Strong Funds Defined Contribution Plan and Trust - Whole Foods Market Inc.
STRONG FUNDS
DEFINED CONTRIBUTION PLAN AND TRUST
Basic Plan Document #04
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS................................1
ARTICLE II TOP HEAVY PROVISIONS ADMINISTRATION.......10
2.1 Top Heavy Plan Requirements......................11
2.2 Determination of Top Heavy Status................11
2.3 Powers and Responsibilities of the Employer......13
2.4 Designation of Administrative Authority..........14
2.5 Allocation and Delegation of Responsibilities....14
2.6 Powers and Duties of the Administrator...........14
2.7 Records and Reports..............................15
2.8 Appointment of Advisers..........................15
2.9 Information from the Employer....................15
2.10 Payment of Expenses..............................15
2.11 Majority Actions.................................16
2.12 Claims Procedure.................................16
2.13 Claims Review Procedure..........................16
ARTICLE III ELIGIBILITY...............................16
3.1 Conditions of Eligibility........................16
3.2 Effective Date of Participation..................16
3.3 Determination of Eligibility.....................17
3.4 Termination of Eligibility.......................17
3.5 Omission of Eligible Employee....................17
3.6 Inclusion of Ineligible..........................17
3.7 Election Not to Participate......................17
3.8 Control of Entities by Owner-Employee............17
ARTICLE IV CONTRIBUTION AND ALLOCATION...............18
4.1 Formula for Determining Employer's Contribution..18
4.2 Time of Payment of Employer's Contributions......18
4.3 Allocation of Contribution, Forfeitures and
Earnings.........................................18
4.4 Maximum Annual Additions.........................22
4.5 Adjustment for Excessive Annual Additions........28
4.6 Rollover Contributions...........................28
4.7 Transfers from Qualified Plans...................28
4.8 Voluntary Employee Contributions.................29
4.9 Directed Investment Account......................30
4.10 Qualified Voluntary Employee Contributions.......30
4.11 Actual Contribution Percentage Tests.............30
4.12 Integration in More Than One Plan................30
4.13 Veterans' Reemployment Rights....................30
ARTICLE V VALUATIONS................................31
5.1 Valuation of the Trust Fund......................31
5.2 Method of Valuation..............................31
ARTICLE VI DETERMINATION AND DISTRIBUTION OF BENEFITS...31
6.1 Determination of Benefits Upon Retirement........31
6.2 Determination of Benefits Upon Death.............31
6.3 Determination of Benefits in Event of Disability.32
6.4 Determination of Benefits Upon Termination.......32
6.5 Distribution of Benefits.........................34
6.6 Distribution of Benefits Upon Death..............38
6.7 Time of Segregation or Distribution..............40
6.8 Distribution for Minor Beneficiary...............41
6.9 Location of Participant or Beneficiary Unknown...41
6.10 Pre-retirement Distribution......................41
6.11 Advance Distribution for Hardship................41
6.12 Alternate Payee Benefits and Distributions.......42
6.13 Special Rule for Profit Sharing Plans............42
ARTICLE VII TRUSTEE...................................42
7.1 Basic Responsibilities of the Trustee............42
7.2 Investment Powers and Duties of the Trustee......43
7.3 Other Powers of the Trustee......................44
7.4 Loans to Participants............................45
7.5 Duties of the Trustee Regarding Payments.........46
7.6 Trustee's Compensation and Expenses and Taxes....46
7.7 Annual Report of the Trustee.....................47
7.8 Audit............................................47
7.9 Resignation, Removal and Succession of Trustee...47
7.10 Transfers and Direct Rollovers...................48
7.11 Trustee Indemnification..........................49
7.12 Employer Securities and Real Property............49
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ARTICLE VIII AMENDMENT, TERMINATION, AND MERGERS.......49
8.1 Amendment........................................49
8.2 Termination......................................50
8.3 Merger or Consolidation..........................50
ARTICLE IX MISCELLANEOUS.............................50
9.1 Employer Adoptions...............................50
9.2 Participant's Rights.............................50
9.3 Alienation.......................................50
9.4 Construction of Plan.............................51
9.5 Gender and Number................................51
9.6 Legal Action.....................................51
9.7 Prohibition Against Diversion of Funds...........51
9.8 Bonding..........................................51
9.9 Employer's and Trustee's Protective Clause.......52
9.10 Insurer's Protective Clause......................52
9.11 Receipt and Release for Payments.................52
9.12 Action by the Employer...........................52
9.13 Named Fiduciaries and Allocation of
Responsibility...................................52
9.14 Headings.........................................52
9.15 Approval by Internal Revenue Service.............53
9.16 Uniformity.......................................53
9.17 Payment of Benefits..............................53
ARTICLE X PARTICIPATING EMPLOYERS...................53
10.1 Election to Become a Participating Employer......53
10.2 Requirements of Participating Employers..........53
10.3 Designation of Agent.............................54
10.4 Employee Transfers...............................54
10.5 Participating Employer's Contribution and
Forfeitures......................................54
10.6 Amendment........................................54
10.7 Discontinuance of Participation..................54
10.8 Administrator's Authority........................54
10.9 Participating Employer Contribution for
Affiliate........................................54
ARTICLE XI CASH OR DEFERRED PROVISIONS...............55
11.1 Formula for Determining Employer's Contribution..55
11.2 Participant's Salary Reduction Election..........55
11.3 Allocation of Contribution, Forfeitures and
Earnings.........................................57
11.4 Actual Deferral Percentage Tests.................59
11.5 Adjustment to Actual Deferral Percentage Tests...60
11.6 Actual Contribution Percentage Tests.............62
11.7 Adjustment to Actual Contribution Percentage
Tests............................................63
11.8 Advance Distribution for Hardship................66
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ARTICLE I
DEFINITIONS
As used in this Plan, the following words and phrases shall have the meanings
set forth herein unless a different meaning is clearly required by the context:
1.1 "Act" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time.
1.2 "Administrator" means the person(s) or entity designated by the
Employer pursuant to section 2.4 to administer the Plan on behalf of
the Employer.
1.3 "Adoption Agreement" means the separate Agreement which is executed by
the Employer and accepted by the Trustee which sets forth the elective
provisions of this Plan and Trust as specified by the Employer.
1.4 "Affiliated Employer" means the Employer and any corporation which is a
member of a controlled group of corporations (as defined in Code
ss.414(b)) which includes the Employer; any trade or business (whether
or not incorporated) which is under common control (as defined in Code
ss.414(c)) with the Employer; any organization (whether or not
incorporated) which is a member of an affiliated service group (as
defined in Code ss.414(m)) which includes the Employer; and any other
entity required to be aggregated with the Employer pursuant to
Regulations under Code ss.414(o).
1.5 "Aggregate Account" means with respect to each Participant, the value
of all accounts maintained on behalf of a Participant, whether
attributable to Employer or Employee contributions, subject to the
provisions of section 2.2.
1.6 "Anniversary Date" means the last day of the Plan Year specified in the
Adoption Agreement.
1.7 "Beneficiary" means the person or persons to whom a share of a deceased
Participant's interest in the Plan is payable, subject to the
restrictions of sections 6.2 and 6.6. A Participant's Beneficiary shall
be their spouse, if any, unless the Participant designates a person or
persons other than their spouse as Beneficiary with the spouse's
written consent.
If no Beneficiary has been designated pursuant to the provisions of
this Plan, or if no Beneficiary survives the Participant and there is
no surviving spouse, the Beneficiary under the Plan shall be the
deceased Participant's estate. If a Beneficiary dies after becoming
entitled to receive a distribution under the Plan but before
distribution is made to them in full, and if no other Beneficiary has
been designated to receive the balance of the distribution in such
event, the estate of the deceased Beneficiary shall be the Beneficiary
for the balance of the distribution.
1.8 "Benefiting" means benefiting under the Plan for any Plan Year during
which a Participant received or is deemed to receive an allocation in
accordance with Regulation ss.1.410(b)-3(a).
1.9 "Code" means the Internal Revenue Code of 1986, as amended or replaced
from time to time.
1.10 "Compensation" with respect to any Participant means one of the
following as elected in the Adoption Agreement. However, Compensation
for any Self-Employed Individual shall be equal to their Earned Income.
(a) Information required to be reported under ss.ss.6041, 6051 and
6052 (Wages, Tips and Other Compensation Box on Form W-2).
Compensation is defined as wages, as defined in 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.ss.6041(d), 6051(a)(3), and 6052. Compensation must be
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
(such as the exception for agricultural labor in
ss.3401(a)(2).
(b) ss.3401(a) Wages. Compensation is defined as 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 (such as the exception for agricultural labor in
Code ss.3401(a)(2)).
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(c) 415 Safe-Harbor Compensation. Compensation is defined as
wages, salaries, and fees for professional services and other
amounts received (without regard to whether or not an amount
is paid in cash) for personal services actually rendered in
the course of employment with the Employer maintaining the
Plan to the extent that the amounts are includible in gross
income (including, but not limited to, commissions paid
salesmen, compensation for services on the basis of a
percentage of profits, commissions on insurance premiums,
tips, bonuses, fringe benefits, and reimbursements, or other
expense allowances under a nonaccountable plan (as described
in Regulationss.1.62-2(c)), and excluding the following:
(1) Employer contributions to a plan of deferred
compensation which are not includible in the
Employee's gross income for the taxable year in which
contributed, or Employer contributions under a
simplified employee pension plan to the extent such
contributions are deductible by the Employee, or any
distributions from a plan of deferred compensation;
(2) Amounts realized from the exercise of a nonqualified
stock option, or when restricted stock (or property)
held by the Employee either becomes freely
transferable or is no longer subject to a substantial
risk of forfeiture;
(3) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option; and
(4) Other amounts which received special tax benefits, or
contributions made by the Employer (whether or not
under a salary reduction agreement) towards the
purchase of an annuity contract described in
ss.403(b) of the Internal Revenue Code (whether or
not the contributions are actually excludable from
the gross income of the Employee).
If, in connection with the adoption of any amendment,
the definition of Compensation has been modified,
then, for Plan Years prior to the Plan Year which
includes the adoption date of such amendment,
Compensation means compensation determined pursuant
to the Plan then in effect.
In addition, if specified in the Adoption Agreement,
Compensation for all Plan purposes shall also include
compensation which is not currently includible in the
Participant's gross income by reason of the
application of Code ss.ss.125, 402(e)(3),
402(h)(1)(B), or 403(b).
For years beginning on or after January 1, 1989, and
before January 1, 1994, Compensation in excess of
$200,000 shall be disregarded. Such amount shall be
adjusted at the same time and in such manner as
permitted under Code ss.415(d). In applying this
limitation, the family group of a Highly Compensated
Participant who is subject to the Family Member
aggregation rules of Code ss.414(q)(6) because such
Participant is either a "five percent owner" of the
Employer or one of the ten (10) Highly Compensated
Employees paid the greatest "415 Compensation" during
the year, shall be treated as a single Participant,
except that for this purpose Family Members shall
include only the affected Participant's spouse and
any lineal descendants who have not attained age
nineteen (19) before the close of the year. If, as a
result of the application of such rules, the adjusted
$200,000 limitation is exceeded, then (except for
purposes of determining the portion of Compensation
up to the integration level if this plan is
integrated), the limitation shall be prorated among
the affected individuals in proportion to each such
individual's Compensation as determined under this
section prior to the application of this limitation.
For Plan Years beginning on or after January 1, 1994,
the annual Compensation for each Employee taken into
account under the Plan shall not exceed $150,000, as
adjusted by the Commissioner for increases in the
cost of living in accordance with ss.401(a)(17)(B) of
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the Internal Revenue Code. The cost-of-living
adjustment in effect for a calendar year applies to
any period, not exceeding 12 months, over which
Compensation is determined (determination period)
beginning in such calendar year. If a determination
period consists of fewer than 12 months, the annual
Compensation limit will be multiplied by a fraction,
the numerator of which is the number of months in the
determination period, and the denominator of which is
12.
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 annual compensation limit
in effect for that prior period . For this purpose,
in determining allocations in plan years beginning on
or after January 1, 1989, the annual compensation
limit 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 annual compensation limit
in effect for determination periods beginning before
that date is $150,000.
1.11 "Contract" or "Policy" means any life insurance policy, retirement
income policy, or annuity contract (group or individual) issued by the
Insurer. In the event of any conflict between the terms of this Plan
and the terms of any insurance contract purchased hereunder, the Plan
provisions shall control.
1.12 "Contribution Period" means the regular period specified by the
Employer in the Adoption Agreement for which the Employer shall make
Employer contributions, if any, and the regular period specified by the
Employer in the Adoption Agreement for which Participants may make
Employee Contributions, if any.
1.13 "Deferred Compensation" means, with respect to any Participant, that
portion of the Participant's total Compensation which has been
contributed to the Plan in accordance with the Participant's deferral
election pursuant to section 11.2.
1.14 "Early Retirement Date" means the date specified in the Adoption
Agreement on which a Participant or Former Participant has satisfied
the age and service requirements specified in the Adoption Agreement
(Early Retirement Age). A Participant shall become fully Vested upon
satisfying this requirement if still employed at their Early Retirement
Age.
A Former Participant who terminates employment after satisfying the
service requirement for Early Retirement and who thereafter reaches the
age requirement contained herein shall be fully vested and entitled to
elect an Early Retirement benefit under this Plan.
1.15 "Earned Income" means with respect to a Self-Employed Individual, the
net earnings from self-employment in the trade or business with respect
to which the Plan is established, for which the personal services of
the individual are a material income-producing factor. Net earnings
will be determined without regard to items not included in gross income
and the deductions allocable to such items. Net earnings are reduced by
contributions by the Employer to a qualified Plan to the extent
deductible under Code ss.404. In addition, for Plan Years beginning
after December 31, 1989, net earnings shall be determined with regard
to the deduction allowed to the Employer by Code ss.164(f).
1.16 "Elective Deferral Contribution" means the Employer's contributions to
the Plan that are made pursuant to the Participant's deferral election
pursuant to section 11.2, excluding any such amounts distributed as
"excess annual additions" pursuant to section 4.4. Elective Deferral
Contributions shall be subject to the requirements of sections 11.2(b)
and 11.2(c) and shall further be required to satisfy the discrimination
requirements of Regulation ss.1.401(k)-1(b)(3), the provisions of which
are specifically incorporated herein by reference.
1.17 "Eligible Employee" means any Employee eligible to participate in the
Plan pursuant to the provisions elected in the Adoption Agreement.
1.18 "Employee" means any employee of the Employer maintaining the plan or
of any other employer required to be aggregated with such Employer
underss.ss.414(b), (c), (m) or (o) of the Code.
The term Employee shall also include any Leased Employee deemed to be
an employee of any Employer described in the previous paragraph as
provided in ss.ss. 414(n) or (o) of the Code.
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1.19 "Employer" means the entity specified in the Adoption Agreement, any
Participating Employer (as defined in section 10.1) which shall adopt
this Plan, any successor which shall maintain this Plan, and any
predecessor which has maintained this Plan.
1.20 "Excess Compensation" means, with respect to a Plan that is integrated
with Social Security, a Participant's Compensation which is in excess
of the Integration Level set forth in the Adoption Agreement.
1.21 "Excess Contributions" means, with respect to a Plan Year, the excess
of Elective Deferral Contributions, and Qualified Nonelective
Contributions and Qualified Matching Contributions treated as Elective
Deferral Contributions made on behalf of Highly Compensated
Participants for the Plan Year over the maximum amount of such
contributions permitted under section 11.4(a).
1.22 "Excess Deferred Compensation" means, with respect to any taxable year
of a Participant, the excess of the aggregate amount of such
Participant's Deferred Compensation and the Elective Deferral
Contributions pursuant to section 11.2(f) actually made on behalf of
such Participant for such taxable year, over the dollar limitation
provided for in Code ss.402(g), which is incorporated herein by
reference. Excess Deferred Compensation shall be treated as an "annual
addition" pursuant to section 4.4 when contributed to the Plan unless
distributed to the affected Participant not later than the first April
15th following the close of the Participant's taxable year.
1.23 "Family Member" means, with respect to an affected Participant, such
Participant's spouse, and such Participant's lineal descendants and
ascendants and their spouses, all as described in Code ss.414(q)(6)(B).
1.24 "Fiduciary" means any person who (a) exercises any discretionary
authority or discretionary control respecting management of the Plan or
exercises any authority or control respecting management or disposition
of its assets, (b) renders investment advice for a fee or other
compensation, direct or indirect, with respect to any monies or other
property of the Plan or has any authority or responsibility to do so,
or (c) has any discretionary authority or discretionary responsibility
in the administration of the Plan, including, but not limited to, the
Trustee, the Employer and its representative body, and the
Administrator.
1.25 "Fiscal Year" means the Employer's accounting year as specified in the
Adoption Agreement.
1.26 "Forfeiture" means that portion of a Participant's Account that is not
Vested, and occurs on the earlier of:
(a) the distribution of the entire Vested portion of a
Participant's Account, or
(b) the last day of the Plan Year in which the Participant incurs
five (5) consecutive One-Year Breaks in Service.
Furthermore, for purposes of paragraph (a) above, in the case of a
Terminated Participant whose Vested benefit is zero, such Terminated
Participant shall be deemed to have received a distribution of their
Vested benefit upon their termination of employment. In addition, the
term Forfeiture shall also include amounts deemed to be Forfeitures
pursuant to any other provision of this Plan.
1.27 "Former Participant" means a person who has been a Participant, but who
has ceased to be a Participant for any reason.
1.28 "414(s) Compensation" with respect to any Employee means their
Compensation as defined in section 1.9. However, for purposes of this
section, Compensation shall be Compensation paid and, if selected in
the Adoption Agreement, shall only be recognized as of an Employee's
effective date of participation. If, in connection with the adoption of
any amendment, the definition of "414(s) Compensation" has been
modified, then for Plan Years prior to the Plan Year which includes the
adoption date of such amendment, "414(s) Compensation" means
compensation determined pursuant to the Plan then in effect.
1.29 "415 Compensation" means compensation as defined in section 4.4(f)(2).
If, in connection with the adoption of any amendment, the definition of
"415 Compensation" has been modified, then, for Plan Years prior to the
Plan Year which includes the adoption date of such amendment, "415
Compensation" means compensation determined pursuant to the Plan then
in effect.
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1.30 "Highly Compensated Employee" means an Employee described in Code
ss.414(q) and the Regulations thereunder and generally means an
Employee who performed services for the Employer during the
"determination year" and is in one or more of the following groups:
(a) Employees who at any time during the "determination year" or
"look-back year" were "five percent owners" as defined in
section 1.37(c).
(b) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $75,000.
(c) Employees who received "415 Compensation" during the
"look-back year" from the Employer in excess of $50,000 and
were in the Top Paid Group of Employees for the Plan Year.
(d) Employees who during the "look-back year" were officers of the
Employer (as that term is defined within the meaning of the
Regulations under Code ss.416) and received "415 Compensation"
during the "look-back year" from the Employer greater than 50
percent of the limit in effect under Code ss.415(b)(1)(A) for
any such Plan Year. The number of officers shall be limited to
the lesser of (i) 50 employees; or (ii) the greater of three
(3) employees or 10 percent of all employees. If the Employer
does not have at least one officer whose annual "415
Compensation" is in excess of 50 percent of the Code
ss.415(b)(1)(A) limit, then the highest paid officer of the
Employer will be treated as a Highly Compensated Employee.
(e) Employees who are in the group consisting of the 100 Employees
paid the greatest "415 Compensation" during the "determination
year" and are also described in (b), (c) or (d) above when
these paragraphs are modified to substitute "determination
year" for "look-back year."
The "determination year" shall be the Plan Year for which testing is
being performed, and the "look-back year" shall be the immediately
preceding twelve-month period. However, if the 5.6 Plan Year is a
calendar year, or if another Plan of the Employer so provides, then the
"look-back year" shall be the calendar year ending with or within the
Plan Year for which testing is being performed, and the "determination
year" (if applicable) shall be the period of time, if any, which
extends beyond the "look-back year" and ends on the last day of the
Plan Year for which testing is being performed (the "lag period"). With
respect to this election, it shall be applied on a uniform and
consistent basis to all plans, entities, and arrangements of the
Employer.
For purposes of this section, the determination of "415 Compensation"
shall be made by including amounts that would otherwise be excluded
from a Participant's gross income by reason of the application of Code
ss.ss.125, 402(e)(3), 402(h)(1)(B) and, in the case of Employer
contributions made pursuant to a salary reduction agreement, Code
ss.403(b). Additionally, the dollar threshold amounts specified in (b)
and (c) above shall be adjusted at such time and in such manner as is
provided in Regulations. In the case of such an adjustment, the dollar
limits which shall be applied are those for the calendar year in which
the "determination year" or "look back year" begins.
In determining who is a Highly Compensated Employee, Employees who are
non-resident aliens and who received no earned income (within the
meaning of Code ss.911(d)) from the Employer constituting United States
source income within the meaning of Code ss.861(a)(3) shall not be
treated as Employees. Additionally, all Affiliated Employers shall be
taken into account as a single employer and Leased Employees within the
meaning of Code ss.ss.414(n)(2) and 414(o)(2) shall be considered
Employees unless such Leased Employees are covered by a plan described
in Code ss.414(n)(5) and are not covered in any qualified plan
maintained by the Employer. The exclusion of Leased Employees for this
purpose shall be applied on a uniform and consistent basis for all of
the Employer's retirement plans. In addition, Highly Compensated Former
Employees shall be treated as Highly Compensated Employees without
regard to whether they performed services during the "determination
year."
1.31 "Highly Compensated Former Employee" means a former Employee who had a
separation year prior to the "determination year" and was a Highly
Compensated Employee in the year of separation from service or in any
"determination year" after attaining age 55. Notwithstanding the
foregoing, an Employee who separated from service prior to 1987 will be
treated as a Highly Compensated Former Employee only if during the
separation year (or year preceding the separation year) or any year
after the Employee attains age 55 (or the last year ending before the
Employee's 55th birthday), the Employee either received "415
Compensation" in excess of $50,000 or was a "five percent owner." For
purposes of this section, "determination year," "415 Compensation" and
"five percent owner" shall be determined in accordance with section
1.28. Highly Compensated Former Employees shall be treated as Highly
Compensated Employees. The method set forth in this section for
determining who is a "Highly Compensated Former Employee" shall be
applied on a uniform and consistent basis for all purposes for which
the Code ss.414(q) definition is applicable.
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1.32 "Highly Compensated Participant" means any Highly Compensated Employee
who is eligible to participate in the Plan.
1.33 "Hour of Service" means (1) each hour for which an Employee is directly
or indirectly compensated or entitled to compensation by the Employer
for the performance of duties during the applicable computation period;
(2) each hour for which an Employee is directly or indirectly
compensated or entitled to compensation by the Employer (irrespective
of whether the employment relationship has terminated) for reasons
other than performance of duties (such as vacation, holidays, sickness,
jury duty, disability, lay-off, military duty or leave of absence)
during the applicable computation period; (3) each hour for which back
pay is awarded or agreed to by the Employer without regard to
mitigation of damages. The same Hours of Service shall not be credited
both under (1) or (2), as the case may be, and under (3).
Notwithstanding the above, (i) no more than 501 Hours of Service are
required to be credited to an Employee on account of any single
continuous period during which the Employee performs no duties (whether
or not such period occurs in a single computation period); (ii) an hour
for which an Employee is directly or indirectly paid, or entitled to
payment, on account of a period during which no duties are performed is
not required to be credited to the Employee if such payment is made or
due under a plan maintained solely for the purpose of complying with
applicable worker's compensation, or unemployment compensation or
disability insurance laws; and (iii) Hours of Service are not required
to be credited for a payment which solely reimburses an Employee for
medical or medically related expenses incurred by the Employee.
For purposes of this section, a payment shall be deemed to be made by
or due from the Employer regardless of whether such payment is made by
or due from the Employer directly, or indirectly through, among others,
a trust fund, or insurer, to which the Employer contributes or pays
premiums and regardless of whether contributions made or due to the
trust fund, insurer, or other entity are for the benefit of particular
Employees or are on behalf of a group of Employees in the aggregate.
An Hour of Service must be counted for the purpose of determining a
Year of Service, a year of participation for purposes of accrued
benefits, a One-Year Break in Service, and employment commencement date
(or reemployment commencement date). The provisions of Department of
Labor regulations ss.2530.200b-2( b) and (c) are incorporated herein by
reference.
Hours of Service will be credited for employment with all Affiliated
Employers and for any individual considered to be a Leased Employee
pursuant to Code ss.ss.414(n) or 414(o) and the Regulations thereunder.
Hours of Service will be determined on the basis of the method selected
in the Adoption Agreement.
1.34 "Insurer" means any legal reserve insurance company which shall issue
one or more policies under the Plan.
1.35 "Integration Level" means, for an integrated plan, the amount specified
by the Employer in the Adoption Agreement. If the Integration Level is
based on the Taxable Wage Base, and the Taxable Wage Base is amended,
the Integration Level will be deemed to have been amended.
1.36 "Investment Manager" means an entity that (a) has the power to manage,
acquire, or dispose of Plan assets and (b) acknowledges fiduciary
responsibility to the Plan in writing. Such entity must be a person,
firm, or corporation registered as an investment adviser under the
Investment Advisers Act of 1940, a bank, or an insurance company.
1.37 "Joint and Survivor Annuity" means an annuity for the life of a
Participant with a survivor annuity for the life of the Participant's
spouse which is not less than 1/2, nor greater than the amount of the
annuity payable during the joint lives of the Participant and the
Participant's spouse. The Joint and Survivor Annuity will be the amount
of benefit which can be purchased with the Participant's Vested
interest in the Plan.
1.38 "Key Employee" means an Employee as defined in Code ss.416(i) and the
Regulations thereunder. Generally, any Employee or former Employee (as
well as each of their Beneficiaries) is considered a Key Employee if
they, at any time during the Plan Year that contains the "Determination
Date" or any of the preceding four (4) Plan Years, have been included
in one of the following categories:
(a) an officer of the Employer (as that term is defined within the
meaning of the Regulations under Code ss.416) having annual
"415 Compensation" greater than 50 percent of the amount in
effect under Code ss.415(b)(1)(A) for any such Plan Year.
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(b) one of the ten employees having annual "415 Compensation" from
the Employer for a Plan Year greater than the dollar
limitation in effect under Code ss.415(c)(1)(A) for the
calendar year in which such Plan Year ends and owning (or
considered as owning within the meaning of Code ss.318) both
more than one-half percent interest and the largest interests
in the Employer.
(c) a "five percent owner" of the Employer. "Five percent owner"
means any person who owns (or is considered as owning within
the meaning of Code ss.318) more than five percent (5%) of the
outstanding stock of the Employer or stock possessing more
than five percent (5%) of the total combined voting power of
all stock of the Employer or, in the case of an unincorporated
business, any person who owns more than five percent (5%) of
the capital or profits interest in the Employer. In
determining percentage ownership hereunder, employers that
would otherwise be aggregated under Code ss.ss.414(b), (c),
(m) and (o) shall be treated as separate employers.
(d) a "one percent owner" of the Employer having an annual "415
Compensation" from the Employer of more than $150,000. "One
percent owner" means any person who owns (or is considered as
owning within the meaning of Codess.318) more than one percent
(1%) of the outstanding stock of the Employer or stock
possessing more than one percent (1%) of the total combined
voting power of all stock of the Employer or, in the case of
an unincorporated business, any person who owns more than one
percent (1%) of the capital or profits interest in the
Employer. In determining percentage ownership hereunder,
employers that would otherwise be aggregated under
Codess.ss.414(b), (c), (m) and (o) shall be treated as
separate employers. However, in determining whether an
individual has "415 Compensation" of more than $150,000, "415
Compensation" from each employer required to be aggregated
under Codess.ss.414(b), (c), (m) and (o) shall be taken into
account.
For purposes of this section, the determination of "415
Compensation" shall be made by including amounts that would
otherwise be excluded from a Participant's gross income by
reason of the application of Code ss.ss.125, 402(e)(3),
402(h)(1)(B) and, in the case of Employer contributions made
pursuant to a salary reduction agreement, Code ss.403(b).
