Exhibit 10.1
PROTOTYPE DEFINED CONTRIBUTION PLAN AND TRUST
SPONSORED BY
SunTrust Bank
BASIC PLAN DOCUMENT #02
June, 2002
TABLE OF CONTENTS
ARTICLE 1
PLAN ELIGIBILITY AND PARTICIPATION
1.1 Eligibility for Plan Participation....................................1
1.2 Excluded Employees....................................................1
(a) Independent contractors......................................1
(b) Leased Employees.............................................1
1.3 Employees of Related Employers........................................2
(a) Nonstandardized Agreement....................................2
(b) Standardized Agreement.......................................2
1.4 Minimum Age and Service Conditions....................................2
(a) Maximum permissible age and service conditions...............2
(b) Year of Service..............................................2
(c) Eligibility Computation Periods..............................2
(d) Application of eligibility rules.............................3
(e) Amendment of age and service requirements....................3
1.5 Entry Dates...........................................................3
(a) Entry Date requirements......................................3
(b) Single annual Entry Date.....................................3
1.6 Eligibility Break in Service Rules....................................4
(a) Rule of Parity Break in Service..............................4
(b) One-year Break in Service rule for Plans using a two Years
of Service eligibility condition......................................4
(c) One-year holdout Break in Service rule.......................4
1.7 Eligibility upon Reemployment.........................................5
1.8 Operating Rules for Employees Excluded by Class.......................5
(a) Eligible Participant becomes part of an excluded class of
Employees.............................................................5
(b) Excluded Employee becomes part of an eligible class of
Employee..............................................................5
1.9 Relationship to Accrual of Benefits...................................5
1.10 Waiver of Participation...............................................5
ARTICLE 2
EMPLOYER CONTRIBUTIONS AND ALLOCATIONS
2.1 Amount of Employer Contributions......................................6
(a) Limitation on Employer Contributions.........................6
(b) Limitation on Included Compensation..........................6
(c) Contribution of property.....................................6
(d) Frozen Plan..................................................6
2.2 Profit Sharing Plan Contribution and Allocations......................6
(a) Amount of Employer Contribution..............................6
(b) Allocation formula for Employer Contributions................7
(c) Special rules for determining Included Compensation..........9
2.3 401(k) Plan Contributions and Allocations............................10
(a) Section 401(k) Deferrals....................................10
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(b) Employer Matching Contributions.............................11
(c) Qualified Matching Contributions (QMACs)....................11
(d) Employer Nonelective Contributions..........................12
(e) Qualified Nonelective Contributions (QNECs).................12
(f) Safe Harbor Contributions...................................12
(g) Prior SIMPLE 401(k) plan....................................13
2.4 Money Purchase Plan Contribution and Allocations.....................13
(a) Employer Contributions......................................13
(b) Uniform percentage or uniform dollar amount.................13
(c) Permitted Disparity Method..................................13
(d) Contribution based on service...............................14
(e) Davis-Bacon Contribution Formula............................14
(f) Applicable period for determining Included Compensation.....15
(g) Special rules for determining Included Compensation.........15
(h) Limit on contribution where Employer maintains another
plan in addition to a money purchase plan............................15
2.5 Target Benefit Plan Contribution.....................................15
(a) Stated Benefit..............................................15
(b) Employer Contribution.......................................16
(c) Benefit formula.............................................16
(d) Definitions.................................................21
2.6 Allocation Conditions................................................23
(a) Safe harbor allocation condition............................24
(b) Application of last day of employment rule for money
purchase and target benefit Plans in year of termination.............24
(c) Elapsed Time Method.........................................24
(d) Special allocation condition for Employer Matching
Contributions under Nonstandardized 401(k) Agreement.................24
(e) Application to designated period............................25
2.7 Fail-Safe Coverage Provision.........................................26
(a) Top-Heavy Plans.............................................27
(b) Category 1 Employees - Otherwise Eligible Participants
(who are Nonhighly Compensated Employees) who are still employed
by the Employer on the last day of the Plan Year but who failed to
satisfy the Plan's Hours of Service condition........................27
(c) Category 2 Employees - Otherwise Eligible Participants
(who are Nonhighly Compensated Employees) who terminated employment
during the Plan Year with more than 500 Hours of Service.............27
(d) Special Fail-Safe Coverage Provision........................27
2.8 Deductible Employee Contributions....................................27
ARTICLE 3
EMPLOYEE AFTER-TAX CONTRIBUTIONS, ROLLOVER CONTRIBUTIONS AND TRANSFERS
3.1 Employee After-Tax Contributions.....................................28
3.2 Rollover Contributions...............................................28
3.3 Transfer of Assets...................................................28
(a) Protection of Protected Benefits............................29
(b) Transferee plan.............................................29
(c) Transfers from a Defined Benefit Plan, money purchase plan
or 401(k) plan.......................................................29
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(d) Qualified Transfer..........................................29
(e) Trustee's right to refuse transfer..........................31
ARTICLE 4
PARTICIPANT VESTING
4.1 In General...........................................................32
(a) Attainment of Normal Retirement Age.........................32
(b) Vesting upon death, becoming Disabled, or attainment of
Early Retirement Age.................................................32
(c) Addition of Employer Nonelective Contribution or Employer
Matching Contribution................................................32
(d) Vesting upon merger, consolidation or transfer..............32
4.2 Vesting Schedules....................................................32
(a) Full and immediate vesting schedule.........................32
(b) 7-year graded vesting schedule..............................33
(c) 6-year graded vesting schedule..............................33
(d) 5-year cliff vesting schedule...............................33
(e) 3-year cliff vesting schedule...............................33
(f) Modified vesting schedule...................................33
4.3 Shift to/from Top-Heavy Vesting Schedule.............................33
4.4 Vesting Computation Period...........................................33
(a) Anniversary Years...........................................33
(b) Measurement on same Vesting Computation Period..............33
4.5 Crediting Years of Service for Vesting Purposes......................33
(a) Calculating Hours of Service................................33
(b) Excluded service............................................34
4.6 Vesting Break in Service Rules.......................................34
(a) One-year holdout Break in Service...........................34
(b) Five-Year Forfeiture Break in Service.......................34
(c) Rule of Parity Break in Service.............................34
4.7 Amendment of Vesting Schedule........................................35
4.8 Special Vesting Rule - In-Service Distribution When Account Balance
Less than 100% Vested................................................35
ARTICLE 5
FORFEITURES
5.1 In General...........................................................36
5.2 Timing of forfeiture.................................................36
(a) Cash-Out Distribution.......................................36
(b) Five-Year Forfeiture Break in Service.......................36
(c) Lost Participant or Beneficiary.............................36
(d) Forfeiture of Employer Matching Contributions...............36
5.3 Forfeiture Events....................................................36
(a) Cash-Out Distribution.......................................36
(b) Five-Year Forfeiture Break in Service.......................38
(c) Lost Participant or Beneficiary.............................39
(d) Forfeiture of Employer Matching Contributions...............39
5.4 Timing of Forfeiture Allocation......................................39
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5.5 Method of Allocating Forfeitures.....................................39
(a) Reallocation of forfeitures.................................39
(b) Reduction of contributions..................................39
(c) Payment of Plan expenses....................................39
ARTICLE 6
SPECIAL SERVICE CREDITING PROVISIONS
6.1 Year of Service - Eligibility........................................40
(a) Selection of Hours of Service...............................40
(b) Use of Equivalency Method...................................40
(c) Use of Elapsed Time Method..................................40
6.2 Eligibility Computation Period.......................................40
6.3 Year of Service - Vesting............................................40
(a) Selection of Hours of Service...............................40
(b) Equivalency Method..........................................40
(c) Elapsed Time Method.........................................41
6.4 Vesting Computation Period...........................................41
6.5 Definitions..........................................................41
(a) Equivalency Method..........................................41
(b) Elapsed Time Method.........................................41
6.6 Switching Crediting Methods..........................................41
(a) Shift from crediting Hours of Service to Elapsed Time
Method...............................................................41
(b) Shift from Elapsed Time Method to an Hours of Service
method...............................................................42
6.7 Service with Predecessor Employers...................................42
ARTICLE 7
LIMITATION ON PARTICIPANT ALLOCATIONS
7.1 Annual Additions Limitation - No Other Plan Participation............43
(a) Annual Additions Limitation.................................43
(b) Using estimated Total Compensation..........................43
(c) Disposition of Excess Amount................................43
7.2 Annual Additions Limitation - Participation in Another Plan..........44
(a) In general..................................................44
(b) This Plan's Annual Addition Limitation......................44
(c) Annual Additions reduction..................................44
(d) No Annual Additions permitted...............................44
(e) Using estimated Total Compensation..........................44
(f) Excess Amounts..............................................45
(g) Disposition of Excess Amounts...............................45
7.3 Modification of Correction Procedures................................45
7.4 Definitions Relating to the Annual Additions Limitation..............45
(a) Annual Additions............................................45
(b) Defined Contribution Dollar Limitation......................46
(c) Employer....................................................46
(d) Excess Amount...............................................46
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(e) Limitation Year.............................................46
(f) Maximum Permissible Amount..................................46
(g) Total Compensation..........................................46
7.5 Participation in a Defined Benefit Plan..............................47
(a) Repeal of rule..............................................47
(b) Special definitions relating to Section 7.5.................47
ARTICLE 8
PLAN DISTRIBUTIONS
8.1 Distribution Options.................................................49
8.2 Amount Eligible for Distribution.....................................49
8.3 Distributions After Termination of Employment........................49
(a) Account Balance exceeding $5,000............................49
(b) Account Balance not exceeding $5,000........................50
(c) Permissible distribution events under a 401(k) plan.........50
(d) Disabled Participant........................................50
(e) Determining whether vested Account Balance exceeds $5,000...50
(f) Effective date of $5,000 vested Account Balance rule........51
8.4 Distribution upon the Death of the Participant.......................51
(a) Post-retirement death benefit...............................51
(b) Pre-retirement death benefit................................51
(c) Determining a Participant's Beneficiary.....................52
8.5 Distributions Prior to Termination of Employment.....................53
(a) Employee After-Tax Contributions, Rollover Contributions,
and transfers........................................................53
(b) Employer Contributions......................................53
(c) Section 401(k) Deferrals, Qualified Nonelective
Contributions, Qualified Matching Contributions, and Safe Harbor
Contributions........................................................53
(d) Corrective distributions....................................54
8.6 Hardship Distribution................................................54
(a) Safe harbor Hardship distribution...........................54
(b) Non-safe harbor Hardship distribution.......................55
(c) Amount available for distribution...........................55
8.7 Participant Consent..................................................55
(a) Participant notice..........................................55
(b) Special rules...............................................55
8.8 Direct Rollovers.....................................................56
(a) Eligible Rollover Distribution..............................56
(b) Eligible Retirement Plan....................................56
(c) Direct Rollover.............................................56
(d) Direct Rollover notice......................................57
(e) Special rules for Hardship withdrawals of Section 401(k)
Deferrals............................................................57
8.9 Sources of Distribution..............................................57
(a) Exception for Hardship withdrawals..........................57
(b) In-kind distributions.......................................57
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ARTICLE 9
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
9.1 Applicability........................................................58
(a) Election to have requirements apply.........................58
(b) Election to have requirements not apply.....................58
(c) Accumulated deductible employee contributions...............58
9.2 Qualified Joint and Survivor Annuity (QJSA)..........................58
9.3 Qualified Preretirement Survivor Annuity (QPSA)......................58
9.4 Definitions..........................................................59
(a) Qualified Joint and Survivor Annuity (QJSA).................59
(b) Qualified Preretirement Survivor Annuity (QPSA).............59
(c) Distribution Commencement Date..............................59
(d) Qualified Election..........................................59
(e) QPSA Election Period........................................59
(f) Pre-Age 35 Waiver...........................................60
9.5 Notice Requirements..................................................60
(a) QJSA........................................................60
(b) QPSA........................................................60
9.6 Exception to the Joint and Survivor Annuity Requirements.............60
9.7 Transitional Rules...................................................60
(a) Automatic joint and survivor annuity........................61
(b) Election of early survivor annuity..........................61
(c) Qualified Early Retirement Age..............................61
ARTICLE 10
REQUIRED DISTRIBUTIONS
10.1 Required Distributions Before Death..................................62
(a) Deferred distributions......................................62
(b) Required minimum distributions..............................62
10.2 Required Distributions After Death...................................62
(a) Distribution beginning before death.........................62
(b) Distribution beginning after death..........................62
(c) Treatment of trust beneficiaries as Designated
Beneficiaries........................................................63
(d) Trust beneficiary qualifying for marital deduction..........63
10.3 Definitions..........................................................64
(a) Required Beginning Date.....................................64
(b) Five-Percent Owner..........................................64
(c) Designated Beneficiary......................................64
(d) Applicable Life Expectancy..................................64
(e) Life Expectancy.............................................65
(f) Distribution Calendar Year..................................65
(g) Participant's Benefit.......................................65
10.4 GUST Elections.......................................................65
(a) Distributions under Old-Law Required Beginning Date rules...65
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(b) Option to postpone distributions............................65
(c) Election to stop minimum required distributions.............66
10.5 Transitional Rule....................................................67
ARTICLE 11
PLAN ADMINISTRATION AND SPECIAL OPERATING RULES
11.1 Plan Administrator...................................................68
(a) Acceptance of responsibility by designated Plan
Administrator........................................................68
(b) Resignation of designated Plan Administrator................68
(c) Named Fiduciary.............................................68
11.2 Duties and Powers of the Plan Administrator..........................68
(a) Delegation of duties and powers.............................68
(b) Specific duties and powers..................................68
11.3 Employer Responsibilities............................................69
11.4 Plan Administration Expenses.........................................69
11.5 Qualified Domestic Relations Orders (QDROs)..........................69
(a) In general..................................................69
(b) Qualified Domestic Relations Order (QDRO)...................69
(c) Recognition as a QDRO.......................................69
(d) Contents of QDRO............................................70
(e) Impermissible QDRO provisions...............................70
(f) Immediate distribution to Alternate Payee...................70
(g) No fee for QDRO determination...............................70
(h) Default QDRO procedure......................................70
11.6 Claims Procedure.....................................................71
(a) Filing a claim..............................................71
(b) Notification of Plan Administrator's decision...............72
(c) Review procedure............................................72
(d) Decision on review..........................................72
(e) Default claims procedure....................................72
11.7 Operational Rules for Short Plan Years...............................72
11.8 Operational Rules for Related Employer Groups........................73
ARTICLE 12
TRUST PROVISIONS
12.1 Creation of Trust....................................................74
12.2 Trustee..............................................................74
(a) Discretionary Trustee.......................................74
(b) Directed Trustee............................................74
12.3 Trustee's Responsibilities Regarding Administration of Trust.........74
12.4 Trustee's Responsibility Regarding Investment of Plan Assets.........75
12.5 More than One Person as Trustee......................................76
12.6 Annual Valuation.....................................................76
12.7 Reporting to Plan Administrator and Employer.........................76
12.8 Reasonable Compensation..............................................76
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12.9 Resignation and Removal of Trustee...................................77
12.10 Indemnification of Trustee...........................................77
12.11 Appointment of Custodian.............................................77
ARTICLE 13
PLAN ACCOUNTING AND INVESTMENTS
13.1 Participant Accounts.................................................78
13.2 Value of Participant Accounts........................................78
(a) Periodic valuation..........................................78
(b) Daily valuation.............................................78
13.3 Adjustments to Participant Accounts..................................78
(a) Distributions and forfeitures from a Participant's Account..78
(b) Life insurance premiums and dividends.......................78
(c) Contributions and forfeitures allocated to a Participant's
Account..............................................................78
(d) Net income or loss..........................................78
13.4 Procedures for Determining Net Income or Loss........................78
(a) Net income or loss attributable to General Trust Account....78
(b) Net income or loss attributable to a Directed Account.......79
(c) Share or unit accounting....................................79
(d) Suspense accounts...........................................79
13.5 Investments under the Plan...........................................80
(a) Investment options..........................................80
(b) Limitations on the investment in Qualifying Employer
Securities and Qualifying Employer Real Property.....................80
(c) Participant direction of investments........................81
ARTICLE 14
PARTICIPANT LOANS
14.1 Default Loan Policy..................................................83
14.2 Administration of Loan Program.......................................83
14.3 Availability of Participant Loans....................................83
14.4 Reasonable Interest Rate.............................................83
14.5 Adequate Security....................................................83
14.6 Periodic Repayment...................................................84
(a) Unpaid leave of absence.....................................84
(b) Military leave..............................................84
14.7 Loan Limitations.....................................................84
14.8 Segregated Investment................................................85
14.9 Spousal Consent......................................................85
14.10 Procedures for Loan Default..........................................85
14.11 Termination of Employment............................................86
(a) Offset of outstanding loan..................................86
(b) Direct Rollover.............................................86
(c) Modified loan policy........................................86
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ARTICLE 15
INVESTMENT IN LIFE INSURANCE
15.1 Investment in Life Insurance.........................................87
15.2 Incidental Life Insurance Rules......................................87
(a) Ordinary life insurance policies............................87
(b) Life insurance policies other than ordinary life............87
(c) Combination of ordinary and other life insurance policies...87
(d) Exception for certain profit sharing and 401(k) plans.......87
(e) Exception for Employee After-Tax Contributions and Rollover
Contributions........................................................87
15.3 Ownership of Life Insurance Policies.................................87
15.4 Evidence of Insurability.............................................87
15.5 Distribution of Insurance Policies...................................87
15.6 Discontinuance of Insurance Policies.................................88
15.7 Protection of Insurer................................................88
15.8 No Responsibility for Act of Insurer.................................88
ARTICLE 16
TOP-HEAVY PLAN REQUIREMENTS
16.1 In General...........................................................89
16.2 Top-Heavy Plan Consequences..........................................89
(a) Minimum allocation for Non-Key Employees....................89
(b) Special Top-Heavy Vesting Rules.............................91
16.3 Top-Heavy Definitions................................................91
(a) Determination Date..........................................91
(b) Determination Period........................................91
(c) Key Employee................................................91
(d) Permissive Aggregation Group................................91
(e) Present Value...............................................91
(f) Required Aggregation Group..................................92
(g) Top-Heavy Plan..............................................92
(h) Top-Heavy Ratio.............................................92
(i) Total Compensation..........................................93
(j) Valuation Date..............................................93
ARTICLE 17
401(k) PLAN PROVISIONS
17.1 Limitation on the Amount of Section 401(k) Deferrals.................94
(a) In general..................................................94
(b) Maximum deferral limitation.................................94
(c) Correction of Codess.402(g) violation.......................94
17.2 Nondiscrimination Testing of Section 401(k) Deferrals - ADP Test.....95
(a) ADP Test testing methods....................................95
(b) Special rule for first Plan Year............................96
(c) Use of QMACs and QNECs under the ADP Test...................96
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(d) Correction of Excess Contributions..........................96
(e) Adjustment of deferral rate for Highly Compensated
Employees............................................................98
17.3 Nondiscrimination Testing of Employer Matching Contributions and
Employee After-Tax Contributions - ACP Test..........................98
(a) ACP Test testing methods....................................98
(b) Special rule for first Plan Year............................99
(c) Use of Section 401(k) Deferrals and QNECs under the ACP
Test.................................................................99
(d) Correction of Excess Aggregate Contributions................99
(e) Adjustment of contribution rate for Highly Compensated
Employees...........................................................101
17.4 Multiple Use Test...................................................101
(a) Aggregate Limit............................................101
(b) Correction of the Multiple Use Test........................101
17.5 Special Testing Rules...............................................102
(a) Special rule for determining ADP and ACP of Highly
Compensated Employee Group..........................................102
(b) Aggregation of plans.......................................102
(c) Disaggregation of plans....................................102
(d) Special rules for the Prior Year Testing Method............103
17.6 Safe Harbor 401(k) Plan Provisions..................................103
(a) Safe harbor conditions.....................................103
(b) Deemed compliance with ADP Test............................107
(c) Deemed compliance with ACP Test............................107
(d) Rules for applying the ACP Test............................108
(e) Aggregated plans...........................................108
(f) First year of plan.........................................108
17.7 Definitions.........................................................108
(a) ACP - Average Contribution Percentage......................108
(b) ADP - Average Deferral Percentage..........................108
(c) Excess Aggregate Contributions.............................108
(d) Excess Contributions.......................................109
(e) Highly Compensated Employee Group..........................109
(f) Nonhighly Compensated Employee Group.......................109
(g) QMACs - Qualified Matching Contribution....................109
(h) QNECs - Qualified Nonelective Contributions................109
(i) Testing Compensation.......................................109
ARTICLE 18
PLAN AMENDMENTS AND TERMINATION
18.1 Plan Amendments.....................................................110
(a) Amendment by the Prototype Sponsor.........................110
(b) Amendment by the Employer..................................110
(c) Protected Benefits.........................................111
18.2 Plan Termination....................................................111
(a) Full and immediate vesting.................................111
(b) Distribution procedures....................................111
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(c) Termination upon merger, liquidation or dissolution of the
Employer............................................................112
18.3 Merger or Consolidation.............................................112
ARTICLE 19
MISCELLANEOUS
19.1 Exclusive Benefit...................................................113
19.2 Return of Employer Contributions....................................113
(a) Mistake of fact............................................113
(b) Disallowance of deduction..................................113
(c) Failure to initially qualify...............................113
19.3 Alienation or Assignment............................................113
19.4 Participants' Rights................................................113
19.5 Military Service....................................................113
19.6 Paired Plans........................................................113
19.7 Annuity Contract....................................................114
19.8 Use of IRS compliance programs......................................114
19.9 Loss of Prototype Status............................................114
19.10 Governing Law.......................................................114
19.11 Waiver of Notice....................................................114
19.12 Use of Electronic Media.............................................114
19.13 Severability of Provisions..........................................114
19.14 Binding Effect......................................................114
ARTICLE 20
GUST ELECTIONS AND EFFECTIVE DATES
20.1 GUST Effective Dates................................................115
20.2 Highly Compensated Employee Definition..............................115
(a) Top-Paid Group Test........................................115
(b) Calendar Year Election.....................................115
(c) Old-Law Calendar Year Election.............................115
20.3 Required Minimum Distributions......................................116
20.4 $5,000 Involuntary Distribution Threshold...........................116
20.5 Repeal of Family Aggregation for Allocation Purposes................116
20.6 ADP/ACP Testing Methods.............................................116
20.7 Safe Harbor 401(k) Plan.............................................116
ARTICLE 21
PARTICIPATION BY RELATED EMPLOYERS (CO-SPONSORS)
21.1 Co-Sponsor Adoption Page............................................117
21.2 Participation by Employees of Co-Sponsor............................117
21.3 Allocation of Contributions and Forfeitures.........................117
21.4 Co-Sponsor No Longer a Related Employer.............................117
(a) Manner of discontinuing participation......................117
(b) Multiple employer plan.....................................117
21.5 Special Rules for Standardized Agreements...........................117
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(a) New Related Employer.......................................118
(b) Former Related Employer....................................118
ARTICLE 22
PLAN DEFINITIONS
22.1 Account.............................................................119
22.2 Account Balance.....................................................119
22.3 Accrued Benefit.....................................................119
22.4 ACP -- Average Contribution Percentage..............................119
22.5 ACP Test -- Actual Contribution Percentage Test.....................119
22.6 Actual Hours Crediting Method.......................................119
22.7 Adoption Agreement..................................................119
22.8 ADP -- Average Deferral Percentage..................................119
22.9 ADP Test -- Actual Deferral Percentage Test.........................119
22.10 Agreement...........................................................119
22.11 Aggregate Limit.....................................................119
22.12 Alternate Payee.....................................................119
22.13 Anniversary Year Method.............................................119
22.14 Anniversary Years...................................................119
22.15 Annual Additions....................................................120
22.16 Annual Additions Limitation.........................................120
22.17 Annuity Starting Date...............................................120
22.18 Applicable Life Expectancy..........................................120
22.19 Applicable Percentage...............................................120
22.20 Average Compensation................................................120
22.21 Averaging Period....................................................120
22.22 Balance Forward Method..............................................120
22.23 Basic Plan Document.................................................120
22.24 Beneficiary.........................................................120
22.25 BPD.................................................................120
22.26 Break-in-Service - Eligibility......................................120
22.27 Break-in-Service - Vesting..........................................120
22.28 Calendar Year Election..............................................120
22.29 Cash-Out Distribution...............................................120
22.30 Code................................................................120
22.31 Codess.415 Safe Harbor Compensation.................................121
22.32 Compensation Dollar Limitation......................................121
22.33 Co-Sponsor..........................................................121
22.34 Co-Sponsor Adoption Page............................................121
22.35 Covered Compensation................................................121
22.36 Cumulative Disparity Limit..........................................121
22.37 Current Year Testing Method.........................................121
22.38 Custodian...........................................................121
22.39 Davis-Bacon Act Service.............................................121
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22.40 Davis-Bacon Contribution Formula....................................121
22.41 Defined Benefit Plan................................................121
22.42 Defined Benefit Plan Fraction.......................................122
22.43 Defined Contribution Plan...........................................122
22.44 Defined Contribution Plan Dollar Limitation.........................122
22.45 Defined Contribution Plan Fraction..................................122
22.46 Designated Beneficiary..............................................122
22.47 Determination Date..................................................122
22.48 Determination Period................................................122
22.49 Determination Year..................................................122
22.50 Directed Account....................................................122
22.51 Directed Trustee....................................................122
22.52 Direct Rollover.....................................................122
22.53 Disabled............................................................122
22.54 Discretionary Trustee...............................................122
22.55 Distribution Calendar Year..........................................122
22.56 Distribution Commencement Date......................................122
22.57 Early Retirement Age................................................122
22.58 Earned Income.......................................................122
22.59 Effective Date......................................................123
22.60 Elapsed Time Method.................................................123
22.61 Elective Deferrals..................................................123
22.62 Eligibility Computation Period......................................123
22.63 Eligible Participant................................................123
22.64 Eligible Rollover Distribution......................................123
22.65 Eligible Retirement Plan............................................123
22.66 Employee............................................................123
22.67 Employee After-Tax Contribution Account.............................124
22.68 Employee After-Tax Contributions....................................124
22.69 Employer............................................................124
22.70 Employer Contribution Account.......................................124
22.71 Employer Contributions..............................................124
22.72 Employer Matching Contribution Account..............................124
22.73 Employer Matching Contributions.....................................124
22.74 Employer Nonelective Contributions..................................124
22.75 Employment Commencement Date........................................124
22.76 Employment Period...................................................124
22.77 Entry Date..........................................................124
22.78 Equivalency Method..................................................124
22.79 ERISA...............................................................124
22.80 Excess Aggregate Contributions......................................124
22.81 Excess Amount.......................................................124
22.82 Excess Compensation.................................................124
22.83 Excess Contributions................................................125
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22.84 Excess Deferrals....................................................125
22.85 Excluded Employee...................................................125
22.86 Fail-Safe Coverage Provision........................................125
22.87 Favorable IRS Letter................................................125
22.88 Five-Percent Owner..................................................125
22.89 Five-Year Forfeiture Break in Service...............................125
22.90 Flat Benefit........................................................125
22.91 Flat Excess Benefit.................................................125
22.92 Flat Offset Benefit.................................................125
22.93 Former Related Employer.............................................125
22.94 Four-Step Formula...................................................125
22.95 General Trust Account...............................................125
22.96 GUST Legislation....................................................125
22.97 Hardship............................................................125
22.98 Highest Average Compensation........................................125
22.99 Highly Compensated Employee.........................................125
(a) Definition.................................................125
(b) Other Definitions..........................................126
(c) Application of Highly Compensated Employee definition......126
22.100 Highly Compensated Employee Group...................................126
22.101 Hour of Service.....................................................126
(a) Performance of duties......................................126
(b) Nonperformance of duties...................................126
(c) Back pay award.............................................127
(d) Related Employers/Leased Employees.........................127
(e) Maternity/paternity leave..................................127
22.102 Included Compensation...............................................127
22.103 Insurer.............................................................128
22.104 Integrated Benefit Formula..........................................128
22.105 Integration Level...................................................128
22.106 Investment Manager..................................................128
22.107 Key Employee........................................................128
22.108 Leased Employee.....................................................128
22.109 Life Expectancy.....................................................128
22.110 Limitation Year.....................................................128
22.111 Lookback Year.......................................................128
22.112 Maximum Disparity Percentage........................................128
22.113 Maximum Offset Percentage...........................................128
22.114 Maximum Permissible Amount..........................................128
22.115 Measuring Period....................................................128
22.116 Multiple Use Test...................................................128
22.117 Named Fiduciary.....................................................128
22.118 Net Profits.........................................................128
22.119 New Related Employer................................................128
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22.120 Nonhighly Compensated Employee......................................129
22.121 Nonhighly Compensated Employee Group................................129
22.122 Nonintegrated Benefit Formula.......................................129
22.123 Non-Key Employee....................................................129
22.124 Nonresident Alien Employees.........................................129
22.125 Nonstandardized Agreement...........................................129
22.126 Normal Retirement Age...............................................129
22.127 Offset Compensation.................................................129
22.128 Offset Benefit Formula..............................................129
22.129 Old-Law Calendar Year Election......................................129
22.130 Old-Law Required Beginning Date.....................................129
22.131 Owner-Employee......................................................129
22.132 Paired Plans........................................................129
22.133 Participant.........................................................129
22.134 Period of Severance.................................................129
22.135 Permissive Aggregation Group........................................129
22.136 Permitted Disparity Method..........................................129
22.137 Plan................................................................129
22.138 Plan Administrator..................................................130
22.139 Plan Year...........................................................130
22.140 Pre-Age 35 Waiver...................................................130
22.141 Predecessor Employer................................................130
22.142 Predecessor Plan....................................................130
22.143 Present Value.......................................................130
22.144 Present Value Stated Benefit........................................130
22.145 Prior Year Testing Method...........................................130
22.146 Pro Rata Allocation Method..........................................130
22.147 Projected Annual Benefit............................................130
22.148 Protected Benefit...................................................130
22.149 Prototype Plan......................................................130
22.150 Prototype Sponsor...................................................130
22.151 QDRO -- Qualified Domestic Relations Order..........................130
22.152 QJSA -- Qualified Joint and Survivor Annuity........................130
22.153 QMAC Account........................................................130
22.154 QMACs -- Qualified Matching Contributions...........................130
22.155 QNEC Account........................................................131
22.156 QNECs -- Qualified Nonelective Contributions........................131
22.157 QPSA -- Qualified Preretirement Survivor Annuity....................131
22.158 QPSA Election Period................................................131
22.159 Qualified Election..................................................131
22.160 Qualified Transfer..................................................131
22.161 Qualifying Employer Real Property...................................131
22.162 Qualifying Employer Securities......................................131
22.163 Reemployment Commencement Date......................................131
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22.164 Related Employer....................................................131
22.165 Required Aggregation Group..........................................131
22.166 Required Beginning Date.............................................131
22.167 Reverse QNEC Method.................................................131
22.168 Rollover Contribution Account.......................................131
22.169 Rollover Contribution...............................................131
22.170 Rule of Parity Break in Service.....................................131
22.171 Safe Harbor 401(k) Plan.............................................131
22.172 Safe Harbor Contribution............................................131
22.173 Safe Harbor Matching Contribution Account...........................131
22.174 Safe Harbor Matching Contributions..................................132
22.175 Safe Harbor Nonelective Contribution Account........................132
22.176 Safe Harbor Nonelective Contributions...............................132
22.177 Salary Reduction Agreement..........................................132
22.178 Section 401(k) Deferral Account.....................................132
22.179 Section 401(k) Deferrals............................................132
22.180 Self-Employed Individual............................................132
22.181 Shareholder-Employee................................................132
22.182 Shift-to-Plan-Year Method...........................................132
22.183 Short Plan Year.....................................................132
22.184 Social Security Retirement Age......................................132
22.185 Standardized Agreement..............................................132
22.186 Stated Benefit......................................................132
22.187 Straight Life Annuity...............................................132
22.188 Successor Plan......................................................133
22.189 Taxable Wage Base...................................................133
22.190 Testing Compensation................................................133
22.191 Theoretical Reserve.................................................133
22.192 Three Percent Method................................................133
22.193 Top-Paid Group......................................................133
22.194 Top-Paid Group Test.................................................133
22.195 Top-Heavy Plan......................................................133
22.196 Top-Heavy Ratio.....................................................133
22.197 Total Compensation..................................................133
(a) W-2 Wages..................................................133
(b) Withholding Wages..........................................133
(c) Code ss.415 Safe Harbor Compensation.......................133
22.198 Transfer Account....................................................134
22.199 Trust...............................................................134
22.200 Trustee.............................................................134
22.201 Two-Step Formula....................................................134
22.202 Union Employee......................................................134
22.203 Unit Benefit........................................................134
22.204 Unit Excess Benefit.................................................134
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22.205 Unit Offset Benefit.................................................134
22.206 Valuation Date......................................................134
22.207 Vesting Computation Period..........................................134
22.208 W-2 Wages...........................................................135
22.209 Withholding Wages...................................................135
22.210 Year of Participation...............................................135
22.211 Year of Service.....................................................135
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ARTICLE 1
PLAN ELIGIBILITY AND PARTICIPATION
This Article contains the rules for determining when an Employee becomes
eligible to participate in the Plan. Part 1 and Part 2 of the Agreement contain
specific elections for applying these Plan eligibility and participation rules.
Article 6 of this BPD and Part 7 of the Agreement contain special service
crediting elections to override the default provisions under this Article.
1.1 Eligibility for Plan Participation. An Employee who satisfies the
Plan's minimum age and service conditions (as elected in Part 1, #5 of
the Agreement) is eligible to participate in the Plan beginning on the
Entry Date selected in Part 2 of the Agreement, unless he/she is
specifically excluded from participation under Part 1, #4 of the
Agreement. An Employee who has satisfied the Plan's minimum age and
service conditions and is employed on his/her Entry Date is referred to
as an Eligible Participant. (See Section 1.7 below for the rules
regarding an Employee who terminates employment prior to his/her Entry
Date.) An Employee who is excluded from participation under Part 1, #4
of the Agreement is referred to as an Excluded Employee.
1.2 Excluded Employees. Unless specifically excluded under Part 1, #4 of
the Agreement, all Employees of the Employer are entitled to
participate under the Plan upon becoming an Eligible Participant. Any
Employee who is excluded under Part 1, #4 of the Agreement may not
participate under the Plan, unless such Excluded Employee subsequently
becomes a member of an eligible class of Employees. (See Section 1.8(b)
of this Article for rules regarding an Excluded Employee's entry into
the Plan if he/she subsequently becomes a member of an eligible class
of Employees.)
The Employer may elect under Part 1, #4 of the 401(k) Agreement to
exclude different groups of Employees for Section 401(k) Deferrals,
Employer Matching Contributions, and Employer Nonelective
Contributions. Unless provided otherwise under Part 1, #4.f. of the
Nonstandardized 401(k) Agreement, for purposes of determining the
Excluded Employees, any selection made with respect to Section 401(k)
Deferrals also will apply to any Employee After-Tax Contributions and
any Safe Harbor Contributions; any selections made with respect to
Employer Matching Contributions also will apply to any Qualified
Matching Contributions (QMACs); and any selections made with respect to
Employer Nonelective Contributions also will apply to any Qualified
Nonelective Contributions (QNECs).
(a) Independent contractors. Any individual who is an independent
contractor, or who performs services with the Employer under
an agreement that identifies the individual as an independent
contractor, is specifically excluded from the Nonstandardized
Plan. In the event the Internal Revenue Service (IRS)
retroactively reclassifies such an individual as an Employee,
the reclassified Employee will become an Eligible Participant
on the date the IRS issues a final determination regarding
his/her employment status (or the individual's Entry Date, if
later), unless the individual is otherwise excluded from
participation under Part 1, #4 of the Nonstandardized
Agreement. For periods prior to the date of such final
determination, the reclassified Employee will not have any
rights to accrued benefits under the Plan, except as agreed to
by the Employer and the IRS, or as set forth in an amendment
adopted by the Employer.
(b) Leased Employees. If an individual is a Leased Employee, such
individual is treated as an Employee of the Employer and may
participate under the Plan upon satisfying the Plan's minimum
age and service conditions, unless the Employer elects to
exclude Leased Employees from participation under Part 1,
#4.d. of the Nonstandardized Agreement.
(1) Definition of Leased Employee. Effective for Plan
Years beginning after December 31, 1996, a Leased
Employee, as defined in Code ss.414(n), is an
individual who performs services for the Employer on
a substantially full time basis for a period of at
least one year pursuant to an agreement between the
Employer and a leasing organization, provided such
services are performed under the primary direction or
control of the recipient Employer. For Plan Years
beginning before January 1, 1997, the definition of
Leased Employee is as defined under Code ss.414(n),
as in effect for such years.
(2) Credit for benefits. If a Leased Employee receives
contributions or benefits under a plan maintained by
the leasing organization that are attributable to
services performed for the Employer, such
contributions or benefits shall be treated as
provided by the Employer.
(3) Safe harbor plan. A Leased Employee will not be
considered an Employee of the Employer if such Leased
Employee is covered by a money purchase plan of the
leasing organization which provides: (i) a
nonintegrated employer contribution of at least 10%
of compensation, (ii) immediate participation, and
(iii) full and immediate vesting. For this paragraph
to apply, Leased Employees must not constitute more
than 20% of the total Nonhighly Compensated Employees
of the Employer.
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1.3 Employees of Related Employers. Employees of the Employer that executes
the Signature Page of the Agreement and Employees of any Related
Employer that executes a Co-Sponsor Adoption Page under the Agreement
are eligible to participate in this Plan.
(a) Nonstandardized Agreement. In a Nonstandardized Agreement, a
Related Employer is not required to execute a Co-Sponsor
Adoption Page. However, Employees of a Related Employer that
does not execute a Co-Sponsor Adoption Page are not eligible
to participate in the Plan.
(b) Standardized Agreement. In a Standardized Agreement, Employees
of all Related Employers are eligible to participate under the
Plan upon satisfying any required minimum age and/or service
conditions (unless otherwise excluded under Part 1, #4 of the
Agreement). All Related Employers (who have Employees who may
be eligible under the Plan) must execute a Co-Sponsor Adoption
Page under the Agreement, so the Employees of such Related
Employers are eligible to become Participants in the Plan.
(See Article 21 for applicable rules if a Related Employer
does not sign the Co-Sponsor Adoption Page and the effect of
an acquisition or disposition transaction that is described in
Codess.410(b)(6)(C).)
1.4 Minimum Age and Service Conditions. Part 1, #5 of the Agreement
contains specific elections as to the minimum age and service
conditions which an Employee must satisfy prior to becoming eligible to
participate under the Plan. An Employee may be required to attain a
specific age or to complete a certain amount of service with the
Employer prior to commencing participation under the Plan. If no
minimum age or service conditions apply to a particular contribution
(i.e., the Employer elects "None" under Part 1, #5.a. of the
Agreement), an Employee is treated as satisfying the Plan's eligibility
requirements on the individual's Employment Commencement Date.
Different age and service conditions may be selected under Part 1, #5
of the 401(k) Agreement for Section 401(k) Deferrals, Employer Matching
Contributions, and Employer Nonelective Contributions. For purposes of
applying the eligibility conditions under Part 1, #5, any selection
made with respect to Section 401(k) Deferrals also will apply to any
Employee After-Tax Contributions; any selections made with respect to
Employer Matching Contributions also will apply to any Qualified
Matching Contributions (QMACs); and any selections made with respect to
Employer Nonelective Contributions also will apply to any Qualified
Nonelective Contributions (QNECs), unless otherwise provided under Part
1, #5.f. of the Nonstandardized 401(k) Agreement. In addition, any
eligibility conditions selected with respect to Section 401(k)
Deferrals also will apply to any Safe Harbor Contributions designated
under Part 4E of the 401(k) Agreement, unless otherwise provided under
Part 4E, #30.d. of the 401(k) Agreement. If different conditions apply
for different contributions, the rules in this Article for determining
when an Employee is an Eligible Participant are applied separately with
respect to each set of eligibility conditions.
(a) Maximum permissible age and service conditions. Codess.410(a)
provides limits on the maximum permissible age and service
conditions that may be required prior to Plan participation.
The Employer may not require an Employee, as a condition of
Plan participation, to attain an age older than age 21. The
Employer also may not require an Employee to complete more
than one Year of Service, unless the Employer elects full and
immediate vesting under Part 6 of the Agreement, in which case
the Employer may require an Employee to complete up to two
Years of Service. (The Employer may not require an Employee to
complete more than one Year of Service to be eligible to make
Section 401(k) Deferrals under the 401(k) Agreement.)
(b) Year of Service. Unless the Employer elects otherwise under
Part 7, #23 of the Agreement [Part 7, #41 of the 401(k)
Agreement], an Employee will earn one Year of Service for
purposes of applying the eligibility rules under this Article
if the Employee completes at least 1,000 Hours of Service with
the Employer during an Eligibility Computation Period (as
defined in subsection (c) below). An Employee will receive
credit for a Year of Service, as of the end of the Eligibility
Computation Period, if the Employee completes the required
Hours of Service during such period, even if the Employee is
not employed for the entire period. In calculating an
Employee's Hours of Service for purposes of applying the
eligibility rules under this Article, the Employer will use
the Actual Hours Crediting Method, unless elected otherwise
under Part 7 of the Agreement. (See Article 6 of this BPD for
a description of alternative service crediting methods.)
(c) Eligibility Computation Periods. For purposes of determining
Years of Service under this Article, an Employee's initial
Eligibility Computation Period is the 12 month period
beginning on the Employee's Employment Commencement Date. If
one Year of Service is required for eligibility, and the
Employee is not credited with a Year of Service for the first
Eligibility Computation Period, subsequent Eligibility
Computation Periods are calculated under the Shift to Plan
Year Method, unless the Employer elects under Part 7, #24.a.
of the Agreement [Part 7, #42.a. of the 401(k) Agreement] to
use the Anniversary Year Method. If two Years of Service are
required for eligibility, subsequent Eligibility Computation
Periods are measured on the Anniversary Year Method, unless
the Employer elects under Part 7, #24.b. of the Agreement
[Part 7, #42.b. of the 401(k) Agreement] to use the Shift to
Plan Year Method. In the case of a 401(k) Agreement in which a
two Years of Service eligibility condition is used for either
Employer Matching Contributions or Employer Nonelective
Contributions, the method used to determine Eligibility
Computation Periods for the two Years of Service condition
also will apply to any one Year of Service eligibility
condition used with respect to any other contributions under
the Plan.
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(1) Shift-to-Plan-Year Method. Under the
Shift-to-Plan-Year Method, after the initial
Eligibility Computation Period, subsequent
Eligibility Computation Periods are measured using
the Plan Year. In applying the Shift-to-Plan-Year
Method, the first Eligibility Computation Period
following the shift to the Plan Year is the first
Plan Year that commences after the Employee's
Employment Commencement Date. See Section 11.7 for
rules that apply if there is a short Plan Year.
(2) Anniversary Year Method. Under the Anniversary Year
Method, after the initial Eligibility Computation
Period, each subsequent Eligibility Computation
Period is the 12-month period commencing with the
anniversary of the Employee's Employment Commencement
Date.
(d) Application of eligibility rules.
(1) General rule - Effective Date. All Employees who have
satisfied the conditions for being an Eligible
Participant (and have reached their Entry Date (as
determined under Part 2 of the Agreement)) as of the
Effective Date of the Plan are eligible to
participate in the Plan as of the Effective Date
(provided the Employee is employed on such date and
is not otherwise excluded from participation under
Part 1, #4 of the Agreement). If an Employee has
satisfied all the conditions for being an Eligible
Participant as of the Effective Date of the Plan,
except the Employee has not yet reached his/her Entry
Date, the Employee will become an Eligible
Participant on the appropriate Entry Date in
accordance with this Article.
(2) Dual eligibility provision. The Employer may modify
the rule described in subsection (1) above by
electing under Part 1, #6.a. of the Nonstandardized
Agreement [Part 1, #6 of the Standardized Agreement]
to treat all Employees employed on the Effective Date
of the Plan as Eligible Participants as of such date.
Alternatively, the Employer may elect under Part 1,
#6.b. of the Nonstandardized Agreement to apply the
dual eligibility provision as of a specified date.
Any Employee employed as of a date designated under
Part 1, #6 will be deemed to be an Eligible
Participant as of the later of such date or the
Effective Date of this Plan, whether or not the
Employee has otherwise satisfied the eligibility
conditions designated under Part 1, #5 and whether or
not the Employee has otherwise reached his/her Entry
Date (as designated under Part 2 of the Agreement).
Thus, all eligible Employees employed on the date
designated under Part 1, #6 will commence
participating under the Plan as of the appropriate
date.
(e) Amendment of age and service requirements. If the Plan's
minimum age and service conditions are amended, an Employee
who is an Eligible Participant immediately prior to the
effective date of the amendment is deemed to satisfy the
amended requirements. This provision may be modified under the
special Effective Date provisions under Appendix A of the
Agreement.
1.5 Entry Dates. Part 2 of the Agreement contains specific elections
regarding the Entry Dates under the Plan. An Employee's Entry Date is
the date as of which he/she is first considered an Eligible
Participant. Depending on the elections in Part 2 of the Agreement, the
Entry Date may be the exact date on which an Employee completes the
Plan's age and service conditions, or it might be some date that occurs
before or after such conditions are satisfied. If an Employee is
excluded from participation under Part 1, #4 of the Agreement, see the
rules under Section 1.8 of this Article.
The Employer may elect under Part 2 of the 401(k) Agreement to apply
different Entry Dates for Section 401(k) Deferrals, Employer Matching
Contributions, and Employer Nonelective Contributions. Unless provided
otherwise in Part 2, #8.f. of the Nonstandardized 401(k) Agreement, the
Entry Date chosen for Section 401(k) Deferrals also applies to any
Employee After-Tax Contributions and to any Safe Harbor Contributions
designated under Part 4E of the Agreement; the Entry Date chosen for
Employer Matching Contributions also applies to any Qualified Matching
Contributions (QMACs); and the Entry Date chosen for Employer
Nonelective Contributions also applies to any Qualified Nonelective
Contributions (QNECs).
(a) Entry Date requirements. Except as provided under Section
1.4(d)(2) above, an Employee (other than an Excluded Employee)
commences participation under the Plan (i.e., becomes an
Eligible Participant) as of the Entry Date selected in Part 2
of the Agreement, provided the individual is employed by the
Employer on that Entry Date. (See Section 1.7 below for the
rules applicable to Employees who are not employed on the
Entry Date.) In no event may an Eligible Participant's Entry
Date be later than: (1) the first day of the Plan Year
beginning after the date on which the Eligible Participant
satisfies the maximum permissible minimum age and service
conditions described in Section 1.4, or (2) six months after
the date the Eligible Participant satisfies such age and
service conditions.
(b) Single annual Entry Date. If the Employer elects a single
annual Entry Date under Part 2, #8 of the Agreement, the
maximum permissible age and service conditions described in
Section 1.4 above are reduced by one half (1/2) year, unless:
(1) the Employer elects under Part 2, #7.c. of the Agreement
to use the Entry
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(C)Copyright 2001 SunTrust Bank Basic Plan Document
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Date nearest the date the Employee satisfies the Plan's
minimum age and service conditions and the Entry Date is the
first day of the Plan Year or (2) the Employer elects under
Part 2, #7.d. of the Agreement to use the Entry Date preceding
the date the Employee satisfies the Plan's minimum age and
service conditions.
1.6 Eligibility Break in Service Rules. For purposes of eligibility to
participate, an Employee is credited with all Years of Service earned
with the Employer, except as provided under the following Break in
Service rules. In applying these Break in Service rules, Years of
Service and Breaks in Service (as defined in Section 22.26) are
measured on the same Eligibility Computation Period as defined in
Section 1.4(c) above.
(a) Rule of Parity Break in Service. This Break in Service rule
applies only to Participants who are totally nonvested (i.e.,
0% vested) in their Employer Contribution Account and Employer
Matching Contribution Account, as applicable. Under this Break
in Service rule, if a nonvested Participant incurs a period of
consecutive one-year Breaks in Service which equals or exceeds
the greater of five (5) or the Participant's aggregate number
of Years of Service with the Employer, all service earned
prior to the consecutive Break in Service period will be
disregarded and the Participant will be treated as a new
Employee for purposes of determining eligibility under the
Plan. The Employer may elect under Part 7, #27 of the
Agreement [Part 7, #45 of the 401(k) Agreement] not to apply
the Rule of Parity Break in Service rule.
(1) Previous application of the Rule of Parity Break in
Service rule. In determining a Participant's
aggregate Years of Service for purposes of applying
the Rule of Parity Break in Service, any Years of
Service otherwise disregarded under a previous
application of this rule are disregarded.
(2) Application to the 401(k) Agreement. The Rule of
Parity Break in Service rule applies only to
determine the individual's right to resume as an
Eligible Participant with respect to his/her Employer
Contribution Account and/or Employer Matching
Contribution Account. In determining whether a
Participant is totally nonvested for purposes of
applying the Rule of Parity Break in Service rule,
the Participant's Section 401(k) Deferral Account,
Employee After-Tax Contribution Account, QMAC
Account, QNEC Account, Safe Harbor Nonelective
Contribution Account, Safe Harbor Matching
Contribution Account, and Rollover Contribution
Account are disregarded.
(b) One year Break in Service rule for Plans using a two Years of
Service eligibility condition. If the Employer elects to use
the two Years of Service eligibility condition under Part 1,
#5.e. of the Agreement, any Employee who incurs a one year
Break in Service before satisfying the two Years of Service
eligibility condition will not be credited with service earned
before such one year Break in Service.
(c) One-year holdout Break in Service rule. The one-year holdout
Break in Service rule will not apply unless the Employer
specifically elects in Part 7, #27.b. of the Nonstandardized
Agreement [Part 7, #45.b. of the Nonstandardized 401(k)
Agreement] to have it apply. If the one-year holdout Break in
Service rule is elected, an Employee who has a one-year Break
in Service will not be credited for eligibility purposes with
any Years of Service earned before such one-year Break in
Service until the Employee has completed a Year of Service
after the one-year Break in Service. (The one-year holdout
Break in Service rule does not apply under the Standardized
Agreements.)
(1) Operating rules. An Employee who is precluded from
receiving Employer Contributions (other than Section
401(k) Deferrals) as a result of the one-year holdout
Break in Service rule, and who completes a Year of
Service following the Break in Service, is reinstated
as an Eligible Participant as of the first day of the
12-month measuring period (determined under
subsection (2) or (3) below) during which the
Employee completes the Year of Service. Unless
otherwise selected under Part 7, #45.b.(1)(b) of the
Nonstandardized 401(k) Agreement, the one-year
holdout Break in Service rule does not apply to
preclude an otherwise Eligible Participant from
making Section 401(k) Deferrals to the Plan. If the
Employer elects under Part 7, #45.b.(1)(b) of the
Nonstandardized 401(k) Agreement to have the one-year
holdout Break in Service rule apply to Section 401(k)
Deferrals, an Employee who is precluded from making
Section 401(k) Deferrals as a result of this Break in
Service rule is re-eligible to make Section 401(k)
Deferrals immediately upon completing 1,000 Hours of
Service with the Employer during a subsequent
measuring period (as determined under subsection (2)
or (3) below). No corrective action need be taken by
the Employer as a result of the failure to
retroactively permit the Employee to make Section
401(k) Deferrals.
(2) Plans using the Shift-to-Plan-Year Method. If the
Plan uses the Shift-to-Plan-Year Method (as defined
in Section 1.4(c)(1)) for measuring Years of Service,
the period for determining whether an Employee
completes a Year of Service following the one-year
Break in Service is the 12-month period commencing on
the Employee's Reemployment Commencement Date and, if
necessary, subsequent Plan Years beginning with the
Plan Year which includes the first anniversary of the
Employee's Reemployment Commencement Date.
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
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(3) Plans using Anniversary Year Method. If the Plan uses
the Anniversary Year Method (as defined in Section
1.4(c)(2)) for measuring Years of Service, the period
for determining whether an Employee completes a Year
of Service following the one-year Break in Service is
the 12-month period which commences on the Employee's
Reemployment Commencement Date and, if necessary,
subsequent 12-month periods beginning on
anniversaries of the Employee's Reemployment
Commencement Date.
1.7 Eligibility upon Reemployment. Subject to the Break in Service rules
under Section 1.6, a former Employee is reinstated as an Eligible
Participant immediately upon rehire if the Employee had satisfied the
Plan's minimum age and service conditions prior to termination of
employment, regardless of whether the Employee was actually employed on
his/her Entry Date, unless the Employee is an Excluded Employee upon
his/her return to employment. This requirement is deemed satisfied if a
rehired Employee is permitted to commence making Section 401(k)
Deferrals as of the beginning of the first payroll period commencing
after the Employee's Reemployment Commencement Date.
If an Employee is reemployed prior to his/her Entry Date, the Employee
does not become an Eligible Participant under the Plan until such Entry
Date. A rehired Employee who had not satisfied the Plan's minimum age
and service conditions prior to termination of employment is eligible
to participate in the Plan on the appropriate Entry Date following
satisfaction of the eligibility requirements under this Article.
1.8 Operating Rules for Employees Excluded by Class.
(a) Eligible Participant becomes part of an excluded class of
Employees. If an Eligible Participant becomes part of an
excluded class of Employees, his/her status as an Eligible
Participant ceases immediately. As provided in subsection (b)
below, such Employee's status as an Eligible Participant will
resume immediately upon his/her returning to an eligible class
of Employees, regardless of whether such date is a normal
Entry Date under the Plan, subject to the application of any
Break in Service rules under Section 1.6 and the special rule
for Section 401(k) Deferrals under subsection (b) below.
(b) Excluded Employee becomes part of an eligible class of
Employee. If an Excluded Employee becomes part of an eligible
class of Employees, the following rules apply. If the Entry
Date that otherwise would have applied to such Employee
following his/her completion of the Plan's minimum age and
service conditions has already passed, then the Employee
becomes an Eligible Participant on the date he/she becomes
part of the eligible class of Employees, regardless of whether
such date is a normal Entry Date under the Plan. This
requirement is deemed satisfied if the Employee is permitted
to commence making Section 401(k) Deferrals as of the
beginning of the first payroll period commencing after the
Employee becomes part of an eligible class of Employees. If
the Entry Date that would have applied to such Employee has
not passed, then the Employee becomes an Eligible Participant
on such Entry Date. If the Employee has not satisfied the
Plan's minimum age and service conditions, the Employee will
become an Eligible Participant on the appropriate Entry Date
following satisfaction of the eligibility requirements under
this Article.
1.9 Relationship to Accrual of Benefits. An Eligible Participant is
entitled to accrue benefits in the Plan but will not necessarily do so
in every Plan Year that he/she is an Eligible Participant. Whether an
Eligible Participant's Account receives an allocation of Employer
Contributions depends on the requirements set forth in Part 4 of the
Agreement. If an Employee is an Eligible Participant for purposes of
making Section 401(k) Deferrals under the 401(k) Agreement, such
Employee is treated as an Eligible Participant under the Plan
regardless of whether he/she actually elects to make Section 401(k)
Deferrals.
1.10 Waiver of Participation. Unless the Employer elects otherwise under
Part 13, #57 of the Nonstandardized Agreement [Part 13, #75 of the
Nonstandardized 401(k) Agreement], an Eligible Participant may not
waive participation under the Plan. For this purpose, a failure to make
Section 401(k) Deferrals or Employee After-Tax Contributions under a
401(k) plan is not a waiver of participation. The Employer may elect
under Part 13, #57 of the Nonstandardized Agreement [Part 13, #75 of
the Nonstandardized 401(k) Agreement] to permit Employees to make a
one-time irrevocable election to not participate under the Plan. Such
election must be made upon inception of the Plan or at any time prior
to the time the Employee first becomes eligible to participate under
any plan maintained by the Employer. An Employee who makes a one-time
irrevocable election not to participate may not subsequently elect to
participate under the Plan. An Employee may not waive participation
under a Standardized Agreement.
An Employee who elects not to participate under this Section 1.10 is
treated as a nonbenefiting Employee for purposes of the minimum
coverage requirements under Code ss.410(b). However, an Employee who
makes a one-time irrevocable election not to participate, as described
in the preceding paragraph, is not an Eligible Participant for purposes
of applying the ADP Test or ACP Test under the 401(k) Agreement. See
Section 17.7(e) and (f). A waiver of participation must be filed in the
manner, time and on the form required by the Plan Administrator.
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ARTICLE 2
EMPLOYER CONTRIBUTIONS AND ALLOCATIONS
This Article describes how Employer Contributions are made to and allocated
under the Plan. The type of Employer Contributions that may be made under the
Plan and the method for allocating such contributions will depend on the type of
Plan involved. Section 2.2 of this BPD provides specific rules regarding
contributions and allocations under a profit sharing plan; Section 2.3 provides
the rules for a 401(k) plan; Section 2.4 provides the rules for a money purchase
plan; and Section 2.5 provides the rules for a target benefit plan. Part 4 of
the Agreement contains the elective provisions for the Employer to specify the
amount and type of Employer Contributions it will make under the Plan and to
designate any limits on the amount it will contribute to the Plan each year.
Employee After-Tax Contributions, Rollover Contributions and transfers to the
Plan are discussed in Article 3 and the allocation of forfeitures is discussed
in Article 5. Part 3 of the Agreement contains elective provisions for
determining an Employee's Included Compensation for allocation purposes.
2.1 Amount of Employer Contributions. The Employer shall make Employer
Contributions to the Trust as determined under the contribution formula
elected in Part 4 of the Agreement. If this Plan is a 401(k) plan,
Employer Contributions include Section 401(k) Deferrals, Employer
Nonelective Contributions, Employer Matching Contributions, QNECs,
QMACs, and Safe Harbor Contributions, to the extent such contributions
are elected under the 401(k) Agreement. The Employer has the
responsibility for determining the amount and timing of Employer
Contributions under the terms of the Plan.
(a) Limitation on Employer Contributions. Employer Contributions
are subject to the Annual Additions Limitation described in
Article 7 of this BPD. If allocations to a Participant exceed
(or will exceed) such limitation, the excess will be corrected
in accordance with the rules under Article 7. In addition, the
Employer must comply with the special contribution and
allocation rules for Top-Heavy Plans under Article 16.
(b) Limitation on Included Compensation. For purposes of
determining a Participant's allocation of Employer
Contributions under this Article, the Included Compensation
taken into account for any Participant for a Plan Year may not
exceed the Compensation Dollar Limitation under Section 22.32.
(c) Contribution of property. Subject to the consent of the
Trustee, the Employer may make its contribution to the Plan in
the form of property, provided such contribution does not
constitute a prohibited transaction under the Code or ERISA.
The decision to make a contribution of property is subject to
the general fiduciary rules under ERISA.
(d) Frozen Plan. The Employer may designate under Part 4, #12 of
the Agreement [#3 of the 401(k) Agreement] that the Plan is a
frozen Plan. As a frozen Plan, the Employer will not make any
Employer Contributions with respect to Included Compensation
earned after the date identified in the Agreement, and if the
Plan is a 401(k) Plan, no Participant will be permitted to
make Section 401(k) Deferrals or Employee After-Tax
Contributions to the Plan for any period following the
effective date identified in the Agreement.
2.2 Profit Sharing Plan Contribution and Allocations. This Section 2.2 sets
forth rules for determining the amount of any Employer Contributions
under the profit sharing plan Agreement. This Section 2.2 also applies
for purposes of determining any Employer Nonelective Contributions
under the 401(k) plan Agreement. In applying this Section 2.2 to the
401(k) Agreement, the term Employer Contribution refers solely to
Employer Nonelective Contributions. Any reference to the Agreement
under this Section 2.2 is a reference to the profit sharing plan
Agreement or 401(k) plan Agreement (as applicable).
(a) Amount of Employer Contribution. The Employer must designate
under Part 4, #12 of the profit sharing plan Agreement the
amount it will contribute as an Employer Contribution under
the Plan. If the Employer adopts the 401(k) plan Agreement and
elects to make Employer Nonelective Contributions under Part
4C of the Agreement, the Employer must complete Part 4C, #20
of the Agreement, unless the only Employer Nonelective
Contribution authorized under the Plan is a QNEC under Part
4C, #22. An Employer Contribution authorized under this
Section may be totally within the Employer's discretion or may
be a fixed amount determined as a uniform percentage of each
Eligible Participant's Included Compensation or as a fixed
dollar amount for each Eligible Participant. An Employer
Contribution under this Section will be allocated to the
Eligible Participants' Employer Contribution Account in
accordance with the allocation formula selected under Part 4,
#13 of the Agreement [Part 4C, #21 of the 401(k) Agreement].
(1) Davis-Bacon Contribution Formula. The Employer may
elect a Davis-Bacon Contribution Formula under Part
4, #12.d. of the Nonstandardized Agreement [Part 4C,
#20.d. of the Nonstandardized 401(k) Agreement].
Under the Davis-Bacon Contribution Formula, the
Employer will provide an Employer Contribution for
each Eligible Participant who performs Davis-Bacon
Act Service. For this purpose, Davis-Bacon Act
Service is any service performed by an Employee under
a public contract subject to the Davis-Bacon Act or
to any other federal, state or municipal prevailing
wage law. Each such Eligible Participant will receive
a contribution based on the hourly
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
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contribution rate for the Participant's employment
classification, as designated on Schedule A of the
Agreement. Schedule A is incorporated as part of the
Agreement.
In applying the Davis-Bacon Contribution Formula
under this subsection (1), the following default
rules will apply. The Employer may modify these
default rules under Part 4, #12.d.(2) of the
Nonstandardized Agreement [Part 4C, #20.d.(2) of the
Nonstandardized 401(k) Agreement].
(i) Eligible Employees. Highly Compensated
Employees are Excluded Employees for
purposes of receiving an Employer
Contribution under the Davis-Bacon
Contribution Formula.
(ii) Minimum age and service conditions. No
minimum age or service conditions will apply
for purposes of determining an Employee's
eligibility under the Davis-Bacon
Contribution Formula.
(iii) Entry Date. For purposes of applying the
Davis-Bacon Contribution Formula, an
Employee becomes an Eligible Participant on
his/her Employment Commencement Date.
(iv) Allocation conditions. No allocation
conditions (as described in Section 2.6)
will apply for purposes of determining an
Eligible Participant's allocation under the
Davis-Bacon Contribution Formula.
(v) Vesting. Employer Contributions made
pursuant to the Davis-Bacon Contribution
Formula are always 100% vested.
(vi) Offset of other Employer Contributions. The
contributions under the Davis Bacon
Contribution Formula will not offset any
other Employer Contributions under the Plan.
However, the Employer may elect under Part
4, #12.d.(1) of the Nonstandardized
Agreement [Part 4C, #20.d.(1) of the
Nonstandardized 401(k) Agreement] to offset
any other Employer Contributions made under
the Plan by the contributions a Participant
receives under the Davis-Bacon Contribution
Formula. Under the Nonstandardized 401(k)
plan Agreement, the Employer may elect under
Part 4C, #20.d.(1) to apply the offset under
this subsection to Employer Nonelective
Contributions, Employer Matching
Contributions, or both.
(2) Net Profits. The Employer may elect under Part 4, #12
of the Agreement [Part 4B, #16 and Part 4C, #20 of
the 401(k) Agreement], to limit any Employer
Contribution under the Plan to Net Profits. Unless
modified in the Agreement, Net Profits means the
Employer's net income or profits determined in
accordance with generally accepted accounting
principles, without any reduction for taxes based
upon income, or the contributions made by the
Employer under this Plan or any other qualified plan.
Unless specifically elected otherwise under Part 4,
#12.e.(2) of the Nonstandardized Agreement [Part 4C,
#20.e.(2) of the Nonstandardized 401(k) Agreement],
this limit will not apply to any Employer
Contributions made under a Davis-Bacon Contribution
Formula.
(3) Multiple formulas. If the Employer elects more than
one Employer Contribution formula, each formula is
applied separately. The Employer's aggregate Employer
Contribution for a Plan Year will be the sum of the
Employer Contributions under all such formulas.
(b) Allocation formula for Employer Contributions. The Employer
must elect a definite allocation formula under Part 4, #13 of
the profit sharing plan Agreement that determines how much of
the Employer Contribution is allocated to each Eligible
Participant. If the Employer adopts the 401(k) plan Agreement
and elects to make an Employer Nonelective Contribution (other
than a QNEC) under Part 4C, #20 of the Agreement, Part 4C, #21
also must be completed designating the allocation formula
under the Plan. An Eligible Participant is only entitled to an
allocation if such Participant satisfies the allocation
conditions described in Part 4, #15 of the Agreement [Part 4C,
#24 of the 401(k) Agreement]. See Section 2.6.
(1) Pro Rata Allocation Method. If the Employer elects
the Pro Rata Allocation Method, a pro rata share of
the Employer Contribution is allocated to each
Eligible Participant's Employer Contribution Account.
A Participant's pro rata share is determined based on
the ratio such Participant's Included Compensation
bears to the total of all Eligible Participants'
Included Compensation. However, if the Employer
elects under Part 4, #12.c. of the Agreement [Part
4C, #20.c. of the 401(k) Agreement] to contribute a
uniform dollar amount for each Eligible Participant,
the pro rata allocation method allocates that uniform
dollar amount to each Eligible Participant. If the
Employer elects a Davis-Bacon Contribution Formula
under Part 4, #12.d. of the Nonstandardized Agreement
[Part 4C, #20.d. of the Nonstandardized 401(k)
Agreement], the Employer Contributions made pursuant
to such formula will be allocated to each Eligible
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Participant based on his/her Davis-Bacon Act Service
in accordance with the employment classifications
identified under Schedule A of the Agreement.
(2) Permitted Disparity Method. If the Employer elects
the Permitted Disparity Method, the Employer
Contribution is allocated to Eligible Participants
under the Two-Step Formula or the Four-Step Formula
(as elected under the Agreement). The Permitted
Disparity Method only may apply if the Employer
elects under the Agreement to make a discretionary
contribution. The Employer may not elect the
Permitted Disparity Method under the Plan if another
qualified plan of the Employer, which covers any of
the same Employees, uses permitted disparity in
determining the allocation of contributions or the
accrual of benefits under the plan.
For purposes of applying the Permitted Disparity
Method, Excess Compensation is the portion of an
Eligible Participant's Included Compensation that
exceeds the Integration Level. The Integration Level
is the Taxable Wage Base, unless the Employer
designates a different amount under Part 4, #14.b.(2)
of the Agreement [Part 4C, #23.b.(2) of the 401(k)
Agreement].
(i) Two-Step Formula. If the Employer elects the
Two-Step Formula, the following allocation
method applies. However, the Employer may
elect under Part 4, #14.b.(1) of the
Agreement [Part 4C, #23.b.(1) of the 401(k)
Agreement] to have the Four-Step Method, as
described in subsection (ii) below,
automatically apply for any Plan Year in
which the Plan is a Top-Heavy Plan.
(A) Step One. The Employer Contribution
is allocated to each Eligible
Participant's Account in the ratio
that each Eligible Participant's
Included Compensation plus Excess
Compensation for the Plan Year
bears to the total Included
Compensation plus Excess
Compensation of all Eligible
Participants for the Plan Year. The
allocation under this Step One, as
a percentage of each Eligible
Participant's Included Compensation
plus Excess Compensation, may not
exceed the Applicable Percentage
under the following table:
Integration Level Applicable
(as a % of the Taxable Wage Base) Percentage
----------------------------------- ----------
100% 5.7%
More than 80% but less than 100% 5.4%
More than 20% and not more than 80% 4.3%
20% or less 5.7%
(B) Step Two. Any Employer Contribution
remaining after Step One will be
allocated in the ratio that each
Eligible Participant's Included
Compensation for the Plan Year
bears to the total Included
Compensation of all Eligible
Participants for the Plan Year.
(ii) Four-Step Formula. If the Employer elects
the Four-Step Formula, or if the Plan is a
Top-Heavy Plan and the Employer elects under
the Agreement to have the Four-Step Formula
apply for any Plan Year that the Plan is a
Top-Heavy Plan, the following allocation
method applies. The allocation under this
Four-Step Formula may be modified if the
Employer maintains a Defined Benefit Plan
and elects under Part 13, #54.b. of the
Agreement [Part 13, #72.b. of the 401(k)
Agreement] to provide a greater top-heavy
minimum contribution. See Section
16.2(a)(5)(ii).
(A) Step One. The Employer Contribution
is allocated to each Eligible
Participant's Account in the ratio
that each Eligible Participant's
Total Compensation for the Plan
Year bears to all Eligible
Participants' Total Compensation
for the Plan Year, but not in
excess of 3% of each Eligible
Participant's Total Compensation.
For any Plan Year for which the
Plan is a Top-Heavy Plan, an
allocation will be made under this
subsection (A) to any Non-Key
Employee who is an Eligible
Participant (and is not an Excluded
Employee) if such individual is
employed as of the last day of the
Plan Year, even if such individual
fails to satisfy any minimum Hours
of Service allocation condition
under Part 4, #15 of the Agreement
[Part 4C, #24 of the 401(k)
Agreement]. If the Plan is a
Top-Heavy 401(k) Plan, an
allocation also will be made under
this subsection (A) to any
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
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Employee who is an Eligible
Participant for purposes of making
Section 401(k) Deferrals under the
Plan, even if the individual has
not satisfied the minimum age and
service conditions under Part 1, #5
of the Agreement applicable to any
other contribution types.
(B) Step Two. Any Employer Contribution
remaining after the allocation in
Step One will be allocated to each
Eligible Participant's Account in
the ratio that each Eligible
Participant's Excess Compensation
for the Plan Year bears to the
Excess Compensation of all Eligible
Participants for the Plan Year, but
not in excess of 3% of each
Eligible Participant's Included
Compensation.
(C) Step Three. Any Employer
Contribution remaining after the
allocation in Step Two will be
allocated to each Eligible
Participant's Account in the ratio
that the sum of each Eligible
Participant's Included Compensation
and Excess Compensation bears to
the sum of all Eligible
Participants' Included Compensation
and Excess Compensation. The
allocation under this Step Three,
as a percentage of each Eligible
Participant's Included Compensation
plus Excess Compensation, may not
exceed the Applicable Percentage
under the following table:
Integration Level Applicable
(as a % of the Taxable Wage Base) Percentage
---------------------------------- ----------
100% 2.7%
More than 80% but less than 100% 2.4%
More than 20% and not more than 80% 1.3%
20% or less 2.7%
(D) Step Four. Any remaining Employer
Contribution will be allocated to
each Eligible Participant's Account
in the ratio that each Eligible
Participant's Included Compensation
for the Plan Year bears to all
Eligible Participants' Included
Compensation for that Plan Year.
