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EXHIBIT 10.3
PROTOTYPE DEFINED CONTRIBUTION PLAN
AND TRUST/CUSTODIAL ACCOUNT
SPONSORED BY
THIRD NATIONAL BANK IN NASHVILLE
BASIC PLAN DOCUMENT
JULY 1994
COPYRIGHT 1994
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This document is copyrighted under the laws of the United States. Its use,
duplication or reproduction, including the use of electronic means, is
prohibited by law without the express consent of the author.
TABLE OF CONTENTS
PARAGRAPH PAGE
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ARTICLE I
DEFINITIONS
1.1 Actual Deferral Percentage [For The ADP
Or 401(k) Test] 1
1.2 Adoption Agreement 1
1.3 Aggregate Limit 2
1.4 Annual Additions 2
1.5 Annuity Starting Date 2
1.6 Applicable Calendar Year 2
1.7 Applicable Life Expectancy 3
1.8 Average Contribution Percentage [The ACP
For The 401(m) Test] 3
1.9 Average Deferral Percentage [The ADP
For The 401(k) Test] 3
1.10 Break In Service 3
1.11 Code 3
1.12 Compensation 3
1.13 Contribution Percentage [For The ACP
Or 401(m) Test] 5
1.14 Custodian 6
1.15 Defined Benefit Plan 6
1.16 Defined Benefit (Plan) Fraction 6
1.17 Defined Contribution Dollar Limitation 6
1.18 Defined Contribution Plan 7
1.19 Defined Contribution (Plan) Fraction 7
1.20 Designated Beneficiary 7
1.21 Direct Rollover 7
1.22 Direct Rollover Of Benefits 7
1.23 Disability 8
1.24 Distribution Calendar Year 8
1.25 Early Retirement Age 8
1.26 Earned Income 8
1.27 Effective Date 8
1.28 Election Period 8
1.29 Elective Deferral 8
1.30 Eligible Participant 9
1.31 Eligible Retirement Plan 9
1.32 Eligible Rollover Distribution 9
1.33 Employee 9
1.34 Employer 9
1.35 Entry Date 10
1.36 Excess Aggregate Contributions [ACP Or
401(m) Test] 10
1.37 Excess Amount (415 Limits) Or
Excess Annual Additions 11
1.38 Excess Contribution [ADP Or 401(k) Test] 11
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1.39 Excess Elective Deferrals ($7,000 as Indexed) 11
1.40 Family Member 11
1.41 First Distribution Calendar Year 11
1.42 Fund 11
1.43 Hardship 11
1.44 Highest Average Compensation 11
1.45 Highly Compensated Employee 11
1.46 Hour Of Service 12
1.47 Key Employee 14
1.48 Leased Employee 14
1.49 Limitation Year 14
1.50 Master Or Prototype Plan 14
1.51 Matching Contribution 14
1.52 Maximum Permissible Amount 14
1.53 Net Profit 15
1.54 Normal Retirement Age 15
1.55 Owner-Employee 15
1.56 Paired Plans 15
1.57 Participant 15
1.58 Participant's Benefit 15
1.59 Permissive Aggregation Group 15
1.60 Plan 15
1.61 Plan Administrator 15
1.62 Plan Year 15
1.63 Present Value 16
1.64 Projected Annual Benefit 16
1.65 Qualified Deferred Compensation Plan 16
1.66 Qualified Domestic Relations Order (QDRO) 16
1.67 Qualified Early Retirement Age 16
1.68 Qualified Joint And Survivor Annuity 16
1.69 Qualified Matching Contribution 16
1.70 Qualified Non-Elective Contributions 17
1.71 Qualified Voluntary Contribution 17
1.72 Required Aggregation Group 17
1.73 Required Beginning Date 17
1.74 Rollover Contribution 17
1.75 Salary Savings Agreement 17
1.76 Self-Employed Individual 17
1.77 Service 17
1.78 Shareholder Employee 17
1.79 Simplified Employee Pension Plan 17
1.80 Sponsor 17
1.81 Spouse (Surviving Spouse) 18
1.82 Super Top-Heavy Plan 18
1.83 Taxable Wage Base 18
1.84 Top-Heavy Determination Date 18
1.85 Top-Heavy Plan 18
1.86 Top-Heavy Ratio 18
1.87 Top-Paid Group 19
1.88 Transfer Contribution 20
1.89 Trustee 20
1.90 Valuation Date 20
1.91 Valuation Period 20
1.92 Vested Account Balance 20
1.93 Voluntary Contribution 20
1.94 Welfare Benefit Fund 21
1.95 Year Of Service 21
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ARTICLE II
ELIGIBILITY REQUIREMENTS
2.1 Participation 22
2.2 Change In Classification Of Employment 22
2.3 Computation Period 22
2.4 Employment Rights 23
2.5 Service With Controlled Groups 23
2.6 Owner-Employees 23
2.7 Leased Employees 23
2.8 Thrift Plans 24
ARTICLE III
EMPLOYER CONTRIBUTIONS
3.1 Amount 25
3.2 Expenses And Fees 25
3.3 Responsibility For Contributions 25
3.4 Return Of Contributions 25
ARTICLE IV
EMPLOYEE CONTRIBUTIONS
4.1 Voluntary Contributions 26
4.2 Qualified Voluntary Contributions 26
4.3 Rollover Contribution 26
4.4 Transfer Contribution 27
4.5 Employer Approval Of
Transfer Contributions 27
4.6 Salary Savings Contributions
(Elective Deferrals) 28
4.7 Required Voluntary Contributions 28
4.8 Direct Rollover Of Benefits 29
4.9 Special Rules For Direct Rollovers 29
ARTICLE V
PARTICIPANT ACCOUNTS
5.1 Separate Accounts 31
5.2 Adjustments To Participant Accounts 31
5.3 Allocating Employer Contributions 32
5.4 Allocating Investment Earnings And Losses 32
5.5 Participant Statements 33
ARTICLE VI
RETIREMENT BENEFITS AND DISTRIBUTIONS
6.1 Normal Retirement Benefits 34
6.2 Early Retirement Benefits 34
6.3 Benefits On Termination Of Employment 34
6.4 Restrictions On Immediate Distributions 36
6.5 Normal Form Of Payment 37
6.6 Commencement Of Benefits 37
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6.7 Claims Procedures 38
6.8 In-Service Withdrawals 38
6.9 Hardship Withdrawals 40
6.10 Previous Distribution Options 41
ARTICLE VII
DISTRIBUTION REQUIREMENTS
7.1 Joint And Survivor Annuity Requirements 42
7.2 Minimum Distribution Requirements 42
7.3 Limits On Distribution Periods 42
7.4 Required Distributions On Or After The
Required Beginning Date 42
7.5 Required Beginning Date 43
7.6 Transitional Rule 44
7.7 Designation Of Beneficiary For Death Benefit 46
7.8 Nonexistence Of Beneficiary 46
7.9 Distribution Beginning Before Death 46
7.10 Distribution Beginning After Death 46
7.11 Distribution Of Excess Elective Deferrals 47
7.12 Distributions Of Excess Contributions
(ADP Amounts) 48
7.13 Distribution Of Excess Aggregate Contributions
(ACP Amounts) 48
ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 Applicability Of Provisions 50
8.2 Payment Of Qualified Joint And Survivor
Annuity 50
8.3 Payment of Qualified Pre-Retirement
Survivor Annuity 50
8.4 Qualified Election 50
8.5 Notice Requirements For Qualified Joint
And Survivor Annuity 51
8.6 Notice Requirements For Qualified Pre-
Retirement Survivor Annuity 51
8.7 Special Safe-Harbor Exception For
Certain Profit-Sharing Plans 52
8.8 Transitional Joint And Survivor
Annuity Rules 53
8.9 Automatic Joint And Survivor Annuity
And Early Survivor Annuity 53
8.10 Annuity Contracts 54
ARTICLE IX
VESTING
9.1 Employee Contributions 55
9.2 Employer Contributions 55
9.3 Computation Period 55
9.4 Requalification Prior To Five Consecutive
One-Year Breaks In Service 55
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9.5 Requalification After Five Consecutive
One-Year Breaks In Service 55
9.6 Calculating Vested Interest 56
9.7 Forfeitures 56
9.8 Amendment Of Vesting Schedule 56
9.9 Service With Controlled Groups 57
ARTICLE X
LIMITATIONS ON ALLOCATIONS AND
ANTIDISCRIMINATION TESTING
10.1 Participation Only In This Plan 58
10.2 Disposition Of Excess Annual Additions 58
10.3 Participation In This Plan And Another
Prototype Defined Contribution Plan
Welfare Benefit Fund Or Individual Medical
Account Maintained By The Employer 59
10.4 Disposition Of Excess Annual Additions
Under Two Plans 60
10.5 Participation In This Plan And Another
Defined Contribution Plan Which Is Not
A Master Or Prototype Plan 60
10.6 Participation In This Plan And A Defined
Benefit Plan 60
10.7 Average Deferral Percentage
[ADP Or 401(k)] Test 60
10.8 Special Rules Relating To Application
Of ADP Test 61
10.9 Recharacterization 62
10.10 Average Contribution Percentage [ACP or
401(m) Test 62
10.11 Special Rules Relating To Application
Of ACP Test 63
ARTICLE XI
ADMINISTRATION
11.1 Plan Administrator 65
11.2 Trustee/Custodian 65
11.3 Administrative Fees And Expenses 66
11.4 Division Of Duties And Indemnification 66
ARTICLE XII
TRUST FUND/CUSTODIAL ACCOUNT
12.1 The Fund 69
12.2 Control Of Plan Assets 69
12.3 Exclusive Benefit Rules 69
12.4 Assignment And Alienation Of Benefits 69
12.5 Determination Of Qualified Domestic
Relations Order (QDRO) 69
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ARTICLE XIII
INVESTMENTS
13.1 Fiduciary Standards 71
13.2 Funding Arrangement 71
13.3 Investment Alternatives Of The Trustee 71
13.4 Investment Alternatives Of The Custodian 73
13.5 Participant Loans 73
13.6 Insurance Policies 75
13.7 Employer Investment Direction 77
13.8 Employee Investment Direction 77
ARTICLE XIV
TOP-HEAVY PROVISIONS
14.1 Applicability Of Rules 79
14.2 Minimum Contribution 79
14.3 Minimum Vesting 80
14.4 Limitations On Allocations 80
ARTICLE XV
AMENDMENT AND TERMINATION
15.1 Amendment By Sponsor 81
15.2 Amendment By Employer 81
15.3 Termination 81
15.4 Qualification Of Employer's Plan 82
15.5 Mergers And Consolidations 82
15.6 Resignation And Removal 82
15.7 Qualification Of Prototype 83
ARTICLE XVI
GOVERNING LAW 84
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PROTOTYPE DEFINED CONTRIBUTION PLAN AND
TRUST/CUSTODIAL ACCOUNT
SPONSORED BY
THIRD NATIONAL BANK IN NASHVILLE
The Sponsor hereby establishes the following Prototype Retirement Plan and
Trust/Custodial Account for use by those of its customers who qualify and wish
to adopt a qualified retirement program. Any Plan and Trust/Custodial Account
established hereunder shall be administered for the exclusive benefit of
Participants and their beneficiaries under the following terms and conditions:
ARTICLE I
DEFINITIONS
1.1 ACTUAL DEFERRAL PERCENTAGE [FOR THE ADP OR 401(K) TEST] The ratio
(expressed as a percentage and calculated separately for each Participant) of:
(a) the amount of Employer contributions [as defined at (c) and
(d)] actually paid over to the Fund on behalf of such
Participant for the Plan Year to
(b) the Participant's Compensation which includes amounts for the
period during which the Employee was eligible to participate
or if otherwise selected by the Employer in the Adoption
Agreement, Compensation may include Compensation for the
entire Plan Year (whether or not the Employee was a
Participant for the entire Plan Year).
Employer contributions on behalf of any Participant shall include:
(c) any Elective Deferrals made pursuant to the Participant's
deferral election, including Excess Elective Deferrals, but
excluding Elective Deferrals that are taken into account in
the Contribution Percentage test (provided the ADP test is
satisfied both with and without exclusion of these Elective
Deferrals) or are returned as excess Annual Additions; and
(d) at the election of the Employer, Qualified Non-Elective
Contributions and Qualified Matching Contributions.
For purposes of computing Actual Deferral Percentages, an Employee who would be
a Participant but for the failure to make Elective Deferrals shall be treated
as a Participant on whose behalf no Elective Deferrals are made.
1.2 ADOPTION AGREEMENT The document attached to this Plan by which an
Employer elects to establish a qualified retirement plan and trust/custodial
account under the terms of this Prototype Plan and Trust/Custodial Account.
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1.3 AGGREGATE LIMIT The sum of:
(a) 125 percent of the greater of the ADP of the non-Highly
Compensated Employees for the 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
Plan Year of the cash or deferred arrangement as described in
Code Section 401(k) or Code Section 402(h)(1)(B), and
(b) the lesser of 200% or two percent plus the lesser of such ADP
or ACP.
Alternatively, the aggregate limit can be determined by substituting "the
lesser of 200% or 2 percent plus" for "125% of" in (a) above, and substituting
"125% of" for "the lesser of 200% or 2 percent plus" in (b) above.
1.4 ANNUAL ADDITIONS The sum of the following amounts credited to a
Participant's account for the Limitation Year:
(a) Employer Contributions,
(b) Employee Contributions (under Article IV),
(c) forfeitures,
(d) amounts allocated after March 31, 1984 to an individual medical
account, as defined in Code Section 415(l)(2), which is
part of a pension or annuity plan maintained by the Employer
(these amounts are treated as Annual Additions to a Defined
Contribution Plan though they arise under a Defined Benefit
Plan), and
(e) amounts derived from contributions paid or accrued after 1985,
in taxable years ending after 1985, which are either
attributable to post-retirement medical benefits allocated to
the account of a Key Employee under a Welfare Benefit Fund
maintained by the Employer are also treated as Annual Additions
to a Defined Contribution Plan. For purposes of this
paragraph, an Employee is a Key Employee if he or she meets the
requirements of paragraph 1.43 at any time during the Plan Year
or any preceding Plan Year. Welfare Benefit Fund is defined at
paragraph 1.89.
Excess amounts applied in a Limitation Year to reduce Employer contributions
will be considered Annual Additions for such Limitation Year, pursuant to the
provisions of Article X.
1.5 ANNUITY STARTING DATE The first day of the first period for which an
amount is paid as an annuity or in any other form.
1.6 APPLICABLE CALENDAR YEAR The First Distribution Calendar Year, and in
the event of the recalculation of life expectancy, such succeeding calendar
year. If payments commence in accordance with paragraph 7.4(e) before the
Required Beginning Date, the Applicable Calendar Year is the year such payments
commence. If distribution is in the form of an immediate annuity purchased
after the Participant's death with the Participant's remaining interest, the
Applicable Calendar Year is the year of purchase.
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1.7 APPLICABLE LIFE EXPECTANCY Used in determining the required minimum
distribution. 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 as so recalculated. The life expectancy of a non-Spouse
Beneficiary may not be recalculated.
1.8 AVERAGE CONTRIBUTION PERCENTAGE [THE ACP FOR THE 401(M) TEST] The
average of the Contribution Percentages for each Highly Compensated Employee
and for each non-Highly Compensated Employee.
1.9 AVERAGE DEFERRAL PERCENTAGE [THE ADP FOR THE 401(K) TEST] The average
of the Actual Deferral Percentages for each Highly Compensated Employee and for
each non-Highly Compensated Employee.
1.10 BREAK IN SERVICE A 12-consecutive month period during which an
Employee fails to complete more than 500 Hours of Service.
1.11 CODE The Internal Revenue Code of 1986, including any amendments
thereto.
1.12 COMPENSATION The Employer may select one of the following three
safe-harbor definitions of compensation in the adoption agreement.
Compensation shall only include amounts earned while a Participant if Plan Year
is chosen as the applicable computation period.
(a) CODE SECTION 3401(A) WAGES. Compensation is defined as wages
within the meaning of Code Section 3401(a) for the
purposes of Federal 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)].
(b) CODE SECTION 6041 AND 6051 WAGES. Compensation is defined as
wages as defined in 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 Section 6041(d) and 6051(a)(3).
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)].
(c) CODE SECTION 415 COMPENSATION. For purposes of applying the
limitations of Article X and Top-Heavy Minimums, the
definition of Compensation shall be Code Section 415
Compensation as follows: a Participant's Earned Income, wages,
salaries, and fees for professional services and other amounts
received (without regard to whether or not an amount is paid in
cash) for personal services actually rendered in the course of
employment with the Employer maintaining the Plan to the extent
that the amounts are includible in gross income [including, but
not limited to, commissions paid salesmen,
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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 Regulation
1.62-2(c)], and excluding the following:
1. Employer contributions to a plan of deferred
compensation which are not includible in the
Employee's gross income for the taxable year in which
contributed, or Employer contributions under a
Simplified Employee Pension Plan 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,
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 excludible from the gross income of the
Employee).
For purposes of applying the limitations of Article X and Top-Heavy minimums,
the definition of Compensation shall be Code Section 415 Compensation described
in this paragraph 1.12(c). Also, for purposes of applying the limitations of
Article X, Compensation for a Limitation Year is the Compensation actually paid
or made available during such Limitation Year. Notwithstanding the preceding
sentence, Compensation for a Participant in a defined contribution plan who is
permanently and totally disabled [as defined in Code Section 22(e)(3)] is the
Compensation such Participant would have received for the Limitation Year if
the Participant had been paid at the rate of Compensation paid immediately
before becoming permanently and totally disabled. Such imputed Compensation
for the disabled Participant may be taken into account only if the participant
is not a Highly Compensated Employee [as defined in Code Section 414(q)] and
contributions made on behalf of such Participant are nonforfeitable when made.
If the Employer fails to pick the determination period in the Adoption
Agreement, the Plan Year shall be used. Unless otherwise specified by the
Employer in the adoption agreement, Compensation shall be determined as
provided in 1.12(c). In Nonstandardized Adoption Agreements 003, 004 and 008,
the Employer may choose to eliminate or exclude categories of Compensation
which do not violate the provisions of Code Sections 401(a)(4), 414(s),
regulations thereunder and Revenue Procedure 89-65.
Beginning with 1989 Plan Years, the annual Compensation of each Participant
which may be taken into account for determining all benefits provided under the
Plan (including benefits under Article XIV) for any year shall not exceed
$200,000, as adjusted under Code Section 415(d).
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For Plan 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).
The cost-of-living adjustment in effect for a calendar year applies to any
determination period beginning in such year. In determining the Compensation
of a Participant for purposes of this limitation, the rules of Code Section
414(q)(6) 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 end of the Plan year. If,
as a result of the application of such rules the adjusted annual Compensation
limitation is exceeded, then (except for purposes of determining the portion of
Compensation up to the integration level if this Plan provides for permitted
disparity), the limitation shall be prorated among the affected individuals in
proportion to each such individual's Compensation as determined under this
section prior to the application of this limitation. In the event that "family
aggregation" is repealed by Congress, such provisions contained herein shall be
null and void. In that event, the Plan shall use each Participant's total
Compensation, as provided in the Adoption Agreement, up to the maximum allowed
under law for any Plan Year.
If a Plan has a Plan Year that contains fewer than 12 Calendar Months, then the
annual compensation limit for that period is an amount equal to the annual
Compensation as adjusted for the calendar year in which the compensation period
begins, multiplied by a fraction the numerator of which is the number of full
months in the Short determination period and the denominator of which is 12.
If Compensation for any prior Plan Year is taken into account in determining an
employee's contributions or benefits for the current year, the Compensation for
such prior year is subject to the applicable annual compensation limit in
effect for that prior year. For this purpose, for years beginning before
January 1, 1990, the applicable annual compensation limit is $200,000.
Compensation shall not include deferred compensation other than contributions
through a salary reduction agreement to a cash or deferred plan under Code
Section 401(k), a Simplified Employee Pension Plan under Code Section
402(h)(1)(B), a cafeteria plan under Code Section 125 or a tax-deferred annuity
under Code Section 403(b). Unless elected otherwise by the Employer in the
Adoption Agreement, these deferred amounts will be considered as Compensation
for Plan purposes. These deferred amounts are not counted as Compensation for
purposes of Articles X and XIV. When applicable to a Self-Employed Individual,
Compensation shall mean Earned Income.
1.13 CONTRIBUTION PERCENTAGE [FOR THE ACP OR 401(M) TEST] The ratio
(expressed as a percentage and calculated separately for each Participant) of:
(a) the Participant's Contribution Percentage Amounts [as defined
at (c) through (f)] actually paid over to the Fund on behalf
of such Participant for the Plan Year to
(b) the Participant's Compensation which includes amounts for the
period during which the Employee was eligible to participate
or if otherwise selected by the Employer in the Adoption
Agreement, Compensation may include Compensation for the
entire Plan Year (whether or not the Employee was a
Participant for the entire Plan Year).
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The "Contribution Percentage Amount" on behalf of any Participant shall
include:
(c) the amount of Employee Voluntary Contributions, Matching
Contributions and Qualified Matching Contributions (to the
extent not taken into account for purposes of the ADP test)
made under the Plan on behalf of the Participant for the Plan
Year.
(d) forfeitures of Excess Aggregate Contributions or Matching
Contributions allocated to the Participant's matching
account which shall be taken into account in the year in which
such forfeiture is allocated,
(e) at the election of the Employer, Qualified Non-Elective
Contributions in the Contribution Percentage Amount, and
(f) the Employer may also elect to use Elective Deferrals in the
Contribution Percentage Amount so long as the ADP test is met
before the Elective Deferrals are used in the ACP test and
continues to be met following the exclusion of those Elective
Deferrals that are used to meet the ACP test.
(g) the amount of Elective Deferrals recharacterized as voluntary
contributions under paragraph 10.9
Contribution Percentage amounts shall not include Matching Contributions,
whether or not qualified, that are forfeited either to correct Excess Aggregate
Contributions, or because the contributions to which they relate are Excess
Deferrals, Excess Contributions or Excess Aggregate Contributions.
1.14 CUSTODIAN The individual or institution appointed by the Employer to
have custody of all or part of the Fund.
1.15 DEFINED BENEFIT PLAN A Plan under which a Participant's benefit is
determined by a formula contained in the Plan and no individual accounts are
maintained for Participants.
1.16 DEFINED BENEFIT (PLAN) FRACTION A fraction, the numerator of which is
the sum of the Participant's Projected Annual Benefits under all the Defined
Benefit Plans (whether or not terminated) maintained by the Employer, and the
denominator of which is the lesser of 125 percent of the dollar limitation
determined for the Limitation Year under Code Sections 415(b) and (d) or 140
percent of the Highest Average Compensation, including any adjustments under
Code Section 415(b).
Notwithstanding the above, if the Participant was a Participant as of the first
day of the first Limitation Year beginning after 1986, in one or more Defined
Benefit Plans maintained by the Employer which were in existence on May 6,
1986, the denominator of this fraction will not be less than 125 percent of the
sum of the annual benefits under such plans which the Participant had accrued
as of the close of the last Limitation Year beginning before 1987, disregarding
any changes in the terms and conditions of the plan after May 5, 1986. The
preceding sentence applies only if the Defined Benefit Plans individually and
in the aggregate satisfied the requirements of Section 415 for all Limitation
Years beginning before 1987.
