or in such other
format as permitted by the IRS and the DOL. Such rules shall include, at a
minimum, the following: 1) the identity of the person or positions
authorized to administer the Participant loan program, 2) the 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, 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 in the event of such default.
SECTION SIX: DEFINITIONS
Unless modified in Section Six of the Adoption Agreement, words and phrases used
in the Plan with initial capital letters shall, for the purpose of this Plan,
have the meanings set forth in the portion of the Plan entitled "Definitions"
unless the context indicates that other meanings are intended.
SECTION SEVEN: MISCELLANEOUS
7.01 THE FUND
A. ESTABLISHMENT AND MAINTENANCE - By adopting this Plan, the Employer
establishes the Fund, which shall consist of the assets of the Plan
received and held by the Trustee for which it serves as Trnstee (or
Custodian, if applicable) pursuant to Section Eight. Assets within the
Fund may be pooled on behalf of all Participants, earmarked on behalf
of each Participant or be a combination of pooled and earmarked
assets. To the extent that assets are earmarked for a particular
Participant, they will be held in a Separate Fund for that
Participant.
No part of the corpus or income of the Fund may be used for, or
diverted to, purposes other than for the exclusive benefit of
Participants or their Beneficiaries. The Fund will be valued each
Valuation Date at fair market value.
B. DIVISION OF FUND INTO INVESTMENT FUNDS - The Employer may direct the
Trustee (or Custodian, if applicable) to divide and redivide the Fund
into one or more Investment Funds. Such Investment Funds may include,
but not be limited to, Investment Funds representing the assets under
the control of an investment manager pursuant to Plan Section 7.22(C)
and Investment Funds representing investment options available for
individual direction by Participants pursuant to Plan Section 7.22(B).
Upon each division or redivision, the Employer may specify the part of
the Fund to be allocated to each such Investment Fund and the terms
and conditions, if any, under which the assets in such Investment Fund
shall be invested.
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7.02 INDIVIDUAL ACCOUNTS
A. ESTABLISHMENT AND MAINTENANCE - The Plan Administrator shall
establish and maintain an Individual Account in the name of each
Participant to reflect the total value of their interest in the Fund
(including but not limited to Employer Contributions and earnings
thereon). Each Individual Account established hereunder shall consist
of such subaccounts as may be needed for each Participant, including:
1. a subaccount to reflect Employer Contributions and Forfeitures
allocated on behalf of a Participant;
2. a subaccount to reflect a Participant's rollover contributions;
3. a subaccount to reflect a Participant's transfer contributions;
4. a subaccount to reflect a Participant's Nondeductible Employee
Contributions;
5. a subaccount to reflect a Participant's Pre-Tax Elective
Deferrals; and
6. a subaccount to reflect a Participant's Roth Elective Deferrals.
The Plan Administrator may establish additional accounts as it may
deem necessary for the proper administration of the Plan, including,
but not limited to, a suspense account for Forfeitures as required
pursuant to Plan Section 4.01(C) or (D).
If this Plan is funded by individual contracts that provide a
Participant's Benefit under the Plan, such individual contracts shall
constitute the Participant's Individual Account. If this Plan is
funded by group contracts under the group annuity or group insurance
contract, premiums or other consideration received by the insurance
company must be allocated to Participants' Individual Accounts under
the Plan.
B. VALUATION OF INDIVIDUAL ACCOUNTS
1. Where all or a portion of the assets of a Participant's
Individual Account are invested in a Separate Fund for the
Participant, then the value of that portion of such Participant's
Individual Account at any relevant time equals the sum of the
fair market values of the assets in such Separate Fund, less any
applicable charges or penalties.
2. The fair market value of the remainder of each Individual
Account is determined in the following manner:
a. Separate Fund- First, the portion of the Individual Account
invested in each Investment Fund as of the previous
Valuation Date is determined. Each such portion is reduced
by any withdrawal made from the applicable Investment Fund
to or for the benefit of a Participant or the Participant's
Beneficiary, further reduced by any amounts forfeited by the
Participant pursuant to Plan Section 4.01(C) or (D), and
further reduced by any transfer to another Investment Fund
since the previous Valuation Date, and is increased by any
amount transferred from another Investment Fund since the
previous Valuation Date. The resulting amounts are the net
Individual Account portions invested in the Investment
Funds.
b. No Separate Fund - Second, the net Individual Account
portions invested in each Investment Fund are adjusted
upwards or downwards, pro rata (i.e., using the ratio of
each net Individual Account portion to the sum of all net
Individual Account portions) so that the sum of all the net
Individual Account portions invested in an Investment Fund
will equal the then fair market value of the Investment
Fund. Notwithstanding the previous sentence, for the first
Plan Year only, the net Individual Account portions shall be
the sum of all contributions made to each Participant's
Individual Account during the first Plan Year.
c. Allocations - Third, any contributions to the Plan and
Forfeitures are allocated in accordance with the appropriate
allocation provisions of Section Three of the Plan. For
purposes of this Section Seven of the Plan, contributions
made by the Employer for any Plan Year but after that Plan
Year will be considered to have been made on the last day of
that Plan Year regardless of when paid to the Trustee (or
Custodian, if applicable).
Amounts contributed between Valuation Dates will not be
credited with investment gains or losses until the next
following Valuation Date.
d. Aggregation of Portions - Finally, the portions of the
Individual Account invested in each Investment Fund
(determined in accordance with (a), (b) and (c) above) are
added together.
C. MODIFICATION OF METHOD FOR VALUING INDIVIDUAL ACCOUNTS - If necessary
or appropriate, the Plan Administrator may establish different or
additional procedures (which shall be uniform and nondiscriminatory)
for determining the fair market value of the Individual Accounts
including, but not limited to, valuation on a daily basis pursuant to
the number of shares of each permissible investment held on behalf of
a Participant.
7.03 POWERS AND DUTIES OF THE PLAN ADMINISTRATOR
A. The Plan Administrator shall have the authority to control and manage
the operation and administration of the Plan. The Plan Administrator
shall administer the Plan for the exclusive benefit of the
Participants and their Beneficiaries in accordance with the specific
terms of the Plan.
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B. The Plan Administrator may, by appointment, allocate the duties of
the Plan Administrator among several individuals or entities. Such
appointments shall not be effective until the party designated accepts
such appointment in writing.
C. The Plan Administrator shall be charged with the duties of the
general administration of the Plan, including, but not limited to, the
following:
1. To determine all questions of interpretation or policy in a
manner consistent with the Plan's documents, The Plan
Administrator's construction or determination in good faith shall
be conclusive and binding on all persons except as otherwise
provided herein or by law. Any interpretation or construction
shall be done in a nondiscriminatory manner and shall be
consistent with the intent that the Plan shall continue to be
deemed a qualified plan under the terms of Code Section 401(a),
as amended from time to time, and shall comply with the terms of
ERISA, as amended from time to time;
2. To determine all questions relating to the eligibility of
Employees to become or remain Participants hereunder;
3. To compute the amounts necessary or desirable to be contributed
to the Plan;
4. To compute the amount and kind of benefits to which a
Participant or Beneficiary shall be entitled under the Plan and
to direct the Trustee (or Custodian, if applicable) with respect
to all disbursements under the Plan, and, when requested by the
Trustee (or Custodian, if applicable), to furnish the Trustee (or
Custodian, if applicable) with instructions, in writing, on
matters pertaining to the Plan and the Trustee (or Custodian, if
applicable) may rely and act thereon;
5. To maintain all records necessary for the administration of the
Plan;
6. To prepare and file such disclosures and tax forms as may be
required from time to time by the Secretary of Labor or the
Secretary of the Treasury;
7. To furnish each Employee, Participant or Beneficiary such
notices, information, and reports under such circumstances as may
be required by law;
8. To periodically review the performance of each Fiduciary and all
other relevant parties to ensure such individuals' obligations
under the Plan are performed in a manner that is acceptable under
the Plan and applicable law; and
9. To furnish a statement to each Participant or Beneficiary no
later than 270 days after the close of each Plan Year, indicating
the Individual Account balances of such Participant as of the
last Valuation Date in such Plan Year.
D. The Plan Administrator shall have all of the powers necessary or
appropriate to accomplish their duties under the Plan, including, but
not limited to, the following:
1. To appoint and retain such persons as may be necessary to carry
out the functions of the Plan Administrator;
2. To appoint and retain counsel, specialists, or other persons as
the Plan Administrator deems necessary or advisable in the
administration of the Plan;
3. To resolve all questions of administration of the Plan;
4. To establish such uniform and nondiscriminatory rules which it
deems necessary to carry out the terms of the Plan;
5. To make any adjustments in a uniform and nondiscriminatory
manner which it deems necessary to correct any arithmetical or
accounting errors which may have been made for any Plan Year;
6. To correct any defect, supply any omission, 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; and
7. If the Plan pennits a form of distribution other than a lump
sum, and a Participant elects such form of distribution, the Plan
Administrator may place that Participant's Individual Account
into a segregated Investment Fund for the purpose of maintaining
the necessary liquidity to provide benefit installments on a
periodic basis.
7.04 EXPENSES AND COMPENSATION
All reasonable expenses of administration, including, but not limited to,
those involved in retaining necessary professional assistance, may be paid
from the assets of the Fund. Alternatively, the Employer may, in its
discretion, pay any or all such expenses. Pursuant to uniform and
nondiscriminatory rules that the Plan Administrator may establish from time
to time, administrative expenses and expenses unique to a particular
Participant or group of Participants may be charged to the Individual
Account of such Participant or may be assessed against terminated
Participants even if not assessed against active Participants (subject to
rules promulgated by the IRS and the DOL), or the Plan Administrator may
allow Participants to pay such fees outside of the Plan. The Employer shall
furnish the Plan Administrator with such clerical and other assistance as
the Plan Administrator may need in the performance of their duties.
7.05 INFORMATION FROM EMPLOYER
To enable the Plan Administrator to perform their duties, the Employer
shall supply complete, accurate, and timely information to the Plan
Administrator (or their designated agents) on all marters relating to the
Compensation of all Participants; their regular employment; retirement,
death, Disability, Severance from Employment or Termination of Employment;
and such other pertinent facts as the Plan Administrator (or their agents)
may require. The Plan Administrator shall advise the Trustee (or Custodian,
if applicable) of such of the foregoing facts as may be pertinent to the
Trustee's (or Custodian's) duties under the Plan. The Plan Administrator
(or their
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52
agents) is entitled to rely on such information as is supplied by the
Employer and shall have no duty or responsibility to verify such
information. Such information, including authorizations and directions, may
be exchanged among the Employer, the Plan Administrator, the Trustee (or
Custodian, if applicable), or their agents through electronic, telephonic,
or other means (including, for example, through the Internet) pursuant to
applicable servicing arrangements in effect for the Plan.
7.06 PLAN AMENDMENTS
A. RIGHT OF PROTOTYPE SPONSOR TO AMEND THE PLAN OR TERMINATE SPONSORSHIP
1 The Employer, by adopting the Plan, expressly delegates to the
Prototype Sponsor the power, but not the duty, to amend the Plan
without any further action or consent of the Employer as the
Prototype Sponsor deems either necessary for the purpose of
adjusting the Plan to comply with all laws and regulations
governing pension or profit sharing plans or desirable to the
extent consistent with such laws and regulations. Specifically,
it is understood that the amendments may be made unilaterally by
the Prototype Sponsor. However, it shall be understood that the
Prototype Sponsor shall be under no obligation to amend the Plan
documents, and the Employer expressly waives any rights or claims
against the Prototype Sponsor for not exercising this power to
amend. For purposes of Prototype Sponsor amendments, the mass
submitter shall generally be recognized as the agent of the
Prototype Sponsor. If the Prototype Sponsor does not adopt IRS
model amendments adopted by the mass submitter, the Plan will no
longer be identical to or a minor modifier of the mass submitter
plan and will be considered an individually designed plan.
Notwithstanding the foregoing, the adoption of good faith IRS
amendments must be accomplished pursuant to the rules for each
such amendment as prescribed by the IRS.
2. An amendment by the Prototype Sponsor shall be accomplished by
giving notice (either in writing or in any other form permitted
under rules promulgated by the IRS and DOL) to the Adopting
Employer of the amendment to be made. The notice shall set forth
the text of such amendment and the date such amendment is to be
effective. Such amendment shall take effect unless within the 30
day period after such notice is provided, or within such shorter
period as the notice may specify, the Adopting Employer gives the
Prototype Sponsor written notice of refusal to consent to the
amendment. Such written notice of refusal shall have the effect
of withdrawing the Plan as a prototype plan and shall cause the
Plan to be considered an individually designed plan.
3. In addition to the amendment rights described above, the
Prototype Sponsor shall have the right to terminate its
sponsorship of this Plan by providing notice (either in writing
or in any other form permitted under rules promulgated by the IRS
and DOL) to the Adopting Employer of such termination. Such
termination of sponsorship shall have the effect of withdrawing
the Plan as a prototype plan and shall cause the Plan to be
considered an individually designed plan. The Prototype Sponsor
shall have the right to terminate its sponsorship of this Plan
regardless of whether the Prototype Sponsor has terminated
sponsorship with respect to other employers adopting its
prototype Plan.
B. RIGHT OF ADOPTING EMPLOYER TO AMEND THE PLAN - The Adopting Employer
may amend the Plan to
1. change options previously selected in the Adoption Agreement;
2. add overriding language in the Adoption Agreement when such
language is necessary to satisfy Code Section 415 or Code Section
416 because of the required aggregation of multiple plans;
3. amend administrative provisions of the trust or custodial
document in the case of a nonstandardized plan and make more
limited amendments in the case of a standardized plan, such as
the name of the Plan, Employer, Trustee or Custodian, Plan
Administrator and other Fiduciaries, the trust year, and the name
of pooled trust in which the Plan's trust will participate;
4. add certain sample and model amendments published by the IRS or
other required good faith amendments which specifically provide
that their adoption will not cause the Plan to be treated as
individually designed; and
5. add or change provisions permitted under the Plan or specify or
change the Effective Date of a provision as permitted under the
Plan and correct obvious and unambiguous typographical errors or
cross-references that merely correct a reference but that do not
in any way change the original intended meaning of the
provisions.
An Adopting 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
will be considered to have an individually designed plan.
An Adopting Employer who wishes to amend the Plan shall document the
amendment in writing, executed by a duly authorized officer of the
Adopting Employer. If the amendment is in the form of a restated
Adoption Agreement, the amendment shall become effective on the date
provided in the Adoption Agreement. Any other amendment shall become
effective as described therein upon execution by the Adopting Employer
and, if appropriate, the Trustee (or Custodian, if applicable). A copy
of a restated Adoption Agreement or other amendment must be provided
to the Prototype Sponsor and the Trustee (or Custodian, if applicable)
before the effective date of the amendment.
The Adopting Employer further reserves the right to replace the Plan
in its entirety by adopting another retirement plan which the Adopting
Employer designates as a replacement plan.
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53
C. LIMITATION ON POWER TO AMEND - No amendment to the Plan shall be
effective to the extent that it has the effect of decreasing a
Participant's accrued benefit. Notwithstanding the preceding sentence,
a Participant's Individual Account may be reduced to the extent
permitted under Code Section 412(c)(8). For purposes of this
paragraph, a Plan amendment which has the effect of decreasing a
Participant's Individual Account with respect to benefits attributable
to service before the amendment shall be treated as reducing an
accrued benefit. For purposes of this paragraph, a Participant shall
not accrue a right to an allocation of an Employer Profit Sharing
Contribution, Employer Money Purchase Pension Contribution or Target
Benefit Contribution for the current Plan Year until the last day of
such Plan Year and after the application of all amendments required or
permitted by the IRS.
No amendment to the Plan shall be effective to eliminate or restrict
an optional form of benefit. The preceding sentence shall not apply to
a Plan amendment that eliminates or restricts the ability of a
Participant to receive payment of their Individual Account under a
particular optional form of benefit if the amendment provides a
single-sum distribution form, Where this Plan document is being
adopted to amend another plan that contains a protected benefit not
provided for in this document, the Employer must complete Attachment
A, "Protected Benefit and Prior Plan Provisions," describing such
protected benefit which shall become part of the Plan.
D. AMENDMENT OF VESTING SCHEDULE - If the vesting schedule of the Plan
is amended, in the case of an Employee who is a Participant as of the
later of the date such amendment is adopted or the date it becomes
effective, the Vested percentage (determined as of such date) of such
Employee's Individual Account derived from Employer Contributions will
not be less than the percentage computed under the Plan as of that
date without regard to such amendment. Furthermore, if the Plan's
vesting schedule is amended, or the Plan is amended in any way that
directly or indirectly affects the computation of the Participant's
Vested percentage, or if the Plan is deemed amended by an automatic
change to or from a top-heavy vesting schedule, each Participant with
at least three Years of Vesting Service with the Employer may elect,
within the time set forth below, to have the Vested percentage
computed under the Plan without regard to such amendment.
The period during which the election may be made shall commence with
the date the amendment is adopted or deemed to be made and shall end
the later of
1. 60 days after the amendment is adopted;
2. 60 days after the amendment becomes effective; or
3. 60 days after the Participant is issued a notice (either in
writing or in any other form permitted under rules promulgated by
the IRS and DOL) of the amendment by the Employer or Plan
Administrator.
7.07 PLAN MERGER OR CONSOLIDATION
In the case of any merger or consolidation of the Plan with, or transfer of
assets or liabilities of such Plan to, any other plan, each Participant
shall be entitled to receive benefits immediately after the merger,
consolidation, or transfer (if the Plan had then terminated) which are
equal to or greater than the benefits they would have been entitled to
receive immediately before the merger, consolidation, or transfer (if the
Plan had then terminated). The Trustee (or Custodian, if applicable) has
the authority to enter into merger agreements or agreements to directly
transfer the assets of this Plan, but only if such agreements are made with
trustees or custodians of other retirement plans described in Code Section
401(a) or such other plans permitted by laws or regulations.
7.08 PERMANENCY
The Employer expects to continue this Plan and make the necessary
contributions thereto indefinitely, but such continuance and payment is not
assumed as a contractual obligation. Neither the Adoption Agreement nor the
Plan nor any amendment or modification thereof nor the making of
contributions hereunder shall be construed as giving any Participant or any
other person any legal or equitable right against the Employer, the Trustee
(or Custodian, if applicable), the Plan Administrator, or the Prototype
Sponsor except as specifically provided herein, or as provided by law,
7.09 METHOD AND PROCEDURE FOR TERMINATION
The Plan may be terminated by the Adopting Employer at any time by
appropriate action of its managing body. Such termination shall be
effective on the date specified by the Adopting Employer. The Plan shall
terminate, if required by either the IRS or the DOL, if the Adopting
Employer is dissolved or terminated. Written notice of the termination and
effective date thereof shall be given to the Trustee (or Custodian, if
applicable), Plan Administrator, Prototype Sponsor, and the Participants
and Beneficiaries of deceased Participants. The required filings (such as
the Form 5500 series and others) must be made by the Adopting Employer with
the IRS and any other regulatory body as required by current laws and
regulations. Until all of the assets have been distributed from the Fund,
the Adopting Employer must keep the Plan in compliance with current laws
and regulations by making appropriate amendments to the Plan and by taking
such other measures as may be required. If the Plan is abandoned by the
Adopting Employer, however, a qualified termination administrator (QTA) (or
other entity permitted by the IRS or DOL) may terminate the Plan according
to rules promulgated by the IRS and DOL.
7.10 CONTINUANCE OF PLAN BY SUCCESSOR EMPLOYER
Notwithstanding the preceding Plan Section 7.09, a successor of the
Adopting Employer may continue the Plan and be substituted in the place of
the present Adopting Employer. The successor and the present Adopting
Employer (or, if deceased, the executor of the estate of a deceased
Self-Employed Individual who was the Adopting Employer) must execute a
written instrument authorizing such substitution, and the successor shall
amend the Plan in accordance with Plan Section 7.06.
7.11 FAILURE OF PLAN QUALIFICATION
If the Plan fails to retain its qualified status, the Plan will no longer
be considered to be part of a prototype plan. and such Employer can no
longer participate under this prototype. In such event, the Plan will be
considered an individually designed plan.
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7.12 GOVERNING LAWS AND PROVISIONS
To the extent such laws are not preempted by federal law, the terms and
conditions of this Plan shall be governed by the laws of the state in which
the Prototype Sponsor is located, unless otherwise agreed to in writing by
the Prototype Sponsor and the Employer.
In the event of any conflict between the provisions of this Basic Plan
Document and provisions of the Adoption Agreement, the summary plan
description, or any related documents, the Basic Plan Document will
control.
7.13 STATE COMMUNITY PROPERTY LAWS
The terms and conditions of this Plan shall be applicable without regard to
the community property laws of any state.
7.14 HEADINGS
The headings of the Plan have been inserted for convenience of reference
only and are to be ignored in any construction of the provisions hereof.
7.15 GENDER AND NUMBER
Whenever any words are used herein in the masculine gender they shall be
construed as though they were also used in the feminine gender in all cases
where they would so apply, and whenever any words are used herein in the
singular form they shall be construed as though they were also used in the
plural form in all cases where they would so apply.
7.16 STANDARD OF FIDUCIARY CONDUCT
The Employer, Plan Administrator, Trustee, and any other Fiduciary under
this Plan shall discharge their duties with respect to this Plan solely in
the interests of Participants and their Beneficiaries, and with the care,
skill, prudence, and diligence under the circumstances then prevailing that
a prudent person acting in like capacity and familiar with such matters
would use in the conduct of an enterprise of a like character and with like
aims. No Fiduciary shall cause the Plan to engage in any transaction known
as a "nonexempt prohibited transaction" under either the Code or ERISA,
7.17 GENERAL UNDERTAKING OF ALL PARTIES
All parties to this Plan and all persons claiming any interest whatsoever
hereunder agree to perform any and all acts and execute any and all
documents and papers which may be necessary or desirable for the carrying
out of this Plan and any of its provisions.
7.18 AGREEMENT BINDS HEIRS, ETC.
This Plan shall be binding upon the heirs, executors, administrators,
successors, and assigns, as those terms shall apply to any and all parties
hereto, present and future.
7.19 DETERMINATION OF TOP-HEAVY STATUS
A. IN GENERAL-Except as provided in Plan Section 7.19(B), this Plan is a
Top-Heavy Plan if any of the following conditions exist:
1. If the top-heavy ratio for this Plan exceeds 60 percent and this
Plan is not part of any Required Aggregation Group or Permissive
Aggregation Group of plans;
2. If this Plan is part of a Required Aggregation Group of plans
but not part of a Permissive Aggregation Group and the top-heavy
ratio for the group of plans exceeds 60 percent; or
3. If this Plan is a part of a Required Aggregation Group and part
of a Permissive Aggregation Group of plans and the top-heavy
ratio for the Permissive Aggregation Group exceeds 60 percent.
B. TOP-HEAVY RATIO
1. If the Employer maintains one or more defined contribution plans
(including any simplified employee pension plan) and the Employer
has not maintained any defined benefit plan which during the
five-year period ending on the Determination Date(s) has or has
had accrued benefits, the top-heavy ratio for this Plan alone or
for the Required or Permissive Aggregation Group as appropriate
is a fraction, the numerator of which is the sum of the account
balances of all Key Employees as of the Determination Date(s)
(including any part of any account balance distributed in the
one-year period ending on the Determination Date(s) (five-year
period ending on the Determination Date in the case of a
distribution made for a reason other than Severance from
Employment, death, or Disability and in determining whether the
Plan is top-heavy for Plan Years beginning before January 1,
2002)) and the denominator of which is the sum of all account
balances (including any part of any account balance distributed
in the one-year period ending on the Determination Date(s),
(five-year period ending on the Determination Date in the case of
a distribution made for a reason other than Severance from
Employment, death, or Disability and in determining whether the
Plan is top-heavy for Plan Years beginning before January 1,
2002)) both computed in accordance with Code Section 416 and the
regulations thereunder. Both the numerator and the 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 regulations thereunder.
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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 five-year period ending on the Determination Date(s) has or
has had any accrued benefits, the top-heavy ratio for any Required or
Permissive Aggregation Group, as appropriate, is a fraction, the
numerator of which is the sum of account balances under the aggregated
defined contribution plan or plans for all Key Employees, determined
in accordance with 1) above, and the Present Value of accrued benefits
under the aggregated defined benefit plan or plans for all Key
Employees as of the Determination Date(s), and the denominator of
which is the sum of the account balances under the aggregated defined
contribution plan or plans for all Participants, determined in
accordance with 1) above, and the Present Value of accrued benefits
under the defined benefit plan or plans for all Participants as of the
Determination Date(s), all determined in accordance with Code Section
416 and the regulations thereunder. The accrued benefits under a
defined benefit plan in both the numerator and denominator of the top-
heavy ratio are increased for any distribution of an accrued benefit
made in the one-year period ending on the Determination Date
(five-year period ending on the Determination Date in the case of a
distribution made for a reason other than Severance from Employment,
death, or Disability and in determining whether the Plan is top-heavy
for Plan Years beginning before January 1, 2002).
3. For purposes of (1) and (2) above, the value of account balances and
the Present Value of accrued benefits will be determined as of the
most recent Valuation Date that falls within or ends with the 12-month
period ending on the Determination Date, except as provided in Code
Section 416 and the regulations thereunder for the first and second
plan years of a defined benefit plan. The account balances and accrued
benefits of a Participant 1) who is not a Key Employee but who was a
Key Employee in a prior year, or 2) who has not been credited with at
least one Hour of Service with any employer maintaining the plan at
any time during the one-year period (five-year period ending on the
Determination Date in the case of a distribution made for a reason
other than Severance from Employment, death, or Disability and in
determining whether the Plan is top-heavy for Plan Years beginning
before January 1, 2002) 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 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 1) the method, if any, that uniformly applies for
accrual purposes under all defined benefit plans maintained by the
Employer, or 2) 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 41 1(b)(1)(C).
C. SIMPLE 401(K) PLAN EXCEPTION -Notwithstanding Plan Section 7.19(A)
above, the Plan is not treated as a Top-Heavy Plan under Code Section
416 for any Year for which an Eligible Employer maintains this Plan as
a SIMPLE 401(k) Plan.
D. SAFE HARBOR 401(K) PLAN EXCEPTION - Notwithstanding Plan Section
7.19(A) above, the Plan is not treated as a Top-Heavy Plan under Code
Section 416 for any Year for which an Eligible Employer makes only
those contributions described in Code Sections 401(k)(12) and 401 (m)(
11) for any Plan Year. If any other contributions are made for a Plan
Year (e.g., Employer Profit Sharing Contributions, forfeitures, etc.),
the Top-Heavy rules describe in Code Section 416(g)(4)(H) will apply
for that Plan Year.
7.20 INALIENABILITY OF BENEFITS
No benefit or interest available under the Plan will be subject to
assignment or alienation, either voluntarily or involuntarily. The
preceding sentence shall not apply to judgments and settlements described
in Code Section 401(a)(13)(C) and ERISA Section 206(d)(4). Such sentence
shall, however, apply to the creation, assignment, or recognition of a
right to any benefit payable with respect to a Participant pursuant to a
Domestic Relations Order, unless such order is determined to be a Qualified
Domestic Relations Order as defined in the Definitions Section of the Plan.
Generally, a Domestic Relations Order cannot be a Qualified Domestic
Relations Order until January 1, 1985. However, in the case of a Domestic
Relations Order entered before January 1, 1985, the Plan Administrator:
1) shall treat such order as a Qualified Domestic Relations Order if the
Plan Administrator is paying benefits pursuant to such order on
January 1,1985, and
2) may treat any other such order entered before January 1, 1985, as a
Qualified Domestic Relations Order even if such order does not meet
the requirements of Code Section 414(p).
Notwithstanding any provision of the Plan to the contrary, a
distribution to an Alternate Payee under a Qualified Domestic
Relations Order shall be permitted even if the Participant affected by
such order is not otherwise entitled to a distribution, and even if
such Participant has not attained the earliest retirement age as
defined in Code Section 414(p).
7.21 BONDING
Every Fiduciary and every person who handles funds or other property of the
Plan shall be bonded to the extent required by ERISA Section 412 and the
regulations thereunder for purposes of protecting the Plan against loss by
reason of acts of fraud or dishonesty on the part of the person, group, or
class, alone or in connivance with others, to be covered by such bond. The
amount of the bond shall be fixed at the beginning of each Plan Year and
shall not be less than 10 percent of the amount of funds handled. The
amount of funds handled shall be determined by the funds handled the
previous Plan Year or, if none, the amount of funds estimated, in
accordance with rules provided by the Secretary of Labor, to be handled
during the current Plan Year. Notwithstanding the foregoing, no bond shall
be less than $1,000 nor more than $500.000. except that the Secretary of
Labor shall have the right to prescribe an amount in excess of $500,000.
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7.22 INVESTMENT AUTHORITY
A. PLAN INVESTMENTS - Except as provided in Plan Section 7.22(B)
(relating to individual direction of investments by Participants), the
Adopting Employer, not the Trustee (or Custodian, if applicable),
shall have exclusive management and control over the investment of the
Fund into any permitted investment. The Adopting Employer shall be
responsible for establishing a funding policy statement on behalf of
the Plan and shall provide a copy of such funding policy statement to
the Discretionary Trustee, if any. Notwithstanding the foregoing, if
the Trustee is designated as a Discretionary Trustee in the Adoption
Agreement, such Discretionary Trustee may enter into an agreement with
the Adopting Employer whereby the Discretionary Trustee will manage
the investment of all or a portion of the Fund. Any such agreement
shall be in writing and set forth such matters as the Discretionary
Trustee deems necessary or desirable.
B. DIRECTION OF INVESTMENTS BY PARTICIPANTS - Unless otherwise indicated
in the Adoption Agreement, each Participant shall have the
responsibility for directing the Trustee (or Custodian, if provided
for under a separate agreement between the Adopting Employer and the
Custodian), regarding the investment of all or part of their
Individual Account. If all of the requirements of ERISA Section
404(c)(1) are satisfied, then to the extent so directed, the Adopting
Employer, Plan Administrator, Trustee, the Custodian (if applicable),
and all other Fiduciaries are relieved of Fiduciary liability under
ERISA Section 404, provided that it shall be the Adopting Employer's
responsibility to direct the Trustee (or Custodian, if applicable) as
to permissible investments into which Participants may direct their
individual investments.
The Plan Administrator shall direct that a Separate Fund be
established in the name of each Participant who directs the
investment of part or all of their Individual Account. Each Separate
Fund shall be charged or credited (as appropriate) with the earnings,
gains, losses, or expenses attributable to such Separate Fund. No
Fiduciary shall be liable for any loss that results from a
Participant's individual direction. The assets subject to individual
direction shall not be invested in collectibles as that term is
defined in Code Section 408(m).
The Plan Administrator shall establish such uniform and
nondiscriminatory rules relating to individual direction as it deems
necessary or advisable including, but not limited to, rules
describing 1) which portions of Participants' Individual Accounts can
be individually directed, 2) the frequency of investment changes, 3)
the forms and procedures for making investment changes, and 4) the
effect of a Participant's failure to make a valid direction.
The Plan Administrator may, in a uniform and nondiscriminatory
manner, limit the available investments for Participants' individual
direction to certain specified investment options (including, but not
limited to, certain mutual funds, investment contracts, deposit
accounts, and group trusts). The Plan Administrator may permit, in a
uniform and nondiscriminatory manner, a Beneficiary of a deceased
Participant or the Alternate Payee under a Qualified Domestic
Relations Order to individually direct investments in accordance with
this Plan Section 7.22(B).
Notwithstanding any provision hereof to the contrary, if the Adoption
Agreement permits Participants to direct investments and also names a
Directed Trustee, such Participants shall furnish investment
instruction to the Plan Administrator under procedures adopted by the
Adopting Employer and/or the Plan Administrator consistent with the
Plan, and it shall be the responsibility of the Plan Administrator to
provide direction to the Directed Trustee regarding the investment of
such amounts. If a Participant who has the right to direct
investments under the terms of the Plan fails to provide such
direction to the Plan Administrator, the Plan Administrator shall
direct the investment of such Participant's Individual Accounts, The
Plan Administrator shall maintain records showing the interest of
each Participant and/or Beneficiary in the Fund unless the Directed
Trustee enters into a written agreement with the Adopting Employer to
keep separate accounts for each such Participant or Beneficiary.