(3) Uniform points allocation. The Employer may elect
under Part 4, #13.c. of the Nonstandardized Agreement
[Part 4C, #21.c. of the Nonstandardized 401(k)
Agreement] to allocate the Employer Contribution
under a uniform points allocation formula. Under this
formula, the allocation for each Eligible Participant
is determined based on the Eligible Participant's
total points for the Plan Year, as determined under
the Nonstandardized Agreement. An Eligible
Participant's allocation of the Employer Contribution
is determined by multiplying the Employer
Contribution by a fraction, the numerator of which is
the Eligible Participant's total points for the Plan
Year and the denominator of which is the sum of the
points for all Eligible Participants for the Plan
Year.
An Eligible Participant will receive points for each
year(s) of age and/or each Year(s) of Service
designated under Part 4, #13.c. of the
Nonstandardized Agreement [Part 4C, #21.c. of the
Nonstandardized 401(k) Agreement]. In addition, an
Eligible Participant also may receive points based on
his/her Included Compensation, if the Employer so
elects under the Nonstandardized Agreement. Each
Eligible Participant will receive the same number of
points for each designated year of age and/or service
and the same number of points for each designated
level of Included Compensation. An Eligible
Participant must receive points for either age or
service, or may receive points for both age and
service. If the Employer also provides points based
on Included Compensation, an Eligible Participant
will receive points for each level of Included
Compensation designated under Part 4, #13.c.(3) of
the Nonstandardized Agreement [Part 4C, #21.c.(3) of
the Nonstandardized 401(k) Agreement]. For this
purpose, the Employer may not designate a level of
Included Compensation that exceeds $200.
To satisfy the nondiscrimination safe harbor under
Treas. Reg. ss.1.401(a)(4)-2, the average of the
allocation rates for Highly Compensated Employees in
the Plan must not exceed the average of the
allocation rates for the Nonhighly Compensated
Employees in the Plan. For this purpose, the average
allocation rates are determined in accordance with
Treas. Reg. ss.1.401(a)(4)-2(b)(3)(B).
(c) Special rules for determining Included Compensation
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9
(1) Applicable period for determining Included
Compensation. In determining an Eligible
Participant's allocation under Part 4, #13 of the
Agreement [Part 4C, #21 of the 401(k) Agreement], the
Participant's Included Compensation is determined
separately for each period designated under Part 4,
#14.a.(1) of the Agreement [Part 4C, #23.a.(1) of the
401(k) Agreement]. If the Employer elects the
Permitted Disparity Method under Part 4, #13.b. of
the Agreement [Part 4C, #21.b. of the 401(k)
Agreement], the period designated must be the Plan
Year. If the Employer elects the Pro Rata Allocation
Method or the uniform points allocation formula, and
elects a period other than the Plan Year, a
Participant's allocation of Employer Contributions
will be determined separately for each period based
solely on Included Compensation for such period. The
Employer need not actually make the Employer
Contribution during the designated period, provided
the total Employer Contribution for the Plan Year is
allocated based on the proper Included Compensation.
(2) Partial period of participation. If an Employee is an
Eligible Participant for only part of a Plan Year,
the Employer Contribution formula(s) will be applied
based on such Employee's Included Compensation for
the period he/she is an Eligible Participant.
However, the Employer may elect under Part 4,
#14.a.(2) of the Agreement [Part 4C, #23.a.(2) of the
401(k) Agreement] to base the Employer Contribution
formula(s) on the Employee's Included Compensation
for the entire Plan Year, including the portion of
the Plan Year during which the Employee is not an
Eligible Participant. In applying this subsection (2)
to the 401(k) Agreement, an Employee's status as an
Eligible Participant is determined solely with
respect to the Employer Nonelective Contribution
under Part 4C of the Agreement.
(3) Measurement period. Except as provided in subsection
(2) above, for purposes of determining an Eligible
Participant's allocation of Employer Contributions,
Included Compensation is measured on the Plan Year,
unless the Employer elects under Part 4, #14.a.(3) of
the Nonstandardized Agreement [Part 3, #11.b. of the
Nonstandardized 401(k) Agreement] to measure Included
Compensation on the calendar year ending in the Plan
Year or on the basis of any other 12-month period
ending in the Plan Year. If the Employer elects to
measure Included Compensation on the calendar year or
other 12-month period ending in the Plan Year, the
Included Compensation of any Employee whose
Employment Commencement Date is less than 12 months
before the end of such period must be measured on the
Plan Year or such Employee's period of participation,
as determined under subsection (2) above. If the
Employer adopts the Nonstandardized 401(k) Agreement,
any election under Part 3, #11.b. of the Agreement
applies for purposes of all contributions permitted
under the Agreement.
2.3 401(k) Plan Contributions and Allocations. This Section 2.3 applies if
the Employer has adopted the 401(k) plan Agreement. The 401(k)
Agreement is a profit sharing plan with a 401(k) feature. Any reference
to the Agreement under this Section 2.3 is a reference to the 401(k)
Agreement. The Employer must designate under Part 4 of the Agreement
the amount and type of Employer Contributions it will make under the
Plan. Employer Contributions under a 401(k) plan are generally subject
to special limits and nondiscrimination rules. (See Article 17 for a
discussion of the special rules that apply to the Employer
Contributions under a 401(k) plan.) The Employer may make any (or all)
of the following contributions under the 401(k) Agreement.
(a) Section 401(k) Deferrals. If so elected under Part 4A of the
Agreement, an Eligible Participant may enter into a Salary
Reduction Agreement with the Employer authorizing the Employer
to withhold a specific dollar amount or a specific percentage
from the Participant's Included Compensation and to deposit
such amount into the Participant's Section 401(k) Deferral
Account under the Plan. An Eligible Participant may defer with
respect to Included Compensation that exceeds the Compensation
Dollar Limitation, provided the deferrals otherwise satisfy
the limitations under Codess.402(g) and any other limitations
under the Plan. A Salary Reduction Agreement may only relate
to Included Compensation that is not currently available at
the time the Salary Reduction Agreement is completed. An
Employer may elect under Part 4A, #15 of the Agreement to
provide a special effective date solely for Section 401(k)
Deferrals under the Plan.
An Employee's Section 401(k) Deferrals are treated as Employer
Contributions for all purposes under this Plan, except as
otherwise provided under the Code or Treasury regulations. If
the Employer adopts the Nonstandardized 401(k) Agreement and
does not elect to allow Section 401(k) Deferrals under Part 4A
of the Agreement, the only contributions an Eligible
Participant may make to the Plan are Employee After-Tax
Contributions as authorized under Article 3 of this BPD and
Part 4D of the Nonstandardized Agreement. In either case, an
Eligible Participant may also receive Employer Nonelective
Contributions and/or Employer Matching Contributions under the
Plan, to the extent authorized under the Agreement. (The
Employee may not make Employee After-Tax Contributions under
the Standardized 401(k) Agreement.)
(1) Change in deferral election. At least once a year, an
Eligible Participant may enter into a new Salary
Reduction Agreement, or may change his/her elections
under an existing Salary Reduction Agreement, at the
time and in the manner prescribed by the Plan
Administrator on the Salary
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
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Reduction Agreement form (or other written
procedures). The Salary Reduction Agreement may also
provide elections as to the investment funds into
which the Section 401(k) Deferrals will be
contributed and the time and manner a Participant may
change such elections.
(2) Automatic deferral election. If elected under Part
4A, #14 of the Agreement, the Employer will
automatically withhold the amount designated under
Part 4A, #14 from Eligible Participants' Included
Compensation for payroll periods starting with such
Participants' Entry Date, unless the Eligible
Participant completes a Salary Reduction Agreement
electing a different deferral amount (including a
zero deferral amount). The Employer must designate in
Part 4A, #14 of the Agreement the date as of which an
Employee's deferral election will be taken into
account to override the automatic deferral election
under this subparagraph (2). This automatic deferral
election does not apply to any Eligible Participant
who has elected to defer an amount equal to or
greater than the automatic deferral amount designated
in Part 4A, #14 of the Agreement. The Employer may
elect under Part 4A, #14.b. of the Agreement to apply
the automatic deferral election only to Employees who
become Eligible Participants after a specified date.
The Plan Administrator will deposit all amounts
withheld pursuant to this automatic deferral election
into the appropriate Participant's Section 401(k)
Deferral Account.
Prior to the time an automatic deferral election
first goes into effect, an Eligible Participant must
receive written notice concerning the effect of the
automatic deferral election and his/her right to
elect a different level of deferral under the Plan,
including the right to elect not to defer. After
receiving the notice, an Eligible Participant must
have a reasonable time to enter into a new Salary
Reduction Agreement before any automatic deferral
election goes into effect.
(b) Employer Matching Contributions. If so elected under Part 4B
of the Agreement, the Employer will make an Employer Matching
Contribution, in accordance with the matching contribution
formula(s) selected in Part 4B, #16, to Eligible Participants
who satisfy the allocation conditions under Part 4B, #19 of
the Agreement. See Section 2.6. Any Employer Matching
Contribution determined under Part 4B, #16 will be allocated
to the Eligible Participant's Employer Matching Contribution
Account.
(1) Applicable contributions. The Employer must elect
under the Nonstandardized Agreement whether the
matching contribution formula(s) applies to Section
401(k) Deferrals, Employee After-Tax Contributions,
or both. Under the Standardized Agreement, Employer
Matching Contributions apply only to Section 401(k)
Deferrals. The contributions eligible for an Employer
Matching Contribution are referred to under this
Section as "applicable contributions." If a matching
formula applies to both Section 401(k) Deferrals and
Employee After-Tax Contributions, such contributions
are aggregated to determine the Employer Matching
Contribution allocated under the formula.
(2) Multiple formulas. If the Employer elects more than
one matching contribution formula under Part 4B, #16
of the Agreement, each formula is applied separately.
An Eligible Participant's aggregate Employer Matching
Contributions for a Plan Year will be the sum of the
Employer Matching Contributions the Participant is
entitled to under all such formulas.
(3) Applicable contributions taken into account under the
matching contribution formula. The Employer must
elect under Part 4B, #17.a. of the Agreement the
period for which the applicable contributions are
taken into account in applying the matching
contribution formula(s) and in applying any limits on
the amount of such contributions that may be taken
into account under the formula(s). In applying the
matching contribution formula(s), applicable
contributions (and Included Compensation) are
determined separately for each designated period and
any limits on the amount of applicable contributions
taken into account under the matching contribution
formula(s) are applied separately for each designated
period.
(4) Partial period of participation. In applying the
matching contribution formula(s) under the Plan to an
Employee who is an Eligible Participant for only part
of the Plan Year, the Employer may elect under Part
4B, #17.b. of the Agreement to take into account
Included Compensation for the entire Plan Year or
only for the portion of the Plan Year during which
the Employee is an Eligible Participant.
Alternatively, the Employer may elect under Part 4B,
#17.b.(3) of the Agreement to take into account
Included Compensation only for the period that the
Employee actually makes applicable contributions
under the Plan. In applying this subsection (4), an
Employee's status as an Eligible Participant is
determined solely with respect to the Employer
Matching Contribution under Part 4B of the Agreement.
(c) Qualified Matching Contributions (QMACs). If so elected under
Part 4B, #18 of the Agreement, the Employer may treat all (or
a portion) of its Employer Matching Contributions as QMACs. If
an Employer Matching Contribution is designated as a QMAC, it
must satisfy the requirements for a QMAC (as described in
Section 17.7(g)) at the time the contribution is made to the
Plan and must be allocated to the Participant's
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QMAC Account. To the extent an Employer Matching Contribution
is treated as a QMAC under Part 4B, #18, such contribution
will be 100% vested, regardless of any inconsistent elections
under Part 6 of the Agreement relating to Employer Matching
Contributions. (See Sections 17.2(d)(2) and 17.3(d)(2) for the
ability to make QMACs to correct an ADP or ACP failure without
regard to any election under Part 4B, #18 of the Agreement.)
Under Part 4B, #18, the Employer may designate all Employer
Matching Contributions as QMACs or may designate only those
Employer Matching Contributions under specific matching
contribution formula(s) to be QMACs. Alternatively, the
Employer may authorize a discretionary QMAC, in addition to
the Employer Matching Contributions designated under Part 4B,
#16, to be allocated uniformly as a percentage of Section
401(k) Deferrals made during the Plan Year. The Employer may
elect under the Agreement to allocate the discretionary QMAC
only to Eligible Participants who are Nonhighly Compensated
Employees or to all Eligible Participants. If the Employer
elects both a discretionary Employer Matching Contribution
formula and a discretionary QMAC formula, the Employer must
designate, in writing, the extent to which any matching
contribution is intended to be an Employer Matching
Contribution or a QMAC.
(d) Employer Nonelective Contributions. If so elected under Part
4C of the Agreement, the Employer may make Employer
Nonelective Contributions on behalf of each Eligible
Participant under the Plan who has satisfied the allocation
conditions described in Part 4C, #24 of the Agreement. See
Section 2.6. The Employer must designate under Part 4C, #20 of
the Agreement the amount of any Employer Nonelective
Contributions it wishes to make under the Plan. The amount of
any Employer Nonelective Contributions authorized under the
Plan and the method of allocating such contributions is
described in Section 2.2 of this Article.
(e) Qualified Nonelective Contributions (QNECs). The Employer may
elect under Part 4C, #22 of the Agreement to permit
discretionary QNECs under the Plan. A QNEC must satisfy the
requirements for a QNEC (as described in Section 17.7(h)) at
the time the contribution is made to the Plan and must be
allocated to the Participant's QNEC Account. If the Plan
authorizes the Employer to make both a discretionary Employer
Nonelective Contribution and a discretionary QNEC, the
Employer must designate, in writing, the extent to which any
contribution is intended to be an Employer Nonelective
Contribution or a QNEC. To the extent an Employer Nonelective
Contribution is treated as a QNEC under Part 4C, #22, such
contribution will be 100% vested, regardless of any
inconsistent elections under Part 6 of the Agreement relating
to Employer Nonelective Contributions. (See Sections
17.2(d)(2) and 17.3(d)(2) for the ability to make QNECs to
correct an ADP or ACP failure without regard to any election
under Part 4C, #22 of the Agreement.)
If the Employer makes a QNEC for the Plan Year, it will be
allocated to Participants' QNEC Account based on the
allocation method selected by the Employer under Part 4C, #22
of the Agreement. An Eligible Participant will receive a QNEC
allocation even if he/she has not satisfied any allocation
conditions designated under Part 4C, #24 of the Agreement,
unless the Employer elects otherwise under the Part 4C, #22.c.
of the Agreement.
(1) Pro Rata Allocation Method. If the Employer elects
the Pro Rata Allocation Method under Part 4C, #22.a.
of the Agreement, any Employer Nonelective
Contribution properly designated as a QNEC will be
allocated as a uniform percentage of Included
Compensation to all Eligible Participants who are
Nonhighly Compensated Employees or to all Eligible
Participants, as specified under Part 4C, #22.a.
(2) Bottom-up QNEC method. If the Employer elects the
Bottom-up QNEC method under Part 4C, #22.b. of the
Agreement, any Employer Nonelective Contribution
properly designated as a QNEC will be first allocated
to the Eligible Participant with the lowest Included
Compensation for the Plan Year for which the QNEC is
being allocated. To receive an allocation of the QNEC
under this subsection (2), the Eligible Participant
must be a Nonhighly Compensated Employee for the Plan
Year for which the QNEC is being allocated.
The QNEC will be allocated to the Eligible
Participant with the lowest Included Compensation
until all of the QNEC has been allocated or until the
Eligible Participant has reached his/her Annual
Additions Limitation, as described in Article 7. For
this purpose, if two or more Eligible Participants
have the same Included Compensation, the QNEC will be
allocated equally to each Eligible Participant until
all of the QNEC has been allocated, or until each
Eligible Participant has reached his/her Annual
Additions Limitation. If any QNEC remains
unallocated, this process is repeated for the
Eligible Participant(s) with the next lowest level of
Included Compensation in accordance with the
provisions under this subsection (2), until all of
the QNEC is allocated.
(f) Safe Harbor Contributions. If so elected under Part 4E of the
401(k) Agreement, the Employer may elect to treat this Plan as
a Safe Harbor 401(k) Plan. To qualify as a Safe Harbor 401(k)
Plan, the Employer must make a Safe Harbor Nonelective
Contribution or a Safe Harbor Matching Contribution under the
Plan. Such contributions are subject to special vesting and
distribution restrictions and must be allocated to the
Eligible
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
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Participants' Safe Harbor Nonelective Contribution Account or
Safe Harbor Matching Contribution Account, as applicable.
Section 17.6 describes the requirements that must be met to
qualify as a Safe Harbor 401(k) Plan and the method for
calculating the amount of the Safe Harbor Contribution that
must be made under the Plan.
(g) Prior SIMPLE 401(k) plan. If this Agreement is being used to
amend or restate a 401(k) plan which complied with the SIMPLE
401(k) plan provisions under Code ss.401(k)(11), any provision
in this Agreement which is inconsistent with the SIMPLE 401(k)
plan provisions is not effective for any Plan Year during
which the plan complied with the SIMPLE 401(k) plan
provisions.
2.4 Money Purchase Plan Contribution and Allocations. This Section 2.4
applies if the Employer has adopted the money purchase plan Agreement.
Any reference to the Agreement under this Section 2.4 is a reference to
the money purchase plan Agreement.
(a) Employer Contributions. The Employer must elect under Part 4
of the Nonstandardized Agreement to make Employer
Contributions under one or more of the following methods:
(1) as a uniform percentage of each Eligible
Participant's Included Compensation;
(2) as a uniform dollar amount for each Eligible
Participant;
(3) under the Permitted Disparity Method (using either
the individual method or group method);
(4) under a formula based on service with the Employer;
or
(5) under a Davis-Bacon Contribution Formula.
Under the Standardized Agreement, the Employer may only elect
to make an Employer Contribution as a uniform percentage of
Included Compensation, a uniform dollar amount, or under the
Permitted Disparity Method.
An Eligible Participant is only entitled to share in the
Employer Contribution if such Participant satisfies the
allocation conditions described under Part 4, #15 of the
Agreement. See Section 2.6.
If the Employer elects more than one Employer Contribution
formula under Part 4, #12 of the Agreement, each formula is
applied separately. An Eligible Participant's aggregate
Employer Contributions for a Plan Year will be the sum of the
Employer Contributions the Participant is entitled to under
all such formulas.
(b) Uniform percentage or uniform dollar amount. The contribution
made by the Employer must be allocated to Eligible
Participants in a definitely determinable manner. If the
Employer elects to make an Employer Contribution as a uniform
percentage of Included Compensation under Part 4, #12.a. of
the Agreement or as a uniform dollar amount under Part 4,
#12.b. of the Agreement, each Eligible Participant's
allocation of the Employer Contribution will equal the amount
determined under the contribution formula elected under the
Agreement.
(c) Permitted Disparity Method. The Employer may elect under Part
4, #12.c. of the Agreement to use the Permitted Disparity
Method using either the individual method or the group method.
An Employer may not elect a Permitted Disparity Method under
the Plan if another qualified plan of the Employer, which
covers any of the same Employees, uses permitted disparity in
determining the allocation of contributions or accrual of
benefits under the plan.
For purposes of applying the Permitted Disparity Method,
Excess Compensation is the portion of an Eligible
Participant's Included Compensation that exceeds the
Integration Level. The Integration Level is the Taxable Wage
Base, unless the Employer designates a different amount under
Part 4, #14.b. of the Agreement.
(1) Individual method. If the Employer elects the
Permitted Disparity Method using the individual
method, each Eligible Participant will receive an
allocation of the Employer Contribution equal to the
amount determined under the contribution formula
under Part 4, #12.c.(1) of the Agreement. Under the
individual Permitted Disparity Method, the Employer
will contribute (i) a fixed percentage of each
Eligible Participant's Included Compensation for the
Plan Year plus (ii) a fixed percentage of each
Eligible Participant's Excess Compensation. The
percentage of each Eligible Participant's Excess
Compensation under (ii) may not exceed the lesser of
the percentage of total Included Compensation
contributed under (i) or the Applicable Percentage
under the following table:
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(C)Copyright 2001 SunTrust Bank Basic Plan Document
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Integration Level Applicable
(As a percentage of the Taxable Wage Base) Percentage
------------------------------------------ ----------
100% 5.7%
More than 80% but less than 100% 5.4%
More than 20% and not more than 80% 4.3%
20% or less 5.7%
(2) Group method. If the Employer elects the Permitted
Disparity Method using the group method under Part 4,
#12.c.(2) of the Agreement, the Employer will
contribute a fixed percentage (as designated in the
Agreement) of the total Included Compensation for the
Plan Year of all Eligible Participants. The total
Employer Contribution is then allocated among the
Eligible Participants under either the Two-Step
Formula or the Four-Step Formula described below.
(i) Two-Step Formula. If the Employer elects the
Two-Step Formula, the Employer Contribution
will be allocated in the same manner as
under Section 2.2(b)(2)(i) above. However,
the Employer may elect to have the Four-Step
Formula automatically apply for any Plan
Year in which the Plan is a Top-Heavy Plan.
(ii) Four-Step Formula. If the Employer elects
the Four-Step Formula or if the Plan is a
Top-Heavy Plan and the Employer elects to
have the Four-Step Formula apply for Plan
Years when the Plan is a Top-Heavy Plan, the
Employer Contribution will be allocated to
Eligible Participants in the same manner as
under Section 2.2(b)(2)(ii) above.
(d) Contribution based on service. The Employer may elect under
Part 4, #12.d. of the Nonstandardized Agreement to provide an
Employer Contribution for each Eligible Participant based on
the service performed by such Eligible Participant during the
Plan Year (or other period designated under Part 4, #13.a. of
the Agreement). The Employer may provide a fixed dollar amount
of a fixed percentage of Included Compensation for each Hour
of Service, each week of employment or any other measuring
period selected under Part 4, #12.d. of the Nonstandardized
Agreement. If the Employer elects to make a contribution based
on service, each Eligible Participant will receive an
allocation of the Employer Contribution equal to the amount
determined under the contribution formula under Part 4, #12.d.
of the Nonstandardized Agreement.
(e) Davis-Bacon Contribution Formula. The Employer may elect under
Part 4, #12.e. of the Nonstandardized Agreement to provide an
Employer Contribution for each Eligible Participant who
performs Davis-Bacon Act Service. For this purpose,
Davis-Bacon Act Service is any service performed by an
Employee under a public contract subject to the Davis-Bacon
Act or to any other federal, state or municipal prevailing
wage law. Each such Eligible Participant will receive a
contribution based on the hourly contribution rate for the
Participant's employment classification, as designated on
Schedule A of the Agreement. Schedule A is incorporated as
part of the Agreement. In applying the Davis-Bacon
Contribution Formula under this subsection (e), the following
default rules will apply. The Employer may modify these
default rules under Part 4, #12.e.(2) of the Nonstandardized
Agreement
(1) Eligible Employees. Highly Compensated Employees are
Excluded Employees for purposes of receiving an
Employer Contribution under the Davis-Bacon
Contribution Formula.
(2) Minimum age and service conditions. No minimum age or
service conditions will apply for purposes of
determining an Employee's eligibility under the
Davis-Bacon Contribution Formula.
(3) Entry Date. For purposes of applying the Davis-Bacon
Contribution Formula, an Employee becomes an Eligible
Participant on his/her Employment Commencement Date.
(4) Allocation conditions. No allocation conditions (as
described in Section 2.6) will apply for purposes of
determining an Eligible Participant's allocation
under the Davis-Bacon Contribution Formula.
(5) Vesting. Employer Contributions made pursuant to the
Davis-Bacon Contribution Formula are always 100%
vested.
(6) Offset of other Employer Contributions. The
contributions under the Davis Bacon Contribution
Formula will not offset any other Employer
Contributions under the Plan. However, the Employer
may elect under Part 4, #12.e.(1) of the
Nonstandardized Agreement to offset any other
Employer
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
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Contributions made under the Plan by the Employer
Contributions a Participant receives under the
Davis-Bacon Contribution Formula.
(f) Applicable period for determining Included Compensation. In
determining the amount of Employer Contribution to be
allocated to an Eligible Participant, Included Compensation is
determined separately for each period designated under Part 4,
#13.a. of the Agreement. If the Employer elects the Permitted
Disparity Method under Part 4, #12.c. of the Agreement, the
period designated under Part 4, #13.a. must be the Plan Year.
If the Employer elects an Employer Contribution formula under
Part 4, #12 of the Agreement other than the Permitted
Disparity Method, and elects a period under Part 4, #13.a.
other than the Plan Year, a Participant's allocation of
Employer Contributions will be determined separately for each
period based solely on Included Compensation for such period.
If the Employer elects the service formula under Part 4,
#12.d. of the Nonstandardized Agreement, the Employer
Contribution also will be determined separately for each
period designated under Part 4, #13.a. of the Agreement based
on service performed during such period. The Employer need not
actually make the Employer Contribution during the designated
period, provided the total Employer Contribution for the Plan
Year is allocated based on the proper Included Compensation.
(g) Special rules for determining Included Compensation. The same
rules as discussed under Section 2.2(c)(2) apply to permit the
Employer to elect under Part 4, #13.b. of the Agreement to
take into account an Employee's Included Compensation for the
entire Plan Year, even if the Employee is an Eligible
Participant for only part of the Plan Year. If no election is
made under Part 4, #13.b., only Included Compensation for the
portion of the Plan Year while an Employee is an Eligible
Participant will be taken into account in determining an
Employee's Employer Contribution under the Plan. The Employer
also may elect under Part 4, #13.c. of the Agreement to take
into account Included Compensation for the calendar year
ending in the Plan Year or other 12-month period, as provided
in Section 2.2(c)(3).
(h) Limit on contribution where Employer maintains another plan in
addition to a money purchase plan. If the Employer adopts the
money purchase plan Agreement and also maintains another
qualified retirement plan, the contribution to be made under
the money purchase plan Agreement (as designated in Part 4 of
the Agreement) will not exceed the maximum amount that is
deductible under Code ss.404(a)(7), taking into account all
contributions that have been made to the plans prior to the
date a contribution is made under the money purchase plan
Agreement.
2.5 Target Benefit Plan Contribution. This Section 2.5 applies if the
Employer has adopted the target benefit plan Agreement. Any reference
to the Agreement under this Section 2.5 is a reference to the target
benefit plan Agreement.
(a) Stated Benefit. A Participant's Stated Benefit, as of any Plan
Year, is the amount determined in accordance with the benefit
formula selected under Part 4 of the Agreement, payable
annually in the form of a Straight Life Annuity commencing
upon the Participant's Normal Retirement Age (as defined in
Part 5 of the Agreement) or current age (if later). In
applying the benefit formula under Part 4, all projected Years
of Participation (as defined in subsection (d)(10) below) are
counted beginning with the first Plan Year and projecting
through the last day of the Plan Year in which the Participant
attains Normal Retirement Age (or the current Plan Year, if
later), assuming all relevant factors remain constant for
future Plan Years. For this purpose, the first Plan Year is
the latest of:
(1) the first Plan Year in which the Participant becomes
an Eligible Participant;
(2) the first Plan Year immediately following a Plan Year
in which the Plan did not satisfy the target benefit
plan safe harbor under Treas. Reg.
ss.1.401(a)(4)-8(b)(3); or
(3) the first Plan Year taken into account under the
Plan's benefit formula, as designated in Part 4,
#13.c. of the Agreement. If Part 4, #13.c. is not
completed, the first Plan Year taken into account
under this subsection (3) will be the original
Effective Date of this Plan, as designated under
#59.a. or #59.b.(2) of the Agreement, as applicable.
If this Plan is a "prior safe harbor plan" then, solely for
purposes of determining projected Years of Participation, the
Plan is deemed to satisfy the target benefit plan safe harbor
under Treas. Reg. ss.1.401(a)(4)-8(b)(3) and the Participant
is treated as an Eligible Participant under the Plan for any
Plan Year beginning prior to January 1, 1994. This Plan is a
prior safe harbor plan if it was originally in effect on
September 19, 1991, and on that date the Plan contained a
stated benefit formula that took into account service prior to
that date, and the Plan satisfied the applicable
nondiscrimination requirements for target benefit plans for
those prior years. For purposes of determining whether a plan
satisfies the applicable nondiscrimination requirements for
target benefit plans for Plan Years beginning before January
1, 1994, no amendments after September 19, 1991, other than
amendments necessary to satisfy ss.401(l) of the Code, will be
taken into account.
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(C)Copyright 2001 SunTrust Bank Basic Plan Document
15
(b) Employer Contribution. Each Plan Year, the Employer will
contribute to the Plan on behalf of each Eligible Participant
who has satisfied the allocation conditions under Part 4, #15
of the Agreement, an amount necessary to fund the
Participant's Stated Benefit, determined in accordance with
the benefit formula selected under Part 4, #13 of the
Agreement. The Employer's required contribution may be reduced
by forfeitures in accordance with the provisions of Section
5.5(b).
(1) Participant has not reached Normal Retirement Age. If
a Participant has not reached Normal Retirement Age
by the last day of the Plan Year, the Employer
Contribution for such Plan Year with respect to that
Participant is the excess, if any, of the Present
Value Stated Benefit (as defined in subsection (3)
below) over the Theoretical Reserve (as defined in
subsection (4) below), multiplied by the appropriate
Amortization Factor from Table II under Exhibit A of
the Agreement. The factors under Table II are
determined based on the applicable interest rate
assumptions selected under Part 4, #14.b.(1) of the
Agreement.
(2) Participant has reached Normal Retirement Age. If a
Participant has reached Normal Retirement Age by the
last day of the Plan Year, the Employer Contribution
for such Plan Year with respect to that Participant
is the excess, if any, of the Present Value Stated
Benefit (as defined in subsection (3) below) over the
Theoretical Reserve (as defined in subsection (4)
below).
(3) Present Value Stated Benefit. For purposes of
determining the Employer Contribution under the Plan,
a Participant's Present Value Stated Benefit is the
Participant's Stated Benefit multiplied by the
appropriate present value factor under Table I or
Table IA, as appropriate (if the Participant has not
attained Normal Retirement Age) or Table IV (if the
Participant has attained Normal Retirement Age). The
Present Value Stated Benefit must be further adjusted
by the factors under Table III if the Normal
Retirement Age under the Plan is other than age 65.
(See Exhibit A under the Agreement for the applicable
factors. The applicable factors are determined based
on the applicable interest rate assumptions selected
under Part 4, #14.b.(1) of the Agreement and assuming
a UP-1984 mortality table. If the Employer elects a
different applicable mortality table under Part 4,
#14.b.(2), appropriate factors must be attached to
the Agreement.)
(4) Theoretical Reserve. Except as provided in the
following paragraph, for the first Plan Year for
which the Stated Benefit is determined (see
subsection (a) above), a Participant's Theoretical
Reserve is zero. For each subsequent Plan Year, the
Theoretical Reserve is the sum of the Theoretical
Reserve for the prior Plan Year plus the Employer
Contribution required for such prior Plan Year. The
sum is then adjusted for interest (using the Plan's
interest assumptions for the prior Plan Year) through
the last day of the current Plan Year. For any Plan
Year following the Plan Year in which the Participant
attains Normal Retirement Age, no interest adjustment
is required. For purposes of determining a
Participant's Theoretical Reserve, minimum
contributions required solely to comply with the
Top-Heavy Plan rules under Article 16 are not
included.
If this Plan was a prior safe harbor plan (see the
definition of prior safe harbor plan under subsection
(a) above), with a benefit formula that takes into
account Plan Years prior to the first Plan Year this
Plan satisfies the target benefit plan safe harbor
under Treas. Reg. ss.1.401(a)(4)-8(b)(3)(c), the
Theoretical Reserve for the first Plan Year is
determined by subtracting the result in subsection
(ii) from the result in subsection (i).
(i) Determine the present value of the Stated
Benefit as of the last day of the Plan Year
immediately preceding the first Plan Year
this Plan satisfies the target benefit plan
safe harbor under Treas.
Reg.ss.1.401(a)(4)-8(b)(3)(c), using the
actuarial assumptions, the provisions of the
Plan, and the Participant's compensation as
of such date. For a Participant who has
attained Normal Retirement Age, the Stated
Benefit will be determined using the
actuarial assumptions, the provisions of the
Plan, and the Participant's compensation as
of such date, using a straight life annuity
factor for a Participant whose attained age
is the Normal Retirement Age under the Plan.
(ii) Determine the present value of future
Employer Contributions (i.e., the Employer
Contributions due each Plan Year using the
actuarial assumptions, the provisions of the
Plan (disregarding those provisions of the
Plan providing for the limitations of ss.415
of the Code or the minimum contributions
under ss.416 of the Code)), and the
Participant's compensation as of such date,
beginning with the first Plan Year through
the end of the Plan Year in which the
Participant attains Normal Retirement Age.
(c) Benefit formula. The Employer may elect under Part 4 of the
Agreement to apply a Nonintegrated Benefit Formula or an
Integrated Benefit Formula. The benefit formula selected under
Part 4 of the Agreement must comply with the target benefit
plan safe harbor rules under Treas. Reg.
ss.1.401(a)(4)-8(b)(3).
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
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(1) Nonintegrated Benefit Formula. Under a Nonintegrated
Benefit Formula, benefits provided under Social
Security are not taken into account when determining
an Eligible Participant's Stated Benefit. A
Nonintegrated Benefit Formula may provide for a Flat
Benefit or a Unit Benefit.
(i) Flat Benefit. The Employer may elect under
Part 4, #13.a.(1) of the Agreement to apply
a Flat Benefit formula that provides a
Stated Benefit equal to a specified
percentage of Average Compensation. A
Participant's Stated Benefit determined
under the Flat Benefit formula will be
reduced pro rata if the Participant's
projected Years of Participation are less
than 25 Years of Participation. For a
Participant with less than 25 projected
Years of Participation, the base percentage
and the excess percentage are reduced by
multiplying such percentages by a fraction,
the numerator of which is the Participant's
projected Years of Participation, and the
denominator of which is 25.
(ii) Unit Benefit. The Employer may elect under
Part 4, #13.a.(2) of the Agreement or under
Part 4, #13.a.(3) of the Nonstandardized
Agreement to apply a Unit Benefit formula
that provides a Stated Benefit equal to a
specified percentage of Average Compensation
multiplied by the Participant's Years of
Participation with the Employer. The
Employer may elect to limit the Years of
Participation taken into account under a
Unit Benefit formula, however, the Plan must
take into account all Years of Participation
up to at least 25 years.
If the Employer elects a tiered formula
under Part 4, #13.a.(3) of the
Nonstandardized Agreement, the highest
benefit percentage for any Participant with
less than 33 Years of Participation cannot
be more than one-third larger than the
lowest benefit percentage for any
Participant with less than 33 Years of
Participation. This requirement is satisfied
if the percentage under Part 4, #13.a.(3)(a)
applies to all Years of Participation up to
at least 33. If the percentage under Part 4,
#13.a.(3)(a) applies to Years of
Participation less than 33, this paragraph
will be satisfied if the total Years of
Participation taken into account under Part
4, #13.a.(3)(b) and Part 4, #13.a.(3)(d) is
not less than 33 and the percentage
designated in Part 4, #13.a.(3)(c) is not
less than P1(25-Y)/(33-Y) and is not greater
than P1(44-Y)/(33-Y), where P1 is the
percentage under Part 4, #13.a.(3)(a) and Y
is the number of Years of Participation to
which the percentage under Part 4,
#13.a.(3)(a) applies. If the total Years of
Participation taken into account under Part
4, #13.a.(3)(b) and Part 4, #13.a.(3)(d) is
less than 33, a similar calculation applies
to any percentage designated in Part 4,
#13.a.(3)(e).
(2) Integrated Benefit Formula. An Integrated Benefit
Formula is designed to provide a greater benefit to
certain Participants to make up for benefits not
provided under Social Security. An Integrated Benefit
Formula may provide for a Flat Excess Benefit, a Unit
Excess Benefit, a Flat Offset Benefit, or a Unit
Offset Benefit. An Employer may not elect an
Integrated Benefit Formula under the Plan if another
qualified plan of the Employer, which covers any of
the same Employees, uses permitted disparity (or
imputes permitted disparity) in determining the
allocation of contributions or accrual of benefits
under the plan.
(i) Flat Excess Benefit. The Employer may elect
under Part 4, #13.b.(1) of the Agreement to
apply a Flat Excess Benefit formula that
provides a Stated Benefit equal to a
specified percentage of Average Compensation
("base percentage") plus a specified
percentage of Excess Compensation ("excess
percentage").
(A) Maximum permitted disparity. In
completing a Flat Excess Benefit
formula under Part 4, #13.b.(1) of
the Agreement, the excess
percentage under Part 4,
#13.b.(1)(b) may not exceed the
Maximum Disparity Percentage
identified under subsection (3)(i)
below. The excess percentage may be
further reduced under the
Cumulative Disparity Limit under
subsection (3)(iv) below.
(B) Limitation on Years of
Participation. The Participant's
base percentage and excess
percentage under the Flat Excess
Benefit formula are reduced pro
rata if the Participant's projected
Years of Participation are less
than 35 years. For a Participant
with less than 35 projected Years
of Participation, the base
percentage and the excess
percentage are reduced by
multiplying such percentages by a
fraction, the numerator of which is
the Participant's projected Years
of Participation, and the
denominator of which is 35.
(ii) Unit Excess Benefit. The Employer may elect
under Part 4, #13.b.(2) of the Agreement or
under Part 4, #13.b.(3) of the
Nonstandardized Agreement to apply a Unit
Excess Benefit formula which provides a
Stated Benefit equal to a specified
percentage of
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17
Average Compensation ("base percentage")
plus a specified percentage of Excess
Compensation ("excess percentage")
multiplied by the Participant's Years of
Participation with the Employer.
(A) Maximum permitted disparity. In
completing a Unit Excess Benefit
formula under Part 4, #13.b. of the
Agreement, the excess percentage
under the formula may not exceed
the Maximum Disparity Percentage
identified under subsection (3)(i)
below. In addition, if the Employer
elects a tiered formula under Part
4, #13.b.(3) of the Nonstandardized
Agreement, the percentage
designated under Part 4,
#13.b.(3)(d) and/or Part 4,
#13.b.(3)(f), as applicable, may
not exceed the sum of the base
percentage under Part 4,
#13.b.(3)(a) and the excess
percentage under Part 4,
#13.b.(3)(b).
(B) Limitation on Years of
Participation. The Employer must
identify under Part 4, #13.b. the
Years of Participation that will be
taken into account under the Unit
Excess Benefit formula. If the
Employer elects a uniform formula
under Part 4, #13.b.(2) of the
Agreement, the Plan must take into
account all Years of Participation
up to at least 25. In addition, a
Participant may not be required to
complete more than 35 Years of
Participation to earn his/her full
Stated Benefit. (See the Cumulative
Disparity Limit under subsection
(3)(iv) below for additional
restrictions that may limit a
Participant's Years of
Participation that may be taken
into account under the Plan.)
If the Employer elects a tiered
formula under Part 4, #13.b.(3) of
the Nonstandardized Agreement and
the Years of Participation
specified under Part 4,
#13.b.(3)(c) is less than 35, the
percentage under Part 4,
#13.b.(3)(d) must equal the sum of
the base percentage under Part 4,
#13.b.(3)(a) and the excess
percentage under Part 4,
#13.b.(3)(b) and any Years of
Participation required under Part
4, #13.b.(3)(e) may not be less
than 35 minus the Years of
Participation designated under Part
4, #13.b.(3)(c). (See the
Cumulative Disparity Limit under
subsection (3)(iv) below for
additional restrictions that may
limit a Participant's Years of
Participation that may be taken
into account under the Plan.) If
the number of Years of
Participation specified under Part
4, #13.b.(3)(c) is less than 35,
and Part 4, #13.b.(3)(d) is not
checked, the percentage specified
under Part 4, #13.b.(3)(f) must
equal the sum of the base
percentage under Part 4,
#13.b.(3)(a) and the excess
percentage under Part 4,
#13.b.(3)(b).
(iii) Flat Offset Benefit. The Employer may elect
under Part 4, #13.b.(4) of the
Nonstandardized Agreement or Part 4,
#13.b.(3) of the Standardized Agreement to
apply a Flat Offset Benefit formula that
provides a Stated Benefit equal to a
specified percentage of Average Compensation
("gross percentage") offset by a specified
percentage of Offset Compensation ("offset
percentage").
(A) Maximum permitted disparity. In
applying a Flat Offset Benefit
formula, the offset percentage for
any Participant may not exceed the
Maximum Offset Percentage
identified under subsection (3)(ii)
below. The offset percentage may be
further reduced under the
Cumulative Disparity Limit under
subsection (3)(iv) below.
(B) Limitation on Years of
Participation. The Participant's
gross percentage and offset
percentage under the Flat Offset
Benefit formula are reduced pro
rata if the Participant's projected
Years of Participation are less
than 35 years. For a Participant
with less than 35 projected Years
of Participation, the gross
percentage and the offset
percentage are reduced by
multiplying such percentages by a
fraction, the numerator of which is
the Participant's projected Years
of Participation, and the
denominator of which is 35.
(iv) Unit Offset Benefit. The Employer may elect
under Part 4, #13.b.(5) and Part 4,
#13.b.(6) of the Agreement or under Part 4,
#13.b.(4) of the Standardized Agreement to
apply a Unit Offset Benefit formula which
provides a Stated Benefit equal to a
specified percentage of Average Compensation
("gross percentage") offset by a specified
percentage of Offset Compensation ("offset
percentage") multiplied by the Participant's
Years of Participation with the Employer.
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
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(A) Maximum permitted offset. In
applying a Unit Offset Benefit
formula, the offset percentage for
any Participant may not exceed the
Maximum Offset Percentage
identified under subsection (3)(ii)
below. In addition, if the Employer
elects a tiered formula under Part
4, #13.b.(6) of the Nonstandardized
Agreement, the percentage
designated under Part 4,
#13.b.(6)(d) and/or Part 4,
#13.b.(6)(f), as applicable, may
not exceed the gross percentage
under Part 4, #13.b.(6)(a).
(B) Limitation on Years of
Participation. The Employer must
identify under Part 4, #13.b. the
Years of Participation that will be
taken into account under the Unit
Offset Benefit formula. If the
Employer elects a uniform offset
formula under Part 4, #13.b.(5) of
the Nonstandardized Agreement or
Part 4, #13.b.(4) of the
Standardized Agreement, the Plan
must take into account all Years of
Participation up to at least 25. In
addition, a Participant may not be
required to complete more than 35
Years of Participation to earn
his/her full Stated Benefit. (See
the Cumulative Disparity Limit
under subsection (3)(iv) below for
additional restrictions that may
limit a Participant's Years of
Participation that may be taken
into account under the Plan.)
If the Employer elects a tiered
offset formula under Part 4,
#13.b.(6) of the Nonstandardized
Agreement and the Years of
Participation specified under Part
4, #13.b.(6)(c) is less than 35,
any percentage under Part 4,
#13.b.(6)(d) must equal the gross
percentage under Part 4,
#13.d.(6)(a) and any Years of
Participation required under Part
4, #13.b.(6)(e) may not be less
than 35 minus the Years of
Participation designated under Part
4, #13.b.(6)(c). (See the
Cumulative Disparity Limit under
subsection (3)(iv) below for
additional restrictions that may
limit a Participant's Years of
Participation that may be taken
into account under the Plan.) If
the number of Years of
Participation specified under Part
4, #13.b.(6)(c) is less than 35,
and Part 4, #13.b.(6)(d) is not
checked, the percentage specified
under Part 4, #13.b.(6)(f) must
equal the gross percentage under
Part 4, #13.b.(6)(a).
(3) Special rules for applying Integrated Benefit
Formulas under Part 4, #13.b. of the Agreement.
(i) Maximum Disparity Percentage. In applying
the Flat Excess Benefit formula described in
subsection (2)(i) above or the Unit Excess
Benefit formula described in subsection
(2)(ii) above, the excess percentage under
the formula may not exceed the Maximum
Disparity Percentage. Under a Flat Excess
Benefit formula, the Maximum Disparity
Percentage is the lesser of the base
percentage specified under the Agreement or
the appropriate factor described under the
Simplified Table below multiplied by 35.
Under a Unit Excess Benefit formula, the
Maximum Disparity Percentage is the lesser
of the base percentage specified under the
Agreement or the appropriate factor
described under the Simplified Table below.
In applying the Simplified Table below, NRA
is a Participant's Normal Retirement Age
under the Plan. If a Participant's Normal
Retirement Age is prior to age 55, the
applicable factors under the Simplified
Table must be further reduced to a factor
that is the Actuarial Equivalent of the
factor at age 55. (See (iii) below for
possible adjustments to the Simplified Table
if an Integration Level other than Covered
Compensation is selected under Part 4,
#14.d.(1) of the Agreement.)
Simplified Table
Maximum Maximum
NRA Disparity Percentage NRA Disparity Percentage
--- -------------------- --- --------------------
70 0.838 62 0.416
69 0.760 61 0.382
68 0.690 60 0.346
67 0.627 59 0.330
66 0.571 58 0.312
65 0.520 57 0.294
64 0.486 56 0.278
63 0.450 55 0.260
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19
(ii) Maximum Offset Percentage. In applying the
Flat Offset Benefit formula described in
subsection (2)(iii) above or the Unit Offset
Benefit formula described in subsection
(2)(iv) above, the offset percentage under
the formula may not exceed the Maximum
Offset Percentage. Under a Flat Offset
Benefit formula, the Maximum Offset
Percentage is the lesser of 50% of the gross
percentage specified under the Agreement or
the appropriate factor described under the
Simplified Table above, multiplied by 35.
Under a Unit Offset Benefit formula, the
Maximum Offset Percentage is the lesser of
50% of the gross percentage specified under
the Agreement or the appropriate factor
described under the Simplified Table above.
In applying the Simplified Table above, NRA
is a Participant's Normal Retirement Age
under the Plan. If a Participant's Normal
Retirement Age is prior to age 55, the
applicable factors under the Simplified
Table must be further reduced to a factor
that is the Actuarial Equivalent of the
factor at age 55. (See (iii) below for
possible adjustments to the Simplified Table
if an Integration Level other than Covered
Compensation is selected under Part 4,
#14.d.(1) of the Agreement.)
(iii) Adjustments to the Maximum Disparity
Percentage / Maximum Offset Percentage for
Integration Level other than Covered
Compensation. The factors under the
Simplified Table under subsection (i) above
are based on an Integration Level equal to
Covered Compensation. If the Employer elects
under Part 4, #14.d.(1)(b) - (e) of the
Agreement to use an Integration Level other
than Covered Compensation, the factors under
the Simplified Table may have to be
modified. If the Employer elects to modify
the Integration Level under Part 4,
#14.d.(1)(b) or Part 4, #14.d.(1)(c) of the
Agreement, no modification to the Simplified
Table is required. If the Employer elects to
modify the Integration Level under Part 4,
#14.d.(1)(d) or Part 4, #14.d.(1)(e), the
factors under the Modified Table below must
be used instead of the factors under the
Simplified Table.
Modified Table - Factors for Integration Level
other than Covered Compensation
Maximum Maximum
NRA Disparity Percentage NRA Disparity Percentage
--- -------------------- --- --------------------
70 0.670 62 0.331
69 0.608 61 0.305
68 0.552 60 0.277
67 0.627 59 0.264
66 0.502 58 0.250
65 0.416 57 0.234
64 0.388 56 0.222
63 0.360 55 0.208
(iv) Cumulative Disparity Limit. The Cumulative
Disparity Limit applies to further limit the
permitted disparity under the Plan. If the
Cumulative Disparity Limit applies, the
following adjustment will be made to the
Participant's Stated Benefit, depending on
the type of formula selected under the
Agreement.
(A) Flat Excess Benefit. In applying a
Flat Excess Benefit formula, if a
Participant's cumulative disparity
years exceed 35, the excess
percentage under the formula will
be reduced as provided below. For
this purpose, a Participant's
cumulative disparity years consist
of: (I) the Participant's projected
Years of Participation (up to 35);
(II) any years the Participant
benefited (or is treated as having
benefited) under this Plan prior to
the Participant's first Year of
Participation; and (III) any years
credited to the Participant for
allocation or accrual purposes
under one or more qualified plans
or simplified employee pension
plans (whether or not terminated)
ever maintained by the Employer
(other than years counted in (I) or
(II) above). For purposes of
determining the Participant's
cumulative disparity years, all
years ending in the same calendar
year are treated as the same year.
If the Cumulative Disparity Limit
applies, the excess percentage
under the formula will be reduced
by multiplying the excess
percentage (as adjusted under this
subsection (3)) by a fraction (not
less than zero), the numerator of
which is 35 minus the sum of the
years in (II) and (III) above, and
the denominator of which is 35.
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
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(B) Unit Excess Benefit. In applying a
Unit Excess Benefit formula, the
projected Years of Participation
taken into account under the
formula may not exceed the
Participant's cumulative disparity
years. For this purpose, the
Participant's cumulative disparity
years equal 35 minus: (I) the years
the Participant benefited or is
treated as having benefited under
this Plan prior to the
Participant's first Year of
Participation, and (II) the years
credited to the Participant for
allocation or accrual purposes
under one or more qualified plans
or simplified employee pension
plans (whether or not terminated)
ever maintained by the Employer
other than years counted in (I)
above or counted toward a
Participant's projected Years of
Participation. For purposes of
determining the Participant's
cumulative disparity years, all
years ending in the same calendar
year are treated as the same year.
(C) Flat Offset Benefit. In applying a
Flat Offset Benefit formula, if a
Participant's cumulative disparity
years exceed 35, the gross
percentage and offset percentage
under the formula will be reduced
as provided below. For this
purpose, a Participant's cumulative
disparity years consist of: (I) the
Participant's projected Years of
Participation (up to 35); (II) any
years the Participant benefited (or
is treated as having benefited)
under this Plan prior to the
Participant's first Year of
Participation; and (III) any years
credited to the Participant for
allocation or accrual purposes
under one or more qualified plans
or simplified employee pension
plans (whether or not terminated)
ever maintained by the Employer
(other than years counted in (I) or
(II) above). For purposes of
determining the Participant's
cumulative disparity years, all
years ending in the same calendar
year are treated as the same year.
If the Cumulative Disparity Limit
applies, the offset percentage will
be reduced by multiplying such
percentage by a fraction (not less
than 0), the numerator of which is
35 minus the sum of the years in
(II) and (III) above, and the
denominator of which is 35. The
gross benefit percentage will be
reduced by the number of percentage
points by which the offset
percentage is reduced.
(D) Unit Offset Benefit. In applying a
Unit Offset Benefit formula, the
Years of Participation taken into
account under the formula may not
exceed the Participant's cumulative
disparity years. For this purpose,
the Participant's cumulative
disparity years equal 35 minus: (I)
the years the Participant benefited
or is treated as having benefited
under this Plan prior to the
Participant's first Year of
Participation, and (II) the years
credited to the Participant for
allocation or accrual purposes
under one or more qualified plans
or simplified employee pension
plans (whether or not terminated)
ever maintained by the Employer
other than years counted in (I)
above or counted toward a
Participant's projected Years of
Service. For purposes of
determining the Participant's
cumulative disparity years, all
years ending in the same calendar
year are treated as the same year.
(d) Definitions. The following definitions apply for purposes of
applying the benefit formulas described under this Section
2.5.
(1) Average Compensation. The average of a Participant's
annual Included Compensation during the Averaging
Period, as designated in Part 3, #11 of the
Agreement. If no modifications are made to the
definition of Average Compensation under Part 3, #11,
Average Compensation is the average of the
Participant's annual Included Compensation for the
three (3) consecutive Plan Years during the
Participant's entire employment history which produce
the highest average.
(i) Averaging Period. Unless the Employer elects
otherwise under Part 3, #11.a. of the
Agreement, the Averaging Period for
determining a Participant's Average
Compensation is made up of the three (3)
consecutive Measuring Periods during the
Participant's Employment Period which
results in the highest Average Compensation.
The Employer may elect under Part 3, #11.a.
to apply an alternative Averaging Period
which is greater than three (3) consecutive
Measuring Periods, may elect to take into
account the highest Average Compensation
over a period of nonconsecutive Measuring
Periods, or may elect to take into account
all Measuring Periods during the
Participant's Employment Period.
(ii) Measuring Period. Unless the Employer elects
otherwise under Part 3, #11.b. of the
Agreement, the Measuring Period for
determining Average Compensation is the Plan
Year. (If the Plan has a short Plan Year,
Average Compensation is based on Included
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(C)Copyright 2001 SunTrust Bank Basic Plan Document
21
Compensation earned during the 12-month
period ending on the last day of the short
Plan Year.) The Employer may elect under
Part 3, #11.b. to apply an alternative
Measuring Period for determining Average
Compensation based on the calendar year or
any other designated 12-month period.
Alternatively, the Employer may elect to use
calendar months as the Measuring Periods. If
monthly Measuring Periods are selected under
Part 3, #11.b., the Averaging Period
designated under Part 3, #11.a. must be at
least 36 months.
(iii) Employment Period. Unless the Employer
elects otherwise under Part 3, #11.c. of the
Agreement, the Employment Period used to
determine Average Compensation is the
Participant's entire employment period with
the Employer. Instead of measuring Average
Compensation over a Participant's entire
period of employment, the Employer may elect
under Part 3, #11.c. to use Averaging
Periods only during the period following the
Participant's original Entry Date (as
determined under Part 2 of the Agreement) or
any other specified period. If the Employer
elects an alternative Employment Period
under Part 3, #11.c., such Employment Period
must end in the current Plan Year and may
not be shorter than the Averaging Period
selected in Part 3, #11.a. (or the
Participant's entire period of employment,
if shorter).
(iv) Drop-out years. Unless elected otherwise
under Part 3, #11.d. of the Agreement, all
Measuring Periods within a Participant's
Employment Period are included for purposes
of determining Average Compensation. The
Employer may elect under Part 3, #11.d. to
exclude the Measuring Period in which the
Participant terminates employment or any
Measuring Period during which a Participant
does not complete a designated number of
Hours of Service. If the Employer elects to
apply an Hour of Service requirement under
Part 3, #11.d.(2), the designated Hours of
Service required for any particular
Participant may not exceed 75% of the Hours
of Service that an Employee working
full-time in the same job category as the
Participant would earn during the Measuring
Period.
In determining whether the Measuring Periods
within an Averaging Period are consecutive
(see subsection (i) above), any Measuring
Period excluded under this subsection (iv)
will be disregarded.
(2) Covered Compensation. For purposes of applying an
Integrated Benefit Formula, a Participant's Covered
Compensation for the Plan Year is the average of the
Taxable Wage Bases in effect for each calendar year
during the 35-year period ending on the last day of
the calendar year in which the Participant attains
(or will attain) his/her Social Security Retirement
Age. In determining a Participant's Covered
Compensation, the Taxable Wage Base in effect as of
the beginning of the Plan Year is assumed to remain
constant for all future years. If a Participant is 35
or more years away from his/her Social Security
Retirement Age, the Participant's Covered
Compensation is the Taxable Wage Base in effect as of
the beginning of the Plan Year. A Participant's
Covered Compensation remains constant for Plan Years
beginning after the calendar year in which the
Participant attains Social Security Retirement Age.
Unless elected otherwise under Part 4, #14.d.(2) of
the Agreement, a Participant's Covered Compensation
must be adjusted every Plan Year to reflect the
Taxable Wage Base in effect for such year. The
Employer may designate under Part 4, #14.d.(2)(a) to
use Covered Compensation for a Plan Year earlier than
the current Plan Year. Such earlier Plan Year may not
be more than 5 years before the current Plan Year.
For the sixth Plan Year following the Plan Year used
to calculate Covered Compensation (as determined
under this sentence), Covered Compensation will be
adjusted using Covered Compensation for the prior
Plan Year. Covered Compensation will not be adjusted
for Plan Years prior to the sixth Plan Year following
the Plan Year used to calculate Covered Compensation.
In determining a Participant's Covered Compensation,
the Employer may elect under Part 4, #14.d.(2)(b) to
apply the rounded Covered Compensation tables issued
by the IRS instead of using the applicable Taxable
Wage Bases of the Participant.
(3) Excess Compensation. Excess Compensation is used for
purposes of determining a Participant's Normal
Retirement Benefit under an Excess Benefit Formula. A
Participant's Excess Compensation is the excess (if
any) of the Participant's Average Compensation over
the Integration Level.
(4) Integration Level. The Integration Level under the
Plan is used for determining the Excess Compensation
or Offset Compensation used to determine a
Participant's Stated Benefit under the Plan. The
Employer may elect under Part 4, #14.d.(1)(a) of the
Agreement to use a Participant's Covered Compensation
for the Plan Year as the Integration Level.
Alternatively, the Employer may
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
22
elect under Parts 4, #14.d.(1)(b) - (e) to apply an
alternative Integration Level under the Plan. (See
subsection (c)(3)(iii) above for special rules that
apply if the Employer elects an alternative
Integration Level.)
(5) Offset Compensation. A Participant's Offset
Compensation is used to determine a Participant's
Stated Benefit under an Offset Benefit formula.
Unless modified under Part 3, #12 of the Agreement,
Offset Compensation is the average of a Participant's
annual Included Compensation over the three (3)
consecutive Plan Years ending with the current Plan
Year. A Participant's Offset Compensation is taken
into account only to the extent it does not exceed
the Integration Level under the Plan. For purposes of
determining a Participant's Offset Compensation,
Included Compensation which exceeds the Taxable Wage
Base in effect for the beginning of a Measuring
Period will not be taken into account.
(i) Measuring Period. Unless elected otherwise
under Part 3, #12.a. of the Agreement,
Offset Compensation is determined based on
Included Compensation earned during the Plan
Year (or the 12-month period ending on the
last day of the Plan Year for a short Plan
Year). Instead of using Plan Years, the
Employer may elect under Part 3, #12.a. to
determine Offset Compensation over the
3-year period ending with or within the
current Plan Year based on calendar years or
any other designated 12-month period.
(ii) Drop-out years. Unless elected otherwise
under Part 3, #12.b. of the Agreement,
Offset Compensation is determined based on
the three consecutive Measuring Periods
ending with or within the current Plan Year.
The Employer may elect under Part 3, #12.b.
to disregard the Measuring Period in which a
Participant terminates employment for
purposes of determining Offset Compensation.
(6) Social Security Retirement Age. An Employee's
retirement age as determined under Section 230 of the
Social Security Retirement Act. For a Participant who
attains age 62 before January 1, 2000 (i.e., born
before January 1, 1938), the Participant's Social
Security Retirement Age is 65. For a Participant who
attains age 62 after December 31, 1999, and before
January 1, 2017 (i.e., born after December 31, 1937,
but before January 1, 1955), the Participant's Social
Security Retirement Age is 66. For a Participant
attaining age 62 after December 31, 2016 (i.e., born
after December 31, 1954), the Participant's Social
Security Retirement Age is 67.
(7) Stated Benefit. The amount determined in accordance
with the benefit formula selected in Part 4 of the
Agreement, payable annually as a Straight Life
Annuity commencing at Normal Retirement Age (or
current age, if later). (See subsection (a) above.)
(8) Straight Life Annuity. An annuity payable in equal
installments for the life of the Participant that
terminates upon the Participant's death.
(9) Taxable Wage Base. Taxable Wage Base is the
contribution and benefit base under Section 230 of
the Social Security Retirement Act at the beginning
of the Plan Year.
(10) Year of Participation. For purposes of determining a
Participant's Stated Benefit under the Plan, a
Participant's Years of Participation are defined
under Part 4, #14.a. of the Agreement. (See
subsection (a) above for rules regarding the
determination of a Participant's projected Years of
Participation.)
The Employer may elect under Part 4, #14.a.(1) to
define an Employee's Years of Participation as each
Plan Year during which the Employee satisfies the
allocation conditions designated under Part 4, #15 of
the Agreement (see Section 2.6 below), including Plan
Years prior to the Employee's becoming an Eligible
Participant under the Plan. Alternatively, the
Employer may elect under Part 4, #14.a.(2) of the
Agreement to define an Employee's Years of
Participation as each Plan Year during which the
Employee satisfies the allocation conditions
designated under Part 4, #15 of the Agreement (see
Section 2.6 below), taking into account only Plan
Years during which the Employee is an Eligible
Participant. The Employer may elect under Part 4,
#14.a.(3) to disregard any Year of Participation
completed prior to a date designated under the
Agreement.
2.6 Allocation Conditions. In order to receive an allocation of Employer
Contributions (other than Section 401(k) Deferrals and Safe Harbor
Contributions), an Eligible Participant must satisfy any allocation
conditions designated under Part 4, #15 of the Agreement with respect
to such contributions. (Similar allocation conditions apply under Part
4B, #19 of the 401(k) Agreement for Employer Matching Contributions and
Part 4C, #24 of the 401(k) Agreement for Employer Nonelective
Contributions.) Under the Nonstandardized Agreements, the imposition of
an allocation condition may cause the Plan to fail the minimum coverage
requirements under Code ss.410(b), unless the only allocation condition
under the Plan is a safe harbor allocation condition. (Under the
Standardized Agreements, the only
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(C)Copyright 2001 SunTrust Bank Basic Plan Document
23
allocation condition permitted is a safe harbor allocation condition.
But see (b) below for a special rule upon plan termination.)
(a) Safe harbor allocation condition. Under the safe harbor
allocation condition under Part 4, #15.b. of the
Nonstandardized Agreement [Part 4B, #19.b. and Part 4C, #24.b.
of the Nonstandardized 401(k) Agreement], the Employer may
elect to require an Eligible Participant to be employed on the
last day of the Plan Year or to complete more than a specified
number of Hours of Service (not to exceed 500) during the Plan
Year to receive an allocation of Employer Contributions (other
than Section 401(k) Deferrals or Safe Harbor Contributions)
under the Plan. Under this safe harbor allocation condition,
an Eligible Participant whose employment terminates before
he/she completes the designated Hours of Service is not
entitled to an allocation of Employer Contributions subject to
such allocation condition. However, if an Eligible Participant
completes at least the designated Hours of Service during a
Plan Year, the Participant is eligible for an allocation of
such Employer Contributions, even if the Participant's
employment terminates during the Plan Year.
The imposition of the safe harbor allocation condition will
not cause the Plan to fail the minimum coverage requirements
under Code ss.410(b) because Participants who are excluded
from participation solely as a result of the safe harbor
allocation condition are excluded from the coverage test.
Except as provided under subsection (b) below, the safe harbor
allocation condition is the only allocation condition that may
be used under the Standardized Agreement.
(b) Application of last day of employment rule for money purchase
and target benefit Plans in year of termination. The Employer
may elect under Part 4, #15.c. of the money purchase or target
benefit plan Nonstandardized Agreement to require an Eligible
Participant to be employed on the last day of the Plan Year to
receive an Employer Contribution under the Plan. Regardless of
whether the Employer elects to apply a last day of employment
condition under the money purchase or target benefit plan
Agreement, in any Plan Year during which a money purchase or
target benefit Plan is terminated, the last day of employment
condition applies. Any unallocated forfeitures under the Plan
will be allocated in accordance with the contribution formula
designated under Part 4 of the Agreement to each Eligible
Participant who completes at least one Hour of Service during
the Plan Year.
(c) Elapsed Time Method. The Employer may elect under Part 4,
#15.e. of the Nonstandardized Agreement [Part 4B, #19.e. and
Part 4C, #24.e. of the Nonstandardized 401(k) Agreement] to
apply the allocation conditions using the Elapsed Time Method.
Under the Elapsed Time Method, instead of requiring the
completion of a specified number of Hours of Service, the
Employer may require an Employee to be employed with the
Employer for a specified number of consecutive days.
(1) Safe harbor allocation condition. The Employer may
elect under Part 4, #15.e.(1) of the Agreement [Part
4B, #19.e.(1) and/or Part 4C, #24.e.(1) of the
Nonstandardized 401(k) Agreement] to apply the safe
harbor allocation condition (as described in
subsection (a) above) using the Elapsed Time Method.
Under the safe harbor Elapsed Time Method, a
Participant who terminates employment with less than
a specified number of consecutive days of employment
(not more than 91 days) during the Plan Year will not
be entitled to an allocation of the designated
Employer Contributions. The use of the safe harbor
allocation condition under the Elapsed Time Method
provides the same protection from coverage as
described in subsection (a) above.
(2) Service condition. Alternatively, the Employer may
elect under Part 4, #15.e.(2) of the Nonstandardized
Agreement [Part 4B, #19.e.(2) and/or Part 4C,
#24.e.(2) of the Nonstandardized 401(k) Agreement] to
require an Employee to complete a specified number of
consecutive days of employment (not exceeding 182) to
receive an allocation of the designated Employer
Contributions.
(d) Special allocation condition for Employer Matching
Contributions under Nonstandardized 401(k) Agreement. The
Employer may elect under Part 4B, #19.f. of the
Nonstandardized 401(k) Agreement to require as a condition for
receiving an Employer Matching Contribution that a Participant
not withdraw the underlying applicable contributions being
matched prior to the end of the period for which the Employer
Matching Contribution is being made. Thus, for example, if the
Employer elects under Part 4B, #17.a. of the Nonstandardized
401(k) Agreement to apply the matching contribution formula on
the basis of the Plan Year quarter, a Participant would not be
entitled to an Employer Matching Contribution with respect to
any applicable contributions contributed during a Plan Year
quarter to the extent such applicable contributions are
withdrawn prior to the end of the Plan Year quarter during
which they are contributed. A Participant could take a
distribution of applicable contributions that were contributed
for a prior period without losing eligibility for a current
Employer Matching Contribution. This subsection (d) will not
prevent a Participant from receiving an Employer Matching
Contribution merely because the Participant takes a loan (as
permitted under Article 14) from matched contributions.
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
24
(e) Application to designated period. The Employer may elect under
Part 4, #15.f. of the Nonstandardized Agreement [Part 4B,
#19.g. and Part 4C, #24.f. of the Nonstandardized 401(k)
Agreement] to apply any allocation condition(s) selected under
the Agreement on the basis of the period designated under Part
4, #14.a.(1) of the Nonstandardized Agreement [Part 4B, #17.a.
or Part 4C, #23.a.(1) of the Nonstandardized 401(k)
Agreement]. If this subsection (e) applies to any allocation
condition(s) under the Plan, the following procedural rules
apply. (This subsection (e) does not apply to the target
benefit plan Agreement. See subsection (3) for rules
applicable to the Standardized Agreements.)
(1) Last day of employment requirement. If the Employer
elects under Part 4, #15.f. of the Nonstandardized
Agreement [Part 4B, #19.g. or Part 4C, #24.f. of the
Nonstandardized 401(k) Agreement] to apply the
allocation conditions on the basis of designated
periods and the Employer elects to apply a last day
of employment condition under Part 4, #15.c. of the
Nonstandardized Agreement [Part 4B, #19.c. or Part
4C, #24.c. of the Nonstandardized 401(k) Agreement],
an Eligible Participant will be entitled to receive
an allocation of Employer Contributions for the
period designated under Part 4, #14.a.(1) of the
Nonstandardized Agreement [Part 4B, #17.a. or Part
4C, #23.a.(1) of the Nonstandardized 401(k)
Agreement] only if the Eligible Participant is
employed with the Employer on the last day of such
period. If an Eligible Participant terminates
employment prior to end of the designated period, no
Employer Contribution will be allocated to that
Eligible Participant for such period. Nothing in this
subsection (1) will cause an Eligible Participant to
lose Employer Contributions that were allocated for a
period prior to the period in which the individual
terminates employment.
(2) Hours of Service condition. If the Employer elects to
apply the allocation conditions on the basis of
specified periods under Part 4, #15.f. of the
Agreement [Part 4B, #19.g. or Part 4C, #24.f. of the
Nonstandardized 401(k) Agreement], and elects to
apply an Hours of Service condition under Part 4,
#15.d. of the Nonstandardized Agreement [Part 4B,
#19.d. or Part 4C, #24.d. of the Nonstandardized
401(k) Agreement], an Eligible Participant will be
entitled to receive an allocation of Employer
Contributions for the period designated under Part 4,
#14.a.(1) of the Nonstandardized Agreement [Part 4B,
#17.a. or Part 4C, #23.a.(1) of the Nonstandardized
401(k) Agreement] only if the Eligible Participant
completes the required Hours of Service before the
last day of such period. In applying the fractional
method under subsection (i) or the period-by-period
method under subsection (ii), an Eligible Participant
who completes a sufficient number of Hours of Service
for the Plan Year to earn a Year of Service under the
Plan will be entitled to a full contribution for the
Plan Year, as if the Eligible Participant satisfied
the Hours of Service condition for each designated
period. A catch-up contribution may be required for
such Participants.
(i) Fractional method. The Employer may elect
under Part 4, #15.f.(1) of the
Nonstandardized Agreement [Part 4B,
#19.g.(1) or Part 4C, #24.f.(1) of the
Nonstandardized 401(k) Agreement] to apply
the Hours of Service condition on the basis
of specified period using the fractional
method. Under the fractional method, the
required Hours of Service for any period are
determined by multiplying the Hours of
Service required under Part 4, #15.d. of the
Nonstandardized Agreement [Part 4B, #19.d.
or Part 4C, #24.d. of the Nonstandardized
401(k) Agreement] by a fraction, the
numerator of which is the total number of
periods completed during the Plan Year
(including the current period) and the
denominator of which is the total number of
periods during the Plan Year. Thus, for
example, if the Employer applies a 1,000
Hours of Service condition to receive an
Employer Matching Contribution and elects to
apply such condition on the basis of Plan
Year quarters, an Eligible Participant would
have to complete 250 Hours of Service by the
end of the first Plan Year quarter [1/4 x
1,000], 500 Hours of Service by the end of
the second Plan Year quarter [2/4 x 1,000],
750 Hours of Service by the end of the third
Plan Year quarter [3/4 x 1,000] and 1,000
Hours of Service by the end of the Plan Year
[4/4 x 1,000] to receive an allocation of
the Employer Matching Contribution for such
period. If an Eligible Participant does not
complete the required Hours of Service for
any period during the Plan Year, no Employer
Contribution will be allocated to that
Eligible Participant for such period.
However, if an Eligible Participant
completes the required Hours of Service
under Part 4, #15.d. for the Plan Year, such
Participant will receive a full contribution
for the Plan Year as if the Participant
satisfied the Hours of Service conditions
for each period during the year. Nothing in
this subsection (i) will cause an Eligible
Participant to lose Employer Contributions
that were allocated for a period during
which the Eligible Participant completed the
required Hours of Service for such period.