1.17 DEFINED CONTRIBUTION DOLLAR LIMITATION Thirty thousand dollars
($30,000) or if greater, one-fourth of the defined benefit dollar limitation
set forth in Code Section 415(b)(1) as in effect for the Limitation Year.
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1.18 DEFINED CONTRIBUTION PLAN A Plan under which individual accounts are
maintained for each Participant to which all contributions, forfeitures,
investment income and gains or losses, and expenses are credited or deducted.
A Participant's benefit under such Plan is based solely on the fair market
value of his or her account balance.
1.19 DEFINED CONTRIBUTION (PLAN) FRACTION A Fraction, the numerator of
which is the sum of the Annual Additions to the Participant's account under all
the Defined Contribution Plans (whether or not terminated) maintained by the
Employer for the current and all prior Limitation Years (including the Annual
Additions attributable to the Participant's nondeductible Employee
contributions to all Defined Benefit Plans, whether or not terminated,
maintained by the Employer, and the Annual Additions attributable to all
Welfare Benefit Funds, as defined in paragraph 1.89 and individual medical
accounts, as defined in Code Section 415(1)(2), 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 the 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 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 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. The Annual Addition for any Limitation
Year beginning before 1987, shall not be re-computed to treat all Employee
Contributions as Annual Additions.
1.20 DESIGNATED BENEFICIARY The individual who is designated as the
beneficiary under the Plan in accordance with Code Section 401(a)(9) and the
regulations thereunder.
1.21 DIRECT ROLLOVER A payment by the plan to the Eligible Retirement Plan
specified by the Participant.
1.22 DIRECT ROLLOVER OF BENEFITS Notwithstanding any provision of the Plan
to the contrary that would otherwise limit a Participant's election under this
paragraph, for distributions made on or after January 1, 1993, a Participant
may elect, at the time and in the manner prescribed by the Plan Administrator,
to have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Participant in a Direct Rollover.
Any portion of a distribution which is not paid directly to an Eligible
Retirement Plan shall be distributed to the Participant. For purposes of this
paragraph, a Surviving Spouse or a Spouse or former Spouse who is an alternate
payee under a Qualified Domestic Relations Order as defined in Code Section
414(p), will be permitted to elect to have any Eligible Rollover Distribution
paid directly to an individual retirement account (IRA) or an individual
retirement annuity (IRA).
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The plan provisions otherwise applicable to distributions continue to apply to
Rollover and Transfer Contributions.
1.23 DISABILITY An illness or injury of a potentially permanent nature,
expected to last for a continuous period of not less than 12 months, certified
by a physician selected by or satisfactory to the Employer which prevents the
Employee from engaging in any occupation for wage or profit for which the
Employee is reasonably fitted by training, education or experience.
1.24 DISTRIBUTION CALENDAR YEAR A calendar year for which a minimum
distribution is required.
1.25 EARLY RETIREMENT AGE The age set by the Employer in the Adoption
Agreement (but not less than 55), which is the earliest age at which a
Participant may retire and receive his or her benefits under the Plan.
1.26 EARNED INCOME Net earnings from self-employment in the trade or
business with respect to which the Plan is established, determined without
regard to items not included in gross income and the deductions allocable to
such items, provided that personal services of the individual are a material
income-producing factor. Earned income shall be reduced by contributions made
by an Employer to a qualified plan to the extent deductible under Code Section
404. For tax years beginning after 1989, net earnings shall be determined
taking into account the deduction for one-half of self-employment taxes
allowed to the Employer under Code Section 164(f) to the extent deductible.
1.27 EFFECTIVE DATE The date on which the Employer's retirement plan or
amendments to such plan become effective. For amendment changes taking place
after the Tax Reform Act of 1986 Effective Date, the Effective Date and
effective periods of such plan amendments or plan changes for any restated Plan
shall be the dates and periods specified in the Adoption Agreement Appendix A.
1.28 ELECTION PERIOD The period which begins on the first day of the Plan
Year in which the Participant attains age 35 and ends on the date of the
Participant's death. If a Participant separates from service prior to the
first day of the Plan Year in which age 35 is attained, the Election Period
shall begin on the date of separation, with respect to the account balance as
of the date of separation.
1.29 ELECTIVE DEFERRAL Employer contributions made to the Plan at the
election of the Participant, in lieu of cash Compensation. Elective Deferrals
shall also include contributions made pursuant to a Salary Savings 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 qualified cash or
deferred arrangement as described in Code Section 401(k), any simplified
employee pension cash or deferred arrangement as described in Code Section
402(h)(1)(B), any eligible deferred compensation plan under Code Section 457,
any plan as described under Code Section 501(c)(18), and any Employer
contributions made on the behalf of a Participant for the purchase of an
annuity contract under Code Section 403(b) pursuant to a Salary Savings
Agreement.
Elective Deferrals which cause a Participant to have an excess Annual Addition
shall not be deemed Annual Additions in that Limitation Year if such Elective
Deferrals (whether voluntary or mandatory) are distributed. These amounts shall
be disregarded for purposes of Code Section 402(g), the ADP test under Code
Section 401(k)(3) and the ACP test under Code Section 401(m)(2). These
distributions shall be in accordance with IRS Regulations Section 1.415-6(b)(6).
Elective Deferrals shall not include any deferrals properly distributed as
Excess Annual Additions.
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1.30 ELIGIBLE PARTICIPANT Any Employee who is eligible to make a Voluntary
Contribution, or an Elective Deferral (if the Employer takes such contributions
into account in the calculation of the Contribution Percentage), or to receive
a Matching Contribution (including forfeitures) or a Qualified Matching
Contribution. If a Voluntary Contribution or Elective Deferral is required as
a condition of participation in the Plan, any Employee who would be a
Participant in the Plan if such Employee made such a contribution shall be
treated as an Eligible Participant even though no Voluntary Contributions or
Elective Deferrals are made.
1.31 ELIGIBLE RETIREMENT PLAN An individual retirement account (IRA) as
described in Code Section 408(a), an individual retirement annuity (IRA) as
described in Code Section 408(b), an annuity plan as described in Code Section
403(a), or a qualified trust as described in Code Section 401(a), which accepts
Eligible Rollover Distributions. However, in the case of an Eligible Rollover
Distribution to a Surviving Spouse, an Eligible Retirement Plan is an
individual retirement account or individual retirement annuity.
1.32 ELIGIBLE ROLLOVER DISTRIBUTION Any distribution of all or any portion
of the balances to the credit of the Participant except that an Eligible
Rollover Distribution does not include:
(a) 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 Participant or
the joint lives (or joint life expectancies) of the Participant
and the Participant's Designated Beneficiary, or for a
specified period of ten years or more;
(b) any distribution to the extent such distribution is required
under Code Section 401(a)(9); and
(c) the portion of any distribution that is not includible in
gross income (determined without regard to the exclusion
for net unrealized appreciation with respect to Employer
Securities).
1.33 EMPLOYEE Any person employed by the Employer (including Self-Employed
Individuals and partners), all Employees of a member of an affiliated service
group [as defined in Code Section 414(m)], Employees of a controlled group of
corporations [as defined in Code Section 414(b)], all Employees of any
incorporated or unincorporated trade or business which is under common control
[as defined in Code Section 414(c)], leased Employees [as defined in Code
Section 414(n)] and any Employee required to be aggregated by Code Section
414(o). All such Employees shall be treated as employed by a single Employer.
1.34 EMPLOYER The Self-Employed Individual, partnership, corporation or
other organization which adopts this Plan including any firm that succeeds the
Employer and adopts this Plan. For purposes of Article X, Limitations on
Allocations, Employer shall mean 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 Code Section 415(h)], all commonly controlled trades or
businesses [as defined in Code Section 414(c) as modified by Code Section
415(h)] or affiliated service groups [as defined in Code Section 414(m)] of
which the adopting Employer is a part, and any other entity required to be
aggregated with the Employer pursuant to regulations under Code Section 414(o).
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If this Plan provides contributions or benefits for one or more Owner-Employees
who control both the business for which this Plan is established and one or
more other trades or businesses, this Plan and the plan established for other
trades or businesses must, when looked at as a single plan, satisfy Code
Sections 401(a) and (d) for the employees of this and all other trades or
businesses. If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or businesses, the
Employees of the other trades or businesses must be included in a plan which
satisfies Code Sections 401(a) and (d) and which provides contributions and
benefits not less favorable than provided for Owner-Employees under this Plan.
If an individual is covered as an Owner-Employee under the plans of two or more
trades or businesses which are not controlled and the individual controls a
trade or business, then the contributions or benefits of the employees under
the plan of the trades or businesses which are controlled must be as favorable
as those provided for him under the most favorable plan of the trade or
business which is not controlled.
For purposes of the preceding paragraph, an Owner-Employee, or two or more
owner-employees, will be considered to control a trade or business if the
Owner-Employee, or two or more Owner-Employees together:
(a) own the entire interest in an unincorporated trade or
business, or
(b) in the case of a partnership, own more than 50 percent of
either the capital interest or the profits interest in the
partnership.
An Owner-Employee, or two or more Owner-Employees shall be treated as owning
any interest in a partnership which is owned, directly or indirectly, by a
partnership in which such Owner-Employee, or such two or more Owner-Employees,
are considered to control within the meaning of the preceding paragraph.
1.35 ENTRY DATE The date on which an Employee commences participation in
the Plan as determined by the Employer in the Adoption Agreement. Unless the
Employer specifies otherwise in the Adoption Agreement, the Entry Date shall be
the first day of the Plan Year or the first day of the seventh month of the
Plan Year coinciding with or following the date on which an Employee meets the
eligibility requirements.
1.36 EXCESS AGGREGATE CONTRIBUTIONS [ACP OR 401(M) TEST] The excess, with
respect to any Plan Year, of:
(a) The aggregate Contribution Percentage Amounts taken into
account in computing the numerator of the Contribution
Percentage actually made on behalf of Highly Compensated
Employees for such Plan Year, over
(b) The maximum Contribution Percentage Amounts permitted by the
ACP test (determined by reducing contributions made on
behalf of Highly Compensated Employees in order of their
Contribution Percentages beginning with the highest of such
percentages).
Such determination shall be made after first determining Excess Elective
Deferrals pursuant to paragraph 1.35 and determining Excess Contributions
pursuant to paragraph 1.34.
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1.37 EXCESS AMOUNT (415 LIMITS) OR EXCESS ANNUAL ADDITIONS The excess of
the Participant's Annual Additions for the Limitation Year over the Maximum
Permissible Amount.
1.38 EXCESS CONTRIBUTION [ADP OR 401(K) TEST] With respect to any Plan
Year, the excess of:
(a) The aggregate amount of Employer contributions actually taken
into account in computing the ADP of Highly Compensated
Employees for such Plan Year, over
(b) The maximum amount of such contributions permitted by the ADP
test (determined by reducing contributions made on behalf of
Highly Compensated Employees in order of the ADPs, beginning
with the highest of such percentages).
1.39 EXCESS ELECTIVE DEFERRALS ($7,000 AS INDEXED) Those Elective
Deferrals that are includible in a Participant's gross income under Code
Section 402(g) to the extent such Participant's Elective Deferrals for a
taxable year exceed the dollar limitation under such Code Section. Excess
Elective Deferrals shall be treated as Annual Additions under the Plan, unless
such amounts are distributed no later than the first April 15th following the
close of the Participants' taxable year.
1.40 FAMILY MEMBER The Employee's Spouse, any lineal descendants and
ascendants and the Spouse of such lineal descendants and ascendants.
1.41 FIRST DISTRIBUTION CALENDAR YEAR 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 paragraph 7.10.
1.42 FUND All contributions received by the Trustee/Custodian under this
Plan and Trust/Custodial Account, investments thereof and earnings and
appreciation thereon.
1.43 HARDSHIP An immediate and heavy financial need of the Employee where
such Employee lacks other available resources.
1.44 HIGHEST AVERAGE COMPENSATION 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 the Adoption Agreement.
1.45 HIGHLY COMPENSATED EMPLOYEE Any Employee who performs service for the
Employer during the determination year and who, during the immediate prior
year:
(a) received Compensation from the Employer in excess of $75,000
[as adjusted pursuant to Code Section 415(d)]; or
(b) received Compensation from the Employer in excess of $50,000
[as adjusted pursuant to Code Section 415(d)] and was a member
of the Top-Paid Group for such year; or
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(c) was an officer of the Employer and received Compensation
during such year that is greater than 50 percent of the
dollar limitation in effect under Code Section 415(b)(1)(A).
Notwithstanding (a), (b) and (c), an Employee who was not Highly Compensated
during the preceding Plan Year shall not be treated as a Highly Compensated
Employee with respect to the current Plan Year unless such Employee is a member
of the 100 Employees paid the greatest Compensation during the year for which
such determination is being made.
(d) Employees who are five percent (5%) Owners at any time during
the immediate prior year or determination year.
If no officer has satisfied the Compensation requirement of subsection (c)
above during either a determination year or the prior year, the highest paid
officer for such year shall be treated as a Highly Compensated Employee.
For purposes of this paragraph 1.41, the determination year shall be the Plan
Year. The prior year shall be the twelve-month period immediately preceding
the determination year.
Highly Compensated Employee includes Highly Compensated active Employees and
Highly Compensated former Employees. 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 an active Highly Compensated
Employee for either the separation year or any determination year ending on or
after the Employee's 55th birthday.
If an Employee is, during a determination year or the prior year, a family
member of either a 5 percent owner who is an active or former employee or a
Highly Compensated Employee who is one of the 10 most highly compensated
employees ranked on the basis of Compensation paid by the Employer during such
year, then the family member and the 5 percent (5%) Owner or top-ten Highly
Compensated Employee shall be aggregated. In such case, the family member and
5 percent (5%) Owner or top-ten Highly Compensated Employee shall be treated as
a single Employee receiving Compensation and Plan contributions or benefits
equal to the sum of such Compensation and contributions or benefits of the
family member and 5 percent (5%) Owner or top-ten Highly Compensated Employee.
For purposes of this section, family member includes the spouse, lineal
ascendants and descendants of the employee or former employee and the spouses
of such lineal ascendants and descendants.
The determination of who is a Highly Compensated Employee, including the
determinations of the number and identity of employees in the top-paid group,
the top 100 employees, the number of employees treated as officers and the
Compensation that is considered, will be made in accordance with Code Section
414(q) and the regulations thereunder.
1.46 HOUR OF SERVICE
(a) Each hour for which an Employee is paid, or entitled to
payment, for the performance of duties for the Employer. These
hours shall be credited to the Employee for the computation
period in which the duties are performed; and
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(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 shall be credited under this paragraph for any
single continuous period (whether or not such period occurs in
a single computation period). Hours under this paragraph shall
be calculated and credited pursuant to 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, is either awarded or agreed to by the Employer.
The same Hours of Service shall not be credited both under
paragraph (a) or paragraph (b), as the case may be, and under
this paragraph (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.
(d) Hours of Service shall be credited for employment with the
Employer and with other members of an affiliated service
group [as defined in Code Section 414(m)], a controlled group
of corporations [as defined in Code Section 414(b)], or a group
of trades or businesses under common control [as defined in
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) and the
regulations thereunder. Hours of Service shall also be
credited for any individual considered an Employee for purposes
of this Plan under Code Section 414(n) or Code Section 414(o)
and the regulations thereunder.
(e) Solely for purposes of determining whether a Break in Service,
as defined in paragraph 1.10, 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, 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 by reason of the
pregnancy of the individual, by reason of a birth of a child of
the individual, by reason of the placement of a child with the
individual in connection with the adoption of such child by
such individual, or 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 in the computation period in which the absence begins
if the crediting is necessary to prevent a Break in Service in
that period, or in all other cases, in the following
computation period. No more than 501 hours will be credited
under this paragraph.
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(f) Hours of Service shall be determined on the basis of the method
selected in the Adoption Agreement.
1.47 KEY EMPLOYEE Any Employee or former Employee (and the beneficiaries
of such employee), who at any time during the determination period was an
officer of the Employer if such individual's annual compensation exceeds 50% of
the dollar limitation under Code Section 415(b)(1)(A) (the defined benefit
maximum annual benefit), an owner (or considered an owner under Code Section
318) of one of the ten largest interests in the employer if such individual's
compensation exceeds 100% of the dollar limitation under Code Section
415(c)(1)(A), a 5% owner of the Employer, or a 1% owner of the Employer who has
an annual compensation of more than $150,000. For purposes of determining who
is a Key Employee, annual compensation shall mean Compensation as defined for
Article X, but including amounts deferred through a salary reduction agreement
to a cash or deferred plan under Code Section 401(k), a Simplified Employee
Pension Plan under Code Section 408(k), a cafeteria plan under Code Section 125
or a tax-deferred annuity under Code Section 403(b). The determination period
is the Plan Year containing the Determination Date and the four preceding Plan
Years. The determination of who is a Key Employee will be made in accordance
with Code Section 416(i)(1) and the regulations thereunder.
1.48 LEASED EMPLOYEE Any person (other than an Employee of the recipient)
who pursuant to an agreement between the recipient and any other person
("leasing organization"), has performed services for the recipient [or for the
recipient and related persons determined in accordance with Code Section
414(n)(6)] on a substantially full-time basis for a period of at least one
year, and such services are of a type historically performed by Employees in
the business field of the recipient Employer.
1.49 LIMITATION YEAR The calendar year or such other 12-consecutive month
period designated by the Employer in the Adoption Agreement for purposes of
determining the maximum Annual Addition to a Participant's account. 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.
1.50 MASTER OR PROTOTYPE PLAN A plan, the form of which is the subject of
a favorable opinion letter from the Internal Revenue Service.
1.51 MATCHING CONTRIBUTION An Employer contribution made to this or any
other defined contribution plan on behalf of a Participant on account of an
Employee Voluntary or Mandatory Contribution made by such Participant, or on
account of a Participant's Elective Deferral, under a Plan maintained by the
Employer.
1.52 MAXIMUM PERMISSIBLE AMOUNT The maximum Annual Addition that may be
contributed or allocated to a Participant's account under the plan for any
Limitation Year shall not exceed the lesser of:
(a) the Defined Contribution Dollar Limitation, or
(b) 25% of the Participant's Compensation for the Limitation Year.
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The compensation limitation referred to in (b) shall not apply to any
contribution for medical benefits [within the meaning of Code Section 401(h) or
Code Section 419A(f)(2)] which is otherwise treated as an Annual Addition under
Code Section 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 divided by 12.
1.53 NET PROFIT The current and accumulated operating earnings of the
Employer before Federal and State income taxes, excluding nonrecurring or
unusual items of income, and before contributions to this and any other
qualified plan of the Employer. Alternatively, the Employer may fix another
definition in the Adoption Agreement.
1.54 NORMAL RETIREMENT AGE The age, set by the Employer in the Adoption
Agreement, at which a Participant may retire and receive his or her benefits
under the Plan.
1.55 OWNER-EMPLOYEE A sole proprietor, or a partner owning more than 10%
of either the capital or profits interest of the partnership.
1.56 PAIRED PLANS Two or more Plans maintained by the Sponsor designed so
that a single or any combination of Plans adopted by an Employer will meet the
antidiscrimination rules, the contribution and benefit limitations, and the
Top-Heavy provisions of the Code.
1.57 PARTICIPANT Any Employee who has met the eligibility requirements and
is participating in the Plan.
1.58 PARTICIPANT'S BENEFIT The account balance as of the last Valuation
Date in the calendar year immediately preceding the Distribution Calendar Year
(valuation calendar year) increased by the amount of any contributions or
forfeitures allocated to the account balance as of the dates in the valuation
calendar year after the Valuation Date and decreased by distributions made in
the valuation calendar year after the Valuation Date. A special exception
exists for the second distribution Calendar Year. For purposes of this
paragraph, 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.
1.59 PERMISSIVE AGGREGATION GROUP Used for Top-Heavy testing purposes, it
is the Required Aggregation Group of plans plus any other plan or plans of the
Employer which, when considered as a group with the Required Aggregation Group,
would continue to satisfy the requirements of Code Sections 401(a)(4) and 410.
1.60 PLAN The Employer's retirement plan as embodied herein and in the
Adoption Agreement.
1.61 PLAN ADMINISTRATOR The Employer.
1.62 PLAN YEAR The 12-consecutive month period designated by the Employer
in the Adoption Agreement.
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1.63 PRESENT VALUE When determining the Present Value of accrued benefits,
with respect to any Defined Benefit Plan maintained by the Employer, interest
and mortality rates shall be determined in accordance with the provisions of
the respective plan. If applicable, interest and mortality assumptions will be
specified by the Employer in the Adoption Agreement.
1.64 PROJECTED ANNUAL BENEFIT Used to test the maximum benefit which may
be obtained from a combination of retirement plans, it is the annual retirement
benefit (adjusted to an actuarial equivalent straight life annuity if such
benefit is expressed in a form other than a straight life annuity or Qualified
Joint and Survivor Annuity) to which the Participant would be entitled under
the terms of a Defined Benefit Plan or plans assuming:
(a) the Participant will continue employment until Normal
Retirement Age under the plan (or current age, if later), and
(b) the Participant's Compensation for the current Limitation Year
and all other relevant factors used to determine benefits
under the plan will remain constant for all future Limitation
Years.
1.65 QUALIFIED DEFERRED COMPENSATION PLAN Any pension, profit-sharing,
stock bonus, or other plan which meets the requirements of Code Section 401 and
includes a trust exempt from tax under Code Section 501(a) or any annuity plan
described in Code Section 403(a).
1.66 QUALIFIED DOMESTIC RELATIONS ORDER (QDRO) A Qualified Domestic
Relations Order or QDRO is a signed domestic relations order issued by a State
Court which creates, recognizes or assigns to an alternate payee(s) the right
to receive all or part of a Participant's Plan benefit. An alternate payee is
a Spouse, former Spouse, child, or other dependent who is treated as a
beneficiary under the Plan as a result of the QDRO. Determination of a QDRO
shall be made in accordance with paragraph 12.5.
1.67 QUALIFIED EARLY RETIREMENT AGE For purposes of paragraph 8.9,
Qualified Early Retirement Age is the latest of:
(a) the earliest date, under the Plan, on which the Participant
may elect to receive retirement benefits,
(b) the first day of the 120th month beginning before the
Participant reaches Normal Retirement Age, or
(c) the date the Participant begins participation.
1.68 QUALIFIED JOINT AND SURVIVOR ANNUITY An immediate annuity for the
life of the Participant with a survivor annuity for the life of the
Participant's Spouse which is at least 50% of but not more than the amount of
the annuity payable during the joint lives of the Participant and the
Participant's Spouse. The exact amount of the Survivor Annuity is to be
specified by the Employer in the Adoption Agreement. If not designated by the
Employer, the Survivor Annuity will be 50% of the amount paid to the
Participant during his or her lifetime. The Qualified Joint and Survivor
Annuity will be the amount of benefit which can be provided by the
Participant's Vested Account Balance.
1.69 QUALIFIED MATCHING CONTRIBUTION Matching Contributions which when
made are subject to the distribution and nonforfeitability requirements under
Code Section 401(k).
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1.70 QUALIFIED NON-ELECTIVE CONTRIBUTIONS Contributions (other than
Matching Contributions or Qualified Matching 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 Deferrals and
Qualified Matching Contributions.
1.71 QUALIFIED VOLUNTARY CONTRIBUTION A tax-deductible voluntary Employee
contribution. These contributions may no longer be made to the Plan.