C. INVESTMENT MANAGERS
1. Definition of Investment Manager - The Adopting Employer may
appoint one or more investment managers to make investment
decisions with respect to all or a portion of the Fund. The
investment manager shall be any firm or individual registered as
an investment adviser under the Investment Advisers Act of 1940,
a bank as defined in said Act, or an insurance company qualified
under the laws of more than one state to perform services
consisting of the management, acquisition, or disposition of any
assets of the Plan.
2. Investment Manager's Authority - A separate Investment Fund
shall be established representing the assets of the Fund invested
at the direction of the investment manager. The investment
manager so appointed shall direct the Trustee (or Custodian, if
applicable) with respect to the investment of such Investment
Fund. The investments which may be acquired at the direction of
the investment manager are those described in Plan Section
7.22(D).
3. Written Agreement - The appointment of any investment manager
shall be by written agreement between the Adopting Employer and
the investment manager and a copy of such agreement (and any
modification or termination thereof) must be given to the Trustee
(or Custodian, if applicable). The agreement shall set forth,
among other matters, the effective date of the investment
manager's appointment and an acknowledgment by the investment
manager that it is a Fiduciary of the Plan under ERISA.
4. Concerning the Trustee (or Custodian, if applicable) - Written
notice of each appointment of an investment manager shall be
given to the Trustee (or Custodian, if applicable) at least 60
days in advance of the effective date of such appointment. Such
notice shall specify which portion of the Fund will constitute
the Investment Fund subject to the investment manager's
direction. If the separate Investment Fund subject to the
direction of the Investment Manager is a permissible investment
option to the Trustee (or Custodian, as applicable) pursuant to
Plan Section 7.22(D), the Trustee (or Custodian, if applicable)
shall comply with the investment direction given to it by the
investment manager and will not be liable for any loss which may
result by reason of any action (or inaction) it takes at the
direction of the investment manager.
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D. PERMISSIBLE INVESTMENTS - The Trustee (or Custodian, if applicable)
may invest the assets of the Plan in property of any character, real
or personal, including, but not limited to, the following: stocks,
including Qualifying Employer Securities, and including shares of
open-end investment companies (mutual funds); bonds; notes;
debentures; proprietary mutual funds; deposit accounts; options;
limited partnership interests; mortgages; real estate or any interests
therein; unit investment trusts; Treasury Bills, and other U.S.
Government obligations; common trust funds, combined investment
trusts, collective trust funds or commingled funds maintained by a
bank or similar financial organization (whether or not the Trustee
hereunder); savings accounts, certificates of deposit, demand or time
deposits or money market accounts of a bank or similar financial
organization (whether or not the Trustee hereunder); annuity contracts
that are "guaranteed benefit policies," as defined in ERISA Section
401(b)(2)(B); unless excluded in the Adoption Agreement, life
insurance policies; or in such other investments as is deemed proper
without regard to investments authorized by statute or rule of law
governing the investment of trust funds but with regard to ERISA and
this Plan. Notwithstanding the preceding sentence, the Prototype
Sponsor may, as a condition of making the Plan available to the
Adopting Employer, limit the types of property in which the assets of
the Plan may be invested. The list of permissible investment options
shall be further limited in accordance with any applicable law,
regulations, or other restrictions applicable to the Trustee or
Custodian, including, but not limited to, internal operational
procedures adopted by such Trustee (or Custodian, if applicable). The
actions of a Discretionary Trustee named in the Adoption Agreement
shall also be subject to the funding policy statement provided by the
Adopting Employer. If any Trustee (or Custodian, if applicable)
invests all or any portion of the Fund pursuant to written
instructions provided by the Adopting Employer (including an
investment manager appointed by the Adopting Employer pursuant to Plan
Section 7.22(C)) or any Participant pursuant to Plan Section 7.22(B),
the Trustee (or Custodian, if applicable) will be deemed to have
invested pursuant to the Adopting Employer's funding policy statement
To the extent the assets of the Plan are invested in a group trust,
including a collective trust fund or commingled funds maintained by a
bank or similar financial organization, the declaration of trust of
such composite trust shall be deemed to be a part of the Plan, and
any investment in such composite trust shall be subject to all of the
provisions of such declaration of trust, as the same may be amended
or supplemented from time to time.
If the responsibility for directing investments for Elective
Deferrals (and earnings) is executed by someone other than the
Participants, the acquisition of Qualifying Employer Securities will
be limited to ten percent of the fair market value of the assets of
the Plan, to the extent required by ERISA Section 407(b)(2).
E. MATTERS RELATING TO INSURANCE
1. If elected by the Plan Sponsor in the Adoption Agreement, a life
insurance contract may be purchased on behalf of a Participant.
No life insurance contract may be purchased unless the insured
under the contract is the Participant or, where this Plan is a
profit sharing or 401(k) plan, the Participant's Spouse or
another individual in whom the Participant has an insurable
interest. If a life insurance contract is to be purchased for a
Participant, the aggregate premium for certain life insurance for
each Participant must be less than a certain percentage of the
aggregate Employer Contributions and Forfeitures allocated to a
Participant's Individual Account at any particular time as
follows.
a. Ordinary Life Insurance - For purposes of these incidental
insurance provisions, ordinary life insurance contracts are
contracts with both nondecreasing death benefits and
nonincreasing premiums. If such contracts are purchased,
less than 50 percent of the aggregate Employer Contributions
and Forfeitures allocated to any Participant's Individual
Account will be used to pay the premiums attributable to
them.
b. Term and Universal Life Insurance - No more than 25 percent
of the aggregate Employer Contributions and Forfeitures
allocated to any Participant's Individual Account will be
used to pay the premiums on term life insurance contracts,
universal life insurance contracts, and all other life
insurance contracts which are not ordinary life.
c. Combination - The sum of 50 percent of the ordinary life
insurance premiums and all other life insurance premiums
will not exceed 25 percent of the aggregate Employer
Contributions and Forfeitures allocated to any Participant's
Individual Account.
If this Plan is a profit sharing plan, the above incidental
benefits limits do not apply to life insurance contracts
purchased by an Employee who has been a Participant in the Plan
for five or more years or purchased with Employer Contributions
and Forfeitures that have been in the Participant's Individual
Account for at least two full Plan Years, measured from the date
such contributions were allocated. For purposes of this Plan
Section 7.22(E)(1), rollover and transfer contributions shall be
considered Employer Contributions, and therefore may be used to
pay contract premiums. No part of the Deductible Employee
Contribution account will be used to purchase life insurance.
2. Any dividends or credits earned on insurance contracts for a
Participant shall be allocated to such Participant's Individual
Account derived from Employer Contributions for whose benefit the
contract is held.
3. Subject to Plan Section 5.10, the contracts on a Participant's
life will be converted to cash or an annuity or distributed to
the Participant upon separation from service with the Employer.
In addition, contracts on the joint lives of a Participant and
another person may not be maintained under this Plan if such
Participant ceases to have an insurable interest in such other
person.
4. Subject to Plan Section 7.22(D), the Trustee (or Custodian, if
applicable) shall apply for and will be the owner of any
insurance contract(s) purchased under the terms of this Plan. The
insurance contract(s) must provide that proceeds will be payable
to the trust fund. However, the Trustee (or Custodian, if
applicable) shall be required to pay over all proceeds of the
contract(s) to the Participant's Designated Beneficiary in
accordance with the distribution provisions of this Plan. A
Participant's Spouse will be the designated beneficiary of the
proceeds in all circumstances unless a Qualified Election has
been made in accordance with Plan Section 5.10. Under no
circumstances shall the Fund retain any part of the proceeds. 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.
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5. Subject to Plan Section 7.22(D), the Plan Administrator may
direct the Trustee (or Custodian, if applicable) to sell and
distribute insurance or annuity contracts to a Participant (or
other party as may be permitted) in accordance with applicable
law or regulations.
6. Notwithstanding any other provision herein, and except as may be
otherwise provided by ERISA, the Employer shall indemnify and
hold harmless the insurer, its officers, directors, employees,
agents, heirs, executors, successors, and assigns, from and
against any and all liabilities, damages, judgments, settlements,
losses, costs, charges, or expenses (including legal expenses) at
any time arising out of or incurred in connection with any action
taken by such parties in the performance of their duties with
respect to this Plan, unless there has been a final adjudication
of gross negligence or willful misconduct in the performance of
such duties.
Further, except as may be otherwise provided by ERISA, the
Employer will indemnify the insurer from any liability, claim,
or expense (including legal expense) that the insurer incurs by
reason of, or which results in whole or in part from the
reliance of the insurer on the facts and other directions and
elections the Employer communicates or fails to communicate.
7.23 PROCEDURES AND OTHER MATTERS REGARDING DOMESTIC RELATIONS ORDERS
A. To the extent provided in any Qualified Domestic Relations Order, the
former Spouse of a Participant shall be treated as a surviving Spouse
of such Participant for purposes of any benefit payable in the form of
either a Qualified Joint and Survivor Annuity or Qualified
Preretirement Survivor Annuity.
B. The Plan shall not be treated as failing to meet the requirements of
the Code, which generally prohibits payment of benefits before the
Participant's Termination of Employment or Severance from Employment,
as applicable, with the Employer, solely by reason of payments to an
Alternate Payee pursuant to a Qualified Domestic Relations Order.
C. In the case of any Domestic Relations Order received by the Plan,
1. the Plan Administrator shall promptly notify the Participant and
any other Alternate Payee of the receipt of such order and the
Plan's procedure for determining the qualified status of Domestic
Relations Orders, and
2. within a reasonable period after receipt of such order, the Plan
Administrator shall determine whether such order is a Qualified
Domestic Relations Order and notify the Participant and each
Alternate Payee of such determination.
The Plan Administrator shall establish reasonable procedures to
determine the qualified status of Domestic Relations Orders and to
administer distributions under such qualified orders.
D. During any period in which the issue of whether a Domestic Relations
Order is a Qualified Domestic Relations Order is being determined by
the Plan Administrator, by a court of competent jurisdiction, or
otherwise, the Plan Administrator shall segregate in a separate
account in the Plan or in an escrow account the amounts which would
have been payable to the Alternate Payee during such period if the
order had been determined to be a Qualified Domestic Relations Order.
If within 18 months the order or modification thereof is determined to
be a Qualified Domestic Relations Order, the Plan Administrator shall
pay the segregated amounts (plus any interest thereon) to the person
or persons entitled thereto. If within 18 months either 1) it is
determined that the order is not a Qualified Domestic Relations Order,
or 2) the issue as to whether such order is a Qualified Domestic
Relations Order is not resolved, then the Plan Administrator shall pay
the segregated amounts (plus any interest thereon) to the person or
persons who would have been entitled to such amounts if there had been
no order. Any determination that an order is a Qualified Domestic
Relations Order which is made after the close of the 18-month period
shall be applied prospectively only.
7.24 INDEMNIFICATION OF PROTOTYPE SPONSOR
Notwithstanding any other provision herein, and except as may be otherwise
provided by ERISA, the Employer shall indemnify and hold harmless the
Prototype Sponsor, its officers, directors, employees, agents, heirs,
executors, successors, and assigns, from and against any and all
liabilities, damages, judgments, settlements, losses, costs, charges, or
expenses (including legal expenses) at any time arising out of or incurred
in connection with any action taken by such parties in the performance of
their duties with respect to this Plan, unless there has been a final
adjudication of gross negligence or willful misconduct in the performance
of such duties. Further, except as may be otherwise provided by ERISA, the
Employer will indemnify the Prototype Sponsor from any liability, claim,
or expense (including legal expense) that the Prototype Sponsor incurs by
reason of, or which results in whole or in part from, the reliance of the
Prototype Sponsor on the facts and other directions and elections the
Employer, Plan Administrator, or Investment Fiduciary communicates or
fails to communicate.
7.25 MILITARY SERVICE
Notwithstanding any provision of this Plan to the contrary, contributions,
benefits, and service credit with respect to qualified military service
will be provided in accordance with Code Section 414(u).
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SECTION EIGHT: TRUSTEE AND CUSTODIAN
8.01 FINANCIAL ORGANIZATION AS CUSTODIAN
This Section 801 applies where the Adopting Employer, by execution of the
Adoption Agreement, appoints the entity named therein as Custodian for the
Plan, and the entity accepts such appointment, all subject to the terms of
the Basic Plan Document. The Adopting Employer represents and warrants to
the entity that it has all requisite right, power, and authority and has
taken all required actions necessary under the Plan and applicable law to
designate the financial organization as Custodian of the Plan pursuant to
the terms of the Basic Plan Document. The Employer, Plan Administrator,
any Trustee, any other Investment Fiduciary, and the Custodian so
appointed shall be bound by all the terms of this Basic Plan Document and
Adoption Agreement. Notwithstanding any provision hereof regarding the
responsibilities of or granting powers to the Custodian, the Custodian
shall serve as a non-discretionary, directed Custodian of the Fund, shall
have no discretionary authority with respect to the management or
administration of the Plan or the Fund, and will act only as directed by
the entity or individual who has such authority.
A. RESPONSIBILITIES OF THE CUSTODIAN - The Custodian's responsibilities
may be further limited by the Plan Trustee(s) and, notwithstanding any
provision hereof to the contrary, may also be further limited by the
terms of a separate agreement between the Custodian and the Adopting
Employer. Subject to the previous sentence, the responsibilities of
the Custodian shall be limited to the following:
1. To receive Plan contributions and to hold, invest and reinvest,
and distribute the Fund as authorized by the Adopting Employer or
its designee without distinction between principal and interest;
provided, however, that nothing in this Plan shall require the
Custodian to maintain physical custody of stock certificates (or
other indicia of ownership of any type of asset) representing
assets within the Fund.
2. To maintain accurate records of contributions, investments,
earnings, receipts, disbursements, withdrawals, and other
transactions with respect to the Fund, and all accounts, books,
and records relating thereto shall be open at all reasonable
times to inspection and audit by any person designated by the
Employer; provided, however, that the Custodian is given
reasonable advance notice of such inspection by the Employer. On
direction of the Adopting Employer or Plan Administrator, and if
agreed to in writing by the Custodian, the Custodian may provide
annual or interim accountings, valuations, or other reports
concerning the assets of the custodial account subject to payment
of all required additional fees for such reports. The Custodian's
accounting will be at the Custodial Account level rather than the
Participant level, and the Custodian will not be responsible for
Participant-level record-keeping, reporting, or communication
unless it agrees to do so in a separate written agreement with
the Adopting Employer or Plan Administrator. The Custodian will
also furnish the Adopting Employer with such other information as
the Custodian possesses and which is necessary for the Adopting
Employer to comply with the reporting requirements of ERISA, as
applicable. An accounting will be deemed to have been approved by
the Adopting Employer unless the Adopting Employer or Plan
Administrator objects to the contents of an accounting within
sixty (60) days of its mailing or electronic transmission by the
Custodian. Any objections must set forth the specific grounds on
which they are based. Upon approval, the Custodian shall be
forever released from any and all liability with respect to the
Account.
3. To make disbursements from the Fund to Participants or
Beneficiaries upon the proper authorization of the Plan
Administrator.
4. To furnish to the Plan Administrator an annual statement which
reflects the value of the investments in the custody of the
Custodian as of the end of the period and as of any other times
as the Custodian and Plan Administrator may agree to in writing,
including an agreement regarding the application of additional
fees for such additional report.
B. POWERS OF THE CUSTODIAN - Except as otherwise provided in this Plan,
and subject to receipt of instructions from the Adopting Employer,
Plan Administrator, or Investment Fiduciary, as appropriate, the
Custodian shall have the power, but, in the absence of proper
direction as provided in Section 8.01(A) above, not the duty to take
any action with respect to the Fund which it deems necessary or
advisable to discharge its responsibilities under this Plan including,
but not limited to, the following powers:
1. To invest all or a portion of the Fund (including idle cash
balances) in time deposits, savings accounts, money market
accounts, or similar investments bearing a reasonable rate of
interest in the Custodian's own savings department or the savings
department of another financial organization;
2. 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 or
subscription rights 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 pay any assessment 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;
3. To hold securities or other property of the Fund in its own
name, in the name of its nominee, or in bearer form; and
4. 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.
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8.02 TRUSTEE
This Section 8.02 applies where either a financial organization and/or one
or more individuals has/have indicated in the Adoption Agreement that it
will serve as Trustee with respect to all or a portion of the assets of
the Fund. The responsibilities and powers of the Trustee may not be
expanded except with its prior written consent and, notwithstanding any
provision hereof to the contrary, may be further limited by the terms of a
separate agreement between the Trustee and the Adopting Employer.
Notwithstanding any provision hereof regarding the responsibilities of or
granting powers to the Trustee, a Directed Trustee shall have no
discretionary authority with respect to the management or administration
of the Plan or the Fund, and will act only as directed by the entity or
individual who has such authority.
A. ESTABLISHMENT OF THE TRUST
1. The Adopting Employer and the Trustee hereby agree to the
establishment of a trust consisting of the Fund, The Trustee
shall carry out the duties and responsibilities herein specified,
but shall be under no duty to determine whether the amount of any
contribution by the Employer or any Participant is in accordance
with the terms of the Plan nor shall the Trustee be responsible
for the collection of any contributions required under the Plan.
2. The Fund shall be held, invested, reinvested and administered by
the Trustee in accordance with the terms of the Plan and this
Agreement solely in the interest of Participants and their
Beneficiaries and for the exclusive purpose of providing benefits
to Participants and their Beneficiaries and defraying reasonable
expenses of administering the Plan. Except as provided in Section
8.02(G)(2), no assets of the Plan shall inure to the benefit of
the Employer.
3. The Trustee shall pay benefits and expenses from the Fund only
upon the written direction of the Plan Administrator, The Trustee
shall be fully entitled to rely on such directions furnished by
the Plan Administrator, and shall be under no duty to ascertain
whether the directions are in accordance with the provisions of
the Plan.
B. INVESTMENT OF THE FUND
1. The Adopting Employer shall have the exclusive authority and
discretion to select the permissible investment funds
("Permissible Investment Funds") available for investment under
the Plan. In making such selection, the Employer shall use the
care, skill, prudence and diligence under the circumstances then
prevailing that a prudent person acting in a like capacity and
familiar with such mailers would use in the conduct of an
enterprise of a like character and with like aims. The available
investments under the Plan shall be sufficiently diversified so
as to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so. The Employer
shall notify the Trustee in writing of the selection of the
Permissible Investment Funds currently available for investment
under the Plan, and any changes thereto.
2. Unless otherwise designated by the Employer in the Adoption
Agreement, each Participant shall have the exclusive right, in
accordance with the provisions of the Plan, to direct the
investment by the Trustee of all amounts allocated to the
separate accounts of the Participant under the Plan among any one
or more of the available Permissible Investment Funds. All
investment directions by Participants shall be timely furnished
to the Trustee by the Plan Administrator, except to the extent
such directions are transmitted telephonically or otherwise by
Participants directly to the Trustee or its delegate in
accordance with rules and procedures established and approved by
the Plan Administrator and communicated to the Trustee. In making
any investment of the assets of the Fund, the Trustee shall be
fully entitled to rely on such directions furnished to it by the
Plan Administrator or by Participants in accordance with the Plan
Administrator's approved rules and procedures, and shall be under
no duty to make any inquiry or investigation with respect
thereto.
3. Notwithstanding Section 7.22(A) of the Plan, to the extent so
designated by the Employer in the Adoption Agreement, the Trustee
shall invest amounts allocated to the separate accounts of
Participants under the Plan as directed by the Plan Administrator
or other named fiduciary for the Plan (including any investment
manager as defined in Section 3(38) of ERISA) identified by the
Employer in the Adoption Agreement. In making any investments of
the assets of the Fund, the Trustee shall be fully entitled to
rely on such directions properly furuished to it by the Plan
Administrator or named fiduciary and shall be under no duty to
make any inquiry or investigation with respect thereto.
4. The Plan or Plan Administrator may designate a default fund
under the Plan in which the Trustee shall deposit contributions
to the Fund on behalf of Participants who have been identified by
the Plan Administrator as having not specified investment choices
under the Plan. If the Trustee receives any asset that is not
accompanied by instructions directing its investment, the Trustee
shall immediately notify the Plan Administrator of that fact, and
the Trustee may, in its discretion, return or hold all or a
portion of the received asset outside of the Fund without
liability for loss of income or appreciation pending receipt of
proper investment directions. Otherwise, it is specifically
intended under the Plan and this Agreement that the Trustee shall
have no discretionary authority to determine the investment of
the assets of the Fund.
5. Except as may be authorized by regulations promulgated by the
Secretary of Labor, the Trustee shall not maintain the indicia of
ownership in any assets of the Fund outside of the jurisdiction
of the district courts of the United States.
C. POWERS OF THE TRUSTEE - Subject to the provisions of Sections
8.02(B)(l), 8.02(B)(2) & 8.02(B)(3), the Trustee shall have the
authority, in addition to any authority given by law, to exercise the
following powers in the administration of the Fund:
1. to invest and reinvest all or a part of the Fund in accordance
with Participants' investment directions in any available
Investment Fund selected by the Employer without restriction to
investments authorized for fiduciaries, including, without
limitation on the amount that may be invested therein, any
common, collective or commingled trust fund. Any investment in,
and any terms and conditions of, any common, collective or
commingled trust fund available only to employee trusts which
meets the requirements of the Code, or corresponding provisions
of subsequent income tax laws of the United States, shall
constitute an integral part of this Section 8.02 and the Plan;
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2. to dispose of all or any part of the investments, securities, or
other property which may from time to time or at any time
constitute the Fund, and to make, execute and deliver to the
purchasers thereof good and sufficient deeds of conveyance
therefor, and all assignments, transfers and other legal
instruments, either necessary or convenient for passing the title
and ownership thereto, free and discharged of all trusts and
without liability on the part of such purchasers to see to the
application of the purchase money;
3. to hold that portion of the Fund as the Trustee may deem
necessary for ordinary administration, the transfer of assets to
another trust or fiduciary, pending investment instructions, and
for the disbursement of funds in cash, without liability for
interest, by depositing the same in any bank (including deposits
that bear no interest or a reasonable rate of interest in a bank
or similar financial institution supervised by the United States
or a State, even where a bank or financial institution is the
Trustee, or otherwise is a Fiduciary of the Plan, subject to the
rules and regulations governing such deposits, and without regard
to the amount of any such deposit);
4. to cause any investment of the Fund to be registered in the name
of the Trustee or the name of its nominee or nominees or to
retain such investment unregistered or in a form permitting
transfer by delivery; provided that the books and records of the
Trustee shall at all times show that all such investments are
part of the Fund;
5. except as provided further in Section 8.02(E) hereof with
respect to shares of Qualifying Employer Securities that are held
by the Fund, to vote in person or by proxy with respect to all
mutual fund shares which are held by the Plan solely in
accordance with directions furnished to it by the Employer, and
to vote in person or by proxy with respect to all other
securities credited to a Participant's separate accounts under
the Plan solely in accordance with directions furnished to it by
the Participant;
6. to consult and employ any suitable agent to act on behalf of the
Trustee and to contract for legal, accounting, clerical and other
services deemed necessary by the Trustee to manage and administer
the Fund according to the terms of the Plan and this Agreement;
7. upon the written direction of the Plan Administrator, to make
loans from the Fund to Participants in amounts and on terms
approved by the Plan Administrator in accordance with the
provisions of the Plan; provided that the Plan Administrator
shall have the responsibility for collecting all loan repayments
required to be made under the Plan and for furnishing the Trustee
with copies of all promissory notes evidencing such loans; and
8. to pay from the Fund all taxes imposed or levied with respect to
the Fund or any part thereof under existing or future laws, and
to contest the validity or amount of any tax, assessment, claim
or demand respecting the Fund or any part thereof.
D. DUTIES AND RESPONSIBILITIES OF THE TRUSTEE
1. The Trustee, the Employer and the Plan Administrator shall each
discharge their assigned duties and responsibilities under this
Agreement and the Plan solely in the interest of Participants and
their Beneficiaries in the following manner:
(a) for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and defraying
reasonable expenses of administering the Plan;
(b) with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent person acting
in a like capacity and familiar with such matters would use
in the conduct of an enterprise of a like character and with
like aims;
(c) by diversifying the available investments under the Plan so
as to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so; and
(d) in accordance with the provisions of the Plan and this
Section 8.02 insofar as they are consistent with the
provisions of ERISA.
2. The Trustee shall keep full and accurate accounts of all
receipts, investments, disbursements and other transactions
hereunder, including such specific records as may be agreed upon
in writing between the Employer and the Trustee. All such
accounts, books and records containing Plan information shall be
open to inspection and audit at all reasonable times by any
authorized representative of the Employer or the Plan
Administrator. A Participant may examine only those individual
account records pertaining directly to him.
3. Within 120 days after the end of each Plan Year or within 120
days after its removal or resignation, the Trustee shall file
with the Plan Administrator a written account of the
administration of the Fund showing all transactions effected by
the Trustee subsequent to the period covered by the last
preceding account to the end of such Plan Year or date of removal
or resignation and all property held at its fair market value at
the end of the accounting period. Upon approval of such
accounting by the Plan Administrator, neither the Employer nor
the Plan Administrator shall be entitled to any further
accounting by the Trustee. The Plan Administrator may approve
such accounting by written notice of approval delivered to the
Trustee or by failure to express objection to such accounting in
writing delivered to the Trustee within 90 days from the date on
which the accounting is delivered to the Plan Administrator.
4. The Trustee shall not be required to determine the facts
concerning the eligibility of any Participant to participate in
the Plan, the amount of benefits payable to any Participant or
Beneficiary under the Plan, or the date or method of payment or
disbursement. The Trustee shall be fully entitled to rely solely
upon the written advice and directions of the Plan Administrator
as to any such question of fact.
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5. Unless resulting from the Trustee's negligence, willful misconduct,
lack of good faith, or breach of its fiduciary duties under this
Agreement or ERISA, the Employer shall indemnify and save harmless the
Trustee from, against, for and in respect of any and all damages,
losses, obligations, liabilities, liens, deficiencies, costs and
expenses, including without limitation, reasonable attorney's fees
incident to any suit, action, investigation, claim or proceedings
suffered, sustained, incurred or required to be paid by the Trustee in
connection with the Plan or this Section 8.02.
E. VOTING AND OTHER RIGHTS OF QUALIFYING EMPLOYER SECURITIES
1. Each Participant or Beneficiary of a deceased Participant
(referred to herein collectively as Participant) shall have the
right to direct the Trustee as to the manner of voting and the
exercise of all other rights which a shareholder of record has
with respect to shares (and fractional shares) of Qualifying
Employer Securities which have been allocated to the
Participant's separate account including, but not limited to, the
right to sell or retain shares in a public or private tender
offer.
2. All shares (and fractional shares) of Qualifying Employer
Securities for which the Trustee has not received timely
Participant directions shall be voted or exercised by the Trustee
in the same proportion as the shares (and fractional shares) of
Qualifying Employer Securities for which the Trustee received
timely Participant directions, except in the case where to do so
would be inconsistent with the provisions of Title I of ERISA.
All reasonable efforts shall be made to inform each Participant
that shares of Employer Stock for which the Trustee does not
receive Participant direction shall be voted pro rata in
proportion to the shares for which the Trustee has received
Participant direction.
3. Notwithstanding anything to the contrary, in the event of a
tender offer for Qualifying Employer Securities, the Trustee
shall interpret a Participant's silence as a direction not to
tender the shares of Qualifying Employer Securities allocated to
the Participant's separate account and, therefore, the Trustee
shall not tender any shares (or fractional shares) of Qualifying
Employer Securities for which it does not receive timely
directions to tender such shares (or fractional shares) from
Participants, except in the case where to do so would be
inconsistent with the provisions of Title I of ERISA.
Furthermore, tender offer materials provided to Participants
shall specifically inform Participants that the Trustee shall
interpret a Participant's silence as a direction not to tender
the Participant's shares of Qualifying Employer Securities.
4. Each Participant exercising his authority under this Article
shall be considered a named fiduciary of the Plan within the
meaning of ERISA section 402(a)(2) with respect to the voting
directions or response to an offer provided by the Participant
(including in the case where a Participant's silence is treated
by the Trustee as a direction not to tender as provided under
Section 8.02(E)(3) hereof).
5. Information relating to the purchase, holding and sale of
securities and the exercise of voting, tender and other similar
rights with respect to Qualifying Employer Securities by
Participants and beneficiaries shall be maintained in accordance
with procedures that are designed to safeguard the
confidentiality of such information, except to the extent
necessary to comply with Federal laws or State laws not preempted
by ERISA. The Trustee shall be the fiduciary who is responsible
for ensuring that such procedures are sufficient to safeguard the
confidentiality of the information described above, and that such
procedures are followed.
6. Notwithstanding any provision contained in the Plan to the
contrary, this Section 8.02(E) shall govern the procedures to be
followed in connection with the voting of Qualifying Employer
Securities held by the Plan and the disposition of Qualifying
Employer Securities pursuant to any tender or exchange offer
therefor. In the event of any conflict or inconsistency between
the provisions of this Section 8.02(E) and any other provisions
of the Plan, the provisions of this Section 8.02(E) shall
control.
F. APPOINTMENT OF INVESTMENT MANAGERS
1. Subject to Plan Section 7.22(D), the Plan Administrator may
appoint one or more Investment Managers with respect to some or
all of the assets of the Fund as contemplated by section
402(c)(3) of ERISA. Any such investment manager shall acknowledge
to the Plan Administrator in writing that it accepts such
appointment and that it is an ERISA fiduciary with respect to the
Plan and the Fund. The Plan Administrator shall provide the
Trustee with a copy of the written agreement (and any amendments
thereto) between the Plan Administrator and the Investment
Manager. By notifying the Trustee of the appointment of an
Investment Manager, the Plan Administrator shall be deemed to
certify that such Investment Manager meets the requirements of
section 3(38) of ERISA. The authority of the Investment Manager
shall continue until the Plan Administrator rescinds the
appointment or the Investment Manager has resigned.
2. The assets with respect to which a particular Investment Manager
has been appointed shall be specified by the Plan Administrator
and shall be segregated in a separate account for the Investment
Manager (the "Separate Account") and the Investment Manager shall
have the power to direct the Trustee in every aspect of the
investment of the assets of the Separate Account. The Investment
Manager will be the fiduciary responsible for the selecting,
negotiating, placing (including the execution of) investment
contracts, and valuing of all investments held under the Separate
Account. The Trustee may rely on such valuations including but
not limited to the Investment Manager's responsibility for
determining, and promptly informing Trustee, if assets should be
carried on the Plans' books at any value other than contract
value. The Investment Manager shall be responsible for making any
proxy voting or tender offer decisions with respect to securities
held in the Separate Account and the Investment Manager shall
maintain a record of the reasons for the manner in which it voted
proxies or responded to tender offers. The Trustee shall not be
liable for the acts or omissions of an Investment Manager and
shall have no liability or responsibility for acting or not
acting pursuant to the direction of, or failing to act in the
absence of, any direction from an Investment Manager, unless the
Trustee knows that by such action or failure to act it would be
itself committing a breach of
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fiduciary duty or participating in a breach of fiduciary duty by
such Investment Manager, it being the intention of the parties
that the Trustee shall have the full protection of section
405(d) of ERISA.
G. PROHIBITION OF DIVERSION
1. Except as provided in Section 8.02(G)(2) of this Article, at no
time prior to the satisfaction of all liabilities with respect to
Participants and their Beneficiaries under the Plan shall any
part of the corpus or income of the Fund be used for, or diverted
to, purposes other than for the exclusive benefit of Participants
or their Beneficiaries, or for defraying reasonable expenses of
administering the Plan.
2. The provisions of Section 8.02(G)(l) notwithstanding, contributions
made by the Employer under the Plan may be returned to the Employer
under the following conditions:
(a) If a contribution is made by mistake of fact, such contribution
may be returned to the Employer within one year of the payment
of such contribution;
(b) Contributions to the Plan are specifically conditioned upon their
deductibility under the Code. To the extent a deduction is
disallowed for any such contribution, it may be returned to the
Employer within one year after the disallowance of the deduction.
