Exhibit 10.10
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
DEFINED CONTRIBUTION PLAN
BASIC PLAN DOCUMENT NUMBER 03
AS AMENDED TO INCORPORATE THE PROVISIONS OF
THE URUGUAY ROUND AGREEMENTS ACT (GATT),
THE SMALL BUSINESS JOB PROTECTION ACT OF 1996 (SBJPA),
THE INTERNAL REVENUE CODE SECTION 414(u) PROVISIONS OF THE UNIFORMED
SERVICES EMPLOYMENT AND REEMPLOYMENT RIGHTS ACT OF 1994 (USERRA),
THE TAXPAYER RELIEF ACT OF 1997 (TRA '97); AND
THE INTERNAL REVENUE SERVICE RESTRUCTURING AND REFORM ACT OF 1998
(RRA).
TABLE OF CONTENTS
SECTION CONTENTS PAGE
ARTICLE I - DEFINITIONS
1.1 Accrued Benefit ................................................................................ 1
1.2 Additional Matching Contributions .............................................................. 1
1.3 Additional Nonelective Contributions ........................................................... 1
1.4 Adoption Agreement ............................................................................. 1
1.5 Alternate Payee ................................................................................ 1
1.6 Annuity ........................................................................................ 1
1.7 Annuity Contract ............................................................................... 1
1.8 Annuity Starting Date .......................................................................... 1
1.9 Beneficiary .................................................................................... 2
1.10 Board of Directors ............................................................................. 2
1.11 CODA ........................................................................................... 2
1.12 Code ........................................................................................... 2
1.13 Compensation ................................................................................... 2
1.14 Considered Net Profits ......................................................................... 6
1.15 Contribution Period ............................................................................ 6
1.16 Davis-Beacon Act ............................................................................... 6
1.17 Disability ..................................................................................... 7
1.18 Disability Retirement Date ..................................................................... 7
1.19 Early Retirement Date .......................................................................... 7
1.20 Earned Income .................................................................................. 7
1.21 Effective Date ................................................................................. 8
1.22 Elective Deferral Contributions ................................................................ 8
1.23 Employee ....................................................................................... 8
1.24 Employee Contributions ......................................................................... 8
1.25 Employer ....................................................................................... 9
1.26 Entry Date ..................................................................................... 9
1.27 ERISA .......................................................................................... 9
1.28 Fiduciary ...................................................................................... 9
1.29 Forfeiture ..................................................................................... 10
1.30 Highly Compensated Employee .................................................................... 10
1.31 Insurance Company .............................................................................. 12
1.32 Late Retirement Date ........................................................................... 12
1.33 Leased Employee ................................................................................ 12
1.34 Life Annuity ................................................................................... 13
1.35 Life Insurance Policy .......................................................................... 13
1.36 Matching Contributions ......................................................................... 13
1.37 Money Purchase Pension Contributions ........................................................... 13
1.38 Named Fiduciary ................................................................................ 13
1.39 Nonelective Contributions ...................................................................... 13
1.40 Non-Trusteed ................................................................................... 14
1.41 Normal Retirement Age .......................................................................... 14
1.42 Normal Retirement Date ......................................................................... 14
1.43 Owner-Employee ................................................................................. 14
1.44 Participant .................................................................................... 14
1.45 Participant's Account .......................................................................... 14
1.46 Participant's Employer Stock Account ........................................................... 15
1.47 Partner ........................................................................................ 16
1.48 Partnership .................................................................................... 16
1.49 Person ......................................................................................... 16
1.50 Plan ........................................................................................... 16
-i-
1.51 Plan Administrator ............................................................................. 17
1.52 Plan Year ...................................................................................... 17
1.53 Prevailing Wage Law ............................................................................ 17
1.54 Prior Employer Contributions ................................................................... 17
1.55 Prior Required Employee Contributions .......................................................... 17
1.56 Prior Voluntary Employee Contributions ......................................................... 17
1.57 QDRO ........................................................................................... 17
1.58 Qualified Matching Contributions ............................................................... 17
1.59 Qualified Nonelective Contributions ............................................................ 18
1.60 QVEC Contributions ............................................................................. 18
1.61 Required Employee Contributions ................................................................ 18
1.62 Rollover Contribution .......................................................................... 18
1.63 Salary Deferral Agreement ...................................................................... 18
1.64 Self-Employed Individual ....................................................................... 18
1.65 Serious Financial Hardship ..................................................................... 18
1.66 Shareholder-Employee ........................................................................... 18
1.67 Social Security Integration Level .............................................................. 18
1.68 Social Security Taxable Wage Base .............................................................. 18
1.69 Sponsoring Organization ........................................................................ 18
1.70 Spouse ......................................................................................... 18
1.71 Straight Life Annuity .......................................................................... 18
1.72 Termination of Employment ...................................................................... 18
1.73 True-Up Contributions .......................................................................... 18
1.74 Trust .......................................................................................... 19
1.75 Trustee ........................................................................................ 19
1.76 Vested Interest ................................................................................ 19
1.77 Vesting Percentage ............................................................................. 19
1.78 Voluntary Employee Contributions ............................................................... 20
ARTICLE II - GENERAL PROVISIONS
2A. SERVICE
2A.1 Service ........................................................................................ 21
2A.2 Absence from Employment ........................................................................ 21
2A.3 Hour of Service ................................................................................ 21
2A.4 1-Year Break-in-Service ........................................................................ 22
2A.5 Year(s) of Service ............................................................................. 22
2A.6 Determining Vesting Percentage ................................................................. 24
2A.7 Excluded Years of Service for Vesting .......................................................... 24
2A.8 Change in Plan Years ........................................................................... 25
2A.9 Elapsed Time ................................................................................... 25
2A.10 Excluded Periods of Service for Vesting ........................................................ 26
2B. ELIGIBILITY, ENROLLMENT AND PARTICIPATION
2B.1 Eligibility .................................................................................... 27
2B.2 Enrollment ..................................................................................... 27
2B.3 Reemployed Participant ......................................................................... 28
2B.4 Eligible Class ................................................................................. 28
2B.5 Waiver of Participation ........................................................................ 28
2C. CONTRIBUTIONS AND ALLOCATIONS
2C.1 Profit Sharing/Thrift Plan with 401(k) Feature ................................................. 29
2C.2 Money Purchase Pension Plan .................................................................... 41
2C.3 Rollover Contributions ......................................................................... 44
2C.4 Participant Initiated Transfers................................................................. 44
-ii-
2C.5 Contributions Subject to Davis-Bacon Act ....................................................... 46
2C.6 QVEC Contributions ............................................................................. 46
ARTICLE III - DISTRIBUTIONS
3A. TIMING AND FORM OF BENEFITS
3A.1 Payment of Benefits ............................................................................ 47
3A.2 Commencement of Benefits ....................................................................... 50
3A.3 From Life Insurance Policies ................................................................... 51
3A.4 Nontransferable ................................................................................ 51
3A.5 Alternate Payee Special Distribution ........................................................... 51
3B. MINIMUM DISTRIBUTION REQUIREMENTS
3B.1 Definitions .................................................................................... 52
3B.2 Distribution Requirements ...................................................................... 54
3B.3 Death Distribution Provisions .................................................................. 55
3B.4 Transitional Rule .............................................................................. 56
3C. JOINT AND SURVIVOR ANNUITY REQUIREMENTS
3C.1 Applicability .................................................................................. 58
3C.2 Definitions .................................................................................... 58
3C.3 Qualified Joint and Survivor Annuity ........................................................... 59
3C.4 Qualified Preretirement Survivor Annuity ....................................................... 59
3C.5 Notice Requirements ............................................................................ 60
3C.6 Safe Harbor Rules .............................................................................. 61
3C.7 Transitional Rules ............................................................................. 62
3D. TERMINATION OF EMPLOYMENT
3D.1 Distribution ................................................................................... 64
3D.2 Repayment of Prior Distribution ................................................................ 65
3D.3 Life Insurance Policy .......................................................................... 66
3D.4 No Further Rights or Interest .................................................................. 66
3D.5 Forfeiture ..................................................................................... 66
3D.6 Lost Participant ............................................................................... 67
3D.7 Deferral of Distribution ....................................................................... 67
-iii-
3E. WITHDRAWALS
3E.1 Withdrawal - Employee Contributions ............................................................ 67
3E.2 Withdrawal - Elective Deferral Contributions ................................................... 68
3E.3 Withdrawal - Qualified Matching Contributions................................................... 68
3E.4 Withdrawal - Qualified Nonelective Contributions................................................ 68
3E.5 Withdrawal - Safe Harbor 401(k) Elective Deferral
Contributions and ADP Test Safe Harbor Contributions............................................ 69
3E.6 Withdrawal - Employer Contributions ............................................................ 69
3E.7 Withdrawal for Serious Financial Hardship of
Contributions Other than Elective Deferral Contributions........................................ 70
3E.8 Withdrawal for Serious Financial Hardship of Elective Deferral Contributions ................... 70
3E.9 Withdrawal - QVEC Contributions and Rollover Contributions ..................................... 72
3E.10 Notification ................................................................................... 72
3E.11 Vesting Continuation ........................................................................... 72
3E.12 Withdrawal - Participant's Employer Stock Account .............................................. 72
3F. DIRECT ROLLOVERS
3F.1 Definitions .................................................................................... 72
3F.2 Direct Rollovers ............................................................................... 73
ARTICLE IV - LEGAL LIMITATIONS ON CONTRIBUTIONS
4A. NONDISCRIMINATION TESTS
4A.1 Definitions .................................................................................... 74
4A.2 Actual Deferral Percentage Test ................................................................ 75
4A.3 Special Rules - ADP Test ....................................................................... 76
4A.4 Actual Contribution Percentage Test ............................................................ 77
4A.5 Special Rules - ADP/ACP Tests .................................................................. 78
4B. LIMITATIONS ON ALLOCATIONS
4B.1 Definitions .................................................................................... 80
4B.2 Basic Limitation ............................................................................... 85
4B.3 Estimated Maximum Permissible Amount ........................................................... 85
4B.4 Actual Maximum Permissible Amount .............................................................. 85
4B.5 Participants Covered by Another Prototype Defined Contribution Plan ............................ 86
4B.6 Participants Covered by Non-Prototype Defined Contribution Plan ................................ 87
4B.7 Participants Covered by Defined Benefit Plan ................................................... 87
4C. TREATMENT OF EXCESSES
4C.1 Definitions .................................................................................... 87
4C.2 Excess Elective Deferral Contributions ......................................................... 88
4C.3 Excess Annual Additions ........................................................................ 89
4C.4 Excess Contributions ........................................................................... 90
4C.5 Excess Aggregate Contributions ................................................................. 91
-iv-
ARTICLE V - PARTICIPANT PROVISIONS
5A. ANNUITY CONTRACT AND PARTICIPANT'S ACCOUNT
5A.1 Participant's Account .......................................................................... 93
5A.2 Investment Transfers ........................................................................... 93
5A.3 Participant's Account Valuation ................................................................ 93
5B. LIFE INSURANCE POLICIES
5B.1 Optional Purchase of Life Insurance ............................................................ 94
5B.2 Premiums on Life Insurance Policies ............................................................ 94
5B.3 Limitations on Premiums ........................................................................ 94
5B.4 Disposal ....................................................................................... 95
5B.5 Rights under Policies .......................................................................... 95
5B.6 Loans .......................................................................................... 95
5B.7 Conditions of Coverage ......................................................................... 95
5B.8 Policy Not Yet in Force ........................................................................ 95
5B.9 Value of Policy ................................................................................ 95
5B.10 Dividends ...................................................................................... 96
5B.11 Distribution ................................................................................... 96
5B.12 Application .................................................................................... 96
5C. LOANS
5C.1 Loans to Participants .......................................................................... 96
5C.2 Loan Procedures ................................................................................ 97
5C.3 USERRA Loan Suspension.......................................................................... 98
5D. PARTICIPANTS' RIGHTS
5D.1 General Rights of Participants and Beneficiaries ............................................... 98
5D.2 Filing a Claim for Benefits .................................................................... 98
5D.3 Denial of Claim ................................................................................ 98
5D.4 Remedies Available to Participants ............................................................. 98
5D.5 Limitation of Rights ........................................................................... 99
5D.6 100% Vested Contributions ...................................................................... 99
5D.7 Reinstatement of Benefit ....................................................................... 99
5D.8 Non-Alienation ................................................................................. 99
ARTICLE VI - OVERSEER PROVISIONS
6A. FIDUCIARY DUTIES AND RESPONSIBILITIES
6A.1 General Fiduciary Standard of Conduct .......................................................... 110
6A.2 Service in Multiple Capacities ................................................................. 110
6A.3 Limitations on Fiduciary Liability ............................................................. 110
6A.4 Investment Manager ............................................................................. 110
6B. THE PLAN ADMINISTRATOR
6B.1 Designation and Acceptance ..................................................................... 110
6B.2 Duties and Responsibility ...................................................................... 110
6B.3 Special Duties ................................................................................. 111
6B.4 Expenses and Compensation ...................................................................... 111
6B.5 Information from Employer ...................................................................... 111
6B.6 Administrative Committee; Multiple Signatures .................................................. 111
6B.7 Resignation and Removal; Appointment of Successor .............................................. 112
-v-
6B.8 Investment Manager ............................................................................. 112
6B.9 Delegation of Duties ........................................................................... 112
6C. TRUST AGREEMENT
6C.1 Creation and Acceptance of Trust ............................................................... 113
6C.2 Trustee Capacity; Co-Trustees .................................................................. 113
6C.3 Resignation and Removal; Appointment of Successor Trustee ...................................... 113
6C.4 Taxes, Expenses and Compensation of Trustee .................................................... 113
6C.5 Trustee Entitled to Consultation ............................................................... 114
6C.6 Rights, Powers and Duties of Trustee ........................................................... 114
6C.7 Evidence of Trustee Action ..................................................................... 116
6C.8 Investment Policy .............................................................................. 116
6C.9 Period of the Trust ............................................................................ 117
6D. THE INSURANCE COMPANY
6D.1 Duties and Responsibilities .................................................................... 117
6D.2 Relation to Employer, Plan Administrator and Participants ...................................... 117
6D.3 Relation to Trustee ............................................................................ 117
6E. ADOPTING EMPLOYER
6E.1 Election to Become Adopting Employer ........................................................... 117
6E.2 Definition ..................................................................................... 118
6E.3 Effective Date of Plan ......................................................................... 118
6E.4 Forfeitures .................................................................................... 118
6E.5 Contributions .................................................................................. 118
6E.6 Expenses ....................................................................................... 118
6E.7 Substitution of Plans .......................................................................... 118
6E.8 Termination of Plans ........................................................................... 118
6E.9 Amendment ...................................................................................... 118
6E.10 Plan Administrator's Authority ................................................................. 119
ARTICLE VII - SPECIAL CIRCUMSTANCES WHICH MAY AFFECT THE PLAN
7A. TOP-HEAVY PROVISIONS
7A.1 Definitions .................................................................................... 120
7A.2 Minimum Allocation ............................................................................. 123
7A.3 Minimum Vesting Schedule ....................................................................... 124
7B. AMENDMENT, TERMINATION OR MERGER OF THE PLAN
7B.1 Amendment of Elections under Adoption Agreement by Employer .................................... 125
7B.2 Amendment of Plan, Trust, and Form of Adoption Agreement ....................................... 126
7B.3 Conditions of Amendment ........................................................................ 127
7B.4 Termination of the Plan ........................................................................ 127
7B.5 Full Vesting ................................................................................... 127
7B.6 Application of Forfeitures ..................................................................... 127
7B.7 Merger with Other Plan ......................................................................... 127
7B.8 Transfer from Other Plans ...................................................................... 128
7B.9 Transfer to Other Plans ........................................................................ 128
7B.10 Approval by the Internal Revenue Service ....................................................... 128
7B.11 Subsequent Unfavorable Determination ........................................................... 129
7C. SUBSTITUTION OF PLANS
-vi-
7C.1 Substitution of Plans .......................................................................... 129
7C.2 Transfer of Assets ............................................................................. 129
7C.3 Substitution for Pre-Existing Master or Prototype Plan ......................................... 130
7C.4 Partial Substitution or Partial Transfer of the Plan or Assets ................................. 130
ARTICLE VIII - MISCELLANEOUS
8.1 Nonreversion ................................................................................... 131
8.2 Gender and Number .............................................................................. 131
8.3 Reference to the Internal Revenue Code and ERISA ............................................... 131
8.4 Governing Law .................................................................................. 131
8.5 Compliance with the Internal Revenue Code and ERISA ............................................ 131
8.6 Contribution Recapture ......................................................................... 131
-vii-
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
DEFINED CONTRIBUTION PLAN
BASIC PLAN DOCUMENT NUMBER 03
The Plan set forth herein may be adopted by an Employer and accepted by the Plan
Administrator and, if applicable, the Trustee by executing an Adoption
Agreement, which together shall constitute the Employer's Plan, for the
exclusive benefit of its eligible Employees and their Beneficiaries, as fully as
if set forth in said Adoption Agreement; provided, however, no Employer may
adopt this Plan except with the consent of Connecticut General Life Insurance
Company.
An Employer's adoption of this Plan shall not supersede any previously adopted
amendments made to reflect the provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001(EGTRRA) or Code section 401(a)(9) final regulations.
ARTICLE I - DEFINITIONS
1.1 ACCRUED BENEFIT. The term Accrued Benefit means the value of the
Participant's Account on any applicable date.
1.2 ADDITIONAL MATCHING CONTRIBUTIONS. The term Additional Matching
Contributions means additional discretionary Matching Contributions
made to the Plan by the Employer, as authorized by its Board of
Directors by resolution. Additional Matching Contributions shall be
treated as Matching Contributions for nondiscrimination testing and
allocation purposes.
1.3 ADDITIONAL NONELECTIVE CONTRIBUTIONS. The term Additional Nonelective
Contributions means additional discretionary Nonelective Contributions
made to the Plan by the Employer, as authorized by its Board of
Directors by resolution.
1.4 ADOPTION AGREEMENT. The term Adoption Agreement means the prescribed
agreement by which the Employer adopts this Plan, and which sets forth
the elective provisions of this Plan as specified by the Employer.
1.5 ALTERNATE PAYEE. The term Alternate Payee means a person, other than
the Participant, identified under a QDRO to be a recipient of part or
all of the Participant's benefit under the Plan.
1.6 ANNUITY. The term Annuity means a series of payments made over a
specified period of time.
1.7 ANNUITY CONTRACT. The term Annuity Contract means the group annuity
contract form issued by the Insurance Company to fund the benefits
provided under this Plan, as such contract may be amended from time to
time in accordance with the terms thereof. The Employer will specify
and communicate to its Employees the types of investments available
under this Plan and Annuity Contract.
1.8 ANNUITY STARTING DATE. The term Annuity Starting Date means the first
day of the first period for which an amount is paid as an Annuity or
any other form.
Article I - Definitions February 6, 2002
-1-
1.9 BENEFICIARY. The term Beneficiary means the beneficiary or
beneficiaries entitled to any benefits under a Participant's Account
hereunder upon the death of a Participant, Beneficiary or Alternate
Payee pursuant to a QDRO. If any Life Insurance Policy is purchased on
the life of a Participant hereunder, the Beneficiary under such Policy
shall be designated separately therein. However, any such Beneficiary
designation shall be subject to the terms of Section 3C.
A Participant's Beneficiary shall be his Spouse, if any, unless the
Participant designates a person or persons other than his Spouse as
Beneficiary with his Spouse's written consent. A Participant may
designate a Beneficiary on the form approved by the Plan Administrator.
If any distribution is made to a Beneficiary in the form of an Annuity,
and if such Annuity provides for a death benefit, then such Beneficiary
shall also have a right to designate a beneficiary and to change that
beneficiary from time to time. As an alternative to receiving the
benefit in the form of an Annuity, the Beneficiary may elect to receive
a single cash payment or any other form of payment provided by the
Employer's election in the Adoption Agreement.
If no Beneficiary has been designated pursuant to the provisions of
this Section, or if no Beneficiary survives the Participant and he has
no surviving Spouse, then the Beneficiary under the Plan shall be the
deceased Participant's surviving children in equal shares or, if there
are no surviving children, the Participant's estate. If a Beneficiary
dies after becoming entitled to receive a distribution under the Plan
but before distribution is made to him in full, and if no other
Beneficiary has been designated to receive the balance of the
distribution in that event, the estate of the deceased Beneficiary
shall be the Beneficiary for the balance of the distribution.
If the Employer so elects in the Adoption Agreement, an Alternate Payee
and/or Beneficiary shall be allowed to direct the investment of his
segregated portion of the Participant's Account, pursuant to Section
5A. An individual who is designated as an Alternate Payee in a QDRO
relating to a Participant's benefits under this Plan shall be treated
as a Beneficiary hereunder, to the extent provided by such order.
1.10 BOARD OF DIRECTORS. The term Board of Directors means the Employer's
board of directors or other comparable governing body.
1.11 CODA. The term CODA means cash or deferred arrangement as described in
Code section 401(k) and the regulations thereunder.
1.12 CODE. The term Code means the Internal Revenue Code of 1986, as amended
from time to time.
1.13 COMPENSATION. The term Compensation means Compensation as defined
below. For any Self-Employed Individual covered under the Plan,
Compensation shall mean Earned Income. Compensation shall include only
that Compensation which is actually paid to the Participant during the
applicable Determination Period. Except as provided elsewhere in this
Plan, the "Determination
Article I - Definitions February 6, 2002
-2-
Period" shall be the period elected by the Employer in the Adoption
Agreement. If the Employer makes no election, the Determination Period
shall be the Plan Year.
An Employer may elect in the Adoption Agreement to use one of the
following definitions of Compensation for purposes of allocating all
contributions:
(a) WAGES, TIPS, AND OTHER COMPENSATION BOX ON FORM W-2.
(Information required to be reported under Code sections 6041,
6051 and 6052). Wages within the meaning of Code section
3401(a) and all other payments of compensation to an Employee
by the Employer (in the course of the Employer's trade or
business) for which the Employer is required to furnish the
Employee a written statement under Code sections 6041(d),
6051(a)(3), and 6052. Compensation must be determined without
regard to any rules under Code section 3401(a) that limit the
remuneration included in wages based on the nature or location
of the employment or the services performed (such as the
exception for agricultural labor in Code section 3401(a)(2)).
(b) SECTION 3401(a) WAGES. Wages as defined in Code section
3401(a) for the purposes of income tax withholding at the
source but determined without regard to any rules that limit
the remuneration included in wages based on the nature or
location of the employment or the services performed (such as
the exception for agricultural labor in Code section
3401(a)(2)).
(c) 415 SAFE-HARBOR COMPENSATION. Wages, salaries, and fees for
professional services and other amounts received (without
regard to whether or not an amount is paid in cash) for
personal services actually rendered in the course of
employment with the Employer maintaining the Plan to the
extent that the amounts are includable in gross income
(including, but not limited to, commissions paid salesmen,
compensation for services on the basis of a percentage of
profits, commissions on insurance premiums, tips, bonuses,
fringe benefits, and reimbursements or other expense
allowances under a nonaccountable plan as described in Code
section 1.62-2(c)), and excluding the following:
(1) Employer contributions to a plan of deferred
compensation which are not includable in the
Employee's gross income for the taxable year in which
contributed, or Employer contributions under a
simplified employee pension plan to the extent such
contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;
(2) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property)
held by the Employee either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture;
Article I - Definitions February 6, 2002
-3-
(3) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(4) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not
under a salary reduction agreement) towards the
purchase of an annuity contract described in Code
section 403(b) (whether or not the contributions are
actually excludable from the gross income of the
Employee).
(d) MODIFIED WAGES, TIPS, AND OTHER COMPENSATION BOX ON FORM W-2.
Compensation as defined in subsection (a) above, but reduced
by all of the following items (even if includable in gross
income): reimbursements or other expense allowances, fringe
benefits (cash or noncash), moving expenses, deferred
compensation, and welfare benefits. This definition may not be
used by standardized plans or plans using a contribution or
allocation formula that is integrated with Social Security.
(e) MODIFIED SECTION 3401(a) WAGES. Compensation as defined in
subsection (b) above, but reduced by all of the following
items (even if includable in gross income): reimbursements or
other expense allowances, fringe benefits (cash or noncash),
moving expenses, deferred compensation, and welfare benefits.
This definition may not be used by standardized plans or plans
using a contribution or allocation formula that is integrated
with Social Security.
(f) MODIFIED 415 SAFE-HARBOR COMPENSATION. Compensation as defined
in subsection (c) above, but reduced by all of the following
items (even if includable in gross income): reimbursements or
other expense allowances, fringe benefits (cash or noncash),
moving expenses, deferred compensation, and welfare benefits.
This definition may not be used by standardized plans or plans
using a contribution or allocation formula that is integrated
with Social Security.
(g) REGULAR OR BASE SALARY OR WAGES. Regular or base salary or
wages (excluding overtime and bonuses) received during the
applicable period by the Employee from the Employer. This
definition may not be used by standardized plans or plans
using a contribution or allocation formula that is integrated
with Social Security.
(h) REGULAR OR BASE SALARY WAGES PLUS OVERTIME AND/OR BONUSES.
Regular or base salary or wages, plus either or both overtime
and/or bonuses, as elected by the Employer in the Adoption
Agreement, received during the applicable period by the
Employee from the Employer. This definition may not be used by
standardized plans or plans using a contribution or allocation
formula that is integrated with Social Security.
(i) A REASONABLE ALTERNATIVE DEFINITION OF COMPENSATION, as that
term is used in Code section 414(s)(3) and the regulations
thereunder, provided that the definition does not favor
Article I - Definitions February 6, 2002
-4-
Highly Compensated Employees and satisfies the
nondiscrimination requirements under Code section 414(s). This
definition may not be used by standardized plans or plans
using a contribution or allocation formula that is integrated
with Social Security.
For years beginning before January 1, 1998, if elected by the Employer
in the Adoption Agreement, Compensation shall include any amount which
is contributed by the Employer pursuant to a salary reduction agreement
and which is not includable in the gross income of the Employee under
Code sections 125, 402(e)(3), 402(h)(1)(B) or 403(b).
For years beginning on or after January 1, 1998, if elected by the
Employer in the Adoption Agreement, Compensation shall exclude any
amount which is contributed by the Employer pursuant to a salary
reduction agreement and which is not includible in gross income of the
Employee under Code sections 125, 402(e)(3), 402 (h)(1)(B) or 403(b).
Effective for years beginning on or after January 1, 2001 (or such
earlier date specified in section IV.C of the Adoption Agreement which
cannot be earlier than January 1, 1998), Code section 132(f)(4)
deferrals shall be treated in the same manner as section 125 deferrals.
For years beginning on or after January 1, 1994, the annual
Compensation of each Participant taken into account for determining all
benefits provided under the Plan for any Plan Year shall not exceed
$150,000, as adjusted for increases in the cost-of-living in accordance
with Code section 401(a)(17)(B). The cost-of-living adjustment in
effect for a calendar year applies to any Determination Period
beginning in such calendar year.
If a Determination Period consists of fewer than 12 calendar months,
then the annual compensation limit is an amount equal to the annual
compensation limit for the calendar year in which the compensation
period begins, multiplied by the ratio obtained by dividing the number
of full months in the period by 12.
For Determination Periods beginning before January 1, 1997, in
determining the Compensation of a Participant for purposes of this
limit, the rules of Code section 414(q)(6), as in effect prior to
January 1, 1997, shall apply, except in applying such rules, the term
"family" shall include only the spouse of the Participant and any
lineal descendants of the Participant who have not attained age 19
before the close of the year. If, as a result of the application of
such rules, the adjusted annual Compensation limit is exceeded, then
(except for purposes of determining the portion of Compensation up to
the integration level if this Plan uses a contribution or allocation
formula that is integrated with Social Security), the limit shall be
prorated among the affected individuals in proportion to each such
individual's Compensation as determined under this Section prior to the
application of this limit. The provisions of this paragraph shall not
apply for Determination Periods beginning on or after January 1, 1997.
Article I - Definitions February 6, 2002
-5-
In determining allocations in Plan Years beginning on or after January
1, 1994, the annual compensation limit in effect for Determination
Periods beginning before that date is $150,000.
1.14 CONSIDERED NET PROFITS. The term Considered Net Profits means the
entire amount of the accumulated or current operating profits
(excluding capital gains from the sale or involuntary conversion of
capital or business assets) of the Employer after all expenses and
charges other than (1) the Employer contribution to this and any other
qualified plan, and (2) federal, state or local taxes based upon or
measured by income, as determined by the Employer, either on an
estimated basis or a final basis, in accordance with the generally
accepted accounting principles used by the Employer. When, for any Plan
Year, the amount of Considered Net Profits has been determined by the
Employer, and the Employer contribution made on the basis of such
determination, such determination and contribution shall be final and
conclusive and shall not be subject to change because of any
adjustments in income or expense which may be required by the Internal
Revenue Service or otherwise. Such determination and contribution shall
not be open to question by any Participant either before or after the
Employer contribution has been made.
In the case of an Employer that is a non-profit entity, the term
Considered Net Profits means the entire amount of the accumulated or
current operating surplus (excluding capital gains from the sale or
involuntary conversion of capital or business assets) of the Employer
after all expenses and charges other than (1) the contribution made by
the Employer to the Plan, and (2) federal, state or local taxes based
upon or measured by income, in accordance with the generally accepted
accounting principles used by the Employer.
1.15 CONTRIBUTION PERIOD. The term Contribution Period means that regular
period, specified by the Employer in its Adoption Agreement, for which
the Employer shall make Employer contributions, if any, and that
regular period specified by the Employer in its Adoption Agreement, for
which Participants may make Employee Contributions, if any, and
Elective Deferral Contributions, if any. The first Contribution Period
may be an irregular period, not longer than one month, commencing not
prior to the Effective Date. However, the first Contribution Period for
Elective Deferral Contributions may not commence before the later of
the Plan's Effective Date or adoption date.
1.16 DAVIS-BACON ACT The term Davis-Bacon Act means the Davis-Bacon Act (40
U.S.C. section 276(a) et seq., as amended from time to time), which
guarantees minimum wages to laborers and mechanics employed on Federal
government contracts for the construction, alteration, or repair of
public buildings or works. The minimums are the amounts found by the
Secretary of Labor to be prevailing for similar workers in the area in
which the work is to be done.
The term "wages" as used in the Davis-Bacon Act includes, in addition
to the basic hourly rate of pay, contributions irrevocably made to
trustees for pension benefits for laborers and mechanics employed on
Federal government contracts and the
Article I - Definitions February 6, 2002
-6-
cost of other fringe benefits. However, overtime pay is to be computed
only on the basis of the basic hourly rate of pay. Davis-Bacon
contributions are only allowed in non-standardized plans.
1.17 DISABILITY. The term Disability means a Participant's incapacity to
engage in any substantial gainful activity because of a medically
determinable physical or mental impairment which can be expected to
result in death, or which has lasted or can be expected to last for a
continuous period of not less than 12 months. The permanence and degree
of such impairment shall be supported by medical evidence. All
Participants in similar circumstances shall be treated alike.
If elected by the Employer in the Adoption Agreement, nonforfeitable
contributions will be made to the Plan on behalf of all disabled
Participants.
1.18 DISABILITY RETIREMENT DATE. The term Disability Retirement Date means
the first day of the month after the Plan Administrator has determined
that a Participant's incapacity is a Disability. A Participant who
retires from the Service of the Employer as of his Disability
Retirement Date shall have a Vesting Percentage of 100% and shall be
entitled to receive a distribution of the entire value of his
Participant's Account and any Life Insurance Policies, or the values
thereof, as of his Disability Retirement Date, subject to the
provisions of Section 3A and Section 3C.
1.19 EARLY RETIREMENT DATE. If the Employer has specified in its Adoption
Agreement that Early Retirement is permitted, then the term Early
Retirement Date means the first day of the month coinciding with or
next following the date a Participant is separated from Service with
the Employer for any reason other than death or Disability, provided
that on such date the Participant has attained the conditions specified
by the Employer in its Adoption Agreement and has not attained his
Normal Retirement Age. A Participant who retires from the Service of
the Employer on or after his Early Retirement Date shall have a Vesting
Percentage of 100% and shall be entitled to receive a distribution of
the entire value of his Participant's Account and any Life Insurance
Policies, or the values thereof, as of his Early Retirement Date,
subject to the provisions of Section 3A and Section 3C.
If a Participant separates from Service before satisfying the age
requirement for Early Retirement, but has satisfied the Service
requirement, the Participant shall be 100% vested as of his Termination
of Employment date, but he will not be eligible for a distribution of
the entire value of his Participant's Account until satisfying such age
requirement.
1.20 EARNED INCOME. The term Earned Income means the net earnings from
self-employment in the trade or business with respect to which the Plan
is established, and for which the personal services of the individual
are a material income-producing factor. Net earnings will be determined
without regard to items not included in gross income and the deductions
allocable to such items. Net earnings are reduced by contributions made
by the
Article I - Definitions February 6, 2002
-7-
Employer to a qualified plan to the extent deductible under Code
section 404.
Net earnings shall be determined with regard to the deductions allowed
to the taxpayer by Code section 164(f) for taxable years beginning
after December 31, 1989.
1.21 EFFECTIVE DATE. The term Effective Date means the date specified by the
Employer in its Adoption Agreement as the Effective Date of the Plan.
1.22 ELECTIVE DEFERRAL CONTRIBUTIONS. The term Elective Deferral
Contributions means contributions made by the Employer to the Plan at
the election of the Participant (or, if elected by the Employer in the
Adoption Agreement, through a deemed election by an Employee), in lieu
of cash compensation, and shall include contributions made pursuant to
a Salary Deferral Agreement or other deferral mechanism.
With respect to any taxable year, a Participant's elective deferral is
the sum of all Employer contributions made on behalf of such
Participant pursuant to an election to defer under any CODA, any
simplified employee pension cash or deferred arrangement as described
in section 402(h)(1)(B), any SIMPLE IRA plan described in section
408(p), any eligible deferred compensation plan as described in section
457, any plan described in section 501(c)(18), and any Employer
contributions made on the behalf of a Participant for the purchase of
an annuity contract under section 403(b) pursuant to a salary reduction
agreement.
Elective Deferral Contributions shall not include those contributions
properly distributed as Excess Annual Additions, as defined in Section
4C.1(b).
1.23 EMPLOYEE. The term Employee means any employee of the Employer
maintaining the Plan or any other employer required to be aggregated
with such Employer under Code sections 414(b), (c), (m), or (o).
The term Employee also includes any Leased Employee deemed to be an
Employee of the Employer in accordance with Code sections 414(n) or
(o).
If elected by the Employer in the Adoption Agreement, an individual
shall not be treated as an Employee unless he or she is reported on the
payroll, income tax withholding, wage tax liability, or worker
compensation coverage records, or any such similar record, of the
Employer as a common law employee, or is otherwise explicitly covered
as a Leased Employee. Under this provision, individuals not treated as
common law employees by the Employer on the type of records previously
described shall be excluded from participation in the Plan even if a
court or administrative agency later determines that such individuals
are common law employees. This provision applies only to
non-standardized plans.
1.24 EMPLOYEE CONTRIBUTIONS. The term Employee Contributions means
contributions to this Plan or any other plan, that are designated
Article I - Definitions February 6, 2002
-8-
or treated at the time of contribution as after-tax contributions made
by the Employee and are allocated to a separate account to which
attributable earnings and losses are allocated. Such term includes
Required Employee Contributions, Voluntary Employee Contributions,
Prior Required Employee Contributions, and Prior Voluntary Employee
Contributions.
1.25 EMPLOYER. The term Employer means the employer that adopts this Plan.
In the case of a group of Employers that constitutes a controlled group
of corporations (as defined in Code section 414(b)) or that constitutes
trades or businesses (whether or not incorporated) that are under
common control (as defined in section 414(c)) or that constitutes an
affiliated service group (as defined in section 414(m)), Service with
all such employers shall be considered Service with the Employer for
purposes of eligibility and vesting. The term Employer shall also mean
any Adopting Employer as defined in Section 6E.2.
A state or local government or political subdivision thereof, or any
agency or instrumentality thereof, may not elect a 401(k) option (CODA)
in the Adoption Agreement, unless the sponsoring entity is a rural
cooperative as defined in Code section 401(k)(7)(E)(iv).
1.26 ENTRY DATE. The term Entry Date means either the Effective Date or each
applicable date thereafter as specified by the Employer in its Adoption
Agreement, when an Employee who has fulfilled the eligibility
requirements commences participation in the Plan.
If an Employee is not in the active Service of the Employer as of his
initial Entry Date, his subsequent Entry Date shall be the date he
returns to the active Service of the Employer, provided he still meets
the eligibility requirements. If an Employee does not enroll as a
Participant as of his initial Entry Date, his subsequent Entry Date
shall be the applicable Entry Date as specified by the Employer in the
Adoption Agreement when the Employee actually enrolls as a Participant.
1.27 ERISA. The term ERISA means the Employee Retirement Income Security Act
of 1974 (PL93-406) as it may be amended from time to time, and any
regulations issued pursuant thereto as such Act and such regulations
affect this Plan and Trust.