1.72 REQUIRED AGGREGATION GROUP Used for Top-Heavy testing purposes, it
consists of:
(a) 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
(b) any other qualified plan of the Employer which enables a plan
described in (a) to meet the requirements of Code Sections
401(a)(4) or 410.
1.73 REQUIRED BEGINNING DATE The date on which a Participant is required
to take his or her first minimum distribution under the Plan. The rules are
set forth at paragraph 7.5.
1.74 ROLLOVER CONTRIBUTION A contribution made by a Participant of an
amount distributed to such Participant from another Qualified Deferred
Compensation Plan in accordance with Code Sections 402(a)(5), (6), and (7).
1.75 SALARY SAVINGS AGREEMENT An agreement between the Employer and a
participating Employee where the Employee authorizes the Employer to withhold a
specified percentage of his or her Compensation for deposit to the Plan on
behalf of such Employee.
1.76 SELF-EMPLOYED INDIVIDUAL An individual who has Earned Income for the
taxable year from the trade or business for which the Plan is established
including an individual who would have had Earned Income but for the fact that
the trade or business had no Net Profit for the taxable year.
1.77 SERVICE The period of current or prior employment with the Employer.
If the Employer maintains a plan of a predecessor employer, Service for such
predecessor shall be treated as Service for the Employer.
1.78 SHAREHOLDER EMPLOYEE An Employee or Officer who owns [or is consid-
ered as owning within the meaning of Code Section 318(a)(1)], on any day during
the taxable year of an electing small business corporation (S Corporation),
more than 5% of such corporation's outstanding stock.
1.79 SIMPLIFIED EMPLOYEE PENSION PLAN An individual retirement account
which meets the requirements of Code Section 408(k), and to which the Employer
makes contributions pursuant to a written formula. These plans are considered
for contribution limitation and Top-Heavy testing purposes.
1.80 SPONSOR Third National Bank in Nashville, or any successor(s) or
assign(s).
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1.81 SPOUSE (SURVIVING SPOUSE) The Spouse or Surviving Spouse of the
Participant, provided that a former Spouse will be treated as the Spouse or
Surviving Spouse and a current Spouse will not be treated as the Spouse or
Surviving Spouse to the extent provided under a Qualified Domestic Relations
Order as prescribed in Code Section 414(p).
1.82 SUPER TOP-HEAVY PLAN A Plan described at paragraph 1.81 under which
the Top-Heavy Ratio [as defined at paragraph 1.82] exceeds 90%.
1.83 TAXABLE WAGE BASE For plans with an allocation formula which takes
into account the Employer's contribution under the Federal Insurance
Contributions Act (FICA), the maximum amount of earnings which may be
considered wages for such Plan Year under the Social Security Act [Code Section
3121(a)(1)]. The Employer may, in the Adoption Agreement, specify an amount
less than the Taxable Wage Base for the allocation formula.
1.84 TOP-HEAVY DETERMINATION DATE 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, the last day of that year.
1.85 TOP-HEAVY PLAN For any Plan Year beginning after 1983, the Employer's
Plan is top-heavy if any of the following conditions exists:
(a) If the Top-Heavy Ratio for the Employer's Plan exceeds 60% and
this Plan is not part of any Required Aggregation Group or
Permissive Aggregation Group of Plans.
(b) If the Employer's 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%.
(c) If the Employer's 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%.
1.86 TOP-HEAVY RATIO
(a) 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 the regulations thereunder. Both the numerator
and denominator of the Top-Heavy Ratio are increased to reflect
any contribution not actually made as of the Determination
Date, but which is required to be taken into account on that
date under Code Section 416 and the regulations thereunder.
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(b) If the Employer maintains one or more Defined Contribution
Plans (including any Simplified Employee Pension Plan)
and the Employer maintains or has maintained one or more
Defined Benefit Plans which during the 5-year period ending on
the Determination Date(s) has or has had any accrued benefits,
the Top-Heavy Ratio for any Required or Permissive Aggregation
Group as appropriate is a fraction, the numerator of which is
the sum of account balances under the aggregated Defined
Contribution Plan or Plans for all Key Employees, determined in
accordance with (a) 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 (a) above, and the
Present Value of accrued benefits under the Defined Benefit
Plan or Plans for all Participants as of the Determination
Date(s), all determined in accordance with Code Section 416 and
the regulations thereunder. The accrued benefits under a
Defined Benefit Plan in both the numerator and denominator of
the Top-Heavy Ratio are increased for any distribution of an
accrued benefit made in the 5-year period ending on the
Determination Date.
(c) For purposes of (a) and (b) above, the value of account
balances and the Present Value of accrued benefits will
be determined as of the most recent Valuation Date that falls
within or ends with the 12-month period ending on the
Determination Date, except as provided in Code Section 416 and
the regulations thereunder for the first and second plan years
of a Defined Benefit Plan. The account balances and accrued
benefits of a participant (1) who is not a Key Employee but who
was a Key Employee in a prior year, or (2) who has not been
credited with at least one hour of service with any Employer
maintaining the Plan at any time during the 5-year period
ending on the Determination Date will be disregarded. The
calculation of the Top-Heavy Ratio, and the extent to which
distributions, rollovers, and transfers are taken into account
will be made in accordance with Code Section 416 and the
regulations thereunder. Qualified Voluntary Employee
Contributions will not be taken into account for purposes of
computing the Top-Heavy Ratio. When aggregating plans the
value of account balances and accrued benefits will be
calculated with reference to the Determination Dates that fall
within the same calendar year. The accrued benefit of a
Participant other than a Key Employee shall be determined under
(1) the method, if any, that uniformly applies for accrual
purposes under all Defined Benefit Plans maintained by the
Employer, or (2) if there is no such method, as if such benefit
accrued not more rapidly than the slowest accrual rate
permitted under the fractional rule of Code Section
411(b)(1)(C).
1.87 TOP-PAID GROUP The group consisting of the top 20% of Employees when
ranked on the basis of Compensation paid during such year. For purposes of
determining the number of Employees in the group (but not who is in it), the
following Employees shall be excluded:
(a) Employees who have not completed 6 months of Service.
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(b) Employees who normally work less than 17-1/2 hours per week.
(c) Employees who normally do not work more than 6 months during
any year.
(d) Employees who have not attained age 21.
(e) Employees included in a collective bargaining unit, covered
by an agreement between employee representatives and the
Employer, where retirement benefits were the subject of good
faith bargaining and provided that 90% or more of the
Employer's Employees are covered by the agreement.
(f) Employees who are nonresident aliens and who receive no earned
income which constitutes income from sources within the United
States.
1.88 TRANSFER CONTRIBUTION A non-taxable transfer of a Participant's
benefit directly from a Qualified Deferred Compensation Plan to this Plan.
1.89 TRUSTEE The Sponsor of this Prototype Plan or the individual(s)
appointed by the Employer in the Adoption Agreement.
1.90 VALUATION DATE The date all Participants' or former Participants'
accounts are valued in accordance with Article V, as designated in the Adoption
Agreement.
1.91 VALUATION PERIOD The time period set forth in the Adoption Agreement
for issuing regularly scheduled Employer administrative reports, procedures and
Participant statements.
1.92 VESTED ACCOUNT BALANCE The aggregate value of the Participant's
Vested Account Balances derived from Employer and Employee contributions
(including Rollovers), whether vested before or upon death, including the
proceeds of insurance contracts, if any, on the Participant's life. The
provisions of Article VIII shall apply to a Participant who is vested in
amounts attributable to Employer contributions, Employee contributions (or
both) at the time of death or distribution.
For purposes of paragraph 8.7, Vested Account Balance shall mean, in the case
of a money purchase pension plan, the Participant's separate account balance
attributable solely to Qualified Voluntary Contributions. For profit-sharing
plans the above definition shall apply.
1.93 VOLUNTARY CONTRIBUTION An Employee contribution made to the Plan by
or on behalf of a Participant that is included in the Participant's gross
income in the year in which made and that is maintained under a separate
account to which earnings and losses are allocated. For Plan Years beginning
after 1986, Voluntary Contributions may be made only under Adoption Agreements
#007, #008 and #009 Cash or Deferred Profit-Sharing Plans.
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1.94 WELFARE BENEFIT FUND Any fund that is part of a plan of the Employer,
or has the effect of a plan, through which the Employer provides welfare
benefits to Employees or their beneficiaries. For these purposes, Welfare
Benefits means any benefit other than those with respect to which Code Section
83(h) (relating to transfers of property in connection with the performance of
services), Code Section 404 (relating to deductions for contributions to an
Employee's trust or annuity and Compensation under a deferred payment plan),
Code Section 404(A) (relating to certain foreign deferred compensation plans),
and the election under Code Section 463 (relating to the accrual of vacation
pay) apply. For purposes of this paragraph, a "Fund" is any social club,
voluntary employee benefit association, supplemental unemployment benefit trust
or qualified group legal service organization described in Code Sections
501(c)(7), (9), (17) or (20); any trust, corporation, or other organization not
exempt from income tax, or to the extent provided in regulations, any account
held for an Employer by any person.
1.95 YEAR OF SERVICE A 12-consecutive month period during which an
Employee is credited with not less than 1,000 (or such lesser number as
specified by the Employer in the Adoption Agreement) Hours of Service.
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ARTICLE II
ELIGIBILITY REQUIREMENTS
2.1 PARTICIPATION Employees who meet the eligibility requirements in the
Adoption Agreement on the Effective Date of the Plan shall become Participants
as of the Effective Date of the Plan. If so elected in the Adoption Agreement,
all Employees employed on the Effective Date of the Plan may participate, even
if they have not satisfied the Plan's specified eligibility requirements.
Other Employees shall become Participants on the Entry Date specified in the
Adoption Agreement. Depending on the Plan's eligibility requirements, the
entry date may actually be earlier than the date on which the Employee
satisfies the eligibility requirements. The Employee must satisfy the
eligibility requirements specified in the Adoption Agreement and be employed on
the Entry Date to become a Participant in the Plan. Once an Employee has met
the eligibility requirements, he or she will participate in the Plan no later
than the earlier of:
(a) the first day of the Plan Year beginning after the date on
which the Employee has met the minimum age and service
requirements, or
(b) six months after the date the requirements have been met.
In the event an Employee who is not a member of the eligible class of Employees
becomes a member of the eligible class, such Employee shall participate
immediately if such Employee has satisfied the minimum age and service
requirements and would have previously become a Participant had he or she been
in the eligible class. All Years of Service with the Employer will count
towards eligibility except if an Employee has a one-year Break in Service
before satisfying the Plan's eligibility requirements. Service prior to such
Break in Service will not be taken into account. If an Employee's Years of
Service are disregarded pursuant to the preceding sentence, the Employee will
be treated as a newly hired Employee for eligibility purposes. A former
Participant shall again become a Participant upon returning to the employ of
the Employer as of the next Entry Date or if earlier, the next Valuation Date.
For this purpose, the Participant's Compensation and Service shall be
considered from the date of rehire.
2.2 CHANGE IN CLASSIFICATION OF EMPLOYMENT In the event a Participant
becomes ineligible to participate because he or she is no longer a member of an
eligible class of Employees, such Employee shall participate immediately upon
his or her return to an eligible class of Employees.
2.3 COMPUTATION PERIOD For purposes of determining Years of Service and
Breaks in Service for purposes of eligibility, the 12-consecutive month period
shall commence on the date on which an Employee first performs an Hour of
Service for the Employer and each anniversary thereof, such that the succeeding
12-consecutive month period commences with the employee's first anniversary of
employment and so on. If, however, the period so specified is one year or
less, the succeeding 12-consecutive month period shall commence on the first
day of the Plan Year prior to the anniversary of the date the Employee first
performed an Hour of Service regardless of whether the Employee is entitled to
be credited with 1,000 Hours of Service (or such lesser number as specified by
the Employer in the Adoption Agreement) during the Employee's first employment
year.
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2.4 EMPLOYMENT RIGHTS Participation in the Plan shall not confer upon a
Participant any employment rights, nor shall it interfere with the Employer's
right to terminate the employment of any Employee at any time.
2.5 SERVICE WITH CONTROLLED GROUPS All Years of Service with other
members of a controlled group of corporations [as defined in Code Section
414(b)], trades or businesses under common control [as defined in Code Section
414(c)], or members of an affiliated service group [as defined in Code Section
414(m)] shall be credited for purposes of determining an Employee's eligibility
to participate.
2.6 OWNER-EMPLOYEES If this Plan provides contributions or benefits for
one or more Owner-Employees who control both the business for which this Plan
is established and one or more other trades or businesses, this Plan and the
Plan established for other trades or businesses must, when looked at as a
single Plan, satisfy Code Sections 401(a) and (d) for the Employees of this and
all other trades or businesses.
If the Plan provides contributions or benefits for one or more Owner-Employees
who control one or more other trades or businesses, the Employees of the other
trades or businesses must be included in a Plan which satisfies Code Sections
401(a) and (d) and which provides contributions and benefits not less favorable
than provided for Owner-Employees under this Plan.
If an individual is covered as an Owner-Employee under the plans of two or more
trades or businesses which are not controlled, and the individual controls a
trade or business, then the contributions or benefits of the Employees under
the plan of the trades or businesses which are controlled must be as favorable
as those provided for him or her under the most favorable plan of the trade or
business which is not controlled.
For purposes of the preceding sentences, an Owner-Employee, or two or more
Owner-Employees, will be considered to control a trade or business if the
Owner-Employee, or two or more Owner-Employees together:
(a) own the entire interest in an unincorporated trade or
business, or
(b) in the case of a partnership, own more than 50% of either the
capital interest or the profits interest in the partnership.
For purposes of the preceding sentence, an Owner-Employee, or two or more
Owner-Employees shall be treated as owning any interest in a partnership which
is owned, directly or indirectly, by a partnership which such Owner-Employee,
or such two or more Owner-Employees, are considered to control within the
meaning of the preceding sentence.
2.7 LEASED EMPLOYEES Any leased Employee shall be treated as an Employee
of the recipient Employer; however, contributions or benefits provided by the
leasing organization which are attributable to services performed for the
recipient Employer shall be treated as provided by the recipient Employer. A
leased Employee shall not be considered an Employee of the recipient if such
Employee is covered by a money purchase pension plan providing:
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(a) a non-integrated Employer contribution rate of at least 10% of
Compensation, [as defined in Code Section 415(c)(3) but
including amounts contributed by the Employer pursuant to a
salary reduction agreement, which are excludable from the
Employee's gross income under a cafeteria plan covered by Code
Section 125, a cash or deferred profit-sharing plan under
Section 401(k) of the Code, a Simplified Employee Pension Plan
under Code Section 402(h)(1)(B) and a tax-sheltered annuity
under Code Section 403(b)],
(b) immediate participation, and
(c) full and immediate vesting.
This exclusion is only available if Leased Employees do not constitute more
than twenty percent (20%) of the recipient's non-highly compensated work force.
2.8 THRIFT PLANS If the Employer makes an election in the Adoption
Agreement to require Voluntary Contributions to participate in this Plan, the
Employer shall notify each eligible Employee in writing of his or her
eligibility for participation within a reasonable period of time prior to the
appropriate Entry Date. The Employee shall indicate his or her intention to
join the Plan by authorizing the Employer to withhold a percentage of his or
her Compensation as provided in the Plan. Such authorization shall be returned
to the Employer at least 10 days prior to the Employee's Entry Date. The
Employee may decline participation by so indicating on the enrollment form or
by failure to return the enrollment form to the Employer prior to the
Employee's Entry Date. If the Employee declines to participate, such Employee
shall be given the opportunity to join the Plan on the next Entry Date. The
taking of a Hardship withdrawal under the provisions of paragraph 6.9 will
impact the Participant's ability to make these contributions.
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ARTICLE III
EMPLOYER CONTRIBUTIONS
3.1 AMOUNT The Employer intends to make periodic contributions to the
Plan in accordance with the formula or formulas selected in the Adoption
Agreement. However, the Employer's contribution for any Plan Year shall be
subject to the limitations on allocations contained in Article X.
3.2 EXPENSES AND FEES The Employer shall also be authorized to reimburse
the Fund for all expenses and fees incurred in the administration of the Plan
or Trust/Custodial Account and paid out of the assets of the Fund. Such
expenses shall include, but shall not be limited to, fees for professional
services, printing and postage. Brokerage commissions may not be reimbursed.
3.3 RESPONSIBILITY FOR CONTRIBUTIONS Neither the Trustee/Custodian nor
the Sponsor shall be required to determine if the Employer has made a
contribution or if the amount contributed is in accordance with the Adoption
Agreement or the Code. The Employer shall have sole responsibility in this
regard. The Trustee/Custodian shall be accountable solely for contributions
actually received by it within the limits of Article XI.
3.4 RETURN OF CONTRIBUTIONS Contributions made to the Fund by the
Employer shall be irrevocable except as provided below:
(a) any contribution forwarded to the Trustee/Custodian because
of a mistake of fact, provided that the contribution is
returned to the Employer within one year of the contribution.
The nondeductibility of the Employer's contribution does not in
and of itself constitute a mistake of fact which may cause the
return of contributions.
(b) In the event that the Commissioner of 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.
(c) Contributions forwarded to the Trustee/Custodian are presumed
to be deductible and are conditioned on their
deductibility. Contributions which are determined to be not
deductible will be returned to the Employer within one year of
the disallowance of the deduction.
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ARTICLE IV
EMPLOYEE CONTRIBUTIONS AND ROLLOVERS
4.1 VOLUNTARY CONTRIBUTIONS An Employee may make Voluntary Contributions
to the Plan established hereunder if so authorized by the Employer in the
Adoption Agreement under a uniform and nondiscriminatory manner. Such
contributions are subject to the limitations on Annual Additions and together
with Employer matching contributions as defined in Code Section 401(m) are
subject to antidiscrimination testing as set forth in Code Section 401(m). For
Plan Years beginning after 1986, Voluntary Contributions may be made only under
Adoption Agreements #007, #008 and #009 Cash or Deferred Profit-Sharing Plans.
4.2 QUALIFIED VOLUNTARY CONTRIBUTIONS A Participant may no longer make
Qualified Voluntary Contributions to the Plan. Amounts already contributed may
remain in the Trust Fund/Custodial Account until distributed to the
Participant. Such amounts will be maintained in a separate account which will
be nonforfeitable at all times. The account will share in the gains and losses
of the Trust in the same manner as described at paragraph 5.4 of the Plan. No
part of the Qualified Voluntary Contribution account will be used to purchase
life insurance. Subject to Article VIII, Joint and Survivor Annuity
Requirements (if applicable), the Participant may withdraw any part of the
Qualified Voluntary Contribution account by making a written application to the
Plan Administrator.
4.3 ROLLOVER CONTRIBUTION Unless otherwise provided in the Adoption
Agreement, a Participant may make a Rollover Contribution to any Defined
Contribution Plan established hereunder of all or any part of an amount
distributed or distributable to him or her from a Qualified Deferred
Compensation Plan provided:
(a) the amount distributed to the Participant is deposited to the
Plan no later than the sixtieth day after such distribution
was received by the Participant,
(b) the amount distributed is not one of a series of substantially
equal periodic payments made for the life (or life
expectancy) of the Participant or the joint lives (or joint
life expectancies) of the Participant and the Participant's
Designated Beneficiary, or for a specified period of ten years
or more;
(c) the amount distributed is not required under Code Section
401(a)(9);
(d) if the amount distributed includes property, such property is
rolled over only upon the Trustee/Custodian's approval, or if
sold the proceeds of such property may be rolled over,
(e) the amount distributed is not includible in gross income
(determined without regard to the exclusion for net
unrealized appreciation with respect to employer securities).
(f) the amount rolled over does not include any amounts
contributed on an after-tax basis by the Participant to the
Qualified Deferred Compensation Plan.
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In addition, if the Adoption Agreement allows Rollover Contributions, the Plan
will also accept any Eligible Rollover Distribution directly to the Plan.
Rollover Contributions which relate to distributions prior to January 1, 1993,
must be made in accordance with paragraphs (a) through (f) and additionally
meet the requirements of paragraph (g):
(g) the distribution from the Qualified Deferred Compensation Plan
constituted the Participant's entire interest in such Plan and
was distributed within one taxable year to the Participant:
(1) on account of separation from Service, a Plan
termination, or in the case of a profit-sharing
or stock bonus plan, a complete discontinuance of
contributions under such plan within the meaning of
Code Section 402(a)(6)(A), or
(2) in one or more distributions which constitute a
qualified lump sum distribution within the meaning of
Code Section 402(e)(4)(A), determined without
reference to subparagraphs (B) and (H),
Such Rollover Contribution may also be made through an Individual Retirement
Account qualified under Code Section 408 where the IRA was used as a conduit
from the Qualified Deferred Compensation Plan, the Rollover Contribution is
made in accordance with the rules provided under paragraph (a) through (c) and
the Rollover Contribution does not include any regular IRA contributions, or
earnings thereon, which the Participant may have made to the IRA. Rollover
Contributions which relate to distributions prior to January 1, 1993, may be
through an IRA in accordance with paragraphs (a) through (f) and additional
requirements as provided in the previous sentence. The Trustee/Custodian shall
not be held responsible for determining the tax-free status of any Rollover
Contribution made under this Plan.
4.4 TRANSFER CONTRIBUTION Unless provided otherwise in the Adoption
Agreement, a Participant may, subject to the provisions of paragraph 4.5, also
arrange for the direct transfer of his or her benefit from a Qualified Deferred
Compensation Plan to this Plan provided that the transfer is made in accordance
with paragraphs 4.3(b), 4.3(c) and 4.3(d) hereof. For accounting and record
keeping purposes, Transfer Contributions shall be identical to Rollover
Contributions.
In the event the Employer accepts a Transfer Contribution from a Plan in which
the Employee was directing the investments of his or her account, the Employer
may continue to permit the Employee to direct his or her investments in
accordance with paragraph 13.8 with respect only to such Transfer Contribution.
Notwithstanding the above, the Employer may refuse to accept such Transfer
Contributions.
4.5 EMPLOYER APPROVAL OF TRANSFER CONTRIBUTIONS The Employer maintaining
a safe-harbor Profit-Sharing Plan in accordance with the provisions of
paragraph 8.7, acting in a nondiscriminatory manner, may in its sole discretion
refuse to allow Transfer Contributions to its profit-sharing plan, if such
contributions are directly or indirectly being transferred from a defined
benefit plan, a money purchase pension plan (including a target benefit plan),
a stock bonus plan, or another profit-sharing plan which would otherwise
provide for a life annuity form of payment to the Participant.
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4.6 SALARY SAVINGS CONTRIBUTIONS (ELECTIVE DEFERRALS) A Participant may
enter into a Salary Savings Agreement with the Employer authorizing the
Employer to withhold a portion of such Participant's Compensation not to exceed
$7,000 per calendar year as adjusted under Code Section 415(d) or, if lesser,
the percentage of Compensation specified in the Adoption Agreement and to
deposit such amount to the Plan. No Participant shall be permitted to have
Elective Deferrals made under this Plan or any other qualified plan maintained
by the Employer, during any taxable year, in excess of the dollar limitation
contained in Code Section 402(g) in effect at the beginning of such taxable
year. Thus, the $7,000 limit may be reduced if a Participant contributes
pre-tax contributions to qualified plans of this or other Employers. Any such
contribution shall be credited to the Employee's Salary Savings Account.