Contributions which are not deductible in the taxable year in
which made but are deductible in subsequent taxable years shall
not be considered to be disallowed for purposes of this
subsection; and
(c) Contributions to the Plan are specifically conditioned on initial
qualification of the Plan under the Code. If the Plan is
determined to be disqualified, contributions made in respect of
any period subsequent to the effective date of such
disqualification may be returned to the Employer within
one year after the date of denial of qualification, but only
if the application for the qualification is made by the time
prescribed by law for filing the employer's return for the
taxable year in which the plan is adopted, or such later date
as the Secretary of the Treasury may prescribe.
H. COMMUNICATION WITH PLAN ADMINISTRATOR AND ADOPTING EMPLOYER
1. Whenever the Trustee is permitted or required to act upon the
directions or instructions of the Plan Administrator, the Trustee
shall be entitled to act upon any written communication signed or
electronic communication reasonably believed to be sent by any person
or agent designated to act as or on behalf of the Plan Administrator.
Such person or agent shall be so designated either under the
provisions of the Plan or in writing by the Employer and their
authority shall continue until revoked in writing. The Trustee shall
incur no liability for failure to act on such person's or agent's
instructions or orders without written communication, and the Trustee
shall be fully protected in all actions taken in good faith in
reliance upon any instructions, directions, certifications and
communications believed to be genuine and to have been signed or
communicated by the proper person.
2. The Adopting Employer shall notify the Trustee in writing as to the
appointment, removal or resignation of any person designated to act as
or on behalf of the Plan Administrator. After such notification, the
Trustee shall be fully protected in acting upon the directions of, or
dealing with, any person designated to act as or on behalf of the Plan
Administrator until it receives notice to the contrary. The Trustee
shall have no duty to inquire into the qualifications of any person
designated to act as or on behalf of the Plan Administrator.
I. TRUSTEE'S COMPENSATION - The Trustee shall be entitled to reasonable
compensation for its services as may be agreed upon by the Trustee and the
Adopting Employer. The Trustee shall also be entitled to reimbursement for
all expenses properly and actually incurred on behalf of the Plan. Such
compensation or reimbursement shall be paid to the Trustee out of the Fund
unless paid directly by the Employer. The Trustee's compensation shall
also include any earnings attributable to outstanding benefit checks
issued to participants (with the earnings period beginning on the date the
check is written and ending on the date the check is presented for
payment) and assets received by the Trustee pending receipt of proper
investment instructions pursuant to Section 8.02(B)(4) (with the earnings
period beginning on the date the assets are received and ending on the
date in which proper investment instructions are received). The
earnings rate on such amounts shall generally be based upon the federal
approximate funds rate.
J. RESIGNATION AND REMOVAL OF TRUSTEE
1. The Trustee may resign at any time by written notice to the Employer
which shall be effective 30 days after delivery unless prior thereto a
successor trustee shall have been appointed.
2. The Trustee may be removed by the Employer at any time upon 30 days
written notice to the Trustee; such notice, however, may be waived by
the Trustee.
3. The appointment of a successor trustee hereunder shall be accomplished
by and shall take effect upon the delivery to the resigning or removed
Trustee, as the case may be, of written notice of the Employer
appointing such successor trustee, and an acceptance in writing of the
office of successor trustee hereunder executed by the successor so
appointed. Any successor trustee may be either a corporation
authorized and empowered to exercise trust powers or one or more
individuals. All of the provisions set forth herein with respect to
the Trustee shall relate to each successor trustee so appointed with
the same force and effect as if such successor trustee had been
originally named herein as the Trustee hereunder. If within 30 days
after notice of resignation has been given under the provisions of
this Article a successor trustee has not been appointed, the resigning
Trustee or the Employer may apply to any court of competent
jurisdiction for the appointment of a successor trustee.
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4. Upon the appointment of a successor trustee, the resigning or
removed Trustee shall transfer and deliver the Fund to such
successor trustee, after reserving such reasonable amount as it
shall deem necessary to provide for its expenses in the
settlement of its account, the amount of any compensation due to
it and any sums chargeable against the Fund for which it may be
liable. If the sums so reserved are not sufficient for such
purposes, the resigning or removed Trustee shall be entitled to
reimbursement for any deficiency from the successor trustee and
the Employer who shall be jointly and severally liable therefor.
K. AMENDMENT AND TERMINATION OF THE TRUST AND PLAN
1. The Employer may, by delivery to the Trustee of an instrument in
writing, amend, terminate or partially terminate this Agreement
at any time; provided, however, that no amendment shall increase
the duties or liabilities of the Trustee without the Trustee's
consent; and, provided further, that no amendment shall divert
any part of the Fund to any purpose other than providing benefits
to Participants and their Beneficiaries or defraying reasonable
expenses of administering the Plan.
2. If the Plan is terminated in whole or in part, or if the
Employer permanently discontinues its contributions to the Plan,
the Trustee shall distribute the Fund or any part thereof in such
manner and at such times as the Plan Administrator shall direct
in writing. In the absence of receipt of such written directions
after the effective date of such termination, the Trustee may
distribute the Fund in accordance with the provisions of the
Plan.
8.03 NO OBLIGATION TO QUESTION DATA
The Employer shall furnish the Trustee (or Custodian, if applicable) and
Plan Administrator the information which each party deems necessary for the
administration of the Plan including, but not limited to, changes in a
Participant's status, eligibility, mailing addresses and other such data as
may be required. The Trustee (or Custodian, if applicable) and Plan
Administrator shall be entitled to act on such information as is supplied
them and shall have no duty or responsibility to further verity or question
such information.
8.04 DEGREE OF CARE - LIMITATIONS OF LIABILITY
The Trustee (or Custodian, if applicable) shall be under no duty to take
any action other than its express responsibilities under this Plan unless
the responsible party under the terms of the Plan shall furnish the
Trustee (or Custodian, if applicable) with written instructions; provided
that in no event may the Trustee's (or Custodian's, if applicable)
responsibilities be expanded except with its prior written consent. Any
instructions hereunder may be delivered to the Trustee (or Custodian, if
applicable) directly by the responsible party or by other mutually agreed
upon parties. The Trustee (or Custodian, if applicable) shall not be
liable for any action taken or omitted by it in good faith in reliance
upon any instructions received hereunder or any other notice, request,
consent, certificate, or other instrument or paper reasonably believed by
it to be genuine and to have been properly executed. A Directed Trustee
(or Custodian, if applicable) shall have no duty to inquire into the
purpose or propriety of any order, instruction, or other communication
received hereunder and may conclusively presume that any such order,
instruction, or other communication is accurate and complete. The Trustee
(or Custodian, if applicable) shall not be responsible for determining
that all instructions provided to the Trustee (or Custodian, if
applicable) are being given by the appropriate party and are in proper
form under the provisions of the Plan and applicable law. The Trustee (or
Custodian, if applicable) may conclusively presume that any instructions
received have been duly authorized by the Employer, Investment Fiduciary,
Plan Administrator, Trustee, or Participant, as applicable, pursuant to
the terms of the Plan and applicable law.
The Trustee (or Custodian, if applicable) shall not be responsible for the
validity or effect or the qualification under the Code or the Plan. The
Trustee (or Custodian, if applicable) shall not be required to take any
action upon receipt of any notice from the IRS or other taxing authority
(unless such notice relates to the performance of the Trustee (or
Custodian, if applicable) responsibilities in Plan Sections 8.01(A) or
8.02(A)) except to promptly forward a copy thereof to the Employer.
Further, it is specifically understood that the Trustee (or Custodian, if
applicable) shall have no duty or responsibility with respect to the
determination of matters pertaining to the eligibility of any Employee to
become a Participant or remain a Participant hereunder, the amount of
benefit to which a Participant or Beneficiary shall be entitled to receive
hereunder, whether a distribution to Participant or Beneficiary is
appropriate under the terms of the Plan, the size and type of any policy
to be purchased from any insurer for any Participant hereunder, or any
other similar matters, it being understood that all such responsibilities
under the Plan are vested in the Plan Administrator.
8.05 MISCELLANEOUS
A. GOVERNING LAW - Notwithstanding any other section or provision of
this Plan, the construction, validity and administration of this Plan
Section Eight shall be governed by the laws of the Commonwealth of
Pennsylvania, except to the extent that such laws have been
specifically superseded by ERISA.
B. NECESSARY PARTIES - To the extent permitted by law, only the Employer
and the Trustee (or Custodian, if applicable) shall be necessary
parties in any application to the courts for an interpretation of
Section 8.01 or 8.02 or for an accounting by the Trustee (or
Custodian, if applicable), and no other Plan Fiduciary, Participant,
Beneficiary, or other person having an interest in the Fund shall be
entitled to any notice or service of process. Any final judgment
entered in such an action or proceeding shall, to the extent permitted
by law, be conclusive upon all persons claiming in Plan Sections 8.01
or 8.02.
C. FORCE MAJEURE - The Trustee (or Custodian, if applicable) shall not
be responsible or liable for the failure or delay in performance of
its obligations arising out of or caused, directly or indirectly, by
circumstances beyond its reasonable control, or that could not be
avoided by the exercise of due care, such as an act of God or any
mechanical, electronic, or communications failure.
SECTION NINE: ADOPTING EMPLOYER SIGNATURE
Section Nine of the Plan Adoption Agreement must contain the signature of an
authorized representative of the Adopting Employer evidencing the Employer's
agreement to be bound by the terms of the Basic Plan Document, Adoption
Agreement, and, if applicable, separate trust or custodial agreement.
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(VANGUARD LOGO)
COMPREHENSIVE 401(K) PROFIT SHARING PLAN
NONSTANDARDIZED ADOPTION AGREEMENT
EMPLOYER INFORMATION
Name of Adopting Employer Hamilton Precision Metals, Inc.
Address 1780 Rohrerstown Road
City Lancaster State PA Zip 17601-2334
Telephone 717-569-7061 Adopting Employer's Federal Tax Identification Number
72-1532170
Adopting Employer's Tax Year End (specify month and day) 12/31
Type of Business (select one) [ ] Sole Proprietorship [ ] Partnership [X]
C Corporation [ ]S Corporation [ ] LLC [ ]Other (specify a legal entity
recognized under federal income tax laws)______
Name of Plan Hamilton Precision Metals 401(k) Employee Savings Plan
Plan Sequence Number 002 Trust Identification Number (if applicable)
________________ Account Number 097409
RELATED EMPLOYERS - If the Adopting Employer is part of a controlled group of
corporations (as defined in Code Section 414(b) as modified by Code Section
415(h)), a group of commonly controlled trades or businesses (as defined in Code
Section 414(c) as modified by Code Section 415(h)) or an affiliated service
group (as defined in Code Section 414(m)) of which the Adopting Employer is a
part, or any other entity required to be aggregated with the Adopting Employer
pursuant to Code Section 414(o), then such related employers will participate
in this Plan, unless specifically indicated otherwise in Section Two, Part B of
this Adoption Agreement.
SECTION ONE: EFFECTIVE DATES
Complete Part A or B
PART A. [ ] NEW PLAN EFFECTIVE DATE
This is the initial adoption of a 401(k) profit sharing plan by
the Adopting Employer.
The Effective Date of this Plan is ____________________________.
The Effective Date for Elective Deferrals under this Plan, if
different from above, is:
PRE-TAX ELECTIVE DEFERRALS (select one)
OPTION 1: [ ] The next payroll date coinciding with or
following the later of the date this Adoption
Agreement is signed or the Effective Date.
OPTION 2: [ ] ________________ (Must be on or after the
later of the date this Adoption Agreement is
signed or the Effective Date)
NOTE: If no option is selected, Option I will apply for
Pre-Tax Elective Deferrals.
ROTH ELECTIVE DEFERRALS (select one)
OPTION 1: [ ] The next payroll date coinciding with or
following the later of the date this Adoption
Agreement is signed or the Effective Date.
OPTION 2: [ ] ______________ (Must be on or after the later
of the date this Adoption Agreement is signed
or the Effective Date)
NOTE: If no option is selected, Option I will apply for Roth
Elective Deferrals.
NOTE: The Effective Date is usually the first day of the
Plan Year in which this Adoption Agreement is signed and may not
be earlier than such date. Elective Deferrals, however, cannot
be made available before the later of the date this Adoption
Agreement is signed or the Effective Date for Elective
Deferrals.
PART B. [X] EXISTING PLAN AMENDMENT OR RESTATEMENT DATE
This is an amendment or restatement of an existing qualified
plan (a Prior Plan).
The Prior Plan was initially effective on 01/01/1994.
The Effective Date of this amendment or restatement is
01/01/2010 (except as otherwise provided on Attachment B, Special
Effective Date(s), if applicable, or in the Basic Plan Document).
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Page 1 of 36
The Effective Date for Elective Deferrals under this Plan, if
added by this amendment and different from above, is:
PRE-TAX ELECTIVE DEFERRALS (select one)
OPTION 1: [ ] The next payroll date coinciding with or
following the later of the date this Adoption
Agreement is signed or the Effective Date.
OPTION 2: [ ] _____________________ (Must be on or after
the later of the date this Adoption Agreement
is signed or the Effective Date)
NOTE: If no option is selected, Option I will apply for
Pre-Tax Elective Deferrals.
ROTH ELECTIVE DEFERRALS (select one)
OPTION 1: [ ] The next payroll date coinciding with or
following the later of the date this Adoption
Agreement is signed or the Effective Date.
OPTION 2: [ ] _________________ (Must be on or after the
later of the date this Adoption Agreement is
signed or the Effective Date)
NOTE: If no option is selected, Option I will apply for Roth
Elective Deferrals.
NOTE: The restatement Effective Date is generally the first day of
the Plan Year in which this Adoption Agreement is signed. An
amendment or restatement Effective Date after the first day of the
Plan Year in which this Adoption Agreement is signed may result in
a reduction or elimination of accrued benefits, violating Code
Section 411(d) (6). Notwithstanding the foregoing, Effective Dates
for certain items (e.g., EGTRRA and other government
pronouncements) are governed by the dates specified in the Basic
Plan Document. If Elective Deferrals are being made available for
the first time as a result of this amendment or restatement, the
Elective Deferrals cannot be made available before the later of
the date this Adoption Agreement is signed or the Effective Date
for Elective Deferrals. If different Effective Dates are selected
for Pre-Tax and Roth Elective Deferrals, the Effective Date for
Pre-Tax Elective Deferrals must be either the same date or an
earlier date than that selected for Roth Elective Deferrals.
SECTION TWO: ELIGIBILITY
Complete Parts A through E
NOTE: Eligibility requirements selected for Elective Deferrals will also apply
to Qualified Nonelective Contributions, if such contributions are made to the
Plan. Eligibility requirements selected for Matching Contributions will apply to
Qualified Matching Contributions, if such contributions are made to the Plan.
PART A. AGE AND YEARS OF ELIGIBILITY SERVICE
1. AGE REQUIREMENT. An Employee will be eligible to become a
Participant in the Plan for purposes of becoming a Contributing
Participant (and thus eligible to make Elective Deferrals),
receiving Matching Contributions, or receiving an allocation of any
Employer Profit Sharing Contributions, as applicable, made pursuant
to Section Three of the Adoption Agreement, after attaining the
following age (select and complete all that apply):
[x] Elective Deferrals - Age 18 (no more than 21).
[x] Matching Contributions - Age 18 (no more than 21).
[ ] Employer Profit Sharing Contributions - Age ______ (no more
than 21).
NOTE: If no age is specified for a contribution source there will
be no age requirement for such source.
2. YEARS OF ELIGIBILITY SERVICE REQUIREMENT. An Employee will be
eligible to become a Participant in the Plan for purposes of
becoming a Contributing Participant (and thus eligible to make
Elective Deferrals), receiving Matchin Contributions, or receiving
an allocation of any Employer Profit Sharing Contributions, as
applicable, made pursuant to Section Three of the Adoption
Agreement (select and complete all that apply):
[ ] No Eligibility Service Required.
If this option is selected, there will be no eligibility
service requirement for the following contributions (select
all that apply):
[ ] Elective Deferrals.
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
[x] After completing 6 consecutive Months of Eligibility Service
(no more than 12).
If this option is selected, an Employee will be eligible to
become a Participant in the Plan for purposes of the following
contributions after completing the number of Months of
Eligibility Service specified above (select all that apply):
[x] Elective Deferrals.
[x] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
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Page 2 of 36
[ ] After completing ______ consecutive Months of Eligibility
Service (no more than 12) during which the Employee completes
at least _______ Hours of Service (no more than 1,000).
NOTE: Employees not meeting the hours requirement within the
initial number of months indicated in the Adoption Agreement
will satisfy the Month of Eligibility Service requirement when
they complete 1,000 Hours of Service within the Eligibility
Computation Period.
If this option is selected, an Employee will be eligible to
become a Participant in the Plan for purposes of the following
contributions after completing the number of Months of
Eligibility Service and Hours of Service specified above
(select all that apply):
[ ] Elective Deferrals.
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
[ ] After Completing 1 Year of Eligibility Service.
If this option is selected, an Employee will be eligible to
become a Participant in the Plan for purposes of the following
contributions after completing 1 Year of Eligibility Service
(select all that apply):
[ ] Elective Deferrals.
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
[ ] After completing 2 Years of Eligibility Service.
If this option is selected, an Employee will be eligible to
become a Participant in the Plan for purposes of the following
contributions after completing 2 Years of Eligibility Service
(select all that apply):
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
[ ] Other.
If this option is selected, an Employee will be eligible to
become a Participant in the Plan for purposes of the following
contributions after completing the following requirements
(select and complete all that apply):
[ ] Elective Deferrals (cannot require more than 1 Year of
Eligibility Service)
---------------------------------------------------------
[ ] Matching Contributions (cannot require more than 2 Years
of Eligibility Service)
---------------------------------------------------------
[ ] Employer Profit Sharing Contributions (cannot require
more than 2 Years of Eligibility Service)
---------------------------------------------------------
NOTE: If no Year of Eligibility Service requirement is selected for
any contribution source, an Employee will become eligible to
become a Participant upon date of hire with respect to such
source. A Participant cannot be required to complete more than one
Year of Eligibility Service for Elective Deferrals or two Years of
Eligibility Service for Matching Contributions and Employer Profit
Sharing Contributions. If more than one Year of Eligibility
Service is selected in this Section Two, Part A for either
Matching Contributions or Employer Profit Sharing Contributions,
the immediate 100 percent vesting schedule in Section Four will
automatically apply to such contribution source.
3. AGE AND YEARS OF ELIGIBILITY SERVICE WAIVERS
A. EMPLOYEES EMPLOYED AS OF THE EFFECTIVE DATE
Will an Employee (other than an Employee who either is part of
an excluded class of Employees or is employed by a related
employer that does not participate in the Plan) employed as of
the Effective Date(s) listed in Section One, Part A, of the
Adoption Agreement who has not otherwise met the age and Years
of Eligibility Service requirements listed above be considered
to have met those requirements as of the Effective Date and be
eligible to become a Participant in the Plan for purposes of
becoming a Contributing Participant (and thus eligible to make
Elective Deferrals), receiving Matching Contributions, or
receiving an allocation of any Employer Profit Sharing
Contributions, as applicable, made pursuant to Section Three of
the Adoption Agreement (select one)?
OPTION 1: [ ] Yes.
If Option 1 is selected, the waiver will apply to
the following contributions (select all that
apply):
[ ] Elective Deferrals.
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
OPTION 2: [x] No.
NOTE: If no option is selected, Option 2 will apply.
(C)2009 Ascensus, Inc., Brainerd, MN
Page 3 of 36
B. EMPLOYEES EMPLOYED AS OF A SPECIFIED DATE
Will an Employee (other than an Employee who either is part of
an excluded class of Employees or is employed by a related
employer that does not participate in the Plan) employed on
_______________ (specify a month, day, and year) who has not
otherwise met the age and Years of Eligibility Service
requirements be considered to have met those requirements and
be eligible to become a Participant in the Plan for purposes of
becoming a Contributing Participant (and thus eligible to make
Elective Deferrals), receiving Matching Contributions, or
receiving an allocation of any Employer Profit Sharing
Contributions, as applicable, made pursuant to Section Three of
the Adoption Agreement (select one)?
OPTION 1: [ ] Yes.
If Option 1 is selected, the waiver will apply
to the following contributions (select all that
apply):
[ ] Elective Deferrals.
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
OPTION 2: [X] Not applicable.
NOTE: If no option is selected, Option 2 will apply. If Option
1 is selected but no date is specified, no additional age and
Years of Eligibility Service waivers will apply. This age and
Years of Eligibility Service waiver may be used either when
this Plan is adopted or when the Plan is subsequently amended
('e.g., to add one or more types of contribution, to add a
previously excluded group of Employees, etc.).
C. MERGERS AND ACQUISITIONS
Will an Employee (other than an Employee who either is part of
an excluded class of Employees or is employed by a related
employer that does not participate in the Plan) employed on
___________________ (specify a month, day, and year) who 1)
became an Employee as a result of a merger with or acquisition
of the prior employer(s) listed below, and 2) has not otherwise
met the age and Years of Eligibility Service requirements be
considered to have met those requirements and be eligible to
become a Participant in the Plan for purposes of becoming a
Contributing Participant (and thus eligible to make Elective
Deferrals), receiving Matching Contributions, or receiving an
allocation of any Employer Profit Sharing Contributions, as
applicable, made pursuant to Section Three of the Adoption
Agreement (select one)?
OPTION 1: [ ] Yes.
If Option 1 is selected, the waiver will apply
to the following contributions (select all that
apply):
[ ] Elective Deferrals.
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
Prior Employer(s):_______________________________
OPTION 2: [X] Not applicable.
NOTE: If no option is selected, Option 2 will apply. If Option
1 is selected but no date is specified, no additional age and
Years of Eligibility Service waivers will apply. This age and
Years of Eligibility Service waiver may be used either when
this Plan is adopted or when a merger or acquisition occurs.
Waivers that include only Employees from certain prior
employers may create testing implications under Code Sections
401(a)(4)or 410(b).
PART B. EXCLUSION OF CERTAIN CLASSES OF EMPLOYEES
An Employee will be eligible to become a Participant in the Plan unless
such Employee is (select all that apply):
[ ] Included in a unit of Employees covered by a collective bargaining
agreement between the Employer and Employee representatives, if
retirement benefits were the subject of good faith bargaining and
if two percent or less of the Employees who are covered pursuant to
that agreement are professionals as defined in Treasury Regulation
Section 1.410(b)-9. For this purpose, the term "Employee
representatives" does not include any organization in which more
than half of the members are Employees who are owners, officers, or
executives of the Employer.
If this exclusion is selected, it will apply to the following
contributions (select all that apply):
[ ] Elective Deferrals.
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
[ ] A nonresident alien (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)).
If this exclusion is selected, it will apply to the following
contributions (select all that apply):
[ ] Elective Deferrals.
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
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Page 4 of 36
[X] An Employee as the result of a transaction described in Code
Section 410(b)(6)(C). Such Employee will be excluded during the
period beginning on the date of the change in the member(s) of the
group and ending on the last day of the first Plan Year beginning
after the date of the change. A transaction described in Code
Section 410(b)(6)(C) is an asset or stock acquisition, merger, or
similar transaction involving a change in the employer of the
employees of a trade or business.
If this exclusion is selected, it will apply to the following
contributions (select all that apply):
[X] Elective Deferrals.
[X] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
[ ] A Leased Employee.
If this exclusion is selected, it will apply to the following
contributions (select all that apply):
[ ] Elective Deferrals.
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
[ ] A Highly Compensated Employee.
If this exclusion is selected, it will apply to the following
contributions (select all that apply):
[ ] Elective Deferrals.
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
[X] Incorrectly determined not to be an Employee (e.g., erroneously
classified as an independent contractor).
If this exclusion is selected, it will apply to the following
contributions (select all that apply):
[X] Elective Deferrals.
[X] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
[ ] An Employee employed with a related Employer as defined in the
Employer Information section on page one of this Adoption Agreement
that has not adopted this Plan. (List all related Employers who are
not adopting this Plan and who would be eligible to participate
unless specifically excluded.)
-------------------------------------------------------------------
[X] Other.
If this exclusion is selected, it will apply to the following
contributions and excluded groups (select all that apply):
[X] Elective Deferrals (Describe the classification(s) of Employees
that will be excluded from the Plan. Classifications cannot be
based on Compensation. Note that any classification that is
directly or indirectly based on the number of Hours of Service
that an Employee is customarily scheduled to work shall be
invalid if any such Employee completes 1,000 Hours of Service
during an Eligibility Computation Period.)
Employees not classified as a union employee, and other members
of the controlled group where the Employer chooses not to
participate
[X] Matching Contributions (Describe the classification(s) of
Employees that will be excluded from the Plan. Classifications
cannot be based on Compensation. Note that any classification
that is directly or indirectly based on the number of Hours of
Service that an Employee is customarily scheduled to work shall
be invalid if any such Employee completes 1,000 Hours of
Service during an Eligibility Computation Period.)
Employees not classified as a union employee, and other members
of the controlled group where the Employer chooses not to
participate
[ ] Employer Profit Sharing Contributions (Describe the
classification(s) of Employees that will be excluded from the
Plan. Classifications cannot be based on Compensation. Note
that any classification that is directly or indirectly based
on the number of Hours of Service that an Employee is
customarily scheduled to work shall be invalid if any such
Employee completes 1,000 Hours of Service during an Eligibility
Computation Period.)
NOTE: Exclusions of Employees (other than statutorily excluded
Employees under Code Section 410(b) (3) and (4) may result in
the Plan needing to be amended to include enough Employees to
pass the minimum coverage requirements under Code Section
410(b).
PART C. ENTRY DATES
The Entry Dates shall be (select all that apply):
[ ] Immediately upon meeting age and Years of Eligibility Service -
The day the age and Years of Eligibility Service requirements in
Section Two, Part A, are satisfied.
If this Entry Date option is selected, it will apply to the
following contributions (select all that apply):
[ ] Elective Deferrals.
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
(C) 2009 Ascensus, Inc., Brainerd, MN
Page 5 of 36
[X] Monthly- The first day of each month of the Plan Year.
If this Entry Date option is selected, it will apply to the
following contributions (select all that apply):
[X] Elective Deferrals.
[X] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
[ ] Quarterly - The first day of the Plan Year and the first day of the
fourth, seventh, and tenth months of the Plan Year.
If this Entry Date option is selected, it will apply to the
following contributions (select all that apply):
[ ] Elective Deferrals.
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
[ ] Semi-Annually--The first day of the Plan Year and the first day of
the seventh month of the Plan Year.
If this Entry Date option is selected, it will apply to the
following contributions (select all that apply):
[ ] Elective Deferrals.
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
[ ] Annually - The first day of the Plan Year.
If this Entry Date option is selected, it will apply to the
following contributions (select all that apply):
[ ] Elective Deferrals.
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
[ ] Other.
If this Entry Date option is selected, it will apply to the
following contributions and Entry Dates (select all that apply):
[ ] Elective Deferrals (define Entry Date(s))
_____________________________________________________________
[ ] Matching Contributions (define Entry Date(s))
_____________________________________________________________
[ ] Employer Profit Sharing Contributions (define Entry Date(s))
_____________________________________________________________
NOTE: If no Entry Dates are specified for a contribution source,
semi-annual Entry Dates will apply to such source. The "Annually" and
"Other" Entry Date options can be selected only if the eligibility
requirements and Entry Dates are coordinated such that each Employee
will become a Participant in the Plan by the earlier of 1)the first day
of the Plan Year beginning after the date the Employee satisfies the
age and Years of Eligibility Service requirements of Code Section
410(a) and ERISA Section 202, or 2) six months after the date the
Employee satisfies such requirements.
PART D. HOURS REQUIRED FOR ELIGIBILITY PURPOSES
1. __________ Hours of Service (no more than 1,000) shall be required
to constitute a Year of Eligibility Service.
2. ___________ Hours of Service (no more than 500 and less than the
number specified in Part D, item 1, above) must be exceeded to avoid a
Break in Eligibility Service.
NOTE: If no hours are specified,1,000 and 500 will apply for items, and
2, respectively unless the Elapsed Time method of determining service
applies.
PART E. ELIGIBILITY COMPUTATION PERIOD
An Employee's Eligibility Computation Periods after their initial
Eligibility Computation Period shall be (select one):
OPTION 1: [X] Each Plan Year commencing with the Plan Year beginning
during their initial Eligibility Computation Period.
OPTION 2: [ ] The 12-consecutive month periods commencing on the
anniversaries of their Employment Commencement Date.
NOTE: If no option is selected Option 1 will apply.
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SECTION THREE: CONTRIBUTIONS
Complete Parts A through I
PART A. ELECTIVE DEFERRALS
1. AUTHORIZATION OF ELECTIVE DEFERRALS
Will Pre-Tax Elective Deferrals be permitted under this Plan
(select one)?
OPTION 1: [X] Yes (complete the following):
Will Roth Elective Deferrals be permitted under
this Plan in addition to Pre-Tax Elective Deferrals?
SUBOPTION 1: [ ] Yes.
SUBOPTION 2: [X] No.
NOTE: If no suboption is selected, Suboption 1 will
apply.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will apply. Complete the
relevant portions of the remainder of Part A only if Option 1 is
selected.
2. LIMITS ON ELECTIVE DEFERRALS
a. If Elective Deferrals are permitted under the Plan, a
Contributing Participant may elect under a salary reduction
agreement to have their Compensation reduced by the amount
described below. Such amount shall be contributed to the Plan by
the Employer on behalf of the Contributing Participant
(select one):
OPTION 1: [ ] An amount equal to a percentage of the
Contributing Participant's Compensation from
________ percent to _______ percent in increments
of __________ percent.
OPTION 2: [ ] An amount of the Contributing Participant's
Compensation not less than $______________ and
not more than $_____
OPTION 3: [ ] An amount equal to a percentage of the
Contributing Participant's Compensation from
________ percent to _______ percent in increments
of_______ percent, or an amount of the
Contributing Participant's Compensation not less
than $__________ and not more than $__________
OPTION 4: [X] An amount equal to a dollar amount or percentage
of the Contributing Participant's Compensation
not to exceed the limits imposed by Code Sections
401(k), 402(g), 404, and 415.
For any taxable year, a Contributing Participant's combined
Pre-Tax and Roth Elective Deferrals shall not exceed the limit
contained in Code Section 402(g) in effect at the beginning of
such taxable year.
NOTE: If no option is selected, Option 4 will apply. Unless
specified otherwise in the Adoption Agreement, bonuses shall be
included in Compensation and will, therefore, be subject to a
Participant's salary reduction agreement.
b. Notwithstanding item (a) above, if Elective Deferrals are
permitted under the Plan, a Contributing Participant who is a
Highly Compensated Employee may elect under a salary reduction
agreement to have his or her Compensation reduced by an amount
as described below (select one):
OPTION 1: [ ] An amount equal to a percentage of the
Contributing Participant's Compensation from
_______ percent to _______ percent in increments
of________ percent.
OPTION 2: [ ] An amount of the Contributing Participant's
Compensation not less than $_____________ and not
more than $_____
OPTION 3: [ ] An amount equal to a percentage of the
Contributing Participant's Compensation from
________ percent to _______ percent in increments
of_______ percent, or an amount of the
Contributing Participant's Compensation not less
than $____________ and not more than $__________
OPTION 4: [ ] An amount equal to a dollar amount or percentage
of the Contributing Participant's Compensation
not to exceed the limits imposed by Code Sections
401(k), 402(g), 404, and 415.
OPTION 5: [X] Not applicable. The provisions of item (a) above
shall apply.
NOTE: If no option is selected, Option 5 will apply.
3. SEPARATE DEFERRAL ELECTION FOR BONUSES
Instead of or in addition to making Elective Deferrals through
payroll deduction, may a Contributing Participant make a separate
deferral election on part or all of a bonus rather than applying
the Contributing Participant's salary reduction agreement for
Pre-Tax and/or Roth Elective Deferrals, if any, to the bonus
(select one)?
OPTION 1: [ ] Yes.
OPTION 2: [X] No.
NOTE: If no option is selected, Option 2 will apply. A separate
deferral election made with respect to a bonus shall not be subject
to the limits described under the portion of this Adoption
Agreement titled "Limits on Elective Deferrals" unless such limits
are prescribed by the Code or related Treasury Regulations.