1.39 "Late Retirement Date" means the date of, or the first day of the month
or the Anniversary Date coinciding with or next following, whichever
corresponds to the election made for the Normal Retirement Date, a
Participant's actual retirement after having reached their Normal
Retirement Date.
1.40 "Leased Employee" means any person (other than an Employee of the
recipient) who pursuant to an agreement between the recipient and any
other person ("leasing organization") has performed services for the
recipient (or for the recipient and related persons determined in
accordance with Code ss.414(n)(6)) on a substantially full time basis
for a period of at least one year, and such services are of a type
historically performed by employees in the business field of the
recipient employer. Contributions or benefits provided a Leased
Employee by the leasing organization which are attributable to services
performed for the recipient employer shall be treated as provided by
the recipient employer.
A Leased Employee shall not be considered an Employee of the recipient
if: (i) such employee is covered by a money purchase pension plan
providing: (1) a nonintegrated employer contribution rate of at least
10 percent of compensation, as defined in Code ss.415(c)(3), but
including amounts contributed pursuant to a salary reduction agreement
which are excludable from the employee's gross income under Code
ss.ss.125, 402(e)(3), 402(h)(1)(b), or 403(b), (2) immediate
participation, and (3) full and immediate vesting; and (ii) Leased
Employees do not constitute more than 20 percent of the recipients
non-highly compensated workforce.
1.41 "Matching Contributions" means contributions made by the Employer to
the Plan on behalf of a Participant on account of a Participant's
Elective Deferral Contributions. The Employer may designate at the time
of contribution that all or a portion of such Matching Contribution be
treated as a Qualified Matching Contribution.
If elected by the Employer in the Adoption Agreement, the Employer may
contribute an additional Matching Contribution for each Participant at
the end of each Plan Year so that the total Matching Contribution for
each Participant is calculated on an annual basis.
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In the case of a partnership plan, Matching Contributions on behalf of
partners are treated as Elective Deferral Contributions pursuant to the
regulations under Code ss.401(k).
1.42 "Net Profit" means with respect to any Fiscal Year the Employer's net
income or profit for such Fiscal Year determined upon the basis of the
Employer's books of account in accordance with generally accepted
accounting principles, without any reduction for taxes based upon
income, or for contributions made by the Employer to this Plan and any
other qualified plan. In the case of an entity that is a non-profit
entity, including a government body, the term Net Profit shall mean the
entire amount of the accumulated or current operating surplus
(excluding capital gains from the sale or involuntary conversion of
capital or business assets) of the Employer after all expenses and
charges other than (1) the contribution made by the Employer to the
Plan, and (2) federal, state, or local taxes based upon or measured by
income, in accordance with the generally accepted accounting principles
used by the Employer.
1.43 "Nonelective Contribution" means the Employer's contributions to the
Plan made in accordance with a definite formula as specified in the
Adoption Agreement. The Employer may designate at the time of
contribution that the Nonelective Contribution shall be treated as a
Qualified Nonelective Contribution.
1.44 "Non-Highly Compensated Participant" means any Participant who is
neither a Highly Compensated Employee nor a Family Member.
1.45 "Non-Key Employee" means any Employee or former Employee (and their
Beneficiaries) who is not a Key Employee.
1.46 "Normal Retirement Age" means the age specified in the Adoption
Agreement at which time a Participant shall become fully Vested in
their Participant's Account.
1.47 "Normal Retirement Date" means the date specified in the Adoption
Agreement on which a Participant shall become eligible to have their
benefits distributed to them.
1.48 "One-Year Break in Service" means the applicable computation period
during which an Employee has not completed more than 500 Hours of
Service with the Employer. Further, solely for the purpose of
determining whether a Participant has incurred a One-Year Break in
Service, Hours of Service shall be recognized for "authorized leaves of
absence" and "maternity and paternity leaves of absence."
"Authorized leave of absence" means an unpaid, temporary cessation from
active employment with the Employer pursuant to an established
nondiscriminatory policy, whether occasioned by illness, military
service, or any other reason.
A "maternity or paternity leave of absence" means, for Plan Years
beginning after December 31, 1984, an absence from work for any period
by reason of the Employee's pregnancy, birth of the Employee's child,
placement of a child with the Employee in connection with the adoption
of such child, or any absence for the purpose of caring for such child
for a period immediately following such birth or placement. For this
purpose, Hours of Service shall be credited for the computation period
in which the absence from work begins, only if credit therefore is
necessary to prevent the Employee from incurring a One-Year Break in
Service, or, in any other case, in the immediately following
computation period. The Hours of Service credited for a "maternity or
paternity leave of absence" shall be those which would normally have
been credited but for such absence, or, in any case in which the
Administrator is unable to determine such hours normally credited,
eight (8) Hours of Service per day. The total Hours of Service required
to be credited for a "maternity or paternity leave of absence" shall
not exceed 501.
1.49 "Owner-Employee" means a sole proprietor who owns the entire interest
in the Employer or a partner who owns more than 10% of either the
capital interest or the profits interest in the Employer.
1.50 "Participant" means any Eligible Employee who participates in the Plan
as provided in section 3.2 and has not for any reason become ineligible
to participate further in the Plan.
1.51 "Participant's Account" means the account established and maintained by
the Administrator for each Participant with respect to their total
interest under the Plan resulting from:
(a) Nonelective Contributions, if any, adjusted for any gains or
losses;
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(b) Matching Contributions, if any, adjusted for any gains or
losses;
(c) Elective Deferral Contributions, if any, adjusted for any
gains or losses;
(d) Voluntary Employee Contributions, if any, adjusted for any
gains or losses;
(e) Qualified Voluntary Employee Contributions, if any, adjusted
for any gains or losses;
(f) Qualified Nonelective and Qualified Matching Contributions, if
any, adjusted for any gains or losses;
(g) Rollover Contributions, if any, adjusted for any gains or
losses.
1.52 "Participant's Elective Account" means the account established and
maintained by the Administrator for each Participant with respect to
their total interest in the Plan and Trust resulting from the
Employer's Elective Deferral Contributions. A separate accounting shall
be maintained with respect to that portion of the Participant's
Elective Account attributable to Elective Deferral Contributions made
pursuant to section 11.2, Qualified Matching Contributions if they are
deemed to be Elective Deferral Contributions, and any Qualified
Nonelective Contributions.
1.53 "Plan" means this instrument (hereinafter referred to as Strong Funds
Defined Contribution Plan and Trust Basic Plan Document #04) including
all amendments thereto, and the Adoption Agreement as adopted by the
Employer.
1.54 "Plan Year" means the 12-consecutive month period specified by the
Employer in the Adoption Agreement.
1.55 "Pre-Retirement Survivor Annuity" means an immediate annuity for the
life of the Participant's spouse, the payments under which must be
equal to the actuarial equivalent of 100% of the Participant's Vested
interest in the Plan as of the date of death.
1.56 "Qualified Matching Contributions" means Matching Contributions made by
the Employer which are designated as Qualified Matching Contributions
when made, and are subject to the distribution and nonforfeitability
requirements of Code ss.401(k).
1.57 "Qualified Nonelective Contributions" means the Employer's
contributions to the Plan and allocated to Participants' accounts that
the Participants may not elect to receive in cash until distributed
from the Plan. The Employer must designate an Employer Contribution as
a Qualified Nonelective Contribution when made. Such Qualified
Nonelective Contributions are subject to the distribution and
nonforfeitability requirements of Code ss.401(k).
1.58 "Qualified Voluntary Employee Contribution Account" means the account
established and maintained by the Administrator for each Participant
with respect to their total interest under the 8.9 `Plan resulting from
the Participant's tax-deductible Qualified Voluntary Employee
Contributions made pursuant to section 4.10.
1.59 "Regulation" means the Income Tax Regulations as promulgated by the
Secretary of the Treasury or their delegate, and as amended from time
to time.
1.60 "Retirement Date" means the date as of which a Participant retires for
reasons other than Total and Permanent Disability, whether such
retirement occurs on a Participant's Normal, Early, or Late Retirement
Date (see section 6.1).
1.61 "Rollover Contribution" means an amount representing all or part of a
distribution from a pension or profit sharing plan meeting the
requirements of Code ss.401(a) that is eligible for rollover to this
Plan in accordance with the requirements set forth in Code ss.402
(including Direct Rollovers) or Code ss.408(d)(3), whichever is
applicable.
1.62 "Self-Employed Individual" means an individual who has earned income
for the taxable year from the trade or business for which the Plan is
established, and, also, an individual who would have had earned income
but for the fact that the trade or business had no net profits for the
taxable year. A Self-Employed Individual shall be treated as an
Employee.
1.63 "Shareholder-Employee" means a Participant who owns more than five
percent (5%) of the Employer's outstanding capital stock during any
year in which the Employer elected to be taxed as a Small Business
Corporation ("subchapter S-Corporation") under the applicable Code
section.
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1.64 "Short Plan Year" means, if specified in the Adoption Agreement, that
the Plan Year shall be less than a 12 month period. If chosen, the
following rules shall apply in the administration of this Plan. The
determination of whether an Employee has completed a Year of Service
for vesting and eligibility purposes shall be made in accordance with
Department of Labor Regulation ss.2530.203-2(c). In addition, if this
Plan is integrated with Social Security, the integration level shall
also be proportionately reduced based on the number of days in the
Short Plan Year.
1.65 "Taxable Wage Base" means, with respect to any year, the maximum amount
of earnings which may be considered wages for such year under
Codess.3121(a)(1).
1.66 "Termination of Employment" means a severance of the Employer-Employee
relationship which occurs prior to a Participant's Normal Retirement
Age for any reason other than Early Retirement, Total and Permanent
Disability, or death.
1.67 "Terminated Participant" means a person who has been a Participant, but
whose employment has been terminated other than by death, Total and
Permanent Disability or retirement.
1.68 "Top Paid Group" shall be determined pursuant to Code ss.414(q) and the
Regulations thereunder and generally means the top 20 percent of
Employees who performed services for the Employer during the applicable
year, ranked according to the amount of "415 Compensation" (as
determined pursuant to section 1.28) received from the Employer during
such year. All Affiliated Employers shall be taken into account as a
single employer, and Leased Employees shall be treated as Employees
pursuant to Code ss.414(n) or (o). Employees who are non-resident
aliens who received no earned income (within the meaning of Code
ss.911(d)(2)) from the Employer constituting United States source
income within the meaning of Code ss.861(a)(3) shall not be treated as
Employees. Additionally, for the purpose of determining the number of
active Employees in any year, the following additional Employees shall
also be excluded, however, such Employees shall still be considered for
the purpose of identifying the particular Employees in the Top Paid
Group:
(a) Employees with less than six (6) months of service;
(b) Employees who normally work less than 17 1/2hours per week;
(c) Employees who normally work less than six (6) months during a
year; and
(d) Employees who have not yet attained age 21.
In addition, if 90 percent or more of the Employees of the
Employer are covered under agreements the Secretary of Labor
finds to be collective bargaining agreements between Employee
representatives and the Employer, and the Plan covers only
Employees who are not covered under such agreements, then
Employees covered by such agreements shall be excluded from
both the total number of active Employees as well as from the
identification of particular Employees in the Top Paid Group.
The foregoing exclusions set forth in this section shall be
applied on a uniform and consistent basis for all purposes for
which the Code ss.414(q) definition is applicable.
1.69 "Total and Permanent Disability" means the inability to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death
or which has lasted or can be expected to last for a continuous period
of not less than 12 months. The disability of a Participant shall be
determined by a licensed physician chosen by the Administrator.
However, if the condition constitutes total disability under the
federal Social Security Acts, the Administrator may rely upon such
determination that the Participant is Totally and Permanently Disabled
for the purposes of this Plan. The determination shall be applied
uniformly to all Participants.
1.70 "Trustee" means the person or entity named in the Adoption Agreement
and any successors.
1.71 "Trust Fund" means the assets of the Plan and Trust as the same shall
exist from time to time.
1.72 "Vested" means the nonforfeitable portion of any account maintained on
behalf of a Participant.
1.73 "Voluntary Employee Contributions" means each Participant's
nondeductible voluntary contributions, if any, made pursuant to section
4.8.
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1.74 "Year of Service" means the computation period of twelve (12)
consecutive months, herein set forth, and during which an Employee has
completed at least 1000 Hours of Service. For purposes of eligibility
for participation, the initial computation period shall begin with the
date on which the Employee first performs an Hour of Service
(employment commencement date). The computation period beginning after
a One-Year Break in Service shall be measured from the date on which an
Employee again performs an Hour of Service. The succeeding computation
periods shall begin with the first anniversary of the Employee's
employment commencement date. However, if one (1) Year of Service or
less is required as a condition of eligibility, then after the initial
eligibility computation period, the eligibility computation period
shall shift to the current Plan Year which includes the anniversary of
the date on which the Employee first performed an Hour of Service. An
Employee who is credited with 1,000 Hours of Service in both the
initial eligibility computation period and the first Plan Year which
commences prior to the first anniversary of the Employee's initial
eligibility computation period will be credited with two Years of
Service for purposes of eligibility to participate.
For vesting purposes, and all other purposes not specifically addressed
in this section, the computation period shall be the Plan Year,
including periods prior to the Effective Date of the Plan unless
specifically excluded pursuant to the Adoption Agreement.
Years of Service and breaks in service will be measured on the same
computation period.
Years of Service with any predecessor Employer which maintained this
Plan shall be recognized. Years of Service with any other predecessor
Employer shall be recognized as specified in the Adoption Agreement.
Years of Service with any Affiliated Employer shall be recognized.
ARTICLE II
TOP HEAVY PROVISIONS ADMINISTRATION
2.1 Top Heavy Plan Requirements
For any Plan Year in which the Plan is Top Heavy, the Plan shall
provide the special vesting requirements of Code ss.416(b) pursuant to
section 6.4 of the Plan and the special minimum allocation requirements
of Code ss.416(c) pursuant to section 4.3(i) of the Plan.
2.2 Determination of Top Heavy Status
(a) This Plan shall be a Top Heavy Plan for any Plan Year
beginning after December 31, 1983, if any of the following
conditions exists:
(1) If the top-heavy ratio for this Plan exceeds 60
percent and this plan is not part of any required
aggregation group or permissive aggregation group of
plans.
(2) If this Plan is a part of a required aggregation
group of plans but not part of a permissive
aggregation group and the top-heavy ratio for the
group of plans exceeds 60 percent.
(3) If this Plan is a part of a required aggregation
group and part of a permissive aggregation group of
plans and the top-heavy ratio for the permissive
aggregation group exceeds 60 percent.
(b) Top-heavy ratio means:
(1) If the Employer maintains one or more defined
contribution plans (including any Simplified Employee
Pension Plan) and the Employer has not maintained any
defined benefit plan which during the 5-year period
ending on the determination date(s) has or has had
accrued benefits, the top-heavy ratio for this Plan
alone or for the required or permissive aggregation
group as appropriate is a fraction, the numerator of
which is the sum of the account balances of all Key
Employees as of the determination date(s) (including
any part of any account balance distributed in the
5-year period ending on the determination date(s)),
and the denominator of which is the sum of all
account balances (including any part of any account
balance distributed in the 5-year period ending on
the determination date(s)), both computed in
accordance with Codess.416 and the regulations
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thereunder. Both the numerator and denominator of the
top-heavy ratio are increased to reflect any
contribution not actually made as of the
determination date, but which is required to be taken
into account on that date under Codess.416 and the
regulations thereunder.
(2) If the Employer maintains one or more defined
contribution plans (including any Simplified Employee
Pension Plan) and the Employer maintains or has
maintained one or more defined benefit plans which
during the 5-year period ending on the determination
date(s) has or has had any accrued benefits, the
top-heavy ratio for any required or permissive
aggregation group as appropriate is a fraction, the
numerator of which is the sum of account balances
under the aggregated defined contribution plan or
plans for all Key Employees, determined in accordance
with (a) above, and the present value of accrued
benefits under the aggregated defined benefit plan or
plans for all Key Employees as of the determination
date(s), and the denominator of which is the sum of
the account balances under the aggregated defined
contribution plan or plans for all Participants,
determined in accordance with (a) above, and the
present value of accrued benefits under the defined
benefit plan or plans for all Participants as of the
determination date(s), all determined in accordance
with Codess.416 and the regulations thereunder. The
accrued benefits under a defined benefit plan in both
the numerator and denominator of the top-heavy ratio
are increased for any distribution of an accrued
benefit made in the five-year period ending on the
determination date.
(3) For purposes of (1) and (2) above the value of
account balances and the present value of accrued
benefits will be determined as of the most recent
valuation date that falls within or ends with the
12-month period ending on the determination date,
except as provided in Codess.416 and the regulations
thereunder for the first and second plan years of a
defined benefit plan. The account balances and
accrued benefits of a Participant (1) who is not a
Key Employee but who was a Key Employee in a prior
year, or (2) who has not been credited with at least
one Hour of Service with any Employer maintaining the
Plan at any time during the 5-year period ending on
the determination date will be disregarded. The
calculation of the top-heavy ratio, and the extent to
which distributions, rollovers, and transfers are
taken into account will be made in accordance with
Codess.416 and the regulations thereunder. Deductible
employee contributions will not be taken into account
for purposes of computing the top-heavy ratio. When
aggregating plans the value of account balances and
accrued benefits will be calculated with reference to
the determination dates that fall within the same
calendar year.
The accrued benefit of a Participant other than a Key Employee
shall be determined under (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).
(c) This Plan shall be a Super Top Heavy Plan for any Plan Year
beginning after December 31, 1983, in which, as of the
Determination Date, (1) the Present Value of Accrued Benefits
of Key Employees and (2) the sum of the Aggregate Accounts of
Key Employees under this Plan and all plans of an Aggregation
Group, exceeds ninety percent (90%) of the Present Value of
Accrued Benefits and the Aggregate Accounts of all Key and
Non-Key Employees under this Plan and all plans of an
Aggregation Group.
(d) "Aggregation Group" means either a Required Aggregation Group
or a Permissive Aggregation Group as hereinafter determined.
(1) Required Aggregation Group: In determining a Required
Aggregation Group hereunder, each qualified plan of
the Employer, including any Simplified Employee
Pension Plan, in which a Key Employee is a
participant in the Plan Year containing the
Determination Date or any of the four preceding Plan
Years, and each other qualified plan of the Employer
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which enables any qualified plan in which a Key
Employee participates to meet the requirements of
Code ss.ss.401(a)(4) or 410, will be required to be
aggregated. Such group shall be known as a Required
Aggregation Group.
In the case of a Required Aggregation Group, each
plan in the group will be considered a Top Heavy Plan
if the Required Aggregation Group is a Top Heavy
Group. No plan in the Required Aggregation Group will
be considered a Top Heavy Plan if the Required
Aggregation Group is not a Top Heavy Group.
(2) Permissive Aggregation Group: The Employer may also
include any other plan of the Employer, including any
Simplified Employee Pension Plan, not required to be
included in the Required Aggregation Group, provided
the resulting group, taken as a whole, would continue
to satisfy the provisions of Code ss.ss.401(a)(4) and
410. Such group shall be known as a Permissive
Aggregation Group.
In the case of a Permissive Aggregation Group, only a
plan that is part of the Required Aggregation Group
will be considered a Top Heavy Plan if the Permissive
Aggregation Group is a Top Heavy Group. No plan in
the Permissive Aggregation Group will be considered a
Top Heavy Plan if the Permissive Aggregation Group is
not a Top Heavy Group.
(3) Only those plans of the Employer in which the
Determination Dates fall within the same calendar
year shall be aggregated in order to determine
whether such plans are Top Heavy Plans.
(4) An Aggregation Group shall include any terminated
plan of the Employer if it was maintained within the
last five (5) years ending on the Determination Date.
(e) "Determination Date" means (a) the last day of the preceding
Plan Year, or (b) in the case of the first Plan Year, the last
day of such Plan Year.
(f) Present Value of Accrued Benefit: In the case of a defined
benefit plan, the Present Value of Accrued Benefit shall be
based only on the interest and mortality rates specified in
the Adoption Agreement.
(g) "Top Heavy Group" means an Aggregation Group in which, as of
the Determination Date, the sum of:
(1) the Present Value of Accrued Benefits of Key
Employees under all defined benefit plans included in
the group, and
(2) the Aggregate Accounts of Key Employees under all
defined contribution plans included in the group
exceeds sixty percent (60%) of a similar sum
determined for all Participants.
(h) "Valuation Date" means the last day of the Plan Year as of
which account balances or Accrued Benefits are valued for
purposes of calculating the Top Heavy Ratio.
2.3 Powers and Responsibilities of the Employer
(a) The Employer shall be empowered to appoint and remove the
Trustee and the Administrator from time to time as it deems
necessary for the proper administration of the Plan to assure
that the Plan is being operated for the exclusive benefit of
the Participants and their Beneficiaries in accordance with
the terms of the Plan, the Code, and the Act.
(b) The Employer shall designate one or more investment vehicles
as permissible investments for the Trust Fund. Each such
investment vehicle shall be either (i) an investment company
registered under the Investment Company Act of 1940, which may
be an investment company to which the sponsoring organization
of this Plan, or an affiliate thereof, provides investment
advisory or other services, (ii) a common, collective or
pooled trust fund maintained by the Trustee, or (iii) a
separate investment fund maintained by the Trustee that is
invested primarily in stock issued by the Employer or an
affiliate thereof that is readily tradable on an established
securities market and that constitutes a "qualifying employer
security" (as defined inss.407(d)(5) of the Act). If
Participants are not authorized pursuant to section 4.9 to
direct the Trustee as to the investment of their individual
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accounts, the Employer shall direct the Trustee as to the
allocation of the assets of the Trust Fund and contributions
thereto among such designated investment vehicles. The
Employer may also direct that the Trustee hold in the Trust
Fund insurance policies or other property transferred to the
Trust Fund from a prior trustee of the Plan or a plan that has
been merged with the Plan. The Plan's funding policy and
method shall be that the Trust Fund and all contributions
thereto shall be held and invested by the Trustee in the
investment vehicles designated by the Employer and in other
property the Trustee is directed to hold by the Employer or an
Investment Manager.
(c) The Employer may, in its discretion, appoint an Investment
Manager to manage all or a designated portion of the assets of
the Plan. In such event, the Trustee shall follow the
directive of the Investment Manager in investing the assets of
the Plan managed by the Investment Manager.
(d) The Employer shall periodically review the performance of any
Fiduciary or other person to whom duties have been delegated
or allocated by it under the provisions of this Plan or
pursuant to procedures established hereunder. This requirement
may be satisfied by formal periodic review by the Employer or
by a qualified person specifically designated by the Employer,
through day-to-day conduct and evaluation, or through other
appropriate ways.
2.4 Designation of Administrative Authority
The Employer shall appoint one or more Administrators. Any person,
including, but not limited to, the Employees of the Employer, shall be
eligible to serve as an Administrator. Any person so appointed shall
signify their acceptance by filing written acceptance with the
Employer. An Administrator may resign by delivering their written
resignation to the Employer or be removed by the Employer by delivery
of written notice of removal, to take effect at a date specified
therein, or upon delivery to the Administrator if no date is specified.
The Employer, upon the resignation or removal of an Administrator,
shall promptly designate in writing a successor to this position. If
the Employer does not appoint an Administrator, the Employer will
function as the Administrator.
2.5 Allocation and Delegation of Responsibilities
If more than one person is appointed as Administrator, the
responsibilities of each Administrator may be specified by the Employer
and accepted in writing by each Administrator. In the event that no
such delegation is made by the Employer, the Administrators may
allocate the responsibilities among themselves, in which event the
Administrators shall notify the Employer and the Trustee in writing of
such action and specify the responsibilities of each Administrator. The
Trustee thereafter shall accept and rely upon any documents executed by
the appropriate Administrator until such time as the Employer or the
Administrators file with the Trustee a written revocation of such
designation.
2.6 Powers and Duties of the Administrator
The primary responsibility of the Administrator is to administer the
Plan for the exclusive benefit of the Participants and their
Beneficiaries, subject to the specific terms of the Plan. The
Administrator shall administer the Plan in accordance with its terms
and shall have the power and discretion to construe the terms of the
Plan and determine all questions arising in connection with the
administration, interpretation, and application of the Plan. Any such
determination by the Administrator shall be conclusive and binding upon
all persons. The Administrator may establish procedures, correct any
defect, supply any information, or reconcile any inconsistency in such
manner and to such extent as shall be deemed necessary or advisable to
carry out the purpose of the Plan; provided, however, that any
procedure, discretionary act, interpretation or construction shall be
done in a nondiscriminatory manner based upon uniform principles
consistently applied and shall be consistent with the intent that the
Plan shall continue to be deemed a qualified plan under the terms of
Code ss.401(a), and shall comply with the terms of the Act and all
regulations issued pursuant thereto. The Administrator shall have all
powers necessary or appropriate to accomplish their duties under this
Plan.
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The Administrator shall be charged with the duties of the general
administration of the Plan, including, but not limited to, the
following:
(a) the discretion to determine all questions relating to the
eligibility of Employees to participate or remain a
Participant hereunder and to receive benefits under the Plan;
(b) to compute, certify, and direct the Trustee with respect to
the amount and the kind of benefits to which any Participant
shall be entitled hereunder; (c) to authorize and direct the
Trustee with respect to all nondiscretionary or otherwise
directed disbursements from the Trust Fund;
(d) to maintain all necessary records for the administration of
the Plan;
(e) to interpret the provisions of the Plan and to make and
publish such rules for regulation of the Plan as are
consistent with the terms hereof;
(f) to determine the size and type of any Contract to be purchased
from any Insurer, and to designate the Insurer from which such
Contract shall be purchased;
(g) to compute and certify to the Employer and to the Trustee from
time to time the sums of money necessary or desirable to be
contributed to the Trust Fund;
(h) to consult with the Employer and the Trustee regarding the
short and long-term liquidity needs of the Plan in order that
the Trustee can exercise any investment discretion in a manner
designed to accomplish specific objectives;
(i) to prepare and distribute to Employees a procedure for
notifying Participants and Beneficiaries of their rights to
elect Joint and Survivor Annuities and Pre-Retirement Survivor
Annuities if required by the Code and Regulations thereunder;
(j) to assist any Participant regarding their rights, benefits, or
elections available under the Plan.
2.7 Records and Reports
The Administrator shall keep a record of all actions taken and shall
keep all other books of account, records, and other data that may be
necessary for proper administration of the Plan and shall be
responsible for supplying all information and reports to the Internal
Revenue Service, Department of Labor, Participants, Beneficiaries and
others as required by law.
2.8 Appointment of Advisers
The Administrator, or the Trustee with the consent of the
Administrator, may appoint counsel, specialists, advisers, and other
persons as the Administrator or the Trustee deems necessary or
desirable in connection with the administration of this Plan.
2.9 Information from the Employer
To enable the Administrator to perform their functions, the Employer
shall supply full and timely information to the Administrator on all
matters relating to the Compensation of all Participants, their Hours
of Service, their Years of Service, their retirement, death,
disability, or termination of employment, and such other pertinent
facts as the Administrator may require; and the Administrator shall
advise the Trustee of such of the foregoing facts as may be pertinent
to the Trustee's duties under the Plan. The Administrator may rely upon
such information as is supplied by the Employer and shall have no duty
or responsibility to verify such information.
2.10 Payment of Expenses
All expenses of administration may be paid out of the Trust Fund unless
paid by the Employer. Such expenses shall include any expenses incident
to the functioning of the Administrator, including, but not limited to,
fees of accountants, counsel, and other specialists and their agents,
and other costs of administering the Plan. Until paid, the expenses
shall constitute a liability of the Trust Fund. However, the Employer
may reimburse the Trust Fund for any administration expense incurred.
Any administration expense paid to the Trust Fund as a reimbursement
shall not be considered an Employer contribution.
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2.11 Majority Actions
Except where there has been an allocation and delegation of
administrative authority pursuant to section 2.5, if there shall be
more than one Administrator, they shall act by a majority of their
number, but may authorize one or more of them to sign all papers on
their behalf.