Unless otherwise specified in the Adoption Agreement, a Participant may amend
his or her Salary Savings Agreement to increase, decrease or terminate the
percentage upon 30 days written notice to the Employer. In the event a
Participant does not enter into a Salary Savings Agreement at the beginning of
a Plan Year, he or she may enter into a Salary Savings Agreement with the
Employer upon 30 days notice or as otherwise specified in the Adoption
Agreement for purposes of this and the preceding sentence. If a Participant
terminates his or her agreement, such Participant shall not be permitted to put
a new Salary Savings Agreement into effect until the first pay period in the
next Plan Year, unless otherwise stated in the Adoption Agreement. The
Employer may also amend or terminate said agreement on written notice to the
Participant. If a Participant has not authorized the Employer to withhold at
the maximum rate and desires to increase the total withheld for a Plan Year,
such Participant may authorize the Employer upon 30 days notice to withhold a
supplemental amount up to 100% of his or her Compensation for one or more pay
periods up to the total annual percentage permitted by the Employer in the
Adoption Agreement for the applicable period until the end of the Plan Year.
In no event may the sum of the amounts withheld under the Salary Savings
Agreement plus the supplemental withholding exceed 25% of a Participant's
Compensation for a Plan Year. The Employer may also recharacterize as
after-tax Voluntary Contributions all or any portion of amounts previously
withheld under any Salary Savings Agreement within the Plan Year as provided
for at paragraph 10.9. This may be done to insure that the Plan will meet one
of the antidiscrimination tests under Code Section 401(k). Elective Deferrals
shall be deposited in the Trust within 30 days after being withheld from the
Participant's pay.
4.7 REQUIRED VOLUNTARY CONTRIBUTIONS If the Employer makes a thrift
election in the Adoption Agreement, each eligible Participant shall be required
to make Voluntary Contributions to the Plan for credit to his or her account as
provided in the Adoption Agreement. This election is only available in 401(k)
Adoption Agreements. Such Voluntary Contributions shall be withheld from the
Employee's Compensation and shall be transmitted by the Employer to the
Trustee/Custodian as agreed between the Employer and Trustee/Custodian. A
Participant may discontinue participation or change his or her Voluntary
Contribution percentage by so advising the Employer at least 30 days prior to
the date on which such discontinuance or change is to be effective. If a
Participant discontinues his or her Voluntary Contributions, such Participant
may not again authorize Voluntary Contributions for a period of six months from
the date of discontinuance. A Participant may voluntarily change his or her
Voluntary Contribution percentage once during any Plan Year and may also agree
to have a reduction in his or her contribution, if required to satisfy the
requirements of the ACP test.
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4.8 DIRECT ROLLOVER OF BENEFITS Notwithstanding any provision of the Plan
to the contrary that would otherwise limit a Participant's election under this
paragraph, for distributions made on or after January 1, 1993, a Participant
may elect, at the time in the manner prescribed by the Plan Administrator, to
have any portion of an Eligible Rollover Distribution paid directly to an
Eligible Retirement Plan specified by the Participant in a Direct Rollover.
Any portion of a distribution which is not paid directly to an Eligible
Retirement Plan shall be distributed to the Participant. For purposes of this
paragraph, a Surviving Spouse or a Spouse or Former Spouse who is an alternate
payee under a Qualified Domestic Relations Order as defined in Code Section
414(p), will be permitted to elect to have any Eligible Rollover Distribution
paid directly to an individual retirement account (IRA) or an individual
retirement annuity (IRA).
The plan provisions otherwise applicable to distributions continue to add to
Rollover and Transfer Contributions.
4.9 SPECIAL RULES FOR DIRECT ROLLOVERS The following special rules apply
to all Direct Rollovers:
(a) MINIMUM DIRECT ROLLOVER No Direct Rollover is allowable
hereunder with respect to any Eligible Rollover
Distribution during a taxable year of the Distributee unless
the sum of all Eligible Rollover Distributions to that
Distributee during that taxable year are reasonably expected to
equal or exceed Two Hundred Dollars ($200.00).
(b) LIMIT ON NUMBER OF DIRECT ROLLOVERS A Distributee may not
designate more than one Eligible Retirement Plan into
which all or any portion of an Eligible Rollover Distribution
is to be transferred by the Trustee. A Distributee may
designate only one Eligible Retirement Plan as the recipient of
a Direct Rollover with respect to any Eligible Rollover
Distribution.
(c) DISTRIBUTION AND DIRECT ROLLOVER A Distributee may direct the
Trustee to make a payment of only a portion of an
Eligible Rollover Distribution to an Eligible Retirement Plan
and distribute the remainder to the Distributee in cash,
provided that the total amount of the Eligible Rollover
Distribution exceeds Five Hundred Dollars ($500.00) and the
amount to be paid to the Eligible Retirement Plan as a Direct
Rollover equals at least Five Hundred Dollars ($500.00).
(d) DEEMED DISTRIBUTION IF NO DIRECT ROLLOVER In the event that
the Distributee fails to make an election under Section
B regarding all or any portion of an Eligible Rollover
Distribution within the time period provided under the Plan (or
rules and regulations promulgated by the Plan Administrator
pursuant to its authority under the Plan), the Distributee
shall be deemed to have elected not to make a Direct Rollover
with respect to such Eligible Rollover Distribution or such
portion thereof, whichever the case may be.
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(e) WAIVER OF 30 DAYS The Plan Administrator shall provide
written notice in accordance with Code Section 402(f) to
the Distributee of the Distributee's right to make a Direct
Rollover of an Eligible Rollover Distribution and the Plan
Administrator shall advise the Distributee in writing that the
Distributee has the right to elect whether or not to make a
Direct Rollover within a prescribed time period determined by
the Plan Administrator, which time period shall be no less than
thirty (30) days nor no more than ninety (90) days after the
date of such notice provided under Section 402(f); provided,
however, that if the Distributee either affirmatively elects to
make a Direct Rollover with respect to an Eligible Rollover
Distribution or portion thereof or affirmatively elects not to
make a Direct Rollover with respect to an Eligible Rollover
Distribution or portion thereof, the Trustee shall distribute
the amount subject to such election in accordance with the
Distributee's election and as otherwise provided under the
terms of the Plan, without regard to whether such distribution
is made less than thirty (30) days after the date the notice
described under Code Section 402(f) is provided to the
Distributee.
(f) DIRECT ROLLOVER OF LOANS NOT ALLOWED In the case of an
adopting Employer that elects to allow Participant loans
under the Plan, a Distributee may not elect a Direct Rollover
with respect to any portion of an Eligible Rollover
Distribution that is offset against such Participant loan.
(g) RULES AND PROCEDURES The Plan Administrator may promulgate
procedures and rules for the purpose of implementing the
provisions of the Unemployment Compensation Act of 1992
affecting the Plan. The Plan Administrator may also adopt
rules, regulations or procedures that incorporate any
alternative provisions, alternative means of compliance or
administrative practices otherwise allowable under the
Unemployment Compensation Act of 1992, treasury regulations or
official pronouncement of the Internal Revenue Service
pertaining to the Unemployment Compensation Act of 1992, to the
extent not inconsistent with the terms of this Plan. Any rule,
regulation or procedure adopted hereunder shall be given full
force and effect and shall not be overturned or invalidated
unless arbitrary and capricious.
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ARTICLE V
PARTICIPANT ACCOUNTS
5.1 SEPARATE ACCOUNTS The Employer shall establish a separate bookkeeping
account for each Participant showing the total value of his or her interest in
the Fund. Each Participant's account shall be separated for bookkeeping
purposes into the following sub-accounts:
(a) Employer contributions.
(1) Matching Contributions.
(2) Qualified Matching Contributions.
(3) Qualified Non-Elective Contributions.
(4) Discretionary Contributions.
(5) Elective Deferrals.
(b) Voluntary Contributions (and additional amounts including
required contributions and, if applicable, either repayments
of loans previously defaulted on and treated as "deemed
distributions" on which a tax report has been issued, and
amounts paid out upon a separation from service which have
been included in income and which are repaid after being
re-hired by the Employer).
(c) Qualified Voluntary Contributions (if the Plan previously
accepted these).
(d) Rollover Contributions and Transfer Contributions.
5.2 ADJUSTMENTS TO PARTICIPANT ACCOUNTS As of each Valuation Date of the
Plan, the Employer shall add to each account:
(a) the Participant's share of the Employer's contribution and for
forfeitures as determined in the Adoption Agreement,
(b) any Elective Deferrals, Voluntary, Rollover or Transfer
Contributions made by the Participant,
(c) any repayment of amounts previously paid out to a Participant
upon a separation from Service and repaid by the Participant
since the last Valuation Date, and
(d) the Participant's proportionate share of any investment
earnings and increase in the fair market value of the Fund
since the last Valuation Date, as determined at paragraph 5.4.
The Employer shall deduct from each account:
(e) any withdrawals or payments made from the Participant's
account since the last Valuation Date, and
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(f) the Participant's proportionate share of any decrease in the
fair market value of the Fund since the last Valuation Date,
as determined at paragraph 5.4.
5.3 ALLOCATING EMPLOYER CONTRIBUTIONS The Employer's contribution shall
be allocated to Participants in accordance with the allocation formula selected
by the Employer in the Adoption Agreement, and the minimum contribution and
allocation requirements for Top-Heavy Plans. Beginning with the 1990 Plan Year
and thereafter, for plans on Standardized Adoption Agreements 001, 002, 005,
006, 007 and #009, Participants who are credited with more than 500 Hours of
Service or are employed on the last day of the Plan Year must receive a full
allocation of Employer contributions. In Nonstandardized Adoption Agreements
003, 004 and 008, Employer contributions shall be allocated to the accounts of
Participants employed by the Employer on the last day of the Plan Year unless
indicated otherwise in the Adoption Agreement. In the case of a non-Top-Heavy,
Nonstandardized Plan, Participants must also have completed a Year of Service
unless otherwise specified in the Adoption Agreement. For Nonstandardized
Adoption Agreements 003, 004 and 008, the Employer may only apply the last day
of the Plan Year and Year of Service requirements if the Plan satisfies the
requirements of Code Sections 401(a)(26) and 410(b) and the regulations
thereunder including the exception for 401(k) plans. If, when applying the
last day and Year of Service requirements, the Plan fails to satisfy the
aforementioned requirements, additional Participants will be eligible to
receive an allocation of Employer Contributions until the requirements are
satisfied. Participants who are credited with a Year of Service, but not
employed at Plan Year end, are the first category of additional Participants
eligible to receive an allocation. If the requirements are still not
satisfied, Participants credited with more than 500 Hours of Service and
employed at Plan Year end are the next category of Participants eligible to
receive an allocation. Finally, if necessary to satisfy the said requirements,
any Participant credited with more than 500 Hours of Service will be eligible
for an allocation of Employer Contributions. The Service requirement is not
applicable with respect to any Plan Year during which the Employer's Plan is
Top-Heavy. In the case of a non-Top-Heavy Plan, Participants must also have
completed a Year of Service as defined in the Adoption Agreement. The Service
requirement is not applicable with respect to any Plan Year during which the
Employer's Plan is Top-Heavy.
5.4 ALLOCATING INVESTMENT EARNINGS AND LOSSES A Participant's share of
investment earnings and any increase or decrease in the fair market value of
the Fund shall be based on the proportionate value of all active accounts
(other than accounts with segregated investments) as of the last Valuation Date
less withdrawals since the last Valuation Date. If Employer contributions are
made monthly, quarterly, or on some other systematic basis, the adjusted value
of such accounts for allocation of investment income and gains or losses shall
include one-half the Employer contributions for such period. If Employer
and/or Employee contributions are not made on a systematic basis, it is assumed
that they are made at the end of the valuation period and therefore will not
receive an allocation of investment earnings and gains or losses for such
period. Account balances not yet forfeited shall receive an allocation of
earnings and/or losses. Accounts with segregated investments shall receive
only the income or loss on such segregated investments.
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Alternatively, at the Plan Administrator's option, all Employer contributions
will be credited with an allocation of the actual investment earnings and gains
and losses from the actual date of deposit of each such contribution until the
end of the period. Accounts with segregated investments shall receive only the
income or loss on such segregated investments. In no event shall the selection
of a method of allocating gains and losses be used to discriminate in favor of
the Highly Compensated Employees.
5.5 PARTICIPANT STATEMENTS Upon completing the allocations described
above for the Valuation Date coinciding with the end of the Plan Year, the
Employer shall prepare a statement for each Participant showing the additions
to and subtractions from his or her account since the last such statement and
the fair market value of his or her account as of the current Valuation Date.
Employers so choosing may prepare Participant statements for each Valuation
Date.
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ARTICLE VI
RETIREMENT BENEFITS AND DISTRIBUTIONS
6.1 NORMAL RETIREMENT BENEFITS A Participant shall be entitled to receive
the balance held in his or her account from Employer contributions upon
attaining Normal Retirement Age or at such earlier dates as the provisions of
this Article VI may allow. If the Participant elects to continue working past
his or her Normal Retirement Age, he or she will continue as an active Plan
Participant and no distribution shall be made to such Participant until his or
her actual retirement date unless the employer elects otherwise in the Adoption
Agreement, or a minimum distribution is required by law. Settlement shall be
made in the normal form, or if elected, in one of the optional forms of payment
provided below.
6.2 EARLY RETIREMENT BENEFITS If the Employer so provides in the Adoption
Agreement, an early retirement benefit will be available to individuals who
meet the age and Service requirements. An individual who meets the Early
Retirement Age requirements and separates from Service, will become fully
vested, regardless of any vesting schedule which otherwise might apply. If a
Participant separates from Service before satisfying the age requirements, but
after having satisfied the Service requirement, he or she will be entitled to
elect an Early Retirement Benefit upon satisfaction of the age requirement.
6.3 BENEFITS ON TERMINATION OF EMPLOYMENT
(a) If a Participant terminates employment prior to Normal
Retirement Age, such Participant shall be entitled to
receive the vested balance held in his or her account payable
at Normal Retirement Age in the normal form, or if elected, in
one of the optional forms of payment provided hereunder. If
applicable, the Early Retirement Benefit provisions may be
elected. Notwithstanding the preceding sentence, a former
Participant may, if allowed in the Adoption Agreement, make
application to the Employer requesting early payment of any
deferred vested and nonforfeitable benefit due.
(b) If a Participant terminates employment, and the value of that
Participant's Vested Account Balance derived from Employer and
Employee Contributions is not greater than $3,500, the
Participant may receive a lump sum distribution of the value of
the entire vested portion of such account balance and the
nonvested portion will be treated as a forfeiture. The
Employer shall continue to follow their consistent policy as
may be established, regarding immediate cash-outs of Vested
Account Balances of $3,500 or less. For purposes of this
Article, if the value of a Participant's Vested Account Balance
is zero, the Participant shall be deemed to have received a
distribution of such Vested Account Balance immediately
following termination. Likewise, if the Participant is
reemployed prior to incurring 5 consecutive 1-year Breaks in
Service they will be deemed to have immediately repaid such
distribution. For Plan Years beginning
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prior to 1989, a Participant's Vested Account Balance shall
not include Qualified Voluntary Contributions.
Notwithstanding the above, if the Employer maintains or has
maintained a policy of not distributing any amounts until the
Participant's Normal Retirement Age, the Employer can continue
to uniformly apply such policy.
(c) If a Participant terminates Employment with a Vested Account
Balance derived from Employer and Employee contributions
in excess of $3,500, and elects (with his or her Spouse's
consent) to receive 100% of the value of his or her Vested
Account Balance in a lump sum, the non-vested portion will be
treated as a forfeiture. Except as provided in paragraph
6.4(c), the Participant (and his or her Spouse) must consent to
any distribution, when the Vested Account Balance described
above exceeds $3,500 or if at the time of any prior
distribution it exceeded $3,500. For Plan Years beginning
prior to 1989, a Participant's Vested Account Balance shall not
include Qualified Voluntary Contributions.
(d) Distribution of less than 100% of the Participant's Vested
Account Balance shall only be permitted if the Participant is
fully vested upon termination of employment.
(e) BUY BACK RULE If a Participant who is not 100% vested
receives or is deemed to receive a distribution pursuant
to subsection (a), (b) or (c) of this paragraph, and such
Participant's non-vested benefit is forfeited hereunder, and if
such Participant resumes employment covered under this Plan,
the Participant shall have the right to repay to the Plan the
full amount of the distribution attributable to Employer
contributions on or before the earlier of the date that the
Participant incurs 5 consecutive 1-year Breaks in Service
following the date of distribution or five years after the
first date on which the Participant is subsequently
reemployed. In such event, the Participant's forfeiture shall
be restored to his or her account as of the Valuation
Date at the end of the Plan Year following the date on which
repayment of the distribution is received. Unless otherwise
specified by the Employer in the Adoption Agreement,
restoration of forfeitures will obtain from current year's
forfeitures first, additional Employer contribution second and
lastly from income or gain to the Plan for that Plan Year.
(f) A Participant shall also have the option, to postpone payment
of his or her Plan benefits until the first day of April
following the calendar year in which he or she attains age
70-1/2. Any balance of a Participant's account resulting from
his or her Employee contributions not previously withdrawn, if
any, may be withdrawn by the Participant immediately following
separation from Service.
(g) If a Participant ceases to be an active Employee as a result
of a Disability as defined at paragraph 1.21, such Participant
shall be able to make an application for a disability
retirement benefit payment. The Participant's account balance
will be deemed "immediately distributable" as set forth in
paragraph 6.4, and will be fully vested pursuant to paragraph
9.2.
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6.4 RESTRICTIONS ON IMMEDIATE DISTRIBUTIONS
(a) An account balance is immediately distributable if any part of
the account balance could be distributed to the Participant (or
Surviving Spouse) before the Participant attains (or would have
attained if not deceased) the later of the Normal Retirement
Age or age 62.
(b) If the value of a Participant's Vested Account Balance derived
from Employer and Employee Contributions exceeds (or at the
time of any prior distribution exceeded) $3,500, and the
account balance is immediately distributable, the Participant
and his or her Spouse (or where either the Participant or the
Spouse has died, the survivor) must consent to any distribution
of such account balance. The consent of the Participant and
the Spouse shall be obtained in writing within the 90-day
period ending on the annuity starting date, which is the first
day of the first period for which an amount is paid as an
annuity or any other form. The Plan Administrator shall notify
the Participant and the Participant's Spouse of the right to
defer any distribution until the later of the date on which the
Participant attains (or would have attained if not decreased)
the Normal Retirement Age or age 62. 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.
(c) 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 paragraph 8.7 of
the Plan, only the Participant need consent to the
distribution of an account balance that is immediately
distributable. Neither the consent of the Participant nor the
Participant's Spouse shall be required to the extent that a
distribution is required to satisfy Code Section 401(a)(9) or
Code Section 415. In addition, upon termination of this Plan
if the Plan does not offer an annuity option (purchased from a
commercial provider), and if 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.
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(d) 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 1988, the Participant's
Vested Account Balance shall not include amounts attributable
to Qualified Voluntary Contributions.
(e) In a profit-sharing plan in which distributions under Code
Sections 401(a)(11) and 417 do not apply, such distributions
may commence less than 30 days after the notice required under
Regulations Section 1.411(a)-11(c) is given, provided that:
(1) the Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at
least 30 days after receiving the notice to consider
the decision of whether or not to elect a distribution
(and, if applicable, a particular distribution option),
and
(2) the Participant, after receiving the notice,
affirmatively elects a distribution.
6.5 NORMAL FORM OF PAYMENT The normal form of payment for a profit-sharing
plan satisfying the requirements of paragraph 8.7 hereof shall be a lump sum
with no option for annuity payments. For all other plans, the normal form of
payment hereunder shall be a Qualified Joint and Survivor Annuity as provided
under Article VIII. However, a Participant whose Vested Account Balance derived
from Employer and Employee contributions exceeds $3,500, or if at the time of
any prior distribution it exceeds $3,500, shall (with the consent of his or her
Spouse) have the right to receive his or her benefit in a lump sum or in
monthly, quarterly, semi-annual or annual payments from the Fund over any period
not extending beyond the life expectancy of the Participant and his or her
Beneficiary. For Plan Years beginning prior to 1989, a Participant's Vested
Account Balance shall not include Qualified Voluntary Contributions. The normal
form of payment shall be automatic, unless the Participant files a written
request with the Employer prior to the date on which the benefit is
automatically payable, electing a lump sum or installment payment option. No
amendment to the Plan may eliminate one of the optional distribution forms
listed above.
6.6 COMMENCEMENT OF BENEFITS
(a) Unless the Participant elects otherwise, distribution of
benefits will begin no later than the 60th day after the close
of the Plan Year in which the latest of the following events
occur:
(1) the Participant attains age 65 (or normal retirement
age if earlier),
(2) the 10th anniversary of the year in which the
Participant commenced participation in the Plan, or
(3) the Participant terminates Service with the Employer.
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(b) Notwithstanding the foregoing, the failure of a Participant and
Spouse (if necessary) to consent to a distribution while a
benefit is immediately distributable, within the meaning of
paragraph 6.4 hereof, shall be deemed an election to defer
commencement of payment of any benefit sufficient to satisfy
this paragraph.
(c) Unless the Employer provides for an earlier commencement date
in the Adoption Agreement, distributions of benefits will be
made no later than 60 days following the close of the Plan Year
during which a distribution is requested or otherwise becomes
payable.
6.7 CLAIMS PROCEDURES Upon retirement, death, or other severance of
employment, the Participant or his or her representative of such Participant may
make application to the Employer requesting payment of benefits due and the
manner of payment. If no application for benefits is made, the Employer shall
automatically pay any vested benefit due hereunder in the normal form at the
time prescribed at paragraph 6.5. If an application for benefits is made, the
Employer shall accept, reject, or modify such request and shall notify the
Participant in writing setting forth the response of the Employer and in the
case of a denial or modification the Employer shall:
(a) state the specific reason or reasons for the denial,
(b) provide specific reference to pertinent Plan provisions on
which the denial is based,
(c) provide a description of any additional material or information
necessary for the Participant or his representative to
perfect the claim and an explanation of why such material or
information is necessary, and
(d) explain the Plan's claim review procedure as contained in this
Plan.
In the event the request is rejected or modified, the Participant or his
representative may within 60 days following receipt by the Participant or
representative of such rejection or modification, submit a written request for
review by the Employer of its initial decision. Within 60 days following such
request for review, the Employer shall render its final decision in writing to
the Participant or representative stating specific reasons for such decision. If
the Participant or representative is not satisfied with the Employer's final
decision, the Participant or representative can institute an action in a federal
court of competent jurisdiction; for this purpose, process would be served on
the Employer.