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Page 7 of 36
4. CATCH-UP CONTRIBUTIONS
Will eligible Contributing Participants be permitted to make
Catch-up Contributions pursuant to Plan Section 3.01(G)
(select one)?
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will apply.
5. CEASING ELECTIVE DEFERRALS
A Contributing Participant may stop making Elective Deferrals
prospectively by revoking a salary reduction agreement.
(select one):
OPTION 1: [X] As of such times established by the Plan
Administrator in a uniform and nondiscriminatoiy
manner.
OPTION 2: [ ] Monthly - As of the first day of any month.
OPTION 3: [ ] Quarterly - As of the first day of any quarter.
OPTION 4: [ ] Semi-Annually - As of the first day of the Plan Year
and the first day of the seventh month of the Plan
Year.
OPTION 5: [ ] Annually -No sooner than as of the first day of the
next Plan Year.
OPTION 6: [ ] Other (Specify one or more dates (at least once per
year) established by the Plan Administrator in a
uniform and nondiscriminatory manner.) _____________
NOTE: If no option is selected Option 1 will apply.
6. RETURN AS A CONTRIBUTING PARTICIPANT AFTER CEASING ELECTIVE
DEFERRALS
A Participant who ceases Elective Deferrals by revoking a salary
reduction agreement may return as a Contributing Participant
(select one):
OPTION 1: [X] As of such times established by the Plan
Administrator in a uniform and nondiscriminatory
manner.
OPTION 2: [ ] Monthly -As of the first day of any subsequent
month.
OPTION 3: [ ] Quarterly - As of the first day of any subsequent
quarter.
OPTION 4: [ ] Semi-Annually - As of the first day of the Plan Year
and the first day of the seventh month of the Plan
Year.
OPTION 5: [ ] Annually -No sooner than as of the first day of the
next Plan Year.
OPTION 6: [ ] Other (Specify one or more dates (at least once per
year) established by the Plan Administrator in a
uniform and nondiscriminatory manner.) _____________
NOTE: If no option is selected, Option 1 will apply.
7. CHANGING ELECTIVE DEFERRAL AMOUNTS
A Contributing Participant may modify a salary reduction agreement
to prospectively increase or decrease the amount of their Elective
Deferrals (select one):
OPTION 1: [X] As of such times established by the Plan
Administrator in a uniform and nondiscriminatory
manner.
OPTION 2: [ ] Monthly - As of the first day of the month.
OPTION 3: [ ] Quarterly - As of the first day of any quarter.
OPTION 4: [ ] Semi-Annually - As of the first day of the Plan Year
and first day of the seventh month of the Plan Year,
OPTION 5: [ ] Annually - No sooner than as of the first day of the
next Plan Year.
OPTION 6: [ ] Other (Specify one or more dates (at least once per
year) established by the Plan Administrator in a
uniform and nondiscriminatory manner.) _____________
NOTE: If no option is selected, Option 1 will apply.
8. CLAIMING EXCESS ELECTIVE DEFERRALS
A Participant who claims Excess Elective Deferrals for the
preceding calendar year must submit their claim in writing to the
Plan Administrator by (select one):
OPTION 1: [X] March 1.
OPTION 2: [ ] Other (specify a date not later than April 15)
NOTE: If no option is selected, Option 1 will apply. If Excess
Elective Deferrals are not removed by April 15, they will be
included in income when distributed and may be subject to a 10%
early distribution penalty under Code Section 72(t).
9. AUTOMATIC ENROLLMENT FOR ELECTIVE DEFERRALS
A. AUTHORIZATION OF AUTOMATIC ELECTIVE DEFERRALS
Will the automatic Elective Deferral enrollment provisions in
Plan Section 3.01(E) apply (select one)?
OPTION 1: [ ] Yes.
OPTION 2: [X] No.
NOTE: If no option is selected, Option 2 will apply. Complete
the remainder of this item 9 only if Option 1 is selected.
(C) 2009 Ascensus, Inc., Brainerd, MN
Page 8 of 36
I. NEW EMPLOYEES
If an Employee who has met the eligibility requirements set
forth in Section Two of the Adoption Agreement fails to
provide the Employer a salary reduction agreement, will a
portion of such eligible Employee's Compensation be
automatically withheld and contributed to the Plan as an
Elective Deferral (select one,)?
OPTION 1: [ ] Yes, for Employees hired on or after the
Effective Date.
OPTION 2: [ ] Yes, for Employees who meet the eligibility
requirements in Section Two, Part A of the
Adoption Agreement on or after the Effective
Date.
OPTION 3: [ ] No.
NOTE: If no option is selected, Option 1 will apply.
II. CURRENT EMPLOYEES
Will automatic enrollment for Elective Deferrals apply to
all eligible Employees who fail to return a salary
reduction agreement on or after the Effective Date,
including those who met the eligibility requirements in the
Adoption Agreement before the Effective Date (select one)?
OPTION 1: [ ] Yes, but only to those Employees who are not
Contributing Participants (i.e., are
deferring 0 percent).
OPTION 2: [ ] Yes, but only to those Employees deferring
less than the amount in item (b) below
(including 0 percent).
OPTION 3: [ ] No.
NOTE: If no option is selected, Option 3 will apply.
B. INITIAL AMOUNT OF AUTOMATIC ELECTIVE DEFERRAL
The following percentage or amount of each eligible Employee's
Compensation will be automatically withheld and contributed to
the Plan as an Elective Deferral if Option 1 was selected in item
9(a) above (select and complete one):
OPTION 1: [ ]______ Percent.
OPTION 2: [ ]$____________.
NOTE: If no option is selected, Option I will apply and three
percent of Compensation will be withheld.
C. TAX CHARACTER OF ELECTIVE DEFERRALS -AUTOMATIC ENROLLMENT
How will amounts automatically withheld from Compensation and
contributed to the Plan under Part A, item 9 above as Elective
Deferrals be designated for tax purposes (select one)?
OPTION 1: [ ] Pre-tax Elective Deferrals.
OPTION 2: [ ] Roth Elective Deferrals.
NOTE: If no option is selected, Option 1 will apply. Option 2
may only be selected if Section Three, Part A of the Adoption
Agreement allows Roth Elective Deferrals.
10. AUTOMATIC INCREASE IN ELECTIVE DEFERRALS
A. AUTHORIZATION OF AUTOMATIC ELECTIVE DEFERRAL INCREASE
Will Elective Deferrals be increased automatically each year for
Employees who are automatically enrolled under item 9 above
(select one)?
OPTION 1: [ ] Yes.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 2 will apply. Complete the
remainder of this item 10 only if Option 1 is selected.
B. Will Elective Deferrals be increased automatically each year for
Employees whose deferral elections are below _____ percent
(specify a percentage), whether or not automatically enrolled
under item 9 above?
OPTION 1: [ ] Yes.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 2 will apply. If Option 1
is selected and no percentage is indicated, three percent will
apply.
C. AUTOMATIC ELECTIVE DEFERRAL INCREASE AMOUNT
If Option 1 was selected in item 10(a) and/or 10(b) above, such
increases will occur in the following increments (select one):
OPTION 1: [ ] ____ percent per year up to a maximum of ____
percent.
OPTION 2: [ ] $______ per year up to a maximum amount of $______.
OPTION 3: [ ] Other (specify)___________________________________.
NOTE: If no option is selected, Option 1 will apply and annual
increases will be made in increments of one percent of
Compensation up to a maximum of ten percent.
(C)2009 Ascensus, Inc., Brainerd, MN
Page 9 of 36
D. TIMING OF AUTOMATIC ELECTIVE DEFERRAL INCREASES
If automatic increases are selected in item 10(a) and/or 10(b)
above, such increases will occur on the following dates (select
one):
OPTION 1: [ ] Each anniversary of the Contributing Participant's
date of hire.
OPTION 2: [ ] Each anniversary of the date the Contributing
Participant met the eligibility requirements set
forth in Section Two, Part A of the Adoption
Agreement.
OPTION 3: [ ] First day of each Plan Year.
OPTION 4: [ ] First day of each Calendar Year.
OPTION 5: [ ] Other (specify) _________________________________.
NOTE: If no option is selected, Option 1 will apply.
PART B. MATCHING CONTRIBUTIONS (Employers that intend to maintain an ADP/ACP
Safe Harbor CODA plan, as defined in Plan Section 3.03 that is not
subject to ACP testing, must skip this Part B and complete Part C.
Matching Contributions made under this Part B will be subject to ACP
testing).
1. Authorization of Matching Contributions
Will the Employer make Matching Contributions to the Plan on
behalf of a Qualifying Contributing Participant (select one)?
OPTION 1:[X] Yes, with respect to the following types of
contributions (select all that apply):
[X] Pre-Tax Elective Deferrals.
[ ] Roth Elective Deferrals.
[ ] Nondeductible Employee Contribution.
OPTION 2:[ ] No.
NOTE: If no option is selected, Option 2 will apply. Complete the
remainder of this Part B only if Option 1 is selected.
2. MATCHING CONTRIBUTIONS AND CATCH-UP CONTRIBUTIONS
Will Matching Contributions be made in accordance with the
Matching Contribution formula specified in items 3 and 4 below,
with regard to Catch-up Contributions (select one)?
OPTION 1:[X] Yes.
OPTION 2:[ ] No.
NOTE: If no option is selected, Option 1 will apply.
3. MATCHING CONTRIBUTION FORMULA
If the Employer elected to make Matching Contributions in item 1
above, then the amount of such Matching Contributions made on
behalf of a Qualifying Contributing Participant each Plan Year
shall be equal to (select one):
OPTION 1:[ ] Discretionary Match.
That percentage of each Qualifying Contributing
Participant's Elective Deferral (and/or
Nondeductible Employee Contribution, if applicable)
which the Employer, in its sole discretion,
determines from year to year. The amount, the
allocation formula, and the percentage or dollar
amount limit applicable to such match, if any, is
at the complete and sole discretion of the Employer
and may vary from year to year. Any Matching
Contribution will be allocated in a
nondiscriminatory manner based upon each
Contributing Participant's Elective Deferrals (and/
or Nondeductible Employee Contributions, if
applicable).
OPTION 2: [X] Percentage of Contribution Match.
That percentage of each Qualifying Contributing
Participant's Elective Deferral (and/or
Nondeductible Employee Contribution, if
applicable) determined by the Contributing
Participant's rate of Elective Deferrals (and/or
Nondeductible Employee Contribution, if
applicable) as specified in the matching schedule
below.
Elective Deferral Percentage Matching Percentage
---------------------------- -------------------
Less than or equal to 6 % 50 %
Notwithstanding the Matching Contribution formula
specified above, no Matching Contributions in
excess of $_______ or 6_______ percent of a
Contributing Participant's Compensation will be
made with respect to any Contributing Participant
for any Plan Year. (Complete the applicable blank
(s), if any)
OPTION 3: [ ] Two-Tiered Percentage of Contribution Match.
That percentage of each Qualifying Contributing
Participant's Elective Deferral (and/or
Nondeductible Employee Contribution, if
applicable) determined by the Contributing
Participant's rate of Elective Deferrals (and/or
Nondeductible Employee Contribution, if
applicable) as specified in the matching schedule
below.
Elective Deferral Percentage Matching Percentage
---------------------------- -------------------
Base Rate Less than or equal to ______ % ______%
Tier 2 Greater than ______, but less than or equal to ______% ______%
Notwithstanding the Matching Contribution formula
specified above, no Matching Contributions in
excess of $___________ or ________ percent of a
Contributing Participant's Compensation will be
made with respect to any Contributing Participant
for any Plan Year. (Complete the applicable
blank(s), if any)
(C)2009 Ascensus, Inc., Brainerd, MN
Page 10 of 36
OPTION 4: [ ] Multi-Tiered Percentage of Contribution Match.
An amount equal to a percentage of each Qualifying
Contributing Participant's Elective Deferral
(and/or Nondeductible Employee Contribution, if
applicable) determined by the Contributing
Participant's rate of Elective Deferrals (and/or
Nondeductible Employee Contribution, if
applicable) as specified in the matching schedule
below.
Elective Deferral Percentage Matching Percentage
---------------------------- -------------------
Base Rate Less than or equal to ________% ______%
Tier 2 Greater than ______, but less than or equal to _______% ______%
Tier 3 Greater than ______, but less than or equal to _______% ______%
Tier 4 Greater than ______% ______%
Notwithstanding the Matching Contribution formula
specified above, no Matching Contributions in
excess of$__________ or _______ percent of a
Contributing Participant's Compensation will be
made with respect to any Contributing Participant
for any Plan Year. (Complete the applicable blank
(s), if any)
OPTION 5: [ ] Years of Service Match.
An amount equal to a percentage of each Qualifying
Contributing Participant's Elective Deferral
(and/or Nondeductible Employee Contribution, if
applicable) determined by the number of such
Contributing Participant's Years of [ ]
Eligibility [ ] Vesting Service with the Employer
as specified in the matching schedule below.
Years of Service Matching Percentage
---------------- -------------------
Base Rate Less than or equal to ________ years _______%
Tier 2 Greater than _______, but less than or equal to_______ years _______%
Tier 3 Greater than _______, but less than or equal to_______ years _______%
Tier 4 Greater than ______ years _______%
Notwithstanding the Matching Contribution formula
specified above, no Matching Contributions in
excess of $___________ or _______ percent of a
Contributing Participant's Compensation will be
made with respect to any Contributing Participant
for any Plan Year. (Complete the applicable
blank(s), if any)
OPTION 6: [ ] Discretionary Match By Location or Business
Classification.
Any Matching Contribution will be allocated in a
nondiscriminatory manner based upon each
Qualifying Contributing Participant's Elective
Deferral (and/or Nondeductible Employee
Contribution, if applicable) which the Employer,
in its sole discretion, determines from year to
year for each separate location, or business
classification. The amount, the allocation
formula, and the percentage or dollar amount limit
applicable to such match, if any, is at the
complete discretion of the Employer and may vary
for each location or business classification on a
separate and individual basis.
OPTION 7: [ ] Other formula (Specify an amount equal to a
percentage of the Elective Deferrals and/or
Nondeductible Employee Contribution, (if
applicable) of each Qualifyng Contributing
Participant entitled thereto.)
NOTE: if no option is selected, Option 1 will apply. If Matching
Contribution percentages in Options 3 through 7 above increase as
the percent of a Contributing Participant's Elective Deferral
percentage increases (e.g., the Matching Contribution percentage
in Tier 3 is greater than the Matching Contribution percentage in
Tier 2, etc.), special nondiscrimination testing under Code
Section 401 (a) (4) may be necessary. If Option 7 is selected,
the formula specified can only allow Matching Contributions to be
made with respect to a Contributing Participant's Elective
Deferrals (and/or Nondeductible Employee Contribution, if
applicable). Matching Contributions in excess of 100% of a
Contributing Participant's Elective Deferrals (and/or
Nondeductible Employee Contribution, if applicable) will be
subject to the additional ACP testing limits under Plan Section
3.02 and Treasury Regulation 1.401(m) -2(a)(5).
4. SUPPLEMENTAL MATCH
Will the Employer be permitted to make supplemental Matching
Contributions, in an amount to be determined from year to year at the
Employer's discretion, in addition to the Matching Contributions
described in Part B, items 2 and 3 above (select one)?
OPTION 1: [ ] Yes.
If Option 1 is selected the supplemental Matching
Contributions will be allocated to each Contributing
Participant in accordance with the following Matching
Contribution formula (select one):
SUBOPTION A: [ ] Discretionary Match. That percentage of
each Contributing Participant's Elective
Deferral (and/or Nondeductible Employee
Contribution, if applicable)which the Employer,
in its sole discretion, determines from year to
year.
SUBOPTION B: [ ] Other (specify)____________________________
_______________________________________________
NOTE: Matching Contributions in excess of]00%
of a Contributing Participant's Elective
Deferrals (and/or Nondeductible Employee
Contribution, (f applicable) will be subject to
the additional ACP testing limits under Plan
Section 3.02 and Treasury Regulation 1.401
(m)-2(a)(5).
OPTION 2: [X] No.
NOTE: If no option is selected, Option 2 will apply.
(C) 2009 Ascensus, Inc., Branerd, MN
Page 11 of 36
5. QUALIFYING CONTRIBUTING PARTICIPANTS
A Contributing Participant will be a Qualifying Contributing Participant,
and thus entitled to share in Matching Contributions for any Plan Year,
only if the Participant has satisfied all of the eligibility requirements
described in Section Two of this Adoption Agreement on at least one day
of such Plan Year and satisfies the following additional conditions
(select one):
OPTION 1: [ ] Hours of Service Requirement.The Contributing Participant
completes at least _______(not more than 1,000) Hours of
Service during the Plan Year. However, this condition
will be waived for the following reason(s)
(select all that apply):
[ ] The Contributing Participant's Death.
[ ] The Contributing Participant's Termination of
Employment after having incurred a Disability.
[ ] The Contributing Participant's Termination of
Employment after having reached Normal Retirement
Age.
[ ] The Contributing Participant's Termination of
Employment after having reached Early Retirement
Age.
[ ] The Contributing Participant is employed on the
last day of the Plan Year.
[ ] Last Day Requirement.The Participant is an Employee of the
Employer on the last day of the Plan Year. However, this
condition will be waived for the following reason(s)
(select all that apply):
[ ] The Contributing Participant's Death.
[ ] The Contributing Participant's Termination of
Employment after having incurred a Disability.
[ ] The Contributing Participant's Termination of
Employment after having reached Normal Retirement
Age.
[ ] The Contributing Participant's Termination of
Employment after having reached Early
Retirement Age.
[ ] The Contributing Participant's Termination of
Employment after having completed at least _______
Hours of Service during the Plan Year.
OPTION 2:[x] No additional conditions apply.
NOTE: If no option is selected, Option 2 will apply.
PART C. SAFE HARBOR CODA CONTRIBUTIONS
1. APPLICATION OF SAFE HARBOR CODA
A. SAFE HARBOR PROVISIONS
Will the Safe Harbor CODA provisions of Plan Section 3.03 apply
(select one)?
OPTION 1: [ ] Yes.
OPTION 2: [x] No.
NOTE: If no option is selected, Option 2 will apply. Complete the
remainder of this Part C only if Option 1 is selected. If Option
1 is selected, the Safe Harbor CODA provisions of the Plan will
apply for the Plan Year and the provisions relating to the ADP
or ACP test generally will not apply. Contribution provisions
that are selected in addition to the options listed in this
Part C may subject the Plan to ADP, ACP, and top-heavy testing.
A Plan intending to satisfy the Safe Harbor CODA requirements of
Code Sections 401 (k)(12) and 401 (m) (11) generally must
satisfy such requirements, including the notice requirement, for
the entire Plan Year. If a Safe Harbor CODA is eliminated during
a Plan Year, the Plan will be subject to provisions relating to
the ADP and ACP tests, including restrictions on the selection of
testing methods (e.g., current vs. prior year).
B. PARTICIPANTS ENTITLED TO RECEIVE SAFE HARBOR CODA CONTRIBUTIONS
Safe Harbor CODA contributions will be made on behalf of (select
one):
OPTION 1:[ ] Each Eligible Employee who is a non-Highly
Compensated Employee (and, in the case of Safe
Harbor Matching Contributions, makes Elective
Deferrals to the Plan).
OPTION 2:[ ] All Eligible Employees (who, in the case of
Safe Harbor Matching Contributions, make Elective
Deferrals to the Plan).
NOTE: If no option is selected, Option 2 will apply.
2. ADP TEST SAFE HARBOR CONTRIBUTIONS
The Employer will make the following ADP Test Safe Harbor
Contributions for the Plan Year (select one):
OPTION 1:[ ] Basic Matching Contributions.
The Employer will make Matching Contributions to
the Individual Account of each Eligible Employee,
as described in item 1(b) above, equal to:
(i) 100 percent of the amount of the Employee's
Elective Deferrals that do not exceed three
percent of the Employee's Compensation for
the Plan Year, plus
(ii) 50 percent of the amount of the Employee's
Elective Deferrals that exceed three percent
of the Employee's Compensation but do not
exceed five percent of the Employee's
Compensation.
OPTION 2:[ ] Enhanced Matching Contributions.
The Employer will make Matching Contributions to
the Individual Account of each Eligible Employee,
as described in item 1(b) above, in an amount
equal to the sum of:
Elective Deferral Percentage Matching Percentage
------------------------------------------------ --------------------
Base Rate Less than or equal to _______% (not less than 3%) 100%
Tier 2 Greater than ______,but less than or equal to _______% (not greater than 6%) ______%
NOTE: The Enhanced Matching Contribution formula
must be completed so that, at any rate of Elective
Deferrals, the Matching Contribution is at least
equal to the Matching Contribution that would be
received if the Employer were making Basic
Matching Contributions, but the rate of match
cannot increase as Elective Deferrals increase.
(C)2009 Ascensus, Inc., Brainerd, MN
Page 12 of 36
OPTION 3:[ ] Safe Harbor Nonelective Contributions
The Employer will make a Safe Harbor Nonelective
Contribution to the Individual Account of each
Eligible Employee, as described in item 1(b)
above, in an amount equal to _______ (not less
than 3) percent of the Employee's Compensation for
the Plan Year.
NOTE: If no option is selected, Option 1 will apply.
3. RECIPIENT PLAN
The ADP Test Safe Harbor Contributions will be made to (select
one):
OPTION 1:[ ]This Plan.
OPTION 2:[ ]Other plan (specify plan of the Employer)
NOTE: If no option is selected, Option 1 will apply.
4. ACP TEST SAFE HARBOR MATCHING CONTRIBUTIONS
NOTE: No additional contributions are required in order to
satisfy the Safe Harbor CODA requirements. The Employer may,
however, make Matching Contributions in addition to Basic or
Enhanced Matching Contributions. To ensure that the Plan
continues to satisfy the Safe Harbor CODA requirements, only the
following additional Matching Contributions may be made (see the
NOTE below for specific contribution limitations).
For the Plan Year, the Employer will make ACP Test Safe Harbor
Matching Contributions to the Individual Account of each Eligible
Employee, as described in item 1(b) above, in the amount of
(select one):
OPTION 1:[ ] Percentage of Contribution Match.
A Matching Contribution that equals _______
percent of the Employee's Elective Deferrals that
do not exceed percent (not more than six percent)
of the Employee's Compensation for the Plan Year.
OPTION 2:[ ] Two-Tiered Percentage of Contribution Match.
That percentage of each Contributing Participant's
Elective Deferral determined by the Contributing
Participant's rate of Elective Deferral as specified in
the matching schedule below.
Elective Deferral Percentage Matching Percentage
------------------------------------------------------ -------------------
Base Rate Less than or equal to _______% ______%
Tier 2 Greater than ______, but less than or equal to _______% ______%
NOTE: The matching percentage for Tier 2 cannot exceed
the matching percentage for the base rate. No Matching
Contributions will be made on Elective Deferrals that
exceed six percent of Compensation.
OPTION 3:[ ] A discretionary contribution that matches those
Employee's Elective Deferrals that do not exceed a
permissible percentage of the Employee's Compensation
for the Plan Year.
NOTE: The Elective Deferrals that are matched will be determined
by the Employer for the year, but in no event can a Matching
Contribution be made on Elective Deferrals that exceed six
percent of the Employee's Compensation. In addition, the total
additional discretionary Matching Contribution made to any
Employee cannot exceed four percent of the Employee's
Compensation for the Plan Year. For example, the Employer could
not choose a discretionary formula that provided a 25 cent
Matching Contribution for every dollar deferred if the match were
given on Elective Deferrals up to eight percent of Compensation
(this exceeds the six percent limitation on Elective Deferrals
that can be matched). Neither could the Employer provide a
discretionary dollar-for-dollar Matching Contribution on Elective
Deferrals up to six percent of Compensation (this exceeds the four
percent absolute limitation on a discretionary ACP Test Safe
Harbor Matching Contribution). If the Employer wishes to make
Matching Contributions in addition to ACP Test Safe Harbor
Matching Contributions, Section Three, Part B, must be completed.
Such contributions will be subject to ACP testing.
PART D. EMPLOYER PROFIT SHARING CONTRIBUTIONS
1. AUTHORIZATION OF EMPLOYER PROFIT SHARING CONTRIBUTIONS
Will the Employer make Employer Profit Sharing Contributions to
the Plan on behalf of Qualifying Participants (select one)?
OPTION 1:[ ]Yes.
OPTION 2:[X] No.
NOTE: If no option is selected, Option 1 will apply. Complete the
remainder of Part D only if Option 1 is selected.
2. CONTRIBUTION FORMULA (select one)
OPTION 1:[ ] Discretionary Formula. For each Plan Year the
Employer may contribute an amount to be
determined from year to year.
OPTION 2:[ ] Fixed Formula. ________ percent of the Compensation of
all Qualifying Participants under the Plan for
the Plan Year.
OPTION 3:[ ] Fixed Percent of Profits Formula. ________ percent of
the Employer's profits that are in excess of
$____________
OPTION 4:[ ] Government Contract Formula. For each Hour of Service
of covered employment under a government contract, the
Employer shall contribute an amount as described in
Plan Section 3.04(B)(3).
OPTION 5:[ ] Discretionary Formula By Location or Business
Classification. For each Plan Year the Employer
may contribute an amount to be determined from year to
year and that amount may vary for each location or
business classification on a separate and
individual basis.
NOTE: If no option is selected, Option 1 will apply. If Option 4 is
selected,the government contract allocation formula must be selected
in item 3 below.
(C)2009 Ascensus,Inc.,Brainerd, MN
Page 13 of 36
3. ALLOCATION FORMULA
Employer Profit Sharing Contributions will be allocated to the
Individual Accounts of Qualifying Participants as follows (select
one):
OPTION 1:[ ] Pro Rata Formula. In the ratio that each Qualifying
Participant's Compensation for the Plan Year bears to
the total Compensation of all Qualifying
Participants for the Plan Year.
OPTION 2:[ ] Flat Dollar Formula. In the same dollar amount for
each Qualifying Participant.
OPTION 3:[ ] Integrated Formula. Pursuant to the following integrated
allocation formula described in Plan
Section 3.041(B) (2) (select one):
SUBOPTION (A):[ ] Excess Integrated Formula.
SUBOPTION (B):[ ] Base Integrated Formula.
NOTE: If no suboption is selected, Suboption (a) will
apply.
The integration level will be (select one):
SUBOPTION (A):[ ] The Taxable Wage Base.
SUBOPTION (B):[ ] $_______________ (a dollar amount less
than the Taxable Wage Base).
SUBOPTION (C):[ ] ____________ percent (not more than
100 percent) of the Taxable Wage Base.
NOTE: If no suboption is selected, Suboption (a) will
apply.
OPTION 4:[ ] Government Contract Formula. Pursuant to the government
contract contribution formula selected in Part D, item
2, Option 4, above.
OPTION 5:[ ] Uniform Points Formula. Employer Profit Sharing
Contributions shall be allocated to the Individual
Accounts of Qualifying Participants in the ratio that
each Qualifying Participant's points for the Plan Year
bears to the total points of all Qualifying Participants
for the Plan Year.
Each Qualifying Participant's points for the Plan Year
shall be computed by adding the points determined under
(a), (b) and (c) below (specify a number for each
item):
(a) __________ points for each year of the Participant's
age.
(b) __________ points for each of the Participant's
Years of Service (including years before this Plan
or a Prior Plan was established).
(c) __________ points for each $100 of the Participant's
Compensation for the Plan Year.
OPTION 6:[ ] Age Weighted Formula. Employer Profit Sharing
Contributions shall be allocated to the Individual
Accounts of Qualifying Participants in the manner
described below:
STEP 1: Determine each Qualifying Participant's
number of points based upon the
following formula:
Points.01 x Compensation x Allocation Factor
derived from the allocation factor tables set
forth in Section 10 of the Adoption Agreement.
The pre-retirement and post-retirement interest
rate used to calculate the annual Employer
Profit Sharing Contribution shall be
(select one):
SUBOPTION A:[ ] 7.5%
SUBOPTION B:[ ] 8.0%
SUBOPTION C:[ ] 8.5%
NOTE: If no option is selected,
Suboption (c) will apply.
STEP 2: Determine each Qualifying Participant's
allocation through calculation of
the following formula:
Allocation = Points of Oualifying Participant x Employer Profit
--------------------------------
Total Points of all Qualifying Participants Sharing Contribution
STEP 3: Make any reallocations as necessary to satisfy
either the safe harbor formula for plans with a
uniform points allocation or the general test
described in Code Section 401(a)(4) and the
corresponding Treasury Regulations concerning
nondiscrimination in the amount of Employer
Profit Sharing Contributions. Identify whether
the safe harbor or general test will be
satisfied for the selected formula (select
one):
SUBOPTION A:[ ]Safe harbor reallocations may be
made as necessary as described
in Plan Section
3.04(B)(8)(b)(i).
SUBOPTION B:[ ]General test reallocations may
be made as necessary as
described in Plan
Section3.04(B)(8)(b)(ii).
NOTE: If no Option is elected, Suboption (a)
shall be deemed to be selected.
(C)2009.Ascensus,Inc.,Brainerd, MN
Page 14 of 36
OPTION 7: [ ] New Comparability Formula. Employer Profit Sharing Contributions,
if any, will be allocated as described in Plan Section 3.04(B)
(8) pertaining to group allocations (select one):
SUBOPTION (A): [ ] Individual Allocation Groups. Each Qualifying
Participant shall constitute a separate
allocation group.
NOTE: The Employer must provide the Plan Administrator or
Trustee, if applicable, written instructions describing the
allocation of the Employer Profit Sharing Contribution. The
instructions must be provided no later than the Employer's tax
return due date, including extensions, of the year for which the
allocation is made.
SUBOPTION (B): [ ] Pre-Determined Allocation Groups. Qualifying
Participants will be divided into the
following groups (one or more) with the same
allocation ratio. (Specify the groups by
category of Qualifying Participant, including
both Highly Compensated Employees and non-
Highly Compensated Employees):
Allocation Group 1:
---------------------------
Allocation Group 2: __________________________
______________________________________________
Allocation Group 3: __________________________
______________________________________________
Allocation Group 4: __________________________
______________________________________________
Allocation Group 5: __________________________
______________________________________________
Allocation Group 6: __________________________
______________________________________________
NOTE: If more than six allocation groups are needed, complete
Attachment C, New Comparability Allocation Group(s). The specific
categories of Quaflfying Participants should be such that resulting
allocations are provided in a definite predetermined formula that
complies with Treasury Regulation 1.401-1 (b) (1) (ii). The number
of allocation rates must not exceed the maximum allowable number of
allocation rates as described in Plan Section 3.04 (B) (8). Highly
Compensated Employees may each be in separate allocation groups.
Non-Highly Compensated Employees must be grouped using allocation
rates specified in Plan Section 3. 04(B)(8). The grouping of non-
Highly Compensated Employees must be done in a reasonable manner
and should reflect a reasonable classification in accordance with
Treasury Regulation 1.410(b)- 4(b). In the case of self-employed
individuals (i.e., sole proprietorships or partnerships), the
requirements of Treasury Regulation 1.401(k)-1(a)(6) continue to
apply, and the allocation method should not be such that a cash or
deferred election is createdfor a Self Employed Individual as a
result of application of the allocation method.)
INTEREST RATE ASSUMPTION AND MORTALITY TABLE
The following assumptions will be used to calculate the equivalent
benefit accrual rate:
1. Interest Rate. The pre-retirement and post-retirement interest
rate assumption shall be (select one)
OPTION 1: [ ] 7.5%
OPTION 2: [ ] 8.0%
OPTION 3: [ ] 8.5%
NOTE: If no option is selected, Option 3 will be deemed to be
selected.
2. Mortality Table. The mortality table shall be (select one)
OPTION 1: [ ] UP-1984 Mortality Table
OPTION 2: [ ] 1983 Group Annuity Mortality Table (1983 GAM)
OPTION 3: [ ] 1983 Individual Annuity Mortality Table (1983 IAM)
OPTION 4: [ ] 1971 Group Annuity Mortality Table (1971 GAM)
OPTION 5: [ ] 1971 Individual Annuity Mortality Table (1971 IAM)
NOTE: If no option is selected, Option 1 will be deemed to be
selected.
NEW COMPARABILITY GATEWAY
For purpose of satisfying the new comparability gateway the Plan
shall use the following method (select one):
OPTION 1: [ ] The Plan will provide benefits that satisfy the
broadly available basis requirements described in
Plan Section 3.04(B)(9)(a).