1.28 FIDUCIARY. The term Fiduciary means any or all of the following, as
applicable:
(a) Any Person who exercises any discretionary authority or
control respecting the management of the Plan or its assets;
(b) Any Person who renders investment advice for a fee or other
compensation, direct or indirect, respecting any monies or
other property of the Plan or has authority or responsibility
to do so;
(c) Any Person who has discretionary authority or responsibility
in the administration of the Plan;
Article I - Definitions February 6, 2002
-9-
(d) Any Person who has been designated by a Named Fiduciary
pursuant to authority granted by the Plan, who acts to carry
out a fiduciary responsibility, subject to any exceptions
granted directly or indirectly by ERISA.
1.29 FORFEITURE. The term Forfeiture means the amount, if any, by which the
value of a Participant's Account exceeds his Vested Interest upon the
occurrence of an immediate Break-in-Service, a 1-Year Break-in-Service
or 5 consecutive 1-Year Breaks-in-Service, as elected by the Employer
in its Adoption Agreement pursuant to Section 3D.5, following such
Participant's Termination of Employment.
1.30 HIGHLY COMPENSATED EMPLOYEE. The term Highly Compensated Employee
includes both Highly Compensated Active Employees and Highly
Compensated Former Employees.
(a) STANDARD METHOD: Effective for Plan Years beginning after
December 31, 1996, a "Highly Compensated Active Employee" includes any
Employee who performs service for the Employer during the Plan Year and
who:
(1) During either the current Plan Year (the
"Determination Period") or the immediately preceding
12-month period (the "Look-Back Year"), owns (or is
considered to own within the meaning of section 318
of the Code, as modified by section 416(I)(1)(B)(iii)
of the Code) more than 5% of the outstanding stock of
the Employer or stock possessing more than 5% of the
total voting power of all stock of the Employer, or,
if the Employer is other than a corporation, owns
more than 5% of the capital or profits interest in
the Employer. The determination of 5% ownership shall
be made separately for each member of a controlled
group of corporations (as defined in Code section
414(b)), or a group of businesses under common
control (as defined in Code section 414(c)), or for
an affiliated service group (as defined in Code
section 414(m)); or
(2) During the Look-Back Year,
(A) Received Compensation in excess of $80,000
(as indexed); and
(B) If elected by the Employer in the Adoption
Agreement, was in the top 20% of Employees
of the Employer ranked by Compensation (the
"Top-Paid Group").
A "Highly Compensated Former Employee" includes any Employee
who separated from Service (or was deemed to have separated)
prior to the Determination Year, performs no service for the
Employer during the Determination Year, and was a highly
compensated active employee for either the separation year or
any Determination Year ending on or after the Employee's 55th
birthday.
Article I - Definitions February 6, 2002
-10-
The determination of who is a Highly Compensated Employee,
including the determinations of the number and identity of the
Employees in the top-paid group, will be made in accordance
with Code section 414(q) and the regulations thereunder.
If elected by the Employer in the Adoption Agreement, a Plan
with a non-calendar year Plan Year may elect to treat the
calendar year beginning with or within the Look-Back Year as
the Look-Back Year for purposes of determining whether an
Employee is a Highly Compensated Employee on account of the
Employee's Compensation for a Look-Back Year.
For purposes of this definition, Compensation shall mean
compensation as defined in Code section 415(c)(3). For Plan
Years beginning before January 1, 1998, for purposes of this
definition, Compensation also includes elective or salary
reduction contributions to a cafeteria plan, CODA or
tax-sheltered annuity even though excluded from the definition
under Code section 415(c)(3) for those years.
Effective for Plan Years beginning on or after the date
specified by the Employer in section XIII.C of the Adoption
Agreement (Limitations on Allocations), Compensation shall
include elective amounts that are not includible in the gross
income of the Employee by reason of Code section 132(f)(4).
(b) HIGHLY COMPENSATED EMPLOYEE DETERMINATION ON SNAPSHOT BASIS:
If elected by the Employer in the Adoption Agreement, the
Employer may determine who is a Highly Compensated Employee
and substantiate that the Plan complies with the
nondiscrimination requirements on the basis of the Employer's
work force on a single day during the Plan Year, provided that
day is reasonably representative of the Employer's work force
and the Plan's coverage throughout the Plan Year. The day
elected by the Employer and indicated on the Adoption
Agreement shall be the "Snapshot Day."
To apply the snapshot basis methodology:
(1) The Employer determines who is a Highly Compensated
Employee on the basis of the data as of the Snapshot
Day, except as provided in (3) below.
(2) If the determination of who is a Highly
Compensated Employee is made earlier than the last
day of the Plan Year, the Employee's Compensation
that is used to determine an Employee's status must
be projected for the Plan Year under a reasonable
method established by the Employer.(3) If there are
Employees not employed on the Snapshot Day who are
taken into account in testing, they must be
determined to be either Highly Compensated Employees
or non-Highly Compensated Employees. In addition to
those Employees who are determined to be Highly
Compensated Employees on the Plan's Snapshot Day, the
Employer
Article I - Definitions February 6, 2002
-11-
must treat as a Highly Compensated Employee any
eligible Employee for the Plan Year who:
(a) Terminated employment prior to the Snapshot
Day and was a 5% Owner in the prior or
current Plan Year;
(b) Terminated employment prior to the Snapshot
Day and had Compensation for the Look-Back
Year greater than or equal to the
Compensation in the Look-Back Year of any
Employee who is treated as a Highly
Compensated Employee on the Snapshot Day
(except for Employees who are Highly
Compensated Employees solely because they
are 5-percent owners; or
(c) Becomes employed during the Plan Year but
after the Snapshot Day and is a 5-percent
owner.
1.31 INSURANCE COMPANY. The term Insurance Company means Connecticut General
Life Insurance Company, a legal reserve life insurance company of
Hartford, Connecticut. If any company other than Connecticut General
Life Insurance Company has issued any Life Insurance Policy held by the
Trustee under the Plan, then with respect to such Policy only and
matters pertaining directly thereto, the term Insurance Company shall
be deemed to refer to such other issuing company.
1.32 LATE RETIREMENT DATE. The term Late Retirement Date means the first day
of the month coinciding with or next following the date a Participant
is separated from Service with the Employer after his Normal Retirement
Age, for any reason other than death.
1.33 LEASED EMPLOYEE. The term Leased Employee means any person (other than
an Employee of the recipient Employer) who, pursuant to an agreement
between the recipient Employer and any other person ("leasing
organization"), has performed services for the recipient Employer (or
for the recipient Employer and related persons determined in accordance
with Code section 414(n)(6)) on a substantially full-time basis for a
period of at least one year, and such services are performed under the
primary direction or control of the recipient Employer. Contributions
or benefits provided a Leased Employee by the leasing organization
which are attributable to services performed for the recipient Employer
shall be treated as provided by the recipient Employer.
A Leased Employee shall not be considered an Employee of the recipient
Employer if such employee is covered by a money purchase pension plan
of the leasing organization providing: (a) a nonintegrated employer
contribution rate of at least 10 percent of compensation, as defined in
Code section 415(c)(3), but including amounts contributed pursuant to a
salary reduction agreement which are excludable from the employee's
gross income under section 125, section 402(e)(3), section
402(h)(1)(B), section 403(b) or section 132(f)(4) of the Code, (b)
immediate participation, and (c) full and immediate vesting; and Leased
Employees do not constitute more than 20 percent of the recipient's
non-highly compensated work force.
Article I - Definitions February 6, 2002
-12-
1.34 LIFE ANNUITY The term Life Annuity means an Annuity payable over the
life or life expectancy of one or more individuals.
1.35 LIFE INSURANCE POLICY. The term Life Insurance Policy (or Policy) means
a policy of individual life insurance purchased from the Insurance
Company on the life of any Participant.
1.36 MATCHING CONTRIBUTIONS. The term Matching Contributions means
contributions made by the Employer to the Plan for a Participant on
account of either Elective Deferral Contributions or Required Employee
Contributions. In addition, any Forfeiture reallocated as a Matching
Contribution shall be considered a Matching Contribution for purposes
of this Plan. If elected by the Employer in the Adoption Agreement,
Matching Contributions shall be made out of Considered Net Profits in
an amount specified by the Employer in its Adoption Agreement for each
$1.00 contributed as either an Elective Deferral Contribution or a
Required Employee Contribution, as further specified by the Employer in
its Adoption Agreement. The term Matching Contributions shall include
Additional Matching Contributions, True-Up Contributions, ADP Test Safe
Harbor Contributions, and ACP Test Safe Harbor Matching Contributions.
Should there be insufficient Considered Net Profits of the Employer for
such Employer contribution, the amount of such Matching Contributions
may be diminished to the amount that can be made from the Employer's
Considered Net Profits.
The Employer may designate at the time of contribution that all or a
portion of such Matching Contributions be treated as Qualified Matching
Contributions.
If elected by the Employer in the Adoption Agreement, Partners shall
not be entitled to receive Matching Contributions. If Partners are
entitled to receive Matching Contributions, for Plan Years prior to
1998, such Contributions shall be considered Elective Deferral
Contributions for all purposes under this Plan.
1.37 MONEY PURCHASE PENSION CONTRIBUTIONS. The term Money Purchase Pension
Contributions means contributions made to the Plan by the Employer in
accordance with a definite formula as specified in the Adoption
Agreement.
1.38 NAMED FIDUCIARY. The term Named Fiduciary means the Administrator and
any other Fiduciary designated by the Employer, and any successor
thereto.
1.39 NONELECTIVE CONTRIBUTIONS. The term Nonelective Contributions means
contributions made to the Plan by the Employer in accordance with a
definite formula as specified in the Adoption Agreement. The Employer
may designate at the time of contribution that the Nonelective
Contribution shall be treated as a Qualified Nonelective Contribution.
The term Nonelective Contributions shall include nonelective
contributions that are ADP Test Safe Harbor Contributions.
Article I - Definitions February 6, 2002
-13-
1.40 NON-TRUSTEED. The term Non-Trusteed means that the Employer has
specified in the Adoption Agreement that there will not be a Trust as a
part of the Plan. Contributions under a Non-Trusteed plan will be made
directly to the Insurance Company. If the Employer specifies in the
Adoption Agreement that the Plan is Non-Trusteed, then the terms and
provisions of this Plan relating to the Trust shall be of no force or
effect.
1.41 NORMAL RETIREMENT AGE. The term Normal Retirement Age means the age
selected in the Adoption Agreement. If the Employer enforces a
mandatory retirement age, the Normal Retirement Age is the lesser of
that mandatory age or the age specified in the Adoption Agreement.
Notwithstanding the vesting schedule elected by the Employer in the
Adoption Agreement, an Employee's right to his or her account balance
shall be nonforfeitable upon the attainment of Normal Retirement Age.
1.42 NORMAL RETIREMENT DATE. The term Normal Retirement Date means the first
day of the month coinciding with or next following the date a
Participant attains his Normal Retirement Age. If a Participant retires
from the Service of the Employer on his Normal Retirement Date, he
shall receive a distribution of the entire value of his Participant's
Account, as of his Normal Retirement Date, subject to the provisions of
Section 3A and Section 3C.
1.43 OWNER-EMPLOYEE. The term Owner-Employee means an individual who is a
sole proprietor, or who is a Partner owning more than 10 percent of
either the capital or profits interest of the Partnership.
1.44 PARTICIPANT. The term Participant means any person who has a
Participant's Account in the Plan and/or Trust. Notwithstanding the
foregoing, for purposes of making or receiving contributions under the
plan, the term Participant means a current or former Employee who is or
was employed during the Contribution Period or Plan Year, as
applicable, and who meets or met the eligibility and allocation
requirements for participation, as further described in the Adoption
Agreement.
If elected by the Employer in the Adoption Agreement, and only for
purposes of the investment of contributions as described in Section 5A,
the term Participant shall include former Participants, Beneficiaries,
and Alternate Payees. Former Participants shall include those
Participants who upon Termination of Employment elected to defer
distribution in accordance with Section 3A of the Plan.
1.45 PARTICIPANT'S ACCOUNT. The term Participant's Account means the sum of
the following sub-accounts maintained on behalf of each Participant.
(a) Money Purchase Pension Contributions, if any, plus any income
and minus any loss thereon;
Article I - Definitions February 6, 2002
-14-
(b) Nonelective Contributions, including any Nonelective
Contributions that are ADP Test Safe Harbor Contributions, if
any, plus any income and minus any loss thereon;
(c) Matching Contributions, including any Matching Contributions
that are ADP Test Safe Harbor Contributions, ACP Test Safe
Harbor Matching Contributions, or True-Up Contributions, if
any, plus any income and minus any loss thereon;
(d) Qualified Nonelective Contributions, if any, plus any income
and minus any loss thereon;
(e) Qualified Matching Contributions, if any, plus any income and
minus any loss thereon;
(f) Prior Employer Contributions, if any, plus any income and
minus any loss thereon;
(g) Elective Deferral Contributions, if any, plus any income and
minus any loss thereon;
(h) Employee Contributions, if any, plus any income and minus any
loss thereon;
(i) QVEC Contributions, if any, plus any income and minus any loss
thereon;
(j) Rollover Contributions, if any, plus any income and minus any
loss thereon.
A Participant's Account shall be invested in accordance with rules
established by the Plan Administrator that shall be applied in a
consistent and nondiscriminatory manner.
1.46 PARTICIPANT'S EMPLOYER STOCK ACCOUNT. The term Participant's Employer
Stock Account means that portion, if any, of the Participant's Account
which is invested in shares of the Employer's stock. Such Participant's
Employer Stock Account shall be credited with dividends paid, if any.
Such Participant's Employer Stock Account will be valued on each day
that the public exchange, over which the Employer's stock is traded, is
open for unrestricted trading. In the event that the Employer's stock
is not publicly traded, it shall be valued not less frequently than
annually.
Amounts that are invested in the Participant's Employer Stock Account
may be invested in any short term account prior to actual investment in
the Participant's Employer Stock Account.
As elected by the Employer in the Adoption Agreement:
(a) The Trustee will vote the shares of the Employer's stock
invested in the Participant's Employer Stock Account; or
(b) The Trustee will vote the shares of the Employer's stock in
accordance with any instructions received by the Trustee from
the Participant; or
Article I - Definitions February 6, 2002
-15-
(c) The Trustee may request voting instructions from the
Participants provided this is done in a consistent and
nondiscriminatory manner.
As elected by the Employer in the Adoption Agreement, the Employer may
offer investment in, and Participants may invest in, shares of any or
all Employers (as designated by the sponsoring Employer) that are part
of the same controlled group of corporations or trades or business
under common control as the sponsoring employer, whether or not a
Participant is employed by that particular entity. Alternatively, as
elected by the Employer in the Adoption Agreement, investment may be
limited to the stock of the specific Employer or Adopting Employer that
employees the Participant.
The ability of a Participant who is subject to the reporting
requirements of section 16(a) of the Securities Exchange Act of 1934
(the "Act") to make withdrawals or investment changes involving the
Participant's Employer Stock Account may be restricted by the Plan
Administrator to comply with the rules under section 16(b) of the Act.
Effective January 1, 1999, plans that contain a CODA may invest no more
than 10% of the Plan's assets attributable to elective deferrals
Contributions in Employer stock, unless (a) Participants direct the
investment in Employer stock, (b) an Elective Deferral Contribution of
no more than 1% of Compensation (as defined in the Plan for purposes of
making Elective Deferral Contributions) is required to be invested in
Employer stock, or (c) on the last day of the preceding Plan Year, the
fair market value of all assets in all the defined contribution plans
of the Employer equal no more than 10% of all of the Employer's plans'
assets (excluding any multiemployer plans).
A money purchase pension plan making an initial investment in shares of
the Employer's stock after December 31, 1974, may not acquire shares to
the extent that the aggregate fair market value of the Employer's stock
held by the Plan will exceed 10 percent of the fair market value of the
assets of the Plan.
1.47 PARTNER. The term Partner means a member of a Partnership.
1.48 PARTNERSHIP. The term Partnership means a partnership as defined in
Code section 7701(a)(2) and the regulations thereunder and includes a
syndicate, group, pool, joint venture, or other unincorporated
organization through or by means of which any business, financial
operation, or venture is carried on, and which is not a corporation or
a trust or estate within the meaning of the Code. A joint undertaking
merely to share expenses is not a Partnership. In addition, mere
co-ownership of property which is maintained, kept in repair, and
rented or leased does not constitute a Partnership.
1.49 PERSON. The term Person means any natural person, partnership,
corporation, trust or estate.
1.50 PLAN. The term Plan means this Connecticut General Life Insurance
Company Defined Contribution Plan and the Adoption
Article I - Definitions February 6, 2002
-16-
Agreement as adopted by the Employer and as both may be amended from
time to time.
1.51 PLAN ADMINISTRATOR. The term Plan Administrator means the Person or
Persons designated by the Employer in its Adoption Agreement and any
successor(s) thereto. If more than one Person shall be designated, the
committee thus formed shall be known as the Administrative Committee
and all references in the Plan to the Plan Administrator shall be
deemed to apply to the Administrative Committee. The Plan Administrator
shall signify in writing his acceptance of his responsibility as a
Named Fiduciary.
1.52 PLAN YEAR. The term Plan Year means the 12-consecutive month period
specified by the Employer in the Adoption Agreement.
If the Plan Year changes to a different 12-consecutive month period,
the first new Plan Year shall begin before the end of the last old Plan
Year. In this event, the period beginning on the first day of the last
old Plan Year and ending on the day before the first day of the first
new Plan Year shall be treated as a short Plan Year for purposes of
determining Highly Compensated Employees, performing the
Nondiscrimination Tests set forth in Section 4A, and applying the
Top-Heavy provisions of Section 7A. However, Service will be credited
in accordance with the provisions of Section 2A.8.
1.53 PREVAILING WAGE LAW The term Prevailing Wage Law means any statute or
ordinance that requires the Employer to pay its Employees working on
public contracts at wage rates not less than those determined pursuant
to that statute classes of workers in the geographical area where the
contract is performed, including the Davis-Bacon Act and similar
Federal, state, or municipal prevailing wage statutes.
1.54 PRIOR EMPLOYER CONTRIBUTIONS. The term Prior Employer Contributions
means contributions of a type no longer allowed under the terms of this
Plan and the Adoption Agreement made by the Employer prior to the date
indicated on the Adoption Agreement.
1.55 PRIOR REQUIRED EMPLOYEE CONTRIBUTIONS The term Prior Required Employee
Contributions means Employee post-tax contributions that the Employer
required as either a condition of participation, or for receiving an
Employer contribution, prior to the date indicated on the Adoption
Agreement.
1.56 PRIOR VOLUNTARY EMPLOYEE CONTRIBUTIONS The term Prior Voluntary
Employee Contributions means post-tax contributions made voluntarily by
an Employee prior to the date indicated on the Adoption Agreement.
1.57 QDRO. The term QDRO means a Qualified Domestic Relations Order as
determined in accordance with Code section 414(p) and regulations
thereunder.
1.58 QUALIFIED MATCHING CONTRIBUTIONS. The term Qualified Matching
Contributions means Matching Contributions which are subject to
Article I - Definitions February 6, 2002
-17-
the distribution and nonforfeitability requirements of Code section
401(k) when made.
1.59 QUALIFIED NONELECTIVE CONTRIBUTIONS. The term Qualified Nonelective
Contributions means Nonelective Contributions made by the Employer and
allocated to Participants' accounts that the Participants may not elect
to receive in cash until distributed from the Plan; that are
nonforfeitable when made; and that are distributable only in accordance
with the distribution provisions that are applicable to Elective
Deferral Contributions and Qualified Matching Contributions.
1.60 QVEC CONTRIBUTIONS. The term QVEC Contributions means voluntary amounts
contributed by the Participant prior to January 1, 1987, which the
Participant designated in writing were eligible for a tax deduction
under Code section 219(a).
QVEC Contributions will be maintained in a separate account, which will
be nonforfeitable (i.e., 100% vested) at all times. The account will
share in the gains and losses under the Plan in the same manner as
described in Section 5A.3 of the Plan.
1.61 REQUIRED EMPLOYEE CONTRIBUTIONS. The term Required Employee
Contributions means Employee post-tax contributions that the Employer
requires either as a condition of participation or for receipt of an
Employer contribution.
1.62 ROLLOVER CONTRIBUTION. The term Rollover Contribution means an amount
representing all or part of a distribution from a pension or profit
sharing plan meeting the requirements of Code section 401(a), which is
eligible for rollover to this Plan in accordance with the requirements
set forth in Code section 402 (including Direct Rollovers) or Code
section 408(d)(3), whichever is applicable.
1.63 SALARY DEFERRAL AGREEMENT. The term Salary Deferral Agreement means an
agreement between a Participant and the Employer to defer receipt of a
portion of the Participant's Compensation by making Elective Deferral
Contributions to the Plan. If elected by the Employer in the Adoption
Agreement, the term Salary Deferral Agreement shall also include a
deemed election by an Employee to defer receipt of Compensation by
making Elective Deferral Contributions to the Plan.
1.64 SELF-EMPLOYED INDIVIDUAL. The term Self-Employed Individual means an
individual who has Earned Income for the taxable year from the trade or
business for which the Plan is established; also, an individual who
would have Earned Income but for the fact that the trade or business
had no net profits for the taxable year.
1.65 SERIOUS FINANCIAL HARDSHIP. The term Serious Financial Hardship means
an immediate and heavy financial need of the Participant where such
Participant lacks the available resources to meet the hardship. The
Plan Administrator shall make a determination of whether a Serious
Financial Hardship exists in accordance with the applicable provisions
of Section 3E.
Article I - Definitions February 6, 2002
-18-
1.66 SHAREHOLDER-EMPLOYEE The term Shareholder-Employee means an Employee or
officer of an electing small business S corporation who owns (or is
considered as owning within the meaning of Code section 318(a)(1)), on
any day during the taxable year of such corporation, more than 5% of
the outstanding stock of the corporation.
1.67 SOCIAL SECURITY INTEGRATION LEVEL. The term Social Security Integration
Level means the Social Security Taxable Wage Base or such lesser amount
specified by the Employer in the Adoption Agreement. If the Social
Security Taxable Wage Base is amended, the Social Security Integration
Level will be deemed to have been amended.
1.68 SOCIAL SECURITY TAXABLE WAGE BASE. The term Social Security Taxable
Wage Base means the contribution and benefit base in effect under
section 230 of the Social Security Act at the beginning of the Plan
Year.
1.69 SPONSORING ORGANIZATION. The term Sponsoring Organization means
Connecticut General Life Insurance Company, a legal reserve life
insurance company of Hartford, Connecticut.
1.70 SPOUSE. The term Spouse means the lawful wife of a male Participant, or
the lawful husband of a female Participant. However, a former Spouse
will be treated as the Spouse or surviving Spouse and a current Spouse
will not be treated as the Spouse or surviving Spouse to the extent
provided under a QDRO.
1.71 STRAIGHT LIFE ANNUITY. The term Straight Life Annuity means an annuity
payable in equal installments for the life of the Participant, and that
terminates upon the Participant's death.
1.72 TERMINATION OF EMPLOYMENT. The term Termination of Employment means a
severance of the Employer-Employee relationship which occurs prior to a
Participant's Normal Retirement Age for any reason other than Early
Retirement, Disability, or death.
1.73 TRUE-UP CONTRIBUTIONS. The term True-Up Contributions means Matching
Contributions made to the Plan by the Employer so that total Matching
Contributions for each Participant are calculated on an annual basis
rather than on the basis selected by the Employer in the Adoption
Agreement.
1.74 TRUST. The term Trust means the Trust Agreement if the Employer
specifies in the Adoption Agreement that the Plan is Trusteed. The
Trust Agreement is entered into by the Employer, the Plan Administrator
and the Trustee by completing and signing the Adoption Agreement, which
Trust Agreement forms a part of, and implements the provisions of the
Plan as it applies to the Employer. If the Employer specifies in the
Adoption Agreement that the Plan is Non-Trusteed, then the terms and
provisions of this Plan relating to the Trust shall be of no force and
effect.
1.75 TRUSTEE. The term Trustee means the trustee(s) designated by the
Employer in its Adoption Agreement, if applicable, and any successor(s)
thereto.
Article I - Definitions February 6, 2002
-19-
1.76 VESTED INTEREST. The term Vested Interest means the nonforfeitable
right to an immediate or deferred benefit on any date in the amount
which is equal to the sum of (a), (b) and (c) below:
(a) The value on that date of that portion of the Participant's
Account that is attributable to and derived from Employee
Contributions, if any;
(b) The value on that date of the portion of the Participant's
Account attributable to Elective Deferral Contributions, if
any; Qualified Nonelective Contributions, if any; QVEC
Contributions, if any; Rollover Contributions, if any; ADP
Test Safe Harbor Contributions, if any; ACP Test Safe Harbor
Matching Contributions, if any; and Qualified Matching
Contributions, if any;
(c) The value on that date of that portion of the Participant's
Account that is attributable to and derived from contributions
made by the Employer (and Forfeitures, if any), multiplied by
his Vesting Percentage determined on the date applicable.
Employer contributions described in subsection (c), plus the earnings
thereon, shall be, at any relevant time, a part of the Participant's
Vested Interest equal to an amount ("X") determined by the following
formula:
X = P (AB + D) - D
For purposes of applying this formula:
P = The Participant's Vesting Percentage at the relevant time.
AB = The account balance attributable to such contributions, plus the
earnings there on, at the relevant time.
D = The amount of any distribution. A deemed distribution shall
not be treated as an actual distribution for purposes of
applying this calculation. The amount of any deemed
distribution shall not be included in "D."
1.77 VESTING PERCENTAGE. The term Vesting Percentage means the Participant's
nonforfeitable interest in Money Purchase Pension Contributions,
Matching Contributions, Nonelective Contributions, or Prior Employer
Contributions credited to his Participant's Account, plus any income
and minus any loss thereon. The Vesting Percentage for each such
Employer contribution is computed in accordance with one of the
schedules listed below, based on Years of Service with the Employer, as
specified by the Employer in its Adoption Agreement:
(a) 100% full and immediate;
(b) 100% after 3 Years of Service;
Article I - Definitions February 6, 2002
-20-
(c) 20% per Year of Service, 100% at 5 Years of Service;
(d) 20% after 3 Years of Service, 20% per Year of Service
thereafter, 100% at 7 Years of Service;
(e) 20% after 2 Years of Service, 20% per Year of Service
thereafter, 100% at 6 Years of Service;
(f) 100% after 5 Years of Service;
(g) 25% after 1 Year of Service, 100% after 4 Years of Service;
(h) Other.
However, if a Participant dies prior to attaining his Normal Retirement
Age, his Vesting Percentage shall be 100%.
Any Employer Contributions under the Plan made pursuant to the
Davis-Bacon Act or any other prevailing wage law shall always have a
vesting percentage of 100%.
1.78 VOLUNTARY EMPLOYEE CONTRIBUTIONS. The term Voluntary Employee
Contributions means post-tax contributions made voluntarily by an
Employee.
Article I - Definitions February 6, 2002
-21-
ARTICLE II - GENERAL PROVISIONS
2A. SERVICE
2A.1 SERVICE. The term Service means active employment with the Employer as
an Employee. Service shall be credited for purposes of Eligibility,
Contributions, and Benefits with respect to qualified military service
in accordance with section 414(u) of the Internal Revenue Code.
2A.2 ABSENCE FROM EMPLOYMENT. Absence from employment on account of a leave
of absence authorized by the Employer pursuant to the Employer's
established leave policy will be counted as employment with the
Employer provided that such leave of absence is of not more than two
years' duration. Absence from employment on account of active duty with
the Armed Forces of the United States will be counted as employment
with the Employer. Service will be credited for any qualified military
service as required by Code section 414(u). If the Employee does not
return to active employment with the Employer, his Service will be
deemed to have ceased on the date the Plan Administrator receives
notice that the Employee will not return. The Employer's leave policy
shall be applied in a uniform and nondiscriminatory manner to all
Participants under similar circumstances.
For purposes of determining an Employee's eligibility and vesting
status for periods while the Employee is absent from work for reasons
covered under the Family and Medical Leave Act, Service will be
credited in accordance with and to the extent required by the
provisions of the Family and Medical Leave Act.
IF THE EMPLOYER HAS ELECTED IN THE ADOPTION AGREEMENT TO DETERMINE SERVICE BASED
UPON 1,000 HOURS, THEN THE FOLLOWING SECTIONS 2A.3 THROUGH 2A.8 SHALL APPLY.
2A.3 HOUR OF SERVICE. The term Hour of Service means:
(a) Each hour for which an Employee is directly or indirectly
paid, or entitled to payment, by the Employer for the
performance of duties. These hours shall be credited to the
Employee for the Computation Period or Periods, as defined in
Section 2A.5, in which the duties were performed; and
(b) Each hour for which an Employee is paid or entitled to
payment, by the Employer on account of a period of time during
which no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacity (including disability), layoff,
jury duty, military duty or leave of absence. No more than 501
Hours of Service will be credited under this paragraph for a
single Computation Period (whether or not the period occurs in
a single Computation Period). Hours under this paragraph will
be
Article II - General Provisions February 6, 2002
-22-
calculated and credited pursuant to section 2530.200b-2 of the
Department of Labor regulations which are incorporated herein
by this reference; and
(c) Each hour for which back pay, irrespective of mitigation of
damages, has been either awarded or agreed to by the Employer.
The same Hours of Service will not be credited under
subsection (a) or subsection (b), as the case may be, and
under this subsection (c). These hours shall be credited to
the Employee for the Computation Period or periods to which
the award or agreement pertains rather than the Computation
Period in which the award, agreement or payment is made; and
Hours of Service will be credited for employment with other
members of an affiliated service group (under Code section
414(m)), a controlled group of corporations (under Code
section 414(b)), or a group of trades or businesses under
common control (under Code section 414(c)), of which the
adopting Employer is a member, and any other entity required
to be aggregated with the Employer pursuant to Code section
414(o).
(d) Each hour of qualified military service as defined in Code
section 414(u)(5).
Hours of Service will also be credited for any individual considered an
Employee for purposes of this Plan under Code sections 414(n) or
414(o).
Solely for purposes of determining whether a 1-Year Break-in-Service,
as defined in Section 2A.4, for participation and vesting purposes has
occurred in a Computation Period, an individual who is absent from work
for maternity or paternity reasons shall receive credit for the Hours
of Service which would otherwise have been credited to such individual
but for such absence, or in any case in which such hours cannot be
determined, eight (8) Hours of Service per day of such absence. For
purposes of this paragraph, an absence from work for maternity or
paternity reasons means an absence (1) by reason of the pregnancy of
the individual, (2) by reason of a birth of a child of the individual,
(3) by reason of the placement of a child with the individual in
connection with the adoption of such child by such individual, or (4)
for purposes of caring for such child for a period beginning
immediately following such birth or placement. The Hours of Service
credited under this paragraph shall be credited (1) in the Computation
Period in which the absence begins if the crediting is necessary to
prevent a Break-in-Service in that period, or (2) in all other cases,
in the following Computation Period.
Service shall be determined on the basis of the method selected in the
Adoption Agreement.
2A.4 1-YEAR BREAK-IN-SERVICE. The term 1-Year Break-in-Service means any
Computation Period during which an Employee fails to complete more than
500 Hours of Service.
Article II - General Provisions February 6, 2002
-23-
2A.5 YEAR(S) OF SERVICE. The term Year(s) of Service means a 12-consecutive
month period ("Computation Period") during which an Employee has
completed at least 1,000 Hours of Service.
(a) Eligibility Computation Period. For purposes of determining
Years of Service and Breaks-in-Service for eligibility, the
12-consecutive month period shall begin with the date on which
the Employee first performs an Hour of Service for the
Employer and, where additional periods are necessary, as
elected in the Adoption Agreement, either succeeding
anniversaries of his employment commencement date or the Plan
Year beginning within the Employee's initial 12-consecutive
month period of employment and, if necessary, succeeding
anniversaries thereof. The employment commencement date is the
date on which the Employee first performs an Hour of Service
for the Employer maintaining the Plan.
(b) Vesting Computation Period. As elected by the Employer in the
Adoption Agreement, for computing Years of Service and
Breaks-in-Service for vesting, the 12-consecutive month
period:
(1) Shall be the Plan Year; or
(2) Shall begin with the date on which the Employee first
performs an Hour of Service for the Employer and,
where additional periods are necessary, succeeding
anniversaries of that date.
However, active participation as of the last day of the Plan
Year is not required in order for a Participant to be credited
with a Year of Service for vesting purposes.
(c) Contribution Computation Period. If the Employer specifies an
annual Contribution Period in its Adoption Agreement for the
purpose of determining a Participant's eligibility to receive
a contribution, the 12-consecutive month period shall be any
Plan Year during which the Participant is credited with at
least 1,000 Hours of Service. However, when an Employee first
becomes a Participant or resumes active participation in the
Plan following a 1-Year Break-in-Service on a date other than
the first day of the Plan Year, all Hours of Service credited
to the Participant during that Plan Year, including those
Hours credited prior to the date the Employee enrolls (or
reenrolls) as an Participant in the Plan shall be counted.
Furthermore, the Employer may require in its Adoption
Agreement that a Participant be a Participant as of the last
day of the Plan Year in order to be eligible to receive a
contribution for a Plan Year.
(d) If in its Adoption Agreement the Employer permits Early
Retirement, the 12-consecutive month period for determining
Early Retirement shall be the Plan Year. However, active
participation as of the last day of the Plan Year is not
required in order for a Participant to be credited with a Year
of Service.
Article II - General Provisions February 6, 2002
-24-
Service with a predecessor organization of the Employer shall be
treated as Service with the Employer for the purposes of subsections
(a), (b) and (d) above in any case in which the Employer maintains the
plan of such predecessor organization. In addition, if elected by the
Employer in the Adoption Agreement, service with a predecessor
organization of the Employer shall be treated as Service with the
Employer, even if the Employer does not maintain the plan of such
predecessor organization.
If elected in the Adoption Agreement, service with a subsidiary or
affiliate of the Employer that is not related to the Employer under the
provisions of Code sections 414(b), (c) or (m) shall be treated as
Service with the Employer for purposes of (a), (b) and (d) above.
2A.6 DETERMINING VESTING PERCENTAGE. Vesting credit shall be given for each
Year of Service except those periods specifically excluded in the
Adoption Agreement.
If a Participant completes less than 1,000 Hours of Service during a
Plan Year while remaining in the service of the Employer, his Vesting
Percentage shall not be increased for such Plan Year. However, at such
time as the Participant again completes at least 1,000 Hours of Service
in any subsequent Plan Year, his Vesting Percentage shall then take
into account all Years of Service with the Employer except those
specifically excluded in the Adoption Agreement.
If an individual who ceases to be an Employee and is subsequently
rehired as an Employee enrolls (or reenrolls) in the Plan, upon his
participation (or reparticipation) his Vesting Percentage shall then
take into account all Years of Service except those specifically
excluded in the Adoption Agreement.
In the case of a Participant who has 5 consecutive 1-Year
Breaks-in-Service, all Years of Service after such Breaks-in-Service
will be disregarded for the purpose of vesting the Employer-derived
account balance that accrued before such breaks. However, both
pre-break and post-break Service will count for the purpose of vesting
the Employer-derived account balance that accrues after such
Breaks-in-Service. Both accounts will share in the earnings and losses
of the fund. In the case of a Participant who does not have
5-consecutive 1-Year Breaks-in-Service, both the pre-break and
post-break Service will count in vesting both the pre-break and
post-break Employer-derived account balance.
2A.7 EXCLUDED YEARS OF SERVICE FOR VESTING. In determining the Vesting
Percentage of an Employee, all Years of Service with the Employer(s)
maintaining the Plan shall be taken into account, except that the
following periods may be excluded, as specified by the Employer in its
Adoption Agreement:
(a) Years of Service prior to the time a Participant attained age
18;
Article II - General Provisions February 6, 2002
-25-
(b) Years of Service during which the Employer did not maintain
the Plan or a predecessor plan;
(c) Years of Service during a period for which the Employee made
no Required Employee Contributions;
(d) Years of Service prior to any 1-Year Break-in-Service, until
the Employee completes one Year of Service following such
1-Year Break-in-Service.
(e) In the case of an Employee who has no Vested Interest in
Employer contributions, Years of Service before any period of
consecutive 1-Year Breaks-in-Service if the number of such
consecutive 1-Year Breaks-in-Service equals or exceeds the
greater of (i) 5, or (ii) the total number of Years of Service
before such break.
For the purposes of this Section, a predecessor plan shall mean a plan
of the Employer that was terminated within five years preceding or
following the Effective Date of this Plan.
2A.8 CHANGE IN PLAN YEARS. If the Plan Year is changed, the following
special rules shall apply.
(a) Vesting Computation Periods. If the Vesting Computation Period
is the Plan Year, Years of Service and 1-Year
Breaks-in-Service shall be measured over two overlapping
12-consecutive month periods. The first such period shall
begin on the first day of the last old Plan Year and the
second such period shall begin on the first day of the first
new Plan Year, thereby creating an overlap. All Hours of
Service performed during the overlap period must be counted in
both Vesting Computation Periods. A Participant who completes
at least 1,000 Hours of Service during each such period shall
be credited with two Years of Service for Vesting.