6.8 IN-SERVICE WITHDRAWALS An Employee may withdraw all or any part of the
fair market value of his or her Mandatory Contributions, Voluntary
Contributions, Qualified Voluntary Contributions or Rollover Contributions, upon
written request to the Employer. Transfer Contributions, which originate from a
Plan meeting the safe-harbor provisions of paragraph 8.7, may also be withdrawn
by an Employee upon written request to the Employer. Transfer Contributions not
meeting the safe-harbor provisions may only be withdrawn upon retirement, death,
Disability, termination or termination of the Plan, and will be subject to
Spousal consent requirements contained in Code Sections 411(a)(11) and 417. No
such withdrawals are permitted from a money purchase plan until the participant
attains Normal Retirement Age. Such request shall include the Participant's
address, social security number, birthdate, and amount of the withdrawal. If at
the time a distribution of
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Qualified Voluntary Contributions is received the Participant has not attained
age 59-1/2 and is not disabled, as defined at Code Section 22(e)(3), the
Participant will be subject to a federal income tax penalty, unless the
distribution is rolled over to a qualified plan or individual retirement plan
within 60 days of the date of distribution. A Participant may withdraw all or
any part of the fair market value of his or her pre-1987 Voluntary Contributions
with or without withdrawing the earnings attributable thereto. Post-1986
Voluntary Contributions may only be withdrawn along with a portion of the
earnings thereon. The amount of the earnings to be withdrawn is determined by
using the formula: DA[1-(V / V + E)], where DA is the distribution amount, V is
the amount of Voluntary Contributions and V + E is the amount of Voluntary
Contributions plus the earnings attributable thereto. A Participant withdrawing
his or her other contributions prior to attaining age 59-1/2, will be subject to
a federal tax penalty to the extent that the withdrawn amounts are includible in
income. Unless the Employer provides otherwise in the Adoption Agreement, any
Participant in a profit-sharing plan who is 100% fully vested in his or her
Employer contributions may withdraw all or any part of the fair market value of
any of such contributions, plus the investment earnings thereon, after attaining
age 59-1/2 without separation from Service. In a profit-sharing plan where the
Employer has so elected, the attainment of age 59-1/2 shall be deemed a
distributable event. Such distributions shall not be eligible for redeposit to
the Fund. A withdrawal under this paragraph shall not prohibit such Participant
from sharing in any future Employer Contribution he or she would otherwise be
eligible to share in. A request to withdraw amounts pursuant to this paragraph
must if applicable, be consented to by the Participant's Spouse. The consent
shall comply with the requirements of paragraph 6.4 relating to immediate
distributions.
Elective Deferrals, Qualified Non-elective Contributions, and Qualified Matching
Contributions, and income allocable to each are not distributable to a
Participant or his or her Beneficiary or Beneficiaries, in accordance with such
Participant's or Beneficiary's or Beneficiaries' election, earlier than upon
separation from Service, death, or Disability. Such amounts may also be
distributed upon:
(a) Termination of the Plan without the establishment of another
Defined Contribution Plan.
(b) The disposition by a corporation to an unrelated corporation of
substantially all of the assets [within the meaning of Code
Section 409(d)(2)] used in a trade or business of such
corporation if such corporation continues to maintain this Plan
after the disposition, but only with respect to Employees who
continue employment with the corporation acquiring such assets.
(c) The disposition by a corporation to an unrelated entity of such
corporation's interest in a subsidiary [within the meaning of
Code Section 409(d)(3)] if such corporation continues to
maintain this plan, but only with respect to Employees who
continue employment with such subsidiary.
(d) The attainment of age 59-1/2.
(e) The Hardship of the Participant as described in paragraph 6.9.
All distributions that may be made pursuant to one or more of the foregoing
distributable events are subject to the Spousal and Participant consent
requirements, if applicable, contained in Code Sections 401(a)(11) and 417.
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6.9 HARDSHIP WITHDRAWALS If permitted by the Trustee/Custodian and the
Employer in the Adoption Agreement, a Participant may request a Hardship
withdrawal. If the Participant has not attained age 59-1/2, the Participant may
be subject to a federal income tax penalty. Such request shall be in writing to
the Employer who shall have sole authority to authorize a hardship withdrawal,
pursuant to the rules below.
Hardship withdrawals may include Elective Deferrals regardless of when
contributed and any earnings accrued and credited thereon as of the last day of
the Plan Year ending before July 1, 1989 and Employer related contributions,
including but not limited to Employer Matching Contributions, plus the
investment earnings thereon to the extent vested. Qualified Matching
Contributions, Qualified Non-Elective Contributions and Elective Deferrals
reclassified as Voluntary Contributions plus the investment earnings thereon are
only available for Hardship withdrawal prior to age 59-1/2 to the extent that
they were credited to the Participant's Account as of the last day of the Plan
Year ending prior to July 1, 1989. The Plan Administrator may limit withdrawals
to Elective Deferrals and the earnings thereon as stipulated above. For purposes
of this section, a hardship is defined as an immediate and heavy financial need
of the Participant where the Participant lacks other available resources to meet
the need. Hardship withdrawals are subject to the Spousal consent requirements
contained in Code Section 401(a)(11) and 417.
Only the following reasons are valid to obtain hardship withdrawal:
(a) medical expenses [within the meaning of Code Section 213(d)]
of the Participant, his or her Spouse, children and other
dependents,
(b) the purchase (excluding mortgage payments) of a principal
residence for the Participant,
(c) payment of tuition and related educational fees for the next
twelve (12) months of post-secondary education for the
Participant, his or her Spouse, children or other dependents,
or
(d) the need to prevent eviction of the Employee from or a
foreclosure on the mortgage of, the Employee's principal
residence.
Furthermore, conditions (e), (f) and (h) below must be met in a cash or deferred
profit-sharing plan in order for a withdrawal to be authorized, while condition
(g) applies to all profit-sharing plans including cash or deferred plans.
(e) The Participant has obtained all distributions, other than
hardship distributions, and all nontaxable loans under all
plans maintained by the Employer.
(f) All plans maintained by the Employer (other than flexible
benefit plans under Code Section 125 providing for current
benefits) shall provide that the Employee's Elective Deferrals
and Voluntary Contributions will be suspended for twelve months
after the receipt of the Hardship distribution.
(g) The distribution is not in excess of the amount of the
immediate and heavy financial need [(a) through (d)] above.
Heavy financial need includes amounts necessary to pay any
Federal, State or local income taxes or penalties reasonably
anticipated to result from the distribution.
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(h) All plans maintained by the Employer provide that an Employee
may not make Elective Deferrals for the Employee's taxable year
immediately following the taxable year of the hardship
distribution in excess of the applicable limit under Code
Section 402(g) for such taxable year, less the amount of such
Employee's pre-tax contributions for the taxable year of the
hardship distribution.
(i) If a distribution is made at a time when a Participant has a
nonforfeitable right to less than 100% of the account balance
derived from Employer contributions and the Participant may
increase the nonforfeitable percentage in the account:
(1) A separate sub-account will be established
for the Participant's interest in the Plan as
of the time of the distribution, and
(2) At any relevant time the Participant's
nonforfeitable portion of the separate account
will be equal to an amount ("X") determined by
the formula:
X = P (AB + D) - D
For purposes of applying the formula: "P" is the nonforfeitable
percentage at the relevant time, "AB" is the account balance at
the relevant time, and "D" is the amount of the distribution.
6.10 PREVIOUS DISTRIBUTION OPTIONS Notwithstanding any restrictions
required by law, any payment or distribution option previously offered by the
Adopting Employer in a predecessor plan to this Plan shall continue to be
offered to eligible Participants under this Plan. Such payment or distribution
options shall be specifically set forth in the Adoption Agreement in the
Distribution Options section.
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ARTICLE VII
DISTRIBUTION REQUIREMENTS
7.1 JOINT AND SURVIVOR ANNUITY REQUIREMENTS All distributions made under
the terms of this Plan must comply with the provisions of Article VIII
including, if applicable, the safe harbor provisions thereunder.
7.2 MINIMUM DISTRIBUTION REQUIREMENTS All distributions required under this
Article shall be determined and made in accordance with the minimum distribution
requirements of Code Section 401(a)(9) and the regulations thereunder, including
the minimum distribution incidental benefit rules found at Regulations Section
1.401(a)(9)-2. The entire interest of a Participant must be distributed or begin
to be distributed no later than the Participant's Required Beginning Date. Life
expectancy and joint and last survivor life expectancy are computed by using the
expected return multiples found in Tables V and VI of Regulations Section
1.72-9. Life expectancies of the Participant, Spouse (or Surviving Spouse) or
non-Spouse beneficiary shall be calculated as specified in the adoption
agreement. The life expectancy of a non-Spouse beneficiary however, may not be
recalculated annually.
7.3 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):
(a) the life of the Participant,
(b) the life of the Participant and a Designated Beneficiary,
(c) a period certain not extending beyond the life expectancy of
the Participant, or
(d) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated
beneficiary.
7.4 REQUIRED DISTRIBUTIONS ON OR AFTER THE REQUIRED BEGINNING DATE
(a) If a participant's benefit is to be distributed over (1) a
period not extending beyond the life expectancy of the
Participant or the joint life and last survivor expectancy of
the Participant and the Participant's Designated Beneficiary
or (2) a period not extending beyond the life expectancy of
the Designated Beneficiary, the amount required to be
distributed for each calendar year, beginning with
distributions for the First Distribution Calendar Year, must
at least equal the quotient obtained by dividing the
Participant's benefit by the Applicable Life Expectancy.
(b) For calendar years beginning before 1989, if the Participant's
Spouse is not the Designated Beneficiary, the method of
distribution selected must have assured that at least 50% of
the Present Value of the amount available for distribution was
to be paid within the life expectancy of the Participant.
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(c) For calendar years beginning after 1988, the amount to be
distributed each year, beginning with distributions for
the First Distribution Calendar Year shall not be less than
the quotient obtained by dividing the Participant's benefit by
the lesser of (1) the Applicable Life Expectancy or (2) if the
Participant's Spouse is not the Designated Beneficiary, the
applicable divisor determined from the table set forth in
Q&A-4 of Regulations Section 1.401(a)(9)-2. Distributions
after the death of the Participant shall be distributed using
the Applicable Life Expectancy as the relevant divisor without
regard to Regulations Section 1.401(a)(9)-2.
(d) 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 Participant's
Required Beginning Date occurs, must be made on or before
December 31 of that Distribution Calendar Year.
(e) 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.
(f) For purposes of determining the amount of the required
distribution for the First Distribution Calendar Year, the
account balance to be used is the account balance determined
as of the last valuation preceding the First Distribution
Calendar Year. This balance will be increased by the amount
of any contributions or forfeitures allocated to the account
balance after the valuation date but before the last day of
such preceding calendar year. Such balance will also be
decreased by distributions made after the Valuation Date but
before the last day of such preceding Calendar Year. For all
other years, the account balance to be used is the last
valuation preceding such Distribution Calendar Year.
(g) For purposes of subparagraph 7.4(f), 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.
7.5 REQUIRED BEGINNING DATE
(a) General Rule. The Required Beginning Date of a Participant is
the first day of April of the calendar year following the
calendar year in which the Participant attains age 70-1/2.
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(b) Transitional Rules. The Required Beginning Date of a
Participant who attains age 70-1/2 before 1988, shall be
determined in accordance with (1) or (2) below:
(1) Non-5-percent owners. The Required Beginning Date of
a Participant who is not a 5-percent owner is the
first day of April of the calendar year following the
calendar year in which the later of retirement or
attainment of age 70- 1/2 occurs. In the case of a
Participant who is not a 5-percent owner who attains
age 70-1/2 during 1988 and who has not retired as of
January 1, 1989, the Required Beginning Date is April
1 1990.
(2) 5-percent owners. The Required Beginning Date of a
Participant who is a 5-percent owner during any year
beginning after 1979, is the first day of April
following the later of:
(i) the calendar year in which the Participant
attains age 70-1/2, or
(ii) the earlier of the calendar year with or
within which ends the plan year in which the
Participant becomes a 5- percent owner, or
the calendar year in which the Participant
retires.
(c) A Participant is treated as a 5-percent owner for purposes of
this Paragraph if such Participant is a 5-percent owner as
defined in Code Section 416(i) (determined in accordance with
Code 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 Owner attains age
66-1/2 or any subsequent Plan Year.
(d) Once distributions have begun to a 5-percent owner under this
paragraph, they must continue to be distributed, even if the
Participant ceases to be a 5-percent owner in a subsequent
year.
7.6 TRANSITIONAL RULE
(a) Notwithstanding the other requirements of this Article and
subject to the requirements of Article VIII, Joint and
Survivor Annuity Requirements, distribution on behalf of any
Employee, including a 5-percent owner, may be made in
accordance with all of the following requirements (regardless
of when such distribution commences):
(1) The distribution by the Trust is one which would not
have disqualified such Trust under Code Section
401(a)(9) as in effect prior to amendment by the
Deficit Reduction Act of 1984.
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(2) The distribution is in accordance with a method of
distribution designated by the Employee whose
interest in the Trust 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
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 distributions to be made upon the death of the
Employee.
(c) For any distribution which commences before 1984, but
continues after 1983, the Employee or the beneficiary, to whom
such distribution is being made, will be presumed to have
designated the method of distribution under which the
distribution is being made if the method of distribution was
specified in writing and the distribution satisfies the
requirements in subparagraphs (a)(1) and (a)(5) above.
(d) If a designation is revoked, any subsequent distribution must
satisfy the requirements of Code Section 401(a)(9) and the
regulations thereunder. If a designation is revoked subsequent
to the date distributions are required to begin, the Trust
must distribute by the end of the calendar year following the
calendar year in which the revocation occurs the total amount
not yet distributed which would have been required to have
been distributed to satisfy Code Section 401(a)(9) and the
regulations thereunder, but for the section 242(b)(2) election
of the Tax Equity and Fiscal Responsibility Act of 1982. For
calendar years beginning after 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 (one not named in the designation) under
the designation will not be considered to be a revocation of
the designation, so long as such substitution or addition does
not alter the period over which distributions are to be made
under the designation, directly or indirectly (for example, by
altering the relevant measuring life). In the case in which an
amount is transferred or rolled over from one plan to another
plan, the rules in Q&A J-2 and Q&A J-3 of the regulations
shall apply.
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7.7 DESIGNATION OF BENEFICIARY FOR DEATH BENEFIT Each Participant shall
file a written designation of beneficiary with the Employer upon qualifying for
participation in this Plan. Such designation shall remain in force until revoked
by the Participant by filing a new beneficiary form with the Employer. If
provided for in the Adoption Agreement, a Participant may elect to have a
portion of his or her account balance invested in an insurance contract. If an
insurance contract is purchased under the Plan, the Trustee must be named as
Beneficiary under the terms of the contract. However, the Participant shall
designate a Beneficiary to receive the proceeds of the contract after settlement
is received by the Trustee. Under a profit-sharing plan satisfying the
requirements of paragraph 8.7 hereof, the Designated Beneficiary shall be the
Participant's Surviving Spouse, if any, unless such Spouse properly consents
otherwise.
7.8 NONEXISTENCE OF BENEFICIARY Any portion of the amount payable hereunder
which is not disposed of because of the Participant's or former Participant's
failure to designate a beneficiary, or because all of the Designated
Beneficiaries predeceased the Participant, shall be paid to his or her Spouse.
If the Participant has no Spouse at the time of death, payment shall be made to
the personal representative of his or her estate in a lump sum.
7.9 DISTRIBUTION BEGINNING BEFORE DEATH If the Participant dies after
distribution of his or her interest has begun, the remaining portion of such
interest will continue to be distributed at least as rapidly as under the method
of distribution being used prior to the Participant's death.
7.10 DISTRIBUTION BEGINNING AFTER DEATH If the Participant dies before
distribution of his or her interest begins, distribution of the Participant's
entire interest shall be completed by December 31 of the calendar 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 (a) or (b)
below:
(a) If any portion of the Participant's interest is payable to a
Designated Beneficiary, distributions may be made over the
life or over a period certain not greater than 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;
(b) If the Designated Beneficiary is the Participant's surviving
Spouse, the date distributions are required to begin in
accordance with (a) above shall not be earlier than the later
of (1) December 31 of the calendar year immediately following
the calendar year in which the participant died or (2)
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 paragraph 7.10 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 date of death of the participant. If the Participant has no
Designated Beneficiary, or if the Designated Beneficiary does not elect a method
of distribution, then distribution of the Participant's entire interest must be
completed by December 31 of the calendar year containing the fifth anniversary
of the Participant's death.
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For purposes of this paragraph if the Surviving Spouse dies after the
Participant, but before payments to such Spouse begin, the provisions of this
paragraph with the exception of paragraph (b) herein, shall be applied as if the
Surviving Spouse were the Participant.
For purposes of paragraph 7.9 and this paragraph, any amount paid to a child of
the Participant will be treated as if it had been paid to the Surviving Spouse
if the amount becomes payable to the Surviving Spouse when the child attains the
age of majority.
Distribution of a Participant's interest in the Plan is considered to begin on
the Participant's Required Beginning Date (or if applicable, the date
distribution is required to begin to the Surviving Spouse who takes instead of
the Participant). 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.
7.11 DISTRIBUTION OF EXCESS ELECTIVE DEFERRALS
(a) Notwithstanding any other provision of the Plan, Elective
Deferrals plus any income and minus any loss allocable
thereto, shall be distributed no later than April 15, 1988,
and each April 15 thereafter, to Participants to whose
accounts Excess Elective Deferrals were allocated for the
preceding taxable year, and who claim Excess Elective
Deferrals for such taxable year. Excess Elective Deferrals
shall be treated as Annual Additions under the Plan, unless
such amounts are distributed no later than the first April
15th following the close of the Participant's taxable year. A
Participant is deemed to notify the Plan Administrator of any
Excess Elective Deferrals that arise by taking into account
only those Elective Deferrals made to this Plan and any other
plans of this Employer.
(b) The Participant's claim shall be in writing; shall be
submitted to the Plan Administrator not later than March 1 of
each year; shall specify the amount of the Participant's
Excess Elective Deferrals for the preceding taxable year; and
shall be accompanied by the Participant's written statement
that if such amounts are not distributed, such Excess Elective
Deferrals, when added to amounts deferred under other plans or
arrangements described in Code Sections 401(k), 408(k)
[Simplified Employee Pensions], or 403(b) [annuity programs
for public schools and charitable organizations] will exceed
the $7,000 limit as adjusted under Code Section 415(d) imposed
on the Participant by Code Section 402(g) for the year in
which the deferral occurred.
(c) ADJUSTED BALANCE METHOD Excess Elective Deferrals shall be
adjusted for any income or loss up to the end of the taxable
year, during which such excess was deferred. Income or loss
will be calculated under any reasonable method, provided it
does not violate the general nondiscrimination requirements of
Code Section 401(a)(4), the regulations under Code Section
401(k), and is consistently used for all Participants for
their corrective distributions and is used by the Plan for
income allocations to Participants' accounts.
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(d) If the Participant receives a return of his or her Elective
Deferrals, the amount of such contributions which are returned
must be brought into the Employee's taxable income.
7.12 DISTRIBUTIONS OF EXCESS CONTRIBUTIONS (ADP AMOUNTS)
(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 accounts such Excess
Contributions were allocated for the preceding Plan Year. 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 (10) 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. Excess Contributions shall be allocated to
Participants who are subject to the Family Member aggregation
rules of Code Section 414(q)(6) in the manner prescribed by
the regulations.
(b) Excess Contributions (including the amounts recharacterized)
shall be treated as Annual Additions under the Plan.
(c) Excess Contributions shall be adjusted for any income or loss
up to the end of the Plan Year. Income or loss will be
calculated under any reasonable method, provided it does not
violate the general nondiscrimination requirements of Code
Section 401(a)(4), the regulations under Code Section 401(k),
and is consistently used for all Participants for their
corrective distributions and is used by the Plan for income
allocations to Participants' accounts.
(d) PROPORTIONATE DISTRIBUTION Excess Contributions shall be
distributed from the Participant's Elective Deferral account
and Qualified Matching Contribution account (if applicable) in
proportion to the Participant's Elective Deferrals and
Qualified Matching Contributions (to the extent used in the
ADP test) for the Plan Year. Excess Contributions shall be
distributed from the Participant's Qualified Non-Elective
Contribution account only to the extent that such Excess
Contributions exceed the balance in the Participant's Elective
Deferral account and Qualified Matching Contribution account.
7.13 DISTRIBUTION OF EXCESS AGGREGATE CONTRIBUTIONS (ACP AMOUNTS)
(a) Notwithstanding any other provision of this Plan, Excess
Aggregate Contributions, plus any income and minus any loss
allocable thereto, shall be forfeited, if the employer so
elects in the Adoption Agreement, or if not forfeitable,
distributed no later than the last day of each Plan Year to
Participants to whose accounts such Excess Aggregate
Contributions were allocated for the preceding Plan Year.
Excess Aggregate Contributions shall be allocated to
Participants who are subject to the Family Member aggregation
rules of Code Section 414(q)(6) in the manner
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prescribed by the regulations. 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 (10) percent excise tax will be imposed on the Employer
maintaining the Plan with respect to those amounts. Excess
Aggregate Contributions shall be treated as Annual Additions
under the plan.
(b) Excess Aggregate Contributions shall be adjusted for any
income or loss up to the end of the Plan Year. The income or
loss allocable to Excess Aggregate Contributions is the sum of
income or loss for the Plan Year allocable to the
Participant's Voluntary Contribution account, Matching
Contribution account (if any, and if all amounts therein are
not used in the ADP test) and, if applicable, Qualified
Non-Elective Contribution account and Elective Deferral
account. Income or loss will be calculated under the method
used to calculate investment earnings and losses elsewhere in
the Plan.
(c) Forfeitures of Excess Aggregate Contributions may either be
reallocated to the accounts of non-Highly Compensated
Employees or applied to reduce Employer contributions, as
elected by the Employer in the Adoption Agreement.
(d) Excess Aggregate Contributions shall be forfeited if such
amount is not vested. If vested, such excess shall be
distributed on a pro-rata basis from the Participant's
Voluntary Contribution account (and, if applicable, the
Participant's Qualified Non-Elective Contribution account or
Elective Deferral account, or both).
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ARTICLE VIII
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
8.1 APPLICABILITY OF PROVISIONS The provisions of this Article shall apply
to any Participant who is credited with at least one Hour of Service with the
Employer on or after August 23, 1984 and such other Participants as provided in
paragraph 8.8.
8.2 PAYMENT OF 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 Early Retirement Age under the Plan.
8.3 PAYMENT OF QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY Unless an
optional form of benefit has been selected within the Election Period pursuant
to a Qualified Election, if a Participant dies before the Annuity Starting Date
then the Participant's Vested Account Balance shall be applied towards the
purchase of an annuity for the life of the Surviving Spouse. The Surviving
Spouse may elect to have such annuity distributed within a reasonable period
after the Participant's death.
A Participant who does not meet the age 35 requirement set forth in the Election
Period as of the end of any current Plan Year may make a special qualified
election to waive the qualified Pre-retirement Survivor annuity for the period
beginning 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 Pre-
retirement Survivor Annuity in such terms as are comparable to the explanation
required under paragraph 8.5. Qualified Pre-retirement Survivor Annuity coverage
will be automatically reinstated as of the first day of the Plan Year in which
the Participant attains age 35. Any new waiver on or after such date shall be
subject to the full requirements of this Article.
8.4 QUALIFIED ELECTION A Qualified Election is an election to either waive
a Qualified Joint and Survivor Annuity or a qualified pre-retirement survivor
annuity. Any such election 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.
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Additionally, a Participant's waiver of the Qualified Joint and Survivor Annuity
shall not be effective unless the election designates a form of benefit payment
which may not be changed without spousal consent (or the Spouse expressly
permits designations by the Participant without any further spousal consent). If
it is established to the satisfaction of the Plan Administrator 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 paragraphs
8.5 and 8.6 below.