OPTION 2: [ ] The Plan will satisfy the minimum allocation method
identified below (select one):
SUBOPTION A: [ ] Provide each non-Highly Compensated
Employee with a minimum allocation of
at least 5% of the non-Highly
Compensated Employee's Compensation
(if the definition of Compensation is
not within the meaning of Code
Section 41 5(c)(3), a definition
which satisfies Code Section 415(c)
(3) will apply).
SUBOPTION B: [ ] Provide each non-Highly Compensated
Employee with a minimum allocation so
that each non-Highly Compensated
Employee has an allocation rate of
at least one-third of the allocation
rate of the Highly Compensated
Employee with the highest allocation
rate.
(c) 2009 Aacensus, Inc., Brainerd, MN
Page 15 of 36
SUBOPTION C: [ ] Provide each non-Highly Compensated
Employee with a minimum allocation
equal to the lesser of the amount
described in Suboption A or Suboption
B above.
SUBOPTION D: [ ] Reallocate contributions allocated
to Highly Compensated Employees to
non-Highly Compensated Employees so
that the allocation to each non-
Highly Compensated Employee equals
at least one-third of the allocation
rate of the Highest Compensated
Employee with the highest allocation
rate in the manner as described in
Plan Section 3.04(B)(10).
SUBOPTION E: [ ] Reallocate contributions allocated
to Highly Compensated Employees to
non-Highly Compensated Employees so
that the allocation to each non-
Highly Compensated Employee equals
at least 5% of the non-Highly
Compensated Employee's Compensation
(if the definition of Compensation
is not within the meaning of Code
Section 415(c)(3), a definition
which satisfies Code Section 415(c)
(3) will apply) in the manner as
described in Plan Section 3.04(B)
(11).
SUBOPTION F: [ ] Reallocate preliminary contributions
or hypothetical contributions paid to
to Highly Compensated Employees to
non-Highly Compensated Employees so
that the allocation to each non-
Highly Compensated Employee equals
the lesser of the amount described
in Suboption D or Suboption E above.
NOTE: If Option 2 is selected and no suboption is
selected, Suboption F will apply, if necessary.
NOTE: If no option is selected, Option 1 will apply unless the
government contract contribution formula is selected in item 2 above,
in which case Option 4 will apply. Option 4 cannot be selected unless
the government contract contribution formula in item 2 above applies.
In the case of Self-Employed Individuals, the requirements of Treasury
Regulation Section 1.401(k)-1(A)(6) continue to apply, and a new
comparability or age-weighted allocation method should not be such that
a cash or deferred election is created for a Self- Employed Individual
as a result of the allocation method.
4. QUALIFYING PARTICIPANTS
A Participant will be a Qualifying Participant, and thus entitled to
share in the Employer Profit Sharing Contribution for any Plan Year,
only if the Participant has satisfied all of the eligibility
requirements described in Section Two of this Adoption Agreement on at
least one day of such Plan Year and satisfies the following additional
condition(s) (select one):
OPTION 1: [ ] Hours of Service Requirement. The Participant completes at
least ----------- (not more than 1,000) Hours of Service
during the Plan Year. However, this condition will be
waived for the following reason(s) (select all that
apply):
[ ] The Participant's Death.
[ ] The Participant's Termination of Employment after
having incurred a Disability.
[ ] The Participant's Termination of Employment after
having reached Normal Retirement Age.
[ ] The Participant's Termination of Employment after
having reached Early Retirement Age.
[ ] The Participant is employed on the last day of the
Plan Year.
[ ] Last Day Requirement. The Participant is an Employee of
the Employer on the last day of the Plan Year. However,
this condition will be waived for the following reason(s)
(select all that apply):
[ ] The Participant's Death.
[ ] The Participant's Termination of Employment after
having incurred a Disability.
[ ] The Participant's Termination of Employment after
having reached Normal Retirement Age.
[ ] The Participant's Termination of Employment after
having reached Early Retirement Age.
[ ] The Participant's Termination of Employment after
having completed at least ------- Hours of Service
during the Plan Year.
OPTION 2: [ ] No additional conditions apply.
NOTE: If no option is selected, Option 2 will apply.
5. CONTRIBUTIONS TO NON-HIGHLY COMPENSATED DISABLED PARTICIPANTS
Will a non-Highly Compensated Employee Participant who has incurred
a Disability be entitled to an Employer Profit Sharing
Contribution pursuant to Plan Section 3.04(B)(1) (select one)?
OPTION 1: [ ] Yes.
OPTION 2: [ ] No.
NOTE: If no option is selected Option 2 will apply.
PART E. QUALIFIED NONELECTIVE CONTRIBUTIONS
1. QUALIFIED NONELECTIVE CONTRIBUTION FORMULA
For each Plan Year, the Employer may contribute an amount to be
determined from year to year.
(C) 2009 Ascensus, Inc, Brainerd, MN
Page 16 of 36
2. ALLOCATION OF QUALIFIED NONELECTIVE CONTRIBUTIONS
Allocation of Qualified Nonelective Contributions to Participants
entitled thereto shall be made (select one):
OPTION 1:[X] Targeted QNEC. In an amount, determined pursuant
to Plan Section 3.05, required to satisfy either the
Actual Deferral Percentage test described in Plan
Section 3.13, the Actual Contribution Percentage test
described in Plan Section 3.14, or both.
OPTION 2:[ ] Pro Rata - Non-Highly Compensated Employee
Participants. In the ratio that each non-Highly
Compensated Employee Participant's Compensation for the
applicable Plan Year bears to the total Compensation of
all non-Highly Compensated Employee Participants for
such Plan Year.
OPTION 3:[ ] Pro Rata - All Participants. In the ratio that
each Participant's Compensation for the applicable Plan
Year bears to the total Compensation of all
Participants for such Plan Year.
OPTION 4:[ ] Limited Pro Rata - Non-Highly Compensated
Employee Participants. In the ratio that each
non-Highly Compensated Employee Participant's
Compensation not in excess of $------- for the
applicable Plan Year bears to the total Compensation of
all non-Highly Compensated Employee Participants
entitled to an allocation not in excess of
$--------for such Plan Year.
OPTION 5:[ ] Government Contract Formula. In an amount based
on each Hour of Service of covered employment under a
government contract, as described in Plan Section
3.05(B).
NOTE: If no option is selected Option I will apply.
3. ADDITIONAL CONDITIONS FOR RECEIVING QUALIFIED NONELECTIVE
CONTRIBUTIONS
A Participant will be a Qualifying Participant, and thus entitled to
share in Qualified Nonelective Contribution for any Plan Year, only
if the Participant has satisfied all of the eligibility requirements
of Section Two of this Adoption Agreement on at least one day of
such Plan Year and satisfies the following additional condition(s)
(select one):
OPTION 1:[ ] Hours of Service Requirement. The Participant
completes at least -------(not more than 1,000) Hours
of Service during the Plan Year. However, this
condition will be waived for the following reason(s)
(select all that apply):
[ ] The Participant's Death.
[ ] The Participant's Termination of Employment
after having incurred a Disability,
[ ] The Participant's Termination of Employment after
having reached Normal Retirement Age.
[ ] The Participant's Termination of Employment after
having reached Early Retirement Age.
[ ] The Participant is employed on the last day of
the Plan Year.
[X] Last Day Requirement. The Participant is an Employee of
the Employer on the last day of the Plan Year. However,
this condition will be waived for the following
reason(s) (select all that apply):
[ ] The Participant's Death.
[ ] The Participant's Termination of Employment after
having incurred a Disability.
[ ] The Participant's Termination of Employment after
having reached Normal Retirement Age.
[ ] The Participant's Termination of Employment after
having reached Early Retirement Age.
[ ] The Participant's Termination of Employment after
having completed at least------- Hours of Service
during the Plan Year.
OPTION 2: [ ]No additional conditions apply.
NOTE: If no option is selected, Option 2 will apply.
PART F. QUALIFIED MATCHING CONTRIBUTIONS
1. QUALIFIED MATCHING CONTRIBUTION FORMULA
A. QUALIFIED MATCHING CONTRIBUTIONS
Qualified Matching Contributions, if made to the Plan, will be
made with respect to (select all that apply):
[X] Pre-Tax Elective Deferrals.
[ ]Roth Elective Deferrals.
[ ]Nondeductible Employee Contributions.
NOTE: If no option is selected, Qualified Matching Contributions
will be made with respect to Pre-Tax Elective Deferrals and
Roth Elective Deferrals.
B. QUALIFIED MATCHING CONTRIBUTION FORMULA
If the Employer will make Qualified Matching Contributions, then
the amount of such Qualified Matching Contributions made on
behalf of a Qualifying Contributing Participant each Plan Year
shall be equal to (select one):
OPTION 1:[ ] Percentage of Contribution Match.
That percentage of each Contributing Participant's
Elective Deferral (and/or Nondeductible Employee
Contribution, if applicable) determined by the
Contributing Participant's rate of Elective
Deferrals (and/or Nondeductible Employee
Contribution, if applicable) as specified in the
matching schedule below.
Elective Deferral Percentage Matching Percentage
---------------------------- -------------------
Less than or equal to______% _______%
Notwithstanding the Qualified Matching
Contribution formula specified above, no Qualified
Matching Contributions in excess of $---------or
---------percent of a Contributing Participant's
Compensation will be made with respect to any
Contributing Participant for any Plan Year.
(Complete the applicable blank(s), if any)
(c)2009 Ascensus, Inc., Brainerd, MN
Page 17 of 36
OPTION 2:[ ] Two-Tiered Percentage of Contribution Match.
That percentage of each Contributing Participant's
Elective Deferral (and/or Nondeductible Employee
Contribution, if applicable) determined by the
Contributing Participant's rate of Elective
Deferrals (and/or Nondeductible Employee
Contribution, if applicable) as specified in the
matching schedule below.
Elective Deferral Percentage Matching Percentage
Base Rate Less than or equal to -------% -------%
Tier 2 Greater than -------,but less than or equal to -------% ------%
Notwithstanding the Qualified Matching
Contribution formula specified above, no Qualified
Matching Contributions in excess of $----------- or
-------- percent of a Contributing Participant's
Compensation will be made with respect to any
Contributing Participant for any Plan Year.
(Complete the applicable blank(s), if any)
OPTION 3:[X] Such amount, if any, as determined by the
Employer in its sole discretion, equal to that
percentage of the Elective Deferrals (and/or
Nondeductible Employee Contribution, if
applicable) of each Contributing Participant
entitled thereto that would be sufficient to cause
the Plan to satisfy either the Actual Deferral
Percentage test (described in Plan Section 3.13)
or the Actual Contribution Percentage test
(described in Plan Section 3.14) for the Plan
Year, or both.
Notwithstanding the Qualified Matching
Contribution formula specified above, no Qualified
Matching Contributions in excess of $-----------
or -------- percent of a Contributing Participant's
Compensation will be made with respect to any
Contributing Participant for any Plan Year.
(Complete the applicable blank(s), if any)
OPTION 4:[ ] Other formula (Specify' an amount equal to
a percentage of the Elective Deferrals (and/or
Nondeductible Employee Contribution, if
applicable) of each Contributing Participant
entitled thereto)
NOTE: If no option is selected, Option 3 will apply. Matching
Contributions in excess of 100 percent of a Contributing
Participant's Elective Deferrals (and/or Nondeductible
Employee Contribution, if applicable) will be subject to the
additional ACP testing limits under Plan Section 3.06 and
Treasury Regulation Section 1.401(m)-2(a)(5).
2. PARTICIPANTS ENTITLED TO QUALIFIED MATCHING CONTRIBUTIONS
A. CONTRIBUTING PARTICIPANTS ELIGIBLE FOR QUALIFIED MATCHING
CONTRIBUTIONS
Qualified Matching Contributions, if made to the Plan, will be
made on behalf of (select one):
OPTION 1:[X] Each Contributing Participant who makes
Elective Deferrals (and Nondeductible Employee
Contributions, if applicable) and who is a
non-Highly Compensated Employee.
OPTION 2:[ ] All Contributing Participants who make
Elective Deferrals (and Nondeductible Employee
Contributions, if applicable).
NOTE: If no option is selected, Option 1 will apply.
B. ADDITIONAL CONDITIONS FOR RECEIVING QUALIFIED MATCHING
CONTRIBUTIONS
A Contributing Participant will be a Qualifying Contributing
Participant for purposes of Qualified Matching
Contributions, and thus entitled to share in Qualified
Matching Contributions for any Plan Year, only if the
Participant has satisfied all of the requirements of Section
Two on at least one day of such Plan Year and satisfies the
following additional condition(s) (select one):
OPTION 1: [ ] Hours of Service Requirement. The
Participant completes at least --------(not more
than 1,000) Hours of Service during the Plan Year.
However, this condition will be waived for the
following reason(s) (select all that apply):
[ ] The Participant's Death.
[ ] The Participant's Termination of Employment
after having incurred a Disability.
[ ] The Participant's Termination of Employment
after having reached Normal Retirement Age.
[ ] The Participant's Termination of Employment
after having reached Early Retirement Age.
[ ] The Participant is employed on the last day
of the Plan Year.
[ ] Last Day Requirement. The Participant is an
Employee of the Employer on the last day of the
Plan Year. However, this condition will be waived
for the following reason(s) (select all that
apply):
[ ] The Participant's Death.
[ ] The Participant's Termination of Employment
after having incurred a Disability.
[ ] The Participant's Termination of Employment
after having reached Normal Retirement Age.
[ ] The Participant's Termination of Employment
after having reached Early Retirement Age.
[ ] The Participant's Termination of Employment
after having completed at least ------- Hours
of Service during the Plan Year.
OPTION 2:[X] No additional conditions.
NOTE: If no option is selected, Option 2 will apply.
(C)2009 Ascensus, Inc., Brainerd, MN
Page 18 of 36
PART G. OTHER CONTRIBUTIONS
1. ROLLOVER CONTRIBUTIONS
May an Employee make rollover contributions to the Plan pursuant
to Plan Section 3.07 (select one)?
OPTION 1: [ ]Yes.
OPTION 2: [ ]Yes, unless such Employee is part of any excluded class
of Employees.
OPTION 3: [X]Yes, but only after becoming a Participant.
OPTION 4: [ ]No.
NOTE: If no option is selected, Option 2 will apply.
A. DIRECT ROLLOVERS
I. SOURCES OF ELIGIBLE ROLLOVER DISTRIBUTIONS
The Plan will accept Direct Rollovers of Eligible Rollover
Distributions from (select "Yes" or "No" to each of the
following items by selecting the appropriate box,):
1. A qualified plan described in Code Section 401(a) or
403(a). [X] Yes [ ] No
2. An annuity contract described in Code Section 403(b).
[X]Yes [ ] No
3. An eligible plan under Code Section 457(b) that is
maintained by a state, political subdivision of a state,
or any agency or instrumentality of a state or political
subdivision of a state. [X]Yes [ ]No
NOTE: If a box is not selected for an item, "Yes" will apply
for such item.
II. ROLLOVER EXCLUSIONS
Will the Plan accept the following as Direct Rollovers
(Select "Yes" Or "No" To Each Of The Following Items By
Selecting The Appropriate Box)?
1. Nondeductible Employee Contributions. [ ]Yes [X]No
2. Roth Elective Deferrals. [ ]Yes [X]No
NOTE: Item 2 may be selected only if the Plan permits Roth
Elective Deferrals under Part A of this Section. If a
box is not selected for an item, "No" will apply for
such item.
B. IN DIRECT ROLLOVERS
I. SOURCES OF ELIGIBLE ROLLOVER DISTRIBUTIONS
The Plan will accept Indirect Rollovers of Eligible
Rollover Distributions from (select "Yes" or "No" to
each of the following items by selecting the
appropriate box):
1. A qualified plan described in Code Section 401(a) or
403(a). [X]Yes [ ] No
2. An annuity contract described in Code Section 403(b).
[X]Yes [ ] No
3. An eligible plan under Code Section 457(b) that is
maintained by a state, political subdivision of a
state, or any agency or instrumentality of a state or
political subdivision of a state. [X]Yes [ ]No
NOTE: If a box is not selected for an item, "Yes" will apply
for such item.
II. ROLLOVER EXCLUSIONS
Will the Plan accept Indirect Rollover contributions of
Roth Elective Deferrals (select one)?
OPTION 1: [ ] Yes.
OPTION 2: [X]No.
NOTE: Indirect Rollover contributions may only consist of
earnings attributable to Roth Elective Deferrals. If no
option is selected, Option 2 will apply.
C. ROLLOVER CONTRIBUTIONS FROM IRAS
Will the Plan accept rollover contributions of the portion of a
distribution from an individual retirement account or annuity
described in Code Section 408(a) or 408(b) that is eligible to be
rolled over and would otherwise be includible in gross income
(select one)?
OPTION 1:[X] Yes.
OPTION 2: [ ]No.
NOTE: If no option is selected, Option 1 will apply.
(C)2009 Ascensus, Inc., Brainerd, MN
Page 19 of 36
2. TRANSFER CONTRIBUTIONS
May an Employee make transfer contributions to the Plan pursuant to
Plan Section 3.08 (select one)?
OPTION 1: [ ] Yes.
OPTION 2: [ ] Yes, unless such Employee is part of any
excluded class of Employees.
OPTION 3: [X] Yes, but only after becoming a Participant.
OPTION 4: [ ] Yes, but only if the assets are exempt from the
Qualified Joint and Survivor Annuity rules as described
in Plan Section 5.10 (without regard to Plan Section
5.10(E) thereof).
OPTION 5: [ ] No.
NOTE: If no option is selected, Option 2 will apply.
3. NONDEDUCTIBLE EMPLOYEE CONTRIBUTIONS
May a Participant make Nondeductible Employee Contributions pursuant
to Plan Section 3.10 (select one)?
OPTION 1: [ ] Yes. If "Yes," check here if such contributions
will be mandatory. [ ]
OPTION 2: [X] No.
NOTE: If no option is selected, Option 2 will apply.
Nondeductible Employee Contributions may commence on (must be on or
after the Effective Date)-----------------------------------------.
4. TOP-HEAVY CONTRIBUTIONS
A. MINIMUM ALLOCATION OR BENEFIT
For any Plan Year with respect to which this Plan is a Top-Heavy
Plan, any minimum allocation required pursuant to Plan Section
3.04(E) shall be made (select one):
OPTION 1: [X] To this Plan. (If the allocation formula
selected in Part D above does not satisfy the
top-heavy minimum allocation by design, select
either Suboption 1 or Suboption 2 below.
The allocation formula set forth in Part D above
shall be modified to provide for the minimum
allocation for non- Key Employees as follows:
SUBOPTION 1: [X]
STEP 1: The annual Employer
Profit Sharing
Contribution shall be
initially allocated to
the accounts of all
Employees based upon the
formula set forth in Part
D above. If any non-Key
Employee does not receive
a top-heavy minimum
allocation under the
formula, the Employer
Profit Sharing
Contribution shall
instead be allocated
first to the non-Key
Employees having less
than the minimum
top-heavy allocation in
an amount equal to the
initial allocation plus
any additional amount
necessary to provide the
top-heavy minimum
allocation.
STEP 2: The remaining Employer
Profit Sharing
Contributions shall then
be allocated based upon
the formula set forth in
Part D, provided, however,
those non-Key Employees
receiving a top-heavy
minimum allocation under
Step 1 of this suboption
(a) shall not be entitled
to receive any additional
allocation. Should any
remaining non-Key Employee
fail to receive a
top-heavy minimum
allocation under this Step
2, the calculation set
forth in Step 1 shall be
repeated until all non-Key
Employees have received a
top-heavy minimum
allocation and the
remaining Employer Profit
Sharing Contribution has
been allocated.
In the event the annual
Employer Profit Sharing
Contribution does not
equal or exceed three
percent (3%) of the total
Compensation of all
eligible non-Key
Employees, eligible Key
Employees shall not share
in the allocation and such
three percent (3%)
allocation on behalf of
non-Key Employees shall be
reduced pro rata based
upon the ratio each
eligible non-Key
Employee's Compensation
bears to the total of all
such non-Key Employee's
Compensation.
SUBOPTION 2: [ ] An allocation of three
percent (3%) of Compensation will
first be made to all Employees
eligible to participate in the
Plan; thereafter the remaining
Employer Profit Sharing
Contribution will be allocated to
the accounts of all Employees as
set forth in Part D above. In the
event the annual Employer Profit
Sharing Contribution does not
equal or exceed three percent (3%)
of the total Compensation of all
eligible non-Key Employees, such
three percent (3%) allocation
shall be reduced pro rata based
upon the ratio each eligible
non-Key Employee's Compensation
bears to the total of all such
non-Key Employees' Compensation.
NOTE: If no suboption is selected, Suboption 1 will
apply.
OPTION 2: [ ] To the following plan maintained by the Employer:
(Describe below the extent, if any, to which the
top-heavy minimum benefit requirement of Code
Section 416(c) and Plan Section 3.04(E) shall be
met in another plan. This should include the name
of the other plan, the minimum benefit that will
be provided under such other plan, and the
Employees who will receive the minimum benefit
under such other plan.)
(C) 2009 Ascensus, Inc., Brainerd, MN
Page 20 of 36
OPTION 3: [ ] In accordance with the following method: (Provide
language describing the method that will be used to satisfy
Code Section 416. Such method must preclude Employer
discretion.)-----------------------------------------------
-----------------------------------------------------------
NOTE: If no option is selected, Option 1 will apply.
B. PARTICIPANTS ENTITLED TO RECEIVE MINIMUM ALLOCATION
If a minimum allocation required pursuant to Plan Section 3.04(E) is
not satisfied with either Employer Profit Sharing Contributions or
Matching Contributions, the remaining minimum allocation required
pursuant to Plan Section 3.04(E) shall be allocated to the Individual
Accounts of (select one):
OPTION 1: [X] Participants who are not Key Employees.
OPTION 2: [ ] All Participants.
NOTE: If no option is selected, Option 1 will apply.
C. TOP-HEAVY RATIO
For purposes of computing the top-heavy ratio as described in Plan
Section 7.19(B), the Present Value of benefits under a defined benefit
plan will be discounted only for mortality and interest based on the
following (select one):
OPTION 1: [X] Not applicable because the Employer has not
maintained a defined benefit plan.
OPTION 2: [ ] The interest rate and mortality table specified
for this purpose in the defined benefit plan.
OPTION 3: [ ] Interest rate of ______ percent and the following
mortality table (specify)________________________ .
PART H. ADP TESTING METHOD
The testing method used for purposes of the ADP test under this Plan
shall be (select one):
OPTION 1: [X] Prior Year Testing Method.
INITIAL PLAN YEAR ADP
If this is not a successor Plan, then for the first Plan
Year that this Plan permits any Participant to make
Elective Deferrals, the ADP for Participants who are
non-Highly Compensated Employees shall be (select one):
SUBOPTION (A): [ ] 3%.
SUBOPTION (B): [ ] Such first Plan Year's ADP.
NOTE: If no suboption is selected, Suboption (a) will
apply.
OPTION 2: [ ] Current Year Testing Method.
NOTE: If no option is selected, Option 1 will apply unless the Adopting
Employer elects to apply the Safe Harbor CODA provisions of Section
Three, Part C above, in which case Option 2 will apply. If the
Adopting Employer elects to apply the Safe Harbor CODA provisions of
Section Three, Part C above, Option 2 must be selected. If Option 2 is
selected, the current year testing method must continue to be used
unless 1.) the Plan has been using the current year testing method for
the preceding five Plan Years, or, if fewer, the number of Plan Years
the Plan has been in existence, or 2) the Plan otherwise meets one of
the conditions specified in the Treasury Regulations (or additional
guidance issued by the Internal Revenue Service (IRS)) for changing
from the current year testing method. The current year testing method
may be elected for the ADP test even if prior year testing is elected
for the ACP test. However, if different testing methods for the ADP and
ACP tests are selected, the Plan cannot use recharacterization to
correct Excess Contributions, take Elective Deferrals into
consideration to satisfy the ACP test, or use Qualified Matching
Contributions to satisfy the ADP test.
PART I. ACP TESTING METHOD
The testing method used for purposes of the ACP test under this Plan
shall be (select one):
OPTION 1: [X] Prior Year Testing Method.
INITIAL PLAN YEAR ACP
If this is not a successor Plan, then for the first Plan
Year that this Plan permits any Participant to make
Nondeductible Employee Contributions, provides for
Matching Contributions or both, the ACP for Participants
who are non-Highly Compensated Employees shall be (select
one):
SUBOPTION (A): [ ] 3%.
SUBOPTION (B): [ ] Such first Plan Year's ACP.
NOTE: If no suboption is selected, Suboption (a) will
apply.
OPTION 2: [ ] Current Year Testing Method.
NOTE: If no option is selected, Option 1 will apply unless the
Adopting Employer elects to apply the Safe Harbor CODA provisions of
Section Three, Part C above, in which case Option 2 will apply. If the
Adopting Employer elects to apply the Safe Harbor CODA provisions of
Section Three, Part C above, Option 2 must be selected. If Option 2 is
selected, the current year testing method must continue to be used
unless 1) the Plan has been using the current year testing method for
the preceding five Plan Years, or, if fewer, the number of Plan Years
the Plan has been in existence, or 2) the Plan otherwise meets one of
the conditions specified in the Treasury Regulations (or additional
guidance issued by the Internal Revenue Service (IRS)) for changing
from the current year testing method. The current year testing method
may be elected for the ACP test even if prior year testing is elected
for the ADP test However, if different testing methods for the ADP and
ACP tests are selected, the Plan cannot use recharacterization to
correct Excess Contributions, take Elective Deferrals into
consideration to satisfy if the ACP test, or use Qualified Matching
Contributions to satisfy the ADP test.
(C)2009 Ascensus, Inc., Brainerd, MN
Page 21 of 36
SECTION FOUR: VESTING AND FORFEITURES
Complete Parts A through I
PART A. VESTING SCHEDULE FOR MATCHING CONTRIBUTIONS
A Participant will become Vested in the portion of their Individual
Account derived from Matching Contributions (including ACP Test Safe
Harbor Matching Contributions), if applicable, made pursuant to Section
Three of the Adoption Agreement as follows.
YEARS OF
VESTING
SERVICE VESTED PERCENTAGE
-------------------------------------------------------------------------------------------------------------------------
Matching Option 1[X] Option 2 [ ] Option 3 [ ] Option 4 [ ] (Complete if chosen) Option 5 [ ] (Complete if chosen)
-------------------------------------------------------------------------------------------------------------------------
Less than One 100% 0% 0% ______ % ______ %
1 100% 0% 0% ______ % ______ %
2 100% 0% 20% ______ % (not less than 20%) ______ %
3 100% 100% 40% ______ % (not less than 40%) 100%
4 100% 100% 60% ______ % (not less than 60%) 100%
5 100% 100% 80% ______ % (not less than 80%) 100%
6 100% 100% 100% 100% 100%
NOTE: If no option is selected as of the first date on which such
contributions may be made to the Plan, Option 1 will apply. A
Participant with accrued benefits derived from Matching Contributions
who has not completed at least one Hour of Service under the Plan in a
Plan Year beginning after December 31, 2001, will be subject to the
vesting schedule in effect after January 1, 2002, unless otherwise
elected by the Employer in an amendment adopting provisions of the
Economic Growth and Tax Relief Reconciliation Act of 200l (EGTRRA).
Please list the pre-EGTRR A vesting schedules, If applicable, on
Attachment A, Protected Benefits and Prior Plan Provisions.
PART B. VESTING SCHEDULE FOR EMPLOYER PROFIT SHARING CONTRIBUTIONS
A Participant will become Vested in the portion of their Individual
Account derived from Employer Profit Sharing Contributions, if
applicable, made pursuant to Section Three of the Adoption Agreement as
follows.
YEARS OF
VESTING
SERVICE VESTED PERCENTAGE
-------------------------------------------------------------------------------------------------------------------------
Profit Sharing Option 1[X] Option 2 [ ] Option 3 [ ] Option 4 [ ] (Complete if chosen) Option 5 [ ] (Complete if chosen)
-------------------------------------------------------------------------------------------------------------------------
Less than One 100% 0% 0% ______ % ______ %
1 100% 0% 0% ______ % ______ %
2 100% 0% 20% ______ % (not less than 20%) ______ %
3 100% 100% 40% ______ % (not less than 40%) 100%
4 100% 100% 60% ______ % (not less than 60%) 100%
5 100% 100% 80% ______ % (not less than 80%) 100%
6 100% 100% 100% 100% 100%
NOTE: If no option is selected as of the first date on which such
contributions may be made to the Plan, Option 1 will apply.
PART C. MEASURING PERIOD FOR VESTING
Years of Vesting Service will be measured over the following
12-consecutive month period:
OPTION 1: [X] The Plan Year.
OPTION 2: [ ] The 12-consecutive month period commencing with
the Employee's Employment Commencement Date and each
successive 12-month period commencing on the
anniversaries of the Employee's Employment Commencement
Date.
OPTION 3: [ ] Other (specify)_________________________________________ .
NOTE: If no option is selected, Option 1 will apply.
PART D. YEAR OF VESTING SERVICE
1. _________ Hours of Service (no more than 1,000) shall be
required to constitute a Year of Vesting Service.
2. ____________ Hours of Service (no more than 500 but less
than the number specified in Part D, item 1, above) must
be exceeded to avoid a Break in Vesting Service.
NOTE: If no hours are specified, 1,000 and 500 will apply for items 1
and 2, respectively.
PART E. EXCLUSION OF CERTAIN YEARS OF VESTING SERVICE
All of an Employee's Years of Vesting Service with the Employer are
counted to determine the Vested percentage in the Participant's
Individual Account except (select all that apply):
[ ] Years of Vesting Service before the Employee reaches
age 18.
[ ] Years of Vesting Service before the Employer
maintained this Plan or a predecessor plan.
[ ] Years of Vesting Service during a period for which the
Employee made no mandatory Nondeductible Employee
Contributions.
(C) 2009 Ascensus, Inc., Brainerd, MN
Page 22 of 36
PART F. FULLY VESTED UNDER CERTAIN CIRCUMSTANCES
Will an Employee be fully Vested under the following circumstances
(select "Yes" or "No" to each of the following items by selecting the
appropriate box)?
1. The Employee dies. [ ] Yes [ ] No
2. The Employee incurs a Disability. [ ] Yes [ ] No
3. The Employee satisfies the conditions
for Early Retirement Age ('if applicable,). [ ] Yes [ ] No
NOTE: if a box is not selected for an item, "Yes" will apply for that
item.
PART G. Allocation of Forfeitures of Matching Contributions
Forfeitures of Matching Contributions will be (select one):
OPTION 1: [ ] Allocated to the Individual Accounts of the
Participants specified below in the ratio that each
Participant's Compensation for the Plan Year bears to the
total Compensation of all Participants for such Plan
Year.
The Participants entitled to receive allocations of such
Forfeitures will be (select one):
SUBOPTION (A): [ ] Qualifying Contributing Participants.
SUBOPTION (B): [ ] Qualifying Participants.
SUBOPTION (C): [ ] All Participants.
NOTE: If no suboption is selected, Suboption (a) will
apply.
OPTION 2: [X] Applied to reduce Employer Contributions.
NOTE: if no option is selected, Option 2 will apply. Pursuant to Plan
Section 3.04(C) and notwithstanding the election mode above, the
Employer may first apply Forfeitures to the payment of the Plan's
administrative expenses in accordance with Plan Section 7.04 and/or the
restoration of Participant's individual Accounts pursuant to Plan
Section 4.01 (C)(3).
PART H. ALLOCATION OF FORFEITURES OF EXCESS AGGREGATE CONTRIBUTIONS
Forfeitures of Excess Aggregate Contributions will be (select one):
OPTION 1: [ ] Allocated to the Individual Accounts of eac Qualifying
Contributing Participant's Matching Contribution account
in the ratio that each Qualifying Contributing
Participant's Compensation for the Plan Year bears to the
total Compensation of all Qualifying Contributing
Participants who are non-Highly Compensated Employees for
such Plan Year.
OPTION 2: [X] Applied to reduce Employer Contributions.