(b) Contribution Computation Periods. To determine a Participant's
eligibility to receive a contribution for a short Plan Year,
the 1,000 Hours of Service requirement shall be prorated by
multiplying by a fraction, the numerator of which is the
number of full months in the short Plan Year and the
denominator of which is 12.
Article II - General Provisions February 6, 2002
-26-
IF THE EMPLOYER HAS ELECTED IN THE ADOPTION AGREEMENT TO DETERMINE SERVICE BASED
UPON ELAPSED TIME, THEN THE FOLLOWING SECTIONS 2A.9 AND 2A.10 SHALL APPLY.
2A.9 ELAPSED TIME. If the Employer has selected an eligibility or vesting
requirement in the Adoption Agreement that is or includes a fractional
Year(s) of Service requirement, or applies elapsed time provisions to a
full year service requirement, the provisions of this Section shall
apply.
(a) For purposes of determining an Employee's initial or continued
eligibility to participate in the Plan, or the Participant's
Vested Interest in Employer contributions, an Employee will
receive credit for the aggregate of all time period(s)
commencing with the Employee's first day of employment or
reemployment and ending on the date a Break-in-Service (as
defined in this Section) begins. The first day of employment
or reemployment is the first day the Employee performs an Hour
of Service. An Employee will also receive credit for any
Period of Severance of less than 12-consecutive months.
Fractional periods of a year will be expressed in terms of
days.
(b) For purposes of this Section, "Hour of Service" shall mean
each hour for which an Employee is paid or entitled to payment
for the performance of duties for the Employer, and each hour
of qualified military service as defined in Code section
414(u)(5).
(c) For purposes of this Section, a "Break-in-Service" is a Period
of Severance of at least 12 consecutive months.
(d) A "Period of Severance" is a continuous period of time during
which the Employee is not employed by the Employer. Such
period begins on the date the Employee retires, quits or is
discharged, or if earlier, the 12-month anniversary of the
date on which the Employee was otherwise first absent from
Service.
(e) In the case of an individual who is absent from work for
maternity or paternity reasons, the 12-consecutive month
period beginning on the first anniversary of the first day of
such absence shall not constitute a Break-in-Service. For
purposes of this paragraph, an absence from work for maternity
or paternity reasons means an absence (1) by reason of the
pregnancy of the individual, (2) by reason of the birth of a
child of the individual, (3) by reason of the placement of a
child with the individual in connection with the adoption of
such child by such individual, or (4) for purposes of caring
for such child for a period beginning immediately following
such birth or placement.
Each Employee will share in Employer contributions for the
period beginning on the date the Employee commences
participation under the Plan and ending on the date on which
such Employee severs employment with the Employer or is no
longer a member of an eligible class of Employees.
Article II - General Provisions February 6, 2002
-27-
(f) If the Employer is a member of an affiliated service group
(under Code section 414(m)), a controlled group of
corporations (under Code section 414(b)), a group of trades or
businesses under common control (under Code section 414(c)) or
any other entity required to be aggregated with the Employer
pursuant to Code section 414(o), Service will be credited for
any employment for any period of time for any other member of
such group. Service will also be credited for any individual
required under Code section 414(n) or Code section 414(o) to
be considered an Employee of any Employer aggregated under
Code sections 414(b), (c), or (m) of such group.
2A.10 EXCLUDED PERIODS OF SERVICE FOR VESTING. In determining the Vesting
Percentage of an Employee, all Periods of Service with the Employer(s)
maintaining the Plan shall be taken into account, except that the
following periods may be excluded, as specified by the Employer in its
Adoption Agreement:
(a) Periods of Service prior to the time a Participant attained
age 18;
(b) Periods of Service during which the Employer did not maintain
the Plan or a predecessor plan;
(c) Periods of Service during which the Employee made no Required
Employee Contributions;
(d) Periods of Service prior to any one-year Period of Severance,
until the Employee completes a one-year period of Service
following such Period of Severance;
(e) In the case of an Employee who has no Vested Interest in
Employer contributions, Periods of Service before any Period
of Severance if the number of consecutive one-year Periods of
Severance equals or exceeds the greater of (i) 5, or (ii) the
total number of one-year Periods of Service before such Period
of Severance.
For the purposes of this Section, a predecessor plan shall mean a plan
of the Employer that was terminated within five years preceding or
following the Effective Date of this Plan.
2B. ELIGIBILITY, ENROLLMENT AND PARTICIPATION
2B.1 ELIGIBILITY. Each Employee shall be eligible to participate in the Plan
and receive an appropriate allocation of Employer contributions as of
the Entry Date following the day he meets the following requirements,
if any, specified by the Employer in its Adoption Agreement, relating
to:
(a) Required service;
(b) Minimum attained age;
(c) Job class requirements.
Article II - General Provisions February 6, 2002
-28-
In addition to the eligibility conditions stated above, the Employer
may specify in the Adoption Agreement certain groups of Employees who
are not eligible to participate in the Plan.
Notwithstanding the foregoing, if the Employer's Plan as set forth
herein replaces or amends a preceding plan, then those Employees
participating under the Plan as written prior to such replacement or
amendment shall be eligible to be Participants hereunder without regard
to length of Service or minimum attained age otherwise required herein.
There shall be no required service or minimum attained age requirements
for any Employer Contributions under the Plan made pursuant to the
Davis Bacon Act or any other Prevailing Wage Law.
2B.2 ENROLLMENT. Each eligible Employee may enroll as of his Entry Date by
completing and delivering to the Plan Administrator an enrollment form
and, if applicable, a payroll deduction authorization and/or a Salary
Deferral Agreement.
If deemed elections by Employees for Elective Deferral Contributions
are elected by the Employer in the Adoption Agreement, such Employees
shall become Participants and shall be deemed to have enrolled in the
Plan as of the date Elective Deferral Contributions begin.
2B.3 REEMPLOYMENT. In the case of an individual who ceases to be an Employee
and is subsequently rehired as an Employee, the following provisions
shall apply in determining eligibility to again participate in the
Plan:
(a) If the Employee had met the eligibility requirements as
specified in Section 2B.1, such Employee will become a
Participant in the Plan in accordance with Section 2B.2 as of
the date he is reemployed as an Employee.
(b) If the Employee had not formerly met the eligibility
requirements specified in Section 2B.1, such Employee will
become a Participant in the Plan after meeting the
requirements of Section 2B.1 in accordance with Section 2B.2.
2B.4 ELIGIBLE CLASS. If a Participant becomes ineligible to participate
because he is no longer a member of an eligible class of Employees,
such Employee shall participate immediately upon his return to an
eligible class of Employees. If such Participant incurs a
Break-in-Service, eligibility will be determined under the
Break-in-Service rules of the Plan.
If an Employee who is not a member of the eligible class of Employees
becomes a member of the eligible class, such Employee shall participate
immediately if such Employee has satisfied the minimum age and Service
requirements and would have previously become a Participant had he been
in the eligible class. If such Participant incurs a Break-in-Service,
eligibility will be determined under the Break-in-Service rules of the
Plan.
Article II - General Provisions February 6, 2002
-29-
2B.5 WAIVER OF PARTICIPATION. Notwithstanding any provision of the Plan to
the contrary, if Required Employee Contributions are elected by the
Employer in the Adoption Agreement, any Employee in accordance with the
rules of the Plan may decline to become a Participant by filing a
written waiver of participation with the Plan Administrator in the
manner prescribed.
An Employee may make a one-time irrevocable waiver of participation
upon the later of his commencement of employment with the Employer or
the date he is first eligible to participate in the Plan.
Any Employee who files such a waiver shall not become a Participant and
such Employee shall not receive any additional Compensation or other
sums by reason of his waiver of participation.
No Employee who is eligible to participate in a standardized plan may
waive participation or voluntarily reduce his or her Compensation for
purposes of this Plan.
2C. CONTRIBUTIONS AND ALLOCATIONS
2C.1 PROFIT SHARING/THRIFT PLAN WITH 401(k) FEATURE.
(a) Contributions - Employer.
For each Plan Year, as specified in the Adoption Agreement,
the Employer shall make one or more of the following
contributions.
(1) Elective Deferral Contributions.
(2) Matching Contributions.
(3) Nonelective Contributions.
(b) Contributions - Participant.
For Plans that contain a CODA, for each Plan Year, as
specified in the Adoption Agreement, each Participant may make
periodic Required Employee Contributions or Voluntary Employee
Contributions.
For Plans that contain a CODA, a Participant may elect to make
a Voluntary Employee Contribution in a lump sum. Such lump sum
Voluntary Employee Contribution may be made (1) as of the
Effective Date, or (2) as elected by the Employer in the
Adoption Agreement. Voluntary Employee Contributions shall be
subject to the terms of Section 4B.
Article II - General Provisions February 6, 2002
-30-
(c) Fail-Safe Contribution.
The Employer reserves the right to make a discretionary
Nonelective Contribution to the Plan for any Plan Year, if the
Employer determines that such a contribution is necessary to
ensure the Actual Deferral Percentage test or the Actual
Contribution Percentage test will be satisfied for that Plan
Year, and provided the Employer has elected in the Adoption
Agreement to use the Current Year Testing method. Such amount
shall be designated by the Employer at the time of
contribution as a Qualified Nonelective Contribution and shall
be known as a Fail-Safe Contribution.
The Fail-Safe Contribution must be allocated as of a date
within the plan year to which it relates and must be paid to
the Trust by the last day of the 12-month period following the
Plan Year to which it relates.
The Fail-Safe Contribution shall be made on behalf of all
eligible non-Highly Compensated Employees who are Participants
and who are considered under the Actual Deferral Percentage
test or, if applicable, the Actual Contribution Percentage
test, and shall be allocated to the Participant's Account of
each such Participant in an amount equal to a fixed percentage
of such Participant's Compensation. The fixed percentage shall
be equal to the minimum fixed percentage necessary to be
contributed by the Employer on behalf of each eligible
non-Highly Compensated Employee who is a Participant so that
the Actual Deferral Percentage test or, if applicable, the
Actual Contribution Percentage test, is satisfied.
(d) USERRA Contribution.
An Employee who is reemployed following a period of qualified
military service (as defined in Code section 414(u)) shall be
entitled to make up Elective Deferral Contributions and
Voluntary Employee Contributions, and to receive related
Matching Contributions and Nonelective Contributions to the
extent required by Code section 414(u).
(e) Contributions - Changes.
For each Plan Year, a Participant may change the amount of his
Required Employee Contributions, Voluntary Employee
Contributions, or Elective Deferral Contributions as often as
the Plan Administrator allows (on a consistent and
nondiscriminatory basis), on certain dates prescribed by the
Plan Administrator.
(f) Contributions - Timing.
(1) Elective Deferral Contributions shall be paid by the
Employer to the Trust or the Insurance Company, as
elected by the Employer in the Adoption Agreement,
but never later than 15 days after the close of the
month in which they were deferred.
Article II - General Provisions February 6, 2002
-31-
(2) Matching Contributions made on other than an annual
basis shall be paid to the Trust or Insurance
Company, as elected by the Employer in the Adoption
Agreement. Matching Contributions, including
Additional Matching Contributions, made on an annual
basis shall be paid to the Trust or the Insurance
Company, as applicable, at the end of the Plan Year,
or as soon as possible on or after the last day of
such Plan Year, but in no event later than the date
prescribed by law for filing the Employer's income
tax return, including any extension thereof. To the
extent that Matching Contributions are used to
purchase Life Insurance Policies, then such
contributions for any Plan Year may be paid to the
Trust when premiums for such Policies are due during
the Plan Year.
(3) Nonelective Contributions made on other than an
annual basis shall be paid to the Trust or Insurance
Company, as applicable, as elected by the Employer in
the Adoption Agreement. Nonelective Contributions,
including Additional Nonelective Contributions, made
on an annual basis shall be paid to the Trust or the
Insurance Company, as applicable, at the end of the
Plan Year, or as soon as possible on or after the
last day of such Plan Year, but in any event not
later than the date prescribed by law for filing the
Employer's income tax return, including any extension
thereof. To the extent that Nonelective Contributions
are used to purchase Life Insurance Policies, then
such contributions for any Plan Year may be paid to
the Trust when premiums for such Policies are due
during the Plan Year.
(4) Employee Contributions shall be transferred by the
Employer to the Trust or the Insurance Company, as
elected by the Employer in the Adoption Agreement,
but never later than 15 days following the close of
the month in which such contributions are made by the
Employee.
(5) The Fail-Safe Contribution for any Plan Year as
determined above shall be paid to the Insurance
Company at the end of the Plan Year, or as soon as
possible on or after the last day of such Plan Year,
but in no event later than the date which is
prescribed by law for filing the Employer's income
tax return, including any extensions thereof.
(g) Contributions - Allocations.
The allocation of Nonelective Contributions shall be made in
accordance with (1), (2), (3), (4) or (5) below, as specified
by the Employer in the Adoption Agreement.
(1) Formula A: Compensation Ratio - Not Integrated with
Social Security.
Article II - General Provisions February 6, 2002
-32-
The allocation to each Participant shall be made in
the proportion that the Compensation paid to each
Participant eligible to receive an allocation bears
to the Compensation paid to all Participants eligible
to receive an allocation.
(2) Formula B: Integrated with Social Security - Step
Rate Method.
Base Contribution: An amount equal to a percentage
(as specified in the Adoption Agreement) of the
Compensation of each Participant up to the Social
Security Integration Level;
Excess Contribution: In addition, an amount equal to
a percentage (as specified in the Adoption Agreement)
of the Participant's Compensation which is in excess
of the Social Security Integration Level, subject to
the Limitations on Allocations in accordance with
Section 4B. This Excess Contribution percentage shall
not exceed the lesser of:
(A) twice the Base Contribution or
(B) the Base Contribution plus the greater of:
(i) the old age insurance portion of
the Old Age Survivor Disability
(OASDI) tax rate; or
(ii) 5.7%.
If the Employer has elected in the Adoption Agreement
to use a Social Security Integration Level that in
any Plan Year is the greater of $10,000 or 20% but
less than 100% of the Social Security Taxable Wage
Base, then the 5.7% limitation specified in
2C.1(f)(2)(B)(ii) shall be adjusted in accordance
with the following table:
IF THE SOCIAL SECURITY INTEGRATION LEVEL
is more But not more Adjust
than Than 5.7% to
- ------------------------------------------------------------------------
the greater of $10,000 or 80% of the Social Security 4.3%
20% of the Social Security Taxable Wage Base
Taxable Wage Base
80% of the Social Security 100% of the Social Security 5.4%
Taxable Wage Base Taxable Wage Base
In the case of any Participant who has exceeded the
Cumulative Permitted Disparity Limit described in
Section 2C.1(g), Nonelective Contributions shall be
Article II - General Provisions February 6, 2002
-33-
allocated in an amount equal to the Excess
Contribution percentage of two times such
Participant's total Compensation for the Plan Year.
Any remaining Nonelective Contributions or
Forfeitures will be allocated to each Participant's
Account in the ratio that each Participant's total
Compensation for the Plan Year bears to all
Participants' total Compensation for that Plan Year.
(3) Formula B: Integrated with Social Security - Maximum
Disparity Method.
Subject to the Limitations on Allocations specified
in Section 4B, for each Plan Year the allocation to
each Participant shall be made in accordance with the
following:
(A) An amount equal to 5.7% of the sum of each
Participant's total Compensation plus
Compensation that is in excess of the Social
Security Integration Level shall be
allocated to each Participant's Account. If
the Employer does not contribute such amount
for all Participants, an amount shall be
allocated to each Participant's Account
equal to the same proportion that each
Participant's total Compensation plus
Compensation that is in excess of the Social
Security Integration Level bears to the
total Compensation plus Compensation in
excess of the Social Security Integration
Level of all Participants in the Plan. In
the case of any Participant who has exceeded
the Cumulative Permitted Disparity Limit
described in Section 2C.1(g), two times such
Participant's total Compensation for the
Plan Year will be taken into account.
If the Employer has elected in the Adoption
Agreement to use a Social Security
Integration Level that in any Plan Year is
the greater of $10,000 or 20% but less than
100% of the Social Security Taxable Wage
Base, then the 5.7% limitation specified in
this subsection shall be adjusted in
accordance with the following table:
IF THE SOCIAL SECURITY INTEGRATION LEVEL
is more But not more Adjust
than Than 5.7% to
- ------------------------------------------------------------------------
the greater of $10,000 or 80% of the Social Security 4.3%
20% of the Social Security Taxable Wage Base
Taxable Wage Base
80% of the Social Security 100% of the Social Security 5.4%
Taxable Wage Base Taxable Wage Base
Article II - General Provisions February 6, 2002
-34-
(B) The balance of the Nonelective Contribution
(if any), shall be allocated to the
Participant's Account in the proportion that
each Participant's Compensation bears to the
total Compensation of all Participants.
(4) Formula C: Flat Dollar Amount.
The allocation to each Participant shall be a flat
dollar amount as elected by the Employer in the
Adoption Agreement.
(5) Formula D: Uniform Points Allocation.
The allocation to each Participant shall be based on
a Uniform Points Allocation as elected by the
Employer in the Adoption Agreement. Formula D may not
be used under a Standardized plan.
(h) Allocation Requirements.
Employer contributions shall be allocated to the accounts of
Participants in accordance with the allocation requirement as
specified by the Employer in its Adoption Agreement. If the
Employer has adopted a standardized plan, the allocation of
any nonannual contribution made by the Employer shall be made
to each Participant who is a Participant on any day of the
Contribution Period regardless of Hours of Service.
Annual Overall Permitted Disparity Limit. Notwithstanding the
preceding paragraph, for any Plan Year this Plan benefits any
Participant who benefits under another qualified plan or
simplified employee pension plan, as defined in Code section
408(k), maintained by the Employer that provides for permitted
disparity (or imputes disparity), Employer contributions and
Forfeitures will be allocated to the account of each
Participant who either completes more than 500 Hours of
Service during the Plan Year or who is employed as of the last
day of the Plan Year in the ratio that such Participant's
total Compensation bears to the total Compensation of all
Participants.
Cumulative Permitted Disparity Limit. Effective for Plan Years
beginning on or after January 1, 1995, the Cumulative
Permitted Disparity Limit for a Participant is 35 total
cumulative permitted disparity years. Total cumulative
permitted years mean the number of years credited to the
Participant for allocation or accrual purposes under this
Plan, any other qualified plan or simplified employee pension
plan (whether or not terminated) ever maintained by the
Employer. For purposes of determining the Participant's
Cumulative Permitted Disparity Limit, all years ending in the
same calendar year are treated as the same year. If the
Participant has not benefited under a defined benefit or
Article II - General Provisions February 6, 2002
-35-
target benefit plan for any year beginning on or after January
1, 1994, the Participant has no Cumulative Permitted Disparity
Limit.
(i) Forfeitures.
Forfeitures will be used in the manner elected in the Adoption
Agreement as follows:
(1) Allocated in accordance with the allocation formula
elected in the Adoption Agreement for the
contributions from which the Forfeitures were
generated; or
(2) First, to reduce Employer contributions or pay Plan
expenses, with any remaining Forfeitures allocated in
accordance with the allocation formula elected in the
Adoption Agreement for the contributions from which
the Forfeitures were generated.
(j) Expenses.
The Employer may contribute to the Plan the amount necessary
to pay any reasonable expenses of administering the Plan. In
lieu of the Employer contributing the amount necessary to pay
such charges, these expenses may be paid from Plan assets.
(k) Special Rules - Elective Deferral Contributions.
(1) Each Participant may elect (or shall be deemed to
have elected if the Employer has elected deemed
elections by Participants in the Adoption Agreement)
to defer his Compensation in an amount specified in
the Adoption Agreement, subject to the limitations of
this Section. A Salary Deferral Agreement (or
modification of an earlier Salary Deferral Agreement)
may not be made with respect to Compensation which is
currently available on or before the date the
Participant executed such election, or if later, the
later of the date the Employer adopts this CODA, or
the date such arrangement first becomes effective.
Any elections made pursuant to this Section shall
become effective as soon as administratively
feasible.
(2) Elective Deferral Contributions will be allocated to
the Participant's Account and shall be 100 percent
vested and nonforfeitable at all times.
(3) During any taxable year, no Participant shall be
permitted to have Elective Deferral Contributions
made under this Plan, or any other qualified plan
maintained by the Employer, in excess of the dollar
limitation contained in Code section 402(g) in effect
at the beginning of such taxable year. If a
Participant takes a withdrawal of Elective Deferral
Contributions due to a Serious Financial Hardship, as
provided in Section 3E.5, his Elective Deferral
Article II - General Provisions February 6, 2002
-36-
Contributions for his taxable year immediately
following the taxable year of such distribution may
not exceed the Code section 402(g) limit for such
taxable year less the amount of Elective Deferral
Contributions made for the Participant in the taxable
year of the distribution.
(4) Elective Deferral Contributions that are not in
excess of the limits described in subsection (3)
above shall be subject to the Limitations on
Allocations in accordance with Section 4B.
Elective Deferral Contributions that are in excess of
the limits described in (3) above shall also be
subject to the Section 4B limitations, as further
provided in Section 4C.2.
(5) An Employee's eligibility to make Elective Deferral
Contributions under a CODA may not be conditioned
upon the completion of more than one (1)
Year-of-Service or the attainment of more than age
twenty-one (21).
(6) A Participant may modify the amount of Elective
Deferral Contributions such Participant makes to the
Plan as often as the Plan Administrator allows, as
specified in the Adoption Agreement, but in no event
not less frequently than once per calendar year. Such
modification may be made by filing a written notice
with the Plan Administrator within the time period
prescribed by the Plan Administrator.
(l) Safe Harbor 401(k) Plans - Special Rules.
(1) If elected by the Employer in the Adoption Agreement, the
Employer may establish a Safe Harbor 401(k) Plan, and the
provisions of this section 2.C.1(l) shall apply for the Plan
Year and any other provisions relating to the ADP Test or ACP
Test shall not apply.
Notwithstanding the foregoing, to the extent that the
Employer elects in the Adoption Agreement to make
Matching Contributions or Nonelective Contributions
that do not meet the requirements of this section
2.C.1(l), then the other provisions of this Plan
relating to such contributions shall apply thereto.
Moreover, any such contributions shall be required to
meet the Actual Contribution Percentage test
requirements using Current Year Testing methods. In
addition, if the Employer elects in the Adoption
Agreement to allow Participants to make Voluntary
Employee Contributions or Required Employee
Contributions, the Safe Harbor 401(k) rules shall not
apply to these contributions. Any such contributions
shall be required to meet the Actual Contribution
Percentage test requirements.
If the Employer elects in the Adoption Agreement to
establish a Safe Harbor 401(k) Plan, the election
must
Article II - General Provisions February 6, 2002
-37-
apply to all Eligible Employees under the Plan even
if they comprise two or more groups of Employees who,
but for this election, must be mandatorily
disaggregated for nondiscrimination testing.
(2) To the extent that any other provision of the Plan is
inconsistent with the provisions of this section, the
provisions of this section shall apply to a Safe Harbor 401(k)
Plan.
(3) Definitions.
(A) ACP Test Safe Harbor. ACP Test Safe Harbor is the
method described in section 2.C.1(l)(5) for
satisfying the Actual Contribution Percentage Test.
(B) ACP Test Safe Harbor Matching Contributions. ACP
Test Safe Harbor Matching Contributions are matching
contributions described in section 2.C.1(l)(5) of the
Plan.
(C) ADP Test Safe Harbor. ADP Test Safe Harbor is the
method described in section 2.C.1(l)(4) for
satisfying the Actual Deferral Percentage Test.
(D) ADP Test Safe Harbor Contributions. ADP Test Safe
Harbor Contributions are matching contributions and
nonelective contributions described in section
2.C.1(l)(4) of the Plan.
(E) Compensation. Compensation is as defined in
section 1.13 of the Plan, except that for purposes of
this section 2.C.1(l), no dollar limit, other than
that imposed by Code section 401(a)(17), may apply to
a Nonhighly Compensated Employee. To the extent that
an Employer elects to use a reasonable alternative
definition of Compensation, as defined in section
1.13(I), for determining the Compensation subject to
a Participant's elective deferral election, that
definition must permit each Employee to elect
sufficient Elective Deferrals to receive the maximum
amount of any Matching Contributions available to the
Participant under the Plan.
(F) Eligible Employee. Eligible Employee means any
Employee eligible to make Elective Deferral
Contributions under the Plan for any part of the Plan
Year, or who would be eligible but for a suspension
due to a Serious Financial Hardship Withdrawal
described in section 3.E.7(b) of the Plan, or any
statutory limitation, such as that imposed under
sections 402(g) and 415 of the Code.
(G) Matching Contributions. Matching Contributions
are contributions made by the Employer on account of
an Eligible Employee's Elective Deferral
Contributions.
Article II - General Provisions February 6, 2002
-38-
(4) ADP Test Safe Harbor.
(A) ADP Test Safe Harbor Contributions.
(i) Unless the Employer elects in the
Adoption Agreement to make Enhanced Matching
Contributions or Safe Harbor Nonelective
Contributions, the Employer shall contribute
for the Contribution Period a Safe Harbor
Matching Contribution equal to:
(a) $1.00 for each $1.00 of any
Employee's Elective Deferral
Contributions up to three (3)
percent of the Employee's
Compensation for the Contribution
Period; plus
(b) $.50 for each $1.00 of the
Employee's Elective Deferral
Contribution in excess of three (3)
percent of the Employee's
Compensation but that do not exceed
five (5) percent of the Employee's
Compensation.
The ADP Test Safe Harbor Contribution in
this section 2.C.1(l)(4)(A) shall be known
as Basic Matching Contributions.
(ii) Notwithstanding the requirements of (i)
above that the Employer make the ADP Test
Safe Harbor Contribution to this Plan, if
the Plan is a non-standardized plan and the
Employer elects in the Adoption Agreement,
the ADP Test Safe Harbor Contribution will
be made to the defined contribution plan of
the Employer indicated in the Adoption
Agreement. However, the ADP Test Safe Harbor
Contribution must be made to this Plan
unless (a) each Employee eligible under this
Plan is also eligible under the other plan,
and (b) the other Plan has the same Plan
Year as this Plan.
(iii) ADP Test Safe Harbor Contributions are
nonforfeitable and 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, attainment of age
59-1/2. In addition, such contributions must
satisfy the ADP Test Safe Harbor without
regard to permitted disparity under Code
section 414(l).
Article II - General Provisions February 6, 2002
-39-
(B) Notice Requirement.
At least 30 days, but not more than 90 days,
before the beginning of each Plan Year, the
Employer shall 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 the Employee become eligible after the
90th day before the beginning of the Plan
Year (including any Employee who become
eligible during 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 become
eligible.
(C) 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 (B) above.
(5) ACP Test Safe Harbor.
ACP Test Safe Harbor Matching Contributions.
(A) In addition to the ADP Safe Harbor Matching
Contributions described in section 2.C.1(l)(4) above,
the Employer will make the ACP Test Safe Harbor
Contributions, if any, indicated in the Adoption
Agreement for the Contribution Period.
(B) ACP Test Safe Harbor Contributions will be vested
as indicated in the Adoption Agreement, but, in any
event, such contributions shall be 100% vested at
Normal Retirement Age, upon the complete or partial
termination of the Plan, or upon the complete
discontinuance of Employer Contributions.
(C) Forfeitures of any nonvested ACP Test Safe Harbor
Contributions shall be applied in the manner elected
by the Employer in the Adoption Agreement.
(6) Other Requirements.
All contributions made to a Safe Harbor 401(k) Plan
shall not be based on Considered Net Profits of the
Employer.
(m) Suspension of Contributions.
(1) Elective Deferral Contributions. The following
provisions shall apply with respect to suspension of
Elective Deferral Contributions, including Elective
Article II - General Provisions February 6, 2002
-40-
Deferral Contributions made under a Safe Harbor
401(k) Plan.
(A) Voluntary Suspension. A Participant may
elect to suspend his Salary Deferral
Agreement for Elective Deferral
Contributions by filing a written notice
thereof with the Plan Administrator. Such
Contributions shall be suspended on the date
specified in such notice, which date must be
at least 15 days after such notice is filed.
The notice shall specify the period for
which such suspension shall be effective.
(B) Suspension for Leave. A Participant who is
absent from employment on account of an
authorized unpaid leave of absence, military
leave, or for a period of qualified military
service, shall have his Salary Deferral
Agreement suspended during such leave. Such
suspension of contributions shall be
effective on the date payment of
Compensation by the Employer to him ceases,
and shall remain in effect until payment of
Compensation resumes.
(C) Withdrawal Suspension. A Participant who
elects a withdrawal in accordance with
Section 3E may have his Elective Deferral
Contributions suspended on the date such
election becomes effective. Such suspension
shall remain in effect for the number of
months specified therein. If a Participant
receives a serious financial hardship
withdrawal of Elective Deferral
Contributions, all employee contributions
(both pre-tax and post-tax contributions)
will be suspended in accordance with section
3E.8 of the Plan.
(D) Non-Elective Suspension. A Participant who
ceases to meet the eligibility requirements
as specified in Section 2B.1 but who remains
in the employ of the Employer shall have his
Elective Deferral Contributions suspended,
effective as of the date he ceases to meet
the eligibility requirements. Such
suspension shall remain in effect until he
again meets such eligibility requirements.
The Participant may elect to reactivate his Salary Deferral
Agreement for Elective Deferral Contributions by filing a
written notice thereof with the Plan Administrator. The Salary
Deferral Agreement shall be reactivated following the
expiration of the suspension period described above.
(2) Required Employee Contributions. The following provisions
shall apply with respect to suspension of Required Employee
Contributions by Participants. In the event that a Participant
suspends his Required Employee Contributions, he
Article II - General Provisions February 6, 2002
-41-
shall automatically have his Voluntary Employee Contributions
suspended for the same period of time.
(A) Voluntary Suspension. A Participant may elect to
suspend his payroll deduction authorization for his
Required Employee Contributions by filing a written
notice thereof with the Plan Administrator. Such
notice shall be effective, and his applicable
contributions shall be suspended, on the date
specified in such notice, which date must be at least
15 days after such notice is filed. The notice shall
specify the period for which such suspension shall be
effective. Such period must be a minimum of one month
and may extend indefinitely.
(B) Suspension for Leave. A Participant who is absent
from employment on account of an authorized unpaid
leave of absence, military leave, or for a period of
qualified military leave, shall have his payroll
deduction authorization for Required Employee
Contributions suspended during such leave. Such
suspension of contributions shall be effective on the
date payment of Compensation by the Employer to him
ceases, and shall remain in effect until payment of
Compensation resumes.
(C) Withdrawal Suspension. A Participant who elects a
withdrawal in accordance with Section 3E may have his
Required Employee Contributions suspended on the date
such election becomes effective. Such suspension
shall remain in effect for the number of months
specified under the provisions of Section 3E. If a
Participant receives a serious financial hardship
withdrawal of Elective Deferral Contributions, all
employee contributions (both pre-tax and post-tax
contributions) will be suspended in accordance with
section 3E.8 of the Plan.
(D) Involuntary Suspension. A Participant who ceases to
meet the eligibility requirements as specified in
Section 2B.1 but who remains in the employ of the
Employer shall have his Required Employee
Contributions suspended, effective as of the date he
ceases to meet the eligibility requirements. Such
suspension shall remain in effect until he again
meets such eligibility requirements.
The Participant may elect to reactivate his payroll deduction
authorization by filing a written notice thereof with the Plan
Administrator. The payroll deduction authorization shall be
reactivated following the expiration of the suspension period
described above.
(3) Voluntary Employee Contributions. The following provisions
apply with respect to suspension of Voluntary Employee
Contributions by Participants.
Article II - General Provisions February 6, 2002
-42-
(A) Voluntary Suspension. A Participant may elect to
suspend his payroll deduction authorization for his
Voluntary Employee Contributions by filing a written
notice thereof with the Plan Administrator. Such
notice shall be effective, and his applicable
contributions shall be suspended, on the date
specified in such notice, which date must be at least
15 days after such notice is filed. The notice shall
specify the period for which such suspension shall be
effective.
(B) Suspension for Leave. A Participant who is absent
from employment on account of an authorized unpaid
leave of absence, military leave, or for a period of
qualified military leave, shall have his payroll
deduction order for Voluntary Employee Contributions
suspended during such leave. Such suspension of
contributions shall be effective on the date payment
of Compensation by the Employer to him ceases, and
shall remain in effect until payment of Compensation
resumes.
(C) Withdrawal Suspension. A Participant who elects a
withdrawal in accordance with Section 3E may have his
Voluntary Employee Contributions suspended on the
date such election becomes effective. Such suspension
shall remain in effect for the number of months
specified therein. If a Participant receives a
serious financial hardship withdrawal of Elective
Deferral Contributions, all employee contributions
(both pre-tax and post-tax contributions) will be
suspended in accordance with section 3E.8 of the
Plan.
(D) Involuntary Suspension. A Participant who ceases to
meet the eligibility requirements as specified in
Section 2B.1 but who remains in the employ of the
Employer shall have his Voluntary Employee
Contributions suspended, effective as of the date he
ceases to meet the eligibility requirements. Such
suspension shall remain in effect until he again
meets such eligibility requirements.
The Participant may elect to reactivate his payroll deduction
authorization by filing a written notice thereof with the Plan
Administrator. The payroll deduction authorization shall be
reactivated following the expiration of the suspension period
described above.
2C.2 MONEY PURCHASE PENSION PLAN.
(a) Contributions - Employer. As specified in the Adoption
Agreement, the Employer shall contribute an amount equal to a
fixed percentage of each Participant's Compensation, a flat
dollar amount, or an amount integrated with Social Security in
accordance with (1), (2) or (3) below:
Article II - General Provisions February 6, 2002
-43-
(1) Formula A: Not Integrated with Social Security. An
amount equal to a percentage from l% to 25% of the
Compensation of each Participant, as elected by the
Employer in the Adoption Agreement, subject to the
Limitations on Allocations in accordance with Section
4B.
(2) Formula B: Flat Dollar Amount. An amount, as elected
by the Employer in the Adoption Agreement.
(3) Formula C: Integrated with Social Security.
Base Contribution: An amount equal to a percentage
(as specified in the Adoption Agreement) of
Compensation of each Participant up to the Social
Security Integration Level;
Excess Contribution: In addition, an amount equal to
a percentage (as specified in the Adoption Agreement)
of the Participant's Compensation which is in excess
of the Social Security Integration Level, subject to
the Limitations on Allocations in accordance with
Section 4B. This Excess Contribution percentage shall
not exceed the lesser of:
(A) twice the Base Contribution or
(B) the Base Contribution plus the greater of:
(i) old age insurance portion of the
Old Age Survivor Disability (OASDI)
tax rate; or
(ii) 5.7%.
If the Employer has elected in the Adoption Agreement
to use a Social Security Integration Level that in
any Plan Year is the greater of $10,000 or 20% but
less than 100% of the Social Security Taxable Wage
Base, then the 5.7% limitation specified in
2C.2(a)(3)(B)(ii) shall be adjusted in accordance
with the following table:
IF THE SOCIAL SECURITY INTEGRATION LEVEL
is more but not more Adjust
than than 5.7% to
- ------------------------------------------------------------------------
the greater of $10,000 or 80% of the Social Security 4.3%
20% of the Social Security Taxable Wage Base
Taxable Wage Base
80% of the Social Security 100% of the Social Security 5.4%
Taxable Wage Base Taxable Wage Base
Article II - General Provisions February 6, 2002
-44-
However, in the case of any Participant who has
exceeded the Cumulative Permitted Disparity Limit
described below, the Employer will contribute for
each Participant who either completes more than 500
Hours of Service during the Plan Year or is employed
on the last day of the Plan Year, an amount equal to
the Excess Contribution percentage multiplied by the
Participant's total Compensation.
Annual Overall Permitted Disparity Limit. Notwithstanding the
preceding provisions of this Section 2C.2(a), for any Plan
Year this Plan benefits any Participant who benefits under
another qualified plan or simplified employee pension plan, as
defined in Code section 408(k), maintained by the Employer
that provides for permitted disparity (or imputes disparity),
Employer contributions and Forfeitures will be allocated to
the account of each Participant who either completes more than
500 Hours of Service during the Plan Year or who is employed
as of the last day of the Plan Year in the ratio that such
Participant's total Compensation bears to the total
Compensation of all Participants.
Cumulative Permitted Disparity Limit. Effective for Plan Years
beginning on or after January 1, 1995, the Cumulative
Permitted Disparity Limit for a Participant is 35 total
cumulative permitted disparity years. Total cumulative
permitted years mean the number of years credited to the
Participant for allocation or accrual purposes under this
Plan, any other qualified plan or simplified employee pension
plan (whether or not terminated) ever maintained by the
Employer. For purposes of determining the Participant's
Cumulative Permitted Disparity Limit, all years ending in the
same calendar year are treated as the same year. If the
Participant has not benefited under a defined benefit or
target benefit plan for any year beginning on or after January
1, 1994, the Participant has no Cumulative Permitted Disparity
Limit.
(b) Contributions - Participant.
The Plan Administrator will not accept Required Employee
Contributions or Voluntary Employee Contributions that are
made for Plan Years beginning after the Plan Year in which
this document is being adopted by the Employer. Required
Employee Contributions and Voluntary Employee Contributions
for Plan Years beginning after December 31, 1986, but before
the Plan Year in which this document is adopted, will be
limited so as to meet the nondiscrimination test of Code
section 401(m) as provided in Section 4A.4.