8.5 NOTICE REQUIREMENTS FOR QUALIFIED JOINT AND SURVIVOR ANNUITY The Plan
Administrator shall provide each Participant a written explanation of:
(a) the terms and conditions of a Qualified Joint and Survivor
Annuity;
(b) the Participant's right to make and the effect of an election
to waive the Qualified Joint and Survivor Annuity form of
benefit;
(c) the rights of a Participant's Spouse; and
(d) the right to make, and the effect of, a revocation of a
previous election to waive the Qualified Joint and Survivor
Annuity.
Such notice shall be provided not less than 30 days and no more than 90 days
prior to the Annuity Starting Date.
8.6 NOTICE REQUIREMENTS FOR QUALIFIED PRE-RETIREMENT SURVIVOR ANNUITY The
Plan Administrator shall provide each Participant a written explanation of the
qualified pre-retirement survivor annuity in such terms and in such manner as
would be comparable to the explanation provided for meeting the requirements of
paragraph 8.5 applicable to a Qualified Joint and Survivor Annuity. Such
explanation shall be provided within whichever of the following periods ends
last:
(a) 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;
(b) a reasonable period ending after the individual becomes a
Participant;
(c) a reasonable period ending after this Article first applies to
the Participant.
Notwithstanding the foregoing, notice must be provided within a reasonable
period ending after separation from Service in the case of a Participant who
separates from Service before attaining age 35.
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For purposes of applying the preceding paragraph, a reasonable period ending
after the enumerated events described in (b) and (c) is the end of the two-year
period beginning one-year prior to the date the applicable event occurs, and
ending one-year after that date. In the case of a Participant who separates from
Service before the Plan Year in which age 35 is attained, notice shall be
provided within the two-year period beginning one year prior to separation and
ending one year after separation. If such a Participant subsequently returns to
employment with the Employer, the applicable period for such Participant shall
be redetermined.
8.7 SPECIAL SAFE-HARBOR EXCEPTION FOR CERTAIN PROFIT-SHARING PLANS
(a) This paragraph 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 1988,
from or under a separate account attributable solely to
Qualified Voluntary contributions, as maintained on behalf of
a Participant in a money purchase pension plan, (including a
target benefit plan) if the following conditions are
satisfied:
(1) the Participant does not or cannot elect payments in
the form of a life annuity; and
(2) on the death of a Participant, the Participant's
Vested Account Balance will be paid to the
Participant's Surviving Spouse, but if there is no
Surviving Spouse, or if the Surviving Spouse has
consented in a manner conforming to a Qualified
Election, then to the Participant's Designated
Beneficiary.
The Surviving Spouse may elect to have distribution of the
Vested Account Balance commence within the 90-day period
following the date of the Participant's death. The 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. These safe-harbor rules shall
not be operative with respect to a Participant in a
profit-sharing plan if that plan is a direct or indirect
transferee of a Defined Benefit Plan, money purchase plan, a
target benefit plan, stock bonus plan, or profit-sharing plan
which is subject to the survivor annuity requirements of Code
Section 401(a)(11) and Code Section 417, and would therefore
have a Qualified Joint and Survivor Annuity as its normal form
of benefit.
(b) The Participant may waive the spousal death benefit described
in this paragraph at any time provided that no such waiver
shall be effective unless it satisfies the conditions
described in paragraph 8.4 (other than the notification
requirement referred to therein) that would apply to the
Participant's waiver of the Qualified Pre- Retirement
Survivor Annuity.
(c) If this paragraph 8.7 is operative, then all other provisions
of this Article other than paragraph 8.8 are inoperative.
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8.8 TRANSITIONAL JOINT AND SURVIVOR ANNUITY RULES Special transition rules
apply to Participants who were not receiving benefits on August 23, 1984.
(a) Any living Participant not receiving benefits on August 23,
1984, who would otherwise not receive the benefits prescribed
by the previous paragraphs of this Article, must be given the
opportunity to elect to have the prior paragraphs of this
Article apply if such Participant is credited with at least
one Hour of Service under this Plan or a predecessor Plan in a
Plan Year beginning on or after January 1, 1976 and such
Participant had at least 10 Years of Service for vesting
purposes when he or she separated from Service.
(b) Any living Participant not receiving benefits on August 23,
1984, who was credited with at least one Hour of Service under
this Plan or a predecessor Plan on or after September 2, 1974,
and who is not otherwise credited with any Service in a Plan
Year beginning on or after January 1, 1976, must be given the
opportunity to have his or her benefits paid in accordance
with paragraph 8.9.
(c) The respective opportunities to elect [as described in (a) and
(b) above] must be afforded to the appropriate Participants
during the period commencing on August 23, 1984 and ending on
the date benefits would otherwise commence to said
Participants.
8.9 AUTOMATIC JOINT AND SURVIVOR ANNUITY AND EARLY SURVIVOR ANNUITY Any
Participant who has elected pursuant to paragraph 8.8(b) and any Participant who
does not elect under paragraph 8.8(a) or who meets the requirements of paragraph
8.8(a), except that such Participant does not have at least 10 years of vesting
Service when he or she separates from Service, shall have his or her benefits
distributed in accordance with all of the following requirements if benefits
would have been payable in the form of a life annuity.
(a) Automatic Joint and Survivor Annuity. If benefits in the form
of a life annuity become payable to a married Participant who:
(1) begins to receive payments under the Plan on or after
Normal Retirement Age, or
(2) dies on or after Normal Retirement Age while still
working for the Employer, or
(3) begins to receive payments on or after the Qualified
Early Retirement Age, or
(4) separates from Service on or after attaining Normal
Retirement (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,
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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
such election will be in writing and may be changed by the
Participant at any time.
(b) Election of Early Survivor Annuity. A Participant who is
employed after attaining the Qualified Early Retirement Age
will be given the opportunity to elect, during the Election
Period, to have a survivor annuity payable on death. If the
Participant elects the survivor annuity, payments under such
annuity must not be less than the payments which would have
been made to the Spouse under the Qualified Joint and
Survivor Annuity if the Participant had retired on the day
before his or her death. Any election under this provision
will be in writing and may be changed by the Participant at
any time. The Election Period begins on the later of:
(1) the 90th day before the Participant attains the
Qualified Early Retirement Age, or
(2) the date on which participation begins,
and ends on the date the Participant terminates
employment.
8.10 ANNUITY CONTRACTS Any annuity contract distributed under this Plan
must be nontransferable. The terms of any annuity contract purchased and
distributed by the Plan to a Participant or Spouse shall comply with the
requirements of this Plan.
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ARTICLE IX
VESTING
9.1 EMPLOYEE CONTRIBUTIONS A Participant shall always have a 100% vested
and nonforfeitable interest in his or her Elective Deferrals, Voluntary
Contributions, Qualified Voluntary Contributions, Rollover Contributions, and
Transfer Contributions plus the earnings thereon. No forfeiture of Employer
related contributions (including any minimum contributions made under paragraph
14.2 hereof) will occur solely as a result of an Employee's withdrawal of any
Employee contributions.
9.2 EMPLOYER CONTRIBUTIONS A Participant shall acquire a vested and
nonforfeitable interest in his or her account attributable to Employer
contributions in accordance with the table selected in the Adoption Agreement,
provided that if a Participant is not already fully vested, he or she shall
become so upon attaining Normal Retirement Age, Early Retirement Age, on death
prior to normal retirement, on retirement due to Disability, or on termination
of the Plan.
9.3 COMPUTATION PERIOD The computation period for purposes of determining
Years of Service and Breaks in Service for purposes of computing a Participant's
nonforfeitable right to his or her account balance derived from Employer
contributions shall be determined by the Employer in the Adoption Agreement. If
the Employer provides for other than full and immediate vesting and does not
designate otherwise, the Computation Period shall be the Plan Year. In the event
a former Participant with no vested interest in his or her Employer contribution
account requalifies for participation in the Plan after incurring a Break in
Service, such Participant shall be credited for vesting with all pre-break and
post-break Service.
9.4 REQUALIFICATION PRIOR TO FIVE CONSECUTIVE ONE-YEAR BREAKS IN SERVICE
The account balance of such Participant shall consist of any undistributed
amount in his or her account as of the date of re-employment plus any future
contributions added to such account plus the investment earnings on the account.
The Vested Account Balance of such Participant shall be determined by
multiplying the Participant's account balance (adjusted to include any
distribution or redeposit made under paragraph 6.3) by such Participant's vested
percentage. All Service of the Participant, both prior to and following the
break, shall be counted when computing the Participant's vested percentage.
9.5 REQUALIFICATION AFTER FIVE CONSECUTIVE ONE-YEAR BREAKS IN SERVICE If
such Participant is not fully vested upon re-employment, a new account shall be
established for such Participant to separate his or her deferred vested and
nonforfeitable account, if any, from the account to which new allocations will
be made. The Participant's deferred account to the extent remaining shall be
fully vested and shall continue to share in earnings and losses of the Fund.
When computing the Participant's vested portion of the new account, all
pre-break and post-break Service shall be counted. However, notwithstanding this
provision, no such former Participant who has had five consecutive one-year
Breaks in Service shall acquire a larger vested and nonforfeitable interest in
his or her prior account balance as a result of requalification hereunder.
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9.6 CALCULATING VESTED INTEREST A Participant's vested and nonforfeitable
interest shall be calculated by multiplying the fair market value of his or her
account attributable to Employer contributions on the Valuation Date preceding
distribution by the decimal equivalent of the vested percentage as of his or her
termination date. The amount attributable to Employer contributions for purposes
of the calculation includes amounts previously paid out pursuant to paragraph
6.3 and not repaid. The Participant's vested and nonforfeitable interest, once
calculated above, shall be reduced to reflect those amounts previously paid out
to the Participant and not repaid by the Participant. The Participant's vested
and nonforfeitable interest so determined shall continue to share in the
investment earnings and any increase or decrease in the fair market value of the
Fund up to the Valuation Date preceding or coinciding payment.
9.7 FORFEITURES Any balance in the account of a Participant who has
separated from Service to which he or she is not entitled under the foregoing
provisions, shall be forfeited and applied as provided in the Adoption
Agreement. If not specified otherwise in the Adoption Agreement, forfeitures
will be allocated to Participants in the same manner as the Employer's
contribution. A forfeiture may only occur if the Participant has received a
distribution under paragraphs 6.3(a) and (b) from the Plan or if the Participant
has incurred five consecutive 1-year Breaks in Service. Forfeitures shall inure
only to the accounts of Participants of the adopting Employer's plan. No
forfeiture will occur solely as a result of a Participant's withdrawal of his or
her Employee contributions. If not specified otherwise in the Adoption
Agreement, forfeitures shall occur and be allocated at the end of the Plan Year
during which the former Participant incurs five consecutive one-year Breaks in
Service. Reallocation of forfeitures shall be made no later than one year after
a cash out or the occurrence of the Participant's fifth consecutive one year
Break in Service. If a Participant's Vested Account Balance is forfeited because
the Participant or Designated Beneficiary cannot be found, such benefit will be
reinstated if a claim is made by the Participant or Designated Beneficiary.
Furthermore, a Highly Compensated Employee's Matching Contributions may be
forfeited, even if vested, if the contributions to which they relate are Excess
Deferrals, Excess Contributions, or Excess Aggregate Contributions.
9.8 AMENDMENT OF VESTING SCHEDULE No amendment to the Plan shall have the
effect of decreasing a Participant's vested interest determined without regard
to such amendment as of the later of the date such amendment is adopted or the
date it becomes effective. Further, if the vesting schedule of the Plan is
amended, or the Plan is amended in any way that directly or indirectly affects
the computation of any Participant's nonforfeitable percentage or if the Plan is
deemed amended by an automatic change to or from a Top-Heavy vesting schedule,
each Participant with at least three Years of Service with the Employer may
elect, within a reasonable period after the adoption of the amendment or change,
to have his or her nonforfeitable percentage computed under the Plan without
regard to such amendment or change. For Participant's who do not have at least
one Hour of Service in any Plan Year beginning after 1988, the preceding
sentence shall be applied by substituting "Five Years of Service" for "Three
Years of Service" where such language appears. The period during which the
election may be made shall commence with the date the amendment is adopted or
deemed to be made and shall end on the later of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
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(c) 60 days after the Participant is issued written notice of the
amendment by the Employer or the Trustee/Custodian. If the
Trustee/Custodian is asked to so notify, the Fund will be
charged for the costs thereof.
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 section 412(c)(8) of the Code (relating to financial hardships). For
purposes of this paragraph, a Plan amendment which has the effect of decreasing
a Participant's account balance or eliminating an optional form of benefit, with
respect to benefits attributable to service before the amendment, shall be
treated as reducing an accrued benefit.
9.9 SERVICE WITH CONTROLLED GROUPS All Years of Service with other members
of a controlled group of corporations [as defined in Code Section 414(b)],
trades or businesses under common control [as defined in Code Section 414(c)],
or members of an affiliated service group [as defined in Code Section 414(m)]
shall be considered for purposes of determining a Participant's nonforfeitable
percentage.
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ARTICLE X
LIMITATIONS ON ALLOCATIONS
AND ANTIDISCRIMINATION TESTING
10.1 PARTICIPATION ONLY IN THIS PLAN If the Participant does not
participate in and has never participated in another qualified plan, a Welfare
Benefit Fund (as defined in paragraph 1.89) or an individual medical account, as
defined in Code Section 415(l)(2), maintained by the adopting Employer, which
provides an Annual Addition as defined in paragraph 1.4, 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 contribution 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.
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 estimate of the Participant's
Compensation for the Limitation Year, uniformly determined for all Participants
similarly situated. 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.
10.2 DISPOSITION OF EXCESS ANNUAL ADDITIONS If pursuant to paragraph 10.1
or as a result of the allocation of forfeitures, there is an Excess Amount, the
excess will be disposed of under one of the following methods as determined in
the Adoption Agreement. If no election is made in the Adoption Agreement then
method "(a)" below shall apply.
(a) Suspense Account Method
(1) Any Elective Deferrals, nondeductible Employee
Voluntary Contributions or required Voluntary
Contributions to the extent they reduce the Excess
Amount, will be returned to the Participant;
(2) If after the application of paragraph (1) an Excess
Amount still exists, and the Participant is covered
by the Plan at the end of the Limitation Year, the
Excess Amount in the Participant's account will be
used to reduce Employer contributions (including any
allocation of forfeitures) for such Participant in
the next Limitation Year, and each succeeding
Limitation Year if necessary;
(3) If after the application of paragraph (1) an Excess
Amount still exists, and the Participant is not
covered by the Plan at the end of the Limitation
Year, the Excess Amount will be held unallocated in a
suspense account. The suspense account will be
applied to reduce future Employer contributions
(including allocation of any forfeitures) for all
remaining Participants in the next Limitation Year,
and each succeeding Limitation Year if necessary;
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(4) If a suspense account is in existence at any time
during the Limitation Year pursuant to this
paragraph, it will not participate in the allocation
of investment gains and losses. If a suspense account
is in existence at any time during a particular
Limitation Year, all amounts in the suspense account
must be allocated and reallocated to Participants'
accounts before any Employer contributions or any
Employee or Voluntary Contributions may be made to
the Plan for that Limitation Year. Excess amounts
other than excess Elective Deferrals which may be
returned to Participants under Paragraph 1.35 may not
be distributed to Participants or former
Participants.
(b) Spillover Method
(1) Any Elective Deferrals, nondeductible Employee
Voluntary or required Voluntary Contributions, to the
extent they reduce the Excess Amount, will be
returned to the Participant.
(2) Any Excess Amount which would be allocated to the
account of an individual Participant under the Plan's
allocation formula will be reallocated to other
Participants in the same manner as other Employer
contributions. No such reallocation shall be made to
the extent that it will result in an Excess Amount
being created in such Participant's own account.
(3) To the extent that amounts cannot be reallocated
under (1) above, the suspense account provisions of
(a) above will apply.
10.3 PARTICIPATION IN THIS PLAN AND ANOTHER PROTOTYPE DEFINED CONTRIBUTION
PLAN, WELFARE BENEFIT FUND OR INDIVIDUAL MEDICAL ACCOUNT MAINTAINED BY THE
EMPLOYER The Annual Additions which may be credited to a Participant's account
under this Plan for any Limitation Year will not exceed the Maximum Permissible
Amount reduced by the Annual Additions credited to a Participant's account under
the other plans and Welfare Benefit Funds and individual medical accounts as
defined in Code Section 415(l)(2), maintained by the Employer which provides an
Annual Addition as defined in paragraph 1.4 for the same Limitation Year. If the
Annual Additions, with respect to the Participant under other Defined
Contribution Plans and Welfare Benefit Funds maintained by the Employer, are
less than the Maximum Permissible Amount and the Employer contribution that
would otherwise be contributed or allocated to the Participant's 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 Defined Contribution Plans and Welfare Benefit
Funds in the aggregate are equal to or greater than the Maximum Permissible
Amount, no amount will be contributed or allocated to the Participant's account
under this Plan for the Limitation Year. Prior to determining the Participant's
actual Compensation
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for the Limitation Year, the Employer may determine the Maximum Permissible
Amount for a Participant in the manner described in paragraph 10.1. 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.
10.4 DISPOSITION OF EXCESS ANNUAL ADDITIONS UNDER TWO PLANS If, pursuant to
paragraph 10.3 or as a result of forfeitures, a Participant's Annual Additions
under this Plan and such other plans would result in an Excess Amount for a
Limitation Year, the Excess Amount will be deemed to consist of the Annual
Additions last allocated except that Annual Additions attributable to a Welfare
Benefit Fund or individual medical account as defined in Code Section 415(l)(2)
will be deemed to have been allocated first regardless of the actual allocation
date. If an Excess Amount was allocated to a Participant on an allocation date
of this Plan which coincides with an allocation date of another plan, the Excess
Amount attributed to this Plan will be the product of:
(a) the total Excess Amount allocated as of such date, times
(b) the ratio of:
(1) the Annual Additions allocated to the Participant for
the Limitation Year as of such date under the Plan,
to
(2) the total Annual Additions allocated to the
Participant for the Limitation Year as of such date
under this and all the other qualified Master or
Prototype Defined Contribution Plans.
Any Excess Amount attributed to this Plan will be disposed of in the manner
described in paragraph 10.2.
10.5 PARTICIPATION IN THIS PLAN AND ANOTHER DEFINED CONTRIBUTION PLAN WHICH
IS NOT A MASTER OR PROTOTYPE 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 paragraphs 10.3 and 10.4 as though the other plan were a Master
or Prototype Plan, unless the Employer provides other limitations in the
Adoption Agreement.
10.6 PARTICIPATION IN THIS PLAN AND A DEFINED BENEFIT PLAN 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. For any Plan Year during which the Plan is Top-Heavy, the
Defined Benefit and Defined Contribution Plan Fractions shall be calculated in
accordance with Code Section 416(h). 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 provisions set forth in the Adoption Agreement.
10.7 AVERAGE DEFERRAL PERCENTAGE [ADP OR 401(K)] TEST With respect to any
Plan Year, the Average Deferral Percentage for Participants who are Highly
Compensated Employees and the Average Deferral Percentage for Participants who
are non-Highly Compensated Employees must satisfy one of the following tests:
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(a) BASIC TEST The Average Deferral Percentage for Participants
who are Highly Compensated Employees for the Plan Year is not
more than 1.25 times the Average Deferral Percentage for
Participants who are non-Highly Compensated Employees for the
same Plan Year, or
(b) ALTERNATIVE TEST The Average Deferral Percentage for
Participants who are Highly Compensated Employees for the Plan
Years does not exceed the Average Deferral Percentage for
Participants who are non-Highly Compensated Employees for the
same Plan Year by more than 2 percentage points provided that
the Average Deferral Percentage for Participants who are
Highly Compensated Employees is not more than 2.0 times the
Average Deferral Percentage for Participants who are
non-Highly Compensated Employees.
10.8 SPECIAL RULES RELATING TO APPLICATION OF ADP TEST
(a) ADDITIONAL EMPLOYER 401(K) PLANS The Actual Deferral
Percentage for any Participant who is a Highly Compensated
Employee for the Plan Year and who is eligible to have
Elective Deferrals (and Qualified Non-Elective Contributions
or Qualified Matching Contributions, or both, if treated as
Elective Deferrals for purposes of the ADP test) allocated to
his or her accounts under two or more arrangements described
in Code Section 401(k), that are maintained by the Employer,
shall be determined as if such Elective Deferrals (and, if
applicable, such Qualified Non-Elective Contributions or
Qualified Matching Contributions, or both) were made under a
single arrangement. If a Highly Compensated Employee
participates in two or more cash or deferred arrangements that
have different Plan Years, all cash or deferred arrangements
ending with or within the same calendar year shall be treated
as a single arrangement.
(b) PLAN AGGREGATION In the event that this Plan satisfies the
requirements of Code Sections 401(k), 401(a)(4), or 410(b),
only if aggregated with one or more other plans, or if one or
more other plans satisfy the requirements of such Code
Sections only if aggregated with this Plan, then this Section
shall be applied by determining the Actual Deferral Percentage
of Employees as if all such plans were a single plan. For Plan
Years beginning after 1989, plans may be aggregated in order
to satisfy Code Section 401(k) only if they have the same Plan
Year.
(c) FAMILY MEMBER AGGREGATION For purposes of determining the
Actual Deferral Percentage of a Participant who is a 5-percent
owner or one of the ten most highly-paid Highly Compensated
Employees, the Elective Deferrals (and Qualified Non-Elective
Contributions or Qualified Matching Contributions, or both, if
treated as Elective Deferrals for purposes of the ADP test)
and Compensation of such Participants shall include the
Elective Deferrals (and, if applicable, Qualified Non-Elective
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Contributions and Qualified Matching Contributions, or both)
for the Plan Year of Family Members as defined in paragraph
1.36 of this Plan. Family Members, with respect to such Highly
Compensated Employees, shall be disregarded as separate
Employees in determining the ADP both for Participants who are
non-Highly Compensated Employees and for Participants who are
Highly Compensated Employees.
(d) TIMING OF CONTRIBUTIONS For purposes of determining the ADP
test, Elective Deferrals, Qualified Non-Elective Contributions
and Qualified Matching Contributions must be made before the
last day of the twelve-month period immediately following the
Plan Year to which contributions relate. In the event of
repeal of the family aggregation rules under Code Section
414(q)(6), all applications of those rules under this Plan
shall cease as of the effective date of such repeal.
(e) DOCUMENTATION The Employer shall maintain records sufficient
to demonstrate satisfaction of the ADP test and the amount of
Qualified Non-Elective Contributions or Qualified Matching
Contributions, or both, used in such test.
(f) ADDITIONAL IRS REQUIREMENTS The determination and treatment of
the Actual Deferral Percentage amounts of any Participant
shall satisfy such other requirements as may be prescribed by
the Secretary of the Treasury.
10.9 RECHARACTERIZATION If the Employer allows for Voluntary Contributions
in the Adoption Agreement, a Participant may treat his or her Excess
Contributions as an amount distributed to the Participant and then contributed
by the Participant to the Plan. Recharacterized amounts will remain
nonforfeitable and subject to the same distribution requirements as Elective
Deferrals. Amounts may not be recharacterized by a Highly Compensated Employee
to the extent that such amount in combination with other Employee Contributions
made by that Employee would exceed any stated limit under the Plan on Voluntary
Contributions. Recharacterization must occur no later than two and one-half
months after the last day of the Plan Year in which such Excess Contributions
arose and is deemed to occur no earlier than the date the last Highly
Compensated Employee is informed in writing of the amount recharacterized and
the consequences thereof. Recharacterized amounts will be taxable to the
Participant for the Participant's tax year in which the Participant would have
received them in cash.