NOTE: if no option is selected, Option 2 will apply. Pursuant to Plan
Section 3.04(C) and notwithstanding the election made above, the
Employer may first apply Forfeitures to the payment of the Plan's
administrative expenses in accordance with Plan Section 7.04 and/or the
restoration of Participant's Individual Accounts pursuant to Plan
Section 4.01 (C)(3).
PART I. ALLOCATION OF FORFEITURES OF EMPLOYER PROFIT SHARING CONTRIBUTIONS
Forfeitures of Employer Profit Sharing Contributions will be (select
one):
OPTION 1: [ ] Allocated to the Individual Accounts of the Participants
specified below in the manner described in Plan Section
3.04(B) (for Employer Profit Sharing Contributions).
The Participants entitled to receive allocations of such
Forfeitures will be (select one):
SUBOPTION (A): [ ] Qualifying Participants.
SUBOPTION (B): [ ] All Participants.
NOTE: if no suboption is selected, Suboption (a) will
apply.
OPTION 2: [ ] Applied to reduce Employer Contributions.
NOTE: If no option is selected, Option 2 will apply. Pursuant to Plan
Section 3.04(C) and notwithstanding the election made above, the
Employer may first apply Forfeitures to the pursuant of the Plan's
administrative expenses in accordance with Plan Section 7.04 and/or the
restoration of Participant's Individual Accounts pursuant to Plan
Section 4. 01(C)(3)
(C)2009 Ascensus, Inc., Brainerd, MN
Page 23 of 36
SECTION FIVE: DISTRIBUTIONS AND LOANS
Complete Parts A through F
PART A. ELIGIBILITY FOR DISTRIBUTIONS (Answer each of the following items.)
1. DISTRIBUTIONS UPON TERMINATION OF EMPLOYMENT
A. INDIVIDUAL ACCOUNT BALANCES LESS THAN OR EQUAL TO THE CASHOUT
LEVEL
CASHOUT LEVEL FOR TERMINATED PARTICIPANTS
For purposes of applying the cashout rules in Plan Section
4.01(C), the cashout level will be (select one):
OPTION 1: [ ] $5,000.
OPTION 2: [X] $1,000.
OPTION 3: [ ] $200.
OPTION 4: [ ] $_______ (specify an amount less than $1,000).
OPTION 5: [ ] Not Applicable. The cashout distribution
provisions in Plan Section 4.0l(C)(1)
will not apply.
NOTE: If no option is selected, Option 2 will apply. A cashout
level exceeding $1,000 will subject the Plan to the automatic
rollover requirements of Code Section 401 (a)(31) (B) as
described in Plan Section 5.01(B). if Option 5 is selected you
may skip item (ii) below because the value of the Vested
portion of the Participant's individual Account must remain in
the Plan until the Participant is entitled to, and requests (if
required), a distribution. The value of a Participant's Vested
Individual Account for purposes of determining the cashout
level shall be determined by including rollover contributions.
B. INDIVIDUAL ACCOUNT BALANCES EXCEEDING CASHOUT LEVEL
I. EMPLOYEE HAS NOT REACHED NORMAL RETIREMENT AGE
May an Employee who has not reached Normal Retirement Age
request a distribution from the Plan of that portion of the
Participant's Individual Account attributable to the
following types of contributions upon incurring a
Termination of Employment (select one)?
OPTION 1: [X] Yes, with respect to the following
contributions.
[X] Matching Contributions (if applicable).
[ ] Employer Profit Sharing Contributions (if
applicable).
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will apply with
regard to Matching Contributions, and Employer Profit
Sharing Contributions.
II. SEVERANCE FROM EMPLOYMENT
May a Participant request a distribution of their Elective
Deferrals, Qualified Nonelective Contributions, Qualified
Matching Contributions, and earnings on account of
Severance from Employment pursuant to Plan Section 5.01
(A)(2)?
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will apply.
2. DISTRIBUTIONS DURING EMPLOYMENT
A. IN-SERVICE WITHDRAWALS
I. IN-SERVICE AVAILABILITY FOR ELECTIVE DEFERRALS
Will a Participant who has not incurred a Severance from
Employment be entitled to request an in-service withdrawal
from the Plan of that portion of the Participant's
Individual Account attributable to Elective Deferrals,
Qualified Nonelective Contributions, and Qualified Matching
Contributions (select one)?
[X] Yes, if he or she has attained age 59.5 (must be at
least age 59 1/2. If no age is specified, age 59 1/2 will
apply)
[ ] Yes, if he or she has attained Normal Retirement Age.
NOTE: If either box is selected above, select whether
in-service distributions will be available from Pre-Tax
and/or Roth Elective Deferrals.
[X] Pre-Tax Elective Deferrals.
[ ] Roth Elective Deferrals.
NOTE: If a Participant is permitted to request an in-service
distribution upon attainment of Normal Retirement Age, he or
she must also be at least age 59 1/2 to be eligible for the
distribution. If in-service distributions are permitted and
neither Pre-Tax nor Roth Elective Deferrals is selected,
in-service distributions will be permitted from both Pre-Tax
Elective Deferrals and Roth Elective Deferrals.
II. IN-SERVICE AVAILABILITY FOR EMPLOYER CONTRIBUTIONS
Will a Participant be entitled to request an in-service
withdrawal from the Plan of that portion of the
Participant's Individual Account attributable to Matching
Contributions, and Employer Profit Sharing Contributions
(select one)?
OPTION 1: [X] Yes, with respect to the following
contributions (select all that apply and
complete the table below):
[X] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
OPTION 2: [ ] No.
NOTE: if no option is selected, Option 1 will apply with
respect to all Matching Contributions, and Employer Profit
Sharing Contributions.
(C)2009 Ascensus, Inc. Brainerd, MN
Page 24 of 36
MATCHING EMPLOYER PROFIT SHARING
CONTRIBUTIONS CONTRIBUTIONS
-------------- ------------------------
Upon attainment of age 59 l/2
Upon attainment of Normal Retirement Age [X]
Upon attainment of age (specify an age other than age 59
1/2):
Upon reaching a Vested percentage equal to: 100%
The maximum Vested percent of the Individual Account
that may be withdrawn is (specify Vested percent):
After contributions have been allocated to the Plan for a
period of years equal to (must be at least two):
After participating in the Plan for a period of years equal to
(must be at least five unless the applicable contributions
have been allocated to the Plan for at least two years as
specified in the box above):
The maximum number of in-service withdrawals that may
be taken while a Participant is employed by the Employer is
(specify either "unlimited" or the actual number that
applies (e.g., one, one per year, etc.)):
After participating in the Plan for a period of years equal to (a) (a)
(a) and attaining age (b). (b) (b)
After becoming 100% Vested, participating in the Plan for a (a) (a)
period of years equal to (a) and attaining age (b). (b) (b)
NOTE: Place an "x" or enter the specific criteria (e.g., age,
vested percentage, etc.) in each box, as applicable. A
Participant need only satisfy the criteria in one of the rows to
be eligible for an in-service distribution. If Option 1 applies
and no selections or entries are made in the table above, Plan
Section 5.01(C)(1) will apply in determining whether a
Participant is entitled to an in-service distribution and there
will be no limit on the number of in-service distributions.
B. HARDSHIP WITHDRAWALS
I. HARDSHIP AVAILABILITY FOR ELECTIVE DEFERRALS
Will a Participant who has not incurred a Severance from
Employment be entitled to request a hardship distribution from
the Plan of that portion of the Individual Account attributable
to Elective Deferrals (select one)?
OPTION 1: [X] Yes, with respect to the following
Elective Deferrals (select all that apply):
[X] Pre-tax Elective Deferrals.
[ ] Roth Elective Deferrals.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will apply and hardship
distributions will be available from both Pre-tax and Roth
Elective Deferrals. Hardship distributions of Elective Deferrals
will result in a suspension of an Employee's Elective Deferrals
(and Employee Nondeductible Contributions, if applicable) as
described in Plan Section 5.01(C)(2)(b).
II. HARDSHIP AVAILABILITY FOR MATCHING CONTRIBUTIONS AND EMPLOYER
PROFIT SHARING CONTRIBUTIONS
Will a Participant be entitled to request a hardship
distribution from the Plan (select all that apply)?
OPTION 1: [ ] Yes, with respect to the following
contributions (select all that apply):
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
OPTION 2: [ ] Yes, with respect to the following
contribution and only with respect to a
Participant who is 100 percent Vested in their
Individual Account attributable to such
contributions (select all that apply):
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
OPTION 3: [ ] Yes, with respect to the following
contribution and only with respect to a
Participant who has participated in the Plan for___
or more years and has attained age___ (select all
that apply):
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
OPTION 4: [ ] Yes, with respect to the following
contribution and only with respect to a
Participant who is 100 percent Vested in their
Individual Account and has participated in the
Plan for or more years and has attained age___
(select all that apply):
[ ] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
(C) 2009 Ascensus, Inc., Brainerd, MN
Page 25 of 36
OPTION 5: [X] No.
NOTE: If no option is selected, Option 1 will apply
with respect to all Matching Contributions and
Employer Profit Sharing Contributions. If Option I, 2,
3, or 4 applies, complete the following.
How will hardship be defined for purposes of
this section?
SUBOPTION (A): [ ] The definition of
hardship described in Plan
Section 5.01(C)(2)(a) will
apply with respect to the
following types of
contributions, therefore an
Employee's Elective
Deferrals (and
Nondeductible Employee
Contributions, if
applicable) will not be
suspended for six months
(select all that apply):
[ ] Matching Contributions.
[ ] Employer ProfitSharing
Contributions.
SUBOPTION (B): [ ] The safe harbor
definition of hardship
distribution described in
Plan Section 5.01(C)(2)(b)
will apply with respect to
the following types of
contributions, except that
an Employee's Elective
Deferrals (and
Nondeductible Employee
Contributions, if
applicable) will NOT be
suspended for six months
(select all that apply):
[ ] Matching
Contributions.
[ ] Employer Profit
Sharing Contributions.
SUBOPTION (C): [ ] The safe harbor
definition of hardship
distribution described in
Plan Section 5.01(C)(2)(b)
will apply with respect to
the following types of
contributions, including
the requirement that an
Employee's Elective
Deferrals (and
Nondeductible Employee
Contributions, if
applicable) will be
suspended for six months
(select all that apply):
[ ] Matching
Contributions.
[ ] Employer Profit
Sharing Contributions.
NOTE: If no suboption is selected, Suboption
(b) will apply to the option selected in item
(b)(ii) above with regard to Matching
Contributions and Employer Profit Sharing
Contributions.
3. MISCELLANEOUS DISTRIBUTION ISSUES
A. WITHDRAWALS OF ROLLOVER CONTRIBUTIONS
Will an Employee be entitled to request a distribution of their
rollover contributions at any time (select one)?
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will apply. If Option 2
applies, the Plan's provisions governing distributions will
apply according to Plan Section 5.01(A)(1).
B. WITHDRAWALS OF TRANSFER CONTRIBUTIONS
Will an Employee be entitled to request a distribution of their
transfer contributions at any time subject to the restrictions
of Plan Section 5.01(D) (select one)?
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will apply. If Option 2
applies, the Plan's provisions governing distributions will
apply according to Plan Section 5.01(A)(1).
C. DISABILITY
Will a Participant who has incurred a Disability be entitled to
request a distribution from the Plan (select one)?
OPTION 1: [X] Yes (select all that apply):
[X] Elective Deferrals.
[X] Matching Contributions.
[ ] Employer Profit Sharing Contributions.
OPTION 2: [ ] NO.
NOTE: If no option is selected, Option 1 will apply. If Option 1
applies and no contribution source is selected, distributions
will be permitted from all contribution sources.
PART B. FORM OF DISTRIBUTION (Answer each of the following items.)
1. INDIVIDUAL ACCOUNT BALANCES OF $1,000 OR LESS
Cashout distributions of $1,000 or less that are Eligible Rollover
Distributions and are made to terminated Participants pursuant to
Plan Section 5.01(B) shall be (select one):
OPTION 1: [X] Paid in a lump sum distribution.
OPTION 2: [ ] Paid in a Direct Rollover to an individual
retirement account (as defined in Code Sections
408(a) and 408(b)).
NOTE: If no option is selected, Option 1 will apply.
2009 Ascensus, Inc., Brainerd, MN
Page 26 of 36
2. INDIVIDUAL ACCOUNT BALANCES EXCEEDING $1,000
A. LUMP SUM
Will a Participant be entitled to request a distribution of the
Vested portion of their Individual Account in a lump sum,
subject to Plan Section 5.02 (select one)?
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
B. PARTIAL PAYMENTS
Will a Participant be entitled to request a partial
distribution of the Vested portion of their Individual Account,
subject to Plan Section 5.02 (select one)?
OPTION 1: [ ] Yes.
OPTION 2: [X] NO.
C. INSTALLMENT PAYMENTS
Will a Participant be entitled to request a distribution of the
Vested portion of their Individual Account over a period not to
exceed the life expectancy of the Participant or the joint and
last survivor life expectancy of the Participant and their
designated Beneficiary, subject to Plan Section 5.02 (select
one)?
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
D. ANNUITY CONTRACTS
Will a Participant be entitled to apply the Vested portion of
their Individual Account toward the purchase of an annuity
contract, subject to Plan Section 5.02 (select one)?
OPTION 1: [ ] Yes.
OPTION 2: [X] No.
NOTE: Option 1 must be selected for at least one of Items (a) through
(d) in Part B, item 2 above. If neither option is selected for items
(a) or (b) in Part B, item 2 above, Option 1 will apply. If neither
option is selected for items (c) or (d), Option 2 will apply. If this
Plan is restating a Prior Plan, the forms of distribution under this
Plan must generally be at least as favorable as under the Prior Plan.
PART C. TIMING OF DISTRIBUTIONS
1. DEATH, DISABILITY OR ATTAINMENT OF NORMAL RETIREMENT AGE
If a Participant dies, incurs a Disability or attains Normal
Retirement Age, and a distributable event has occurred,
distributions shall commence as soon as administratively feasible
following (select one):
OPTION 1: [X] The date the Participant (or Beneficiary of a
deceased Participant) requests a distribution.
OPTION 2: [ ] The next valuation date after the Participant
(or Beneficiary of a deceased Participant) requests a
distribution.
OPTION 3: [ ] The last day of the Plan Year within which
the Participant (or Beneficiary of a deceased
Participant) requests a distribution.
OPTION 4: [ ] The last day of the Plan Year within which
the Participant (or Beneficiary of a deceased
Participant) requests a distribution or the
Participant requests a distribution and incurs (not
more than five) consecutive one-year Breaks in
Vesting Service, whichever is later.
NOTE: If no option is selected Option I will apply. A Participant's
request for a distribution must be accompanied by their Spouse's
consent (if required) as prescribed in Plan Section 5.10.
2. TERMINATION OF EMPLOYMENT OR SEVERANCE FROM EMPLOYMENT
If a Participant has a Termination of Employment or Severance from
Employment, and a distributable event has occurred, distributions
shall commence as soon as administratively feasible following
(select one):
OPTION 1: [X] The date the Participant (or Beneficiary of a
deceased Participant) requests a distribution.
OPTION 2: [ ] The next valuation date after the Participant
(or Beneficiary of a deceased Participant) requests a
distribution.
OPTION 3: [ ] The last day of the Plan Year within which
the Participant (or Beneficiary of a deceased
Participant) requests a distribution.
OPTION 4: [ ] The last day of the Plan Year within which the
Participant (or Beneficiary of a deceased
Participant) requests a distribution or the
Participant requests a distribution and incurs (not
more than five) consecutive one-year Breaks in
Vesting Service, whichever is later.
NOTE: If no option is selected, Option I will apply. A
Participant's request for a distribution must be accompanied by
their Spouse's consent (if required) as prescribed in Plan Section
5.10.
2009 Ascensus, Inc., Brainerd, MN
Page 27 of 36
PART D. REQUIRED MINIMUM DISTRIBUTIONS
1. ELECTION TO APPLY FIVE-YEAR RULE TO DISTRIBUTIONS TO DESIGNATED
BENEFICIARIES
Will Designated Beneficiaries be required to take distributions
according to the five-year rule (select one)?
OPTION 1: [ ] Yes. If the Participant dies before
distributions have begun and there is a Designated
Beneficiary, distribution to the Designated
Beneficiary is not required to begin by the date
specified in Plan Section 5.05(D)(2), 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 have begun, this
election will apply as if the surviving Spouse were
the Participant.
OPTION 2: [X] No.
NOTE: If no option is selected, Option 2 will apply.
If applicable, this item 1 shall apply to (select
one):
OPTION 1: [ ] All distributions.
OPTION 2: [ ] The following distributions
(specify):_______
NOTE: If no option is selected, Option 1 will apply.
2. ELECTION TO PERMIT PARTICIPANTS OR BENEFICIARIES TO ELECT
FIVE-YEAR RULE
Will Participants or Designated Beneficiaries be
permitted to elect, on an individual basis, whether the five-year
rule or the life expectancy rule applies (select one)?
OPTION 1: [X] Yes. Participants or Beneficiaries may elect
on an individual basis whether the five-year rule or
the life expectancy rule in Plan Section 5.05(D)(2)
applies to distributions after the death of a
Participant who has a Designated Beneficiary.
OPTION 2: [ ] No. Distributions will be made in accordance
with Plan Section 5.05(D)(2) and, if applicable, item
1 above.
NOTE: If no option is selected, Option 1 will apply. If Option 1 in
Part D, item 1 above is selected, Option 2 in Part D, item 2 must
be selected.
PART E. RETIREMENT EQUITY ACT SAFE HARBOR
Will the safe harbor provisions of Plan Section 5.10(E) apply (select
one)?
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will apply.
SURVIVOR ANNUITY PERCENTAGE (Complete only if Option 2 is selected or
if certain Plan assets (e.g., transfer contributions) are subject to
the Retirement Equity Act annuity requirements.)
The survivor annuity portion of the Qualified Joint and Survivor Annuity
will be a percentage equal to percent (at least 50 percent, but no more
than 100 percent) of the amount paid to the Participant before their
death.
NOTE: If no option is selected, the survivor annuity portion of the
Qualified Joint and Survivor Annuity will be equal to 50 percent.
PART F. LOANS
May a Participant request a loan pursuant to Plan Section 5.16 (select
one)?
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: If no option is selected Option 2 will apply.
NOTE: Generally, Code Section 411(d)(6) prohibits the elimination of protected
benefits. Protected benefits include the timing of payout options. If the Plan
is restating a Prior Plan that permitted a distribution option described above
that involves the timing of a distribution, the selections must generally be at
least as favorable as under the Prior Plan. Certain forms of distributions
(e.g., redundant forms of distribution) may, however, be eliminated. Refer to
Code Section 411(d)(6) and the corresponding Treasury regulation for details
pertaining to the elimination of otherwise protected benefits. Note that ADP
Test Safe Harbor Contributions may not be distributed earlier than Severance
from Employment, death, Disability, an event described in Code Section
401(k)(10), or, in the case of a profit sharing plan, the attainment of age
59 1/2.
SECTION SIX: DEFINITIONS
Complete Parts A through J
PART A. COMPENSATION FOR ALLOCATION AND OTHER GENERAL PURPOSES (Define
compensation by placing an "x" in each of the applicable boxes below.
If a contribution source listed below is not available in the Plan,
select "Not Applicable "for such source.
1. BASE DEFINITION
Compensation will mean all of each Participant's (select one for
each contribution source):
EMPLOYER
PROFIT SHARING
ELECTIVE DEFERRALS MATCHING CONTRIBUTIONS CONTRIBUTIONS
-------------- ------------------ ---------------------- --------------
Not Applicable X
W-2 Wages
3401(a) Wages X X
415 Safe-Harbor Compensation
NOTE: If no box is selected for a contribution source, W-2
wages will apply to such source.
2009 Ascensus, Inc., Brainerd, MN
Page 28 of 36
2. DETERMINATION PERIOD
Compensation shall be determined over the following applicable period
(select one for each contribution source):
EMPLOYER PROFIT SHARING
ELECTIVE DEFERRALS MATCHING CONTRIBUTIONS CONTRIBUTIONS
------------------ ---------------------- -----------------------
Not Applicable [X]
Plan Year [X] [X]
Calendar Year Ending With Or Within The Plan Year
Consecutive 12-Month Period, Beginning On (specify month and day)
NOTE: If no box is selected for a contribution source, Plan Year will apply to
such source.
3. INCLUSION OF ELECTIVE DEFERRALS
Compensation shall include Employer Contributions (made pursuant to a
salary reduction agreement) that are not includible in the gross income of
the Employee under any of the following Code Sections: Section 125
(cafeteria plans), Section 132(f)(4) (transportation fringe benefits),
Section 402(e)(3) (401(k) plans), Section 408(k) (salary deferral SEP
plans), Section 403(b) (tax sheltered annuity plans), Section 457
(deferred compensation plans of state and local governments and
tax-exempt organizations) (select "Yes" or "No" for each of the
following contribution types).
Elective Deferrals [X] Yes [ ] No
Matching Contributions [X] Yes [ ] No
Employer Profit Sharing Contributions [ ] Yes [ ] No
NOTE: If a box is not selected for an item, "Yes" will apply for the
applicable contribution type, if applicable.
4. EXCLUSIONS FROM COMPENSATION
Compensation shall exclude the following (select all that apply).
EMPLOYER PROFIT SHARING
ELECTIVE DEFERRALS MATCHING CONTRIBUTIONS CONTRIBUTIONS
------------------ ---------------------- -----------------------
Not Applicable [X]
Bonuses
Overtime
Commissions
Other (specify)
See Other Plan Information [X] [X]
NOTE: If a box is not selected for a contribution source, such item will be
included in Compensation for such contribution source, if applicable. No
exclusions from Compensation are permitted with respect to Employer
Profit Sharing Contributions if the integrated allocation formula in
Section Three, Part D, item 3 is selected. If any items are excluded,
the definition of Compensation may not be a safe harbor alternative
definition of compensation and may be subject to nondiscrimination
testing under Code Section 414(s).
5. POST-SEVERANCE COMPENSATION
A. REGULAR COMPENSATION
In addition to any adjustment to Compensation elected above, will
regular compensation be included in Compensation (select one)?
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will apply.
B. LEAVE PAYMENTS
In addition to any adjustment to Compensation elected above, will leave
payments be excluded from Compensation (select one)?
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will apply.
2009 Ascensus, Inc., Brainerd, MN
Page 29 of 36
6. PRE-ENTRY DATE COMPENSATION
Unless a different definition of Compensation is required by
either the Code or ERISA, for the Plan Year in which an Employee
enters the Plan, the Employee's Compensation that will be taken
into account for purposes of the Plan will be (select one for
each contribution source):
EMPLOYER PROFIT
ELECTIVE MATCHING SHARING
DEFERRALS CONTRIBUTIONS CONTRIBUTIONS
----------------------------------- --------- ------------- ----------------
Not Applicable
Compensation from Entry Date X X X
Compensation for the full Plan Year
NOTE: If no box is selected for a contribution source,
Compensation from Entry Date will apply to such source,
7. DEEMED 125 COMPENSATION
Will Compensation include deemed Code Section 125 compensation?
OPTION 1: [ ] Yes.
OPTION 2: [X] No.
NOTE: If no option is selected, Option 2 will apply.
PART B. DISABILITY
For purposes of this Plan, Disability will mean (select one):
OPTION 1: [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 12
months.
OPTION 2: [ ] 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 or as defined under the employer's long
term disability program.
NOTE: If no option is selected, Option 1 will apply.
PART C. HIGHLY COMPENSATED EMPLOYEE
1. TOP PAID GROUP ELECTION
For purposes of determining who is a Highly Compensated Employee
under the Plan, will the top paid group election apply (select one)?
OPTION 1: [ ] Yes.
OPTION 2: [X] No.
NOTE: If no option is selected, Option 2 will apply.
2. CALENDAR YEAR DATA ELECTION
If the Plan Year is a fiscal year other than a calendar year, for
purposes of determining who is a Highly Compensated Employee
(other than a five-percent owner) under the Plan, will the
calendar year data election apply (select one)?
OPTION 1: [ ] Yes.
OPTION 2: [X] No.
NOTE: If no option is selected, Option 2 will apply. If the Plan Year is a
calendar year, the Highly Compensated Employee determination will be based on
the calendar year.
PART D. HOUR OF SERVICE - METHOD OF DETERMINING SERVICE
1. Service for purposes of determining eligibility to participate
in the Plan will be determined on the basis of (select one):
OPTION 1: [X] Elapsed Time.
OPTION 2: [ ] Actual hours for which an Employee is paid or
entitled to payment.
OPTION 3: [ ] Days worked. An Employee will be credited with 10
Hours of Service if under the definition of Hours
of Service such Employee would be credited with at
least one Hour of Service during the day.
OPTION 4: [ ] Weeks worked. An Employee will be credited with 45
Hours of Service if under the definition of Hours
of Service such Employee would be credited with at
least one Hour of Service during the week.
OPTION 5: [ ] Semi-Monthly payroll periods worked. An Employee
will be credited with 95 Hours of Service if under
the definition of Hours of Service such Employee
would be credited with at least one Hour of
Service during the semi-monthly payroll period.
OPTION 6: [ ] Months worked. An Employee will be credited with
190 Hours of Service if under the definition of
Hours of Service such Employee would be credited
with at least one Hour of Service during the
month.
NOTE: If no option is selected, Option 2 will apply.
(C) 2009 Ascensus, Inc., Brainerd, MN
Page 30 of 36
2. Service for purposes of determining if a Participant is a
Qualifying Participant or Qualifying Contributing Participant
(and therefore eligible to receive an Employer Contribution) will
be determined on the basis of (select one):
OPTION 1: [ ] Elapsed Time.
OPTION 2: [X] Actual hours for which an Employee is paid or
entitled to payment.
OPTION 3: [ ] Days worked. An Employee will be credited with 10
Hours of Service if under the definition of Hours
of Service such Employee would be credited with at
least one Hour of Service during the day.
OPTION 4: [ ] Weeks worked. An Employee will be credited with 45
Hours of Service if under the definition of Hours
of Service such Employee would be credited with at
least one Hour of Service during the week.
OPTION 5: [ ] Semi-Monthly payroll periods worked. An Employee
will be credited with 95 Hours of Service if under
the definition of Hours of Service such Employee
would be credited with at least one Hour of
Service during the semi-monthly payroll period.
OPTION 6: [ ] Months worked. An Employee will be credited with
190 Hours of Service if under the definition of
Hours of Service such Employee would be credited
with at least one Hour of Service during the
month.
NOTE: If no option is selected, Option 2 will apply.
3. Service for purposes of determining a Participant's Vested
percentage will be determined on the basis of (select one):
OPTION 1: [X] Elapsed Time.
OPTION 2: [ ] Actual hours for which an Employee is paid or
entitled to payment.
OPTION 3: [ ] Days worked. An Employee will be credited with 10
Hours of Service if under the definition of Hours
of Service such Employee would be credited with at
least one Hour of Service during the day.
OPTION 4: [ ] Weeks worked. An Employee will be credited with 45
Hours of Service if under the definition of Hours
of Service such Employee would be credited with at
least one Hour of Service during the week.
OPTION 5: [ ] Semi-Monthly payroll periods worked. An Employee
will be credited with 95 Hours of Service if under
the definition of Hours of Service such Employee
would be credited with at least one Hour of
Service during the semi-monthly payroll period.
OPTION 6: [ ] Months worked. An Employee will be credited with
190 Hours of Service if under the definition of
Hours of Service such Employee would be credited
with at least one Hour of Service during the
month.
NOTE: If no option is selected, Option 2 will apply.
PART E. LIMITATION YEAR MEANS
OPTION 1: [X] The Plan Year.
OPTION 2: [ ] The calendar year.
OPTION 3: [ ] Other 12-consecutive month period (Specify a
12-consecutive month period selected in a uniform and
nondiscriminatory manner.)
-----------------------------
NOTE: If no option is selected, Option 1 will apply.
PART F. PLAN YEAR MEANS
OPTION 1: [ ] The 12-consecutive month period which coincides
with the Adopting Employer's tax year.
OPTION 2: [X] The calendar year.
OPTION 3: [ ] The 52/53 week period ending on the last _____________
(specify day of the week) nearest __________________
(specify month and day) of each year.
OPTION 4: [ ] Other 12-consecutive month period (Specify a
12-consecutive month period selected in a uniform and
nondiscriminatory manner.)__________________________
NOTE: If no option is selected, Option 1 will apply.
If the initial Plan Year or any subsequent Plan Year is less than 12
months (a short Plan Year) specify such Plan Year's beginning and
ending dates.
---------------------------------------------------------
PART G. PREDECESSOR EMPLOYER SERVICE
In addition to the Hours of Service credited when an Employer
maintains the plan of a predecessor employer, Hours of Service with a
predecessor employer will be credited for the following purposes where
the Employer does not maintain the plan of a predecessor employer
(select all that apply):
[ ] Eligibility.
[ ] Vesting.
[ ] Allocation of Contributions.
Name of Predecessor Employer(s): ___________________________________
If service with a predecessor is taken into account for one or more of
the items listed above, specify any additional limitations on
crediting service that apply (e.g., limitations by business
classification, length of service, etc.):
(C) 2009 Ascensus, Inc., Brainerd, MN
Page 31 of 36
PART H. REQUIRED BEGINNING DATE
For purposes of determining when minimum distributions must begin to
be made to each Participant, the Required Beginning Date will mean
(select one):
OPTION 1: [ ] The April 1 of the calendar year following the calendar
year in which a Participant attains age 70 1/2.
OPTION 2: [ ] April 1 of the calendar year following the calendar
year in which the Participant attains age 70 1/2,
except that distributions to a Participant (other than
a five-percent owner) with respect to benefits accrued
after _______________ (specify month, day, and year)
must commence by April 1 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.
OPTION 3: [X] The later of the April 1 of the calendar year following
the calendar year in which a Participant attains age
70 1/2 or retires except that distributions to a
five-percent owner must commence by the April 1 of the
calendar year following the calendar year in which the
Participant attains age 70 1/2.
NOTE: If no option is selected, Option 3 will apply.
(If Option 3 is selected, choose one or more of the
following suboptions.)
SUBOPTION (A): [X] Any Participant (other than a
five-percent owner of the Employer)
attaining age 70 1/2 in years after
1995 may elect by the April 1 of
the calendar year following the
year in which the Participant
attained age 70 1/2 (or by December
31, 1997, in the case of a
Participant attaining age 70 1/2 in
1996) to defer distributions until
the calendar year following the
calendar year in which the
Participant retires. An election to
defer distributions will be deemed
made by a Participant who does not
request a minimum distribution by
April 1 of the year following the
year in which the Participant
attains age 70 1/2.
SUBOPTION (B): [X] Any Participant (other than a
five-percent owner) attaining age
70 1/2 in years before 1997 may
elect to stop distributions and
recommence by the April 1 of the
calendar year following the year in
which the Participant retires.
There is either (select one):
(i) [ ] a new annuity starting
date upon recommencement,
or
(ii) [x] no new annuity starting
date upon recommencement.
NOTE: If neither item (i) nor item
(ii) is selected, item (ii)
will apply.
NOTE: If no suboption(s) is selected, Suboptions (a)
and (b) will apply.
PART I. RETIREMENT AGE
1. EARLY RETIREMENT AGE
The Early Retirement Age under the Plan will be (select one):
OPTION 1: [X] An Early Retirement Age is not applicable under
the Plan.
OPTION 2: [ ] A Participant satisfies the Plan's Early
Retirement Age conditions by attaining age ______
and completing ______ Years of Vesting Service.
NOTE: If no option is selected Option 1 will apply.
2. NORMAL RETIREMENT AGE
The Normal Retirement Age under the Plan will be (select and
complete one):
OPTION 1: [X] Age 65 (not to exceed 65 or such later age as may
be allowed under Code Section 411(a)(8)).
OPTION 2: [ ] The later of age (not to exceed 65 or such later
age as may be allowed under Code Section
411(a)(8)) ______ or the ______ (not to exceed
fifth) anniversary of the first day of the first
Plan Year in which the Participant commenced
participation in the Plan.
NOTE: If no option is selected, Option 1 and age 59 1/2 will
apply.
PART J. VALUATION DATE
The Plan Valuation Date will be (select one):
OPTION 1: [ ] Daily.