2.12 Claims Procedure
Claims for benefits under the Plan may be filed in writing with the
Administrator. Written notice of the disposition of a claim shall be
furnished to the claimant within 90 days after the application is
filed. In the event the claim is denied, the reasons for the denial
shall be specifically set forth in the notice in language calculated to
be understood by the claimant, pertinent provisions of the Plan shall
be cited, and, where appropriate, an explanation as to how the claimant
can perfect the claim will be provided. In addition, the claimant shall
be furnished with an explanation of the Plan's claims review procedure.
2.13 Claims Review Procedure
Any Employee, former Employee, or Beneficiary of either, who has been
denied a benefit by a decision of the Administrator pursuant to section
2.12 shall be entitled to request the Administrator to give further
consideration to their claim by filing with the Administrator a written
request for a hearing. Such request, together with a written statement
of the reasons why the claimant believes their claim should be allowed,
shall be filed with the Administrator no later than 60 days after
receipt of the written notification provided for in section 2.12. The
Administrator shall then conduct a hearing within the next 60 days, at
which the claimant may be represented by an attorney or any other
representative of their choosing and expense and at which the claimant
shall have an opportunity to submit written and oral evidence and
arguments in support of their claim. At the hearing (or prior thereto
upon five (5) business days written notice to the Administrator) the
claimant or their representative shall have an opportunity to review
all documents in the possession of the Administrator which are
pertinent to the claim at issue and its disallowance. Either the
claimant or the Administrator may cause a court reporter to attend the
hearing and record the proceedings. In such event, a complete written
transcript of the proceedings shall be furnished to both parties by the
court reporter. The full expense of any such court reporter and such
transcripts shall be borne by the party causing the court reporter to
attend the hearing. A final decision as to the allowance of the claim
shall be made by the Administrator within 60 days of receipt of the
appeal (unless there has been an extension of 60 days due to special
circumstances, provided the delay and the special circumstances
occasioning it are communicated to the claimant within the original 60
day period). Such communication shall be written in a manner calculated
to be understood by the claimant and shall include specific reasons for
the decision and specific references to the pertinent Plan provisions
on which the decision is based.
ARTICLE III
ELIGIBILITY
3.1 Conditions of Eligibility
Any Eligible Employee shall be eligible to participate hereunder on the
earliest Plan Entry Date specified in the Adoption Agreement upon
satisfying the requirements specified in the Adoption Agreement.
3.2 Effective Date of Participation
An Eligible Employee who has become eligible to be a Participant shall
become a Participant effective as of the Plan Entry Date specified in
the Adoption Agreement. In the event an Employee who has satisfied the
Plan's eligibility requirements and would otherwise have become a
Participant shall go from a classification of an ineligible Employee to
an Eligible Employee, such Employee shall become a Participant as of
the date they again become an Eligible Employee. In the event an
Employee who has satisfied the Plan's eligibility requirements and
would otherwise become a Participant shall go.14 from a classification
of an Eligible Employee to an ineligible Employee and becomes
ineligible to participate and has not incurred a One-Year Break in
Service, such Employee shall participate in the Plan as of the date
they return to an eligible class of Employees. If such Employee does
incur a One-Year Break in Service, eligibility will be determined under
the Break in Service rules of the Plan.
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3.3 Determination of Eligibility
The Administrator shall determine the eligibility of each Employee for
participation in the Plan based upon information furnished by the
Employer. Such determination shall be conclusive and binding upon all
persons, as long as the same is made pursuant to the Plan and the Act.
Such determination shall be subject to review per section 2.13.
3.4 Termination of Eligibility
In the event a Participant shall go from a classification of an
Eligible Employee to an ineligible Employee, such Former Participant
shall continue to vest in their interest in the Plan for each Year of
Service completed while a ineligible Employee, until such time as their
Participant's Account shall be forfeited or distributed pursuant to the
terms of the Plan. Additionally, their interest in the Plan shall
continue to share in the earnings of the Trust Fund.
3.5 Omission of Eligible Employee
If, in any Plan Year, any Employee who should be included as a
Participant in the Plan is erroneously omitted and discovery of such
omission is not made until after a contribution by their Employer for
the year has been made, the Employer shall make a subsequent
contribution, if necessary after the application of section 4.3(e), so
that the omitted Employee receives a total amount which the said
Employee would have received had they not been omitted. Such
contribution shall be made regardless of whether or not it is
deductible in whole or in part in any taxable year under applicable
provisions of the Code.
3.6 Inclusion of Ineligible
Employee If, in any Plan Year, any person who should not have been
included as a Participant in the Plan is erroneously included and
discovery of such incorrect inclusion is not made until after a
contribution for the year has been made, the Employer shall not be
entitled to recover the contribution made with respect to the
ineligible person regardless of whether or not a deduction is allowable
with respect to such contribution. In such event, the amount
contributed with respect to the ineligible person shall constitute a
Forfeiture for the Plan Year in which the discovery is made.
3.7 Election Not to Participate
An Employee may, subject to the approval of the Employer, elect
voluntarily not to participate in the Plan. The election not to
participate must be communicated to the Employer, in writing, at least
thirty (30) days before the beginning of a Plan Year. For Standardized
Plans, a Participant or an Eligible Employee may not elect not to
participate. Furthermore, the foregoing election not to participate
shall not be available with respect to partners in a partnership.
3.8 Control of Entities by Owner-Employee
(a) If this Plan provides contributions or benefits for one or
more Owner-Employees who control both the business for which
this Plan is established and one or more other entities, this
Plan and the plan established for other trades or businesses
must, when looked at as a single Plan, satisfy Code
ss.ss.401(a) and (d) for the Employees of this and all other
entities.
(b) If the Plan provides contributions or benefits for one or more
Owner-Employees who control one or more other trades or
businesses, the employees of the other trades or businesses
must be included in a plan which satisfies Code ss.ss.401(a)
and (d) and which provides contributions and benefits not less
favorable than provided for Owner-Employees under this Plan.
(c) If an individual is covered as an Owner-Employee under the
plans of two or more trades or businesses which are not
controlled and the individual controls a trade or business,
then the benefits or contributions of the employees under the
plan of the trades or businesses which are controlled must be
as favorable as those provided for them under the most
favorable plan of the trade or business which is not
controlled.
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(d) For purposes of the preceding paragraphs, an Owner-Employee,
or two or more Owner-Employees, will be considered to control
an entity if the Owner-Employee, or two or more
Owner-Employees together:
(1) own the entire interest in an unincorporated entity,
or
(2) in the case of a partnership, own more than 50
percent of either the capital interest or the profits
interest in the partnership.
(e) For purposes of the preceding sentence, an Owner-Employee, or
two or more Owner-Employees shall be treated as owning any
interest in a partnership which is owned, directly or
indirectly, by a partnership which such Owner-Employee, or
such two or more Owner-Employees, are considered to control
within the meaning of the preceding sentence.
ARTICLE IV
CONTRIBUTION AND ALLOCATION
4.1 Formula for Determining Employer's Contribution
(a) For a Money Purchase Plan
(1) For each Plan Year, the Employer shall make
contributions on behalf of each Participant eligible
to share in allocations as specified in the Adoption
Agreement and section 4.3 of the Plan. All
contributions by the Employer shall be made in cash
or in such employer securities as is acceptable to
the Trustee.
(2) If elected in the non-standardized Adoption
Agreement, the Employer shall not contribute on
behalf of a Participant who performs less than a Year
of Service during any Plan Year, unless a
contribution is required pursuant to section 4.3(h).
(3) Notwithstanding the foregoing, the Employer's
contribution for any Fiscal Year shall not exceed the
maximum amount allowable as a deduction to the
Employer under the provisions of Code ss.404.
However, to the extent necessary to provide the top
heavy minimum allocations, the Employer shall make a
contribution even if it exceeds the amount which is
deductible under Code ss.404.
(b) For a Profit Sharing Plan
(1) For each Plan Year, the Employer shall make
contributions on behalf of each Participant eligible
to share in allocations as specified in the Adoption
Agreement and section 4.3 of the Plan. All
contributions by the Employer shall be made in cash
or in such employer securities as is acceptable to
the Trustee. Notwithstanding the foregoing, however,
the Employer's contribution for any Fiscal Year shall
not exceed the maximum amount allowable as a
deduction to the Employer under the provisions of
Code ss.404.
(2) Except, however, to the extent necessary to provide
the top heavy minimum allocations, the Employer shall
make a contribution even if it exceeds current or
accumulated Net Profit or the amount which is
deductible under Code ss.404.
4.2 Time of Payment of Employer's Contributions
The Employer shall generally pay to the Trustee its contribution to the
Plan for each Plan Year within the time prescribed by law, including
extensions of time, for the filing of the Employer's federal income tax
return for the Fiscal Year.
4.3 Allocation of Contribution, Forfeitures and Earnings
(a) The Administrator shall establish and maintain an account in
the name of each Participant to which the Administrator shall
credit as of each Anniversary Date, or other valuation date,
all amounts allocated to each such Participant as set forth
herein.
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(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper
allocation of the Employer's contributions for each Plan Year.
Within a reasonable period of time after the date of receipt
by the Administrator of such information, the Administrator
shall allocate such contribution as follows:
(1) For an integrated Plan:
(i) The Employer's contribution shall be
allocated to each Participant's Account,
except as provided in section 4.3(f), in a
dollar amount equal to 5.7% of the sum of
each Participant's total Compensation plus
Excess Compensation. If the Employer does
not contribute such amount for all
Participants, each Participant will be
allocated a share of the contribution in the
same proportion that their total
Compensation plus their total Excess
Compensation for the Plan Year bears to the
total Compensation plus the total Excess
Compensation of all Participants for that
year.
However, in the case of any Participant who
has exceeded the cumulative permitted limit,
the allocation set forth in the paragraph
above shall be based on two times such
Participant's total Compensation, rather
than total Compensation plus Excess
Compensation.
Regardless of the preceding, 4.3% shall be
substituted for 5.7% above if the
Integration Level is more than 20% and less
than or equal to 80% of the Taxable Wage
Base. If the Integration Level is less than
100% and more than 80% of the Taxable Wage
Base, then 5.4% shall be substituted for
5.7% above.
(ii) The balance of the Employer's contribution
over the amount allocated above, if any,
shall be allocated to each Participant's
Account in the same proportion that their
total Compensation for the Year bears to the
total Compensation of all Participants for
such year.
(iii) Except, however, if elected in the
non-standardized Adoption Agreement, a
Participant who performs less than a Year of
Service during any Plan Year shall not share
in the Employer's contribution for that
year, unless a contribution is required
pursuant to section 4.3(h).
(2) For a non-integrated Plan:
(i) The Employer's contribution shall be
allocated to each Participant's Account in
the same proportion that each such
Participant's Compensation for the year
bears to the total Compensation of all
Participants for such year.
(ii) Except, however, if elected in the
non-standardized Adoption Agreement, a
Participant who performs less than a Year of
Service during any Plan Year shall not share
in the Employer's contribution for that
year, unless a contribution is required
pursuant to section 4.3(h).
(3) Overall permitted disparity limits
(i) Annual overall permitted disparity limit:
Notwithstanding the preceding paragraphs,
for any plan year this plan benefits any
participant who benefits under another
qualified plan or simplified employee
pension, as defined in section 408(k) of the
Code, maintained by the employer that
provides for permitted disparity (or imputes
disparity), employer contributions and
forfeitures will be allocated to the account
of each participant who either completes
more than 500 hours of service during the
plan year or who is employed on the last day
of the plan year in the ratio that such
participant's total compensation bears to
the total compensation of all participants.
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(ii) Cumulative permitted disparity limit:
Effective for plan years beginning on or
after January 1, 1995, the cumulative
permitted disparity limit for a participant
is 35 total cumulative permitted disparity
years. Total cumulative permitted years
means the number of years credited to the
participant for allocation or accrual
purposes under this plan, any other
qualified plan or simplified employee
pension plan (whether or not terminated)
ever maintained by the employer. For
purposes of determining the participant's
cumulative permitted disparity limit, all
years ending in the same calendar year are
treated as the same year. If the participant
has not benefited under a defined benefit or
target benefit plan for any year beginning
on or after January 1, 1994, the participant
has no cumulative disparity limit.
(c) Any earnings or losses (net appreciation or net depreciation)
of the Trust Fund shall be allocated to each Participant's
Account on a daily basis.
(d) Participants' Accounts shall be debited for any insurance or
annuity premiums paid, if any, and credited with any dividends
or interest received on insurance contracts.
(e) As of each Anniversary Date, any amounts which became
Forfeitures since the last Anniversary Date shall first be
made available to reinstate previously forfeited account
balances of Former Participants, if any, in accordance with
section 6.4(g)(2) or be used to satisfy any contribution that
may be required pursuant to section 3.5 and/or 6.9. The
remaining Forfeitures, if any, shall be treated in accordance
with the Adoption Agreement. Provided, however, that in the
event the allocation of Forfeitures provided herein shall
cause the "annual addition" (as defined in section 4.4) to any
Participant's Account to exceed the amount allowable by the
Code, the excess shall be reallocated in accordance with
section 4.5. Except, however, if elected in the
non-standardized Adoption Agreement, a Participant who
performs less than a Year of Service during any Plan Year
shall not share in the Plan Forfeitures for that year.
(f) Minimum Allocations Required for Top Heavy Plan Years:
Notwithstanding the foregoing, for any Top Heavy Plan Year,
the sum of the Employer's contributions and Forfeitures
allocated to the Participant's Account of each Non-Key
Employee shall be equal to at least three percent (3%) of such
Non-Key Employee's "415 Compensation" (reduced by
contributions and forfeitures, if any, allocated to each
Non-Key Employee in any defined contribution plan included
with this plan in a Required Aggregation Group). However, if
(i) the sum of the Employer's contributions and Forfeitures
allocated to the Participant's Account of each Key Employee
for such Top Heavy Plan Year is less than three percent (3%)
of each Key Employee's "415 Compensation" and (ii) this Plan
is not required to be included in an Aggregation Group to
enable a defined benefit plan to meet the requirements of
Codess.401(a)(4) or 410, the sum of the Employer's
contributions and Forfeitures allocated to the Participant's
Account of each Non-Key Employee shall be equal to the largest
percentage allocated to the Participant's Account of any Key
Employee.
However, for each Non-Key Employee who is a Participant in a
paired Profit Sharing Plan or 401(k) Profit Sharing Plan and a
paired Money Purchase Plan, the minimum 3% allocation
specified above shall be provided in the Money Purchase Plan.
If this is an integrated Plan, then for any Top Heavy Plan
Year the Employer's contribution shall be allocated as
follows:
(1) An amount equal to 3% multiplied by each
Participant's Compensation for the Plan Year shall be
allocated to each Participant's Account. If the
Employer does not contribute such amount for all
Participants, the amount shall be allocated to each
Participant's Account in the same proportion that
their total Compensation for the Plan Year bears to
the total Compensation of all Participants for such
year.
(2) The balance of the Employer's contribution over the
amount allocated under subparagraph (1) hereof shall
be allocated to each Participant's Account in a
dollar amount equal to 3% multiplied by a
Participant's Excess Compensation. If the Employer
does not contribute such amount for all Participants,
each Participant will be allocated a share of the
contribution in the same proportion that their Excess
Compensation bears to the total Excess Compensation
of all Participants for that year. For purposes of
this step, in the case of any Participant who has
exceeded the cumulative disparity limit described in
section 4.3(b)(3), such Participant's total
Compensation for the Plan Year will be taken into
account.
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(3) The balance of the Employer's contribution over the
amount allocated under subparagraph (2) hereof shall
be allocated to each Participant's Account in a
dollar amount equal to 2.7% multiplied by the sum of
each Participant's total Compensation plus Excess
Compensation. If the Employer does not contribute
such amount for all Participants, each Participant
will be allocated a share of the contribution in the
same proportion that their total Compensation plus
their total Excess Compensation for the Plan Year
bears to the total Compensation plus the total Excess
Compensation of all Participants for that year. For
purposes of this step, in the case of any Participant
who has exceeded the cumulative permitted disparity
limit described in section 4.3(b)(3), two times such
Participant's total Compensation for the Plan Year
will be taken into account.
Regardless of the preceding, 1.3% shall be
substituted for 2.7% above if Excess Compensation is
based on more than 20% and less than or equal to 80%
of the Taxable Wage Base. If Excess Compensation is
based on less than 100% and more than 80% of the
Taxable Wage Base, then 2.4% shall be substituted for
2.7% above.
(4) The balance of the Employer's contributions over the
amount allocated above, if any, shall be allocated to
each Participant's Account in the same proportion
that their total Compensation for the Plan Year bears
to the total Compensation of all Participants for
such year.
For each Non-Key Employee who is a Participant in
this Plan and another non-paired defined contribution
plan maintained by the Employer, the minimum 3%
allocation specified above shall be provided as
specified in the Adoption Agreement.
(g) For purposes of the minimum allocations set forth above, the
percentage allocated to the Participant's Account of any Key
Employee shall be equal to the ratio of the sum of the
Employer's contributions and Forfeitures allocated on behalf
of such Key Employee divided by the "415 Compensation" for
such Key Employee.
(h) For any Top Heavy Plan Year, the minimum allocations set forth
in this section shall be allocated to the Participant's
Account of all Non-Key Employees who are Participants and who
are employed by the Employer on the last day of the Plan Year,
including Non-Key Employees who have (1) failed to complete a
Year of Service; or (2), in the case of a cash or deferred
arrangement, declined to make Elective Deferral Contributions
to the Plan.
However, the minimum allocation shall be made regardless of
any option selected in the Adoption Agreement, and shall be
determined without regard to any social security contribution.
(i) Notwithstanding anything herein to the contrary, in any Plan
Year in which the Employer maintains both this Plan and a
defined benefit pension plan included in a Required
Aggregation Group which is top heavy, the Employer shall not
be required to provide a Non-Key Employee with both the full
separate minimum defined benefit plan benefit and the full
separate defined contribution plan allocations. Therefore, if
the Employer maintains both a Defined Benefit and a Defined
Contribution Plan that are a Top Heavy Group, the top heavy
minimum benefits shall be provided as follows:
(1) If selected in the Adoption Agreement
(i) The requirements of section 2.1 shall apply
except that each Non-Key Employee who is a
Participant in the Profit Sharing Plan or
Money Purchase Plan and who is also a
Participant in the Defined Benefit Plan
shall receive a minimum allocation of five
percent (5%) of such Participant's "415
Compensation" from the applicable Defined
Contribution Plan(s).
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(ii) For each Non-Key Employee who is a
Participant only in the Defined Benefit Plan
the Employer will provide a minimum
non-integrated benefit equal to 2% of their
highest five consecutive year average "415
Compensation" for each Year of Service while
a Participant in the Plan, in which the Plan
is top heavy, not to exceed ten.
(iii) For each Non-Key Employee who is a
Participant only in this Defined
Contribution Plan, the Employer shall
provide a contribution equal to 3% of their
"415 Compensation."
(2) If selected in the Adoption Agreement
(i) The minimum allocation specified in section
4.3(i)(1)(i) shall be 7 1/2% if the Employer
elects in the Adoption Agreement for years
in which the Plan is Top Heavy, but not
Super Top Heavy.
(ii) The minimum benefit specified in section
4.3(i)(1)(ii) shall be 3% if the Employer
elects in the Adoption Agreement for years
in which the Plan is Top Heavy, but not
Super Top Heavy.
(iii) The minimum allocation specified in section
4.3(i)(1)(iii) shall be 4% if the Employer
elects in the Adoption Agreement for years
in which the Plan is Top Heavy, but not
Super Top Heavy.
(j) For the purposes of this section, "415 Compensation" shall be
limited to $150,000 (adjusted in such manner as permitted
under Codess.415(d)).
(k) Notwithstanding anything herein to the contrary, any
Participant who terminated employment during the Plan Year for
reasons other than death, Total and Permanent Disability, or
retirement shall or shall not share in the allocations of the
Employer's Contributions and Forfeitures as provided in the
Adoption Agreement.
Notwithstanding the foregoing, if this is a standardized Plan,
any such terminated Participant shall share in the allocations
as provided in this section provided such Participant
completed more than 500 Hours of Service.
(l) Notwithstanding anything herein to the contrary, Participants
terminating for reasons of death, Total and Permanent
Disability, or retirement shall share in the allocations as
provided in this section regardless of whether they completed
a Year of Service during the Plan Year.
(m) If a Former Participant is reemployed after five (5)
consecutive One-Year Breaks in Service, then separate accounts
shall be maintained as follows:
(1) one account for nonforfeitable benefits attributable
to pre-break service; and
(2) one account representing their employer derived
account balance in the Plan attributable to
post-break service.
4.4 Maximum Annual Additions
(a)(1) If the Participant does not participate in, and
has never participated in another qualified plan
maintained by the Employer, or a welfare benefit fund
(as defined in Codess.419(e)), maintained by the
Employer, or an individual medical account (as
defined in Codess.415(l)(2)) maintained by the
Employer, or a simplified employee pension (as
defined in Codess.408(k)) maintained by the Employer,
which provides Annual Additions, the amount of Annual
Additions which may be credited to the Participant's
accounts for any Limitation Year shall not exceed the
lesser of the Maximum Permissible Amount or any other
limitation contained in this Plan. If the Employer
contribution that would otherwise be contributed or
allocated to the Participant's accounts would cause
the Annual Additions for the Limitation Year to
exceed the Maximum Permissible Amount, the amount
contributed or allocated will be reduced so that the
Annual Additions for the Limitation Year will equal
the Maximum Permissible Amount.
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(2) Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer
may determine the Maximum Permissible Amount for a
Participant on the basis of a reasonable estimation
of the Participant's Compensation for the Limitation
Year, uniformly determined for all Participants
similarly situated.
(3) As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible
Amount for such Limitation Year shall be determined
on the basis of the Participant's actual compensation
for such Limitation Year.
(4) If there is an excess amount pursuant to section
4.4(a)(3) or section 4.5, the excess will be disposed
of as follows:
(i) Any nondeductible Voluntary Employee
Contributions, to the extent they would
reduce the Excess Amount, will be
distributed to the Participant;
(ii) Any Elective Deferral Contributions, to the
extent they would reduct the Excess Amount,
will be distributed to the Participant;
(iii) If, after the application of subparagraphs
(i) and (ii), an Excess Amount still exists,
and the Participant is covered by the Plan
at the end of the Limitation Year, the
Excess Amount in the Participant's account
will be used to reduce Employer
contributions (including any allocation of
Forfeitures) for such Participant in the
next Limitation Year, and each succeeding
Limitation Year if necessary;
(iv) If, after the application of subparagraphs
(i) and (ii), an Excess Amount still exists,
and the Participant is not covered by the
Plan at the end of a Limitation Year, the
Excess Amount will be held unallocated in a
suspense account. The suspense account will
be applied to reduce future Employer
contributions (including allocation of any
Forfeitures) for all remaining Participants
in the next Limitation Year, and each
succeeding Limitation Year if necessary;
(v) If a suspense account is in existence at any
time during a Limitation Year pursuant to
this section, it will not participate in the
allocation of investment gains and losses.
If a suspense account is in existence at any
time during a particular limitation year,
all amounts in the suspense account must be
allocated and reallocated to participants'
accounts before any employer contributions
or any employee contributions may be made to
the plan for that limitation year. Excess
amounts may not be distributed to
participants or former participants.
(b)(1) This subsection applies if, in addition to this
Plan, the Participant is covered under another
qualified Prototype defined contribution plan
maintained by the Employer, or a welfare benefit fund
maintained by the Employer, or an individual medical
account maintained by the Employer, or a simplified
employee pension maintained by the Employer, which
provides Annual Additions, during any Limitation
Year. The Annual Additions which may be credited to a
Participant's accounts under this Plan for any such
Limitation Year shall not exceed the Maximum
Permissible Amount reduced by the Annual Additions
credited to a Participant's accounts under the other
qualified master and prototype defined contribution
plans, welfare benefit funds, individual medical
accounts, and simplified employee pensions for the
same Limitation Year. If the Annual Additions with
23
<PAGE>
respect to the Participant under other defined
contribution plans, welfare benefit funds, individual
medical accounts, and simplified employee pensions
maintained by the Employer are less than the Maximum
Permissible Amount and the Employer contribution that
would otherwise be contributed or allocated to the
Participant's accounts under this Plan would cause
the Annual Additions for the Limitation Year to
exceed this limitation, the amount contributed or
allocated will be reduced so that the Annual
Additions under all such plans and welfare benefit
funds for the Limitation Year will equal the Maximum
Permissible Amount. If the Annual Additions with
respect to the Participant under such other defined
contribution plans, welfare benefit funds, individual
medical accounts, and simplified employee pensions in
the aggregate are equal to or greater than the
Maximum Permissible Amount, no amount will be
contributed or allocated to the Participant's account
under this Plan for the Limitation Year.
(2) Prior to determining the Participant's actual
Compensation for the Limitation Year, the Employer
may determine the Maximum Permissible Amount for a
Participant in the manner described in section
4.4(a)(2).
(3) As soon as is administratively feasible after the end
of the Limitation Year, the Maximum Permissible
Amount for the Limitation Year will be determined on
the basis of the Participant's actual Compensation
for the Limitation Year.
(4) If, pursuant to section 4.4(b)(2) or section 4.5, a
Participant's Annual Additions under this Plan and
such other plans would result in an Excess Amount for
a Limitation Year, the Excess Amount will be deemed
to consist of the Annual Additions last allocated,
except that Annual Additions attributable to a
simplified employee pension will be deemed to have
been allocated first, followed by annual additions to
a welfare benefit fund or individual medical account,
regardless of the actual allocation date.
(5) If an Excess Amount was allocated to a Participant on
an allocation date of this Plan which coincides with
an allocation date of another plan, the Excess Amount
attributed to this Plan will be the product of:
(i) the total Excess Amount allocated as of such
date, times
(ii) the ratio of (1) the Annual Additions
allocated to the Participant for the
Limitation Year as of such date under this
Plan to (2) the total Annual Additions
allocated to the Participant for the
Limitation Year as of such date under this
and all the other qualified defined
contribution plans.
(6) Any Excess Amount attributed to this Plan will be
disposed in the manner described in section
4.4(a)(4).
(c) If the Participant is covered under another qualified defined
contribution plan maintained by the Employer which is not a
Master or Prototype Plan, Annual Additions which may be
credited to the Participant's account under this Plan for any
Limitation Year will be limited in accordance with section
4.4(b), unless the Employer provides other limitations in the
Adoption Agreement.
(d) if the Employer maintains, or at any time maintained, a
qualified defined benefit plan covering any Participant in
this Plan the sum of the Participant's Defined Benefit Plan
Fraction and Defined Contribution Plan Fraction will not
exceed 1.0 in any Limitation Year. The Annual Additions which
may be credited to the Participant's account under this Plan
for any Limitation Year will be limited in accordance with the
Limitation on Allocations section of the Adoption Agreement.
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<PAGE>
Except, however, if the Plans are standardized paired plans,
the rate of accrual in the defined benefit plan will be
reduced to the extent necessary so that the sum of the Defined
Contribution Fraction and Defined Benefit Fraction will equal
1.0.
(e) For purposes of applying the limitations of Code ss.415, the
transfer of funds from one qualified plan to another is not an
"annual addition." In addition, the following are not Employee
contributions for the purposes of section 4.4(f)(1)(2): (1)
rollover contributions (as defined in Code ss.ss.402(a)(5),
403(a)(4), 403(b)(8) and 408(d)(3)); (2) repayments of loans
made to a Participant from the Plan; (3) repayments of
distributions received by an Employee pursuant to Code
ss.411(a)(7)(B) (cash-outs); (4) repayments of distributions
received by an Employee pursuant to Code ss.411(a)(3)(D)
(mandatory contributions); and (5) Employee contributions to a
simplified employee pension excludable from gross income under
Code ss.408(k)(6).