(c) Contributions - Timing.
Contributions made on other than an annual basis shall be paid
to the Trust or Insurance Company, as applicable, not less
frequently than monthly or every four weeks. Contributions
made on an annual basis shall be paid to the Trust or the
Insurance Company, as applicable, at the end of the Plan Year,
or as soon as possible on or after the last
Article II - General Provisions February 6, 2002
-45-
day of such Plan Year, but in any event not later than the
date prescribed by law for filing the Employer's income tax
return, including any extension thereof. To the extent that
contributions are used to purchase Life Insurance Policies,
such contributions for any Plan Year may be paid to the Trust
when premiums for such Policies are due during the Plan Year.
(d) Contributions - Allocation.
Employer Contributions shall be allocated to the Participants'
Account in accordance with the allocation requirements as
specified by the Employer in the Adoption Agreement. If the
Employer has adopted a standardized plan, the allocation of
any nonannual contribution made by the Employer shall be made
for each Participant who is a Participant on any day of the
Contribution Period regardless of Hours of Service.
(e) Forfeitures.
Forfeitures will be used in the manner elected in the Adoption
Agreement as follows:
(1) Allocated in the same manner elected in the Adoption
Agreement for the allocation of Employer
contributions; or
(2) First, to reduce Employer contributions or pay Plan
expenses, with any remaining Forfeitures allocated in
the same manner elected in the Adoption Agreement for
the allocation of Employer contributions.
(f) Expenses.
The Employer may contribute to the Plan the amount necessary
to pay any applicable expense charges and administration
charges. In lieu of the Employer contributing the amount
necessary to pay such charges, these expenses may be paid from
Plan assets.
Article II - General Provisions February 6, 2002
-46-
2C.3 ROLLOVER CONTRIBUTIONS.
If elected by the Employer in the Adoption Agreement, and without
regard to the limitations imposed under Section 4B, the Plan may
receive Rollover Contributions on behalf of an Employee, if the
Employee is so entitled under Code sections 402(c), 403(a)(4), or
408(d)(3)(A). Contributions may be rolled over into the Plan either
directly or indirectly, in the form of cash, and, if elected by the
Employer in the Adoption Agreement, in the form of a loan note from a
prior Code section 401(a) qualified plan in which the employee was a
participant, and may be all or a portion of the funds eligible for
rollover. Receipt of Rollover Contributions shall be subject to the
approval of the Plan Administrator. Before approving the receipt of a
Rollover Contribution, the Plan Administrator may request any documents
or other information from an Employee or opinions of counsel which the
Plan Administrator deems necessary to establish that such amount is a
Rollover Contribution.
If Rollover Contributions are elected by the Employer in the Adoption
Agreement, they may, if also elected by the Employer in the Adoption
Agreement, be received from an Employee who is not otherwise eligible
to participate in the Plan. Rollover Contributions may be withdrawn by
such Employee pursuant to the provisions of the Adoption Agreement and
Section 3E. In addition, such Employee may direct the investment and
transfer of amounts in his Participant's Account pursuant to the terms
of Section 5A. Upon Termination of Employment, such Employee shall be
entitled to a distribution of his Participant's Account.
2C.4 PARTICIPANT INITIATED TRANSFERS.
For plan amendments adopted and effective on or after September 6,
2000, and if elected by the Employer in the Adoption Agreement, a
Participant may elect to transfer amounts directly from a qualified
plan to this qualified plan, or vice versa, provided the following
requirements are met.
(a) Elective Transfers.
(1) The Participant must be eligible for an immediate
distribution of benefits from the transferor plan.
(2) The Participant must voluntarily elect, with spousal
consent, if necessary, to transfer the benefits. Such
a transfer will eliminate all protected forms of
benefits that were available under the transferor
plan. The Participant must have the option of leaving
the benefits in the transferor plan, or to take an
optional form of benefit if the transferor plan is
terminating.
(3) The Participant's transferred benefit must be 100%
vested.
(4) The amount transferred, plus the amount of any
allowable simultaneous direct rollover, must equal
100% of the Participant's vested benefit.
Article II - General Provisions February 6, 2002
-47-
(5) On or after January 1, 2002, the transfer occurs only
when the Participant is not eligible to receive an
immediate distribution of his or her entire
nonforfeitable benefit in a single sum distribution
consisting entirely of a distribution eligible for a
direct rollover. In such an instance, the amount
transferred may consist of either the benefit that
may not be directly rolled over or the entire
benefit. In either case, the entire amount is treated
as an elective transfer.
(b) Transaction Transfers.
(1) The transaction must be made in connection with an
asset acquisition, stock acquisition, merger, or
other similar transaction, involving a change in the
employer of the employees of a trade or business.
(2) The transfer may be made only between like-kind
defined contribution plans [e.g., section 401(k) plan
to section 401(k) plan, money purchase pension plan
to money purchase pension plan], except that a
transfer from a non-section 401(k) profit sharing
plan or a non-employee stock ownership plan (ESOP)
stock bonus plan may be made to any type of defined
contribution plan.
(3) The Plan receiving the transferred benefits must
provide Qualified Joint and Survivor Annuity and
Qualified Preretirement Survivor Annuity benefits on
the transferred assets if those rules applied to the
assets while in the transferor plan.
(4) The rules of Code section 411(a)(10) and Section
7B.1, applicable to a plan amending its vesting
schedule, shall apply to the transferred benefits.
(c) Employment Change Transfers.
(1) The transfer is made in connection with a change in
the Participant's employment status such that the
Participant would not be entitled to additional
allocations under the transferor plan.
(2) All requirements of subparagraph (b), above, apply.
2C.5 CONTRIBUTIONS UNDER THE PLAN SUBJECT TO DAVIS-BACON ACT.
If the Employer designates under the Adoption Agreement that Employer
contributions under the Plan are to be made in different amounts for
different contracts subject to the Davis-Bacon Act or other Prevailing
Wage Law, the Employer shall file with the Plan Administrator an
irrevocable written designation for each Prevailing Wage Law project,
stating the hourly contribution rate to be contributed to the Plan by
the Employer for each class of Employees working on the project in
order to comply with the
Article II - General Provisions February 6, 2002
-48-
Prevailing Wage Law applicable to the project. The contribution rate
designation shall be irrevocable with respect to work on that project,
although the hourly contribution rate may be increased prospectively by
the filing of a new written contribution rate designation with the Plan
Administrator.
2C.6 QVEC CONTRIBUTIONS.
The Plan Administrator will not accept QVEC Contributions which are
made for a taxable year beginning after December 31, 1986.
Contributions made prior to that date will be maintained in a separate
account that will be nonforfeitable at all times. The account will
share in the gains and losses under the Plan in the same manner as
described in Section 5A.3 of the Plan. No part of the QVEC
Contributions portion of the Participant's Account will be used to
purchase Life Insurance Policies. No part of the QVEC Contributions
portion of the Participant's Account will be available for loans.
Subject to Section 3C, Joint and Survivor Annuity Requirements (if
applicable), the Participant may withdraw any part of his QVEC
Contributions by making a written application to the Plan
Administrator.
Article II - General Provisions February 6, 2002
-49-
ARTICLE III - DISTRIBUTIONS
3A. TIMING AND FORM OF BENEFITS
3A.1 PAYMENT OF BENEFITS. The rules and procedures for electing the timing
and form of distribution effective for each Participant or Beneficiary
shall be formulated and administered by the Plan Administrator in a
consistent manner for all Participants in similar circumstances. For
money purchase and target benefit plans, the normal form of
distribution shall be a Life Annuity. For a profit sharing plan, the
normal form of distribution shall be a single sum cash payment. For any
plan, the distribution shall be made within an administratively
reasonable time following the date the application for distribution is
filed with the Plan Administrator.
If elected by the Employer in the Adoption Agreement, a Participant, or
his Beneficiary as the case may be, may elect to receive distribution
of all or a portion of his Vested Interest in one or a combination of
the following forms of payment:
(a) Single sum cash payment;
(b) Life Annuity;
(c) Installment Payments (i.e., a series of periodic single-sum
cash payments over time, with no life contingency);
(d) Installment Refund Annuity (i.e., an Annuity that provides for
fixed monthly payments for a period certain of not less than 3
nor more than 15 years. If a Participant dies before the
period certain expires, the Annuity will be paid to the
Participant's Beneficiary for the remainder of the period
certain. The period certain shall be chosen by the Participant
at the time the Annuity is purchased with the Participant's
Vested Interest. The Installment Refund Annuity is not a Life
Annuity and in no event shall the period certain extend to a
period which equals or exceeds the life expectancy of the
Participant);
(e) Employer stock, to the extent the Participant is invested
therein.
(f) In-kind distribution from self-directed brokerage account, to
the extent the Participant is invested therein.
The election of the form of distribution shall be irrevocable.
If elected by the Employer in the Adoption Agreement, upon termination
of the Plan, all distributions shall be made in a single lump sum
distribution.
All distributions are subject to the provisions of Section 3C, Joint
and Survivor Annuity Requirements.
Article III - Distributions February 6, 2002
-50-
For plan amendments adopted and effective on or after September 6,
2000, the Employer may amend the Plan to eliminate or restrict the
ability of Participants to receive a distribution under any form, or
combination of forms, benefit, provided that thereafter the forms of
benefit available to the Participant include the right to take a single
sum cash payment form of distribution under the same conditions as to
timing and eligibility as the form of benefit eliminated or restricted.
Any amendment under the provisions of the preceding sentence shall not
apply to any participant with an Annuity Starting Date that precedes
the earlier of (a) the 90th day after the date such Participant
receives a summary of material modification reflecting the change, or
(b) the first day of the second year beginning after the date the
amendment is adopted. However, a Qualified Joint and Survivor Annuity
form of payment may not be removed from a money purchase pension plan,
or from that portion of a profit sharing plan, including a section
401(k) plan, that maintains assets transferred to it from a plan that
was subject to the Qualified Joint and Survivor Annuity requirements.
In addition, any amendment eliminating the ability of a Participant to
receive a distribution in the form of Employer Stock may only be made
with respect to amounts not already invested in Employer Stock as of
the date of amendment or some future date. The employer shall maintain
a list of those Participants who are eligible for a distribution of
Employer Stock.
If the value of a Participant's Vested Interest is $5,000 or such
lesser amount as indicated by the Employer in the Adoption Agreement,
the Employer shall indicate in the Adoption Agreement whether a
distribution shall be made in the form of a single sum cash payment
upon such Participant's Termination of Employment and may not be
deferred or the Participant may elect to defer distribution until the
Employee's Required Beginning Date. If the Employer permits
Participants to defer such distributions, failure to make an election
will be deemed to be an election to defer to the Employee's Required
Beginning Date.
If the Participant's Vested Interest exceeds $5,000 or such lesser
amount as indicated by the Employer on the Adoption Agreement, and such
amount is immediately distributable, the Participant and the
Participant's Spouse, if required, (or where the either the Participant
or the Spouse has died, the survivor) must consent to any distribution
of such account balance. The consent of the Participant and the
Participant's Spouse, if required, shall be obtained in writing within
the 90-day period ending on the Annuity Starting Date. The "Annuity
Starting Date" is the first day of the first period for which an amount
is paid as an Annuity or any other form.
An account balance is considered immediately distributable if any part
of the account balance could be distributed to the Participant (or
surviving Spouse) before the Participant attains (or would have
attained if not deceased) the later of Normal Retirement Age or age 62.
Article III - Distributions February 6, 2002
-51-
Instead of consenting to a distribution, the Participant may elect to
defer the distribution until his or her Required Beginning Date.
Failure to make an election will be deemed to be an election to defer
to the Required Beginning Date.
Notwithstanding any prior provision, if a former Participant maintains
an account balance in the Plan subsequent to termination, the Employer
may mandate a distribution in the form of an immediate single sum cash
pay-out if the value of such account ceases to exceed $5,000 or such
lesser amount as indicated by the Employer in the Adoption Agreement.
The preceding sentence shall not apply to any annuity or installment
payments for which one or more scheduled periodic payments remain.
The Plan Administrator shall notify the Participant and the
Participant's Spouse of the right to defer any distribution. Such
notification shall include a general description of the material
features and an explanation of the relative values of the optional
forms of benefit available under the Plan in a manner that would
satisfy the notice requirements of Code section 417(a)(3), and shall be
provided no less than 30 days and no more than 90 days prior to the
Annuity Starting Date.
If the distribution is one to which Code sections 401(a)(11) and 417 do
not apply, such distribution may commence less than 30 days after the
notice required under Code regulation section 1.411(a)-11(c) is given,
provided that:
(a) The Plan Administrator clearly informs the Participant that
the Participant has a right to a period of at least 30 days
after receiving the notice to consider the decision of whether
or not to elect a distribution (and, if applicable, a
particular distribution option);
(b) The Participant, after receiving the notice, affirmatively
elects a distribution;
(c) The Participant may revoke any affirmative distribution election
prior to the Annuity Starting Date, or, if later, at any time prior to
the expiration of the 7-day period beginning the day after the
explanation of the Qualified Joint and Survivor Annuity is provided to
the Participant; and
(d) The Annuity Starting Date is a Date after the date the written
explanation is provided to the Participant. For distributions on or
after December 31, 1996, the Annuity Starting Date may be a date prior
to the date the written explanation is provided to the Participant,
provide the distribution does not commence until at least 30 days after
the written explanation is provided, and the other provisions of this
paragraph are met.
Notwithstanding the foregoing, only the Participant need consent to the
commencement of a distribution in the form of a Qualified Joint and
Survivor Annuity while the account balance is immediately
distributable. Furthermore, if payment in the form of a Qualified Joint
and Survivor Annuity is not required with respect to the Participant
pursuant to Section 3C.6 of the Plan,
Article III - Distributions February 6, 2002
-52-
only the Participant need consent to the distribution of an account
balance that is immediately distributable. Neither the consent of the
Participant nor the Participant's Spouse shall be required to the
extent that a distribution is required to satisfy Code section
401(a)(9) or section 415. In addition, upon termination of this Plan,
if the Plan does not offer an annuity option (purchased from a
commercial provider) and if the Employer or any entity within the same
controlled group as the Employer does not maintain another defined
contribution plan (other than an employee stock ownership plan as
defined in Code section 4975(e)(7)), the Participant's account balance
will, without the Participant's consent, be distributed to the
Participant. However, if any entity within the same controlled group as
the Employer maintains another defined contribution plan (other than an
employee stock ownership plan as defined in Code section 4975(e)(7),
then the Participant's account balance will be transferred without the
Participant's consent to the other plan if the Participant does not
consent to an immediate distribution.
For purposes of determining the applicability of the foregoing consent
requirements to distributions made before the first day of the first
Plan Year beginning after December 31, 1988, the Participant's vested
account balance shall not include amounts attributable to QVEC
Contributions made between December 31, 1981 and January 1, 1987, plus
gains and minus losses thereon ("accumulated QVEC Contributions").
The terms of any annuity contract purchased and distributed by the Plan
to a Participant or Spouse shall comply with the requirements of this
Plan.
A Participant who terminates employment and does not consent to an
immediate distribution shall have his distribution deferred. Such a
distribution shall commence no later than his Required Beginning Date.
Loans may not be initiated for Participants covered by this paragraph
except if, after his Termination of Employment, the Participant is
still a party-in-interest (as defined in ERISA). A Participant who
continues to maintain an account balance under the Plan may elect to
withdraw an amount which is equal to any whole percentage (not to
exceed 100%) from his Participant's Account. Such an election shall be
made in accordance with Section 3E. Such Participant as described
herein shall have the authority to direct the transfer of his Vested
Interest in accordance with Section 5A.2. The election to defer
distribution may be revoked at any time by submitting a written request
to the Plan Administrator. Any Forfeiture attributable to withdrawals
shall be subject to the requirements of Sections 3D.1 and 3E.8 of the
Plan. A Participant whose Termination of Employment is on or after his
Early Retirement Date may elect to defer the distribution subject to
the requirements of Section 3B.
3A.2 COMMENCEMENT OF BENEFITS. Unless the Participant elects otherwise,
distribution of benefits will begin no later than the 60th day after
the latest of the close of the Plan Year in which:
(a) The Participant attains age 65 (or Normal Retirement Age, if
earlier);
Article III - Distributions February 6, 2002
-53-
(b) The 10th anniversary of the year in which the Participant
commenced participation in the Plan occurs; or,
(c) The Participant terminates Service with the Employer.
Notwithstanding the foregoing, the failure of a Participant and Spouse
to consent to a distribution, if required, while a benefit is
immediately distributable within the meaning of Section 3A.1 of the
Plan, shall be deemed to be an election to defer distribution to the
Participant's Required Beginning Date.
However, in no event shall distribution of that portion of a
Participant's Account attributable to Elective Deferral Contributions,
Qualified Matching Contributions, and Qualified Nonelective
Contributions be made prior to the earliest of the Participant's
Retirement, death, Disability, separation from Service, attainment of
age 59-1/2, or, with respect to Elective Deferral Contributions only,
due to Serious Financial Hardship, unless such distribution is made on
account of:
(a) The Employer's sale, to an unrelated entity, of its interest
in a subsidiary (within the meaning of Code section
409(d)(3)), where the Employer continues to maintain this Plan
and the Participant continues employment with the subsidiary;
or
(b) The Employer's sale, to an unrelated corporation, of
substantially all assets (within the meaning of Code section
409(d)(2)) used in its trade or business, where the Employer
continues to maintain this Plan and the Participant continues
employment with the employer acquiring such assets; or
(c) The termination of the Plan, as provided in Section 7B,
without the establishment of another defined contribution
plan, other than an employee stock ownership plan (as defined
in Code sections 4975(e)(7), a simplified employee pension
plan (as defined in Code section 408(k)), or a SIMPLE IRA plan
(as described in Code section 408(p)).
All distributions that may be made in accordance with one or more of
the preceding distributable events are subject to the spousal and
Participant consent requirements (if applicable) of Code sections
401(a)(11) and 417. In addition, distributions made after March 31,
1988, which are triggered by any of the events described in the
immediately preceding paragraphs (a), (b), or (c), must be made in a
lump sum.
3A.3 FROM LIFE INSURANCE POLICIES. The Trustee shall arrange with the
Insurance Company any distribution due to any Participant during his
lifetime from any Life Insurance Policy or Policies on his life. The
manner of distribution shall be a transfer of the values of said Policy
or Policies to the Participant's Account for distribution as a portion
thereof in accordance with this Section.
Subject to Section 3C, Joint and Survivor Annuity Requirements, the
Policies on a Participant's life will be converted to cash or
Article III - Distributions February 6, 2002
-54-
an Annuity or distributed to the Participant upon commencement of
benefits.
In the event of any conflict between the terms of this Plan and the
terms of any Life Insurance Policy purchased hereunder, the Plan
provisions shall control.
3A.4 NONTRANSFERABLE. Any Annuity Contract distributed Hereford must be
nontransferable.
3A.5 ALTERNATE PAYEE SPECIAL DISTRIBUTION. Distributions pursuant to Section
5D.8 may be made without regard to the age or employment status of the
Participant.
Article III - Distributions February 6, 2002
-55-
3B. MINIMUM DISTRIBUTION REQUIREMENTS
3B.1 DEFINITIONS.
(a) APPLICABLE LIFE EXPECTANCY. The term Applicable Life
Expectancy means the Life Expectancy (or joint and last
survivor expectancy) calculated using the attained age of the
Participant (or Designated Beneficiary) as of the
Participant's (or Designated Beneficiary's) birthday in the
applicable calendar year reduced by one for each calendar year
which has elapsed since the date Life Expectancy was first
calculated. If Life Expectancy is being recalculated, the
Applicable Life Expectancy shall be the Life Expectancy so
recalculated. The applicable calendar year shall be the first
Distribution Calendar Year, and if Life Expectancy is being
recalculated, such succeeding calendar year.
(b) DESIGNATED BENEFICIARY. The term Designated Beneficiary means
the individual who is designated as the Beneficiary under the
Plan in accordance with Code section 401(a)(9) and the
regulations thereunder. If a Participant's Beneficiary, as
determined in accordance with Section 1.9, is his estate, such
Participant shall be treated as having no Designated
Beneficiary.
(c) DISTRIBUTION CALENDAR YEAR. The term Distribution Calendar
Year means a calendar year for which a minimum distribution is
required. For distributions beginning before the Participant's
death, the first Distribution Calendar Year is the calendar
year immediately preceding the calendar year which contains
the Participant's Required Beginning Date. For distributions
beginning after the Participant's death, the first
Distribution Calendar Year is the calendar year in which
distributions are required to begin pursuant to Section 3B.3
below.
(d) 5-PERCENT OWNER. For purposes of this Section, the term
5-Percent Owner means a 5-percent owner as defined in Code
section 416(i) (determined in accordance with section 416 but
without regard to whether the Plan is Top-Heavy) at any time
during the Plan Year ending with or within the calendar year
in which such Employee attains age 70-1/2 or any later Plan
Year.
Once distributions have begun to a 5-Percent Owner under this
section, they must continue to be distributed even if the
Employee ceases to be a 5-Percent Owner.
(e) LIFE EXPECTANCY. The term Life Expectancy means life
expectancy and joint and last survivor expectancy as computed
by use of the expected return multiples in Table V and VI of
section 1.72-9 of the Income Tax Regulations.
Unless otherwise elected by the Participant (or Spouse, in the
case of distributions described in Section 3B.3(b)(2)) by the
time distributions are required to begin, Life Expectancies
shall be recalculated annually. Such election shall be
irrevocable as to the Participant (or Spouse) and
Article III - Distributions February 6, 2002
-56-
shall apply to all subsequent years. The Life Expectancy of a
non-Spouse Beneficiary may not be recalculated.
(f) PARTICIPANT'S BENEFIT. The term Participant's Benefit means:
(1) The Participant's Vested Interest as of the last
valuation date in the calendar year immediately
preceding the Distribution Calendar Year ("Valuation
Calendar Year") increased by the amount of any
contributions or Forfeitures allocated to the
Participant's Account as of dates in the Valuation
Calendar Year after the valuation date and decreased
by distributions made in the Valuation Calendar Year
after the valuation date.
(2) Exception for second Distribution Calendar Year. For
purposes of paragraph (1) above, if any portion of
the minimum distribution for the first Distribution
Calendar Year is made in the second Distribution
Calendar Year on or before the Required Beginning
Date, the amount of the minimum distribution made in
the second Distribution Calendar Year shall be
treated as if it had been made in the immediately
preceding Distribution Calendar Year.
(g) REQUIRED BEGINNING DATE. As elected by the Employer in the
Adoption Agreement, the term Required Beginning Date shall
mean either:
(1) The Required Beginning Date of a Participant is the
first day of April of the calendar year following the
calendar year in which the Participant attains age
70-1/2 (Pre-SBJPA RBD); or
(2) The Required Beginning Date of a Participant is the later
of the first day of April of the calendar year following the
calendar year in which the Participant attains age 70-1/2 or
retires, except that benefit distributions to a 5-Percent
Owner must commence by the first day of April of the calendar
year following the calendar year in which the Participant
attains age 70-1/2 (SBJPA RBD).
As elected by the Employer in the Adoption Agreement:
(1) The Pre-SBJPA RBD may be removed and replaced entirely by
the SBJPA RBD at any time elected by the Employer in the
Adoption Agreement, provided the date is a date after December
31, 1996, or
(2) The Pre-SBJPA RBD may be replaced for any calendar
year, as elected by the Employer in the Adoption
Agreement, provided the calendar year is a calendar
year after 1998, or
(3) The Pre-SBJPA RBD may be replaced for any calendar
year, as elected by the Employer in the Adoption
Agreement, provided the calendar year is a calendar
year after 1998. However, non-5% Owners may make an
irrevocable election to receive payments beginning
the
Article III - Distributions February 6, 2002
-57-
April 1 following the calendar year in which they
attain age 70-1/2, or
(4) The Pre-SBJPA RBD shall apply to all Employees, or
(5) The Pre-SBJPA RBD shall apply to all Employees,
except that non-5% Owners who reach age 70-1/2 in any calendar
year after 1998 may defer their Required Beginning Date to
their SBJPA RBD.
3B.2 DISTRIBUTION REQUIREMENTS.
(a) Except as otherwise provided in Section 3C, Joint and Survivor
Annuity Requirements, the requirements of this Section 3B
shall apply to any distribution of a Participant's Accrued
Benefit and will take precedence over any inconsistent
provisions of this Plan. Unless otherwise specified, the
provisions of this Section apply to calendar years beginning
after December 31, 1984.
(b) All distributions required under this Section 3B shall be
determined and made in accordance with regulations under
section 401(a)(9), including the minimum distribution
incidental benefit requirement of regulations section
1.401(a)(9)-2.
A Participant's entire Vested Interest must be distributed or
begin to be distributed no later than the Participant's
Required Beginning Date.
(c) Limits on Distribution Periods. As of the first Distribution
Calendar Year, distributions, if not made in a single sum, may
only be made over one of the following periods (or a
combination thereof):
(1) The life of the Participant;
(2) The life of the Participant and a Designated
Beneficiary;
(3) A period certain not extending beyond the Life
Expectancy of the Participant; or
(4) A period certain not extending beyond the joint and
last survivor expectancy of the Participant and a
Designated Beneficiary.
(d) Determination of amount to be distributed each year. If the
Participant's Vested Interest is to be distributed in other
than a single sum, the following minimum distribution rules
shall apply on or after the Required Beginning Date:
(1) If the Participant's entire Vested Interest is to be
distributed over (1) a period not extending beyond
the Life Expectancy of the Participant or the joint
life and last survivor expectancy of the Participant
and the Participant's Designated Beneficiary or (2) a
period not extending beyond the Life Expectancy of
the Designated Beneficiary, the amount required to be
Article III - Distributions February 6, 2002
-58-
distributed for each calendar year, beginning with
distributions for the first Distribution Calendar
Year, must at least equal the quotient obtained by
dividing the Participant's benefit by the Applicable
Life Expectancy.
(2) For calendar years beginning before January 1, 1989,
if the Participant's Spouse is not the Designated
Beneficiary, the method of distribution selected must
assure that at least 50% of the present value of the
amount available for distribution is paid within the
Life Expectancy of the Participant.
(3) For calendar years beginning after December 31, 1988,
the amount to be distributed each year, beginning
with distributions for the first Distribution
Calendar Year, shall not be less than the quotient
obtained by dividing the Participant's benefit by the
lesser of (1) the Applicable Life Expectancy or (2)
if the Participant's Spouse is not the Designated
Beneficiary, the applicable divisor determined from
the table set forth in regulations section
1.401(a)(9)-2, Q&A-4. Distributions after the death
of the Participant shall be distributed using the
Applicable Life Expectancy in Section 3B.2(d)(1)
above, as the relevant divisor without regard to
regulations section 1.401(a)(9)-2.
(4) The minimum distribution required for the
Participant's first Distribution Calendar Year must
be made on or before the Participant's Required
Beginning Date. The minimum distribution for other
calendar years, including the minimum distribution
for the Distribution Calendar Year in which the
Employee's Required Beginning Date occurs, must be
made on or before December 31 of that Distribution
Calendar Year.
(e) Other Forms. If the Participant's benefit is distributed in
the form of an Annuity purchased from an Insurance Company,
distributions thereunder shall be made in accordance with the
requirements of Code section 401(a)(9) and the regulations
thereunder.
3B.3 DEATH DISTRIBUTION PROVISIONS. Upon the death of the Participant, the
following distribution provisions shall take effect:
(a) Distributions Beginning Before Death. If the Participant dies
after distribution of his entire Vested Interest has begun,
the remaining portion of such entire Vested Interest will
continue to be distributed at least as rapidly as under the
method of distribution being used prior to the Participant's
death.
(b) Distributions Beginning After Death. If the Participant dies
before distribution of his entire Vested Interest begins,
distribution of the Participant's entire Vested Interest shall
be completed by December 31 of the calendar
Article III - Distributions February 6, 2002
-59-
year containing the fifth anniversary of the Participant's
death except to the extent that an election is made to receive
distributions in accordance with (1) or (2) below:
(1) If any portion of the Participant's entire Vested
Interest is payable to a Designated Beneficiary,
distributions may be made over the Life Expectancy of
the Designated Beneficiary commencing on or before
December 31 of the calendar year immediately
following the calendar year in which the Participant
died;
(2) If the Designated Beneficiary is the Participant's
surviving Spouse, the date distributions are required
to begin in accordance with (1) above shall not be
earlier than the later of (i) December 31 of the
calendar year immediately following the calendar year
in which the Participant died and (ii) December 31 of
the calendar year in which the Participant would have
attained age 70-1/2.
If the Participant has not made an election pursuant to this
Section 3B.3(b) by the time of his or her death, the
Participant's Designated Beneficiary must elect the method of
distribution no later than the earlier of (1) December 31 of
the calendar year in which distributions would be required to
begin under this Section, or (2) December 31 of the calendar
year which contains the fifth anniversary of the Participant's
date of death. If the Participant has no Designated
Beneficiary, or if the Designated Beneficiary does not elect a
method of distribution, distribution of the Participant's
entire Vested Interest must be completed by December 31 of the
calendar year containing the fifth anniversary of the
Participant's death and will be paid in the form of a single
sum cash payment.
(c) For purposes of Section 3B.3(b) above, if the surviving Spouse
dies after the Participant, but before payments to such Spouse
begin, the provisions of this Section, with the exception of
paragraph (b)(2) therein, shall be applied as if the surviving
Spouse were the Participant.
(d) For purposes of this Section, distribution of a Participant's
entire Vested Interest pursuant to Section 3B.3(b) is
considered to begin on the Participant's Required Beginning
Date (or, if paragraph (c) above is applicable, the date
distribution is required to begin to the Surviving Spouse). If
distribution in the form of an Annuity irrevocably commences
to the Participant before the Required Beginning Date, the
date distribution is considered to begin is the date
distribution actually commences.
3B.4 TRANSITIONAL RULE.
(a) Notwithstanding the other requirements of this Section 3B and
subject to the requirements of Section 3C, Joint and Survivor
Annuity Requirements, distribution on behalf of any Employee,
including a 5-Percent Owner, may be made in
Article III - Distributions February 6, 2002
-60-
accordance with all of the following requirements (regardless
of when such distribution commences):
(1) The distribution by the Plan is one which would not
have disqualified such Plan under Code section
401(a)(9) as in effect prior to amendment by the
Deficit Reduction Act of 1984.
(2) The distribution is in accordance with a method of
distribution designated by the Employee whose entire
Vested Interest in the Plan is being distributed or,
if the Employee is deceased, by a Beneficiary of such
Employee.
(3) Such designation was in writing, was signed by the
Employee or the Beneficiary, and was made before
January 1, 1984.
(4) The Employee had accrued a benefit under the Plan as
of December 31, 1983.
(5) The method of distribution designated by the Employee
or the Beneficiary specifies the time at which
distribution will commence, the period over which
distributions will be made, and in the case of any
distribution upon the Employee's death, the
Beneficiaries of the Employee listed in order of
priority.
(b) A distribution upon death will not be covered by this
transitional rule unless the information in the designation
contains the required information described above with respect
to the distribution to be made upon the death of the Employee.
(c) For any distribution that commences before January 1, 1984,
but continues after December 31, 1983, the Employee or the
Beneficiary, to whom such distribution is being made, will be
presumed to have designated the method of distribution under
which the distribution is being made if the method of
distribution was specified in writing and the distribution
satisfies the requirements in subsections (a)(1) and (5).
(d) If a designation is revoked, any subsequent distribution must
satisfy the requirements of Code section 401(a)(9) and related
regulations. If a designation is revoked subsequent to the
date distributions are required to begin, the Plan must
distribute by the end of the calendar year following the
calendar year in which the revocation occurs the total amount
not yet distributed which would have been required to have
been distributed to satisfy Code section 401(a)(9) and related
regulations, except for the TEFRA section 242(b)(2) election.
For calendar years beginning after December 31, 1988, such
distributions must meet the minimum distribution incidental
benefit requirements in regulations section 1.401(a)(9)-2. Any
changes in the designation will be considered to be a
revocation of the designation. However, the mere substitution
or addition of another Beneficiary
Article III - Distributions February 6, 2002
-61-
(one not named in the designation) under the designation will
not be considered to be a revocation of the designation, so
long as such substitution or addition does not alter the
period over which distributions are to be made under the
designation, directly or indirectly (for example, by altering
the relevant measuring life). In the case in which an amount
is transferred or rolled from one plan to another plan, the
rules in Q&A J-2 and Q&A J-3 of regulation section
1.401(a)(9)-1 shall apply.
Article III - Distributions February 6, 2002
-62-
3C. JOINT AND SURVIVOR ANNUITY REQUIREMENTS
3C.1 APPLICABILITY. Except as provided in Section 3C.6, the provisions of
this Section 3C shall apply to any Participant who is credited with at
least one Hour of Service with the Employer on or after August 23,
1984, and such other Participants as provided in Section 3C.7.
3C.2 DEFINITIONS. The following definitions shall apply to this Section 3C.
(a) EARLIEST RETIREMENT AGE. The term Earliest Retirement Age
means the earliest date on which, under the Plan, the
Participant could elect to receive retirement benefits.
(b) ELECTION PERIOD. The term Election Period means the period
which begins on the first day of the Plan Year in which the
Participant attains age 35 and ends on the date of the
Participant's death. If a Participant separates from service
prior to the first day of the Plan Year in which he attains
age 35, with respect to the Vested Account Balance as of the
date of separation, the election period shall begin on the
date of separation.
Pre-age 35 waiver: A Participant who will not yet attain age
35 as of the end of any current Plan Year may make a special
Qualified Election to waive the Qualified Preretirement
Survivor Annuity for the period beginning on the date of such
election and ending on the first day of the Plan Year in which
the Participant will attain age 35. Such election shall not be
valid unless the Participant receives a written explanation of
the Qualified Preretirement Survivor Annuity in such terms as
are comparable to the explanation required under Section
3C.5(a). Except as provided in Section 3C.6, Qualified
Preretirement Survivor coverage will be automatically
reinstated as of the first day of the Plan Year in which the
Participant attains age 35. Any new waiver on or after such
date shall be subject to the full requirements of this Section
3C.
(c) QUALIFIED ELECTION. The term Qualified Election means a waiver
of a Qualified Joint and Survivor Annuity or a Qualified
Preretirement Survivor Annuity. Any waiver of a Qualified
Joint and Survivor Annuity or a Qualified Preretirement
Survivor Annuity shall not be effective unless: (a) the
Participant's Spouse consents in writing to the election; (b)
the election designates a specific Beneficiary, including any
class of beneficiaries or any contingent beneficiaries, which
may not be changed without spousal consent (or the Spouse
expressly permits designations by the Participant without any
further spousal consent); (c) the Spouse's consent
acknowledges the effect of the election; and (d) the Spouse's
consent is witnessed by a Plan representative or notary
public.
Additionally, a Participant's waiver of the Qualified Joint
and Survivor Annuity shall not be effective unless the
election designates a form of benefit payment which may not
Article III - Distributions February 6, 2002
-63-
be changed without spousal consent (or the Spouse expressly
permits designations by the Participant without any further
spousal consent). If it is established to the satisfaction of
a Plan representative that there is no Spouse or that the
Spouse cannot be located, a waiver will be deemed a Qualified
Election.
Any consent by a Spouse obtained under this provision (or
establishment that the consent of a Spouse may not be
obtained) shall be effective only with respect to such Spouse.
A consent that permits designations by the Participant without
any requirement of further consent by such Spouse must
acknowledge that the Spouse has the right to limit consent to
a specific Beneficiary, and a specific form of benefit where
applicable, and that the Spouse voluntarily elects to
relinquish either or both of such rights. A revocation of a
prior waiver may be made by a Participant without the consent
of the Spouse at any time before the commencement of benefits.
The number of revocations shall not be limited. No consent
obtained under this provision shall be valid unless the
Participant has received notice as provided in Section 3C.5
below.
(d) QUALIFIED JOINT AND SURVIVOR ANNUITY. The term Qualified Joint
and Survivor Annuity means an immediate Annuity for the life
of the Participant with a survivor Annuity for the life of the
Spouse which is not less than 50 percent and not more than 100
percent of the amount of the Annuity which is payable during
the joint lives of the Participant and the Spouse and which is
the amount of benefit which can be purchased with the
Participant's Vested Account Balance. The percentage of the
survivor annuity under the Plan shall be 50 percent (unless a
different percentage is elected by the Participant).
(e) VESTED ACCOUNT BALANCE. The term Vested Account Balance means
the aggregate value of the Participant's vested account
balances derived from contributions made by both the
Participant and Employer, whether vested before or upon death,
including the proceeds of insurance contracts, if any, on the
Participant's life and Rollover Contributions. The provisions
of this Section 3C shall apply to a Participant who is vested
in amounts attributable to Employer contributions, Employee
Contributions (or both) made under this Plan at the time of
death or distribution.
3C.3 QUALIFIED JOINT AND SURVIVOR ANNUITY. Unless an optional form of
benefit is selected pursuant to a Qualified Election within the 90-day
period ending on the Annuity Starting Date, a married Participant's
Vested Account Balance will be paid in the form of a Qualified Joint
and Survivor Annuity and an unmarried Participant's Vested Account
Balance will be paid in the form of a Life Annuity. The Participant may
elect to have such Annuity distributed upon attainment of the Earliest
Retirement Age under the Plan.