OPTION 2: [ ] The last day of the Plan Year and each other date
designated by the Plan Administrator which is selected
in a uniform and nondiscriminatory manner.
OPTION 3: [ ] The last day of each Plan quarter.
OPTION 4: [ ] The last day of each month.
OPTION 5: [ ] Other (Specify one or more dates that are selected in a
uniform and nondiscriminatory manner, including the
last day of the Plan Year.) Each business day the New
York Stock Exchange is open for trading.
NOTE: If no option is selected Option 2 will apply.
(C)2009 Ascensus, Inc., Brainerd, MN
Page 32 of 36
SECTION SEVEN: MISCELLANEOUS
Complete Parts A and B
PART A. LIFE INSURANCE
Will life insurance investments be permitted under the Plan (select
one)?
OPTION 1: [ ] Yes.
OPTION 2: [X] No.
NOTE: If no option is selected, Option 2 will apply.
PART B. PARTICIPANT DIRECTION
1. AUTHORIZATION
Will a Participant be responsible for directing any or all of the
investment of their Plan assets pursuant to Plan Section 7.22(B)
(select one)?
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will apply. Complete the
remainder of Part B only if Option 1 is selected.
2. INVESTMENT OPTIONS
A Participant may direct the investment of their Plan assets
among the following investments (select one):
OPTION 1: [X] Only those investment options designated by the
Plan Administrator or other Fiduciary as being
subject to Participant direction.
OPTION 2: [ ] Any investment permitted by the Plan.
NOTE: If no option is selected, Option 1 will apply.
3. ACCOUNTS SUBJECT TO PARTICIPANT DIRECTION
A Participant shall be responsible for directing the following
portions of their Individual Account (select one):
OPTION 1: [X] The entire Individual Account.
OPTION 2: [ ] Those accounts that the Plan Administrator may
designate from time to time in a uniform and
nondiscriminatory manner.
OPTION 3: [ ] The following accounts (select all that apply):
[ ] Elective Deferral account.
[ ] Matching Contribution account.
[ ] Employer Profit Sharing Contribution account.
[ ] Rollover contribution account.
[ ] Transfer contribution account.
[ ] Other (Specify one or more of the accounts that
may, in part, comprise a Participant's
Individual Account under this Plan. Do not list
any restrictions on Participant direction that
would be deemed to restrict any benefits,
rights, or features in a discriminatory manner
prohibited under Code Section 401(a)(4).)
NOTE: If no option is selected, Option 1 will apply.
4. FREQUENCY OF INVESTMENT CHANGES
A Participant may make changes to the investments within their
Individual Account with the following frequency (select one):
OPTION 1: [ ] In accordance with uniform and nondiscriminatory
rules established by the Plan Administrator or
other Fiduciary.
OPTION 2: [X] Daily.
OPTION 3: [ ] Monthly.
OPTION 4: [ ] Quarterly.
OPTION 5: [ ] Other (Specify one or more uniform and
nondiscriminatory periods selected by the Plan
Administrator.)
NOTE: If no option is selected, Option 1 will apply. The Plan's
Valuation Dates must be at least as often as the frequency
selected above.
5. ERISA 404(C) COMPLIANCE
Does the Adopting Employer intend to operate this Plan in
compliance with ERISA Section 404(c) as set forth in Plan Section
7.22(B)?
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will apply.
(C) 2009 Ascensus, Inc., Brainerd, MN
Page 33 of 36
SECTION EIGHT: TRUSTEE AND CUSTODIAN
Complete Parts A and B (as applicable)
PART A. TRUSTEE (This Part A must be completed unless the Plan only covers one
or more Self-Employed Individuals or satisfies another exception under
ERISA. Select one.)
1. TRUSTEE APPOINTMENT
OPTION 1: [X] Financial Organization as Trustee
OPTION 2: [ ] Individual Trustee(s)
The Trustee of this Plan shall be a: [x] Directed Trustee
[ ] Discretionary Trustee
Name of Trustee Vanguard Fiduciary Trust Company
Address P.O. Box 2900, Valley Forge, PA 19482
Telephone (800) 523-188
Signature /s/ ILLEGIBLE Title Dennis Simmons, Principal
Name of Trustee__________________________________________________
Address__________________________________________________________
Telephone________________________________________________________
Signature______________________ Title_______________________
Name of Trustee__________________________________________________
Address__________________________________________________________
Telephone________________________________________________________
Signature______________________ Title_______________________
Name of Trustee__________________________________________________
Address__________________________________________________________
Telephone________________________________________________________
Signature______________________ Title_______________________
2. TRUST AGREEMENT
If a Trustee is designated in Part A, item 1 above, which trust
agreement will apply to the Plan (select one)?
OPTION 1: [ ] Trust provisions contained in Plan Section Eight.
OPTION 2: [x] Separate executed trust agreement attached hereto.
NOTE: If no option is selected, Option 1 will apply. If Option
2 is selected, the attached trust agreement must be on file with
the IRS for use by the Prototype Sponsor listed in Section Nine
below.
PART B. CUSTODIAN (Both a Custodian and Trustee may be appointed for the Plan.
This Part B must be completed if a Trustee is not named in Part A,
above.)
1. CUSTODIAN APPOINTMENT
Financial Organization _________________________________________
Address ________________________________________________________
Signature ______________________________________________________
Type Name _________________________ Title ______________________
2. CUSTODIAL AGREEMENT
If a Custodian is designated in Part B, item 1 above, which
custodial agreement will apply to the Plan (select one)?
OPTION 1: [ ] Custodial provisions contained in Plan Section
Eight.
OPTION 2: [ ] Separate executed custodial agreement attached
hereto.
NOTE: If no option is selected, Option 1 will apply. If Option 2
is selected, the attached custodial agreement must be on file
with the IRS for use by the Prototype Sponsor listed in Section
Nine below.
(C)2009 Ascensus, Inc., Brainerd, MN
Page 34 of 36
SECTION NINE: EMPLOYER SIGNATURE
PROTOTYPE SPONSOR
Name of Prototype Sponsor Vanguard Fiduciary Trust Company
Address P.O. Box 2900, Valley Forge, PA 19482
Telephone 800-523-1188
PLAN ADMINISTRATOR
[ ] Check here and provide the applicable information below if someone other
than the Adopting Employer will be the Plan Administrator.
Name of Plan Administrator._______________________________________________
Address __________________________________________________________________
City __________________ State ______________________ Zip _________________
Telephone ________________________________________________________________
Signature of Plan Administrator ______________ Date Signed _______________
Type Name ________________________________________________________________
Check the applicable box if there is an attachment(s) that applies to this Plan
other than a separate trust or custodial agreement.
[ ] Attachment A, Protected Benefits and Prior Plan Provisions.
[ ] Attachment B, Special Effective Date(s).
[ ] Attachment C, New Comparability Allocation Group(s).
[x] Other: (If this box is checked, please describe the attachment(s)) Plan
Clarification
AUTHORIZED EMPLOYER SIGNATURE
I AM AN AUTHORIZED REPRESENTATIVE OF THE ADOPTING EMPLOYER NAMED ABOVE AND I
STATE THE FOLLOWING:
1. I ACKNOWLEDGE THAT I HAVE RELIED UPON MY OWN ADVISORS REGARDING THE
COMPLETION OF THIS ADOPTION AGREEMENT AND THE LEGAL TAX IMPLICATIONS OF
ADOPTING THIS PLAN;
2. I UNDERSTAND THAT I SHOULD REVIEW THIS DOCUMENT CAREFULLY FOR ACCURACY
AND COMPLETENESS AS I HAVE FINAL RESPONSIBILITY FOR ENSURING THAT THE
OPERATIONAL COMPLIANCE REQUIREMENTS FOR THE PLAN ARE MET. I UNDERSTAND
THAT MY FAILURE TO PROPERLY COMPLETE THIS ADOPTION AGREEMENT MAY RESULT IN
DISQUALIFICATION OF THE PLAN;
3. I UNDERSTAND THAT THE PROTOTYPE SPONSOR WILL INFORM ME OF ANY AMENDMENTS
MADE TO THE PLAN AND WILL NOTIFY ME SHOULD IT DISCONTINUE OR ABANDON THE
PLAN; AND
4. I HAVE RECEIVED A COPY OF THIS ADOPTION AGREEMENT, THE CORRESPONDING
BASIC PLAN DOCUMENT AND, IF APPLICABLE, ANY SEPARATE TRUST OR CUSTODIAL
AGREEMENT USED IN LIEU OF THE TRUST OR CUSTODIAL AGREEMENT CONTAINED IN
THE BASIC PLAN DOCUMENT.
Signature of Adopting Employer -s- Henry J. Policave Date Signed 12/28/2010
Type Name Henry J. Policave Title Director Global Benefits & HR
NOTE: The Adopting Employer may rely on an opinion letter issued by the Internal
Revenue Service as evidence that the Plan is qualified under Code Section 401
only to the extent provided in Revenue Procedure 2005-16. 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 Revenue Procedure 2005-16. 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 Basic Plan Document #01.
(C)2009 Ascensus, Inc., Brainerd, MN
Page 35 of 36
SECTION TEN: ALLOCATION FACTOR TABLES
Employers selecting the Age-Weighted Formula in the Adoption Agreement for
purposes of allocating Employer Profit Sharing Contributions shall use the
following tables in determining the Allocation Factor.
AGE RELATED ALLOCATION FACTORS*
Participant's Interest Rate
Current Age 7.5% 8.0% 8.5%
------------- ----- ------------- ----
1 0.991 0.714 0.515
2 1.066 0.771 0.559
3 1.146 0.833 0.606
4 1.232 0.899 0.658
5 1.324 0.971 0.714
6 1.423 1.049 0.775
7 1.530 1.133 0.840
8 1.645 1.223 0.912
9 1.768 1.321 0.989
10 1.901 1.427 1.074
11 2.043 1.541 1.165
12 2.197 1.665 1.264
13 2.361 1.798 1.371
14 2.539 1.942 1.488
15 2.729 2.097 1.614
16 2.934 2.265 1.751
17 3.154 2.446 1.900
18 3.390 2.641 2.062
19 3.644 2.853 2.237
20 3.918 3.081 2.427
21 4.212 3.327 2.634
22 4.527 3.594 2.857
23 4.867 3.881 3.100
24 5.232 4.192 3.364
25 5.624 4.527 3.650
26 6.046 4.889 3.960
27 6.500 5.280 4.297
28 6.987 5.703 4.662
29 7.511 6.159 5.058
30 8.075 6.652 5.488
31 8.680 7.184 5.954
32 9.331 7.758 6.461
33 10.031 8.379 7.010
34 10.783 9.049 7.606
35 11.592 9.773 8.252
36 12.462 10.555 8.953
37 13.396 11.400 9.714
38 14.401 12.311 10.540
39 15.481 13.296 11.436
40 16.642 14.360 12.408
41 17.890 15.509 13.463
42 19.232 16.750 14.607
43 20.674 18.090 15.849
44 22.225 19.537 17.196
45 23.892 21.100 18.658
46 25.684 22.788 20.244
47 27.610 24.611 21.964
48 29.681 26.580 23.831
49 31.907 28.706 25.857
50 34.300 31.002 28.055
51 36.872 33.483 30.439
52 39.638 36.161 33.027
53 42.611 39.054 35.834
54 45.806 42.178 38.880
55 49.242 45.553 42.185
56 52.935 49.197 45.770
57 56.905 53.133 49.661
58 61.173 57.383 53.882
59 65.761 61.974 58.462
60 70.693 66.932 63.431
61 75.995 72.286 68.823
62 81.695 78.069 74.673
63 87.822 84.315 81.020
64 94.408 91.060 87.907
65 101.489 98.345 95.379
----------
* BASED ON THE UP 1984 MORTALITY TABLE TESTING AGE 65
(C)2009 Anscenus, Inc., Brainered, MN
Page 36 of 36
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OTHER PLAN INFORMATION
Section Six; Part A,4: Exclusions from Compensation: Compensation shall exclude
the following; reimbursements or other expense allowances, fringebenefits (cash
or non-cash), Group Term Life Insurance benefits in excess of $50,000, moving
expenses, deterred compensation and welfare benefits.
QUALIFIED RETIREMENT PLAN
FINAL 415/411 REGULATIONS
BASIC PLAN DOCUMENT AMENDMENT
This Amendment of the Plan (hereinafter referred to as "the Amendment") is
comprised of this Basic Plan Document Amendment and the corresponding Adoption
Agreement Amendment. The Amendment is adopted to reflect the final regulations
published by the Department of the Treasury on April 5, 2007, governing
limitations on benefits and contributions within qualified plans under Section
415 of the Internal Revenue Code. The Amendment is intended to provide good
faith compliance with the requirements of the final regulations. The Amendment
is also adopted to reflect the final regulations published by the Department of
the Treasury on August 9, 2006, which provide guidance with respect to the
interaction between the anti-cutback rules of Section 411(d)(6) of the Internal
Revenue Code and the nonforfeitability requirements of Section 411(a) of the
Internal Revenue Code. The Amendment is intended to provide good faith
compliance with the requirements of the final regulations. The portion of the
Amendment addressing the 415 regulations shall be effective for Limitation Years
beginning on or after the Restatement Date of the Basic Plan Document to which
the Amendment applies. The portion of the Amendment addressing the 411
regulations shall be effective beginning on the Restatement Date of the Basic
Plan Document to which the Amendment applies and shall supersede any
inconsistent provisions of the Plan.
NOTE: Section numbers used below correspond to the Basic Plan Document Sections
to which the Amendment provisions relate.
DEFINITIONS
ANNUAL ADDITIONS
THE DEFINITION OF ANNUAL ADDITIONS IS MODIFIED BY REMOVING THE LAST PARAGRAPH
REGARDING EXCESS ANNUAL ADDITIONS.
COMPENSATION
ANY ELECTIONS PREVIOUSLY MADE ON YOUR PLAN'S ADOPTION AGREEMENT WITH RESPECT TO
THE DEFINITION OF COMPENSATION WILL CONTINUE TO APPLY. THE DEFINITION OF 415
SAFE-HARBOR COMPENSATION UNDER THE GENERAL DEFINITION OF COMPENSATION SECTION A,
PARAGRAPH THREE IS REPLACED WITH THE FOLLOWING:
A. GENERAL DEFINITION
3. 415 safe-harbor compensation.
a. Items includible as Compensation. Compensation is defined as:
(1) Wages, salaries, 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 (or to the extent amounts would have been received
and includible in gross income but for an election under
Code Sections 125(a), 132(f)(4), 402(e)(3), 402(h)(1)(B),
402(k), or 457(b)). These amounts include, but are not
limited to, commissions paid to 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 Section
1.62-2(c) of the Treasury Regulations.
(2) In the case of an Employee who is an Employee within the
meaning of Code Section 401(c)(1) and regulations
promulgated under Code Section 401(c)(1), the Employee's
earned income (as described in Code Section 401(c)(2) and
regulations promulgated under Code Section 401(c)(2)), plus
amounts deferred at the election of the Employee that would
be includible in gross income but for the rules of Code
Sections 402(e)(3), 402(h)(1)(B), 402(k), or 457(b).
(3) Amounts described in Code Section 104(a)(3), 105(a), or
105(h), but only to the extent that these amounts are
includible in the gross income of the Employee.
(4) Amounts paid or reimbursed by the Employer for moving
expenses incurred by an Employee, but only to the extent
that at the time of the payment it is reasonable to believe
that these amounts are not deductible by the Employee under
Code Section 217.
(5) The value of a nonstatutory option (which is an option
other than a statutory option as defined in Section
1.421-l(b) of the Treasury Regulations) granted to an
Employee by the Employer, but only to the extent that the
value of the option is includible in the gross income of the
Employee for the taxable year in which granted.
(6) The amount includible in the gross income of an Employee
upon making the election described in Code Section 83(b).
(7) Amounts that are includible in the gross income of an
Employee under the rules of Code Sections 409A or Section
457(f)(1)(A) or because the amounts are constructively
received by the Employee.
b. Items not includible as Compensation. The term Compensation does
not include-
(1) Contributions (other than elective contributions described
in Code Sections 402(e)(3), 408(k)(6), 408(p)(2)(A)(i), or
457(b)) made by the Employer to a plan of deferred
compensation (including a simplified employee pension
described in Code Section 408(k) or a simple retirement
account described in Code Section 408(p), and whether or not
qualified) to the extent that the contributions are not
includible in the gross income of the Employee for the
taxable year in which contributed. In addition, any
distributions from a plan of deferred compensation (whether
or not qualified) are not considered as Compensation for
Code Section 415 purposes, regardless of whether such
amounts are includible in the gross income of the Employee
when distributed.
(2) Amounts realized from the exercise of a nonstatutory option
(which is an option other than a statutory option as defined
in Section 1.421-1(b) of the Treasury Regulations), or when
restricted stock or other property held by an Employee
either becomes freely transferable or is no longer subject
to a substantial risk of forfeiture (see Code Section 83 and
regulations promulgated under Code Section 83).
(C)2007 ASCENSUS, INC.
Page 1 of 3
(3) Amounts realized from the sale, exchange, or other
disposition of stock acquired under a statutory stock option
(as defined in Section 1.421-l(b) of the Treasury
Regulations).
(4) Other amounts that receive special tax benefits, such as
premiums for group term life insurance (but only to the
extent that the premiums are not includible in the gross
income of the employee and are not salary reduction amounts
that are described in Code Section 125).
(5) Other items of remuneration that are similar to any of the
items listed in paragraphs (b)(1) through (b)(4) of this
section.
For any Self-Employed Individual covered under the
Plan, Compensation will mean Earned Income.
THE DEFINITION OF COMPENSATION, SECTION B, IS MODIFIED BY REPLACING THE
LAST PARAGRAPH WITH THE FOLLOWING:
B. DETERMINATION PERIOD AND OTHER RULES
Payments made after Severance from Employment will be either included or
excluded from Compensation within the meaning of Code Section 415(c)(3),
depending on the category of such compensation. Whether or not such
compensation is included or excluded is based on the definition below and
the elections made by the Employer in the Adoption Agreement. Such
payments, if included, must meet the following requirements:
1. Compensation described in paragraph (2) of this section will be
included in the definition of Compensation (within the meaning of Code
Section 415(c)(3)). In addition, compensation described in paragraphs
(3) and (4) of this section will be excluded from the definition of
Compensation (within the meaning of Code Section 415(c)(3)) unless
otherwise elected in the Adoption Agreement Amendment. If the Adopting
Employer elects in the Adoption Agreement Amendment to include
compensation described in paragraphs (3) or (4) or both, such payments
must also meet the following requirements:
(a) Those amounts are paid by the later of 2 1/2 months after
Severance from Employment with the Employer maintaining the Plan
or the end of the Limitation Year that includes the date of
Severance from Employment with the Employer maintaining the Plan;
and
(b) Those amounts would have been included in the definition of
Compensation if they were paid prior to the Employee's Severance
from Employment with the Employer maintaining the Plan.
(c) A governmental plan (as defined in Code Section 414(d)) may
provide for the substitution of the calendar year in which the
Severance from Employment with the Employer maintaining the Plan
occurs for the Limitation Year in which the Severance from
Employment with the Employer maintaining the Plan occurs.
2. Regular Pay. An amount is described in this paragraph (2) if-
(a) The payment is regular Compensation for services during the
Employee's regular working hours, or Compensation for services
outside the Employee's regular working hours (such as overtime or
shift differential), commissions, bonuses, or other similar
payments; and
(b) The payment would have been paid to the Employee prior to a
Severance from Employment if the Employee had continued in
employment with the Employer.
3. Leave Cashouts. An amount is described in this paragraph (3) if-
(a) The payment is for unused accrued bona fide sick, vacation, or
other leave, but only if the Employee would have been able to use
the leave if employment had continued.
4. Deferred Compensation. An amount is described in this paragraph (4)
if-
(a) The payment is an amount received by an Employee pursuant to a
nonqualified unfunded deferred compensation plan, but only if the
payment would have been paid to the Employee at the same time if the
Employee had continued in employment with the Employer and only to the
extent that the payment is includible in the Employee's gross income.
5. Other post-severance payments. Any payment that is not described in
paragraph (2), (3), or (4) of this section is not considered
Compensation under paragraph (1) of this section if paid after
Severance from Employment with the Employer maintaining the Plan, even
if it is paid within the time period described in paragraph (1) of
this section. Thus, Compensation does not include severance pay, or
parachute payments within the meaning of Code Section 280G(b)(2), if
they are paid after Severance from Employment with the Employer
maintaining the Plan, and does not include post-severance payments
under a nonqualified unfunded deferred compensation plan unless the
payments would have been paid at that time without regard to the
Severance from Employment. Any payments not described above are not
considered Compensation if paid after Severance from Employment, even
if they are paid within 2 1/2 months following Severance from
Employment, except for payments to an individual who does not
currently perform services for the Employer by reason of qualified
military service (within the meaning of Code Section 414(u)(l)) to the
extent these payments do not exceed the amounts the individual would
have received if the individual had continued to perform services for
the Employer rather than entering qualified military service.
THE DEFINITION OF COMPENSATION IS AMENDED BY ADDING THE FOLLOWING AS NEW ITEM G
AFTER THE LAST PARAGRAPH.
G. ELECTIVE DEFERRALS
Notwithstanding anything in the Plan to the contrary, with respect to
Compensation that is paid (or would have been paid but for a cash or
deferred election) in Plan Years beginning on or after July 1, 2007, a
Participant may only make Elective Deferrals from Compensation within the
meaning of Code Section 415(c)(3) and Treasury Regulation 1.415(c)-2.
EARNED INCOME
THE DEFINITION OF EARNED INCOME IS AMENDED BY ADDING THE FOLLOWING PARAGRAPH AS
PARAGRAPH THREE:
For purposes of applying the limitations of Code Section 415, in the case of an
Employee who is an Employee within the meaning of Code Section 401(c)(1) and
regulations promulgated under Code Section 401(c)(1), the Employee's earned
income (as described in Code Section 401(c)(2) and regulations promulgated under
Code Section 401(c)(2)), shall include amounts deferred at the election of the
Employee that would be includible in gross income but for the rules of Code
Sections 402(e)(3), 402(h)(1)(B), 402(k), or 457(b).
(C)2007 Ascensus, Inc.
Page 2 of 3
HIGHLY COMPENSATED EMPLOYEE
THE DEFINITION OF HIGHLY COMPENSATED EMPLOYEE IS AMENDED BY REPLACING THE LAST
PARAGRAPH WITH THE FOLLOWING:
The determination of who is a Highly Compensated Employee, including but not
limited to, the determinations of the number and identity of Employees in the
top-paid group and the Compensation that is considered, will be made in
accordance with Code Section 414(q) and the regulations thereunder. Adoption
Agreement elections to include or exclude items from Compensation that are
inconsistent with Code Section 414(q) will be disregarded for purposes of
determining who is a Highly Compensation Employee.
LIMITATION YEAR
THE DEFINITION OF LIMITATION YEAR IS AMENDED BY ADDING THE FOLLOWING PARAGRAPH
AS PARAGRAPH TWO:
If a Plan is terminated effective as of a date other than the last day of the
Plan's Limitation Year, the Plan is treated for purposes of this section as if
the Plan was amended to change its Limitation Year. As a result of this deemed
amendment, the Code Section 415(c)(1)(A) dollar limit must be prorated under the
short Limitation Year rules.
SECTION THREE: CONTRIBUTIONS
PARAGRAPH (A)(4) OF SECTION 3, LIMITATION ON ALLOCATIONS, IS REPLACED WITH THE
FOLLOWING:
Any Excess Annual Additions allocated to a Participant should be corrected
through the Employee Plans Compliance Resolution System or such other correction
method allowed by statute, regulations or regulatory authorities.
SECTION SEVEN: MISCELLANEOUS
SECTION 7.06(D), AMENDMENT OF VESTING SCHEDULE, AMENDED BY ADDING THE FOLLOWING
AT THE END OF THIS SECTION:
With respect to benefits accrued as of the later of the adoption or effective
date of the amendment, the Vested percentage of each Participant will be the
greater of the Vested percentage under the old vesting schedule or the Vested
percentage under the new vesting schedule.
(C)2007 Ascensus, Inc.
Page 3 of 3
QUALIFIED RETIREMENT PLAN
FINAL 415 REGULATIONS
ADOPTION AGREEMENT AMENDMENT
This Amendment of the Plan (hereinafter referred to as "the Amendment") is
comprised of this Adoption Agreement Amendment and the corresponding Basic Plan
Document Amendment and is adopted to reflect the final regulations published by
the Department of the Treasury on April 5, 2007, governing limitations on
benefits and contributions within qualified plans under Section 415 of the
Internal Revenue Code. The Amendment is intended to provide good faith
compliance with those requirements until the Plan is formally restated to
include such provisions and supersedes the provisions of the Plan to the extent
those provisions are inconsistent with the provisions of the Amendment. The
Amendment shall be effective for Limitation Years beginning on or after July 1,
2007.
EMPLOYER INFORMATION
Name of Adopting Employer Hamilton Precision Metals, Inc.
Address 1780 Rohrerstown Road
City Lancaster State PA Zip 17601-2334
Telephone 717-569-7061 Adopting Employer's Federal Tax Identification Number
72-1532170
Adopting Employer's Tax Year End (specify month and day) 12/31
Name of Plan Hamilton Precision Metals 401(k) Employee Savings Plan
Plan Sequence Number 002
SECTION SIX: DEFINITIONS
PART A, ITEM 5 OF THE ADOPTION AGREEMENT IS REMOVED AND REPLACED WITH THE
FOLLOWING:
PART A. 5. POST-SEVERANCE COMPENSATION
LEAVE CASHOUTS
In addition to any adjustment to Compensation elected in the
Adoption Agreement, will Compensation exclude Leave Cashouts paid
after Severance from Employment as described in the accompanying
Basic Plan Document Amendment under item(B)(3) (select one)?
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will apply and such
compensation will be excluded from the definition of
Compensation.
DEFERRED COMPENSATION
In addition to any adjustment to Compensation elected in the
Adoption Agreement, will Compensation exclude Deferred
Compensation paid after Severance from Employment as described in
the accompanying Basic Plan Document Amendment under item (B)(4)
(select one)?
OPTION 1: [X] Yes.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will apply and such
compensation will be excluded from the definition of
Compensation.
SIGNATURE OF EMPLOYER
1. I ACKNOWLEDGE THAT I HAVE RELIED UPON MY OWN ADVISORS REGARDING THE
COMPLETION OF THIS AMENDMENT AND THE LEGAL AND TAX IMPLICATION AMENDING
THIS PLAN;
2. I UNDERSTAND THAT MY FAILURE TO PROPERLY COMPLETE THIS AMENDMENT MAY
RESULT IN DISQUALIFICATION OF THE PLAN; AND
3. I HAVE RECEIVED A COPY OF THIS AMENDMENT.
Signature of Adopting Employer (ILLEGIBLE) Date Signed 4/6/2009
Type Name Henry Policare Title Dir. Global Benefits of HR
(C)2007 Ascensus, Inc.
Page 1 of 1
PENSION PROTECTION ACT OF 2006
BASIC PLAN DOCUMENT AMENDMENT
This amendment of the Plan (hereinafter referred to as "the Amendment") is
comprised of this Pension Protection Act of 2006 Basic Plan Document Amendment
(the "Basic Plan Document Amendment") and the corresponding Adoption Agreement
Amendment. The Amendment is adopted to reflect provisions of the Pension
Protection Act of 2006 ("PPA") and other legislation, including the Worker,
Retiree, and Employer Recovery Act of 2008 (other than the waiver of 2009
required minimum distributions). The Amendment is intended to provide good faith
compliance with the PPA and related guidance until the Plan is restated to
include the PPA requirements. Except as otherwise provided, the Amendment shall
be effective as of the later of the first day of the first Plan Year beginning
after August 17, 2006, or the Effective Date of the Plan. This Amendment
supersedes the provisions of the Plan to the extent those provisions are
inconsistent with the provisions of the Amendment. The previous sentence will
apply to the vesting provisions of the Amendment only until the Plan is restated
for the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA).
After the Plan is restated for EGTRRA, the vesting schedule selected in the
EGTRRA Adoption Agreement will apply. This Amendment will not cause the Plan to
become individually designed.
DEFINITIONS
MATCHING CONTRIBUTION
THE PLAN'S DEFINITION OF MATCHING CONTRIBUTION IS REPLACED WITH THE FOLLOWING:
Means an Employer Contribution made to this or any other defined contribution
plan on behalf of a Participant on account of an Elective Deferral or a
Nondeductible Employee Contribution made by such Participant under a plan
maintained by the Employer. Notwithstanding the foregoing, if the Adopting
Employer has elected to apply the Safe Harbor CODA provisions of the Plan,
Matching Contributions means contributions made by the Employer on account of an
Eligible Employee's Elective Deferrals. For Plan Years beginning on or after
January 1, 1998, Matching Contributions made by self-employed Participants (as
defined in Code Section 401(c)) shall not be treated as Elective Deferrals.
QUALIFIED OPTIONAL SURVIVOR ANNUITY (QOSA)
QUALIFIED OPTIONAL SURVIVOR ANNUITY (QOSA) IS ADDED TO THE PLAN AS A NEW DEFINED
TERM WITH THE FOLLOWING DEFINITION:
Means an annuity 1) for the life of the Participant with a survivor annuity for
the life of the Spouse that is equal to the "applicable percentage" of the
amount of the annuity that is payable during the joint lives of the Participant
and the Spouse, and 2) that is the actuarial equivalent of a single annuity for
the life of the Participant. If the survivor annuity provided by the Qualified
Joint and Survivor Annuity is less than 75 percent of the annuity payable during
the joint lives of the Participant and the Spouse, the applicable percentage is
75 percent. If the survivor annuity provided by the Qualified Joint and Survivor
Annuity is greater than or equal to 75 percent, the applicable percentage is 50
percent.
CONTRIBUTIONS
THE BASIC PLAN DOCUMENT SECTION TITLED REGULAR CONTRIBUTION LIMIT, AND
DISCUSSING CONTRIBUTION LIMITS FOR A DEEMED IRA DESIGNATED BY THE IRA HOLDER AS
A ROTH IRA, IF APPLICABLE, IS MODIFIED BY ADDING THE FOLLOWING TO THE END:
Effective for taxable years beginning after 2006, these limitations (if
applicable) will be increased under Code Section 408A(c)(3) to reflect
cost-of-living adjustments.
OTHER PROVISIONS
PART A. DIRECT ROLLOVERS TO THE PLAN OF AFTER-TAX AMOUNTS IN ANNUITY CONTRACTS
If rollover contributions made from Code Section 403(b) plans are
otherwise permitted under the Plan, the Plan will accept Direct
Rollovers of distributions of Nondeductible Employee Contributions
and/or Roth Elective Deferrals (if applicable) if indicated in the
Adoption Agreement Amendment.
Applicability and Effective Date: This provision shall apply if
elected by the Employer in the Adoption Agreement Amendment and shall
be effective as specified in the Adoption Agreement Amendment.
VESTING
OTHER PROVISIONS
PART A. PARTICIPANTS SUBJECT TO THE PPA VESTING SCHEDULE
A Participant's Individual Account derived from Employer Profit
Sharing Contributions, Employer Money Purchase Pension Contributions
or Employer Target Benefit Pension Contributions shall vest as
provided in the Adoption Agreement Amendment. If no election is made,
all benefits attributable to such contributions shall be fully Vested
when made to the Plan. If the vesting schedule for Employer Profit
Sharing Contributions, Employer Money Purchase Pension Contributions
or Employer Target Benefit Pension Contributions is something other
than 100% immediate vesting, the Participant election in the Basic
Plan Document section titled Amendment Of Vesting Schedule shall
apply.
Applicability and Effective Date: Unless otherwise elected in the
Adoption Agreement Amendment, this provision shall apply to all
Participants that have accrued benefits derived from Employer Profit
Sharing Contributions, Employer Money Purchase Pension Contributions
or Employer Target Benefit Pension Contributions as of December 31,
2006. If this provision does not apply to all Participants, only
Participants with accrued benefits derived from Employer Profit
Sharing Contributions, Employer Money Purchase Pension Contributions
or Employer Target Benefit Pension Contributions who complete an Hour
of Service under the Plan in a Plan Year beginning after December 31,
2006, will be subject to the accelerated vesting schedule.