10.10 AVERAGE CONTRIBUTION PERCENTAGE [ACP OR 401(M)] TEST If the Employer
makes Matching Contributions or if the Plan allows Employees to make Voluntary
Contributions the Plan must meet additional nondiscrimination requirements
provided under Code Section 401(m). If Employee Contributions (including any
Salary Savings Contributions recharacterized as Voluntary Contributions) are
made pursuant to this Plan, then in addition to the ADP test referenced in
paragraph 10.7, the Average Contribution Percentage test is also applicable. The
Average Contribution Percentage for Participants who are Highly Compensated
Employees for each Plan Year and the Average Contribution Percentage for
Participants who are Non-Highly Compensated Employees for the same Plan Year
must satisfy one of the following tests:
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(a) BASIC TEST The Average Contribution Percentage for
Participants who are Highly Compensated Employees for the Plan
Year shall not exceed the Average Contribution Percentage for
Participants who are non-Highly Compensated Employees for the
same Plan Year multiplied by 1.25; or
(b) ALTERNATIVE TEST The ACP for Participants who are Highly
Compensated Employees for the Plan Year shall not exceed the
Average Contribution Percentage for Participants who are
non-Highly Compensated Employees for the same Plan Year
multiplied by two (2), provided that the Average Contribution
Percentage for Participants who are Highly Compensated
Employees does not exceed the Average Contribution Percentage
for Participants who are non-Highly Compensated Employees by
more than two (2) percentage points.
10.11 SPECIAL RULES RELATING TO APPLICATION OF ACP TEST
(a) AGGREGATE LIMIT If one or more Highly Compensated Employees
participate in both a cash or deferred arrangement and a plan
subject to the ACP test maintained by the Employer and the sum
of the ADP and ACP of those Highly Compensated Employees
subject to either or both tests exceeds the Aggregate Limit,
then the ADP or ACP of those Highly Compensated Employees who
also participate in a cash or deferred arrangement will be
reduced (beginning with such Highly Compensated Employee whose
ADP or ACP is the highest) as set forth in the Adoption
Agreement so that the limit is not exceeded. The amount by
which each Highly Compensated Employee's Contribution
Percentage Amounts is reduced shall be treated as an Excess
Aggregate Contribution. The ADP and ACP of the Highly
Compensated Employees are determined after any corrections
required to meet the ADP and ACP tests. Multiple use does not
occur if either the ADP or the ACP of the Highly Compensated
Employees does not exceed 1.25 multiplied by the ADP and ACP
of the non-Highly Compensated Employees.
(b) INDIVIDUAL AGGREGATION For purposes of this Article, the
Contribution Percentage for any Participant who is a Highly
Compensated Employee and who is eligible to have Contribution
Percentage Amounts allocated to his or her account under two
or more plans described in Code Section 401(a), or
arrangements described in Code Section 401(k) that are
maintained by the Employer, shall be determined as if the
total of such Contribution Percentage Amounts was made under
each Plan. If a Highly Compensated Employee participates in
two or more cash or deferred arrangements that have different
plan years, all cash or deferred arrangements ending with or
within the same calendar year shall be treated as a single
arrangement.
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(c) PLAN AGGREGATION In the event that this Plan satisfies the
requirements of Code Sections 401(a)(4), 401(m), or 410(b)
only if aggregated with one or more other plans, or if one or
more other plans satisfy the requirements of the above listed
Code Sections only if aggregated with this Plan, then this
Section shall be applied by determining the Contribution
Percentage of Employees as if all such plans were a single
plan. For plan years beginning after 1989, plans may be
aggregated in order to satisfy Code Section 401(m) only if the
aggregated plans have the same Plan Year.
(d) FAMILY MEMBER AGGREGATION For purposes of determining the
Contribution percentage of a Participant who is a five-percent
owner or one of the ten most highly-paid, Highly Compensated
Employees, the Contribution Percentage Amounts and
Compensation of such Participant shall include the
Contribution Percentage Amounts and Compensation for the Plan
Year of Family Members as defined in Paragraph 1.37 of this
Plan. Family Members, with respect to Highly Compensated
Employees, shall be disregarded as separate Employees in
determining the Contribution Percentage both for Participants
who are non-Highly Compensated Employees and for Participants
who are Highly Compensated Employees. In the event of repeal
of the family aggregation rules under Code Section 414(q)(6),
all applications of those rules under this Plan shall cease as
of the effective date of such repeal.
(e) TIMING OF CONTRIBUTIONS For purposes of determining the
Contribution Percentage test, Employee Contributions are
considered to have been made in the Plan Year in which
contributed to the trust. Matching Contributions and Qualified
Non-Elective Contributions will be considered made for a Plan
Year if made no later than the end of the twelve-month period
beginning on the day after the close of the Plan Year.
(f) DOCUMENTATION The Employer shall maintain records sufficient
to demonstrate satisfaction of the ACP test and the amount of
Qualified Non-Elective Contributions or Qualified Matching
Contributions, or both, used in such test.
(g) ADDITIONAL IRS REQUIREMENTS The determination and treatment of
the Contribution Percentage of any Participant shall satisfy
such other requirements as may be prescribed by the Secretary
of the Treasury.
(h) CONTRIBUTION USE LIMITATIONS Qualified Matching Contributions
and Qualified Non-Elective Contributions used to satisfy the
ADP test may not be used to satisfy the ACP test.
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ARTICLE XI
ADMINISTRATION
11.1 PLAN ADMINISTRATOR The Employer shall be the named fiduciary and Plan
Administrator. These duties shall include:
(a) appointing the Plan's attorney, accountant, actuary, or any
other party needed to administer the Plan,
(b) directing the Trustee/Custodian with respect to payments from
the Fund,
(c) communicating with Employees regarding their participation and
benefits under the Plan, including the administration of all
claims procedures,
(d) filing any returns and reports with the Internal Revenue
Service, Department of Labor, or any other governmental
agency,
(e) reviewing and approving any financial reports, investment
reviews, or other reports prepared by any party appointed by
the Employer under paragraph (a),
(f) establishing a funding policy and investment objectives
consistent with the purposes of the Plan and the Employee
Retirement Income Security Act of 1974, and
(g) construing and resolving any question of Plan interpretation.
The Plan Administrator's interpretation of Plan provisions
including eligibility and benefits under the Plan is final,
and unless it can be shown to be arbitrary and capricious will
not be subject to "de novo" review.
11.2 TRUSTEE/CUSTODIAN The Trustee/Custodian shall be responsible for the
administration of investments held in the Fund. These duties shall include:
(a) receiving contributions under the terms of the Plan,
(b) making distributions from the Fund in accordance with written
instructions received from an authorized representative of the
Employer, and
(c) keeping accurate records reflecting its administration of the
Fund and making such records available to the Employer for
review and audit. Within 90 days after each Plan Year, and
within 90 days after its removal or resignation, the
Trustee/Custodian shall file with the Employer an accounting
of its administration of the Fund during such year or from the
end of the preceding Plan Year to the date of removal or
resignation. Such accounting shall include a statement of cash
receipts and disbursements since the date of its last
accounting and shall contain an asset list showing the fair
market value of investments held in the Fund as of the end of
the Plan Year. The value of marketable investments
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shall be determined using the most recent price quoted on a
national securities exchange or over the counter market. The
value of non-marketable investments shall be determined in the
sole judgement of the Trustee/Custodian which determination
shall be binding and conclusive. The value of investments in
securities or obligations of the Employer in which there is no
market shall be determined in the sole judgement of the
Employer and the Trustee/Custodian shall have no
responsibility with respect to the valuation of such assets.
The Employer shall review the Trustee/Custodian's accounting
and notify the Trustee/Custodian in the event of its
disapproval of the report within 90 days, providing the
Trustee/Custodian with a written description of the items in
question. The Trustee/Custodian shall have 60 days to provide
the Employer with a written explanation of the items in
question. If the Employer again disapproves, the
Trustee/Custodian shall file its accounting in a court of
competent jurisdiction for audit and adjudication.
(d) employing such agents attorneys or other professionals as the
Trustee may deem necessary or advisable in the performance of
its duties.
The Trustee's/Custodian's duties shall be limited to those described above. The
Employer shall be responsible for any other administrative duties required under
the Plan or by applicable law.
11.3 ADMINISTRATIVE FEES AND EXPENSES All reasonable costs, charges and
expenses incurred by the Trustee/Custodian in connection with the administration
of the Fund and all reasonable costs, charges and expenses incurred by the Plan
Administrator in connection with the administration of the Plan (including fees
for legal services rendered to the Trustee/Custodian or Plan Administrator) may
be paid by the Employer, but if not paid by the Employer when due, shall be paid
from the Fund. Such reasonable compensation to the Trustee/Custodian as may be
agreed upon from time to time between the Employer and the Trustee/Custodian and
such reasonable compensation to the Plan Administrator as may be agreed upon
from time to time between the Employer and Plan Administrator may be paid by the
Employer, but if not paid by the Employer when due shall be paid by the Fund.
The Trustee shall have the right in accordance with the Adopting Employer's
administrative procedure to liquidate trust assets to cover its fees.
Notwithstanding the foregoing, no compensation other than reimbursement for
expenses shall be paid to a Plan Administrator who is the Employer or a full-
time Employee of the Employer. In the event any part of the Trust/Custodial
Account becomes subject to tax, all taxes incurred will be paid from the Fund
unless the Plan Administrator advises the Trustee/Custodian not to pay such tax.
11.4 DIVISION OF DUTIES AND INDEMNIFICATION
(a) The Trustee/Custodian shall have the authority and discretion
to manage and govern the Fund to the extent provided in this
instrument, but does not guarantee the Fund in any manner
against investment loss or depreciation in asset value, or
guarantee the adequacy of the Fund to meet and discharge all
or any liabilities of the Plan.
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(b) The Trustee/Custodian shall not be liable for the making,
retention or sale of any investment or reinvestment made by
it, as herein provided, or for any loss to, or diminution of
the Fund, or for any other loss or damage which may result
from the discharge of its duties hereunder except to the
extent it is judicially determined that the Trustee/Custodian
has failed to exercise the care, skill, prudence and diligence
under the circumstances then prevailing that a prudent person
acting in a like capacity and familiar with such matters would
use in the conduct of an enterprise of a like character with
like aims.
(c) The Employer warrants that all directions issued to the
Trustee/Custodian by it or the Plan Administrator will be in
accordance with the terms of the Plan and not contrary to the
provisions of the Employee Retirement Income Security Act of
1974 and regulations issued thereunder.
(d) The Trustee/Custodian shall not be answerable for any action
taken pursuant to any direction, consent, certificate, or
other paper or document on the belief that the same is genuine
and signed by the proper person. All directions by the
Employer, Participant or the Plan Administrator shall be in
writing. The Employer shall deliver to the Trustee/Custodian
certificates evidencing the individual or individuals
authorized to act as set forth in the Adoption Agreement or as
the Employer may subsequently inform the Trustee/Custodian in
writing and shall deliver to the Trustee/Custodian specimens
of their signatures.
(e) The duties and obligations of the Trustee/Custodian shall be
limited to those expressly imposed upon it by this instrument
or subsequently agreed upon by the parties. Responsibility for
administrative duties required under the Plan or applicable
law not expressly imposed upon or agreed to by the
Trustee/Custodian, shall rest solely with the Employer.
(f) The Trustee shall be indemnified and saved harmless by the
Employer from and against any and all liability to which the
Trustee/Custodian may be subjected, including all expenses
reasonably incurred in its defense, for any action or failure
to act resulting from compliance with the instructions of the
Employer, the employees or agents of the Employer, the Plan
Administrator, or any other fiduciary to the Plan, and for any
liability arising from the actions or non-actions of any
predecessor Trustee/Custodian or fiduciary or other
fiduciaries of the Plan.
(g) The Trustee/Custodian shall not be responsible in any way for
the application of any payments it is directed to make or for
the adequacy of the Fund to meet and discharge any and all
liabilities under the Plan.
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(h) The Trustee/Custodian shall not be responsible in any way for
any actions taken, or failure to act by a prior
Trustee/Custodian under a prior document. The Employer shall
indemnify and hold harmless the Trustee/Custodian for such
prior Trustee/Custodian acts or inaction for any periods
applicable, including periods for which the Trustee/Custodian
must restate the Plan retroactively to comply with any tax law
or regulations thereunder.
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ARTICLE XII
TRUST FUND/CUSTODIAL ACCOUNT
12.1 THE FUND The Fund shall consist of all contributions made under
Article III and Article IV of the Plan and the investment thereof and earnings
thereon. All contributions and the earnings thereon less payments made under the
terms of the Plan, shall constitute the Fund. The Fund shall be administered as
provided in this document.
12.2 CONTROL OF PLAN ASSETS The assets of the Fund or evidence of ownership
shall be held by the Trustee/Custodian under the terms of the Plan and
Trust/Custodial Account. If the assets represent amounts transferred from
another trustee/custodian under a former plan, the Trustee/Custodian named
hereunder shall not be responsible for any actions of the prior fiduciary
including the review of the propriety of any investment under the former plan.
Such review shall be the responsibility of the Employer.
12.3 EXCLUSIVE BENEFIT RULES No part of the Fund shall be used for, or
diverted to, purposes other than for the exclusive benefit of Participants,
former Participants with a vested interest, and the beneficiary or beneficiaries
of deceased Participants having a vested interest in the Fund at death.
12.4 ASSIGNMENT AND ALIENATION OF BENEFITS No right or claim to, or
interest in, any part of the Fund, or any payment from the Fund, shall be
assignable, transferable, or subject to sale, mortgage, pledge, hypothecation,
commutation, anticipation, garnishment, attachment, execution, or levy of any
kind. The Trustee/Custodian shall not recognize any attempt to assign, transfer,
sell, mortgage, pledge, hypothecate, commute, or anticipate the same, except to
the extent required by law. The preceding sentences 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 Qualified Domestic Relations Order, as defined in
Code Section 414(p), or any domestic relations order entered before January 1,
1985 which the Plan attorney and Plan Administrator deem to be qualified.
12.5 DETERMINATION OF QUALIFIED DOMESTIC RELATIONS ORDER (QDRO) A domestic
relations order shall specifically state all of the following in order to be
deemed a Qualified Domestic Relations Order ("QDRO"):
(a) The name and last known mailing address (if any) of the
Participant and of each alternate payee covered by the QDRO.
However, if the QDRO does not specify the current mailing
address of the alternate payee, but the Plan Administrator has
independent knowledge of that address, the QDRO will still be
valid.
(b) The dollar amount or percentage of the Participant's benefit
to be paid by the Plan to each alternate payee, or the manner
in which the amount or percentage will be determined.
(c) The number of payments or period for which the order applies.
(d) The specific plan (by name) to which the domestic relations
order applies.
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The domestic relations order shall not be deemed a QDRO if it requires the Plan
to provide:
(e) any type or form of benefit, or any option not already
provided for in the Plan;
(f) increased benefits, or benefits in excess of the Participant's
vested rights;
(g) payment of a benefit earlier than allowed by the Plan's
earliest retirement provisions or in the case of a
profit-sharing plan, prior to the allowability of in-service
withdrawals, or
(h) payment of benefits to an alternate payee which are required
to be paid to another alternate payee under another QDRO.
Promptly, upon receipt of a domestic relations order ("Order") which may or may
not be "Qualified", the Plan Administrator shall notify the Participant and any
alternate payee(s) named in the Order of such receipt, and include a copy of
this paragraph 12.5. The Plan Administrator shall then forward the Order to the
Plan's legal counsel for an opinion as to whether or not the Order is in fact
"Qualified" as defined in Code Section 414(p). Within a reasonable time after
receipt of the Order, not to exceed 60 days, the Plan's legal counsel shall make
a determination as to its "Qualified" status and the Participant and any
alternate payee(s) shall be promptly notified in writing of the determination.
If the "Qualified" status of the Order is in question, there will be a delay in
any payout to any payee including the Participant, until the status is resolved.
In such event, the Plan Administrator shall segregate the amount that would have
been payable to the alternate payee(s) if the Order had been deemed a QDRO. If
the Order is not Qualified, or the status is not resolved (for example, it has
been sent back to the Court for clarification or modification) within 18 months
beginning with the date the first payment would have to be made under the Order,
the Plan Administrator shall pay the segregated amounts plus interest to the
person(s) who would have been entitled to the benefits had there been no Order.
If a determination as to the Qualified status of the Order is made after the
18-month period described above, then the Order shall only be applied on a
prospective basis. If the Order is determined to be a QDRO, the Participant and
alternate payee(s) shall again be notified promptly after such determination.
Once an Order is deemed a QDRO, the Plan Administrator shall pay to the
alternate payee(s) all the amounts due under the QDRO, including segregated
amounts plus interest which may have accrued during a dispute as to the Order's
qualification.
Unless specified otherwise in the Adoption Agreement, the earliest retirement
age with regard to the Participant against whom the QDRO is entered shall be the
date the Order is deemed Qualified. This will only allow distributions to
alternate payee(s) and not to the Participant.
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ARTICLE XIII
INVESTMENTS
13.1 FIDUCIARY STANDARDS The Trustee/Custodian shall invest and reinvest
principal and income in the same Fund in accordance with the investment
objectives established by the Employer, provided that:
(a) such investments are prudent under the Employee Retirement
Income Security Act of 1974 and the regulations thereunder,
(b) such investments are sufficiently diversified or otherwise
insured or guaranteed to minimize the risk of large losses,
and
(c) such investments are similar to those which would be purchased
by another professional money manager for a like plan with
similar investment objectives.
13.2 FUNDING ARRANGEMENT The Employer shall, in the Adoption Agreement,
appoint the Sponsor to serve as either Trustee or Custodian of the Fund. If the
Sponsor is appointed Trustee, the Fund shall be invested in any of the
alternatives available to the Trustee under paragraph 13.3 herein. If the
Sponsor is appointed Custodian, the Fund shall be invested only in the
alternatives available to the Custodian under paragraph 13.4 herein.
13.3 INVESTMENT ALTERNATIVES OF THE TRUSTEE The Trustee shall implement an
investment program based on the Employer's investment objectives and the
Employee Retirement Income Security Act of 1974. In addition to powers given by
law, the Trustee may:
(a) invest the Fund in any form of property, including common and
preferred stocks, exchange traded put and call options, bonds,
money market instruments, mutual funds (including funds for
which the Sponsor, Trustee or its affiliates serve as
investment advisor or any other such capacity), savings
accounts, certificates of deposit, Treasury bills, insurance
policies and contracts, or in any other property, real or
personal, having a ready market including securities issued by
the Trustee and/or affiliates of the Trustee. The Trustee may
invest in its own deposits and, if applicable, those of
affiliates, which bear a reasonable interest rate. No portion
of any Qualified Voluntary Contribution, or the earnings
thereon, may be invested in life insurance contracts or, as
with any Participant-directed investment, in tangible personal
property characterized by the IRS as a collectible,
(b) transfer any assets of the Fund to a group or collective trust
established to permit the pooling of funds of separate pension
and profit-sharing trusts, provided the Internal Revenue
Service has ruled such group or collective trust to be
qualified under Code Section 401(a) and exempt under Code
Section 501(a) (or the applicable corresponding provision of
any other Revenue Act) or to any other common, collective, or
commingled trust fund which has been or may hereafter be
established and maintained by the
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Trustee and/or affiliates of the Trustee. Such commingling of
assets of the Fund with assets of other qualified trusts is
specifically authorized, and to the extent of the investment
of the Fund in such a group or collective trust, the terms of
the instrument establishing the group or collective trust
shall be a part hereof as though set forth herein,
(c) invest up to 100% of the Fund in the common stock, debt
obligations, or any other security issued by the Employer or
by an affiliate of the Employer within the limitations
provided under Sections 406, 407, and 408 of the Employee
Retirement Income Security Act of 1974 and further provided
that such investment does not constitute a prohibited
transaction under Code Section 4975. Any such investment in
Employer securities shall only be made upon written direction
by the Employer who shall be solely responsible for propriety
of such investment,
Voting and Tendering of Stock The shares of Employer stock
which have been allocated to Participants' accounts shall be
voted or tendered, as applicable, by the Trustee in accordance
with the written directions provided by the Plan Administrator
which are given pursuant to the Participants' written
instructions. The Trustee shall vote or tender, as applicable,
any unallocated Employer stock, and allocated but unvoted
Employer stock, in accordance with the written direction
received from the Plan Administrator. Whenever such voting or
tendering rights are to be exercised, the Plan Administrator
shall be responsible for ensuring that all Participants are
provided with adequate opportunity to deliver their
instructions to the Plan Administrator regarding the voting or
tendering of Employer stock allocated to their Accounts. The
Participants' instructions with respect to the voting or
tendering of allocated shares hereunder shall be confidential.
(d) hold cash uninvested and deposit same with any banking or
savings institution, including its own banking department, or
the banking department of an affiliate,
(e) join in or oppose the reorganization, recapitalization,
consolidation, sale or merger of corporations or properties,
including those in which it is interested as Trustee, upon
such terms as it deems wise,
(f) hold investments in nominee or bearer form,
(g) vote proxies and if appropriate pass them on to any investment
manager which may have directed the investment in the equity
giving rise to the proxy,
(h) exercise all ownership rights with respect to assets held in
the Fund.
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13.4 INVESTMENT ALTERNATIVES OF THE CUSTODIAN The Custodian shall be
depository of all or part of the Fund and shall, at the direction of the Trustee
hold any assets received from the Trustee or its agents. The Custodian shall
receive and deliver assets as instructed by the Trustee or its agents. To the
extent that the Custodian holds title to Plan assets and such ownership requires
action on the part of the registered owner, such action will be taken by the
Custodian only upon receipt of specific instructions from the Trustee or its
agents. Proxies shall be voted by or pursuant to the express direction of the
Trustee or authorized agent of the Trustee. As Custodian, the Sponsor shall not
give any investment advice, including any opinion on the prudence of directed
investments. The Employer and Trustee and the agents thereof assume all
responsibility for adherence to fiduciary standards under the Employee
Retirement Income Security Act of 1974 (ERISA) and all amendments thereof, and
regulations thereunder.
13.5 PARTICIPANT LOANS If agreed upon by the Trustee and permitted by the
Employer in the Adoption Agreement, Participant Loans will be permitted in the
Employer's Plan. A Plan Participant may make application only to the Employer to
request a loan from the Fund. The Employer shall have the sole right to approve
or disapprove a Participant's application provided that loans shall be made
available to all Participants and beneficiaries on a reasonably equivalent
basis. Loans shall not be made available to highly compensated employees [as
defined in Code Section 414(q)] in an amount greater than the amount made
available to other Employees. Any loan granted under the Plan shall be made
subject to the following rules:
(a) LIMITATIONS No loan, when aggregated with any outstanding
Participant loans under the Employer's Plan(s), shall exceed
the lesser of (i) $50,000 reduced by the excess, if any, of
the highest outstanding balance of loans during the one year
period ending on the day before the loan is made, over the
outstanding balance of loans from the Plan on the date the
loan is made or (ii) one-half of the fair market value of a
Participant's Vested Account Balance built up from Employer
Contributions, Voluntary Contributions, and Rollover
Contributions. If the Participant's Vested Account Balance is
$20,000 or less, the maximum loan shall not exceed the lesser
of $10,000 or 100% of the Participant's Vested Account
Balance. For the purpose of the above limitation, all loans
from all plans of the Employer and other members of a group of
employers described in Code Sections 414(b), 414(c), 414(m),
and 414(o) are aggregated. An assignment or pledge of any
portion of the Participant's interest in the Plan and a loan,
pledge, or assignment with respect to any insurance contract
purchased under the Plan, will be treated as a loan under this
paragraph.