(ii) Period-by-period method. The Employer may
elect under Part 4, #15.f.(2) of the
Nonstandardized Agreement [Part 4B,
#19.g.(2) or Part 4C, #24.f.(2) of the
Nonstandardized 401(k) Agreement] to apply
the Hours of Service condition on the basis
of specified period using the
period-by-period method. Under the
period-by-period
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(C)Copyright 2001 SunTrust Bank Basic Plan Document
25
method, the required Hours of Service for
any period are determined separately for
such period. The Hours of Service required
for any specific period are determined by
multiplying the Hours of Service required
under Part 4, #15.d. of the Nonstandardized
Agreement [Part 4B, #19.d. or Part 4C,
#24.d. of the Nonstandardized 401(k)
Agreement] by a fraction, the numerator of
which is one (1) and the denominator of
which is the total number of periods during
the Plan Year. Thus, for example, if the
Employer applies a 1,000 Hours of Service
condition to receive an Employer Matching
Contribution and elects to apply such
condition on the basis of Plan Year
quarters, an Eligible Participant would have
to complete 250 Hours of Service in each
Plan Year quarter [1/4 x 1,000] to receive
an allocation of the Employer Matching
Contribution for such period. If an Eligible
Participant does not complete the required
Hours of Service for any period during the
Plan Year, no Employer Contribution will be
allocated to that Eligible Participant for
such period. However, if an Eligible
Participant completes the required Hours of
Service under Part 4, #15.d. for the Plan
Year, such Participant will receive a full
contribution for the Plan Year as if the
Participant satisfied the Hours of Service
conditions for each period during the year.
Nothing in this subsection (ii) will cause
an Eligible Participant to lose Employer
Contributions that were allocated for a
period during which the Eligible Participant
completed the required Hours of Service for
such period.
(3) Safe harbor allocation condition. If the Employer
elects to apply the allocation conditions on the
basis of specified periods under Part 4, #15.f. of
the Nonstandardized Agreement [Part 4B, #19.g. or
Part 4C, #24.f. of the Nonstandardized 401(k)
Agreement] and elects to apply the safe harbor
allocation condition under Part 4, #15.b. of the
Nonstandardized Agreement [Part 4B, #19.b. or Part
4C, #24.b. of the Nonstandardized 401(k) Agreement],
the rules under subsection (1) above will apply,
without regard to the rules under subsection (2)
above. Thus, an Eligible Employee who terminates
during a period designated under Part 4, #14.a.(1) of
the Nonstandardized Agreement [Part 4B, #17.a. or
Part 4C, #23.a.(1) of the Nonstandardized 401(k)
Agreement] will not receive an allocation of Employer
Contributions for such period if the Eligible
Participant has not completed the Hours of Service
designated under Part 4, #15.b. of the
Nonstandardized Agreement [Part 4B, #19.b. or Part
4C, #24.b. of the Nonstandardized 401(k) Agreement].
Nothing in this subsection (3) will cause an Eligible
Participant to lose Employer Contributions that were
allocated for a period prior to the period in which
the individual terminates employment. (This
subsection (3) also applies if the Employer elects to
apply the safe harbor allocation condition on the
basis of specified periods under Part 4, #15.c. of
the Standardized Agreement [Part 4B, #19.c. or Part
4C, #22.c. of the Standardized 401(k) Agreement].)
(4) Elapsed Time Method. The election to apply the
allocation conditions on the basis of specified
periods does not apply to the extent the Elapsed Time
Method applies under Part 4, #15.e. of the
Nonstandardized Agreement [Part 4B, #19.e. or Part
4C, #24.e. of the Nonstandardized 401(k) Agreement].
If an Employer elects to apply the allocation
conditions on the basis of specified periods and
elects to apply the Elapsed Time Method, an Eligible
Employee will be entitled to an allocation of
Employer Contributions if such Eligible Participant
is employed as of the last day of such period,
without regard to the number of consecutive days in
such period. Thus, in effect, the Elapsed Time Method
will only apply to prevent an allocation of Employer
Contributions for the last designated period in the
Plan Year, if the Eligible Participant has not
completed the consecutive days required under Part 4,
#15.e. of the Nonstandardized Agreement [Part 4B,
#19.e. or Part 4C, #24.e. of the Nonstandardized
401(k) Agreement] by the end of the Plan Year. The
last day of employment rules subsection (1) above
still may apply (to the extent applicable) for
periods during which the Eligible Participant
terminates employment.
2.7 Fail-Safe Coverage Provision. If the Employer has elected to apply a
last day of the Plan Year allocation condition and/or an Hours of
Service allocation condition under a Nonstandardized Agreement, the
Employer may elect under Part 13, #56 of the Nonstandardized Agreement
[Part 13, #74 of the Nonstandardized 401(k) Agreement] to apply the
Fail-Safe Coverage Provision. Under the Fail-Safe Coverage Provision,
if the Plan fails to satisfy the ratio percentage coverage requirements
under Code ss.410(b) for a Plan Year due to the application of a last
day of the Plan Year allocation condition and/or an Hours of Service
allocation condition, such allocation condition(s) will be
automatically eliminated for the Plan Year for certain otherwise
Eligible Participants, under the process described in subsections (a)
through (d) below, until enough Eligible Participants are benefiting
under the Plan so that the ratio percentage test of Treasury Regulation
ss.1.410(b)-2(b)(2) is satisfied.
If the Employer elects to have the Fail-Safe Coverage Provision apply,
such provision automatically applies for any Plan Year for which the
Plan does not satisfy the ratio percentage coverage test under Code
ss.410(b). (Except as provided in the following paragraph, the Plan may
not use the average benefits test to comply with the minimum coverage
requirements if the Fail-Safe Coverage Provision is elected.) The Plan
satisfies the ratio percentage test if the percentage of the Nonhighly
Compensated Employees under the Plan is at least 70% of the percentage
of the Highly
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
26
Compensated Employees who benefit under the Plan. An Employee is
benefiting for this purpose only if he/she actually receives an
allocation of Employer Contributions or forfeitures or, if testing
coverage of a 401(m) arrangement (i.e., a Plan that provides for
Employer Matching Contributions and/or Employee After-Tax
Contributions), the Employee would receive an allocation of Employer
Matching Contributions by making the necessary contributions or the
Employee is eligible to make Employee After-Tax Contributions. To
determine the percentage of Nonhighly Compensated Employees or Highly
Compensated Employees who are benefiting, the following Employees are
excluded for purposes of applying the ratio percentage test: (i)
Employees who have not satisfied the Plan's minimum age and service
conditions under Section 1.4; (ii) Nonresident Alien Employees; (iii)
Union Employees; and (iv) Employees who terminate employment during the
Plan Year with less than 501 Hours of Service and do not benefit under
the Plan.
Under the Fail-Safe Coverage Provision, certain otherwise Eligible
Participants who are not benefiting for the Plan Year as a result of a
last day of the Plan Year allocation condition or an Hours of Service
allocation condition will participate under the Plan based on whether
such Participants are Category 1 Employees or Category 2 Employees.
Alternatively, the Employer may elect under Part 13, #56.b.(2) of the
Nonstandardized Agreement [Part 13, #74.b.(2) of the Nonstandardized
401(k) Agreement] to apply the special Fail-Safe Coverage Provision
described in (d) below which eliminates the allocation conditions for
otherwise Eligible Participants with the lowest Included Compensation.
If after applying the Fail-Safe Coverage Provision, the Plan does not
satisfy the ratio percentage coverage test, the Fail-Safe Coverage
Provision does not apply, and the Plan may use any other available
method (including the average benefit test) to satisfy the minimum
coverage requirements under Code ss.410(b).
(a) Top-Heavy Plans. Unless provided otherwise under Part 13,
#56.b.(1) of the Nonstandardized Agreement [Part 13, #74.b.(1)
of the Nonstandardized 401(k) Agreement], if the Plan is a
Top-Heavy Plan, the Hours of Service allocation condition will
be eliminated for all Non-Key Employees who are Nonhighly
Compensated Employees, prior to applying the Fail-Safe
Coverage Provisions under subsections (b) and (c) or (d)
below.
(b) Category 1 Employees - Otherwise Eligible Participants (who
are Nonhighly Compensated Employees) who are still employed by
the Employer on the last day of the Plan Year but who failed
to satisfy the Plan's Hours of Service condition. The Hours of
Service allocation condition will be eliminated for Category 1
Employees (who did not receive an allocation under the Plan
due to the Hours of Service allocation condition) beginning
with the Category 1 Employee(s) credited with the most Hours
of Service for the Plan Year and continuing with the Category
1 Employee(s) with the next most Hours of Service until the
ratio percentage test is satisfied. If two or more Category 1
Employees have the same number of Hours of Service, the
allocation condition will be eliminated for those Category 1
Employees starting with the Category 1 Employee(s) with the
lowest Included Compensation. If the Plan still fails to
satisfy the ratio percentage test after all Category 1
Employees receive an allocation, the Plan proceeds to Category
2 Employees.
(c) Category 2 Employees - Otherwise Eligible Participants (who
are Nonhighly Compensated Employees) who terminated employment
during the Plan Year with more than 500 Hours of Service. The
last day of the Plan Year allocation condition will then be
eliminated for Category 2 Employees (who did not receive an
allocation under the Plan due to the last day of the Plan Year
allocation condition) beginning with the Category 2
Employee(s) who terminated employment closest to the last day
of the Plan Year and continuing with the Category 2
Employee(s) with a termination of employment date that is next
closest to the last day of the Plan Year until the ratio
percentage test is satisfied. If two or more Category 2
Employees terminate employment on the same day, the allocation
condition will be eliminated for those Category 2 Employees
starting with the Category 2 Employee(s) with the lowest
Included Compensation.
(d) Special Fail-Safe Coverage Provision. Instead of applying the
Fail-Safe Coverage Provision based on Category 1 and Category
2 Employees, the Employer may elect under Part 13, #56.b.(2)
of the Nonstandardized Agreement [Part 13, #74.b.(2) of the
Nonstandardized 401(k) Agreement] to eliminate the allocation
conditions beginning with the otherwise Eligible
Participant(s) (who are Nonhighly Compensated Employees and
who did not terminate employment during the Plan Year with 500
Hours of Service or less) with the lowest Included
Compensation and continuing with such otherwise Eligible
Participants with the next lowest Included Compensation until
the ratio percentage test is satisfied. If two or more
otherwise Eligible Participants have the same Included
Compensation, the allocation conditions will be eliminated for
all such individuals.
2.8 Deductible Employee Contributions. The Plan Administrator will not
accept deductible employee contributions that are made for a taxable
year beginning after December 31, 1986. Contributions made prior to
that date will be maintained in a separate Account which will be
nonforfeitable at all times. The Account will share in the gains and
losses under the Plan in the same manner as described in Section 13.4.
No part of the deductible voluntary contribution Account will be used
to purchase life insurance. Subject to the Joint and Survivor Annuity
requirements under Article 9 (if applicable), the Participant may
withdraw any part of the deductible voluntary contribution Account by
making a written application to the Plan Administrator.
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(C)Copyright 2001 SunTrust Bank Basic Plan Document
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ARTICLE 3
EMPLOYEE AFTER-TAX CONTRIBUTIONS, ROLLOVER CONTRIBUTIONS AND TRANSFERS
This Article provides the rules regarding Employee After-Tax Contributions,
Rollover Contributions and transfers that may be made under this Plan. The
Trustee has the authority under Article 12 to accept Rollover Contributions
under this Plan and to enter into transfer agreements concerning the transfer of
assets from another qualified retirement plan to this Plan, if so directed by
the Plan Administrator.
3.1 Employee After-Tax Contributions. The Employer may elect under Part 4D
of the Nonstandardized 401(k) Agreement to allow Eligible Participants
to make Employee After-Tax Contributions under the Plan. Employee
After-Tax Contributions may only be made under the Nonstandardized
401(k) Agreement. Any Employee After-Tax Contributions made under this
Plan are subject to the ACP Test outlined in Section 17.3. (Nothing
under this Section precludes the holding of Employee After-Tax
Contributions under a profit sharing plan or money purchase plan that
were made prior to the adoption of this Prototype Plan.)
The Employer may elect under Part 4D, #25 of the Nonstandardized 401(k)
Agreement to impose a limit on the maximum amount of Included
Compensation an Eligible Participant may contribute as an Employee
After-Tax Contribution. The Employer may also elect under Part 4D, #26
of the Nonstandardized 401(k) Agreement to impose a minimum amount that
an Eligible Participant may contribute to the Plan during any payroll
period.
Employee After-Tax Contributions must be held in the Participant's
Employee After-Tax Contribution Account, which is always 100% vested. A
Participant may withdraw amounts from his/her Employee After-Tax
Contribution Account at any time, in accordance with the distribution
rules under Section 8.5(a), except as prohibited under Part 10 of the
Agreement. No forfeitures will occur solely as a result of an
Employee's withdrawal of Employee After-Tax Contributions.
3.2 Rollover Contributions. An Employee may make a Rollover Contribution to
this Plan from another "qualified retirement plan" or from a "conduit
IRA," if the acceptance of rollovers is permitted under Part 12 of the
Agreement or if the Plan Administrator adopts administrative procedures
regarding the acceptance of Rollover Contributions. Any Rollover
Contribution an Employee makes to this Plan will be held in the
Employee's Rollover Contribution Account, which is always 100% vested.
A Participant may withdraw amounts from his/her Rollover Contribution
Account at any time, in accordance with the distribution rules under
Section 8.5(a), except as prohibited under Part 10 of the Agreement.
For purposes of this Section 3.2, a "qualified retirement plan" is any
tax qualified retirement plan under Code ss.401(a) or any other plan
from which distributions are eligible to be rolled over into this Plan
pursuant to the Code, regulations, or other IRS guidance. A "conduit
IRA" is an IRA that holds only assets that have been properly rolled
over to that IRA from a qualified retirement plan under Code ss.401(a).
To qualify as a Rollover Contribution under this Section, the Rollover
Contribution must be transferred directly from the qualified retirement
plan or conduit IRA in a Direct Rollover or must be transferred to the
Plan by the Employee within sixty (60) days following receipt of the
amounts from the qualified plan or conduit IRA.
If Rollover Contributions are permitted, an Employee may make a
Rollover Contribution to the Plan even if the Employee is not an
Eligible Participant with respect to any or all other contributions
under the Plan, unless otherwise prohibited under separate
administrative procedures adopted by the Plan Administrator. An
Employee who makes a Rollover Contribution to this Plan prior to
becoming an Eligible Participant shall be treated as a Participant only
with respect to such Rollover Contribution Account, but shall not be
treated as an Eligible Participant until he/she otherwise satisfies the
eligibility conditions under the Plan.
The Plan Administrator may refuse to accept a Rollover Contribution if
the Plan Administrator reasonably believes the Rollover Contribution
(a) is not being made from a proper plan or conduit IRA; (b) is not
being made within sixty (60) days from receipt of the amounts from a
qualified retirement plan or conduit IRA; (c) could jeopardize the
tax-exempt status of the Plan; or (d) could create adverse tax
consequences for the Plan or the Employer. Prior to accepting a
Rollover Contribution, the Plan Administrator may require the Employee
to provide satisfactory evidence establishing that the Rollover
Contribution meets the requirements of this Section.
The Plan Administrator may apply different conditions for accepting
Rollover Contributions from qualified retirement plans and conduit
IRAs. Any conditions on Rollover Contributions must be applied
uniformly to all Employees under the Plan.
3.3 Transfer of Assets. The Plan Administrator may direct the Trustee to
accept a transfer of assets from another qualified retirement plan on
behalf of any Employee, even if such Employee is not eligible to
receive other contributions under the Plan. If a transfer of assets is
made on behalf of an Employee prior to the Employee's becoming an
Eligible Participant, the Employee shall be treated as a Participant
for all purposes with respect to such transferred amount. Any assets
transferred to this Plan from another plan must be accompanied by
written instructions designating the name of
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
28
each Employee for whose benefit such amounts are being transferred, the
current value of such assets, and the sources from which such amounts
are derived. The Plan Administrator will deposit any transferred assets
in the appropriate Participant's Transfer Account. The Transfer Account
will contain any sub-Accounts necessary to separately track the sources
of the transferred assets. Each sub-Account will be treated in the same
manner as the corresponding Plan Account.
The Plan Administrator may direct the Trustee to accept a transfer of
assets from another qualified plan of the Employer in order to comply
with the qualified replacement plan requirements under Code ss.4980(d)
(relating to the excise tax on reversions from a qualified plan)
without affecting the status of this Plan as a Prototype Plan. A
transfer made pursuant to Code ss.4980(d) will be allocated as Employer
Contributions either in the Plan Year in which the transfer occurs, or
over a period of Plan Years (not exceeding the maximum period permitted
under Code ss.4980(d)), as provided in the applicable transfer
agreement. To the extent a transfer described in this paragraph is not
totally allocable in the Plan Year in which the transfer occurs, the
portion which is not allocable will be credited to a suspense account
until allocated in accordance with the transfer agreement.
The Plan Administrator may refuse to accept a transfer of assets if the
Plan Administrator reasonably believes the transfer (a) is not being
made from a proper qualified plan; (b) could jeopardize the tax-exempt
status of the Plan; or (c) could create adverse tax consequences for
the Plan or the Employer. Prior to accepting a transfer of assets, the
Plan Administrator may require evidence documenting that the transfer
of assets meets the requirements of this Section. The Trustee will have
no responsibility to determine whether the transfer of assets meets the
requirements of this Section; to verify the correctness of the amount
and type of assets being transferred to the Plan; or to perform any due
diligence review with respect to such transfer.
(a) Protection of Protected Benefits. Except in the case of a
Qualified Transfer (as defined in subsection (d) below), a
transfer of assets is initiated at the Plan level and does not
require Participant or spousal consent. If the Plan
Administrator directs the Trustee to accept a transfer of
assets to this Plan, the Participant on whose behalf the
transfer is made retains all Protected Benefits that applied
to such transferred assets under the transferor plan.
(b) Transferee plan. Except in the case of a Qualified Transfer
(as defined in subsection (d)), if the Plan Administrator
directs the Trustee to accept a transfer of assets from
another plan which is subject to the Joint and Survivor
Annuity requirements under Codess.401(a)(11), the amounts so
transferred continue to be subject to such requirements, as
provided in Article 9. If this Plan is not otherwise subject
to the Qualified Joint and Survivor Annuity requirements (as
determined under Part 11, #41.a. of the Agreement [Part 11,
#59.a. of the 401(k) Agreement]), the Qualified Joint and
Survivor Annuity requirements apply only to the amounts under
the Transfer Account which are attributable to the amounts
which were subject to the Qualified Joint and Survivor Annuity
requirements under the transferor plan. The Employer may
override this default rule by checking Part 11, #41.b. of the
Agreement [Part 11, #59.b. of the 401(k) Agreement] thereby
subjecting the entire Plan to the Qualified Joint and Survivor
Annuity Requirements.
(c) Transfers from a Defined Benefit Plan, money purchase plan or
401(k) plan.
(1) Defined Benefit Plan. The Plan Administrator will not
direct the Trustee to accept a transfer of assets
from a Defined Benefit Plan unless such transfer
qualifies as a Qualified Transfer (as defined in
subsection (d) below) or the assets transferred from
the Defined Benefit Plan are in the form of paid-up
annuity contracts which protect all the Participant's
Protected Benefits under the Defined Benefit Plan.
(However, see the special rule under the second
paragraph of Section 3.3 above regarding transfers
authorized under Code ss.4980(d).)
(2) Money purchase plan. If this Plan is a profit sharing
plan or a 401(k) plan and the Plan Administrator
directs the Trustee to accept a transfer of assets
from a money purchase plan (other than as a Qualified
Transfer as defined in subsection (d) below), the
amounts transferred (and any gains attributable to
such transferred amounts) continue to be subject to
the distribution restrictions applicable to money
purchase plan assets under the transferor plan. Such
amounts may not be distributed for reasons other than
death, disability, attainment of Normal Retirement
Age, or termination of employment, regardless of any
distribution provisions under this Plan that would
otherwise permit a distribution prior to such events.
(3) 401(k) plan. If the Plan Administrator directs the
Trustee to accept a transfer of Section 401(k)
Deferrals, QMACs, QNECs, or Safe Harbor Contributions
from a 401(k) plan, such amounts retain their
character under this Plan and such amounts (including
any allocable gains or losses) remain subject to the
distribution restrictions applicable to such amounts
under the Code.
(d) Qualified Transfer. The Plan may eliminate certain Protected
Benefits (as provided under subsection (3) below) related to
plan assets that are received in a Qualified Transfer from
another plan. A Qualified Transfer
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is a plan to plan transfer of a Participant's benefits that
meets the requirements under subsection (1) or (2) below.
(1) Elective transfer. A plan-to-plan transfer of a
Participant's benefits from another qualified plans
is a Qualified Transfer if such transfer satisfies
the following requirements.
(i) The Participant must have the right to
receive an immediate distribution of his/her
benefits under the transferor plan at the
time of the Qualified Transfer. For
transfers that occur on or after January 1,
2002, the Participant must not be eligible
at the time of the Qualified Transfer to
take an immediate distribution of his/her
entire benefit in a form that would be
entirely eligible for a Direct Rollover.
(ii) The Participant on whose behalf benefits are
being transferred must make a voluntary,
fully informed election to transfer his/her
benefits to this Plan.
(iii) The Participant must be provided an
opportunity to retain the Protected Benefits
under the transferor plan. This requirement
is satisfied if the Participant is given the
option to receive an annuity that protects
all Protected Benefits under the transferor
plan or the option of leaving his/her
benefits in the transferor plan.
(iv) The Participant's spouse must consent to the
Qualified Transfer if the transferor plan is
subject to the Joint and Survivor Annuity
requirements under Article 9. The spouse's
consent must satisfy the requirements for a
Qualified Election under Section 9.4(d).
(v) The amount transferred (along with any
contemporaneous Direct Rollover) must not be
less than the value of the Participant's
vested benefit under the transferor plan.
(vi) The Participant must be fully vested in the
transferred benefit.
(2) Transfer upon specified events. For transfers that
occur on or after September 6, 2000, a plan-to-plan
transfer of a Participant's entire benefit (other
than amounts the Plan accepts as a Direct Rollover)
from another Defined Contribution Plan that is made
in connection with an asset or stock acquisition,
merger, or other similar transaction involving a
change in the Employer or is made in connection with
a Participant's change in employment status that
causes the Participant to become ineligible for
additional allocations under the transferor plan, is
a Qualified Transfer if such transfer satisfies the
following requirements:
(i) The Participant need not be eligible for an
immediate distribution of his/her benefits
under the transferor plan.
(ii) The Participant on whose behalf benefits are
being transferred must make a voluntary,
fully informed election to transfer his/her
benefits to this Plan.
(iii) The Participant must be provided an
opportunity to retain the Protected Benefits
under the transferor plan. This requirement
is satisfied if the Participant is given the
option to receive an annuity that protects
all Protected Benefits under the transferor
plan or the option of leaving his/her
benefits in the transferor plan.
(iv) The benefits must be transferred between
plans of the same type. To satisfy this
requirement, the transfer must satisfy the
following requirements.
(A) To accept a Qualified Transfer
under this subsection (2) from a
money purchase plan, this Plan also
must be a money purchase plan.
(B) To accept a Qualified Transfer
under this subsection (2) from a
401(k) plan, this Plan also must be
a 401(k) plan.
(C) To accept a Qualified Transfer
under this subsection (2) from a
profit sharing plan, this Plan may
be any type of Defined Contribution
Plan.
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(3) Treatment of Qualified Transfer.
(i) Rollover Contribution Account. If the Plan
Administrator directs the Trustee to accept
on behalf of a Participant a transfer of
assets that qualifies as a Qualified
Transfer, the Plan Administrator will treat
such amounts as a Rollover Contribution and
will deposit such amounts in the
Participant's Rollover Contribution Account.
A Qualified Transfer may include benefits
derived from Employee After-Tax
Contributions.
(ii) Elimination of Protected Benefits. If the
Plan accepts a Qualified Transfer, the Plan
does not have to protect any Protected
Benefits derived from the transferor plan.
However, if the Plan accepts a Qualified
Transfer that meets the requirements for a
transfer under subsection (2) above, the
Plan must continue to protect the QJSA
benefit if the transferor plan is subject to
the QJSA requirements.
(e) Trustee's right to refuse transfer. If the assets to be
transferred to the Plan under this Section 3.3 are not
susceptible to proper valuation and identification or are of
such a nature that their valuation is incompatible with other
Plan assets, the Trustee may refuse to accept the transfer of
all or any specific asset, or may condition acceptance of the
assets on the sale or disposition of any specific asset.
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ARTICLE 4
PARTICIPANT VESTING
This Article contains the rules for determining the vested (nonforfeitable)
amount of a Participant's Account Balance under the Plan. Part 6 of the
Agreement contains specific elections for applying these vesting rules. Part 7
of the Agreement contains special service crediting elections to override the
default provisions under this Article.
4.1 In General. A Participant's vested interest in his/her Employer
Contribution Account and Employer Matching Contribution Account is
determined based on the vesting schedule elected in Part 6 of the
Agreement. A Participant is always fully vested in his/her Section
401(k) Deferral Account, Employee After-Tax Contribution Account, QNEC
Account, QMAC Account, Safe Harbor Nonelective Contribution Account,
Safe Harbor Matching Contribution Account, and Rollover Contribution
Account.
(a) Attainment of Normal Retirement Age. Regardless of the Plan's
vesting schedule, a Participant's right to his/her Account
Balance is fully vested upon the date he/she attains Normal
Retirement Age, provided the Participant is an Employee on or
after such date.
(b) Vesting upon death, becoming Disabled, or attainment of Early
Retirement Age. If elected by the Employer in Part 6, #21 of
the Agreement [Part 6, #39 of the 401(k) Agreement], a
Participant will become fully vested in his/her Account
Balance if the Participant dies, becomes Disabled, or attains
Early Retirement Age while employed by the Employer.
(c) Addition of Employer Nonelective Contribution or Employer
Matching Contribution. If the Plan is a Safe Harbor 401(k)
Plan as defined in Section 17.6, all amounts allocated to the
Participant's Safe Harbor Nonelective Contribution Account
and/or Safe Harbor Matching Contribution Account are always
100% vested. If a Safe Harbor 401(k) Plan is amended to add a
regular Employer Nonelective Contribution or Employer Matching
Contribution, a Participant's vested interest in such amounts
is determined in accordance with the vesting schedule selected
under Part 6 of the Agreement. The addition of a vesting
schedule under Part 6 for such contributions is not considered
an amendment of the vesting schedule under Section 4.7 below
merely because the Participant was fully vested in his/her
Safe Harbor Nonelective Contribution Account or Safe Harbor
Matching Contribution Account.
(d) Vesting upon merger, consolidation or transfer. No accelerated
vesting will be required solely because a Defined Contribution
Plan is merged with another Defined Contribution Plan, or
because assets are transferred from a Defined Contribution
Plan to another Defined Contribution Plan. Thus, for example,
Participants will not automatically become 100% vested in
their Employer Contribution Account(s) solely on account of a
merger of a money purchase plan with a profit sharing or
401(k) Plan or a transfer of assets between such Plans. (See
Section 18.3 for the benefits that must be protected as a
result of a merger, consolidation or transfer.)
4.2 Vesting Schedules. The Plan's vesting schedule will determine an
Employee's vested percentage in his/her Employer Contribution Account
and/or Employer Matching Contribution Account. The vested portion of a
Participant's Employer Contribution Account and/or Employer Matching
Contribution Account is determined by multiplying the Participant's
vesting percentage determined under the applicable vesting schedule by
the total amount under the applicable Account.
The Employer must elect a normal vesting schedule and a Top-Heavy Plan
vesting schedule under Part 6 of the Agreement. The Top-Heavy Plan
vesting schedule will apply for any Plan Year in which the plan is a
Top-Heavy Plan. If this Plan is a 401(k) plan, the Employer must elect
a normal and Top-Heavy Plan vesting schedule for both Employer
Nonelective Contributions and Employer Matching Contributions, but only
to the extent such contributions are authorized under Part 4B and/or
Part 4C of the 401(k) Agreement.
The Employer may choose any of the following vesting schedules as the
normal vesting schedule under Part 6 of the Agreement. For the
Top-Heavy Plan vesting, the Employer may only choose the full and
immediate, 6-year graded, 3-year cliff, or modified vesting schedule,
as described below.
(a) Full and immediate vesting schedule. Under the full and
immediate vesting schedule, the Participant is always 100%
vested in his/her Account Balance.
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(b) 7 year graded vesting schedule. Under the 7 year graded
vesting schedule, an Employee vests in his/her Employer
Contribution Account and/or Employer Matching Contribution
Account in the following manner:
After 3 Years of Service - 20% vesting
After 4 Years of Service - 40% vesting
After 5 Years of Service - 60% vesting
After 6 Years of Service - 80% vesting
After 7 Years of Service - 100% vesting
(c) 6 year graded vesting schedule. Under the 6 year graded
vesting schedule, an Employee vests in his/her Employer
Contribution Account and/or Employer Matching Contribution
Account in the following manner:
After 2 Years of Service - 20% vesting
After 3 Years of Service - 40% vesting
After 4 Years of Service - 60% vesting
After 5 Years of Service - 80% vesting
After 6 Years of Service - 100% vesting
(d) 5 year cliff vesting schedule. Under the 5 year cliff vesting
schedule, an Employee is 100% vested after 5 Years of Service.
Prior to the fifth Year of Service, the vesting percentage is
zero.
(e) 3 year cliff vesting schedule. Under the 3 year cliff vesting
schedule, an Employee is 100% vested after 3 Years of Service.
Prior to the third Year of Service, the vesting percentage is
zero.
(f) Modified vesting schedule. For the normal vesting schedule,
the Employer may elect a modified vesting schedule under which
the vesting percentage for each Year of Service is not less
than the percentage that would be required for each Year of
Service under the 7 year graded vesting schedule, unless 100%
vesting occurs after no more than 5 Years of Service. For the
Top Heavy Plan vesting schedule, the Employer may elect a
modified vesting schedule under which the vesting percentage
for each Year of Service is not less than the percentage that
would be required for each Year of Service under the 6 year
graded vesting schedule, unless 100% vesting occurs after no
more than 3 Years of Service.
4.3 Shift to/from Top-Heavy Vesting Schedule. For a Plan Year in which the
Plan is a Top-Heavy Plan, the Plan automatically shifts to the
Top-Heavy Plan vesting schedule. Once a Plan uses a Top-Heavy Plan
vesting schedule, that schedule will continue to apply for all
subsequent Plan Years. The Employer may override this default provision
under Part 6, #22 of the Nonstandardized Agreement [Part 6, #40 of the
Nonstandardized 401(k) Agreement]. The rules under Section 4.7 will
apply when a Plan shifts to or from a Top-Heavy Plan vesting schedule.
4.4 Vesting Computation Period. For purposes of computing a Participant's
vested interest in his/her Employer Contribution Account and/or
Employer Matching Contribution Account, an Employee's Vesting
Computation Period is the 12-month period measured on a Plan Year
basis, unless the Employer elects under Part 7, #26 of the Agreement
[Part 7, #44 of the 401(k) Agreement] to measure Vesting Computation
Periods using Anniversary Years. The Employer may designate an
alternative 12-month period under Part 7, #26.b. of the Nonstandardized
Agreement [Part 7, #44.b. of the Nonstandardized 401(k) Agreement]. Any
Vesting Computation Period designated under Part 7, #26.b. or #44.b.,
as applicable, must be a 12-consecutive month period and must apply
uniformly to all Participants
(a) Anniversary Years. If the Employer elects to measure Vesting
Computation Periods using Anniversary Years, the Vesting
Computation Period is the 12-month period commencing on the
Employee's Employment Commencement Date (or Reemployment
Commencement Date) and each subsequent 12-month period
commencing on the anniversary of such date.
(b) Measurement on same Vesting Computation Period. The Plan will
measure Years of Service and Breaks in Service (if applicable)
for purposes of vesting on the same Vesting Computation
Period.
4.5 Crediting Years of Service for Vesting Purposes. Unless the Employer
elects otherwise under Part 7, #25 of the Agreement [Part 7, #43 of the
401(k) Agreement], an Employee will earn one Year of Service for
purposes of applying the vesting rules if the Employee completes 1,000
Hours of Service with the Employer during a Vesting Computation Period.
An Employee will receive credit for a Year of Service as of the end of
the Vesting Computation Period, if the Employee completes the required
Hours of Service during such period, even if the Employee is not
employed for the entire period.
(a) Calculating Hours of Service. In calculating an Employee's
Hours of Service for purposes of applying the vesting rules
under this Article, the Employer will use the Actual Hours
Crediting Method, unless the Employer elects otherwise under
Part 7, #25 of the Agreement [Part 7, #43 of the 401(k)
Agreement]. (See Article 6 of this Plan for a description of
the alternative service crediting methods.)
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(b) Excluded service. Unless the Employer elects to exclude
certain service with the Employer under Part 6, #20 of the
Agreement [Part 6, #38 of the 401(k) Agreement], all service
with the Employer is counted for vesting purposes.
(1) Service before the Effective Date of the Plan. Under
Part 6, #20.a. of the Agreement [Part 6, #38.a. of
the 401(k) Agreement], the Employer may elect to
exclude service during any period for which the
Employer did not maintain the Plan or a Predecessor
Plan. For this purpose, a Predecessor Plan is a
qualified plan maintained by the Employer that is
terminated within the 5-year period immediately
preceding or following the establishment of this
Plan. A Participant's service under a Predecessor
Plan must be counted for purposes of determining the
Participant's vested percentage under this Plan.
(2) Service before a certain age. Under Part 6, #20.b. of
the Agreement [Part 6, #38.b.of the 401(k)
Agreement], the Employer may elect to exclude service
before an Employee attains a certain age. For this
purpose, the Employer may not designate an age
greater than 18. An Employee will be credited with a
Year of Service for the Vesting Computation Period
during which the Employee attains the requisite age,
provided the Employee satisfies all other conditions
required for a Year of Service.
4.6 Vesting Break in Service Rules. Except as provided under Section
4.5(b), in determining a Participant's vested percentage, a Participant
is credited with all Years of Service earned with the Employer, subject
to the following Break in Service rules. In applying these Break in
Service rules, Years of Service and Breaks in Service (as defined in
Section 22.27) are measured on the same Vesting Computation Period as
defined in Section 4.4 above.
(a) One year holdout Break in Service. The one year holdout Break
in Service rule will not apply unless the Employer
specifically elects in Part 7, #27.b. of the Nonstandardized
Agreement [Part 7, #45.b. of the Nonstandardized 401(k)
Agreement] to have it apply. If the one year holdout Break in
Service rule is elected, an Employee who has a one year Break
in Service will not be credited for vesting purposes with any
Years of Service earned before such one year Break in Service
until the Employee has completed a Year of Service after the
one year Break in Service. The one year holdout rule does not
apply under the Standardized Agreement.
(b) Five Year Forfeiture Break in Service. In the case of a
Participant who has five (5) consecutive one year Breaks in
Service, all Years of Service after such Breaks in Service
will be disregarded for the purpose of vesting in the portion
of the Participant's Employer Contribution Account and/or
Employer Matching Contribution Account that accrued before
such Breaks in Service, but both pre break and post break
service will count for purposes of vesting in the portion of
such Accounts that accrues after such breaks. The Participant
will forfeit the nonvested portion of his/her Employer
Contribution Account and/or Employer Matching Contribution
Account accrued prior to incurring five consecutive Breaks in
Service, in accordance with Section 5.3(b).
In the case of a Participant who does not have five
consecutive one-year Breaks in Service, all Years of Service
will count in vesting both the pre-break and post-break
Account Balance derived from Employer Contributions.
(c) Rule of Parity Break in Service. This Break in Service rule
applies only to Participants who are totally nonvested (i.e.,
0% vested) in their Employer Contribution Account and Employer
Matching Contribution Account. If an Employee is vested in any
portion of his/her Employer Contribution Account or Employer
Matching Contribution Account, the Rule of Parity does not
apply. Under this Break in Service rule, if a nonvested
Participant incurs a period of consecutive one year Breaks in
Service which equals or exceeds the greater of five (5) or the
Participant's aggregate number of Years of Service with the
Employer, all service earned prior to the consecutive Break in
Service period will be disregarded and the Participant will be
treated as a new Employee for purposes of determining vesting
under the Plan. The Employer may elect under Part 7, #27.a. of
the Agreement [Part 7, #45.a. of the 401(k) Agreement] not to
apply the Rule of Parity Break in Service rule.
(1) Previous application of the Rule of Parity Break in
Service rule. In determining a Participant's
aggregate Years of Service for purposes of applying
the Rule of Parity Break in Service rule, any Years
of Service otherwise disregarded under a previous
application of this rule are not counted.
(2) Application to the 401(k) Agreement. The Rule of
Parity Break in Service rule applies only to
determine the individual's vesting rights with
respect to his/her Employer Contribution Account and
Employer Matching Contribution Account. In
determining whether a Participant is totally
nonvested for purposes of applying the Rule of Parity
Break in Service rule, the Participant's Section
401(k) Deferral Account, Employee After-Tax
Contribution Account, QMAC Account,
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QNEC Account, Safe Harbor Nonelective Contribution
Account, Safe Harbor Matching Contribution Account,
and Rollover Contribution Account are disregarded.
4.7 Amendment of Vesting Schedule. If the Plan's vesting schedule is
amended (or is deemed amended by an automatic change to or from a
Top-Heavy Plan vesting schedule), each Participant with at least three
(3) Years of Service with the Employer, as of the end of the election
period described in the following paragraph, may elect to have his/her
vested interest computed under the Plan without regard to such
amendment or change. For this purpose, a Plan amendment, which in any
way directly or indirectly affects the computation of the Participant's
vested interest, is considered an amendment to the vesting schedule.
However, the new vesting schedule will apply automatically to an
Employee, and no election will be provided, if the new vesting schedule
is at least as favorable to such Employee, in all circumstances, as the
prior vesting schedule.
The period during which the election may be made shall commence with
the date the amendment is adopted or is deemed to be made and shall end
on the latest of:
(a) 60 days after the amendment is adopted;
(b) 60 days after the amendment becomes effective; or
(c) 60 days after the Participant is issued written notice of the
amendment by the Employer or Plan Administrator.
Furthermore, if the vesting schedule of the Plan is amended, in the
case of an Employee who is a Participant as of the later of the date
such amendment is adopted or effective, the vested percentage of such
Employee's Account Balance derived from Employer Contributions
(determined as of such date) will not be less than the percentage
computed under the Plan without regard to such amendment.
4.8 Special Vesting Rule - In-Service Distribution When Account Balance
Less than 100% Vested. If amounts are distributed from a Participant's
Employer Contribution Account or Employer Matching Contribution Account
at a time when the Participant's vested percentage in such amounts is
less than 100% and the Participant may increase the vested percentage
in the Account Balance:
(a) A separate Account will be established for the Participant's
interest in the Plan as of the time of the distribution, and
(b) At any relevant time the Participant's vested portion of the
separate Account will be equal to an amount ("X") determined
by the formula:
X = P (AB + D) - D
Where:
P is the vested percentage at the relevant time;
AB is the Account Balance at the relevant time; and
D is the amount of the distribution.
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ARTICLE 5
FORFEITURES
This Article contains the rules relating to the timing and disposition of
forfeitures of the nonvested portion of a Participant's Account Balance. Part 8
of the Agreement provides elections on the allocation of forfeitures. The rules
for determining the vested portion of a Participant's Account Balance are
contained in Article 4 of this BPD.
5.1 In General. The Plan Administrator has the responsibility to determine
the amount of a Participant's forfeiture based on the application of
the vesting provisions of Article 4. Until an amount is forfeited
pursuant to this Article, nonvested amounts will be held in the Account
of the Participant and will share in gains and losses of the Trust (as
determined under Article 13).
5.2 Timing of forfeiture. The forfeiture of all or a portion of a
Participant's nonvested Account Balance occurs upon any of the events
listed below:
(a) Cash Out Distribution. The date the Participant receives a
total Cash Out Distribution as defined in Section 5.3(a).
(b) Five Year Forfeiture Break in Service. The last day of the
Vesting Computation Period in which the Participant incurs a
Five Year Forfeiture Break in Service as defined in Section
5.3(b).
(c) Lost Participant or Beneficiary. The date the Plan
Administrator determines that a Participant or Beneficiary
cannot be located to receive a distribution from the Plan. See
Section 5.3(c).
(d) Forfeiture of Employer Matching Contributions. With respect to
Employer Matching Contributions under a 401(k) plan, the date
a distribution is made as described in Section 5.3(d).
5.3 Forfeiture Events.
(a) Cash Out Distribution. If a Participant receives a total
distribution upon termination of his/her participation in the
Plan (a "Cash Out Distribution"), the nonvested portion (if
any) of the Participant's Account Balance is forfeited in
accordance with the provisions of this Article. If a
Participant has his/her nonvested Account Balance forfeited as
a result of a Cash Out Distribution, such Participant must be
given the right to "buy back" the forfeited benefit, as
provided in subsection (2) below. (See Article 8 for the rules
regarding the availability and timing of Plan distributions
and the consent requirements applicable to such
distributions.)
(1) Amount of forfeiture. The Cash-Out Distribution rules
under this subsection (a) apply only if the
Participant is less than 100% vested in his/her
Employer Contribution Account and/or Employer
Matching Contribution Account. If the Participant is
100% vested in his/her entire Account Balance, no
forfeiture of benefits will occur solely as a result
of the Cash-Out Distribution.
(i) Total Cash-Out Distribution. If a
Participant receives a Cash-Out Distribution
of his/her entire vested Account Balance,
the Participant will immediately forfeit the
entire nonvested portion of his/her Account
Balance, as of the date of the distribution
(as determined under subsection (A) or (B)
below, whichever applies). The forfeited
amounts will be used in the manner
designated under Part 8 of the Agreement.
(A) No further allocations. If the
terminated Participant is not
entitled to any further allocations
under the Plan for the Plan Year in
which the Participant terminates
employment, the Cash-Out
Distribution occurs on the day the
Participant receives a distribution
of his/her entire vested Account
Balance. The Participant's
nonvested benefit is immediately
forfeited on such date, in
accordance with the provisions
under Section 5.5.
(B) Additional allocations. If the
terminated Participant is entitled
to an additional allocation under
the Plan for the Plan Year in which
the Participant terminates
employment, a Cash-Out Distribution
is deemed to occur when the
Participant receives a distribution
of his/her entire vested Account
Balance, including any amounts that
are still to be allocated under the
Plan. Thus, a Participant who is
entitled to an additional
allocation under the Plan will not
have a total Cash-Out Distribution
until such additional amounts are
distributed, regardless of whether
the Participant takes a complete
distribution of his/her vested
Account Balance before receiving
the additional allocation.
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
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(C) Modification of default cash-out
rules. The Employer may override
the default cash-out rules under
subsections (A) and (B) above by
electing under Part 8, #32 of the
Agreement [Part 8, #50 of the
401(k) Agreement] to have the
Cash-Out Distribution and related
forfeiture occur immediately upon a
distribution of the terminated
Participant's entire vested Account
Balance, without regard to whether
the Participant is entitled to an
additional allocation under the
Plan.
(ii) Deemed Cash-Out Distribution. If a
Participant terminates employment with the
Employer with a vested Account Balance of
zero in his/her Employer Contribution
Account and/or Employer Matching
Contribution Account, the Participant is
treated as receiving a "deemed" Cash-Out
Distribution from the Plan. Upon a deemed
Cash-Out, the nonvested portion of the
Participant's Account Balance will be
forfeited in accordance with subsection (A)
or (B) below.
(A) No further allocations. If the
Participant is not entitled to any
further allocations under the Plan
for the Plan Year in which the
Participant terminates employment,
the deemed Cash-Out Distribution is
deemed to occur on the day the
employment terminates. The
Participant's nonvested benefit is
immediately forfeited on such date,
in accordance with the provisions
under Section 5.5.
(B) Additional allocations. If the
Participant is entitled to an
additional allocation under the
Plan for the Plan Year in which the
Participant terminates employment,
the deemed Cash-Out Distribution is
deemed to occur on the first day of
the Plan Year following the Plan
Year in which the termination
occurs.
(C) Modification of default cash-out
rules. The Employer may override
the default cash-out rules under
subsections (A) and (B) above by
electing under Part 8, #32 of the
Agreement [Part 8, #50 of the
401(k) Agreement] to have the
deemed Cash-Out Distribution and
related forfeiture occur
immediately upon a distribution of
the terminated Participant's entire
vested Account Balance, without
regard to whether the Participant
is entitled to an additional
allocation under the Plan.
(iii) Other distributions. If the Participant
receives a distribution of less than the
entire vested portion of his/her Employer
Contribution Account and Employer Matching
Contribution Account (including any
additional amounts to be allocated under
subsection (i)(B) above), the total Cash-Out
Distribution rule under subsection (i) above
does not apply until the Participant
receives a distribution of the remainder of
the vested portion of his/her Account
Balance. Until the Participant receives a
distribution of the remainder of the vested
portion of his/her Account Balance, the
special vesting rule described in Section
4.8 applies to determine the vested
percentage of the Participant's Employer
Contribution Account and Employer Matching
Account (as applicable). The nonvested
portion of such Accounts will not be
forfeited until the earlier of: (A) the
occurrence of a Five-Year Forfeiture Break
in Service described in Section 5.3(b) or
(B) the date the Participant receives a
total Cash-Out Distribution of the remaining
vested portion of his/her Account Balance.
(2) Buy-back/restoration. If a Participant receives (or
is deemed to receive) a Cash-Out Distribution that
results in a forfeiture under subsection (1) above,
and the Participant subsequently resumes employment
covered under this Plan, the Participant may
"buy-back" the forfeited portion of his/her
Account(s) by repaying to the Plan the full amount of
the Cash-Out Distribution from such Account(s).
(i) Buy-back opportunity. A Participant may
buy-back the portion of his/her benefit that
is forfeited as a result of a Cash-Out
Distribution (or a deemed Cash-Out
Distribution) by repaying the amount of such
Cash-Out Distribution to the Plan before the
earlier of:
(A) five (5) years after the first date
on which the Participant is
subsequently re-employed by the
Employer, or
(B) the date a Five-Year Forfeiture
Break in Service occurs (as defined
in Section 5.3(b)).
If a Participant receives a deemed Cash-Out
Distribution pursuant to subsection (1)(ii)
above, and the Participant resumes
employment covered under this Plan before
the date
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the Participant incurs a Five-Year
Forfeiture Break in Service, the Participant
is deemed to have repaid the Cash-Out
Distribution immediately upon his/her
reemployment.
To receive a restoration of the forfeited
portion of his/her Employer Contribution
Account and/or Employer Matching
Contribution Account, a Participant must
repay the entire Cash-Out Distribution that
was made from the Participant's Employer
Contribution Account and Employer Matching
Contribution Account, unadjusted for any
interest that might have accrued on such
amounts after the distribution date. For
this purpose, the Cash-Out Distribution is
the total value of the Participant's vested
Employer Contribution Account and Employer
Matching Contribution Account that is
distributed at any time following the
Participant's termination of employment. If
a Participant also received a distribution
from other Accounts, the Participant need
not repay such amounts to have the forfeited
portion of his/her Employer Contribution
Account and/or Employer Matching
Contribution Account restored.
(ii) Restoration of forfeited benefit. Upon a
Participant's proper repayment of a Cash-Out
Distribution in accordance with subsection
(i) above, the forfeited portion of the
Participant's Employer Contribution Account
and Employer Matching Contribution Account
(as applicable) will be restored, unadjusted
for any gains or losses on such amount. For
this purpose, a Participant who received a
deemed Cash-Out Distribution is
automatically treated as having made a
proper repayment and his/her forfeited
benefit will be restored in accordance with
this subsection (ii) if the Participant
returns to employment with the Employer
prior to incurring a Five-Year Forfeiture
Break in Service. A Participant is not
entitled to restoration under this
subsection (ii) if the Participant returns
to employment after incurring a Five-Year
Forfeiture Break in Service.
The forfeited portion of the Participant's
Account(s) will be restored no later than
the end of the Plan Year following the Plan
Year in which the Participant repays the
Cash-Out Distribution in accordance with
subsection (i) above. Although the Plan
Administrator may permit a Participant to
make a partial repayment of a Cash-Out
Distribution, no portion of the
Participant's forfeited benefit will be
restored until the Participant repays the
entire Cash-Out Distribution in accordance
with subsection (i) above. If a Participant
received a deemed Cash-Out Distribution, the
Participant's forfeited benefit will be
restored no later than the end of the Plan
Year following the Plan Year in which the
Participant returns to employment with the
Employer.
If a Participant's forfeited benefit is
required to be restored under this
subsection (ii), the restoration of such
benefit will occur from the following
sources. If the following sources are not
sufficient to completely restore the
Participant's benefit, the Employer must
make an additional contribution to the Plan.
(A) Any forfeitures that have not been
allocated to Participants' Accounts
for the Plan Year in which the
Employer is restoring the
Participant's benefit in accordance
with this subsection (ii).
(B) If Participants are not permitted
to self-direct investments under
the Plan, any Trust earnings which
have not been allocated to
Participants' Accounts for the Plan
Year in which the Employer is
restoring the Participant's benefit
in accordance with this subsection
(ii).
(C) If the Employer makes a
discretionary contribution to the
Plan, it may designate all or any
part of such discretionary
contribution as a restoration
contribution under this subsection
(ii).
(b) Five Year Forfeiture Break in Service. In the case of a
Participant who has five (5) consecutive one year Breaks in
Service, the nonvested portion of the Participant's Account
Balance will be forfeited as of the end of the Vesting
Computation Period in which the Participant incurs his/her
fifth consecutive Break in Service. See Section 4.6(b) for
more information on the Five Year Forfeiture Break in Service.
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(c) Lost Participant or Beneficiary.
(1) Inability to locate Participant or Beneficiary. If
the Plan Administrator, after a reasonable effort and
time, is unable to locate a Participant or a
Beneficiary in order to make a distribution otherwise
required by the Plan, the distributable amount may be
forfeited, as permitted under applicable laws and
regulations. In determining what is a reasonable
effort and time, the Plan Administrator may follow
any applicable guidance provided under statute,
regulation, or other IRS or DOL guidance of general
applicability.
(2) Restoration of forfeited amounts. If, after the
distributable amount is forfeited, the Participant or
Beneficiary is located, the Plan will restore the
forfeited amount (unadjusted for gains or losses) to
such Participant or Beneficiary within a reasonable
time. The method of restoring a forfeited benefit
under subsection (a)(2)(ii) above applies to any
restoration required under this subsection (2).
(d) Forfeiture of Employer Matching Contributions. This subsection
(d) only applies if the Plan is a 401(k) Plan.
(1) Correction of ACP Test. If a Participant receives a
corrective distribution of Excess Aggregate
Contributions to correct the ACP Test, the portion of
such corrective distribution which relates to
nonvested Employer Matching Contributions, including
any allocable income or loss, will be forfeited (as
permitted under Section 17.3(d)(1)) in the Plan Year
in which the corrective distribution is made from the
Plan.
(2) Excess Deferrals, Excess Contributions, and Excess
Aggregate Contributions. If a Participant receives a
distribution of Excess Deferrals, Excess
Contributions, or Excess Aggregate Contributions, the
Employer will forfeit the portion of his/her Employer
Matching Contribution Account (whether vested or not)
which is attributable to such distributed amounts
(except to the extent such amount has been
distributed as Excess Contributions or Excess
Aggregate Contributions, pursuant to Article 17). A
forfeiture of Employer Matching Contributions under
this subsection (2) occurs in the Plan Year in which
the Participant receives the distribution of Excess
Deferrals, Excess Contributions, and/or Excess
Aggregate Contributions.
5.4 Timing of Forfeiture Allocation. Pursuant to the elections under Part 8
of the Agreement, forfeitures are allocated in either the same Plan
Year in which the forfeitures occur or in the Plan Year following the
Plan Year in which the forfeitures occur.
5.5 Method of Allocating Forfeitures. Forfeitures will be allocated in
accordance with the method chosen by the Employer under Part 8 of the
Agreement. In no event, however, will a Participant receive an
allocation of forfeitures arising from his/her own Account. If no
method of allocation is selected under Part 8 of the Agreement, any
forfeitures will be used to reduce the Employer's contributions for the
Plan Year following the Plan Year in which the forfeiture occurs as
described under (b) below.
(a) Reallocation of forfeitures. If the Employer elects to
reallocate forfeitures as additional contributions, the
forfeitures will be added to other contributions made by the
Employer (as designated under Part 8 of the Agreement) for the
Plan Year designated under Part 8, #29 of the Agreement [Part
8, #47 of the 401(k) Agreement], and such amounts will be
allocated to Eligible Participants under the allocation method
chosen under Part 4 of the Agreement with respect to such
contributions. Reallocation of forfeitures is not available
under the target benefit plan Agreement.
(b) Reduction of contributions. If the Employer elects under Part
8 of the Agreement to use forfeitures to reduce its
contributions under the Plan, the Employer may adjust its
contribution deposits in any manner, provided the total
Employer Contributions made for the Plan Year properly take
into account the forfeitures that are to be used to reduce
such contributions for that Plan Year. If the contributions
are allocated over multiple allocation periods, the Employer
may reduce its contribution for any allocation periods within
the Plan Year in which the forfeitures are to be allocated so
that the total amount allocated for the Plan Year is proper.
(c) Payment of Plan expenses. If the Employer elects under Part 8,
#31 of the Agreement [Part 8, #49 of the 401(k) Agreement],
forfeitures will first be used to pay Plan expenses for the
Plan Year in which the forfeitures would otherwise be
allocated. This subsection (c) applies only if the Plan
otherwise would pay such expenses as authorized under Section
11.4. If any forfeitures remain after the payment of Plan
expenses under this subsection, the remaining forfeitures will
be allocated as selected under Part 8 of the Agreement.
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(C)Copyright 2001 SunTrust Bank Basic Plan Document
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ARTICLE 6
SPECIAL SERVICE CREDITING PROVISIONS
This Article contains special service crediting rules that apply for purposes of
determining an Employee's eligibility to participate and the vested percentage
in his/her Account Balance under the Plan. This Article 6 and Part 7 of the
Agreement permit the Employer to override the general service crediting rules
under Articles 1 and 4 with respect to eligibility and vesting and to apply
special service crediting rules, such as the Equivalency Method and the Elapsed
Time Method for crediting service. Section 6.7 of this Article and Part 13, #53
of the Agreement [Part 13, #71 of the 401(k) Agreement] contain special rules
for crediting service with Predecessor Employers.
6.1 Year of Service - Eligibility. Section 1.4(b) defines a Year of Service
for eligibility purposes. Generally, an Employee earns a Year of
Service for eligibility purposes upon the completion of 1,000 Hours of
Service during an Eligibility Computation Period. For this purpose,
Hours of Service are calculated using the Actual Hours Crediting
Method. Part 7, #23 of the Agreement [Part 7, #41 of the 401(k)
Agreement] permits the Employer to modify these default provisions for
determining a Year of Service for eligibility purposes.
(a) Selection of Hours of Service. The Employer may elect to
modify the requirement that an Employee complete 1,000 Hours
of Service during an Eligibility Computation Period to earn a
Year of Service. Under Part 7, #23.a. of the Agreement [Part
7, #41.a. of the 401(k) Agreement], the Employer may designate
a specific number of Hours of Service (which cannot exceed
1,000) that an Employee must complete during the Eligibility
Computation Period to earn a Year of Service. Any Hours of
Service designated in accordance with this subsection (a) will
be determined using the Actual Hours Crediting Method, unless
the Employer elects to use the Equivalency Method under Part
7, #23.b. of the Agreement [Part 7, #41.b. of the 401(k)
Agreement].
(b) Use of Equivalency Method. The Employer may elect under Part
7, #23.b. of the Agreement [Part 7, #41.b. of the 401(k)
Agreement] to use the Equivalency Method (as defined in
Section 6.5(a)) instead of the Actual Hours Crediting Method
in determining whether an Employee has completed the required
Hours of Service to earn a Year of Service.
(c) Use of Elapsed Time Method. The Employer may elect under Part
7, #23.c. of the Agreement [Part 7, #41.c. of the 401(k)
Agreement] to use the Elapsed Time Method (as defined in
Section 6.5(b)) instead of counting Hours of Service in
applying the eligibility conditions under Article 1. The
Elapsed Time Method may not be selected if the Employer elects
to apply a designated Hours of Service requirement under Part
7, #23.a. of the Agreement [Part 7, #41.a. of the 401(k)
Agreement].
6.2 Eligibility Computation Period. Section 1.4(c) defines the Eligibility
Computation Period used to determine whether an Employee has earned a
Year of Service for eligibility purposes. Generally, if one Year of
Service is required for eligibility, the Eligibility Computation Period
is determined using the Shift-to-Plan-Year Method (as defined in
Section 1.4(c)(1)). Part 7, #24 of the Agreement [Part 7, #42 of the
401(k) Agreement] permits the Employer to use the Anniversary Year
Method (as defined in Section 1.4(c)(2)) for determining Eligibility
Computation Periods under the Plan. If the Employer selects two Years
of Service eligibility condition (under Part 1, #5.e. of the
Agreement), the Anniversary Year Method applies, unless the Employer
elects to use the Shift-to-Plan-Year Method. In the case of a 401(k)
plan in which a two Years of Service eligibility condition is used for
either Employer Matching Contributions or Employer Nonelective
Contributions, the method used to determine Eligibility Computation
Periods for the two Years of Service condition also will apply to any
one Year of Service eligibility condition used with respect to any
other contributions.
6.3 Year of Service - Vesting. Section 4.5 defines a Year of Service for
vesting purposes. Generally, an Employee earns a Year of Service for
vesting purposes upon the completion of 1,000 Hours of Service during a
Vesting Computation Period. For this purpose, Hours of Service are
calculated using the Actual Hours Crediting Method. Part 7, #25 of the
Agreement [Part 7, #43 of the 401(k) Agreement] permits the Employer to
modify these default provisions for determining a Year of Service for
vesting purposes.
(a) Selection of Hours of Service. The Employer may elect to
modify the requirement that an Employee complete 1,000 Hours
of Service during a Vesting Computation Period to earn a Year
of Service. Under Part 7, #25.a. of the Agreement [Part 7,
#43.a. of the 401(k) Agreement], the Employer may designate a
specific number of Hours of Service (which cannot exceed
1,000) that an Employee must complete during the Vesting
Computation Period to earn a Year of Service. Any Hours of
Service designated in accordance with this subsection (a) will
be determined using the Actual Hours Crediting Method, unless
the Employer elects to use the Equivalency Method under Part
7, #25.b. of the Agreement [Part 7, #43.b. of the 401(k)
Agreement].
(b) Equivalency Method. The Employer may elect under Part 7,
#25.b. of the Agreement [Part 7, #43.b. of the 401(k)
Agreement] to use the Equivalency Method (as defined in
Section 6.5(a)) instead of the Actual Hours
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
40
Crediting Method in determining whether an Employee has
completed the required Hours of Service to earn a Year of
Service.
(c) Elapsed Time Method. The Employer may elect under Part 7,
#25.c. of the Agreement [Part 7, #43.c. of the 401(k)
Agreement] to use the Elapsed Time Method (as defined in
Section 6.5(b)) instead of counting Hours of Service in
applying the vesting provisions under Article 4. The Elapsed
Time Method may not be selected if the Employer elects to
apply a designated Hours of Service requirement under Part 7,
#25.a. of the Agreement [Part 7, #43.a. of the 401(k)
Agreement].
6.4 Vesting Computation Period. Section 4.4 defines the Vesting Computation
Period used to determine whether an Employee has earned a Year of
Service for vesting purposes. Generally, the Vesting Computation Period
is the Plan Year. Part 7, #26 of the Agreement [Part 7, #44 of the
401(k) Agreement] permits the Employer to elect to use Anniversary
Years (see Section 4.4(a)) or, under the Nonstandardized Agreement, any
other 12-consecutive month period as the Vesting Computation Period.
6.5 Definitions.
(a) Equivalency Method. Under the Equivalency Method, an Employee
is credited with 190 Hours of Service for each calendar month
during the Eligibility Computation Period or Vesting
Computation Period, as applicable, for which the Employee
completes at least one Hour of Service. Instead of applying
the Equivalency Method on the basis of months worked, the
Employer may elect to apply different equivalencies under Part
7, #28 of the Agreement [Part 7, #46 of the 401(k) Agreement].
The Employer may credit Employees with 10 Hours of Service for
each day worked, 45 Hours of Service for each week worked, or
95 Hours of Service for each semi monthly payroll period
worked during the Eligibility Computation Period or Vesting
Computation Period, as applicable. For this purpose, an
Employee will receive credit for the appropriate Hours of
Service if the Employer completes at least one Hour of Service
during the applicable period.
(b) Elapsed Time Method. Under the Elapsed Time Method, an
Employee receives credit for the aggregate of all periods of
service commencing with the Employee's Employment Commencement
Date (or Reemployment Commencement Date) and ending on the
date the Employee begins a Period of Severance (as defined in
subsection (2) below) which lasts at least 12 consecutive
months. In calculating an Employee's aggregate period of
service, an Employee receives credit for any Period of
Severance that lasts less than 12 consecutive months. If an
Employee's aggregate period of service includes fractional
years, such fractional years are expressed as days.
(1) Year of Service. For purposes of determining whether
an Employee has earned a Year of Service under the
Elapsed Time Method, an Employee is credited with a
Year of Service for each 12-month period of service
the Employee completes under the above paragraph,
whether or not such period of service is consecutive.
(2) Period of Severance. For purposes of applying the
Elapsed Time Method, a Period of Severance is any
continuous period of time during which the Employee
is not employed by the Employer. A Period of
Severance begins on the date the Employee retires,
quits or is discharged, or if earlier, the 12-month
anniversary of the date on which the Employee is
first absent from service for a reason other than
retirement, quit or discharge.
In the case of an Employee who is absent from work
for maternity or paternity reasons, the
12-consecutive month period beginning on the first
anniversary of the first date of such absence shall
not constitute a Period of Severance. For purposes of
this paragraph, an absence from work for maternity or
paternity reasons means an absence (i) by reason of
the pregnancy of the Employee, (ii) by reason of the
birth of a child of the Employee, (iii) by reason of
the placement of a child with the Employee in
connection with the adoption of such child by the
Employee, or (iv) for purposes of caring for a child
of the Employee for a period beginning immediately
following the birth or placement of such child.
(3) Break in Service rules. The Break in Service rules
described in Sections 1.6 and 4.6 also apply under
the Elapsed Time Method. For purposes of applying the
Break in Service rules under the Elapsed Time Method,
a Break in Service is any Period of Severance of at
least 12 consecutive months.
6.6 Switching Crediting Methods. The following rules apply if the service
crediting method is changed in a manner described below.
(a) Shift from crediting Hours of Service to Elapsed Time Method.
If the service crediting method under the Plan is changed from
a method that uses Hours of Service to a method using Elapsed
Time, each Employee's
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(C)Copyright 2001 SunTrust Bank Basic Plan Document
41
period of service under the Elapsed Time Method is the sum of
the amounts under subsections (1) and (2) below.
(1) The number of Years of Service credited under the
Hours of Service method for the period ending
immediately before the computation period during
which the change to the Elapsed Time Method occurs.
(2) For the computation period in which the change
occurs, the Plan Administrator will determine the
greater of: (i) the period of service that would be
credited under the Elapsed Time Method for the
Employee's service from the first day of that
computation period through the date of the change, or
(ii) the service that would be taken into account
under the Hours of Service method for that
computation period through the date of the change. If
(i) is greater, then Years of Service are credited
under the Elapsed Time Method beginning with the
first day of the computation period during which the
change to the Elapsed Time Method occurs. If (ii) is
greater, then Years of Service are credited under the
Hours of Service method for the computation period
during which the change to the Elapsed Time Method
occurs and under the Elapsed Time Method beginning
with the first day of the computation period that
follows the computation period in which the change
occurs. If the change occurs as of the first day of a
computation period, treat subsection (1) as
applicable for purposes of applying the rule in this
paragraph.
(b) Shift from Elapsed Time Method to an Hours of Service method.
If the service crediting method changes from the Elapsed Time
Method to an Hours of Service method, each Employee's Years of
Service under the Hours of Service method is the sum of the
amounts under subsections (1) and (2) below.
(1) The number of Years of Service credited under the
Elapsed Time Method as of the date of the change.
(2) For the computation period in which the change to the
Hours of Service method occurs, the portion of that
computation period in which the Elapsed Time Method
was in effect is converted into an equivalent number
of Hours of Service, using the Equivalency Method
described in Section 6.5(a). For the remainder of the
computation period, actual Hours of Service are
counted, unless the Equivalency Method has been
elected in Part 7 of the Agreement. The Hours of
Service deemed credited for the portion of the
computation period in which the Elapsed Time Method
was in effect are added to the actual Hours of
Service credited for the remaining portion of the
computation period to determine if the Employee has a
Year of Service for that computation period. If the
change to the Hours of Service method occurs as of
the first day of a computation period, then the
determination as to whether an Employee has completed
a Year of Service for the first computation period
that the change is in effect is based solely on the
Hours of Service method.
6.7 Service with Predecessor Employers. If the Employer maintains the plan
of a Predecessor Employer, any service with such Predecessor Employer
is treated as service with the Employer for purposes of applying the
provisions of this Plan. If the Employer maintains the Plan of a
Predecessor Employer, the Employer may complete Part 13, #53 of the
Agreement [Part 13, #71 of the 401(k) Agreement] to identify the
Predecessor Employer and to specify that service with such Predecessor
Employer will be credited for all purposes under the Plan. The failure
to complete Part 13, #53 of the Agreement [Part 13, #71 of the 401(k)
Agreement] with respect to service of a Predecessor Employer where the
Employer is maintaining a Plan of such Predecessor Employer will not
override the requirement that such predecessor service be counted for
all purposes under the Plan.
If the Employer does not maintain the plan of a Predecessor Employer,
service with such Predecessor Employer does not count under this Plan,
unless the Employer specifically designates under Part 13, #53 of the
Agreement [Part 13, #71 of the 401(k) Agreement] to include service
with such Predecessor Employer. If the Employer elects to credit
service with a Predecessor Employer under this paragraph, the Employer
must designate the purpose for which it is crediting Predecessor
Employer service. If the Employer will treat service with multiple
Predecessor Employers differently, the Employer should complete an
additional election for each Predecessor Employer for which service is
being credited differently. If the Employer is not crediting service
with any Predecessor Employers, Part 13, #53 of the Agreement [Part 13,
#71 of the 401(k) Agreement] need not be completed.
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
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ARTICLE 7
LIMITATION ON PARTICIPANT ALLOCATIONS
This Article provides limitations on the amount a Participant may receive as an
allocation under the Plan for a Limitation Year. The limitation on allocations
(referred to herein as the Annual Additions Limitation) applies in the aggregate
to all plans maintained by the Employer. Part 13, #54.c. of the Agreement [Part
13, #72.c. of the 401(k) Agreement] permits the Employer to specify how the Plan
will comply with the Annual Additions Limitation where the Employer maintains a
plan (or plans) in addition to this Plan.
7.1 Annual Additions Limitation - No Other Plan Participation.
(a) Annual Additions Limitation. If the Participant does not
participate in, and has never participated in another
qualified retirement plan, a welfare benefit fund (as defined
under Code ss.419(e)), an individual medical account (as
defined under Code ss.415(l)(2)), or a SEP (as defined under
Code ss.408(k)) maintained by the Employer, then 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.
Generally, if an Employer Contribution that would otherwise be
contributed or allocated to a Participant's Account will cause
that Participant's Annual Additions for the Limitation Year to
exceed the Maximum Permissible Amount, the amount to be
contributed or allocated to such Participant will be reduced
so that the Annual Additions allocated to such Participant's
Account for the Limitation Year will equal the Maximum
Permissible Amount. However, if a contribution or allocation
to a Participant's Account will exceed the Maximum Permissible
Amount due to a correctable event described in subsection (c)
below, the Excess Amount may be contributed or allocated to
such Participant and corrected in accordance with the
correction procedures outlined in subsection (c).
(b) Using estimated Total Compensation. Prior to determining the
Participant's actual Total Compensation for the Limitation
Year, the Employer may determine the Maximum Permissible
Amount for a Participant on the basis of a reasonable
estimation of the Participant's Total Compensation for the
Limitation Year, uniformly determined for all Participants
similarly situated.
As soon as administratively feasible after the end of the
Limitation Year, the Employer will determine the Maximum
Permissible Amount for the Limitation Year on the basis of the
Participant's actual Total Compensation for the Limitation
Year.
(c) Disposition of Excess Amount. If, as a result of the use of
estimated Total Compensation, the allocation of forfeitures, a
reasonable error in determining the amount of Section 401(k)
Deferrals that may be made under this Article 7, or other
reasonable error in applying the Annual Additions Limitation,
an Excess Amount arises, the excess will be disposed of as
follows:
(1) Any Employee After-Tax Contributions (plus
attributable earnings), to the extent such
contributions would reduce the Excess Amount, will be
returned to the Participant. The Employer may elect
not to apply this subsection (1) if the ACP Test (as
defined in Section 17.3) has already been performed
and the distribution of Employee After-Tax
Contributions to correct the Excess Amount will cause
the ACP Test to fail or will change the amount of
corrective distributions required under Section
17.3(d)(1) of this BPD.
If Employer Matching Contributions were allocated
with respect to Employee After-Tax Contributions for
the Limitation Year, the Employee After-Tax
Contributions and Employer Matching Contributions
will be corrected together. Employee After-Tax
Contributions will be distributed under this
subsection (1) only to the extent the Employee
After-Tax Contributions, plus the Employer Matching
Contributions allocated with respect to such Employee
After-Tax Contributions, reduce the Excess Amount.
Thus, after correction under this subsection (1),
each Participant should have the same level of
Employer Matching Contribution with respect to the
remaining Employee After-Tax Contributions as
provided under Part 4B of the Agreement. Any Employer
Matching Contributions identified under this
subsection (1) will be treated as an Excess Amount
correctable under subsections (3) and (4) below. If
Employer Matching Contributions are allocated to both
Employee After-Tax Contributions and to Section
401(k) Deferrals, this subsection (1) is applied by
treating Employer Matching Contributions as allocated
first to Section 401(k) Deferrals.
(2) If, after the application of subsection (1), an
Excess Amount still exists, any Section 401(k)
Deferrals (plus attributable earnings), to the extent
such deferrals would reduce the Excess Amount, will
be distributed to the Participant. The Employer may
elect not to apply this subsection (2) if the
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(C)Copyright 2001 SunTrust Bank Basic Plan Document
43
ADP Test (as defined in Section 17.2) has already
been performed and the distribution of Section 401(k)
Deferrals to correct the Excess Amount will cause the
ADP Test to fail or will change the amount of
corrective distributions required under Section
17.2(d)(1) of this BPD.