3C.4 QUALIFIED PRERETIREMENT SURVIVOR ANNUITY. Unless an optional form of
benefit has been selected within the Election Period
Article III - Distributions February 6, 2002
-64-
pursuant to a Qualified Election, if a Participant dies before the
Annuity Starting Date, then no less than 50 percent (or 100 percent if
so elected in the Adoption Agreement) of the Participant's Vested
Account Balance shall be applied toward the purchase of an Annuity for
the life of the surviving Spouse. If less than 100 percent is selected,
then the remaining portion of the Vested Account Balance shall be paid
to the Participant's Beneficiary. If less than 100 percent of the
Vested Account Balance is paid to the surviving Spouse, the amount of
Employee Contributions allocated to the surviving Spouse will be in the
same proportion as the Employee Contributions bears to the total Vested
Account Balance of the Participant. The surviving Spouse may elect to
have such Annuity distributed within a reasonable period after the
Participant's death.
3C.5 NOTICE REQUIREMENTS.
(a) In the case of a Qualified Joint and Survivor Annuity, the
Plan Administrator shall no less than 30 days and no more than
90 days prior to the Annuity Starting Date provide each
Participant with a written explanation of: (i) the terms and
conditions of a Qualified Joint and Survivor Annuity; (ii) the
Participant's right to make and the effect of an election to
waive the Qualified Joint and Survivor Annuity form of
benefit; (iii) the rights of a Participant's Spouse; and (iv)
the right to make, and the effect of, a revocation of a
previous election to waive the Qualified Joint and Survivor
Annuity.
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 written explanation described in
the preceding paragraph provided: (i) 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, (ii) the Participant
is permitted to revoke any affirmative distribution election
at least until the Annuity Starting Date, or, if later, at any
time prior to the expiration of the 7-day period that begins
the day after the explanation of the Qualified Joint and
Survivor Annuity is provided to the Participant; and (iii) the
Annuity Starting Date is a date after the date the written
explanation was provided to the Participant.
For distributions on or after December 31, 1996, the Annuity
Starting Date may be a date prior to the date the written
explanation is provided to the Participant if the distribution
does not commence until at least 30 days after such written
explanation is provided. The 30-day period may be waived
providing the provisions of the preceding paragraph are met.
(b) In the case of a Qualified Preretirement Survivor Annuity, the
Plan Administrator shall provide each Participant within the
applicable period (described in subsection (c) below) for such
Participant a written explanation of the Qualified
Preretirement Survivor Annuity in such terms and in such
manner as would be comparable to the explanation provided
Article III - Distributions February 6, 2002
-65-
for meeting the requirements of Section 3C.5(a) applicable to
a Qualified Joint and Survivor Annuity.
(c) The "applicable period" for a Participant is whichever of the
following periods ends last: (i) the period beginning with the
first day of the Plan Year in which the Participant attains
age 32 and ending with the close of the Plan Year preceding
the Plan Year in which the Participant attains age 35; (ii) a
reasonable period ending after the individual becomes a
Participant; (iii) a reasonable period ending after the
Qualified Joint and Survivor Annuity is no longer fully
subsidized; (iv) a reasonable period ending after this Section
3C first applies to the Participant. Notwithstanding the
foregoing, notice must be provided within a reasonable period
ending after separation from Service before attaining age 35.
For purposes of applying the preceding paragraph, a reasonable
period ending after the enumerated events described in (ii),
(iii) and (iv) is the end of the two-year period beginning one
year prior to the date the applicable event occurs, and ending
one year after that date. In the case of a Participant who
separates from Service before the Plan Year in which he
attains age 35, notice shall be provided within the two-year
period beginning one year prior to separation and ending one
year after separation. If such a Participant thereafter
returns to employment with the Employer, the applicable period
for such Participant shall be redetermined.
(d) Notwithstanding the other requirements of this Section, the
respective notices prescribed by this Section need not be
given to a Participant if (1) the Plan "fully subsidizes" the
costs of a Qualified Joint and Survivor Annuity or Qualified
Preretirement Survivor Annuity, and (2) the Plan does not
allow the Participant to waive the Qualified Joint and
Survivor Annuity or Qualified Preretirement Survivor Annuity
and does not allow a married Participant to designate a
nonspouse Beneficiary. For purposes of this Section 3C.5(d), a
Plan fully subsidizes the costs of a benefit if no increase in
cost or decrease in benefits to the Participant may result
from the Participant's failure to elect another benefit.
3C.6 SAFE HARBOR RULES.
(a) This Section shall apply to a Participant in a profit sharing
plan, and to any distribution made on or after the first day
of the first Plan Year beginning after December 31, 1988, from
or under a separate account attributable solely to accumulated
QVEC Contributions (as described in Section 3A.1), and
maintained on behalf of a Participant in a money purchase
pension plan (including a target benefit plan), if the
following conditions are met: (1) the Participant does not or
cannot elect payments in the form of a Life Annuity; and (2)
the Plan provides that upon the death of a Participant, the
Participant's Vested Account Balance will be paid to the
Participant's surviving Spouse,
Article III - Distributions February 6, 2002
-66-
but if there is no surviving Spouse, or if the surviving
Spouse has consented in a manner conforming to a Qualified
Election, then to the Participant's designated Beneficiary.
(b) The surviving Spouse may elect to have distribution of the
Vested Account Balance commence within the 90-day period
following the date of the Participant's death. The account
balance shall be adjusted for gains or losses occurring after
the Participant's death in accordance with the provisions of
the Plan governing the adjustment of account balances for
other types of distributions.
(c) The Participant may waive the spousal death benefit described
in this Section 3C.6 at any time provided that no such waiver
shall be effective unless it satisfies the conditions of
Section 3C.2(c) (other than the notification requirement
referred to therein) that would apply to the Participant's
waiver of the Qualified Preretirement Survivor Annuity.
(d) If this Section 3C.6 is operative, then the other provisions
of this Section 3C, other than Section 3C.7, shall be
inoperative, except to the extent the Employer elects to apply
those provisions to loans, withdrawals, or distributions by
making the appropriate elections in the Adoption Agreement.
This Section 3C.6 shall not be operative with respect to a
Participant in a profit sharing plan if the plan is a direct
or indirect transferee of a defined benefit plan, money
purchase plan, a target benefit plan, stock bonus, or profit
sharing plan that is subject to the survivor annuity
requirements of Code sections 401(a)(11) and 417.
(e) For purposes of this Section 3C.6, the term Vested Account
Balance shall mean, in the case of a money purchase pension
plan or a target benefit plan, the Participant's separate
account balance attributable solely to accumulated QVEC
Contributions (as described in Section 3A.1). In the case of a
profit sharing plan, the term Vested Account Balance shall
have the same meaning as provided in Section 3C.2(e).
3C.7 TRANSITIONAL RULES.
(a) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed
by the previous Sections of this Section 3C must be given the
opportunity to elect to have the prior Sections of this
Section 3C apply if such Participant is credited with at least
one Hour of Service under this Plan or a predecessor plan in a
Plan Year beginning on or after January 1, 1976, and such
Participant had at least 10 years of vesting Service when he
separated from Service.
(b) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one Hour of Service under
this Plan or a predecessor plan on or after September 2, 1974,
and who is not otherwise credited with any Service in a Plan
Year beginning on or after January 1, 1976, must
Article III - Distributions February 6, 2002
-67-
be given the opportunity to have his benefits paid in
accordance with Section 3C.7(d).
(c) The respective opportunities to elect (as described in
Sections 3C.7(a) and 3C.7(b) above) must be afforded to the
appropriate Participants during the period commencing on
August 23, 1984, and ending on the date benefits would
otherwise commence to said Participants.
(d) Any Participant who has elected pursuant to Section 3C.7(b),
and any Participant who does not elect under Section 3C.7(a),
or who meets the requirements of Section 3C.7(a), except that
such Participant does not have at least 10 years of vesting
Service when he separates from Service, shall have his
benefits distributed in accordance with all of the following
requirements if benefits would have been payable in the form
of a Life Annuity:
(1) Automatic Joint and Survivor Annuity. If benefits in
the form of a Life Annuity become payable to a
married Participant who:
(A) Begins to receive payments under the Plan on
or after Normal Retirement Age; or
(B) Dies on or after Normal Retirement Age while
still working for the Employer; or
(C) Begins to receive payments on or after the
Qualified Early Retirement Age; or
(D) Separates from Service on or after attaining
Normal Retirement Age (or the Qualified
Early Retirement Age) and after satisfying
the eligibility requirements for the payment
of benefits under the Plan and thereafter
dies before beginning to receive such
benefits;
then such benefits will be received under this Plan
in the form of a Qualified Joint and Survivor
Annuity, unless the Participant has elected otherwise
during the Election Period. The Election Period must
begin at least 6 months before the Participant
attains Qualified Early Retirement Age and end not
more than 90 days before the commencement of
benefits. Any election hereunder will be in writing
and may be changed by the Participant at any time.
(2) Election of Early Survivor Annuity. A Participant who
is employed after attaining the Qualified Early
Retirement Age will be given the opportunity to
elect, during the Election Period, to have a survivor
Annuity payable on death. If the Participant elects
the survivor Annuity, payments under such Annuity
must not be less than the payments which would have
been made to the Spouse under the Qualified Joint and
Survivor Annuity if the Participant had retired on
the day before his or her death. Any election under
this provision will be in writing and may be changed
by the Participant at any time. The Election Period
begins
Article III - Distributions February 6, 2002
-68-
on the later of (1) the 90th day before the Participant
attains the Qualified Early Retirement Age, or (2) the date on
which participation begins, and ends on the date the
Participant terminates employment.
(3) For purposes of this Section 3C.7(d):
(A) Qualified Early Retirement Age is the latest
of:
(i) The earliest date, under the Plan,
on which the Participant may elect
to receive retirement benefits;
(ii) The first day of the 120th month
beginning before the Participant
reaches Normal Retirement Age; or
(iii) The date the Participant begins
participation.
(B) Qualified Joint and Survivor Annuity is an
Annuity for the life of the Participant with
a survivor Annuity for the life of the
Spouse as described in Section 3C.2(d).
3D. TERMINATION OF EMPLOYMENT
3D.1 DISTRIBUTION. A Participant who terminates employment shall be entitled
to receive a distribution of his entire Vested Interest. Such
distribution shall be further subject to the terms and conditions of
Section 3C. The method used, as elected by the Employer in the Adoption
Agreement, is one of the following:
(a) Immediate (Cash-Out Method).
If at the time of his Termination of Employment the
Participant is not 100% vested and does not take a
distribution from the portion of his Vested Interest that is
attributable to contributions made by the Employer, the
non-vested portion of his Participant's Account will become a
Forfeiture upon the date such terminated Participant incurs 5
consecutive 1-Year Breaks-in-Service.
However, if at the time of his Termination of Employment the
Participant is not 100% vested and does take a distribution
from the portion of his Vested Interest that is attributable
to contributions made by the Employer, or if the Participant
is 0% vested, the non-vested portion of his Participant's
Account will become a Forfeiture immediately upon the
Participant's Termination of Employment date.
If a Participant whose non-vested portion of his Participant's
Account became a Forfeiture in accordance with the terms of
the preceding paragraph is later rehired by the Employer and
re-enrolls in the Plan before incurring 5 consecutive 1-Year
Breaks-in-Service, then the amount of the Forfeiture shall be
restored to the Participant's Account by
Article III - Distributions February 6, 2002
-69-
the Employer in accordance with the repayment provision
elected by the Employer in the Adoption Agreement and
described in Section 3D.2.
(b) 1-Year Break-in-Service (Cash-Out Method).
If at the time of his Termination of Employment the
Participant is not 100% vested and does not take a
distribution from the portion of his Vested Interest that is
attributable to contributions made by the Employer, the
non-vested portion of his Participant's Account will become a
Forfeiture upon the date such terminated Participant incurs 5
consecutive 1-Year Breaks-in-Service.
However, if at the time of his Termination of Employment the
Participant is not 100% vested and does take a distribution
from the portion of his Vested Interest that is attributable
to contributions made by the Employer, or if the Participant
is 0% vested, the non-vested portion of his Participant's
Account will become a Forfeiture upon the date such terminated
Participant incurs a 1-Year Break-in-Service.
If a terminated Participant, whose non-vested portion of his
Participant's Account became a Forfeiture in accordance with
the terms of the preceding paragraph, is later rehired by the
Employer and re-enrolls in the Plan before incurring 5
consecutive 1-Year Breaks-in-Service, then the amount of the
Forfeiture shall be restored to the Participant's Account by
the Employer in accordance with the repayment provision
elected by the Employer in the Adoption Agreement and
described in Section 3D.2.
(c) 5 Consecutive 1-Year Breaks-in-Service.
If at the time of his Termination of Employment the
Participant is not 100% vested, the non-vested portion of his
Participant's Account will become a Forfeiture upon the date
the terminated Participant incurs 5 consecutive 1-Year
Breaks-in-Service.
3D.2 REPAYMENT OF PRIOR DISTRIBUTION
If a terminated Participant is later rehired by the Employer and
re-enrolls in the Plan, the following Optional Payback or Required
Payback provisions, as elected by the Employer in the Adoption
Agreement, will apply:
(a) Optional Payback:
(1) If the Participant was 0% vested at his Termination
of Employment and did not incur 5 consecutive 1-Year
Breaks-in-Service after such date, the amount which
became a Forfeiture, if any, shall be restored by the
Employer at the time such Participant re-enrolls in
the Plan.
(2) If the Participant was vested but not 100% vested at
his Termination of Employment and did not incur 5
Article III - Distributions February 6, 2002
-70-
consecutive 1-Year Breaks-in-Service after such date,
the amount which became a Forfeiture, if any, shall
be restored by the Employer at the time such
Participant re-enrolls in the Plan. In addition, the
Participant may repay the full amount of the
distribution attributable to Employer contributions,
if any, made at his Termination of Employment. Such
repayment of Employer contributions, however, must be
made before the Participant has incurred 5
consecutive 1-Year Breaks-in-Service following the
date he received the distribution or five years after
the Participant is rehired by the Employer, whichever
is earlier.
(3) If the Participant had incurred 5 consecutive 1-Year
Breaks-in-Service after his termination of
Employment, the amount of the Participant's Account
that became a Forfeiture shall remain a Forfeiture
and such Participant shall be prohibited from
repaying a distribution made at his Termination of
Employment.
(b) Required Payback:
(1) If the Participant was 0% vested at his Termination
of Employment and did not incur 5 consecutive 1-Year
Breaks-in-Service after such date, the amount which
became a Forfeiture, if any, shall be restored by the
Employer at the time such Participant re-enrolls in
the Plan.
(2) If the Participant was vested but not 100% vested at
his Termination of Employment and did not incur 5
consecutive 1-Year Breaks-in-Service after such date,
the Participant shall be required to repay the full
amount of the distribution attributable to Employer
contributions, if any, made at his Termination of
Employment. Such repayment of Employer contributions,
however, must be made before the Participant has
incurred 5 consecutive 1-Year Breaks-in-Service
following the date he received the distribution or
five years after the Participant is rehired by the
Employer, whichever is earlier. When the Participant
makes such repayment, the amount which became a
Forfeiture, if any, shall be restored by the Employer
at the same time such repayment is made. However, if
the Participant does not repay the distribution made
in accordance with this Section 3D within the period
of time specified above, that Forfeiture shall remain
a Forfeiture.
(3) If the Participant had incurred 5 consecutive 1-Year
Breaks-in-Service after his Termination of
Employment, the amount of the Participant's Account
that became a Forfeiture shall remain a Forfeiture
and such Participant shall be prohibited from
repaying the distribution made at his Termination of
Employment.
3D.3 LIFE INSURANCE POLICY. If all or any portion of the value of any Life
Insurance Policy on the Participant's life will become a
Article III - Distributions February 6, 2002
-71-
Forfeiture, the Participant shall have the right to buy such policy
from the Trustee for the then value of such policy less the value of
any Vested Interest therein, within 30 days after written notice from
the Trustee is mailed to his last known address.
3D.4 NO FURTHER RIGHTS OR INTEREST. A Participant shall have no further
interest in or any rights to any portion of his Participant's Account
that becomes a Forfeiture due to his Termination of Employment once the
Participant incurs 5 consecutive 1-Year Breaks-in-Service in accordance
with Section 2A.4.
3D.5 FORFEITURE. Any Forfeiture arising in accordance with the provisions of
Section 3D.1 shall be treated as follows:
Any amount of Forfeitures shall be used in accordance with (a) or (b)
below, in the manner set forth in Section 2C.
(a) Reallocation. Forfeitures shall be allocated in accordance
with the allocation formula of the contributions from which
they arose.
(b) Employer Credit and Reallocation of Remainder. Forfeitures
shall first be used to reduce and in lieu of the Employer
contribution next due under Section 2C, or to pay Plan
expenses, at the earliest opportunity after such Forfeiture
becomes available. Any Forfeitures remaining following use as
an Employer credit shall be allocated in accordance with the
allocation formula of the contributions from which they arose.
Notwithstanding anything above to the contrary, if Forfeitures are
generated immediately or upon the occurrence of a 1-Year
Break-in-Service, and a former Participant returns to employment with
the Employer after Forfeitures are generated but prior to the
occurrence of 5 consecutive 1-Year Breaks-in-Service, Forfeitures, if
any, will first be used to make whole the nonvested account of such
Participant, equal to the value of the nonvested account at the time
the Participant terminated employment with the Employer in accordance
with the applicable provisions of Section 3D.2. In the event that the
available Forfeitures are not sufficient to make whole the nonvested
account, the Employer will make an additional contribution sufficient
to make the nonvested account whole.
3D.6 LOST PARTICIPANT. If a benefit is forfeited because the Participant or
Beneficiary cannot be found, as discussed in Section 5D.7, such benefit
will be reinstated if a claim is made by the Participant or
Beneficiary.
3D.7 DEFERRAL OF DISTRIBUTION. If elected by the Employer, and as discussed
in Section 3A.1, a Participant who terminates employment and does not
consent to an immediate distribution shall have his distribution
deferred (and may be responsible for all reasonable fees and expenses
associated with maintaining his account in a deferred status, as
permitted by ERISA).
Article III - Distributions February 6, 2002
-72-
3E. WITHDRAWALS
3E.1 WITHDRAWAL - EMPLOYEE CONTRIBUTIONS.
(a) Required Employee Contributions. If the Employer has elected
in its Adoption Agreement to allow for a withdrawal of
Required Employee Contributions and earnings thereon, then a
Participant may elect to withdraw from his Participant's
Account an amount equal to any whole percentage (not exceeding
100%) of his entire Vested Interest in his Participant's
Account attributable to Required Employee Contributions plus
any income and minus any loss thereon. On the date the
election becomes effective, the Participant shall be suspended
from making any further contributions to the Plan, and from
having any Matching Contributions made on his behalf for a
period, as elected by the Employer in its Adoption Agreement.
(b) Voluntary Employee Contributions. If the Employer has elected
in its Adoption Agreement to allow for withdrawal of Voluntary
Employee Contributions and earnings thereon, then a
Participant may elect to withdraw from his Participant's
Account an amount which is equal to any whole percentage (not
exceeding 100%) of the entire Vested Interest in his
Participant's Account attributable to Voluntary Employee
Contributions plus any income and minus any loss thereon.
(c) Prior Required Employee Contributions. If the Employer has
elected in its Adoption Agreement to allow for a withdrawal of
Prior Required Employee Contributions and earnings thereon,
then a Participant may elect to withdraw from his
Participant's Account an amount equal to any whole percentage
(not exceeding 100%) of his entire Vested Interest in his
Participant's Account attributable to Prior Required Employee
Contributions plus any income and minus any loss thereon.
(d) Prior Voluntary Employee Contributions. If the Employer has
elected in its Adoption Agreement to allow for withdrawal of
Prior Voluntary Employee Contributions and earnings thereon,
then a Participant may elect to withdraw from his
Participant's Account an amount which is equal to any whole
percentage (not exceeding 100%) of the entire Vested Interest
in his Participant's Account attributable to Prior Voluntary
Employee Contributions plus any income and minus any loss
thereon.
If a Participant elects a withdrawal under the provisions of this
Section, he may not elect another withdrawal under this Section for an
additional period specified by the Employer in its Adoption Agreement.
The Participant shall notify the Plan Administrator in writing of his
election to make a withdrawal under this Section. Any such election
shall be effective as of the date specified in such notice, which date
must be at least 15 days after notice is filed.
Article III - Distributions February 6, 2002
-73-
No Forfeitures will occur solely as a result of an Employee's
withdrawal of Employee Contributions.
3E.2 WITHDRAWAL - ELECTIVE DEFERRAL CONTRIBUTIONS. If the Participant has
attained age 59-1/2, and if selected by the Employer in its Adoption
Agreement, the Participant may elect to withdraw from his Participant's
Account an amount which is equal to any whole percentage (not exceeding
100%) of his Vested Interest in his Participant's Account attributable
to his Elective Deferral Contributions and earnings thereon.
The Participant shall notify the Plan Administrator in writing of his
election to make a withdrawal under this Section. Any such election
shall be effective as of the date specified in such notice, which date
must be at least 15 days after notice is filed.
3E.3 WITHDRAWAL - QUALIFIED MATCHING CONTRIBUTIONS. If the Participant has
attained age 59-1/2, and if selected by the Employer in its Adoption
Agreement, the Participant may elect to withdraw from his Participant's
Account an amount which is equal to any whole percentage (not exceeding
100%) of his Vested Interest in his Participant's Account attributable
to his Qualified Matching Contributions and earnings thereon.
The Participant shall notify the Plan Administrator in writing of his
election to make a withdrawal under this Section. Any such election
shall be effective as of the date specified in such notice, which date
must be at least 15 days after notice is filed.
3E.4 WITHDRAWAL - QUALIFIED NONELECTIVE CONTRIBUTIONS. If the Participant
has attained age 59-1/2, and if selected by the Employer in its
Adoption Agreement, the Participant may elect to withdraw from his
Participant's Account an amount which is equal to any whole percentage
(not exceeding 100%) of his Vested Interest in his Participant's
Account attributable to his Qualified Nonelective Deferral
Contributions and earnings thereon.
The Participant shall notify the Plan Administrator in writing of his
election to make a withdrawal under this Section. Any such election
shall be effective as of the date specified in such notice, which date
must be at least 15 days after notice is filed.
3E.5 WITHDRAWAL - SAFE HARBOR 401(k) ELECTIVE DEFERRAL CONTRIBUTIONS AND ADP
TEST SAFE HARBOR CONTRIBUTIONS . If the Participant has attained age
59-1/2, and if selected by the Employer in its Adoption Agreement, the
Participant may elect to withdraw from his Participant's Account an
amount which is equal to any whole percentage (not exceeding 100%) of
his Vested Interest in his Participant's Account attributable to his
Safe Harbor 401(k) Elective Deferral Contributions and ADP Test Safe
Harbor Contributions.
Article III - Distributions February 6, 2002
-74-
If the Employer has selected in its Adoption Agreement, a distribution
may be made to a Participant on account of Serious Financial Hardship
from his Participant's Account an amount which is equal to any whole
percentage (not exceeding 100%) of his Vested Interest in his
Participant's Account attributable to his Safe Harbor 401(k) Elective
Deferral Contributions. Serious Financial Hardship withdrawals of Safe
Harbor 401(k) Elective Deferral Contributions shall be subject to the
provisions of subparagraphs (a) and (b) of Section 3E.8 of the Plan.
The Participant shall notify the Plan Administrator in writing of his
election to make a withdrawal under this Section. Any such election
shall be effective as of the date specified in such notice, which date
must be at least 15 days after notice is filed.
3E.6 WITHDRAWAL - EMPLOYER CONTRIBUTIONS. If the Employer has specified in
its Adoption Agreement that withdrawals of Matching Contributions,
Nonelective Contributions, Prior Employer Contributions, or ACP Test
Safe Harbor Contribution, if applicable, are permitted, a Participant,
who has been a Participant for at least 60 consecutive months, may
elect to withdraw from his Participant's Account an amount equal to a
whole percentage (not to exceed 100%) of his Vested Interest in his
Participant's Account attributable to Matching Contributions (and
reallocated Forfeitures, if applicable), Nonelective Contributions,
(and reallocated Forfeitures, if applicable), or Prior Employer
Contributions (and reallocated Forfeitures, if applicable), along with
earnings. On the date the election becomes effective, the Participant
may be suspended from making Employee Contributions and Elective
Deferral Contributions, if any, and from having Employer contributions
made on his behalf for a period of time, as selected by the Employer in
its Adoption Agreement. This suspension provision shall only apply to
non-standardized plans. In lieu of or in addition to the 60-months of
participation requirement, the Employer may specify in the Adoption
Agreement that withdrawal of Employer contributions, to the extent
vested, shall be available upon or following the attainment of age
59-1/2.
In lieu of, or in addition to the 60 consecutive months of
participation or attainment of age 59-1/2 requirements in the preceding
paragraph, the Employer may specify in the Adoption Agreement that
withdrawals of Employer Contributions to the extent vested shall be
available after a contribution has accumulated under the Plan for a
fixed number of years (not to be less than 2 years) as elected by the
Employer in the Adoption Agreement. This provision shall apply
separately and independently to each separate contribution made by the
Employer.
In the event a Participant's suspension period occurs during a year (or
years) when no Employer contributions are made, such suspension shall
be taken into account when the next Employer contribution(s) is made.
The Participant shall notify the Plan Administrator in writing of his
election to make a withdrawal under this Section. Any such election
shall be effective as of the date specified in such
Article III - Distributions February 6, 2002
-75-
notice, which date must be at least 15 days after notice is filed.
3E.7 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF CONTRIBUTIONS OTHER THAN
ELECTIVE DEFERRAL CONTRIBUTIONS. Except as provided in Sections 7B.1
and 7B.7(e), if the Plan is a profit sharing plan or a thrift plan, and
if the Employer has elected in its Adoption Agreement to permit
withdrawals due to the occurrence of events that constitute Serious
Financial Hardships to a Participant, such Participant may withdraw all
or a portion of his Vested Interest (excluding Elective Deferral
Contributions, Qualified Nonelective Contributions, Qualified Matching
Contributions, and earnings on these contributions). Such Serious
Financial Hardship must be shown by positive evidence submitted to the
Plan Administrator that the hardship is of sufficient magnitude to
impair the Participant's financial security. Withdrawals shall be
determined in a consistent and nondiscriminatory manner, and shall not
affect the Participant's rights under the Plan to make additional
withdrawals or to continue to be a Participant.
3E.8 WITHDRAWAL FOR SERIOUS FINANCIAL HARDSHIP OF ELECTIVE DEFERRAL
CONTRIBUTIONS. If the Employer has selected in its Adoption Agreement,
a distribution may be made on account of Serious Financial Hardship if
subparagraphs (a) and (b) of this Section are satisfied. The funds
available for withdrawal shall be the portion of a Participant's
Account attributable to Elective Deferral Contributions, including any
earnings credited to such contributions as of the later of December 31,
1998, and the end of the last Plan Year ending before July 1, 1989
("pre-1989 earnings"), and if applicable, Qualified Matching
Contributions credited to the Participant's Account as of the later of
December 31, 1998, and the end of the last Plan Year ending before July
1, 1989, Qualified Nonelective Contributions credited to the
Participant's Account as of the later of December 31, 1998, and the end
of the last Plan Year ending before July 1, 1989, and any pre-1989
earnings attributable to Qualified Matching Contributions, or Qualified
Nonelective Contributions. Qualified Matching Contributions credited to
the Participant's Account after the end of the last Plan Year ending
before July 1, 1989, Qualified Nonelective Contributions credited to
the Participant's Account after the end of the last Plan Year ending
before July 1, 1989, and earnings on Elective Deferral Contributions,
Qualified Matching Contributions, and Qualified Nonelective
Contributions credited after the end of the last Plan Year ending
before July 1, 1989 shall not be eligible for withdrawal under this
Section. For purposes of this Section, a distribution may be made on
account of a hardship only if the distribution is made on account of an
immediate and heavy financial need of the Employee where such Employee
lacks other available resources. Hardship distributions are subject to
the spousal consent requirements contained in sections 401(a)(11) and
417 of the Code.
(a) The following are the only financial needs considered
immediate and heavy for purposes of this Section:
(i) Expenses for medical care described in Code section
213(d) previously incurred by the Employee, the
Employee's Spouse, or any dependents of the Employee
Article III - Distributions February 6, 2002
-76-
(as defined in Code section 152) or necessary for
these persons to obtain medical care described in
Code section 213(d);
(ii) Costs directly related to the purchase of a principal
residence for the Employee (excluding mortgage
payments);
(iii) Payments necessary to prevent the eviction of the
Employee from the Employee's principal residence or
foreclosure on the mortgage on that residence; or
(iv) Tuition payments, related educational fees and
amounts distributed for the payment of room-and-board
expenses for the next 12 months of post-secondary
education for the Employee, his or her Spouse, or any
of his or her dependents.
(b) To the extent the amount of distribution requested does not
exceed the amount required to relieve the Participant's
financial need, such distribution will be considered as
necessary to satisfy an immediate and heavy financial need of
the Employee only if:
(i) The Employee has obtained all distributions, other
than hardship distributions, and all nontaxable loans
under all plans maintained by the Employer;
(ii) All plans maintained by the Employer provide that the
Employee's Elective Deferral Contributions and if
applicable, Employee Contributions, will be suspended
for 12 months after the receipt of the hardship
distribution;
(iii) The distribution is not in excess of the amount of
the immediate and heavy financial need (including
amounts necessary to pay any federal, state, or local
income taxes or penalties reasonably anticipated to
result from the distribution); and
(iv) All plans maintained by the Employer provide that the
Employee may not make Elective Deferral Contributions
for the Employee's taxable year immediately following
the taxable year of the hardship distribution in
excess of the applicable limit under Code section
402(g) for such taxable year less the amount of such
Employee's Elective Deferral Contributions for the
taxable year of the hardship distribution.
3E.9 WITHDRAWAL - QVEC CONTRIBUTIONS AND ROLLOVER CONTRIBUTIONS. If selected
by the Employer in its Adoption Agreement, a Participant may elect to
withdraw from his Participant's Account as often during each Plan Year
as elected by the Employer in the Adoption Agreement, any amount up to
100% of his entire Vested Interest in his Participant's Account
attributable to his QVEC Contributions or Rollover Contributions along
with earnings thereon.
Article III - Distributions February 6, 2002
-77-
The Participant shall notify the Plan Administrator in writing of his
election to make a withdrawal under this Section. Any such election
shall be effective as of the date specified in such notice, which date
must be at least 15 days after notice is filed.
3E.10 NOTIFICATION. The Participant shall notify the Plan Administrator in
writing of his election to make a withdrawal under Section 3E. Any such
election shall be effective as of the date specified in such notice,
which date must be at least 15 days after such notice is filed. Payment
of the withdrawal shall be subject to the terms and conditions of
Section 3A. All withdrawals made under the provisions of Section 3E
shall be subject to the spousal consent requirements of Section 3C, as
applicable.
3E.11 VESTING CONTINUATION. In the event a partially vested Participant takes
a withdrawal of less than 100% of his Vested Interest in accordance
with Section 3E.6 or 3E.7, or 3E.8, the remaining portion of his
Participant's Account attributable to Employer contributions shall vest
according to the formula as set forth in Section 1.76.
3E.12 WITHDRAWAL - PARTICIPANT'S EMPLOYER STOCK ACCOUNT. The ability of a
Participant who is subject to the reporting requirements of section
16(a) of the Securities Exchange Act of 1934 (the "Act") to make
withdrawals or investment changes involving the Participant's Employer
Stock Account may be restricted by the Plan Administrator to comply
with the rules under section 16(b) of the Act.
3F. DIRECT ROLLOVERS
3F.1 DEFINITIONS
(a) DIRECT ROLLOVER. The term Direct Rollover means a payment by
the Plan to the Eligible Retirement Plan specified by the
Distributee.
(b) DISTRIBUTEE. The term Distributee means an Employee or former
Employee. In addition, the Employee's or former Employee's
surviving Spouse and the Employee's or former Employee's
Spouse who is the Alternate Payee under a QDRO, are
Distributees with regard to the interest of the Spouse or
former Spouse.
Article III - Distributions February 6, 2002
-78-
(c) ELIGIBLE RETIREMENT PLAN. The term Eligible Retirement Plan
means an individual retirement account described in Code
section 408(a), an individual retirement annuity described in
Code section 408(b), an annuity plan described in Code section
403(a), or a qualified plan described in Code section 401(a),
that accepts the Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to
the surviving Spouse, an Eligible Retirement Plan is an
individual retirement account or an individual retirement
annuity.
(d) ELIGIBLE ROLLOVER DISTRIBUTION. The term Eligible Rollover
Distribution means any distribution of all or any portion of
the balance to the credit of the Distributee, except that an
Eligible Rollover Distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for
the life (or Life Expectancy) of the Distributee or the joint
lives (or joint life expectancies) of the Distributee and the
Distributee's designated Beneficiary, or for a specified
period of ten years or more; any distribution to the extent
such distribution is required under Code section 401(a)(9);
and the portion of any distribution that is not includable in
gross income (determined without regard to the exclusion for
net unrealized appreciation with respect to employer
securities); and any other distribution(s) that is reasonably
expected to total less than $200 during a year. In addition,
unless the Employer elects some other effective date within
its' Plan's 1999 Plan Year, effective May 1, 1999, an Eligible
Rollover Distribution shall not include any distribution of
Elective Deferral Contribution made due to a Serious Financial
Hardship withdrawal.
3F.2 DIRECT ROLLOVERS. This Section applies to distributions made on or
after January 1, 1993. Notwithstanding any provision of the Plan to the
contrary that would otherwise limit a Distributee's election under this
Section, a Distributee may elect, at the time and in the manner
prescribed by the Plan Administrator, to have any portion of an
Eligible Rollover Distribution that is equal to at least $500 paid
directly to an Eligible Retirement Plan specified by the Distributee in
a Direct Rollover.
Article III - Distributions February 6, 2002
-79-
ARTICLE IV - LEGAL LIMITATIONS ON CONTRIBUTIONS
4A. NONDISCRIMINATION TESTS
4A.1 DEFINITIONS.
(a) ACTUAL CONTRIBUTION PERCENTAGE. The term Actual Contribution
Percentage (ACP) means the average of the Actual Contribution
Ratios of the Eligible Participants in a group.
(b) ACTUAL CONTRIBUTION RATIO. The term Actual Contribution Ratio
means the ratio (expressed as a percentage) of a Participant's
Contribution Percentage Amounts to that Participant's
Compensation for the Plan Year (whether or not the Employee
was a Participant for the entire Plan Year).
The Actual Contribution Percentage for an Employee who is
eligible to be a Participant but fails to make Employee
Contributions, receive Matching Contributions, or receive
Qualified Matching Contributions or Qualified Nonelective
Contributions (to the extent not taken into account for the
ADP Test) shall be zero.
(c) ACTUAL DEFERRAL PERCENTAGE. The term Actual Deferral
Percentage (ADP) means the average of the Actual Deferral
Ratios for a specified group of Participants.
(d) ACTUAL DEFERRAL RATIO. The term Actual Deferral Ratio means
the ratio (expressed as a percentage) of a Participant's
Deferral Percentage Amounts to that Participant's Compensation
for such Plan Year. The Actual Deferral Ratio for an Employee
who is eligible to be a Participant but fails to make Elective
Deferral Contributions shall be zero.
(e) AGGREGATE LIMIT. The term Aggregate Limit means the sum of:
(i) 125 percent of the greater of the ADP of the non-Highly
Compensated Employees for the Prior Plan Year or the ACP of
non-Highly Compensated Employees under the plan subject to
Code section 401(m) for the Plan Year beginning with or within
the Prior Plan Year of the CODA and (ii) the lesser of 200% or
two plus the lesser of such ADP or ACP. "Lesser" is
substituted for "greater" in "(i)", above, and "greater" is
substituted for "lesser" after "two plus the" in "(ii)" if it
would result in a larger Aggregate Limit. If the Employer has
elected in the Adoption Agreement to use the Current Year
testing method, then in calculating the Aggregate Limit for a
Plan Year, the Nonhighly Compensated Employees' ADP and ACP
for that Plan Year, instead of the Prior Plan year, is used.
(f) CONTRIBUTION PERCENTAGE AMOUNTS. The term Contribution
Percentage Amounts means the sum of the Employee
Contributions, Matching Contributions, Qualified Matching
Contributions (to the extent not taken into account for
purposes of the ADP test) and Qualified Nonelective
Contributions (to the extent not taken into account for
Article IV - Legal Limitations February 6, 2002
-80-
purposes of the ADP test) made under the Plan on behalf of the
Participant for the Plan Year. Such Contribution Percentage
Amounts shall not include Matching Contributions that are
forfeited either to correct Excess Aggregate Contributions or
because the contributions to which they relate are Excess
Elective Deferral Contributions, Excess Contributions, or
Excess Aggregate Contributions. The Employer may elect to use
Elective Deferrals in the Contribution Percentage Amounts as
long as the ADP test (as described in Section 4A.2) is met
before the Elective Deferrals are used in the ACP test (as
described in Section 4A.4) and the ADP test continues to be
met following the exclusion of those Elective Deferrals that
are used to meet the ACP test.