(f) For purposes of this section, the following terms shall be
defined as follows:
(1) Annual Additions means the sum credited to a
Participant's accounts for any Limitation Year of (1)
Employer contributions, (2) effective with respect to
"limitation years" beginning after December 31, 1986,
Employee contributions, (3) forfeitures, (4)
allocations under a simplified employee pension, (5)
amounts allocated, after March 31, 1984, to an
individual medical account, as defined in
Codess.415(l)(2), which is part of a pension or
annuity plan maintained by the Employer, and (6)
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
Codess.419A(d)(3)) under a welfare benefit fund (as
defined in Codess.419(e)) maintained by the Employer.
Except, however, the "415 Compensation" percentage
limitation referred to in paragraph (a)(2) above
shall not apply to: (1) any contribution for medical
benefits (within the meaning of Codess.419A(f)(2))
after separation from service which is otherwise
treated as an "annual addition," or (2) any amount
otherwise treated as an "annual addition" under
Codess.415(l)(1). Notwithstanding the foregoing, for
"limitation years" beginning prior to January 1,
1987, only that portion of Employee contributions
equal to the lesser of Employee contributions in
excess of six percent (6%) of "415 Compensation" or
one-half of Employee contributions shall be
considered an "annual addition."
For this purpose, any Excess Amount applied under
sections 4.4(a)(4) and 4.4(b)(6) in the Limitation
Year to reduce Employer contributions shall be
considered Annual Additions for such Limitation Year.
(2) Compensation means a Participant's Compensation as
elected in the Adoption Agreement and fully defined
in Plan section 1.10. However, regardless of any
selection made in the Adoption Agreement, "415
Compensation" shall exclude compensation which is not
currently includible in the Participant's gross
income by reason of the application of Code
ss.ss.125, 402(e)(3), 402(h)(1)(B), or 403(b). For
limitation years beginning after December 31, 1991,
for purposes of applying the limitations of this
article, compensation for a limitation year is the
compensation actually paid or made available during
such limitation year.
Notwithstanding the preceding sentence, compensation
for a participant in a defined contribution plan who
is permanently and totally disabled (as defined in
ss.22(e)(3) of the Internal Revenue Code) is the
compensation such participant would have received for
the limitation year if the participant had been paid
at the rate of compensation paid immediately before
becoming permanently and totally disabled; such
imputed compensation for the disabled participant may
be taken into account only if the participant is not
a Highly Compensated Employee and contributions made
on behalf of such participant are nonforfeitable when
made.
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<PAGE>
(3) Defined Benefit Fraction means a fraction, the
numerator of which is the sum of the Participant's
Projected Annual Benefits under all the defined
benefit plans (whether or not terminated) maintained
by the Employer, and the denominator of which is the
lesser of 125 percent of the dollar limitation
determined for the Limitation Year under Code
ss.ss.415(b) and (d) or 140 percent of their 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 end of the close of the last Limitation Year
beginning before January 1, 1987, disregarding any
changes in the terms and conditions of the plan after
May 5, 1986. The preceding sentence applies only if
the defined benefit plans individually and in the
aggregate satisfied the requirements of Code ss.415
for all Limitation Years beginning before January 1,
1987.
Notwithstanding the foregoing, for any Top Heavy Plan
Year, 100 shall be substituted for 125 unless the
extra minimum allocation is being made pursuant to
the Employer's election in F1 of the Adoption
Agreement. However, for any Plan Year in which this
Plan is a Super Top Heavy Plan, 100 shall be
substituted for 125 in any event.
(4) Defined Contribution Dollar Limitation means $30,000,
or, if greater, one-fourth of the defined benefit
dollar limitation set forth in Code ss.415(b)(1) as
in effect for the Limitation Year.
(5) Defined Contribution Fraction means a fraction, the
numerator of which is the sum of the Annual Additions
to the Participant's account under all the defined
contribution plans (whether or not terminated)
maintained by the Employer for the current and all
prior Limitation Years, (including the Annual
Additions attributable to the Participant's
nondeductible Voluntary Employee Contributions to any
defined benefit plans, whether or not terminated,
maintained by the Employer and the annual additions
attributable to all welfare benefit funds, individual
medical accounts, and simplified employee pensions
maintained by the Employer), and the denominator of
which is the sum of the maximum aggregate amounts for
the current and all prior Limitation Years of Service
with the Employer (regardless of whether a defined
contribution plan was maintained by the Employer).
The maximum aggregate amount in any Limitation Year
is the lesser of 125 percent of the Defined
Contribution Dollar Limitation or 35 percent of the
Participant's Compensation for such year. For
Limitation Years beginning prior to January 1, 1987,
the "annual addition" shall not be recomputed to
treat all Employee contributions as an Annual
Addition.
If the Employee was a Participant as of the end of
the first day of the first Limitation Year beginning
after December 31, 1986, in one or more defined
contribution plans maintained by the Employer which
were in existence on May 5, 1986, the numerator of
this fraction will be adjusted if the sum of this
fraction and the Defined Benefit Fraction would
otherwise exceed 1.0 under the terms of this Plan.
Under the adjustment, an amount equal to the product
of (1) the excess of the sum of the fractions over
1.0 times (2) the denominator of this fraction, will
be permanently subtracted from the numerator of this
fraction. The adjustment is calculated using the
26
<PAGE>
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.
Notwithstanding the foregoing, for any Top Heavy Plan
Year, 100 shall be substituted for 125 unless the
extra minimum allocation is being made pursuant to
the Employer's election in the Adoption Agreement.
However, for any Plan Year in which this Plan is a
Super Top Heavy Plan, 100 shall be substituted for
125 in any event.
(6) Employer means the Employer that adopts this Plan and
all members of a controlled group of corporations (as
defined in Code ss.414(b) as modified by Code
ss.415(h)), all commonly controlled trades or
businesses (as defined in Code ss.414(c) as modified
by Code ss.415(h)) 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).
(7) Excess Amount means the excess of the Participant's
Annual Additions for the Limitation Year over the
Maximum Permissible Amount.
(8) Highest Average Compensation means the average
Compensation for the three consecutive Years of
Service with the Employer that produces the highest
average. A Year of Service with the Employer is the
12 consecutive month period defined in the Adoption
Agreement which is used to determine Compensation
under the Plan.
(9) Limitation Year means the Compensation Year (a 12
consecutive month period) as elected by the Employer
in the Adoption Agreement. All qualified plans
maintained by the Employer must use the same
Limitation Year. If the Limitation Year is amended to
a different 12 consecutive month period, the new
Limitation Year must begin on a date within the
Limitation Year in which the amendment is made.
(10) Master or Prototype Plan means a plan the form of
which is the subject of a favorable opinion letter
from the Internal Revenue Service.
(11) Maximum Permissible Amount means the maximum Annual
Addition that may be contributed or allocated to a
Participant's account under the plan for any
Limitation Year, which shall not exceed the lesser
of:
(i) the Defined Contribution Dollar Limitation,
or
(ii) 25 percent of the Participant's Compensation
for the Limitation Year.
The Compensation Limitation referred to in
(ii) shall not apply to any contribution for
medical benefits (within the meaning of Code
ss.ss.401(h) or 419A(f)(2)) which is
otherwise treated as an annual addition
under Code ss.ss.415(l)(1) or 419A(d)(2).
If a short Limitation Year is created
because of an amendment changing the
Limitation Year to a different 12
consecutive month period, the Maximum
Permissible Amount will not exceed the
Defined Contribution Dollar Contribution
multiplied by the following fraction:
number of months in the short Limitation Year
---------------------------------------------
(12) Projected Annual Benefit means the annual retirement
benefit (adjusted to an actuarially equivalent
straight life annuity if such benefit is expressed in
a form other than a straight life annuity or
qualified Joint and Survivor Annuity) to which the
Participant would be entitled under the terms of the
plan assuming:
(i) the Participant will continue employment
until Normal Retirement Age (or current age,
if later), and
27
<PAGE>
(ii) the Participant's Compensation for the
current Limitation Year and all other
relevant factors used to determine benefits
under the Plan will remain constant for all
future Limitation Years.
For purposes of this section, straight life
annuity means an annuity payable in equal
installments for the life of the Participant
that terminates upon the Participant's
death.
4.5 Adjustment for Excessive Annual Additions
If as a result of the allocation of Forfeitures, a reasonable error in
estimating a Participant's annual Compensation, a reasonable error in
determining the amount of Elective Deferral Contributions (within the
meaning of Code ss.402(g)(3)) that may be made with respect to any
Participant under the limits of section 4.4, or other facts and
circumstances to which Regulation 1.415-6(b)(6) shall be applicable,
the "annual additions" under this Plan would cause the maximum provided
in section 4.4 to be exceeded, the Administrator shall treat the excess
in accordance with section 4.4(a)(4).
4.6 Rollover Contributions
Without regard to the limitations imposed under section 4.4, if elected
by the Employer in the Adoption Agreement, the Plan may receive
Rollover Contributions on behalf of an Employee, if the Employee is
entitled under Code ss.ss.402(c), 403(a)(4), or 408(d)(3)(A).
Contributions may be rolled over directly or indirectly, in the form of
cash, and may be all or a portion of the funds eligible for rollover.
Receipt of Rollover Contributions shall be subject to the approval of
the Plan Administrator. Before approving the receipt of a Rollover
Contribution, the Plan Administrator may request any documents or other
information from an Employee or opinions of counsel which the Plan
Administrator deems necessary to establish that such amount is a
Rollover Contribution.
If elected by the Employer in the Adoption Agreement, Rollover
Contributions may be received from an employee who is not otherwise
eligible to participate in the Plan.
Rollover Contributions may be withdrawn by an Employee pursuant to the
provisions of the Adoption Agreement and Article VI of the Plan.
4.7 Transfers from Qualified Plans
If specified in the Adoption Agreement and with the consent of the
Administrator, amounts may be transferred from other qualified plans,
provided that the trust from which such funds are transferred permits
the transfer to be made and the transfer will not jeopardize the tax
exempt status of the Plan or create adverse tax consequences for the
Employer. The amounts transferred shall be set up in a separate
account. Such account shall be fully Vested at all times and shall not
be subject to forfeiture for any reason.
Amounts attributable to Elective Deferral Contributions (as defined in
Regulation ss.1.401(k)-1(g)(4)), including amounts treated as Elective
Deferral Contributions, which are transferred from another qualified
plan in a plan-to-plan transfer shall be subject to the distribution
limitations provided for in Regulation ss.1.401(k)-1(d).
Furthermore, such amounts shall be considered as part of a
Participant's benefit in determining whether an involuntary cash-out of
benefits without Participant consent may be made.
The Administrator may direct that employee transfers made after a
valuation date be segregated into a separate account for each
Participant until such time as the allocations pursuant to this Plan
have been made, at which time they may remain segregated or be invested
as part of the general Trust Fund, to be determined by the
Administrator.
28
<PAGE>
Prior to accepting any transfers to which this section applies, the
Administrator may require the Employee to establish that the amounts to
be transferred to this Plan meet the requirements of this section and
may also require the Employee to provide an opinion of counsel
satisfactory to the Employer that the amounts to be transferred meet
the requirements of this section.
Notwithstanding anything herein to the contrary, a transfer directly to
this Plan from another qualified plan (or a transaction having the
effect of such a transfer) shall only be permitted if it will not
result in the elimination or reduction of any "ss.411(d)(6) protected
benefit" as described in section 8.1.
Notwithstanding any provision of this Plan to the contrary, to the
extent that any optional form of benefit under this Plan permits a
distribution prior to the employee's retirement, death, disability, or
severance from employment, and prior to plan termination, the optional
form of benefit is not available with respect to benefits attributable
to assets (including the post-transfer earnings thereon) and
liabilities that are transferred, within the meaning of Code ss.414(l),
to this Plan from a money purchase pension plan qualified under Code
ss.401(a) (other than any portion of those assets and liabilities
attributable to voluntary employee contributions).
4.8 Voluntary Employee Contributions
(a) If this is an amendment to a Plan that had previously allowed
Voluntary Employee Contributions, then, except as provided in
4.8(b) below, this Plan will not accept Voluntary Employee
Contributions for Plan Years beginning after the Plan Year in
which this Plan is adopted by the Employer.
(b) For 401(k) Plans, if elected in the Adoption Agreement, each
Participant may, at the discretion of the Administrator in a
nondiscriminatory manner, elect to voluntarily contribute a
portion of their compensation earned while a Participant under
this Plan. Such contributions shall be paid to the Trustee
within a reasonable period of time but in no event later than
90 days after the receipt of the contribution.
(c) The portion of a Participant's Account attributable to their
Voluntary Employee Contributions shall be fully Vested at all
times and shall not be subject to Forfeiture for any reason.
(d) A Participant may elect to withdraw their Voluntary Employee
Contributions and the actual earnings thereon pursuant to the
provisions in the Adoption Agreement in a manner which is
consistent with and satisfies the provisions of section 6.5,
including, but not limited to, all notice and consent
requirements of Codess.ss.411(a)(11) and 417 and the
Regulations thereunder. If the Administrator maintains
sub-accounts with respect to Voluntary Employee Contributions
(and earnings thereon) which were made on or before a
specified date, a Participant shall be permitted to designate
which sub-account shall be the source for their withdrawal. No
Forfeitures shall occur solely as a result of an Employee's
withdrawal of Employee contributions. The tax status of any
distribution including Voluntary Employee Contributions shall
be governed by Codess.72.
In the event a Participant has received a hardship
distribution pursuant to Regulation 1.401(k)-1(d)(2)(iii)(B)
from any plan maintained by the Employer, then such
Participant shall be barred from making any voluntary
contributions for a period of twelve (12) months after receipt
of the withdrawal or distribution.
(e) The Administrator may direct that Voluntary Employee
Contributions made after a valuation date be segregated into a
separate account until such time as the allocations pursuant
to this Plan have been made, at which time they may remain
segregated or be invested as part of the general Trust Fund,
to be determined by the Administrator. In any event, a
separate account will be maintained for the nondeductible
Voluntary Employee Contribution of such Participant.
29
<PAGE>
4.9 Directed Investment Account
(a) If elected in the Adoption Agreement, each Participant
(including Former Participants, Beneficiaries, and Alternate
Payees with account balances as indicated in the Adoption
Agreement) shall direct the Trustee as to the investment of
the Participant's individual account balances from among the
investment vehicles designated by the Employer pursuant to
section 2.3(b). Any such direction shall be delivered to the
Administrator by the Participant at such time and in such
manner as the Administrator shall direct, and the
Administrator shall take all actions necessary to carry out
such directions. That portion of the account of any
Participant so directing will be considered a Directed
Investment Account.
(b) A separate Directed Investment Account shall be established
for each Participant who has directed an investment. Transfers
between the Participant's regular account and their Directed
Investment Account shall be charged and credited as the case
may be to each account. The Directed Investment Account shall
not share in Trust Fund Earnings, but it shall be charged or
credited as appropriate with the net earnings, gains, losses
and expenses as well as any appreciation or depreciation in
market value attributable to such account.
(c) The Administrator shall establish a procedure, to be applied
in a uniform and nondiscriminatory manner, setting forth the
permissible investment options under this section, how often
changes between investments may be made, and any other
limitations that the Administrator shall impose on a
Participant's right to direct investments, including those
required for compliance with ERISA ss.404(c) and regulations
promulgated thereunder.
4.10 Qualified Voluntary Employee Contributions
(a) If this is an amendment to a Plan that previously permitted
deductible voluntary contributions, then each Participant who
made a "Qualified Voluntary Employee Contribution" within the
meaning of Code ss.219(e)(2) as it existed prior to the
enactment of the Tax Reform Act of 1986, shall have their
contribution held in a separate Qualified Voluntary Employee
Contribution Account which shall be fully Vested at all times.
Such contributions, however, shall not be permitted if they
are attributable to taxable years beginning after December 31,
1986.
(b) A Participant may, upon written request delivered to the
Administrator, make withdrawals from their Qualified Voluntary
Employee Contribution Account. Any distribution shall be made
in a manner which is consistent with and satisfies the
provisions of section 6.5, including, but not limited to, all
notice and consent requirements of Code ss.ss.411(a)(11) and
417 and the Regulations thereunder.
(c) At Normal Retirement Date, or such other date when the
Participant or their Beneficiary shall be entitled to receive
benefits, the fair market value of the Qualified Voluntary
Employee Contribution Account shall be used to provide
additional benefits to the Participant or their Beneficiary.
4.11 Actual Contribution Percentage Tests
In the event this Plan previously provided for voluntary or mandatory
Employee contributions, then, with respect to Plan Years beginning
after December 31, 1986, such contributions must satisfy the provisions
of Code ss.401(m) and the Regulations thereunder.
4.12 Integration in More Than One Plan
If the Employer and/or an Affiliated Employer maintain qualified
retirement plans integrated with Social Security such that any
Participant in this Plan is covered under more than one of such plans,
then such plans will be considered to be one plan and will be
considered to be integrated if the extent of the integration of all
such plans does not exceed 100%. For purposes of the preceding
sentence, the extent of integration of a plan is the ratio, expressed
as a percentage, which the actual benefits, benefit rate, offset rate,
or employer contribution rate, whatever is applicable under the Plan
bears to the limitation applicable to such Plan. If the Employer
maintains two or more standardized paired plans, only one plan may be
integrated with Social Security.
4.13 Veterans' Reemployment Rights
Notwithstanding any provision of this Plan to the contrary,
contributions, benefits, and service credit with respect to qualified
military service will be provided in accordance with Code ss.414(u).
30
<PAGE>
ARTICLE V
VALUATIONS
5.1 Valuation of the Trust Fund
The Administrator shall direct the Trustee, as of each Anniversary
Date, and at such other date or dates deemed necessary by the
Administrator, herein called "valuation date," to determine the net
worth of the assets comprising the Trust Fund as it exists on the
"valuation date." In determining such net worth, the Trustee shall
value the assets comprising the Trust Fund at their fair market value
as of the "valuation date" and shall deduct all expenses for which the
Trustee has not yet obtained reimbursement from the Employer or the
Trust Fund.
5.2 Method of Valuation
In determining the fair market value of securities held in the Trust
Fund which are listed on a registered stock exchange, the Administrator
shall direct the Trustee to value the same at the prices they were last
traded on such exchange preceding the close of business on the
"valuation date." If such securities were not traded on the "valuation
date," or if the exchange on which they are traded was not open for
business on the "valuation date," then the securities shall be valued
at the prices at which they were last traded prior to the "valuation
date." Any unlisted security held in the Trust Fund shall be valued at
its bid price next preceding the close of business on the "valuation
date," which bid price shall be obtained from a registered broker or an
investment banker. In determining the fair market value of assets other
than securities for which trading or bid prices can be obtained, the
Trustee may appraise such assets itself, or in its discretion, employ
one or more appraisers for that purpose and rely on the values
established by such appraiser or appraisers.
ARTICLE VI
DETERMINATION AND DISTRIBUTION OF BENEFITS
6.1 Determination of Benefits Upon Retirement
Every Participant may terminate their employment with the Employer and
retire for the purposes hereof on or after their Normal Retirement Date
or Early Retirement Date. Upon such Normal Retirement Date or Early
Retirement Date, all amounts credited to such Participant's Account
shall become distributable. However, a Participant may postpone the
termination of their employment with the Employer to a later date, in
which event the participation of such Participant in the Plan,
including the right to receive allocations pursuant to section 4.3,
shall continue until their Late Retirement Date. Upon a Participant's
Retirement Date, or as soon thereafter as is practicable, the
Administrator shall direct the distribution of all amounts credited to
such Participant's Account in accordance with section 6.5.
6.2 Determination of Benefits Upon Death
(a) Upon the death of a Participant before their Retirement Date
or other termination of their employment, all amounts credited
to such Participant's Account shall become fully Vested. The
Administrator shall direct, in accordance with the provisions
of sections 6.6 and 6.7, the distribution of the deceased
Participant's accounts to the Participant's Beneficiary.
(b) Upon the death of a Former Participant, the Administrator
shall direct, in accordance with the provisions of sections
6.6 and 6.7, the distribution of any remaining amounts
credited to the accounts of such deceased Former Participant
to such Former Participant's Beneficiary.
(c) The Administrator may require such proper proof of death and
such evidence of the right of any person to receive payment of
the value of the account of a deceased Participant or Former
Participant as the Administrator may deem desirable. The
Administrator's determination of death and of the right of any
person to receive payment shall be conclusive.
(d) Unless otherwise elected in the manner prescribed in section
6.6, the Beneficiary of the Pre-Retirement Survivor Annuity
shall be the Participant's spouse. Except, however, the
Participant may designate a Beneficiary other than their
spouse for the Pre-Retirement Survivor Annuity if:
(1) the Participant and their spouse have validly waived
the Pre-Retirement Survivor Annuity in the manner
prescribed in section 6.6, and the spouse has waived
their right to be the Participant's Beneficiary, or
(2) the Participant is legally separated or has been
abandoned (within the meaning of local law) and the
Participant has a court order to such effect (and
there is no "qualified domestic relations order" as
defined in Code ss.414(p) which provides otherwise),
or
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<PAGE>
(3) the Participant has no spouse, or
(4) the spouse cannot be located.
In such event, the designation of a Beneficiary shall
be made on a form satisfactory to the Administrator.
A Participant may at any time revoke their
designation of a Beneficiary or change their
Beneficiary by filing written notice of such
revocation or change with the Administrator. However,
the Participant's spouse must again consent in
writing to any change in Beneficiary unless the
original consent acknowledged that the spouse had the
right to limit consent only to a specific Beneficiary
and that the spouse voluntarily elected to relinquish
such right. In the event no valid designation of
Beneficiary exists at the time of the Participant's
death, the death benefit shall be payable to their
estate.
(e) If the Plan provides an insured death benefit and a
Participant dies before any insurance coverage to which they
are entitled under the Plan is effected, their death benefit
from such insurance coverage shall be limited to the standard
rated premium which was or should have been used for such
purpose.
(f) In the event of any conflict between the terms of this Plan
and the terms of any Contract issued hereunder, the Plan
provisions shall control.
6.3 Determination of Benefits in Event of Disability
In the event of a Participant's Total and Permanent Disability prior to
their Retirement Date or other termination of their employment, all
amounts credited to such Participant's Account shall become fully
Vested. In the event of a Participant's Total and Permanent Disability,
the Administrator, in accordance with the provisions of sections 6.5
and 6.7, shall direct the distribution to such Participant of all
amounts credited to such Participant's Account as though they had
retired.
6.4 Determination of Benefits Upon Termination
(a) On or before the Anniversary Date, or other valuation date,
coinciding with or subsequent to the termination of a
Participant's employment for any reason other than retirement,
death, or Total and Permanent Disability, the Administrator
may direct that the amount of the Vested portion of such
Terminated Participant's Account be segregated and invested
separately. In the event the Vested portion of a Participant's
Account is not segregated, the amount shall remain in a
separate account for the Terminated Participant and shall
share in gains and losses until such time as a distribution is
made to the Terminated Participant. The amount of the portion
of the Participant's Account which is not Vested may be
credited to a separate account (which will always share in
gains and losses of the Trust Fund) and at such time as the
amount becomes a Forfeiture shall be treated in accordance
with the provisions of the Plan regarding Forfeitures.
Regardless of whether distributions in-kind are permitted, in
the event that the amount of the Vested portion of the
Terminated Participant's Account equals or exceeds the fair
market value of any insurance Contracts, the Trustee, when so
directed by the Administrator and agreed to by the Terminated
Participant, shall assign, transfer, and set over to such
Terminated Participant all Contracts on their life in such
form or with such endorsements, so that the settlement options
and forms of payment are consistent with the provisions of
section 6.5. In the event that the Terminated Participant's
Vested portion does not at least equal the fair market value
of the Contracts, if any, the Terminated Participant may pay
over to the Trustee the sum needed to make the distribution
equal to the value of the Contracts being assigned or
transferred, or the Trustee, pursuant to the Participant's
election, may borrow the cash value of the Contracts from the
Insurer so that the value of the Contracts is equal to the
Vested portion of the Terminated Participant's Account and
then assign the Contracts to the Terminated Participant.
Distribution of the funds due to a Terminated Participant
shall be made on the occurrence of an event which would result
in the distribution had the Terminated Participant remained in
the employ of the Employer (upon the Participant's death,
Total and Permanent Disability, Early or Normal Retirement).
However, at the election of the Participant, the Administrator
shall direct that the entire Vested portion of the Terminated
Participant's Account to be payable to such Terminated
32
<PAGE>
Participant provided the conditions, if any, set forth in the
Adoption Agreement have been satisfied. Any distribution under
this paragraph shall be made in a manner which is consistent
with and satisfies the provisions of section 6.5, including
but not limited to all notice and consent requirements of Code
ss.ss.411(a)(11) and 417 and the Regulations thereunder.
Notwithstanding the above, if the value of a Terminated
Participant's Vested benefit does not exceed, and at the time
of any prior distribution, has never exceeded $3,500, the
Administrator shall direct that the entire Vested benefit be
paid to such Participant in a single lump-sum without regard
to the consent of the Participant or the Participant's spouse.
(b) The Vested portion of any Participant's Account shall be a
percentage of such Participant's Account determined on the
basis of the Participant's number of Years of Service
according to the vesting schedule specified in the Adoption
Agreement.
(c) For any Top Heavy Plan Year, one of the minimum top heavy
vesting schedules as elected by the Employer in the Adoption
Agreement will automatically apply to the Plan. The minimum
top heavy vesting schedule applies to all benefits within the
meaning of Codess.411(a)(7) except those attributable to
Employee contributions, including benefits accrued before the
effective date of Codess.416 and benefits accrued before the
Plan became top heavy. Further, no decrease in a Participant's
Vested percentage may occur in the event the Plan's status as
top heavy changes for any Plan Year. However, this section
does not apply to the account balances of any Employee who
does not have an Hour of Service after the Plan has initially
become top heavy and the Vested percentage of such Employee's
Participant's Account shall be determined without regard to
this section 6.4(c).
If in any subsequent Plan Year, the Plan ceases to be a Top
Heavy Plan, the Administrator shall continue to use the
vesting schedule in effect while the Plan was a Top Heavy Plan
for each Employee who had an Hour of Service during a Plan
Year when the Plan was Top Heavy.
(d) Notwithstanding the vesting provisions above, upon the
complete discontinuance of the Employer's contributions to the
Plan or upon any full or partial termination of the Plan, all
amounts credited to the account of any affected Participant
shall become 100% Vested and shall not thereafter be subject
to Forfeiture.
(e) If this is an amended or restated Plan, then notwithstanding
the vesting schedule specified in the Adoption Agreement, the
Vested percentage of a Participant's Account shall not be less
than the Vested percentage attained as of the later of the
effective date or adoption date of this amendment and
restatement. The computation of a Participant's nonforfeitable
percentage of their interest in the Plan shall not be reduced
as the result of any direct or indirect amendment to this
Article, or due to changes in the Plan's status as a Top Heavy
Plan.
(f) If the Plan's vesting schedule is amended, or if the Plan is
amended in any way that directly or indirectly affects the
computation of the Participant's nonforfeitable percentage or
if the Plan is deemed amended by an automatic change to a top
heavy vesting schedule, then each Participant with at least
three (3) Years of Service as of the expiration date of the
election period may elect to have their nonforfeitable
percentage computed under the Plan without regard to such
amendment or change. For Participants who do not have at least
one (1) Hour of Service in any Plan Year beginning after
December 31, 1988, the preceding sentence shall be applied by
substituting "five (5) Years of Service" for "three (3) Years
of Service) where such language appears. If a Participant
fails to make such election, then such Participant shall be
subject to the new vesting schedule. The Participant's
election period shall commence on the adoption date of the
amendment and shall end 60 days after the latest of:
(1) the adoption date of the amendment,
(2) the effective date of the amendment, or
(3) the date the Participant receives written notice of
the amendment from the Employer or Administrator.
33
<PAGE>
(g) (1) If any Former Participant shall be reemployed by the
Employer before a One-Year Break in Service occurs,
they shall continue to participate in the Plan in the
same manner as if such termination had not occurred.