If Employer Matching Contributions were allocated
with respect to Section 401(k) Deferrals for the
Limitation Year, the Section 401(k) Deferrals and
Employer Matching Contributions will be corrected
together. Section 401(k) Deferrals will be
distributed under this subsection (2) only to the
extent the Section 401(k) Deferrals, plus Employer
Matching Contributions allocated with respect to such
Section 401(k) Deferrals, reduce the Excess Amount.
Thus, after correction under this subsection (2),
each Participant should have the same level of
Employer Matching Contribution with respect to the
remaining Section 401(k) Deferrals as provided under
Part 4B of the Agreement. Any Employer Matching
Contributions identified under this subsection (2)
will be treated as an Excess Amount correctable under
subsection (3) or (4) below.
(3) If, after the application of subsection (2), an
Excess Amount still exists, the Excess Amount is
allocated to a suspense account and is used in the
next Limitation Year (and succeeding Limitation
Years, if necessary) to reduce Employer Contributions
for all Participants under the Plan. The Excess
Amounts are treated as Annual Additions for the
Limitation Year in which such amounts are allocated
from the suspense account.
(4) If a suspense account is in existence at any time
during a Limitation Year pursuant to this Article 7,
such suspense account will not participate in the
allocation of investment gains and losses, unless
otherwise provided in uniform valuation procedures
established by the Plan Administrator. If a suspense
account is in existence at any time during a
particular Limitation Year, all amounts in the
suspense account must be allocated to Participants'
Accounts before the Employer makes any Employer
Contributions, or any Employee After-Tax
Contributions are made, for that Limitation Year.
7.2 Annual Additions Limitation - Participation in Another Plan.
(a) In general. This Section 7.2 applies if, in addition to this
Plan, the Participant receives an Annual Addition during any
Limitation Year from another Defined Contribution Plan, a
welfare benefit fund (as defined under Code ss.419(e)), an
individual medical account (as defined under Code
ss.415(l)(2)), or a SEP (as defined under Code ss.408(k))
maintained by the Employer. If the Employer maintains, or at
any time maintained, a Defined Benefit Plan (other than a
Paired Plan) covering any Participant in this Plan, see
Section 7.5.
(b) This Plan's Annual Addition Limitation. The Annual Additions
that 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 any other Defined Contribution
Plan, welfare benefit fund, individual medical account, or SEP
maintained by the Employer for the same Limitation Year.
(c) Annual Additions reduction. If the Annual Additions with
respect to the Participant under any other Defined
Contribution Plan, welfare benefit fund, individual medical
account, or SEP maintained by the Employer are less than the
Maximum Permissible Amount and the Annual Additions that would
otherwise be contributed or allocated to the Participant's
Account under this Plan would exceed the Annual Additions
Limitation for the Limitation Year, 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. However, if a contribution or
allocation to a Participant's Account will exceed the Maximum
Permissible Amount due to a correctable event described in
Section 7.1(c), the Excess Amount may be contributed or
allocated to such Participant and corrected in accordance with
the correction procedures outlined in Section 7.1(c).
(d) No Annual Additions permitted. If the Annual Additions with
respect to the Participant under such other Defined
Contribution Plan(s), welfare benefit fund(s), individual
medical account(s), or SEP(s) 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. However, if a contribution
or allocation to a Participant's Account will exceed the
Maximum Permissible Amount due to a correctable event
described in Section 7.1(c), the Excess Amount may be
contributed or allocated to such Participant and corrected in
accordance with the correction procedures outlined in Section
7.1(c).
(e) Using estimated Total Compensation. Prior to determining the
Participant's actual Total Compensation for the Limitation
Year, the Employer may determine the Maximum Permissible
Amount for a Participant in the manner described in Section
7.1(b). 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 Total Compensation for the Limitation
Year.
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(f) Excess Amounts. If, as a result of the use of estimated Total
Compensation, an allocation of forfeitures, a reasonable error
in determining the amount of Section 401(k) Deferrals that may
be made under this Article 7, or other reasonable error in
applying the Annual Additions Limitation, a Participant's
Annual Additions under this Plan and such other plans or funds
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 SEP will be deemed to have been allocated
first, followed by Annual Additions to a welfare benefit fund
or individual medical account, regardless of the actual
allocation date.
(1) Same allocation date. If an Excess Amount is
allocated to a Participant on an allocation date of
this Plan that coincides with an allocation date of
another plan, such Excess Amount will be attributed
to the following types of plan(s) in the order
listed, until the entire Excess Amount is allocated.
(i) First, to any 401(k) plan(s) maintained by
the Employer.
(ii) Then, to any profit sharing plan(s)
maintained by the Employer.
(iii) Then, to any money purchase plan(s)
maintained by the Employer.
(iv) Finally, to any target benefit plan(s)
maintained by the Employer.
If an amount is allocated to the same type of Plan on
the same allocation date, the Excess Amount will be
allocated to each plan in accordance with the pro
rata allocation method outlined in the following
paragraph.
(2) Alternative methods. The Employer may elect under
Part 13, #54.c. of the Agreement [Part 13, #72.c. of
the 401(k) Agreement] to modify the default rules
under this subsection (f). For example, the Employer
may elect to attribute any Excess Amount which is
allocated on the same date to this Plan and to
another plan maintained by the Employer by
designating the specific plan to which the Excess
Amount is allocated or by using a pro rata allocation
method. Under the pro rata allocation method, the
Excess Amount attributed to this Plan is the product
of:
(i) the total Excess Amount allocated as of such
date, times
(ii) the ratio of (A) the Annual Additions
allocated to the Participant for the
Limitation Year as of such date under this
Plan to (B) the total Annual Additions
allocated to the Participant for the
Limitation Year as of such date under this
and all other Defined Contribution Plans.
(g) Disposition of Excess Amounts. Any Excess Amount attributed to
this Plan will be disposed in the manner described in Section
7.1(c).
7.3 Modification of Correction Procedures. The Employer may elect under
Part 13, #51.c. of the Agreement [Part 13, #69.c. of the 401(k)
Agreement] to modify any of the corrective provisions under Section 7.1
of this BPD. The provisions in Section 7.2 may be modified under Part
13, #54.c. of the Agreement [Part 13, #72.c. of the 401(k) Agreement].
7.4 Definitions Relating to the Annual Additions Limitation.
(a) Annual Additions: The sum of the following amounts credited to
a Participant's Account for the Limitation Year:
(1) Employer Contributions, including Section 401(k)
Deferrals;
(2) Employee After-Tax Contributions;
(3) forfeitures;
(4) amounts allocated to an individual medical account
(as defined in Code ss.415(l)(2)), which is part of a
pension or annuity plan maintained by the Employer,
are treated as Annual Additions to a Defined
Contribution Plan. Also, amounts derived from
contributions paid or accrued after December 31,
1985, in taxable years ending after such date, which
are attributable to post-retirement medical benefits
allocated to the separate account of a key employee
(as defined in Code ss.419A(d)(3)) under a welfare
benefit fund (as defined in Code ss.419(e))
maintained by the Employer are treated as Annual
Additions to a Defined Contribution Plan; and
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(5) allocations under a SEP (as defined in Code
ss.408(k)).
For this purpose, any Excess Amount applied under Sections
7.1(c) or 7.2(f) in the Limitation Year to reduce Employer
Contributions will be considered Annual Additions for such
Limitation Year.
An Annual Addition is credited to a Participant's Account for
a particular Limitation Year if such amount is allocated to
the Participant's Account as of any date within that
Limitation Year. An Annual Addition will not be deemed
credited to a Participant's Account for a particular
Limitation Year unless such amount is actually contributed to
the Plan no later than 30 days after the time prescribed by
law for filing the Employer's income tax return (including
extensions) for the taxable year with or within which the
Limitation Year ends. In the case of Employee After-Tax
Contributions, such amount shall not be deemed credited to a
Participant's Account for a particular Limitation Year unless
the contributions are actually contributed to the Plan no
later than 30 days after the close of that Limitation Year.
(b) Defined Contribution Dollar Limitation: $30,000, as adjusted
under Code ss.415(d).
(c) Employer. For purposes of this Article 7, Employer shall mean
the Employer that adopts this Plan, and all members of a
controlled group of corporations (as defined in ss.414(b) of
the Code as modified by ss.415(h)), all commonly controlled
trades or businesses (as defined in ss.414(c) of the Code as
modified by ss.415(h)) or affiliated service groups (as
defined in ss.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 ss.414(o) of the Code.
(d) Excess Amount: The excess of the Participant's Annual
Additions for the Limitation Year over the Maximum Permissible
Amount.
(e) Limitation Year: The Plan Year, unless the Employer elects
another 12 consecutive month period under Part 13, #51.a. of
the Agreement [Part 13, #69.a. of the 401(k) Agreement]. All
qualified retirement plans under Codess.401(a) 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. If the
Plan has an initial Plan Year that is less than 12 months, the
Limitation Year for such first Plan Year is the 12 month
period ending on the last day of that Plan Year, unless
otherwise specified in Part 13, #51.c. of the Agreement [Part
13, #69.c. of the 401(k) Agreement].
(f) Maximum Permissible Amount: The maximum Annual Additions that
may be contributed or allocated to a Participant's Account
under the Plan for any Limitation Year shall not exceed the
lesser of:
(1) the Defined Contribution Dollar Limitation, or
(2) 25 percent of the Participant's Total Compensation
for the Limitation Year.
The Total Compensation limitation referred to in (2) shall not
apply to any contribution for medical benefits (within the
meaning of Code ss.401(h) or ss.419A(f)(2)) which is otherwise
treated as an Annual Addition under Code ss.415(l)(1) or
ss.419A(d)(2).
If a short Limitation Year is created because of an amendment
changing the Limitation Year to a different 12-consecutive
month period, the Maximum Permissible Amount will not exceed
the Defined Contribution Dollar Limitation multiplied by the
following fraction:
Number of months in the short Limitation Year
---------------------------------------------
12
If a short Limitation Year is created because the Plan has an
initial Plan Year that is less than 12 months, no proration of
the Defined Contribution Dollar Limitation is required, unless
provided otherwise under Part 13, #51.c. of the Agreement
[Part 13, #69.c. of the 401(k) Agreement]. (See subsection (e)
above for the rule allowing the use of a full 12-month
Limitation Year for the first year of the Plan, thereby
avoiding the need to prorate the Defined Contribution Dollar
Limitation.)
(g) Total Compensation: The amount of compensation as defined
under Section 22.197, subject to the Employer's election under
Part 3, #9 of the Agreement.
(1) Self-Employed Individuals. For a Self-Employed
Individual, Total Compensation is such individual's
Earned Income.
(2) Total Compensation actually paid or made available.
For purposes of applying the limitations of this
Article 7, Total Compensation for a Limitation Year
is the Total Compensation actually paid or
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
46
made available to an Employee during such Limitation
Year. However, the Employer may include in Total
Compensation for a Limitation Year amounts earned but
not paid in the Limitation Year because of the timing
of pay periods and pay days, but only if these
amounts are paid during the first few weeks of the
next Limitation Year, such amounts are included on a
uniform and consistent basis with respect to all
similarly-situated Employees, and no amounts are
included in Total Compensation in more than one
Limitation Year. The Employer need not make any
formal election to include accrued Total Compensation
described in the preceding sentence.
(3) Disabled Participants. Total Compensation does not
include any imputed compensation for the period a
Participant is Disabled. However, the Employer may
elect under Part 13, #51.b. of the Agreement [Part
13, #69.b. of the 401(k) Agreement], to include under
the definition of Total Compensation, the amount a
terminated Participant who is permanently and totally
Disabled (as defined in Section 22.53) would have
received for the Limitation Year if the Participant
had been paid at the rate of Total Compensation paid
immediately before becoming permanently and totally
Disabled. If the Employer elects under Part 13,
#51.b. of the Agreement [Part 13, #69.b. of the
401(k) Agreement] to include imputed compensation for
a Disabled Participant, a Disabled Participant will
receive an allocation of any Employer Contribution
the Employer makes to the Plan based on the
Employee's imputed compensation for the Plan Year.
Any Employer Contributions made to a Disabled
Participant under this subsection (3) are fully
vested when made. For Limitation Years beginning
before January 1, 1997, imputed compensation for a
Disabled Participant may be taken into account only
if the Participant is not a Highly Compensated
Employee for such Plan Year.
(4) Special rule for Limitation Years beginning before
January 1, 1998. For Limitation Years beginning
before January 1, 1998, for purposes of applying the
limitations of this Article 7 and for determining the
minimum top-heavy contribution required under Section
16.2(a), Total Compensation paid or made available
during such Limitation Year shall not include any
Elective Deferrals, or any amount which is
contributed or deferred by the Employer at the
election of the Employee and which is not includible
in the gross income of the Employee by reason of Code
ss.125 or ss.457.
7.5 Participation in a Defined Benefit Plan. If the Employer maintains, or
at any time maintained, a Defined Benefit Plan (other than a Paired
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. If the sum of
the Defined Benefit Plan Fraction and the Defined Contribution Plan
Fraction exceeds 1.0 in any Limitation Year, the Plan will satisfy the
1.0 limitation by reducing a Participant's Projected Annual Benefit
under the Defined Benefit Plan.
(a) Repeal of rule. The limitations under this Section 7.5 do not
apply for Limitation Years beginning on or after January 1,
2000. However, the Employer may have continued to apply rules
consistent with this Section 7.5 for Plan Years beginning
after December 31, 1999 and before the Employer first adopted
a plan to comply with the GUST Legislation. If the Employer is
adopting this Plan as a restatement of a prior plan to comply
with the GUST Legislation, the provisions of the prior plan
control for purposes of applying the combined limitation rules
under Codess.415(e) for Limitation Years beginning before the
Effective Date of this Plan. For Limitation Years beginning on
or after the Effective Date of this Plan, the provisions of
this Section 7.5 apply. If for any Limitation Year beginning
prior to the date this Plan is adopted as a GUST restatement,
the Employer did not comply in operation with the provisions
under this Section 7.5 or the provisions of the prior plan, as
applicable, the Employer may document under Appendix B 4 of
the Agreement how the Plan was operated to comply with the
combined limitation rules under Codess.415(e).
(b) Special definitions relating to Section 7.5.
(1) Defined Benefit Plan Fraction: A fraction, the
numerator of which is the sum of the Participant's
Projected Annual Benefit 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
ss.ss.415(b) and (d) or 140 percent of the
Participant's Highest Average Compensation, including
any adjustments under Code ss.415(b).
Notwithstanding the above, if the Participant was a
Participant as of the first day of the first
Limitation Year beginning after December 31, 1986, in
one or more Defined Benefit Plans maintained by the
Employer which were in existence on May 6, 1986, the
denominator of this fraction will not be less than
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 January 1, 1987, disregarding any changes in
the terms and conditions of the plans after May 5,
1986. The preceding sentence applies only if the
Defined Benefit Plans individually and in the
aggregate satisfied the requirements of Code ss.415
for all Limitation Years beginning before January 1,
1987.
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(C)Copyright 2001 SunTrust Bank Basic Plan Document
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If the Plan is a Top-Heavy Plan for any Plan Year,
100% will be substituted for 125% in the prior
paragraph, unless in Part 13, #54.b. of the Agreement
[Part 13, #72.b. of the 401(k) Agreement], the
Employer provides an extra minimum top-heavy
allocation or benefit in accordance with Code
ss.416(h) and the regulations thereunder. In any
event, if the Top-Heavy Ratio exceeds 90%, then 100%
will always be substituted for 125% in the prior
paragraph.
(2) 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 Employee
After-Tax 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 under Code
ss.419(e)), individual medical accounts (as defined
under Code ss.415(l)(2)), and SEPs (as defined under
Code ss.408(k)) maintained by the Employer, and the
denominator of which is the sum of the maximum
aggregate amount for the current and all prior
Limitation Years during which the Participant
performed service with the Employer (regardless of
whether a Defined Contribution Plan was maintained by
the Employer during such years). The maximum
aggregate amount in any Limitation Year is the lesser
of: (i) 125 percent of the Defined Contribution
Dollar Limitation in effect under Code
ss.415(c)(l)(A) (as determined under Code
ss.ss.415(b) and (d)) for such Limitation Year or
(ii) 35 percent of the Participant's Total
Compensation for such Limitation Year.
If the Plan is a Top-Heavy Plan for any Plan Year,
100% will be substituted for 125% unless in Part 13,
#54.b. of the Agreement [Part 13, #72.b. of the
401(k) Agreement], the Employer provides an extra
minimum top-heavy allocation or benefit in accordance
with Code ss.416(h) and the regulations thereunder.
In any event, if the Top-Heavy Ratio exceeds 90%,
then 100% will always be substituted for 125%.
If the Employee was a Participant as of the end of
the first day of the first Limitation Year beginning
after December 31, 1986, in one or more Defined
Contribution Plans maintained by the Employer which
were in existence on May 6, 1986, the numerator of
this fraction will be adjusted if the sum of this
fraction and the Defined Benefit Plan Fraction would
otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment, an amount equal to the product
of (i) the excess of the sum of the fractions over
1.0 times (ii) the denominator of this fraction, will
be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the
fractions as they would be computed as of the end of
the last Limitation Year beginning before January 1,
1987, and disregarding any changes in the terms and
conditions of the Plan made after May 5, 1986, but
using the Code ss.415 limitation applicable to the
first Limitation Year beginning on or after January
1, 1987.
The Annual Additions for any Limitation Year
beginning before January 1, 1987 shall not be
recomputed to treat all Employee After-Tax
Contributions as Annual Additions.
(3) Highest Average Compensation: The average Total
Compensation for the three consecutive years of
service with the Employer that produces the highest
average.
(4) Projected Annual Benefit: The annual retirement
benefit (adjusted to an actuarially equivalent
straight life annuity if such benefit is expressed in
a form other than a straight life annuity or
Qualified Joint and Survivor Annuity) to which the
Participant would be entitled under the terms of the
Plan assuming:
(i) the Participant will continue employment
until Normal Retirement Age under the Plan
(or current age, if later), and
(ii) the Participant's Total 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.
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
48
ARTICLE 8
PLAN DISTRIBUTIONS
Except as provided under Article 9 (Joint and Survivor Annuity Requirements),
this Article 8 governs all distributions to Participants under the Plan.
Sections 8.1 and 8.2 set forth the available distribution options under the Plan
and the amount available for distribution. Section 8.3 sets forth the
Participants' distribution options following termination of employment, Section
8.4 discusses the distribution options upon a Participant's death, and Sections
8.5 and 8.6 set forth the in-service distribution options under the Plan,
including the conditions for receiving a Hardship distribution. Parts 9 and 10
of the Agreement contain the elective provisions for the Employer to identify
the timing of distributions and the permitted distribution events under the
Plan.
8.1 Distribution Options. A Participant who terminates employment with the
Employer may receive a distribution of his/her vested Account Balance
at the time and in the manner designated under Part 9 of the Agreement.
A Participant may receive an in-service distribution prior to his/her
termination of employment with the Employer only to the extent
permitted under Part 10 of the Agreement.
Distributions from the Plan will be made in the form of a lump sum of
the Participant's entire vested Account Balance, a single sum
distribution of a portion of the Participant's vested Account Balance,
installments, annuity payments, or other form as selected under Part 11
of the Agreement. Unless provided otherwise under Part 11 of the
Agreement, a Participant may select any combination of the available
distribution forms.
If the Employer elects to permit a single sum distribution of a portion
of the Participant's vested Account Balance, the Employer may limit the
availability or frequency of subsequent withdrawals under Part 11,
#40.f. of the Nonstandardized Agreement [Part 11, #58.f. of the
Nonstandardized 401(k) Agreement]. If the Employer elects under Part 11
of the Agreement to permit installment payments as an optional form of
distribution, the Participant (and spouse, if applicable) may elect to
receive installments in monthly, quarterly, semi-annual, or annual
payments over a period not exceeding the Life Expectancy of the
Participant and his/her Designated Beneficiary. The Participant may
elect at any time to accelerate the payment of all, or any portion, of
an installment distribution. If the Employer elects under Part 11 of
the Agreement to permit annuity payments, such annuity payments may not
be in a form that will provide for payments over a period extending
beyond either the life of the Participant (or the lives of the
Participant and his/her designated Beneficiary) or the life expectancy
of the Participant (or the life expectancy of the Participant and
his/her designated Beneficiary). The Employer may restrict the
availability of installment payments or annuity payments under Part 11,
#40.f. of the Nonstandardized Agreement [Part 11, #58.f. of the
Nonstandardized 401(k) Agreement].
If the Plan is subject to the Joint and Survivor Annuity requirements
under Article 9, the Plan must make distribution in the form of a QJSA
(as defined in Section 9.4(a)) unless the Participant (and spouse, if
the Participant is married) elects an alternative distribution form in
accordance with Section 9.4(d). (See Section 9.1 for the rules
regarding the application of the Joint and Survivor Annuity
requirements.)
8.2 Amount Eligible for Distribution. For purposes of determining the
amount a Participant may receive as a distribution from the Plan, a
Participant's Account Balance is determined as of the Valuation Date
(as specified in Part 12 of the Agreement) which immediately precedes
the date the Participant receives his/her distribution from the Plan.
For this purpose, the Participant's Account Balance must be increased
for any contributions allocated to the Participant's Account since the
most recent Valuation Date and must be reduced for any distributions
the Participant received from the Plan since the most recent Valuation
Date. A Participant does not share in any allocation of gains or losses
attributable to the period between the Valuation Date and the date of
the distribution under the Plan, unless provided otherwise under Part
12 of the Agreement or under uniform funding and valuation procedures
established by the Plan Administrator. In the case of a
Participant-directed Account, the determination of the value of the
Participant's Account for distribution purposes is subject to the
funding and valuation procedures applicable to such directed Account.
8.3 Distributions After Termination of Employment. Subject to the required
minimum distribution provisions under Article 10, a Participant whose
employment with the Employer is terminated for any reason, other than
death, is entitled to receive a distribution of his/her vested Account
Balance in accordance with this Section 8.3 as of the date selected in
Part 9 of the Agreement. If a Participant dies while employed by the
Employer, or dies before distribution of his/her vested Account Balance
is completed, distribution will be made in accordance with Section 8.4.
(a) Account Balance exceeding $5,000. If a Participant's entire
vested Account Balance exceeds $5,000 at the time of
distribution, the Participant may elect to receive a
distribution of his/her vested Account Balance in any form
permitted under Part 11 of the Agreement at the time indicated
under Part 9, #33 of the Agreement [Part 9, #51 of the 401(k)
Agreement]. The Participant must receive proper notice and
must consent in writing, in accordance with Section 8.7, prior
to receiving a distribution from the Plan. If the Participant
does not consent to a distribution upon terminating employment
with the Employer, distribution will be made in accordance
with Article 10. (Also see Section 8.8 for additional notice
requirements.)
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(C)Copyright 2001 SunTrust Bank Basic Plan Document
49
(b) Account Balance not exceeding $5,000. If a Participant's
entire vested Account Balance does not exceed $5,000 at the
time of distribution, the Plan Administrator will distribute
the Participant's entire vested Account Balance in a single
lump sum at the time indicated under Part 9, #34 of the
Agreement [Part 9, #52 of the 401(k) Agreement]. Although the
Participant need not consent to receive a distribution under
this subsection (b), the Participant must receive the notice
described in Section 8.8 (if applicable) prior to receiving
the distribution from the Plan. The Employer may modify the
rule under this subsection (b) by electing under Part 9,
#37.a. of the Agreement [Part 9, #55.a. of the 401(k)
Agreement] to require Participant consent prior to a
distribution from the Plan, without regard to whether the
Participant's vested Account Balance exceeds $5,000 at the
time of distribution.
(c) Permissible distribution events under a 401(k) plan. A
Participant may not receive a distribution of Section 401(k)
Deferrals, QNECs, QMACs and Safe Harbor Contributions under
this Section 8.3 unless the Participant satisfies one of the
following conditions:
(1) The Participant has a "separation from service" with
the Employer. For this purpose, a separation from
service occurs when an Employee terminates employment
with the Employer. If a Participant changes jobs as a
result of the Employer's liquidation, merger,
consolidation, or other similar transaction, a
distribution may be made to the Participant if the
Plan Administrator determines the Participant has
incurred a separation from service in accordance with
rules promulgated under the Code or regulations, or
by reason of a ruling or other published guidance
from the IRS. A Participant may not receive a
distribution by reason of separation from service, or
continue to receive an installment distribution based
on separation from service, if prior to the time the
distribution is made from the Plan, the Participant
returns to employment with the Employer.
(2) The Employer is a corporation and the Employer sells
substantially all of the assets of a trade or
business (within the meaning of ss.409(d)(2) of the
Code) to an unrelated corporation, provided the
purchaser does not continue to maintain the Plan with
respect to the Participant after the sale and the
Participant becomes employed by the unrelated
corporation as a result of the sale and the
distribution is made by the end of the second
calendar year after the year of the sale. For this
purpose, an Employer is deemed to have sold
substantially all of the assets of a trade or
business if it sells 85% or more of the total assets
of such trade or business.
(3) The Employer is a corporation and the Employer sells
a subsidiary to an unrelated corporation, provided
the purchaser does not continue to maintain the Plan
with respect to the Participant after the sale and
the Participant continues to be employed by the
unrelated corporation after the sale and the
distribution is made by the end of the second
calendar year after the year of the sale.
(d) Disabled Participant. A terminated Employee who is Disabled at
the time of termination, or who becomes Disabled after
terminating employment with the Employer, generally is
entitled to a distribution in the time and manner specified in
Part 9 of the Agreement. However, if so elected in Part 9, #35
of the Agreement [Part 9, #53 of the 401(k) Agreement], a
terminated Employee who is Disabled at the time of
termination, or who becomes Disabled after terminating
employment with the Employer, is entitled to a distribution in
the time and manner specified in Part 9, #35 of the Agreement
[Part 9, #53 of the 401(k) Agreement], to the extent such
election will result in an earlier distribution than would
otherwise be available under Part 9 of the Agreement.
(e) Determining whether vested Account Balance exceeds $5,000. For
distributions made on or after October 17, 2000, the
determination of whether a Participant's vested Account
Balance exceeds $5,000 is based on the value of the
Participant's Account as of the most recent Valuation Date. In
determining the value of a Participant's Account for
distributions made before October 17, 2000, the "lookback
rule" may apply. If the lookback rule applies, the
Participant's vested Account Balance is deemed to exceed
$5,000 for purposes of applying the provisions under this
Article 8 and Article 9.
For distribution made after March 21, 1999 and before October
17, 2000, the "lookback rule" is applicable to a distribution
to a Participant if the Participant previously received a
distribution when his/her vested Account Balance exceeded
$5,000, and either subsection (1) or (2) applies.
(1) The distribution is subject to the Joint and Survivor
Annuity requirements of Article 9.
(2) The distribution is not subject to the Joint and
Survivor Annuity requirements of Article 9, but a
periodic distribution method (e.g., an installment
distribution) is currently in effect with respect to
the Participant's vested Account Balance, at least
one scheduled payment still remains, and when the
first periodic payment was made under such election,
the vested Account Balance exceeded $5,000.
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For distributions made before March 21, 1999, the lookback
rule applies to all distributions, without regard to
subsections (1) and (2) above. However, the Plan does not fail
to satisfy the requirements of this subsection (e) if, prior
to the adoption of this Plan, the lookback rule was applied to
all distributions (without regard to the limitations described
in subsections (1) and (2) above), or if the limitations
described in subsections (1) and (2) above were applied to
distributions made before March 22, 1999 but in a Plan Year
beginning after August 5, 1997.
(f) Effective date of $5,000 vested Account Balance rule. The
provisions under this Article 8 and Article 9 which refer to a
$5,000 vested Account Balance are effective for Plan Years
beginning after August 5, 1997, unless a later effective date
is specified in the GUST provisions under Appendix B 3.a. of
the Agreement. For plan years beginning prior to August 6,
1997 (or any later effective date specified in Appendix B 3.a.
of the Agreement) any reference under this Article 8 or
Article 9 to a $5,000 vested Account Balance should be applied
by replacing $5,000 with $3,500.
8.4 Distribution upon the Death of the Participant. The death benefit
payable with respect to a deceased Participant depends on whether the
Participant dies after distribution of his Account Balance has
commenced (see subsection (a) below) or before distribution commences
(see subsection (b) below).
(a) Post retirement death benefit. If a Participant dies after
commencing distribution of his/her benefit under the Plan, the
death benefit is the benefit payable under the form of payment
that has commenced. If a Participant commences distribution
prior to death only with respect to a portion of his/her
Account Balance, then the rules in subsection (b) apply to the
rest of the Account Balance.
(b) Pre retirement death benefit. If a Participant dies before
commencing distribution of his/her benefit under the Plan, the
death benefit that is payable depends on whether the value of
the death benefit exceeds $5,000 and whether the Joint and
Survivor Annuity requirements of Article 9 apply. If there is
both a QPSA death benefit and a non QPSA death benefit, each
death benefit is valued separately to determine whether it
exceeds $5,000. For death benefits distributed before the
$5,000 rule described in Section 8.3(f) is effective,
substitute $3,500 for $5,000.
(1) Death benefit not exceeding $5,000. If the value of
the pre-retirement death benefit does not exceed
$5,000, it shall be paid in a single sum as soon as
administratively feasible after the Participant's
death.
(2) Death benefit that exceeds $5,000. If the value of
the pre-retirement death benefit exceeds $5,000, the
payment of the death benefit will depend on whether
the Joint and Survivor Annuity requirements apply.
(i) If the Joint and Survivor Annuity
requirements do not apply. In this case, the
entire death benefit is payable in the form
and at the time described below in
subsection (ii)(B).
(ii) If the Joint and Survivor Annuity
requirements apply. In this case, the death
benefit consists of a QPSA death benefit
(see Section 9.3) and, if the QPSA is
defined to be less than 100% of the
Participant's vested Account Balance, a
non-QPSA death benefit. The QPSA death
benefit is payable in accordance with
subsection (A) below, unless the Participant
has waived such death benefit under the
waiver procedures described in Section
9.4(d). In the event there is a proper
waiver of the QPSA death benefit, then such
portion of the death benefit is payable in
the same manner as the non-QPSA death
benefit. The non-QPSA death benefit is
payable in the form and at the time
described below in subsection (B).
(A) QPSA death benefit. If the
pre-retirement death benefit is
payable in the QPSA form, then it
shall be paid in accordance with
Article 9. If the QPSA death
benefit has not been waived, but
the surviving spouse elects a
different form of payment, then
distribution of the QPSA death
benefit is made in accordance with
the form of payment elected by the
spouse, provided such form of
payment is available under Section
8.1. The surviving spouse may
request the payment of the QPSA
death benefit (in the QPSA form or
in the form elected by the
surviving spouse) as soon as
administratively feasible after the
death of the Participant. However,
payment of the death benefit will
not commence without the consent of
the surviving spouse prior to the
date the Participant would have
reached Normal Retirement Age (or
age 62, if later). If the QPSA
death benefit has been waived, in
accordance with the procedures in
Article 9, then the portion of the
Participant's vested Account
Balance that would have been
payable as a QPSA death benefit in
the absence of such a waiver is
treated as a death benefit payable
under subsection (B).
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(B) Non-QPSA death benefits. Any
pre-retirement death benefit not
described in subsection (A) is
payable under this paragraph. Such
death benefit is payable in lump
sum as soon as administratively
feasible after the Participant's
death. However, the death benefit
may be payable in a different form
if prescribed by the Participant's
Beneficiary designation, or if the
Beneficiary, before a lump sum
payment of the benefit is made,
requests an election as to the form
of payment. An alternative form of
payment must be one that is
available under Section 8.1.
(3) Minimum distribution requirements. In no event will
any death benefit be paid in a manner that is
inconsistent with the minimum distribution
requirements of Section 10.2. In addition, the
Beneficiary of any pre-retirement death benefit
described above in subsection (2) may postpone the
commencement of the death benefit to a date that is
not later than the latest commencement date permitted
under Section 10.2, unless such election is
prohibited in Part 9, #37.b. of the Agreement [Part
9, #55.b. of the 401(k) Agreement].
(c) Determining a Participant's Beneficiary. A Participant may
designate a Beneficiary to receive the death benefits
described in this Section 8.4. Any Beneficiary designation is
subject to the rules under subsections (1) (4) below. A
Participant may change or revoke a Beneficiary designation at
any time by filing a new designation with the Plan
Administrator. Any new Beneficiary designation is subject to
the spousal consent rules described below, unless the spouse
specifically waives such right under a general consent as
authorized under Section 9.4(d). Unless specified otherwise in
the Participant's designated beneficiary election form, if a
Beneficiary does not predecease the Participant but dies
before distribution of the death benefit is made to the
Beneficiary, the death benefit will be paid to the
Beneficiary's estate.
The Plan Administrator may request proper proof of the
Participant's death and may require the Beneficiary to provide
evidence of his/her right to receive a distribution from the
Plan in any form or manner the Plan Administrator may deem
appropriate. The Plan Administrator's determination of the
Participant's death and of the right of a Beneficiary to
receive payment under the Plan shall be conclusive. If a
distribution is to be made to a minor or incompetent
Beneficiary, payments may be made to the person's legal
guardian, conservator, or custodian in accordance with the
Uniform Gifts to Minors Act or similar law as permitted under
the laws of the state where the Beneficiary resides. The Plan
Administrator or Trustee will not be liable for any payments
made in accordance with this subsection (c) and are not
required to make any inquiries with respect to the competence
of any person entitled to benefits under the Plan.
If a Participant designates his/her spouse as Beneficiary and
subsequent to such Beneficiary designation, the Participant
and spouse are divorced or legally separated, the designation
of the spouse as Beneficiary under the Plan is automatically
rescinded unless specifically provided otherwise under a
divorce decree or QDRO, or unless the Participant enters into
a new Beneficiary designation naming the prior spouse as
Beneficiary.
(1) Spousal consent to Beneficiary designation:
post-retirement death benefit. If a Participant is
married at the time distribution commences to the
Participant, the Beneficiary of any post-retirement
death benefit is the Participant's surviving spouse,
regardless of whether the Joint and Survivor Annuity
requirements under Article 9 apply, unless there is
no surviving spouse or the spouse has consented to
the Beneficiary designation in a manner that is
consistent with the requirements for a Qualified
Election under Section 9.4(d), or makes a valid
disclaimer of the benefit. If the Joint and Survivor
Annuity requirements apply, the spouse is determined
as of the Distribution Commencement Date for purposes
of this spousal consent requirement. If the Joint and
Survivor Annuity requirements do not apply, the
spouse is determined as of the Participant's date of
death for purposes of this spousal consent
requirement.
(2) Spousal consent to Beneficiary designation:
pre-retirement death benefit. The rules for spousal
consent depend on whether the Joint and Survivor
Annuity requirements in Article 9 apply.
(i) If the Joint and Survivor Annuity
requirements apply. In this case, the QPSA
death benefit will be payable in accordance
with Section 9.3. The QPSA death benefit may
be payable to a non-spouse Beneficiary only
if the spouse consents to the Beneficiary
designation, pursuant to the Qualified
Election requirements under Section 9.4(d),
or makes a valid disclaimer. The non-QPSA
death benefit, if any, is payable to the
person named in the Beneficiary designation,
without regard to whether spousal consent is
obtained for such designation. If a spouse
does not properly consent to a Beneficiary
designation, the QPSA waiver is invalid, and
the QPSA death benefit is still payable to
the spouse, but the Beneficiary designation
remains valid with respect to any non-QPSA
death benefit.
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(ii) If the Joint and Survivor Annuity
requirements do not apply. In this case, the
surviving spouse (determined at the time of
the Participant's death), if any, must be
treated as the sole Beneficiary, regardless
of any contrary Beneficiary designation,
unless there is no surviving spouse, or the
spouse has consented to the Beneficiary
designation in a manner that is consistent
with the requirements for a Qualified
Election under Section 9.4(d) or makes a
valid disclaimer.
(3) Default beneficiaries. To the extent a Beneficiary
has not been named by the Participant (subject to the
spousal consent rules discussed above) and is not
designated under the terms of this Plan to receive
all or any portion of the deceased Participant's
death benefit, such amount shall be distributed to
the Participant's surviving spouse (if the
Participant was married at the time of death). If the
Participant does not have a surviving spouse at the
time of death, distribution will be made to the
Participant's surviving children, in equal shares. If
the Participant has no surviving children,
distribution will be made to the Participant's
estate. The Employer may modify the default
beneficiary rules described in this subparagraph by
addition attaching appropriate language as an
addendum to the Agreement.
(4) One-year marriage rule. The Employer may elect under
Part 11, #41.c. of the Agreement [Part 11, #59.c. of
the 401(k) Agreement], for purposes of applying the
provisions of this Section 8.4, that an individual
will not be considered the surviving spouse of the
Participant if the Participant and the surviving
spouse have not been married for the entire one-year
period ending on the date of the Participant's death.
8.5 Distributions Prior to Termination of Employment.
(a) Employee After Tax Contributions, Rollover Contributions, and
transfers. A Participant may withdraw at any time, upon
written request, all or any portion of his/her Account Balance
attributable to Employee After Tax Contributions or Rollover
Contributions. Any amounts transferred to the Plan pursuant to
a Qualified Transfer (as defined in Section 3.3(d)) also may
be withdrawn at any time pursuant to a written request. No
forfeiture will occur solely as a result of an Employer's
withdrawal of Employee After Tax Contributions. The Employer
may elect in Part 10, #39.d. of the Nonstandardized Agreement
[Part 10, #57.d. of the Nonstandardized 401(k) Agreement] to
modify the availability of in service withdrawals of Employee
After Tax Contributions, Rollover Contributions, or Qualified
Transfers.
With respect to transfers (other than Qualified Transfers) and
subject to the restrictions on distributions of transferred
assets under Section 3.3, a Participant may request a
distribution of all or any portion of his/her Transfer Account
only as permitted under this Article with respect to
contributions of the same type as are being withdrawn.
(b) Employer Contributions. Except as provided in Section 14.10
dealing with defaulted Participant loans, a Participant may
receive a distribution of all or any portion of his/her vested
Account Balance attributable to Employer Contributions prior
to termination of employment only as permitted under Part 10
of the Agreement. If the Joint and Survivor Annuity
requirements under Article 9 apply to the Participant, the
Participant's spouse (if the Participant is married at the
time of distribution) must consent to a distribution in
accordance with Section 9.2.
The Employer may elect under the profit sharing or 401(k) plan
Agreement to permit in-service distributions of Employer
Contributions (other than Section 401(k) Deferrals, QMACs,
QNECs, and Safe Harbor Contributions) upon the occurrence of a
specified event or upon the completion of a certain number of
years. In no case, however, may a distribution that is made
solely on account of the completion of a designated number of
years be made with respect to Employer Contributions that have
been accumulated in the Plan for less than 2 years. This rule
does not apply if the Participant has been an Eligible
Participant in the Plan for at least 5 years. An in-service
distribution may be made on account of a specified event
(other than the completion of a designated number of years) at
any time, if authorized under Part 10 of the Agreement.
If a Participant with a partially vested benefit receives an
in-service distribution under the Plan, the special vesting
schedule under Section 4.8 must be applied to determine the
Participant's vested percentage in his/her remaining Account
Balance. This special vesting schedule will not apply if the
Employer limits the availability of in-service distributions
under Part 10 of the Agreement to Participants who are 100%
vested.
(c) Section 401(k) Deferrals, Qualified Nonelective Contributions,
Qualified Matching Contributions, and Safe Harbor
Contributions. If the Employer has adopted the 401(k)
Agreement, a Participant may receive an in service
distribution of all or any portion of his/her Section 401(k)
Deferral Account, QMAC Account, QNEC Account, Safe Harbor
Matching Contribution Account and Safe Harbor Nonelective
Contribution Account only as permitted under Part 10 of the
Agreement. No provision in this Plan or in Part 10 of the
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Agreementmay be interpreted to permit a Participant to receive
a distribution of such amounts prior to the occurrence of one
of the following events:
(1) the Participant becoming Disabled;
(2) the Participant's attainment of age 59 1/2;
(3) the Participant's Hardship (as defined in Section
8.6).
(d) Corrective distributions. Nothing in this Article 8 precludes
the Plan Administrator from making a distribution to a
Participant, to the extent such distribution is made to
correct a qualification defect in accordance with the
corrective procedures under the IRS' voluntary compliance
programs. Thus, for example, nothing in this Article 8 would
preclude the Plan from making a corrective distribution to an
Employee who received contributions under the Plan prior to
becoming an Eligible Participant. Any such distribution must
be made in accordance with the correction procedures
applicable under the IRS' voluntary correction programs.
8.6 Hardship Distribution. To the extent permitted under Part 10 of the
Agreement, a Participant may receive an in-service distribution on
account of a Hardship. The Employer may elect under Part 10, #38.c. of
the Agreement [Part 10, #56.c. of the 401(k) Agreement] to permit a
Hardship distribution only if the Participant satisfies the safe harbor
Hardship requirements under subsection (a) below. Alternatively, the
Employer may elect under Part 10, #38.d. of the Agreement [Part 10,
#56.d. of the 401(k) Agreement] to permit a Hardship distribution of
Employer Contributions (other than Section 401(k) Deferrals) in
accordance with the requirements of subsection (b) below. A Hardship
distribution of Section 401(k) Deferrals must meet the requirements of
a safe harbor Hardship as described under subsection (a) below. A
Hardship distribution under this Section 8.6 is not available for
QNECs, QMACs or Safe Harbor Contributions.
(a) Safe harbor Hardship distribution. To qualify for a safe
harbor Hardship, a Participant must demonstrate an immediate
and heavy financial need, as described in subsection (1), and
must satisfy the conditions described in subsection (2).
(1) Immediate and heavy financial need. To be considered
an immediate and heavy financial need, the Hardship
distribution must be made on account of one of the
following events:
(i) the incurrence of medical expenses (as
described in ss.213(d) of the Code), of the
Participant, the Participant's spouse or
dependents;
(ii) the purchase (excluding mortgage payments)
of a principal residence for the
Participant;
(iii) payment of tuition and related educational
fees (including room and board) for the next
12 months of post-secondary education for
the Participant, the Participant's spouse,
children or dependents;
(iv) to prevent the eviction of the Participant
from, or a foreclosure on the mortgage of,
the Participant's principal residence; or
(v) any other event that the IRS recognizes as a
safe harbor Hardship distribution event
under ruling, notice or other guidance of
general applicability.
A Participant must provide the Plan Administrator
with a written request for a Hardship distribution.
The Plan Administrator may require written
documentation, as it deems necessary, to sufficiently
document the existence of a proper Hardship event.
(2) Conditions for taking a safe harbor Hardship
withdrawal. A Participant may receive a safe harbor
Hardship withdrawal only if all of the following
conditions are satisfied.
(i) The Participant has obtained all available
distributions, other than Hardship
distributions, and all nontaxable loans
under the Plan and all other qualified plans
maintained by the Employer.
(ii) The Participant is suspended from making any
Section 401(k) Deferrals (and any Employee
After-Tax Contributions) under the Plan or
any other plans (other than welfare benefit
plans) maintained by the Employer for 12
months after the receipt of the Hardship
distribution.
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
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(iii) The distribution is not in excess of the
amount of the immediate and heavy financial
need (including amounts necessary to pay any
federal, state or local income taxes or
penalties reasonably anticipated to result
from the distribution).
(iv) The limitation on Elective Deferrals under
Code ss.402(g) for the Participant for the
taxable year immediately following the
taxable year of the Hardship distribution is
reduced by the amount of any Elective
Deferrals the Participant made during the
taxable year of the Hardship distribution.
(b) Non safe harbor Hardship distribution. The Employer may elect
under Part 10, #38.d. of the Agreement [Part 10, #56.d. of the
401(k) Agreement] to permit a Hardship distribution of
Employer Contributions (other than Section 401(k) Deferrals)
on account of an immediate and heavy financial need (as
described in subsection (a)(1) above), but without regard to
the requirements of subsection (a)(2) above. Solely for the
purpose of applying this subsection (b), a Hardship
distribution will be on account of an immediate and heavy
financial need if such Hardship distribution is made to pay
for funeral expenses for a family member of the Participant or
upon the Participant's Disability. The Employer may add other
permitted Hardship events under Part 10, #39.d. of the
Nonstandardized Agreement [Part 10, #57.d. of the
Nonstandardized 401(k) Agreement]. A non safe harbor Hardship
distribution is not available for Section 401(k) Deferrals,
QNECs, QMACs, or Safe Harbor Contributions.
(c) Amount available for distribution. A Participant may receive a
Hardship distribution of any portion of his/her vested
Employer Contribution Account or Employer Matching
Contribution Account (including earnings thereon), as
permitted under Part 10 of the Agreement. A Participant may
receive a Hardship distribution of any portion of his/her
Section 401(k) Deferral Account, if permitted under Part 10 of
the Agreement, provided such distribution, when added to other
Hardship distributions from Section 401(k) Deferrals, does not
exceed the total Section 401(k) Deferrals the Participant has
made to the Plan (increased by income allocable to such
Section 401(k) Deferrals that was credited by the later of
December 31, 1988 or the end of the last Plan Year ending
before July 1, 1989). A Participant may not receive a Hardship
distribution from his/her QNEC Account, QMAC Account, Safe
Harbor Nonelective Contribution Account or Safe Harbor
Matching Contribution Account.
8.7 Participant Consent. If the value of a Participant's entire vested
Account Balance exceeds $5,000 (as determined in accordance with
Section 8.3(e)), the Participant must consent to any distribution of
such Account Balance prior to his/her Required Beginning Date (as
defined in Section 10.3(a)). The Employer may modify this provision
under Part 9, #37.b. of the Agreement [Part 9, #55.b. of the 401(k)
Agreement] to provide for automatic distribution to a terminated
Participant (or Beneficiary) as of the date the Participant attains (or
would have attained if not deceased) the later of Normal Retirement Age
or age 62. A Participant must consent in writing to a distribution
under this Section 8.7 within the 90-day period ending on the
Distribution Commencement Date (as defined in Section 22.56). If the
Participant is subject to the Joint and Survivor Annuity requirements
under Article 9 of this Plan, the Participant's spouse (if the
Participant is married at the time of the distribution) also must
consent to the distribution in accordance with Section 9.2. If the
distribution is an Eligible Rollover Distribution, the Participant must
also direct the Plan Administrator as to whether he/she wants a Direct
Rollover and if so, the name of the Eligible Retirement Plan to which
the distribution will be made. (See Section 8.8 for more information
regarding the Direct Rollover rules.)
(a) Participant notice. Prior to receiving a distribution from the
Plan, the Participant must be notified of his/her right to
defer any distribution from the Plan in accordance with the
provisions under Article 10 of this BPD. The notification
shall include a general description of the material features
and the relative values of the optional forms of benefit
available under the Plan (consistent with the requirements
under Codess.417(a)(3)). The notice must be provided no less
than 30 days and no more than 90 days prior to the
Participant's Distribution Commencement Date. However,
distribution may commence less than 30 days after the notice
is given, if the Participant is clearly informed of his/her
right to take 30 days after receiving the notice to decide
whether or not to elect a distribution (and, if applicable, a
particular distribution option), and the Participant, after
receiving the notice, affirmatively elects to receive the
distribution prior to the expiration of the 30 day minimum
period. (But see Section 9.5(a) for the rules regarding the
timing of distributions when the Joint and Survivor Annuity
requirements apply.) The notice requirements described in this
paragraph may be satisfied by providing a summary of the
required information, so long as the conditions described in
applicable regulations for the provision of such a summary are
satisfied, and the full notice is also provided (without
regard to the 90 day period described in this subsection).
(b) Special rules. The consent rules under this Section 8.7 apply
to distributions made after the Participant's termination of
employment and to distributions made prior to the
Participant's termination of employment. However, the consent
of the Participant (and the Participant's spouse, if
applicable) shall not be required to the extent that a
distribution is made:
(1) to satisfy the required minimum distribution rules
under Article 10;
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(2) to satisfy the requirements of Code ss.415, as
described in Article 7;
(3) to correct Excess Deferrals, Excess Contributions or
Excess Aggregate Contributions, as described in
Article 17.
In addition, if distributions are being made on account of the
termination of the Plan, and an annuity option is not
available under the Plan, the Participant's Account Balance
will, without the Participant's consent, be distributed to the
Participant, without regard to the value of the Participant's
vested Account Balance, unless the Employer (or any Related
Employer) maintains another Defined Contribution Plan (other
than an employee stock ownership plan as defined in Code
ss.4975(e)(7)). If the Employer or any Related Employer
maintains another Defined Contribution Plan (other than an
employee stock ownership plan), 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 (to the extent consent to
an immediate distribution is otherwise required under this
Section 8.7).
8.8 Direct Rollovers. This Section 8.8 applies to distributions made on or
after January 1, 1993. Notwithstanding any provision in the Plan to the
contrary, a Participant may elect to have all or any portion of an
Eligible Rollover Distribution paid directly to an Eligible Retirement
Plan in a Direct Rollover. If a Participant elects a Direct Rollover of
only a portion of an Eligible Rollover Distribution, the Plan
Administrator may require that the amount being rolled over equals at
least $500.
For purposes of this Section 8.8, a Participant includes a Participant
or former Participant. In addition, this Section applies to any
distribution from the Plan made to a Participant's surviving spouse or
to a Participant's spouse or former spouse who is the Alternate Payee
under a QDRO, as defined in Section 22.151.
If it is reasonable to expect (at the time of the distribution) that
the total amount the Participant will receive as a distribution during
the calendar year will total less than $200, the Employer need not
offer the Participant a Direct Rollover option with respect to such
distribution.
(a) Eligible Rollover Distribution. An Eligible Rollover
Distribution is any distribution of all or any portion of a
Participant's Account Balance, except for the following
distributions:
(1) 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 Beneficiary, or for a specified period
of ten years or more;
(2) any distribution to the extent such distribution is a
required minimum distribution under Article 10;
(3) 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);
(4) an in-service Hardship withdrawal of Section 401(k)
Deferrals, as described in subsection (e) below; and
(5) a distribution made to satisfy the requirements of
Code ss.415, as described in Article 7, or a
distribution to correct Excess Deferrals, Excess
Contributions or Excess Aggregate Contributions, as
described in Article 17.
(b) Eligible Retirement Plan. An Eligible Retirement Plan is:
(1) an individual retirement account described in
ss.408(a) of the Code;
(2) an individual retirement annuity described in
ss.408(b) of the Code;
(3) an annuity plan described in ss.403(a) of the Code;
or
(4) a qualified plan described in ss.401(a) of the Code.
However, in the case of an Eligible Rollover Distribution to a
surviving spouse, an Eligible Retirement Plan is only an
individual retirement account or individual retirement
annuity.
(c) Direct Rollover. A Direct Rollover is a payment made directly
from the Plan to the Eligible Retirement Plan specified by the
Participant. The Plan Administrator may develop reasonable
procedures for accommodating Direct Rollover requests.
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(d) Direct Rollover notice. A Participant entitled to an Eligible
Rollover Distribution must receive a written explanation of
his/her right to a Direct Rollover, the tax consequences of
not making a Direct Rollover, and, if applicable, any
available special income tax elections. The notice must be
provided within the same 30 - 90 day timeframe applicable to
the Participant consent notice under Section 8.7(a). The
Direct Rollover notice must be provided to all Participants,
unless the total amount the Participant will receive as a
distribution during the calendar year is expected to be less
than $200.
If a Participant terminates employment with a total vested
Account Balance of $5,000 or less (as determined under Section
8.3(e)) and the Participant does not respond to the Direct
Rollover notice indicating whether a Direct Rollover is
desired and the name of the Eligible Retirement Plan to which
the Direct Rollover is to be made, the Plan Administrator will
distribute the Participant's entire vested Account Balance (in
accordance with Section 8.3(b)) no earlier than 30 days and no
later than 90 days following the provision of the notice under
Section 8.7. The notice will describe the procedures for
making a default distribution under this paragraph, including
any rules for making a default Direct Rollover to an IRA. Any
default provisions described under the notice must be applied
uniformly and in a nondiscriminatory manner. If the notice
provides for a default Direct Rollover, the default
distribution will be made as a Direct Rollover to the IRA
designated under the notice. The notice must contain pertinent
information regarding the Direct Rollover, including the name,
address, and telephone number of the IRA trustee and
information regarding IRA maintenance and withdrawal fees and
how the IRA funds will be invested. The notice will describe
the timing of the Direct Rollover and the Participant's
ability to affirmatively opt out of the Direct Rollover. The
selection of an IRA trustee, custodian or issuer and the
selection of IRA investments for purposes of a default Direct
Rollover constitutes a fiduciary act subject to the general
fiduciary standards and prohibited transaction provisions of
ERISA.
(e) Special rules for Hardship withdrawals of Section 401(k)
Deferrals. A Hardship withdrawal of Section 401(k) Deferrals
(as described in Codess.401(k)(2)(B)(i)(IV)) is not an
Eligible Rollover Distribution to the extent such withdrawal
is made after December 31, 1998 or, if later, the first day
(but not later than January 1, 2000) that the Plan
Administrator begins to treat such Hardship withdrawals as
ineligible for rollover. Subject to any contrary pronouncement
under statute, regulation or IRS guidance, the Employer may
treat a Hardship withdrawal of Section 401(k) Deferrals as an
Eligible Rollover Distribution if the Participant otherwise
satisfies a non Hardship distribution event described in
Codess.401(k)(2) or (10) at the time of the withdrawal,
regardless of whether the Plan's procedures characterizes such
distribution as a Hardship withdrawal.
8.9 Sources of Distribution. Unless provided otherwise in separate
administrative provisions adopted by the Plan Administrator, in
applying the distribution provisions under this Article 8,
distributions will be made on a pro rata basis from all Accounts from
which a distribution is permitted under this Article. Alternatively,
the Plan Administrator may permit Participants to direct the Plan
Administrator as to which Account the distribution is to be made.
Regardless of a Participant's direction as to the source of any
distribution, the tax effect of such a distribution will be governed by
Code ss.72 and the regulations thereunder.
(a) Exception for Hardship withdrawals. If the Plan permits a
Hardship withdrawal from both Section 401(k) Deferrals and
Employer Contributions, a Hardship distribution will first be
treated as having been made from a Participant's Employer
Contribution Account and then from the Employer's Matching
Contribution Account, to the extent such Hardship distribution
is available with respect to such Accounts. Only when all
available amounts have been exhausted under the Participant's
Employer Contribution Account and/or Employer Matching
Contribution Account will a Hardship distribution be made from
a Participant's Section 401(k) Deferral Account. The Plan
Administrator may modify this provision in separate
administrative procedures.
(b) In kind distributions. Nothing in this Article precludes the
Plan Administrator from making a distribution in the form of
property, or other in kind distribution
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ARTICLE 9
JOINT AND SURVIVOR ANNUITY REQUIREMENTS
This Article provides rules concerning the application of the Joint and Survivor
Annuity requirements under this Plan. If the Plan is a profit sharing plan or a
401(k) plan, Part 11, #41.b. of the Agreement [Part 11, #59.b. of the 401(k)
Agreement] permits the Employer to apply the Joint and Survivor Annuity
requirements to all Participants under the Plan. If the Employer does not elect
to apply the Joint and Survivor Annuity requirements to all Participants, the
Plan is only subject to the Joint and Survivor Annuity requirements to the
extent required under Section 9.1(b) of this Article.
9.1 Applicability. Except as provided in Section 9.6 below, this Article 9
applies to any distribution received by a Participant under the money
purchase plan Agreement or the target benefit plan Agreement. For a
profit sharing plan or 401(k) plan, the following rules apply.
(a) Election to have requirements apply. If this Plan is a profit
sharing plan or a 401(k) plan, and the Employer elects under
Part 11, #41.b. of the profit sharing plan Agreement or Part
11, #59.b. of the 401(k) Agreement to apply the Joint and
Survivor Annuity requirements, then this Article 9 applies in
the same manner as it does to a money purchase plan or a
target benefit plan.
(b) Election to have requirements not apply. If this Plan is a
profit sharing plan or a 401(k) plan, and the Employer elects
under Part 11, #41.a. of the profit sharing plan Agreement or
Part 11, #59.a. of the 401(k) Agreement not to apply the Joint
and Survivor Annuity requirements, this Article 9 generally
will not apply to distributions from the Plan. However, the
rules of this Article 9 will apply to a Participant under the
following conditions:
(1) the Participant elects to receive his/her benefit in
the form of a life annuity (if a life annuity is a
permissible distribution option under Part 11 of the
Agreement); or
(2) the Participant has received a direct or indirect
transfer of benefits (other than a Qualified Transfer
as defined in Section 3.3(d)) from any plan which was
subject to the Joint and Survivor Annuity
requirements at the time of the transfer (but only to
such transferred benefits); or
(3) the Participant's benefits under the Plan are used to
offset the benefits under another plan of the
Employer that is subject to the Joint and Survivor
Annuity requirements.
Nothing in this subsection (b) prohibits a Plan Administrator
from developing administrative procedures that apply the
spousal consent requirements outlined in this Article 9 to a
Plan that is not otherwise subject to the Joint and Survivor
Annuity requirements. For example, the Plan Administrator may
require under separate administrative procedures to require
spousal consent to Participant distributions or may in a
separate loan procedure require spousal consent prior to
granting a Participant loan, without subjecting the Plan to
the Joint and Survivor Annuity requirements.
(c) Accumulated deductible employee contributions. For purposes of
applying the rules under this Section 9.1, any distribution
from a separate Account under a money purchase plan or a
target benefit plan which is attributable solely to
accumulated deductible employee contributions, as defined in
Code ss.72(o)(5)(B), is treated as a distribution from a
profit sharing plan or 401(k) plan for which the rules under
subsection (b) above apply.
9.2 Qualified Joint and Survivor Annuity (QJSA. If the Joint and Survivor
Annuity requirements apply to a Participant, any distribution from the
Plan to that Participant must be in the form of a QJSA (as defined in
Section 9.4(a)), unless the Participant (and the Participant's spouse,
if the Participant is married) elects to receive the distribution in an
alternative form, as authorized under Part 11 of the Agreement. Any
election of an alternative form of distribution must be pursuant to a
Qualified Election. Only the Participant needs consent (pursuant to
Section 8.7) to the commencement of a distribution in the form of a
QJSA.
9.3 Qualified Preretirement Survivor Annuity (QPSA. If the Joint and
Survivor Annuity requirements apply to a Participant who dies before
the Distribution Commencement Date, the spouse of that Participant is
entitled to receive a QPSA (as defined in Section 9.4(b)), unless the
Participant and spouse have waived the QPSA pursuant to a Qualified
Election. The Employer may elect under Part 11, #41.c. of the Agreement
[Part 11, #59.c. of the 401(k) Agreement] that a surviving spouse is
not entitled to a QPSA benefit if the Participant and surviving spouse
were not married throughout the one year period ending on the date of
the Participant's death. Any portion of a Participant's vested Account
Balance that is not payable to the surviving spouse as a QPSA (or other
form elected by the surviving spouse) constitutes a non-QPSA death
benefit and is payable under the rules described in Section 8.4.
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9.4 Definitions.
(a) Qualified Joint and Survivor Annuity (QJSA). A QJSA is an
immediate annuity payable over the life of the Participant
with a survivor annuity payable over the life of the spouse.
If the Participant is not married as of the Distribution
Commencement Date, the QJSA is an immediate annuity payable
over the life of the Participant. The survivor annuity must
provide for payments to the surviving spouse equal to 50% of
the payments that the Participant is entitled under the
annuity during the joint lives of the Participant and the
spouse. The Employer may elect under Part 11, #41.b. of the
Agreement [Part 11, #59.b. of the 401(k) Agreement] to make
payments to the surviving spouse equal to 100%, 75% or 66 2/3%
(instead of 50%) of the payments the Participant is entitled
to under the annuity.
(b) Qualified Preretirement Survivor Annuity (QPSA). A QPSA is an
annuity payable over the life of the surviving spouse that is
purchased using 50% of the Participant's vested Account
Balance as of the date of death. The Employer may elect under
Part 11, #41.b. of the Agreement [Part 11, #59.b. of the
401(k) Agreement] to provide a QPSA equal to 100% (instead of
50%) of the Participant's vested Account Balance. The
remaining vested Account Balance will be distributed in
accordance with the death distribution provisions under
Section 8.4. To the extent the Participant's vested Account
Balance is derived from Employee After Tax Contributions, the
QPSA will share in the Employee After Tax Contributions in the
same proportion as the Employee After Tax Contributions bear
to the total vested Account Balance of the Participant.
The surviving spouse may elect to have the QPSA distributed at
any time following the Participant's death (subject to the
required minimum distribution rules under Article 10) and may
elect to receive distribution in any form permitted under
Section 8.1 of the Plan. If the surviving spouse fails to
elect distribution upon the Participant's death, the QPSA
benefit will be distributed in accordance with Section 8.4.
(c) Distribution Commencement Date. The Distribution Commencement
Date is the date an Employee commences distributions from the
Plan. If a Participant commences distribution with respect to
a portion of his/her Account Balance, a separate Distribution
Commencement Date applies to any subsequent distribution. If
distribution is made in the form of an annuity, the
Distribution Commencement Date is the first day of the first
period for which annuity payments are made.
(d) Qualified Election. A Participant (and the Participant's
spouse) may waive the QJSA or QPSA pursuant to a Qualified
Election. If it is established to the satisfaction of a plan
representative that there is no spouse or that the spouse
cannot be located, any waiver signed by the Participant is
deemed to be a Qualified Election. For this purpose, a
Participant will be deemed to not have a spouse if the
Participant is legally separated or has been abandoned and the
Participant has a court order to such effect. However, a
former spouse of the Participant will be treated as the spouse
or surviving spouse and any current spouse will not be treated
as the spouse or surviving spouse to the extent provided under
a QDRO.
A Qualified Election is a written election signed by both the
Participant and the Participant's spouse (if applicable) that
specifically acknowledges the effect of the election. The
spouse's consent must be witnessed by a plan representative or
notary public. In the case of a waiver of the QJSA, the
election must designate an alternative form of benefit payment
that may not be changed without spousal consent (unless the
spouse enters into a general consent agreement expressly
permitting the Participant to change the form of payment
without any further spousal consent). In the case of a waiver
of the QPSA, the election must be made within the QPSA
Election Period and the election must designate a specific
alternate Beneficiary, including any class of Beneficiaries or
any contingent Beneficiaries, which may not be changed without
spousal consent (unless the spouse enters into a general
consent agreement expressly permitting the Participant to
change the Beneficiary designation without any further spousal
consent).
Any consent by a spouse under a Qualified Election (or a
determination that the consent of a spouse is not required)
shall be effective only with respect to such spouse. If the
Qualified Election permits the Participant to change a payment
form or Beneficiary designation without any further consent by
the spouse, the Qualified Election must acknowledge that the
spouse has the right to limit consent to a specific form of
benefit or a specific Beneficiary, as applicable, and that the
spouse voluntarily elects to relinquish either or both of such
rights. A Participant or spouse may revoke a prior waiver of
the QPSA benefit at any time before the commencement of
benefits. Spousal consent is not required for a Participant to
revoke a prior QPSA waiver. No consent obtained under this
provision shall be valid unless the Participant has received
notice as provided in Section 9.5 below.
(e) QPSA Election Period. A Participant (and the Participant's
spouse) may waive the QPSA at any time during the QPSA
Election Period. The QPSA Election Period is the period
beginning on the first day of the Plan Year in which the
Participant attains age 35 and ending on the date of the
Participant's death. If a Participant separates from service
prior to the first day of the Plan Year in which age 35 is
attained, with respect to the Account Balance as of the date
of separation, the QPSA Election Period begins on the date of
separation.
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(f) Pre Age 35 Waiver. A Participant who has not yet attained age
35 as of the end of a Plan Year may make a special Qualified
Election to waive, with spousal consent, the QPSA for the
period beginning on the date of such election and ending on
the first day of the Plan Year in which the Participant will
attain age 35. Such election is not valid unless the
Participant receives the proper notice required under Section
9.5 below. QPSA coverage is 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 must satisfy all
the requirements for a Qualified Election.
9.5 Notice Requirements.
(a) QJSA. In the case of a QJSA, the Plan Administrator shall
provide each Participant with a written explanation of: (1)
the terms and conditions of the QJSA; (2) the Participant's
right to make and the effect of an election to waive the QJSA
form of benefit; (3) the rights of the Participant's spouse;
and (4) the right to make, and the effect of, a revocation of
a previous election to waive the QJSA. The notice must be
provided to each Participant under the Plan no less than 30
days and no more than 90 days prior to the Distribution
Commencement Date.
A Participant may commence receiving a distribution in a form
other than a QJSA less than 30 days after receipt of the
written explanation described in the preceding paragraph
provided: (1) the Participant has been provided with
information that clearly indicates that the Participant has at
least 30 days to consider whether to waive the QJSA and elect
(with spousal consent) a form of distribution other than a
QJSA; (2) the Participant is permitted to revoke any
affirmative distribution election at least until the
Distribution Commencement Date or, if later, at any time prior
to the expiration of the 7-day period that begins the day
after the explanation of the QJSA is provided to the
Participant; and (3) the Distribution Commencement Date is
after the date the written explanation was provided to the
Participant. For distributions on or after December 31, 1996,
the Distribution Commencement Date may be a date prior to the
date the written explanation is provided to the Participant if
the distribution does not commence until at least 30 days
after such written explanation is provided, subject to the
waiver of the 30-day period.
(b) QPSA. In the case of a QPSA, the Plan Administrator shall
provide each Participant within the applicable period for such
Participant a written explanation of the QPSA in such terms
and in such manner as would be comparable to the explanation
provided for the QJSA in subsection (a) above. The applicable
period for a Participant is whichever of the following periods
ends last: (1) the period beginning with the first day of the
Plan Year in which the Participant attains age 32 and ending
with the close of the Plan Year preceding the Plan Year in
which the Participant attains age 35; (2) a reasonable period
ending after the individual becomes a Participant; or (3) a
reasonable period ending after the joint and survivor annuity
requirements first apply to the Participant. Notwithstanding
the foregoing, notice must be provided within a reasonable
period ending after separation from service in the case of a
Participant who separates from service before attaining age
35.
For purposes of applying the preceding paragraph, a reasonable
period ending after the enumerated events described in (2) and
(3) is the end of the two-year period beginning one year prior
to the date the applicable event occurs, and ending one year
after that date. In the case of a Participant who separates
from service before the Plan Year in which age 35 is attained,
notice shall be provided within the two-year period beginning
one year prior to separation and ending one year after
separation. If such a Participant thereafter returns to
employment with the employer, the applicable period for such
Participant shall be redetermined.
9.6 Exception to the Joint and Survivor Annuity Requirements. Except as
provided in Section 9.7, this Article 9 does not apply to any
Participant who has not earned an Hour of Service with the Employer on
or after August 23, 1984. In addition, if, as of the Distribution
Commencement Date, the Participant's vested Account Balance (for
pre-death distributions) or the value of the QPSA death benefit (for
post-death distributions) does not exceed $5,000, the Participant or
surviving spouse, as applicable, will receive a lump sum distribution
pursuant to Section 8.4(b)(1), in lieu of any QJSA or QPSA benefits.
(See Section 8.3(e) for special rules for calculating the value of a
Participant's vested Account Balance.)
9.7 Transitional Rules. Any living Participant not receiving benefits on
August 23, 1984, who would otherwise not receive the benefits
prescribed under this Article 9 must be given the opportunity to elect
to have the preceding provisions of this Article 9 apply if such
Participant is credited with at least one Hour of Service under this
Plan or a predecessor plan in a Plan Year beginning on or after January
1, 1976, and such Participant had at least 10 years of vesting service
when he or she separated from service. The Participant must be given
the opportunity to elect to have this Article 9 apply during the period
commencing on August 23, 1984, and ending on the date benefits would
otherwise commence to such Participant. A Participant described in this
paragraph who has not elected to have this Article 9 apply is subject
to the rules in this Section 9.7 instead. Also, a Participant who does
not qualify to elect to have this Article 9 apply because such
Participant does not have at least 10 Years of Service for vesting
purposes is subject to the rules of this Section 9.7.
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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/her
benefits paid in accordance with the following paragraph. The
Participant must be given the opportunity to elect to have this Section
9.7 apply (other than the first paragraph of this Section) during the
period commencing on August 23, 1984, and ending on the date benefits
would otherwise commence to such Participant.
If, under either of the preceding two paragraphs, a Participant is
subject to this Section 9.7, the following rules apply.
(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;
(2) dies on or after Normal Retirement Age while still
working for the Employer;
(3) begins to receive payments on or after the Qualified
Early Retirement Age; or
(4) separates from service on or after attaining Normal
Retirement Age (or the Qualified Early Retirement
Age) and after satisfying the eligibility
requirements for the payment of benefits under the
plan and thereafter dies before beginning to receive
such benefits;
then such benefits will be received under this plan in the
form of a QJSA, unless the Participant has elected otherwise
during the election period. For this purpose, the election
period must begin at least 6 months before the participant
attains Qualified Early Retirement Age and end not more than
90 days before the commencement of benefits. Any election
hereunder will be in writing and may be changed by the
Participant at any time.
(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 that would have
been made to the spouse under the QJSA 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. For this purpose, 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.
(c) Qualified Early Retirement Age. The Qualified Early Retirement
Age is the latest of:
(1) the earliest date, under the plan, on which the
Participant may elect to receive retirement benefits,
(2) the first day of the 120th month beginning before the
Participant reaches Normal Retirement Age, or
(3) the date the Participant begins participation under
the Plan.
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ARTICLE 10
REQUIRED DISTRIBUTIONS
This Article provides for the required commencement of distributions upon
certain events. In addition, this Article places limitations on the period over
which distributions may be made to a Participant or Beneficiary. To the extent
the distribution provisions of this Plan, particularly Articles 8 and 9, are
inconsistent with the provisions of this Article 10, the provisions of this
Article control. Part 13 of the Agreement contains specific elections for
applying the rules under this Article 10.
10.1 Required Distributions Before Death.
(a) Deferred distributions. A Participant must be permitted to
receive a distribution from the Plan no later than the 60th
day after the latest of the close of the Plan Year in which:
(1) the Participant attains age 65 (or Normal Retirement
Age, if earlier);
(2) occurs the 10th anniversary of the year in which the
Participant commenced participation in the Plan; or,
(3) the Participant terminates service with the Employer.
(b) Required minimum distributions. The entire interest of a
Participant must be distributed or begin to be distributed no
later than the Participant's Required Beginning Date (as
defined in Section 10.3(a)) over one of the following periods
(or a combination thereof):
(1) the life of the Participant,
(2) the life of the Participant and a Designated
Beneficiary,
(3) a period certain not extending beyond the Life
Expectancy of the Participant, or
(4) a period certain not extending beyond the joint and
last survivor Life Expectancy of the Participant and
a Designated Beneficiary.