(g) DEFERRAL PERCENTAGE AMOUNTS. The term Deferral Percentage
Amounts means any Elective Deferral Contributions made
pursuant to the Participant's deferral election, including
Excess Elective Deferral Contributions of Highly Compensated
Employees, but excluding Elective Deferral Contributions that
are taken into account in the ACP test (provided the ADP test
is satisfied both with and without exclusion of these Elective
Deferral Contributions). In addition, the Employer may choose
to make Qualified Nonelective Contributions and Qualified
Matching Contributions.
(h) ELIGIBLE PARTICIPANT. The term Eligible Participant means any
Employee who is eligible to make an Employee Contribution or
Elective Deferral Contribution (if the Employer takes such
contributions into account in the calculation of the Actual
Contribution Ratio), or to receive a Matching Contribution
(including Forfeitures) or a Qualified Matching Contribution.
If an Employee Contribution is required as a condition of
participation in the Plan, any Employee who would be a
Participant in the Plan if such Employee made the Required
Employee Contribution shall be treated as an Eligible
Participant on behalf of whom no Employee Contributions are
made.
IF THE EMPLOYER HAS ELECTED IN ITS ADOPTION AGREEMENT TO PROVIDE FOR ELECTIVE
DEFERRAL CONTRIBUTIONS, THEN SECTIONS 4A.2 THROUGH 4A.5 SHALL APPLY.
4A.2 ACTUAL DEFERRAL PERCENTAGE TEST.
(a) 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 satisfy one
of the following tests:
(1) 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
Article IV - Legal Limitations February 6, 2002
-81-
(2) The ADP for a Plan Year for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
prior year's ADP for Participants who were non-Highly
Compensated Employees for the prior Plan Year multiplied by
2.0, provided that the ADP for Participants who are Highly
Compensated Employees does not exceed the prior year's ADP for
Participants who were non-Highly Compensated Employees in the
prior Plan Year by more than two (2) percentage points.
For the first Plan Year in which the Plan exists and for which
it permits any Participant to make Elective Deferral
Contributions, and provided the Plan is not a successor plan,
for purposes of the foregoing tests, the prior year's
non-Highly Compensated Employee's ADP shall be either 3
percent or the current Plan Year's ADP for these Participants,
as elected by the Employer in the Adoption Agreement.
(b) Current Year Testing. If elected by the Employer in the Adoption
Agreement, the ADP Tests in 4A.2(a)(1) and (2) above will be applied
comparing the current Plan Year's ADP for Participants who are Highly
Compensated Employees with the current Plan Year's ADP for
Participant's who are non-Highly Compensated Employees. Once made, this
election can only be undone if the Plan meets the requirements for
changing to Prior Year Testing set forth in IRS Notice 98-1 (or
succeeding guidance).
(c) Safe Harbor 401(k) Plan. If elected by the Employer in the Adoption
Agreement, the Plan may elect to be treated as a Safe Harbor 401(k)
Plan and will be subject to the provisions of section 2.C.1(l) of this
Plan, and the provisions of these sections 4.A.2(a) and (b) shall not
apply thereto.
4A.3 SPECIAL RULES - ADP TEST.
(a) A Participant is a Highly Compensated Employee for a
particular Plan Year if he or she meets the definition of
Highly Compensated Employee in effect for that Plan Year.
Similarly, a Participant is a Nonhighly Compensated Employee
for a Plan Year if he or she does not meet the definition of
Highly Compensated Employee in effect for that Plan Year.
(b) The ADP for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have
Elective Deferral Contributions (and Qualified Nonelective
Contributions or Qualified Matching Contributions, or both, if
treated as Elective Deferrals for purposes of the ADP test)
allocated to his accounts under two or more CODAs maintained
by the Employer, shall be determined as if such Elective
Deferral Contributions (and, if applicable, such Qualified
Nonelective Contributions or Qualified Matching Contributions,
or both) were made under a single CODA. If a Highly
Compensated Employee participates in two or more CODAs that
have different Plan Years, such CODAs are treated as a single
CODA with respect to the Plan Years ending with or within the
same calendar year. Notwithstanding the foregoing, certain
plans shall be treated as separate if
Article IV - Legal Limitations February 6, 2002
-82-
mandatorily disaggregated under regulations under Code section
401(k).
(c) If this Plan satisfies the requirements of Code sections
401(k), 401(a)(4), or 410(b) only if aggregated with one or
more other plans, or if one or more other plans satisfy the
requirements of such Code sections only if aggregated with
this Plan, then this Section shall be applied by determining
the ADP of Employees as if all such plans were a single plan.
Any adjustments tot he Nonhighly Compensated Employee ADP for
the prior year will be made in accordance with IRS Notice 98-1
(and any superceding guidance), unless the Employer has
elected in its Adoption Agreement to use the Current Year
Testing method. For Plan Years beginning after December 31,
1989, plans may be aggregated in order to satisfy Code section
401(k) only if they have the same Plan Year, and use the same
ADP testing method.
(d) For Plan Years beginning on or after January 1, 1997, the
family aggregation rules of section 414(q)(6) shall no longer
apply.
(e) For purposes of determining the ADP test, Elective Deferral
Contributions, Qualified Nonelective Contributions and
Qualified Matching Contributions must be made before the last
day of the 12-month period immediately following the Plan Year
to which such contributions relate.
(f) 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.
If the Prior Year testing method is elected by the Employer in the Adoption
Agreement, Qualified Nonelective Contributions and Qualified Matching
Contributions may not be contributed after the end of the Plan Year for which
the ADP Test is being conducted in order to meet the requirements for their use
and inclusion in that year's ADP Test.
(g) The determination and treatment of the Deferral Percentage
Amounts of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
(h) If the Employer determines before the end of the Plan Year
that the Plan may not satisfy the ADP test for the Plan Year,
the Employer may require that the amounts of Elective Deferral
Contributions being allocated to the accounts of Highly
Compensated Employees be reduced to the extent necessary to
prevent Excess Contributions from being made to the Plan.
Although the Employer may reduce the amounts of Elective
Deferral Contributions that may be allocated to the
Participant's Accounts of Highly Compensated Employees, the
affected Employees shall continue to participate in the Plan.
When the situation that resulted in the reduction of Elective
Deferral Contributions ceases to exist, the
Article IV - Legal Limitations February 6, 2002
-83-
Employer shall reinstate the amounts of Elective Deferral
Contributions elected by the affected Participants in their
Salary Deferral Agreement to the fullest extent possible.
IF THE EMPLOYER HAS ELECTED IN ITS ADOPTION AGREEMENT, TO PROVIDE FOR EMPLOYEE
CONTRIBUTIONS AND/OR MATCHING CONTRIBUTIONS REQUIRED TO BE TESTED UNDER CODE
SECTION 401(m), THEN SECTIONS 4A.4 AND 4A.5 SHALL APPLY.
4A.4 ACTUAL CONTRIBUTION PERCENTAGE TEST.
(a) 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:
(1) 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
(2) 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
two (2), provided that the ACP for Participants who are Highly
Compensated Employees does not exceed the prior year's ACP for
Participants who were non-Highly Compensated Employees in the
prior Plan Year by more than two (2) percentage points.
For the first Plan Year in which the Plan exists and for which it provides any
Participant with contributions subject to the ACP Test, and provided the Plan is
not a successor plan, for purposes of the foregoing tests, the prior year's
non-Highly Compensated Employee's ACP shall be either 3 percent or the current
Plan Year's ACP for these Participants, as elected by the Employer in the
Adoption Agreement.
(b) Current Year Testing. If elected by the Employer in the Adoption
Agreement, the ACP Tests in 4A.2(a)(1)and (2) above will be applied
comparing the current Plan Year's ACP for Participants who are Highly
Compensated Employees with the current Plan Year's ACP for
Participant's who are non-Highly Compensated Employees. Once made, this
election can only be undone if the Plan meets the requirements for
changing to Prior Year Testing set forth in Notice 98-1 (or superseding
guidance).
(c) Safe Harbor 401(k) Plan. If elected by the Employer in the Adoption
Agreement, the Plan may elect to be treated as a Safe Harbor 401(k)
Plan and will be subject to the provisions of section 2.C.1(l) of this
Plan, and the provisions of these sections 4.A.4(a) and (b) shall not
apply thereto.
4A.5 SPECIAL RULES - ADP/ACP TESTS.
Article IV - Legal Limitations February 6, 2002
-84-
(a) Participant is a Highly Compensated Employee for a particular
Plan Year if he or she meets the definition of Highly Compensated
Employee in effect for that Plan Year. Similarly, a Participant is a
non-Highly Compensated Employee for a Plan Year if he or she does not
meet the definition of Highly Compensated Employee in effect for that
Plan Year.
(b) Multiple Use: If one or more Highly Compensated Employees
participates in both a CODA and a plan subject to the ACP test
maintained by the Employer, and the sum of the ADP and ACP of
those Highly Compensated Employees subject to either or both
tests exceeds the Aggregate Limit, then the ACP of those
Highly Compensated Employees who also participate in a CODA
will be reduced (beginning with such Highly Compensated
Employee whose Actual Contribution Ratio is the highest) so
that the limit is not exceeded. The amount by which each
Highly Compensated Employee's Contribution Percentage Amounts
are reduced shall be treated as an Excess Aggregate
Contribution. The ADP and ACP of the Highly Compensated
Employees are determined after any corrections required to
meet the ADP and ACP tests and are deemed to be the maximum
permitted under such tests for the Plan Year. Multiple use
does not occur if both the ADP and ACP of the Highly
Compensated Employees does not exceed 1.25 multiplied by the
ADP and ACP of the non-Highly Compensated Employees.
(c) For purposes of this Section, the Actual Contribution Ratio
for any Participant who is a Highly Compensated Employee and
who is eligible to have Contribution Percentage Amounts
allocated to his account under two or more plans described in
Code section 401(a), or CODAs that are maintained by the
Employer, shall be determined as if the total of such
Contribution Percentage Amounts was made under each plan. If a
Highly Compensated Employee participates in two or more CODAs
that have different Plan Years, all CODAs ending with or
within the same calendar year are treated as a single CODA.
Notwithstanding the foregoing, certain plans shall be treated
as separate if mandatorily disaggregated under regulations
under Code section 401(m).
(d) If this Plan satisfies the requirements of Code sections
401(m), 401(a)(4) or 410(b) only if aggregated with one or
more other plans, or if one or more other plans satisfy the
requirements of such sections of the Code only if aggregated
with this Plan, then this Section shall be applied by
determining the Actual Contribution Ratio of Employees as if
all such plans were a single plan. Any adjustments to the
non-Highly Compensated Employee ACP for the prior Plan Year
will be made in accordance with IRS Notice 98-1 (and any
superceding guidance) unless the Employer has elected in the
Adoption Agreement to use the Current Year Testing method. For
Plan Years beginning after December 31, 1989, plans may be
aggregated in order to satisfy Code section 401(m) only if
they have the same Plan Year and use the same ACP testing
method.
Article IV - Legal Limitations February 6, 2002
-85-
(e) For Plan Years beginning on or after January 1, 1997, the
family aggregation rules of former Code section 414(q)(6)
shall no longer apply.
(f) For purposes of determining the ACP test, Employee
Contributions are considered to have been made in the Plan
Year in which contributed to the Plan. Qualified Matching
Contributions and Qualified Nonelective Contributions are
considered made for a Plan Year if made no later than the end
of the 12-month period beginning on the day after the close of
the Plan Year. However, if the Prior Year Testing Method is
elected by the Employer in the Adoption Agreement, Qualified
Matching Contributions and Qualified Nonelective Contributions
may not be contributed after the end of the Plan Year for
which the ACP Test is being conducted in order to meet the
requirements for their use and inclusion in the ACP Test.
(g) 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.
(h) The determination and treatment of the Contribution Percentage
Amounts of any Participant shall satisfy such other
requirements as may be prescribed by the Secretary of the
Treasury.
4B. LIMITATIONS ON ALLOCATIONS
4B.1 DEFINITIONS. The following definitions apply for purposes of Section
4B.
(a) ANNUAL ADDITIONS. The term Annual Additions means the sum of
the following amounts credited to a Participant's Account for
the Limitation Year:
(1) All contributions made by the Employer which shall
include:
Elective Deferral Contributions;
Money Purchase Pension Contributions
Matching Contributions;
Nonelective Contributions;
Qualified Nonelective Contributions;
Qualified Matching Contributions;
Prior Employer Contributions.
(2) Employee Contributions;
(3) Forfeitures; and
(4) Amounts allocated after March 31, 1984 to an
individual medical account, as defined in Code
section 415(l)(2), which is part of a pension or
annuity plan maintained by the Employer, are treated
as Annual Additions to a defined contribution plan.
Also,
Article IV - Legal Limitations February 6, 2002
-86-
amounts derived from contributions paid or accrued
after December 31, 1985 in taxable years ending after
such date, which are attributable to post-retirement
medical benefits allocated to the separate account of
a Key Employee as defined in Code section 419A(d)(3),
under a welfare benefit fund as defined in Code
section 419(e), maintained by the Employer, are
treated as Annual Additions to a defined contribution
plan; and
(5) Allocations under a simplified employee pension plan.
For this purpose, any Excess Annual Additions applied under
Sections 4C.3 or 4B.5(f) in the Limitation Year to reduce
Employer contributions will be considered Annual Additions for
such Limitation Year.
(b) COMPENSATION. As elected by the Employer in the Adoption
Agreement, the term Compensation means all of a Participant's:
(1) WAGES, TIPS, AND OTHER COMPENSATION BOX ON FORM W-2.
(Information required to be reported under Code
sections 6041, 6051 and 6052). Wages within the
meaning of Code section 3401(a) and all other
payments of compensation to an Employee by the
Employer (in the course of the Employer's trade or
business) for which the Employer is required to
furnish the Employee a written statement under Code
sections 6041(d), 6051(a)(3), and 6052. Compensation
must be determined without regard to any rules under
Code section 3401(a) that limit the remuneration
included in wages based on the nature or location of
the employment or the services performed (such as the
exception for agricultural labor in Code section
3401(a)(2)).
(2) SECTION 3401(a) WAGES. Wages as defined in Code
section 3401(a) for the purposes of income tax
withholding at the source but determined without
regard to any rules that limit the remuneration
included in wages based on the nature or location of
the employment or the services performed (such as the
exception for agricultural labor in Code section
3401(a)(2)).
(3) 415 SAFE-HARBOR COMPENSATION. Wages, salaries, and
fees for professional services and other amounts
received (without regard to whether or not an amount
is paid in cash) for personal services actually
rendered in the course of employment with the
Employer maintaining the Plan to the extent that the
amounts are includable in gross income (including,
but not limited to, commissions paid salesmen,
compensation for services on the basis of a
percentage of profits, commissions on insurance
premiums, tips, bonuses, fringe benefits, and
reimbursements or other expense allowances under a
nonaccountable plan as described in Code section
1.62-2(c)), and excluding the following:
Article IV - Legal Limitations February 6, 2002
-87-
(A) Employer contributions to a plan of deferred
compensation which are not includable in the
Employee's gross income for the taxable year
in which contributed, or Employer
contributions under a simplified employee
pension plan to the extent such
contributions are deductible by the
Employee, or any distributions from a plan
of deferred compensation;
(B) Amounts realized from the exercise of a
non-qualified stock option, or when
restricted stock (or property) held by the
Employee either becomes freely transferable
or is no longer subject to a substantial
risk of forfeiture;
(C) Amounts realized from the sale, exchange or
other disposition of stock acquired under a
qualified stock option; and
(D) Other amounts which received special tax
benefits, or contributions made by the
Employer (whether or not under a salary
reduction agreement) towards the purchase of
an annuity contract described in Code
section 403(b) (whether or not the
contributions are actually excludable from
the gross income of the Employee).
For any Self-Employed Individual, Compensation means Earned
Income.
For Limitation Years beginning after December 31, 1991, for
purposes of applying the limitations of this Section 4B,
Compensation for a Limitation Year is the Compensation
actually paid or includable in gross income during such
Limitation Year.
Notwithstanding the preceding, for Limitation Years beginning
after December 31, 1997, for purposes of applying the
limitations of this Article 4B, Compensation paid or made
available during such Limitation Year shall include any
elective deferral contributions (as defined in Code section
402(g)), and any amount which is contributed or deferred by
the Employer at the election of the Employee and which is not
includible in gross income of the Employee by reason of Code
sections 125 or 457. Effective for Plan Years beginning on or
after the date specified by the Employer in section XIII.C of
the Adoption Agreement (Limitations on Allocations),
Compensation shall include elective amounts that are not
includible in the gross income of the Employee by reason of
Code section 132(f)(4).
Notwithstanding the preceding two sentences, Compensation for
a Participant in a defined contribution plan who is
permanently and totally disabled (as defined in Code section
22(e)(3)) is the Compensation such Participant would have
received for the Limitation Year if the Participant had been
Article IV - Legal Limitations February 6, 2002
-88-
paid at the rate of Compensation paid immediately before
becoming permanently and totally disabled. For Limitation
Years beginning before January 1, 1997, such imputed
Compensation for the disabled Participant may be taken into
account only if the Participant is not a Highly Compensated
Employee and contributions made on behalf of such Participant
are nonforfeitable when made. For Limitation Years beginning
after December 31, 1996, such imputed Compensation for the
disabled Participant may be taken into account only if such
contributions are made on behalf of all such Participants and
nonforfeitable when made.
(c) DEFINED BENEFIT FRACTION. The term Defined Benefit Fraction
means a fraction, the numerator of which is the sum of the
Participant's Projected Annual Benefits under all the defined
benefit plans (whether or not terminated) maintained by the
Employer, and the denominator of which is the lesser of 125
percent of the dollar limitation determined for the Limitation
Year under Code sections 415(b) and (d), or 140 percent of the
Highest Average Compensation including any adjustments under
Code section 415(b).
Notwithstanding the above, if the Participant was a
Participant as of the first day of the Limitation Year
beginning after December 31, 1986 in one or more defined
benefit plans maintained by the Employer which were in
existence on May 6, 1986, the denominator of this fraction
will not be less than 125 percent of the sum of the annual
benefits under such plans which the Participant had accrued as
of the later of the close of the last Limitation Year
beginning before January 1, 1987, disregarding any changes in
the terms and conditions of the Plan after May 5, 1986. The
preceding sentence applies only if the defined benefit plans
individually and in the aggregate satisfied the requirements
of Code section 415 for all Limitation Years beginning before
January 1, 1987.
Notwithstanding the foregoing, for any Top-Heavy Plan Year,
100 shall be substituted for 125 unless the extra minimum
allocation is being made pursuant to the Employer's election
in the Adoption Agreement. However, for any Plan Year in which
this Plan is a Super Top-Heavy Plan, 100 shall be substituted
for 125 in any event.
(d) DEFINED CONTRIBUTION DOLLAR LIMITATION. The term Defined
Contribution Dollar Limitation means $30,000, as adjusted for
cost-of-living increases in accordance with Code section
415(d).
Article IV - Legal Limitations February 6, 2002
-89-
(e) DEFINED CONTRIBUTION FRACTION. The term Defined Contribution
Fraction means a fraction, the numerator of which is the sum
of the Annual Additions to the Participant's accounts under
all the defined contribution plans (whether or not terminated)
maintained by the Employer for the current and all prior
Limitation Years (including the Annual Additions attributable
to the Participant's nondeductible employee contributions to
all defined benefit plans, whether or not terminated,
maintained by the Employer, and the Annual Additions
attributable to all welfare benefit funds, as defined in Code
section 419(e), individual medical accounts, as defined in
Code section 415(l)(2), and simplified employee pension plans,
as defined in Code section 408(k), maintained by the
Employer), and the denominator of which is the sum of the
maximum aggregate amounts for the current and all prior
Limitation Years of service with the Employer (regardless of
whether a defined contribution plan was maintained by the
Employer). The maximum aggregate amount in any Limitation Year
is the lesser of 125 percent of the dollar limitation
determined under Code sections 415(b) and (d) in effect under
Code section 415(c)(1)(A) or 35 percent of the Participant's
Compensation for such year.
If the Employee was a Participant as of the end of the first
day of the first Limitation Year beginning after December 31,
1986, in one or more defined contribution plans maintained by
the Employer which were in existence on May 6, 1986, the
numerator of this fraction will be adjusted if the sum of this
fraction and the Defined Benefit Fraction would otherwise
exceed 1.0 under the terms of this Plan. Under the adjustment,
an amount equal to the product of (1) the excess of the sum of
the fractions over 1.0 times (2) the denominator of this
fraction, will be permanently subtracted from the numerator of
this fraction. The adjustment is calculated using the
fractions as they would be computed as of the end of the last
Limitation Year beginning before January 1, 1987, and
disregarding any changes in the terms and conditions of the
Plan made after May 5, 1986, but using the section 415
limitation applicable to the first Limitation Year beginning
on or after January 1, 1987.
Notwithstanding the foregoing, for any Top-Heavy Plan Year,
100 shall be substituted for 125 unless the extra minimum
allocation is being made pursuant to the Employer's election
in the Adoption Agreement. However, for any Plan Year in which
this Plan is a Super Top-Heavy Plan, 100 shall be substituted
for 125 in any event.
The Annual Additions for any Limitation Year beginning before
January 1, 1987 shall not be recomputed to treat all Employee
Contributions as Annual Additions.
(f) EMPLOYER. For purposes of this Section 4B, the term Employer
means the Employer that adopts this Plan, and all members of a
controlled group of corporations (as defined in Code section
414(b) as modified by section 415(h)), a group of commonly
controlled trades or businesses (as defined in
Article IV - Legal Limitations February 6, 2002
-90-
Code section 414(c) as modified by section 415(h)) or
affiliated service groups (as defined in Code section 414(m))
of which the adopting Employer is a part and any other entity
required to be aggregated with the Employer pursuant to
regulations under Code section 414(o).
(g) HIGHEST AVERAGE COMPENSATION. The term Highest Average
Compensation means the average Compensation for the three
consecutive Years of Service with the Employer that produces
the highest average. A Year of Service with the Employer is
the 12-consecutive month period defined in Section 2A.5.
(h) LIMITATION YEAR. The term Limitation Year means a calendar
year, or the 12-consecutive month period elected by the
Employer in the Limitation Year section of the Adoption
Agreement. All qualified plans maintained by the Employer must
use the same Limitation Year. If the Limitation Year is
amended to a different 12-consecutive month period, the new
Limitation Year must begin on a date within the Limitation
Year in which the amendment is made.
(i) MASTER OR PROTOTYPE PLAN. The term Master or Prototype Plan
means a plan the form of which is the subject of a favorable
opinion letter from the national office of the Internal
Revenue Service.
(j) MAXIMUM PERMISSIBLE AMOUNT. The term Maximum Permissible
Amount means the maximum Annual Additions that may be
contributed or allocated to a Participant's Account under the
Plan for any Limitation Year, which shall not exceed the
lesser of:
(1) The Defined Contribution Dollar Limitation, or
(2) 25 percent of the Participant's Compensation for the
Limitation Year.
The Compensation limitation referred to in (2) above, shall
not apply to any contribution for medical benefits (within the
meaning of Code section 401(h) or 419A(f)(2)) which is
otherwise treated as Annual Additions under Code sections
415(l)(1) or 419A(d)(2).
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different 12-consecutive
month period, the Maximum Permissible Amount will not exceed
the Defined Contribution Dollar Limitation multiplied by the
following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
(k) PROJECTED ANNUAL BENEFIT. The term Projected Annual Benefit
means the annual retirement benefit (adjusted to an
actuarially equivalent Straight Life Annuity if such benefit
is expressed in a form other than a Straight Life Annuity or
Qualified Joint and Survivor Annuity) to which the
Article IV - Legal Limitations February 6, 2002
-91-
Participant would be entitled under the terms of the Plan
assuming:
(1) The Participant will continue employment until Normal
Retirement Age under the Plan (or current age, if
later); and
(2) The Participant's Compensation for the current
Limitation Year and all other relevant factors used
to determine benefits under the Plan will remain
constant for all future Limitation Years.
4B.2 BASIC LIMITATION. If the Participant does not participate in, and has
never participated in another qualified plan or welfare benefit fund
maintained by the Employer, as defined in Code section 419(e), or an
individual medical account, as defined in Code section 415(l)(2),
maintained by the Employer, or a simplified employee pension, as
defined in Code section 408(k), maintained by the Employer, which
provides Annual Additions as defined in Section 4B.1(a), the amount of
Annual Additions which may be credited to the Participant's Account for
any Limitation Year will not exceed the lesser of the Maximum
Permissible Amount or any other limitation contained in this Plan. If
the Employer contributions that would otherwise be contributed or
allocated to the Participant's Account would cause the Annual Additions
for the Limitation Year to exceed the Maximum Permissible Amount, the
amount contributed or allocated will be reduced so that the Annual
Additions for the Limitation Year will equal the Maximum Permissible
Amount.
4B.3 ESTIMATED MAXIMUM PERMISSIBLE AMOUNT. Prior to determining the
Participant's actual Compensation for the Limitation Year, the Employer
may determine the Maximum Permissible Amount for a Participant on the
basis of a reasonable estimation of the Participant's Compensation for
the Limitation Year, uniformly determined for all Participants
similarly situated.
4B.4 ACTUAL MAXIMUM PERMISSIBLE AMOUNT. As soon as administratively feasible
after the end of the Limitation Year, the Maximum Permissible Amount
for the Limitation Year will be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
4B.5 PARTICIPANTS COVERED BY ANOTHER PROTOTYPE DEFINED CONTRIBUTION PLAN.
(a) This Section applies if, in addition to this Plan, the
Participant is covered under another qualified Master or
Prototype defined contribution Plan maintained by the
Employer, or a welfare benefit fund, as defined in Code
section 419(e), maintained by the Employer, or an individual
medical account as defined in Code section 415(l)(2),
maintained by the Employer, or a simplified employee pension
plan, as defined in Code section 408(k), that provides Annual
Additions as defined in Section 4B.1(a), during any Limitation
Year. The Annual Additions which may be credited
Article IV - Legal Limitations February 6, 2002
-92-
to a Participant's Account under this Plan for any such
Limitation Year will not exceed the Maximum Permissible Amount
reduced by the Annual Additions credited to a Participant's
account under the other qualified Master and Prototype defined
contribution Plans, welfare benefit funds, individual medical
accounts, and simplified employee pension plans for the same
Limitation Year. If the Annual Additions with respect to the
Participant under other qualified Master and Prototype defined
contribution Plans, welfare benefit funds, individual medical
accounts, and simplified employee pension plans maintained by
the Employer are less than the Maximum Permissible Amount and
the Employer contributions that would otherwise be contributed
or allocated to the Participant's Account under this Plan
would cause the Annual Additions for the Limitation Year to
exceed this limitation, the amount contributed or allocated
will be reduced so that the Annual Additions under all such
plans and funds for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with respect to
the Participant under such other qualified master and
prototype defined contribution plans, welfare benefit funds,
individual medical accounts, and simplified employee pension
plans, in the aggregate are equal to or greater than the
Maximum Permissible Amount, no amount will be contributed or
allocated to the Participant's Account under this Plan for the
Limitation Year.
(b) Prior to determining the Participant's actual Compensation for
the Limitation Year, the Employer may determine the estimated
Maximum Permissible Amount for a Participant in the manner
described in Section 4B.3.
(c) As soon as is administratively feasible after the end of the
Limitation Year, the Maximum Permissible Amount for the
Limitation Year will be determined on the basis of the
Participant's actual Compensation for the Limitation Year.
(d) If, pursuant to Section 4B.5(c), or as a result of the
allocation of Forfeitures, a Participant's Annual Additions
under this Plan and such other plans would result in Excess
Annual Additions as defined in Section 4C.1(b) for a
Limitation Year, the Excess Annual Additions will be deemed to
consist of the Annual Additions last allocated, except that
Annual Additions attributable to a simplified employee pension
plan will be deemed to have been allocated first, followed by
Annual Additions to a welfare benefit fund or individual
medical account, regardless of the actual allocation date.
(e) If Excess Annual Additions were allocated to a Participant on
an allocation date of this Plan which coincides with an
allocation date of another plan, the Excess Annual Additions
attributed to this Plan will be the product of:
(1) The total Excess Annual Additions allocated as of
such date, multiplied by
Article IV - Legal Limitations February 6, 2002
-93-
(2) The ratio of (i) the Annual Additions allocated to
the Participant for the Limitation Year as of such
date under this Plan to (ii) the total Annual
Additions allocated to the Participant for the
Limitation Year as of such date under this and all
the other qualified Master or Prototype defined
contribution Plans.
(f) Any Excess Annual Additions attributed to this Plan will be
disposed of in the manner described in Section 4C.3.
4B.6 PARTICIPANTS COVERED BY NON-PROTOTYPE DEFINED CONTRIBUTION PLAN. If the
Participant is covered under another qualified defined contribution
plan maintained by the Employer which is not a Master or Prototype
Plan, Annual Additions which may be credited to the Participant's
Account under this Plan for any Limitation Year will be limited in
accordance with Section 4B.5 as though the other plan were a Master or
Prototype Plan, unless the Employer provides other limitations in the
Limitations on Allocations section of the Adoption Agreement.
4B.7 PARTICIPANTS COVERED BY DEFINED BENEFIT PLAN. The provisions of this
section 4B.7 shall only apply for Limitation Years beginning before
January 1, 2000. If the Employer maintains, or at any time maintained,
a qualified defined benefit plan covering any Participant in this Plan,
the sum of the Participant's Defined Benefit Plan Fraction and Defined
Contribution Plan Fraction will not exceed 1.0 in any Limitation Year.
The Annual Additions which may be credited to the Participant's Account
under this Plan for any Limitation Year will be limited in accordance
with the Limitations on Allocations section of the Adoption Agreement.
4C. TREATMENT OF EXCESSES
4C.1 DEFINITIONS.
(a) EXCESS AGGREGATE CONTRIBUTIONS. The term Excess Aggregate
Contributions means, with respect to any Plan Year, the excess
of:
(1) The aggregate Contribution Percentage Amounts taken
into account in computing the ACP of Highly
Compensated Employees for such Plan Year, over
(2) The maximum Contribution Percentage Amounts permitted
by the ACP test (determined by hypothetically
reducing the Contribution Percentage Amounts made on
behalf of Highly Compensated Employees in order of
their Actual Contribution Ratios beginning with the
highest of such ratios). Such determination shall be
made after first determining Excess Elective Deferral
Contributions, pursuant to Section 4C.2(a) and then
determining Excess Contributions pursuant to Section
4C.4.
(b) EXCESS ANNUAL ADDITIONS. The term Excess Annual Additions
means the excess of the Participant's Annual Additions for the
Limitation Year over the Maximum Permissible Amount.
Article IV - Legal Limitations February 6, 2002
-94-
(c) EXCESS CONTRIBUTIONS. The term Excess Contributions means,
with respect to any Plan Year, the excess of:
(1) The aggregate Deferral Percentage Amounts taken into
account in computing the ADP of Highly Compensated
Employees for such Plan Year, over
(2) The maximum Deferral Percentage Amounts permitted by
the ADP test (determined by hypothetically reducing
the Deferral Percentage Amounts made on behalf of
Highly Compensated Employees in order of their Actual
Deferral Ratios, beginning with the highest of such
ratios).
(d) EXCESS ELECTIVE DEFERRAL CONTRIBUTIONS. The term Excess
Elective Deferral Contributions means those Elective Deferral
Contributions that are includable in a Participant's gross
income under Code section 402(g) to the extent such
Participant's Elective Deferral Contributions for a taxable
year exceed the dollar limitation under such Code section.
Excess Elective Deferral Contributions shall be treated as
Annual Additions under the Plan pursuant to Section 4B, unless
such amounts are distributed in accordance with the provisions
of Section 4C.2(a), below.
4C.2 EXCESS ELECTIVE DEFERRAL CONTRIBUTIONS.
(a) In the event that Elective Deferral Contributions made during
a calendar year exceed the limit specified in Section
2C.1(j)(4), then the Excess Elective Deferral Contributions,
plus any income and minus any loss allocable thereto, shall be
distributed to the Participant by the April 15 following the
calendar year in which such amount was contributed, provided
that the Participant notifies the Plan Administrator no later
than 30 days in advance of his intent to withdraw such Excess
Elective Deferral Contributions, or is deemed to notify the
Plan Administrator. A Participant is deemed to notify the Plan
Administrator of any Excess Elective Deferral Contributions
that arise by taking into account only those Elective
Deferrals made to this Plan and any other plans of this
Employer. The spousal consent provisions of Section 3C shall
not apply to any distribution of Excess Elective Deferral
Contributions.
(b) Excess Elective Deferral Contributions shall be adjusted for
any income or loss for the Employee's tax year. The income or
loss allocable to excess Elective Deferral Contributions is an
amount determined by multiplying the sum of the income or loss
allocable to the Participant's Elective Deferral Contribution
account for the taxable year by a fraction, the numerator of
which is such Participant's Excess Elective Deferral
Contributions for the taxable year, and the denominator of
which is equal to the sum of the Participant's Account balance
attributable to Elective Deferral Contributions as of the
beginning of the taxable year plus the Participant's Elective
Deferral Contributions for the taxable year. Income for the
gap period (the period from the end of the taxable year to the
date of
Article IV - Legal Limitations February 6, 2002
-95-
distribution) shall not be allocated to Excess Elective
Deferral Contributions.
(c) Matching Contributions, as defined in Section 1.36, that are
attributable to Excess Elective Deferral Contributions shall
be forfeited, and as such, shall be applied to reduce Employer
contributions or pay Plan expenses.
4C.3 EXCESS ANNUAL ADDITIONS. If, pursuant to Section 4B.4 or as a result of
the allocation of Forfeitures, there are Excess Annual Additions, the
excess will be disposed of using any of the following methods:
(a) Employee Contributions or Elective Deferral Contributions or
both, to the extent they would reduce the Excess Annual
Additions, will be returned to the Participant. The
Contributions returned in accordance with the preceding shall
include any gains or losses attributable to such
Contributions.
Employee Contributions so returned will be disregarded with
respect to the ACP test. Elective Deferral Contributions so
returned will be disregarded with respect to the Elective
Deferral limitation described in Section 2C.1(j)(4) of the
Plan and the ADP test.
(b) If, after the application of paragraph (a), Excess Annual
Additions still exist and the Participant is covered by the
Plan at the end of the Limitation Year, the Excess Annual
Additions in the Participant's Account, other than Employee
Contributions and Elective Deferral Contributions, will be
used to reduce Employer contributions (including any
allocation of Forfeitures) for such Participant in the next
Limitation Year, and each succeeding Limitation Year, if
necessary.
(c) If, after the application of paragraph (a), Excess Annual
Additions still exist and the Participant is not covered by
the Plan at the end of a Limitation Year, the Excess Annual
Additions will be held unallocated in a suspense account. The
suspense account will be applied to reduce future Employer
contributions (including allocation of any Forfeiture) for all
remaining Participants in the next Limitation Year, and each
succeeding Limitation Year if necessary.
(d) If a suspense account is in existence at any time during the
Limitation Year pursuant to this Section, it will not
participate in the allocation of the Trust or Insurance
Company's gains and losses. If a suspense account is in
existence at any time during a particular Limitation Year, all
amounts in the suspense account must be allocated and
reallocated to the Participants' Account before any Employer
or Employee Contributions may be made to the Plan for that
Limitation Year. Except as provided in Section 4C.3(a), Excess
Annual Additions may not be distributed to Participants or
former Participants.
Article IV - Legal Limitations February 6, 2002
-96-
4C.4 EXCESS CONTRIBUTIONS.
(a) Notwithstanding any other provision of this Plan, Excess
Contributions, plus any income and minus any loss allocable
thereto, shall be distributed no later than the last day of
each Plan Year to Participants to whose Participants' Accounts
such Excess Contributions were allocated for the preceding
Plan Year. Excess Contributions are allocated to the Highly
Compensated Employee with the largest amounts of 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 contributions and
continuing in descending order until all Excess Contributions
have been allocated. For purposes of the preceding sentence,
the "largest amount" is determined after distribution of any
Excess Contributions. If such excess amounts are distributed
more than 2-1/2 months after the last day of the Plan Year in
which such excess amounts arose, a ten percent excise tax will
be imposed on the Employer maintaining the Plan with respect
to such amounts.
Such distributions shall be made to Highly Compensated
Employees on the basis of the respective portions of the
Excess Contributions attributable to each of such Employees.
(b) Excess Contributions shall be treated as Annual Additions, as
defined in Section 4B.1, under the Plan in the Limitation Year
in which they arose.
(c) Excess Contributions shall be adjusted for any income or loss
for the Plan Year. The income or loss allocable to Excess
Contributions allocated to each Participant is the sum of the
income or loss allocable to the Participant's Account for
Deferral Percentage Amounts for the Plan Year, by a fraction,
the numerator of which is such Participant's Excess
Contributions for the Plan Year and the denominator of which
is equal to the sum of the Participant's Account balance
attributable to Deferral Percentage Amounts as of the
beginning of the Plan Year plus the Participant's Deferral
Percentage Amounts for the Plan Year. Income for the gap
period (the period from the end of the Plan Year to the date
of distribution) shall not be allocated to Excess
Contributions.