(2) If an employee receives a distribution pursuant to
this section and the employee resumes employment
covered under this plan, the employee's
employer-derived account balance will be restored to
the amount on the date of distribution if the
employee repays to the plan the full amount of the
distribution attributable to employer contributions
before the earlier of five (5) years after the first
date on which the participant is subsequently
re-employed by the employer, or the date the
participant incurs five (5) consecutive One-Year
Breaks in Service following the date of the
distribution. If a non-Vested Former Participant was
deemed to have received a distribution and such
Former Participant is reemployed by the Employer
before five (5) consecutive One-Year Breaks in
Service, then such Participant will be deemed to have
repaid the deemed distribution as of the date of
reemployment.
(3) If any Former Participant is reemployed after a
One-Year Break in Service has occurred, Years of
Service shall include Years of Service prior to their
One-Year Break in Service subject to the following
rules:
(i) Any Former Participant who under the Plan
does not have a nonforfeitable right to any
interest in the Plan resulting from Employer
contributions shall lose credits if their
consecutive One-Year Breaks in Service equal
or exceed the greater of (A) five (5) or (B)
the aggregate number of their pre-break
Years of Service;
(ii) After five (5) consecutive One-Year Breaks
in Service, a Former Participant's Vested
Account balance attributable to pre-break
service shall not be increased as a result
of post-break service. Separate accounts
shall be maintained for the Participant's
pre-break and post-break Employer-derived
account balances. Both accounts shall share
in the earnings and losses of the fund;
(iii) A Former Participant who is reemployed and
who has not had their Years of Service
before a One-Year Break in Service
disregarded pursuant to (i) above, shall
participate in the Plan as of their date of
reemployment;
(iv) If a Former Participant completes a Year of
Service (a One-Year Break in Service
previously occurred, but employment had not
terminated), they shall participate in the
Plan retroactively from the first day of the
Plan Year during which they complete one (1)
Year of Service.
(h) In determining Years of Service for purposes
of vesting under the Plan, Years of Service
shall be excluded as specified in the
Adoption Agreement.
6.5 Distribution of Benefits
(a) (1) Unless otherwise elected as provided below, a
Participant who is married on the "annuity starting
date" and who does not die before the "annuity
starting date" shall receive the value of all of
their benefits in the form of a Joint and Survivor
Annuity. The Joint and Survivor Annuity is an annuity
that commences immediately and shall be equal in
value to a single life annuity. Such joint and
survivor benefits following the Participant's death
shall continue to the spouse during the spouse's
lifetime at a rate equal to 50% of the rate at which
such benefits were payable to the Participant. This
Joint and Survivor Annuity shall be considered the
designated qualified Joint and Survivor Annuity and
automatic form of payment for the purposes of this
34
<PAGE>
Plan. However, the Participant may elect to receive a
smaller annuity benefit with continuation of payments
to the spouse at a rate of seventy-five percent (75%)
or one hundred percent (100%) of the rate payable to
a Participant during their lifetime which alternative
Joint and Survivor Annuity shall be equal in value to
the automatic Joint and 50% Survivor Annuity. An
unmarried Participant shall receive the value of
their benefit in the form of a life annuity. Such
unmarried Participant, however, may elect in writing
to waive the life annuity. The election must comply
with the provisions of this section as if it were an
election to waive the Joint and Survivor Annuity by a
married Participant, but without the spousal consent
requirement. The Participant may elect to have any
annuity provided for in this section distributed upon
the attainment of the "earliest retirement age" under
the Plan. The "earliest retirement age" is the
earliest date on which, under the Plan, the
Participant could elect to receive retirement
benefits.
(2) Any election to waive the Joint and Survivor Annuity
must be made by the Participant in writing during the
election period and be consented to by the
Participant's spouse. If the spouse is legally
incompetent to give consent, the spouse's legal
guardian, even if such guardian is the Participant,
may give consent. Such election shall designate a
Beneficiary (or a form of benefits) that may not be
changed without spousal consent (unless the consent
of the spouse expressly permits designations by the
Participant without the requirement of further
consent by the spouse). Such spouse's consent shall
be irrevocable and must acknowledge the effect of
such election and be witnessed by a Plan
representative or a notary public. Such consent shall
not be required if it is established to the
satisfaction of the Administrator that the required
consent cannot be obtained because there is no
spouse, the spouse cannot be located, or other
circumstances that may be prescribed by Regulations.
The election made by the Participant and consented to
by their spouse may be revoked by the Participant in
writing without the consent of the spouse at any time
during the election period. The number of revocations
shall not be limited. Any new election must comply
with the requirements of this paragraph. A former
spouse's waiver shall not be binding on a new spouse.
(3) The election period to waive the Joint and Survivor
Annuity shall be the 90 day period ending on the
"annuity starting date."
(4) For purposes of this section and section 6.6, the
"annuity starting date" means the first day of the
first period for which an amount is paid as an
annuity, or, in the case of a benefit not payable in
the form of an annuity, the first day on which all
events have occurred which entitles the Participant
to such benefit.
(5) With regard to the election, the Administrator shall
provide to the Participant no less than 30 days and
no more than 90 days before the "annuity starting
date" a written explanation of:
(i) the terms and conditions of the Joint and
Survivor Annuity, and
(ii) the Participant's right to make and the
effect of an election to waive the Joint and
Survivor Annuity, and
(iii) the right of the Participant's spouse to
consent to any election to waive the Joint
and Survivor Annuity, and
(iv) the right of the Participant to revoke such
election, and the effect of such revocation.
35
<PAGE>
(b) In the event a married Participant duly elects pursuant to
paragraph (a)(2) above not to receive their benefit in the
form of a Joint and Survivor Annuity, or if such Participant
is not married, in the form of a life annuity, the
Administrator, pursuant to the election of the Participant,
shall direct the distribution to a Participant or their
Beneficiary any amount to which they are entitled under the
Plan in one or more of the following methods which are
permitted pursuant to the Adoption Agreement:
(1) A single-sum payment in cash or in property;
(2) Payments over a period certain in monthly, quarterly,
semiannual, or annual cash installments. In order to
provide such installment payments, the Administrator
may direct that the Participant's interest in the
Plan be segregated and invested separately, and that
the funds in the segregated account be used for the
payment of the installments. The period over which
such payment is to be made shall not extend beyond
the Participant's life expectancy (or the life
expectancy of the Participant and their designated
Beneficiary);
(3) Purchase of or providing an annuity. However, such
annuity may not be in any form that will provide for
payments over a period extending beyond either the
life of the Participant (or the lives of the
Participant and their designated Beneficiary) or the
life expectancy of the Participant (or the life
expectancy of the Participant and their designated
Beneficiary).
(c) The present value of a Participant's Joint and Survivor
Annuity may not be paid without their written consent if the
value exceeds, or has ever exceeded at the time of any prior
distribution, $3,500. Further, the spouse of a Participant
must consent in writing to any immediate distribution. If the
value of the Participant's Vested benefit does not exceed
$3,500 and has never exceeded $3,500 at the time of any prior
distribution, the Administrator may immediately distribute
such benefit without such Participant's or spouse's consent.
Any written consent required under this paragraph must be
obtained not more than 90 days before commencement of the
distribution and shall be made in a manner consistent with
section 6.5(a)(2) and section 6.5(d).
(d) Any distribution to a Participant who has a benefit which
exceeds, or has ever exceeded at the time of any prior
distribution, $3,500 shall require such Participant's consent
if such distribution commences prior to the later of their
Normal Retirement Age or age 62. With regard to this required
consent:
(1) No consent shall be valid unless the Participant has
received a general description of the material
features and an explanation of the relative values of
the optional forms of benefit available under the
Plan that would satisfy the notice requirements of
Code ss.417.
(2) The Participant must be informed of their right to
defer receipt of the distribution. If a Participant
fails to consent, it shall be deemed an election to
defer the commencement of payment of any benefit.
However, any election to defer the receipt of
benefits shall not apply with respect to
distributions which are required under section
6.5(e).
(3) Notice of the rights specified under this paragraph
shall be provided no less than 30 days and no more
than 90 days before the "annuity starting date."
(4) Written consent of the Participant to the
distribution must not be made before the Participant
receives the notice and must not be made more than 90
days before the "annuity starting date."
(5) No consent shall be valid if a significant detriment
is imposed under the Plan on any Participant who does
not consent to the distribution.
(e) Notwithstanding any provision in the Plan to the contrary, the
distribution of a Participant's benefits, made on or after
January 1, 1985, whether under the Plan or through the
purchase of an annuity Contract, shall be made in accordance
with the following requirements and shall otherwise comply
with Code ss.401(a)(9) and the Regulations thereunder
(including Regulation ss.1.401(a)(9)-2):
(1) A Participant's benefits shall be distributed to them
not later than April 1st of the calendar year
following the later of (i) the calendar year in which
the Participant attains age 70 1/2or (ii) the
calendar year in which the Participant retires,
36
<PAGE>
provided, however, that this clause (ii) shall not
apply in the case of a Participant who is a "five (5)
percent owner" at any time during the five (5) Plan
Year period ending in the calendar year in which they
attain age 70 1/2or, in the case of a Participant who
becomes a "five (5) percent owner" during any
subsequent Plan Year, clause (ii) shall no longer
apply and the required beginning date shall be the
April 1st of the calendar year following the calendar
year in which such subsequent Plan Year ends.
Alternatively, distributions to a Participant must
begin no later than the applicable April 1st as
determined under the preceding sentence and must be
made over the life of the Participant (or the lives
of the Participant and the Participant's designated
Beneficiary) or, if benefits are paid in the form of
a Joint and Survivor Annuity, the life expectancy of
the Participant (or the life expectancies of the
Participant and their designated Beneficiary) in
accordance with Regulations. For Plan Years beginning
after December 31, 1988, clause (ii) above shall not
apply to any Participant unless the Participant had
attained age 70 1/2before January 1, 1988 and was not
a "five (5) percent owner" at any time during the
Plan Year ending with or within the calendar year in
which the Participant attained age 66 1/2or any
subsequent Plan Year.
(2) Distributions to a Participant and their
Beneficiaries shall only be made in accordance with
the incidental death benefit requirements of Code
ss.401(a)(9)(G) and the Regulations thereunder.
Additionally, for calendar years beginning before
1989, distributions may also be made under an
alternative method which provides that the then
present value of the payments to be made over the
period of the Participant's life expectancy exceeds
fifty percent (50%) of the then present value of the
total payments to be made to the Participant and
their Beneficiaries.
(f) For purposes of this section, the life expectancy of a
Participant and a Participant's spouse (other than in the case
of a life annuity) shall be redetermined annually in
accordance with Regulations if permitted pursuant to the
Adoption Agreement. If the Participant or the Participant's
spouse may elect whether recalculations will be made, then the
election, once made, shall be irrevocable. If no election is
made by the time distributions must commence, then the life
expectancy of the Participant and the Participant's spouse
shall not be subject to recalculation. Life expectancy and
joint and last survivor expectancy shall be computed using the
return multiples in Tables V and VI of Regulation ss.1.72-9.
(g) All annuity Contracts under this Plan shall be
non-transferable when distributed. Furthermore, the terms of
any annuity Contract purchased and distributed to a
Participant or spouse shall comply with all of the
requirements of this Plan.
(h) Subject to the spouse's right of consent afforded under the
Plan, the restrictions imposed by this section shall not apply
if a Participant has, prior to January 1, 1984, made a written
designation to have their retirement benefit paid in an
alternative method acceptable under Code ss.401(a) as in
effect prior to the enactment of the Tax Equity and Fiscal
Responsibility Act of 1982.
(i) If a distribution is made at a time when a Participant who has
not terminated employment is not fully Vested in their
Participant's Account and the Participant may increase the
Vested percentage in such account:
(1) A separate account shall be established for the
Participant's interest in the Plan as of the time of
the distribution, and
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<PAGE>
(2) At any relevant time the Participant's Vested portion
of the separate account shall be equal to an amount
("X") determined by the formula:
X = P(AB plus (RxD)) - (R x D)
For purposes of applying the formula: P is the Vested
percentage at the relevant time, AB is the account
balance at the relevant time, D is the amount of
distribution, and R is the ratio of the account
balance at the relevant time to the account balance
after distribution.
6.6 Distribution of Benefits Upon Death
(a) Unless otherwise elected as provided below, a Vested
Participant who dies before the annuity starting date and who
has a surviving spouse shall have the Pre-Retirement Survivor
Annuity paid to their surviving spouse. The Participant's
spouse may direct that payment of the Pre-Retirement Survivor
Annuity commence within a reasonable period after the
Participant's death. If the spouse does not so direct, payment
of such benefit will commence at the time the Participant
would have attained the later of their Normal Retirement Age
or age 62. However, the spouse may elect a later commencement
date. Any distribution to the Participant's spouse shall be
subject to the rules specified in section 6.6(h).
(b) Any election to waive the Pre-Retirement Survivor Annuity
before the Participant's death must be made by the Participant
in writing during the election period and shall require the
spouse's irrevocable consent in the same manner provided for
in section 6.5(a)(2). Further, the spouse's consent must
acknowledge the specific nonspouse Beneficiary.
Notwithstanding the foregoing, the nonspouse Beneficiary need
not be acknowledged, provided the consent of the spouse
acknowledges that the spouse has the right to limit consent
only to a specific Beneficiary and that the spouse voluntarily
elects to relinquish such right.
(c) The election period to waive the Pre-Retirement Survivor
Annuity shall begin on the first day of the Plan Year in which
the Participant attains age 35 and end on the date of the
Participant's death. An earlier waiver (with spousal consent)
may be made provided a written explanation of the
Pre-Retirement Survivor Annuity is given to the Participant
and such waiver becomes invalid at the beginning of the Plan
Year in which the Participant turns age 35. In the event a
Vested Participant separates from service prior to the
beginning of the election period, the election period shall
begin on the date of such separation from service.
(d) With regard to the election, the Administrator shall provide
each Participant within the applicable period, with respect to
such Participant (and consistent with Regulations), a written
explanation of the Pre-Retirement Survivor Annuity containing
comparable information to that required pursuant to section
6.5(a)(5). For the purposes of this paragraph, the term
"applicable period" means, with respect to a Participant,
whichever of the following periods ends last:
(1) The period beginning with the first day of the Plan
Year in which the Participant attains age 32 and
ending with the close of the Plan Year preceding the
Plan Year in which the Participant attains age 35;
(2) A reasonable period after the individual becomes a
Participant. For this purpose, in the case of an
individual who becomes a Participant after age 32,
the explanation must be provided by the end of the
three-year period beginning with the first day of the
first Plan Year for which the individual is a
Participant;
(3) A reasonable period ending after the Plan no longer
fully subsidizes the cost of the Pre-Retirement
Survivor Annuity with respect to the Participant;
(4) A reasonable period ending after Codess.401(a)(11)
applies to the Participant; or
(5) A reasonable period after separation from service in
the case of a Participant who separates before
attaining age 35. For this purpose, the Administrator
must provide the explanation during the period
beginning one year before the separation from service
and ending one year after separation.
(e) The Pre-Retirement Survivor Annuity provided for in this
section shall apply only to Participants who are credited with
an Hour of Service on or after August 23, 1984. Former
Participants who are not credited with an Hour of Service on
or after August 23, 1984 shall be provided with rights to the
Pre-Retirement Survivor Annuity in accordance with
ss.303(e)(2) of the Retirement Equity Act of 1984.
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<PAGE>
(f) If the value of the Pre-Retirement Survivor Annuity derived
from Employer and Employee contributions does not exceed
$3,500 and has never exceeded $3,500 at the time of any prior
distribution, the Administrator shall direct the immediate
distribution of such amount to the Participant's spouse. If
the value exceeds, or has ever exceeded at the time of any
prior distribution, $3,500, an immediate distribution of the
entire amount may be made to the surviving spouse, provided
such surviving spouse consents in writing to such
distribution. Any written consent required under this
paragraph must be obtained not more than 90 days before
commencement of the distribution and shall be made in a manner
consistent with section 6.5(a)(2).
(g) In the event there is an election to waive the Pre-Retirement
Survivor Annuity, and for death benefits in excess of the
Pre-Retirement Survivor Annuity, such death benefits shall be
paid to the Participant's Beneficiary by either of the
following methods, as elected by the Participant (or if no
election has been made prior to the Participant's death, by
their Beneficiary) subject to the rules specified in section
6.6(h) and the selections made in the Adoption Agreement:
(1) A single-sum payment in cash or in property;
(2) Payment in monthly, quarterly, semi-annual, or annual
cash installments over a period to be determined by
the Participant or their Beneficiary. After periodic
installments commence, the Beneficiary shall have the
right to reduce the period over which such periodic
installments shall be made, and the cash amount of
such periodic installments shall be adjusted
accordingly;
(3) A straight life annuity.
(h) Notwithstanding any provision in the Plan to the contrary,
distributions upon the death of a Participant shall be made in
accordance with the following requirements and shall otherwise
comply with Code ss.401(a)(9) and the Regulations thereunder.
(1) If it is determined, pursuant to Regulations, that
the distribution of a Participant's interest has
begun and the Participant dies before their entire
interest has been distributed to them, the remaining
portion of such interest shall be distributed at
least as rapidly as under the method of distribution
selected pursuant to section 6.5 as of their date of
death.
(2) If a Participant dies before they have begun to
receive any distributions of their interest in the
Plan or before distributions are deemed to have begun
pursuant to Regulations, then their death benefit
shall be distributed to their Beneficiaries in
accordance with the following rules subject to the
selections made in the Adoption Agreement and
subsections 6.6(h)(3) and 6.6(i) below:
(i) The entire death benefit shall be
distributed to the Participant's
Beneficiaries by December 31st of the
calendar year in which the fifth anniversary
of the Participant's death occurs;
(ii) The five-year distribution requirement of
(i) above shall not apply to any portion of
the deceased Participant's interest which is
payable to or for the benefit of a
designated Beneficiary. In such event, such
portion shall be distributed over the life
of such designated Beneficiary (or over a
period not extending beyond the life
expectancy of such designated Beneficiary)
provided such distribution begins not later
than December 31st of the calendar year
immediately following the calendar year in
which the Participant died;
(iii) However, in the event the Participant's
spouse (determined as of the date of the
Participant's death) is their designated
Beneficiary, the provisions of (ii) above
shall apply except that the requirement that
distributions commence within one year of
the Participant's death shall not apply. In
lieu thereof, distributions must commence on
or before the later of: (1) December 31st of
the calendar year immediately following the
calendar year in which the Participant died;
39
<PAGE>
or (2) December 31st of the calendar year in
which the Participant would have attained
age 70 1/2. If the surviving spouse dies
before distributions to such spouse begin,
then the five-year distribution requirement
of this section shall apply as if the spouse
was the Participant.
(3) Notwithstanding subparagraph (2) above, or any
selections made in the Adoption Agreement, if a
Participant's death benefits are to be paid in the
form of a Pre-Retirement Survivor Annuity, then
distributions to the Participant's surviving spouse
must commence on or before the later of: (1) December
31st of the calendar year immediately following the
calendar year in which the Participant died; or (2)
December 31st of the calendar year in which the
Participant would have attained age 70 1/2.
(i) For purposes of section 6.6(h)(2), the
election by a designated Beneficiary to be
excepted from the five-year distribution
requirement (if permitted in the Adoption
Agreement) must be made no later than
December 31st of the calendar year following
the calendar year of the Participant's
death. Except, however, with respect to a
designated Beneficiary who is the
Participant's surviving spouse, the election
must be made by the earlier of: (1) December
31st of the calendar year immediately
following the calendar year in which the
Participant died or, if later, the calendar
year in which the Participant would have
attained age 70 1/2; or (2) December 31st of
the calendar year which contains the fifth
anniversary of the date of the Participant's
death. An election by a designated
Beneficiary must be in writing and shall be
irrevocable as of the last day of the
election period stated herein. In the
absence of an election by the Participant or
a designated Beneficiary, the five-year
distribution requirement shall apply.
(j) For purposes of this section, the life expectancy of a
Participant and a Participant's spouse (other than in the case
of a life annuity) shall or shall not be redetermined annually
as provided in the Adoption Agreement and in accordance with
Regulations. If the Participant or the Participant's spouse
may elect, pursuant to the Adoption Agreement, to have life
expectancies recalculated, then the election, once made shall
be irrevocable. If no election is made by the time
distributions must commence, then the life expectancy of the
Participant and the Participant's spouse shall not be subject
to recalculation. Life expectancy and joint and last survivor
expectancy shall be computed using the return multiples in
Tables V and VI of Regulation ss.1.72-9.
(k) In the event that less than 100% of a Participant's interest
in the Plan is distributed to such Participant's spouse, the
portion of the distribution attributable to the Participant's
Voluntary Employee Contributions shall be in the same
proportion that the Participant's Voluntary Employee
Contributions bear to the Participant's total interest in the
Plan.
(l) Subject to the spouse's right of consent afforded under the
Plan, the restrictions imposed by this section shall not apply
if a Participant has, prior to January 1, 1984, made a written
designation to have their death benefits paid in an
alternative method acceptable under Code ss.401(a) as in
effect prior to the enactment of the Tax Equity and Fiscal
Responsibility Act of 1982.
6.7 Time of Segregation or Distribution
Except as limited by sections 6.5 and 6.6, whenever a distribution is
to be made, or a series of payments are to commence, on or as of an
Anniversary Date, the distribution or series of payments may be made or
begun on such date or as soon thereafter as is practicable, but in no
event later than 180 days after the Anniversary Date. However, unless a
Former Participant elects in writing to defer the receipt of benefits
(such election may not result in a death benefit that is more than
incidental), the payment of benefits shall begin not later than the
60th day after the close of the Plan Year in which the latest of the
following events occurs: (a) the date on which the Participant attains
the earlier of age 65 or the Normal Retirement Age specified herein;
(b) the 10th anniversary of the year in which the Participant commenced
participation in the Plan; or (c) the date the Participant terminates
their service with the Employer.
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Notwithstanding the foregoing, the failure of a Participant and, if
applicable, the Participant's spouse, to consent to a distribution
pursuant to section 6.5(d), shall be deemed to be an election to defer
the commencement of payment of any benefit sufficient to satisfy this
section.
6.8 Distribution for Minor Beneficiary
In the event a distribution is to be made to a minor, then the
Administrator may direct that such distribution be paid to the legal
guardian, or if none, to a parent of such Beneficiary or a responsible
adult with whom the Beneficiary maintains their residence, or to the
custodian for such Beneficiary under the Uniform Gift to Minors Act or
Gift to Minors Act, if such is permitted by the laws of the state in
which said Beneficiary resides. Such a payment to the legal guardian,
custodian, or parent of a minor Beneficiary shall fully discharge the
Trustee, Employer, and Plan from further liability on account thereof.
6.9 Location of Participant or Beneficiary Unknown
In the event that all, or any portion, of the distribution payable to a
Participant or their Beneficiary hereunder shall, at the later of the
Participant's attainment of age 62 or their Normal Retirement Age,
remain unpaid solely by reason of the inability of the Administrator,
after sending a registered letter, return receipt requested, to the
last known address, and after further diligent effort, to ascertain the
whereabouts of such Participant or their Beneficiary, the amount so
distributable shall be treated as a Forfeiture pursuant to the Plan. In
the event a Participant or Beneficiary is located subsequent to their
benefit being reallocated, such benefit shall be restored, first from
Forfeitures, if any, and then from an additional Employer contribution
if necessary.
6.10 Pre-retirement Distribution
For Profit Sharing Plans and 401(k) Profit Sharing Plans, if elected in
the Adoption Agreement, at such time as a Participant shall have
satisfied the conditions specified in the Adoption Agreement, the
Administrator, at the election of the Participant, shall direct the
distribution of up to the entire Vested amount then credited to the
accounts maintained on behalf of the Participant. In the event that the
Administrator makes such a distribution, the Participant shall continue
to be eligible to participate in the Plan on the same basis as any
other Employee. Any distribution made pursuant to this section shall be
made in a manner consistent with section 6.5, including, but not
limited to, all notice and consent requirements of Code
ss.ss.411(a)(11) and 417 and the Regulations thereunder.
6.11 Advance Distribution for Hardship
(a) For Profit Sharing Plans, if elected in the Adoption
Agreement, the Administrator, at the election of the
Participant, shall direct the distribution to any Participant
in any one Plan Year up to the lesser of 100% of their
Participant's Account valued as of the last Anniversary Date
or other valuation date or the amount necessary to satisfy the
immediate and heavy financial need of the Participant.
Withdrawal under this section shall be authorized only if the
distribution is on account of:
(1) Medical expenses described in Code ss.213(d) incurred
by the Participant, their spouse, or any of their
dependents (as defined in Code ss.152) or expenses
necessary for these persons to obtain medical care;
(2) The purchase (excluding mortgage payments) of a
principal residence for the Participant;
(3) Funeral expenses for a member of the Participant's
family;
(4) Payment of tuition and related educational fees for
the next 12 months of post-secondary education for
the Participant, their spouse, children, or
dependents; or
(5) The need to prevent the eviction of the Participant
from their principal residence or foreclosure on the
mortgage of the Participant's principal residence.
(b) Any distribution made pursuant to this section shall be made
in a manner which is consistent with and satisfies the
provisions of section 6.5, including, but not limited to, all
notice and consent requirements of Code ss.ss.411(a)(11) and
417 and the Regulations thereunder.
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6.12 Alternate Payee Benefits and Distributions
All rights and benefits, including elections, provided to a Participant
in this Plan shall be subject to the rights afforded to any "alternate
payee" under a "qualified domestic relations order." Furthermore, a
distribution to an "alternate payee" shall be permitted if such
distribution is authorized by a "qualified domestic relations order,"
even if the affected Participant has not reached the "earliest
retirement age" under the Plan. For the purposes of this section,
"alternate payee," "qualified domestic relations order" and "earliest
retirement age" shall have the meaning set forth under Code ss.414(p).
6.13 Special Rule for Profit Sharing Plans
If the following conditions are satisfied, then this section shall
apply to a Participant in a Profit Sharing Plan or 401(k) Profit
Sharing Plan and to any distribution, made on or after the first day of
the first plan year beginning after December 31, 1988, from or under a
separate account attributable solely to accumulated deductible employee
contributions, as defined in Code ss.72(o)(5)(B), and maintained on
behalf of a participant in a money purchase pension plan, (including a
target benefit plan).
(a) The Participant does not or cannot elect benefits in the form
of a life annuity;
(b) Upon the death of the Participant, the Participant's entire
Vested account balance will be paid to their surviving spouse,
or, if there is no surviving spouse or the surviving spouse
has already consented to waive their benefit in accordance
with section 6.6, to their designated Beneficiary;
Then except to the extent otherwise provided in this Plan, the other
provisions of sections 6.2, 6.5 and 6.6 regarding spousal consent and
the forms of distributions shall be inoperative with respect to this
Plan.
If a distribution is one to which ss.ss.401(a)(11) and 417 of the
Internal Revenue Code do not apply, such distribution may commence less
than 30 days after the notice required under ss.1.411(a)-11(c) of the
Income Tax Regulations is given, provided that:
(a) the Plan Administrator clearly informs the Participant that
the Participant has a right to a period of at least 30 days
after the notice to consider the decision of whether or not to
elect a distribution (and, if applicable, a particular
distribution option), and
(b) the Participant, after receiving the notice, affirmatively
elects a distribution.
This section shall not apply to any Participant if it is determined
that this Plan is a direct or indirect transferee of a defined benefit
plan or money purchase plan, or a target benefit plan, stock bonus or
profit sharing plan which would otherwise provide for a life annuity
form of payment to the Participant.
ARTICLE VII
TRUSTEE
7.1 Basic Responsibilities of the Trustee
The Trustee shall have the following categories of responsibilities:
(a) To invest the assets of the Trust Fund in the investment
vehicles or other property designated by the Employer pursuant
to section 2.3(b) subject, however, to the direction of any
Investment Manager appointed pursuant to section 2.3(b) and/or
the directions of Participants as communicated to the Trustee
by the Administrator pursuant to section 4.9;
(b) At the direction of the Administrator, to pay benefits
required under the Plan to be paid to Participants, or, in the
event of their death, to their Beneficiaries;
(c) To maintain records of receipts and disbursements and furnish
to the Employer and/or Administrator for each Plan Year a
written annual report per section 7.7; and
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(d) If there shall be more than one Trustee, they shall act by a
majority of their number, but may authorize one or more of
them to sign papers on their behalf.