If the Participant's interest is to be distributed over a
period designated under subsection (3) or (4) above, the
amount required to be distributed for each calendar year must
at least equal the quotient obtained by dividing the
Participant's Benefit (as determined under Section 10.3(g)) by
the lesser of (i) the Applicable Life Expectancy or (ii) if
the Participant's Designated Beneficiary is not his/her
spouse, the minimum distribution incidental benefit factor set
forth in Q&A-4 of Prop. Treas. Reg. ss.401(a)(9)-2.
Distributions after the death of the Participant shall be
determined using the Applicable Life Expectancy as the
relevant divisor regardless of the Participant's Designated
Beneficiary.
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 Distribution 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.
If a Participant receives a distribution in the form of an
annuity purchased from an insurance company, distributions
thereunder shall be made in accordance with the requirements
of Code ss.401(a)(9) and the regulations thereunder. For
calendar years beginning before January 1, 1989, if the
Participant's spouse is not the Designated Beneficiary, the
method of distribution selected must ensure that at least 50%
of the Present Value of the amount available for distribution
is paid within the life expectancy of the Participant.
10.2 Required Distributions After Death.
(a) Distribution beginning before death. If the Participant dies
after he/she has begun receiving distributions under Section
10.1(b), the remaining portion of the Participant's vested
Account Balance shall continue to be distributed at least as
rapidly as under the method of distribution being used prior
to the Participant's death.
(b) Distribution beginning after death. Subject to the rules under
Section 8.4(b), if the Participant dies before receiving
distributions under Section 10.1(b), distribution of the
Participant's entire vested Account Balance shall be completed
by December 31 of the calendar year containing the fifth
anniversary of the Participant's death, except to the extent
an election is made to receive distributions in accordance
with subsection (1) or (2) below.
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(1) To the extent any portion of the Participant's vested
Account Balance is payable to a Designated
Beneficiary, distributions may be made over the life
of the Designated Beneficiary or over a period
certain not greater than the Life Expectancy of the
Designated Beneficiary, provided such distributions
begin on or before December 31 of the calendar year
immediately following the calendar year in which the
Participant died.
(2) If the Designated Beneficiary is the Participant's
surviving spouse, he/she may delay the distribution
under subsection (1) until December 31 of the
calendar year in which the Participant would have
attained age 70-1/2, if such date is later than the
date described in subsection (1).
If the Participant has not made an election pursuant to this
subsection (b) by the time of his/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 subsection (b), 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, 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.
For purposes of this subsection (b), if the surviving spouse
dies after the Participant, but before payments to such spouse
begin, the provisions of this subsection (b), with the
exception of subsection (2) above, shall be applied as if the
surviving spouse were the Participant.
(c) Treatment of trust beneficiaries as Designated Beneficiaries.
If a trust is properly named as a Beneficiary under the Plan,
the beneficiaries of the trust will be treated as the
Designated Beneficiaries of the Participant solely for
purposes of determining the distribution period under this
Article 10 with respect to the trust's interests in the
Participant's vested Account Balance. The beneficiaries of a
trust will be treated as Designated Beneficiaries for this
purpose only if, as of the later of the date the trust is
named as a Beneficiary of the Participant or the Participant's
Required Beginning Date (and as of all subsequent periods
during which the trust is named as a Beneficiary of the
Participant), the following requirements are met:
(1) the trust is a valid trust under state law, or would
be but for the fact there is no corpus;
(2) the trust is irrevocable or will, by its terms,
become irrevocable upon the death of the Participant;
(3) the beneficiaries of the trust who are beneficiaries
with respect to the trust's interests in the
Participant's vested Account Balance are identifiable
from the trust instrument; and
(4) the Plan Administrator receives the documentation
described in Question D-7 of Proposed Treas. Reg.
ss.1.401(a)(9)-1, as subsequently amended or finally
adopted.
If the foregoing requirements are satisfied and the Plan
Administrator receives such additional information as it may
request, the Plan Administrator may treat such beneficiaries
of the trust as Designated Beneficiaries.
(d) Trust beneficiary qualifying for marital deduction. If a
Beneficiary is a trust (other than an estate marital trust)
that is intended to qualify for the federal estate tax marital
deduction under Code ss.2056 ("marital trust"), then:
(1) in no event will the annual amount distributed from
the Plan to the marital trust be less than the
greater of:
(i) all fiduciary accounting income with respect
to such Beneficiary's interest in the Plan,
as determined by the trustee of the marital
trust, or
(ii) the minimum distribution required under this
Article 10;
(2) the trustee of the marital trust (or the trustee's
legal representative) shall be responsible for
calculating the amount to be distributed under
subsection (1) above and shall instruct the Plan
Administrator in writing to distribute such amount to
the marital trust;
(3) the trustee of the marital trust may from time to
time notify the Plan Administrator in writing to
accelerate payment of all or any part of the portion
of such Beneficiary's interest that remains to be
distributed, and may also notify the Plan
Administrator to change the frequency of
distributions (but not less often than annually); and
(4) the trustee of the marital trust shall be responsible
for characterizing the amounts so distributed form
the Plan as income or principle under applicable
state laws.
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10.3 Definitions.
(a) Required Beginning Date. A Participant's Required Beginning
Date is the date designated under subsection (1)(i) or (ii)
below, as applicable, unless the Employer elects under Part
13, #52 of the Agreement [Part 13, #70 of the 401(k)
Agreement] to apply the Old Law Required Beginning Date, as
described in subsection (2) below. If the Employer does not
select the Old Law Required Beginning Date under Part 13, #52
of the Agreement [Part 13, #70 of the 401(k) Agreement], the
Required Beginning Date rules under subsection (1) below
apply. (But see Section 10.4 for special rules dealing with
operational compliance with the GUST Legislation.)
(1) "New-law" Required Beginning Date. If the Employer
does not elect to apply the Old-Law Required
Beginning Date under Part 13, #52 of the Agreement
[Part 13, #70 of the 401(k) Agreement], a
Participant's Required Beginning Date under the Plan
is:
(i) For Five-Percent Owners. April 1 that
follows the end of the calendar year in
which the Participant attains age 70-1/2.
(ii) For Participants other than Five-Percent
Owners. April 1 that follows the end of the
calendar year in which the later of the
following two events occurs:
(A) the Participant attains age 70-1/2
or
(B) the Participant retires.
If a Participant is not a Five-Percent Owner for the
Plan Year that ends with or within the calendar year
in which the Participant attains age 70-1/2, and the
Participant has not retired by the end of such
calendar year, his/her Required Beginning Date is
April 1 that follows the end of the first subsequent
calendar year in which the Participant becomes a
Five-Percent Owner or retires.
A Participant may begin in-service distributions
prior to his/her Required Beginning Date only to the
extent authorized under Article 10 and Part 9 of the
Agreement. However, if this Plan were amended to add
the Required Beginning Date rules under this
subsection (1), a Participant who attained age 70-1/2
prior to January 1, 1999 (or, if later, January 1
following the date the Plan is first amended to
contain the Required Beginning Date rules under this
subsection (1)) may receive in-service minimum
distributions in accordance with the terms of the
Plan in existence prior to such amendment.
(2) Old-Law Required Beginning Date. If the Old-Law
Required Beginning Date is elected under Part 13, #52
of the Agreement [Part 13, #70 of the 401(k)
Agreement], the Required Beginning Date for all
Participants will be determined under subsection
(1)(i) above, without regard to the rule in
subsection (1)(ii). The Required Beginning Date for
all Participants under the Plan will be April 1 of
the calendar year following attainment of age 70-1/2.
(b) Five Percent Owner. A Participant is a Five Percent Owner for
purposes of this Section if such Participant is a Five Percent
Owner (as defined in Section 22.88) at any time during the
Plan Year ending with or within the calendar year in which the
Participant attains age 70 1/2. Once distributions have begun
to a Five Percent Owner under this Article, they must continue
to be distributed, even if the Participant ceases to be a Five
Percent Owner in a subsequent year.
(c) Designated Beneficiary. A Beneficiary designated by the
Participant (or the Plan), whose Life Expectancy may be taken
into account to calculate minimum distributions, pursuant to
Code ss.401(a)(9) and the regulations thereunder.
(d) Applicable Life Expectancy. The determination of the
Applicable Life Expectancy depends on whether the term certain
method or the recalculation method is being use to adjust the
Life Expectancy in each Distribution Calendar Year. The
recalculation method may only be used to determine the Life
Expectancy of the Participant and/or the Participant's spouse.
The recalculation method is not available with respect to a
nonspousal Designated Beneficiary.
If the Designated Beneficiary is the Participant's spouse, or
if the Participant's (or surviving spouse's) single life
expectancy is the Applicable Life Expectancy, the term certain
method is used unless the recalculation method is elected by
the Participant (or by the surviving spouse). If the
Designated Beneficiary is not the Participant's spouse, the
term certain method is used to determine the Life Expectancy
of both the Participant and the Designated Beneficiary, unless
the recalculation method is elected by the Participant with
respect to his/her Life Expectancy. The term certain method
will always apply for purposes of determining the
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Applicable Life Expectancy of a nonspousal Designated
Beneficiary. An election to recalculate Life Expectancy (or
the failure to elect recalculation) shall be irrevocable as of
the Participant's Required Beginning Date as to the
Participant (or spouse) and shall apply to all subsequent
years.
If the term certain method is being used, the Life Expectancy
determined for the first Distribution Calendar Year is reduced
by one for each subsequent Distribution Year. If the
recalculation method is used, the following rules apply:
(1) If the Life Expectancy is the Participant's (or
surviving spouse's) single Life Expectancy, the
Applicable Life Expectancy is redetermined for each
Distribution Year based on the Participant's (or
surviving spouse's) age on his/her birthday which
falls in such year.
(2) If the Life Expectancy is a joint and last survivor
Life Expectancy based on the ages of the Participant
and the Participant's spouse, and the recalculation
method is elected with respect to both the
Participant and his/her spouse, the Applicable Life
Expectancy is redetermined for each Distribution Year
based on the ages of the individuals on their
birthdays that fall in such year.
(3) If the Life Expectancy is a joint and last survivor
Life Expectancy based on the ages of the Participant
and the Participant's spouse, and the recalculation
method is elected with respect to only one such
individual, or if the Life Expectancy is a joint and
last survivor Life Expectancy based on the ages of
the Participant and a nonspousal Designated
Beneficiary, and the recalculation method is elected
with respect to the Participant, the Applicable Life
Expectancy is determined in accordance with the
procedures outlined in Prop. Treas. Reg.
ss.1.401(a)(9)-1, E-8(b), or other applicable
guidance.
(e) Life Expectancy. For purposes of determining a Participant's
required minimum distribution amount, Life Expectancy and
joint and last survivor Life Expectancy are computed using the
expected return multiples in Tables V and VI of ss.1.72 9 of
the Income Tax Regulations.
(f) Distribution Calendar Year. A calendar year for which a
minimum distribution is required. For distributions beginning
before the Participant's death, the first Distribution
Calendar Year is the calendar year immediately preceding the
calendar year that contains the Participant's Required
Beginning Date. For distributions beginning after the
Participant's death, the first Distribution Calendar Year is
the calendar year in which distributions are required to begin
pursuant to Section 10.2.
(g) Participant's Benefit. For purposes of determining a
Participant's required minimum distribution, the Participant's
Benefit is determined based on his/her Account Balance as of
the last Valuation Date in the calendar year immediately
preceding the Distribution Calendar Year increased by the
amount of any contributions or forfeitures allocated to the
Account Balance as of dates in the Distribution Calendar Year
after the Valuation Date and decreased by distributions made
in the Distribution Calendar Year after the Valuation Date.
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.
10.4 GUST Elections. If this Plan is being restated to comply with the GUST
Legislation (as defined in Section 22.96), Appendix B-2 of the
Agreement permits the Employer to designate how it operated this Plan
in compliance with the required minimum distribution rules for years
prior to the date the Plan is adopted.
(a) Distributions under Old Law Required Beginning Date rules.
Unless the Employer specifically elects to apply the Old Law
Required Beginning Date rule under Part 13, #52 of the
Agreement [Part 13, #70 of the 401(k) Agreement], the Required
Beginning Date rules (as described in Section 10.3(a)(1))
apply. However, if prior to the adoption of this Prototype
Plan, the terms of the Plan reflected the Old Law Required
Beginning Date rules, minimum distributions for such years are
required to be calculated in accordance with that Old Law
Required Beginning Date, except to the extent any operational
elections described in subsection (b) or (c) below applied.
(b) Option to postpone distributions. For calendar years beginning
after December 31, 1996 and prior to the restatement of this
Plan to comply with the GUST changes, the Plan may have
permitted Participants (other than Five Percent Owners) who
would otherwise have begun receiving minimum distributions
under the terms of the Plan in effect for such years to
postpone receiving their minimum distributions until the
Required Beginning Date under Section 10.3(a)(1), even though
the terms of the Plan (prior to the restatement) did not
permit such an election. Appendix B 2.a. of the Agreement
permits the Employer to specify the years during which
Participants were permitted to postpone receiving minimum
distributions under the Plan. Appendix B 2 need not be
completed if Participants were not provided the option to
postpone
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receiving minimum distributions, either because the Plan used
the "Old Law" Required Beginning Date rules or because the
Plan made distributions under the "New Law" Required Beginning
Date rules and contained other optional forms of benefit under
its general elective distribution provisions that preserved
the optional forms of benefit under the "Old Law Required
Beginning Date" rules.
(c) Election to stop minimum required distributions. A Participant
(other than a Five Percent Owner) who began receiving minimum
distributions in accordance with the Old Law Required
Beginning Date rules under the Plan prior to the date the Plan
was amended to comply with the GUST changes generally must
continue to receive such minimum distributions, even if the
Participant is still employed with the Employer. However,
prior to the restatement of this Plan to comply with the GUST
changes, the Plan may have permitted Participants to stop
minimum distributions if they had not reached the Required
Beginning Date described in Section 10.3(a)(1), even though
the terms of the Plan did not permit such an election. Under
Appendix B 2.b. of the Agreement, the Employer may designate
the year in which Participants were permitted to stop
receiving minimum distributions in accordance with this
subsection (c). A Participant must recommence minimum
distributions as required under the Required Beginning Date
rules applicable under this restated Plan.
A Participant's election to stop and recommence distributions
is subject to the spousal consent requirements under Article 9
(if the Plan is otherwise subject to the Joint and Survivor
Annuity requirements) and is subject to the terms of any
applicable QDRO. The manner in which the Plan must comply with
the spousal consent requirements depends on whether or not the
Employer elects under Appendix B-2.c. of the Agreement to have
the recommencement of benefits constitute a new Distribution
Commencement Date. If the Plan is not otherwise subject to the
Joint and Survivor Annuity requirements, Appendix B-2.c. need
not be completed.
(1) New Distribution Commencement Date. If the Employer
elects under Appendix B-2.c.(1) of the Agreement that
recommencement of benefits will create a new
Distribution Commencement Date, no spousal consent is
required for a Participant to elect to stop
distributions, except where such distributions are
being paid in the form of a QJSA. Where such
distributions are being paid in the form of a QJSA,
in order to comply with this subsection (1), the
person who was the Participant's spouse on the
original Distribution Commencement Date must consent
to the election to stop distributions and the
spouse's consent must acknowledge the effect of the
election. Because there is a new Distribution
Commencement Date upon recommencement of benefits,
the Plan, in order to satisfy this subsection (1),
must comply with all of the requirements of Article 9
upon such recommencement, including payment of a QPSA
(as defined in Section 9.4(b)) if the Participant
dies before the new Distribution Commencement Date.
(2) No new Distribution Commencement Date. If the
Employer elects under Appendix B-2.c.(2) of the
Agreement that recommencement of benefits will not
create a new Distribution Commencement Date, no
spousal consent is required for the Participant to
elect to stop required minimum distributions prior to
retirement. In addition, no spousal consent is
required when payments recommence to the Participant
if:
(i) payments recommence to the Participant with
the same Beneficiary and in a form of
benefit that is the same but for the
cessation of distributions;
(ii) the individual who was the Participant's
spouse on the Distribution Commencement Date
executed a general consent within the
meaning of ss.1.401(a)-20, A-31 of the
regulations; or
(iii) the individual who was the Participant's
spouse on the Distribution Commencement Date
executed a specific consent to waive a QJSA
within the meaning of ss.1.401(a)-20, A-31,
and the Participant is not married to that
individual when benefits recommence.
To qualify under this subsection (2), consent of the
individual who was the Participant's spouse on the
Distribution Commencement Date is required prior to
recommencement of distributions if the Participant
chooses to recommence benefits in a different form
than the form in which benefits were being
distributed prior to the cessation of distributions
or with a different Beneficiary. Consent of the
Participant's spouse is also required if the original
form of distribution was a QJSA (as defined in
Section 9.4(a)) or the spouse originally executed a
specific consent to waive the QJSA within the meaning
of ss.1.401(a)-20, A-31, of the regulations, and the
Participant is still married to that individual when
benefits recommence.
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10.5 Transitional Rule. The minimum distribution requirements in Section
10.2 do not apply if distribution of the Participant's Account Balance
is subject to a TEFRA ss.242(b)(2) election. A TEFRA ss.242(b) election
overrides the required minimum distribution rules only if the following
requirements are satisfied.
(a) The distribution by the Plan is one that would not have
disqualified the Plan under ss.401(a)(9) of the Code as in
effect prior to amendment by the Deficit Reduction Act of
1984.
(b) The distribution is in accordance with a method of
distribution designated by the Participant whose interest in
the Plan is being distributed or, if the Participant is
deceased, by a Beneficiary of such Participant.
(c) Such designation was in writing, was signed by the Participant
or the Beneficiary, and was made before January 1, 1984.
(d) The Participant had accrued a benefit under the Plan as of
December 31, 1983.
(e) The method of distribution designated by the Participant 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 Participant's
death, the Beneficiaries of the Participant listed in order of
priority.
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
Participant.
For any distribution which commences before January 1, 1984, but continues after
December 31, 1983, the Participant, or the Beneficiary, to whom such
distribution is being made, will be presumed to have designated the method of
distribution under which the distribution is being made if the method of
distribution was specified in writing and the distribution satisfies the
requirements in subsections (a) and (e) above.
If a designation is revoked any subsequent distribution must satisfy the
requirements of Code ss.401(a)(9) and the proposed regulations thereunder. If a
designation is revoked subsequent to the date distributions are required to
begin, the Plan must distribute by the end of the calendar year following the
calendar year in which the revocation occurs the total amount not yet
distributed which would have been required to have been distributed to satisfy
Code ss.401(a)(9) and the proposed regulations thereunder, but for the TEFRA
ss.242(b)(2) election. For calendar years beginning after December 31, 1988,
such distributions must meet the minimum distribution incidental benefit
requirements in ss.1.401(a)(9)-2 of the proposed regulations (or other
applicable regulations). Any changes in the designation will be considered to be
a revocation of the designation. However, the mere substitution or addition of
another Beneficiary (one not named in the designation) under the designation
will not be considered to be a revocation of the designation, so long as such
substitution or addition does not alter the period over which distributions are
to be made under the designation, directly or indirectly (for example, by
altering the relevant measuring life). In the case in which an amount is
transferred or rolled over from one plan to another plan, the rules in Questions
J-2 and J-3 of ss.1.401(a)(9)-1 of the proposed regulations (or other applicable
regulations) shall apply.
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ARTICLE 11
PLAN ADMINISTRATION AND SPECIAL OPERATING RULES
This Article describes the duties and responsibilities of the Plan
Administrator. In addition, this Article sets forth default QDRO procedures and
benefit claims procedures, as well as special operating rules when an Employer
is a member of a Related Employer group and when there is a Short Plan Year.
Provisions related to Plan accounting and investments are contained in Article
13.
11.1 Plan Administrator. The Employer is the Plan Administrator, unless the
Employer designates in writing another person or persons as the Plan
Administrator. The Employer may designate the Plan Administrator by
name, by reference to the person or group of persons holding a certain
position, by reference to a procedure under which the Plan
Administrator is designated, or by reference to a person or group of
persons charged with the specific responsibilities of Plan
Administrator. If any Related Employer has executed a Co-Sponsor
Adoption Page, the Employer referred to in this Section is the Employer
that executes the Signature Page of the Agreement.
(a) Acceptance of responsibility by designated Plan Administrator.
If the Employer designates a Plan Administrator other than
itself, the designated Plan Administrator must accept its
responsibilities in writing. The designated Plan Administrator
will serve in a manner and for the time period as agreed upon
with the Employer. If more than one person has the
responsibility of Plan Administrator, the group shall act by
majority vote, but may designate specific persons to act on
the Plan Administrator's behalf.
(b) Resignation of designated Plan Administrator. A designated
Plan Administrator may resign by delivering a written
resignation to the Employer. The Employer may remove a
designated Plan Administrator by delivering a written notice
of removal. If a designated Plan Administrator resigns or is
removed, and no new Plan Administrator is designated, the
Employer is the Plan Administrator.
(c) Named Fiduciary. The Plan Administrator is the Plan's Named
Fiduciary, unless the Plan Administrator specifically names
another person as Named Fiduciary and the designated person
accepts its responsibilities as Named Fiduciary in writing.
11.2 Duties and Powers of the Plan Administrator. The Plan Administrator
will administer the Plan for the exclusive benefit of the Plan
Participants and Beneficiaries, and in accordance with the terms of the
Plan. To the extent the terms of the Plan are unclear, the Plan
Administrator may interpret the Plan, provided such interpretation is
consistent with the rules of ERISA and Code ss.401 and is performed in
a uniform and nondiscriminatory manner. This right to interpret the
Plan is an express grant of discretionary authority to resolve
ambiguities in the Plan document and to make discretionary decisions
regarding the interpretation of the Plan's terms, including who is
eligible to participate under the Plan, and the benefit rights of a
Participant or Beneficiary. The Plan Administrator will not be held
liable for any interpretation of the Plan terms or decision regarding
the application of a Plan provision provided such interpretation or
decision is not arbitrary or capricious.
(a) Delegation of duties and powers. To the extent provided for in
an agreement with the Employer, the Plan Administrator may
delegate its duties and powers to one or more persons. Such
delegation must be in writing and accepted by the person or
persons receiving the delegation.
(b) Specific duties and powers. The Plan Administrator has the
general responsibility to control and manage the operation of
the Plan. This responsibility includes, but is not limited to,
the following:
(1) To construe and enforce the terms of the Plan,
including those related to Plan eligibility, vesting
and benefits;
(2) To develop separate procedures, consistent with the
terms of the Plan, to assist in the administration of
the Plan, including the adoption of separate or
modified loan policy procedures (see Article 14),
procedures for direction of investment by
Participants (see Section 13.5(c)), procedures for
determining whether domestic relations orders are
QDROs (see Section 11.5), and procedures for the
proper determination of investment earnings to be
allocated to Participants' Accounts (see Section
13.4);
(3) To communicate with the Trustee and other responsible
persons with respect to the crediting of Plan
contributions, the disbursement of Plan distributions
and other relevant matters;
(4) To maintain all necessary records which may be
required for tax and other administration purposes;
(5) To furnish and to file all appropriate notices,
reports and other information to Participants,
Beneficiaries, the Employer, the Trustee and
government agencies (as necessary);
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(6) To answer questions Participants and Beneficiaries
may have relating to the Plan and their benefits;
(7) To review and decide on claims for benefits under the
Plan;
(8) To retain the services of other persons, including
Investment Managers, attorneys, consultants, advisers
and others, to assist in the administration of the
plan;
(9) To correct any defect or error in the administration
of the Plan;
(10) To establish a "funding policy and method" for the
Plan for purposes of ensuring the Plan is satisfying
its financial objectives and is able to meet its
liquidity needs; and
(11) To suspend contributions, including Section 401(k)
Deferrals and/or Employee After-Tax Contributions, on
behalf of any or all Highly Compensated Employees, if
the Plan Administrator reasonably believes that such
contributions will cause the Plan to discriminate in
favor of Highly Compensated Employees. See Sections
17.2(e) and 17.3(e).
11.3 Employer Responsibilities. The Employer will provide in a timely manner
all appropriate information necessary for the Plan Administrator to
perform its duties. This information includes, but is not limited to,
Participant compensation data, Employee employment, service and
termination information, and other information the Plan Administrator
may require. The Plan Administrator may rely on the accuracy of any
information and data provided by the Employer.
The Employer will provide to the Trustee written notification of the
appointment of any person or persons as Plan Administrator, Investment
Manager, or other Plan fiduciary, and the names, titles and authorities
of any individuals who are authorized to act on behalf of such persons.
The Trustee shall be entitled to rely upon such information until it
receives written notice of a change in such appointments or
authorizations.
11.4 Plan Administration Expenses. All reasonable expenses related to plan
administration will be paid from Plan assets, except to the extent the
expenses are paid (or reimbursed) by the Employer. For this purpose,
Plan expenses include all reasonable costs, charges and expenses
incurred by the Trustee in connection with the administration of the
Trust (including such reasonable compensation to the Trustee as may be
agreed upon from time to time between the Employer or Plan
Administrator and the Trustee and any fees for legal services rendered
to the Trustee). All reasonable additional administrative expenses
incurred to effect investment elections made by Participants and
Beneficiaries under Section 13.5(c) shall be paid from the Trust and,
as elected by the Plan Administrator, shall either be charged (in
accordance with such reasonable nondiscriminatory rules as the Plan
Administrator deems appropriate under the circumstances) to the Account
of the individual making such election or treated as a general expense
of the Trust. All transaction-related expenses incurred to effect a
specific investment for an individually-directed Account (such as
brokerage commissions and other transfer expenses) shall, as elected by
the Plan Administrator, either be paid from or otherwise charged
directly to the Account of the individual providing such direction or
treated as a general Trust expense. In addition, unless specifically
prohibited under statute, regulation or other guidance of general
applicability, the Plan Administrator may charge to the Account of an
individual Participant a reasonable charge to offset the cost of making
a distribution to the Participant, Beneficiary, or Alternate Payee. If
liquid assets of the Trust are insufficient to cover the fees of the
Trustee or the Plan Administrator, then Trust assets shall be
liquidated to the extent necessary for such fees. In the event any part
of the Trust becomes subject to tax, all taxes incurred will be paid
from the Trust.
11.5 Qualified Domestic Relations Orders (QDROs.
(a) In general. The Plan Administrator must develop written
procedures for determining whether a domestic relations order
is a QDRO and for administering distributions under a QDRO.
For this purpose, the Plan Administrator may use the default
QDRO procedures set forth in subsection (h) below or may
develop separate QDRO procedures.
(b) Qualified Domestic Relations Order (QDRO). A QDRO is a
domestic relations order that creates or recognizes the
existence of an Alternate Payee's right to receive, or assigns
to an Alternate Payee the right to receive, all or a portion
of the benefits payable with respect to a Participant under
the Plan. (See Code ss.414(p).) The QDRO must contain certain
information and meet other requirements described in this
Section 11.5.
(c) Recognition as a QDRO. To be recognized as a QDRO, an order
must be a "domestic relations order" that relates to the
provision of child support, alimony payments, or marital
property rights for the benefit of an Alternate Payee. The
Plan Administrator is not required to determine whether the
court or agency issuing the domestic relations order had
jurisdiction to issue an order, whether state law is correctly
applied in the order, whether service was properly made on the
parties, or whether an individual identified in an order as an
Alternate Payee is a proper Alternate Payee under state law.
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(1) Domestic relations order. A domestic relations order
is a judgment, decree, or order (including the
approval of a property settlement) that is made
pursuant to state domestic relations law (including
community property law).
(2) Alternate Payee. An Alternate Payee must be a spouse,
former spouse, child, or other dependent of a
Participant.
(d) Contents of QDRO. A QDRO must contain the following
information:
(1) the name and last known mailing address of the
Participant and each Alternate Payee;
(2) the name of each plan to which the order applies;
(3) the dollar amount or percentage (or the method of
determining the amount or percentage) of the benefit
to be paid to the Alternate Payee; and
(4) the number of payments or time period to which the
order applies.
(e) Impermissible QDRO provisions.
(1) The order must not require the Plan to provide an
Alternate Payee or Participant with any type or form
of benefit, or any option, not otherwise provided
under the Plan;
(2) The order must not require the Plan to provide for
increased benefits (determined on the basis of
actuarial value);
(3) The order must not require the Plan to pay benefits
to an Alternate Payee that are required to be paid to
another Alternate Payee under another order
previously determined to be a QDRO; and
(4) The order must not require the Plan to pay benefits
to an Alternate Payee in the form of a Qualified
Joint and Survivor Annuity for the lives of the
Alternate Payee and his or her subsequent spouse.
(f) Immediate distribution to Alternate Payee. Even if a
Participant is not eligible to receive an immediate
distribution from the Plan, an Alternate Payee may receive a
QDRO benefit immediately in a lump sum, provided such
distribution is consistent with the QDRO provisions.
(g) No fee for QDRO determination. The Plan Administrator shall
not condition the making of a QDRO determination on the
payment of a fee by a Participant or an Alternate Payee
(either directly or as a charge against the Participant's
Account).
(h) Default QDRO procedure. If the Plan Administrator chooses this
default QDRO procedure or if the Plan Administrator does not
establish a separate QDRO procedure, this Section 11.5(h) will
apply as the procedure the Plan Administrator will use to
determine whether a domestic relations order is a QDRO. This
default QDRO procedure incorporates the requirements set forth
under Sections 11.5(a) through (g).
(1) Access to information. The Plan Administrator will
provide access to Plan and Participant benefit
information sufficient for a prospective Alternate
Payee to prepare a QDRO. Such information might
include the summary plan description, other relevant
plan documents, and a statement of the Participant's
benefit entitlements. The disclosure of this
information is conditioned on the prospective
Alternate Payee providing to the Plan Administrator
information sufficient to reasonably establish that
the disclosure request is being made in connection
with a domestic relations order.
(2) Notifications to Participant and Alternate Payee. The
Plan Administrator will promptly notify the affected
Participant and each Alternate Payee named in the
domestic relations order of the receipt of the order.
The Plan Administrator will send the notification to
the address included in the domestic relations order.
Along with the notification, the Plan Administrator
will provide a copy of the Plan's procedures for
determining whether a domestic relations order is a
QDRO.
(3) Alternate Payee representative. The prospective
Alternate Payee may designate a representative to
receive copies of notices and Plan information that
are sent to the Alternate Payee with respect to the
domestic relations order.
(4) Evaluation of domestic relations order. Within a
reasonable period of time, the Plan Administrator
will evaluate the domestic relations order to
determine whether it is a QDRO. A reasonable period
will depend on the specific circumstances. The
domestic relations order must
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contain the information described in Section 11.5(c).
If the order is only deficient in a minor respect,
the Plan Administrator may supplement information in
the order from information within the Plan
Administrator's control or through communication with
the prospective Alternate Payee.
(i) Separate accounting. Upon receipt of a
domestic relations order, the Plan
Administrator will separately account for
and preserve the amounts that would be
payable to an Alternate Payee until a
determination is made with respect to the
status of the order. During the period in
which the status of the order is being
determined, the Plan Administrator will take
whatever steps are necessary to ensure that
amounts that would be payable to the
Alternate Payee, if the order were a QDRO,
are not distributed to the Participant or
any other person. The separate accounting
requirement may be satisfied, at the Plan
Administrator's discretion, by a segregation
of the assets that are subject to separate
accounting.
(ii) Separate accounting until the end of "18
month period." The Plan Administrator will
continue to separately account for amounts
that are payable under the QDRO until the
end of an "18-month period." The "18-month
period" will begin on the first date
following the Plan's receipt of the order
upon which a payment would be required to be
made to an Alternate Payee under the order.
If, within the "18-month period," the Plan
Administrator determines that the order is a
QDRO, the Plan Administrator must pay the
Alternate Payee in accordance with the terms
of the QDRO. If, however, the Plan
Administrator determines within the
"18-month period" that the order is not a
QDRO, or if the status of the order is not
resolved by the end of the "18-month
period," the Plan Administrator may pay out
the amounts otherwise payable under the
order to the person or persons who would
have been entitled to such amounts if there
had been no order. If the order is later
determined to be a QDRO, the order will
apply only prospectively; that is, the
Alternate Payee will be entitled only to
amounts payable under the order after the
subsequent determination.
(iii) Preliminary review. The Plan Administrator
will perform a preliminary review of the
domestic relations order to determine if it
is a QDRO. If this preliminary review
indicates the order is deficient in some
manner, the Plan Administrator will allow
the parties to attempt to correct any
deficiency before issuing a final decision
on the domestic relations order. The ability
to correct is limited to a reasonable period
of time.
(iv) Notification of determination. The Plan
Administrator will notify in writing the
Participant and each Alternate Payee of the
Plan Administrator's decision as to whether
a domestic relations order is a QDRO. In the
case of a determination that an order is not
a QDRO, the written notice will contain the
following information:
(A) references to the Plan provisions
on which the Plan Administrator
based its decision;
(B) an explanation of any time limits
that apply to rights available to
the parties under the Plan (such as
the duration of any protective
actions the Plan Administrator will
take); and
(C) a description of any additional
material, information, or
modifications necessary for the
order to be a QDRO and an
explanation of why such material,
information, or modifications are
necessary.
(v) Treatment of Alternate Payee. If an order is
accepted as a QDRO, the Plan Administrator
will act in accordance with the terms of the
QDRO as if it were a part of the Plan. An
Alternate Payee will be considered a
Beneficiary under the Plan and be afforded
the same rights as a Beneficiary. The Plan
Administrator will provide any appropriate
disclosure information relating to the Plan
to the Alternate Payee.
11.6 Claims Procedure. Unless the Plan uses the default claims procedure
under subsection (e) below, the Plan Administrator shall establish a
procedure for benefit claims consistent with the requirements of ERISA
Reg. ss.2560.503-1. The Plan Administrator is authorized to conduct an
examination of the relevant facts to determine the merits of a
Participant's or Beneficiary's claim for Plan benefits. The claims
procedure must incorporate the following guidelines:
(a) Filing a claim. The claims procedure will set forth a
reasonable means for a Participant or Beneficiary to file a
claim for benefits under the Plan.
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(b) Notification of Plan Administrator's decision. The Plan
Administrator must provide a claimant with written
notification of the Plan Administrator's decision relating to
a claim within a reasonable period of time (not more than 90
days unless special circumstances require an extension to
process the claim) after the claim was filed. If the claim is
denied, the notification must set forth the reasons for the
denial, specific reference to pertinent Plan provisions on
which the denial is based, a description of any additional
information necessary for the claimant to perfect the claim,
and the steps the claimant must take to submit the claim for
review.
(c) Review procedure. The claims procedure will provide a claimant
a reasonable opportunity to have a full and fair review of a
denied claim. Such procedure shall allow a review upon a
written application, for the claimant to review pertinent
documents, and to allow the claimant to submit written
comments to the Plan Administrator. The procedure may
establish a limited period (not less than 60 days after the
claimant receives written notification of the denial of the
claim) for the claimant to request a review of the claim
denial.
(d) Decision on review. If a claimant requests a review, the Plan
Administrator must respond promptly to the request. Unless
special circumstances exist (such as the need for a hearing),
the Plan Administrator must respond in writing within 60 days
of the date the claimant submitted the review application. The
response must explain the Plan Administrator's decision on
review.
(e) Default claims procedure. If the Plan Administrator chooses
this default claims procedure or if the Plan Administrator
does not establish a separate claims procedure, the following
will apply.
(1) A person may submit to the Plan Administrator a
written claim for benefits under the Plan. The claim
shall be submitted on a form provided by the Plan
Administrator.
(2) The Plan Administrator will evaluate the claim to
determine if benefits are payable to the Participant
or Beneficiary under the terms of the Plan. The Plan
Administrator may solicit additional information from
the claimant if necessary to evaluate the claim.
(3) If the Plan Administrator determines the claim is
valid, the Participant or Beneficiary will receive in
writing from the Plan Administrator a statement
describing the amount of benefit, the method or
methods of payment, the timing of distributions and
other information relevant to the payment of the
benefit.
(4) If the Plan Administrator denies all or any portion
of the claim, the claimant will receive, within 90
days after receipt of the claim form, a written
explanation setting forth the reasons for the denial,
specific reference to pertinent Plan provisions on
which the denial is based, a description of any
additional information necessary for the claimant to
perfect the claim, and the steps the claimant must
take to submit the claim for review.
(5) The claimant has 60 days from the date the claimant
received the denial of claim to appeal the adverse
decision of the Plan Administrator. The claimant may
review pertinent documents and submit written
comments to the Plan Administrator. The Plan
Administrator will submit all relevant documentation
to the Employer. The Employer may hold a hearing or
seek additional information from the claimant and the
Plan Administrator.
(6) Within 60 days (or such longer period due to the
circumstances) of the request for review, the
Employer will render a written decision on the
claimant's appeal. The Employer shall explain the
decision, in terms that are understandable to the
claimant and by specific references to the Plan
document provisions.
11.7 Operational Rules for Short Plan Years. The following operational rules
apply if the Plan has a Short Plan Year. A Short Plan Year is any Plan
Year that is less than a 12-month period, either because of the
amendment of the Plan Year, or because the Effective Date of a new Plan
is less than 12 months prior to the end of the first Plan Year.
(a) If the Plan is amended to create a Short Plan Year, and an
Eligibility Computation Period or Vesting Computation Period
is based on the Plan Year, the applicable computation period
begins on the first day of the Short Plan Year, but such
period ends on the day which is 12 months from the first day
of such Short Plan Year. Thus, the computation period that
begins on the first day of the Short Plan Year overlaps with
the computation period that starts on the first day of the
next Plan Year. This rule applies only to an Employee who has
at least one Hour of Service during the Short Plan Year.
If a Plan has an initial Short Plan Year, the rule in the
above paragraph applies only for purposes of determining an
Employee's Vesting Computation Period and only if the Employer
elects under Part 6, #20.a. of the Agreement [Part 6, #38.a.
of the 401(k) Agreement] to exclude service earned prior to
the adoption of the Plan. For eligibility and vesting (where
service prior to the adoption of the Plan is not ignored), if
the Eligibility Computation Period or Vesting Computation
Period is based on the Plan Year, the applicable
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computation period will be determined on the basis of the
Plan's normal Plan Year, without regard to the initial short
Plan Year.
(b) If Employer Contributions are allocated for a Short Plan Year,
any allocation condition under Part 4 of the Agreement that
requires an Eligible Participant to complete a specified
number of Hours of Service to receive an allocation of such
Employer Contributions will not be prorated as a result of
such Short Plan Year unless otherwise specified in Part 4 of
the Agreement.
(c) If the Permitted Disparity Method is used to allocate any
Employer Contributions made for a Short Plan Year, the
Integration Level will be prorated to reflect the number of
months (or partial months) included in the Short Plan Year.
(d) The Compensation Dollar Limitation, as defined in Section
22.32, will be prorated to reflect the number of months (or
partial months) included in the Short Plan Year unless the
compensation used for such Short Plan Year is a period of 12
months.
In all other respects, the Plan shall be operated for the Short Plan
Year in the same manner as for a 12-month Plan Year, unless the context
requires otherwise. If the terms of the Plan are ambiguous with respect
to the operation of the Plan for a Short Plan Year, the Plan
Administrator has the authority to make a final determination on the
proper interpretation of the Plan.
11.8 Operational Rules for Related Employer Groups. If an Employer has one
or more Related Employers, the Employer and such Related Employer(s)
constitute a Related Employer group. In such case, the following rules
apply to the operation of the Plan.
(a) If the term "Employer" is used in the context of
administrative functions necessary to the operation,
establishment, maintenance, or termination of the Plan, only
the Employer executing the Signature Page of the Agreement,
and any Co-Sponsor of the Plan, is treated as the Employer.
(b) Hours of Service are determined by treating all members of the
Related Employer group as the Employer.
(c) The term Excluded Employee is determined by treating all
members of the Related Employer group as the Employer, except
as specifically provided in the Plan.
(d) Compensation is determined by treating all members of the
Related Employer group as the Employer, except as specifically
provided in the Plan.
(e) An Employee is not treated as separated from service or
terminated from employment if the Employee is employed by any
member of the Related Employer group.
(f) The Annual Additions Limitation described in Article 7 and the
Top-Heavy Plan rules described in Article 16 are applied by
treating all members of the Related Employer group as the
Employer.
In all other contexts, the term "Employer" generally means a reference
to all members of the Related Employer group, unless the context
requires otherwise. If the terms of the Plan are ambiguous with respect
to the treatment of the Related Employer group as the Employer, the
Plan Administrator has the authority to make a final determination on
the proper interpretation of the Plan.
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ARTICLE 12
TRUST PROVISIONS
This Article sets forth the creation of the Plan's Trust (or, in the case of an
amendment of the Plan, the amended terms of the Trust) and the duties and
responsibilities of the Trustee under the Plan. By executing the Trustee
Declaration under the Agreement, the Trustee agrees to be bound by the duties,
responsibilities and liabilities imposed on the Trustee under the Plan and to
act in accordance with the terms of this Plan. The Employer may act as Trustee
under the Plan by executing the Trustee Declaration.
12.1 Creation of Trust. By adopting this Plan, the Employer creates a Trust
to hold the assets of the Plan (or, in the event that this Plan
document represents an amendment of the Plan, the Employer hereby
amends the terms of the Trust maintained in connection with the Plan).
The Trustee is the owner of the Plan assets held by the Trust. The
Trustee is to hold the Plan assets for the exclusive benefit of Plan
Participants and Beneficiaries. Plan Participants and Beneficiaries do
not have ownership interests in the assets held by the Trust.
12.2 Trustee. The Trustee identified in the Trustee Declaration under the
Agreement shall act either as a Discretionary Trustee or as a Directed
Trustee, as identified under the Agreement.
(a) Discretionary Trustee. A Trustee is a Discretionary Trustee to
the extent the Trustee has exclusive authority and discretion
with respect to the investment, management or control of Plan
assets. Notwithstanding a Trustee's designation as a
Discretionary Trustee, a Trustee's discretion is limited, and
the Trustee shall be considered a Directed Trustee, to the
extent the Trustee is subject to the direction of the Plan
Administrator, the Employer, a properly appointed Investment
Manager, or a Named Fiduciary under an agreement between the
Plan Administrator and the Trustee. A Trustee also is
considered a Directed Trustee to the extent the Trustee is
subject to investment direction of Plan Participants. (See
Section 13.5(c) for a discussion of the Trustee's
responsibilities with regard to Participant directed
investments.)
(b) Directed Trustee. A Trustee is a Directed Trustee with respect
to the investment of Plan assets to the extent the Trustee is
subject to the direction of the Plan Administrator, the
Employer, a properly appointed Investment Manager, a Named
Fiduciary, or Plan Participant. To the extent the Trustee is a
Directed Trustee, the Trustee does not have any discretionary
authority with respect to the investment of Plan assets. In
addition, the Trustee is not responsible for the propriety of
any directed investment made pursuant to this Section and
shall not be required to consult or advise the Employer
regarding the investment quality of any directed investment
held under the Plan.
The Trustee shall be advised in writing regarding the
retention of investment powers by the Employer or the
appointment of an Investment Manager or other Named Fiduciary
with power to direct the investment of Plan assets. Any such
delegation of investment powers will remain in force until
such delegation is revoked or amended in writing. The Employer
is deemed to have retained investment powers under this
subsection to the extent the Employer directs the investment
of Participant Accounts for which affirmative investment
direction has not been received pursuant to Section 13.5(c).
The Employer is a Named Fiduciary for investment purposes if
the Employer directs investments pursuant to this subsection.
Any investment direction shall be made in writing by the
Employer, Investment Manager, or Named Fiduciary, as
applicable. A Directed Trustee must act solely in accordance
with the direction of the Plan Administrator, the Employer,
any employees or agents of the Employer, a properly appointed
Investment Manager or other fiduciary of the Plan, a Named
Fiduciary, or Plan Participants. (See Section 13.5(c) for a
discussion of the Trustee's responsibilities with regard to
Participant directed investments.)
The Employer may direct the Trustee to invest in any media in
which the Trustee may invest, as described in Section 12.4.
However, the Employer may not borrow from the Trust or pledge
any of the assets of the Trust as security for a loan to
itself; buy property or assets from or sell property or assets
to the Trust; charge any fee for services rendered to the
Trust; or receive any services from the Trust on a
preferential basis.
12.3 Trustee's Responsibilities Regarding Administration of Trust. This
Section outlines the Trustee's powers, rights and duties under the Plan
with respect to the administration of the investments held in the Plan.
The Trustee's administrative duties are limited to those described in
this Section 12.3; the Employer is responsible for any other
administrative duties required under the Plan or by applicable law.
(a) The Trustee will receive all contributions made under the
terms of the Plan. The Trustee is not obligated in any manner
to ensure that such contributions are correct in amount or
that such contributions comply with the terms of the Plan, the
Code or ERISA. In addition, the Trustee is under no obligation
to request that the Employer make contributions to the Plan.
The Trustee is not liable for the manner in which such amounts
are deposited or the allocation between Participant's
Accounts, to the extent the Trustee follows the written
direction of the Plan Administrator or Employer.
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(b) The Trustee will make distributions from the Trust in
accordance with the written directions of the Plan
Administrator or other authorized representative. To the
extent the Trustee follows such written direction, the Trustee
is not obligated in any manner to ensure a distribution
complies with the terms of the Plan, that a Participant or
Beneficiary is entitled to such a distribution, or that the
amount distributed is proper under the terms of the Plan. If
there is a dispute as to a payment from the Trust, the Trustee
may decline to make payment of such amounts until the proper
payment of such amounts is determined by a court of competent
jurisdiction, or the Trustee has been indemnified to its
satisfaction.
(c) The Trustee may employ agents, attorneys, accountants and
other third parties to provide counsel on behalf of the Plan,
where the Trustee deems advisable. The Trustee may reimburse
such persons from the Trust for reasonable expenses and
compensation incurred as a result of such employment. The
Trustee shall not be liable for the actions of such persons,
provided the Trustee acted prudently in the employment and
retention of such persons. In addition, the Trustee will not
be liable for any actions taken as a result of good faith
reliance on the advice of such persons.
12.4 Trustee's Responsibility Regarding Investment of Plan Assets. In
addition to the powers, rights and duties enumerated under this
Section, the Trustee has whatever powers are necessary to carry out its
duties in a prudent manner. The Trustee's powers, rights and duties may
be supplemented or limited by a separate trust agreement, investment
policy, funding agreement, or other binding document entered into
between the Trustee and the Plan Administrator which designates the
Trustee's responsibilities with respect to the Plan. A separate trust
agreement must be consistent with the terms of this Plan and must
comply with all qualification requirements under the Code and
regulations. To the extent the exercise of any power, right or duty is
subject to discretion, such exercise by a Directed Trustee must be made
at the direction of the Plan Administrator, the Employer, an Investment
Manager, a Named Fiduciary, or Plan Participant.
(a) The Trustee shall be responsible for the safekeeping of the
assets of the Trust in accordance with the provisions of this
Plan.
(b) The Trustee may invest, manage and control the Plan assets in
a manner that is consistent with the Plan's funding policy and
investment objectives. The Trustee may invest in any
investment, as authorized under Section 13.5, which the
Trustee deems advisable and prudent, subject to the proper
written direction of the Plan Administrator, the Employer, a
properly appointed Investment Manager, a Named Fiduciary or a
Plan Participant. The Trustee is not liable for the investment
of Plan assets to the extent the Trustee is following the
proper direction of the Plan Administrator, the Employer, a
Participant, an Investment Manager, or other person or persons
duly appointed by the Employer to provide investment
direction. In addition, the Trustee does not guarantee the
Trust in any manner against investment loss or depreciation in
asset value, or guarantee the adequacy of the Trust to meet
and discharge any or all liabilities of the Plan.
(c) The Trustee may retain such portion of the Plan assets in cash
or cash balances as the Trustee may, from time to time, deem
to be in the best interests of the Plan, without liability for
interest thereon.
(d) The Trustee may collect and receive any and all moneys and
other property due the Plan and to settle, compromise, or
submit to arbitration any claims, debts, or damages with
respect to the Plan, and to commence or defend on behalf of
the Plan any lawsuit, or other legal or administrative
proceedings.
(e) The Trustee may hold any securities or other property in the
name of the Trustee or in the name of the Trustee's nominee,
and may hold any investments in bearer form, provided the
books and records of the Trustee at all times show such
investment to be part of the Trust.
(f) The Trustee may exercise any of the powers of an individual
owner with respect to stocks, bonds, securities or other
property, including the right to vote upon such stocks, bonds
or securities; to give general or special proxies or powers of
attorney; to exercise or sell any conversion privileges,
subscription rights, or other options; to participate in
corporate reorganizations, mergers, consolidations, or other
changes affecting corporate securities (including those in
which it or its affiliates are interested as Trustee); and to
make any incidental payments in connection with such stocks,
bonds, securities or other property. Unless specifically
agreed upon in writing between the Trustee and the Employer,
the Trustee shall not have the power or responsibility to vote
proxies with respect to any securities of the Employer or a
Related Employer or with respect to any Plan assets that are
subject to the investment direction of the Employer or for
which the power to manage, acquire, or dispose of such Plan
assets has been delegated by the Employer to one or more
Investment Managers or Named Fiduciaries in accordance with
ERISAss.403. With respect to the voting of Employer
securities, or in the event of any tender or other offer with
respect to shares of Employer securities held in the Trust,
the Trustee will follow the direction of the Employer or other
responsible fiduciary or, to the extent voting and similar
rights have been passed through to Participants, of each
Participant with respect to shares allocated to his/her
Account.
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(g) The Trustee may borrow or raise money on behalf of the Plan in
such amount, and upon such terms and conditions, as the
Trustee deems advisable. The Trustee may issue a promissory
note as Trustee to secure the repayment of such amounts and
may pledge all, or any part, of the Trust as security.
(h) The Trustee, upon the written direction of the Plan
Administrator, is authorized to enter into a transfer
agreement with the Trustee of another qualified retirement
plan and to accept a transfer of assets from such retirement
plan on behalf of any Employee of the Employer. The Trustee is
also authorized, upon the written direction of the Plan
Administrator, to transfer some or all of a Participant's
vested Account Balance to another qualified retirement plan on
behalf of such Participant. A transfer agreement entered into
by the Trustee does not affect the Plan's status as a
Prototype Plan.
(i) The Trustee is authorized to execute, acknowledge and deliver
all documents of transfer and conveyance, receipts, releases,
and any other instruments that the Trustee deems necessary or
appropriate to carry out its powers, rights and duties
hereunder.
(j) If the Employer maintains more than one Plan, the assets of
such Plans may be commingled for investment purposes. The
Trustee must separately account for the assets of each Plan. A
commingling of assets, as described in this paragraph, does
not cause the Trusts maintained with respect to the Employer's
Plans to be treated as a single Trust, except as provided in a
separate document authorized in the first paragraph of this
Section 12.4.
(k) The Trustee is authorized to invest Plan assets in a
common/collective trust fund, or in a group trust fund that
satisfies the requirements of IRS Revenue Ruling 81-100. All
of the terms and provisions of any such common/collective
trust fund or group trust into which Plan assets are invested
are incorporated by reference into the provisions of the Trust
for this Plan.
(l) If the Trustee is a bank or similar financial institution, the
Trustee is authorized to invest in any type of deposit of the
Trustee (including its own money market fund) at a reasonable
rate of interest.
(m) The Trustee must be bonded as required by applicable law. The
bonding requirements shall not apply to a bank, insurance
company, or similar financial institution that satisfies the
requirements of ss.412(a)(2) of ERISA.
12.5 More than One Person as Trustee. If the Plan has more than one person
acting as Trustee, the Trustees may allocate the Trustee
responsibilities by mutual agreement and Trustee decisions will be made
by a majority vote (unless otherwise agreed to by the Trustees) or as
otherwise provided in a separate trust agreement or other binding
document.
12.6 Annual Valuation. The Plan assets will be valued at least on an annual
basis. The Employer may designate more frequent valuation dates under
Part 12, #45.b.(2) of the Agreement [Part 12, #63.b.(2) of the 401(k)
Agreement]. Notwithstanding any election under Part 12, #45.b.(2) of
the Agreement [Part 12, #63.b.(2) of the 401(k) Agreement], the Trustee
and Plan Administrator may agree to value the Trust on a more frequent
basis, and/or to perform an interim valuation of the Trust pursuant to
Section 13.2(a).
12.7 Reporting to Plan Administrator and Employer. Within ninety (90) days
following the end of each Plan Year, and within ninety (90) days
following its removal or resignation, the Trustee will file with the
Employer an accounting of its administration of the Trust from the date
of its last accounting. The accounting will include a statement of cash
receipts, disbursements and other transactions effected by the Trustee
since the date of its last accounting, and such further information as
the Trustee and/or Employer deems appropriate. Upon receipt of such
information, the Employer must promptly notify the Trustee of its
approval or disapproval of the information. If the Employer does not
provide a written disapproval within ninety (90) days following the
receipt of the information, including a written description of the
items in question, the Trustee is forever released and discharged from
any liability with respect to all matters reflected in such
information. The Trustee shall have sixty (60) days following its
receipt of a written disapproval from the Employer to provide the
Employer with a written explanation of the terms in question. If the
Employer again disapproves of the accounting, the Trustee may file its
accounting with a court of competent jurisdiction for audit and
adjudication.
All assets contained in the Trust accounting will be shown at their
fair market value as of the end of the Plan Year or as of the date of
resignation or removal. The value of marketable investments shall be
determined using the most recent price quoted on a national securities
exchange or over-the-counter market. The value of non-marketable
securities shall, except as provided otherwise herein, be determined in
the sole judgment of the Trustee, which determination shall be binding
and conclusive. The value of investments in securities or obligations
of the Employer in which there is no market will be determined by an
independent appraiser at least once annually and the Trustee shall have
no responsibility with respect to the valuation of such assets.
12.8 Reasonable Compensation. The Trustee shall be paid reasonable
compensation in an amount agreed upon by the Plan Administrator and
Trustee. The Trustee also will be reimbursed for any reasonable
expenses or fees incurred
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in its function as Trustee. An individual Trustee who is already
receiving full-time pay as an Employee of the Employer may not receive
any additional compensation for services as Trustee. The Plan will pay
the reasonable compensation and expenses incurred by the Trustee,
pursuant to Section 11.4, unless the Employer pays such compensation
and expenses. Any compensation or expense paid directly by the Employer
to the Trustee is not an Employer Contribution to the Plan.
12.9 Resignation and Removal of Trustee. The Trustee may resign at any time
by delivering to the Employer a written notice of resignation at least
thirty (30) days prior to the effective date of such resignation,
unless the Employer consents in writing to a shorter notice period. The
Employer may remove the Trustee at any time, with or without cause, by
delivering written notice to the Trustee at least 30 days prior to the
effective date of such removal. The Employer may remove the Trustee
upon a shorter written notice period if the Employer reasonably
determines such shorter period is necessary to protect Plan assets.
Upon the resignation, removal, death or incapacity of a Trustee, the
Employer may appoint a successor Trustee which, upon accepting such
appointment, will have all the powers, rights and duties conferred upon
the preceding Trustee. In the event there is a period of time following
the effective date of a Trustee's removal or resignation before a
successor Trustee is appointed, the Employer is deemed to be the
Trustee. During such period, the Trust continues to be in existence and
legally enforceable, and the assets of the Plan shall continue to be
protected by the provisions of the Trust.
12.10 Indemnification of Trustee. Except to the extent that it is judicially
determined that the Trustee has acted with gross negligence or willful
misconduct, the Employer shall indemnify the Trustee (whether or not
the Trustee has resigned or been removed) against any liabilities,
losses, damages, and expenses, including attorney, accountant, and
other advisory fees, incurred as a result of:
(a) any action of the Trustee taken in good faith in accordance
with any information, instruction, direction, or opinion given
to the Trustee by the Employer, the Plan Administrator,
Investment Manager, Named Fiduciary or legal counsel of the
Employer, or any person or entity appointed by any of them and
authorized to give any information, instruction, direction, or
opinion to the Trustee;
(b) the failure of the Employer, the Plan Administrator,
Investment Manager, Named Fiduciary or any person or entity
appointed by any of them to make timely disclosure to the
Trustee of information which any of them or any appointee
knows or should know if it acted in a reasonably prudent
manner; or
(c) any breach of fiduciary duty by the Employer, the Plan
Administrator, Investment Manager, Named Fiduciary or any
person or entity appointed by any of them, other than such a
breach which is caused by any failure of the Trustee to
perform its duties under this Trust.
The duties and obligations of the Trustee 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 shall rest solely with the Employer.
The Employer agrees that the Trustee shall have no liability with
regard to the investment or management of illiquid Plan assets
transferred from a prior Trustee, and shall have no responsibility for
investments made before the transfer of Plan assets to it, or for the
viability or prudence of any investment made by a prior Trustee,
including those represented by assets now transferred to the custody of
the Trustee, or for any dealings whatsoever with respect to Plan assets
before the transfer of such assets to the Trustee. The Employer shall
indemnify and hold the Trustee harmless for any and all claims, actions
or causes of action for loss or damage, or any liability whatsoever
relating to the assets of the Plan transferred to the Trustee by any
prior Trustee of the Plan, including any liability arising out of or
related to any act or event, including prohibited transactions,
occurring prior to the date the Trustee accepts such assets, including
all claims, actions, causes of action, loss, damage, or any liability
whatsoever arising out of or related to that act or event, although
that claim, action, cause of action, loss, damage, or liability may not
be asserted, may not have accrued, or may not have been made known
until after the date the Trustee accepts the Plan assets. Such
indemnification shall extend to all applicable periods, including
periods for which the Plan is retroactively restated to comply with any
tax law or regulation.
12.11 Appointment of Custodian. The Plan Administrator may appoint a
Custodian to hold all or any portion of the Plan assets. A Custodian
has the same powers, rights and duties as a Directed Trustee. The
Custodian will be protected from any liability with respect to actions
taken pursuant to the direction of the Trustee, Plan Administrator, the
Employer, an Investment Manager, a Named Fiduciary or other third party
with authority to provide direction to the Custodian.
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ARTICLE 13
PLAN ACCOUNTING AND INVESTMENTS
This Article contains the procedures for valuing Participant Accounts and
allocating net income and loss to such Accounts. Part 12 of the Agreement
permits the Employer to document its administrative procedures with respect to
the valuation of Participant Accounts. Alternatively, the Plan Administrator may
adopt separate investment procedures regarding the valuation and investment of
Participant Accounts.
13.1 Participant Accounts. The Plan Administrator will establish and
maintain a separate Account for each Participant to reflect the
Participant's entire interest under the Plan. To the extent applicable,
the Plan Administrator may establish and maintain for a Participant any
(or all) of the following separate sub-Accounts: Employer Contribution
Account, Section 401(k) Deferral Account, Employer Matching
Contribution Account, QMAC Account, QNEC Account, Employee After-Tax
Contribution Account, Safe Harbor Matching Contribution Account, Safe
Harbor Nonelective Contribution Account, Rollover Contribution Account,
and Transfer Account. The Plan Administrator also may establish and
maintain other sub-Accounts as it deems appropriate.
13.2 Value of Participant Accounts. The value of a Participant's Account
consists of the fair market value of the Participant's share of the
Trust assets. A Participant's share of the Trust assets is determined
as of each Valuation Date under the Plan.
(a) Periodic valuation. The Trustee must value Plan assets at
least annually. The Employer may elect under Part 12,
#45.b.(2) of the Agreement [Part 12, #63.b.(2) of the 401(k)
Agreement] or may elect operationally to value assets more
frequently than annually. The Plan Administrator may request
the Trustee to perform interim valuations, provided such
valuations do not result in discrimination in favor of Highly
Compensated Employees.
(b) Daily valuation. If the Employer elects daily valuation under
Part 12, #44 of the Agreement [Part 12, #62 of the 401(k)
Agreement] or, if in operation, the Employer elects to have
the Plan daily valued, the Plan Administrator may adopt
reasonable procedures for performing such valuations. Unless
otherwise set forth in the written procedures, a daily valued
Plan will have its assets valued at the end of each business
day during which the New York Stock Exchange is open. The Plan
Administrator has authority to interpret the provisions of
this Plan in the context of a daily valuation procedure. This
includes, but is not limited to, the determination of the
value of the Participant's Account for purposes of Participant
loans, distribution and consent rights, and corrective
distributions under Article 17.
13.3 Adjustments to Participant Accounts. As of each Valuation Date under
the Plan, each Participant's Account is adjusted in the following
manner.
(a) Distributions and forfeitures from a Participant's Account. A
Participant's Account will be reduced by any distributions and
forfeitures from the Account since the previous Valuation
Date.
(b) Life insurance premiums and dividends. A Participant's Account
will be reduced by the amount of any life insurance premium
payments made for the benefit of the Participant since the
previous Valuation Date. The Account will be credited with any
dividends or credits paid on any life insurance policy held by
the Trust for the benefit of the Participant.
(c) Contributions and forfeitures allocated to a Participant's
Account. A Participant's Account will be credited with any
contribution or forfeiture allocated to the Participant since
the previous Valuation Date.
(d) Net income or loss. A Participant's Account will be adjusted
for any net income or loss in accordance with the provisions
under Section 13.4.
13.4 Procedures for Determining Net Income or Loss. The Plan Administrator
may establish any reasonable procedures for determining net income or
loss under Section 13.3(d). Such procedures may be reflected in a
funding agreement governing the applicable investments under the Plan.
(a) Net income or loss attributable to General Trust Account. To
the extent a Participant's Account is invested as part of a
General Trust Account, such Account is adjusted for its
allocable share of net income or loss experienced by the
General Trust Account using the Balance Forward Method. Under
the Balance Forward Method, the net income or loss of the
General Trust Account is allocated to the Participant Accounts
that are invested in the General Trust Account, in the ratio
that each Participant's Account bears to all Accounts, based
on the value of each Participant's Account as of the prior
Valuation Date, reduced for the adjustments described in
Section 13.3(a) and 13.3(b) above.
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(1) Inclusion of certain contributions. In applying the
Balance Forward Method for allocating net income or
loss, the Employer may elect under Part 12, #45.b.(3)
of the Agreement [Part 12, #63.b.(3) of the 401(k)
Agreement] or under separate administrative
procedures to adjust each Participant's Account
Balance (as of the prior Valuation Date) for the
following contributions made since the prior
Valuation Date (the "valuation period") which were
not reflected in the Participant's Account on such
prior Valuation Date: (1) Section 401(k) Deferrals
and Employee After-Tax Contributions that are
contributed during the valuation period pursuant to
the Participant's contribution election, (2) Employer
Contributions (including Employer Matching
Contributions) that are contributed during the
valuation period and allocated to a Participant's
Account during the valuation period, and (3) Rollover
Contributions.
(2) Methods of valuing contributions made during
valuation period. In determining Participants'
Account Balances as of the prior Valuation Date, the
Employer may elect to apply a weighted average method
that credits each Participant's Account with a
portion of the contributions based on the portion of
the valuation period for which such contributions
were invested, or an adjusted percentage method, that
increases each Participant's Account by a specified
percentage of such contributions. The Employer may
designate under Part 12, #45.b.(3)(c) of the
Agreement [Part 12, #63.b.(3)(c) of the 401(k)
Agreement] to apply the special allocation rules to
only particular types of contributions or may
designate any other reasonable method for allocating
net income and loss under the Plan.
(i) Weighted average method. The Employer may
elect under Part 12, #45.b.(3)(a) of the
Agreement [Part 12, #63.b.(3)(a) of the
401(k) Agreement] or under separate
administrative procedures to apply a
weighted average method in determining net
income or loss. Under the weighted average
method, a Participant's Account Balance as
of the prior Valuation Date is adjusted to
take into account a portion of the
contributions made during the valuation
period so that the Participant may receive
an allocation of net income or loss for the
portion of the valuation period during which
such contributions were invested under the
Plan. The amount of the adjustment to a
Participant's Account Balance is determined
by multiplying the contributions made to the
Participant's Account during the valuation
period by a fraction, the numerator of which
is the number of months during the valuation
period that such contributions were invested
under the Plan and the denominator is the
total number of months in the valuation
period. The Plan's investment procedures may
designate the specific type(s) of
contributions eligible for a weighted
allocation of net income or loss and may
designate alternative methods for
determining the weighted allocation,
including the use of a uniform weighting
period other than months.
(ii) Adjusted percentage method. The Employer may
elect under Part 12, #45.b.(3)(b) of the
Agreement [Part 12, #63.b.(3)(b) of the
401(k) Agreement] or under separate
investment procedures to apply an adjusted
percentage method of allocating net income
or loss. Under the adjusted percentage
method, a Participant's Account Balance as
of the prior Valuation Date is increased by
a percentage of the contributions made to
the Participant's Account during the
valuation period. The Plan's investment
procedures may designate the specific
type(s) of contributions eligible for an
adjusted percentage allocation and may
designate alternative procedures for
determining the amount of the adjusted
percentage allocation.
(b) Net income or loss attributable to a Directed Account. If the
Participant (or Beneficiary) is entitled to direct the
investment of all or part of his/her Account (see Section
13.5(c)), the Account (or the portion of the Account which is
subject to such direction) will be maintained as a Directed
Account, which reflects the value of the directed investments
as of any Valuation Date. The assets held in a Directed
Account may be (but are not required to be) segregated from
the other investments held in the Trust. Net income or loss
attributable to the investments made by a Directed Account is
allocated to such Account in a manner that reasonably reflects
the investment experience of such Directed Account. Where a
Directed Account reflects segregated investments, the manner
of allocating net income or loss shall not result in a
Participant (or Beneficiary) being entitled to distribution
from the Directed Account that exceeds the value of such
Account as of the date of distribution.
(c) Share or unit accounting. The Plan's investment procedures may
provide for share or unit accounting to reflect the value of
Accounts, if such method is appropriate for the investments
allocable to such Accounts.
(d) Suspense accounts. The Plan's investment procedures also may
provide for special valuation procedures for suspense accounts
that are properly established under the Plan.
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13.5 Investments under the Plan.
(a) Investment options. The Trustee or other person(s) responsible
for the investment of Plan assets is authorized to invest Plan
assets in any prudent investment consistent with the funding
policy of the Plan and the requirements of ERISA. Investment
options include, but are not limited to, the following: common
and preferred stock or other equity securities (including
stock bought and sold on margin); Qualifying Employer
Securities and Qualifying Employer Real Property (to the
extent permitted under subsection (b) below), corporate bonds;
open end or closed end mutual funds (including funds for which
the Prototype Sponsor, Trustee, or their affiliates serve as
investment advisor or in any other capacity); money market
accounts; certificates of deposit; debentures; commercial
paper; put and call options; limited partnerships; mortgages;
U.S. Government obligations, including U.S. Treasury notes and
bonds; real and personal property having a ready market; life
insurance or annuity policies; commodities; savings accounts;
notes; and securities issued by the Trustee and/or its
affiliates, as permitted by law. Plan assets may also be
invested in a common/collective trust fund, or in a group
trust fund that satisfies the requirements of IRS Revenue
Ruling 81 100. All of the terms and provisions of any such
common/collective trust fund or group trust into which Plan
assets are invested are incorporated by reference into the
provisions of the Trust for this Plan. No portion of any
voluntary, tax deductible Employee contributions being held
under the Plan (or any 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) Limitations on the investment in Qualifying Employer
Securities and Qualifying Employer Real Property. The Trustee
may invest in Qualifying Employer Securities and Qualifying
Employer Real Property up to certain limits. Any such
investment shall only be made upon written direction of the
Employer who shall be solely responsible for the propriety of
such investment. Additional directives regarding the purchase,
sale, retention or valuing of such securities may be addressed
in a funding policy, statement of investment policy, or other
separate procedures or documents governing the investment of
Plan assets. In any conflicts between the Plan document and a
separate investment trust agreement, the Plan document shall
prevail.
(1) Money purchase plan. In the case of a money purchase
plan, no more than 10% of the fair market value of
Plan assets may be invested in Qualifying Employer
Securities and Qualifying Employer Real Property.
(2) Profit sharing plan other than a 401(k) plan. In the
case of a profit sharing plan other than a 401(k)
plan, no limit applies to the percentage of Plan
assets invested in Qualifying Employer Securities and
Qualifying Employer Real Property, except as provided
in a funding policy, statement of investment policy,
or other separate procedures or documents governing
the investment of Plan assets.
(3) 401(k) plan. For Plan Years beginning after December
31, 1998, with respect to the portion of the Plan
consisting of amounts attributable to Section 401(k)
Deferrals, no more than 10% of the fair market value
of Plan assets attributable to Section 401(k)
Deferrals may be invested in Qualifying Employer
Securities and Qualifying Employer Real Property if
the Employer, the Trustee, or a person other than the
Participant requires any portion of the Section
401(k) Deferrals and attributable earnings to be
invested in Qualifying Employer Securities or
Qualifying Employer Real Property.
(i) Exceptions to Limitation. The limitation in
this subsection (3) shall not apply if any
one of the conditions in subsections (A),
(B) or (C) applies.
(A) Investment of Section 401(k)
Deferrals in Qualifying Employer
Securities or Qualifying Real
Property is solely at the
discretion of the Participant.
(B) As of the last day of the preceding
Plan Year, the fair market value of
assets of all profit sharing plans
and 401(k) plans of the Employer
was not more than 10% of the fair
market value of all assets under
plans maintained by the Employer.
(C) The portion of a Participant's
Section 401(k) Deferrals required
to be invested in Qualifying
Employer Securities and Qualifying
Employer Real Property for the Plan
Year does not exceed 1% of such
Participant's Included
Compensation.
(ii) Plan Years Beginning Prior to January 1,
1999. For Plan Years beginning before
January 1, 1999, the limitations in this
subsection (3) do not apply and a 401(k)
plan is treated like any other profit
sharing plan.
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(iii) No application to other contributions. The
limitation in this subsection (3) has no
application to Employer Matching
Contributions or Employer Nonelective
Contributions. Instead, the rules under
subsection (2) above apply for such
contributions.
(c) Participant direction of investments. If the Plan (by election
in Part 12, #43 of the Agreement [Part 12, #61 of the 401(k)
Agreement] or by the Plan Administrator's administrative
election) permits Participant direction of investments, the
Plan Administrator must adopt investment procedures for such
direction. The investment procedures should set forth the
permissible investment options available for Participant
direction, the timing and frequency of investment changes, and
any other procedures or limitations applicable to Participant
direction of investment. In no case may Participants direct
that investments be made in collectibles, other than U.S.
Government or State issued gold and silver coins. The
investment procedures adopted by the Plan Administrator are
incorporated by reference into the Plan. If Participant
investment direction is limited to specific investment options
(such as designated mutual funds or common or collective trust
funds), it shall be the sole and exclusive responsibility of
the Employer or Plan Administrator to select the investment
options, and the Trustee shall not be responsible for
selecting or monitoring such investment options, unless the
Trustee has otherwise agreed in writing.