(b) APPLICATION All applications must be made on forms provided by
the Employer and must be signed by the Participant.
(c) INTEREST Any loan under this Plan shall bear interest at a
rate reasonable at the time of application, considering the
purpose of the loan and the rate being charged by
representative commercial banks in the local area for a
similar loan unless the Employer sets forth a different method
for determining loan interest rates in its loan procedures,
such as using the prime rate or some other rate based on the
prime rate. The loan agreement shall also provide that the
payment of principal and interest be amortized in level
payments not less frequently than quarterly.
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(d) TERM The term of such loan shall not exceed five years except
in the case of a loan for the purpose of acquiring any house,
apartment, condominium, or mobile home (not used on a
transient basis) which is used or is to be used within a
reasonable time as the principal residence of the Participant.
The term of such loan shall be determined by the Employer
considering the maturity dates quoted by representative
commercial banks in the local area for a similar loan.
(e) ACCOUNTING The principal and interest paid by a Participant on
his or her loan shall be credited to the Fund in the same
manner as for any other Plan investment. If elected in the
Adoption Agreement, loans may be treated as segregated
investments of the individual Participants. This provision is
not available if its election will result in discrimination in
operation of the Plan.
(f) SPOUSAL CONSENT If a Participant's loan application is
approved by the Employer, such Participant shall be required
to sign a note, loan agreement, and assignment of one-half of
his or her interest in the Fund as collateral for the loan. In
all plans except safe-harbor profit-sharing plans under
paragraph 8.7, the Participant must obtain the consent of his
or her Spouse, if any, within the 90 day period before the
time his or her account balance is used as security for the
loan. A new consent is required if the account balance is used
for any renegotiation, extension, renewal or other revision of
the loan, including an increase in the amount thereof. The
consent must be written, must acknowledge the effect of the
loan, and must be witnessed by a plan representative or notary
public. Such consent shall subsequently be binding with
respect to the consenting Spouse or any subsequent Spouse.
(g) SECURITY If a valid Spousal consent has been obtained, then,
notwithstanding any other provision of this Plan, the portion
of the Participant's Vested Account Balance 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 account balance (determined without
regard to the preceding sentence) is payable to the Surviving
Spouse, then the account balance shall be adjusted by first
reducing the Vested Account Balance by the amount of the
security used as repayment of the loan, and then determining
the benefit payable to the Surviving Spouse.
(h) ADDITIONAL SECURITY The Employer may also require additional
collateral in order to adequately secure the loan.
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(i) ACCELERATION OF MATURITY A Participant's loan shall
immediately become due and payable if such Participant
terminates employment for any reason or fails to make a
principal and/or interest payment as provided in the loan
agreement. If such Participant terminates employment, the
Employer shall immediately request payment of principal and
interest on the loan. If the Participant refuses payment
following termination, the Employer shall reduce the
Participant's Vested Account Balance by the remaining
principal and interest on his or her loan. If the
Participant's Vested Account Balance is less than the amount
due, the Employer shall take whatever steps are necessary to
collect the balance due directly from the Participant.
However, no distribution of the Participant's note or
attachment of the Participant's account balance will occur
until a distributable event occurs in the Plan.
(j) RESTRICTIONS No loans will be made to Owner-Employees (as
defined in paragraph 1.51) or Shareholder-Employees (as
defined in paragraph 1.74), unless the Employer obtains a
prohibited transaction exemption from the Department of Labor.
13.6 INSURANCE POLICIES If agreed upon by the Trustee and approved by the
Employer in the Adoption Agreement, Employees may elect the purchase of life
insurance policies under the Plan. If elected, the maximum annual premium for a
whole life policy shall not exceed 50% of the aggregate Employer contributions
allocated to the account of a Participant. For profit-sharing plans the 50% test
need only be applied against Employer contributions which are not Elective
Deferrals, Qualified Matching Contributions or Qualified Non-Elective
Contributions allocated in the last two years. Whole life policies are policies
with both nondecreasing death benefits and nonincreasing premiums. The maximum
annual premium for term contracts or universal life policies and all other
policies which are not whole life shall not exceed 25% of aggregate Employer
contributions allocated to the account of a Participant. The two year rule for
profit-sharing plans again applies. The maximum annual premiums for a
Participant with both a whole life and a term contract or universal life
policies shall be limited to one-half of the whole life premium plus the term
premium but shall not exceed 25% of the aggregate Employer contributions
allocated to the account of a Participant, subject to the two year rule for
profit-sharing plans. Any policies purchased under this Plan shall be held
subject to the following rules:
(a) OWNER The Trustee shall be applicant and owner of any policies
issued hereunder.
(b) NONTRANSFERABLE CONTRACTS All policies or contracts purchased,
shall be endorsed as nontransferable, and must provide that
proceeds will be payable to the Trustee; however, the Trustee
shall be required to pay over all proceeds of the contracts to
the Participant's Designated Beneficiary in accordance with
the distribution provisions of this Plan. Under no
circumstances shall the Trust retain any part of the proceeds.
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(c) BENEFICIARY Each Participant shall be entitled to designate a
beneficiary under the terms of any contract issued; however,
such designation will be given to the Trustee which must be
the named beneficiary on any policy. Such designation shall
remain in force, until revoked by the Participant, by filing a
new beneficiary form with the Trustee. 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 paragraph 8.4. The beneficiary of a deceased
Participant shall receive, in addition to the proceeds of the
Participant's policy or policies, the amount credited to such
Participant's investment account.
(d) UNINSURABLE PARTICIPANT A Participant who is uninsurable or
insurable at substandard rates, may elect to receive a reduced
amount of insurance, if available, or may waive the purchase
of any insurance.
(e) DIVIDENDS Any dividends, credits earned or other returns
received on any policy or contract purchased, shall be applied
to reduce the next premium due on such Participant's insurance
contract or policy, or if no further premium is due, such
amount shall be credited to the Fund as part of the account of
the Participant for whom the policy or contract is held.
(f) PREMIUMS If Employer contributions are inadequate to pay all
premiums on all insurance policies, the Trustee may, at the
option of the Employer, utilize other amounts remaining in
each Participant's account to pay the premiums on his or her
respective policy or policies, allow the policies to lapse,
reduce the policies to a level at which they may be
maintained, or borrow against the policies on a prorated
basis, provided that the borrowing does not discriminate in
favor of the policies on the lives of Officers, Shareholders,
and highly compensated Employees.
(g) TERMINATION OF EMPLOYMENT On retirement or termination of
employment of a Participant, the Employer shall direct the
Trustee to cash surrender the Participant's policy and credit
the proceeds to his or her account for distribution under the
terms of the Plan. However, before so doing, the Employer
shall direct the Trustee to first offer to transfer ownership
of the policy to the Participant in exchange for payment by
the Participant of the cash value of the policy at the time of
transfer. Such payment shall be credited to the Participant's
account for distribution under the terms of the Plan. All
distributions resulting from the application of this paragraph
shall be subject to the Joint and Survivor Annuity Rules of
Article VIII, if applicable.
(h) ADMINISTRATION The Employer shall be solely responsible to see
that these insurance provisions are administered properly and
that if there is any conflict between the provisions of this
Plan and any insurance contracts issued that the terms of this
Plan will control.
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13.7 EMPLOYER INVESTMENT DIRECTION If agreed upon by the Trustee and
approved by the Employer in the Adoption Agreement, the Employer shall have the
right to direct the Trustee with respect to investments of the Fund, may appoint
an investment manager (registered as an investment advisor under the Investment
Advisors Act of 1940) to direct investments, or may give the Trustee sole
investment management responsibility. The Employer may purchase and sell
interests in a registered investment company (i.e., mutual funds) for which the
Sponsor, its parent, affiliates, or successors, may serve as investment advisor
and receive compensation from the registered investment company for its services
as investment advisor. The Employer shall advise the Trustee in writing
regarding the retention of investment powers, the appointment of an investment
manager, or the delegation of investment powers to the Trustee. Any investment
directive under this Plan shall be made in writing by the Employer or investment
manager, as the case may be. In the absence of such written directive, the
Trustee shall automatically invest the available cash in its discretion in an
appropriate interim investment until specific investment directions are
received. Such instructions regarding the delegation of investment
responsibility shall remain in force until revoked or amended in writing. The
Trustee shall not be responsible for the propriety of any directed investment
made and shall not be required to consult with or advise the Employer regarding
the investment quality of any directed investment held hereunder. If the
Employer fails to designate an investment manager, the Trustee shall have full
investment authority. If the Employer does not issue investment directions, the
Trustee shall have authority to invest the Fund in its sole discretion. While
the Employer may direct the Trustee with respect to Plan investments, the
Employer may not:
(a) borrow from the Fund or pledge any of the assets of the Fund
as security for a loan,
(b) buy property or assets from or sell property or assets to the
Fund,
(c) charge any fee for services rendered to the Fund, or
(d) receive any services from the Fund on a preferential basis.
13.8 EMPLOYEE INVESTMENT DIRECTION If agreed to by the Trustee and
approved by the Employer in the Adoption Agreement, Participants shall be given
the option to direct the investment of their personal contributions and their
share of the Employer's contribution among alternative investment funds
established as part of the overall Fund. The Employee may have the Trustee
purchase and sell for his or her account, shares of registered investment
companies (i.e. mutual funds) for which the Sponsor, its parent, affiliates, or
successors, may serve as investment advisor and receive compensation from the
registered investment company for its services as investment advisor. Unless
otherwise specified by the Employer in the Adoption Agreement, a Participant's
directions shall be limited to the following investments (or such other
investments as the Trustee may expressly approve): (1) registered securities
obtainable through any brokerage house mutually designated by the Participant
and the Trustee, either "over-the-counter" or on a registered national exchange;
(2) any insurance or endowment policy issued by a corporation subject to the
supervision of the insurance commissioner, bank commissioner, or any agency or
officer performing like functions, of any state or territory of the United
States or the District of Columbia; (3) savings accounts or deposits with the
Sponsor, or its affiliates, or, with the Trustee's approval, with a similar
financial institution supervised by the United States or a state--all such
deposits to bear a reasonable rate of interest; (4) shares of investment
companies registered under the Investment Company Act of 1940, as amended; or
any combination of the above. The Participant may direct the Trustee to leave
earnings on any securities so obtained with the designated brokerage house for
reinvestment in accordance with the
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instructions of the Participant, or the Participant may direct that earnings on
such securities be invested in a savings account under option (3) above. If a
Participant fails to direct the Trustee as to the investment of any portion of
his account that is held by the Trustee and which is subject to direction of
investment by the Participant, that portion of his account shall be held in a
money market, a savings account or such other investment alternative which
primary objective is the preservation of principal by the Trustee until such
time as the Trustee receives an effective investment direction for such portion.
The Trustee shall have no duty to inquire into or to invest that portion of the
Participant's account that may be held with a broker or any person other than
the Trustee. The right to direct investments under this Section shall be the
sole and exclusive power granted to Participants. If investments outside the
Trustee's control are allowed, Participants may not direct that investments be
made in collectibles, other than U.S. Government or State issued gold and silver
coins. The exercise of investment directions by a Participant shall not cause
such a Participant to be a fiduciary solely by reason of such exercise, and
neither the Trustee nor any other fiduciary of this Plan shall be liable for any
loss, or by reason of any breach, which results from such Participant's exercise
of investment directions. In its discretion, in the case of Plan assets that are
subject to investment direction by Participants, the Trustee is hereby
authorized to enter into a custodial and investment direction arrangement with a
brokerage firm, under which arrangement: a Participant may transmit an
investment instruction directly to such broker; the Trustee is notified of such
transaction by wire and receives a broker's advice upon consummation of the
trade; a portion of the assets of the Participant's account may be kept on
deposit in the brokerage account maintained for such Participant, and is not
reflected on the records of the Trustee; the Trustee and Participant receive a
monthly statement of assets and transactions from the broker. Under said
arrangement, the brokerage firm is hereby designated as the person charged with
the responsibility of holding the assets of the Participant's account that is in
the custody of the brokerage firm. All investment direction arrangements with
brokerage firms that are outstanding under the Sponsor's Prototype Plan and
Trust shall continue to apply hereunder until modified or rescinded. The
following rules shall apply to the administration of such funds:
(a) At the time an Employee becomes eligible for the Plan, he or
she shall complete an investment designation form stating the
percentage of his or her contributions to be invested in the
available funds.
(b) A Participant may change his or her election with respect to
future contributions by filing a new investment designation
form with the Employer in accordance with the procedures
established by the Plan Administrator.
(c) A Participant may elect to transfer all or part of his or her
balance from one investment fund to another by filing an
investment designation form with the Employer in accordance
with the procedures established by the Plan Administrator.
(d) The Employer shall be responsible when transmitting Employee
and Employer contributions to show the dollar amount to be
credited to each investment fund for each Employee.
(e) Except as otherwise provided in the Plan, neither the Trustee,
nor the Employer, nor any fiduciary of the Plan shall be
liable to the Participant or any of his or her beneficiaries
for any loss resulting from action taken at the direction of
the Participant.
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ARTICLE XIV
TOP-HEAVY PROVISIONS
14.1 APPLICABILITY OF RULES If the Plan is or becomes Top-Heavy in any Plan
Year beginning after 1983, the provisions of this Article will supersede any
conflicting provisions in the Plan or Adoption Agreement.
14.2 MINIMUM CONTRIBUTION Notwithstanding any other provision in the
Employer's Plan, for any Plan Year in which the Plan is Top-Heavy or Super
Top-Heavy, the aggregate Employer contributions and forfeitures allocated on
behalf of any Participant other than a Key Employee (without regard to any
Social Security contribution) under this Plan and any other Defined Contribution
Plan of the Employer shall be the lesser of 3% of such Participant's
Compensation or (if 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 a percentage of the first $200,000 as adjusted
under Code Section 415(d) of the Key Employee's Compensation, allocated on
behalf of any Key Employee for that year. For Plan Years beginning on or after
January 1, 1994, the Compensation amount shall be revised to $150,000 as
adjusted under Code Section 415(d).
Each Participant who is employed by the Employer on the last day of the Plan
Year shall be entitled to receive an allocation of the Employer's minimum
contribution for such Plan Year. The minimum allocation applies 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 the Participant fails to make Voluntary Contributions or Elective
Deferrals to the Plan, or the Participant receives no Employer contribution
because of the Participant's failure to make any Employee contributions, the
Participant's Compensation is less than a stated amount, or the Participant
fails to complete 1,000 Hours of Service (or such lesser number designated by
the Employer in the Adoption Agreement) during the Plan Year. A Paired
profit-sharing plan designated to provide the minimum Top-Heavy contribution
must do so regardless of profits. An Employer may make the minimum Top-Heavy
contribution available to all Participants or just non-Key Employees. Unless the
Employer specifies otherwise in the Adoption Agreement, the minimum Top-Heavy
contribution will be allocated to the accounts of all eligible Participants even
if they are Key Employees.
For purposes of computing the minimum allocation, Compensation shall mean
Compensation under Code Section 1.12(c) of the Plan.
The Top-Heavy minimum contribution does not apply to any Participant to the
extent the Participant is covered under any other plan(s) of the Employer and
the Employer has provided in the Adoption Agreement that the minimum allocation
or benefit requirements applicable to Top-Heavy Plans will be met in the other
plan(s).
If a Key Employee makes an Elective Deferral or has an allocation of Matching
contributions made to his or her account, a Top-Heavy minimum will be required
for all non-Key Employees who are Participants. However, neither Elective
Deferrals by nor Matching Contributions to non-Key Employees may be taken into
account for purposes of satisfying the Top-Heavy minimum contribution
requirement.
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14.3 MINIMUM VESTING For any Plan Year in which this Plan is Top-Heavy, the
minimum vesting schedule elected by, or deemed elected by, the Employer in the
Adoption Agreement will automatically apply to the Plan. If the vesting schedule
selected by the Employer in the Adoption Agreement is less liberal than the
allowable schedule, the schedule will automatically be modified. If the vesting
schedule under the Employer's Plan shifts in or out of the Top-Heavy schedule
for any Plan Year, such shift is an amendment to the vesting schedule and the
election in paragraph 9.8 of the Plan applies. The minimum vesting schedule
applies to all accrued benefits within the meaning of Code Section 411(a)(7)
except those attributable to Employee contributions, including benefits accrued
before the effective date of Code Section 416 and benefits accrued before the
Plan became Top-Heavy. Further, no reduction in vested benefits may occur in the
event the Plan's status as Top-Heavy changes for any Plan Year. However, this
paragraph does not apply to the account balances of any Employee who does not
have an Hour of Service after the Plan initially becomes Top-Heavy and such
Employee's account balance attributable to Employer contributions and
forfeitures will be determined without regard to this paragraph.
14.4 LIMITATIONS ON ALLOCATIONS In any Plan Year in which the plan is
Top-Heavy, the denominators of the Defined Benefit Fraction (as defined in
paragraph 1.16) and Defined Contribution Fraction (as defined in paragraph 1.19)
shall be computed using 100% of the dollar limitation instead of 125%. For
Paired Plans, each of the plans must benefit the same Participants (or the same
Participants must be eligible to make Elective Deferrals in the event one plan
is a Code Section 401(k) Cash or Deferred Savings Plan) in order to insure that
only one plan need provide the Top-Heavy minimum contribution. In the event
eligibility and participation of Employees differs, minimums will be required
under both of the Paired Plans.
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ARTICLE XV
AMENDMENT AND TERMINATION
15.1 AMENDMENT BY SPONSOR The Sponsor may amend any or all provisions of
this Plan and Trust/Custodial Account at any time without obtaining the approval
or consent of any Employer which has adopted this Plan and Trust/Custodial
Account provided that no amendment shall authorize or permit any part of the
corpus or income of the Fund to be used for or diverted to purposes other than
for the exclusive benefit of Participants and their beneficiaries, or eliminate
an optional form of distribution. For purposes of Plan Sponsor amendments, the
mass-submitter shall be recognized as the agent of the Plan Sponsor. If the Plan
Sponsor does not adopt the amendments made by the mass-submitter, the Plan will
no longer be identical to or a minor modifier of the mass-submitter plan.
15.2 AMENDMENT BY EMPLOYER The Employer may amend any option in the
Adoption Agreement, and may include language as permitted in the Adoption
Agreement,
(a) to satisfy Code Section 415, or
(b) to avoid duplication of minimums under Code Section 416
because of the required aggregation of multiple plans.
The Employer may 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 plan for which the Employer must obtain a
separate determination letter. No amendment to the Plan shall change or modify
the Trustee/Custodian's duties unless either approved by the Trustee/Custodian
or required by law.
If the Employer amends the Plan and Trust/Custodial Account other than as
provided above, including providing for a waiver of minimum funding under Code
Section 412(d), the Employer's Plan shall no longer participate in this
Prototype Plan and will be considered an individually designed plan for which
the Employer must obtain a separate determination letter. In such event, all
references to the institution as Plan Sponsor shall be deemed null and void
since the Employer will become the Plan Sponsor of the Plan as it shall be
deemed individually drafted.
15.3 TERMINATION Employers shall have the right to terminate their Plans
upon 60 days notice in writing to the Trustee/Custodian. If the Plan is
terminated, partially terminated, or if there is a complete discontinuance of
contributions under a profit-sharing plan maintained by the Employer, all
amounts credited to the accounts of Participants shall vest and become
nonforfeitable. In the event of a partial termination, only those Participants
who are affected by such partial termination shall become fully vested. In the
event of termination, the Employer shall direct the
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Trustee/Custodian with respect to the distribution of accounts to or for the
exclusive benefit of Participants or their beneficiaries. The Trustee/Custodian
shall dispose of the Fund in accordance with the written directions of the Plan
Administrator, provided that no liquidation of assets and payment of benefits,
(or provision therefor), shall actually be made by the Trustee/Custodian until
after it is established by the Employer in a manner satisfactory to the
Trustee/Custodian, that the applicable requirements, if any, of the Employee
Retirement Income Security Act of 1974 and the Internal Revenue Code governing
the termination of employee benefit plans, have been or are being, complied
with, or that appropriate authorizations, waivers, exemptions, or variances have
been, or are being obtained.
15.4 QUALIFICATION OF EMPLOYER'S PLAN If the adopting Employer fails to
attain or retain Internal Revenue Service qualification, such Employer's Plan
shall no longer participate in this Prototype Plan and will be considered an
individually designed plan.
15.5 MERGERS AND CONSOLIDATIONS
(a) In the case of any merger or consolidation of the Employer's
Plan with, or transfer of assets or liabilities of the
Employer's Plan to, any other plan, Participants in the
Employer's Plan shall be entitled to receive benefits
immediately after the merger, consolidation, or transfer which
are equal to or greater than the benefits they would have been
entitled to receive immediately before the merger,
consolidation, or transfer if the Plan had then terminated.
(b) Any corporation into which the Trustee/Custodian or any
successor trustee/custodian may be merged or with which it may
be consolidated, or any corporation resulting from any merger
or consolidation to which the Trustee/Custodian or any
successor trustee/custodian may be a party, or any corporation
to which all or substantially all the trust business of the
Trustee/Custodian or any successor trustee/custodian may be
transferred, shall be the successor of such Trustee/Custodian
without the filing of any instrument or performance of any
further act, before any court.
15.6 RESIGNATION AND REMOVAL The Trustee/Custodian may resign by written
notice to the Employer which shall be effective 60 days after delivery. The
Employer may discontinue its participation in this Prototype Plan and
Trust/Custodial Account effective upon 60 days written notice to the Sponsor. In
such event the Employer shall, prior to the effective date thereof, amend the
Plan to eliminate any reference to this Prototype Plan and Trust/Custodial
Account and appoint a successor trustee or custodian or arrange for another
funding agent. The Trustee/Custodian shall deliver the Fund to its successor on
the effective date of the resignation or removal, or as soon thereafter as
practicable, provided that this shall not waive any lien the Trustee/Custodian
may have upon the Fund for its compensation or expenses. If the Employer fails
to amend the Plan and appoint a successor trustee, custodian, or other funding
agent within the said 60 days, or such longer period as the Trustee/Custodian
may specify in writing, the Plan shall be deemed individually designed and the
Employer shall be deemed the successor trustee/custodian. The Employer must then
obtain its own determination letter.
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15.7 QUALIFICATION OF PROTOTYPE The Sponsor intends that this Prototype Plan
will meet the requirements of the Code as a qualified Prototype Retirement Plan
and Trust/Custodial Account. Should the Commissioner of Internal Revenue or any
delegate of the Commissioner at any time determine that the Plan and
Trust/Custodial Account fails to meet the requirements of the Code, the Sponsor
will amend the Plan and Trust/Custodial Account to maintain its qualified
status.
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ARTICLE XVI
GOVERNING LAW
Construction, validity and administration of the Prototype Plan and
Trust/Custodial Account, and any Employer Plan and Trust/Custodial Account as
embodied in the Prototype document and accompanying Adoption Agreement, shall be
governed by Federal law to the extent applicable and to the extent not
applicable by the laws of the State/Commonwealth in which the principal office
of the Sponsor is located.
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