7.2 Investment Powers and Duties of the Trustee
(a) The Trustee shall invest and reinvest the Trust Fund without
distinction between principal and income in one or more
investment vehicles designated by the Employer pursuant to
section 2.3(b) or in other property, real or personal,
wherever situated, as the Trustee may be directed by the
Employer (acting pursuant to section 2.3(b)) or an Investment
Manager. The Trustee shall not be restricted to securities or
other property of the character expressly authorized by the
applicable law for trust investments.
(b) The Trustee may employ a bank or trust company pursuant to the
terms of its usual and customary bank agency agreement, under
which the duties of such bank or trust company shall be of a
custodial, clerical and record-keeping nature.
(c) Notwithstanding section 2.3(b), the Employer, in writing to
the Trustee, may delegate investment responsibility to the
Administrator. If the Administrator has been delegated such
authority, (i) the Administrator may exercise the powers
reserved to the Employer by section 2.3(b) hereof, and (ii)
the Trustee shall not be liable or responsible for losses or
unfavorable results arising from the Trustee's compliance with
directions received from the Administrator.
(d) The Trustee may from time to time transfer to a common,
collective, or pooled trust fund maintained by any corporate
Trustee hereunder pursuant to Revenue Ruling 81-100, which has
been designated as an investment vehicle for the Plan pursuant
to section 2.3(b), all or such part of the Trust Fund as the
Trustee may deem advisable, and such part or all of the Trust
Fund so transferred shall be subject to all the terms and
provisions of the common, collective, or pooled trust fund
which contemplate the commingling for investment purposes of
such trust assets with trust assets of other trusts. The
Trustee may withdraw from such common, collective, or pooled
trust fund all or such part of the Trust Fund as the Trustee
may be directed pursuant to section 2.3(b) or 4.9.
(e) The Trustee, at the direction of the Employer and pursuant to
instructions from the Administrator shall own, and pay all
premiums on Contracts on the lives of the Participants which
may be transferred to the Trust Fund from a prior trustee of
the Plan or a plan that has been merged with the Plan. The
aggregate premium for ordinary life insurance for each
Participant must be less than 50% of the aggregate
contributions and Forfeitures allocated to a Participant's
Account. For purposes of this limitation, ordinary life
insurance Contracts are Contracts with both non-decreasing
death benefits and non-increasing premiums. If term insurance
or universal life insurance is purchased with such
contributions, the aggregate premium must be 25% or less of
the aggregate contributions and Forfeitures allocated to a
Participant's Account. If both term insurance and ordinary
life insurance are purchased with such contributions, the
amount expended for term insurance plus one-half of the
premium for ordinary life insurance may not in the aggregate
exceed 25% of the aggregate Employer contributions and
Forfeitures allocated to a Participant's Account. The Trustee
must distribute the Contracts to the Participant or convert
the entire value of the Contracts at or before retirement into
cash or provide for a periodic income so that no portion of
such value may be used to continue life insurance protection
beyond retirement. Notwithstanding the above, the limitations
imposed herein with respect to the purchase of life insurance
shall not apply, in the case of a Profit Sharing Plan, to the
portion of a Participant's Account that has accumulated for at
least two (2) Plan Years.
Notwithstanding anything hereinabove to the contrary, amounts
credited to a Participant's Qualified Voluntary Employee
Contribution Account pursuant to section 4.10, shall not be
applied to the purchase of life insurance contracts.
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(f) The Trustee will be the owner of any life insurance Contract
purchased under the terms of this Plan. The Contract must
provide that the proceeds will be payable to the Trustee;
however, the Trustee shall be required to pay over all
proceeds of the Contract to the Participant's designated
Beneficiary in accordance with the distribution provisions of
Article VI. A Participant's spouse will be the designated
Beneficiary pursuant to section 6.2, unless a qualified
election has been made in accordance with sections 6.5 and 6.6
of the Plan, if applicable. Under no circumstances shall the
Trust retain any part of the proceeds. However, the Trustee
shall not pay the proceeds in a method that would violate the
requirements of the Retirement Equity Act, as stated in
Article VI of the Plan, or Codess.401(a)(9) and the
Regulations thereunder.
7.3 Other Powers of the Trustee
The Trustee, in addition to all powers and authorities under common
law, statutory authority, including the Act, and other provisions of
this Plan, shall have the following powers and authorities, to be
exercised at the direction of the Employer, the Administrator, an
Investment Manager or Plan Participants, as the case may be, pursuant
to section 2.3 or section 4.9.
(a) To purchase, or subscribe for, any securities or other
property and to retain the same. In conjunction with the
purchase of securities, margin accounts may be opened and
maintained;
(b) To sell, exchange, convey, transfer, grant options to
purchase, or otherwise dispose of any securities or other
property held by the Trustee, by private contract or at public
auction. No person dealing with the Trustee shall be bound to
see to the application of the purchase money or to inquire
into the validity, expediency, or propriety of any such sale
or other disposition, with or without advertisement;
(c) To vote upon any stocks, bonds, or other securities; to give
general or special proxies or powers of attorney with or
without power of substitution; to exercise any conversion
privileges, subscription rights or other options, and to make
any payments incidental thereto; to oppose, or to consent to,
or otherwise participate in, corporate reorganizations or
other changes affecting corporate securities, and to delegate
discretionary powers, and to pay any assessments or charges in
connection therewith; and generally to exercise any of the
powers of an owner with respect to stocks, bonds, securities,
or other property. However, the Trustee shall not vote proxies
relating to securities for which it has not been assigned full
investment management responsibilities. In those cases where
another party has such investment authority or discretion, be
it the Administrator or an outside Investment Manager, the
Trustee will deliver all proxies to said party who will then
have full responsibility for voting those proxies;
(d) To cause any securities or other property to be registered in
the Trustee's own name or in the name of one or more of the
Trustee's nominees, and to hold any investments in bearer
form, but the books and records of the Trustee shall at all
times show that all such investments are part of the Trust
Fund;
(e) To borrow or raise money for the purposes of the Plan in such
amount, and upon such terms and conditions, as the Trustee
shall deem advisable; and for any sum so borrowed, to issue a
promissory note as Trustee, and to secure the repayment
thereof by pledging all, or any part, of the Trust Fund; and
no person lending money to the Trustee shall be bound to see
to the application of the money lent or to inquire into the
validity, expediency, or propriety of any borrowing;
(f) To keep such portion of the Trust Fund 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;
(g) To accept and retain for such time as it may deem advisable
any securities or other property received or acquired by it as
Trustee hereunder, whether or not such securities or other
property would normally be purchased as investments hereunder;
(h) To make, execute, acknowledge, and deliver any and all
documents of transfer and conveyance and any and all other
instruments that may be necessary or appropriate to carry out
the powers herein granted;
(i) To settle, compromise, or submit to arbitration any claims,
debts, or damages due or owing to or from the Plan, to
commence or defend suits or legal or administrative
proceedings, and to represent the Plan in all suits and legal
and administrative proceedings;
(j) To employ suitable agents and counsel and to pay their
reasonable expenses and compensation, and such agent or
counsel may or may not be agent or counsel for the Employer;
(k) To apply for and procure from the Insurer as an investment of
the Trust Fund such annuity, or other Contracts (on the life
of any Participant) as the Administrator shall deem proper; to
exercise, at any time or from time to time, whatever rights
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and privileges may be granted under such annuity, or other
Contracts; to collect, receive, and settle for the proceeds of
all such annuity, or other Contracts as and when entitled to
do so under the provisions thereof;
(l) To invest funds of the Trust in time deposits or savings
accounts bearing a reasonable rate of interest in the
Trustee's bank;
(m) To invest in Treasury Bills and other forms of United States
government obligations;
(n) To sell, purchase and acquire put or call options if the
options are traded on and purchased through a national
securities exchange registered under the Securities Exchange
Act of 1934, as amended, or, if the options are not traded on
a national securities exchange, are guaranteed by a member
firm of the New York Stock Exchange;
(o) To deposit monies in federally insured savings accounts or
certificates of deposit in banks or savings and loan
associations;
(p) To pool all or any of the Trust Fund, from time to time, with
assets belonging to any other qualified employee pension
benefit trust created by the Employer or any Affiliated
Employer, and to commingle such assets and make joint or
common investments and carry joint accounts on behalf of this
Plan and such other trust or trusts, allocating undivided
shares or interests in such investments or accounts or any
pooled assets of the two or more trusts in accordance with
their respective interests;
(q) To do all such acts and exercise all such rights and
privileges, although not specifically mentioned herein, as the
Trustee may deem necessary to carry out the purposes of the
Plan;
(r) Directed Investment Account. If elected in the Adoption
Agreement, each Participant may direct the Administrator to
give directions to the Trustee concerning the investment of
the Participant's Directed Investment Account, which
directions shall be delivered to the Trustee by the
Administrator. The Trustee shall not be under any duty to
question any such direction of the Participant or to make any
suggestions to the Participant in connection therewith, and
the Trustee shall comply as promptly as practicable with
directions given by the Administrator. Any such direction may
be of a continuing nature or otherwise and may be revoked by
the Participant at any time in such form as the Administrator
may require. The Trustee may refuse to comply with any
direction from the Participant in the event the Trustee, in
its sole and absolute discretion, deems such directions
improper by virtue of applicable law, and in such event, the
Trustee shall not be responsible or liable for any loss or
expense which may result. Any costs and expenses related to
compliance with the Participant's directions shall be borne by
the Participant's Directed Investment Account. Notwithstanding
anything hereinabove to the contrary, the Trustee shall not
invest any portion of a Directed Investment Account in
"collectibles" within the meaning of that term as employed in
Codess.408(m).
7.4 Loans to Participants
(a) If specified in the Adoption Agreement, the Administrator may,
in the Administrator's sole discretion, make loans to
Participants or Beneficiaries under the following
circumstances: (1)loans shall be made available to all
Participants and Beneficiaries on a reasonably equivalent
basis; (2) loans shall not be made available to Highly
Compensated Employees in an amount greater than the amount
made available to other Participants; (3) loans shall bear a
reasonable rate of interest; (4) loans shall be adequately
secured; (5) shall provide for periodic repayment over a
reasonable period of time; and (6) loans shall be treated as
Directed Investments.
(b) Loans shall not be made to any Shareholder-Employee or
Owner-Employee unless an exemption for such loan is obtained
pursuant to Act ss.408 and further provided that such loan
would not be subject to tax pursuant to Code ss.4975.
(c) Loans shall not be granted to any Participant that provide for
a repayment period extending beyond such Participant's Normal
Retirement Date.
(d) Loans made pursuant to this section (when added to the
outstanding balance of all other loans made by the Plan to the
Participant) shall be limited to the lesser of:
(1) $50,000 reduced by the excess (if any) of the highest
outstanding balance of loans from the Plan to the
Participant during the one year period ending on the
day before the date on which such loan is made, over
the outstanding balance of loans from the Plan to the
Participant on the date on which such loan was made,
or
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(2) one-half (1/2) of the present value of the
non-forfeitable accrued benefit of the Employee under
the Plan.
For purposes of this limit, all plans of the Employer shall be
considered one plan.
(e) No Participant loan shall take into account the present value
of such Participant's Qualified Voluntary Employee
Contribution Account.
(f) Loans shall provide for level amortization with payments to be
made not less frequently than quarterly over a period not to
exceed five (5) years. However, loans used to acquire any
dwelling unit which, within a reasonable time, is to be used
(determined at the time the loan is made) as a principal
residence of the Participant shall provide for periodic
repayment over a reasonable period of time that may exceed
five (5) years.
(g) An assignment or pledge of any portion of a Participant's
interest in the Plan and a loan, pledge, or assignment with
respect to any insurance Contract purchased under the Plan,
shall be treated as a loan under this section.
(h) Any loan made pursuant to this section where the Vested
interest of the Participant is used to secure such loan shall
require the written consent of the Participant's spouse in a
manner consistent with section 6.5 provided the spousal
consent requirements of such section apply to the Participant.
Such written consent must be obtained within the 90-day period
prior to the date the loan is made. Any security interest held
by the Plan by reason of an outstanding loan to the
Participant shall be taken into account in determining the
amount of the death benefit or Pre-Retirement Survivor
Annuity. However, no spousal consent shall be required under
this paragraph if the total accrued benefit subject to the
security is not in excess of $3,500.
(i) With regard to any loans granted, a Participant loan program
shall be established which must include, but need not be
limited to, the following:
(1) the identity of the person or positions authorized to
administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of
loans offered, including what constitutes a hardship
or financial need if selected in the Adoption
Agreement;
(5) the procedure under the program for determining a
reasonable rate of interest;
(6) the types of collateral which may secure a
Participant loan; and
(7) the events constituting default and the steps that
will be taken to preserve plan assets.
Such Participant loan program shall be contained in a
separate written document which, when properly
executed, is hereby incorporated by reference and
made a part of this plan. Furthermore, such
Participant loan program may be modified or amended
in writing from time to time without the necessity of
amending this section of the Plan.
(j) Loan repayments will be suspended under this Plan as permitted
under Codess.414(u)(4).
7.5 Duties of the Trustee Regarding Payments
At the direction of the Administrator, the Trustee shall, from time to
time, in accordance with the terms of the Plan, make payments out of
the Trust Fund. The Trustee shall not be responsible in any way for the
application of such payments.
7.6 Trustee's Compensation and Expenses and Taxes
The Trustee shall be paid such reasonable compensation as set forth in
the Trustee's fee schedule (if the Trustee has such a schedule) or as
agreed upon in writing by the Employer and the Trustee. An individual
serving as Trustee who already receives full-time pay from the Employer
shall not receive compensation from this Plan. In addition, the Trustee
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shall be reimbursed for any reasonable expenses, including reasonable
counsel fees incurred by it as Trustee. Such compensation and expenses
shall be paid from the Trust Fund unless paid or advanced by the
Employer. All taxes of any kind and all kinds whatsoever that may be
levied or assessed under existing or future laws upon, or in respect
of, the Trust Fund or the income thereof, shall be paid from the Trust
Fund.
7.7 Annual Report of the Trustee
Within a reasonable period of time after the later of the Anniversary
Date or receipt of the Employer's contribution for each Plan Year, the
Trustee, or its agent, shall furnish to the Employer and Administrator
a written statement of account with respect to the Plan Year for which
such contribution was made setting forth:
(a) the net income, or loss, of the Trust Fund;
(b) the gains, or losses, realized by the Trust Fund upon sales or
other disposition of the assets;
(c) the increase, or decrease, in the value of the Trust Fund;
(d) all payments and distributions made from the Trust Fund; and
(e) such further information as the Trustee and Administrator may
agree. The Employer, forthwith upon its receipt of each such
statement of account, shall acknowledge receipt thereof in
writing and advise the Trustee and/or Administrator of its
approval or disapproval thereof. Failure by the Employer to
disapprove any such statement of account within thirty (30)
days after its receipt thereof shall be deemed an approval
thereof. The approval by the Employer of any statement of
account shall be binding as to all matters embraced therein as
between the Employer and the Trustee to the same extent as if
the account of the Trustee had been settled by judgment or
decree in an action for a judicial settlement of its account
in a court of competent jurisdiction in which the Trustee, the
Employer and all persons having or claiming an interest in the
Plan were parties; provided, however, that nothing herein
contained shall deprive the Trustee of its right to have its
accounts judicially settled if the Trustee so desires.
7.8 Audit
(a) If an audit of the Plan's records shall be required by the Act
and the regulations thereunder for any Plan Year, the
Administrator shall engage on behalf of all Participants an
independent qualified public accountant for that purpose. Such
accountant shall, after an audit of the books and records of
the Plan in accordance with generally accepted auditing
standards, within a reasonable period after the close of the
Plan Year, furnish to the Administrator and the Trustee a
report of their audit setting forth their opinion as to
whether any statements, schedules or lists, that are required
by Act ss.103 or the Secretary of Labor to be filed with the
Plan's annual report, are presented fairly in conformity with
generally accepted accounting principles applied consistently.
(b) All auditing and accounting fees shall be an expense of and
may, at the election of the Administrator, be paid from the
Trust Fund.
(c) If some or all of the information necessary to enable the
Administrator to comply with Act ss.103 is maintained by a
bank, insurance company, or similar institution, regulated and
supervised and subject to periodic examination by a state or
federal agency, it shall transmit and certify the accuracy of
that information to the Administrator as provided in Act
ss.103(b) within one hundred twenty (120) days after the end
of the Plan Year or such other date as may be prescribed under
regulations of the Secretary of Labor.
7.9 Resignation, Removal and Succession of Trustee
(a) The Trustee may resign at any time by delivering to the
Employer, at least thirty (30) days before its effective date,
a written notice of their resignation.
(b) The Employer may remove the Trustee by mailing by registered
or certified mail, addressed to such Trustee at their last
known address, at least thirty (30) days before its effective
date, a written notice of their removal.
(c) Upon the death, resignation, incapacity, or removal of any
Trustee, a successor may be appointed by the Employer; and
such successor, upon accepting such appointment in writing and
delivering same to the Employer, shall, without further act,
become vested with all the estate, rights, powers,
discretions, and duties of their predecessor with like respect
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as if they were originally named as a Trustee herein. Until
such a successor is appointed, the remaining Trustee or
Trustees shall have full authority to act under the terms of
the Plan.
(d) The Employer may designate one or more successors prior to the
death, resignation, incapacity, or removal of a Trustee. In
the event a successor is so designated by the Employer and
accepts such designation, the successor shall, without further
act, become vested with all the estate, rights, powers,
discretions, and duties of their predecessor with the like
effect as if they were originally named as Trustee herein
immediately upon the death, resignation, incapacity, or
removal of their predecessor.
(e) Whenever any Trustee hereunder ceases to serve as such, they
shall furnish to the Employer and Administrator a written
statement of account with respect to the portion of the Plan
Year during which they served as Trustee. This statement shall
be either
(i) included as part of the annual statement of account
for the Plan Year required under section 7.7 or
(ii) set forth in a special statement. Any such special
statement of account should be rendered to the
Employer no later than the due date of the annual
statement of account for the Plan Year. The
procedures set forth in section 7.7 for the approval
by the Employer of annual statements of account shall
apply to any special statement of account rendered
hereunder and approval by the Employer of any such
special statement in the manner provided in section
7.7 shall have the same effect upon the statement as
the Employer's approval of an annual statement of
account. No successor to the Trustee shall have any
duty or responsibility to investigate the acts or
transactions of any predecessor who has rendered all
statements of account required by section 7.7 and
this subparagraph.
7.10 Transfers and Direct Rollovers
Notwithstanding any other provision contained in this Plan, the Trustee
at the direction of the Administrator shall transfer the Vested
interest, if any, of such Participant in their account to another trust
forming part of a pension, profit sharing, or stock bonus plan
maintained by such Participant's new employer and represented by said
employer in writing as meeting the requirements of Code ss.401(a),
provided that the trust to which such transfers are made permits the
transfer to be made.
(a) Notwithstanding any provision of the Plan to the contrary,
with respect to distributions made after December 31, 1992, a
Participant shall be permitted to elect to have any "eligible
rollover distribution" transferred directly to an "eligible
retirement plan" specified by the Participant. The Plan
provisions otherwise applicable to distributions continue to
apply to the direct transfer option. The Participant shall, in
the time and manner prescribed by the Administrator, specify
the amount to be directly transferred and the "eligible
retirement plan" to receive the transfer. Any portion of a
distribution which is not directly transferred shall be
distributed to the Participant.
(b) For purposes of this section, the term "eligible rollover
distribution" means any distribution other than a distribution
of substantially equal periodic payments over the life or life
expectancy of the Participant (or joint life or joint life
expectancies of the Participant and the designated
beneficiary) or a distribution over a period certain of ten
years or more. Amounts required to be distributed under Code
ss.401(a)(9) are not eligible rollover distributions. The
direct transfer option described in subsection (a) applies
only to eligible rollover distributions which would otherwise
be includible in gross income if not transferred.
(c) For purposes of this section, the term "eligible retirement
plan" means an individual retirement account as described in
Code ss.408(a), an individual retirement annuity as described
in Code ss.408(b), an annuity plan as described in Code
ss.403(a), or a defined contribution plan as described in Code
ss.401(a) which is exempt from tax under Code ss.501(a) and
which accepts rollover distributions.
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(d) The election described in subsection (a) also applies to the
surviving spouse after the Participant's death; however,
distributions to the surviving spouse may only be transferred
to an individual retirement account or individual retirement
annuity. For purposes of subsection (a), a spouse or former
spouse who is the alternate payee under a qualified domestic
relations order as defined in Code ss.414(p) will be treated
as the Participant.
7.11 Trustee Indemnification
The Employer agrees to indemnify and save harmless the Trustee against
any and all claims, losses, damages, expenses and liabilities the
Trustee may incur in the exercise and performance of the Trustee's
powers and duties hereunder, unless the same are determined to be due
to gross negligence or willful misconduct.
7.12 Employer Securities and Real Property
The Trustee shall be empowered to acquire and hold "qualifying Employer
securities" and "qualifying Employer real property," as those terms are
defined in the Act. However, no more than 100%, in the case of a Profit
Sharing Plan or 401(k) Plan or 10%, in the case of a Money Purchase
Plan of the fair market value of all the assets in the Trust Fund may
be invested in "qualifying Employer securities" and "qualifying
Employer real property."
ARTICLE VIII
AMENDMENT, TERMINATION, AND MERGERS
8.1 Amendment
(a) The Employer shall have the right at any time to amend this
Plan subject to the limitations of this section. However, any
amendment which affects the rights, duties, or
responsibilities of the Trustee and Administrator may only be
made with the Trustee's and Administrator's written consent.
Any such amendment shall become effective as provided therein
upon its execution. The Trustee shall not be required to
execute any such amendment unless the amendment affects the
duties of the Trustee hereunder.
(b) The Employer may (1)change the choice of options in the
Adoption Agreement, (2) add overriding language in the
Adoption Agreement when such language is necessary to satisfy
Code ss.ss.415 or 416 because of the required aggregation of
multiple plans, and (3) add certain model amendments published
by the Internal Revenue Service which specifically provide
that their adoption will not cause the Plan to be treated as
an individually designed plan. An Employer that amends the
Plan for any other reason, including a waiver of the minimum
funding requirement under Code ss.412(d), will no longer
participate in this Prototype Plan and will be considered to
have an individually designed plan.
(c) The Employer expressly delegates authority to the sponsoring
organization of this Plan, the right to amend this Plan by
submitting a copy of the amendment to each Employer who has
adopted this Plan after first having received a ruling or
favorable determination from the Internal Revenue Service that
the Plan as amended qualifies under Code ss.401(a) and the
Act. For purposes of this section, the mass submitter shall be
recognized as the agent of the sponsoring organization. If the
sponsoring organization does not adopt the amendments made by
the mass submitter, it will no longer be identical to or a
minor modifier of the mass submitter plan.
(d) No amendment to the Plan shall be effective if it authorizes
or permits any part of the Trust Fund (other than such part as
is required to pay taxes and administration expenses) to be
used for or diverted to any purpose other than for the
exclusive benefit of the Participants or their Beneficiaries
or estates; or causes any reduction in the amount credited to
the account of any Participant; or causes or permits any
portion of the Trust Fund to revert to or become property of
the Employer.
(e) No amendment to the Plan shall be effective to the extent that
it has the effect of decreasing a Participant's accrued
benefit. Notwithstanding the preceding sentence, a
Participant's account balance may be reduced to the extent
permitted under Codess.412(c)(8). For purposes of this
paragraph, a Plan amendment which has the effect of decreasing
a Participant's account balance or eliminating an optional
form of benefit, with respect to benefits attributable to
service before the amendment shall be treated as reducing an
accrued benefit. Furthermore, if the vesting schedule of a
Plan is amended, in the case of an Employee who is a
Participant as of the later of the date such amendment is
adopted or the date it becomes effective, the nonforfeitable
percentage (determined as of such date) of such Employee's
Employerderived accrued benefit will not be less than the
percentage computed under the Plan without regard to such
amendment.
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8.2 Termination
(a) The Employer shall have the right at any time to terminate the
Plan by delivering to the Trustee and Administrator written
notice of such termination. Upon any full or partial
termination all amounts credited to the affected Participants'
Accounts shall become 100% Vested and shall not thereafter be
subject to forfeiture, and all unallocated amounts shall be
allocated to the accounts of all Participants in accordance
with the provisions hereof.
(b) Upon the full termination of the Plan, the Employer shall
direct the distribution of the assets to Participants in a
manner which is consistent with and satisfies the provisions
of section 6.5. Distributions to a Participant shall be made
in cash (or in property if permitted in the Adoption
Agreement) or through the purchase of irrevocable
nontransferable deferred commitments from the Insurer. Except
as permitted by Regulations, the termination of the Plan shall
not result in the reduction of "ss.411(d)(6) protected
benefits" as described in section 8.1.
8.3 Merger or Consolidation
This Plan may be merged or consolidated with, or its assets and/or
liabilities may be transferred to any other plan only if the benefits
which would be received by a Participant of this Plan, in the event of
a termination of the plan immediately after such transfer, merger or
consolidation, are at least equal to the benefits the Participant would
have received if the Plan had terminated immediately before the
transfer, merger or consolidation and such merger or consolidation does
not otherwise result in the elimination or reduction of any
"ss.411(d)(6) protected benefits" as described in section 8.1(e).
ARTICLE IX
MISCELLANEOUS
9.1 Employer Adoptions
Any organization may become the Employer hereunder by executing the
Adoption Agreement in form satisfactory to the Trustee, and it shall
provide such additional information as the Trustee may require. The
consent of the Trustee to act as such shall be signified by its
execution of the Adoption Agreement.
Except as otherwise provided in this Plan, the affiliation of the
Employer and the participation of its Participants shall be separate
and apart from that of any other employer and its participants
hereunder.
9.2 Participant's Rights
This Plan shall not be deemed to constitute a contract between the
Employer and any Participant or to be a consideration or an inducement
for the employment of any Participant or Employee. Nothing contained in
this Plan shall be deemed to give any Participant or Employee the right
to be retained in the service of the Employer or to interfere with the
right of the Employer to discharge any Participant or Employee at any
time regardless of the effect which such discharge shall have upon them
as a Participant of this Plan.
9.3 Alienation
(a) Subject to the exceptions provided below, no benefit which
shall be payable to any person (including a Participant or
their Beneficiary) shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance, or charge, and any attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber, or charge
the same shall be void; and no such benefit shall in any
manner be liable for, or subject to, the debts, contracts,
liabilities, engagements, or torts of any such person, nor
shall it be subject to attachment or legal process for or
against such person, and the same shall not be recognized
except to such extent as may be required by law.
(b) This provision shall not apply to the extent a Participant or
Beneficiary is indebted to the Plan, for any reason, under any
provision of this Plan. At the time a distribution is to be
made to or for a Participant's or Beneficiary's benefit, such
proportion of the amount to be distributed as shall equal such
indebtedness shall be paid to the Plan, to apply against or
discharge such indebtedness. Prior to making a payment,
however, the Participant or Beneficiary must be given written
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notice by the Administrator that such indebtedness is to be so
paid in whole or part from their Participant's Account. If the
Participant or Beneficiary does not agree that the
indebtedness is a valid claim against their Vested
Participant's Account, they shall be entitled to a review of
the validity of the claim in accordance with procedures
provided in sections 2.12 and 2.13.
(c) This provision shall not apply to a "qualified domestic
relations order" defined in Code ss.414(p), and those other
domestic relations orders permitted to be so treated by the
Administrator under the provisions of the Retirement Equity
Act of 1984. The Administrator shall establish a written
procedure to determine the qualified status of domestic
relations orders and to administer distributions under such
qualified orders. Further, to the extent provided under a
"qualified domestic relations order," a former spouse of a
Participant shall be treated as the spouse or surviving spouse
for all purposes under the Plan.
9.4 Construction of Plan
This Plan and Trust shall be construed and enforced according to the
Act and the laws of the State or Missouri to the extent not pre-empted
by the Act.