(d) Excess Contributions allocated to a Participant shall be
distributed from the Participant's Account for Elective
Contributions and Qualified Matching Contributions (if
applicable) in proportion to the Participant's Elective
Deferral Contributions and Qualified Matching Contributions
(to the extent used in the ADP test) for the Plan Year. Excess
Contributions shall be distributed from the Participant's
Qualified Nonelective Contribution Account only to the extent
that such Excess Contributions exceed the balance in the
Participant's Account for Elective Contributions and Qualified
Matching Contributions.
Article IV - Legal Limitations February 6, 2002
-97-
(e) Matching Contributions, as defined in Section 1.36, that are
attributable to Excess Contributions, shall be forfeited, and
as such, shall be applied to reduce Employer contributions or
pay Plan expenses.
4C.5 EXCESS AGGREGATE CONTRIBUTIONS.
(a) Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss
allocable thereto, shall be forfeited, if forfeitable, or if
not forfeitable, distributed no later than the last day of
each Plan Year to Participants to whose Participants' Accounts
such Excess Aggregate Contributions were allocated for the
preceding Plan Year. 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. For purposes of the
preceding sentence, the "largest amount" is determined after
distribution of any Excess Aggregate Contributions. If such
Excess Aggregate Contributions are distributed more than 2-1/2
months after the last day of the Plan Year in which such
excess amounts arose, a ten percent excise tax will be imposed
on the Employer maintaining the Plan with respect to those
amounts.
(b) Excess Aggregate Contributions shall be treated as Annual
Additions, as defined in Section 4B.1, in the Limitation Year
in which they arose.
(c) Excess Aggregate Contributions shall be adjusted for any
income or loss for the Plan Year. The income or loss allocable
to Excess Aggregate Contributions allocated to each
Participant is an amount determined by multiplying the sum of
the income or loss allocable to the Participant's Account for
Contribution Percentage Amounts for the Plan Year by a
fraction, the numerator of which is such Participant's Excess
Aggregate Contributions for the Plan Year, and the denominator
of which is equal to the sum of the Participant's Account
balance attributable to Contribution Percentage Amounts as of
the beginning of the Plan Year plus the Participant's
Contribution Percentage Amounts for the Plan Year. Income for
the gap period (the period from the end of the Plan Year to
the date of distribution) shall not be allocated to Excess
Aggregate Contributions.
(d) Excess Aggregate Contributions allocated to each Participant
shall be forfeited, if forfeitable, or distributed on a
pro-rata basis from the Participant's Account for Employee
Contributions, Matching Contributions, and Qualified Matching
Contributions (and, if applicable, the Participant's Qualified
Nonelective Contributions or Elective Deferral Contributions,
or both).
Article IV - Legal Limitations February 6, 2002
-98-
(e) Forfeitures of Excess Aggregate Contributions shall be applied
to reduce Employer contributions or pay Plan expenses.
(f) Matching Contributions as defined in Section 1.36 that are
attributable to Excess Aggregate Contributions shall be
forfeited, and as such, shall be applied to reduce Employer
contributions or pay Plan expenses.
Article IV - Legal Limitations February 6, 2002
-99-
ARTICLE V - PARTICIPANT PROVISIONS
5A. ANNUITY CONTRACT AND PARTICIPANT'S ACCOUNT
5A.1 PARTICIPANT'S ACCOUNT. A Participant's Account shall be maintained on
behalf of each Participant until such Account is distributed in
accordance with the terms of this Plan.
Each Participant shall have the exclusive authority to direct the
investment of Employee Contributions, Elective Deferral Contributions,
QVEC Contributions and Rollover Contributions, if applicable, from
among the investment options selected by the Employer.
If selected by the Employer in its Adoption Agreement, the Participant,
Beneficiary and/or Alternate Payee additionally shall have the
exclusive authority to direct the investment of contributions made by
the Employer from among the investment choices selected by the
Employer.
5A.2 INVESTMENT TRANSFERS. Each Participant, Beneficiary, and/or Alternate
Payee shall have the exclusive authority to direct the transfer of
amounts between the investment funds designated by the Employer,
attributable to his Employee Contributions, Elective Deferral
Contributions, QVEC Contributions and Rollover Contributions, if
applicable.
If the Employer selects in its Adoption Agreement to grant the
Participant exclusive authority to direct the investment of
contributions made by the Employer, the Participant, Beneficiary,
and/or Alternate Payee shall also have the exclusive authority to
transfer contributions made by the Employer from among the investment
choices selected by the Employer.
The transfer of amounts between investment funds shall be subject to
the rules of the investment funds in which the Participant's Account is
invested or is to be invested.
The Plan Administrator or the Participant, Beneficiary, and/or
Alternate Payee as the case may be, may change such amounts as often as
the Plan Administrator may allow in accordance with the terms of the
investment funds in which the Participant's Account is being invested.
The ability of a Participant who is subject to the reporting
requirements of section 16(a) of the Securities and Exchange Act of
1934 (the "Act") to make withdrawals or investment changes involving
the Participant's Employer Stock Account may be restricted by the Plan
Administrator to comply with rules under section 16(b) of the Act.
5A.3 PARTICIPANT'S ACCOUNT VALUATION. A Participant's Account shall be
maintained on behalf of each Participant until such Account is
distributed in accordance with the terms of this Plan. At least once
per year, as of the last day of the Plan Year, each Participant's
Account shall be adjusted, in the ratio that the Participant's Account
balance bears to all account balances
Article V - Participant Provisions February 6, 2002
-100-
invested into the same investment vehicle, for any earnings, gains,
losses, contributions, withdrawals, expenses, and loans attributable to
such Plan Year, in order to obtain a new valuation of the Participant's
Account. The assets of the Plan will be valued annually at fair market
value as of the last day of each Plan Year.
5B. LIFE INSURANCE POLICIES
5B.1 OPTIONAL PURCHASE OF LIFE INSURANCE. If the Employer in its Adoption
Agreement shall permit the purchase of life insurance on the lives of
some or all Participants hereunder, each eligible Participant may elect
that a portion of the Contribution made on his behalf shall be applied
to the purchase of a Life Insurance Policy or Policies on his life. The
application for each Policy shall be signed by the Participant and by
the Trustee and shall conform to the requirements of the Insurance
Company, including any requested evidence of insurability, and the
requirements of this Section. All Life Insurance Policies shall be
issued so as to permit a common billing date. Any Policy on the life of
a Participant who can qualify for waiver of premium thereunder and
participant account contribution disability benefits thereunder may
include such benefits if applied for by the Participant. The Plan
Administrator may adopt reasonable rules regarding the purchase of Life
Insurance Policies provided such rules are administered in a consistent
and nondiscriminatory manner. No application shall be made hereunder
for any Life Insurance Policy on the life of a Participant acceptable
to the Insurance Company at standard premium rates for a face amount of
less that $1,000 for the first, or any additional Policy issued on the
Participant's life.
5B.2 PREMIUMS ON LIFE INSURANCE POLICIES. The premiums on all Life Insurance
Policies on the life of a Participant shall be paid from the portion of
his Participant's Account attributable to contributions made by the
Employer, to the extent sufficient therefor, otherwise in one of the
following manners:
(a) By a loan against the Participant's Policy or Policies, under
the automatic premium loan provision thereof, or
(b) By payment out of his Participant's Account.
If the Participant is not acceptable to the Insurance Company as a
standard risk at standard rates, a Policy with the same premium but a
lesser death benefit may be purchased.
5B.3 LIMITATIONS ON PREMIUMS. In no case shall the cumulative total premiums
paid on all Policies held on the life of a Participant hereunder exceed
an amount equal to the applicable percentage set forth below of all
Contributions (other than Employee Contributions) and Forfeitures
theretofore allocated or currently due on his behalf:
(a) 49% in the case of ordinary life insurance or similar
policies.
Article V - Participant Provisions February 6, 2002
-101-
(b) 25% in the case of term insurance policies or a combination of
policies, with premiums on ordinary life insurance or similar
policies being given half weight.
If such cumulative total premiums would otherwise exceed this amount,
the necessary steps to avoid this result shall be taken by reduction of
the Participant's life insurance coverage by changing all or a portion
of his coverage to paid-up life insurance or by selling the excess
portion to the Participant.
5B.4 DISPOSAL. A Participant who no longer wishes to have any part of his
allocable share of Contributions used to pay the premiums for any Life
Insurance Policy or Policies may withdraw a prior election by written
notice to the Trustee to that effect. Any Policy shall be disposed of
in accordance with its provisions as the Trustee shall direct.
5B.5 RIGHTS UNDER POLICIES. Each Policy shall provide that the Trustee shall
have the right to receive any or all payments that may be due during
the Participant's lifetime. Any death benefit shall be payable directly
to the Beneficiary named in the Policy and the Participant shall have
the right, subject to the terms of Section 3C, either directly or
through the Trustee, to change the Beneficiary from time to time and to
elect settlement options under the policy for the benefit of the
Beneficiary. The Trustee shall have the right to exercise all other
options and privileges contained in the policy and shall exercise such
rights and privileges in a manner consistent with the terms of the
Plan.
5B.6 LOANS. No loans shall be made against any of the Policies hereunder
either from the Insurance Company or any other source unless such loans
are made in order to pay amounts then due as premiums thereon.
5B.7 CONDITIONS OF COVERAGE. Except as may be otherwise provided in any
conditional or binding receipt issued by the Insurance Company, there
shall be no coverage and no death benefit payable under any Policy to
be purchased from the Insurance Company until such Policy shall have
been delivered and the premium therefor shall have been paid to the
Insurance Company as a premium for that Policy. Neither the Employer
nor the Trustee shall have any responsibility as to the effectiveness
of any Life Insurance Policy purchased from the Insurance Company
hereunder nor be under any liability or obligation to pay any amount to
any Participant or his Beneficiary by reason of any failure or refusal
by the Insurance Company to make such payment.
5B.8 POLICY NOT YET IN FORCE. If at the death of any Participant, the
Trustee shall be holding any amount intended for the purchase of any
Life Insurance Policy on the Participant's life, but coverage under
such Policy shall not yet be in force, the Trustee shall credit such
amount to the Participant's Account to be disposed of as a portion
thereof.
5B.9 VALUE OF POLICY. The value of any Policy on the life of a living
Participant for any purpose under this Plan shall be that amount which
the Insurance Company would pay upon surrender of such Policy in
accordance with its usual rules and practices.
Article V - Participant Provisions February 6, 2002
-102-
5B.10 DIVIDENDS. If dividends are allowed on any Life Insurance Policy, they
shall be used to provide additional benefits under the Policy.
5B.11 DISTRIBUTION No life insurance protection shall continue in force under
the Plan subsequent to a Participant's retirement or Termination of
Employment, whichever occurs first. As of such date, any Life Insurance
Policy shall be distributed to the Participant in accordance with its
terms and the terms of Section 3C.3.
5B.12 APPLICATION. The Trustee, if the Plan is trusteed, or custodian, if the
Plan has a custodial account, shall apply for and will be the owner of
any Life Insurance Policy purchased under the terms of this Plan. The
Life Insurance Policy(ies) must provide that proceeds will be payable
to the Trustee (or custodian, if applicable). However, the Trustee (or
custodian) shall be required to pay over all proceeds of the Life
Insurance Policy(ies) to the Participant's designated Beneficiary in
accordance with the distribution provisions of this Plan. A
Participant's Spouse will be the designated Beneficiary of the proceeds
in all circumstances unless a Qualified Election has been made in
accordance with Section 3C.2(c), Joint and Survivor Annuity
Requirements, if applicable. Under no circumstances shall the Trust (or
custodial account) retain any part of the proceeds.
In the event of any conflict between the provisions of this Plan and
any Life Insurance Policies or annuity contracts issued pursuant to the
Plan, the Plan provisions shall control.
5C. LOANS
5C.1 LOANS TO PARTICIPANTS. If the Employer has specified in its Adoption
Agreement that loans are permitted, then the Plan Administrator may
make a bona fide loan to a Participant, in an amount which, when added
to the outstanding balance of all other loans to the Participant from
all qualified plans of the Employer, does not exceed the lesser of
$50,000 reduced by the excess of the Participant's highest outstanding
loan balance during the 12 months preceding the date on which the loan
is made over the outstanding loan balance on the date the new loan is
made, or 50% of the Participant's Vested Interest in his Participant's
Account excluding amounts attributable to QVEC Contributions.
Notwithstanding any provision in this paragraph to the contrary, loans
may not exceed a Participant's Vested Interest attributable to such
contributions.
In the event of default, foreclosure on the note and attachment of
security will not occur until a distributable event occurs in the Plan.
No loans will be made to any Shareholder-Employee or Owner-Employee or
to family members of Shareholder-Employees or Owner-Employees, as
defined in Code section 267(c)(4).
Article V - Participant Provisions February 6, 2002
-103-
The loan shall be made under such terms, security interest, and
conditions as the Plan Administrator deems appropriate, provided,
however, that:
(a) Loans shall be made available to all Participants and
parties-in-interest (as defined in ERISA and including
Employees and Beneficiaries), on a reasonably equivalent
basis.
(b) Loans shall not be made available to Highly Compensated
Employees on a basis greater than the basis made available to
other Employees.
(c) Loans must bear a reasonable rate of interest.
(d) Loans are adequately secured.
(e) Unless the provisions of Section 3C.6 apply to a Participant,
loans may be made only after a Participant obtains the consent
of his Spouse, if any, to use his Participant's Account as
security for the loan. Spousal consent shall be obtained no
earlier than the beginning of the 90-day period that ends on
the date on which the loan is to be so secured. The consent
must be in writing, must acknowledge the effect of the loan,
and must be witnessed by a Plan representative or notary
public. Such consent shall thereafter be binding with respect
to the consenting Spouse or any subsequent Spouse with respect
to that loan. A new consent shall be required if the
Participant's Account is used for renegotiation, extension,
renewal or other revision of the loan.
(f) Loans must be made in accordance with and subject to all of
the provisions of this Section 5C.
If a valid spousal consent has been obtained in accordance with (e),
then, notwithstanding any other provision of this Plan, the portion of
the Participant's Vested Interest used as a security interest held by
the Plan by reason of a loan outstanding to the Participant shall be
taken into account for purposes of determining the amount of the
account balance payable at the time of death or distribution, but only
if the reduction is used as repayment of the loan. If less than 100% of
the Participant's Vested Interest in his Participant's Account
(determined without regard to the preceding sentence) is payable to the
surviving Spouse, then the Participant's Account shall be adjusted by
first reducing the Vested Interest by the amount of the security used
as repayment of the loan, and then determining the benefit payable to
the surviving Spouse.
5C.2 LOAN PROCEDURES. The Plan Administrator shall establish a written set
of procedures, set forth in the summary plan description or any other
established set of procedures, which becomes a part of such Plan by
which all loans will be administered. Such rules, which are
incorporated herein by reference, will include, but not be limited to
the following:
Article V - Participant Provisions February 6, 2002
-104-
(a) The person or persons authorized to administer the loan
program, identified by name or position;
(b) The loan application procedure;
(c) The basis for approving or denying loans;
(d) Any limits on the types of loans permitted;
(e) The procedure for determining a "reasonable" interest rate;
(f) Acceptable collateral;
(g) Default conditions; and
(h) Steps which will be taken to preserve Plan assets in the event
of default.
5C.3 USERRA LOAN SUSPENSION. Notwithstanding any other provision of this section
5C, if elected by the Employer in the Adoption Agreement, loan repayments under
the Plan shall be suspended as permitted under section 414(u)(4) of the Internal
Revenue Code.
5D. PARTICIPANTS' RIGHTS
5D.1 GENERAL RIGHTS OF PARTICIPANTS AND BENEFICIARIES. The Plan is
established and the Plan or Trust assets are held for the exclusive
purpose of providing benefits for such Employees and their
Beneficiaries as have qualified to participate under the terms of the
Plan.
5D.2 FILING A CLAIM FOR BENEFITS. A Participant or Beneficiary, or the
Employer acting in his behalf, shall notify the Plan Administrator of a
claim of benefits under the Plan. Such request shall be in writing to
the Plan Administrator and shall set forth the basis of such claim and
shall authorize the Plan Administrator to conduct such examinations as
may be necessary to determine the validity of the claim and to take
such steps as may be necessary to facilitate the payment of any
benefits to which the Participant or Beneficiary may be entitled under
the terms of the Plan.
5D.3 DENIAL OF CLAIM. Whenever a claim for benefits by any Participant or
Beneficiary has been denied by a Plan Administrator, a written notice,
prepared in a manner calculated to be understood by the Participant,
must be provided, setting forth (1) the specific reasons for the
denial; (2) the specific reference to pertinent Plan provisions on
which the denial is based; (3) a description of any additional material
or information necessary for the claimant to perfect the claim and an
explanation of why such material or information is necessary; and (4)
an explanation of the Plan's claim review procedure.
5D.4 REMEDIES AVAILABLE TO PARTICIPANTS. A Participant or Beneficiary (1)
may request a review by a Named Fiduciary, other than the Plan
Administrator, upon written application to the Plan; (2) may review
pertinent Plan documents; and (3) may submit issues and comments in
writing to a Named Fiduciary. A Participant or
Article V - Participant Provisions February 6, 2002
-105-
Beneficiary shall have 60 days after receipt by the claimant of
written notification of a denial of a claim to request a review of a
denied claim.
A decision by a Named Fiduciary shall be made promptly and not later
than 60 days after the Named Fiduciary's receipt of a request for
review, unless special circumstances require an extension of the time
for processing in which case a decision shall be rendered as soon as
possible, but not later than 120 days after receipt of a request for
review. The decision on review by a Named Fiduciary shall be in writing
and shall include specific reasons for the decision, written in a
manner calculated to be understood by the claimant, and specific
references to the pertinent Plan provisions on which the decision is
based.
A Participant or Beneficiary shall be entitled, either in his own name
or in conjunction with any other interested parties, to bring such
actions in law or equity or to undertake such administrative actions or
to seek such relief as may be necessary or appropriate to compel the
disclosure of any required information, to enforce or protect his
rights, to recover present benefits due to him or to clarify his rights
to future benefits under the Plan.
5D.5 LIMITATION OF RIGHTS. Participation hereunder shall not grant any
Participant the right to be retained in the Service of the Employer or
any other rights or interest in the Plan or Trust fund other than those
specifically herein set forth.
5D.6 100% VESTED CONTRIBUTIONS. Each Participant, regardless of his length
of Service with the Employer, shall be fully vested (100%) at all times
in any portion of his Participant's Account attributable to the
following contributions, as applicable:
(a) Employee Contributions and earnings thereon;
(b) Elective Deferral Contributions and earnings thereon;
(c) Qualified Matching Contributions and earnings thereon;
(d) Qualified Nonelective Contributions and earnings thereon;
(e) Rollover Contributions and earnings thereon;
(f) QVEC Contributions and earnings thereon.
5D.7 REINSTATEMENT OF BENEFIT. In the event any portion of a benefit which
is payable to a Participant or a Beneficiary shall remain unpaid on
account of the inability of the Plan Administrator, after diligent
effort, to locate such Participant or Beneficiary, the amount so
distributable shall be treated as a Forfeiture under Section 3D. If a
claim is made by the Participant or Beneficiary for any benefit
forfeited under this Section, such benefit must be reinstated by the
Employer.
Article V - Participant Provisions February 6, 2002
-106-
5D.8 NON-ALIENATION. It is a condition of the Plan, and all rights of each
Participant shall be subject thereto, that no right or interest of any
Participant in the Plan shall be assignable or transferable in whole or
in part, either directly or by operation of law or otherwise,
including, but without limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy or in any other manner, and no right or
interest of any Participant in the Plan shall be liable for or subject
to any obligation or liability of such Participant. The preceding
sentence shall not preclude the enforcement of a federal tax levy made
pursuant to Code section 6331 or the collection by the United States on
a judgement resulting from an unpaid tax assessment.
The preceding paragraph shall also apply to the creation, assignment,
or recognition of a right to any benefit payable with respect to a
Participant pursuant to a domestic relations order, unless such order
is determined to be a QDRO. A domestic relations order entered before
January 1, 1985 will be treated as a QDRO if payment of benefits
pursuant to the order has commenced as of such date, and may be treated
as a QDRO if payment of benefits has not commenced as of such date,
even though the order does not satisfy the requirements of Code section
414(p).
The first paragraph of this section shall not preclude:
(a) any assignment or alienation of benefits in pay status to
the extent that such assignment or alienation (i) is voluntary
and revocable, (ii) is not for the purpose of, nor has the
effect of, defraying Plan administration costs, and (iii) does
not, when combined with all other such assignments in the
aggregate, exceed 10% of any benefit payment, or
(b) any assignment or alienation of all, or any portion of,
benefits to a third party, including the participant's
employer, provided such assignment or alienation is (1)
voluntary and revocable and (2) the third party files with the
Plan Administrator a written acknowledgement meeting the
requirements of Treasury Regulation 1.401(a)-13(e)(2) (or any
successor regulation of similar purpose).
The first sentence of this section 5D.8 shall not apply to any offset
of a Participants benefit under a Plan against an amount that the Participant is
ordered or required to pay to the plan if:
(a) the order or requirement to pay arises
(1) under a judgment or conviction for a crime involving
such plan,
(2) under a civil judgment (including a consent order or
decree) entered by a court in an action brought in
connection with a violation (or alleged violation) of
Part 4 of Subtitle B of Title 1 of the Employee
Retirement Income Security Act of 1974, or
(3) pursuant to a settlement agreement between the
Secretary of Labor and the Participant, or a
settlement agreement between the Pension Benefit
Guarantee Corporation and the Participant, in
connection with a violation (or alleged violation of
Article V - Participant Provisions February 6, 2002
-107-
Part 4 of such Subtitle by a fiduciary or any other
person,
(b) the judgment, order, decree, or settlement expressly provides
for the offset of all or a part of the amount ordered or
required to be paid to the Plan against the Participant's
benefits provided under the Plan, and
(c) in a case in which the survivor annuity requirements of Code
section 401(a)(11) apply with respect to distributions from
the Plan to the Participant, if the Participant has a spouse
at the time at which the offset is to be made
(1) either such spouse has consented in writing to such
offset and such consent is witnessed by a notary
public or representative of the Plan (or it is
established to the satisfaction of a Plan
representative that such consent may not be obtained
by reason of circumstances described in Code section
417(a)(2)(B)), or an election to waive the right of
the spouse to either a Qualified Joint and Survivor
Annuity or a Qualified Preretirement Survivor Annuity
is in effect in accordance with the requirements of
Code section 417(a),
(2) such spouse is order or required in such judgment,
order, decree, or settlement to pay an amount to the
Plan in connection with a violation of Part 4 of such
Subtitle, or
(3) in such judgment, order, decree, or settlement, such
spouse retains the right to receive the survivor
annuity under a Qualified Joint and Survivor Annuity
provided pursuant to Code section 401(a)(11)(A)(i)
and under a Qualified Preretirement Survivor Annuity
provided pursuant to Code section 401(a)(11)(A)(ii),
determined in accordance with subparagraph (d)
hereunder.
(d) The survivor annuity described in subparagraph (c)(3) above
shall be determined as if
(1) the participant terminated employment on the date of
the offset,
(2) there was no offset,
(3) the Plan permitted commencement of benefits only on
or after Normal Retirement Age,
(4) the Plan provided only the minimum-required Qualified
Joint and Survivor Annuity, and
(5) the amount of the Qualified Preretirement Survivor
Annuity under the Plan is equal to the amount of the
survivor annuity payable under the minimum-required
Qualified Joint and Survivor Annuity.
Article V - Participant Provisions February 6, 2002
-108-
For purposes of this subparagraph (d), the term
"minimum-required Joint and Survivor Annuity" means the
Qualified Joint and Survivor Annuity which is the actuarial
equivalent of the Participant's accrued benefit (within the
meaning of Code section 411(a)(7)) and under which the
survivor annuity is 50 percent of the amount of the annuity
which is payable during the joint lives of the Participant and
the spouse.
The judgement, order, requirement to pay, decree, or settlement
agreement described above must have been entered into on or after
August 5, 1997.
Article V - Participant Provisions February 6, 2002
-109-
ARTICLE VI - OVERSEER PROVISIONS
6A. FIDUCIARY DUTIES AND RESPONSIBILITIES
6A.1 GENERAL FIDUCIARY STANDARD OF CONDUCT. Each Fiduciary of the Plan shall
discharge his duties hereunder solely in the interest of the
Participants and their Beneficiaries and for the exclusive purpose of
providing benefits to Participants and their Beneficiaries and
defraying reasonable expenses of administering the Plan. Each Fiduciary
shall act with the care, skill, prudence and diligence under the
circumstances that a prudent man acting in a like capacity and familiar
with such matters would use in conducting an enterprise of like
character and with like aims, in accordance with the documents and
instruments governing this Plan, insofar as such documents and
instruments are consistent with this standard.
6A.2 SERVICE IN MULTIPLE CAPACITIES. Any Person or group of Persons may
serve in more than one Fiduciary capacity with respect to this Plan,
specifically including service both as Trustee and Plan Administrator.
6A.3 LIMITATIONS ON FIDUCIARY LIABILITY. Nothing in this Plan shall be
construed to prevent any Fiduciary from receiving any benefit to which
he may be entitled as a Participant or Beneficiary in this Plan, so
long as the benefit is computed and paid on a basis which is consistent
with the terms of this Plan as applied to all other Participants and
Beneficiaries. Nor shall this Plan be interpreted to prevent any
Fiduciary from receiving any reasonable compensation for services
rendered, or for the reimbursement of expenses properly and actually
incurred in the performance of his duties with the Plan; except that no
Person so serving who already receives full-time pay from an Employer
shall receive compensation from this Plan, except for reimbursement of
expenses properly and actually incurred.
6A.4 INVESTMENT MANAGER. If an Investment Manager has been appointed
pursuant to Section 6B.7 of this Plan, he is required to acknowledge in
writing that he has undertaken a Fiduciary responsibility with respect
to the Plan. The Insurance Company's liability as a Fiduciary is
limited to that arising from its management of any assets of the Plan
held by the Insurance Company in its separate accounts.
6B. THE PLAN ADMINISTRATOR
6B.1 DESIGNATION AND ACCEPTANCE. The Employer shall designate a Person or
Persons to serve as Plan Administrator under the Plan and such Persons,
by joining in the execution of the Adoption Agreement, accepts such
appointment and agrees to act in accordance with the terms of the Plan.
6B.2 DUTIES AND RESPONSIBILITY. The Plan Administrator shall administer the
Plan for the exclusive benefit of the Participants and their
Beneficiaries in a nondiscriminatory manner subject to
Article VI - Overseer Provisions February 6, 2002
-110-
the specific terms of the Plan. The Plan Administrator shall perform
all such duties as are necessary to operate, administer, and manage the
Plan in accordance with the terms thereof. This shall include
notification to the Insurance Company of any adjustment made to a
Participant's Account as a result of Excess Annual Additions as defined
in Section 4C.1(b).
The Plan Administrator shall comply with the regulatory provisions of
ERISA and shall furnish to each Participant (a) a summary plan
description, (b) upon written request, a statement of his total
benefits accrued and his vested benefits if any and (c) the information
necessary to elect the benefits available under the Plan. The Plan
Administrator shall also file the appropriate annual reports and any
other data which may be required by appropriate regulatory agencies.
Furthermore, the Plan Administrator shall take the necessary steps to
notify the appropriate interested parties whenever an application is
made to the Secretary of the Treasury for a determination letter in
accordance with Code section 7476 as amended.
6B.3 SPECIAL DUTIES. If the Employer that adopts this Plan is not the Plan
Administrator, and the Plan provides for either Employee Contributions
or Matching Contributions to be made, the Plan Administrator shall:
(a) Maintain records that enable it to monitor the adopting
Employer's compliance with the requirements of Code section
401(m);
(b) Perform the ACP test, as described in Section 4A.4, for the
Employer on an annual basis; and
(c) Notify the Employer if it is required to correct Excess
Aggregate Contributions.
6B.4 EXPENSES AND COMPENSATION. The expenses necessary to administer the
Plan shall be taken from Participants' Accounts unless paid by the
Employer, including but not limited to those involved in retaining
necessary professional assistance from an attorney, an accountant, an
actuary, or an investment advisor. Nothing shall prevent the Plan
Administrator from receiving reasonable compensation for services
rendered in administering this Plan, provided the Plan Administrator is
not a full-time Employee of any Employer adopting this Plan.
6B.5 INFORMATION FROM EMPLOYER. To enable the Plan Administrator to perform
his functions, the Employer shall supply full and timely information to
the Plan Administrator on all matters relating to this Plan as the Plan
Administrator may require.
6B.6 ADMINISTRATIVE COMMITTEE; MULTIPLE SIGNATURES. In the event that more
than one Person has been duly nominated to serve on the Administrative
Committee and has signified in writing the acceptance of such
designation, the signature(s) of one or more Persons may be accepted by
an interested party as conclusive evidence that the Administrative
Committee has duly authorized
Article VI - Overseer Provisions February 6, 2002
-111-
the action therein set forth and as representing the will of and
binding upon the whole Administrative Committee. No Person receiving
such documents or written instructions and acting in good faith and in
reliance thereon shall be obliged to ascertain the validity of such
action under the terms of this Plan. The Administrative Committee shall
act by a majority of its members at the time in office, and such action
may be taken either by a vote at a meeting or in writing without a
meeting.
6B.7 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. The Plan
Administrator, or any member of the Administrative Committee, may
resign at any time by delivering to the Employer a written notice of
resignation, to take effect at a date specified therein, which shall
not be less than 30 days after the delivery thereof, unless such notice
shall be waived.
The Plan Administrator may be removed with or without cause by the
Employer by delivery of written notice of removal, to take effect at a
date specified therein, which shall be not less than thirty (30) days
after delivery thereof, unless such notice shall be waived.
The Employer, upon receipt of or giving notice of the resignation or
removal of the Plan Administrator, shall promptly designate a successor
Plan Administrator who must signify acceptance of this position in
writing. In the event no successor is appointed, the Board of Directors
of the Employer will function as the Administrative Committee until a
new Plan Administrator has been appointed and has accepted such
appointment.
6B.8 INVESTMENT MANAGER. The Plan Administrator may appoint, in writing, an
Investment Manager or Managers to whom is delegated the authority to
manage, acquire, invest or dispose of all or any part of the Plan or
Trust assets. With regard to the assets entrusted to his care, the
Investment Manager shall provide written instructions and directions to
the Employer or Trustee, as applicable, who shall in turn be entitled
to rely upon such written direction. This appointment and delegation
shall be evidenced by a signed written agreement.
6B.9 DELEGATION OF DUTIES. The Plan Administrator shall have the power, to
the extent permitted by law, to delegate the performance of such
Fiduciary and non-Fiduciary duties, responsibilities and functions as
the Plan Administrator shall deem advisable for the proper management
and administration of the Plan in the best interests of the
Participants and their Beneficiaries.
6C. TRUST AGREEMENT
This agreement entered into by and among the Employer, the Plan Administrator
and the Trustee pursuant to the Adoption Agreement completed and signed by the
Employer, the Plan Administrator and Trustee, hereby establishes the Trust with
the following provisions to form a part of and implement the provisions of the
Plan. These provisions shall not be applicable to any Plan where CIGNA Bank &
Trust Company, FSB has been named as Trustee of the Plan in the
Article VI - Overseer Provisions February 6, 2002
-112-
Adoption Agreement, as of the later of the date CIGNA Bank & Trust Company, FSB
counter-signs the trust agreement or the effective date of the trust agreement.
6C.1 CREATION AND ACCEPTANCE OF TRUST. The Trustee, by joining in the
execution of the Adoption Agreement, accepts the Trust hereby created
and agrees to act in accordance with the express terms and conditions
herein stated.
6C.2 TRUSTEE CAPACITY; CO-TRUSTEES. The Trustee may be a Bank, Trust Company
or other corporation possessing trust powers under applicable State or
Federal law or one or more individuals or any combination thereof.
When two or more persons serve as Trustee, they are specifically
authorized, by a written agreement between themselves, to allocate
specific responsibilities, obligations or duties among themselves. An
original copy of such written agreement is to be delivered to the Plan
Administrator.
6C.3 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE. Any Trustee
may resign at any time by delivering to the Plan Administrator a
written notice of resignation, to take effect at a date specified
therein, which shall not be less than 30 days after the delivery
thereof, unless such notice shall be waived.
The Trustee may be removed with or without cause by the Board of
Directors by delivery of a written notice of removal, to take effect at
a date specified therein, which shall not be less than 30 days after
delivery thereof, unless such notice shall be waived.
In the case of the resignation or removal of a Trustee, the Trustee
shall have the right to a settlement of its account, which may be made,
at the option of the Trustee, either (1) by judicial settlement in an
action instituted by the Trustee in a court of competent jurisdiction,
or (2) by written agreement of settlement between the Trustee and the
Plan Administrator.
Upon such settlement, all right, title and interest of such Trustee in
the assets of the Trust and all rights and privileges under this
Agreement theretofore vested in such Trustee shall vest in the
successor Trustee, and thereupon all future liability of such Trustee
shall terminate; provided, however, that the Trustee shall execute,
acknowledge and deliver all documents and written instruments which are
necessary to transfer and convey the right, title and interest in the
Trust assets, and all rights and privileges to the successor Trustee.
The Board of Directors, upon receipt of notice of the resignation or
removal of the Trustee, shall promptly designate a successor Trustee,
whose appointment is subject to acceptance of this Trust in writing and
shall notify the Insurance Company in writing of such successor
Trustee.
6C.4 TAXES, EXPENSES AND COMPENSATION OF TRUSTEE. The Trustee shall deduct
from and charge against the Trust fund any taxes paid by it which may
be imposed upon the Trust fund or the income thereof
Article VI - Overseer Provisions February 6, 2002
-113-
or which the Trustee is required to pay with respect to the interest of
any person therein.
The Employer shall pay the Trustee annually its expenses in
administering the Trust and a reasonable compensation for its service
as Trustee hereunder if the Trustee is not an Employee of the Plan, at
a rate to be agreed upon from time to time. The reasonable compensation
shall include that for any extraordinary services.
6C.5 TRUSTEE ENTITLED TO CONSULTATION. The Trustee shall be entitled to
advice of counsel, which may be counsel for the Plan or the Employer,
in any case in which the Trustee shall deem such advice necessary. With
the exception of those powers and duties specifically allocated to the
Trustee by the express terms of this Plan, it shall not be the
responsibility of the Trustee to interpret the terms of the Plan or
Trust and the Trustee may request, and is entitled to receive guidance
and written direction from the Plan Administrator on any point
requiring construction or interpretation of the Plan documents.
6C.6 RIGHTS, POWERS AND DUTIES OF TRUSTEE. The Trustee shall have the
following rights, powers, and duties:
(a) The Trustee shall be responsible for the safekeeping and
administering of the assets of this Plan and Trust in
accordance with the provisions of this Agreement and any
amendments thereto. The duties of the Trustee under this
Agreement shall be determined solely by the express provisions
of this Agreement and no other further duties or
responsibilities shall be implied. Subject to the terms of
this Plan and Trust, the Trustee shall be fully protected and
shall incur no liability in acting in reliance upon the
written instructions or directions of the Plan Administrator
or a duly designated Investment Manager or any other Named
Fiduciary.
(b) The Trustee shall have all powers necessary or convenient for
the orderly and efficient performance of its duties hereunder,
including but not limited to those specified in this Section.
The Trustee may appoint one or more administrative agents or
contract for the performance of such administrative and
service functions as it may deem necessary for the effective
installation and operation of the Plan and Trust.
(c) The Trustee shall have the power to collect and receive any
and all monies and other property due hereunder and to give
full discharge and acquittance therefor; to settle, compromise
or submit to arbitration any claims, debts or damages due or
owing to or from the Trust; to commence or defend suits or
legal proceedings wherever, in its judgment, any interest of
the Trust requires it; and to represent the Trust in all suits
or legal proceedings in any court of law or equity or before
any other body or tribunal. It shall have the power generally
to do all acts, whether or not expressly authorized, which the
Trustee in the exercise of
Article VI - Overseer Provisions February 6, 2002
-114-
its Fiduciary responsibility may deem necessary or desirable
for the protection of the Trust and the assets thereof.
(d) The Trustee shall make application to the Insurance Company
for the Annuity Contract required hereunder and shall take all
necessary steps to obtain any Life Insurance Policies elected
on the lives of Participants hereunder. In applying for the
Annuity Contract, the Trustee may indicate that, unless it
directs the Insurance Company otherwise, it shall be entitled
to receive all cash payments for further distribution to
Participants and Beneficiaries.
(e) The Trustee may temporarily hold cash balances and shall be
entitled to deposit any such funds received in a bank account
or bank accounts in the name of the Trust in any bank or banks
selected by the Trustee, including the banking department of
the Trustee, pending disposition of such funds in accordance
with the Trust. Any such deposit may be made with or without
interest.
(f) The Trustee shall obtain and deal with any Life Insurance
Policies or other assets of this Trust held or received under
this Plan only in accordance with the written directions from
the Plan Administrator. The Trustee shall be under no duty to
determine any facts or the propriety of any action taken or
omitted by it in good faith pursuant to instructions from the
Plan Administrator.