The Employer may elect under Part 12, #43.b.(1) of the
Agreement [Part 12, #61.b.(1) of the 401(k) Agreement] or
under the separate investment procedures to limit Participant
direction of investment to specific types of contributions.
The investment procedures adopted by the Plan Administrator
may (but need not) allow Beneficiaries under the Plan to
direct investments. (See Section 13.4(b) for rules regarding
allocation of net income or loss to a Directed Account.)
If Participant direction of investments is permitted, the
Employer will designate how accounts will be invested in the
absence of proper affirmative direction from the Participant.
Except as otherwise provided in this Plan, neither the
Trustee, the Employer, nor any other fiduciary of the Plan
will be liable to the Participant or Beneficiary for any loss
resulting from action taken at the direction of the
Participant.
(1) Trustee to follow Participant direction. To the
extent the Plan allows Participant direction of
investment, the Trustee is authorized to follow the
Participant's written direction (or other form of
direction deemed acceptable by the Trustee). A
Directed Account will be established for the portion
of the Participant's Account that is subject to
Participant direction of investment. The Trustee may
decline to follow a Participant's investment
direction to the extent such direction would: (i)
result in a prohibited transaction; (ii) cause the
assets of the Plan to be maintained outside the
jurisdiction of the U.S. courts; (iii) jeopardize the
Plan's tax qualification; (iv) be contrary to the
Plan's governing documents; (v) cause the assets to
be invested in collectibles within the meaning of
Code ss.408(m); (vi) generate unrelated business
taxable income; or (vii) result (or could result) in
a loss exceeding the value of the Participant's
Account. The Trustee will not be responsible for any
loss or expense resulting from a failure to follow a
Participant's direction in accordance with the
requirements of this paragraph.
Participant directions will be processed as soon as
administratively practicable following receipt of
such directions by the Trustee. The Trustee, Plan
Administrator, or Employer will not be liable for a
delay in the processing of a Participant direction
that is caused by a legitimate business reason
(including, but not limited to, a failure of computer
systems or programs, failure in the means of data
transmission, the failure to timely receive values or
prices, or other unforeseen problems outside of the
control of the Trustee, Plan Administrator, or
Employer).
(2) ERISA ss.404(c) protection. If the Plan (by Employer
election under Part 12, #43.b.(2) of the Agreement
[Part 12, #61.b.(2) of the 401(k ) Agreement] or
pursuant to the Plan's investment procedures) is
intended to comply with ERISA ss.404(c), the
Participant investment direction program adopted by
the Plan Administrator should comply with applicable
Department of Labor regulations. Compliance with
ERISA ss.404(c) is not required for plan
qualification purposes. The following information is
provided solely as guidance to assist the Plan
Administrator in meeting the requirements of ERISA
ss.404(c). Failure to meet any of the following safe
harbor requirements does not impose any liability on
the Plan Administrator (or any other fiduciary under
the Plan) for investment decisions made by
Participants, nor does it mean that the Plan does not
comply with ERISA ss.404(c). Nothing in this Plan
shall impose any greater duties upon the Trustee with
respect to the implementation of ERISA ss.404(c) than
those duties expressly provided for in procedures
adopted by the Employer and agreed to by the Trustee.
(i) Disclosure requirements. The Plan
Administrator (or other Plan fiduciary who
has agreed to perform this activity) shall
provide, or shall cause a person designated
to act on his behalf to provide, the
following information to Participants:
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(A) Mandatory disclosures. To satisfy
the requirements of ERISAss.404(c),
the Participants must receive
certain mandatory disclosures,
including (I) an explanation that
the Plan is intended to be an ERISA
ss.404(c) plan; (II) a description
of the investment options under the
Plan; (III) the identity of any
designated Investment Managers that
may be selected by the Participant;
(IV) any restrictions on investment
selection or transfers among
investment vehicles; (V) an
explanation of the fees and
expenses that may be charged in
connection with the investment
transactions; (VI) the materials
relating to voting rights or other
rights incidental to the holding of
an investment; (VII) the most
recent prospectus for an investment
option which is subject to the
Securities Act of 1933.
(B) Disclosures upon request. In
addition, a Participant must be
able to receive upon request (I)
the current value of the
Participant's interest in an
investment option; (II) the value
and investment performance of
investment alternatives available
under the Plan; (III) the annual
operating expenses of a designated
investment alternative; and (IV)
copies of any prospectuses, or
other material, relating to
available investment options.
(ii) Diversified investment options. The
investment procedure must provide at least
three diversified investment options that
offer a broad range of investment
opportunity. Each of the investment
opportunities must have materially different
risk and return characteristics. The
procedure may allow investment under a
segregated brokerage account.
(iii) Frequency of investment instructions. The
investment procedure must provide the
Participant with the opportunity to give
investment instructions as frequently as is
appropriate to the volatility of the
investment. For each investment option, the
frequency can be no less than quarterly.
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ARTICLE 14
PARTICIPANT LOANS
This Article contains rules for providing loans to Participants under the Plan.
This Article applies if: (1) the Employer elects under Part 12 of the Agreement
to provide loans to Participants or (2) if Part 12 does not specify whether
Participant loans are available, the Plan Administrator decides to implement a
Participant loan program. Any Participant loans will be made pursuant to the
default loan policy prescribed by this Article 14 unless the Plan Administrator
adopts a separate written loan policy or modifies the default loan policy in
this Article 14 by adopting modified loan provisions. If the Employer adopts a
separate written loan policy or written modifications to the default loan
program in this Article, the terms of such loan policy or written modifications
will control over the terms of this Plan with respect to the administration of
any Participant loans.
14.1 Default Loan Policy. Loans are available under this Article only if
such loans:
(a) are available to Participants on a reasonably equivalent basis
(see Section 14.3);
(b) are not available to Highly Compensated Employees in an amount
greater than the amount that is available to other
Participants;
(c) bear a reasonable rate of interest (as determined under
Section 14.4) and are adequately secured (as determined under
Section 14.5);
(d) provide for periodic repayment within a specified period of
time (as determined under Section 14.6); and
(e) do not exceed, for any Participant, the amount designated
under Section 14.7.
A separate written loan policy may not modify the requirements under
subsections (a) through (e) above, except as permitted in the
referenced Sections of this Article.
14.2 Administration of Loan Program. A Participant loan is available under
this Article only if the Participant makes a request for such a loan in
accordance with the provisions of this Article or in accordance with a
separate written loan policy. To receive a Participant loan, a
Participant must sign a promissory note along with a pledge or
assignment of the portion of the Account Balance used for security on
the loan. Except as provided in a separate loan policy or in a written
modification to the default loan policy in this Article, any reference
under this Article 14 to a Participant means a Participant or
Beneficiary who is a party in interest (as defined in ERISAss.3(14)).
In the case of a restated Plan, if any provision of this Article 14 is
more restrictive than the terms of the Plan (or a separate written loan
policy) in effect prior to the adoption of this Prototype Plan, such
provision shall apply only to loans finalized after the adoption of
this Prototype Plan, even if the restated Effective Date indicated in
the Agreement predates the adoption of the Plan.
14.3 Availability of Participant Loans. Participant loans must be made
available to Participants in a reasonably equivalent manner. The Plan
Administrator may refuse to make a loan to any Participant who is
determined to be not creditworthy. For this purpose, a Participant is
not creditworthy if, based on the facts and circumstances, it is
reasonable to believe that the Participant will not repay the loan. A
Participant who has defaulted on a previous loan from the Plan and has
not repaid such loan (with accrued interest) at the time of any
subsequent loan will not be treated as creditworthy until such time as
the Participant repays the defaulted loan (with accrued interest). A
separate written loan policy or written modification to this loan
policy may prescribe different rules for determining creditworthiness
and to what extent creditworthiness must be determined.
No Participant loan will be made to any Shareholder-Employee or
Owner-Employee unless a prohibited transaction exemption for such loan
is obtained from the Department of Labor or the prohibition against
loans to such individuals is formally withdrawn by statute or by action
of the Treasury or the Department of Labor. The prohibition against
loans to Shareholder-Employees and Owner-Employees outlined in this
paragraph may not be modified by a separate written loan policy.
14.4 Reasonable Interest Rate. A Participant must be charged a reasonable
rate of interest for any loan he/she receives. For this purpose, the
interest rate charged on a Participant loan must be commensurate with
the interest rates charged by persons in the business of lending money
for loans under similar circumstances. The Plan Administrator will
determine a reasonable rate of interest by reviewing the interest rates
charged by a sample of third party lenders in the same geographical
region as the Employer. The Plan Administrator must periodically review
its interest rate assumptions to ensure the interest rate charged on
Participant loans is reasonable. A separate written loan policy or
written modifications to this loan policy may prescribe an alternative
means of establishing a reasonable interest rate.
14.5 Adequate Security. All Participant loans must be adequately secured.
The Participant's vested Account Balance shall be used as security for
a Participant loan provided the outstanding balance of all Participant
loans made to such
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Participant does not exceed 50% of the Participant's vested Account
Balance, determined immediately after the origination of each loan, and
if applicable, the spousal consent requirements described in Section
14.9 have been satisfied. The Plan Administrator (with the consent of
the Trustee) may require a Participant to provide additional collateral
to receive a Participant loan if the Plan Administrator determines such
additional collateral is required to protect the interests of Plan
Participants. A separate loan policy or written modifications to this
loan policy may prescribe alternative rules for obtaining adequate
security. However, the 50% rule in this paragraph may not be replaced
with a greater percentage.
14.6 Periodic Repayment. A Participant loan must provide for level
amortization with payments to be made not less frequently than
quarterly. A Participant loan must be payable within a period not
exceeding five (5) years from the date the Participant receives the
loan from the Plan, unless the loan is for the purchase of the
Participant's principal residence, in which case the loan must be
payable within a reasonable time commensurate with the repayment period
permitted by commercial lenders for similar loans. Loan repayments must
be made through payroll withholding, except to the extent the Plan
Administrator determines payroll withholding is not practical given the
level of a Participant's wages, the frequency with which the
Participant is paid, or other circumstances.
(a) Unpaid leave of absence. A Participant with an outstanding
Participant loan may suspend loan payments to the Plan for up
to 12 months for any period during which the Participant is on
an unpaid leave of absence. Upon the Participant's return to
employment (or after the end of the 12 month period, if
earlier), the Participant's outstanding loan will be
reamortized over the remaining period of such loan to make up
for the missed payments. The reamortized loan may extend
beyond the original loan term so long as the loan is paid in
full by whichever of the following dates comes first: (1) the
date which is five (5) years from the original date of the
loan (or the end of the suspension, if sooner), or (2) the
original loan repayment deadline (or the end of the suspension
period, if later) plus the length of the suspension period.
(b) Military leave. A Participant with an outstanding Participant
loan also may suspend loan payments for any period such
Participant is on military leave, in accordance with Code
ss.414(u)(4). Upon the Participant's return from military
leave (or the expiration of five years from the date the
Participant began his/her military leave, if earlier), loan
payments will recommence under the amortization schedule in
effect prior to the Participant's military leave, without
regard to the five year maximum loan repayment period.
Alternatively, the loan may be reamortized to require a
different level of loan payment, as long as the amount and
frequency of such payments are not less than the amount and
frequency under the amortization schedule in effect prior to
the Participant's military leave.
A separate loan policy or written modification to this loan policy may
(1) modify the time period for repaying Participant loans, provided
Participant loans are required to be repaid over a period that is not
longer than the periods described in this Section; (2) specify the
frequency of Participant loan repayments, provided the payments are
required at least quarterly; (3) modify the requirement that loans be
repaid through payroll withholding; or (4) modify or eliminate the
leave of absence and/or military leave rules under this Section.
14.7 Loan Limitations. A Participant loan may not be made to the extent such
loan (when added to the outstanding balance of all other loans made to
the Participant) exceeds the lesser of:
(a) $50,000 (reduced by the excess, if any, of the Participant's
highest outstanding balance of loans from the Plan during the
one-year period ending on the day before the date on which
such loan is made, over the Participant's outstanding balance
of loans from the Plan as of the date such loan is made) or
(b) one-half (1/2) of the Participant's vested Account Balance,
determined as of the Valuation Date coinciding with or
immediately preceding such loan, adjusted for any
contributions or distributions made since such Valuation Date.
A Participant may not receive a Participant loan of less than $1,000
nor may a Participant have more than one Participant loan outstanding
at any time. A Participant may renegotiate a loan without violating the
one outstanding loan requirement to the extent such renegotiated loan
is a new loan (i.e., the renegotiated loan separately satisfies the
reasonable interest rate requirement under Section 14.4, the adequate
security requirement under Section 14.5, and the periodic repayment
requirement under Section 14.6). and the renegotiated loan does not
exceed the limitations under (a) or (b) above, treating both the
replaced loan and the renegotiated loan as outstanding at the same
time. However, if the term of the renegotiated loan does not end later
than the original term of the replaced loan, the replaced loan may be
ignored in applying the limitations under (a) and (b) above.
In applying the limitations under this Section, all plans maintained by
the Employer are aggregated and treated as a single plan. In addition,
any assignment or pledge of any portion of the Participant's interest
in the Plan and any loan, pledge, or assignment with respect to any
insurance contract purchased under the Plan will be treated as loan
under this Section.
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A separate written loan policy or written modifications to this loan
policy may (1) modify the limitations on the amount of a Participant
loan; (2) modify or eliminate the minimum loan amount requirement; (3)
permit a Participant to have more than one loan outstanding at a time;
(4) prescribe limitations on the purposes for which loans may be
required; or (5) prescribe rules for reamortization, consolidation,
renegotiation, or refinancing of loans.
14.8 Segregated Investment. A Participant loan is treated as a segregated
investment on behalf of the individual Participant for whom the loan is
made. The Plan Administrator may adopt separate administrative
procedures for determining which type or types of contributions (and
the amount of each type of contribution) may be used to provide the
Participant loan. If the Plan Administrator does not adopt procedures
designating the type of contributions from which the Participant loan
will be made, such loan is deemed to be made on a proportionate basis
from each type of contribution.
Unless requested otherwise on the Participant's loan application, a
Participant loan will be made equally from all investment funds in
which the applicable contributions are held. A Participant or
Beneficiary may direct the Trustee, on his/her loan application, to
withdraw the Participant loan amounts from a specific investment fund
or funds. A Participant loan will not violate the requirements of this
default loan policy merely because the Plan Administrator does not
permit the Participant to designate the contributions or funds from
which the Participant loan will be made. Each payment of principal and
interest paid by a Participant on his/her Participant loan shall be
credited proportionately to such Participant's Account(s) and to the
investment funds within such Account(s).
A separate loan policy or written modifications to this loan policy may
modify the rules of this Section without limitation, including
prescribing different rules for determining the source of a loan with
respect to contribution types and investment funds.
14.9 Spousal Consent. If this Plan is subject to the Joint and Survivor
Annuity requirements under Article 9, a Participant may not use his/her
Account Balance as security for a Participant loan unless the
Participant's spouse, if any, consents to the use of such Account
Balance as security for the loan. The spousal consent must be made
within the 90-day period ending on the date the Participant's Account
Balance is to be used as security for the loan. Spousal consent is not
required, however, if the value of the Participant's total vested
Account Balance (as determined under Section 8.3(e)) does not exceed
$5,000 ($3,500 for loans made before the time the $5,000 rules becomes
effective under Section 8.3). If the Plan is not subject to the Joint
and Survivor Annuity requirements under Article 9, a spouse's consent
is not required to use a Participant's Account Balance as security for
a Participant loan, regardless of the value of the Participant's
Account Balance.
Any spousal consent required under this Section must be in writing,
must acknowledge the effect of the loan, and must be witnessed by a
plan representative or notary public. Any such consent to use the
Participant's Account Balance as security for a Participant loan is
binding with respect to the consenting spouse and with respect to any
subsequent spouse as it applies to such loan. A new spousal consent
will be required if the Account Balance is subsequently used as
security for a renegotiation, extension, renewal, or other revision of
the loan. A new spousal consent also will be required only if any
portion of the Participant's Account Balance will be used as security
for a subsequent Participant loan.
A separate loan policy or written modifications to this loan policy may
not eliminate the spousal consent requirement where it would be
required under this Section, but may impose spousal consent
requirements that are not prescribed by this Section.
14.10 Procedures for Loan Default. A Participant will be considered to be in
default with respect to a loan if any scheduled repayment with respect
to such loan is not made by the end of the calendar quarter following
the calendar quarter in which the missed payment was due.
If a Participant defaults on a Participant loan, the Plan may not
offset the Participant's Account Balance until the Participant is
otherwise entitled to an immediate distribution of the portion of the
Account Balance which will be offset and such amount being offset is
available as security on the loan, pursuant to Section 14.5. For this
purpose, a loan default is treated as an immediate distribution event
to the extent the law does not prohibit an actual distribution of the
type of contributions which would be offset as a result of the loan
default (determined without regard to the consent requirements under
Articles 8 and 9, so long as spousal consent was properly obtained at
the time of the loan, if required under Section 14.9). The Participant
may repay the outstanding balance of a defaulted loan (including
accrued interest through the date of repayment) at any time.
Pending the offset of a Participant's Account Balance following a
defaulted loan, the following rules apply to the amount in default.
(a) Interest continues to accrue on the amount in default until
the time of the loan offset or, if earlier, the date the loan
repayments are made current or the amount is satisfied with
other collateral.
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(b) A subsequent offset of the amount in default is not reported
as a taxable distribution, except to the extent the taxable
portion of the default amount was not previously reported by
the Plan as a taxable distribution.
(c) The post-default accrued interest included in the loan offset
is not reported as a taxable distribution at the time of the
offset.
A separate loan policy or written modifications to this loan policy may
modify the procedures for determining a loan default.
14.11 Termination of Employment.
(a) Offset of outstanding loan. A Participant loan becomes due and
payable in full immediately upon the Participant's termination
of employment. Upon a Participant's termination, the
Participant may repay the entire outstanding balance of the
loan (including any accrued interest) within a reasonable
period following termination of employment. If the Participant
does not repay the entire outstanding loan balance, the
Participant's vested Account Balance will be reduced by the
remaining outstanding balance of the loan (without regard to
the consent requirements under Articles 8 and 9, so long as
spousal consent was properly obtained at the time of the loan,
if required under Section 14.9), to the extent such Account
Balance is available as security on the loan, pursuant to
Section 14.5, and the remaining vested Account Balance will be
distributed in accordance with the distribution provisions
under Article 8. If the outstanding loan balance of a deceased
Participant is not repaid, the outstanding loan balance shall
be treated as a distribution to the Participant and shall
reduce the death benefit amount payable to the Beneficiary
under Section 8.4.
(b) Direct Rollover. Upon termination of employment, a Participant
may request a Direct Rollover of the loan note (provided the
distribution is an Eligible Rollover Distribution as defined
in Section 8.8(a)) to another qualified plan which agrees to
accept a Direct Rollover of the loan note. A Participant may
not engage in a Direct Rollover of a loan to the extent the
Participant has already received a deemed distribution with
respect to such loan. (See the rules regarding deemed
distributions upon a loan default under Section 14.10.)
(c) Modified loan policy. A separate loan policy or written
modifications to this loan policy may modify this Section
14.11, including, but not limited to: (1) a provision to
permit loan repayments to continue beyond termination of
employment; (2) to prohibit the Direct Rollover of a loan
note; and (3) to provide for other events that may accelerate
the Participant's repayment obligation under the loan.
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ARTICLE 15
INVESTMENT IN LIFE INSURANCE
This Article provides special rules for Plans that permit investment in life
insurance on the life of the Participant, the Participant's spouse, or other
family members. The Employer may elect in Part 12 of the Agreement to permit
life insurance investments in the Plan, or life insurance investments may be
permitted, prohibited, or restricted under the Plan through separate investment
procedures or a separate funding policy. If the Plan prohibits investments in
life insurance, this Article does not apply.
15.1 Investment in Life Insurance. A group or individual life insurance
policy purchased by the Plan may be issued on the life of a
Participant, a Participant's spouse, a Participant's child or children,
a family member of the Participant, or any other individual with an
insurable interest. If this Plan is a money purchase plan, a life
insurance policy may only be issued on the life of the Participant. A
life insurance policy includes any type of policy, including a
second-to-die policy, provided that the holding of a particular type of
policy is not prohibited under rules applicable to qualified plans.
Any premiums on life insurance held for the benefit of a Participant
will be charged against such Participant's vested Account Balance.
Unless directed otherwise, the Plan Administrator will reduce each of
the Participant's Accounts under the Plan equally to pay premiums on
life insurance held for such Participant's benefit. Any premiums paid
for life insurance policies must satisfy the incidental life insurance
rules under Section 15.2.
15.2 Incidental Life Insurance Rules. Any life insurance purchased under the
Plan must meet the following requirements:
(a) Ordinary life insurance policies. The aggregate premiums paid
for ordinary life insurance policies (i.e., policies with both
nondecreasing death benefits and nonincreasing premiums) for
the benefit of a Participant shall not at any time exceed 49%
of the aggregate amount of Employer Contributions (including
Section 401(k) Deferrals) and forfeitures that have been
allocated to the Account of such Participant.
(b) Life insurance policies other than ordinary life. The
aggregate premiums paid for term, universal or other life
insurance policies (other than ordinary life insurance
policies) for the benefit of a Participant shall not at any
time exceed 25% of the aggregate amount of Employer
Contributions (including Section 401(k) Deferrals) and
forfeitures that have been allocated to the Account of such
Participant.
(c) Combination of ordinary and other life insurance policies. The
sum of one half (1/2) of the aggregate premiums paid for
ordinary life insurance policies plus all the aggregate
premiums paid for any other life insurance policies for the
benefit of a Participant shall not at any time exceed 25% of
the aggregate amount of Employer Contributions (including
Section 401(k) Deferrals) and forfeitures which have been
allocated to the Account of such Participant.
(d) Exception for certain profit sharing and 401(k) plans. If the
Plan is a profit sharing plan or a 401(k) plan, the
limitations in this Section do not apply to the extent life
insurance premiums are paid only with Employer Contributions
and forfeitures that have been accumulated in the
Participant's Account for at least two years or are paid with
respect to a Participant who has been an Eligible Participant
for at least five years. For purposes of applying this special
limitation, Employer Contributions do not include any Section
401(k) Deferrals, QMACs, QNECs or Safe Harbor Contributions
under a 401(k) plan.
(e) Exception for Employee After Tax Contributions and Rollover
Contributions. The Plan Administrator also may invest, with
the Participant's consent, any portion of the Participant's
Employee After Tax Contribution Account or Rollover
Contribution Account in a group or individual life insurance
policy for the benefit of such Participant, without regard to
the incidental life insurance rules under this Section.
15.3 Ownership of Life Insurance Policies. The Trustee is the owner of any
life insurance policies purchased under the Plan in accordance with the
provisions of this Article 15. Any life insurance policy purchased
under the Plan must designate the Trustee as owner and beneficiary
under the policy. The Trustee will pay all proceeds of any life
insurance policies to the Beneficiary of the Participant for whom such
policy is held in accordance with the distribution provisions under
Article 8 and the Joint and Survivor Annuity requirements under Article
9. In no event shall the Trustee retain any part of the proceeds from
any life insurance policies for the benefit of the Plan.
15.4 Evidence of Insurability. Prior to purchasing a life insurance policy,
the Plan Administrator may require the individual whose life is being
insured to provide evidence of insurability, such as a physical
examination, as may be required by the Insurer.
15.5 Distribution of Insurance Policies. Life insurance policies under the
Plan, which are held on behalf of a Participant, must be distributed to
the Participant or converted to cash upon the later of the
Participant's Distribution Commencement Date (as defined in Section
22.56) or termination of employment. Any life insurance policies that
are held on behalf of a terminated Participant must continue to satisfy
the incidental life insurance rules under Section 15.2.
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If a life insurance policy is purchased on behalf of an individual
other than the Participant, and such individual dies, the Participant
may withdraw any or all life insurance proceeds from the Plan, to the
extent such proceeds exceed the cash value of the life insurance policy
determined immediately before the death of the insured individual.
15.6 Discontinuance of Insurance Policies. Investments in life insurance may
be discontinued at any time, either at the direction of the Trustee or
other fiduciary responsible for making investment decisions. If the
Plan provides for Participant direction of investments, life insurance
as an investment option may be eliminated at any time by the Plan
Administrator. Where life insurance investment options are being
discontinued, the Plan Administrator, in its sole discretion, may offer
the sale of the insurance policies to the Participant, or to another
person, provided that the prohibited transaction exemption requirements
prescribed by the Department of Labor are satisfied.
15.7 Protection of Insurer. An Insurer that issues a life insurance policy
under the terms of this Article, shall not be responsible for the
validity of this Plan and shall be protected and held harmless for any
actions taken or not taken by the Trustee or any actions taken in
accordance with written directions from the Trustee or the Employer (or
any duly authorized representatives of the Trustee or Employer). An
Insurer shall have no obligation to determine the propriety of any
premium payments or to guarantee the proper application of any payments
made by the insurance company to the Trustee.
The Insurer is not and shall not be considered a party to this
Agreement and is not a fiduciary with respect to the Plan solely as a
result of the issuance of life insurance policies under this Article
15.
15.8 No Responsibility for Act of Insurer. Neither the Employer, the Plan
Administrator nor the Trustee shall be responsible for the validity of
the provisions under a life insurance policy issued under this Article
15 or for the failure or refusal by the Insurer to provide benefits
under such policy. The Employer, the Plan Administrator and the Trustee
are also not responsible for any action or failure to act by the
Insurer or any other person which results in the delay of a payment
under the life insurance policy or which renders the policy invalid or
unenforceable in whole or in part.
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ARTICLE 16
TOP-HEAVY PLAN REQUIREMENTS
This Article contains the rules for determining whether the Plan is a Top-Heavy
Plan and the consequences of having a Top-Heavy Plan. Part 6 of the Agreement
provides for elections relating to the vesting schedule for a Top-Heavy Plan.
Part 13 of the Agreement allows the Employer to elect to satisfy the Top-Heavy
Plan allocation requirements under another plan.
16.1 In General. If the Plan is or becomes a Top-Heavy Plan in any Plan
Year, the provisions of this Article 16 will supersede any conflicting
provisions in the Plan or Agreement. However, this Article 16 will no
longer apply if Code ss.416 is repealed.
16.2 Top-Heavy Plan Consequences.
(a) Minimum allocation for Non Key Employees. If the Plan is a Top
Heavy Plan for any Plan Year, except as otherwise provided in
subsections (4) and (5) below, the Employer Contributions and
forfeitures allocated for the Plan Year on behalf of any
Eligible Participant who is a Non Key Employee must not be
less than a minimum percentage of the Participant's Total
Compensation (as defined in Section 16.3(i)). If any Non Key
Employee who is entitled to receive a top heavy minimum
contribution pursuant to this Section 16.2(a) fails to receive
an appropriate allocation, the Employer will make an
additional contribution on behalf of such Non Key Employee to
satisfy the requirements of this Section. The Employer may
elect under Part 4 of the Agreement [Part 4C of the 401(k)
Agreement] to make the top heavy contribution to all Eligible
Participants. If the Employer elects under the Agreement to
provide the top heavy minimum contribution to all Eligible
Participants, the Employer also will make an additional
contribution on behalf of any Key Employee who is an Eligible
Participant and who did not receive an allocation equal to the
top heavy minimum contribution.
(1) Determining the minimum percentage. The minimum
percentage that must be allocated under subsection
(a) above is the lesser of: (i) three (3) percent of
Total Compensation for the Plan Year or (ii) the
highest contribution rate for any Key Employee for
the Plan Year. The highest contribution rate for a
Key Employee is determined by taking into account the
total Employer Contributions and forfeitures
allocated to each Key Employee for the Plan Year, as
a percentage of the Key Employee's Total
Compensation. A Key Employee's contribution rate
includes Section 401(k) Deferrals made by the Key
Employee for the Plan Year (except as provided by
regulation or statute). If this Plan is aggregated
with a Defined Benefit Plan to satisfy the
requirements of Code ss.401(a)(4) or Code ss.410(b),
the minimum percentage is three (3) percent, without
regard to the highest Key Employee contribution rate.
See subsection (5) below if the Employer maintains
more than one plan.
(2) Determining whether the Non-Key Employee's allocation
satisfies the minimum percentage. To determine if a
Non-Key Employee's allocation of Employer
Contributions and forfeitures is at least equal to
the minimum percentage, the Employee's Section 401(k)
Deferrals for the Plan Year are disregarded. In
addition, Matching Contributions allocated to the
Employee's Account for the Plan Year are disregarded,
unless: (i) the Plan Administrator elects to take all
or a portion of the Matching Contributions into
account, or (ii) Matching Contributions are taken
into account by statute or regulation. The rule in
(i) does not apply unless the Matching Contributions
so taken into account could satisfy the
nondiscrimination testing requirements under Code
ss.401(a)(4) if tested separately. Any Employer
Matching Contributions used to satisfy the Top-Heavy
Plan minimum allocation may not be used in the ACP
Test (as defined in Section 17.3), except to the
extent permitted under statute, regulation or other
guidance of general applicability.
(3) Certain allocation conditions inapplicable. The
Top-Heavy Plan minimum allocation shall be made even
though, under other Plan provisions, the Non-Key
Employee would not otherwise be entitled to receive
an allocation, or would have received a lesser
allocation for the Plan Year because of:
(i) the Participant's failure to complete 1,000
Hours of Service (or any equivalent provided
in the Plan),
(ii) the Participant's failure to make Employee
After-Tax Contributions to the Plan, or
(iii) Total Compensation is less than a stated
amount.
The minimum allocation also is determined without
regard to any Social Security contribution or whether
an Eligible Participant fails to make Section 401(k)
Deferrals for a Plan Year in which the Plan includes
a 401(k) feature.
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(4) Participants not employed on the last day of the Plan
Year. The minimum allocation requirement described in
this subsection (a) does not apply to an Eligible
Participant who was not employed by the Employer on
the last day of the applicable Plan Year.
(5) Participation in more than one Top-heavy Plan. The
minimum allocation requirement described in this
subsection (a) does not apply to an Eligible
Participant who is covered under another plan
maintained by the Employer if, pursuant to Part 13,
#54 of the Agreement [Part 13, #72 of the 401(k)
Agreement], the other Plan will satisfy the minimum
allocation requirement.
(i) More than one Defined Contribution Plans. If
the Employer maintains more than one
top-heavy Defined Contribution Plan
(including Paired Plans), the Employer may
designate in Part 13, #54.a. of the
Agreement [Part 13, #72.a. of the 401(k)
Agreement] which plan will provide the
top-heavy minimum contribution to Non-Key
Employees. Alternatively, under Part 13,
#54.a.(3) of the Agreement [Part 13,
#72.a.(3) of the 401(k) Agreement], the
Employer may designate another means of
complying with the top-heavy requirements.
If Part 13, #54 of the Agreement [Part 13,
#72 of the 401(k) Agreement] is not
completed and the Employer maintains more
than one Defined Contribution Plan, the
Employer will be deemed to have selected
this Plan under Part 13, #54.a. of the
Agreement [Part 13, #72.a. of the 401(k)
Agreement] as the Plan under which the
top-heavy minimum contribution will be
provided.
If an Employee is entitled to a top-heavy
minimum contribution but has not satisfied
the minimum age and/or service requirements
under the Plan designated to provide the
top-heavy minimum contribution, the Employee
may receive a top-heavy minimum contribution
under the designated Plan. Thus, for
example, if the Employer maintains both a
401(k) plan and a non-401(k) plan, a Non-Key
Employee who has not satisfied the minimum
age and service conditions under Part 1, #5
of the non-401(k) plan Agreement is eligible
for a top-heavy minimum allocation under the
non-401(k) plan (if so provided under Part
13, #54.a. of the Agreement [Part 13, #72.a.
of the 401(k) Agreement]) if such Employee
has satisfied the eligibility conditions for
making Section 401(k) Deferrals under the
401(k) plan. The provision of a top-heavy
minimum contribution under this paragraph
will not cause the Plan to fail the minimum
coverage or nondiscrimination rules. The
Employer may designate an alternative method
of providing the top-heavy minimum
contribution to such Employees under Part
13, #54.a.(3) of the Agreement [Part 13,
#72.a.(3) of the 401(k) Agreement].
(ii) Defined Contribution Plan and a Defined
Benefit Plan. If the Employer maintains both
a top-heavy Defined Contribution Plan (under
this BPD) and a top-heavy Defined Benefit
Plan, the Employer must designate the manner
in which the plans will comply with the
Top-Heavy Plan requirements. Under Part 13,
#54.b. of the Agreement [Part 13, #72.b. of
the 401(k) Agreement], the Employer may
elect to provide the top-heavy minimum
benefit to Non-Key Employees who participate
in both Plans (A) in the Defined Benefit
Plan; (B) in the Defined Contribution Plan
(but increasing the minimum allocation from
3% to 5%); or (C) under any other acceptable
method of compliance. If a Non-Key Employee
participates only under the Defined Benefit
Plan, the top-heavy minimum benefit will be
provided under the Defined Benefit Plan. If
a Non-Key Employee participates only under
the Defined Contribution Plan, the top-heavy
minimum benefit will be provided under the
Defined Contribution Plan (without regard to
this subsection (ii)). If Part 13, #54.b. of
the Agreement [Part 13, #72.b. of the 401(k)
Agreement] is not completed and the Employer
maintains a Defined Benefit Plan, the
Employer will be deemed to have selected
this Plan under Part 13, #54.b.(1) of the
Agreement [Part 13, #72.b.(1) of the 401(k)
Agreement] as the plan under which the
top-heavy minimum contribution will be
provided.
If the Employer maintains more than one
Defined Contribution Plan in addition to a
Defined Benefit Plan, the Employer may use
Part 13, #54.b.(3) of the Agreement [Part
13, #72.b.(3) of the 401(k) Agreement] to
designate which Defined Contribution Plan
will provide the top-heavy minimum
contribution.
If the Employer is using the Four-Step
Permitted Disparity Method (as described in
Section 2.2(b)(ii)) and elects under Part
13, #54.b.(1) of the Agreement [Part 13,
#72.b.(1) of the 401(k) Agreement] to
provide a 5% top-heavy minimum contribution,
the 3% minimum allocation under Step One is
increased to 5%. The 3% allocation under
Step Two will also be increased to the
lesser of (A) 5% or (B) the amount
determined under Step Three (increased by 3
percentage points). If an additional
allocation is to be
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made under Step Three, the Applicable
Percentage under Section 2.2(b)(ii)(C) must
be reduced by 2 percentage points (but not
below zero).
(6) No forfeiture for certain events. The minimum
top-heavy allocation (to the extent required to be
nonforfeitable under Code ss.416(b)) may not be
forfeited under the suspension of benefit rules of
Code ss.411(a)(3)(B) or the withdrawal of mandatory
contribution rules of Code ss.411(a)(3)(D).
(b) Special Top Heavy Vesting Rules.
(1) Minimum vesting schedules. For any Plan Year in which
this Plan is a Top-Heavy Plan, the Top-Heavy Plan
vesting schedule elected in Part 6, #19 of the
Agreement [Part 6, #37 of the 401(k) Agreement] will
automatically apply to the Plan. The Top-Heavy Plan
vesting schedule will apply to all benefits within
the meaning of Code ss.411(a)(7) except those
attributable to Employee After-Tax Contributions,
including benefits accrued before the effective date
of Code ss.416 and benefits accrued before the Plan
became a Top-Heavy Plan. No decrease in a
Participant's nonforfeitable percentage may occur in
the event the Plan's status as a Top-Heavy Plan
changes for any Plan Year. However, this subsection
does not apply to the Account Balance of any Employee
who does not have an Hour of Service after a
Top-Heavy Plan vesting schedule becomes effective.
(2) Shifting Top-Heavy Plan status. If the vesting
schedule under the Plan shifts in or out of the
Top-Heavy Plan vesting schedule for any Plan Year
because of a change in Top-Heavy Plan status, such
shift is an amendment to the vesting schedule and the
election in Section 4.7 of the Plan applies.
16.3 Top-Heavy Definitions.
(a) Determination Date: For any Plan Year subsequent to the first
Plan Year, the Determination Date is the last day of the
preceding Plan Year. For the first Plan Year of the Plan, the
Determination Date is the last day of that first Plan Year.
(b) Determination Period: The Plan Year containing the
Determination Date and the four (4) preceding Plan Years.
(c) Key Employee: Any Employee or former Employee (and the
Beneficiaries of such Employee) is a Key Employee for a Plan
Year if, at any time during the Determination Period, the
individual was:
(1) an officer of the Employer with annual Total
Compensation in excess of 50 percent of the dollar
limitation under Codess.415(b)(1)(A),
(2) an owner (or considered an owner under Code ss.318)
of one of the ten largest interests in the Employer
with annual Total Compensation in excess of 100
percent of the dollar limitation under Code
ss.415(c)(1)(A);
(3) a Five-Percent Owner (as defined in Section 22.88),
(4) a more than 1-percent owner of the Employer with an
annual Total Compensation of more than $150,000.
The Key Employee determination will be made in accordance with
Code ss.416(i)(1) and the regulations thereunder.
(d) Permissive Aggregation Group: The Required Aggregation Group
of plans plus any other plan or plans of the Employer which,
when considered as a group with the Required Aggregation
Group, would continue to satisfy the requirements of Code
ss.ss.401(a)(4) and 410.
(e) Present Value: The present value based on the interest and
mortality rates specified in the relevant Defined Benefit
Plan. In the event that more than one Defined Benefit Plan is
included in a Required Aggregation Group or Permissive
Aggregation Group, a uniform set of actuarial assumptions must
be applied to determine present value. The Employer may
specify in Part 13, #54.b.(3) of the Agreement [Part 13,
#72.b.(3) of the 401(k) Agreement] the actuarial assumptions
that will apply if the Defined Benefit Plans do not specify a
uniform set of actuarial assumptions to be used to determine
if the plans are Top Heavy.
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(f) Required Aggregation Group:
(1) Each qualified plan of the Employer in which at least
one Key Employee participates or participated at any
time during the Determination Period (regardless of
whether the plan has terminated), and
(2) any other qualified plan of the Employer that enables
a plan described in (l) to meet the coverage or
nondiscrimination requirements of Code ss.ss.410(b)
or 401(a)(4).
(g) Top Heavy Plan: For any Plan Year, this Plan is a Top Heavy
Plan if any of the following conditions exist:
(1) The Plan is not part of any Required Aggregation
Group or Permissive Aggregation Group of plans, and
the Top-Heavy Ratio for the Plan exceeds 60 percent.
(2) The Plan is part of a Required Aggregation Group of
plans, but not part of a Permissive Aggregation
Group, and the Top-Heavy Ratio for the Required
Aggregation Group of plans exceeds 60 percent.
(3) The Plan is part of a Required Aggregation Group and
part of a Permissive Aggregation Group of plans, and
the Top-Heavy Ratio for the Permissive Aggregation
Group exceeds 60 percent.
(h) Top Heavy Ratio:
(1) Defined Contribution Plans only. This paragraph
applies if the Employer maintains one or more Defined
Contribution Plans (including any SEP described under
Code ss.408(k)) and the Employer has not maintained
any Defined Benefit Plan that during the
Determination Period has or has had Accrued Benefits.
The Top-Heavy Ratio for this Plan alone, or for the
Required Aggregation Group or Permissive Aggregation
Group, as appropriate, is a fraction, the numerator
of which is the sum of the Account Balances of all
Key Employees as of the Determination Date(s) and the
denominator of which is the sum of all Account
Balances, both computed in accordance with Code
ss.416 and the regulations thereunder.
(2) Defined Contribution Plan and Defined Benefit Plan.
This paragraph applies if the Employer maintains one
or more Defined Contribution Plans (including a SEP
described under Code ss.408(k)) and the Employer
maintains or has maintained one or more Defined
Benefit Plans which during the Determination Period
has or has had any Accrued Benefits. The Top-Heavy
Ratio for any Required Aggregation Group or
Permissive Aggregation Group, as appropriate, is a
fraction, the numerator of which is the sum of
Account Balances under the aggregated Defined
Contribution Plan(s) for all Key Employees, and the
Present Value of Accrued Benefits under the
aggregated Defined Benefit Plan(s) 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(s) for all Participants and the Present Value of
Accrued Benefits under the Defined Benefit Plan(s)
for all Participants as of the Determination Date(s),
all determined in accordance with Code ss.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 distributions of an accrued benefit made in the
five-year period ending on the Determination Date.
(3) Applicable Valuation Dates. For purposes of
subsections (1) and (2) above, the value of Account
Balances and the Present Value of Accrued Benefits
will be determined as of the most recent Valuation
Date that falls within or ends with the 12-month
period ending on the Determination Date, except as
provided in Code ss.416 and the regulations
thereunder for the first and second Plan Years of a
Defined Benefit Plan. 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.
(4) Valuation of benefits. Determining a Participant's
Account Balance or Accrued Benefit. 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
ss.416 and the regulations thereunder. For purposes
of subsections (1) and (2) above, the Account Balance
and/or Accrued Benefit of each Participant is
adjusted as provided under subsections (i) and (ii)
below.
(i) Increase for prior distributions. In
applying the Top-Heavy Ratio, a
Participant's Account Balance and/or Accrued
Benefit is increased for any distributions
made from the Plan during the Determination
Period.
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(ii) Increase for future contributions. Both the
numerator and denominator of the Top-Heavy
Ratio are increased to reflect any
contribution to a Defined Contribution Plan
not actually made as of the Determination
Date, but which is required to be taken into
account on that date under Code ss.416 and
the regulations thereunder.
(iii) Exclusion of certain benefits. The Account
Balance and/or Accrued Benefit of a
Participant (and any distribution during the
Determination Period with respect to such
Participant's Account Balance or Accrued
Benefit) is disregarded from the Top-Heavy
Ratio if: (A) the Participant is a Non-Key
Employee who was a Key Employee in a prior
year, or (B) the Participant has not been
credited with at least one Hour of Service
during the Determination Period. 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 Codess.416 and the
regulations thereunder.
(iv) Calculation of Accrued Benefit. The Accrued
Benefit of a Participant other than a Key
Employee shall be determined under: (A) the
method, if any, that uniformly applies for
accrual purposes under all Defined Benefit
Plans maintained by the Employer; or (B) if
there is no such method, as if such benefit
accrued not more rapidly than the slowest
accrual rate permitted under the fractional
rule of Code ss.411(b)(1)(C).
(i) Total Compensation. For purposes of determining the minimum
top heavy contribution under 16.2(a), Total Compensation is
determined using the definition under Section 7.4(f),
including the special rule under Section 7.4(f)(4) for years
beginning before January 1, 1998. For this purpose, Total
Compensation is subject to the Compensation Dollar Limitation
as defined in Section 22.32.
(j) Valuation Date: The date as of which Account Balances are
valued for purposes of calculating the Top Heavy Ratio.
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ARTICLE 17
401(k) PLAN PROVISIONS
This Article sets forth the special testing rules applicable to Section 401(k)
Deferrals, Employer Matching Contributions, and Employee After-Tax Contributions
that may be made under the 401(k) Agreement and the requirements to qualify as a
Safe Harbor 401(k) Plan. Section 17.1 provides limits on the amount of Elective
Deferrals an Employee may defer into the Plan during a calendar year. Sections
17.2 and 17.3 set forth the rules for running the ADP Test and ACP Test with
respect to contributions under the 401(k) plan and Section 17.4 discusses the
requirements for applying the Multiple Use Test. Section 17.5 prescribes special
testing rules for performing the ADP Test and the ACP Test. Section 17.6 sets
forth the requirements that must be met to qualify as a Safe Harbor 401(k) Plan.
Unless otherwise stated, any reference to the Agreement under this Article 17 is
a reference to the 401(k) Agreement.
17.1 Limitation on the Amount of Section 401(k) Deferrals.
(a) In general. An Eligible Participant's total Section 401(k)
Deferrals under this Plan, or any other qualified plan of the
Employer, for any calendar year may not exceed the lesser of:
(1) the percentage of Included Compensation designated
under Part 4A, #12 of the Agreement;
(2) the dollar limitation under Code ss.402(g); or
(3) the amount permitted under the Annual Additions
Limitation described in Article 7.
(b) Maximum deferral limitation. If the Employer elects to impose
a maximum deferral limitation under Part 4A, #12 of the
Agreement, it must designate under Part 4A, #12.a. the period
for which such limitation applies. Regardless of any
limitation designated under Part 4A, #12 of the Agreement, the
Employer may provide for alternative limitations in the Salary
Reduction Agreement with respect to designated types of
Included Compensation, such as bonus payments. If no maximum
percentage is designated under Part 4A, #12 of the Agreement,
the only limit on a Participant's Section 401(k) Deferrals
under this Plan is the dollar limitation under Code ss.402(g)
and the Annual Additions Limitation.
(c) Correction of Code ss.402(g) violation. A Participant may not
make Section 401(k) Deferrals that exceed the dollar
limitation under Code ss.402(g). The dollar limitation under
Code ss.402(g) applicable to a Participant's Section 401(k)
Deferrals under this Plan is reduced by any Elective Deferrals
the Participant makes under any other plan maintained by the
Employer. If a Participant makes Section 401(k) Deferrals that
exceed the Code ss.402(g) limit, the Employer may correct the
Code ss.402(g) violation in the following manner.
(1) Suspension of Section 401(k) Deferrals. The Employer
may suspend a Participant's Section 401(k) Deferrals
under the Plan for the remainder of the calendar year
when the Participant's Section 401(k) Deferrals under
this Plan, in combination with any Elective Deferrals
the Participant makes during the calendar year under
any other plan maintained by the Employer, equal or
exceed the dollar limitation under Code ss.402(g).
(2) Distribution of Excess Deferrals. If a Participant
makes Section 401(k) Deferrals under this Plan during
a calendar year which exceed the dollar limitation
under Code ss.402(g), the Participant will receive a
corrective distribution from the Plan of the Excess
Deferrals (plus allocable income) no later than April
15 of the following calendar year. The amount which
must be distributed as a correction of Excess
Deferrals for a calendar year equals the amount of
Elective Deferrals the Participant contributes in
excess of the dollar limitation under Code ss.402(g)
during the calendar year to this Plan, and any other
plan maintained by the Employer, reduced by any
corrective distribution of Excess Deferrals the
Participant receives during the calendar year from
this Plan or other plan(s) maintained by the
Employer. Excess Deferrals that are distributed after
April 15 are includible in the Participant's gross
income in both the taxable year in which deferred and
the taxable year in which distributed.
(i) Allocable gain or loss. A corrective
distribution of Excess Deferrals must
include any allocable gain or loss for the
calendar year in which the Excess Deferrals
are made. For this purpose, allocable gain
or loss on Excess Deferrals may be
determined in any reasonable manner,
provided the manner used to determine
allocable gain or loss is applied uniformly
and in a manner that is reasonably
reflective of the method used by the Plan
for allocating income to Participants'
Accounts.
(ii) Coordination with other provisions. A
corrective distribution of Excess Deferrals
made by April 15 of the following calendar
year may be made without consent of the
Participant or the Participant's spouse, and
without regard to any distribution
restrictions
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applicable under Article 8 or Article 9. A
corrective distribution of Excess Deferrals
made by the appropriate April 15 also is not
treated as a distribution for purposes of
applying the required minimum distribution
rules under Article 10.
(iii) Coordination with corrective distribution of
Excess Contributions. If a Participant for
whom a corrective distribution of Excess
Deferrals is being made received a previous
corrective distribution of Excess
Contributions to correct the ADP Test for
the Plan Year beginning with or within the
calendar year for which the Participant made
the Excess Deferrals, the previous
corrective distribution of Excess
Contributions is treated first as a
corrective distribution of Excess Deferrals
to the extent necessary to eliminate the
Excess Deferral violation. The amount of the
corrective distribution of Excess
Contributions which is required to correct
the ADP Test failure is reduced by the
amount treated as a corrective distribution
of Excess Deferrals.
(3) Correction of Excess Deferrals under plans not
maintained by the Employer. The correction provisions
under subsections (1) and (2) above apply only if a
Participant makes Excess Deferrals under plans
maintained by the Employer. However, if a Participant
has Excess Deferrals because the total Elective
Deferrals for a calendar year under all plans in
which he/she participates, including plans that are
not maintained by the Employer, exceed the dollar
limitation under Code ss.402(g), the Participant may
assign to this Plan any portion of the Excess
Deferrals made during the calendar year. The
Participant must notify the Plan Administrator in
writing on or before March 1 of the following
calendar year of the amount of the Excess Deferrals
to be assigned to this Plan. Upon receipt of a timely
notification, the Excess Deferrals assigned to this
Plan will be distributed (along with any allocable
income or loss) to the Participant in accordance with
the corrective distribution provisions under
subsection (2) above. A Participant is deemed to
notify the Plan Administrator of Excess Deferrals to
the extent such Excess Deferrals arise only under
this Plan and any other plan maintained by the
Employer.
17.2 Nondiscrimination Testing of Section 401(k) Deferrals - ADP Test.
Except as provided under Section 17.6 for Safe Harbor 401(k) Plans, the
Section 401(k) Deferrals made by Highly Compensated Employees must
satisfy the Actual Deferral Percentage Test ("ADP Test") for each Plan
Year. The Plan Administrator shall maintain records sufficient to
demonstrate satisfaction of the ADP Test, including the amount of any
QNECs or QMACs included in such test, pursuant to subsection (c) below.
If the Plan fails the ADP Test for any Plan Year, the corrective
provisions under subsection (d) below will apply.
(a) ADP Test testing methods. For Plan Years beginning on or after
January 1, 1997, the ADP Test will be performed using the
Prior Year Testing Method or Current Year Testing Method, as
selected under Part 4F, #31 of the Agreement. If the Employer
does not select a testing method under Part 4F, #31 of the
Agreement, the Plan will use the Current Year Testing Method.
Unless specifically precluded under statute, regulations or
other IRS guidance, the Employer may amend the testing method
designated under Part 4F for a particular Plan Year (subject
to the requirements under subsection (2) below) at any time
through the end of the 12 month period following the Plan Year
for which the amendment is effective. (For Plan Years
beginning before January 1, 1997, the Current Year Testing
Method is deemed to have been in effect.)
(1) Prior Year Testing Method. Under the Prior Year
Testing Method, the Average Deferral Percentage
("ADP") of the Highly Compensated Employee Group (as
defined in Section 17.7(e)) for the current Plan Year
is compared with the ADP of the Nonhighly Compensated
Employee Group (as defined in Section 17.7(f)) for
the prior Plan Year. If the Employer elects to use
the Prior Year Testing Method under Part 4F of the
Agreement, the Plan must satisfy one of the following
tests for each Plan Year:
(i) The ADP of the Highly Compensated Employee
Group for the current Plan Year shall not
exceed 1.25 times the ADP of the Nonhighly
Compensated Employee Group for the prior
Plan Year.
(ii) The ADP of the Highly Compensated Employee
Group for the current Plan Year shall not
exceed the percentage (whichever is less)
determined by (A) adding 2 percentage points
to the ADP of the Nonhighly Compensated
Employee Group for the prior Plan Year or
(B) multiplying the ADP of the Nonhighly
Compensated Employee Group for the prior
Plan Year by 2.
(2) Current Year Testing Method. Under the Current Year
Testing Method, the ADP of the Highly Compensated
Employee Group for the current Plan Year is compared
to the ADP of the Nonhighly Compensated Employee
Group for the current Plan Year. If the Employer
elects to use the Current Year Testing Method under
Part 4F of the Agreement, the Plan must satisfy the
ADP Test, as described in subsection (1) above, for
each Plan Year, but using the ADP of the Nonhighly
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Compensated Employee Group for the current Plan Year
instead of for the prior Plan Year. If the Employer
elects to use the Current Year Testing Method, it may
switch to the Prior Year Testing Method only if the
Plan satisfies the requirements for changing to the
Prior Year Testing Method as set forth in IRS Notice
98-1 (or superseding guidance).
(b) Special rule for first Plan Year. For the first Plan Year that
the Plan permits Section 401(k) Deferrals, the Employer may
elect under Part 4F, #32.a. of the Agreement to apply the ADP
Test using the Prior Year Testing Method, by assuming the ADP
for the Nonhighly Compensated Employee Group is 3%.
Alternatively, the Employer may elect in Part 4F, #32.b. of
the Agreement to use the Current Year Testing Method using the
actual data for the Nonhighly Compensated Employee Group in
the first Plan Year. This first Plan Year rule does not apply
if this Plan is a successor to a plan (as described in IRS
Notice 98 1 or subsequent guidance) that included a 401(k)
arrangement or the Plan is aggregated for purposes of applying
the ADP Test with another plan that included a 401(k)
arrangement in the prior Plan Year. For subsequent Plan Years,
the testing method selected under Part 4F, #31 will apply.
(c) Use of QMACs and QNECs under the ADP Test. The Plan
Administrator may take into account all or any portion of
QMACs and QNECs (see Sections 17.7(g) and (h)) for purposes of
applying the ADP Test. QMACs and QNECs may not be included in
the ADP Test to the extent such amounts are included in the
ACP Test for such Plan Year. QMACs and QNECs made to another
qualified plan maintained by the Employer may also be taken
into account, so long as the other plan has the same Plan Year
as this Plan. To include QNECs under the ADP Test, all
Employer Nonelective Contributions, including the QNECs, must
satisfy Codess.401(a)(4). In addition, the Employer
Nonelective Contributions, excluding any QNECs used in the ADP
Test or ACP Test, must also satisfy Codess.401(a)(4).
(1) Timing of contributions. In order to be used in the
ADP Test for a given Plan Year, QNECs and QMACs must
be made before the end of the 12-month period
immediately following the Plan Year for which they
are allocated. If the Employer is using the Prior
Year Testing Method (as described in subsection
(a)(1) above), QMACs and QNECs taken into account for
the Nonhighly Compensated Employee Group must be
allocated for the prior Plan Year, and must be made
no later than the end of the 12-month period
immediately following the end of such prior Plan
Year. (See Section 7.4(a) for rules regarding the
appropriate Limitation Year for which such
contributions will be applied for purposes of the
Annual Additions Limitation under Code ss.415.)
(2) Double-counting limits. This paragraph applies if, in
any Plan Year beginning after December 31, 1998, the
Prior Year Testing Method is used to run the ADP Test
and, in the prior Plan Year, the Current Year Testing
Method was used to run the ADP Test. If this
paragraph applies, the following contributions are
disregarded in calculating the ADP of the Nonhighly
Compensated Employee Group for the prior Plan Year:
(i) All QNECs that were included in either the
ADP Test or ACP Test for the prior Plan
Year.
(ii) All QMACs, regardless of how used for
testing purposes in the prior Plan Year.
(iii) Any Section 401(k) Deferrals that were
included in the ACP Test for the prior Plan
Year.
For purposes of applying the double-counting limits,
if actual data of the Nonhighly Compensated Employee
Group is used for a first Plan Year described in
subsection (b) above, the Plan is still considered to
be using the Prior Year Testing Method for that first
Plan Year. Thus, the double-counting limits do not
apply if the Prior Year Testing Method is used for
the next Plan Year.
(3) Testing flexibility. The Plan Administrator is
expressly granted the full flexibility permitted by
applicable Treasury regulations to determine the
amount of QMACs and QNECs used in the ADP Test. QMACs
and QNECs taken into account under the ADP Test do
not have to be uniformly determined for each Eligible
Participant, and may represent all or any portion of
the QMACs and QNECs allocated to each Eligible
Participant, provided the conditions described above
are satisfied.
(d) Correction of Excess Contributions. If the Plan fails the ADP
Test for a Plan Year, the Plan Administrator may use any
combination of the correction methods under this Section to
correct the Excess Contributions under the Plan. (See Section
17.7(d) for the definition of Excess Contributions.)
(1) Corrective distribution of Excess Contributions. If
the Plan fails the ADP Test for a Plan Year, the Plan
Administrator may, in its discretion, distribute
Excess Contributions (including any allocable income
or loss) no later than the last day of the following
Plan Year to correct the ADP
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Test violation. If the Excess Contributions are
distributed more than 2 1/2 months after the last day
of the Plan Year in which such excess amounts arose,
a 10-percent excise tax will be imposed on the
Employer with respect to such amounts.
(i) Amount to be distributed. In determining the
amount of Excess Contributions to be
distributed to a Highly Compensated Employee
under this Section, Excess Contributions are
first allocated equally to the Highly
Compensated Employee(s) with the largest
dollar amount of contributions taken into
account under the ADP Test for the Plan Year
in which the excess occurs. The Excess
Contributions allocated to such Highly
Compensated Employee(s) reduce the dollar
amount of the contributions taken into
account under the ADP Test for such Highly
Compensated Employee(s) until all of the
Excess Contributions are allocated or until
the dollar amount of such contributions for
the Highly Compensated Employee(s) is
reduced to the next highest dollar amount of
such contributions for any other Highly
Compensated Employee(s). If there are Excess
Contributions remaining, the Excess
Contributions continue to be allocated in
this manner until all of the Excess
Contributions are allocated.
(ii) Allocable gain or loss. A corrective
distribution of Excess Contributions must
include any allocable gain or loss for the
Plan Year in which the excess occurs. For
this purpose, allocable gain or loss on
Excess Contributions may be determined in
any reasonable manner, provided the manner
used is applied uniformly and in a manner
that is reasonably reflective of the method
used by the Plan for allocating income to
Participants' Accounts.
(iii) Coordination with other provisions. A
corrective distribution of Excess
Contributions made by the end of the Plan
Year following the Plan Year in which the
excess occurs may be made without consent of
the Participant or the Participant's spouse,
and without regard to any distribution
restrictions applicable under Article 8 or
Article 9. Excess Contributions are treated
as Annual Additions for purposes of
Codess.415 even if distributed from the
Plan. A corrective distribution of Excess
Contributions is not treated as a
distribution for purposes of applying the
required minimum distribution rules under
Article 10.
If a Participant has Excess Deferrals for
the calendar year ending with or within the
Plan Year for which the Participant receives
a corrective distribution of Excess
Contributions, the corrective distribution
of Excess Contributions is treated first as
a corrective distribution of Excess
Deferrals. The amount of the corrective
distribution of Excess Contributions that
must be distributed to correct an ADP Test
failure for a Plan Year is reduced by any
amount distributed as a corrective
distribution of Excess Deferrals for the
calendar year ending with or within such
Plan Year.
(iv) Accounting for Excess Contributions. Excess
Contributions are distributed from the
following sources and in the following
priority:
(A) Section 401(k) Deferrals that are
not matched;
(B) proportionately from Section 401(k)
Deferrals not distributed under (A)
and related QMACs that are included
in the ADP Test;
(C) QMACs included in the ADP Test that
are not distributed under (B); and
(D) QNECs included in the ADP Test.
(2) Making QMACs or QNECs. Regardless of any elections
under Part 4B, #18 or Part 4C, #22 of the Agreement,
the Employer may make additional QMACs or QNECs to
the Plan on behalf of the Nonhighly Compensated
Employees in order to correct an ADP Test violation.
QMACs or QNECs may only be used to correct an ADP
Test violation if the Current Year Testing Method is
selected under Part 4F, #31.b. of the 401(k)
Agreement. Any QMACs contributed under this
subsection (2) which are not specifically authorized
under Part 4B, #18 of the Agreement will be allocated
to all Eligible Participants who are Nonhighly
Compensated Employees as a uniform percentage of
Section 401(k) Deferrals made during the Plan Year.
Any QNECs contributed under this subsection (2) which
are not specifically authorized under Part 4C, #22 of
the Agreement will be allocated to all Eligible
Participants who are Nonhighly Compensated Employees
as a uniform percentage of Included Compensation. See
Sections 2.3(c) and (e), as applicable.
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(3) Recharacterization. If Employee After-Tax
Contributions are permitted under Part 4D of the
Agreement, the Plan Administrator, in its sole
discretion, may permit a Participant to treat any
Excess Contributions that are allocated to that
Participant as if he/she received the Excess
Contributions as a distribution from the Plan and
then contributed such amounts to the Plan as Employee
After-Tax Contributions. Any amounts recharacterized
under this subsection (3) will be 100% vested at all
times. Amounts may not be recharacterized by a Highly
Compensated Employee to the extent that such amount
in combination with other Employee After-Tax
Contributions made by that Participant would exceed
any limit on Employee After-Tax Contributions under
Part 4D of the Agreement.
Recharacterization must occur no later than 2 1/2
months after the last day of the Plan Year in which
such Excess Contributions arise and is deemed to
occur no earlier than the date the last Highly
Compensated Employee is informed in writing of the
amount recharacterized and the consequences thereof.
Recharacterized amounts will be taxable to the
Participant for the Participant's taxable year in
which the Participant would have received such
amounts in cash had he/she not deferred such amounts
into the Plan.
(e) Adjustment of deferral rate for Highly Compensated Employees.
The Employer may suspend (or automatically reduce the rate of)
Section 401(k) Deferrals for the Highly Compensated Employee
Group, to the extent necessary to satisfy the ADP Test or to
reduce the margin of failure. A suspension or reduction shall
not affect Section 401(k) Deferrals already contributed by the
Highly Compensated Employees for the Plan Year. As of the
first day of the subsequent Plan Year, Section 401(k)
Deferrals shall resume at the levels stated in the Salary
Reduction Agreements of the Highly Compensated Employees.
17.3 Nondiscrimination Testing of Employer Matching Contributions and
Employee After-Tax Contributions - ACP Test. Except as provided under
Section 17.6 for Safe Harbor 401(k) Plans, if the Employer elects to
provide Employer Matching Contributions under Part 4B of the Agreement
or to permit Employee After-Tax Contributions under Part 4D of the
Agreement, the Employer Matching Contributions (including QMACs that
are not included in the ADP Test) and/or Employee After-Tax
Contributions made for Highly Compensated Employees must satisfy the
Actual Contribution Percentage Test ("ACP Test") for each Plan Year.
The Plan Administrator shall maintain records sufficient to demonstrate
satisfaction of the ACP Test, including the amount of any Section
401(k) Deferrals or QNECs included in such test, pursuant to subsection
(c) below. If the Plan fails the ACP Test for any Plan Year, the
correction provisions under subsection (d) below will apply.
(a) ACP Test testing methods. For Plan Years beginning on or after
January 1, 1997, the ACP Test will be performed using the
Prior Year Testing Method or the Current Year Testing Method,
as selected under Part 4F, #31 of the Agreement. If the
Employer does not select a testing method under Part 4F, #31
of the Agreement, the Plan will be deemed to use the Current
Year Testing Method. For Plan Years beginning before January
1, 1997, the Current Year Testing Method is deemed to have
been in effect. If the Plan is a Safe Harbor 401(k) Plan, as
designated under Part 4E of the Agreement, the Current Year
Testing Method must be selected.
(1) Prior Year Testing Method. Under the Prior Year
Testing Method, the Average Contribution Percentage
("ACP") of the Highly Compensated Employee Group (as
defined in Section 17.7(e)) for the current Plan Year
is compared with the ACP of the Nonhighly Compensated
Employee Group (as defined in Section 17.7(f)) for
the prior Plan Year. If the Employer elects to use
the Prior Year Testing Method under Part 4F of the
Agreement, the Plan must satisfy one of the following
tests for each Plan Year:
(i) The ACP of the Highly Compensated Employee
Group for the current Plan Year shall not
exceed 1.25 times the ACP of the Nonhighly
Compensated Employee Group for the prior
Plan Year.
(ii) The ACP of the Highly Compensated Employee
Group for the current Plan Year shall not
exceed the percentage (whichever is less)
determined by (A) adding 2 percentage points
to the ACP of the Nonhighly Compensated
Employee Group for the prior Plan Year or
(B) multiplying the ACP of the Nonhighly
Compensated Employee Group for the prior
Plan Year by 2.
(2) Current Year Testing Method. Under the Current Year
Testing Method, the ACP of the Highly Compensated
Employee Group for the current Plan Year is compared
to the ACP of the Nonhighly Compensated Employee
Group for the current Plan Year. If the Employer
elects to use the Current Year Testing Method under
Part 4F of the Agreement, the Plan must satisfy the
ACP Test, as described in subsection (1) above, for
each Plan Year, but using the ACP of the Nonhighly
Compensated Employee Group for the current Plan Year
instead of for the prior Plan Year. If the Employer
elects to use the Current Year Testing Method, it may
switch to the Prior Year Testing
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Method only if the Plan satisfies the requirements
for changing to the Prior Year Testing Method as set
forth in IRS Notice 98-1 (or superseding guidance).
(b) Special rule for first Plan Year. For the first Plan Year that
the Plan includes either an Employer Matching Contribution
formula or permits Employee After Tax Contributions, the
Employer may elect under Part 4F, #33.a. of the Agreement to
apply the ACP Test using the Prior Year Testing Method, by
assuming the ACP for the Nonhighly Compensated Employee Group
is 3%. Alternatively, the Employer may elect in Part 4F,
#33.b. of the Agreement to use the Current Year Testing Method
using the actual data for the Nonhighly Compensated Employee
Group in the first Plan Year. This first Plan Year rule does
not apply if this Plan is a successor to a plan that was
subject to the ACP Test or if the Plan is aggregated for
purposes of applying the ACP Test with another plan that was
subject to the ACP test in the prior Plan Year. For subsequent
Plan Years, the testing method selected under Part 4F, #31
will apply.
(c) Use of Section 401(k) Deferrals and QNECs under the ACP Test.
The Plan Administrator may take into account all or any
portion of Section 401(k) Deferrals and QNECs (see Section
17.7(h)) made to this Plan, or to another qualified plan
maintained by the Employer, for purposes of applying the ACP
Test. QNECs may not be included in the ACP Test to the extent
such amounts are included in the ADP Test for such Plan Year.
Section 401(k) Deferrals and QNECs made to another qualified
plan maintained by the Employer may also be taken into
account, so long as the other plan has the same Plan Year as
this Plan. To include Section 401(k) Deferrals under the ACP
Test, the Plan must satisfy the ADP Test taking into account
all Section 401(k) Deferrals, including those used under the
ACP Test, and taking into account only those Section 401(k)
Deferrals not included in the ACP Test. To include QNECs under
the ACP Test, all Employer Nonelective Contributions,
including the QNECs, must satisfy Codess.401(a)(4). In
addition, the Employer Nonelective Contributions, excluding
any QNECs used in the ADP Test or ACP Test, must also satisfy
Codess.401(a)(4). QNECs may only be used to correct an ACP
Test violation if the Current Year Testing Method is selected
under Part 4F, #31.b. of the 401(k) Agreement.
(1) Timing of contributions. In order to be used in the
ACP Test for a given Plan Year, QNECs must be made
before the end of the 12-month period immediately
following the Plan Year for which they are allocated.
If the Employer is using the Prior Year Testing
Method (as described in subsection (a)(1) above),
QNECs taken into account for the Nonhighly
Compensated Employee Group must be allocated for the
prior Plan Year, and must be made no later than the
end of the 12-month period immediately following such
Plan Year. (See Section 7.4(a) for rules regarding
the appropriate Limitation Year for which such
contributions will be applied for purposes of the
Annual Additions Limitation under Code ss.415.)
(2) Double-counting limits. This paragraph applies if, in
any Plan Year beginning after December 31, 1998, the
Prior Year Testing Method is used to run the ACP Test
and, in the prior Plan Year, the Current Year Testing
Method was used to run the ACP Test. If this
paragraph applies, the following contributions are
disregarded in calculating the ACP of the Nonhighly
Compensated Employee Group for the prior Plan Year:
(i) All QNECs that were included in either the
ADP Test or ACP Test for the prior Plan
Year.
(ii) All Section 401(k) Deferrals, regardless of
how used for testing purposes in the prior
Plan Year.
(iii) Any QMACs that were included in the ADP Test
for the prior Plan Year.
For purposes of applying the double-counting limits,
if actual data of the Nonhighly Compensated Employee
Group is used for a first Plan Year described in
subsection (b) above, the Plan is still considered to
be using the Prior Year Testing Method for that first
Plan Year. Thus, the double-counting limits do not
apply if the Prior Year Testing Method is used for
the next Plan Year.
(3) Testing flexibility. The Plan Administrator is
expressly granted the full flexibility permitted by
applicable Treasury regulations to determine the
amount of Section 401(k) Deferrals and QNECs used in
the ACP Test. Section 401(k) Deferrals and QNECs
taken into account under the ACP Test do not have to
be uniformly determined for each Eligible
Participant, and may represent all or any portion of
the Section 401(k) Deferrals and QNECs allocated to
each Eligible Participant, provided the conditions
described above are satisfied. For Plan Years
beginning after the first Plan Year.
(d) Correction of Excess Aggregate Contributions. If the Plan
fails the ACP Test for a Plan Year, the Plan Administrator may
use any combination of the correction methods under this
Section to correct the Excess
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Aggregate Contributions under the Plan. (See Section 17.7(c) for the
definition of Excess Aggregate Contributions.)
(1) Corrective distribution of Excess Aggregate
Contributions. If the Plan fails the ACP Test for a
Plan Year, the Plan Administrator may, in its
discretion, distribute Excess Aggregate Contributions
(including any allocable income or loss) no later
than the last day of the following Plan Year to
correct the ACP Test violation. Excess Aggregate
Contributions will be distributed only to the extent
they are vested under Article 4, determined as of the
last day of the Plan Year for which the contributions
are made to the Plan. To the extent Excess Aggregate
Contributions are not vested, the Excess Aggregate
Contributions, plus any income and minus any loss
allocable thereto, shall be forfeited in accordance
with Section 5.3(d)(1). If the Excess Aggregate
Contributions are distributed more than 2 1/2 months
after the last day of the Plan Year in which such
excess amounts arose, a 10-percent excise tax will be
imposed on the Employer with respect to such amounts.
(i) Amount to be distributed. In determining the
amount of Excess Aggregate Contributions to
be distributed to a Highly Compensated
Employee under this Section, Excess
Aggregate Contributions are first allocated
equally to the Highly Compensated
Employee(s) with the largest dollar amount
of contributions taken into account under
the ACP Test for the Plan Year in which the
excess occurs. The Excess Aggregate
Contributions allocated to such Highly
Compensated Employee(s) reduce the dollar
amount of the contributions taken into
account under the ACP Test for such Highly
Compensated Employee(s) until all of the
Excess Aggregate Contributions are allocated
or until the dollar amount of such
contributions for the Highly Compensated
Employee(s) is reduced to the next highest
dollar amount of such contributions for any
other Highly Compensated Employee(s). If
there are Excess Aggregate Contributions
remaining, the Excess Aggregate
Contributions continue to be allocated in
this manner until all of the Excess
Aggregate Contributions are allocated.
(ii) Allocable gain or loss. A corrective
distribution of Excess Aggregate
Contributions must include any allocable
gain or loss for the Plan Year in which the
excess occurs. For this purpose, allocable
gain or loss on Excess Aggregate
Contributions may be determined in any
reasonable manner, provided the manner used
is applied uniformly and in a manner that is
reasonably reflective of the method used by
the Plan for allocating income to
Participants' Accounts.