9.5 Gender and Number
Wherever any words are used herein in the masculine, feminine or neuter
gender, they shall be construed as though they were also used in
another gender in all cases where they would so apply, and whenever any
words are used herein in the singular or plural form, they shall be
construed as though they were also used in the other form in all cases
where they would so apply.
9.6 Legal Action
In the event any claim, suit, or proceeding is brought regarding the
Trust and/or Plan established hereunder to which the Trustee or the
Administrator may be a party, and such claim, suit, or proceeding is
resolved in favor of the Trustee or Administrator, they shall be
entitled to be reimbursed from the Trust Fund for any and all costs,
attorney's fees, and other expenses pertaining thereto incurred by them
for which they shall have become liable.
9.7 Prohibition Against Diversion of Funds
Except as provided below and otherwise specifically permitted by law,
it shall be impossible by operation of the Plan or of the Trust, by
termination of either, by power of revocation or amendment, by the
happening of any contingency, by collateral arrangement or by any other
means, for any part of the corpus or income of any Trust Fund
maintained pursuant to the Plan or any funds contributed thereto to be
used for, or diverted to, purposes other than the exclusive benefit of
Participants, or their Beneficiaries. In the event the Employer shall
make a contribution under a mistake of fact pursuant to ss.403(c)(2)(A)
of the Act, the Employer may demand repayment of such contribution at
any time within one (1) year following the time of payment and the
Trustees shall return such amount to the Employer within the one (1)
year period. Earnings of the Plan attributable to the contributions may
not be returned to the Employer but any losses attributable thereto
must reduce the amount so returned.
9.8 Bonding
Every Fiduciary, except a bank or an insurance company, unless exempted
by the Act and regulations thereunder, shall be bonded in an amount not
less than 10% of the amount of the funds such Fiduciary handles;
provided, however, that the minimum bond shall be $1,000 and the
maximum bond, $500,000. The amount of funds handled shall be determined
at the beginning of each Plan Year by the amount of funds handled by
such person, group, or class to be covered and their predecessors, if
any, during the preceding Plan Year, or if there is no preceding Plan
Year, then by the amount of the funds to be handled during the then
current year. The bond shall provide protection to the Plan against any
loss by reason of acts of fraud or dishonesty by the Fiduciary alone or
in connivance with others. The surety shall be a corporate surety
company (as such term is used in Act ss.412(a)(2)), and the bond shall
be in a form approved by the Secretary of Labor. Notwithstanding
anything in the Plan to the contrary, the cost of such bonds shall be
an expense of and may, at the election of the Administrator, be paid
from the Trust Fund or by the Employer.
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9.9 Employer's and Trustee's Protective Clause
Neither the Employer nor the Trustee, nor their successors, shall be
responsible for the validity of any Contract issued hereunder or for
the failure on the part of the Insurer to make payments provided by any
such Contract, or for the action of any person which may delay payment
or render a Contract null and void or unenforceable in whole or in
part.
9.10 Insurer's Protective Clause
The Insurer who shall issue Contracts hereunder shall not have any
responsibility for the validity of this Plan or for the tax or legal
aspects of this Plan. The Insurer shall be protected and held harmless
in acting in accordance with any written direction of the Trustee, and
shall have no duty to see to the application of any funds paid to the
Trustee, nor be required to question any actions directed by the
Trustee. Regardless of any provision of this Plan, the Insurer shall
not be required to take or permit any action or allow any benefit or
privilege contrary to the terms of any Contract which it issues
hereunder, or the rules of the Insurer.
9.11 Receipt and Release for Payments
Any payment to any Participant, their legal representative,
Beneficiary, or to any guardian or committee appointed for such
Participant or Beneficiary in accordance with the provisions of this
Plan, shall, to the extent thereof, be in full satisfaction of all
claims hereunder against the Trustee and the Employer.
9.12 Action by the Employer
Whenever the Employer under the terms of the Plan is permitted or
required to do or perform any act or matter or thing, it shall be done
and performed by a person duly authorized by its legally constituted
authority.
9.13 Named Fiduciaries and Allocation of Responsibility
The "named Fiduciaries" of this Plan are (1) the Employer, (2) the
Administrator, (3) the Trustee, and (4) any Investment Manager
appointed hereunder. The named Fiduciaries shall have only those
specific powers, duties, responsibilities, and obligations as are
specifically given them under the Plan. In general, the Employer shall
have the sole responsibility for making the contributions provided for
under section 4.1; and shall have the sole authority to appoint and
remove the Trustee and the Administrator; to designate investment
vehicles to be held in the Trust Fund; to direct or appoint an
Investment Manager to direct the Trustee with respect to investments of
the Trust Fund; and to amend the elective provisions of the Adoption
Agreement or terminate, in whole or in part, the Plan. The
Administrator shall have the sole responsibility for the administration
of the Plan, which responsibility is specifically described in the
Plan. The Trustee shall have the responsibility to hold and invest the
assets of the Trust Fund as directed by the Employer, an Investment
Manager, the Administrator or Participants pursuant to the terms of the
Plan. Each named Fiduciary warrants that any directions given,
information furnished, or action taken by it shall be in accordance
with the provisions of the Plan, authorizing or providing for such
direction, information or action. Furthermore, each named Fiduciary may
rely upon any such direction, information or action of another named
Fiduciary as being proper under the Plan, and is not required under the
Plan to inquire into the propriety of any such direction, information
or action. It is intended under the Plan that each named Fiduciary
shall be responsible for the proper exercise of its own powers, duties,
responsibilities and obligations under the Plan. No named Fiduciary
shall guarantee the Trust Fund in any manner against investment loss or
depreciation in asset value. Any person or group may serve in more than
one Fiduciary capacity.
9.14 Headings
The headings and subheadings of this Plan have been inserted for
convenience of reference and are to be ignored in any construction of
the provisions hereof.
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9.15 Approval by Internal Revenue Service
(a) Notwithstanding anything herein to the contrary, if, pursuant
to a timely application filed by or in behalf of the Plan, the
Commissioner of Internal Revenue Service or their delegate
should determine that the Plan does not initially qualify as a
tax-exempt plan under Code ss.ss.401 and 501, and such
determination is not contested, or if contested, is finally
upheld, then if the Plan is a new plan, it shall be void ab
initio and all amounts contributed to the Plan, by the
Employer, less expenses paid, shall be returned within one
year and the Plan shall terminate, and the Trustee shall be
discharged from all further obligations. If the
disqualification relates to an amended plan, then the Plan
shall operate as if it had not been amended and restated.
(b) Except as specifically stated in the Plan, any contribution by
the Employer to the Trust Fund is conditioned upon the
deductibility of the contribution by the Employer under the
Code and, to the extent any such deduction is disallowed, the
Employer may within one (1) year following a final
determination of the disallowance, whether by agreement with
the Internal Revenue Service or by final decision of a court
of competent jurisdiction, demand repayment of such disallowed
contribution and the Trustee shall return such contribution
within one (1) year following the disallowance. Earnings of
the Plan attributable to the excess contribution may not be
returned to the Employer, but any losses attributable thereto
must reduce the amount so returned.
(c) If the Employer's Plan fails to attain or retain
qualification, such Plan will no longer participate in this
prototype plan and will be considered an individually designed
plan.
9.16 Uniformity
All provisions of this Plan shall be interpreted and applied in a
uniform, nondiscriminatory manner.
9.17 Payment of Benefits
Benefits under this Plan shall be paid, subject to section 6.10 and
section 6.11 only upon death, Total and Permanent Disability, normal or
early retirement, termination of employment, or upon Plan Termination.
ARTICLE X
PARTICIPATING EMPLOYERS
10.1 Election to Become a Participating Employer
Notwithstanding anything herein to the contrary, with the consent of
the Employer and Trustee, any Affiliated Employer may adopt this Plan
and all of the provisions hereof, and participate herein and be known
as a Participating Employer, by a properly executed document evidencing
said intent and will of such Participating Employer.
10.2 Requirements of Participating Employers
(a) Each Participating Employer shall be required to select the
same Adoption Agreement provisions as those selected by the
Employer other than the Plan Year, the Fiscal Year, and such
other items that must, by necessity, vary among employers.
(b) Each such Participating Employer shall be required to use the
same Trustee as provided in this Plan.
(c) The Trustee may, but shall not be required to, commingle, hold
and invest as one Trust Fund all contributions made by
Participating Employers, as well as all increments thereof.
(d) The transfer of any Participant from or to an Employer
participating in this Plan, whether they be an Employee of the
Employer or a Participating Employer, shall not affect such
Participant's rights under the Plan, and all amounts credited
to such Participant's Account as well as their accumulated
service time with the transferor or predecessor, and their
length of participation in the Plan, shall continue to their
credit.
(e) Any expenses of the Plan which are to be paid by the Employer
or borne by the Trust Fund shall be paid by each Participating
Employer in the same proportion that the total amount standing
to the credit of all Participants employed by such Employer
bears to the total standing to the credit of all Participants.
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10.3 Designation of Agent
Each Participating Employer shall be deemed to be a part of this Plan;
provided, however, that with respect to all of its relations with the
Trustee and Administrator for the purpose of this Plan, each
Participating Employer shall be deemed to have designated irrevocably
the Employer as its agent. Unless the context of the Plan clearly
indicates the contrary, the word "Employer" shall be deemed to include
each Participating Employer as related to its adoption of the Plan.
10.4 Employee Transfers
It is anticipated that an Employee may be transferred between
Participating Employers, and in the event of any such transfer, the
Employee involved shall carry with them their accumulated service and
eligibility. No such transfer shall effect a termination of employment
hereunder, and the Participating Employer to which the Employee is
transferred shall thereupon become obligated hereunder with respect to
such Employee in the same manner as was the Participating Employer from
whom the Employee was transferred.
10.5 Participating Employer's Contribution and Forfeitures
Any contribution or Forfeiture subject to allocation during each Plan
Year shall be allocated among all Participants of all Participating
Employers in accordance with the provisions of this Plan. On the basis
of the information furnished by the Administrator, the Trustee shall
keep separate books and records concerning the affairs of each
Participating Employer hereunder and as to the accounts and credits of
the Employees of each Participating Employer. The Trustee may, but need
not, register Contracts so as to evidence that a particular
Participating Employer is the interested Employer hereunder, but in the
event of an Employee transfer from one Participating Employer to
another, the employing Employer shall immediately notify the Trustee
thereof.
10.6 Amendment
Amendment of this Plan by the Employer at any time when there shall be
a Participating Employer hereunder shall only be by the written action
of each and every Participating Employer and with the consent of the
Trustee where such consent is necessary in accordance with the terms of
this Plan.
10.7 Discontinuance of Participation
Except in the case of a Standardized Plan, any Participating Employer
shall be permitted to discontinue or revoke its participation in the
Plan at any time. At the time of any such discontinuance or revocation,
satisfactory evidence thereof and of any applicable conditions imposed
shall be delivered to the Trustee. The Trustee shall thereafter
transfer, deliver and assign Contracts and other Trust Fund assets
allocable to the Participants of such Participating Employer to such
new Trustee as shall have been designated by such Participating
Employer, in the event that it has established a separate pension plan
for its Employees provided, however, that no such transfer shall be
made if the result is the elimination or reduction of any "ss.411(d)(6)
protected benefits" in accordance with section 8.1(e). If no successor
is designated, the Trustee shall retain such assets for the Employees
of said Participating Employer pursuant to the provisions of Article
VII hereof. In no such event shall any part of the corpus or income of
the Trust Fund as it relates to such Participating Employer be used for
or diverted for purposes other than for the exclusive benefit of the
Employees of such Participating Employer.
10.8 Administrator's Authority
The Administrator shall have authority to make any and all necessary
rules or regulations, binding upon all Participating Employers and all
Participants, to effectuate the purpose of this Article.
10.9 Participating Employer Contribution for Affiliate
If any Participating Employer is prevented in whole or in part from
making a contribution which it would otherwise have made under the Plan
by reason of having no current or accumulated.39 earnings or profits,
or because such earnings or profits are less than the contribution
which it would otherwise have made, then, pursuant to Code
ss.404(a)(3)(B), so much of the contribution which such Participating
Employer was so prevented from making may be made, for the benefit of
the participating employees of such Participating Employer, by other
Participating Employers who are members of the same affiliated group
within the meaning of Code ss.1504 to the extent of their current or
accumulated earnings or profits, except that such contribution by each
such other Participating Employer shall be limited to the proportion of
its total current and accumulated earnings or profits remaining after
adjustment for its contribution to the Plan made without regard to this
paragraph which the total prevented contribution bears to the total
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current and accumulated earnings or profits of all the Participating
Employers remaining after adjustment for all contributions made to the
Plan without regard to this paragraph. A Participating Employer on
behalf of whose employees a contribution is made under this paragraph
shall not be required to reimburse the contributing Participating
Employers.
ARTICLE XI
CASH OR DEFERRED PROVISIONS
Notwithstanding any provisions in the Plan to the contrary, the provisions of
this Article shall apply with respect to any 401(k) Profit Sharing Plan.
Notwithstanding anything in this Article to the contrary, effective as of the
Plan Year in which this amendment becomes effective, the Actual Deferral
Percentage Test and the Actual Contribution Percentage Test shall be applied
(and adjusted) by applying the Family Member aggregation rules of Code
ss.414(q)(6).
11.1 Formula for Determining Employer's Contribution
For each Plan Year, the Employer shall contribute to the Plan:
(a) The amount of the total salary reduction elections of all
Participants made pursuant to section 11.2(a), which amount
shall be deemed an Employer's Elective Deferral Contribution,
plus
(b) If specified in the Adoption Agreement, a Matching
Contribution equal to the percentage specified in the Adoption
Agreement of the Deferred Compensation of each Participant
eligible to share in the allocations of the Matching
Contribution, plus
(c) If specified in the Adoption Agreement, a discretionary
amount, if any, which shall be deemed an Employer's
Nonelective Contribution, plus
(d) A Qualified Nonelective Contribution or Qualified Matching
Contribution, if any, in an amount to be determined by the
Employer. If the Employer so designates, such contribution( s)
shall be treated as an Elective Deferral Contribution.
(e) Notwithstanding the foregoing, however, the Employer's
contributions for any Fiscal Year shall not exceed the maximum
amount allowable as a deduction to the Employer under the
provisions of Codess.404. All contributions by the Employer
shall be made in cash or in such employer securities as is
acceptable to the Trustee.
(f) Except, however, to the extent necessary to provide the top
heavy minimum allocations, the Employer shall make a
contribution even if it exceeds current or accumulated Net
Profit or the amount which is deductible under Codess.404.
(g) Employer Elective Deferral Contributions accumulated through
payroll deductions shall be paid to the Trustee as of the
earliest date on which such contributions can reasonably be
segregated from the Employer's general assets, but in any
event within ninety (90) days from the date on which such
amounts would otherwise have been payable to the Participant
in cash. The provisions of Department of Labor
regulationsss.2510.3-102 are incorporated herein by reference.
Furthermore, any additional Employer contributions which are
allocable to the Participant's Elective Account for a Plan
Year shall be paid to the Plan no later than the twelve-month
period immediately following the close of such Plan Year.
11.2 Participant's Salary Reduction Election
(a) If selected in the Adoption Agreement, each Participant may
elect to defer their Compensation which would have been
received in the Plan Year, but for the deferral election,
subject to the limitations of this section and the Adoption
Agreement. A deferral election (or modification of an earlier
election) may not be made with respect to Compensation which
is currently available on or before the date the Participant
executed such election, or if later, the latest of the date
the Employer adopts this cash or deferred arrangement, or the
date such arrangement first became effective. Any elections
made pursuant to this section shall become effective as soon
as is administratively feasible. The amount by which
Compensation is reduced shall be that Participant's Deferred
Compensation and be treated as an Employer Elective Deferral
Contribution and allocated to that Participant's Elective
Account. Once made, a Participant's election to reduce
Compensation shall remain in effect until modified or
terminated. Modifications may be made as specified in the
Adoption Agreement, and terminations may be made at any time.
Any modification or termination of an election will become
effective as soon as is administratively feasible.
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(b) The balance in each Participant's Elective Account shall be
fully Vested at all times and shall not be subject to
Forfeiture for any reason.
(c) Amounts held in the Participant's Elective Account may be
distributable as permitted under the Plan, but in no event
prior to the earlier of:
(1) a Participant's termination of employment, Total and
Permanent Disability, or death;
(2) a Participant's attainment of age 59 1/2(only in the
case of a profit sharing plan);.
(3) the proven financial hardship of a Participant,
subject to the limitations of section 11.8;
(4) the termination of the Plan without the existence at
the time of Plan termination of another defined
contribution plan (other than an employee stock
ownership plan as defined in Code ss.4975(e)(7)) or
the establishment of a successor defined contribution
plan (other than an employee stock ownership plan as
defined in Code ss.4975(e)(7)) by the Employer or an
Affiliated Employer within the period ending twelve
months after distribution of all assets from the Plan
maintained by the Employer
(5) the date of the sale by the Employer to an entity
that is not an Affiliated Employer of substantially
all of the assets (within the meaning of Code
ss.409(d)(2)) with respect to a Participant who
continues employment with the corporation acquiring
such assets; or
(6) the date of the sale by the Employer or an Affiliated
Employer of its interest in a subsidiary (within the
meaning of Code ss.409(d)(3)) to an entity that is
not an Affiliated Employer with respect to a
Participant who continues employment with such
subsidiary.
(d) A Participant's Deferred Compensation made under this Plan and
all other plans, contracts or arrangements of the Employer
maintaining this Plan shall not exceed the limitation imposed
by Code ss.402(g), as in effect for the calendar year in which
such Plan Year began. If such dollar limitation is exceeded
solely from Elective Deferral Contributions made under this
Plan or any other Plan maintained by the Employer, a
Participant will be deemed to have notified the Administrator
of such excess amount which shall be distributed in a manner
consistent with section 11.2(f). This dollar limitation shall
be adjusted annually pursuant to the method provided in Code
ss.415(d) in accordance with Regulations.
(e) In the event a Participant has received a hardship
distribution pursuant to Regulationss.1.401(k)-1(d)(2)(iii)(B)
from any other plan maintained by the Employer or from their
Participant's Elective Account pursuant to section 11.8, then
such Participant shall not be permitted to elect to have
Deferred Compensation contributed to the Plan on their behalf
for a period of twelve (12) months following the receipt of
the distribution. Furthermore, the dollar limitation under
Codess.402(g) shall be reduced, with respect to the
Participant's taxable year following the taxable year in which
the hardship distribution was made, by the amount of such
Participant's Deferred Compensation, if any, made pursuant to
this Plan (and any other plan maintained by the Employer) for
the taxable year of the hardship distribution.
(f) If a Participant's Deferred Compensation under this Plan
together with any Elective Deferral Contributions (as defined
in Regulationss.1.402(g)-1(b)) under another qualified cash or
deferred arrangement (as defined in Codess.401(k)), a
simplified employee pension (as defined in Codess.408(k)), a
salary reduction arrangement (within the meaning of Code
ss.3121(a)(5)(D)), a deferred compensation plan under
Codess.457, or a trust described in Codess.501(c)(18)
cumulatively exceed the limitation imposed by Codess.402(g)
(as adjusted annually in accordance with the method provided
in Code ss.415(d) pursuant to Regulations) for such
Participant's taxable year, the Participant may, not later
than March 1st following the close of their taxable year,
notify the Administrator in writing of such excess and request
that their Deferred Compensation under this Plan be reduced by
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an amount specified by the Participant. In such event, the
Administrator shall direct the Trustee to distribute such
excess amount (and any Income allocable to such excess amount)
to the Participant not later than the first April 15th
following the close of the Participant's taxable year. Any
distribution of less than the entire amount of Excess Deferred
Compensation and Income shall be treated as a pro rata
distribution of Excess Deferred Compensation and Income. The
amount distributed shall not exceed the Participant's Deferred
Compensation under the Plan for the taxable year. Any
distribution on or before the last day of the Participant's
taxable year must satisfy each of the following conditions:
(1) the Participant shall designate the distribution as
Excess Deferred Compensation;
(2) the distribution must be made after the date on which
the Plan received the Excess Deferred Compensation;
and
(3) the Plan must designate the distribution as a
distribution of Excess Deferred Compensation.
Any distribution under this section shall be made first from
unmatched Deferred Compensation and, thereafter, from Deferred
Compensation which is matched. Matching contributions which
relate to such Excess Deferred Compensation. shall be
forfeited regardless of vesting, in lieu of being distributed.
For the purpose of this section, "Income" means the amount of
income or loss allocable to a Participant's Excess Deferred
Compensation and shall be equal to the allocable gain or loss
for the taxable year of the Participant. The income or loss
allocable is determined by multiplying the income or loss
allocable to the Participant's Deferred Compensation for the
respective period by a fraction. The numerator of the fraction
is the Participant's Excess Deferred Compensation for the
taxable year of the Participant. The denominator is the
balance of the Participant's Elective Account that is
attributable to the Participant's Deferred Compensation
without regard to any income or loss occurring during the
taxable year.
Income or loss allocable to any distribution of Excess
Deferred Compensation on or before the last day of the taxable
year of the Participant shall be calculated from the first day
of the taxable year of the Participant to the date on which
the distribution is made.
For any distribution under this section, the amount of Income
may be computed using a reasonable method that is consistent
with section 4.3(c), provided such method is used consistently
for all Participants and for all such distributions for the
Plan Year.
(g) Notwithstanding the above, a Participant's Excess Deferred
Compensation shall be reduced, but not below zero, by any
distribution and/or recharacterization of Excess Contributions
pursuant to section 11.5(a) for the Plan Year beginning with
or within the taxable year of the Participant.
(h) At Normal Retirement Date, or such other date when the
Participant shall be entitled to receive benefits, the fair
market value of the Participant's Elective Account shall be
used to provide benefits to the Participant or their
Beneficiary.
(i) Employer Elective Deferral Contributions made pursuant to this
section may be segregated into a separate account for each
Participant in a federally insured savings account,
certificate of deposit in a bank or savings and loan
association, money market certificate, or other short-term
debt security acceptable to the Trustee until such time as the
allocations pursuant to section 11.3 have been made.
(j) The Employer and the Administrator shall adopt a procedure
necessary to implement the salary reduction elections provided
for herein.
11.3 Allocation of Contribution, Forfeitures and Earnings
(a) The Administrator shall establish and maintain an account in
the name of each Participant to which the Administrator shall
credit as of each Anniversary Date, or other valuation date,
all amounts allocated to each such Participant as set forth
herein.
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(b) The Employer shall provide the Administrator with all
information required by the Administrator to make a proper
allocation of the Employer's contributions for each Plan Year.
Within a reasonable period of time after the date of receipt
by the Administrator of such information, the Administrator
shall allocate such contribution as follows:
(1) With respect to the Employer's Elective Deferral
Contribution made pursuant to section 11.1(a), to
each Participant's Elective Account in an amount
equal to each such Participant's Deferred
Compensation for the year.
(2) With respect to the Employer's Matching Contribution
made pursuant to section 11.1(b), to each
Participant's Account in accordance with section
11.1(b)
Except, however, a Participant who is not credited with a Year
of Service during any Plan Year shall or shall not share in
the Employer's Matching Contribution for that year as provided
in the Adoption Agreement. However, if this is a standardized
Plan, a Participant shall share in the Employer's Matching
Contribution regardless of Hours of Service.
(3) With respect to the Employer's Nonelective
Contribution made pursuant to section 11.1(c), to
each Participant's Account in accordance with the
provisions of sections 4.3(b)(1) or 4.3(b)(2),
whichever is applicable, 4.3(k) and 4.3(l).
(4) With respect to the Employer's Qualified Nonelective
Contribution made pursuant to section 11.1(d), to
each Participant's Account in the same proportion
that each such Participant's Compensation for the
year bears to the total Compensation of all
Participants for such year. However, if elected in
the non-standardized Adoption Agreement, a
Participant who is not credited with a Year of
Service during any Plan Year shall not share in the
Employer's Qualified Nonelective Contribution for
that year, unless required pursuant to section
4.3(h). In addition, the provisions of sections
4.3(k) and 4.3(l) shall apply with respect to the
allocation of the Employer's Qualified Nonelective
contribution.
(c) Notwithstanding anything in the Plan to the contrary, for Plan
Years beginning after December 31, 1988, in deter mining
whether a Non-Key Employee has received the required minimum
allocation pursuant to section 4.3(f) such Non-Key Employee's
Deferred Compensation and Matching Contributions used to
satisfy the "Actual Deferral Percentage" test pursuant to
section 11.4(a) or the "Actual Contribution Percentage" test
of section 11.6(a) shall not be taken into account.
(d) Notwithstanding anything herein to the contrary, participants
who terminated employment during the Plan Year shall share in
the salary reduction contributions made by the Employer for
the year of termination without regard to the Hours of Service
credited.
(e) Notwithstanding anything herein to the contrary (other than
sections 11.3(d) and 11.3(g)), any Participant who terminated
employment during the Plan Year for reasons other than death,
Total and Permanent Disability, or retirement shall or shall
not share in the allocations of the Employer's Matching
Contribution made pursuant to section 11.1(b), the Employer's
Nonelective Contributions made pursuant to section 11.1(c),
the Employer's Qualified Nonelective Contribution made
pursuant to section 11.1(d), and Forfeitures as provided in
the Adoption Agreement. Notwithstanding the foregoing, if this
is a standardized Plan, any such terminated Participant shall
share in such allocations provided the terminated Participant
completed more than 500 Hours of Service.
(f) Notwithstanding anything herein to the contrary, Participants
terminating for reasons of death, Total and Permanent
Disability, or retirement shall share in the allocation of the
Employer's Matching Contribution made pursuant to section
11.1(b), the Employer's Nonelective Contributions made
pursuant to section 11.1(c), the Employer's Qualified
Nonelective Contribution made pursuant to section 11.1(d), and
Forfeitures as provided in this section regardless of whether
they completed a Year of Service during the Plan Year.
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11.4 Actual Deferral Percentage Tests
(a) Maximum Annual Allocation: The annual allocation derived from
Employer Elective Deferral Contributions and other amounts
treated as Elective Deferral Contributions to a Participant's
Account shall satisfy one of the following tests:
(1) The "Actual Deferral Percentage" for the Highly
Compensated Participant group shall not be more than
the "Actual Deferral Percentage" of the Non-Highly
Compensated Participant group multiplied by 1.25, or
(2) The excess of the "Actual Deferral Percentage" for
the Highly Compensated Participant group over the
"Actual Deferral Percentage" for the Non-Highly
Compensated Participant group shall not be more than
two percentage points. Additionally, the "Actual
Deferral Percentage" for the Highly Compensated
Participant group shall not exceed the "Actual
Deferral Percentage" for the Non-Highly Compensated
Participant group multiplied by 2. The provisions of
Code ss.401(k)(3) and Regulation ss.1.401(k)-1(b) are
incorporated herein by reference.
However, to prevent the multiple use of the
alternative method described in (2) above and Code
ss.401(m)(9)(A), any Highly Compensated Participant
eligible to make Elective Deferral Contributions
pursuant to section 11.2 and to make Employee
contributions or to receive Matching Contributions
under this Plan or under any other plan maintained by
the Employer or an Affiliated Employer shall have
their actual contribution ratio reduced pursuant to
Regulation 1.401(m)-2, the provisions of which are
incorporated herein by reference.
(b) For the purposes of this section "Actual Deferral Percentage"
means, with respect to the Highly Compensated Participant
group and Non-Highly Compensated Participant group for a Plan
Year, the average of the ratios, calculated separately for
each Participant in such group, of the amount of Employer
Elective Deferral Contributions and other amounts treated as
Elective Deferral Contributions allocated to each
Participant's Account for such Plan Year, to such
Participant's "414(s) Compensation" for such Plan Year. The
actual deferral ratio for each Participant and the "Actual
Deferral Percentage" for each group shall be calculated to the
nearest one-hundredth of one percent of the Participant's
"414(s) Compensation." Employer Elective Deferral
Contributions allocated to each Non-Highly Compensated
Participant's Account shall be reduced by Excess Deferred
Compensation to the extent such excess amounts are made under
this Plan or any other plan maintained by the Employer.