(g) All contributions made to the Trust fund under this Plan shall
be paid by the Trustee to the Insurance Company under the
Annuity Contract within 30 days after the date such
contributions were due under the Plan. However, in lieu of
holding any contributions made to the Trust fund, the Trustee
may direct that all such contributions be made directly to the
Insurance Company under the Annuity Contract or any Life
Insurance Policy. The Employer shall keep the Trustee informed
of all contributions made directly to the Insurance Company in
accordance with the Trustee's instructions.
(h) If the whole or any part of the Trust shall become liable for
the payment of any estate, inheritance, income or other tax
which the Trustee shall be required to pay, the Trustee shall
have full power and authority to pay such tax out of any
monies or other property in its hands for the account of the
person whose interest hereunder is so liable. Prior to making
any payment, the Trustee may require such releases or other
documents from any lawful taxing authority as it shall deem
necessary. The Trustee shall not be liable for any nonpayment
of tax when it distributes an interest hereunder on
instructions from the Plan Administrator.
(i) The Trustee shall keep a full, accurate and detailed record of
all transactions of the Trust which the Plan Administrator
shall have the right to examine at any time during the
Trustee's regular business hours. Following the close of the
fiscal year of the Trust, or as soon as practical thereafter,
the Trustee shall furnish the Plan
Article VI - Overseer Provisions February 6, 2002
-115-
Administrator with a statement of account. This account shall
set forth all receipts, disbursements and other transactions
effected by the Trustee during said year.
The Plan Administrator shall promptly notify the Trustee in
writing of its approval or disapproval of the account. The
Plan Administrator's failure to disapprove the account within
60 days after receipt shall be considered an approval. The
approval by the Plan Administrator shall be binding as to all
matters embraced in any statement to the same extent as if the
account of the Trustee had been settled by judgment or decree
of a court of competent jurisdiction under which the Trustee,
Plan Administrator, Employer and all persons having or
claiming any interest in the Trust were parties; provided,
however, that the Trustee may have its account judicially
settled if it so desires.
(j) If, at any time, there shall be a dispute as to the person to
whom payment or delivery of monies or property should be made
by the Trustee, or regarding any action to be taken by the
Trustee, the Trustee may postpone such payment, delivery or
action, retaining the funds or property involved, until such
dispute shall have been resolved in a court of competent
jurisdiction or the Trustee shall have been indemnified to its
satisfaction or until it has received written direction from
the Plan Administrator.
(k) Anything in this instrument to the contrary notwithstanding,
it shall be understood that the Trustee shall have no duty or
responsibility with respect to the determination of matters
pertaining to the eligibility of any Employee to become or
remain a Participant hereunder, the amount of benefit to which
any Participant or Beneficiary shall be entitled hereunder,
all such responsibilities being vested in the Plan
Administrator. The Trustee shall have no duty to collect any
contribution from the Employer and shall not be concerned with
the amount of any contribution nor the application of any
contribution formula.
6C.7 EVIDENCE OF TRUSTEE ACTION. In the event that the Trustee comprises two
or more Trustees, then those Trustees may designate one such Trustee to
transmit all decisions of the Trustee and to sign all necessary notices
and other reports on behalf of the Trustee. All notices and other
reports bearing the signature of the individual Trustee so designated
shall be deemed to bear the signatures of all the individual Trustees
and all parties dealing with the Trustee are entitled to rely on any
such notices and other reports as authentic and as representing the
action of the Trustee.
6C.8 INVESTMENT POLICY. This Plan has been established for the sole purpose
of providing benefits to the Participants and their Beneficiaries. In
determining its investments hereunder, the Trustee shall take account
of the advice provided by the Plan Administrator as to funding policy
and the short and long-range needs of the Plan based on the evident and
probable requirements of the Plan as to the time benefits shall be
payable and the requirements therefor.
Article VI - Overseer Provisions February 6, 2002
-116-
6C.9 PERIOD OF THE TRUST. If it shall be determined that the applicable
State law requires a limitation on the period during which the
Employer's Trust shall continue, then such Trust shall not continue for
a period longer than 21 years following the death of the last of those
Participants including future Participants who are living at the
Effective Date hereof. At least 180 days prior to the end of the
twenty-first year as described in the first sentence of this Section
the Employer, the Plan Administrator and the Trustee shall provide for
the establishment of a successor trust and transfer of Plan assets to
the Trustee. If applicable State law requires no such limitation, then
this Section shall not be operative.
6D. THE INSURANCE COMPANY
6D.1 DUTIES AND RESPONSIBILITIES. The Insurance Company shall issue the
Annuity Contract and any Policies hereunder and thereby assumes all the
duties and responsibilities set forth therein. The terms of the Annuity
Contract may be changed as provided therein without amending this Plan,
provided such changes shall conform (1) to the requirements for
qualification under Code section 401(a), as amended from time to time
and (2) to ERISA, as amended from time to time.
6D.2 RELATION TO EMPLOYER, PLAN ADMINISTRATOR AND PARTICIPANTS. The
Insurance Company may receive the statement of the Plan Administrator
or, if the Plan Administrator so designates, the Employer or the
Trustee, as conclusive evidence of any of the matters decided in the
Plan, and the Insurance Company shall be fully protected in taking or
permitting any action on the basis thereof and shall incur no liability
or responsibility for so doing. The Insurance Company shall not be
required to look into the terms of the Plan, to question any action by
the Employer or the Plan Administrator or any Participant nor to
determine that such action is properly taken under the Plan. The
Insurance Company shall be fully discharged from any and all liability
with respect to any payment to any Participant hereunder in accordance
with the terms of the Annuity Contract or of any Policies under the
Plan. The Insurance Company shall not be required to take any action
contrary to its normal rules and practices.
6D.3 RELATION TO TRUSTEE. The Insurance Company shall not be required to
look into the terms of the Plan or question any action of the Trustee,
and the Insurance Company shall not be responsible for seeing that any
action of the Trustee is authorized by the terms hereof. The Insurance
Company shall be under no obligation to take notice of any change in
Trustee until evidence of such change satisfactory to the Insurance
Company shall have been given to the Insurance Company in writing at
its home office.
6E. ADOPTING EMPLOYER
6E.1 ELECTION TO BECOME ADOPTING EMPLOYER. With the consent of the Employer
and Trustee, if any, any employer, which along with the Employer is
included in a group of employers which constitute a
Article VI - Overseer Provisions February 6, 2002
-117-
controlled group of corporations (as defined in Code section 414(b)) or
which constitutes trade or businesses (whether or not incorporated)
which are under common control (as defined in section 414(c)) or which
constitutes an affiliated service group as defined in section 414(m)
and is identified as an Adopting Employer in the Adoption Agreement,
may adopt this Plan and all of its provisions.
6E.2 DEFINITION. Any employer eligible to adopt this Plan under the
provisions of Section 6E.1 and which adopts this Plan and all of its
provisions, shall be known as an Adopting Employer and shall be
included within the term Employer, as defined in Section 1.25.
6E.3 EFFECTIVE DATE OF PLAN. The effective date of the Plan for an Adopting
Employer on other than the date specified in the Adoption Agreement
shall be the first day of the Plan Year in which such Adopting Employer
adopts this Plan.
6E.4 FORFEITURES. Forfeitures of any nonvested portion of a Participant's
Account, as selected by the Employer in the Adoption Agreement, shall
be allocated only to other Participants who are employed by the
Adopting Employer who made the contributions to such Participant's
Account, or shall be used as a credit only for such Adopting Employer.
6E.5 CONTRIBUTIONS. All contributions made by an Adopting Employer shall be
determined separately by each Adopting Employer and shall be paid to
and held by the Plan for the exclusive benefit of the Employees of such
Adopting Employer and the Beneficiaries of such Employees, subject to
all the terms and conditions of this Plan. The Plan Administrator shall
keep separate books and records concerning the affairs of each Adopting
Employer and as to the accounts and credits of the Employees of each
Adopting Employer.
6E.6 EXPENSES. Subject to Section 6B.4, the expenses necessary to administer
the Plan of any Adopting Employer shall be taken from accounts of
Participants who are Employees, or accounts of Participants who were
former Employee, of such Adopting Employer unless paid for by such
Adopting Employer. The expenses necessary to administer the Plan for
each Adopting Employer shall be determined by the ratio of the value of
all Participants' Accounts of such Adopting Employers to the total
value of all Participants' Accounts of each Adopting Employer.
6E.7 SUBSTITUTION OF PLANS. Subject to the provisions of Section 7C, any
Adopting Employer shall be permitted to withdraw from its participation
in this Plan. The consent of the Employer or any other Adopting
Employer shall not be required.
6E.8 TERMINATION OF PLANS. If any Adopting Employer elects to terminate its
Plan pursuant to Sections 7B.4, 7B.5 and 7B.6, such termination shall
in no way affect the Plan of any other Adopting Employer.
6E.9 AMENDMENT. Amendment of this Plan by the Employer or any Adopting
Employer shall only be by the written consent of the Employer and each
and every Adopting Employer and with the
Article VI - Overseer Provisions February 6, 2002
-118-
consent of the Trustee, if any, where such consent is necessary in
accordance with the terms of this Plan.
6E.10 PLAN ADMINISTRATOR'S AUTHORITY. The Plan Administrator shall have
authority to make any and all necessary rules or regulations, binding
upon all Adopting Employers and all Participants, to effectuate the
purpose of this Section 6E.
Article VI - Overseer Provisions February 6, 2002
-119-
ARTICLE VII - SPECIAL CIRCUMSTANCES WHICH MAY AFFECT THE PLAN
7A. TOP-HEAVY PROVISIONS
7A.1 DEFINITIONS.
(a) ANNUAL COMPENSATION. The term Annual Compensation means
Compensation as defined in the Limitations on Allocations
section of the Adoption Agreement, but including, for all Plan
Years, amounts contributed by the Employer pursuant to a
salary reduction agreement which are excludable from the
Employee's gross income under Code section 125, section
402(e)(3), section 402(h)(1)(B) or section 403(b). Effective
for Plan Years beginning on or after the date specified by the
Employer in section XIII.C of the Adoption Agreement
(Limitations on Allocations), Compensation shall include
elective amounts that are not includible in the gross income
of the Employee by reason of Code section 132(f)(4).
(b) DETERMINATION DATE. The term Determination Date means for any
Plan Year subsequent to the first Plan Year, the last day of
the preceding Plan Year. For the first Plan Year of the Plan,
it means the last day of that year.
(c) DETERMINATION PERIOD. The term Determination Period means the
Plan Year containing the Determination Date and the four
preceding Plan Years.
(d) KEY EMPLOYEE. The term Key Employee means any Employee or
former Employee (and the Beneficiaries of such Employee) who
at any time during the Determination Period was:
(1) An officer of the Employer if such individual's
Annual Compensation exceeds 50 percent of the dollar
limitation under Code section 415(b)(1)(A); or
(2) An owner (or considered an owner under Code section
318) of one of the ten largest interests in the
Employer if such individual's Annual Compensation
exceeds 100 percent of the dollar limitation under
Code section 415(c)(1)(A); or
(3) A 5-percent owner of the Employer; or
(4) A 1-percent owner of the Employer who has Annual
Compensation of more than $150,000.
The determination of who is a Key Employee will be made in
accordance with Code section 416(I)(1) and related
regulations.
(e) PERMISSIVE AGGREGATION GROUP. The term Permissive Aggregation
Group means the Required Aggregation Group of plans plus any
other plan or plans of the Employer which, when considered as
a group with the Required Aggregation
Article VII - Special Circumstances February 6, 2002
-120-
Group, would continue to satisfy the requirements of Code
sections 401(a)(4) and 410.
(f) PRESENT VALUE. Present Value shall be based only on the
interest and mortality rates specified in the Adoption
Agreement.
(g) REQUIRED AGGREGATION GROUP. The term Required Aggregation
Group means (1) each qualified plan of the Employer in which
at least one Key Employee participates or participated at any
time during the Determination Period (regardless of whether
the plan has terminated), and (2) any other qualified plan of
the Employer which enables a plan described in (1) to meet the
requirements of Code sections 401(a)(4) or 410.
(h) TOP-HEAVY PLAN. For any Plan Year beginning after December 31,
1983, this Plan is Top-Heavy if any of the following
conditions exists:
(1) If the Top-Heavy Ratio for this Plan exceeds 60
percent and this Plan is not part of any Required
Aggregation Group or Permissive Aggregation Group of
plans.
(2) If this Plan is a part of a Required Aggregation
Group of plans but not part of a Permissive
Aggregation Group and the Top-Heavy Ratio for the
group of plans exceeds 60 percent.
(3) If this Plan is a part of a Required Aggregation
Group and part of a Permissive Aggregation Group of
plans and the Top-Heavy Ratio for the Permissive
Aggregation Group exceeds 60 percent.
(i) TOP-HEAVY RATIO. The term Top-Heavy Ratio means:
(1) If the Employer maintains one or more defined
contribution plans (including any simplified employee
pension plan) and the Employer has not maintained any
defined benefit plan which during the 5-year period
ending on the Determination Date(s) has or has had
accrued benefits, the Top-Heavy Ratio for this Plan
alone or for the Required or Permissive Aggregation
Group, as appropriate, is a fraction, the numerator
of which is the sum of the account balances of all
Key Employees as of the Determination Date(s)
(including any part of any account balance
distributed in the 5-year period ending on the
Determination Date(s)), and the denominator of which
is the sum of all account balances (including any
part of any account balance distributed in the 5-year
period ending on the Determination Date(s)), both
computed in accordance with Code section 416 and
related regulations. Both the numerator and
denominator of the Top-Heavy Ratio are increased to
reflect any contribution not actually made as of the
Determination Date, but which is
Article VII - Special Circumstances February 6, 2002
-121-
required to be taken into account on that date under
Code section 416 and related regulations.
(2) If the Employer maintains one or more defined
contribution plans (including any simplified employee
pension plans as defined in Code section 408(k)) and
the Employer maintains or has maintained one or more
defined benefit plans, which during the 5-year period
ending on the Determination Date(s) has or has had
any accrued benefits, the Top-Heavy Ratio for any
Required or Permissive Aggregation Group as
appropriate is a fraction, the numerator of which is
the sum of account balances under the aggregated
defined contribution plan or plans for all Key
Employees, determined in accordance with (1) above,
and the Present Value of accrued benefits under the
aggregated defined benefit plan or plans for all Key
Employees as of the Determination Date(s), and the
denominator of which is the sum of the account
balances under the aggregated defined contribution
plan or plans for all Participants, determined in
accordance with (1) above, and the Present Value of
accrued benefits under the defined benefit plan or
plans for all Participants as of the Determination
Date(s), all determined in accordance with Code
section 416 and related regulations. The accrued
benefits under a defined benefit plan in both the
numerator and denominator of the Top-Heavy Ratio are
increased for any distribution of an accrued benefit
made in the 5-year period ending on the Determination
Date.
(3) For purposes of (1) and (2) above, the value of
account balances and the Present Value of accrued
benefits will be determined as of the most recent
Valuation Date that falls within or ends with the
12-month period ending on the Determination Date,
except as provided in Code section 416 and the
regulations thereunder for the first and second plan
years of a defined benefit plan. The account balances
and accrued benefits of a Participant (I) who is not
a Key Employee but who was a Key Employee in a prior
year, or (ii) who has not been credited with at least
one Hour of Service with any Employer maintaining the
Plan at any time during the 5-year period ending on
the Determination Date shall be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to
which distributions, rollovers, and transfers are
taken into account, will be made in accordance with
Code section 416 and the regulations thereunder. QVEC
Contributions will not be taken into account for
purposes of computing the Top-Heavy Ratio. When
aggregating plans, the value of account balances and
accrued benefits will be calculated with reference to
the Determination Dates that fall within the same
calendar year. The accrued benefit of a Participant
other than a Key Employee shall be determined under
(a) the method, if any, that uniformly applies for
accrual purposes under all defined benefit plans
Article VII - Special Circumstances February 6, 2002
-122-
maintained by the Employer, or (b) if there is no
such method, as if such benefit accrued not more
rapidly than the slowest accrual rate permitted under
the fractional rule of Code section 411(b)(1)(C).
(j) VALUATION DATE. The term Valuation Date means the date
specified in the Top-Heavy Provisions section of the Adoption
Agreement as of which account balances or accrued benefit are
valued for purposes of calculating the Top-Heavy Ratio.
7A.2 MINIMUM ALLOCATION. For any Plan Year in which the Plan is Top-Heavy,
the following will apply:
(a) Except as otherwise provided in (c) and (d) below, the
Employer contributions and Forfeitures allocated on behalf of
any Participant who is not a Key Employee shall not be less
than the lesser of three percent of such Participant's
Compensation or in the case where the Employer has no defined
benefit plan which designates this Plan to satisfy Code
section 401, the largest percentage of Employer contributions
and Forfeitures, as limited by Code section 401(a)(17),
allocated on behalf of any Key Employee for that year. The
Minimum Allocation is determined without regard to any Social
Security contribution. This Minimum Allocation shall be made
even though, under other Plan provisions, the Participant
would not otherwise be entitled to receive an allocation, or
would have received a lesser allocation for the year because
of (1) the Participant's failure to complete 1,000 Hours of
Service (or any equivalent provided in the Plan), or (2) the
Participant's failure to make Required Employee Contributions
to the Plan, or (3) Compensation less than a stated amount.
(b) For purposes of computing the Minimum Allocation, Compensation
shall mean Compensation as defined in the Compensation section
of the Adoption Agreement as limited by Code section
401(a)(17).
Notwithstanding the above, if elected by the Employer in the
Adoption Agreement, Compensation shall include any amount
which is contributed by the Employer pursuant to a salary
reduction agreement and which is not includable in the
Employee's gross income under Code sections 125, 401(a)(8),
402(h) or 403(b). Effective for years beginning on or after
January 1, 2001 (or such earlier date specified in section
IV.C of the Adoption Agreement which cannot be earlier than
January 1, 1998), Code section 132(f)(4) deferrals shall be
treated in the same manner as section 125 deferrals.
Effective for years beginning on or after January 1, 2001 (or
such earlier date specified in section IV.C of the Adoption
Agreement which cannot be earlier than January 1, 1998), Code
section 132(f)(4) deferrals shall be treated in the same
manner as section 125 deferrals.
Article VII - Special Circumstances February 6, 2002
-123-
(c) The provision in (a) above shall not apply to any Participant
who was not employed by the Employer on the last day of the
Plan Year.
(d) The provision in (a) above shall not apply to any Participant
to the extent the Participant is covered under any other plan
or plans of the Employer and the Employer has provided in the
Top-Heavy Provisions section of the Adoption Agreement that
the Minimum Allocation or benefit requirement applicable to
Top-Heavy plans will be met in the other plan or plans.
(e) The Minimum Allocation required (to the extent required to be
nonforfeitable under Code section 416(b)) may not be forfeited
under Code sections 411(a)(3)(B) or 411(a)(3)(D).
(f) Neither Elective Deferral Contributions nor Matching
Contributions may be taken into account for the purpose of
satisfying this Minimum Allocation Requirement.
7A.3 MINIMUM VESTING SCHEDULE. For any Plan Year in which this Plan is
Top-Heavy, one of the minimum vesting schedules as elected by the
Employer in the Adoption Agreement will automatically apply to the
Plan. The minimum vesting schedule applies to all benefits within the
meaning of Code section 411(a)(7) except those attributable to Employee
Contributions, Elective Deferral Contributions, QVEC Contributions and
Rollover Contributions including benefits accrued before the effective
date of Code section 416 and benefits accrued before the Plan became
Top-Heavy. Further, no decrease in a Participant's nonforfeitable
percentage may occur in the event the Plan's status as Top-Heavy
changes for any Plan Year. However, this Section does not apply to the
account balances of any Employee who does not have an Hour of Service
after the Plan has initially become Top-Heavy. Such Employee's account
balance attributable to Employer contributions and Forfeitures will be
determined without regard to this Section.
Article VII - Special Circumstances February 6, 2002
-124-
7B. AMENDMENT, TERMINATION OR MERGER OF THE PLAN
7B.1 AMENDMENT OF ELECTIONS UNDER ADOPTION AGREEMENT BY EMPLOYER. The party
elected by the Employer in the Adoption Agreement shall have the right
from time to time to change the elections under its Adoption Agreement
in a manner consistent with the Plan, provided that such amendment or
modification shall be in accordance with the Board of Director's
resolution, if applicable, that describes the amendment procedure and
provided further that the written amendment or modification is signed
by the party elected by the Employer in the Adoption Agreement. The
amendment must be accepted by the Sponsoring Organization. Upon any
such change in the Elections under the Adoption Agreement, the Plan
Administrator, the Trustee and the Sponsoring Organization shall be
furnished a copy thereof. If the Plan's vesting schedule is amended, or
the Plan is amended in any way that directly or indirectly affects the
computation of the Participant's nonforfeitable percentage or if the
Plan is deemed amended by an automatic change to a top-heavy vesting
schedule, each Participant with at least 3 years of Service with the
Employer may elect, in writing, within a reasonable period after the
adoption of the amendment or change, to have the nonforfeitable
percentage computed under the Plan without regard to such amendment or
change. For Participants who do not have at least l Hour of Service in
any Plan Year beginning after December 31, 1988, the preceding sentence
shall be applied by substituting "5 years of Service" for "3 years of
Service" where such language appears.
The period during which the election must be made by the Participant
shall begin no later than the date the Plan amendment is adopted and
end no later than after the latest of the following dates:
(a) The date which is 60 days after the day the amendment is
adopted;
(b) The date which is 60 days after the day the amendment becomes
effective; or
(c) The date which is 60 days after the day the Participant is
issued written notice of the amendment by the Employer or Plan
Administrator.
Such written election by a Participant shall be made to the Plan
Administrator, who shall then give written notice to the Insurance
Company.
No amendment to the Plan shall be effective to the extent that it has
the effect of decreasing a Participant's Accrued Benefit.
Notwithstanding the preceding sentence, a Participant's Account balance
may be reduced to the extent permitted under Code section 412(c)(8).
For purposes of this paragraph, a Plan amendment which has the effect
of decreasing a Participant's Account balance, with respect to benefits
attributable to service before the amendment, shall be treated as
reducing an Accrued Benefit. Furthermore, if the vesting schedule of a
Plan is amended, in the case of an Employee who is a Participant as of
the later of the
Article VII - Special Circumstances February 6, 2002
-125-
date such amendment is adopted or the date it becomes effective, the
nonforfeitable percentage (determined as of such date) of such
Employee's Employer-derived Accrued Benefit will not be less than the
percentage computed under the Plan without regard to such amendment.
No amendment to the Plan shall be effective to eliminate or restrict an
optional form of benefit. The preceding sentence shall not apply to a
plan amendment that eliminates or restricts the ability of a
Participant to receive payment of his or her account balance under a
particular optional form of benefit if the amendment satisfies the
conditions in (1) and (2) below:
(1) The amendment provides a single-sum distribution form that
is otherwise identical to the optional form of benefit
eliminated or restricted. For purposes of this condition (1),
a single-sum distribution form is otherwise identical only if
it is identical in all respects to the eliminated or
restricted optional form of benefit (or would be identical
except that is provides greater rights to the Participant)
except with respect to the timing of payments after
commencement.
(2) The amendment is not effective unless the amendment
provides that the amendment shall not apply to any
distribution with an annuity starting date earlier than the
earlier of: (i) the 90th day after the date the Participant
receiving the distribution has been furnished a summary that
reflects the amendment and satisfies the ERISA requirements at
29 CFR 2520.104b-3 relating to a summary of material
modifications or (ii) the first day of the second Plan Year
following the Plan Year in which the amendment is adopted.
In the event of an amendment to a money purchase pension plan
(including a target benefit plan) to convert it to a profit sharing
plan (including a thrift plan or plan with a 401(k) feature), the
resulting plan shall separately account in each affected Participant's
Account for amounts attributable to coverage under the money purchase
plan, including future earnings on such amounts. On and after the date
of such amendment, these money purchase plan amounts shall remain
subject to the money purchase plan restrictions on distribution.
The Employer may (1) change the choice of options in the Adoption
Agreement, (2) add overriding language in the Adoption Agreement when
such language is necessary to satisfy Code sections 415 or 416 because
of the required aggregation of multiple plans, and (3) add certain
model amendments published by the Internal Revenue Service which
specifically provide that their adoption will not cause the Plan to be
treated as individually designed. An Employer that amends the Plan for
any other reason, including a waiver of the minimum funding
requirements under Code section 412(d), will no longer participate in
this prototype plan and will be considered to have an individually
designed plan.
7B.2 AMENDMENT OF PLAN, TRUST, AND FORM OF ADOPTION AGREEMENT. The
Sponsoring Organization may amend this Plan and Trust, and the form of
the Adoption Agreement, and the Employer in adopting this
Article VII - Special Circumstances February 6, 2002
-126-
Plan and the Plan Administrator and the Trustee in accepting
appointment as Plan Administrator and as Trustee, shall be deemed to
have consented to any such amendment by executing the Adoption
Agreement, provided that the written consent of the Trustee and the
Plan Administrator to any change affecting their duties or
responsibilities shall first be obtained. Upon any such amendment by
the Sponsoring Organization, the Plan Administrator, the Employer and
the Trustee shall be furnished with a copy thereof.
7B.3 CONDITIONS OF AMENDMENT. Neither the Sponsoring Organization nor the
Employer shall make any amendment which would cause the Plan to lose
its status as a qualified plan within the meaning of Code section
401(a).
7B.4 TERMINATION OF THE PLAN. The Employer intends to continue the Plan
indefinitely for the benefit of its Employees, but reserves the right
to terminate the Plan at any time by resolution of its Board of
Directors. Upon such termination, the liability of the Employer to make
Employer contributions hereunder shall terminate. The Plan shall
terminate automatically upon complete discontinuance of Employer
contributions hereunder, if the Plan is a profit sharing plan or a
thrift plan.
7B.5 FULL VESTING. Upon the termination or partial termination of the Plan,
or upon complete discontinuance of Employer contributions, the rights
of all affected Participants in and to the amounts credited to each
such Participant's Account and to any Policies on each Participant's
life shall be 100% vested and nonforfeitable. At Plan termination, each
Participant shall receive a total distribution of his Participant's
Account (including any amounts in the Forfeiture Account allocated in
accordance with Section 7B.6) in accordance with the terms and
conditions of Section 3A, and the assets will be distributed from the
Trust as soon as administratively feasible.
7B.6 APPLICATION OF FORFEITURES. Upon the termination of the Plan, any
amount in the Forfeiture account which has not been applied as of such
termination to reduce the Employer contribution, or has not been
allocated as of such termination, shall be credited on a pro-rata basis
to each Participant's Account in the same manner as the last Employer
contribution made under the Plan from which the forfeiture amount was
generated.
7B.7 MERGER WITH OTHER PLAN. In the case of any merger with or transfer of
assets or liabilities to any other qualified plan after September 2,
1974:
(a) The sum of the account balances in each plan shall equal the
fair market value (determined as of the date of the merger or
transfer as if the plan had then terminated) of the entire
plan assets.
(b) The assets or liabilities of each plan shall be combined to
form the assets of the plan as merged (or transferred), and
each Participant in the plan merged (or transferred) shall
have an account balance equal to the sum of the account
Article VII - Special Circumstances February 6, 2002
-127-
balances the Participant had in the plans immediately prior to
the merger (or transfer).
(c) Immediately after the merger (or transfer), each Participant
in the plan merged (or transferred) shall have an account
balance equal to the sum of the account balances the
Participant had in the plans immediately prior to the merger
(or transfer).
(d) Immediately after the merger (or transfer), each Participant
in the plan merged (or transferred) shall be entitled to the
same optional benefit forms as they were entitled to
immediately prior to the merger (or transfer).
(e) In the event of a merger (or transfer) of a money purchase
pension plan (including a target benefit plan) and a profit
sharing plan (including a thrift plan or plan with a 401(k)
feature), the resulting plan shall separately account in each
affected Participant's Account for amounts attributable to
coverage under the money purchase plan, including future
earnings on such amounts. On and after the date of such merger
(or transfer), these money purchase plan amounts shall remain
subject to the money purchase plan restrictions on
distribution.
7B.8 TRANSFER FROM OTHER PLANS. If elected in the Adoption Agreement, the
Employer may cause all or any of the assets held in another qualified
pension or profit sharing plan meeting the requirements of Code section
401(a) to be transferred to the Plan pursuant to a merger or
consolidation of this Plan with such other plan or for any other
allowable purpose. If transfers are elected by the Employer in the
Adoption Agreement, elective transfers initiated by a Plan Participant
shall also be allowed. Upon receipt of such assets, the Plan shall
separately account for such amounts in each affected Participant's
Account. Such transfer shall be made without regard to the Limitations
on Allocations imposed in Section 4B.
7B.9 TRANSFER TO OTHER PLANS. Upon written direction from the Employer, or,
from a Participant in the case of an elective transfer, the Plan shall
transfer some or all of the assets held under this Plan to another
qualified pension or profit sharing plan meeting the requirements of
Code section 401(a) and sponsored by the Employer.
7B.10 APPROVAL BY THE INTERNAL REVENUE SERVICE. Notwithstanding any other
provisions of this Plan, the Employer's adoption of this Plan is
subject to the condition precedent that the Employer's Plan shall be
approved and qualified by the Internal Revenue Service as meeting the
requirements of Code section 401(a) and, if applicable, that the Trust
established hereunder shall be entitled to exemption under the
provisions of Code section 501(a). In the event the Plan initially
fails to qualify and the Internal Revenue Service issues a final ruling
that the Employer's Plan or Trust fails to so qualify as of the
Effective Date, all liability of the Employer to make further Employer
contributions hereunder shall cease. The Insurance Company, Plan
Administrator, Trustee and any other Named Fiduciary shall be
Article VII - Special Circumstances February 6, 2002
-128-
notified immediately by the Employer, in writing, of such failure to
qualify. Upon such notification, the value of the Participants'
Accounts, including the then value of any Life Insurance Policies,
shall be distributed in cash subject to the terms and conditions of
Section 5B. That portion of such distribution which is attributable to
Participant's Employee Contributions, if any, shall be paid to the
Participant, and the balance of such distribution shall be paid to the
Employer. Upon the death of any Participant prior to the actual
surrender of a Life Insurance Policy or Policies on his life, the death
benefit shall be payable to the Participant's Beneficiary.
If the Employer's Plan fails to attain or retain qualification, such
Plan will no longer participate in this prototype plan and will be
considered an individually designed plan.
7B.11 SUBSEQUENT UNFAVORABLE DETERMINATION. If the Employer is notified
subsequent to initial favorable qualification that the Plan is no
longer qualified within the meaning of Code section 401(a) or, if
applicable, that the Trust is no longer entitled to exemption under the
provisions of Code section 501(a), and if the Employer shall fail
within a reasonable time to make any necessary changes in order that
the Plan shall so qualify, the Participants' Accounts, including any
Life Insurance Policies or the values thereof, shall be fully vested
and nonforfeitable and shall be disposed of in the manner set forth in
Sections 7B.5 and 7B.6 above.
7C. SUBSTITUTION OF PLANS
7C.1 SUBSTITUTION OF PLANS. Subject to the provisions of Section 7B.7, the
Employer may substitute an individually designed plan or a master or
another prototype plan for this Plan without terminating this Plan as
embodied herein, and this shall be deemed to constitute an amendment
and restatement in its entirety of this Plan as heretofore adopted by
the Employer; provided, however that the Employer shall have certified
to the Insurance Company and the Trustee, if applicable, that this Plan
is being continued on a restated basis which meets the requirements of
Code section 401(a) and ERISA.
Any such changes shall be subject to the provisions of Sections 7B.1
and 7B.2 of the Plan.
7C.2 TRANSFER OF ASSETS. Upon 90 days' written notification from the
Employer and the Trustee (unless the Insurance Company shall accept a
shorter period of notification) that a different plan meeting the
requirements set forth in Section 7C.1 above has been executed and
entered into by the Plan Administrator and the Employer, and after the
Insurance Company and the Trustee have been furnished the Employer's
certification in writing that the Employer intends to continue the Plan
as a qualified plan under Code section 401(a) and ERISA, the Insurance
Company shall transfer the value of all Participants' Accounts under
the Annuity Contract to the Trustee or such person or persons as may be
entitled to receive the same, in accordance with the terms of the
Annuity Contract. The Trustee shall likewise make a similar
Article VII - Special Circumstances February 6, 2002
-129-
transfer, including all Life Insurance Policies, or the values thereof,
to such person or persons as may be entitled to receive same. The
Insurance Company and the Trustee may rely fully on the representations
or directions of the Employer with respect to any such transfer and
shall be fully protected and discharged with respect to any such
transfer made in accordance with such representations, instructions, or
directions.
7C.3 SUBSTITUTION FOR PRE-EXISTING MASTER OR PROTOTYPE PLAN. This Plan is
designed:
(a) For adoption by an Employer not previously covered under a
master or prototype plan sponsored by Connecticut General Life
Insurance Company; or
(b) For adoption by an Employer in substitution for a pre-existing
master or prototype plan sponsored by Connecticut General Life
Insurance Company.
If this Plan is adopted in substitution for such a pre-existing master
or prototype plan, it shall be deemed to amend the Employer's prior
Plan in its entirety effective as of the date specified in the
Employer's Adoption Agreement. The Employer's Plan as so amended shall
continue in full force and effect and no termination thereof shall be
deemed to have occurred.
7C.4 PARTIAL SUBSTITUTION OR PARTIAL TRANSFER OF THE PLAN OR ASSETS. In the
event this Plan is adopted as the result of a partial substitution or
partial transfer of the Plan or the assets under the prior Plan as a
result of a merger, consolidation or any other allowable purpose, the
Plan and all transactions allowable under it are subject to the rules
established by the Employer to address the orderly transition of the
Plan or assets.
Article VII - Special Circumstances February 6, 2002
-130-
ARTICLE VIII - MISCELLANEOUS
8.1 NONREVERSION. This Plan has been adopted by the Employer for the
exclusive benefit of the Participants and their Beneficiaries. Except
as otherwise provided in Section 7B.10 and Section 8.6, under no
circumstances shall any funds contributed hereunder at any time revert
to or be used by the Employer, nor shall any such funds or assets of
any kind be used other than for the benefit of the Participants or
their Beneficiaries.
8.2 GENDER AND NUMBER. When necessary to the meaning hereof, and except
when otherwise indicated by the context, either the masculine or the
neuter pronoun shall be deemed to include the masculine, the feminine,
and the neuter, and the singular shall be deemed to include the plural.
8.3 REFERENCE TO THE INTERNAL REVENUE CODE AND ERISA. Any reference herein
to any section of the Internal Revenue Code, ERISA, or to any other
statute or law shall be deemed to include any successor law of similar
import.
8.4 GOVERNING LAW. The Plan and Trust, if applicable, shall be governed and
construed in accordance with the laws of the state where the Employer
or Trustee has its principal office in the United States.
8.5 COMPLIANCE WITH THE INTERNAL REVENUE CODE AND ERISA. This Plan is
intended to comply with all requirements for qualification under the
Internal Revenue Code and ERISA, and if any provision hereof is subject
to more than one interpretation or any term used herein is subject to
more than one construction, such ambiguity shall be resolved in favor
of that interpretation or construction which is consistent with the
Plan being so qualified. If any provision of the Plan is held invalid
or unenforceable, such invalidity or unenforceability shall not affect
any other provisions, and this Plan shall be construed and enforced as
if such provision had not been included.
8.6 CONTRIBUTION RECAPTURE. Notwithstanding any other provisions of this
Plan, (1) in the case of a contribution which is made by an Employer by
a mistake of fact, Section 8.1 shall not prohibit the return of such
contribution to the Employer within one year after the payment of the
contribution, and (2) if a contribution is conditioned upon the
deductibility of the contribution under Code section 404, then, to the
extent the deduction is disallowed, Section 8.1 shall not prohibit the
return to the Employer of such contribution (to the extent disallowed)
within one year after the disallowance of the deduction. The amount
which may be returned to the Employer is the excess of (1) the amount
contributed over (2) the amount that would have been contributed had
there not occurred a mistake of fact or a mistake in determining the
deduction. Earnings attributable to the excess contribution may not be
returned to the Employer, but losses attributable thereto must reduce
the amount to be so returned. Furthermore, if the withdrawal of the
amount attributable to the mistaken contribution would cause the
balance of any Participant's Account to be reduced to less than the
balance which would have been in the Participant's Account had the
mistaken amount not been
Article VIII - Miscellaneous February 6, 2002
-131-
contributed, then the amount to be returned to the Employer would have
to be limited so as to avoid such reduction.
In the event that the Commissioner of the Internal Revenue determines
that the Plan is not initially qualified under the Internal Revenue
Code, any contribution made incident to that initial qualification by
the Employer must be returned to the Employer within one year after the
date the initial qualification is denied, but only if the application
for the qualification is made by the time prescribed by law for filing
the Employer's return for the taxable year in which the Plan is
adopted, or such later date as the Secretary of the Treasury may
prescribe.
Notwithstanding the above, any excess or returned contribution shall
not be returned to the Employer if the Employer has taken Davis-Bacon
Act credit for such contribution. These excess or mistaken
contributions shall be paid to the Employee for whom such credit is
taken.
Article VIII - Miscellaneous February 6, 2002
-132-