(iii) Coordination with other provisions. A
corrective distribution of Excess Aggregate
Contributions made by the end of the Plan
Year following the Plan Year in which the
excess occurs may be made without consent of
the Participant or the Participant's spouse,
and without regard to any distribution
restrictions applicable under Article 8 or
Article 9. Excess Aggregate Contributions
are treated as Annual Additions for purposes
of Codess.415 even if distributed from the
Plan. A corrective distribution of Excess
Aggregate Contributions is not treated as a
distribution for purposes of applying the
required minimum distribution rules under
Article 10.
(iv) Accounting for Excess Aggregate
Contributions. Excess Aggregate
Contributions are distributed from the
following sources and in the following
priority:
(A) Employee After-Tax Contributions
that are not matched;
(B) proportionately from Employee
After-Tax Contributions not
distributed under (A) and related
Employer Matching Contributions
that are included in the ACP Test;
(C) Employer Matching Contributions
included in the ACP Test that are
not distributed under (B);
(D) Section 401(k) Deferrals included
in the ACP Test that are not
matched;
(E) proportionately from Section 401(k)
Deferrals included in the ACP Test
that are not distributed under (D)
and related Employer Matching
Contributions that are included in
the ACP Test and not distributed
under (B) or (C); and
(F) QNECs included in the ACP Test.
(2) Making QMACs or QNECs. Regardless of any elections
under Part 4B, #18 or Part 4C, #22 of the Agreement,
the Employer may make additional QMACs and/or QNECs
to the Plan on behalf of
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100
the Nonhighly Compensated Employees in order to
correct an ACP Test violation to the extent such
amounts are not used in the ADP Test. Any QMACs
contributed under this subsection (2) which are not
specifically authorized under Part 4B, #18 of the
Agreement will be allocated to all Eligible
Participants who are Nonhighly Compensated Employees
as a uniform percentage of Section 401(k) Deferrals
made during the Plan Year. Any QNECs contributed
under this subsection (2) which are not specifically
authorized under Part 4C, #22 of the Agreement will
be allocated to all Eligible Participants who are
Nonhighly Compensated Employees as a uniform
percentage of Included Compensation. See Sections
2.3(c) and (e), as applicable.
(e) Adjustment of contribution rate for Highly Compensated
Employees. The Employer may suspend (or automatically reduce
the rate of) Employee After Tax Contributions for the Highly
Compensated Employee Group, to the extent necessary to satisfy
the ACP Test or to reduce the margin of failure. A suspension
or reduction shall not affect Employee After Tax Contributions
already contributed by the Highly Compensated Employees for
the Plan Year. As of the first day of the subsequent Plan
Year, Employee After Tax Contributions shall resume at the
levels elected by the Highly Compensated Employees.
17.4 Multiple Use Test. If both an ADP Test and an ACP Test are run for the
Plan Year, and the Plan does not pass the 1.25 test under either the
ADP Test or the ACP Test, the Plan must satisfy a special Multiple Use
Test, unless such Multiple Use Test is repealed or modified by statute,
or other IRS guidance.
(a) Aggregate Limit. Under the Multiple Use Test, the sum of the
ADP and the ACP for the Highly Compensated Employee Group may
not exceed the Plan's Aggregate Limit. For this purpose, the
ADP and ACP of the Highly Compensated Employees are determined
after any corrections required to meet the ADP and ACP tests
and are deemed to be the maximum permitted under such tests
for the Plan Year. In applying the Multiple Use Test, the
Plan's Aggregate Limit is the sum of (1) and (2):
(1) 1.25 times the greater of: (i) the ADP of the
Nonhighly Compensated Employee Group or (ii) the ACP
of the Nonhighly Compensated Employee Group; and
(2) the lesser of 2 times or 2 plus the lesser of: (i)
the ADP of the Nonhighly Compensated Employee Group
or (ii) the ACP of the Nonhighly Compensated Employee
Group.
Alternatively, if it results in a larger amount, the Aggregate
Limit is the sum of (3) and (4):
(3) 1.25 times the lesser of: (i) the ADP of the
Nonhighly Compensated Employee Group or (ii) the ACP
of the Nonhighly Compensated Employee Group; and
(4) the lesser of 2 times or 2 plus the greater of: (i)
the ADP of the Nonhighly Compensated Employee Group
or (ii) the ACP of the Nonhighly Compensated Employee
Group.
The Aggregate Limit is calculated using the ADP and ACP of the
Nonhighly Compensated Employee Group that is used in
performing the ADP Test and ACP Test for the Plan Year. Thus,
if the Prior Year Testing Method is being used, the Aggregate
Limit is calculated by using the applicable percentage of the
Nonhighly Compensated Employee Group for the prior Plan Year.
If the Current Year Testing Method is being used, the
Aggregate Limit is calculated by using the applicable
percentage of the Nonhighly Compensated Employee Group for the
current Plan Year.
(b) Correction of the Multiple Use Test. If the Multiple Use Test
is not passed, the following corrective action will be taken.
(1) Corrective distributions. The Plan will make
corrective distributions (or additional corrective
distributions, if corrective distributions are
already being made to correct a violation of the ADP
Test or ACP Test), to the extent other corrective
action is not taken or such other action is not
sufficient to completely eliminate the Multiple Use
Test violation. Such corrective distributions may be
determined as if they were being made to correct a
violation of the ADP Test or a violation of the ACP
Test, or a combination of both, as determined by the
Plan Administrator. Any corrective distribution that
is treated as if it were correcting a violation of
the ADP Test will be determined under the rules
described in Section 17.2(d). Any corrective
distribution that is treated as if it were correcting
a violation of the ACP Test will be determined under
the rules described in Section 17.3(d).
(2) Making QMACs or QNECs. Regardless of any elections
under Part 4B, #18 or Part 4C, #22 of the Agreement,
the Employer may make additional QMACs or QNECs, so
that the resulting ADP and/or ACP of the Nonhighly
Compensated Employee Group is increased to the extent
necessary to satisfy the Multiple Use Test. Any QMACs
contributed under this subsection (2) which are not
specifically authorized under Part 4B, #18 of the
Agreement will be allocated to all Eligible
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101
Participants who are Nonhighly Compensated Employees
as a uniform percentage of Section 401(k) Deferrals
made during the Plan Year. Any QNECs contributed
under this subsection (2) which are not specifically
authorized under Part 4C, #22 of the Agreement will
be allocated to all Eligible Participants who are
Nonhighly Compensated Employees as a uniform
percentage of Included Compensation. See Sections
2.3(c) and (e), as applicable.
17.5 Special Testing Rules. This Section describes special testing rules
that apply to the ADP Test or the ACP Test. In some cases, the special
testing rule is optional, in which case, the election to use such rule
is solely within the discretion of the Plan Administrator.
(a) Special rule for determining ADP and ACP of Highly Compensated
Employee Group. When calculating the ADP or ACP of the Highly
Compensated Employee Group for any Plan Year, a Highly
Compensated Employee's Section 401(k) Deferrals, Employee
After Tax Contributions, and Employer Matching Contributions
under all qualified plans maintained by the Employer are taken
into account as if such contributions were made to a single
plan. If the plans have different Plan Years, the
contributions made in all Plan Years that end in the same
calendar year are aggregated under this paragraph. This
aggregation rule does not apply to plans that are required to
be disaggregated under Codess.410(b).
(b) Aggregation of plans. When calculating the ADP Test and the
ACP Test, plans that are permissively aggregated for coverage
and nondiscrimination testing purposes are treated as a single
plan. This aggregation rule applies to determine the ADP or
ACP of both the Highly Compensated Employee Group and the
Nonhighly Compensated Employee Group. Any adjustments to the
ADP of the Nonhighly Compensated Employee Group for the prior
year will be made in accordance with Notice 98 1 and any
superseding guidance, unless the Employer has elected in Part
4F, #31.b. of the 401(k) Agreement to use the Current Year
Testing Method. Aggregation described in this paragraph is not
permitted unless all plans being aggregated have the same Plan
Year and use the same testing method for the applicable test.
(c) Disaggregation of plans.
(1) Plans covering Union Employees and non-Union
Employees. If the Plan covers Union Employees and
non-Union Employees, the Plan is mandatorily
disaggregated for purposes of applying the ADP Test
and the ACP Test into two separate plans, one
covering the Union Employees and one covering the
non-Union Employees. A separate ADP Test must be
applied for each disaggregated portion of the Plan in
accordance with applicable Treasury regulations. A
separate ACP Test must be applied to the
disaggregated portion of the Plan that covers the
non-Union Employees. The disaggregated portion of the
Plan that includes the Union Employees is deemed to
pass the ACP Test.
(2) Otherwise excludable Employees. If the minimum
coverage test under Code ss.410(b) is performed by
disaggregating "otherwise excludable Employees"
(i.e., Employees who have not satisfied the maximum
age 21 and one Year of Service eligibility conditions
permitted under Code ss.410(a)), then the Plan is
treated as two separate plans, one benefiting the
otherwise excludable Employees and the other
benefiting Employees who have satisfied the maximum
age and service eligibility conditions. If such
disaggregation applies, the following operating rules
apply to the ADP Test and the ACP Test.
(i) For Plan Years beginning before January 1,
1999, the ADP Test and the ACP Test are
applied separately for each disaggregated
plan. If there are no Highly Compensated
Employees benefiting under a disaggregated
plan, then no ADP Test or ACP Test is
required for such plan.
(ii) For Plan Years beginning after December 31,
1998, instead of the rule under subsection
(i), only the disaggregated plan that
benefits the Employees who have satisfied
the maximum age and service eligibility
conditions permitted under Code ss.410(a) is
subject to the ADP Test and the ACP Test.
However, any Highly Compensated Employee who
is benefiting under the disaggregated plan
that includes the otherwise excludable
Employees is taken into account in such
tests. The Employer may elect to apply the
rule in subsection (i) instead.
(3) Corrective action for disaggregated plans. Any
corrective action authorized by this Article may be
determined separately with respect to each
disaggregated portion of the Plan. A corrective
action taken with respect to a disaggregated portion
of the Plan need not be consistent with the method of
correction (if any) used for another disaggregated
portion of the Plan. In the case of a Nonstandardized
Agreement, to the extent the Agreement authorizes the
Employer to make discretionary QNECs or discretionary
QMACs, the Employer is expressly permitted to
designate
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
102
such QNECs or QMACs as allocable only to Eligible
Participants in a particular disaggregated portion of
the Plan.
(d) Special rules for the Prior Year Testing Method. If the Plan
uses the Prior Year Testing Method, and an election made under
subsection (b) or (c) above is inconsistent with the election
made in the prior Plan Year, the plan coverage change rules
described in IRS Notice 98 1 (or other successor guidance)
will apply in determining the ADP and ACP for the Nonhighly
Compensated Employee Group.
17.6 Safe Harbor 401(k) Plan Provisions. For Plan Years beginning after
December 31, 1998, the ADP Test described in Section 17.2 is deemed to
be satisfied for any Plan Year in which the Plan qualifies as a Safe
Harbor 401(k) Plan. In addition, if Employer Matching Contributions are
made for such Plan Year, the ACP Test is deemed satisfied with respect
to such contributions if the conditions of subsection (c) below are
satisfied. To qualify as a Safe Harbor 401(k) Plan, the requirements
under this Section 17.6 must be satisfied for the entire Plan Year.
This Section contains the rules that must be met for the Plan to
qualify as a Safe Harbor 401(k) Plan.
Part 4E of the Agreement allows the Employer to designate the manner in
which it will comply with the safe harbor requirements. If the Employer
wishes to designate the Plan as a Safe Harbor 401(k) Plan, it should
complete Part 4E of the Agreement. The safe harbor provisions described
in this Section are not applicable unless the Plan is identified as a
Safe Harbor 401(k) Plan under Part 4E. The election under Part 4E to be
a Safe Harbor 401(k) Plan is effective for all Plan Years beginning
with the Effective Date of the Plan (or January 1, 1999, if later)
unless the Employer elects otherwise under Appendix B-5.b. of the
Agreement. In addition, to qualify as a Safe Harbor 401(k) Plan, the
Current Year Testing Method (as described in Section 17.3(a)(2)) must
be elected under Part 4F, #31 of the Agreement. (See Section 20.7 for
rules regarding the application of the Safe Harbor 401(k) Plan
provisions for Plan Years beginning before the date this Plan is
adopted.)
(a) Safe harbor conditions. To qualify as a Safe Harbor 401(k)
Plan, the Plan must satisfy the requirements under subsections
(1), (2), (3) and (4) below.
(1) Safe Harbor Contribution. The Employer must provide a
Safe Harbor Matching Contribution or a Safe Harbor
Nonelective Contribution under the Plan. The Employer
must designate the type and amount of the Safe Harbor
Contribution under Part 4E of the Agreement. The Safe
Harbor Contribution must be made to the Plan no later
than 12 months following the close of the Plan Year
for which it is being used to qualify the Plan as a
Safe Harbor 401(k) Plan.
The Employer may elect under Part 4E, #30 of the
Agreement to provide the Safe Harbor Contribution to
all Eligible Participants or only to Eligible
Participants who are Nonhighly Compensated Employees.
Alternatively, the Employer may elect under Part 4E,
#30.c. to provide the Safe Harbor Contribution to all
Nonhighly Compensated Employees who are Eligible
Participants and all Highly Compensated Employees who
are Eligible Participants but who are not Key
Employees. This permits a Plan providing the Safe
Harbor Nonelective Contribution to use such amounts
to satisfy the top-heavy minimum contribution
requirements under Article 16.
In determining who is an Eligible Participant for
purposes of the Safe Harbor Contribution, the
eligibility conditions applicable to Section 401(k)
Deferrals under Part 1, #5 of the Agreement apply.
However, the Employer may elect under Part 4E, #30.d.
to apply a one Year of Service (as defined in Section
1.4(b)) and an age 21 eligibility condition for the
Safe Harbor Contribution, regardless of the
eligibility conditions selected for Section 401(k)
Deferrals under Part 1, #5 of the Agreement. Unless
elected otherwise under Part 2, #8.f., column (1) of
the Nonstandardized Agreement, the special
eligibility rule under Part 4E, #30.d. will be
applied as if the Employer elected under Part 2,
#7.a., column (1) and Part 2, #8.a., column (1) of
the Agreement to use semi-annual Entry Dates
following completion of the minimum age and service
conditions. If different eligibility conditions are
selected for the Safe Harbor Contribution, additional
testing requirements may apply in accordance with IRS
Notice 2000-3.
(i) Safe Harbor Matching Contribution. The
Employer may elect under Part 4E, #27 of the
Agreement to make the Safe Harbor Matching
Contribution with respect to each Eligible
Participant's applicable contributions. For
this purpose, an Eligible Participant's
applicable contributions are the total
Section 401(k) Deferrals and Employee
After-Tax Contributions the Eligible
Participant makes under the Plan. However,
the Employer may elect under Part 4E, #27.d.
to exclude Employee After-Tax Contributions
from the definition of applicable
contributions for purposes of applying the
Safe Harbor Matching Contribution formula.
The Safe Harbor Matching Contribution may be
made under a basic formula or an enhanced
formula. The basic formula under Part 4E,
#27.a. provides an Employer Matching
Contribution that equals:
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103
(A) 100% of the amount of a
Participant's applicable
contributions that do not exceed 3%
of the Participant's Included
Compensation, plus
(B) 50% of the amount of a
Participant's applicable
contributions that exceed 3%, but
do not exceed 5%, of the
Participant's Included
Compensation.
The enhanced formula under Part 4E, #27.b.
provides an Employer Matching Contribution
that is not less, at each level of
applicable contributions, than the amount
required under the basic formula. Under the
enhanced formula, the rate of Employer
Matching Contributions may not increase as
an Employee's rate of applicable
contributions increase.
The Plan will not fail to be a Safe Harbor
401(k) Plan merely because Highly
Compensated Employees also receive a
contribution under the Plan. However, an
Employer Matching Contribution will not
satisfy this Section if any Highly
Compensated Employee is eligible for a
higher rate of Employer Matching
Contribution than is provided for any
Nonhighly Compensated Employee who has the
same rate of applicable contributions.
In applying the Safe Harbor Matching
Contribution formula under Part 4E, #27 of
the Agreement, the Employer may elect under
Part 4E, #27.c.(1) to determine the Safe
Harbor Matching Contribution on the basis of
all applicable contributions a Participant
makes during the Plan Year. Alternatively,
the Employer may elect under Part 4E,
#27.c.(2) - (4) to determine the Safe Harbor
Matching Contribution on a payroll, monthly,
or quarterly basis. If the Employer elects
to use a period other than the Plan Year,
the Safe Harbor Matching Contribution with
respect to a payroll period must be
deposited into the Plan by the last day of
the Plan Year quarter following the Plan
Year quarter for which the applicable
contributions are made.
In addition to the Safe Harbor Matching
Contribution, an Employer may elect under
Part 4B of the Agreement to make Employer
Matching Contributions that are subject to
the normal vesting schedule and distribution
rules applicable to Employer Matching
Contributions. See subsection (c) below for
a discussion of the effect of such
additional Employer Matching Contributions
on the ACP Test.
The Employer may amend the Plan during the
Plan Year to reduce or eliminate the Safe
Harbor Matching Contribution elected under
Part 4E, #27 of the Agreement, provided a
supplemental notice is given to all Eligible
Participants explaining the consequences and
effective date of the amendment, and that
such Eligible Participants have a reasonable
opportunity (including a reasonable period)
to change their Section 401(k) Deferral
and/or Employee After-Tax Contribution
elections, as applicable. The amendment
reducing or eliminating the Safe Harbor
Matching Contribution must be effective no
earlier than the later of: (A) 30 days after
Eligible Participants are given the
supplemental notice or (B) the date the
amendment is adopted. Eligible Participants
must be given a reasonable opportunity (and
reasonable period) prior to the reduction or
elimination of the Safe Harbor Matching
Contribution to change their Section 401(k)
Deferral or Employee After-Tax Contribution
elections, as applicable. If the Employer
amends the Plan to reduce or eliminate the
Safe Harbor Matching Contribution, the Plan
is subject to the ADP Test and ACP Test for
the entire Plan Year.
(ii) Safe Harbor Nonelective Contribution. The
Employer may elect under Part 4E, #28 of the
Agreement to make a Safe Harbor Nonelective
Contribution of at least 3% of Included
Compensation. The Employer may elect under
Part 4E, #28.b. to retain discretion to
increase the amount of the Safe Harbor
Nonelective Contribution in excess of the
percentage designated under Part 4E, #28. In
addition, the Employer may provide for
additional discretionary Employer
Nonelective Contributions under Part 4C of
the Agreement (in addition to the Safe
Harbor Contribution under this Section)
which are subject to the normal vesting
schedule and distribution rules applicable
to Employer Nonelective Contributions.
(A) Supplemental notice. The Employer
may elect under Part 4E, #28.a. of
the Agreement to provide the Safe
Harbor Nonelective Contribution
authorized under Part 4E, #28 only
if the Employer provides a
supplemental notice to Participants
indicating its intention to provide
such Safe Harbor Nonelective
Contribution. If Part 4E, #28.a. is
selected, to qualify as a Safe
Harbor 401(k)
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
104
Plan under Part 4E, the Employer
must notify its Eligible Employees
in the annual notice described in
subsection (4) below that the
Employer may provide the Safe
Harbor Nonelective Contribution
authorized under Part 4E, #28 of
the Agreement and that a
supplemental notice will be
provided at least 30 days prior to
the last day of the Plan Year if
the Employer decides to make the
Safe Harbor Nonelective
Contribution. The supplemental
notice indicating the Employer's
intention to make the Safe Harbor
Nonelective Contribution must be
provided no later than 30 days
prior to the last day of the Plan
Year for the Plan to qualify as a
Safe Harbor 401(k) Plan. If the
Employer selects Part 4E, #28.a. of
the Agreement but does not provide
the supplemental notice in
accordance with this paragraph, the
Employer is not obligated to make
such contribution and the Plan does
not qualify as a Safe Harbor 401(k)
Plan. The Plan will qualify as a
Safe Harbor 401(k) Plan for
subsequent Plan Years if the
appropriate notices are provided
for such years.
(B) Separate Plan. The Employer may
elect under Part 4E, #28.c. of the
Agreement to provide the Employer
Nonelective Contribution under
another Defined Contribution Plan
maintained by the Employer. The
Employer Nonelective Contribution
under such other plan must satisfy
the conditions under this Section
17.6 for this Plan to qualify as a
Safe Harbor 401(k) Plan. Under the
Standardized Agreement, the other
plan designated under Part 4E,
#28.c. must be a Paired Plan as
defined in Section 22.132.
(I) Profit sharing plan
Agreement. If the Plan
designated under Part 4E,
#28.c. is a profit sharing
plan Agreement under this
Prototype Plan, the
Employer must select Part
4, #12.f. under the profit
sharing plan
Nonstandardized Agreement
or Part 4, #12.e. under
the profit sharing plan
Standardized Agreement, as
applicable. The Employer
may elect to provide other
Employer Contributions
under Part 4, #12 of the
profit sharing plan
Agreement, however, the
first amounts allocated
under the profit sharing
plan Agreement will be the
Safe Harbor Nonelective
Contribution required
under the 401(k) plan
Agreement. Any Employer
Contributions designated
under Part 4, #12 of the
profit sharing plan
Agreement are in addition
to the Safe Harbor
Contribution required
under the 401(k) plan
Agreement. (If the only
Employer Contribution to
be made under the profit
sharing plan Agreement is
the Safe Harbor
Nonelective Contribution,
no other selection need be
completed under Part 4 of
the profit sharing plan
Agreement (other than Part
4, #12.f. of the
Nonstandardized Agreement
or Part 4, #12.e. of the
Standardized Agreement, as
applicable).)
If the Employer elects to
provide the Safe Harbor
Nonelective Contribution
under the profit sharing
plan Agreement, the
Employer must select
either the Pro Rata
Allocation Method under
Part 4, #13.a. or the
Permitted Disparity Method
under Part 4, #13.b. of
the profit sharing plan
Agreement. If the Employer
elects the Pro Rata
Allocation Method, the
first amounts allocated
under the Pro Rata
Allocation Method will be
deemed to be the Safe
Harbor Nonelective
Contribution as required
under the 401(k) plan
Agreement. To the extent
required under the 401(k)
plan Agreement, such
amounts are subject to the
conditions for Safe Harbor
Nonelective Contributions
described in subsections
(2) - (4) below, without
regard to any contrary
elections under the
Agreement.
If the Employer elects the
Permitted Disparity
Method, the Safe Harbor
Nonelective Contribution
required under the 401(k)
plan Agreement will be
allocated before applying
the Permitted Disparity
Method of allocation. To
the extent required under
the 401(k) plan Agreement,
such amounts are subject
to the conditions for Safe
Harbor Nonelective
Contributions described in
subsections (2) - (4)
below without regard to
any contrary elections
under the Agreement. If
additional amounts are
contributed under the
profit sharing plan
Agreement, such amounts
will be allocated under
the Permitted Disparity
Method. The Safe Harbor
Nonelective Contribution
may
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105
not be taken into account
in applying the Permitted
Disparity Method of
allocation.
(II) Money purchase plan
Agreement. If the Plan
designated under Part 4E,
#28.c. is a money purchase
plan Agreement under this
Prototype Plan, the
Employer must select Part
4, #12.f. under the money
purchase plan
Nonstandardized Agreement
or Part 4, #12.d. under
the money purchase plan
Standardized Agreement, as
applicable. The Employer
may elect to provide other
Employer Contributions
under Part 4, #12 of the
money purchase plan
Agreement, however, the
first amounts allocated
under the money purchase
plan Agreement will be the
Safe Harbor Nonelective
Contribution required
under the 401(k) plan
Agreement. Any Employer
Contributions designated
under Part 4, #12 of the
money purchase plan
Agreement are in addition
to the Safe Harbor
Contribution. (If the only
Employer Contribution to
be made under the money
purchase plan Agreement is
the Safe Harbor
Nonelective Contribution,
no other need be completed
under Part 4 of the money
purchase plan Agreement
(other than Part 4, #12.f.
of the Nonstandardized
Agreement or Part 4,
#12.d. of the Standardized
Agreement, as
applicable).)
If the Employer elects to
make a Safe Harbor
Contribution under the
money purchase plan
Agreement, the first
amounts allocated under
the Plan will be deemed to
be the Safe Harbor
Nonelective Contribution
as required under the
401(k) plan Agreement.
Such amounts will be
allocated equally to all
Eligible Participants as
defined under the 401(k)
plan Agreement. To the
extent required under the
401(k) plan Agreement,
such amounts are subject
to the conditions for Safe
Harbor Nonelective
Contributions described in
subsections (2) - (4)
below, without regard to
any contrary elections
under the Agreement. If
the Employer elects the
Permitted Disparity Method
of contribution, the Safe
Harbor Nonelective
Contribution required
under the 401(k) plan
Agreement will be
allocated before applying
the Permitted Disparity
Method. The Safe Harbor
Nonelective Contribution
may not be taken into
account in applying the
Permitted Disparity Method
of contribution.
(C) Elimination of Safe Harbor
Nonelective Contribution. The
Employer may amend the Plan during
the Plan Year to reduce or
eliminate the Safe Harbor
Nonelective Contribution elected
under Part 4E of the Agreement. The
Employer must notify all Eligible
Participants of the amendment and
must provide each Eligible
Participants with a reasonable
opportunity (including a reasonable
period) to change their Section
401(k) Deferral and/or Employee
After-Tax Contribution elections,
as applicable. The amendment
reducing or eliminating the Safe
Harbor Nonelective Contribution
must be effective no earlier than
the later of: (A) 30 days after
Eligible Participants are notified
of the amendment or (B) the date
the amendment is adopted. If the
Employer reduces or eliminates the
Safe Harbor Nonelective
Contribution during the Plan Year,
the Plan is subject to the ADP Test
(and ACP Test, if applicable) for
the entire Plan Year.
(2) Full and immediate vesting. The Safe Harbor
Contribution under subsection (1) above must be 100%
vested, regardless of the Employee's length of
service, at the time the contribution is made to the
Plan. Any additional amounts contributed under the
Plan may be subject to a vesting schedule.
(3) Distribution restrictions. Distributions of the Safe
Harbor Contribution under subsection (1) must be
restricted in the same manner as Section 401(k)
Deferrals under Article 8, except that such
contributions may not be distributed upon Hardship.
See Section 8.6(c).
(4) Annual notice. Each Eligible Participant under the
Plan must receive a written notice describing the
Participant's rights and obligations under the Plan,
including a description of: (i) the Safe Harbor
Contribution formula being used under the Plan; (ii)
any other contributions under the Plan; (iii) the
plan to which the Safe Harbor Contributions will be
made (if different from this Plan); (iv) the type and
amount of Included Compensation that may be deferred
under the Plan; (v) the administrative requirements
for making and changing Section 401(k) Deferral
elections; and (vi) the withdrawal and vesting
provisions under the Plan. For any Plan Year that
began in 1999, the
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106
notice requirements described in this paragraph are
deemed satisfied if the notice provided satisfied a
reasonable, good faith interpretation of the notice
requirements under Code ss.401(k)(12). (See
subsection (1)(ii) above for a special supplemental
notice that may need to be provided to qualify as a
Safe Harbor 401(k) Plan.)
Each Eligible Participant must receive the annual
notice within a reasonable period before the
beginning of the Plan Year (or within a reasonable
period before an Employee becomes an Eligible
Participant, if later). For this purpose, an Employee
will be deemed to have received the notice in a
timely manner if the Employee receives such notice at
least 30 days and no more than 90 days before the
beginning of the Plan Year. For an Employee who
becomes an Eligible Participant during a Plan Year,
the notice will be deemed timely if it is provided no
more than 90 days prior to the date the Employee
becomes an Eligible Participant. For Plan Years that
began on or before April 1, 1999, the notice
requirement under this subsection will be satisfied
if the notice was provided by March 1, 1999. If an
Employer first designates the Plan as a Safe Harbor
401(k) Plan for a Plan Year that begins on or after
January 1, 2000 and on or before June 1, 2000, the
notice requirement under this subsection will be
satisfied if the notice was provided by May 1, 2000.
(b) Deemed compliance with ADP Test. If the Plan satisfies all the
conditions under subsection (a) above to qualify as a Safe
Harbor 401(k) Plan, the Plan is deemed to satisfy the ADP Test
for the Plan Year. This Plan will not be deemed to satisfy the
ADP Test for a Plan Year if an Eligible Participant is covered
under another Safe Harbor 401(k) Plan maintained by the
Employer which uses the provisions under this Section to
comply with the ADP Test.
(c) Deemed compliance with ACP Test. If the Plan satisfies all the
conditions under subsection (a) above to qualify as a Safe
Harbor 401(k) Plan, the Plan is deemed to satisfy the ACP Test
for the Plan Year with respect to Employer Matching
Contributions (including Employer Matching Contributions that
are not used to qualify as a Safe Harbor 401(k) Plan),
provided the following conditions are satisfied. If the Plan
does not satisfy the requirements under this subsection (c)
for a Plan Year, the Plan must satisfy the ACP Test for such
Plan Year in accordance with subsection (d) below.
(1) Only Employer Matching Contributions are Safe Harbor
Matching Contributions under basic formula. If the
only Employer Matching Contribution formula provided
under the Plan is a basic safe harbor formula under
Part 4E, #27.a. of the Agreement, the Plan is deemed
to satisfy the ACP Test, without regard to the
conditions under subsections (2) - (5) below.
(2) Limit on contributions eligible for Employer Matching
Contributions. If Employer Matching Contributions are
provided (other than just Employer Matching
Contributions under a basic safe harbor formula) the
total Employer Matching Contributions provided under
the Plan (whether or not such Employer Matching
Contributions are provided under a Safe Harbor
Matching Contribution formula) must not apply to any
Section 401(k) Deferrals or Employee After-Tax
Contributions that exceed 6% of Included
Compensation. If an Employer Matching Contribution
formula applies to both Section 401(k) Deferrals and
Employee After-Tax Contributions, then the sum of
such contributions that exceed 6% of Included
Compensation must be disregarded under the formula.
(3) Limit on discretionary Employer Matching
Contributions. For Plan Years beginning after
December 31, 1999, the Plan will not satisfy the ACP
Safe Harbor if the Employer elects to provide
discretionary Employer Matching Contributions in
addition to the Safe Harbor Matching Contribution,
unless the Employer limits the aggregate amount of
such discretionary Employer Matching Contributions
under Part 4B, #16.b. to no more than 4 percent of
the Employee's Included Compensation.
(4) Rate of Employer Matching Contribution may not
increase. The Employer Matching Contribution formula
may not provide a higher rate of match at higher
levels of Section 401(k) Deferrals or Employee
After-Tax Contributions.
(5) Limit on Employer Matching Contributions for Highly
Compensated Employees. The Employer Matching
Contributions made for any Highly Compensated
Employee at any rate of Section 401(k) Deferrals
and/or Employee After-Tax Contributions cannot be
greater than the Employer Matching Contributions
provided for any Nonhighly Compensated Employee at
the same rate of Section 401(k) Deferrals and/or
Employee After-Tax Contributions.
(6) Employee After-Tax Contributions. If the Plan permits
Employee After-Tax Contributions, such contributions
must satisfy the ACP Test, regardless of whether the
Employer Matching Contributions under Plan are deemed
to satisfy the ACP Test under this subsection (c).
The ACP Test must be performed in accordance with
subsection (d) below.
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(d) Rules for applying the ACP Test. If the ACP Test must be
performed under a Safe Harbor 401(k) Plan, either because
there are Employee After Tax Contributions, or because the
Employer Matching Contributions do not satisfy the conditions
described in subsection (c) above, the Current Year Testing
Method must be used to perform such test, even if the
Agreement specifies that the Prior Year Testing Method
applies. In addition, the testing rules provided in IRS Notice
98 52 (or any successor guidance) are applicable in applying
the ACP Test.
(e) Aggregated plans. If the Plan is aggregated with another plan
under Section 17.5(a) or (b), then the Plan is not a Safe
Harbor 401(k) Plan unless the conditions of this Section are
satisfied on an aggregated basis.
(f) First year of plan. To qualify as a Safe Harbor 401(k) Plan,
the Plan Year must be a 12 month period, except for the first
year of the Plan, in which case the Plan may have a short Plan
Year. In no case may the Plan have a short Plan Year of less
than 3 months.
If the Plan has an initial Plan Year that is less than 12
months, for purposes of applying the Annual Additions
Limitation under Article 7, the Limitation Year will be the
12-month period ending on the last day of the short Plan Year.
Thus, no proration of the Defined Contribution Dollar
Limitation will be required. (See Section 7.4(e).) In
addition, the Employer's Included Compensation will be
determined for the 12-month period ending on the last day of
the short Plan Year.
17.7 Definitions. The following definitions apply for purposes of applying
the provisions of this Article 17.
(a) ACP Average Contribution Percentage. The ACP for a group is
the average of the contribution percentages calculated
separately for each Eligible Participant in the group. An
Eligible Participant's contribution percentage is the ratio of
the contributions made on behalf of the Participant that are
included under the ACP Test, expressed as a percentage of the
Participant's Testing Compensation for the Plan Year. For this
purpose, the contributions included under the ACP Test are the
sum of the Employee After Tax Contributions, Employer Matching
Contributions, and QMACs (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. The ACP may also include
other contributions as provided in Section 17.3(c), if
applicable.
(b) ADP Average Deferral Percentage. The ADP for a group is the
average of the deferral percentages calculated separately for
each Eligible Participant in the group. A Participant's
deferral percentage is the ratio of the Participant's deferral
contributions expressed as a percentage of the Participant's
Testing Compensation for the Plan Year. For this purpose, a
Participant's deferral contributions include any Section
401(k) Deferrals made pursuant to the Participant's deferral
election, including Excess Deferrals of Highly Compensated
Employees (but excluding Excess Deferrals of Nonhighly
Compensated Employees). The ADP may also include other
contributions as provided in Section 17.2(c), if applicable.
In determining a Participant's deferral percentage for the
Plan Year, a deferral contribution may be taken into account
only if such contribution is allocated to the Participant's
Account as of a date within the Plan Year. For this purpose, a
deferral contribution may only be allocated to a Participant's
Account within a particular Plan Year if the deferral
contribution is actually paid to the Trust no later than the
end of the 12-month period immediately following that Plan
Year and the deferral contribution relates to Included
Compensation that (1) would otherwise have been received by
the Participant in that Plan Year or (2) is attributable to
services performed in that Plan Year and would otherwise have
been received by the Participant within 2 1/2 months after the
close of that Plan Year. No formal election need be made by
the Employer to use the 2 1/2-month rule described in the
preceding sentence. However, deferral contributions may only
be taken into account for a single Plan Year.
(c) Excess Aggregate Contributions. Excess Aggregate Contributions
for a Plan Year are the amounts contributed on behalf of the
Highly Compensated Employees that exceed the maximum amount
permitted under the ACP Test for such Plan Year. The total
dollar amount of Excess Aggregate Contributions for a Plan
Year is determined by calculating the amount that would have
to be distributed to the Highly Compensated Employees if the
distributions were made first to the Highly Compensated
Employee(s) with the highest contribution percentage until
either:
(1) the adjusted ACP for the Highly Compensated Employee
Group would reach a percentage that satisfies the ACP
Test, or
(2) the contribution percentage of the Highly Compensated
Employee(s) with the next highest contribution
percentage would be reached.
This process is repeated until the adjusted ACP for the Highly
Compensated Employee Group would satisfy the ACP Test. The
total dollar amount so determined is then divided among the
Highly Compensated
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Basic Plan Document (C)Copyright 2001 SunTrust Bank
108
Employee Group in the manner described in Section 17.3(d)(1)
to determine the actual corrective distributions to be made.
(d) Excess Contributions. Excess Contributions for a Plan Year are
the amounts taken into account in computing the ADP of the
Highly Compensated Employees that exceed the maximum amount
permitted under the ADP Test for such Plan Year. The total
dollar amount of Excess Contributions for a Plan Year is
determined by calculating the amount that would have to be
distributed to the Highly Compensated Employees if the
distributions were made first to the Highly Compensated
Employee(s) with the highest deferral percentage until either:
(1) the adjusted ADP for the Highly Compensated Employee
Group would reach a percentage that satisfies the ADP
Test, or
(2) the deferral percentage of the Highly Compensated
Employee(s) with the next highest deferral percentage
would be reached.
This process is repeated until the adjusted ADP for the Highly
Compensated Employee Group would satisfy the ADP test. The
total dollar amount so determined is then divided among the
Highly Compensated Employee Group in the manner described in
Section 17.2(d)(1) to determine the actual corrective
distributions to be made.
(e) Highly Compensated Employee Group. The Highly Compensated
Employee Group is the group of Eligible Participants who are
Highly Compensated Employees for the current Plan Year. An
Employee who makes a one time irrevocable election not to
participate in accordance with Section 1.10 (if authorized
under Part 13, #75 of the Nonstandardized Agreement) will not
be treated as an Eligible Participant.
(f) Nonhighly Compensated Employee Group. The Nonhighly
Compensated Employee Group is the group of Eligible
Participants who are Nonhighly Compensated Employees for the
applicable Plan Year. If the Prior Year Testing Method is
selected under Part 4F of the Agreement, the Nonhighly
Compensated Employee Group is the group of Eligible
Participants in the prior Plan Year who were Nonhighly
Compensated Employees for that year. If the Current Year
Testing Method is selected under Part 4F of the Agreement, the
Nonhighly Compensated Employee Group is the group of Eligible
Participants who are Nonhighly Compensated Employees for the
current Plan Year. An Employee who makes a one time
irrevocable election not to participate in accordance with
Section 1.10 (if authorized under Part 13, #75 of the
Nonstandardized Agreement) will not be treated as an Eligible
Participant.
(g) QMACs - Qualified Matching Contribution. To the extent
authorized under Part 4B, #18 of the Agreement, QMACs are
Employer Matching Contributions which are 100% vested when
contributed to the Plan and are subject to the distribution
restrictions applicable to Section 401(k) Deferrals under
Article 8, except that no portion of a Participant's QMAC
Account may be distributed from the Plan on account of
Hardship. See Section 8.6(c).
(h) QNECs - Qualified Nonelective Contributions. To the extent
authorized under Part 4C, #22 of the Agreement, QNECs are
Employer Nonelective Contributions which are 100% vested when
contributed to the Plan and are subject to the distribution
restrictions applicable to Section 401(k) Deferrals under
Article 8, except that no portion of a Participant's QNEC
Account may be distributed from the Plan on account of
Hardship. See Section 8.6(c).
(i) Testing Compensation. In determining the Testing Compensation
used for purposes of applying the ADP Test, the ACP Test, and
the Multiple Use Test, the Plan Administrator is not bound by
any elections made under Part 3 of the Agreement with respect
to Total Compensation or Included Compensation under the Plan.
The Plan Administrator may determine on an annual basis (and
within its discretion) the components of Testing Compensation
for purposes of applying the ADP Test, the ACP Test and the
Multiple Use Test. Testing Compensation must qualify as a
nondiscriminatory definition of compensation under
Codess.414(s) and the regulations thereunder and must be
applied consistently to all Participants. Testing Compensation
may be determined over the Plan Year for which the applicable
test is being performed or the calendar year ending within
such Plan Year. In determining Testing Compensation, the Plan
Administrator may take into consideration only the
compensation received while the Employee is an Eligible
Participant under the component of the Plan being tested. In
no event may Testing Compensation for any Participant exceed
the Compensation Dollar Limitation defined in Section 22.32.
In determining Testing Compensation, the Plan Administrator
may exclude amounts paid to an individual as severance pay to
the extent such amounts are paid after the common law
employment relationship between the individual and the
Employer has terminated, provided such amounts also are
excluded in determining Total Compensation under 22.197.
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ARTICLE 18
PLAN AMENDMENTS AND TERMINATION
This Article contains the rules regarding the ability of the Prototype Sponsor
or Employer to make Plan amendments and the effect of such amendments on the
Plan. This Article also contains the rules for administering the Plan upon
termination and the effect of Plan termination on Participants' benefits and
distribution rights.
18.1 Plan Amendments.
(a) Amendment by the Prototype Sponsor. The Prototype Sponsor may
amend the Prototype Plan on behalf of each adopting Employer
who is maintaining the Plan at the time of the amendment. An
amendment by the Prototype Sponsor to the Basic Plan Document
does not require consent of the adopting Employers, nor does
an adopting Employer have to reexecute its Agreement with
respect to such an amendment. The Prototype Sponsor will
provide each adopting Employer a copy of the amended Basic
Plan Document (either by providing substitute or additional
pages, or by providing a restated Basic Plan Document). An
amendment by the Prototype Sponsor to any Agreement offered
under the Prototype Plan is not effective with respect to an
Employer's Plan unless the Employer reexecutes the amended
Agreement.
If the Prototype Plan is amended by the mass submitter, the
mass submitter is treated as the agent of the Prototype
Sponsor. If the Prototype Sponsor does not adopt any
amendments made by the mass submitter, the Prototype Plan will
no longer be identical to or a minor modifier of the mass
submitter Prototype Plan.
(b) Amendment by the Employer. The Employer shall have the right
at any time to amend the Agreement in the following manner
without affecting the Plan's status as a Prototype Plan. (The
ability to amend the Plan as authorized under this Section
applies only to the Employer that executes the Signature Page
of the Agreement. Any amendment to the Plan by the Employer
under this Section also applies to any Related Employer that
participates under the Plan as a Co Sponsor.)
(1) The Employer may change any optional selections under
the Agreement.
(2) The Employer may add additional language where
authorized under the Agreement, including language
necessary to satisfy Code ss.415 or Code ss.416 due
to the aggregation of multiple plans.
(3) The Employer may change the administrative selections
under Part 12 of the Agreement by replacing the
appropriate page(s) within the Agreement. Such
amendment does not require reexecution of the
Signature Page of the Agreement.
(4) The Employer may add any model amendments published
by the IRS which specifically provide that their
adoption will not cause the Plan to be treated as an
individually designed plan.
(5) The Employer may adopt any amendments that it deems
necessary to satisfy the requirements for resolving
qualification failures under the IRS' compliance
resolution programs.
(6) The Employer may adopt an amendment to cure a
coverage or nondiscrimination testing failure, as
permitted under applicable Treasury regulations.
The Employer may amend the Plan at any time for any other
reason, including a waiver of the minimum funding requirement
under Code ss.412(d). However, such an amendment will cause
the Plan to lose its status as a Prototype Plan and become an
individually designed plan.
The Employer's amendment of the Plan from one type of Defined
Contribution Plan (e.g., a money purchase plan) into another
type of Defined Contribution Plan (e.g., a profit sharing
plan) will not result in a partial termination or any other
event that would require full vesting of some or all Plan
Participants.
Any amendment that affects the rights, duties or
responsibilities of the Trustee or Plan Administrator may only
be made with the Trustee's or Plan Administrator's written
consent. Any amendment to the Plan must be in writing and a
copy of the resolution (or similar instrument) setting forth
such amendment (with the applicable effective date of such
amendment) must be delivered to the Trustee.
No amendment may authorize or permit any portion of the assets
held under the Plan to be used for or diverted to a purpose
other than the exclusive benefit of Participants or their
Beneficiaries, except to the extent such assets are used to
pay taxes or administrative expenses of the Plan. An amendment
also may not cause or permit any portion of the assets held
under the Plan to revert to or become property of the
Employer.
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(c) Protected Benefits. Except as permitted under statute (such as
Codess.412(c)(8)), regulations (such as Treas. Reg.ss.1.411(d)
4), or other IRS guidance of general applicability, no Plan
amendment (or other transaction having the effect of a Plan
amendment, such as a merger, acquisition, plan transfer, or
similar transaction) may reduce a Participant's Account
Balance or eliminate or reduce a Protected Benefit to the
extent such Protected Benefit relates to amounts accrued prior
to the adoption date (or effective date, if later) of the Plan
amendment. For this purpose, Protected Benefits include any
early retirement benefits, retirement type subsidies, and
optional forms of benefit (as defined under the regulations).
If the adoption of this Plan will result in the elimination of
a Protected Benefit, the Employer may preserve such Protected
Benefit by identifying the Protected Benefit in accordance
with Part 13, #58 of the Agreement [Part 13, #76 of the 401(k)
Agreement]. Failure to identify Protected Benefits under the
Agreement will not override the requirement that such
Protected Benefits be preserved under this Plan. The
availability of each optional form of benefit under the Plan
must not be subject to Employer discretion.
Effective for amendments adopted and effective on or after
September 6, 2000, if the Plan is a profit sharing plan or a
401(k) plan, the Employer may eliminate all annuity and
installment forms of distribution (including the QJSA form of
benefit to the extent the Plan is not required to offer such
form of benefit under Article 9), provided the Plan offers a
single-sum distribution option that is available at the same
time as the annuity or installment options that are being
eliminated. If the Plan is a money purchase plan or a target
benefit plan, the Employer may not eliminate the QJSA form of
benefit. However, the Employer may eliminate all other annuity
and installment forms of distribution, provided the Plan
offers a single-sum distribution option that is available at
the same time as the annuity or installment options that are
being eliminated. Any amendment eliminating an annuity or
installment form of distribution may not be effective until
the earlier of: (1) the date which is the 90th day following
the date a summary of the amendment is furnished to the
Participant which satisfies the requirements under DOL Reg.
ss.2520.104b-3 or (2) the first day of the second Plan Year
following the Plan Year in which the amendment is adopted.
18.2 Plan Termination. The Employer may terminate this Plan at any time by
delivering to the Trustee and Plan Administrator written notice of such
termination.
(a) Full and immediate vesting. Upon a full or partial termination
of the Plan (or in the case of a profit sharing plan, the
complete discontinuance of contributions), all amounts
credited to an affected Participant's Account become 100%
vested, regardless of the Participant's vested percentage
determined under Article 4. The Plan Administrator has
discretion to determine whether a partial termination has
occurred.
(b) Distribution procedures. Upon the termination of the Plan, the
Plan Administrator shall direct the distribution of Plan
assets to Participants in accordance with the provisions under
Article 8. For this purpose, distribution shall be made to
Participants with vested Account Balances of $5,000 or less in
lump sum as soon as administratively feasible following the
Plan termination, regardless of any contrary election under
Part 9, #34 of the Agreement [Part 9, #52 of the 401(k)
Agreement]. For Participants with vested Account Balances in
excess of $5,000, distribution will be made through the
purchase of deferred annuity contracts which protect all
Protected Benefits under the Plan, unless a Participant elects
to receive an immediate distribution in any form of payment
permitted under the Plan. If an immediate distribution is
elected in a form other than a lump sum, the distribution will
be satisfied through the purchase of an immediate annuity
contract. Distributions will be made as soon as
administratively feasible following the Plan termination,
regardless of any contrary election under Part 9, #33 of the
Agreement [Part 9, #51 of the 401(k) Agreement]. The
references in this paragraph to $5,000 shall be deemed to mean
$3,500, prior to the time the $5,000 threshold becomes
effective under the Plan (as determined in Section 8.3(f)).
For purposes of applying the provisions of this subsection
(b), distribution may be delayed until the Employer receives a
favorable determination letter from the IRS as to the
qualified status of the Plan upon termination, provided the
determination letter request is made within a reasonable
period following the termination of the Plan.
(1) Special rule for certain profit sharing plans. If
this Plan is a profit sharing plan, distribution will
be made to all Participants, without consent, as soon
as administratively feasible following the
termination of the Plan, without regard to the value
of the Participants' vested Account Balance. This
special rule applies only if the Plan does not
provide for an annuity option under Part 11 of the
Agreement and the Employer does not maintain any
other Defined Contribution Plan (other than an ESOP)
at any time between the termination of the Plan and
the distribution.
(2) Special rule for 401(k) plans. Section 401(k)
Deferrals, QMACs, QNECs, Safe Harbor Matching
Contributions and Safe Harbor Nonelective
Contributions under a 401(k) plan (as well as
transferred assets (see Section 3.3(c)(3)) which are
subject to the distribution restrictions applicable
to Section 401(k) Deferrals) may be distributed in a
lump sum upon Plan termination only if the Employer
does not maintain a Successor Plan at any time during
the period beginning on the date of termination and
ending 12 months after the final distribution of all
Plan assets. For this purpose,
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a Successor Plan is any Defined Contribution Plan,
other than an ESOP (as defined in Code
ss.4975(e)(7)), a SEP (as defined in Code ss.408(k)),
or a SIMPLE IRA (as defined in Code ss.408(p)). A
plan will not be considered a Successor Plan, if at
all times during the 24-month period beginning 12
months before the Plan termination, fewer than 2% of
the Eligible Participants under the 401(k) plan are
eligible under such plan. A distribution of these
contributions may be made to the extent another
distribution event permits distribution of such
amounts.
(3) Plan termination not distribution event if assets are
transferred to another Plan. If, pursuant to the
termination of the Plan, the Employer enters into a
transfer agreement to transfer the assets of the
terminated Plan to another plan maintained by the
Employer (or by a successor employer in a transaction
involving the acquisition of the Employer's stock or
assets, or other similar transaction), the
termination of the Plan is not a distribution event
and the distribution procedures above do not apply.
Prior to the transfer of the assets, distribution of
a Participant's Account Balance may be made from the
terminated Plan only to a Participant (or
Beneficiary, if applicable) who is otherwise eligible
for distribution without regard to the Plan's
termination. Otherwise, benefits will be distributed
from the transferee plan in accordance with the terms
of that plan (subject to the protection of any
Protected Benefits that must be continued with
respect to the transferred assets).
(c) Termination upon merger, liquidation or dissolution of the
Employer. The Plan shall terminate upon the liquidation or
dissolution of the Employer or the death of the Employer (if
the Employer is a sole proprietor) provided however, that in
any such event, arrangements may be made for the Plan to be
continued by any successor to the Employer.
18.3 Merger or Consolidation. In the event the Plan is merged or
consolidated with another plan, each Participant must be entitled to a
benefit immediately after such merger or consolidation that is at least
equal to the benefit the Participant would have been entitled to had
the Plan terminated immediately before such merger or consolidation.
(See Section 4.1(d) for rules regarding vesting following a merger or
consolidation.) The Employer may authorize the Trustee to enter into a
merger agreement with the Trustee of another plan to effect such merger
or consolidation. A merger agreement entered into by the Trustee is not
part of this Plan and does not affect the Plan's status as a Prototype
Plan. (See Section 3.3 for the applicable rules where amounts are
transferred to this Plan from another plan.)
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ARTICLE 19
MISCELLANEOUS
This Article contains miscellaneous provisions concerning the Employer's and
Participants' rights and responsibilities under the Plan.
19.1 Exclusive Benefit. Except as provided under Section 19.2, no part of
the Plan assets (including any corpus or income of the Trust) may
revert to the Employer prior to the satisfaction of all liabilities
under the Plan nor will such Plan assets be used for, or diverted to, a
purpose other than the exclusive benefit of Participants or their
Beneficiaries.
19.2 Return of Employer Contributions. Upon written request by the Employer,
the Trustee must return any Employer Contributions provided that the
circumstances and the time frames described below are satisfied. The
Trustee may request the Employer to provide additional information to
ensure the amounts may be properly returned. Any amounts returned shall
not include earnings, but must be reduced by any losses.
(a) Mistake of fact. Any Employer Contributions made because of a
mistake of fact must be returned to the Employer within one
year of the contribution.
(b) Disallowance of deduction. Employer Contributions to the Trust
are made with the understanding that they are deductible. In
the event the deduction of an Employer Contribution is
disallowed by the IRS, such contribution (to the extent
disallowed) must be returned to the Employer within one year
of the disallowance of the deduction.
(c) Failure to initially qualify. Employer Contributions to the
Plan are made with the understanding, in the case of a new
Plan, that the Plan satisfies the qualification requirements
of Codess.401(a) as of the Plan's Effective Date. In the event
that the Internal Revenue Service determines that the Plan is
not initially qualified under the Code, any Employer
Contributions (and allocable earnings) made incident to that
initial qualification 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.
19.3 Alienation or Assignment. Except as permitted under applicable statute
or regulation, a Participant or Beneficiary may not assign, alienate,
transfer or sell any right or claim to a benefit or distribution from
the Plan, and any attempt to assign, alienate, transfer or sell such a
right or claim shall be void, except as permitted by statute or
regulation. Any such right or claim under the Plan shall not be subject
to attachment, execution, garnishment, sequestration, or other legal or
equitable process. This prohibition against alienation or assignment
also applies to the creation, assignment, or recognition of a right to
a benefit payable with respect to a Participant pursuant to a domestic
relations order, unless such order is determined to be a QDRO pursuant
to Section 11.5, or any domestic relations order entered before January
1, 1985.
19.4 Participants' Rights. The adoption of this Plan by the Employer does
not give any Participant, Beneficiary, or Employee a right to continued
employment with the Employer and does not affect the Employer's right
to discharge an Employee or Participant at any time. This Plan also
does not create any legal or equitable rights in favor of any
Participant, Beneficiary, or Employee against the Employer, Plan
Administrator or Trustee. Unless the context indicates otherwise, any
amendment to this Plan is not applicable to determine the benefits
accrued (and the extent to which such benefits are vested) by a
Participant or former Employee whose employment terminated before the
effective date of such amendment, except where application of such
amendment to the terminated Participant or former Employee is required
by statute, regulation or other guidance of general applicability.
Where the provisions of the Plan are ambiguous as to the application of
an amendment to a terminated Participant or former Employee, the Plan
Administrator has the authority to make a final determination on the
proper interpretation of the Plan.
19.5 Military Service. To the extent required under Code ss.414(u), an
Employee who returns to employment with the Employer following a period
of qualified military service will receive any contributions, benefits
and service credit required under Code ss.414(u), provided the Employee
satisfies all applicable requirements under the Code and regulations.
19.6 Paired Plans. If the Employer adopts more than one Standardized
Agreement, each of the Standardized Agreements are considered to be
Paired Plans, provided the Employer completes Part 13, #54 of the
Agreement [Part 13, #72 of the 401(k) Agreement] in a manner which
ensures the plans together comply with the Annual Additions Limitation,
as described in Article 7, and the Top-Heavy Plan rules, as described
in Article 16. If the Employer adopts Paired Plans, each Plan must have
the same Plan Year.
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19.7 Annuity Contract. Any annuity contract distributed under the Plan must
be nontransferable. In addition, the terms of any annuity contract
purchased and distributed to a Participant or to a Participant's spouse
must comply with all requirements under this Plan.
19.8 Use of IRS compliance programs. Nothing in this Plan document should be
construed to limit the availability of the IRS' voluntary compliance
programs, including the IRS Administrative Policy Regarding
Self-Correction (APRSC) program. An Employer may take whatever
corrective actions are permitted under the IRS voluntary compliance
programs, as is deemed appropriate by the Plan Administrator or
Employer.
19.9 Loss of Prototype Status. If the Plan as adopted by the Employer fails
to attain or retain qualification, such Plan will no longer qualify as
a Prototype Plan and will be considered an individually-designed plan.
19.10 Governing Law. The provisions of this Plan shall be construed,
administered, and enforced in accordance with the provisions of
applicable Federal Law and, to the extent applicable, the laws of the
state in which the Trustee has its principal place of business. The
foregoing provisions of this Section shall not preclude the Employer
and the Trustee from agreeing to a different state law with respect to
the construction, administration and enforcement of the Plan.
19.11 Waiver of Notice. Any person entitled to a notice under the Plan may
waive the right to receive such notice, to the extent such a waiver is
not prohibited by law, regulation or other pronouncement.
19.12 Use of Electronic Media. The Plan Administrator may use telephonic or
electronic media to satisfy any notice requirements required by this
Plan, to the extent permissible under regulations (or other generally
applicable guidance). In addition, a Participant's consent to immediate
distribution, as required by Article 8, may be provided through
telephonic or electronic means, to the extent permissible under
regulations (or other generally applicable guidance). The Plan
Administrator also may use telephonic or electronic media to conduct
plan transactions such as enrolling participants, making (and changing)
salary reduction elections, electing (and changing) investment
allocations, applying for Plan loans, and other transactions, to the
extent permissible under regulations (or other generally applicable
guidance).
19.13 Severability of Provisions. In the event that any provision of this
Plan shall be held to be illegal, invalid or unenforceable for any
reason, the remaining provisions under the Plan shall be construed as
if the illegal, invalid or unenforceable provisions had never been
included in the Plan.
19.14 Binding Effect. The Plan, and all actions and decisions made
thereunder, shall be binding upon all applicable parties, and their
heirs, executors, administrators, successors and assigns.
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ARTICLE 20
GUST ELECTIONS AND EFFECTIVE DATES
The provisions of this Plan are generally effective as of the Effective Date
designated on the Signature Page of the Agreement. Appendix A of the Agreement
also allows for special effective dates for specified provisions of the Plan,
which override the general Effective Date under the Agreement. Section 22.96
refers to a series of laws that have been enacted since 1994 as the GUST
Legislation, for which extended time (known as the remedial amendment period)
was provided to Employers to conform their plan documents to such laws. This
Article prescribes special effective date rules for conforming plans to the GUST
Legislation.
20.1 GUST Effective Dates. If the Agreement is adopted within the remedial
amendment period for the GUST Legislation, and the Plan has not
previously been restated to comply with the GUST Legislation, then
special effective dates apply to certain provisions. These special
effective dates apply to the appropriate provisions of the Plan, even
if such special effective dates are earlier than the Effective Date
identified on the Signature Page of the Agreement. The Employer may
specify in elections provided in Appendix B of the Agreement, how the
Plan was operated to comply with the GUST Legislation. Appendix B need
only be completed if the Employer operated this Plan in a manner that
is different from the default provisions contained in this Plan or the
elective choices made under the Agreement. If the Employer did not
operate the Plan in a manner that is different from the default
provisions or elective provisions of the Plan or, if the Plan is not
being restated for the first time to comply with the GUST Legislation,
and prior amendments or restatements of the Plan satisfied the
requirement to amend timely to comply with the GUST Legislation,
Appendix B need not be completed and may be removed from the Agreement.
If one or more qualified retirement plans have been merged into this
Plan, the provisions of the merging plan(s) will remain in full force
and effect until the Effective Date of the plan merger(s), unless
provided otherwise under Appendix A-12 of the Agreement [Appendix A-16
of the 401(k) Agreement]. If the merging plan(s) have not been amended
to comply with the changes required under the GUST Legislation, the
merging plan(s) will be deemed amended retroactively for such required
changes by operation of this Agreement. The provisions required by the
GUST Legislation (as provided under this BPD and related Agreements)
will be effective for purposes of the merging plan(s) as of the same
effective date that is specified for that GUST provision in this BPD
and Appendix B of the Agreement (even if that date precedes the general
Effective Date specified in the Agreement).
20.2 Highly Compensated Employee Definition. The definition of Highly
Compensated Employee under Section 22.99 is modified effective for Plan
Years beginning after December 31, 1996. Under the current definition
of Highly Compensated Employee, the Employer must designate under the
Plan whether it is using the Top-Paid Group Test and whether it is
using the Calendar Year Election or, for the 1997 Plan Year, whether it
used the Old-Law Calendar Year Election.
(a) Top Paid Group Test. In determining whether an Employee is a
Highly Compensated Employee, the Top Paid Group Test under
Section 22.99(b)(4) does not apply unless the Employer
specifically elects under Part 13, #50.a. of the Agreement
[Part 13, #68.a. of the 401(k) Agreement] to have the Top Paid
Group Test apply. The Employer's election to use or not use
the Top Paid Group Test generally applies for all years
beginning with the Effective Date of the Plan (or the first
Plan Year beginning after December 31, 1996, if later).
However, because the Employer may not have operated the Plan
consistent with this Top Paid Group Test election for all
years prior to the date this Plan restatement is adopted,
Appendix B 1.a. of the Agreement also permits the Employer to
override the Top Paid Group Test election under this Plan for
specified Plan Years beginning after December 31, 1996, and
before the date this Plan restatement is adopted.
(b) Calendar Year Election. In determining whether an Employee is
a Highly Compensated Employee, the Calendar Year Election
under Section 22.99(b)(5) does not apply unless the Employer
specifically elects under Part 13, #50.b. of the Agreement
[Part 13, #68.b. of the 401(k) Agreement] to have the Calendar
Year Election apply. The Employer's election to use or not use
the Calendar Year Election is generally effective for all
years beginning with the Effective Date of this Plan (or the
first Plan Year beginning after December 31, 1996, if later).
However, because the Employer may not have operated the Plan
consistent with this Calendar Year Election for all years
prior to the date this Plan restatement is adopted, Appendix B
1.b. of the Agreement permits the Employer to override the
Calendar Year Election under this Plan for specified Plan
Years beginning after December 31, 1996, and before the date
this Plan restatement is adopted.
(c) Old Law Calendar Year Election. In determining whether an
Employee was a Highly Compensated Employee for the Plan Year
beginning in 1997, a special Old Law Calendar Year Election
was available. (See Section 22.99(b)(6) for the definition of
the Old Law Calendar Year Election.) Appendix B 1.c. of the
Agreement permits the Employer to designate whether it used
the Old Law Calendar Year Election for the 1997 Plan Year. If
the Employer did not use the Old Law Calendar Year Election,
the election in Appendix B 1.c. need not be completed.
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20.3 Required Minimum Distributions. Appendix B-2 of the Agreement permits
the Employer to designate how it complied with the GUST Legislation
changes to the required minimum distribution rules. Section 10.4
describes the application of the GUST Legislation changes to the
required minimum distribution rules.
20.4 $5,000 Involuntary Distribution Threshold. For Plan Years beginning on
or after August 5, 1997, a Participant (and spouse, if the Joint and
Survivor Annuity rules apply under Article 9) must consent to a
distribution from the Plan if the Participant's vested Account Balance
exceeds $5,000. (See Section 8.3(e) for the applicable rules for
determining the value of a Participant's vested Account Balance.) For
Plan Years beginning before August 5, 1997, the consent threshold was
$3,500 instead of $5,000.
The increase in the consent threshold to $5,000 is generally effective
for Plan Years beginning on or after August 5, 1997. However, because
the Employer may not have operated the Plan consistent with the $5,000
threshold for all years prior to the date this Plan restatement was
adopted, Appendix B-3.a. of the Agreement permits the Employer to
designate the Plan Year during which it began applying the higher
$5,000 consent threshold. If the Employer began applying the $5,000
consent threshold for Plan Years beginning on or after August 5, 1997,
Appendix B-3.a. need not be completed. If the Employer did not begin
using the $5,000 consent threshold until some later date, the Employer
must designate the appropriate date in Appendix B-3.a.
20.5 Repeal of Family Aggregation for Allocation Purposes. For Plan Years
beginning on or after January 1, 1997, the family aggregation rules
were repealed. For Plan Years beginning before January 1, 1997, the
family aggregation rules required that family members of a Five-Percent
Owner or one of the 10 Employees with the highest ownership interest in
the Employer were aggregated as a single Highly Compensated Employee
for purposes of determining such individuals' share of any
contributions under the Plan. In determining the allocation for such
aggregated individuals, the Compensation Dollar Limitation (as defined
in Section 22.32) was applied on an aggregated basis with respect to
the Five-Percent Owner or top-10 owner, his/her spouse, and his/her
minor children (under the age of 19).
The family aggregation rules were repealed effective for Plan Years
beginning on or after January 1, 1997. However, because the Employer
may not have operated the Plan consistent with the repeal of family
aggregation for all years prior to the date this Plan restatement is
adopted, Appendix B-3.b. of the Agreement permits the Employer to
designate the Plan Year during which it repealed family aggregation for
allocation purposes. If the Employer implemented the repeal of family
aggregation for Plan Years beginning on or after January 1, 1997,
Appendix B-3.b. need not be completed. If the Employer did not
implement the repeal of family aggregation until some later date, the
Employer must designate the appropriate date in Appendix B-3.b.
20.6 ADP/ACP Testing Methods. The GUST Legislation modified the
nondiscrimination testing rules for Section 401(k) Deferrals, Employer
Matching Contributions, and Employee After-Tax Contributions, effective
for Plan Years beginning after December 31, 1996. For purposes of
applying the ADP Test and ACP Test under the 401(k) Agreement, the
Employer must designate the testing methodology used for each Plan
Year. (See Article 17 for the definition of the ADP Test and the ACP
Test and the applicable testing methodology.)
Part 4F of the 401(k) Agreement contains elective provisions for the
Employer to designate the testing methodology it will use in performing
the ADP Test and the ACP Test. Appendix B-5.a. of the 401(k) Agreement
contains elective provisions for the Employer to designate the testing
methodology it used for Plan Years that began before the adoption of
the Agreement.
20.7 Safe Harbor 401(k) Plan. Effective for Plan Years beginning after
December 31, 1998, the Employer may elect under Part 4E of the 401(k)
Agreement to apply the Safe Harbor 401(k) Plan provisions. To qualify
as a Safe Harbor 401(k) Plan for a Plan Year, the Plan must be
identified as a Safe Harbor 401(k) Plan for such year.
If the Employer elects under Part 4E to apply the Safe Harbor 401(k)
Plan provisions, the Plan generally will be considered a Safe Harbor
Plan for all Plan Years beginning with the Effective Date of the Plan
(or January 1, 1999, if later). Likewise, if the Employer does not
elect to apply the Safe Harbor 401(k) provisions, the Plan generally
will not be considered a Safe Harbor Plan for such year. However,
because the Employer may have operated the Plan as a Safe Harbor 401(k)
Plan for Plan Years prior to the Effective Date of this Plan or may not
have operated the Plan consistent with its election under Part 4E to
apply (or to not apply) the Safe Harbor 401(k) Plan provisions for all
years prior to the date this Plan restatement is adopted, Appendix
B-5.b. of the 401(k) Agreement permits the Employer to designate any
Plan Year in which the Plan was (or was not) a Safe Harbor 401(k) Plan.
Appendix B-5.b. should only be completed if the Employer operated this
Plan prior to date it was actually adopted in a manner that is
inconsistent with the election made under Part 4E of the Agreement.
If the Employer elects under Appendix B-5.b. of the Agreement to apply
the Safe Harbor 401(k) Plan provisions for any Plan Year beginning
prior to the date this Plan is adopted, the Plan must have complied
with the requirements under Section 17.6 for such year. The type and
amount of the Safe Harbor Contribution for such Plan Year(s) is the
type and amount of contribution described in the Participant notice
issued pursuant to Section 17.6(a)(4) for such Plan Year.
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ARTICLE 21
PARTICIPATION BY RELATED EMPLOYERS (CO-SPONSORS)
21.1 Co-Sponsor Adoption Page. A Related Employer may elect to participate
under this Plan by executing a Co-Sponsor Adoption Page under the
Agreement. By executing a Co-Sponsor Adoption Page, the Co-Sponsor
adopts all the provisions of the Plan, including the elective choices
made by the Employer under the Agreement. The Co-Sponsor is also bound
by any amendments made to the Plan in accordance with Article 18. The
Co-Sponsor agrees to use the same Trustee as is designated on the
Trustee Declaration under the Agreement, except as provided in a
separate trust agreement authorized under Article 12.
21.2 Participation by Employees of Co-Sponsor. A Related Employer may not
contribute to this Plan unless it executes the Co-Sponsor Adoption
Page. (See Section 1.3 for a discussion of the eligibility rules as
they apply to Employees of Related Employers who do not execute a
Co-Sponsor Adoption Page.) However, in applying the provisions of this
Plan, Total Compensation (as defined in Section 22.197) includes
amounts earned with a Related Employer, regardless of whether such
Related Employer executes a Co-Sponsor Adoption Page. The Employer may
elect under Part 3, #10.b.(7) of the Nonstandardized Agreement [Part 3,
#10.i. of the Nonstandardized 401(k) Agreement] to exclude amounts
earned with a Related Employer that does not execute a Co-Sponsor Page
for purposes of determining an Employee's Included Compensation under
the Plan.
21.3 Allocation of Contributions and Forfeitures. Unless selected otherwise
under the Co-Sponsor Adoption Page, any contributions made by a
Co-Sponsor (and any forfeitures relating to such contributions) will be
allocated to all Eligible Participants employed by the Employer and
Co-Sponsors in accordance with the provisions under this Plan. Under a
Nonstandardized Agreement, a Co-Sponsor may elect under the Co-Sponsor
Page to allocate its contributions (and forfeitures relating to such
contributions) only to the Eligible Participants employed by the
Co-Sponsor making such contributions. If so elected, Employees of the
Co-Sponsor will not share in an allocation of contributions (or
forfeitures relating to such contributions) made by any other Related
Employer (except in such individual's capacity as an Employee of that
other Related Employer). Where contributions are allocated only to the
Employees of a contributing Co-Sponsor, the Plan Administrator will
maintain a separate accounting of an Employee's Account Balance
attributable to the contributions of a particular Co-Sponsor. This
separate accounting is necessary only for contributions that are not
100% vested, so that the allocation of forfeitures attributable to such
contributions can be allocated for the benefit of the appropriate
Employees. An election to allocate contributions and forfeitures only
to the Eligible Participants employed by the Co-Sponsor making such
contributions will preclude the Plan from satisfying the
nondiscrimination safe harbor rules under Treas. Reg. ss.1.401(a)(4)-2
and may require additional nondiscrimination testing.
21.4 Co-Sponsor No Longer a Related Employer. If a Co-Sponsor becomes a
Former Related Employer because of an acquisition or disposition of
stock or assets, a merger, or similar transaction, the Co-Sponsor will
cease to participate in the Plan as soon as administratively feasible.
If the transition rule under Code ss.410(b)(6)(C) applies, the
Co-Sponsor will cease to participate in the Plan as soon as
administratively feasible after the end of the transition period
described in Code ss.410(b)(6)(C). If a Co-Sponsor ceases to be a
Related Employer under this Section 21.4, the following procedures may
be followed to discontinue the Co-Sponsor's participation in the Plan.
(a) Manner of discontinuing participation. To document the
cessation of participation by a Former Related Employer, the
Former Related Employer may discontinue its participation as
follows: (1) the Former Related Employer adopts a resolution
that formally terminates active participation in the Plan as
of a specified date, (2) the Employer that has executed the
Signature Page of the Agreement reexecutes such page,
indicating an amendment by page substitution through the
deletion of the Co Sponsor Adoption Page executed by the
Former Related Employer, and (3) the Former Related Employer
provides any notices to its Employees that are required by
law. Discontinuance of participation means that no further
benefits accrue after the effective date of such
discontinuance with respect to employment with the Former
Related Employer. The portion of the Plan attributable to the
Former Related Employer may continue as a separate plan, under
which benefits may continue to accrue, through the adoption by
the Former Related Employer of a successor plan (which may be
created through the execution of a separate Agreement by the
Former Related Employer) or by spin off of that portion of the
Plan followed by a merger or transfer into another existing
plan, as specified in a merger or transfer agreement.