(c) For the purpose of determining the actual deferral ratio of a
Highly Compensated Participant who is subject to the Family
Member aggregation rules of Code ss.414(q)(6) because such
Participant is either a "five percent owner" of the Employer
or one of the ten (10) Highly Compensated Employees paid the
greatest "415 Compensation" during the year, the following
shall apply:
(1) The combined actual deferral ratio for the family
group (which shall be treated as one Highly
Compensated Participant) shall be the greater of: (i)
the ratio determined by aggregating Employer Elective
Deferral Contributions and "414(s) Compensation" of
all eligible Family Members who are Highly
Compensated Participants without regard to family
aggregation; and (ii) the ratio determined by
aggregating Employer Elective Deferral Contributions
and "414(s) Compensation" of all eligible Family
Members (including Highly Compensated Participants).
However, in applying the $200,000 limit to "414(s)
Compensation" for Plan Years beginning after December
31, 1988, Family Members shall include only the
affected Employee's spouse and any lineal descendants
who have not attained age 19 before the close of the
Plan Year.
(2) The Employer Elective Deferral Contributions and
"414(s) Compensation" of all Family Members shall be
disregarded for purposes of determining the "Actual
Deferral Percentage" of the Non-Highly Compensated
Participant group except to the extent taken into
account in paragraph (1) above.
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<PAGE>
(3) If a Participant is required to be aggregated as a
member of more than one family group in a plan, all
Participants who are members of those family groups
that include the Participant are aggregated as one
family group in accordance with paragraphs (1) and
(2) above.
(d) For the purposes of this section and Codess.ss.401(a)(4),
410(b) and 401(k), if two or more plans which include cash or
deferred arrangements are considered one plan for the purposes
of Codess.401(a)(4) or 410(b) (other than Code
ss.401(b)(2)(A)(ii) as in effect for Plan Years beginning
after December 31, 1988), the cash or deferred arrangements
included in such plans shall be treated as one arrangement. In
addition, two or more cash or deferred arrangements may be
considered as a single arrangement for purposes of determining
whether or not such arrangements satisfy Code ss.ss.401(a)(4),
410(b) and 401(k). In such a case, the cash or deferred
arrangements included in such plans and the plans including
such arrangements shall be treated as one arrangement and as
one plan for purposes of this section and Codess.ss.401(a)(4),
410(b) and 401(k). Plans may be aggregated under this
paragraph (e) only if they have the same plan year.
Notwithstanding the above, an employee stock ownership plan
described in Code ss.4975(e)(7) may not be combined with this
Plan for purposes of determining whether the employee stock
ownership plan or this Plan satisfies this section and Code
ss.ss.401(a)(4), 410(b) and 401(k).
(e) For the purposes of this section, if a Highly Compensated
Participant is a Participant under two (2) or more cash or
deferred arrangements (other than a cash or deferred
arrangement which is part of an employee stock ownership plan
as defined in Code ss.4975(e)(7) for Plan Years beginning
after December 31, 1988) of the Employer or an Affiliated
Employer, all such cash or deferred arrangements shall be
treated as one cash or deferred arrangement for the purpose of
determining the actual deferral ratio with respect to such
Highly Compensated Participant. However, if the cash or
deferred arrangements have different Plan Years, this
paragraph shall be applied by treating all cash or deferred
arrangements ending with or within the same calendar year as a
single arrangement.
11.5 Adjustment to Actual Deferral Percentage Tests
In the event that the initial allocations of the Employer's Elective
Deferral Contributions and Qualified Nonelective Contributions do not
satisfy one of the tests set forth in section 11.4, the Administrator
shall adjust Excess Contributions pursuant to the options set forth
below:
(a) On or before the fifteenth day of the third month following
the end of each Plan Year, the Highly Compensated Participant
having the highest actual deferral ratio shall have their
portion of Excess Contributions distributed to them and/or at
their election recharacterized as a voluntary Employee
contribution pursuant to section 4.8 until one of the tests
set forth in section 11.4 is satisfied, or until their actual
deferral ratio equals the actual deferral ratio of the Highly
Compensated Participant having the second highest actual
deferral ratio. This process shall continue until one of the
tests set forth in section 11.4 is satisfied. For each Highly
Compensated Participant, the amount of Excess Contributions is
equal to the Elective Deferral Contributions and other amounts
treated as Elective Deferral Contributions made on behalf of
such Highly Compensated Participant (determined prior to the
application of this paragraph) minus the amount determined by
multiplying the Highly Compensated Participant's actual
deferral ratio (determined after application of this
paragraph) by their "414(s) Compensation.". However, in
determining the amount of Excess Contributions to be
distributed and/or recharacterized with respect to an affected
Highly Compensated Participant as determined herein, such
amount shall be reduced by any Excess Deferred Compensation
previously distributed to such affected Highly Compensated
Participant for their taxable year ending with or within such
Plan Year. Any distribution and/or recharacterization of
Excess Contributions shall be made in accordance with the
following:
(1) With respect to the distribution of Excess
Contributions pursuant to (a) above, such
distribution:
(i) may be postponed but not later than the
close of the Plan Year following the Plan
Year to which they are allocable;
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(ii) shall be made first from unmatched Deferred
Compensation and, thereafter from Deferred
Compensation which is matched. Matching
contributions which relate to such Excess
Contributions shall be forfeited regardless
of vesting, in lieu of being distributed;
(iii) shall be made from Qualified Nonelective
Contributions and Qualified Matching
Contributions treated as Elective Deferral
Contributions only to the extent that Excess
Contributions exceed the balance in the
Participant's Elective Account attributable
to Deferred Compensation.
(iv) shall be adjusted for Income; and
(v) shall be designated by the Employer as a
distribution of Excess Contributions (and
Income).
(2) With respect to the recharacterization of Excess
Contributions pursuant to (a) above, such
recharacterized amounts:
(i) shall be deemed to have occurred on the date
on which the last of those Highly
Compensated Participants with Excess
Contributions to be recharacterized is
notified of the recharacterization and the
tax consequences of such recharacterization;
(ii) shall not exceed the amount of Deferred
Compensation on behalf of any Highly
Compensated Participant for any Plan Year;
(iii) shall be treated as Voluntary Employee
Contributions for purposes of Code
ss.401(a)(4) and Regulation
ss.1.401(k)-1(b). However, for purposes of
sections 2.2 and 4.3(f), recharacterized
Excess Contributions continue to be treated
as Employer contributions that are Deferred
Compensation. Excess Contributions
recharacterized as Voluntary Employee
Contributions shall continue to be
nonforfeitable and subject to the same
distribution rules provided for in section
11.2(c);
(iv) which relate to Plan Years ending on or
before October 24, 1988, may be treated as
either Employer contributions or Voluntary
Employee Contributions and therefore shall
not be subject to the restrictions of
section 11.2(c);
(v) are not permitted if the amount
recharacterized plus Voluntary Employee
Contributions actually made by such Highly
Compensated Participant, exceed the maximum
amount of Voluntary Employee Contributions
(determined prior to application of section
11.6) that such Highly Compensated
Participant is permitted to make under the
Plan in the absence of recharacterization;
(vi) shall be adjusted for Income.
(3) Any distribution and/or recharacterization of less
than the entire amount of Excess Contributions shall
be treated as a pro rata distribution and/or
recharacterization of Excess Contributions and
Income.
(4) The determination and correction of Excess
Contributions of a Highly Compensated Participant
whose actual deferral ratio is determined under the
family aggregation rules shall be accomplished as
follows:
(i) If the actual deferral ratio for the Highly
Compensated Participant is determined in
accordance with section 11.4(c)(1)(ii), then
the actual deferral ratio shall be reduced
as required herein and the Excess
Contributions for the family unit shall be
allocated among the Family Members in
proportion to the Elective Deferral
Contributions of each Family Member that
were combined to determine the group actual
deferral ratio.
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(ii) If the actual deferral ratio for the Highly
Compensated Participant is determined under
section 11.4(c)(1)(i), then the actual
deferral ratio shall first be reduced as
required herein, but not below the actual
deferral ratio of the group of Family
Members who are not Highly Compensated
Participants without regard to family
aggregation. The Excess Contributions
resulting from this initial reduction shall
be allocated (in proportion to Elective
Deferral Contributions) among the Highly
Compensated Participants whose Elective
Deferral Contributions were combined to
determine the actual deferral ratio. If
further reduction is still required, then
Excess Contributions resulting from this
further reduction shall be determined by
taking into account the contributions of all
Family Members and shall be allocated among
them in proportion to their respective
Elective Deferral Contributions.
(b) Within twelve (12) months after the end of the Plan Year, the
Employer shall make a special Qualified Nonelective
Contribution or Qualified Matching Contribution on behalf of
Non-Highly Compensated Participants in an amount sufficient to
satisfy one of the tests set forth in section 11.4(a).
(c) For purposes of this section, "Income" means the income or
loss allocable to Excess Contributions which shall equal the
sum of the allocable gain or loss for the Plan Year.
(d) Any amounts not distributed or recharacterized within 2
1/2months after the end of the Plan Year shall be subject to
the 10% Employer excise tax imposed by Code ss.4979.
11.6 Actual Contribution Percentage Tests
(a) The "Actual Contribution Percentage," for the Highly
Compensated Participant group shall not exceed the greater of:
(1) 125 percent of such percentage for the Non-Highly
Compensated Participant group; or
(2) the lesser of 200 percent of such percentage for the
Non-Highly Compensated Participant group, or such
percentage for the Non-Highly Compensated Participant
group plus 2 percentage points. However, to prevent
the multiple use of the alternative method described
in this paragraph and Codess.401(m)(9)(A), any Highly
Compensated Participant eligible to make Elective
Deferral Contributions pursuant to section 11.2 or
any other cash or deferred arrangement maintained by
the Employer or an Affiliated Employer and to make
Employee contributions or to receive Matching
Contributions under any plan maintained by the
Employer or an Affiliated Employer shall have their
actual contribution ratio reduced pursuant to
Regulation 1.401(m)-2. The provisions of
Codess.401(m) and Regulationsss.ss.1.401(m)-1(b) and
1.401(m)-2 are incorporated herein by reference.
(b) For the purposes of this section and section 11.7, "Actual
Contribution Percentage" for a Plan Year means, with respect
to the Highly Compensated Participant group and Non-Highly
Compensated Participant group, the average of the ratios
(calculated separately for each Participant in each group) of:
(1) the sum of Employer Matching Contributions made
pursuant to section 11.1(b) (to the extent such
Matching Contributions are not used to satisfy the
tests set forth in section 11.4), Voluntary Employee
Contributions made pursuant to section 4.8 and Excess
Contributions recharacterized as Voluntary Employee
Contributions pursuant to section 11.5 on behalf of
each such Participant for such Plan Year; to
(2) the Participant's "414(s) Compensation" for such Plan
Year.
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(c) For purposes of determining the "Actual Contribution
Percentage" and the amount of Excess Aggregate Contributions
pursuant to section 11.7(d), only Employer Matching
Contributions (excluding Matching Contributions forfeited or
distributed pursuant to section 11.2(f), 11.5(a), or 11.7(a))
contributed to the Plan prior to the end of the succeeding
Plan Year shall be considered. In addition, the Administrator
may elect to take into account, with respect to Employees
eligible to have Employer Matching Contributions made pursuant
to section 11.1(b) or Voluntary Employee Contributions made
pursuant to section 4.8 allocated to their accounts, Elective
Deferral Contributions (as defined in Regulation
ss.1.402(g)-1(b)) and Qualified Nonelective Contributions (as
defined in Codess.401(m)(4)(C)) contributed to any plan
maintained by the Employer. Such Elective Deferral
Contributions and Qualified Nonelective Contributions shall be
treated as Employer Matching Contributions subject to
Regulationss.1.401(m)-1(b)(2) which is incorporated herein by
reference. However, the Plan Year must be the same as the plan
year of the plan to which the Elective Deferral Contributions
and the Qualified Nonelective Contributions are made.
(d) For the purpose of determining the actual contribution ratio
of a Highly Compensated Employee who is subject to the Family
Member aggregation rules of Code ss.414(q)(6) because such
Employee is either a "five percent owner" of the Employer or
one of the ten (10) Highly Compensated Employees paid the
greatest "415 Compensation" during the year, the following
shall apply:
(1) The combined actual contribution ratio for the family
group (which shall be treated as one Highly
Compensated Participant) shall be the greater of: (i)
the ratio determined by aggregating Employer Matching
Contributions made pursuant to section 11.1(b) (to
the extent such Matching Contributions are not used
to satisfy the tests set forth in section 11.4),
Voluntary Employee Contributions made pursuant to
section 4.8, Excess Contributions recharacterized as
Voluntary Employee Contributions pursuant to section
11.5 and "414(s) Compensation" of all eligible Family
Members who are Highly Compensated Participants
without regard to family aggregation; and (ii) the
ratio determined by aggregating Employer Matching
Contributions made pursuant to section 11.1(b) (to
the extent such Matching Contributions are not used
to satisfy the tests set forth in section 11.4),
Voluntary Employee Contributions made pursuant to
section 4.8, Excess Contributions recharacterized as
Voluntary Employee Contributions pursuant to section
11.5 and "414(s) Compensation" of all eligible Family
Members (including Highly Compensated Participants).
However, in applying the $200,000 limit to "414(s)
Compensation" for Plan Years beginning after December
31, 1988, Family Members shall include only the
affected Employee's spouse and any lineal descendants
who have not attained age 19 before the close of the
Plan Year.
(2) The Employer Matching Contributions made pursuant to
section 11.1(b) (to the extent such Matching
Contributions are not used to satisfy the tests set
forth in section 11.4), Voluntary Employee
Contributions made pursuant to section 4.8, Excess
Contributions recharacterized as Voluntary Employee
Contributions pursuant to section 11.5 and "414(s)
Compensation" of all Family Members shall be
disregarded for purposes of determining the "Actual
Contribution Percentage" of the Non-Highly
Compensated Participant group except to the extent
taken into account in paragraph (1) above.
(3) If a Participant is required to be aggregated as a
member of more than one family group in a plan, all
Participants who are members of those family groups
that include the Participant are aggregated as one
family group in accordance with paragraphs (1) and
(2) above.
(e) For purposes of this section and Codess.ss.401(a)(4), 410(b)
and 401(m), if two or more plans of the Employer to which
Matching Contributions, Employee contributions, or both, are
made are treated as one plan for purposes of
Codess.ss.401(a)(4) or 410(b) (other than the average benefits
test under Codess.410(b)(2)(A)(ii) as in effect for Plan Years
beginning after December 31, 1988), such plans shall be
treated as one plan. In addition, two or more plans of the
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Employer to which Matching Contributions, Employee
contributions, or both, are made may be considered as a single
plan for purposes of determining whether or not such plans
satisfy Codess.ss.401(a)(4), 410(b) and 401(m). In such a
case, the aggregated plans must satisfy this section and
Codess.ss.401(a)(4), 410(b) and 401(m) as though such
aggregated plans were a single plan. For plan years beginning
after December 31, 1989, plans may be aggregated under this
paragraph only if they have the same plan year.
Notwithstanding the above, an employee stock ownership plan
described in Codess.4975(e)(7) may not be aggregated with this
Plan for purposes of determining whether the employee stock
ownership plan or this Plan satisfies this section and
Codess.ss.(beta)401(a)(4), 410(b) and 401(m).
(f) If a Highly Compensated Participant is a Participant under two
or more plans (other than an employee stock ownership plan as
defined in Code ss.4975(e)(7) for Plan Years beginning after
December 31, 1988) which are maintained by the Employer or an
Affiliated Employer to which Matching Contributions, Employee
contributions, or both, are made, all such contributions on
behalf of such Highly Compensated Participant shall be
aggregated for purposes of determining such Highly Compensated
Participant's actual contribution ratio. However, for Plan
Years beginning after December 31, 1988, if the plans have
different plan years, this paragraph shall be applied by
treating all plans ending with or within the same calendar
year as a single plan.
(g) For purposes of sections 11.6(a) and 11.7, a Highly
Compensated Participant and a Non-Highly Compensated
Participant shall include any Employee eligible to have
Matching Contributions made pursuant to section 11.1(b)
(whether or not a deferred election was made or suspended
pursuant to section 11.2(e)) allocated to their account for
the Plan Year or to make salary deferrals pursuant to section
11.2 (if the Employer uses salary deferrals to satisfy the
provisions of this section) or Voluntary Employee
Contributions pursuant to section 4.8 (whether or not
Voluntary Employee Contributions are made) allocated to their
account for the Plan Year.
(h) For purposes of this section, "Matching Contribution" shall
mean an Employer contribution made to the Plan, or to a
contract described in Code ss.403(b), on behalf of a
Participant on account of an Employee contribution made by
such Participant, or on account of a participant's deferred
compensation, under a plan maintained by the Employer.
11.7 Adjustment to Actual Contribution Percentage Tests
(a) In the event that the "Actual Contribution Percentage" for the
Highly Compensated Participant group exceeds the "Actual
Contribution Percentage" for the Non-Highly Compensated
Participant group pursuant to section 11.6(a), the
Administrator (on or before the fifteenth day of the third
month following the end of the Plan Year, but in no event
later than the close of the following Plan Year) shall direct
the Trustee to distribute to the Highly Compensated
Participant having the highest actual contribution ratio,
their portion of Excess Aggregate Contributions (and Income
allocable to such contributions) or, if forfeitable, forfeit
such non-Vested Excess Aggregate Contributions attributable to
Employer Matching Contributions (and Income allocable to such
Forfeitures) until either one of the tests set forth in
section 11.6(a) is satisfied, or until their actual
contribution ratio equals the actual contribution ratio of the
Highly Compensated Participant having the second highest
actual contribution ratio. This process shall continue until
one of the tests set forth in section 11.6(a) is satisfied.
The distribution and/or Forfeiture of Excess Aggregate
Contributions shall be made in the following order:
(1) Voluntary Employee Contributions including Excess
Contributions recharacterized as Voluntary Employee
Contributions pursuant to section 11.5(a)(2);
(2) Employer Matching Contributions shall be distributed
(if vested) or forfeited (if non-vested).
(b) Any distribution or Forfeiture of less than the entire amount
of Excess Aggregate Contributions (and Income) shall be
treated as a pro rata distribution of Excess Aggregate
Contributions and Income. Distribution of Excess Aggregate
Contributions shall be designated by the Employer as a
distribution of Excess Aggregate Contributions (and Income).
Forfeitures of Excess Aggregate Contributions shall be treated
in accordance with section 4.3.
(c) Excess Aggregate Contributions attributable to amounts other
than Voluntary Employee Contributions, including forfeited
Matching Contributions, shall be treated as Employer
contributions for purposes of Code ss.ss.404 and 415 even if
distributed from the Plan.
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(d) For the purposes of this section and section 11.6, "Excess
Aggregate Contributions" means, with respect to any Plan Year,
the excess of:
(1) the aggregate amount of Employer Matching
Contributions made pursuant to section 11.1(b) (to
the extent such contributions are taken into account
pursuant to section 11.6(a)), Voluntary Employee
Contributions made pursuant to section 4.8, Excess
Contributions recharacterized as Voluntary Employee
Contributions pursuant to section 11.5 and any
Qualified Nonelective Contributions or Elective
Deferral Contributions taken into account pursuant to
section 11.6(c) actually made on behalf of the Highly
Compensated Participant group for such Plan Year,
over
(2) the maximum amount of such contributions permitted
under the limitations of section 11.6(a).
(e) or each Highly Compensated Participant, the amount of Excess
Aggregate Contributions is equal to the total Employer
Matching Contributions made pursuant to section 11.1(b) (to
the extent taken into account pursuant to section 11.6(a)),
Voluntary Employee Contributions made pursuant to section 4.8,
Excess Contributions recharacterized as Voluntary Employee
Contributions pursuant to section 11.5 and any Qualified
Nonelective Contributions or Elective Deferral Contributions
taken into account pursuant to section 11.6(c) on behalf of
the Highly Compensated Participant (determined prior to the
application of this paragraph) minus the amount determined by
multiplying the Highly Compensated Participant's actual
contribution ratio (determined after application of this
paragraph) by their "414(s) Compensation." The actual
contribution ratio must be rounded to the nearest
one-hundredth of one percent. In no case shall the amount of
Excess Aggregate Contribution with respect to any Highly
Compensated Participant exceed the amount of Employer Matching
Contributions made pursuant to section 11.1(b) (to the extent
taken into account pursuant to section 11.6(a)), Voluntary
Employee Contributions made pursuant to section 4.8, Excess
Contributions recharacterized as Voluntary Employee
Contributions pursuant to section 11.5 and any Qualified
Nonelective Contributions or Elective Deferral Contributions
taken into account pursuant to section 11.6(c) on behalf of
such Highly Compensated Participant for such Plan Year.
(f) The determination of the amount of Excess Aggregate
Contributions with respect to any Plan Year shall be made
after first determining the Excess Contributions, if any, to
be treated as Voluntary Employee Contributions due to
recharacterization for the plan year of any other qualified
cash or deferred arrangement (as defined in Code ss.401(k))
maintained by the Employer that ends with or within the Plan
Year or which are treated as Voluntary Employee Contributions
due to recharacterization pursuant to section 11.5.
(g) The determination and correction of Excess Aggregate
Contributions of a Highly Compensated Participant whose actual
contribution ratio is determined under the family aggregation
rules shall be accomplished as follows:
(1) If the actual contribution ratio for the Highly
Compensated Participant is determined in accordance
with section 11.6(d)(1), then the actual contribution
ratio shall be reduced and the Excess Aggregate
Contributions for the family unit shall be allocated
among the Family Members in proportion to the sum of
Employer Matching Contributions made pursuant to
section 11.1(b) (to the extent taken into account
pursuant to section 11.6(a)), Voluntary Employee
Contributions made pursuant to section 4.8, Excess
Contributions recharacterized as Voluntary Employee
Contributions pursuant to section 11.5 and any
Qualified Nonelective Contributions or Elective
Deferral Contributions taken into account pursuant to
section 11.6(c) of each Family Member that were
combined to determine the group actual contribution
ratio.
(2) If the actual contribution ratio for the Highly
Compensated Participant is determined under section
11.6(d)(2), then the actual contribution ratio shall
first be reduced, as required herein, but not below
the actual contribution ratio of the group of Family
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Members who are not Highly Compensated Participants
without regard to family aggregation. The Excess
Aggregate Contributions resulting from this initial
reduction shall be allocated among the Highly
Compensated Participants whose Employer Matching
Contributions made pursuant to section 11.1(b) (to
the extent taken into account pursuant to section
11.6(a)), Voluntary Employee Contributions made
pursuant to section 4.8, Excess Contributions
recharacterized as Voluntary Employee Contributions
pursuant to section 11.5 and any Qualified
Nonelective Contributions or Elective Deferral
Contributions taken into account pursuant to section
11.6(c) were combined to determine the actual
contribution ratio. If further reduction is still
required, then Excess Aggregate Contributions
resulting from this further reduction shall be
determined by taking into account the contributions
of all Family Members and shall be allocated among
them in proportion to their respective Employer
Matching Contributions made pursuant to section
11.1(b) (to the extent taken into account pursuant to
section 11.6(a)), Voluntary Employee Contributions
made pursuant to section 4.8, Excess Contributions
recharacterized as Voluntary Employee Contributions
pursuant to section 11.5 and any Qualified
Nonelective Contributions or Elective Deferral
Contributions taken into account pursuant to section
11.6(c).
(h) Notwithstanding the above, within twelve (12) months after the
end of the Plan Year, the Employer may make a special
Qualified Nonelective Contribution on behalf of Non-Highly
Compensated Participants in an amount sufficient to satisfy
one of the tests set forth in section 11.6. Such contribution
shall be allocated to the Participant's Qualified Nonelective
Account of each Non-Highly Compensated Participant in the same
proportion that each Non-Highly Compensated Participant's
Compensation for the year bears to the total Compensation of
all Non-Highly Compensated Participants. A separate accounting
shall be maintained for the purpose of excluding such
contributions from the "Actual Deferral Percentage" tests
pursuant to section 11.4.
(i) For purposes of this section, "Income" means the
income or loss allocable to Excess Aggregate
Contributions which shall equal the allocable gain or
loss for the Plan Year. The income or loss allocable
to Excess Aggregate Contributions for the Plan Year
is determined by multiplying the income or loss for
the Plan Year by a fraction. The numerator of the
fraction is the Excess Aggregate Contributions for
the Plan Year. The denominator of the fraction is the
total Participant's Account and Voluntary
Contribution Account attributable to Employer
Matching Contributions subject to section 11.6,
Voluntary Employee Contributions made pursuant to
section 4.8, and any Qualified Nonelective
Contributions and Elective Deferral Contributions
taken into account pursuant to section 11.6(c) as of
the end of the Plan Year without regard to any income
or loss occurring during the year.
The Income allocable to Excess Aggregate
Contributions resulting from recharacterization of
Elective Deferral Contributions shall be determined
and distributed as if such recharacterized Elective
Deferral Contributions had been distributed as Excess
Contributions.
Notwithstanding the above, the amount of Income may
be computed using a reasonable method that is
consistent with section 4.3(c), provided such method
is used consistently for all Participants and for all
such distributions for the Plan Year.
11.8 Advance Distribution for Hardship
(a) The Administrator, at the election of the Participant, shall
direct the Trustee to distribute to any Participant in any one
Plan Year up to the lesser of (1) 100% of their accounts as
specified in the Adoption Agreement valued as of the last
Anniversary Date or other valuation date or (2) the amount
necessary to satisfy the immediate and heavy financial need of
the Participant. Any distribution made pursuant to this
section shall be deemed to be made as of the first day of the
Plan Year or, if later, the valuation date immediately
preceding the date of distribution, and the account from which
the distribution is made shall be reduced accordingly.
Withdrawal under this section shall be authorized only if the
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distribution is on account of one of the following or any
other items permitted by the Internal Revenue Service:.
(1) Medical expenses described in Code ss.213(d) incurred
by the Participant, their spouse, or any of their
dependents (as defined in Code ss.152) or expenses
necessary for these persons to obtain medical care;
(2) The purchase (excluding mortgage payments) of a
principal residence for the Participant;
(3) Payment of tuition and related educational fees for
the next 12 months of post-secondary education for
the Participant, their spouse, children, or
dependents; or
(4) The need to prevent the eviction of the Participant
from their principal residence or foreclosure on the
mortgage of the Participant's principal residence.
(b) No distribution shall be made pursuant to this section unless
the Administrator, based upon the Participant's representation
and such other facts as are known to the Administrator,
determines that all of the following conditions are satisfied:
(1) The distribution is not in excess of the amount of
the immediate and heavy financial need of the
Participant (including any amounts necessary to pay
any federal, state, or local taxes or penalties
reasonably anticipated to result from the
distribution);
(2) The Participant has obtained all distributions, other
than hardship distributions, and all nontaxable loans
currently available under all plans maintained by the
Employer;
(3) The Plan, and all other plans maintained by the
Employer, provide that the Participant's Elective
Deferral Contributions and Voluntary Employee
Contributions will be suspended for at least twelve
(12) months after receipt of the hardship
distribution; and
(4) The Plan, and all other plans maintained by the
Employer, provide that the Participant may not make
Elective Deferral Contributions for the Participant's
taxable year immediately following the taxable year
of the hardship distribution in excess of the
applicable limit under Code ss.402(g) for such next
taxable year less the amount of such Participant's
Elective Deferral Contributions for the taxable year
of the hardship distribution.
(c) Notwithstanding the above, distributions from the
Participant's Elective Account and Qualified Nonelective
Account pursuant to this section shall be limited solely to
the Participant's Deferred Compensation and any income
attributable thereto credited to the Participant's Elective
Account as of December 31, 1988.
(d) Any distribution made pursuant to this section shall be made
in a manner which is consistent with and satisfies the
provisions of section 6.5, including, but not limited to, all
notice and consent requirements of Code ss.ss.411(a)(11) and
417 and the Regulations thereunder.
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