PART B. INDIVIDUAL ACCOUNT BALANCES SUBJECT TO THE PPA VESTING SCHEDULE
Applicability and Effective Date: Unless otherwise elected in the
Adoption Agreement Amendment, this provision shall apply to all
Employer Profit Sharing Contributions, Employer Money Purchase Pension
Contributions or Employer Target Benefit Pension Contributions made to
the Plan that were previously subject to a less favorable vesting
schedule. If this provision does not apply to all Employer Profit
Sharing Contributions, Employer Money Purchase Pension Contributions
or Employer Target Benefit Pension Contributions, only Employer Profit
Sharing Contributions, Employer Money Purchase Pension Contributions
or Employer Target Benefit Pension Contributions that are contributed
to the Plan for Plan Years beginning after December 31, 2006, will be
subject to the accelerated vesting schedule. All previously
contributed Employer Profit Sharing Contributions, Employer Money
Purchase Pension Contributions or Employer Target Benefit Pension
Contributions will remain subject to the separate, less favorable
vesting schedule that was in place before this Adoption Agreement
Amendment.
(C)2009 Ascensus, Inc., Brainerd, MN
Page 1 of 3
DISTRIBUTIONS TO PARTICIPANTS
THE BASIC PLAN DOCUMENT SECTION TITLED SPECIAL REQUIREMENTS FOR CERTAIN 401(K)
CONTRIBUTIONS IS MODIFIED BY REPLACING THE NEXT TO LAST PARAGRAPH WITH THE
FOLLOWING:
Notwithstanding the foregoing, ADP Test Safe Harbor Contributions may not be
distributed earlier than separation from service, death, Disability, an event
described in Code Section 401(k)(10), or, in the case of a profit sharing plan,
the attainment of age 591/2.
THE BASIC PLAN DOCUMENT SECTION TITLED QUALIFIED JOINT AND SURVIVOR ANNUITY IS
AMENDED BY ADDING THE FOLLOWING PARAGRAPH TO THE END:
A Plan that is subject to the Qualified Joint and Survivor Annuity requirements
must offer an additional survivor annuity option in the form of a qualified
optional survivor annuity (QOSA). A QOSA is an annuity 1) for the life of the
Participant with a survivor annuity for the life of the Spouse that is equal to
the applicable percentage of the amount of the annuity that is payable during
the joint lives of the Participant and the Spouse, and 2) that is the actuarial
equivalent of a single annuity for the life of the Participant. If the survivor
annuity provided by the Qualified Joint and Survivor Annuity is less than 75
percent of the annuity payable during the joint lives of the Participant and
Spouse, the applicable percentage for the qualified optional survivor annuity is
75 percent. If the survivor annuity provided by the Qualified Joint and Survivor
Annuity is greater than or equal to 75 percent of the annuity payable during the
joint lives of the Participant and Spouse, the applicable percentage for the
qualified optional survivor annuity is 50 percent.
Effective Date: This provision applies to Plan Years beginning after December
31, 2007.
THE BASIC PLAN DOCUMENT SECTION TITLED DETERMINATION OF INCOME OR LOSS, AND
DISCUSSING THE DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS, IS MODIFIED BY
REPLACING THE FIRST SENTENCE OF THIS PARAGRAPH WITH THE FOLLOWING:
Excess Elective Deferrals shall be adjusted for any income or loss up to the end
of the Plan Year to which such contributions were allocated.
THE BASIC PLAN DOCUMENT SECTION TITLED DETERMINATION OF INCOME OR LOSS, AND
DISCUSSING THE DISTRIBUTION OF EXCESS CONTRIBUTIONS, IS MODIFIED BY REPLACING
THE FIRST SENTENCE OF THIS PARAGRAPH WITH THE FOLLOWING:
Excess Contributions shall be adjusted for any income or loss up to the end of
the Plan Year to which such contributions were allocated.
THE BASIC PLAN DOCUMENT SECTION TITLED DETERMINATION OF INCOME OR LOSS, AND
DISCUSSING THE DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS, IS MODIFIED BY
REPLACING THE FIRST SENTENCE OF THIS PARAGRAPH WITH THE FOLLOWING:
Excess Aggregate Contributions shall be adjusted for any income or loss up to
the end of the Plan Year to which such contributions were allocated.
OTHER PROVISIONS
PART A. DISTRIBUTIONS BECAUSE OF BENEFICIARY HARDSHIP
If elected in the Adoption Agreement Amendment, the definition of
hardship under the Basic Plan Document section titled Hardship
Withdrawals will provide that if an event would constitute a hardship
if it occurred with respect to the Participant's Spouse or dependent,
such event will also constitute a hardship if it occurs to a person
who is the Participant's primary Beneficiary under the Plan. If the
Plan is a Safe Harbor CODA, the Plan will not fail to satisfy the Safe
Harbor CODA requirements because of a mid-year change to implement
this hardship withdrawal provision.
Effective Date: If elected in the Adoption Agreement Amendment this
provision shall be effective as specified in the Adoption Agreement
Amendment.
PART B. DIRECT ROLLOVERS FROM THE PLAN BY BENEFICIARIES
Except as otherwise elected in the Adoption Agreement Amendment, a
Beneficiary (subject to additional regulatory guidance) may directly
roll over their portion of the Individual Account to an inherited
individual retirement arrangement (under Code Sections 408 or 408A).
Such Direct Rollovers must otherwise qualify as Eligible Rollover
Distributions.
Notwithstanding the preceding paragraph and regardless of what is
elected in the Adoption Agreement Amendment, for Plan Years beginning
on or after January 1, 2010, the Plan will permit a Beneficiary
(subject to additional regulatory guidance) to directly roll their
portion of the Individual Account to an inherited individual
retirement arrangement (under Code Sections 408 or 408A). Such Direct
Rollovers must otherwise qualify as Eligible Rollover Distributions.
Effective Date: Unless otherwise specified in the Adoption Agreement
Amendment, this section applies to distributions on or after January
1, 2007.
PART C. QUALIFIED RESERVIST DISTRIBUTIONS
Except as otherwise elected in the Adoption Agreement Amendment,
Participants may take penalty-free qualified reservist distributions
from the Plan. A qualified reservist distribution means any
distribution to a Participant if 1) such distribution is made from
Elective Deferrals, 2) such Participant was ordered or called to
active duty for a period in excess of 179 days or for an indefinite
period, and 3) such distribution is made during the period beginning
on the date of such order or call and ending at the close of the
active duty period. The Participant must have been ordered or called
to active duty after September 11, 2001, and before December 31, 2007,
or such later date as extended by legislation or other means.
Effective Date: Unless otherwise specified in the Adoption Agreement
Amendment, this section applies to distributions after September 11,
2001.
PART D. AGE 62 DISTRIBUTIONS
If elected in the Adoption Agreement Amendment, Participants in a
money purchase pension or target benefit pension plan may take a
distribution when they reach age 62, even if they have not separated
from employment at the time of the distribution.
Effective Date: If elected in the Adoption Agreement Amendment, this
provision shall be effective as specified in the Adoption Agreement
Amendment.
PART E. DISTRIBUTION NOTICES
Distribution notices under Code Sections 402(f), 411(a)(ll), and 417
and notices under ERISA Section 205(c)(7)(A) (and under all related
regulations) that have been subject to a 90-day maximum period will
become subject to a 180-day maximum period.
Effective Date: The revised maximum notice period applies to Plan
Years beginning after December 31, 2006.
(C)2009 Ascensus, Inc., Brainerd, MN
Page 2 of 3
MISCELLANEOUS
THE BASIC PLAN DOCUMENT SECTION TITLED BONDING IS MODIFIED BY ADDING TO THE END
OF THE PARAGRAPH THE FOLLOWING SENTENCE:
In the case of a Plan that holds employer securities (within the meaning of
ERISA Section 407(d)(1)), the maximum bond amount is $1,000,000 or such other
amount as the Secretary of Labor prescribes.
THE BASIC PLAN DOCUMENT SECTION TITLED INVESTMENT AUTHORITY IS MODIFIED BY
ADDING THE FOLLOWING, AS THE NEXT ALPHABETICALLY ORDERED PARAGRAPH, TO THE END:
DIVERSIFICATION REQUIREMENTS WHEN EMPLOYER SECURITIES ARE HELD AS
INVESTMENTS IN THE PLAN
For Plan Years beginning on or after January 1, 2007, Code Section
401(a)(35) requires qualified retirement plans that hold employer
securities to allow Participants, Alternate Payees with Individual Accounts
under the Plan, or Beneficiaries of deceased Participants to diversify
their investments. This Code section and other relevant guidance govern the
diversification procedures, which include the following.
1. Employee Contributions And Elective Deferrals Invested In Employer
Securities - In the case of the portion of an Individual Account
attributable to Nondeductible Employee Contributions and Elective
Deferrals (if applicable) that are invested in employer securities,
the Participant, Alternate Payee, or Beneficiary, as applicable, may
elect to direct the Plan to divest any such securities and to reinvest
an equivalent amount in other investments that meet the investment
option requirements below.
2. Employer Contributions Invested In Employer Securities - In the case
of the portion of an Individual Account attributable to Employer
Contributions other than Elective Deferrals that are invested in
employer securities, a Participant who has completed at least three
years of service, an Alternative Payee with respect to a Participant
who has completed at least three years of service, or a Beneficiary,
as applicable, may elect to direct the Plan to divest any such
securities and to reinvest an equivalent amount in other investments
that meet the investment option requirements below.
3. Investment Options - The diversification requirements above are met if
the Plan offers not less than three investment options, other than
employer securities, to which a Participant, Alternate Payee, or
Beneficiary, as applicable may direct the proceeds from the divestment
of employer securities, each of which is diversified and has
materially different risk and return characteristics. The Plan may
limit the time for divestment and reinvestment to periodic, reasonable
opportunities that occur no less frequently than quarterly. Except as
provided in regulations, the Plan must not impose employer securities
investment restrictions or conditions that are not imposed on the
investment of other Plan assets (other than restrictions or conditions
imposed by securities laws or other relevant guidance).
4. Exception For Certain Plans - The diversification requirement does not
apply to a one-Participant retirement plan or to an employee stock
ownership plan (ESOP) if 1) there are no contributions or earnings in
the ESOP that are held within such plan and that are subject to Code
Sections 401(k) or (m), and 2) such plan is a separate plan for
purposes of Code Section 414(1) with respect to any other defined
benefit plan or defined contribution plan maintained by the same
employer or employers.
5. Transition Rule For Securities Attributable To Employer Contributions
- In the case of the portion of an Individual Account attributable to
Employer Contributions other than Elective Deferrals that are invested
in employer securities, including, a Participant who has completed at
least three years of service, an Alternate Payee with respect to a
Participant who has completed at least three years of service, or a
Beneficiary, as applicable, the employer securities acquired in a Plan
Year beginning before January 1, 2007, will be subject to the
following divestiture and reinvestment transition schedule, which
applies separately with respect to each class of securities.
For the Plan Year in which diversification requirement applies
the applicable percentage subject to diversification is:
First 33%
Second 66%
Third 100%
This three-year phase-in requirement does not apply to a
Participant who has attained age 55 and who has completed at
least three years of service before the first Plan Year
beginning after December 31, 2005.
(C)2009 Ascensus, Inc., Brainerd, MN
Page 3 of 3
PENSION PROTECTION ACT OF 2006
401(K) ADOPTION AGREEMENT AMENDMENT
This amendment of the Plan (hereinafter referred to as "the Amendment") is
comprised of this Pension Protection Act of 2006 401(k) Adoption Agreement
Amendment (the "Adoption Agreement Amendment") and the corresponding Basic Plan
Document Amendment. The Amendment is adopted to reflect provisions of the
Pension Protection Act of 2006 ("PPA") and other legislation, including the
Worker, Retiree, and Employer Recovery Act of 2008 (other than the waiver of
2009 required minimum distributions). The Amendment is intended to provide good
faith compliance with the PPA and related guidance until the Plan is formally
amended to include the PPA requirements. Except as otherwise provided in the
Basic Plan Document Amendment, this Amendment is effective as specified in this
Adoption Agreement Amendment. This Amendment supersedes the existing provisions
of the Plan to the extent those provisions are inconsistent with the provisions
of the Amendment. The previous sentence will apply to the vesting provisions of
the Amendment only until the Plan is restated for the Economic Growth and Tax
Relief Reconciliation Act of 2001 (EGTRRA). After the Plan is restated for
EGTRRA, the vesting schedule selected in the EGTRRA Adoption Agreement will
apply. In general, if you have changed any of the following Adoption Agreement
Amendment provisions one or more times you will need to sign and complete more
than one Adoption Agreement Amendment. For example, if a Beneficiary was
permitted to directly rollover to an individual retirement arrangement in 2007
but was not permitted to do so in 2008, then two Amendments are required.
EMPLOYER INFORMATION
Name of Plan Hamilton Precision Metals 401(k) Employee Savings Plan
Plan Sequence Number 002 Trust Identification Number (if applicable) ____________ Account Number 097409
CONTRIBUTIONS
COMPLETE PART A BELO
PART A. DIRECT ROLLOVER OF 403(B) AFTER-TAX CONTRIBUTIONS
If the Plan cutrently accepts Direct Rollovers from an annuity
contract described in Code Section 403(b), will the Plan accept the
following as Direct Rollovers (select "Yes" or "No" to each of the
following items by selecting the appropriate box)?
1. Nondeductible Employee Contributions. [ ] Yes. [x] No.
2. Roth Elective Deferrals. [ ] Yes. [x] No.
NOTE: Option 2 may be selected only if the Plan allows Roth Elective
Deferrals. If a box is not selected for an item, "No" will apply for
such item.
Effective Date: _______ (Specify an effective date for this provision.
The effective date may not be earlier than the first day of the
taxable year beginning after December 31, 2006.)
VESTING
COMPLETE PARTS A THROUGH C BELOW
PART A. PARTICIPANTS SUBJECT TO THE PPA VESTING SCHEDULE
The accelerated vesting schedule provisions of this Amendment shall
apply to (select one):
OPTION 1: [ ] All Participants with Individual Accounts derived from
Employer Profit Sharing Contributions.
OPTION 2: [ ] Those Participants with Individual Accounts derived
from Employer Profit Sharing Contributions who
complete an Hour of Service under the Plan in a Plan
Year beginning after December 31, 2006.
NOTE: If no option is selected Option 1 will apply.
PART B. INDIVIDUAL ACCOUNT BALANCES SUBJECT TO THE PPA VESTING SCHEDULE
The accelerated vesting schedule provisions of this Amendment shall
apply to (select one):
OPTION 1: [ ] All Employer Profit Sharing Contributions made to the
Plan that were previously subject to a less favorable
vesting schedule.
OPTION 2: [ ] Only those Employer Profit Sharing Contributions made
to the Plan for Plan Years beginning after December
31, 2006.
NOTE: If no option is selected Option 1 will apply.
(C)2009 Ascensus, Inc., Brainerd, MN
Page 1 of 3
PART C. VESTING SCHEDULE FOR EMPLOYER PROFIT SHARING CONTRIBUTIONS
A Participant shall become Vested in their Individual Account derived
from Employer Profit Sharing Contributions made pursuant to the
Contribution section of the Adoption Agreement as follows. (Select one
vesting schedule for Employer Profit Sharing Contributions, if
applicable.)
YEARS OF VESTED PERCENTAGE
VESTING SERVICE Option 1 [ ] Option 2 [ ] Option 3 [ ] Option 4 [ ] (Complete if Chosen)
---------------- ----------- ----------- ----------- ------------ -------------------
Less than One 0% 0% 100% _____%
1 0% 0% 100% _____%
2 0% 20% 100% _____% (not less than 20%)
3 100% 40% 100% _____% (not less than 40%)
4 100% 60% 100% _____% (not less than 60%)
5 100% 80% 100% _____% (not less than 80%)
6 100% 100% 100% _____% (not less than 100%)
NOTE: If no option is selected, Option 3 will apply.
DISTRIBUTIONS
COMPLETE PARTS A THROUGH C BELOW.
PART A. DISTRIBUTIONS BECAUSE OF BENEFICIARY HARDSHIP
If the Plan currently permits hardship distributions, will hardship
distributions also be permitted because of a hardship incurred by the
primary Beneficiary of a Participant (select one)?
OPTION 1: [ ] Yes, effective on _________.(Specify an effective date
for this provision. The effective date may not be
earlier than August 17, 2006.)
OPTION 2: [X] No.
NOTE: If no potion is selected, Option 2 will apply.
PART B. BENEFICIARY ROLLOVERS
Will Beneficiaries be permitted to directly roll over the Individual
Account of deceased Participants to an inherited individual retirement
arrangement (select one)?
OPTION 1: [X] Yes, effective on 05/01/2009. (Specify an effective
date for this provision. The effective date may not
be earlier than January 1, 2007.)
OPTION 2: [ ] No. NOTE: Beneficiaries will be permitted to directly
roll over to inherited individual retirement
arrangements in Plan Years beginning on or after
January 1, 2010, even if Option 2 is selected.
NOTE: If no option is selected, Option I will apply.
PART C. QUALIFIED RESERVIST DISTRIBUTIONS
Will Qualified Reservist Distributions of Elective Deferrals be
permitted (select one)?
OPTION 1: [X] Yes, effective the later of September 11, 2001, or the
effective date of the Plan unless a later effective
date is indicated here 05/01/2009
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will apply.
SIGNATURE OF EMPLOYER
1. I ACKNOWLEDGE THAT I HAVE RELIED UPON MY OWN ADVISERS REGARDING THE
COMPLETION OF THE AMENDMENT AND THE LEGAL AND TAX IMPLICATIONS OF AMENDING
THIS PLAN:
2. I UNDERSTAND THAT MY FAILURE TO PROPERLY COMPLETE THE AMENDMENT MAY RESULT
IN DISQUALIFICATION OF THE PLAN; AND
3. I HAVE RECEIVED A COPY OF THE AMENDMENT.
Signature of Adopting Employer ____________ Date Signed 5/21/2009
Type Name Henery Policave Title Dir. Global Benefits & HR
(C)2009 Ascensus, Inc., Brainerd, MN
Page 2 of 2
HEROES EARNINGS AND ASSISTANCE RELIEF TAX ACT OF 2008 (HEART)
BASIC PLAN DOCUMENT AMENDMENT
This amendment of the Plan (hereinafter referred to as "the Amendment") is
comprised of this Heroes Earnings and Assistance Relief Tax Act of 2008 (HEART)
Basic Plan Document Amendment (the "Basic Plan Document Amendment") and the
corresponding Adoption Agreement Amendment. The Amendment is adopted to reflect
the provisions of the Heroes Earnings and Assistance Relief Tax Act of 2008
(HEART). The Amendment is intended to provide good faith compliance with HEART
and related guidance until the Plan is formally restated to incorporate such
guidance. This Amendment is effective as specified in this Basic Plan Document
Amendment except as otherwise provided in the Adoption Agreement Amendment. This
Amendment supersedes the existing provisions of the Plan to the extent that
those provisions are inconsistent with the provisions of the Amendment. This
amendment will not cause the Plan to become an individually designed plan.
DEFINITIONS
DIFFERENTIAL WAGE PAYMENT
DIFFERENTIAL WAGE PAYMENT IS ADDED TO THE PLAN AS A NEW DEFINED TERM WITH THE
FOLLOWING DEFINITION:
Means a payment defined in Code Section 3401(h)(2) that is made by the Employer
to an individual performing service in the uniformed services.
COMPENSATION
THE PLAN'S DEFINITION OF COMPENSATION IS MODIFIED BY ADDING THE FOLLOWING, AS
THE NEXT ALPHABETICALLY ORDERED PARAGRAPH, TO THE END:
DIFFERENTIAL WAGE PAYMENTS
Notwithstanding anything in this Plan to the contrary, for years beginning on or
after January 1, 2009, (or, if later, the Effective Date of the Plan) if the
Employer chooses to provide Differential Wage Payments to individuals who are
active duty members of the uniformed services, such individuals will be treated
as Employees of the Employer making the Differential Wage Payment, the
Differential Wage Payment will be treated as Compensation for purposes of
applying the Code. Accordingly, Differential Wage Payments must be treated as
Compensation under Code Section 415(c)(3) and Treasury Regulation 1.415-2(d).
Differential Wage Payments will also be treated as Compensation for
contribution, allocation and other general Plan purposes unless excluded from
the Plan's definition of Compensation on the Adoption Agreement Amendment. In
addition, the Plan will not be treated as failing to meet the requirements of
any provision described in Code Section 414(u)(1)(C) by reason of any
contribution or benefit that is based on Differential Wage Payments only if all
Employees of the Employer (as determined under Code Sections 414(b), (c), (m),
and (o)) performing service in the uniformed services described in Code Section
3401(h)(2)(A) are entitled to receive Differential Wage Payments on reasonably
equivalent terms and, if eligible to participate in the Plan, to make
contributions based on the payments on reasonably equivalent terms applying the
provisions of Code Section 410(b)(3), (4) and (5). Such contributions or
benefits may be taken into account for purposes of nondiscrimination testing as
long as they do not cause the Plan to fail the nondiscrimination requirements.
DEEMED SEVERANCE FROM EMPLOYMENT
DEEMED SEVERANCE FROM EMPLOYMENT IS ADDED TO THE PLAN AS A NEW DEFINED TERM WITH
THE FOLLOWING DEFINITION:
Means, effective for years beginning on or after January 1,2009, and
notwithstanding the definition of Differential Wage Payment, an individual is
deemed to cease to be an Employee for purposes of Code Section 414(u)(12)(B)
during any period the individual is performing service in the uniformed services
as defined in Code Section 3401(h)(2)(A).
EMPLOYEE
THE PLAN'S DEFINITION OF EMPLOYEE IS MODIFIED BY ADDING THE FOLLOWING TO THE
END:
The term Employee will also include individuals providing qualified military
service who are treated as reemployed for purposes of applying the rules under
Code Sections 401(a)(37) and 414(u).
DISTRIBUTIONS AND LOANS TO PARTICIPANTS
THE BASIC PLAN DOCUMENT SECTION TITLED MISCELLANEOUS DISTRIBUTION ISSUES IS
MODIFIED BY ADDING AS THE NEXT NUMBERED PARAGRAPH, TO THE END:
Distribution Due to a Deemed Severance from Employment - Except as otherwise
elected in the Adoption Agreement Amendment, effective for years beginning on or
after January 1, 2009, (or such later date as specified in the Adoption
Agreement Amendment), individuals who have a Deemed Severance from Employment
under Code Section 414(u)(12)(B) during a period of uniformed services as
defined in Code Section 3401(h)(2)(A) may elect to receive a distribution of
Elective Deferrals, Qualified Nonelective Contributions, Qualified Matching
Contributions and income allocable to each. If an individual receives a
distribution due to a Deemed Severance from Employment, the individual may not
make an Elective Deferral or Nondeductible Employee Contribution during the
six-month period beginning on the date of the distribution.
MISCELLANEOUS
THE BASIC PLAN DOCUMENT SECTION CONCERNING MILITARY SERVICE IS REPLACED WITH THE
FOLLOWING:
Notwithstanding any provision of this Plan to the contrary, contributions,
benefits, and service credit with respect to qualified military service will be
provided in accordance with Code Section 414(u), including, but not limited to
the following:
PART A. BENEFIT ACCRUAL IN THE CASE OF DEATH OR DISABILITY RESULTING FROM
ACTIVE MILITARY SERVICE.
1. Benefit Accrual - If elected in the Adoption Agreement
Amendment, for benefit accrual purposes, an individual who dies
or becomes disabled on or after January 1, 2007, (or such later
date as specified in the Adoption Agreement Amendment), while
performing qualified military service (as defined in Code Section
414(u)) will be treated as if the individual resumed employment
in accordance with the individual's reemployment rights under the
Uniformed Services Employment and Reemployment Rights Act of 1994
(USERRA), on the day preceding death or Disability (as
applicable) and terminated employment on the actual date of death
or Disability. If the Employer elects to treat an individual as
having resumed employment as described above, subject to items
(2) and (3) below, any full or partial compliance by the Plan
with respect to the benefit accrual requirements will be treated
for purposes of Code Section 414(u)(1) as if such compliance were
required under USERRA.
(C)2010 Ascensus, Inc., Brainerd, MN
Page 1 of 2
2. Nondiscrimination Requirement - Part A, item (1) above will only
apply if all individuals performing qualified military service
with respect to the Employer (as determined under Code Sections
414(b), (c), (m) and (o)) who die or became disabled as a result
of performing qualified military service (as defined in Code
Section 414(u)) prior to reemployment by the Employer are
credited with service and benefits on reasonably equivalent
terms.
3. Determination of Benefits - The amount of Nondeductible Employee
Contributions and the amount of Elective Deferrals of an Employee
treated as reemployed under Part A, item (1) for purposes of
applying Code Section 414(u)(8)(C) will be determined on the
basis of the individual's average actual Nondeductible Employee
Contributions or Elective Deferrals for the lesser of:
a. the 12-month period of service with the Employer
immediately prior to qualified military service (as defined
in Code Section 414(u)), or
b. if service with the Employer is less than such 12 month
period, the actual length of continuous service with the
Employer.
PART B. VESTING IN THE CASE OF DISABILITY RESULTING FROM ACTIVE MILITARY
SERVICE
1. Years of Vesting Service - If elected in the Adoption Agreement
Amendment, for vesting purposes, an individual who becomes
disabled on or after January 1, 2007, (or such later date as
specified in the Adoption Agreement Amendment), while performing
qualified military service (as defined in Code Section 414(u))
will be treated as if the individual resumed employment in
accordance with the individual's reemployment rights under the
Uniformed Services Employment and Reemployment Rights Act of 1994
(USERRA), on the day preceding Disability (as applicable) and
terminated employment on the actual date of Disability. If the
Employer elects to treat an individual as having resumed
employment as described above, subject to item (2) below,
compliance by the Plan with respect to the vesting requirements
will be treated for purposes of Code Section 414(u)(1) as if such
compliance were required under USERRA.
2. Nondiscrimination Requirements - Part B, item (1) above will
apply to the extent permitted under other applicable rules,
including the rules provided in Treasury Regulation Section
1.401(a)(4)-11(d)(3), which provides nondiscrimination rules for
crediting imputed service. Under Treasury Regulation Section
1.401(a)(4)-11(d)(3), the provisions crediting Years of Vesting
Service to any Highly Compensated Employee must apply on the same
terms to all similarly situated non-Highly Compensated Employees.
PART C. DEATH BENEFITS
In the case of an individual Participant who dies on or after January
1, 2007, while performing qualified military service (as defined in
Code Section 414(u)), the Participant's survivors are entitled to any
additional benefits (other than benefit accruals relating to the
period of qualified military service) provided under the Plan had the
Participant resumed employment with the Employer and then terminated
employment on account of death.
(C)2010 Ascensus, Inc., Brainerd, MN
Page 2 of 2
HEROES EARNINGS AND ASSISTANCE RELIEF TAX ACT OF 2008 (HEART)
ADOPTION AGREEMENT AMENDMENT
This amendment of the Plan (hereinafter referred to as "the Amendment") is
comprised of this Heroes Earnings and Assistance Relief Tax Act of 2008 (HEART)
Adoption Agreement Amendment (the "Adoption Agreement Amendment") and the
corresponding Basic Plan Document Amendment. The Amendment is adopted to reflect
the provisions of the Heroes Earnings and Assistance Relief Tax Act of 2008
(HEART). The Amendment is intended to provide good faith compliance with HEART
and related guidance until the Plan is formally restated to incorporate such
guidance. This Amendment is effective as specified in this Adoption Agreement
Amendment except as otherwise provided in the Basic Plan Document Amendment.
This Amendment supersedes the existing provisions of the Plan to the extent that
those provisions are inconsistent with the provisions of the Amendment. This
amendment will not cause the Plan to become an individually designed plan.
EMPLOYER INFORMATION
Name of Plan Hamilton Precision Metals 401 (k) Employee Savings Plan
Plan Sequence Number 002 Trust Identification Number (if applicable) ___________ Account Number 097409
CONTRIBUTIONS
COMPLETE PART A
PART A. BENEFIT ACCRUAL IN THE CASE OF DEATH OR DISABILITY RESULTING FROM
QUALIFIED MILITARY SERVICE
Will the benefit accrual provisions under Code Section 414(u)(9) apply
to individuals who are unable to be reemployed on account of death or
Disability while performing qualified military service as defined in
Code Section 414(u) (select one)?
OPTION 1: [X] Yes, effective 01/01/2007 (Specify a date that is on
or after January 1, 2007, or, if later, the Effective
Date of the Plan.)
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 2 will apply.
VESTING AND FORFEITURES
COMPLETE PART A
PART A. VESTING IN THE CASE OF DISABILITY RESULTING FROM QUALIFIED MILITARY
SERVICE
Will Years of Vesting Service be credited to individuals who are
unable to be reemployed on account of Disability while performing
qualified military service as defined in Code Section 414(u) (select
one)?
OPTION 1: [ ] Yes, effective ___________ (Specify a date that is on
or after January 1, 2007, or, if later, the Effective
Date of the Plan.)
OPTION 2: [ ] No.
OPTION 3: [X] Not applicable. Individuals become 100% Vested upon
Disability under the terms of the Plan.
NOTE: If no option is selected, Option 2 will apply. Regardless of
which option is selected, individuals who are unable to be reemployed
on account of death while performing qualified military service must
be credited with Years of Vesting Service.
DISTRIBUTIONS AND LOANS TO PARTICIPANTS
COMPLETE PART A
PART A. DEEMED SEVERANCE FROM EMPLOYMENT (NOTE: THIS QUESTION APPLIES ONLY
TO 401(K) PLANS. SKIP THIS QUESTION IF THE PLAN IS A MONEY PURCHASE OR
TARGET BENEFIT PENSION PLAN OR A PROFIT SHARING PLAN.)
May a Participant request a distribution of their Elective Deferrals,
Qualified Nonelective Contributions, Qualified Matching Contributions,
and earnings on account of Deemed Severance from Employment while
performing military service as defined in Code Section 3401(h)(2)(A)
(select one)?
OPTION 1: [X] Yes, effective 01/01/2009 (Specify a date that is on
or after January 1, 2009, or, if later, the Effective
Date of the Plan.)
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will apply.
(C)2010 Ascensus, Inc., Brainerd, MN
Page 1 of 2
DEFINITIONS
COMPLETE PART A
PART A. DIFFERENTIAL WAGE PAYMENTS
Unless a different definition of Compensation is required by either
the Code or ERISA, will Differential Wage Payments be included in
Compensation for contribution, allocation and other general Plan
purposes (select one)?
NOTE: Option 1 must be selected if the Plan is a standardized
prototype Plan. Either Option 1 or Option 2 may be selected if the
Plan is a non-standardized prototype Plan or a volume submitter Plan.
Refer to the Plan's Adoption Agreement to determine whether the Plan
is a standardized or non-standardized prototype Plan or a volume
submitter Plan.
OPTION 1: [X] Yes. If this Plan is a non-standardized prototype Plan
or a volume submitter Plan, this Option 1 is effective
01/01/2009 (Specify a date that is on or after January
1, 2009, or, if later, the Effective Date of the
Plan.) If this Plan is a standardized prototype Plan
this Option 1 is effective the later of January 1,
2009, or the Effective Date of the Plan.
OPTION 2: [ ] No.
NOTE: If no option is selected, Option 1 will apply and the effective
date will be the later of January 1, 2009, or the Effective Date of
the Plan.
EMPLOYER SIGNATURE
SIGNATURE OF EMPLOYER
1. I ACKNOWLEDGE THAT I HAVE RELIED UPON MY OWN ADVISERS REGARDING THE
COMPLETION OF THE AMENDMENT AND THE LEGAL AND TAX IMPLICATIONS OF AMENDING
THIS PLAN;
2. I UNDERSTAND THAT MY FAILURE TO PROPERLY COMPLETE THE AMENDMENT MAY RESULT
IN DISQUALIFICATION OF THE PLAN; AND
3. I HAVE RECEIVED A COPY OF THE AMENDMENT.
Signature of Adopting Employer Date Signed 11/2/2010
Type Name [ILLEGIBLE] Title Director Global BFts & HR
(C)2010 Ascensus, Inc., Brainerd, MN
Page 2 of 2