(b) Multiple employer plan. If, after a Co Sponsor becomes a
Former Related Employer, its Employees continue to accrue
benefits under this Plan, the Plan will be treated as a
multiple employer plan to the extent required by law. So long
as the discontinuance procedures of this Section are
satisfied, such treatment as a multiple employer plan will not
affect reliance on the favorable IRS letter issued to the
Prototype Sponsor or any determination letter issued on the
Plan.
21.5 Special Rules for Standardized Agreements. As stated in Section 1.3(b)
of this BPD, under a Standardized Agreement each Related Employer (who
has Employees who may be eligible to participate in the Plan) is
required to execute a Co-Sponsor Adoption Page. If a Related Employer
fails to execute a Co-Sponsor Adoption Page, the Plan will be treated
as an individually-designed plan, except as provided in subsections (a)
and (b) below. Nothing in this
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Plan shall be construed to treat a Related Employer as participating in
the Plan in the absence of a Co-Sponsor Adoption Page executed by that
Related Employer.
(a) New Related Employer. If an organization becomes a New Related
Employer after the Effective Date of the Agreement by reason
of an acquisition or disposition of stock or assets, a merger,
or similar transaction, the New Related Employer must execute
a Co Sponsor Page no later than the end of the transition
period described in Codess.410(b)(6)(C). Participation of the
New Related Employer must be effective no later than the first
day of the Plan Year that begins after such transition period
ends. If the transition period in Codess.410(b)(6)(C) is not
applicable, the effective date of the New Related Employer's
participation in the Plan must be no later than the date it
became a Related Employer.
(b) Former Related Employer. If an organization ceases to be a
Related Employer (Former Related Employer), the provisions of
Section 21.4, relating to discontinuance of participation,
apply.
Under the Standardized Agreement, if the rules of subsections
(a) or (b) are followed, the Employer may continue to rely on
the favorable IRS letter issued to the Prototype Sponsor
during any period in which a New Related Employer is not
participating in the Plan or a Former Related Employer
continues to participate in the Plan. If the rules of
subsections (a) or (b) are not followed, the Plan is treated
as an individually-designed plan for any period of such
noncompliance.
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ARTICLE 22
PLAN DEFINITIONS
This Article contains definitions for common terms that are used throughout the
Plan. All capitalized terms under the Plan are defined in this Article. Where
applicable, this Article will refer to other Sections of the Plan where the term
is defined.
22.1 Account. The separate Account maintained for each Participant under the
Plan. To the extent applicable, a Participant may have any (or all) of
the following separate sub-Accounts within his/her Account: Employer
Contribution Account, Section 401(k) Deferral Account, Employer
Matching Contribution Account, QMAC Account, QNEC Account, Employee
After-Tax Contribution Account, Safe Harbor Matching Contribution
Account, Safe Harbor Nonelective Contribution Account, Rollover
Contribution Account, and Transfer Account. The Transfer Account also
may have any (or all) of the sub-Accounts listed above. The Plan
Administrator may maintain other sub-Accounts, if necessary, for proper
administration of the Plan.
22.2 Account Balance. A Participant's Account Balance is the total value of
all Accounts (whether vested or not) maintained for the Participant. A
Participant's vested Account Balance includes only those amounts for
which the Participant has a vested interest in accordance with the
provisions under Article 4 and Part 6 of the Agreement. A Participant's
Section 401(k) Deferral Account, QMAC Account, QNEC Account, Employee
After-Tax Contribution Account, Safe Harbor Matching Contribution
Account, Safe Harbor Nonelective Contribution Account, and Rollover
Contribution Account are always 100% vested.
22.3 Accrued Benefit. If referred to in the context of a Defined
Contribution Plan, the Accrued Benefit is the Account Balance. If
referred to in the context of a Defined Benefit Plan, the Accrued
Benefit is the benefit accrued under the benefit formula prescribed by
the Defined Benefit Plan.
22.4 ACP -- Average Contribution Percentage. The average of the contribution
percentages for the Highly Compensated Employee Group and the Nonhighly
Compensated Employee Group, which are tested for nondiscrimination
under the ACP Test. See Section 17.7(a).
22.5 ACP Test -- Actual Contribution Percentage Test. The special
nondiscrimination test that applies to Employer Matching Contributions
and/or Employee After-Tax Contributions under the 401(k) Agreement. See
Section 17.3.
22.6 Actual Hours Crediting Method. The Actual Hours Crediting Method is a
method for counting service for purposes of Plan eligibility and
vesting. Under the Actual Hours Crediting Method, an Employee is
credited with the actual Hours of Service the Employee completes with
the Employer or the number of Hours of Service for which the Employee
is paid (or entitled to payment).
22.7 Adoption Agreement. See the definition for Agreement.
22.8 ADP -- Average Deferral Percentage. The average of the deferral
percentages for the Highly Compensated Employee Group and the Nonhighly
Compensated Employee Group, which are tested for nondiscrimination
under the ADP Test. See Section 17.7(b).
22.9 ADP Test -- Actual Deferral Percentage Test. The special
nondiscrimination test that applies to Section 401(k) Deferrals under
the 401(k) Agreement. See Section 17.2.
22.10 Agreement. The Agreement (sometimes referred to as the "Adoption
Agreement") contains the elective provisions under the Plan that an
Employer completes to supplement or modify the provisions under the
BPD. Each Employer that adopts this Plan must complete and execute the
appropriate Agreement. An Employer may adopt more than one Agreement
under this Prototype Plan. Each executed Agreement is treated as a
separate Plan and Trust. For example, if an Employer executes a profit
sharing plan Agreement and a money purchase plan Agreement, the
Employer is treated as maintaining two separate Plans under this
Prototype Plan document. An Agreement is treated as a single Plan, even
if there is one or more executed Co-Sponsor Adoption Pages associated
with the Agreement.
22.11 Aggregate Limit. The limit imposed under the Multiple Use Test on
amounts subject to both the ADP Test and the ACP Test. See Section
17.4(a).
22.12 Alternate Payee. A person designated to receive all or a portion of the
Participant's benefit pursuant to a QDRO. See Section 11.5.
22.13 Anniversary Year Method. A method for determining Eligibility
Computation Periods after an Employee's initial Eligibility Computation
Period. See Section 1.4(c)(2) for more detailed discussion of the
Anniversary Year Method.
22.14 Anniversary Years. An alternative period for measuring Vesting
Computation Periods. See Section 4.4.
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22.15 Annual Additions. The amounts taken into account under a Defined
Contribution Plan for purposes of applying the limitation on
allocations under Code ss.415. See Section 7.4(a) for the definition of
Annual Additions.
22.16 Annual Additions Limitation. The limit on the amount of Annual
Additions a Participant may receive under the Plan during a Limitation
Year. See Article 7.
22.17 Annuity Starting Date. This Plan does not use the term Annuity Starting
Date. To determine whether the notice and consent requirements in
Articles 8 and 9 are satisfied, the Distribution Commencement Date (see
Section 22.56) is used, even for a distribution that is made in the
form of an annuity. However, the payment made on the Distribution
Commencement Date under an annuity form of payment may reflect annuity
payments that are calculated with reference to an "annuity starting
date" that occurs prior to the Distribution Commencement Date (e.g.,
the first day of the month in which the Distribution Commencement Date
falls).
22.18 Applicable Life Expectancy. The Life Expectancy used to determine a
Participant's required minimum distribution under Article 10. See
Section 10.3(d).
22.19 Applicable Percentage. The maximum percentage of Excess Compensation
that may be allocated to Eligible Participants under the Permitted
Disparity Method. See Article 2.
22.20 Average Compensation. The average of a Participant's annual Included
Compensation during the Averaging Period designated under Part 3, #11
of the target benefit plan Agreement. See Section 2.5(d)(1) for a
complete definition of Average Compensation.
22.21 Averaging Period. The period used for determining an Employee's Average
Compensation. Unless modified under Part 3, #11.a. of the target
benefit plan Agreement, the Averaging Period is the three (3)
consecutive Measuring Periods during the Participant's Employment
Period which produces the highest Average Compensation.
22.22 Balance Forward Method. A method for allocating net income or loss to
Participants' Accounts based on the Account Balance as of the most
recent Valuation Date under the Plan. See Section 13.4(a).
22.23 Basic Plan Document. See the definition for BPD.
22.24 Beneficiary. A person designated by the Participant (or by the terms of
the Plan) to receive a benefit under the Plan upon the death of the
Participant. See Section 8.4(c) for the applicable rules for
determining a Participant's Beneficiaries under the Plan.
22.25 BPD. The BPD (sometimes referred to as the "Basic Plan Document") is
the portion of the Plan that contains the non-elective provisions. The
provisions under the BPD may be supplemented or modified by elections
the Employer makes under the Agreement or by separate governing
documents that are expressly authorized by the BPD.
22.26 Break-in-Service - Eligibility. Generally, an Employee incurs a
Break-in-Service for eligibility purposes for each Eligibility
Computation Period during which the Employee does not complete more
than 500 Hours of Service with the Employer. However, if the Employer
elects under Part 7 of the Agreement to require less than 1,000 Hours
of Service to earn a Year of Service for eligibility purposes, a Break
in Service will occur for any Eligibility Computation Period during
which the Employee does not complete more than one-half (1/2) of the
Hours of Service required to earn a Year of Service. (See Section 1.6
for a discussion of the eligibility Break-in-Service rules. Also see
Section 6.5(b) for rules applicable to the determination of a Break in
Service when the Elapsed Time Method is used.)
22.27 Break-in-Service - Vesting. Generally, an Employee incurs a
Break-in-Service for vesting purposes for each Vesting Computation
Period during which the Employee does not complete more than 500 Hours
of Service with the Employer. However, if the Employer elects under
Part 7 of the Agreement to require less than 1,000 Hours of Service to
earn a Year of Service for vesting purposes, a Break in Service will
occur for any Vesting Computation Period during which the Employee does
not complete more than one-half (1/2) of the Hours of Service required
to earn a Year of Service. (See Section 4.6 for a discussion of the
vesting Break-in-Service rules. Also see Section 6.5(b) for rules
applicable to the determination of a Break in Service when the Elapsed
Time Method is used.)
22.28 Calendar Year Election. A special election used for determining the
Lookback Year in applying the Highly Compensated Employee test under
Section 22.99.
22.29 Cash-Out Distribution. A total distribution made to a partially vested
Participant upon termination of participation under the Plan. See
Section 5.3(a) for the rules regarding the forfeiture of nonvested
benefits upon a Cash-Out Distribution from the Plan.
22.30 Code. The Internal Revenue Code of 1986, as amended.
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22.31 Codess.415 Safe Harbor Compensation. An optional definition of
compensation used to determine Total Compensation. This definition may
be selected under Part 3, #9.c. of the Agreement. See Section 22.197(c)
for the definition of Codess.415 Safe Harbor Compensation.
22.32 Compensation Dollar Limitation. The maximum amount of compensation that
can be taken into account for any Plan Year for purposes of determining
a Participant's Included Compensation (see Section 22.102) or Testing
Compensation (see Section 22.190). For Plan Years beginning on or after
January 1, 1994, the Compensation Dollar Limitation is $150,000, as
adjusted for increases in the cost-of-living in accordance with Code
ss.401(a)(17)(B).
In determining the Compensation Dollar Limitation for any applicable
period for which Included Compensation or Testing Compensation is being
determined (the "determination period"), the cost-of-living adjustment
in effect for a calendar year applies to any determination period
beginning with or within such calendar year. If a determination period
consists of fewer than 12 months, the Compensation Dollar Limitation
for such period is an amount equal to the otherwise applicable
Compensation Dollar Limitation multiplied by a fraction, the numerator
of which is the number of months in the short determination period, and
the denominator of which is 12. A determination period will not be
considered to be less than 12 months merely because compensation is
taken into account only for the period the Employee is an Eligible
Participant. If Section 401(k) Deferrals, Employer Matching
Contributions, or Employee After-Tax Contributions are separately
determined for each pay period, no proration of the Compensation Dollar
Limitation is required with respect to such pay periods.
For Plan Years beginning on or after January 1, 1989, and before
January 1, 1994, the Compensation Dollar Limitation taken into account
for determining all benefits provided under the Plan for any Plan Year
shall not exceed $200,000. This limitation shall be adjusted by the
Secretary at the same time and in the same manner as under Code
ss.415(d), except that the dollar increase in effect on January 1 of
any calendar year is effective for Plan Years beginning in such
calendar year and the first adjustment to the $200,000 limitation is
effective on January 1, 1990.
If compensation for any prior determination period is taken into
account in determining a Participant's allocations for the current Plan
Year, the compensation for such prior determination period is subject
to the applicable Compensation Dollar Limitation in effect for that
prior period. For this purpose, in determining allocations in Plan
Years beginning on or after January 1, 1989, the Compensation Dollar
Limitation in effect for determination periods beginning before that
date is $200,000. In addition, in determining allocations in Plan Years
beginning on or after January 1, 1994, the Compensation Dollar
Limitation in effect for determination periods beginning before that
date is $150,000.
22.33 Co-Sponsor. A Related Employer that adopts this Plan by executing the
Co-Sponsor Adoption Page under the Agreement. See Article 21 for the
rules applicable to contributions and deductions for contributions made
by a Co-Sponsor.
22.34 Co-Sponsor Adoption Page. The execution page under the Agreement that
permits a Related Employer to adopt this Plan as a Co-Sponsor. See
Article 21.
22.35 Covered Compensation. The average (without indexing) of the Taxable
Wage Bases in effect for each calendar year during the 35-year period
ending with the last day of the calendar year in which the Participant
attains (or will attain) Social Security Retirement Age. See Section
2.5(d)(2).
22.36 Cumulative Disparity Limit. A limit on the amount of permitted
disparity that may be provided under the target benefit plan Agreement.
See Section 2.5(c)(3)(iv).
22.37 Current Year Testing Method. A method for applying the ADP Test and/or
the ACP Test. See Section 17.2(a)(2) for a discussion of the Current
Year Testing Method under the ADP Test and 17.3(a)(2) for a discussion
of the Current Year Testing Method under the ACP Test.
22.38 Custodian. An organization that has custody of all or any portion of
the Plan assets. See Section 12.11.
22.39 Davis-Bacon Act Service. A Participant's service used to apply the
Davis-Bacon Contribution Formula under Part 4 of the Nonstandardized
Agreement [Part 4C of the Nonstandardized 401(k) Agreement]. For this
purpose, Davis-Bacon Act Service is any service performed by an
Employee under a public contract subject to the Davis-Bacon Act or to
any other federal, state or municipal prevailing wage law. See Section
2.2(a)(1).
22.40 Davis-Bacon Contribution Formula. The Employer may elect under Part 4
of the Nonstandardized Agreement [Part 4C of the Nonstandardized 401(k)
Agreement] to provide an Employer Contribution for each Eligible
Participant who performs Davis-Bacon Act Service. (See Section
2.2(a)(1) (profit sharing plan and 401(k) plan) and Section 2.4(e)
(money purchase plan) for special rules regarding the application of
the Davis-Bacon Contribution Formula.)
22.41 Defined Benefit Plan. A plan under which a Participant's benefit is
based solely on the Plan's benefit formula without the establishment of
separate Accounts for Participants.
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22.42 Defined Benefit Plan Fraction. A component of the combined limitation
test under Code ss.415(e) for Employers that maintain or ever
maintained both a Defined Contribution and a Defined Benefit Plan. See
Section 7.5 (b)(1).
22.43 Defined Contribution Plan. A plan that provides for individual Accounts
for each Participant to which all contributions, forfeitures, income,
expenses, gains and losses under the Plan are credited or deducted. A
Participant's benefit under a Defined Contribution Plan is based solely
on the fair market value of his/her vested Account Balance.
22.44 Defined Contribution Plan Dollar Limitation. The maximum dollar amount
of Annual Additions an Employee may receive under the Plan. See Section
7.4(b).
22.45 Defined Contribution Plan Fraction. A component of the combined
limitation test under Codess.415(e) for Employers that maintain or ever
maintained both a Defined Contribution and a Defined Benefit Plan. See
Section 7.5(b)(2).
22.46 Designated Beneficiary. A Beneficiary who is designated by the
Participant (or by the terms of the Plan) and whose Life Expectancy is
taken into account in determining minimum distributions under Code
ss.401(a)(9). See Article 10.
22.47 Determination Date. The date as of which the Plan is tested to
determine whether it is a Top-Heavy Plan. See Section 16.3(a).
22.48 Determination Period. The period during which contributions to the Plan
are tested to determine if the Plan is a Top-Heavy Plan. See Section
16.3(b).
22.49 Determination Year. The Plan Year for which an Employee's status as a
Highly Compensated Employee is being determined. See Section
22.99(b)(1).
22.50 Directed Account. The Plan assets under a Trust which are held for the
benefit of a specific Participant. See Section 13.4(b).
22.51 Directed Trustee. A Trustee is a Directed Trustee to the extent that
the Trustee's investment powers are subject to the direction of another
person. See Section 12.2(b).
22.52 Direct Rollover. A rollover, at the Participant's direction, of all or
a portion of the Participant's vested Account Balance directly to an
Eligible Retirement Plan. See Section 8.8.
22.53 Disabled. Except as modified under Part 13, #55 of the Agreement [Part
13, #73 of the 401(k) Agreement], an individual is considered Disabled
for purposes of applying the provisions of this Plan if the individual
is unable to engage in any substantial gainful activity by reason of a
medically determinable physical or mental impairment that can be
expected to result in death or which has lasted or can be expected to
last for a continuous period of not less than 12 months. The permanence
and degree of such impairment shall be supported by medical evidence.
22.54 Discretionary Trustee. A Trustee is a Discretionary Trustee to the
extent the Trustee has exclusive authority and discretion to invest,
manage or control the Plan assets without direction from any other
person. See Section 12.2(a).
22.55 Distribution Calendar Year. A calendar year for which a minimum
distribution is required. See Section 10.3(f).
22.56 Distribution Commencement Date. The date an Employee commences
distribution from the Plan. If a Participant commences distribution
with respect to a portion of his/her Account Balance, a separate
Distribution Commencement Date applies to any subsequent distribution.
If distribution is made in the form of an annuity, the Distribution
Commencement Date may be treated as the first day of the first period
for which annuity payments are made.
22.57 Early Retirement Age. The age and/or Years of Service requirement
prescribed by Part 5, #17 of the Agreement [Part 5, #35 of the 401(k)
Agreement]. Early Retirement Age may be used to determine distribution
rights and/or vesting rights. The Plan is not required to have an Early
Retirement Age.
22.58 Earned Income. Earned Income is the net earnings from self-employment
in the trade or business with respect to which the Plan is established,
and for which personal services of the individual are a material
income-producing factor. Net earnings will be determined without regard
to items not included in gross income and the deductions allocable to
such items. Net earnings are reduced by contributions by the Employer
to a qualified plan to the extent deductible under Code ss.404. Net
earnings shall be determined after the deduction allowed to the
taxpayer by Code ss.164(f). If Included Compensation is defined to
exclude any items of Compensation (other than Elective Deferrals), then
for purposes of determining the Included Compensation of a
Self-Employed Individual, Earned Income shall be adjusted by
multiplying Earned Income by the percentage of Total Compensation that
is included for the Eligible Participants who are Nonhighly Compensated
Employees. The percentage is determined by calculating the percentage
of each Nonhighly Compensated Eligible Participant's Total Compensation
that is included in the definition of Included Compensation and
averaging those percentages.
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22.59 Effective Date. The date this Plan, including any restatement or
amendment of this Plan, is effective. Where the Plan is restated or
amended, a reference to Effective Date is the effective date of the
restatement or amendment, except where the context indicates a
reference to an earlier Effective Date. If this Plan is retroactively
effective, the provisions of this Plan generally control. However, if
the provisions of this Plan are different from the provisions of the
Employer's prior plan and, after the retroactive Effective Date of this
Plan, the Employer operated in compliance with the provisions of the
prior plan, the provisions of such prior plan are incorporated into
this Plan for purposes of determining whether the Employer operated the
Plan in compliance with its terms, provided operation in compliance
with the terms of the prior plan do not violate any qualification
requirements under the Code, regulations, or other IRS guidance.
The Employer may designate special effective dates for individual
provisions under the Plan where provided in the Agreement or under
Appendix A of the Agreement. If one or more qualified retirement plans
have been merged into this Plan, the provisions of the merging plan(s)
will remain in full force and effect until the Effective Date of the
plan merger(s), unless provided otherwise under Appendix A-12 of the
Agreement [Appendix A-16 of the 401(k) Agreement]. See Section 20.1 for
special effective date provisions relating to the changes required
under the GUST Legislation.
22.60 Elapsed Time Method. The Elapsed Time Method is a special method for
crediting service for eligibility, vesting or for applying the
allocation conditions under Part 4 of the Agreement. To apply the
Elapsed Time Method for eligibility or vesting, the Employer must elect
the Elapsed Time Method under Part 7 of the Agreement. To apply the
Elapsed Time Method to determine an Employee's eligibility for an
allocation under the Plan, the Employer must elect the Elapsed Time
Method under Part 4, #15.e. of the Nonstandardized Agreement [Part 4B,
#19.e. and/or Part 4C, #24.e. of the Nonstandardized 401(k) Agreement].
(See Section 6.5(b) for more information on the Elapsed Time Method of
crediting service for eligibility and vesting and Section 2.6(c) for
information on the Elapsed Time Method for allocation conditions.)
22.61 Elective Deferrals. Section 401(k) Deferrals, salary reduction
contributions to a SEP described in Code ss.ss.408(k)(6) and
402(h)(1)(B) (sometimes referred to as a SARSEP), contributions made
pursuant to a Salary Reduction Agreement to a contract, custodial
account or other arrangement described in Code ss.403(b), and elective
contributions made to a SIMPLE-IRA plan, as described in Code
ss.408(p). Elective Deferrals shall not include any amounts properly
distributed as an Excess Amount under ss.415 of the Code.
22.62 Eligibility Computation Period. The 12-consecutive month period used
for measuring whether an Employee completes a Year of Service for
eligibility purposes. An Employee's initial Eligibility Computation
Period always begins on the Employee's Employment Commencement Date.
Subsequent Eligibility Computation Periods are measured under the
Shift-to-Plan-Year Method or the Anniversary Year Method. See Section
1.4(c).
22.63 Eligible Participant. Except as provided under Part 1, #6 of the
Agreement, an Employee (other than an Excluded Employee) becomes an
Eligible Participant on the appropriate Entry Date (as selected under
Part 2 of the Agreement) following satisfaction of the Plan's minimum
age and service conditions (as designated in Part 1 of the Agreement).
See Article 1 for the rules regarding participation under the Plan.
For purposes of the 401(k) Agreement, an Eligible Participant is any
Employee (other than an Excluded Employee) who has satisfied the Plan's
minimum age and service conditions designated in Part 1 of the
Agreement with respect to a particular contribution. With respect to
Section 401(k) Deferrals or Employee After-Tax Contributions, an
Employee who has satisfied the eligibility conditions under Part 1 of
the Agreement for making Section 401(k) Deferrals or Employee After-Tax
Contribution is an Eligible Participant with respect to such
contributions, even if the Employee chooses not to actually make any
such contributions. With respect to Employer Matching Contributions, an
Employee who has satisfied the eligibility conditions under Part 1 of
the Agreement for receiving such contributions is an Eligible
Participant with respect to such contributions, even if the Employee
does not receive an Employer Matching Contribution (including
forfeitures) because of the Employee's failure to make Section 401(k)
Deferrals or Employee After-Tax Contributions, as applicable.
22.64 Eligible Rollover Distribution. An amount distributed from the Plan
that is eligible for rollover to an Eligible Retirement Plan. See
Section 8.8(a).
22.65 Eligible Retirement Plan. A qualified retirement plan or IRA that may
receive a rollover contribution. See Section 8.8(b).
22.66 Employee. An Employee is any individual employed by the Employer
(including any Related Employers). An independent contractor is not an
Employee. An Employee is not eligible to participate under the Plan if
the individual is an Excluded Employee under Section 1.2. (See Section
1.3 for rules regarding coverage of Employees of Related Employers.)
For purposes of applying the provisions under this Plan, a
Self-Employed Individual (including a partner in a partnership) is
treated as an Employee. A Leased Employee is also treated as an
Employee of the recipient organization, as provided in Section 1.2(b).
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22.67 Employee After-Tax Contribution Account. The portion of the
Participant's Account attributable to Employee After-Tax Contributions.
22.68 Employee After-Tax Contributions. Employee After-Tax Contributions are
contributions 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 Employee After-Tax Contribution
Account to which earnings and losses are allocated. Employee After-Tax
Contributions may only be made under the Nonstandardized 401(k)
Agreement. See Section 3.1.
22.69 Employer. Except as otherwise provided, Employer means the Employer
(including a Co-Sponsor) that adopts this Plan and any Related
Employer. (See Section 1.3 for rules regarding coverage of Employees of
Related Employers. Also see Section 11.8 for operating rules when the
Employer is a member of a Related Employer group, and Article 21 for
rules that apply to Related Employers that execute a Co-Sponsor
Adoption Page under the Agreement.)
22.70 Employer Contribution Account. If this Plan is a profit sharing plan
(other than a 401(k) plan), a money purchase plan, or a target benefit
plan, the Employer Contribution Account is the portion of the
Participant's Account attributable to contributions made by the
Employer. If this is a 401(k) plan, the Employer Contribution Account
is the portion of the Participant's Account attributable to Employer
Nonelective Contributions, other than QNECs or Safe Harbor Nonelective
Contributions.
22.71 Employer Contributions. If this Plan is a profit sharing plan (other
than a 401(k) plan), a money purchase plan, or a target benefit plan,
Employer Contributions are any contributions the Employer makes
pursuant to Part 4 of to the Agreement. If this Plan is a 401(k) plan,
Employer Contributions include Employer Nonelective Contributions and
Employer Matching Contributions, including QNECs, QMACs and Safe Harbor
Contributions that the Employer makes under the Plan. Employer
Contributions also include any Section 401(k) Deferrals an Employee
makes under the Plan, unless the Plan expressly provides for different
treatment of Section 401(k) Deferrals.
22.72 Employer Matching Contribution Account. The portion of the
Participant's Account attributable to Employer Matching Contributions,
other than QMACs or Safe Harbor Matching Contributions.
22.73 Employer Matching Contributions. Employer Matching Contributions are
contributions made by the Employer on behalf of a Participant on
account of Section 401(k) Deferrals or Employee After-Tax Contributions
made by such Participant, as designated under Parts 4B(b) of the 401(k)
Agreement. Employer Matching Contributions may only be made under the
401(k) Agreement. Employer Matching Contributions also include any
QMACs the Employer makes pursuant to Part 4B, #18 of the 401(k)
Agreement and any Safe Harbor Matching Contributions the Employer makes
pursuant to Part 4E of the 401(k) Agreement. See Section 2.3(b).
22.74 Employer Nonelective Contributions. Employer Nonelective Contributions
are contributions made by the Employer on behalf of Eligible
Participants under the 401(k) Plan, as designated under Part 4C of the
401(k) Agreement. Employer Nonelective Contributions also include any
QNECs the Employer makes pursuant to Part 4C, #22 of the 401(k)
Agreement and any Safe Harbor Nonelective Contributions the Employer
makes pursuant to Part 4E of the 401(k) Agreement. See Section 2.3(d).
22.75 Employment Commencement Date. The date the Employee first performs an
Hour of Service for the Employer. For purposes of applying the Elapsed
Time rules under Section 6.5(b), an Hour of Service is limited to an
Hour of Service as described in Section 22.101(a).
22.76 Employment Period. The period as defined in Part 3, #11.c. of the
target benefit plan Agreement used to determine an Employee's Average
Compensation. See Section 2.5(d)(1)(iii).
22.77 Entry Date. The date on which an Employee becomes an Eligible
Participant upon satisfying the Plan's minimum age and service
conditions. See Section 1.5.
22.78 Equivalency Method. An alternative method for crediting Hours of
Service for purposes of eligibility and vesting. To apply, the Employer
must elect the Equivalency Method under Part 7 of the Agreement. See
Section 6.5(a) for a more detailed discussion of the Equivalency
Method.
22.79 ERISA. The Employee Retirement Income Security Act of 1974, as amended.
22.80 Excess Aggregate Contributions. Amounts which are distributed to
correct the ACP Test. See Section 17.7(c).
22.81 Excess Amount. Amounts which exceed the Annual Additions Limitation.
See Section 7.4(c).
22.82 Excess Compensation. The amount of Included Compensation which exceeds
the Integration Level. Excess Compensation is used for purposes of
applying the Permitted Disparity allocation formula under the profit
sharing or 401(k) plan Agreement (see Section 2.2(b)(2)) or under the
money purchase plan Agreement (see Section 2.4(c)) or for applying the
Integration Formulas under the target benefit plan Agreement (see
Section 2.5(d)(3)).
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22.83 Excess Contributions. Amounts which are distributed to correct the ADP
Test. See Section 17.7(d).
22.84 Excess Deferrals. Elective Deferrals that are includible in a
Participant's gross income because they exceed the dollar limitation
under Code ss.402(g). Excess Deferrals made to this Plan shall be
treated as Annual Additions under the Plan, unless such amounts are
distributed no later than the first April 15 following the close of the
Participant's taxable year for which the Excess Deferrals are made. See
Section 17.1.
22.85 Excluded Employee. An Employee who is excluded under Part 1, #4 of the
Agreement. See Section 1.2.
22.86 Fail-Safe Coverage Provision. A correction provision that permits the
Plan to automatically correct a coverage violation resulting from the
application of a last day of employment or Hours of Service allocation
condition. See Section 2.7.
22.87 Favorable IRS Letter. A notification letter or opinion letter issued by
the IRS to a Prototype Sponsor as to the qualified status of a
Prototype Plan. A separate Favorable IRS Letter is issued with respect
to each Agreement offered under the Prototype Plan. If the term is used
to refer to a letter issued to an Employer with respect to its adoption
of this Prototype Plan, such letter is a determination letter issued by
the IRS.
22.88 Five-Percent Owner. An individual who owns (or is considered as owning
within the meaning of Code ss.318) more than 5 percent of the
outstanding stock of the Employer or stock possessing more than 5
percent of the total combined voting power of all stock of the
Employer. If the Employer is not a corporation, a Five-Percent Owner is
an individual who owns more than 5 percent of the capital or profits
interest of the Employer.
22.89 Five-Year Forfeiture Break in Service. A Break in Service rule under
which a Participant's nonvested benefit may be forfeited. See Section
4.6(b).
22.90 Flat Benefit. A Nonintegrated Benefit Formula under Part 4 of the
target benefit plan Agreement that provides for a Stated Benefit equal
to a specified percentage of Average Compensation. See Section
2.5(c)(1)(i).
22.91 Flat Excess Benefit. An Integrated Benefit Formula under Part 4 of the
target benefit plan Agreement that provides for a Stated Benefit equal
to a specified percentage of Average Compensation plus a specified
percentage of Excess Compensation. See Section 2.5(c)(2)(i).
22.92 Flat Offset Benefit. An Integrated Benefit Formula under Part 4 of the
target benefit plan Agreement that provides for a Stated Benefit equal
to a specified percentage of Average Compensation which is offset by a
specified percentage of Offset Compensation. See Section
2.5(c)(2)(iii).
22.93 Former Related Employer. A Related Employer (as defined in Section
22.164) that ceases to be a Related Employer because of an acquisition
or disposition of stock or assets, a merger, or similar transaction.
See Section 21.4 for the effect when a Co-Sponsor becomes a Former
Related Employer.
22.94 Four-Step Formula. A method for allocating certain Employer
Contributions under the Permitted Disparity Method. See Section
2.2(b)(2)(ii).
22.95 General Trust Account. The Plan assets under a Trust which are held for
the benefit of all Plan Participants as a pooled investment. See
Section 13.4(a).
22.96 GUST Legislation. GUST Legislation refers to the Uruguay Round
Agreements Act (GATT), the Uniformed Services Employment and
Reemployment Rights Act of 1994 (USERRA) the Small Business Job
Protection Act of 1996 (SBJPA), the Taxpayer Relief Act of 1997 (TRA
'97), and the Internal Revenue Service Restructuring and Reform Act of
1998. See Article 20 for special rules for demonstrating compliance
with the qualification changes under the GUST Legislation.
22.97 Hardship. A heavy and immediate financial need which meets the
requirements of Section 8.6.
22.98 Highest Average Compensation. A term used to apply the combined plan
limit under Codess.415(e). See Section 7.5(b)(3).
22.99 Highly Compensated Employee. The definition of Highly Compensated
Employee under this Section is effective for Plan Years beginning after
December 31, 1996. For Plan Years beginning before January 1, 1997,
Highly Compensated Employees are determined under Code ss.414(q) as in
effect at that time.
(a) Definition. An Employee is a Highly Compensated Employee for a
Plan Year if he/she:
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(1) is a Five-Percent Owner (as defined in Section 22.88)
at any time during the Determination Year or the
Lookback Year; or
(2) has Total Compensation from the Employer for the
Lookback Year in excess of $80,000 (as adjusted) and,
if elected under Part 13, #50.a. of the Agreement
[Part 13, #68.a. of the 401(k) Agreement], is in the
Top-Paid Group for the Lookback Year. If the Employer
does not specifically elect to apply the Top-Paid
Group Test, the Highly Compensated Employee
definition will be applied without regard to whether
an Employee is in the Top-Paid Group. The $80,000
amount is adjusted at the same time and in the same
manner as under Code ss.415(d), except that the base
period is the calendar quarter ending September 30,
1996.
(b) Other Definitions. The following definitions apply for
purposes of determining Highly Compensated Employee status
under this Section 22.99.
(1) Determination Year. The Determination Year is the
Plan Year for which the Highly Compensated Employee
determination is being made.
(2) Lookback Year. Unless the Calendar Year Election (or
Old-Law Calendar Year Election) applies, the Lookback
Year is the 12-month period immediately preceding the
Determination Year.
(3) Total Compensation. Total Compensation as defined
under Section 22.197.
(4) Top-Paid Group. An Employee is in the Top-Paid Group
for purposes of applying the Top-Paid Group Test if
the Employee is one of the top 20% of Employees
ranked by Total Compensation. In determining the
Top-Paid Group, any reasonable method of rounding or
tie-breaking is permitted. For purposes of
determining the number of Employees in the Top-Paid
Group for any year, Employees described in Code
ss.414(q)(5) or applicable regulations may be
excluded.
(5) Calendar Year Election. If the Plan Year elected
under the Agreement is not the calendar year, for
purposes of applying the Highly Compensated Employee
test under subsection (a)(2) above, the Employer may
elect under Part 13, #50.b. of the Agreement [Part
13, #68.b. of the 401(k) Agreement] to substitute for
the Lookback Year the calendar year that begins in
the Lookback Year. The Calendar Year Election does
not apply for purposes of applying the Five-Percent
Owner test under subsection (a)(1) above. If the
Employer does not specifically elect to apply the
Calendar Year Election, the Calendar Year Election
does not apply. The Calendar Year Election should not
be selected if the Plan is using a calendar Plan
Year.
(6) Old-Law Calendar Year Election. A special election
available under section 1.414(q)-1T of the temporary
Income Tax Regulations and provided for in Notice
97-45 for the Plan Year beginning in 1997 which
permitted the Employer to substitute the calendar
year beginning with or within the Plan Year for the
Lookback Year in applying subsections (a)(1) and
(a)(2) above. If the 1997 Plan Year was a calendar
year, the effect of the Old-Law Calendar Year
Election was to treat the Determination Year and the
Lookback Year as the same 12-month period. The
Employer may elect to apply the Old-Law Calendar Year
Election under Appendix B-1.c. of the Agreement. See
Section 20.2(c).
(c) Application of Highly Compensated Employee definition. In
determining whether an Employee is a Highly Compensated
Employee for years beginning in 1997, the amendments to Code
ss.414(q) as described above are treated as having been in
effect for years beginning in 1996. In determining an
Employee's status as a highly compensated former employee, the
rules for the applicable Determination Year apply in
accordance with section 1.414(q) 1T, A 4 of the temporary
Income Tax Regulations and Notice 97 45.
22.100 Highly Compensated Employee Group. The group of Highly Compensated
Employees who are included in the ADP Test and/or the ACP Test. See
Section 17.7(e).
22.101 Hour of Service. Each Employee will receive credit for each Hour of
Service as defined in this Section 22.101. An Employee will not receive
credit for the same Hour of Service under more than one category listed
below.
(a) Performance of duties. Hours of Service include each hour for
which an Employee is paid, or entitled to payment, for the
performance of duties for the Employer. These hours will be
credited to the Employee for the computation period in which
the duties are performed.
(b) Nonperformance of duties. Hours of Service include 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
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will be credited under this paragraph for any single
continuous period (whether or not such period occurs in a
single computation period). Hours under this paragraph will be
calculated and credited pursuant to ss.2530.200b 2 of the
Department of Labor Regulations which is incorporated herein
by this reference.
(c) Back pay award. Hours of Service include each hour for which
back pay, irrespective of mitigation of damages, is either
awarded or agreed to by the Employer. The same Hours of
Service will not be credited both under subsection (a) or
subsection (b), as the case may be, and under this subsection
(c). These hours will be credited to the Employee for the
computation period or periods to which the award or agreement
pertains rather than the computation period in which the
award, agreement or payment is made.
(d) Related Employers/Leased Employees. For purposes of crediting
Hours of Service, all Related Employers are treated as a
single Employer. Hours of Service will be credited for
employment with any Related Employer. Hours of Service also
include hours credited as a Leased Employee for a recipient
organization.
(e) Maternity/paternity leave. Solely for purposes of determining
whether a Break in Service has occurred in a computation
period, an individual who is absent from work for maternity or
paternity reasons will 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 (1) by
reason of the pregnancy of the individual, (2) by reason of a
birth of a child of the individual, (3) by reason of the
placement of a child with the individual in connection with
the adoption of such child by such individual, or (4) for
purposes of caring for such child for a period beginning
immediately following such birth or placement. The Hours of
Service credited under this paragraph will be credited (1) in
the computation period in which the absence begins if the
crediting is necessary to prevent a Break in Service in that
period, or (2) in all other cases, in the following
computation period.
22.102 Included Compensation. Included Compensation is Total Compensation, as
modified under Part 3, #10 of the Agreement, used to determine
allocations of contributions and forfeitures. Under the Nonstandardized
Agreement, Included Compensation generally includes amounts an Employee
earns with a Related Employer that has not executed a Co-Sponsor
Adoption Page under the Agreement. However, the Employer may elect
under Part 3, #10.b.(7) of the Nonstandardized Agreement [Part 3,
#10.i. of the Nonstandardized 401(k) Agreement] to exclude all amounts
earned with a Related Employer that has not executed a Co-Sponsor
Adoption Page. Under the Standardized Agreement, Included Compensation
always includes all compensation earned with all Related Employers,
without regard to whether the Related Employer executes the Co-Sponsor
Adoption Page. (See Section 21.5.) In no case may Included Compensation
for any Participant exceed the Compensation Dollar Limitation as
defined in Section 22.32. Included Compensation does not include any
amounts earned while an individual is an Excluded Employee (as defined
in Section 1.2 of this BPD).
The Employer may select under Part 3, #10 of the 401(k) Agreement to
provide a different definition of Included Compensation for determining
Section 401(k) Deferrals, Employer Matching Contributions, and Employer
Nonelective Contributions. Unless otherwise provided in Part 3, #10.j.
of the Nonstandardized 401(k) Agreement, the definition of Included
Compensation chosen for Section 401(k) Deferrals also applies to any
Employee After-Tax Contributions and to any Safe Harbor Contributions
designated under Part 4E of the Agreement; the definition of Included
Compensation chosen for Employer Matching Contributions also applies to
any QMACs; and the definition of Included Compensation chosen for
Employer Nonelective Contributions also applies to any QNECs.
The Employer may elect to exclude from the definition of Included
Compensation any of the amounts permitted under Part 3, #10 of the
Agreement. However, to use the same definition of compensation for
purposes of nondiscrimination testing, the definition of Included
Compensation must satisfy the nondiscrimination requirements of Code
ss.414(s). The definition of Included Compensation will be deemed to be
nondiscriminatory under Code ss.414(s) if the only amounts excluded are
amounts under Part 3, #10.b.(1) - (3) of the Nonstandardized Agreement
[Part 3, #10.c. - e. of the Nonstandardized 401(k) Agreement]. Any
other exclusions could cause the definition of Included Compensation to
fail to satisfy the nondiscrimination requirements of Code ss.414(s).
If the definition of Included Compensation fails to satisfy the
nondiscrimination requirements of Code ss.414(s), additional
nondiscrimination testing may have to be performed to demonstrate
compliance with the nondiscrimination requirements. The definition of
Included Compensation under the Standardized Agreements must satisfy
the nondiscrimination requirements under Code ss.414(s).
If the Plan uses a Permitted Disparity Method under Part 4 of the
Agreement or if the Plan is a Safe Harbor 401(k) Plan, the definition
of Included Compensation must satisfy the nondiscrimination
requirements under Code ss.414(s). Therefore, any exclusions from
Included Compensation under Part 3, #10.b.(4) - (8) of the
Nonstandardized Agreement [Part 3, #10.f. - j. of the Nonstandardized
401(k) Agreement] will apply only to Highly Compensated Employees,
unless specifically provided otherwise under Part 3, #10.b.(8). of the
Nonstandardized Agreement [Part 3, #10.j. of the Nonstandardized 401(k)
Agreement].
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The Employer may elect under Part 3, #10.b.(1) of the Agreement [Part
3, #10.c. of the 401(k) Agreement] to exclude Elective Deferrals,
pre-tax contributions to a cafeteria plan or a Code ss.457 plan, and
qualified transportation fringes under Codess.132(f)(4). Generally, the
exclusion of qualified transportation fringes is effective for Plan
Years beginning on or after January 1, 2001. However, the Employer may
elect an earlier effective date under Appendix B-3.c. of the Agreement.
22.103 Insurer. An insurance company that issues a life insurance policy on
behalf of a Participant under the Plan in accordance with the
requirements under Article 15.
22.104 Integrated Benefit Formula. A benefit formula under Part 4 of the
target benefit plan Agreement that takes into account an Employee's
Social Security benefits. See Section 2.5(c)(2).
22.105 Integration Level. The amount used for purposes of applying the
Permitted Disparity Method allocation formula (or the Integrated
Benefit Formulas under the target benefit plan Agreement). The
Integration Level is the Taxable Wage Base, unless the Employer
designates a different amount under Part 4 of the Agreement.
22.106 Investment Manager. A person (other than the Trustee) who (a) has the
power to manage, acquire, or dispose of Plan assets (b) is an
investment adviser, a bank, or an insurance company as described in
ss.3(38)(B) of ERISA, and (c) acknowledges fiduciary responsibility to
the Plan in writing.
22.107 Key Employee. Employees who are taken into account for purposes of
determining whether the Plan is a Top-Heavy Plan. See Section 16.3(c).
22.108 Leased Employee. An individual who performs services for the Employer
pursuant to an agreement between the Employer and a leasing
organization, and who satisfies the definition of a Leased Employee
under Code ss.414(n). See Section 1.2(b) for rules regarding the
treatment of a Leased Employee as an Employee of the Employer.
22.109 Life Expectancy. A Participant's and/or Designated Beneficiary's life
expectancy used for purposes of determining required minimum
distributions under the Plan. See Section 10.3(e).
22.110 Limitation Year. The measuring period for determining whether the Plan
satisfies the Annual Additions Limitation under Section 7.4(d).
22.111 Lookback Year. The 12-month period immediately preceding the current
Plan Year during which an Employee's status as Highly Compensated
Employee is determined. See Section 22.99(b)(2).
22.112 Maximum Disparity Percentage. The maximum amount by which the
designated percentage of Excess Compensation under an Excess Benefit
formula under Part 4 of the target benefit plan Agreement may exceed
the designated percentage of Average Compensation. See Section
2.5(c)(3)(i).
22.113 Maximum Offset Percentage. The maximum amount that may be designated as
the offset percentage under an Offset Benefit formula under Part 4 of
the target benefit plan Agreement. See Section 2.5(c)(3)(ii).
22.114 Maximum Permissible Amount. The maximum amount that may be allocated to
a Participant's Account within the Annual Additions Limitation. See
Section 7.4(e).
22.115 Measuring Period. The period for which Average Compensation or Offset
Compensation is measured under the target benefit plan Agreement.
Unless elected otherwise under Part 3, #11.b. or Part 3, #12.a. of the
target benefit plan Agreement, as applicable, the Measuring Period is
the Plan Year (or the 12-month period ending on the last day of the
Plan Year for a short Plan Year). See Sections 2.5(d)(1)(ii) and
2.5(d)(5)(i).
22.116 Multiple Use Test. A special nondiscrimination test that applies when
the Plan must perform both the ADP Test and the ACP Test in the same
Plan Year. See Section 17.4.
22.117 Named Fiduciary. The Plan Administrator or other fiduciary named by the
Plan Administrator to control and manage the operation and
administration of the Plan. To the extent authorized by the Plan
Administrator, a Named Fiduciary may delegate its responsibilities to a
third party or parties. The Employer shall also be a Named Fiduciary.
22.118 Net Profits. The Employer's net income or profits that may be used to
limit the amount of Employer Contributions made under the Plan. See
Section 2.2(a)(2).
22.119 New Related Employer. An organization that becomes a Related Employer
(as defined in Section 22.164) with the Employer by reason of an
acquisition or disposition of stock or assets, a merger, or similar
transaction. See Section 21.5 for special procedures under a
Standardized Agreement when there is a New Related Employer.
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22.120 Nonhighly Compensated Employee. Any Employee who is not a Highly
Compensated Employee. See Section 22.99 for the definition of Highly
Compensated Employee.
22.121 Nonhighly Compensated Employee Group. The group of Nonhighly
Compensated Employees included in the ADP Test and/or the ACP Test. See
Section 17.7(f).
22.122 Nonintegrated Benefit Formula. A benefit formula under Part 4 of the
target benefit plan Agreement that does not take into account an
Employee's Social Security benefits. See Section 2.5(c)(1).
22.123 Non-Key Employee. Any Employee who is not a Key Employee. (See Section
16.3(c).)
22.124 Nonresident Alien Employees. An Employee who is neither a citizen of
the United States nor a resident of the United States for U.S. tax
purposes (as defined in Codess.7701(b)), and who does not have any
earned income (as defined in Codess.911) for the Employer that
constitutes U.S. source income (within the meaning of Codess.861). If a
Nonresident Alien Employee has U.S. source income, he/she is treated as
satisfying this definition if all of his/her U.S. source income from
the Employer is exempt from U.S. income tax under an applicable income
tax treaty.
22.125 Nonstandardized Agreement. An Agreement under this Prototype Plan under
which an adopting Employer may not rely on a Favorable IRS Letter
issued to the Prototype Sponsor. In order to have reliance from the IRS
that the form of the Plan as adopted by the Employer is qualified, the
Employer must request a determination letter on the Plan.
22.126 Normal Retirement Age. The age selected under Part 5 of the Agreement.
If a Participant's Normal Retirement Age is determined wholly or partly
with reference to an anniversary of the date the Participant commenced
participation in the Plan and/or the Participant's Years of Service,
Normal Retirement Age is the Participant's age when such requirements
are satisfied. If the Employer enforces a mandatory retirement age, the
Normal Retirement Age is the lesser of that mandatory age or the age
specified in the Agreement.
22.127 Offset Compensation. The average of a Participant's annual Included
Compensation during the three (3) consecutive Measuring Periods
designated under Part 3, #12 of the target benefit plan Agreement. See
Section 2.5(d)(5) for a complete definition of Offset Compensation.
22.128 Offset Benefit Formula A Flat Offset Benefit formula or a Unit Offset
Benefit formula under Part 4 of the target benefit plan Agreement that
provides for a Stated Benefit based on a percentage of Average
Compensation offset by a percentage of Offset Compensation. See Section
2.5(c)(2)(iii) and (iv).
22.129 Old-Law Calendar Year Election. A special election for determining the
Lookback Year under the Highly Compensated Employee test that was
available only for the 1997 Plan Year. See Section 22.99(b)(6).
22.130 Old-Law Required Beginning Date. If so elected under Part 13, #52 of
the Agreement [Part 13, #70 of the 401(k) Agreement], the date by which
minimum distributions must commence under the Plan, as determined under
Section 10.3(a)(2).
22.131 Owner-Employee. A Self-Employed Individual (as defined in Section
22.180) who is a sole proprietor, or who is a partner owning more than
10 percent of either the capital or profits interest of the
partnership.
22.132 Paired Plans. Two or more Standardized Agreements that are designated
as Paired Plans. See Section 19.6.
22.133 Participant. A Participant is an Employee or former Employee who has
satisfied the conditions for participating under the Plan. A
Participant also includes any Employee or former Employee who has an
Account Balance under the Plan, including an Account Balance derived
from a rollover or transfer from another qualified plan or IRA. A
Participant is entitled to share in an allocation of contributions or
forfeitures under the Plan for a given year only if the Participant is
an Eligible Participant as defined in Section 1.1, and satisfies the
allocation conditions set forth in Section 2.6 and Part 4 of the
Agreement.
22.134 Period of Severance. A continuous period of time during which the
Employee is not employed by the Employer and which is used to determine
an Employee's Participation under the Elapsed Time Method. See Section
6.5(b)(2).
22.135 Permissive Aggregation Group. Plans that are not required to be
aggregated to determine whether the Plan is a Top-Heavy Plan. See
Section 16.3(d).
22.136 Permitted Disparity Method. A method for allocating certain Employer
Contributions to Eligible Participants as designated under Part 4 of
the Agreement. See Article 2.
22.137 Plan. The Plan is the retirement plan established or continued by the
Employer for the benefit of its Employees under this Prototype Plan
document. The Plan consists of the BPD and the elections made under the
Agreement. If the
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Employer adopts more than one Agreement offered under this Prototype
Plan, then each executed Agreement represents a separate Plan, unless
the Agreement restates a previously executed Agreement.
22.138 Plan Administrator. The Plan Administrator is the person designated to
be responsible for the administration and operation of the Plan. Unless
otherwise designated by the Employer, the Plan Administrator is the
Employer. If any Related Employer has executed a Co-Sponsor Adoption
Page, the Employer referred to in this Section is the Employer that
executes the Signature Page of the Agreement.
22.139 Plan Year. The 12-consecutive month period for administering the Plan,
on which the records of the Plan are maintained. The Employer must
designate the Plan Year applicable to the Plan under the Agreement. If
the Plan Year is amended, a Plan Year of less than 12 months may be
created. If this is a new Plan, the first Plan Year begins on the
Effective Date of the Plan. If the amendment of the Plan Year or the
Effective Date of a new Plan creates a Plan Year that is less than 12
months long, there is a Short Plan Year. The existence of a Short Plan
Year may be documented under the Plan Year definition on page 1 of the
Agreement. See Section 11.7 for operating rules that apply to Short
Plan Years.
22.140 Pre-Age 35 Waiver. A waiver of the QPSA before a Participant reaches
age 35. See Section 9.4(f).
22.141 Predecessor Employer. An employer that previously employed the
Employees of the Employer. See Section 6.7 for the rules regarding the
crediting of service with a Predecessor Employer.
22.142 Predecessor Plan. A Predecessor Plan is a qualified plan maintained by
the Employer that is terminated within the 5-year period immediately
preceding or following the establishment of this Plan. A Participant's
service under a Predecessor Plan must be counted for purposes of
determining the Participant's vested percentage under the Plan. See
Section 4.5(b)(1).
22.143 Present Value. The current single-sum value of an Accrued Benefit under
a Defined Benefit Plan.
22.144 Present Value Stated Benefit. An amount used to determine the Employer
Contribution under the target benefit plan Agreement. See Section
2.5(b)(3).
22.145 Prior Year Testing Method. A method for applying the ADP Test and/or
the ACP Test. See Section 17.2(a)(1) for a discussion of the Prior Year
Testing Method under the ADP Test and Section 17.3(a)(1) for a
discussion of the Prior Year Testing Method under the ACP Test.
22.146 Pro Rata Allocation Method. A method for allocating certain Employer
Contributions to Eligible Participants under the Plan. See Article 2.
22.147 Projected Annual Benefit. An amount used in the numerator of the
Defined Benefit Plan Fraction. See Section 7.5(b)(4).
22.148 Protected Benefit. A Participant's benefits which may not be eliminated
by Plan amendment. Protected Benefits include early retirement
benefits, retirement-type subsidies, and optional forms of benefit (as
defined under the regulations). See Section 18.1(c).
22.149 Prototype Plan. A plan sponsored by a Prototype Sponsor the form of
which is the subject of a Favorable IRS Letter from the Internal
Revenue Service which is made up of a Basic Plan Document and an
Adoption Agreement. An Employer may establish or continue a plan by
executing an Adoption Agreement under this Prototype Plan.
22.150 Prototype Sponsor. The Prototype Sponsor is the entity that maintains
the Prototype Plan for adoption by Employers. See Section 18.1(a) for
the ability of the Prototype Sponsor to amend this Plan.
22.151 QDRO -- Qualified Domestic Relations Order. A domestic relations order
that provides for the payment of all or a portion of the Participant's
benefits to an Alternate Payee and satisfies the requirements under
Code ss.414(p). See Section 11.5.
22.152 QJSA -- Qualified Joint and Survivor Annuity. A QJSA is an immediate
annuity payable over the life of the Participant with a survivor
annuity payable over the life of the spouse. If the Participant is not
married as of the Distribution Commencement Date, the QJSA is an
immediate annuity payable over the life of the Participant. See Section
9.2.
22.153 QMAC Account. The portion of a Participant's Account attributable to
QMACs.
22.154 QMACs -- Qualified Matching Contributions. An Employer Matching
Contribution made by the Employer that satisfies the requirements under
Section 17.7(g).
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22.155 QNEC Account. The portion of a Participant's Account attributable to
QNECs.
22.156 QNECs -- Qualified Nonelective Contributions. An Employer Nonelective
Contribution made by the Employer that satisfies the requirements under
Section 17.7(h).
22.157 QPSA -- Qualified Preretirement Survivor Annuity. A QPSA is an annuity
payable over the life of the surviving spouse that is purchased using
50% of the Participant's vested Account Balance as of the date of
death. The Employer may modify the 50% QPSA level under Part 11, #41.b.
of the Agreement [Part 11, #59.b. of the 401(k) Agreement]. See Section
9.3.
22.158 QPSA Election Period. The period during which a Participant (and the
Participant's spouse) may waive the QPSA under the Plan. See Section
9.4(e).
22.159 Qualified Election. An election to waive the QJSA or QPSA under the
Plan. See Section 9.4(d).
22.160 Qualified Transfer. A plan-to-plan transfer which meets the
requirements under Section 3.3(d).
22.161 Qualifying Employer Real Property. Real property of the Employer which
meets the requirements under ERISAss.407(d)(4). See Section 13.5(b) for
limitations on the ability of the Plan to invest in Qualifying Employer
Real Property.
22.162 Qualifying Employer Securities. An Employer security which is stock, a
marketable obligation, or interest in a publicly traded partnership as
described in ERISA ss.407(d)(5). See Section 13.5(b) for limitations on
the ability of the Plan to invest in Qualifying Employer Securities.
22.163 Reemployment Commencement Date. The first date upon which an Employee
is credited with an Hour of Service following a Break in Service (or
Period of Severance, if the Plan is using the Elapsed Time Method of
crediting service). For purposes of applying the Elapsed Time rules
under Section 6.5(b), an Hour of Service is limited to an Hour of
Service as described in Section 22.101(a).
22.164 Related Employer. A Related Employer includes all members of a
controlled group of corporations (as defined in Code ss.414(b)), all
commonly controlled trades or businesses (as defined in Code ss.414(c))
or affiliated service groups (as defined in Code ss.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
ss.414(o). For purposes of applying the provisions under this Plan, the
Employer and any Related Employers are treated as a single Employer,
unless specifically stated otherwise. See Section 11.8 for operating
rules that apply when the Employer is a member of a Related Employer
group.
22.165 Required Aggregation Group. Plans which must be aggregated for purposes
of determining whether the Plan is a Top-Heavy Plan. See Section
16.3(f).
22.166 Required Beginning Date. The date by which minimum distributions must
commence under the Plan. See Section 10.3(a).
22.167 Reverse QNEC Method. A method for allocating QNECs under the Plan. See
Section 2.3(e)(2).
22.168 Rollover Contribution Account. The portion of the Participant's Account
attributable to a Rollover Contribution from another qualified plan or
IRA.
22.169 Rollover Contribution. A contribution made by an Employee to the Plan
attributable to an Eligible Rollover Distribution from another
qualified plan or IRA. See Section 8.8(a) for the definition of an
Eligible Rollover Distribution.
22.170 Rule of Parity Break in Service. A Break in Service rule used to
determine an Employee's Participation under the Plan. See Section
1.6(a) for the effect of the Rule of Parity Break in Service on
eligibility to participate under the Plan and see Section 4.6(c) for
the application for the effect of the Rule of Parity Break in Service
Rule on vesting.
22.171 Safe Harbor 401(k) Plan. A 401(k) plan that satisfies the conditions
under Section 17.6.
22.172 Safe Harbor Contribution. A contribution authorized under Part 4E of
the 401(k) Agreement that allows the Plan to qualify as a Safe Harbor
401(k) Plan. A Safe Harbor Contribution may be a Safe Harbor Matching
Contribution or a Safe Harbor Nonelective Contribution.
22.173 Safe Harbor Matching Contribution Account. The portion of a
Participant's Account attributable to Safe Harbor Matching
Contributions.
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22.174 Safe Harbor Matching Contributions. An Employer Matching Contribution
that satisfies the requirements under Section 17.6(a)(1)(i).
22.175 Safe Harbor Nonelective Contribution Account. The portion of a
Participant's Account attributable to Safe Harbor Nonelective
Contributions.
22.176 Safe Harbor Nonelective Contributions. An Employer Nonelective
Contribution that satisfies the requirements under Section
17.6(a)(1)(ii).
22.177 Salary Reduction Agreement. A Salary Reduction Agreement is a written
agreement between an Eligible Participant and the Employer, whereby the
Eligible Participant elects to reduce his/her Included Compensation by
a specific dollar amount or percentage and the Employer agrees to
contribute such amount into the 401(k) Plan. A Salary Reduction
Agreement may require that an election be stated in specific percentage
increments (not greater than 1% increments) or in specific dollar
amount increments (not greater than dollar increments that could exceed
1% of Included Compensation).
A Salary Reduction Agreement may not be effective prior to the later
of: (a) the date the Employee becomes an Eligible Participant; (b) the
date the Eligible Participant executes the Salary Reduction Agreement;
or (c) the date the 401(k) plan is adopted or effective. A Salary
Reduction Agreement is valid even though it is executed by an Employee
before he/she actually has qualified as an Eligible Participant, so
long as the Salary Reduction Agreement is not effective before the date
the Employee is an Eligible Participant. A Salary Reduction Agreement
may only apply to Included Compensation that becomes currently
available to the Employee after the effective date of the Salary
Reduction Agreement.
A Salary Reduction Agreement (or other written procedures) must
designate a uniform period during which an Employee may change or
terminate his/her deferral election under the Salary Reduction
Agreement. An Eligible Participant's right to change or terminate a
Salary Reduction Agreement may not be available on a less frequent
basis than once per Plan Year.
22.178 Section 401(k) Deferral Account. The portion of a Participant's Account
attributable to Section 401(k) Deferrals.
22.179 Section 401(k) Deferrals. Amounts contributed to the 401(k) Plan at the
election of the Participant, in lieu of cash compensation, which are
made pursuant to a Salary Reduction Agreement or other deferral
mechanism, and which are not includible in the gross income of the
Employee pursuant to Code ss.402(e)(3). Section 401(k) Deferrals do not
include any deferrals properly distributed as excess Annual Additions
pursuant to Section 7.1(c)(2).
22.180 Self-Employed Individual. An individual who has Earned Income (as
defined in Section 22.58) for the taxable year from the trade or
business for which the Plan is established, or an individual who would
have had Earned Income but for the fact that the trade or business had
no Net Profits for the taxable year.
22.181 Shareholder-Employee. A Shareholder-Employee means an Employee or
officer of a subchapter S corporation who owns (or is considered as
owning within the meaning of Code ss.318(a)(1)), on any day during the
taxable year of such corporation, more than 5% of the outstanding stock
of the corporation.
22.182 Shift-to-Plan-Year Method. The Shift-to-Plan-Year Method is a method
for determining Eligibility Computation Periods, after an Employee's
initial computation period. See Section 1.4(c)(1).
22.183 Short Plan Year. Any Plan Year that is less than 12 months long, either
because of the amendment of the Plan Year, or because the Effective
Date of a new Plan is less than 12 months prior to the end of the first
Plan Year. See Section 11.7 for the operational rules that apply if the
Plan has a Short Plan Year.
22.184 Social Security Retirement Age. An Employee's retirement age as
determined under Section 230 of the Social Security Retirement Act. See
Section 2.5(d)(6).
22.185 Standardized Agreement. An Agreement under this Prototype Plan that
permits the adopting Employer to rely under certain circumstances on
the Favorable IRS Letter issued to the Prototype Sponsor without the
need for the Employer to obtain a determination letter.
22.186 Stated Benefit. The amount determined in accordance with the benefit
formula selected in Part 4 of the target benefit plan Agreement,
payable annually as a Straight Life Annuity commencing at Normal
Retirement Age (or current age, if later). See Section 2.5(a).
22.187 Straight Life Annuity. An annuity payable in equal installments for the
life of the Participant that terminates upon the Participant's death.
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22.188 Successor Plan. A Successor Plan is any Defined Contribution Plan,
other than an ESOP, SEP, or SIMPLE-IRA plan, maintained by the Employer
which prevents the Employer from making a distribution to Participants
upon the termination of a 401(k) plan. See Section 18.2(b)(2).
22.189 Taxable Wage Base. The maximum amount of wages that are considered for
Social Security purposes. The Taxable Wage Base is used to determine
the Integration Level for purposes of applying the Permitted Disparity
Method allocation formula under the profit sharing or 401(k) plan
Agreement (see Section 2.2(b)(2)) or under the money purchase plan
Agreement (see Section 2.4(c)) or for applying the Integrated Benefit
Formulas under the target benefit plan Agreement (see Section
2.5(d)(9)).
22.190 Testing Compensation. The compensation used for purposes of the ADP
Test, the ACP Test, and the Multiple Use Test. See Section 17.7(i).
22.191 Theoretical Reserve. An amount used to determine the Employer
Contribution under the target benefit plan Agreement. See Section
2.5(b)(4).
22.192 Three Percent Method. A method for applying the ADP Test or the ACP
Test for a new 401(k) Plan. See Section 17.2(b) for a discussion of the
ADP Test for new plans and Section 17.3(b) for a discussion of the ACP
Test for new plans.
22.193 Top-Paid Group. The top 20% of Employees ranked by Total Compensation
for purposes of applying the Top-Paid Group Test. See Section
22.99(b)(4).
22.194 Top-Paid Group Test. An optional test the Employer may apply when
determining its Highly Compensated Employees. See Section 22.99(a)(2).
22.195 Top-Heavy Plan. A Plan that satisfies the conditions under Section
16.3(g). A Top-Heavy Plan must provide special accelerated vesting and
minimum benefits to Non-Key Employees. See Section 16.2.
22.196 Top-Heavy Ratio. The ratio used to determine whether the Plan is a
Top-Heavy Plan. See Section 16.3(h).
22.197 Total Compensation. Total Compensation is used to apply the Annual
Additions Limitation under Section 7.1 and to determine the top-heavy
minimum contribution under Section 16.2 (a). Total Compensation is
either W-2 Wages, Withholding Wages, or Code ss.415 Safe Harbor
Compensation, as designated under Part 3 of the Agreement. For a
Self-Employed Individual, each definition of Total Compensation means
Earned Income. Except as otherwise provided under Sections 7.4(g)(4)
and 16.3(i), each definition of Total Compensation (including Earned
Income for Self-Employed Individuals) is increased to include Elective
Deferrals (as defined in Section 22.61) and elective contributions to a
cafeteria plan under Code ss.125 or to an eligible deferred
compensation plan under Code ss.457. For years beginning on or after
January 1, 2001, each definition of Total Compensation also is
increased to include elective contributions that are not includible in
an Employee's gross income as a qualified transportation fringe under
Code ss.132(f)(4). The Employer may elect an earlier effective date
under Appendix B-3.c. of the Agreement.
Unless modified under the Agreement, Total Compensation does not
include amounts paid to an individual as severance pay to the extent
such amounts are paid after the common-law employment relationship
between the individual and the Employer has terminated. The Employer
may modify the definition of Total Compensation under Part 13, #51.b.
or c. of the Agreement [Part 13, #69.b. or c. of the 401(k) Agreement].
The Employer may elect under #51.b. or #69.b., as applicable, to modify
the definition of Total Compensation to include imputed compensation of
Disabled Employees as permitted under Section 7.4(g)(3) of this BPD.
Additional modifications may be made under #51.c. or #69.c., as
applicable. Any modification to the definition of Total Compensation
must be consistent with the definition of compensation under Treas.
Reg. ss.1.415-2(d).
(a) W 2 Wages. Wages within the meaning of Code ss.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 ss.6041(d), 6051(a)(3), and 6052,
determined without regard to any rules under Code ss.3401(a)
that limit the remuneration included in wages based on the
nature or location of the employment or the services
performed.
(b) Withholding Wages. Wages within the meaning of Code ss.3401(a)
for the purposes of income tax withholding at the source but
determined without regard to any rules that limit the
remuneration included in wages based on the nature or location
of the employment or the services performed.
(c) Code ss.415 Safe Harbor Compensation. A Participant's wages,
salaries, fees for professional services and other amounts
received for personal services actually rendered in the course
of employment with the Employer (without regard to whether or
not such amounts are paid in cash) to the extent that the
amounts are includible in gross income. Such amounts include,
but are not limited to, commissions, compensation for services
on the basis of a percentage of profits, tips, bonuses, fringe
benefits, and reimbursements or other
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expense allowances under a nonaccountable plan (as described
in Treas. Reg.ss.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 (other than
Elective Deferrals) under a SEP (as described in Code
ss.408(k)), or any distributions from a plan of
deferred compensation. For this purpose, Employer
contributions to a plan of deferred compensation do
not include Elective Deferrals (as defined in Section
22.61), elective contributions to a cafeteria plan
under Code ss.125 or a deferred compensation plan
under Code ss.457 and, for years beginning on or
after January 1, 2001, qualified transportation
fringes under Code ss.132(f)(4). The Employer may
elect an earlier effective date for qualified
transportation fringes under Appendix B-3.c. of the
Agreement.
(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.
(4) Other amounts which received special tax benefits, or
contributions made by the Employer (other than
Elective Deferrals) towards the purchase of an
annuity contract described in Code ss.403(b) (whether
or not the contributions are actually excludable from
the gross income of the Employee).
22.198 Transfer Account. The portion of a Participant's Account attributable
to a direct transfer of assets or liabilities from another qualified
retirement plan. See Section 3.3 for the rules regarding the acceptance
of a transfer of assets under this Plan.
22.199 Trust. The Trust is the separate funding vehicle under the Plan.
22.200 Trustee. The Trustee is the person or persons (or any successor to such
person or persons) named in the Trustee Declaration under the
Agreement. The Trustee may be a Discretionary Trustee or a Directed
Trustee. See Article 12 for the rights and duties of a Trustee under
this Plan.
22.201 Two-Step Formula. A method of allocating certain Employer Contributions
under the Permitted Disparity Method. See Section 2.2(b)(2)(i).
22.202 Union Employee. An Employee who is included in a unit of Employees
covered by a collective bargaining agreement between the Employer and
Employee representatives and whose retirement benefits are subject to
good faith bargaining. For this purpose, an Employee will not be
considered a Union Employee for a Plan Year if more than two percent of
the Employees who are covered pursuant to the collective bargaining
agreement are professionals as defined in section 1.410(b)-9 of the
regulations. For this purpose, the term "Employee representatives" does
not include any organization more than half of whose members are
Employees who are owners, officers, or executives of the Employer.
22.203 Unit Benefit. A Nonintegrated Benefit Formula under Part 4 of the
target benefit plan Agreement that provides for a Stated Benefit equal
to a specified percentage of Average Compensation multiplied by the
Participant's projected Years of Participation with the Employer. See
Section 2.5(c)(1)(ii).
22.204 Unit Excess Benefit. An Integrated Benefit Formula under Part 4 of the
target benefit plan Agreement that provides for a Stated Benefit equal
to a specified percentage of Average Compensation plus a specified
percentage of Excess Compensation multiplied by the Participant's
projected Years of Participation. See Section 2.5(c)(2)(ii).
22.205 Unit Offset Benefit. An Integrated Benefit Formula under Part 4 of the
target benefit plan Agreement that provides for a Stated Benefit equal
to a specified percentage of Average Compensation offset by a specified
percentage of Offset Compensation multiplied by the Participant's
projected Years of Participation. See Section 2.5(c)(2)(iv).
22.206 Valuation Date. The date or dates selected under Part 12 of the
Agreement upon which Plan assets are valued. If the Employer does not
select a Valuation Date under Part 12, Plan assets will be valued as of
the last day of each Plan Year. Notwithstanding any election under Part
12 of the Agreement, the Trustee and Plan Administrator may agree to
value the Trust on a more frequent basis, and/or to perform an interim
valuation of the Trust. See Sections 12.6 and 13.2.
22.207 Vesting Computation Period. The 12-consecutive month period used for
measuring whether an Employee completes a Year of Service for vesting
purposes. See Section 4.4.
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22.208 W-2 Wages. An optional definition of Total Compensation which the
Employer may select under Part 3, #9.a. of the Agreement. See Section
22.197(a) for the definition of W-2 Wages.
22.209 Withholding Wages. An optional definition of Total Compensation which
the Employer may select under Part 3, #9.b. of the Agreement. See
Section 22.197(b) for the definition of Withholding Wages.
22.210 Year of Participation. Years of Participation are used to determine a
Participant's Stated Benefit under the target benefit plan Agreement.
See Section 2.5(d)(10).
22.211 Year of Service. An Employee's Years of Service are used to apply the
eligibility and vesting rules under the Plan. Unless elected otherwise
under Part 7 of the Agreement, an Employee will earn a Year of Service
for purposes of applying the eligibility rules if the Employee
completes 1,000 Hours of Service with the Employer during an
Eligibility Computation Period. (See Section 1.4(b).) Unless elected
otherwise under Part 7 of the Agreement, an Employee will earn a Year
of Service for purposes of applying the vesting rules if the Employee
completes 1,000 Hours of Service with the Employer during a Vesting
Computation Period. (See Section 4.5.)
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